Krešimir Sečak, board president, Salona Thanks to the Norwegians we may be able to go into series production
Evacuation of Croatian workers from Libya Before the riots, Libya was one of the biggest construction sites in the world
Music artists struck by pirate notes In 2010 sales of local recordings totalled 1,117,259 45% down
INTERVIEW
LIBYA
MUSIC INDUSTRY
PAGE 4
PAGE 3
PAGE 8 2010
Croatian Business & Finance Weekly Established in 1953 Monday / 7th March / 2011 Year IV / No 0143 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
ZLATNA KUNA AWARDS
Altpro, IN2 and Alstom Hrvatska the best Croatian companies in 2010 Socially responsible business awards received by nine companies Drago Živković ltpro, a producer of high technology equipment for railway transport safety, IN2, an IT engineering company and Alstom Hrvatska, which constructs, produces and services equipment for energy units, were presented with the Zlatna Kuna award for business excellence in 2010, according to the Croatian Chamber of Economy. Erste bank was the best bank and Allianz Zagreb the best insurance company, as stated during the award ceremony at the Zagreb National and University Library.
A
Erste bank and Allianz Zagreb top The lifetime achievement award went to the Zagreb Faculty of Law Professor, Jakša Barbić, who established company law in Croatia and is the main author of Company Act. Petar Čovo from Zadar University received the best innovation award for the Roki robot system, as well as Nebojša Bošković from the Split company, Banko and Branimir Matijašević
from the Zagreb Faculty of Mechanical Engineering and Naval Architecture for the innovative pneumatic grinder. Socially responsible business awards were presented for the first time. Energy Pellets, Hauska&Partner and Oikon were presented with this award for companies in the small-size company category; Hartmann, Holcim and Končar Electrical Engineering Institute in the medium-size and Cemex, Coca Cola Croatia and Ericsson Nikola Tesla for large companies. A special award for the most significant progress in socially responsible business went to Jadran Galenski Laboratory. Companies who are holders of 17 new rights to use the Authentic Croatian label and 10 rights to use the Croatian Quality label were also presented. Problem and consequence The award ceremony host, The Croatian Chamber of Economy President Nadan Vidošević stated that the level of foreign indebtedness of Croatia (standing at over €40 billion) is not a problem, but the consequence of the fact that more than half of the population receive salaries from the
Export 5.4% up Prime Minister, Jadranka Kosor presented the Zlatna Kuna award to large companies. She expressed hope and stated that there are some good indicators of things moving in a positive direction this year. She emphasised rising export growth of 5.4% in January 2011 over January 2010. Speaking about government measures implemented over the past few months to promote the economy, she mentioned the reduction of taxes and state owned company corporate loans, stressing the importance of maintaining the achieved level of social rights for child-bearing women and children. She opined that the support of these rights means investment into the economy which will become obvious in about 20 years. The Prime Minister made an appeal for more consensus and determination in Croatia and stated that the government is not an island and cannot function by itself. She stressed the importance of words used and stressed the key words “ it can be done” as opposed to “it cannot be done” which have been used more frequently to date. To be able to do this, Croatia needs peace and stability, concluded Jadranka Kosor, who was accompanied to the award ceremony by several hundred protesters. The protesters were prevented from entering the Zagreb National and University Library and attending the award ceremony by Special Police forces. state budget and that Croatia has been living on up to €0.80 billion of borrowed foreign money for years now. On the other hand, Croatia has a unique geographical position and a historical chance to become a communication focus between Europe and the new multipolar world. Vidošević is not certain whether we have the ability to take advantage of this op-
portunity; he is convinced, nevertheless, that we lack consensus on the most important issues which cannot be disputed, such as EU accession. Vidošević complained about the shipyards being treated as a problem, suggesting that the shipbuilding sector ranked as third in the world, far beyond footballers of whom Croatia has been proud for many years.
2
Privredni vjesnik Year IV No 0143
SANJA VUKOVIĆ, DIRECTOR OF SAJAM SPLIT
Fairs as the most accessible promotional tool As organisers of leading Croatian fairs, we realised a long time ago that fairs need to provide meetings, concrete deals and training
oes this year’s GAST point to recovered industry of fairs? Despite a difficult 2010 business year, we successfully organised two fairs, SASO and GAST, and GAST 2010 showed a 5% rise in general terms. The beginning of 2011 has shown slight optimism in terms of the tourist season, which has resulted in a growing interest for participating at GAST 2011. To gather in one place so many entrepreneurs and to see how they fight for quality and confirmation on the market, it really does represent a great success in the fair industry. In this day and age we often hear in the media that fairs are history. The internet improved and simplified communication, making it more available, in social as well as business sphere. However, people still feel the need to communicate face-
D
IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription
to-face, especially when making deals. This is visible from experience of foreign fair organisers, whose business was only slightly influenced by the media, around 6%. According to our experience new media do not represent competition, but rather improve market communication. We believe it is precisely the interaction between buyers and business partners, offered through fairs, is the reason why people return to GAST and SASO fairs each year. The great advantage of fairs is definitely face-to-face networking with local and foreign entrepreneurs. New media offer new possibilities which can improve business. They need to be recognised by each organiser, keep up with the pace and the buyers. As organisers of leading Croatian fairs, we realised a long time ago that fairs are not only economic events, but primarily “need to be” places for meeting, making concrete deals, training and professional organisation. It is clear that any member of the professional world, who invests in this type of promotion, expects a lot from them. Compared with various media, fairs are the most accessible and most direct forms of promotion. This was recognised by Croatian entrepreneurs, who decided this year to participate at GAST, the leading gastronomic event in Croatia. Interestingly enough, the furniture sector rented a lot more venues, which shows fairs are truly efficient and profitable tools.
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
16th International GAST fair in Split
Preparing for the tourist season Many fairs face a downturn regardless of having appropriate infrastructure; GAST and SASO cover a wide portfolio of exhibitors Jozo Vrdoljak his year GAST fair in Split gathered 1,300 exhibitors from 13 countries. It is one of the most important economic events in Croatia which is clear from the large number of exhibitors and varied professional conferences. The Croatian wood industry had a most prominent appearance at the Furnitura furniture fair, under the patronage of the Croatian
T
1,300 exhibitors from 13 countries this year Chamber of Economy. It consisted of exhibits and a wide range of events, professional gatherings and exhibitions equally appealing to both professional audiences, such as hotel managers, architects, designers and the wider audience wishing to be informed of the local wood industry proposals. “The wood industry was the initial sector in Croatia to be affected by the crisis; nevertheless it was the first to overcome the situation. It has a 95% share of the domestic market, whilst 65% of production is sold to foreign markets. I am pleased to announce that, in addition, the food industry recorded positive results and its most significant opportunities occur during the tourist season”, estimated
Petar Čobanković, government vice president, anticipating a brighter future for some companies in the Split area such as Dalmacijavino, Kaštelanski staklenici, Brodosplit and Adriachem. Success under canvas Since the GAST fair has not been allocated appropriate premises (the construction has not yet started), in spite of promises made over several years, Jadranka Radovanić, the Croatian Chamber of Economy - Split County Chamber President, concluded that Split is the only fair town without fair premises. “We are demanding the authorities allocate space in the urban plan for the fairground and conference facilities”, she stated. On the other hand, Čobanković claimed that the key to the success of this fair could lie in its simplicity. “We have witnessed many fairs facing a downturn in spite of having a fairground and all the necessary infrastructure, whilst GAST and SASO fairs encourage a huge number of exhibitors even though they are held under canvas”, he stressed. The mayor of Split, Željko Kerum, outlined the most common problems for entrepreneurs in the Split-Dalmatia County and asked the Croatian government to allocate €500 million for projects aimed at encouraging economic activity in the area.
Seven fairs in one The GAST fair comprises a range of specialist fairs: 16th food fair, 16th beverage fair, 16th hotel and catering equipment fair, 7th coffee fair, 6th furniture fair Furnitura, 16th wine fair Dionizijana, 5th SATURN tourism fair and the GAST ‘around the world’ project. It is the leading gastronomic and tourist event in Croatia and a crucial point for the gathering of entrepreneurs and making deals on the eve of tourist season.
www.privredni.hr Business & Finance Weekly
INTERVIEW
( €30,000
price of one vessel for Hansvik Bat
3
( 70 ships
arranged for delivery this year
KREŠIMIR SEČAK, BOARD PRESIDENT, SALONA
THANKS TO THE NORWEGIANS WE MAY BE ABLE TO GO INTO SERIES PRODUCTION I am pleased the Norwegians decided on AD brodovi over several European and five local shipyards. We should build 455 boats for Hansvik Bat during the next five years in boats, we might go into series production, since they are identical boats, 6.3 metres long, formerly built in Norway. I am pleased the Norwegians decided on our boats over several European and
Jozo Vrdoljak he Salona Group covers three companies – AD brodovi producing Salona yachts and the distribution of Maestral rubber dinghies; Salon Charter dealing with nautical activity and AD Nautika, with its main office in B&H, producing small plastic parts and furniture for ships and boats. After working for 11 years in New Zealand and 4 years in Deloitte, Krešimir Sečak became board president of Salona, two years ago. He discussed the situation of small-sized shipyards and company plans with Privredni vjesnik.
T
What was the past business year like for AD brodovi? The year 2010 was solid for us. We achieved an income growth of 70%, and more specifically we earned around €6 million. We owe this income growth to our new model on the market – the Salona 44. Last year, we launched another model, the Salona 41, with good results, since we sold nine boats of this particular model, which is a solid success for our shipyard. We have recently started working on the Salona 60, and a new model, the Salona 38. The commercial season of boats does not coincide with either the calendar or financial year. How long does it last? Our season starts in autumn and lasts until early summer. I must note that customer habits have
Innovation and comfort sell products
changed recently. We received the highest number of orders between February and the beginning of summer. There is a trend to shift orders towards the end of the commercial season. We have already achieved 30% of our plans, and if trends continue, we might have an excellent season. How many employees are there in AD brodovi? Are you a long way from series production? We have around 80 workers, eight of whom are engineers. We wish for series production for Salona, but until now we have not had a sufficient number of orders to achieve that, since we are working on 50 boats a year, of various models. With the latest contract and order from the Norwegian company Hansvik Bat, which concerns the construction of cab-
Recovery in sight Are there signs of recovery for small-sized shipyards? There are, at a global level, although it is very slow. That is why we are presently focused on two aspects. The first regards developing new models, and the other is to find new markets. Lat year we entered the markets of six new countries, and we found distributors for Salona. We manage to sell the Salona 37 in Korea, Japan and Columbia, the Salona 34 in Israel, the Salona 44 in Greece and two Salona 44s in Australia. We signed a contract with an excellent representative in Australia, and we expect good results.
five local shipyards. The value of each boat is €30,000. The first 70 are scheduled for delivery in 2011, and if the plans of the Norwegians are achieved, we should build 455 sailing boats during the next five years. Hansvik Bat is a shipyard with a 45 year-old tradition, and the model of these yachts was awarded as Boat of the year” in Norway at the fair in Oslo. Is the boat project entirely Norwegian? The project is indeed Norwegian, and we will construct the entire boat according to the turnkey system. We will construct plastic and wood equipment. It will be exclusively Croatian work, whilst we will look for other equipment (inox, glass) in Croatia or on the global market. What is the situation on the world market like for Salona boats? In the market niche of performance cruisers there is a lot of competition. We are trying to penetrate the market as much as possible. We regard the crisis as an opportunity for the better global positioning of Salona.
4
Privredni vjesnik Year IV No 0143
( 404 Croatian nationals evacuated from Libya
EVACUATION OF CROATIAN WORKERS FROM LIBYA
All safe and wishing to return soon Before the riots, Libya was one of the biggest construction sites in the world. Numerous Croatian companies left behind lucrative deals, but managed to successfully evacuate their workers Drago Živković he evacuation of Croatian workers from Libya successfully came to an end with 404 Croatians and 51 foreigners being evacuated between February 21 and March 1 with joint efforts by Croatian companies and diplomats. There are four remaining Croatians, who did not wish to leave Libya, but evacuation will be organised for them if needed. The Minister of Foreign Affairs, Gordan Jandroković, evaluated the evacuation from Libya as the most complex operation Croatia has ever undertaken.
The entire world is waiting for the end result, when they will try to find the right people to discuss possible compensation for damage caused “The fact that our workers were dispersed over five different locations made it no easier. They were situated in Tripoli and Benghazi and three other locations within central Libya. The evacuation from the continental part was the most demanding, since it took days to obtain landing permission from Libyan authorities. This was the reason that some workers were evacuated using overland routes to Egypt. Croatia also helped evacuate foreigners, just as many foreign countries took in Croatians in their aeroplanes and ships. Jandroković pointed out that companies helped immensely with their contacts in Libya, as
Boris Scitar/PIXSELL
T
well as the Croatian embassies in various countries, including diplomats at the UN. Overland route to Egypt The last of the evacuated Croatian workers were from the company Crosco, dispersed over three locations. According to board president, Igor Vrban, they organised planes for 27 of them from Kufra, a south-east Libyan oasis. With the help of a specialised English agency, they travelled in convoy to the Egyptian border, and were then taken to Cairo, where a plane from Croatia Airlines waited to take them to Zagreb. Geofizika had 134 workers in five locations in Libya, four of which were in the central part of the country. The director of business development at Geofizika, Dalibor Mikulić, opines that they also boarded nine Americans and five Malta nationals, with great help from Libyan partners. The riots in North Africa struck a huge blow to Geofizika, since this is their main export market. The work that was inter-
rupted, says Mikulić, was worth €39 million, and they also had plans for new deals, worth €25 million. Furthermore, they left behind €30.14 million worth of equipment. Mikulić hopes the situation in the country will settle soon and that they will be able to restart operations. Until then, they will have to find new work for their 300 workers. Investment protection Board president of Montmontaža, Mladen Antunović, specifically points to the help from their Libyan partners, who kept Croatian workers safe; also the Germans and Italians who provided evacuation boats for the workers of Montmontaža, with great assistance from the Croatian embassy in Rome. Antunović says workers of Montmontaža are also eager to return to their work in Libya, since it is a country of great potential and one of the biggest construction sites in the world prior to the current riots. The first workers that managed to leave Libya were
workers of Viadukt. They were extremely lucky, according to board president, Joško Mikulić, since their Libyan colleagues stood at the head of convoys and guided them to Tripoli past the control points. In that chaos they managed to find an aeroplane from the Bulgarian government. They were immediately put on the plane and evacuated. Croatia undoubtedly suffered great damage caused by the Libyan riots. However, it remains vague whether they will they be compensated in accordance with the signed contract on investment promotion and protection. Jandroković explains that the problem is that the entire world, including Croatia, is waiting for the end result, when they will try to find the right people to discuss possible damage compensation. Regarding the Croatian attitude towards Libya, Jandroković shares the opinion of the EU: the situation is out of control, the present government lost its legitimacy, new elections are needed.
www.privredni.hr Business & Finance Weekly
5
( 150 workers ( 70% of shares employed by Prvi maj
owned by employees
PRVI MAJ, LASLOVO
50 years of work and still going strongly onwards Their production programme consists of protective and work clothing and they can provide complete uniforms for military, police and special production for any country Drago Živković o be able to celebrate a 50th anniversary within the Croatian textile industry, and for it to happen in the eastern part of Slavonia, is quite remarkable, especially if when considering a company employing over 150 staff, mostly women, in an Area of Special State Concern. Prvi maj from Laslovo was founded in 1961 and by 1991 it employed over 600 workers. The company was privatised and small shareholders with some70% of shares became majority shareholders. The remainder is owned by Hypo bank. “2010 was the most difficult year for Prvi maj in the period from the War to the present,” stated Davorka Vučak, Director. They reprogrammed their liabilities by negotiating with suppliers
T
and the state in order that salaries could be regularly paid and no staff would have to be laid off. No incentives The Prvi maj production range consists of protective and work clothing, so they mainly rely on work from the public sector which gives them security and increases their chances for survival. Currently, the sewing
of military and police uniforms are of major importance for them where they participate through being allied member tenderers. According to Prvi maj, government authorities should give them more support in public procurement, bearing in mind the fact that they are the only large company in the area and employ mainly women, which is of considerable importance to the local community. They are hoping for the better treatment of the textile industry both through incentives and support, as they received no incentives last year nor had the possibility to participate in some projects which usually attract support. Burdened by the recession, with hopes deceived, Prvi maj had to freeze the necessary investment into warehouse reconstruction and distribution channel development. Nevertheless, the company is anticipating at least a slight im-
provement this year as current results have outperformed last year, stated Davorka Vučak. “It is time to open some valves, to give us the possibility to work for state-owned and public companies. We are currently commencing work for the Ministry of Defence and are anticipating a contract with Ina for a one year term”, was the optimistic forecast of the Director. Prvi maj, together with other members of the economic interest grouping Opteko, which comprises 10 companies, can provide complete uniform solutions for military, police or special programmes for any country. If there is more understanding amongst government authorities and with a little more luck on foreign markets, Prvi maj, which survived the War, will also live through the crisis. The 50th anniversary will be celebrated unpretentiously, together with the local community where it has remained a shining lighthouse of employment.
CROATIA-SERBIA BUSINESS FORUM
Bridging the Sava together t the Croatia-Serbia business forum held recently at the Croatian Chamber of Economy, the President of the Republic of Serbia, Milorad Dodik, invited the Croatian authorities to implement the formerly proposed project Gornji horizonti. It covers the improvement of the upper Trebišnjica river and hydro power plant extension Plat2 in the vicinity of Dubrovnik, which could be of
A
considerable importance to both Croatia and Bosnia and Herzegovina. In addition to providing electricity at am acceptable price, the project would impact on the management of excessive amounts of water from river flows, which is now cooling the Cavtat bay. The Croatian President, Ivo Josipović, participated at the forum and invited businessmen from both sides of the border to
join in co-operation as there are no longer any political barriers. The first visit of Josipović to Banja Luka last year allegedly encouraged a new wave of trade, which has in the meantime increased 40%. There are various possibilities for co-operation in the energy sector, infrastructure construction, the food industry and other sectors, pointed out Josipović. Improvement to the navigability of the Sava is also a
common interest, as well as the construction of bridges, added Dodik. He also pointed out Serbian support for Croatia in the EU accession talks and thanked the Croatian government for ceding to Serbia the translation of European documentation. The forum was attended by representatives of sixty companies from Croatia and the Republic of Serbia, discussing opportunities to improve co-operation. (I.V.)
6 WE PRESENT
Privredni vjesnik Year IV No 0143
SMJELI, DUGOPOLJE
BIG TOYS, POTPIĆAN
Technology against crisis
Champion prosciutto The greatest interest is in prosciutto, pancetta and traditional grill sausages he company Smjeli from Dugopolje has been in the business of curing prosciutto and other dried-meat products since 1997. Its owner and director, Vlado Prančić, employs three workers and more during seasonal operations. In addition to prosciutto, Smjeli also produces cured pancetta, paprika sausage buđola, grill and other types of sausage. Three years ago, Smjeli became champion at the Prosciutto Fair in Sinj. They obtain around 80% of raw material from Slavonija, and im-
T
Smjeli markets 7,000 pieces of prosciutto per year port the remainder. Prančić obtains raw and fresh pork thighs (from a prolonged fattening process), mainly from the company Kutjevo and Slavonian farm of the company Pivac. The biggest problem in this business is securing quality raw material. An additional big problem, seldom mentioned, is the low-quality processing of the thigh. A butcher can destroy top quality raw material for prosciutto in a single bad move, points out Prančić. In order to start producing prosciutto, you need capital on which a return is possible only after three years, if you are able settle claims, which is becoming more
difficult. However, his company is satisfied with his distributor, the Pivka from Rijeka. Complex buđola The ability to obtain protection for prosciutto is slowly coming to an end. Prančić hopes that he will be able to achieve a more favourable and better supply of raw materials with the help of the association Dalmatian Prosciutto, which is working on branding the product. He is displeased with the fact that no EU funding is available for this purpose, more precisely from IPARD, since family farms are required to have their own pork breeding. Not a single prosciutto plant in Dalmatia has one. Some series producers have their own breeding programme and can obtain funding. Another problem is that large-sized companies are not family farms, explains Prančić. He points out that in addition to prosciutto there is also great interest in pancetta, for grill sausages (until March), whilst buđola is a complex product in terms of production and marketing; it possible to market buđola only in exclusive stores and restaurants. Restaurants along the coast are barely profitable during the winter and payment is difficult. In summer, however, during the tourist season, producers mainly turn to fresh rather than dried-meat products.(J.V.)
Big Toys exports 97% of production to many foreign markets e are investing €200,000 in new machinery and we hope to employ at least four to five workers by the end of the year”, noted Mauro Ukušić, director of the company Big Toys which exports 97% of its production. For this reason, the Ministry of Economy pronounced it best exporter in the category of medium-sized companies. From 2002 until today, they have invested in automation, robotics, the production of chairs and furniture made from pipes and sheet metal, raising their export rate to 97%. However, the crisis had a severe impact on them. Ukušić ventured that the first half of 2010 had been the most difficult. Sales plummeted by 40%, some workers’ contracts were not extended and those who stayed worked for minimal wages. With new employees, the company will have around
“
W
Investment of €200,000 into new machinery and new jobs 50 workers, and Ukušić hopes to reintroduce a second shift to increase sales by 35%. New machinery will enable them to produce square and rectangular pipes and chrome-plated chairs, paving the way for entry into the German, Spanish and Austrian markets. They are currently ex-
porting to Italy, France, Slovenia, Bosnia and Herzegovina, Serbia, Bulgaria, Romania, Greece and other countries. Expensive raw materials Production has been burdened by the increasing price of metals and the oscillating prices of other materials they are forced to import. “Incoming prices constantly change, and we cannot afford to produce in large quantities, only to keep them stored. Furthermore, margins remain low, and many companies still lack concrete programmes for achieving everything they would like to achieve. That is the reason why production cannot be planned for the long-term”, says Ukušić, suggesting the typical local problems. In fact, in addition to 136 tax and non-tax duties, exporters face problems with tariff regulations, since customs officials cannot seem to comprehend that two companies can produce together and export one product, and both being regarded as exporters. “Moreover, foreign purchasers seem to be increasingly extending payment deadlines, and sometimes we need to wait 120 days.”. Ukušić remains optimistic in spite of everything. He says a mild recovery in the European economy is visible, and their new technology is unique in this region and should secure new markets and new deals. (J.F.)
www.privredni.hr Business & Finance Weekly
7
CROATIAN FOREIGN CURRENCY MARKET Currency
AUD CAD JPY CHF GBP USD EUR Source: HNB
EUR
Kuna exchange mid-rate
7.44
5,373824 5,451689 6,425205 5,704699 8,628773 5,304979 7,412116
USD
5.38
2.3.
3.3.
4.3.
5.80
7.43
5.36
5.78
7.42
5.34
5.76
7.41
5.32
5.74
7.40
5.30
5.72
7.39 1.3.
WEEK MARCH 5, 2011
CHF
5.3.
5.28 1.3.
2.3.
3.3.
4.3.
5.3.
5.70 1.3.
2.3.
3.3.
4.3.
5.3.
CHANGES IN HOUSEHOLD INCOME AND OUTGOINGS IN 2010
::: news
80% of households with insufficient income
Bad loan standing at 11.2% According to HNB data, the share of bad loans in the total loan volume saw growth of 11.2%, compared with 7.8% in the same period in 2009. Cash loans are considered the most problematic, whilst the least problematic are those for housing. Bad corporate loans stood at €2.67 billion and bad personal loans €1.36 billion.
52% of household outgoings on basic daily needs ccording to the GfK analysis of household income and outgoings movements in Croatia in 2010, almost 80% of households had an insufficient level of income. The average Croatian monthly household income stood at €865.75 in 2010, with the average annual household income at €10,388. Income was highest in Zagreb with €1,035 (€1,045 in 2009), followed by Istria, the Croatian Littoral and Gorski Kotar at €983 (€1,045 in 2009). On the other hand, the lowest income level was in Slavonia, at €650 (€734 in 2009). According to the subjective opinions of individuals surveyed, a sufficient monthly income level
A
for meeting basic daily expenses should be €1,186, whilst for a fourmember household it should be €1,507. The gap between earned and required income is on aver-
Lending up 16% age some €320, according to the GfK analysis. 9% of households stated that their income exceeded that required to meet their needs, whilst 11% stated it matched their needs. 77% of households stated that their earnings level was insufficient, whilst 3% of people
surveyed refused to answer this question. If earned and required income data among households with insufficient revenue are compared, their required income level should on average exceed their current income by 67%. The largest item in the household budget is food and beverages, at about 32%. When housing expenses are added, 52% of household income is expended exclusively on basic daily needs. In addition, lending was up 16%. Household, traffic and education expenses increased in 2010. On the other hand, people started reducing food and beverages outgoings, as well as on clothing and footwear, non-durables, cigarettes and mobile phones. (V.A.)
821,721 income tax returns submitted IRS received about 822,000 annual income tax returns for 2010 as stated by the Ministry of Finance. 821,721 income tax returns have been submitted and the final figures will be known later as income tax returns sent by post have yet to be received. The Ministry anticipates about 1.1 million income tax returns and estimates this will bring in some €0.23 billion in tax paid.
Craft loans at small interest Sisak-Moslavina County has recently invited a tender for craft and entrepreneurial loans with an interest rate ranging from 2.5% to 4.74%. Last year 59 loans were granted under this scheme covering €15.75 million and creating 337 new jobs. This year the credit fund has €13.7 million for this purpose. Loan users can be craftsmen as well as micro, small and medium-sized companies.
8
Privredni vjesnik Year IV No 0143
::: news
Music artists struck by pirate notes
Exports up 5.4% in January Notwithstanding a decrease in the number of ships exported, total Croatian exports in January were 5.4% up over the same period last year. According to the Croatian Bureau of Statistics data, total exports in January were €0.64 billion, whilst imports were 0.7% down to €0.94 billion, reducing the deficit by 11.8%. Export growth was due to farming, fishing and electricity. The processing industry recorded a reduction in exports of 3.1%, as a result of the downturn in shipbuilding.
Down, down, down In 2010 sales of local recordings totalled 1,117,259 - 45% down Boris Odorčić he Croatian Music Institute (IHG), co-founded by associations of composers, musicians and music recorders presented the first available results from the local music industry in 2010. They clearly illustrate how seriously this economic branch has been threatened by recession and piracy. According to the Croatian Discography Association (HDU) data and the Service for copyright protection of music (ZAMP), actual sales of recordings in 2010 saw a decrease of 42% over 2009. There was a plunge of 45% in the sales of recordings (CD albums and singles and DVDs) by domestic music performers with sales totalling 1,117,259 copies. The decrease in sales of foreign recordings was 17% over 2009. However, the mere 289,608 sold copies of all types of foreign performer recordings clearly illustrates their music is being more available on the internet than local music and has therefore been dramatically affected
T Nett salary in Zagreb €885 The average nett salary in Zagreb for December 2010 stood at €885, 3.2% down compared with November and 3.3% up over December 2009, as announced by the Statistics Department of the Zagreb Office for Strategic Planning and City Development. The average nett salary in Zagreb was €862 in 2010, a nominal 1% up with over 2009. Lowest nett salaries in Zagreb for December 2010 were in clothing production, at €457.
Austrians want Croatian contractors Braunsberger Holding representatives, Austrian investors into the shopping centre City Point in Varaždin, announced that they will invite a tender for the work contractor amongst Croatian construction companies. The investment value is €52 million, and will cover about 25,000 m2 and some 80 shops. At the recent press conference it was stated that the construction site will employ some 1,000 workers and that the shopping centre will create at least 600 new jobs when completed.
by illegal downloading for some time. The good news, to some extent, is that sales of music in digital form recorded growth of about 11% over 2009. Nevertheless, it is not easy to be optimistic: computer downloads were 56% up, yet mobile downloads fell by almost 14% for the first time. Logical downgrade Milan Majerović-Stilinović, the Head of Public Relations at IHG, pointed out that recordings have become just one way of music distribution and consumption
Imperative changes in market models and therefore the decrease in its physical sales is logical. “A similar growth and drop in the sales cycle was seen in recordings prior to CD’s, vinyl and music cassettes. Technology is changing, yet the need for music remains, which is clearly illustrated by the fact that the word “music” is the most commonly searched-for word on the internet. The downgrade in the sales of physical recordings indicates that people use alternative distribution channels to access music, which is, unfor-
tunately, most commonly illegal. The wishes and desires of buyers concerning the acquisition of music are constantly changing. People do not only want their music in their CD players; they also want it on their PC’s, laptops and mobiles which they always carry around. Problems arise due to illegal distribution and they are the birth pangs of a new age in which, ultimately, music will come out as the winner”, he stated. Croatian music industry representatives, as with their foreign colleagues, anticipate digital music and market model changes in the near future. Nevertheless, Branko Komljenović, HDU Director, stated that such an annual sales downgrade has never been witnessed so far. “The first sales indicators for 2011 make us hope that this trend will not continue,” he revealed. Sfeci: wrong people earning money Paolo Sfeci, the Croatian Copyright Protection Association Vice President, stated that music is a large global business, yet the wrong people are currently earning money. These are hardware and mobile phone producers and ‘torrent station’ owners, whilst those producing music are earning almost nothing. “Fewer and fewer Croatian musicians can lead decent lives. The number of new performers coming into existence and surviving these conditions is also decreasing. The consequences of this situation are a reduced range of musical programmes, a deprived culture and a poorer country”, he opined.