PV International 0139 by NEstar

Business activity in Zagreb County Recovery to be encouraged by investment into energy sector, logistics, trade and production

Zdravko Zrinušić, board president of Croatia osiguranje In general, Croatians still fail to insure their property against flooding

HPB in the black Operating profit before provisions at €26.78 million, up €3.85 million over the previous year

BUSINESS PROJECTS

INTERVIEW

BANKING

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Croatian Business & Finance Weekly Established in 1953 Monday / 7th February / 2011 Year IV / No 0139 www.privredni.hr

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pvinternational pv international C R O A T I A N

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Project Ipa IIIC (Regional development - regional competition)

Non-refundable aid allocated for six projects Projects, valued at over €5 million, will be used to improve the business infrastructure in Vukovar, Lovas, Ilok, Nova Gradiška, Vodice and Pleternica Krešimir Sočković hrough the project (regional development - regional competition), intended for the development of business infrastructure, non-refundable aid has been allocated to six projects. The projects had been arranged by the Central Finance and Contracting Agency, and they will be implemented by the Ministry of regional development, forestry and water management. Total value of accepted and cofinanced projects exceeds €5 million. In Vukovar, a total of €782,000 will be invested in the development of a new tourism eco-ethno centre Adica, whilst the county of Lovas is build-

A further €6.3 million will be allocated in the second round with project selection in progress ing a regional-support centre for promoting business activities valued at €543,000. The project of the Town of Ilok, the Visitor Centre in Srijem, will also be co-

financed with €475,000. In Nova Gradiška, €1.15 million will be invested for the promotion of enterprises, based on innovation, know-how and technology. Vodice received aid for helping to complete the memorial centre ‘Faust Vrančić’, valued at €1.3 million. Pleternica will be getting a technological-innovation centre with an incubator for the development of rural economy and entrepreneurship, worth €831,000. All projects will be co-financed

with a 75% share from the European fund (€3.74 million) and the remainder will be invested by local administrations. Development comes first Investment in these projects is meant to ensure development and strengthening of SME’s and create new jobs, through the development of new and existing infrastructures in business zones, investment into business incubators

and public tourist infrastructure. In the Central Finance and Contracting Agency for EU programmes and projects, there is an on-going procedure for the selection of project proposals accepted in the second call for the allocation of non-refundable funding for the development of business infrastructure. An amount of €6.3 million has been set aside for these projects, and contracts are expected to be signed during the second half of this year.

Privredni vjesnik Year IV No 0139

NEB CHUPIN, HERMES INTERNATIONAL DIRECTOR

Ecological production the key to success he ecological cultivation of healthy and safe food products impacts upon the most important world trends in food production. Ecological production in Croatia is still in its infancy. This is due to a lack of appropriate technology as well as unsatisfactory government attitudes towards incentives to both agriculturalists and healthy food producers. Nevertheless, Croatian buyers have recognised the value and quality of healthy food and they are prepared to pay more if they are convinced that a higher price means higher quality. It has been proved by our company through its production and distribution of natural and healthy jams and spreads of the highest quality. The ongoing crisis in Croatia and worldwide notwithstanding, 2010 was a crucial year in the development of our company as some significant steps were made. In Croatia and the neigh-

We strengthened our results with Dida Boža products in Croatia and the region last year and our Dalmatia brand for the US market achieved a 40% sales increase bouring countries we strengthened our results with Dida Boža products over 2009, whilst our Dalmatia brand for the US market achieved a 40%sales increase. We broadened our range to a new group of products and launched Dida Boža ecological sugar and ecological bramble juice. We are planning to increase exports to larger country IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription

( €0.18 billion over

over 9 months Zagreb County exports in 2010

BUSINESS ACTIVITY IN ZAGREB COUNTY

From power pla logistics to new

Recovery should be encouraged by investment into the being prepared and the motor racing circuit project is b Igor Vukić

markets such as Russia, Australia and Germany. Although the pinnacle of ecological production in Croatia is still to come, its advantages are being increasingly recognised when compared with “classical” agriculture which often implies an irrational use of non-renewable natural resources as well as harmful consequences on the overall natural balance. Ecological production is integrated into the concept of sustainable development and it is in the end much more cost-effective which is why in most countries it has a clearly defined legal framework. Croatia has joined the trend by defining the basic guidelines for ecological production in laws covering the ecological production of agricultural and food products as well as with regulations on processing in ecological production. Such measures have resulted in an increase in growth and development of ecological production throughout the last year, as well as in increased interest and trust of consumers buying products with eco labels.

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

ontinued export growth and the completion of several infrastructure and logistics projects symbolise the current business year in the Zagreb County. “I am optimistic as market trends indicate movements in a positive direction”, stated Krunoslav Pilko, Principal of Economics Department in Zagreb County. Recovery should be encouraged by investment in the energy sector, logistics centres, trade and production, frameworks for new towns are being developed and the autodrome project is being finalised. The results for the first nine months in 2010 showed exports with a value of €0.18 billion, which was 15.8% more than in the same period in 2009. Imports amounted to €0.67 billion, which was 10.3% less than in the same nine month period in 2009. Zagreb County ranks as the fourth in Croatia in terms of total revenue. The City of Zagreb is first with a share of 51.9%, followed by Split-Dalmatia County (7%) and Primorje-Gorski Kotar (5.9%). Zagreb County has a share of 5.2%, Istria 5.1% and OsijekBaranja 4.3%. 72.4% of Croatian entrepreneurial total revenue is achieved within the area encompassing these six counties.

Energy and protection Krunoslav Pilko claims that the results of trade in goods and services would be even more favourable for Zagreb County if statistics showed them according to their place of origin. Production in the Jamnička kiselica

plant, for example, is attributed to Agrokor which has its headquarters in Zagreb; import results are presented in a similar way. In Zagreb County there are several companies with large exports, selling their merchandise throughout Croatia. Pilka endorses the growth in export results of companies in the county, as well as DIV from Samobor, Cinčaona from Sveta Helena, Telegra, Feroimpex, Strojopromet and other manufacturing companies. Progress in exports can be noted in the number of requests for grants for export certificates and standardisation procedures. Pilko claims that Zagreb County is planning to contribute to the implementation of government investment projects throughout the county. The construction of hydroelectric power stations on the river Sava is of utmost importance. These would exploit the water power potential of the river Sava (about 600 Gigawatt hours annually or 70 megawatts of power) but their construction would also, as Krunoslav Pilko pointed out, improve flood pro-

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( 1.8 million m

for the proposed motor racing circuit project in Bistra

ants and w towns and Formula 1

energy sector, logistics centres, trade and production; frameworks for new towns are being finalised

tection which shown itself to be a serious problem several months ago. Large investment in a “green” town The concession tender for the reconstruction and management of Zagreb airport (ZLZ) is also expected with impatience in the county. ZLZ is located within the county and in addition to income from the concession, synergy effects are expected through the participation of local entrepreneurs in the project, worth €100 million. The important feature of the county as a logistics cen-

tre will also gain more weight with the construction of a large cargo centre near Dugo Selo. An Ikea outlet and a shopping centre could also be constructed in the vicinity, with about 2,000 fulltime job vacancies. With respect to transport solutions, a model of an integrated public transport in Zagreb and its surroundings is being assessed, due to the large number of commuters in the area. A new road network is being planned via the Zagreb detour and motorways. One similar, completed project, the construction of the junction Donja Zdenčina on the ZagrebRijeka motorway, will enable the investment development into a new residential-commercial zone in Klinča Sela. It is there that the Norwegian company Verdispar is planning to construct a “green town” for 6,000 residents covering an area of 2.6 million m2. As announced, the construction of a school and kindergarten, a gym and sports fields, a library, cinema and a health facility will be constructed alongside residential units. The town will be open-plan, surrounded by the business zone with various types

of ecological and high technology production where residents will be able to work. The investment, worth about €1.5 billion in Klinča Selo, should promote the recovery of the construction industry which has been deeply affected by the crisis both in this county and in the rest of Croatia. The County has issued a detailed catalogue of business zones for potential investors. 18 zones have been completed and the reconstruction of 12 zones is ongoing. Cities and municipali-

Investment of €1.5 billion in Klinča Selo should promote construction industry recovery ties have invested over €16.44 million of their own capital and €3.42 million in non-repayable capital has been invested by Zagreb County. The Ministry of Economy has granted non-repayable capital aid of €4.79 million. It has been pointed out in the County that a total of €68.49 million have been invested for

infrastructure in entrepreneurial zones, including the value of land which the Croatian government has irrevocably transferred into town and municipality ownership. Some 200 business buildings and premises Some 200 business buildings and premises have been constructed in entrepreneurial zones throughout the County employing 4,000 staff. The Regional Development Agency together with Invest infocentre is at the disposal of investors, where they can get all necessary information in one place as well as professional assistance and help. The centre should be the co-operation co-ordinator between the state, county and local bodies and potential investors. Business opportunities in 2011 in Zagreb County will be presented on the 23rd February at the meeting of the county head, Stjepan Kožić, with interested entrepreneurs and investors. Potential investors have at their disposal information on available free land areas and the potential crops which could achieve optimum growth there.

The western motor racing circuit re-awakening The Municipality of Bistra in the western part of the Zagreb County has an ambitious plan for a car racing circuit construction, perhaps even Formula 1. Despite the fact that some similar race track projects (in the vicinity of Bregana and Sveta Nedelja) failed as owners started over-valuing their land plots, the project in Bistra stands a better chance of success. Krunoslav Pilko stated that 1.8 million m2 have already been acquired and further project elaboration is ongoing. The project is headed by Krešimir Gulić, head of the municipality of Bistra and the acquisition of land, in co-operation with foreign partners, has been going on behind closed doors for six years. Herman Tilke, designer of 16 motor racing circuits for Formula 1, recently visited Bistra and was delighted by its scenery. The planned race track would have seating for 70,000 spectators plus a further 150,000 around the track. A camp site is also planned as well as a go-kart racing facility, a safe driving centre and other similar facilities. Total investment is estimated at between €250 million and €300 million. Construction should start in 2012, and the facilities should be completed in 2014.

Privredni vjesnik Year IV No 0139

THE REVIVAL OF CROATIAN TEXTILE PRODUCTION

We are not building walls but conquering new markets T7 Vis exports its products to over 30 countries with expansion prospects covering USA, Australia, Dubai and Africa export projects. Even though Jasmina Prokop Tomić did not give details about the value of investment, she did say the company would invest in the revitalisation of machinery and facilities of Pamučna industrija Duga Resa as well as new jobs. Furthermore, whereas Pamučna industrija Duga Resa once had 30 work-

Sanja Plješa rom the former textile giant VIS from Varaždin, a new T7 Group has emerged, in conjunction with the company T7 Vis, to form a visionary and development-oriented company with aims of becoming the regional leader in the production of textile products and technical materials. T7 Vis is oriented towards two areas: promo-textile, the production of promotional parasols for caterers with client logos, and a textile programme for the HoReCa system (equipment for hotels and catering facilities), including tablecloths and napkins. Considering that T7 Vis purchased Pamučna industrija Duga Resa when in bankruptcy, it has recently presented its new products at the international trade fair for home and contract textiles Heimtextil 2011 in Frankfurt.

Excellent debut “We are satisfied with our debut at this fair, since we renewed all partnerships of the old company Pamučna industrija Duga Resa, for example clients from Great Britain and the Netherlands, who have always nurtured the product quality previously offered by Pamučna industrija, and now by T7 Vis. We also arranged new work for this year and next, estimated at several million Euro. We also established excellent relations with customers to whom we will be sending our test products during February. During our busi-

Recognition of colleagues

ness conversations at the fair, we received recognition for top quality and the appearance of our products,” summarised Jasmina Prokop Tomić, marketing director and board member of T7 Vis. Even though the company exports its products to over 30 countries, for the first time they managed to hold serious negotiations with company representatives from USA, Australia, Dubai and Africa. New jobs The management of T7 Vis will continue to invest into the revitalisation of its production in order to better prepare for future

T7 Vis purchased the textile company Pamučna industrija Duga Resa renewing old partnerships ers, it now has 130. Employment will continue during the next five years. For the sake of comparison, the entire T7 Group has 500 employees. “During the crisis, some built walls, others built windmills. We believe that by building windmills, we are conquering new markets, basing the future on product quality and export,” concludes Jasmina Prokop Tomić.

Quarterly profit of €1.12 million

Siemens Hrvatska wins project Franck’s profit decreased by of the year award for 2010 one third Over 200 Siemens sales and project experts from over 30 countries participated at the international meeting of sales and project experts for automation and electricity power plants EFIE’s International Sales Meeting and International Project Execution Days, held in Frankfurt. In the category of quality, Siemens Hrvatska won the award for the most successful project in 2010, specifically its division Fossil Power Generation and Renewable Energy, for the modernisation project of the power plant Pljevlja in Montenegro.

Moreover, last year Siemens Hrvatska achieved pre-tax profit of €6.53 million. During the previous year the profit figure was slightly lower at €6.13 million, according to Siemens’ published report. Last year, company income totalled €125.64 million, which is also an increase over the €123.81 million achieved in 2009. Exports of goods and services also registered an increase, with a value of €42.1 million in 2010 and €5.77 million in 2009. The most important segment of exports related to IT systems and business solutions.

The Zagreb company Franck, one of the largest producers of a range of well-known food products in Croatia (tea, coffee, snacks and food supplements) registered a €1.12 million nett profit during the final quarter of 2010. This is 36.5% down compared with the same quarter of 2009. According to unconsolidated and unrevised report from the Zagreb Stock Exchange, the company simultaneously achieved sales income of €26.88 million, which is on a par with 2009. Total profits decreased by 13.6% during the final quarter to €27.88 million, with total ex-

penditure plummeting by 12.8%, from €30.05 million to €26.22 million. (S.P.)

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INTERVIEW 5

INTERVIEW: ZDRAVKO ZRINUŠIĆ, BOARD PRESIDENT OF CROATIA OSIGURANJE

Not venturing into acquisitions but pursuing fiercer organic growth In general, Croatians still fail to insure their property against flooding Drago Živković dravko Zrinušić has been the president of Croatia osiguranje for almost a year. He took over one of those rare companies in majority state ownership which still manage to preserve their leading position in a quite competitive market. However, the market share of Croatia osiguranje is in constant decline, although that decline was somewhat slower last year.

Could you describe business activities of Croatia osiguranje in 2010 compared with the entire market? The Croatian insurance market achieved total calculated premiums of €1.27 billion by the end of 2010. This is 1.8% less than in 2009. Considering the recession and other problems of the financial sector, I regard this result as quite satisfying. In 2010, Croatia osiguranje achieved its planned results. We managed to slow the decline from 2009, which totalled 6.5%. In 2010, we achieved total calculated premiums of €0.40 billion, which is 4.4% less than in 2009. At the same time, Croatian health insurance achieved premiums

of €13.31 million, a 0.2% rise. Total market share of Croatia osiguranje and Croatian health insurance stood at 32.42%, at the end of the year. Croatia osiguranje operates regionally. Are there ambitions for new takeovers? No. I believe our current companies are strong enough and we are able to spread further throughout the region with even more intense organic growth. Our daughter companies in Serbia, Bosnia and Herzegovina, Macedonia and Kosovo showed good results in 2010. With the right strategy, we can expect even more from 2011. What are the results of insurance against flooding? In 2010, claim settlements against risk of flooding, torrents and high water levels totalled €0.12 million, an increase of 17.79% over 2009. A rise in written premiums for supplementary risk against flooding, torrents and high water levels was primarily registered with civilian fire insurance policies. This regards private homes and organisations from non-production activities, such as hotels, companies, health

institutions and similar. Insurance policies for supplementary risk against flooding, torrents and high level water depend on the exposure zone; more precisely, the frequency of flooding in particular area. In general, Croatians still fail to insure their property against floods. What is the situation regarding crop insurance? Does it pay? Gross insurance premiums for crops and plantations amounted to €10.52 million in 2010. In relation to 2009, premiums de-

Croatia osiguranje still holds roughly 90% of insurance for crops and plantations creased by €1.96 million. The reason behind this fall is due to price cuts in agricultural products. This insurance covers damage from hail, fire, thunder, storm and frost. State subsidies add up to 25% over Croatia. Some local administrations also partially co-finance this type of insurance from 0% to 75%. Notwithstanding, in the Slavonian

counties, with the largest share of crops and plantations, models of co-financing are almost nonexistent. Croatia osiguranje still holds roughly 90% of insurance of crops and plantations in its total portfolio. Currently, the technical results for this type of insurance remain negative. However, we believe this will change with an increased portfolio and finding ways of co-financing. In EU countries, serious agricultural production cannot be imagined without an insurance model, and this something that all our farmers can expect. What is extent of manager insurance? Insurance of managers is developing, registering constant growth. We offer it in our entrepreneurial package, which includes a spectrum of 15 insurance products and it especially pays off for SME’s. In 2009, the amount of written premiums in entrepreneurial packages of Croatia osiguranje increased by 28% over 2008. By the end of 2010, entrepreneurial packages registered the highest growth in premiums and numbers of policies at over 10%.

6 WE PRESENT MARIOLINA, KRK

TROPLET, VINKOVCI

Two generations of success The company produces PVC posts for wine growing and fruit growing, fence banisters and “electrical shepherds” – insulated posts for restraining cattle

More expensive, more tasteful Mariolina produces pasta, the most popular being the ‘Krk’ small trunk-shaped pasta with a long local tradition ariolina from Krk is primarily engaged in fresh and dried pasta production. In addition, it produces several products typical of the Croatian Littoral and the North Adriatic islands. It was founded 17 years ago as a small family business in restricted premises in the historical nucleus of Krk. The products were sold mainly to the catering industry until 2009 which marked a turning point in their business operations when they moved to a new plant in Vrbnik. “The separation of catering from production occurred during the relocation to the new plant. We started with one employee a year ago; now there are five and we are planning to employ two more over the next few months. We have paid special attention to increasing our production capacity and quality in particular, which has resulted in two awards at the first pasta festival in Vodice in November 2010”, pointed out the Director of Mariolina, Boris Dujmović. Although their pasta more expensive, Dujmović is satisfied. “Traditional products are more expensive than mass-produced ones. However, we have succeeded in compensating for the lack of production capacity through the quality of our products. It is our competitive advantage with respect to the considerably lower prices of imported pasta” he explained. The most popular Mari-

olina product is the ‘Krk’ a small, trunk-shaped pasta, with a long local tradition. Tax and unpaid bills The company is planning further investment into production and new technologies, irrespective of significantly unfavourable credit conditions and the aggravated collection of unpaid bills. “The biggest problem is the considerably high retail chain tax. It is one of the main reasons for the higher prices of local products. The price of raw material and other expenses are items of lesser importance with respect to the “havoc” of retail taxes, which is inconceivable yet true. We are helpless as we depend on retail chains and are not in a position to dictate conditions”, emphasised Dujmović. He stressed that pasta production in Croatia is still minimal and total Croatian production could be compared with that of one Italian medium-sized factory. “The formation of a qualitative pasta producers association and networking is an imperative and this has not been achieved so far due to petty personal interests, which is absurd with respect to what we would have achieved with a strong and consistent association. Such an association could appear in the near future. It would certainly make us more competitive”, explained Dujmović. (J.V.)

roplet started its activity last year in the Vinkovci industrial zone and is involved in the production of PVC post for wine growing and fruit growing, fence banisters and “electrical shepherds“ (insulated posts for restraining cattle), as well as exterior window sills, glass pads, facade corner beading and “gal” pads (used for marking underground installations). According to Alen Šimić, Director, Troplet is a subsidiary of Grad-export which has been operating for 20 years and is the largest PVC and aluminium panel producer in Eastern Europe. It employs about 100 staff and 85% of its production is exported to 16 European countries, mainly to Slovenia and Slovakia. Gradexport was on an equal footing with the marketing agency Bruketa&Žinić and several other companies, on the list of the most desirable employers in Croatia. “There are several dozen people daily enquiring about employment in both our companies. I believe we are desirable as we have regular salaries, a Christmas bonus and other rewards”, opined Šimić, adding that their employees are given free additional training when new machinery is purchased.

Crisis detour Grad-Export originated in a ‘golden age’, according to Šimić, as at the time there was the possibility of selling products both in the domestic and foreign mar-

kets. At that time they had three employees and were producing soft wood flooring strips and matchboard. The company has been expanding since 1999 and currently their have premises of 22,500 m2 in two locations. There are 12 full-time employees in Troplet and they sell their products to all the larger Croatian

If we were not exportoriented, we would have certainly been severely affected by the crisis and Serbian wineries. In addition, they export to Bosnia and Herzegovina, Macedonia and Montenegro and are aiming towards market expansion. “We regret that the Croatian market has almost ceased to exist. The crisis can be felt particularly in the construction industry. Orders have plunged by about 50% in the last three years. If we were not export-oriented, we would have certainly been severely affected by the crisis”, estimated Šimić. He added that operating abroad, especially within developed European countries, has several advantages one of them being the regular payment of invoices, which is not the case in Croatia. He is hoping, nevertheless, that any domestic economic recovery will lead towards better liquidity. (J.F.) OBJ

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CROATIAN FOREIGN CURRENCY MARKET Currency

AUD CAD JPY CHF GBP USD EUR Source: HNB

Kuna exchange mid-rate

EUR

7.43

5,543440 5,497816 6,667480 5,739979 8,772959 5,441333 7,414905 WEEK FEBRUARY 5, 2011

USD

5.44

2.2.

3.2.

4.2.

5.2.

5,78

7.42

5.42

5.76

7.41

5.40

5.74

7.40

5.38

5.72

7.39

5.36

5.70

7.38 1.2.

CHF

4.34 1.2.

2.2.

3.2.

4.2.

5.2.

5.68 1.2.

2.2.

3.2.

4.2.

5.2.

::: news

Finally a profitable bank

IKB: €2.46 million profit Last year, Istarska kreditna banka Umag (IKB) operated with profit of €2.46 million, which is 15.8% lower than the year before, according to the published report on the Zagreb Stock Exchange. Nett return on interest decreased by 16% totalling €7.80 million, whereas nett profit from commissions and fees increased by 5% to €2.63 million. Total expenditure, without reserves and value harmonisation was €0.66 million higher than the year before, at €18.26 million.

Zeljko Hladika/PIXSELL

HPB IN THE BLACK

Operating profit before provisions for losses totalled €26.78 million more than €3.85 million up over the previous year Boris Odorčić he Croatian Postal Bank (HPB) nett profit totalled €6.92 million last year, whilst in 2009 it operated at a loss of €61.48 million. Operating profit before provisions for losses amounted to €26.78 million,

Intention to amplify nett profits which is considerably more than the €3.85 million achieved the year before. “HPB is a profitable bank again”, Board President Čedo Maletić stated at a recent briefing with journalists. On one hand, interest rate nett income increased €5.14 million or 11.1% in 2010 over 2009. On

the other hand, notwithstanding a strengthened market position, interest rate income was 12.6% lower. The cause lies in a higher proportion of bad loans not generating income to the profit and loss account, as well as the fact that the bank lowered interest rates on loans during 2010. The bank decreased both the level of fees and commission to its clients which accounted for an income 2.5% lower than last year, yet nett income from these aspect outperformed nett income in 2009 by 13.1%. Interest rate decrease inevitable Maletić pointed out the intention of HPB to amplify its nett profit and anticipated it will achieve about €13.70 million in 2011.

Nevertheless, the bank will continue with its considerably conservative approach to planning. He is also anticipating an inevitable interest rate decrease in the market that will be followed by HPB, plus an increase in loan demand which will occur in the second half of the year. If the bank intends to promote its growth, it should consider a capital increase suggested Maletić. He added that there are several options to accomplish this: from the state budget, with a strategic partner, with existing shareholders or by an initial public offering. “HPB has sufficient potential to be an acceptable investment story for investors”, he proposed. Bank assets totalled €2.03 billion, 5.8 higher % in 2010 compared with the end of the previous year.

Jadransko osiguranje increases profit Last year, Jadransko osiguranje achieved €6.14 million nett profit, some 18.63% higher than the year before, according to published report issued by the Zagreb Stock Exchange. Total premiums were 3% lower compared with 2009, reaching €86.38 million. Total income stood at €93.47 million, of which €87.86 million (94%) refers to gross premiums. The remainder covers financial income from issued loans, deposit investment, real-estate and other financial instruments. Viktor Lenac operate in profit

In 2010, the shipyard Viktor Lenac operated with a nett profit of €0.96 million, 12% more than in 2009, according to the financial report published on the Zagreb Stock Exchange. Total income fell 2.4%, to €44.63 million compared with 2009. Total expenditure decreased by the same percentage to €43.56 million.

8 ::: news More finance for advertising The Croatian Tourist Association (HTZ) has decided to rationalise expenditure on the market for 2011 and redirect €0.50 million towards Krila Hrvatske (Wings of Croatia), an advertising slot with air transporters and travel organisers. According to this consolidated advertising programme, the arrival of 650,000 tourists is expected this season, points out HTZ. In their proposal for such a rationalisation, they took into account specific characteristics and current affairs. The reduction will not affect total activities and results from individual home markets. TA Mali Lošinj accepted into the Knowledge Network At the invitation of the World Tourist Organisation (UNTWO), the Tourist Association of Mali Lošinj has been accepted in the UNWTO Knowledge Network. This is a programme which aims to support member countries regarding all issues of tourist innovation, knowledge, science and technology, in order to encourage competitiveness and the global development of tourism. The UNWTO recognised TA Mali Lošinj as an institution having an inventive approach to business and strategies, especially its projects “Around the World with Lošinj’s Sails”, “Scents and Tastes of Lošinj” and “125 years of medical tourism on the island” and the “Arrival of Apoxyomenos”.

Wine Gourmet Festival in Zagreb The wine and culture event Zagreb Wine Gourmet Festival will take place on February 25-26 at its new location - the Museum of Modern Art. Some of the best Croatian and international producers will present almost 500 superb wines and delicacies during workshops, special tastings, lectures and gourmet presentations.

Privredni vjesnik Year IV No 0139

( 40% of production exported

ORGANIC CULTIVATION TO SUCCESS

Croatian camomile soon in Canada and Israel The Spider Group is a successful company today employing 120 workers and processing around 1,000 tonnes of camomile and medicinal herbs Sanja Plješa he Spider Group was formed three years ago from a former small family-owned company Jan Spider from Pitomača, established in 1990. Jan Spider remains part of the company, in addition to the company Đolta, specialising in agricultural products and Herbarium, specialising in the production of organic teas. Five years ago, Nikola Nemčević joined the management team of Jan Spider. This arrival has proved to be an excellent move, since 30 tonnes of camomile and other herbs

Products of the Spider Group are used in foods and pharmaceutical industry

of course a good team, opined Nemčević. Last year, Nemčević received the Croma award in the category for best manager. The award is given by the Croatian Managers Association.

were purchased, processed and exported during his first year. Their business continued to exT pand. The Spider Group is a sucp cessful company today employc ing i 120 workers and processing around 1,000 tonnes of camomile a and a medicinal herbs with a total value of over €6.85 million. The v Spider Group is also the leadS ing Croatian company for the i processing and export of camomile. The recipe for the company’s successful business is no secret. It is hard work, know-how, vision, transparent goals and

Export orientation From total production, exports account for 40%. However, due to the economic crisis and the extremely poor climate, company results for 2010 were less good than expected. They made income growth of 8%, with income totalling some €6.85 million. Medicinal herbs and their derivatives are exported to Germany, Austria, France, Italy, Slovenia, Bosnia and Herzegovina, Switzerland, Macedonia and Serbia. The company is also preparing for exports to Russia, Israel and Canada, expecting greater re-

sults in the forthcoming years. On 60 hectares of land, the Spider Group has started the organic cultivation of medicinal herbs in accordance with international certificates. These herbs are mainly exported to the EU. Jan Spider has a developed system of management and quality control, which covers all business areas, from supply, production and processing to sales. Medicinal and aromatic herbs are cultivated on 200 hectares of land and on subcontractors’ land, some 400 family owned farms. They grow camomile, mint, balm, plantain, fennel, black and white mallow as well as thyme. They produce medicinal herbs in accordance with eco-friendly production standards on an area of 120 hectares. Nemčević says that the Spider Group aims at becoming the biggest regional processor of high-quality herbs as raw material for producers of food and medicinal teas and preparations based on medicinal herbs. Their products are used in foods and pharmaceutical industry, and they are sold in herbal dispensaries.

Would you like tea? The company also packages tea and preparations for Cedevita, Podravka and Jadran Galenski from Rijeka. Even though tea is a relatively cheap product and tea drinking is a positive global trend, it remains insufficiently recognised in Croatia. In Croatia, around 300 gr. of tea is used, whilst Hungarians use 1.8kg., Poles 2.4kg and Germans 2.8kg per capita. “We hope our efforts will contribute to raising awareness on the benefits of drinking tea,” concluded Nemčević.