Interview: Višnja Jelić Mück, President, Croatian Rural Development Network Rural development via subsidies not valid
Deloitte report on retail sector Big increase in discount trading chains throughout the region
Exchange rate risk would lead to macroeconomic instability Kuna devaluation is medicine worse than illness
INTERVIEW
RETAIL
CURRENCY
PAGE 3
PAGE 5
PAGE 7 2010
Croatian Business & Finance Weekly Established in 1953 Monday / 6th December / 2010 Year IV / No 0133 www.privredni.hr
S U P P O R T E D
B Y
T H E
pvinternational pv international C R O A T I A N
C H A M B E R
O F
E C O N O M Y
AUTUMN ECONOMIC PREDICTIONS FROM THE EUROPEAN COMMISSION
EUROPE HAS RECOVERED WITH CROATIA SLOWLY FOLLOWING BEHIND According to data analysed by the EC, the crisis reached its nadir in the middle of the year after which recovery started Lada Stipić-Niseteo
tions. Naturally, no one can expect leaps similar to those during the negotiations with other middle European countries.
I
n its two major annual reports (autumn and spring), the European Commission processes candidate countries. In its last regular autumn report and predictions of Croatian economic trends, few bright spots could be found other than announcing recovery after a two year long recession. It also reiterated that the country entered recession after a year of dynamic growth, replacing the growth rate of up to 4%, with a two year fall in GDP of 8.7%, whilst investment reduced by a quarter. Croatia reacted to the crisis with a devastating fall in both consumption and imports. As a result of the upswing regionally and in particular within the EU (the main trading partner) Croatian exports are now rising although the analysis warns that the percentage share of those exports is dwindling. Salvation in export markets According to data analysed by the EC, the crisis reached its nadir in the middle of the year, after which the recovery process started. Of course, this year will end with a deficit, with a GDP drop of 1.8% year-on-year. For 2011, a moderate growth rate of 1.5% should be attainable, less than in the case of other economies
Elections – an obstacle to rebalance The postponement of fiscal consolidation might preclude anticipated growth. The EC report paid great attention to the Croatian budget, noting that three rebal-
Analysis warns of Croatian export share decreasing
similar to that of Croatia, and 2.1% in 2013. Private consumption and investment will provide a high level of support. It is also not excluded that any increase in growth of Croatian exports will also take the economy with it. Analysts also believe that the end of negotiations might have a
positive influence, together will all other changes which EU harmonisation will cause, especially with more efficient legislation and judiciary system as well as a more modern state administration. They are counting on more direct foreign investment, influenced by the end of the negotia-
ances were implemented last year as well as a considerable one this year after the economic crisis had placed public finances under severe pressure. There is small chance that the budget deficit will shrink during the next two years. It will increase in 2011, only to return to its current level in 2012 (5.7%), due to economic growth which pulls more money into the state treasury. The EC warns that the forthcoming parliamentary elections represent a major obstacle to any rebalancing and that local patterns of spending, consumption and investment will play a backstage part until such time as politics plays it appropriate rôle.
2 VIEWPOINT
Privredni vjesnik Year IV No 0133
VESNA PAVLETIĆ, CROM AWARD WINNER FOR JUNIOR MANAGER OF THE YEAR
MORE THAN 100,000 PEOPLE OFFER IDEAS FOR BUDGET CUTS
A private enterprise MAJORITY AGREE WITH THE INTRODUCTION OF adventure A PROPERTY TAX
In the business world, the past several days have seen the celebratory atmosphere of the Manager of the More than 45% of the 1,910 budget proposals require Year ceremony VAT to remain at its current rate tarting a small family enterprise is a huge adventure. Vesna Pavletić says that she and her husband were not aware they were making such a huge step when they founded the Pavletić Company almost 10 years ago. They obtained a home mortgage as well as a few smaller loans, thus using all their financial resources. Realising that good sleep is essential for everyone, they focused on the equipment for healthy sleeping, opting for direct sales channels, aided by direct interaction with their clients. At first, the couple were the only employees and their office was a 10m2 part of the family accommodation. Their working day finished at 6p.m. and sales did not immediately meet expectations. Delays in the press and supply, managing complicated legal issues – such problems can easily lead to early discouragement. Vesna remembers how people she knew were sceptical about the new business, rating it as “not such a clever move”. However people become animated about small things. Activating the new fax machine and their first business e-mail made them extremely happy, not to mention the call from the first client which caused an adrenaline rush for both of them. Six months later, the business gradually started to develop and they increased their working team. Today, the company has 108 employees. Many factors bring company success. In the case of Pavletić
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IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription
Company, the most important have been a positive atmosphere and enthusiasm within the family climate. In addition, they pay great attention to training and development. Within their own inhouse training programme, they have established two business academies. Through personal training they further developed their business interests. Together with sales they have dedicated themselves to innovation. They invented and patented a unique product on the global market - Biocrystal®, a sleeping base with a special crystal structure that improves the overall health condition, regenerates the body, balances energy fluctuations and brings relaxation. Foreign companies have shown great interest in Biocrystal®, the reason why Pavletić has started exporting to the US, Germany, Austria, Belgium and the Netherlands. In addition they have been exporting to regional countries for a year now. For Pavletić the future now looks to be a place with unexpected possibilities.
FOR PUBLISHER Nikola Baučić +385 1 4846661 uprava@privredni.hr
IMC MANAGER Dea Olup +385 1 5600028 olup@privredni.hr
EDITOR IN CHIEF Darko Buković +385 1 5600003 bukovic@privredni.hr
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EXECUTIVE EDITORS Andrea Marić maric@privredni.hr Vesna Antonić antonic@privredni.hr
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n less than a week after its launch, the budget calculator applicationwww.proracunskikalkulator.com was used by more than 100,000 visitors, trying to create their own version of the state budget for 2011. On average users made minimum changes to contributions with almost 37% making no change at all in this area. More than 45% of the 1,910 budget proposals require the VAT rate to remain at its current level; less than 20% wanted to reduce VAT to its previous rate of 22%. Over 58% of users agreed with the introduction of a property tax, with 58% supporting the introduction of a capital gains tax. The expenditure page of the application was developed by Vjetrenjača (Windmill), an association for the promotion of freedom of information access, with the help and support of the Croatian Chamber of Economy. In the case of expenditure, users reduced the proposed 25% of healthcare expenditure (excluding social care) by 3.53% with unemployment benefit being decreased by 9%. Regarding pensions, user calculations were in favour of a normalised income for senior citizens as the proposed decrease was approxi-
I
mately 2.5%. Other pensions would be decreased by 5%. Pensions for Croatian soldiers would fall by 13.6%, whereas other remittances to soldiers would be decreased by 6.1%. Users also suggest a decrease in social assistance expenditure by 7.2%, while over 65% support the introduction of a social assistance user’s register, which would limit the policy of receiving assistance according to a financial evaluation (means test). Agricultural subsidies would fall by 9.9% and support to other industries would be decreased by 11.6%. Users would “save’’ almost €68.5 million from the Ministry of the Interior and the Ministry of Defence. Salaries for other state employees would be reduced in order to save an additional €109 million, which implies laying-off 3,650 people, a decrease of 5.8% and a reduction in salaries (gross salary per employee) of 5.7%. The largest savings relate to expenditure covering local administration employees, including 4,305 laid off people (a reduction of 11%), reducing average salaries by 11.9%, thus saving almost €0.14 billion. It is interesting to note that only 10.9% of users support any International Monetary Fund intervention. (B.O.)
INTERVIEW 3
( 12 associations
( 8 LAGs
within the Croatian Rural Development Network
(Local Action Groups) currently operating
Interview: Višnja Jelić Mück, President, Croatian Rural Development Network (HMRR)
Rural development through agricultural subsidies not valid Local people know most about their area, resources and needs which government should respect Jasminka Filipas he Croatian Rural Development Network (HMRR) encompassing 12 associations has been accepted as a member of the European network PREPARE - Partnership for Rural Europe. The partnership consists of both European and national rural development civil society organisations. HMRR is currently the only non-European member. In her interview with Privredni Vjesnik, HMRR President Višnja Jelić Mück talked about the development model applied in the EU and Croatia’s position.
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Give guidelines for methodology of how but not defining what should be done
How would you define rural development? Rural development is a well defined development category. For Croatia, this development is especially important as 92% of the country is designated as rural and almost 50% of the population live within it. Rural areas encounter specific problems such as depopulation especially by the younger generation, the loss of the traditional ways of earning a living, modifications to the typical landscape together with the loss of former surviving models. Since European countries have experienced the same problems (indeed from the 1990’s when
they realised that the traditional strategy of rural development through agricultural subsidies was not sustainable), they developed a 4-way approach: agriculture and forestry, environmental and rural landscape protection, expanding the range of activities and encouraging local partnerships which can initiate and ensure sustainable development. The last of these components is called LEADER (Liaison Entre Actions de Développement de l’Économie Rurale), and relates to the relationship between rural development activities, giving guidelines for the methodology describing how but not defining what should be done. It consists of seven basic elements which need to be fully followed - sustainable development, an approach based on the characteristics of individual areas, the setting up local partnerships, innovation, networking and cooperation. This means that the current development policy is far beyond the model of using only agricultural incentives? Most certainly. To date this policy has been based on directives coming ‘from the very top’. Local people know most about their area, resources and their needs. Government should respect this and provide financial support. In this respect, political thinking should also take regional diversity into account. Another important feature includes local development partnerships, in which case the main assumption is that one ru-
ral community is too small to become a serious contender for development; hence it should be associated with other communities, in which administrative borders can, but do not have to be, respected. Are there any partnerships of this type in Croatia? We have a partnership between10 municipalities and one smaller town at the intersection of three counties. Such associations are called LAGs and are registered as societies. According to our official records, there are currently 8 LAG’s in Croatia, encompassing 67 local administrative units of which 13 are smaller towns, one rural area of a bigger city (Sisak) and 53 municipalities, The LAG’s are situated in the areas of eight counties, and some extend beyond county boundaries. They spread over 7,381 square kilometres and are home to 291,929 inhabitants. Each day we receive
information on new initiatives in this direction. Which are the sources of financing in the case of European LAGs, and which in the case of the Croatian ones? In Europe, LEADER projects are financed by a common agricultural fund, usually with a 50% share of the approved project after completion. The procedure is both technically and financially demanding, which makes it difficult for our still-weak LAG’s to accept. However, under the IPARD programme their capacities are expected to strengthen next year, when for the first time they will have an opportunity to obtain funds intended for institutional and professional development. In addition, both local and international funds support various kinds of cross-border partnerships and international co-operation in certain rural development areas.
4
Privredni vjesnik Year IV No 0133
( 250.000 households
::: news MOL offers Ina shares
covered by B.net
Satellite broadcasting into every home
Last week, MOL Hungarian Oil and Gas informed the capital market about its decision to make an offer to Ina shareholders who do not co-operate with MOL, to purchase not more than a total of 800,910 of unencumbered and repaid in full normal Ina shares, each amounting to €123, for the price of €383.56 per share. Provisions of the Croatian Law on the takeover of share companies are not applied to such a general offer, according to the Zagreb Stock Exchange. Fewer employed in industry In October, total number of employed in industry reduced by 6.2% over 2009, and 0.5% in relation to September 2010. In comparison with the average monthly number of employed in 2009, the number of employed in October fell by 7.9%, according to the Central Bureau for Statistics. The number of employed in October, compared with September, reduced by 0.7% in the production of intermediary products, whilst remained unchanged in the energy sector. Furthermore, there was a reduction of 0.5% in capital products, 0.4% in durable products for broader consumption, and by 0.6% in non-durable products for broader consumption. Import/export ratio 59% Total Croatian exports amounted to €7.29 billion between January and October 2010, according to preliminary reports. At the same time, imports totalled €12.33 billion. The foreign trade deficit totalled €5.05 billion, according to the Central Bureau of Statistics. Expressed in US$, between January and October 2010 exports amounted to US$9.7 billion, whilst imports totalled US$16.4 billion. The foreign trade deficit was US$6.7 billion. The import/ export ratio was 59%.
B.net becomes a national player
Users of B.net programme packages can soon expect additional programmes and services Boris Odorčić
t the end of November, the leading cable distribution service provider and the third largest telecoms operator according to the number of users on the Croatian market B.net, made a huge step forward in its business. Under an agreement signed between the British investment fund Mid Europa Partners and Austrian Bewag, from December 1, B.net is taking over the operations of the local unit of Total TV. This is a regional DTH (Direct to Home) satellite platform, covering cable TV, broadcasts via the Eutelsat satellite system and one of the leading DTH operators in the region, with more than 200,000
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People should have the option of choice access to the services of other providers users. The majority owner is Mid Europa Partners Fund. In 2007, the Austrian Bewag group bought two Croatian cable operators – DCM and Adriatic kabel for €55 million, thus creating B.net Croatia. As B.net reaches more than 250,000 households via its own network in the major national economic centres (Osijek, Rijeka, Solin, Split, Velika Gorica, Zadar and Zagreb), through this integration, Total TV will become the B.net satellite platform. As a result all those who live outside these cities and wish to subscribe to the B.net programme packages, can do so
from the beginning of this month onwards. However, this is possible only via satellite and users must purchase the appropriate equipment. B.net Croatia to continue developing Total TV as its own platform Adrian Ježina, B.net Croatia President of the Management Board, points out that from now on, B.net will provide to its “satellite’’ users a video content service only, excluding internet access. He added that all Total TV employees in Croatia will become integrated into B.net. Robert Knorr, senior partner of Mid Europa Partners Fund, points out that this project presents a test case for further market liberalisation in Croatia. “People deserve to have a variety of choice and have access to the services of other providers’’, believes Knorr. Christian Kurz, head of the energy group Bewag telecommunication unit, suggests that their aim was to turn B.net into a major alternative national operator. In
order to achieve this, they remain open to various options, even that of taking over other alternative operators in Croatia. Mid Europa Partners is present in both Middle and Eastern Europe. It owns several telecommunication operators and pay-TV companies in Europe (Aster in Poland, Invitek in Hungary and Orange in Austria), as well as Telemach in Slovenia and SBB in Serbia. Total investment in the 15 countries in which it operates amounts to €3.2 billion. In terms of the industries in which the Fund has invested to date, in addition to fixed and mobile telecommunications, Knorr stressed investment into healthcare, energy (oil, gas, renewable energy sources) and transportation. At the presentation of this strategic partnership recently, B.net Croatia announced that it would continue developing Total TV as its own satellite platform. Therefore, users of B.net programme packages and those who have used Total TV in Croatia can soon expect additional programmes and services.
www.privredni.hr Business & Finance Weekly
(
5
billion consolidated sales income of Konzum and Idea
DELOITTE REPORT ON THE RETAIL SECTOR FOR 2009
Big increase in discount trading chains Agrokor retail - Konzum and Idea - the largest retail group in the Adria region in 2009, followed by Mercator and Delta Maxy, the Serbian trading chain Boris Odorčić grokor retail (Konzum and Idea), with €2.67 billion of consolidated sales income, is the biggest retail group in the Adria region in 2009, according to the Deloitte regional report published on the retail sector for 2009. This result considers the business operations achieved by Konzum in Croatia and Bosnia and Herzegovina, by Tisak, Idea (Serbia) and TPDC (B&H). Konzum is followed by the Mercator Group, with consolidated regional income of €2.64 billion. The third retail player within the Adria region is
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After a long period the value of the retail index is positive, point out Deloitte the Serbian trading chain Delta Maxy, with over €1 billion of regional income in 2009. With over €1.54 billion of sales income in Croatia alone, Konzum is also the biggest retail trading chain in Croatia. Plodine and Metro Cash&Carry have taken second and third positions, followed by Mercator-H and Kaufland. In addition to the leading position in Croatia, on the basis of sales income achieved during 2009, with its 628 stores on 220,281 m2, Konzum is yet again the leader on the Croatian market. Konzum is followed by Mercator-H and Plodine. Growing trust After a long period, the value of the retail index, often compared with the indicator of
consumer trust, has been positive since July 2010, points out Slaven Ćurić, Deloitte manager. The ownership structure of the biggest trading chains reveals that half the trading chains on the top 10 list of the Adria region are owned by companies
within the region. The remainder are owned by Germany or Austria, after the Spar takeover of Ipercoop stores in Croatia. Ćurić is pointing to a greater rise of discount trading chains. During the past two years, discount chains such as Lidl and Kaufland
Sales Revenue, mil EUR 2009.
2008.
% change in income 2009./2008.
Agrokorova maloprodaja (Konzum/Idea)
2670
2609
2%
2
Mercator
2643
2709
-2%
3
Delta Maxi
1090
1113
-2%
4
Spar
795
769
3%
5
Engrotuš
704
685
3%
6
Metro
510
561
-9%
7
Lidl
376
295
27%
8
Plodine
310
273
14%
9
Kaufland
279
277
1%
10
Billa
202
204
-1%
Rank
Company name
1
continued to open their discount premises in Croatia and Slovenia. “We can expect further expansion of discount trading chains into other countries within the Adria region. Lidl is also regionally known for the largest rise in sales income, which amounted to 27% in 2009 over 2008”, noted Ćurić. Most of the biggest retail groups within the Adria region have not introduced internet shopping to their business. Even the trading chains which offer internet shopping, do not offer this service in all their markets. For example, Konzum offers online shopping only in Croatia and B&H, and Mercator only in Slovenia and Croatia. Similarly, only half of the biggest regional groups have loyalty programmes. Mercator (with 1.5 million card users), Konzum, Tuš, Metro C&C and Billa have the most developed customer loyalty programmes.
6 WE PRESENT AZELIJA, KUPA
Privredni vjesnik Year IV No 0133
ADA, ZAGREB
No wedding, no presents Brides and grooms are becoming more rational and weddings tend to be postponed. Since this is becoming a widespread trend, companies like Ada can only adjust through constant innovation isters Nataša and Nadja Skazlić grew up in Pula and Biograd where they opened their first store called Valentina. It used to be a flower shop, gift shop and an agency for organising weddings. The sisters moved to Zagreb in 1992, starting from basics. They opened Valentina studio, a workshop for organising weddings and other family festivities. During that period, the only places to buy wedding dresses from top Italian manufacturers were Atelier Aimeé, Delsa and Dalin. Soon after they started to manufacture collections of wedding dresses which they now present twice a year. They feel they are on the right track, but
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Houses with character
For next year the factory will ship 80 small oak houses to the UK market ooden houses are synonymous with the feeling of warmth and comfort. Until recently, to own a wooden house meant waging a perpetual fight with wind blowing through the beams, as well as with often complex maintenance. In order to reduce these problems a local producer has used the modern solid wood construction techniques so creating comfortable living areas.
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Currently we use oak and fir and our competitiveness is helped by lower labour costs Azelija Kupa, a wooden house manufacturer from Brod on the river Kupa, uses so-called AZbeams, constructed of several lengths of solid wood, which makes them resistant to unfavourable weather conditions, and the air space in the middle of the beam increases their insulating properties. Due to this innovative approach, wooden house construction has become quicker and cheaper. In addition, this has led to greater freedom and creativity in their design, making the architects the job more satisfying. For next year, the factory will ship 80 small oak houses to the UK market where these structures have proved very popular, functioning as offices, gyms,
additional living rooms or guest rooms. In addition, the shipment is to be followed by trucks transporting larger houses, says Azelija Kupa Sales Manager, Ozren Smerečinski. “Wood is a ‘living’ material with the whole of Europe interested in its use as it ensures warmth, is ecologically acceptable, and its production generates the smallest amount of greenhouse gas. Furthermore, wood is more resistant to earthquakes than brick which is why I am sure that it will be increasingly applied to constructions in the future’’ notes Smerečinski. The houses comply with all building and physical standards and the wood is protected against fungi and damp. For fire protection they use a water-based lacquer which has no impact on human health. Currently, the company exports only to Great Britain although their goal is to increase sales to 24 houses monthly; in the near future they aim to stabilise their sales and enter other markets specifically Slovenia, Austria and Germany. “We use oak and fir as our basis and our competitiveness is increased by lower labour costs, as well as the fact that oak is rarely present on the above markets. Our plant currently employs 12 workers. I am sure that due to our quality and the increasing demand for our products we will soon employ additional numbers’’, suggests Smerečinski. (K.S.)
Annoyed by the poor image of weddings as a “parade” they are still annoyed by the poor image of weddings as a “parade”. Therefore they organise performances in the Gavella Theatre, where young actresses from the Zagreb Youth Theatre act out an imaginary evolution of the wedding dress from the Stone Age to the present day. They have also promoted a TV video, contributing greatly to the market of weddings. The Valentina studio was inherited by the Ada company in
1998, and creates their first trade mark Ada Ideje in 2002, promoting ready-made styling solutions. Portal and address book Their second trade mark Ada Mini was created in 2004, with the foundation of the portal www.ada.hr for newlyweds. In late 2005, they started a project www.imenikvjencanja.com, an address book with over 2,000 Croatian wedding-related companies. Last year they started a new project called Ada Pack - the design of present packaging intended for retail chain stores. Their collections were first distributed through Kraš stores, and have been recently included in the West Gate and King Cross complexes. The store has been dramatically affected by the recession, and the wedding market has been hit even harder, points out Nadja Skazlić. The number of weddings plummeted by 40%, which is double a greater fall than during the war. Many wedding ceremonies take place on a significantly smaller budget and without any special celebration. Brides and grooms are becoming more rational and weddings tend to be postponed until better times. Since this is becoming a widespread socio-economic trend, companies like Ada can only adjust, and the Skazlić sisters do it through constant innovation.
www.privredni.hr Business & Finance Weekly
7
CROATIAN FOREIGN CURRENCY MARKET Currency
AUD CAD JPY CHF GBP USD EUR Source: HNB
Kuna exchange mid-rate
EUR
5,490508 5,583917 6,692841 5,637389 8,766902 5,593602 7,417676 WEEK DECEMBER 4, 2010
7.426
USD
5.72
7.422
5.64
5.68
7.420
5.60
5.64
7.418
5.56
5.60
7.416
4.52 29.11. 30.11. 1.12. 2.12. 3.12.
Kuna devaluation - “the medicine worse than illness” If recent trends continue, it will be harder to maintain kuna/euro stability
C
5.76
5.68
29.11. 30.11. 1.12. 2.12. 3.12.
euro stability, explains Jurčić. Similar will occur with the budget deficit, which will increase to impossible levels by the end of the year, according to Jurčić. Students at the Faculty of Economy, Milan Deskar-Škrbić and Zvonimir Ratkovski, have used their studies to show that companies would not receive any considerable benefit in the medium term from kuna depreciation. The reasons are the high level of “euro-isation” of the local economy, where 60% of products and raw materials are imported. An exchange rate that was put under any level of risk would lead to macroeconomic instability. Working towards increasing public consumption and labour costs is much more important than devaluation, according to these future economists. This would presuppose ra-
CHF
7.424
AN EXCHANGE RATE PUT AT RISK WOULD LEAD TO MACROECONOMIC INSTABILITY
urrently a devaluation of the kuna would not help Croatian companies, according to the statement made by Ljubo Jurčić at the Round Table of the Economy Department of Matica Hrvatska, held recently. “This would not benefit Croatian exports since we lack good export products. A fixed exchange rate must not be our goal, which it has been for the past 16 years. The exchange rate policy is only one method for regulating national economic policy”, opines Jurčić. In his view, economic strategy should be a set of co-ordinated measures (regional, industrial, fiscal and others) with the joint goal of increasing growth and employment; the exchange rate policy can only be one element. However, if present trends continue, it will be harder to maintain kuna/
5.72
tional unions across the negotiating table, similar to those within the German car industry. They consent to lower wages, enabling thus the actual post-recession industrial take-off. Devaluation would be a “medicine worse than the illness” according to sociologist Darko Polšek. Pointing to the devastating social consequences of high inflation, unlike many economists, Polšek believes that a stable exchange rate should be non-negotiable. The practice has shown that inflation is almost impossible to keep under control. It rapidly turns into hyperinflation, where everything suddenly devalues, and those on small incomes lose out in all ways. The chaos which consumes societies with hyperinflation, often ends with a military coup or a dictatorship, concludes Polšek. (I.V.)
5.56 29.11. 30.11. 1.12. 2.12. 3.12.
::: news Allianz Portfolio without purchase fee The fee for investing into Allianz Portfolio balanced fund, which amounted to a maximum of 3% depending on the level of investment, will be cancelled until the end of March for all investors wishing to purchase fund shares. Allianz Portfolio invests primarily in bonds and stocks. The lowest allowable payment into Allianz Portfolio is €342.50, and if the investor has already deposited this amount and does not withdraw it, the minimum amount of additional payment will be €137. Total assets managed by Allianz Inves, stood at €25.33 million on 26 November. Croatia transfers HT shares Based on the revision of proprietary accounts within the Central Clearing Depositary Company, Croatian Telekom, the leading provider of telecommunication services in Croatia, published that Croatia transferred 2,859,148 of Croatian Telekom shares, some 3.5% of the equity capital of the company, to the proprietary account of the Pension fund. Reduced value of property investment The value of gross investment into long-term assets of companies in 2009 was nominally 19.4% lower than in 2008. According to data provided by the Central Bureau of Statistics, the share of construction work equates to 52.5%, equipment 35.6% and 8.9% relates to all other categories. Gross investment in new long-term assets is nominally lower by 16.4% over 2008. Based on purpose, construction (18.7%), processing industry (11.8%) and real-estate (9.5%) have the highest share of gross investment.
8 ::: news One-stop-shop for investors The company Sense Consulting and Energy Institute Hrvoje Požar signed an agreement recently covering business co-operation projects concerning energy planning and efficiency, use of renewable energy resources and environmental protection. The co-operation will enable investors a one-shop-stop service, since they will be provided with all the necessary services in one place required for the implementation of all phases regarding projects of renewable resources and energy efficiency. Sense Consulting will manage the entire project, whilst the Institute will be in charge of suggesting technical solutions and drawing up all necessary documentation. ENT modernising Montenegrin Telekom Ericsson Nikola Tesla and Montenegrin Telekom signed new contracts worth almost €0.95 million. These concern the expansion and modernisation of 2G and 3G mobile networks for T-Mobile Montenegro. The contracts also relate to capacity expansion of landlines and the modernisation of control systems of T-Com Montenegro. Furthermore, new functions of the payment system in real time will also be enabled. Under these contracts, Ericsson Nikola Tesla will also provide training services for employees of Montenegrin Telecom. Croatia transfers HT shares Based on the revision of proprietary accounts within the Central Clearing Depositary Company, Croatian Telekom, the leading provider of telecommunication services in Croatia, published that Croatia transferred 2,859,148 of Croatian Telekom shares, 3.5% of the equity capital, to the proprietary account of the Pension Fund, thereby making it no longer present in the ownership structure of Croatian Telekom.
Privredni vjesnik Year IV No 0133
FIRST WEB SHOP OFFERING SOLELY CROATIAN PRODUCTS
ONE CLICK AWAY FROM ALL CROATIAN PRODUCTS Croatian emigrants are nostalgic about their homeland
Krešimir Sočković t the beginning of September, OZ, a Zagreb based company, launched the first web shop selling solely Croatian products. OZ started the project in May 2010, aiming to offer all Croatian products in one place. Morana Barbara Lučić, representative of the company, says the project aims to promote recognised traditional Croatian products, assist producers to enter new markets and provide opportunities to all enterprises to increase their sales via the internet. “The web page represents a new distribution channel reaching new markets and buyers. The project includes the application of tools and technology which are internationally used daily. On-line shopping is no longer something strange and distant. In fact statistics show that ordering and paying from home, plus delivery to the home address are increasingly practised by buyers’’, points out Morana Barbara Lučić.
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Assisting small scale producers Furthermore, this project will assist small scale producers, lacking the necessary resources to promote their products, as well as those who have encountered problems involving distribution and an overly limited market. The company believes that the majority of the users will be Croatian emigrants. “In foreign countries, there is a substantial demand for Croatian products. Croatian emigrants are nostalgic about their homeland. Foreign countries with high purchasing power have different buying trends where buyers opt for products of good quality and of reliable origin. Their purchasing be-
haviour is not exclusively pricebased. It is estimated that the number of Croats living outside Croatia almost equals the number living within Croatian borders”, advises Morana Barbara Lučić.
OZ have overcome the greatest single problem – that of logistics – delivering products from throughout the country in one package
Products offered on the web page can be found both via browser and via the categories according to which they are classified. One of the categories relates to the holders of the labels Croatian Creation, Croatian Quality and Croatian Island Product. In addition, buyers can order Croatian souvenirs, organic products, food products, cosmetics and toys, as well as industrial IT and construction products, furniture and safety equipment, with a delivery
period of 30 days. Delivery does depend on import regulations of individual countries, as some countries do not allow the import of certain products, such as alcoholic drinks, via mail. Free delivery coming Currently, payment options include credit card payment and Payway, although from the New Year onwards, the company expects to introduce Paypal. “The most difficult issue we had to deal with was that of logistics relating to the delivery of products from all five Croatian regions in one package. However, we have managed to solve this problem and each order will be sent to purchasers globally within the announced deadline. Eventually we aim to provide free delivery but our current priority concerns providing faster delivery upon inquiry”, notes Mo-
rana Barbara L u č i ć . This project is supported by the Ministry of Economy, Labour and Entrepreneurship, the Croatian Chamber of Economy and the Croatian Chamber of Trades and Crafts, as well as a large number of Croatian producers already involved in the project. Other Croatian producers are also welcome to join the project. More information about joining and methods of promoting products are available on the web page.