Daily shortage of medicine In addition to shortages chemists are concerned by low compensation and of new legislation
Stabilisation rather than anti-recession measures undertaken Economy needs much more time to overcome the crisis
Mirko Tunjić, Director, Split EHN, member of Spanish Acciona Energia Energy independence and export a possibility
CHEMISTS
DOING BUSINESS IN CROATIA 2009
INTERVIEW
PAGE 2-3
PAGE 4-5
PAGE 8 2010
Croatian Business & Finance Weekly Established in 1953 Monday / 17th January / 2011 Year IV / No 0136 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
TRADE TRENDS IN 2010
Exports grow but imports trend upwards Import/export ratio for the first 11 months of 2010 at a relatively low average year-on-year level of 58.8% Igor Vukić he second half of 2010 saw continued growth in exports, yet with signs of resumed upward trend in imports. According to the Croatian Bureau of Statistics data, for the first 11 months of 2010 total Croatian exports amounted to €8.09 billion, some 16.6% more than in the same period in 2009. Total imports amounted to
T
Imports recorded a year-on-year decrease in numerous economic segments, with the most prominent being industrial machinery for general use €13.74 billion, 2.6% less than in 2009. Thus, the export/import ratio remained at a comparatively low year-on-year average level of 58.8%. The highest export/import ratio was seen in May 2010, standing at 65.6% but decreased to an average 53.3% in July and August. According to the Croatian National Bank analysis,
the trend of reducing imports, first recorded back in 2008, slowly petered out. Stagnating exports were recorded between July and September 2010, nevertheless exports (irrespective of shipping and oil) were noticeably higher than at the same time in 2009. Several sectors recover The most significant recovery in exports was in medical and pharmaceutical products, artificial fertilizers, electrical machinery, appliances and equipment. There were scarcely any economic segments posting negative movements and the intensity of their year-on-year decrease was imperceptible. The most significant decrease was recorded in various final products and electricity export. After slight growth in the second quarter, positive trends in imports (irrespective of shipping and oil) were noted, gaining strength between July and September. Quarterly growth levels came in at 3.1%. The import upswing was most prominent with engines, equipment and some chemical products, particularly organic chemical products and artificial
Import/export data for 11 months of 2010. (in kuna millions) EXPORTS Shipping Refining Electrical goods Chemical products Clothing Pharmaceutical products Wood processing Total
8091 6111 4475 4304 2373 2135 2044 57.713
Index 2010./2009.
168,7 138,1 99,9 141,6 97,9 134,4 110,6 119,1
IMPORTS 2301 4481 4633 9229 2890 3976 1186 81.717
Index 2010./2009.
80,1 138,2 99 119,2 92,1 102 34,8 95,9
Source: CSO
fertilizers. However, imports recorded a year-on-year decrease in numerous economic segments, with the most prominent being industrial machinery for general use and in specific machinery for particular industrial branches. An import reduction was also apparent in energy products, natural and industrial gas and electrical power. The moving trend of both exports and imports remained remarkably stable throughout 2010, as was pointed out by the Croatian
Chamber of Economy analysts in the January edition of Economic movements. A slight dynamic in export growth can still be recorded, with a corresponding dynamic of import slowdown. Thus, due to exports growing by 16.6% and imports decreasing by 2.6% the trade deficit decreased by 21.2% with respect to the same period of 2009.
2
Privredni P Pr ivredni vjesn vjesnik Year IV No 013 0136
ENTONI SOŠIĆ, KOZMO BOARD PRESIDENT
Drug store market expansion The Kozmo example, with its growth rate of 30% and opening twice as many sales outlets as its competitors last year, clearly illustrates the real possibility of market expansion despite the economic crisis
roatia, with its 200 drug stores is apparently lagging behind the Western countries if compared with its neighbouring countries of the European Union, for example Austria with more than 1,000 drug stores. However, considering the fact that drug stores in Croatia have been present for less than ten years and that their market share of about 40% of cosmetics and similar products has seen continuous growth, it is obvious that Croatian buyers are becoming increasingly aware of drug store shopping advantages over shopping in large chain stores and hypermarkets. Buyers can satisfy their needs for household articles, ranging from food, household paraphernalia, clothing to footwear in chain stores in one place and with greater ease. On the other hand, shopping in drug stores provides
C
IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription
the buyer with a different experience. The range of products typical of drug stores is both broader and more specialised at the same time, thus enabling buyers to identify their favourite products more easily. There are differences between chain store and drug store shopping and both have their adherents in Croatia, notwithstanding the fact that some of their range is similar or identical. Consequently, there definitely is room for further drug store market expansion, and when considering the example of Kozmo with its growth rate of 30% and opening twice as many sales outlets as its competitors in 2010, the conclusion is that market expansion is a real possibility despite the economic crisis can easily be reached. “We believe that the key to our success is market expansion as well as buyer availability and accessibility throughout Croatia. Our branch offices are located both in bigger towns and regional centres and in smaller towns throughout Croatia, as well as on the islands. Buyers opt for drug stores rather than chain stores as they are fully aware of their needs and mainly look for a specific product or a group of products. Therefore, sales assistants must be professional, trained and well-informed about products in order to provide specific information, often even advice to buyers and provide them with the highest possible value for money.
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
TRANSLATION Lučana Banek lucanab@gmail.com Mirjana Cibulka mirjana.cibulka@gmail.com
EXECUTIVE EDITORS Andrea Marić maric@privredni.hr Vesna Antonić antonic@privredni.hr
INTERNATIONAL OPERATIONS Ray Fletcher fletcher@privredni.hr
Chemists mists
Daily shortage of a In addition to a shortage of medicines they are also worried by Jasminka Filipas ccording to the president of the Croatian Chamber of Chemists, Mate Portolan, during 2009 the chemist market shrank 4%. On the other hand, reviewing the first nine months of 2010, there are no signs of either a decrease or increase. The biggest fall was observed in the area of nonprescription medicine, which is logical due to the crisis and the fall in public purchasing power. Since the beginning of 2009, the Croatian Institute for Health Insurance (HZZO) has paid chemists within a deadline of 180 or 190 days. Furthermore, after a long year of crisis and problems, in 2009 and 2010 HZZO planned in the clause regarding medicine with prescription financing in the budget, totalling €0.41 billion in 2009 and €0.43 in 2010, which will provide more stable payment. The planned finance also corresponds to the real consumption of onprescription medicine. For 2010, it was requested in the contract that the payment deadline be 180 rather than 120 days. “We accepted this, since we feel more secure and regular payments are better than faster but irregular ones, with outstanding debts of over 250 days. At the same time, payment for chemists’ services was separated from the purchase value. The service aspect
A
is paid within 120 days,” points out Portolan. He ventured that a big problem for chemists is the low level of compensation for dispensing onprescription medicines. Its average value amounts to 9%. Chemists are paid a fixed compensation for each prescription, which is roughly €1.00 on average. This compensation is amongst the lowest in Europe, urope, where margins range between 25% and 30%. At
www.privredni.hr Business & Finance Weekly
3
( 65% of income
earned by chemists from prescriptions and medicine sales
( 85-90%
income range in European countries
at least a dozen types of medicine low-level compensation on prescription medicines, underhand competition and uncertainty in terms of new legislation the same time, wholesale margins of large chemists is 8.5%. HZZO’s share of the income of chemists is only 25% nett profit on average. Income from sales by hand is 35%-40%, and exceptional income is 35% (cassa sconti, producers’ and suppliers’ discounts and allowances). In other words, from its main activigiving out prescription ty of giv p medicine and selling medicine, chemachieve i t achie ists chieeve 65% off income. This
amount ranges between 85% and 90% in European countries (exceptional income comprises only 10%-15% of chemist income). Shortage of medicines Chemists face many problems, and one of them is daily shortage of at least a dozen types of medicine, through no fault of theirs, since they depend on producers and suppliers. “We are the last in the chain, and when there is a shortage of medicine, we waste time calling everyone asking to provide us with medicine for urgent cases,” said one dispensing
chemist who wished to be anonymous. The shortage might be caused due to the lack of ingredients for a certain medicine, or because more medicine is produced on the same production line, which producers are not inclined to admit, or when medicine gets stuck in the Agency for medicine and medical pproducts. Accordoducts. Accor ing to medical legislation, each eac series of produced and imported importe ready-made medicine is subject subjec
to regular inspection, as well as each series whether it is an ingredient in the producer’s original packaging or wholesalers packaging it personally. This means that inspection must be passed by wholesalers, who distribute imported ready-made medicine, and by importers of ready-made medicine. They are obliged to subject to inspection each series of imported ready-made medicines although there is an exception. If a series had already been inspected in the EU, the Agency must receive a certificate covering the performed quality check
of the producer for each series of the imported ready-made medicine as evidence. Underhand competition Special inspection applies to the first series of each ready-made medicine after obtaining approval for distribution, in addition to each series or ready-made medicine from blood or plasma and immunological medicine as well as other medicines approved by the Minister on the Agency proposal. The Agency is obliged to perform an inspection within 30 days from the receiving the sample. In practice, this means for local producers that inspection is performed for each first series after regis- tration or renewal. It is thereby evident that delivery could get stuck for objective reasons at many levels, but this is not comforting for patients in need of medicine. Most are quite frustrated, since they are forced to pay mandatory and supplementary health insurance and in the end they do get their medicine. Another big problem is the underhand competition of special stores for orthopaedic aids. Portolan says that HZZO performs strict inspections of orthopaedic aids at chemists, but the same is not performed in special stores. He ventures there is constant pressure on the Chamber due to the chemist network; more precisely, the criteria that chemists need to meet in order to ensure equal distribution and availability cancel each other out. “The number of chemists needs to be balanced with fi-
nancial and staffing possibilities. However, an insufficient number of dispensing chemists is another problem. This is only one aspect of the problem, whilst problems relating to the profession are an entirely different story. I will only mention the policy of producers, according to which more medicine is registered as non-prescription medicine. They can be dis-
Chemists are paid a fixed compensation for each prescription, which is roughly €1.00 on average pensed outside of chemists’, jeopardising patient safety. We are supporting the implementation of a greater number of OTC medicines to be dispensed only by dispensing chemists. Our business is jeopardised by low compensation and the sale of medicine and other producers external to chemists,” noted Portolan. He ventures to explain details in his correspondence with the Ministry of Health, in terms of the new medicine law. In May 2009, the Chamber submitted to the Ministry its bill and in April the guidelines on its drafting. The goal of the new law is to organise chemists on ethical principles and safety as well as to turn the industry into a health activity, ensure quality and expert work as well as the training of dispensing chemists. The Chamber bill is based on European legislation, applied in most developed countries. They are not satisfied with the Ministry reply and negotiations are still in progress.
4
Privredni vjesnik Year IV No 0136
DOING BUSINESS IN CROATIA 2009
Stabilisation rather tha measures undertaken
Croatian economy will need much more time under current circumstances to overcome the crisis and achieve sustain M. Sc Economist Jasna Belošević Matić, Director Centre for Macroeconomic Analysis, Croatian Chamber of Economy he intensity of the global economic crisis in 2009 can be most clearly illustrated by the fact of global economic activity downturn for the first time in fifty years. 2008 saw a considerable slowdown in economic activity in Croatia and 2009 there was the first fall in GDP (-5.8%) for nine years. Any economic activity slowdown is on the one hand a reflection of imbalances in the world market and, on the other, of longstanding structural problems within the Croatian economy. Under significantly altered and intensified conditions on both the domestic and international markets, coupled with the lack of personal capital and general financial indiscipline, illiquidity in the real sector grew and by the end of the year it reached its peak over the last nine years. Entrepreneurs’ financial results were also considerably reduced with respect to the previous year, so in that context losses increased by one-third and achieved profits the lowest in the last eight years. We in Croatia have not reacted either adequately or in a timely manner, except for monetary policy, to the deepening of recessionary movements. In the deep recession in 2009 fiscal adjustment was insufficient. The measures undertaken within that context were more stabilisation measures than anti-recession measures. Considering the fact that economic policy did not react adequately or on time to the appearance of the global economic crisis and that we did not succeed in solving structural economic
T
problems, the question as to how to deal with the serious problem of a high level of foreign debt remains for the future and in the cutthroat conditions of capital markets. The crisis in Croatia can easily change in shape from the assumed ‘V’ to ‘U’ or possibly ‘W’. Therefore, the Croatian economy will, in such circumstances, need much more time to overcome the crisis and to achieve sustainable development than will be necessary for economies with a macroeconomic policy moving in the direction of production, exports and increasing employment. Enterpreneurs financial results Increasingly unfavourable conditions on both domestic and foreign market throughout 2009 have made a visible impact on
the financial results of Croatian entrepreneurs. Their financial results were considerably inferior if compared with the previous year. There was an increase in the actual number of entrepreneurs (+1.9 %) and a decrease in numbers employed (-1.0%). Reductions in total revenue (-10.6%), expenditure (-8.9%), profit (-20.6%), long term asset investment (-13.3%) were seen together with an increase in losses (+29.8%). These figures relate to 91,320 entrepreneurs employing 889,396 staff whose average salary amounted to €634.80, some 1.8% lower than the yearon-year average. Total revenue, amounting to €84.02 billion, shows a steeper decrease trend with respect to expenditure - some 1.6 % higher than total expenditure (in 2008 the difference was 3.5%). Total
The crisis in Croatia can easily change in shape from the assumed ‘V’ to ‘U’ or possibly ‘W’ expenditure amounted to €82.73 billion. Only four of 20 fields of activity recorded any growth in total revenue with respect to 2008 (health care and social welfare 11.9%, public administration, defence, compulsory social insurance 10.8%, electricity, gas, steam and air-conditioning supply 7.3% and real estate business 0.6%). A faster drop in total revenue with respect to total expenses reduced profits ( the lowest for the last 8 years) which amounted to €3.62 billion, while losses amounted to €3.01 billion (an increase of 29.8%). The re-
www.privredni.hr Business & Finance Weekly
5
an anti-recession
nable development Food
12.000
Textiles
kn million
10.000 8.000
Wood
6.000
Chemicals
4.000
Finished metal goods
2.000
Transport equip.
0 2008.
2009.
2008.
EXPORT
2009.
IMPORT
Source: DZS, HGK
INDUSTRIAL PRODUCTION BY SELECTED INDUSTRIES - index 2005 =100 140,0
Food
130,0
Textiles
120,0 110,0
Wood
100,0
Chemicals
90,0 80,0
Finished metal goods
70,0
Transport equip.
60,0 2006.
2007.
2008.
2009.
Source: Eurostat, DZS, HGK
CONSOLIDATED ENTREPRENEURIAL FINANCIAL RESULTS 30.000 25.000 20.000 15.000 10.000 5.000 0 -5.000 -10.000
24 .679 19 .885 17 .472 16 .314
10 .765 3.219 7.658
-1.477
- 5.135- 5.261
-5.440
9.762
4.397
-838 -6.721
Source FINA, HGK
OUTSTANDING PAYMENTS 2003 - 2009 30.000
25
25.000
20
20.000
15
15.000 10
10.000
5
5.000 0
0 XII 2003 .X II 2004 .X II 2005 .X II 2006 .X II 2007 .X II 2008 .X II 2009 .
No. illiquid co’s (l) ISource FINA, HGK
Outstanding payments (r)
kn bn
Liquidity and solvency Unfavourable liquidity movement trends in the real sector of the Croatian economy were prolonged from 2008 to 2009 and the highest level of total unsettled liabilities for 10 years was reached, standing at €3.71 billion. The principal reason for this growing illiquidity is to be found primarily in the structural economic problems and the fact that the legal framework is far from adequate (for instance, bankruptcy proceedings are not initiated in due time and last for too long). Illiquidity causes are certainly to be looked for in general financial indiscipline, liquid fund manipulation and other unwholesome activities.
EXPORTS/IMPORTS BY SELECTED INDUSTRIES
kn million
sult of this dynamic of movements to profit and loss was a significant fall in consolidated financial result (-73.0%) with respect to the previous year, and amounted to HRK 4.4 billion. Profit growth was recorded in five fields of activity, yet their share in the profit structure was a meagre 5.6%. Concurrently, profit falls were recorded in five of the most significant fields of activity with respect to 2008, and their share in the structure amounted to about 79% - meat processing industry -12.3% having the highest share in the structure of 23.1%; trade -19.7% (share of 21.5 %) ICT with -29.7% (share of 13.3 %), professional, scientific and technical activities with -12.0% (share of 11.8%) and the construction industry with -17.4% (share of 9.1%).
Loss intensification was identified in 15 fields of activity consisting of manufacturing industry (growth of 23.3% and share of 30.1%), trade (growth of 86.1% and share of 19.3%) and the construction industry (growth of 44.8% and share of 9.5%) whilst other fields of activity had, on average, shares below 8.0%. A positive consolidated financial result (higher profits than losses) was achieved by 14 fields of activity having a value of €0.96 billion, with the highest share (77.6%) in three fields of activity: ICT (32.7%), professional, scientific and technical activities (24.2%) and trade (20.7%). Concurrently, higher losses than profits were recorded in six fields of activity with the value of about €0.36 billion, the highest share (84.8%) related to three fields of activity (hotels and restaurants at 45.6%; real estate business at 30.8% and manufacturing industry at 23.6%). Total asset value by the end of the year amounted to €149.17 billion (growth of 5.9%) and in its structure long term assets had the highest share (62.6%).
6
Privredni vjesnik Year IV No 0136
TOP 50
RANKING
NAME
2007.
2008.
2009.
RANK NO. EMPLOYED
TURNOVER
EXPORT INCOME
RANK
PROFIT AFTER TAX
RANK
ASSET VALUE
RANK
1
1
1
INA, D.D.
10.061
19.735.301.802
5.831.970.767
1
0
307
28.064.289.614
2
2
2
2
KONZUM, D.D.
12.053
12.662.943.455
142.988.011
94
341.666.818
7
7.877.591.773
11
3
3
3
HEP D.D.
433
12.195.368.169
51.923.167
142
299.556.628
8
27.122.231.483
3
4
4
4
HT D.D.
4.894
5.450.332.040
360.107.282
31
896.079.447
2
11.018.449.905
6
5
6
7
ZAGREBAČKI HOLDING D.O.O.
12.108
4.529.798.649
6.377.080
210
22.574.890
101
21.987.285.886
4
6
5
6
T-MOBILE HRVATSKA D.O.O.
1.068
4.447.101.299
351.442.179
32
1.163.275.197
1
5.141.581.848
13
7
9
9
HEP-PROIZVODNJA D.O.O.
2.336
3.924.693.471
0
288
26.387.205
88
9.627.233.942
10
8
10
11
HEP-OPERATOR DISTRIBUCIJSKOG SUSTAVA D.O.O.
9.553
3.653.149.367
0
289
0
377
14.886.872.542
5 25
9
8
8
VIPNET D.O.O.
1.031
3.611.547.857
437.575.870
28
612.089.376
3
2.900.811.435
10
7
10
OMV HRVATSKA D.O.O.
69
3.119.968.312
264.625.386
52
15.148.795
134
1.157.171.565
78
11
13
15
PLIVA HRVATSKA D.O.O.
2.395
2.882.538.266
2.021.901.704
3
51.927.469
48
4.243.947.443
16
12
14
14
VINDIJA D.D. VARAŽDIN
1.078
2.837.082.512
141.898.641
97
50.919.833
51
1.970.371.069
38
13
20
16
TISAK D.D.
3.877
2.812.212.207
711.510
258
13.587.767
143
959.266.191
100
14
27
43
ULJANIK BRODOGRADILIŠTE D. D.
2.079
2.479.197.474
2.126.200.061
2
17.621.530
120
1.994.834.678
36
15
25
41
PLODINE D.D.
2.546
2.466.458.790
0
290
32.182.556
73
2.268.761.347
33
16
24
31
DALEKOVOD, D.D.
1.494
2.414.215.686
614.549.022
16
89.247.794
25
2.165.641.161
35
17
17
17
METRO CASH & CARRY, D.O.O.
1.269
2.385.001.668
21.068.500
178
91.769.845
23
975.939.384
98
18
16
23
MERCATOR - H D.O.O.
3.023
2.278.568.419
2.125.612
236
0
362
3.431.754.543
21
19
22
19
H Š D.O.O.
9.172
2.219.311.866
99.593.264
110
11.094.511
158
2.317.699.082
32
20
11
21
AGROKOR - TRGOVINA D.D.
75
2.140.323.158
184.502.957
73
13.327.946
147
1.258.272.436
71
21
19
13
PODRAVKA D.D.
3.840
2.087.095.787
695.105.763
14
0
312
3.120.506.136
23
22
36
29
KAUFLAND HRVATSKA K.D.
1.967
2.045.324.803
0
291
0
378
1.759.595.027
47
23
34
27
MEDIKA, D.D.
371
1.996.206.981
1.616.678
242
15.486.468
132
1.598.866.030
53
PRIRODNI PLIN D.O.O.
29
1.993.982.828
3.484.792
229
0
360
645.889.905
130
25
31
39
PHOENIX FARMACIJA D.D.
301
1.969.799.002
200.590
275
0
373
1.188.999.005
74
26
12
22
PETROKEMIJA, D.D.
2.371
1.962.520.869
872.129.477
9
0
309
1.521.091.266
57
27
26
20
BRODOSPLIT-BRODOGRADILIŠTE D.O.O.
2.866
1.846.187.501
1.222.146.308
6
0
308
1.483.236.025
58
28
30
25
TDR D. O. O.
543
1.813.451.019
441.895.283
27
471.642.096
6
2.816.102.564
27 165
24
29
38
42
ORBICO D.O.O.
439
1.798.065.657
11.347.274
196
18.368.802
119
479.471.584
30
37
35
DUKAT D.D.
1.430
1.781.177.095
203.308.821
66
139.156.269
13
1.387.045.972
65
31
15
55
ENI CROATIA B.V. - HRVATSKA PODRUŽNICA
4
1.739.085.455
1.519.422.208
4
587.266.156
4
4.071.673.523
17
32
51
38
HP D.D.
11.393
1.693.404.873
34.744.787
154
53.285.241
47
1.361.311.781
66
33
28
32
M SAN GRUPA D.D.
120
1.658.123.773
472.315.451
24
19.760.455
115
843.082.430
107
34
67
107
LIDL HRVATSKA D.O.O. K.D.
1.146
1.649.111.379
0
292
0
379
2.386.015.054
31
35
46
50
MEDICAL INTERTRADE D.O.O.
429
1.627.563.317
5.686.659
217
31.816.633
74
1.059.430.010
87
36
18
12
P.Z. AUTO D.O.O.
135
1.600.424.159
0
293
14.732.332
136
433.435.170
178
37
43
37
BILLA, D.O.O.
1.812
1.588.887.939
0
294
0
380
575.842.760
141
38
56
72
DM-DROGERIE MARKT D.O.O.
982
1.569.414.408
20.674.651
180
109.100.086
19
416.987.522
186
39
52
70
PIK VRBOVEC-MESNA INDUSTRIJA D.D.
1.604
1.532.486.717
99.162.155
111
89.237.235
26
925.966.287
103
40
32
30
ERICSSON NIKOLA TESLA D.D.
1.661
1.479.228.989
918.317.579
8
128.447.089
14
1.552.442.614
55
41
50
47
HRT
3.630
1.463.763.764
17.367.244
189
0
352
1.135.517.726
79
42
42
36
HŽ INFRASTRUKTURA D.O.O.
7.187
1.446.606.184
0
295
469.031
281
10.530.603.273
8
43
40
46
CROATIA AIRLINES D.D.
1.132
1.439.481.934
821.145.442
11
0
310
1.704.707.925
49
44
39
48
EURO-PETROL D.O.O.
405
1.419.950.331
227.817
273
0
372
627.697.674
134 41
45
44
45
CROSCO D.O.O.
2.171
1.415.022.441
699.032.743
13
80.708.031
31
1.880.077.973
46
54
64
KERUM D.O.O.
1.104
1.371.996.177
0
296
12.678.664
150
1.398.744.381
63
47
35
28
GET NEKRETNINE D.D.
1.310
1.352.487.401
883.467
255
0
366
782.648.324
112
48
58
57
HRVATSKE AUTOCESTE D.O.O.
2.860
1.349.521.535
0
297
0
381
44.996.745.654
1
49
85
92
KONČAR-ENERGETSKI TRANSFORMATORI D.O.O.
471
1.329.108.649
1.294.810.646
5
193.622.994
10
1.059.681.194
86
50
59
65
ŽITO D.O.O.
437
1.312.250.091
186.491.800
71
0
326
1.355.251.853
67
www.privredni.hr Business & Finance Weekly
7x10
7
Corporate rankings for 2009
TURNOVER
(000 kn)
PROFIT
(000 kn)
1 INA, D.D.
19.735.301
1 T-MOBILE HRVATSKA D.O.O.
2 KONZUM, D.D.
12.662.943
2 HT D.D.
896.079
3 HEP D.D.
12.195.368
3 VIPNET D.O.O.
612.089
4 HT D.D.
5.450.332
4 ENI CROATIA B.V. - HRVATSKA PODRUŽNICA
587.266
5 ZAGREBAČKI HOLDING D.O.O.
4.529.798
5 ADRIS GRUPA D. D.
506.324
6 T-MOBILE HRVATSKA D.O.O.
4.447.101
6 TDR D. O. O.
471.642
7 HEP-PROIZVODNJA D.O.O.
3.924.693
7 KONZUM, D.D.
341.666
8 HEP-OPERATOR DISTRIBUCIJSKOG SUSTAVA D.O.O.
3.653.149
8 HEP D.D.
299.556
9 VIPNET D.O.O.
3.611.547
196.406
10 OMV HRVATSKA D.O.O.
3.119.968
9 ZAGREBAČKA PIVOVARA D.D. 10 KONČAR-ENERGETSKI TRANSFORMATORI D.O.O.
ASSETS
(000 kn)
CAPITAL & RESERVES
1.163.275
193.622 (000 kn)
1 HRVATSKE AUTOCESTE D.O.O.
44.996.745
1 HRVATSKE AUTOCESTE D.O.O.
23.858.115
2 INA, D.D.
28.064.289
2 HEP D.D.
18.880.005
3 HEP D.D.
27.122.231
3 INA, D.D.
10.751.459
4 ZAGREBAČKI HOLDING D.O.O.
21.987.285
4 HT D.D.
9.498.199
5 HEP-OPERATOR DISTRIBUCIJSKOG SUSTAVA D.O.O.
14.886.872
5 ZAGREBAČKI HOLDING D.O.O.
6.933.354
6 HT D.D.
11.018.449
6 HŽ INFRASTRUKTURA D.O.O.
5.496.875
7 AGROKOR D.D.
10.788.334
7 ADRIS GRUPA D. D.
5.011.538
8 HŽ INFRASTRUKTURA D.O.O.
10.530.603
8 T-MOBILE HRVATSKA D.O.O.
4.100.338
9 AUTOCESTA RIJEKA-ZAGREB, D.D.
10.467.028
9 ENI CROATIA B.V. - HRVATSKA PODRUŽNICA
3.897.421
10 PLIVA HRVATSKA D.O.O.
3.650.653
10 HEP-PROIZVODNJA D.O.O.
9.627.233
EXPORTS
(000 kn)
IMPORTS
(000 kn)
1 INA, D.D.
5.831.970
1 HEP D.D.
3.153.855
2 ULJANIK BRODOGRADILIŠTE D. D.
2.126.200
2 INA, D.D.
3.124.073
3 PLIVA HRVATSKA D.O.O.
2.021.901
3 BAUMAX ZAGREB D.O.O.
2.128.629
4 ENI CROATIA B.V. - HRVATSKA PODRUŽNICA
1.519.422
4 KONZUM, D.D.
1.498.859
5 KONČAR-ENERGETSKI TRANSFORMATORI D.O.O.
1.294.810
5 ULJANIK BRODOGRADILIŠTE D. D.
1.287.450
6 BRODOSPLIT-BRODOGRADILIŠTE D.O.O.
1.222.146
6 M SAN GRUPA D.D.
1.138.336
7 BOXMARK LEATHER D.O.O.
1.144.862
7 P.Z. AUTO D.O.O.
1.123.026
8 ERICSSON NIKOLA TESLA D.D.
918.317
8 PLIVA HRVATSKA D.O.O.
945.343
9 PETROKEMIJA, D.D.
872.129
9 MEDICAL INTERTRADE D.O.O.
918.356
10 TANKERSKA PLOVIDBA D.D.
841.140
10 PHOENIX FARMACIJA D.D.
910.163
No. EMPLOYEES 1 ZAGREBAČKI HOLDING D.O.O.
12.108
2 KONZUM, D.D.
12.053
3 HP D.D.
11.393
4 INA, D.D.
10.061
5 HEP-OPERATOR DISTRIBUCIJSKOG SUSTAVA D.O.O.
9.553
6 H Š D.O.O.
9.172
7 HŽ INFRASTRUKTURA D.O.O.
7.187
8 HT D.D.
4.894
9 FINA
4.372
10 TISAK D.D.
3.877
Source: Fina, HGK
8
Privredni vjesnik Year IV No 0136
Brief Croatian company analysis
Cautious approach in eval economic growth The success of economic policies is measured by the degree in which companies, as the most important segment of
Dr. Žarko Primorac he announcement indicating that Croatian GDP increased by a minimal 0.2% during the third quarter of 2010, caused slight euphoria within government circles. Notwithstanding, economists are cautious in their evaluations of the long-term effects of modest economic growth. Most agree that final estimates should be put on hold, especially since movements in industrial production, investment, public consumption and employment still have not changed course.
T
Only 436 large companies In an attempt to briefly summarise expectations for 2011, this article focuses on a brief analysis of companies. This is extremely important since this sector is the only one with the power to change negative trends in the grim Croatian economic reality. Furthermore, I would like
to point out that deeper analyses of companies are quite rare in Croatian expert publications. Most publications and economic analysts are directed toward macroeconomic movements, whilst relatively little attention is paid to the economic processes within companies. There is no doubt that macroeconomic policies define the framework within which companies operate and they have great influence on their business and behaviour. However, there is something autonomous going on inside companies. Their strategies, politics of development, growth, restructuring, organisation and management are crucial to the success of the entire economy. The success of economic policies is measured by the degree to which companies, as the most important segment of the real sector, accept them, adjust their strategies accordingly and implement them in their plans and activities.
The Croatian sector of companies (excluding banks) includes around 90,000 companies, which employ roughly 900,000 workers or 60% of total employees. The entrepreneurial structure mostly consists of SME’s (some 99.5%), whilst only 436 are large companies. Total income of all Croatian companies amounted €83.97 billion in 2009, of which 33% covers the group of the biggest 100. Only 63 companies achieved total income of over €0.14 billion, and only four of those exceed total income of €1 billion. Overall, it is safe to say the Croatian entrepreneurial structure consists of a large number of SME’s and an extremely small number of large companies. Moreover, economic power is relatively modest in comparison with competitive countries. The important feature of Croatian companies is their relatively low capital base. Capital and reserves of the entire sector comprise 40%, and liabilities 56% of total balance, which points to modest
financial strength. Furthermore, the capital base is mainly represented by infrastructure in public companies, whose market value is questionable, and the coefficient of efficiency is relatively low. The weakening of the capital strength of Croatian companies is also contributed by a low level of accumulation. Nett profit of all companies amounted to €0.60 billion or 0.7% of total income in 2009, whilst losses in that same year were four times greater than nett profits. Unfortunately, movements during the first nine months of 2010 are even more negative. There is no need to point out that an improving condition of companies is an important precondition for the development of economic affairs in their entirety. Primarily, liquidity, which is very poor, should be improved. The number of illiquid and insolvent companies is rapidly increasing, jeopardising the functioning of the entire economic system. In September 2010, the amount of
www.privredni.hr Business & Finance Weekly
9
luating effects of modest the real sector, accept them, adjust their strategies accordingly and implement them in their plans and activities Croatian companies is more pessimistic in terms of overcoming the crisis. They fear that sales would continue to fall. They feel the same in terms of financing and they are insufficiently focused on restructuring. They failed to show enough know-how and confidence to overcome the crisis by restructuring and searching for new business opportunities. Similarly with investment into new products and new technologies. The investment volume in Croatia, even though smaller than in other surrounding coun-
Total income of all Croatian companies amounted €83.97 billion in 2009, of which 33% covers the group of the biggest 100 outstanding debts stood at €4.60 billion, with 31,505 companies and over 40,000 crafts not fulfilling their obligations. If we add to this figure the number of those who fulfil their obligations on an irregular basis, then the level of this epidemic would significantly increase. The state can do many things to solve the problem of illiquidity, as also can banks, the courts and primarily companies. With a little bit of good will However, for the long-term revitalisation of circumstances, financial stabilisation and development processes require a series of long-term measures. In the present crisis, successful companies restructure faster. They focus on their core business, off-load excess property, reduce expenses and employees as well as search for new markets. This kind of revitalisation is a basic part of the strategy for fighting the recession for many global companies. Unfortunately, management of
tries, is not generally meagre. Notwithstanding, the problem is that a large proportion of social investment goes to infrastructural projects, necessary of course, but not of high priority in comparison with economic investment. The technological level of companies is low, and we are increasingly lagging behind in this respect. Since companies’ accumulation is low, they lack sufficient financial capacity for a serious technological renaissance. It would thus be necessary to create a social model through which it would be possible to implement a serious technological revitalisation. It is also worth adding that the crisis does not necessarily have to be seen as a negative process. Company management and those responsible for economic policy need to understand the importance of this period and use it. Use it not only in the fight for a positive GDP growth rate, but restructuring and the revitalisation of the economic sector.
TOP TEN CROATIAN EXPORTERS RANK NAME
6
INA, D.D. ULJANIK BRODOGRADILIŠTE D. D. PLIVA HRVATSKA D.O.O. ENI CROATIA B.V. - HRVATSKA PODRUŽNICA KONČAR-ENERGETSKI TRANSFORMATORI D.O.O. BRODOSPLIT-BRODOGRADILIŠTE D.O.O.
7
BOXMARK LEATHER D.O.O.
1 2 3 4 5
LOCATION
EXPORTS 2009
EXPORTS AS A SHARE OF INCOME (%)
ZAGREB PULA ZAGREB
5.831.970.767 2.126.200.061 2.021.901.704
29,55 85,76 70,14
ZAGREB
1.519.422.208
87,37
ZAGREBSUSEDGRAD SPLIT TRNOVEC BARTOLOVEČKI ZAGREB KUTINA ZADAR
8 ERICSSON NIKOLA TESLA D.D. 9 PETROKEMIJA, D.D. 10 TANKERSKA PLOVIDBA D.D.
1.294.810.646
97,42
1.222.146.308
66,20
1.144.862.985
94,05
918.317.579 872.129.477 841.140.710
62,08 44,44 92,33
TOP TEN CROATIAN IMPORTERS RANK
NAME
LOCATION
IMPORTS 2009
1
HEP D.D.
ZAGREB
3.153.855.841
2
INA, D.D.
ZAGREB
3.124.073.605
3
BAUMAX ZAGREB D.O.O.
ZAGREB-SUSEDGRAD
2.128.629.972
4
KONZUM, D.D.
ZAGREB
1.498.859.183
5
ULJANIK BRODOGRADILIŠTE D. D.
PULA
1.287.450.788
6
M SAN GRUPA D.D.
ZAGREB
1.138.336.858
7
P.Z. AUTO D.O.O.
VELIKA GORICA
1.123.026.218
8
PLIVA HRVATSKA D.O.O.
ZAGREB
945.343.836
9
MEDICAL INTERTRADE D.O.O.
SVETA NEDJELJA
918.356.468
10
PHOENIX FARMACIJA D.D.
ZAGREB
910.163.874
CROATIAN PROFITABILITY IN 2009. (TOP 10) RANK
RANK BY NAME TOTAL ASSETS
1
6
T-MOBILE HRVATSKA D.O.O.
ZAGREB
1.163.275.197
2
4
HT D.D.
ZAGREB
896.079.447
3
9
VIPNET D.O.O.
ZAGREB
612.089.376
4
31
ENI CROATIA B.V. - HRVATSKA PODRUŽNICA
ZAGREB
587.266.156
5
100
ADRIS GRUPA D. D.
ROVINJ
506.324.212
6
28
TDR D. O. O.
ROVINJ
471.642.096
7
2
KONZUM, D.D.
ZAGREB
341.666.818
8
3
HEP D.D.
ZAGREB
299.556.628
9
95
ZAGREBAČKA PIVOVARA D.D.
ZAGREB
196.406.243
49
KONČAR-ENERGETSKI TRANSFORMATORI D.O.O.
ZAGREBSUSEDGRAD
193.622.994
10
LOCATION
TOP 5 GROUPS Rank
NAME
PROFIT
(euro million)
TRADING INCOME
PROFIT
ASSETS
NUMBER EMPLOYED
1
AGROKOR GRUPA
3.607,40
32,30
3.336,80
32.709
2
INA GRUPA
2.775,80
53,70
4.115,30
16.304
3
HEP GRUPA
1.625,70
40,80
3.712,20
14.197
4
HT GRUPA
1.160,40
275,80
1.980,80
6.116
5
ZAGREBAČKI HOLDING
601,90
5,30
3.107,60
12.968
Source: Delloite
10
Privredni vjesnik Year IV No 0136
( 600 MW
of installed power accepted by the Croatian system
( € 900 million
level of sector investment needed
MIRKO TUNJIĆ, DIRECTOR, SPLIT EHN, MEMBER OF SPANISH GROUP ACCIONA ENERGIA
Energy independence and energy export a real possibility Currently wind farm construction in Croatia requires 60 different permits. If you receive one document monthly, you need 60 months for an Environmental Impact Assessment Jozo Vrdoljak HN is a company from Split founded 9 years ago dealing with project development in the field of renewable energy, aiming for wind farm investment as the currently most efficient energy source in the renewable energy sector. The company is a member of the Spanish group Acciona Energia, which has to date invested €10 million in development in Croatia through EHN. Privredni vjesnik spoke with Mirko Tunjić, the Director of EHN, about wind farm construction problems and the advantages of renewable energy sources.
E
Which projects are you currently working on in Croatia? We are currently working on several energy sector projects. However, due to a slow and complex bureaucracy, numerous projects have been halted and their finalisation is impossible at the moment. We have recently obtained the first construction permit for one project for 30 MW power located in Seget Marina. Work on this project should start at the beginning of 2011.
How much can Croatia achieve? Energy sector development in Croatia has so far been of a declaratory nature. We have not yet accepted the fact that energy sector development is of strategic interest for the country. If ecological standards are to be preserved and energy independence achieved, renewable energy projects should become a priority. Energy equipment manufacturing should be developed which, upon investment completion in Croatia, could be exported South-East. Why is wind farm construction not a possibility for the Croatian islands? An Ordinance on Coastal Area Protection was enacted in 2004, which prohibits the building of wind farms on islands. This decision cannot be justified either from the energy or engineering aspects as wind farms could be the most efficient way to supply electricity to the islands. I believe this ordinance will be altered once wind farm construction in inland areas has been completed and once everyone has been convinced of its advantages.
What problems are investors in inland areas faced with? It illogical that energy approval can be received if the project development on a location has been completed within 36 months, as in compliance with regulations; a project can be developed in about five to six years. The necessary conditions are the procurement of an Environmental Impact Assessment, its analysis and estimate, all requiring a certain amount of time to be completed. The fact that everything has to be submitted for public hearing and inspection makes it more aggravating. The procedure takes at least between two and three years. Currently wind farm construction in Croatia requires 60 different permits and consents. Thus, if you receive one document monthly, you need 60 months for the Environmental Impact Assessment. There are over 40 different government bodies and management groups participating in the process of location and building permit grants. How much is your group willing to invest? Our group is willing to invest in all the projects we have started and which we intend to start in Croatia. Thus, investment value depends on the number of projects we can secure and achieve. Croatia is restricted by its territorial and energy capacity, which means that our system can accept about 600MW of installed power. That would constitute about 15% of the total installed power from renewable sources. It would mean investment in this sector of over €900 million.
www.privredni.hr Business & Finance Weekly
11
KOMED
WITH LOCAL KNOW-HOW TO SAVING IN HEALTH Solutions for production expansion were offered for the entire country but those responsible are interested only in saving Jasminka Filipas he preventive bacteriological inspection of food, air, water and other beverages is crucial, since they are the source of all bacterial diseases. When patients come to hospital, only the consequences of insufficient preventive microbiological control are solved there, which is the most expensive scenario, says Antun Kovačiček, owner of the Komed company. He explains that he became and remained the only Croatian producer of equipment for microbiological inspection of food, drinks, and blood amongst others. Komed started as a craft business in 1987, since at that time this activity was not permitted to be performed by a privately owned company. He soon became aware that social circumstances would change, so started to prepare for
T
a new business approach. He developed, with colleagues, diagnostics for microbiological inspections, since at that time all such equipment had been imported - as it is today. Local is three times cheaper, but… For example, Kovačiček developed Hemosept, which the
Agency for Medicine verified. This is a haemoculture for controlling aerobic and anaerobic bacteria in patient blood. It costs only €4.93 per bottle, but many in the health system prefer imported haemocultures, which cost €13.92. Furthermore Kovačiček is most displeased with the sales of his products and disturbed by the lack of ra-
tional thinking and saving in all health care segments. He notes that he and his eight employees have for years been directing development towards the production of such diagnostics capabilities so that laboratories might have a prepared basis for testing. He points out that for the past ten years he and his colleagues have been warning through seminars and assemblies that Croatia cannot remain an importer exclusively. It could actually provide quality production at a regional level. “Company capacity is full and I cannot produce more than I am currently producing. This is why I have been encouraging the idea of expanding production throughout the entire country, but it seems those responsible are interested only in saving,” concludes Kovačiček.
Labour market
Dun&Bradstreet
Employment statistics during 1999
Foreign debt increase an obstacle for investors
According to data published by the Croatian Employment Agency, at the end of 2010 there were 319,845 registered unemployed people, 2.4% higher than in November and 9.7% higher than in December 2009. A further 6,000 to 7,000 people should be added to this figure to include those who were deleted from the register, for example, due to irregular reporting. This brings the total number of unemployed above that of 1999, when it stood at 321,866. In December, 19,869 people lost their jobs, but in the same period 9,334 people were employed. Although the December data brings little if any hope of a slight sign of optimism, the Agency states that a higher employment rate and lower unemployment are still visible on a year-on-year level. Fur-
Dun&Bradstreet, the world’s leading source of insight on businesses, continues to rank Croatia among mild investment risk countries in the latest issue of its periodical International Risk&Payment review covering risk in 132 countries worldwide, as has been reported by Bonline, the exclusive representative of D&B for Croatia in Bosnia and Herzegovina. D&B reviews the Croatian state budget, adopted at the end of 2010, with the Croatian government planning economic growth of 1.5% in 2011 and a deficit of 4.3% of GDP. Specifically, the budget envisages expenditure levelling off. The largest expend-
thermore, between January and December 2010, 146,627 unemployed people found work, 19.4% more than 2009. 141,105 people were employed under a labour contract (19.3% up over 2009), and 5,522 on the basis of other types of work (registering companies, crafts, work agreements). On a monthly level, the unemployment rate continues to fall. It stood at 9.7% in December in comparison with 21.2% in the same month of 2009. However, as with 1999, the number of people who work but do not receive regular salaries remains a highly significant 80,000. (J.F.)
iture is for pensions and salaries to the public sector and a borrowing of €2.82 billion is planned to cover the debt. The government should not face difficulties with capital market borrowing, yet both foreign and public debt increases, as well as a lack of fiscal consolidation, will increase the cost of borrowing and consequently increase the risk aversion caused through the debtor crisis in the Eurozone. D&B believes the budget has been highly influenced by forthcoming elections and that the government has not started with a more restrictive tax policy and structural reform implementation which would improve the investment climate.
12
Privredni vjesnik Year IV No 0136
CROATIAN FOREIGN CURRENCY MARKET Currency
AUD CAD JPY CHF GBP USD EUR Source: HNB
EUR
Kuna exchange mid-rate
7,42
5,478636
USD
5,75
CHF
5,95
7,41
5,70
5,90
6,677165
7,40
5,65
5,85
5,730152
7,39
5,60
5,80
7,38
5,55
5,75
5,556785
8,766596 5,532280 7,401637
7,37 10.1.
WEEK JANUARY 15, 2010
11.1.
12.1.
13.1.
14.1
5,50 10.1.
11.1.
12.1.
13.1.
14.1
5,70 10.1.
11.1.
12.1.
13.1.
14.1
::: news
INSOLVENCY
Croatia ranked 82 on index of economic freedom According to the index of economic freedom from the Heritage Foundation and The Wall Street Journal, and published for the region by their strategic partner Adriatic Institute for Public Policy, Croatia jumped from 92nd to 82nd position globally, and from 37th to 35th in Europe. This result is still below the European average and three key areas are still marked as repressive (property rights, freedom from corruption and labour freedom), according to the American Heritage Foundation.
Inglorious records Unsettled payment orders amounted to €4.80 billion last November, with company debt for unsettled tax and contributions standing at €1.88 billion
Tehnomarket for sale Investment fund Trans Balkan Investment announced the sale of the trade chain store for electronics, Tehnomarket, also operating in Croatia. The Fund did not lliquidity continues its gallop throughout Croatia with unsettled payment orders increasing by €113.55 million last November, reaching its record high of €4.80 billion, as specified in the latest issue of the Croatian Chamber of Economy publication Economic movements. Companies involved in commercial activity and whose accounts
I
state a price for the chain store, but it had been previously announced the transaction will be concluded by October 2011. Đakovština sold for €26 million At a public auction held at the commercial court in Osijek, assets of the defunct milling and bakery industry Đakovština d.d. in bankruptcy, were sold for €26 million. The opening bidding price was €13.7 million. Most of the assets, divided into three large technological units, were bought by the Osijek company Žito, the former lessee of Đakovština.
On a monthly basis there has been an increase of 800 company insolvencies have been blocked have shown an increase of €37.89 million, with those in the construction industry showing an increase of €22.74 million. Together these have mainly contributed to the new record level. Company debt to the state comprises 44% of the
total value of recent due payment orders covering unsettled tax and contributions, the total value of which amounted to a record €1.88 billion. Considerable downturn Concurrently, there has been a considerable increase in the number of business entities whose accounts have been blocked: an increase of 375 among craftspeople and 800 among others (which is one of the sharpest monthly rises). The number of business entities unable to settle their current liabilities has also reached a record high of 74,778. The current situation is dire when current results are compared with the pre-crisis year of 2008. The level of blocked accounts has grown by 90% or €2.27 billion, with the number of blocked business entities’ increasing by 28 % or 15,500. Due to unsettled liabilities 33,065 insolvent companies
employing 45,505 staff owed €3.96 billion in November, some €10.55 million more than in October of the previous year and €1.15 million more than in November in 2009. On a monthly basis there has been an increase of 800 company insolvencies, with the number of employees being reduced by 953. Debt piling up Concerning private individuals, some 41,713 employing 25,473 staff had over €0.84 billion unsettled debt in November 2010, an increase of €7.53 million over October 2010. Moreover, their unsettled liabilities have increased by €0.15 billion in one year. Furthermore, the number of staff employed by private individuals decreased by 271 employees in November 2010 when compared with October of that year, although the figure showed an increase of 1,204 year-on-year.
www.privredni.hr Business & Finance Weekly
13
ECOLOGICAL AGRICULTURE AND BEEKEEPING FARM
XELLA POROBETON HR, ZAGREB
Sound, sight and smell encourage relaxation Visitors can help with the extraction of honey and take part in honey and wax production
Stable growth despite conservative market Every day more people are becoming open to new ideas about Ytong material, free of prejudice ovro Krnić and his family planted an ecological garden and orchard for their personal needs some thirty years ago. They started ecological beekeeping after discovering encouragement for ecological agriculture in Croatia. “When you love your job, it is not hard to comply with regulations” explained Krnić. “You must truly love ecology in order to achieve satisfactory results” Krnić pointed out. The ecological family agriculture farm beekeeping business was founded in 2002 and it contains a beehive enclosure with 50 hives, a bottling plant and a honey and honey product tasting room. In order to produce ecological honey, the producer needs to meet several strict criteria. The apiary must be placed in an ecologically clean area containing sufficient nectar and pollen from self-seeding flowers and herbs and untreated herbs and trees. Beehives must be made of natural materials. Disease and parasite cures and treatment are exclusively natural and involve organic acids rather than chemical veterinary medicines. “Honey must be analysed on a microbiological basis for pesticide residues, antibiotics and hard metals year-on-year. Performance control is done by the supervisory
L
station at least twice a year with expenses being covered by beekeepers. The company authorised for certification, in compliance with the criteria, issues an attestation of a Croatian ecological product, which we received in 2003 and all our products are covered by it” added Krnić. Honey extraction and wax melting In addition to producing between 1,500 and 1,800 kilos of honey annually, the family also produce honey with red beet and bramble juice, honey with shiitake mushroom, honey with green wheat germ, honey with cinnamon, honey with honeycomb, honey with propolis and pollen and honey with dried fruit amongst others. Their eco-honey is sold through their family farm, at fairs throughout Croatia, in health food shops in Zagreb, Šibenik, Rijeka, Vukovar and Karlovac and may also be purchased by mail order. Visitors to their farm will witness the reliability of their programme. They can taste numerous products, understand the life of bees, rest and relax in the floral environment and forget about their daily cares. Also visitors can join a range of workshops on honey extraction, wax melting and honey and wax production. (S.P)
he company Xella porobeton HR promotes and sells the construction material Ytong. Since 2004, it has been part of the international consortium Xella Baustoffe, which employs over 8,500 people. In Croatia, they employ 20 people. Robert Vujnović, director of Xella porobeton HR, points out that in addition to Ytong, their portfolio also includes renowned brands such as Silka, Multipor, Fermacell and Aestuver. Given the conservatism of the Croatian construction market, Xella and Ytong needed to invest a great deal of effort to achieve quality strategy and stable growth as well as take a share of the market. Moreover, our share of the market for construction material was 2%-3% several years ago. Today, we have reached around 8%, which is difficult in a country with a long tradition of bricklaying. Even though it was a relatively long process, it has paid off. This is confirmed by good market position of the Ytong construction system and the high level of customer satisfaction. We must say we have had no complaints about our products, and every day more people are becoming open to new ideas about the Ytong material, free of
T
any prejudice, opines Vujnović. He ventures that this year they expect to top their previous results. Possible plant construction Despite the decline of the construction sector, caused by the crisis, the situation has improved. After a longer wait, they are now venturing into capital projects. However, debt collection difficulties and poor realestate sales remain a problem. This causes the development of the construction industry and an exit to the crisis, to depend on certain companies’ vision and new trends in construction, which have been increasingly affecting business processes and sustainable development of companies, says Vujnović. Regarding their future activities, Vujnović believes that if the Croatian market shows signs of growth, there is the possibility of constructing a plant. “We have already bought land, but whether this project become a reality depends on our owner. The company attitude is that our market is presently covered by the production capacity of plants in the neighbourhood, in which substantial funds were invested with the goal of modernising plants,” concludes Vujnović. (B.O.)
14
Privredni vjesnik Year IV No 0136
VIP SNOW QUEEN TROPHY 2011
Budget restrictions but still a tourism showcase €3.22 million set aside for slalom races with a prize fund for skiers reduced to €120,000 Sanja Plješa ne of the most significant winter and also a tourist event is the Vip Snow Queen Trophy slalom events for both men and women, held on Sljeme, just above Zagreb. Whilst some believe this event is not cost effective through high organising costs, others say it is very important since these events promote Croatia to the world. Due to the economic crisis, 2011 Snow Queen and Snow King events were
O
tailored to fit financial possibilities, with €3.22 million set aside for both races. The prize fund for the best skiers was also smaller compared with 2010, at €120,000. “Given the market crash in the USA, we knew the crisis would hit Croatia, so we made cuts, which also continued this year. The Vip Snow Queen Trophy joined in the general saving. This was achieved through the understanding of most of our partners and suppliers hired to organise the race and who agreed to deliver the same qual-
ity of service as in the past, but at a reduced price,” said Martina Pintarić, head of the press centre of Vip Snow Queen Trophy.
dance of greenery and a business zone with eco-friendly services. The opening of the new exit route on the motorway Zagreb-Rijeka will benefit this investment.
with a trading centre near Zagreb is starting soon, Tvin expects the pace of construction to pick up, since they believe it would be more cost efficient for Ikea to produce furniture in Croatia.
Tourism promotion The arrival of the world’s skiing elite to Sljeme is extremely important for the Zagreb tourist programme and its global promotion. All FIS World Cup races, as with the one on Sljeme, are used for promoting tourism destinations, which cannot be bought with money. Last year,
races on Sljeme were broadcast live and were seen by over 300 million people, according to the FIS official ratings data. For the sake of comparison, the IFM company, specialising in sport analyses, conducted a survey over ten European countries, excluding all press media, radio stations and the internet. Their results show that the amount which Zagreb would have to pay foreign broadcasting stations for advertising during the race would be €7.5 million.
::: news
Norwegians to build residential area The Norwegian company Verdispar International near Klinča Sela will construct a green city, an open area with urban villas and family houses, with an abun-
Ikea and Tvin soon to build joint factory The furniture producer Tvin from Virovitica and Swedish Ikea were scheduled to build a factory in 2008. However, the €25 million investment was postponed. According to Tvin, the construction was postponed as Ikea needed to fill capacity in its factories. Since the construction of an Ikea store
IGH builds motorway in B&H The public company Autoceste FB&H has been allocated work on the construction of the motorway leg on the V.c Corridor between Tarčin and Konjic, to a consortium which includes Croatian IGH. The Consortium, headed by the IPSA Institute and
consisting of IGH Zagreb and TZI Sarajevo, should finish the main 21.5 kilometres long project of the Tarčin-Konjic, The contract is worth in the region of €1.76 million. The leg consists of 13 tunnels and 15 viaducts and is one of the most demanding on the V.c. Corridor.