PV International 0161 by NEstar

Last year ended in deficit Only a small number of Croatian companies implement successful regional strategies, but Croatia has to have at least 20 regional leaders to achieve its economic and scientific potentialy

FINANCE INDUSTRY PAGE 5-8

TOP 400 COMPANIES PAGE 9-14 2010

Croatian Business & Finance Weekly Established in 1953 Monday / 18th July / 2011 Year IV / No 0161 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

BUSINESS SENTIMENT SURVEY FOR THE SECOND QUARTER 2011

Optimism weakens 407 companies generating 10.6% of total revenue and employing 9% of total work force participated in the survey Mirjana Ä&#x152;iĹžmeĹĄija, Ph.D.

Zagreb Faculty of Economics and Business total of 407 companies, 160 in the processing industry, 55 in construction , 71 in trade and 121 in services, participated in the business sentiment survey conducted by Privredni vjesnik at the end of June. Those surveyed generate 10.6% of total revenue and employ 9% of the total number of those employed in Croatian economy. According to the latest survey data, optimism amongst businessmen is weakening. Business cycle indicators in Croatia have been decreasing or retaining the level from the previous quarter, conforming with assessments and expectations of a partial slowdown in global economic growth

Processing industry lagging After eight consecutive quarters of increase, business sentiment indicators recorded a fall of 8.5 points and currently stand at 12.4. If one takes into consideration that it is the first and a not so significant decrease amongst indicators, the conclusion may be reached that more significant amendments within

the business cycle cannot be expected. Nevertheless, it is obvious that the expectations from the second part of the last and the first quarter of this year are being altered, implying the impossibil-

ity of a revival of economic activity in the processing industry over the last quarter of this year. When one considers individual issues regarding the assessment of the current business position, stock, orders, foreign orders and employment, as well as expectations in the forthcoming three to six months, it becomes evident that most businessmen do not expect any significant changes by the end of 2011. The slump of the construction industry According to the latest research results, business sentiment indicators for the construction industry have virtually retained the level from the previous quarter, standing at -54.1 points and still negative. Pessimism permeates nearly all assessments and expectations amongst businessmen in this sector. Over half of respondents were faced with difficulties, mostly in finance, over the previous quarter, whilst 78% has staff surplus. An aggravating fact is also that almost 50% of those responding are anticipating less work in the third quarter over the second. No significant change in trade Business sentiment indicators in trade are currently at the same level as over the

third quarter of 2010 and stands at 34.4 points. Nevertheless, a more significant recovery in the trade sector cannot be expected. The current situation in motor vehicle trade and wholesale is considerably adverse. Less than 10% of respondents assess their current business position as being favourable. They identified the problem of excess stock, particularly in motor vehicles (90%). Businessmen in trade emphasise the problem of staff surplus (49%) and liquidity issues or even illiquidity (65%). Services sector still stable Indicators in the services sector increased 3.3% over the previous quarter, currently standing at 25.5 points. It is evident that the situation here is more favourable than in other economic sectors, since it is witnessing its third consecutive increase. 50% of respondents expanded their business activities and increased turnover during the previous quarter. An equal number of respondents expect an increase in turnover in the forthcoming quarter, which is partly a consequence of a seasonal impact. Changes in the numbers employed and in service prices are not expected in the forthcoming quarter. By the end of the year, businessmen in the services sector anticipate an improvement in activity, or according to the worst scenario, to retain the current level.

Privredni vjesnik Year IV No 0161

GORAN ZRILIĆ, BOARD PRESIDENT, SOLARIS

Tourism is a daily struggle Parallel with financial investment, we invest intensively in our staff since we can only survive with expert and quality staff and services customers wish to buy

ven though many find it difficult to believe, tourist workers do not only work during the season, but throughout the entire year. When the current season ends, preparations for the next start immediately. From early autumn we will start to process primary markets, and from the first half of January, presentations at tourist fairs will be intensified. In addition to all this, success also requires timely marketing positioning on the market, investment into the quality of our programme and a bit of luck. Having all this in mind, Solaris, as the biggest tourist company in the Šibenik area, a resort with five hotels spread along four kilometres of coast, positioned itself according to different target groups and markets depending on the season. In other words, we are oriented during the pre-season towards conferences and groups, whilst the season is based on holiday tourism. As a result of this business policy, Solaris achieves almost 70% turnover in the Šibenik area. With

IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription

marketing positioning we aim to satisfy the demands of the market, which includes continuous investment into quality. Aware of this fact, we first renovated the accommodation facilities in 2003 and then updated the infrastructure, which was completely ruined; we invested in accompanying offers, with a special stress on horticulture and attractions around the hotel. In addition to financial investment, we invest heavily in our staff. We know we can survive only with expert and quality staff, offering services the customers wishes. In accordance with such business policy we decided not to release our workers during the peak of the recession, nor did we reduce their salaries or take any kind of restrictive measures. The recession affected many behavioural trends of our visitors, and during the past several years, tourist workers had to learn how to fight for the market on a daily basis, whilst our plans needed to be adjusted according to the situation. Cautious of such an economic situation, we intensified auto-destinations in order to be sure we would at least meet the low margin of target quota. The results of such strategy exceeded our expectations. Last year, we registered over 630,000 overnight stays, which is 15% up in relation to 2009. Regarding the current season, issuing any kind of precise figures would be like looking into a crystal ball. It is a fact these are uncertain times for many markets, and this can benefit Croatian tourism. However, we need to wait for the end of the year for any precise results.

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

(

companies in small shipbuilding three years ago

ARDUOUS RECOVERY OF SMALL SHIPBUIL

High excise taxe

A decrease in shipbuilding orders considerably contributed industry. The recovery is significantly slower than expected a Jozo Vrdoljak he data for 2010 are still being processed and consequently the numerical impact of the crisis and the possible indicators of recovery within the small shipbuilding sector cannot currently be analysed. Nevertheless, the recovery of this sector - once one of the most propulsive sectors of the Croatian economy - is proceeding at significantly lower pace than expected and many small shipyards have ceased operating. There were 135 companies in small shipbuilding in 2008 and over 131 in 2009. The companies in this sector saw total revenue of €65.75 million and profits of €5.03 million in 2008, whilst one year later the figures were €44.20 million and €3.88 million. These results clearly illustrate the impact of the crisis, which peaked in 2010, according to representatives of the Croatian small shipbuilding sector.

Slightly better than last year A reduction in new orders contributed considerably to the crisis, whilst the introduction of a luxury excise tax rates on vessels, automobiles and aeroplanes was the death blow to small shipbuilding. The procedure to

amend these tax rates continued for too long, further aggravating the problem. According to the impressions and estimates of the most highly regarded representatives from this sector, the current picture is not at all promising. The success of individual companies is an exception rather than a rule. “The current situation in small shipbuilding is slightly more favourable than at the same time last year, as some producers concluded contracts on construction of vessels for the police and customs, some subcontracted work for foreign customers, some have managed to gain orders for production of more affordable small vessels of slightly lower quality. Subsequently, for small vessel producers, with a value between €20,500 and €27,400, the situation improved slightly , whilst producers of more

www.privredni.hr Business & Finance Weekly

INTERVIEW

( €65.75 million

total revenue generated in 2008

( €5 million profit in 2008

LDING

es have jeopardised us seriously

to the crisis, whilst the introduction of new luxury excise tax rates has been the death blow to the shipbuilding and many small shipyards have ceased operating Series production missing

luxurious vessels are still faced with serious problems”, pointed out Boris Vukušić, The President of the Small Shipbuilders Association at the Croatian Chamber of Economy. He believes that abolishing taxes should be insisted upon, as well as on small shipbuilding incentives, yet certainly in a different way than has so far been attempted. “The most serious problem that we in the Small Shipbuilders Association are concerned about is the grey economy. This way of working significantly lowers our rating which we have been attempting to build and promote abroad through our Association. We were identified with quality, whilst currently there is a trend towards producing more affordable smaller vessels, aiming for profit and partly as a consequence of reduced purchasing power. This cannot

have a positive impact in the long term”, explained Vukušić. Abolishing excise taxes is an option Romano Pičuljan, owner and Director of Pičuljan Marine shipyard and the President of the Small Shipbuilders Association and Nautical Sector at the Croatian Employers Association believes that it is possible to completely abolish excise taxes on vessels which would considerably increase the competitiveness of Croatian small shipbuilding solely through common action. Petar Franulović, Assistant Director at Montmontaža Greben from Vela Luka, a shipyard founded in 1948, believes that the only possibility for survival for larger shipyards in the small shipyard sector is operating in foreign markets or exports. According to him,

The most serious deficiency of Croatian small shipyards with respect to world standards is a lack of series production. This considerably reduces production prices, contributes to the identification of producers and increases product competitiveness. The closest to series production amongst Croatian companies is the company Ad brodovi which belongs to the Salona Group. The company had a solid 2010 due to new models, whilst at the beginning of this year it signed a contract with a Norwegian company, Hansvik Bat, for which it builds motor boats with cabins. “This could enable us to become series producers, since we are dealing with identical boats of 6.3 meters in length, which have so far been constructed in Norway. The value of each is €30,000, we agreed on the delivery of 70 boats in 2011 and, if Norwegian plans are achieved, we should construct 455 boats in the forthcoming five years”, pointed out Krešimir Sečak, President of the Salona Group from Solin. family shipyards with merely a few employees can serve local markets since they mainly work for customers they already know. Currently Franulović cannot see any indications of recovery. “Generally speaking, we are export-oriented which has accounted for our ability to cope with the crisis in the last few years both at local and foreign markets. We have been exporting for 50 years, whilst annual export value ranges between 60% and 70% or €6 to €7 million annually, constantly participate in tenders where our competitors are Italians, Spanish, German, Dutch and particularly Turks, whose small shipbuilding has made a large step forward in the last decade”, pointed out Petar Franulović. Higher interest rates, lower competitiveness Franulović stressed bank policy as an aggravating circumstance regarding competitiveness, since interest rates on guarantees are considerably higher than in countries competing for new

jobs with Montmontaža Greben. “In addition, the fact that small shipbuilding has no support has a significant negative impact on our competitiveness. Government support would fairly increase our competitiveness. We are sometimes rejected due to an outdated document which is unacceptable. We are fortunate to provide services throughout the world and to constantly invest in development and new models. New models are an imperative for competitiveness”, explained Franulović. Consequently, he does not believe it is possible to resuscitate small shipyards which have temporarily ceased operating. “Shipbuilding is identical to the automotive industry. You must be present constantly and constantly developing new models”, he stated, adding that he was disappointed with the government negative response to their proposal. The company, employing 300 workers, proposed to the Croatian government building vessels for coast guard duty in exchange for abandoned military facilities.

Privredni vjesnik Year IV No 0161

( over €0.41 billion

invested by Tele2 in infrastructure development

JULIAN OGRIN, TELE2 CROATIA BOARD PRESIDENT

No room for another operator Croatian market corresponds to more mature West European markets regarding customer habits, services and the range of mobile devices managed to invest a mere €0.68 million, mainly as a consequence of urban planning restrictions affecting construction. Tedious, administrative procedures to obtain a construction permit are another aggravating condition, which hinders the construction. We are fully committed to proceeding with long-term investment; nevertheless we must have a strong partnership with the government to ensure faster and larger investment into Croatian economy.

Boris Odorčić obile devices have become powerful tools for internet surfing. Most daily communication, such as Facebook or the use of a chat service, has transferred to small screens. Julian Ogrin, Tele2 Croatia Board President, pointed out that this has been a consequence of increasingly attractive mobile operator data packages as well as a decrease in prices

What is your assessment of the Croatian telecom market? The Croatian market corresponds to more mature West European markets, with respect to user habits, services and range of mobile devices. Some segments, such as SMS, are even more developed. In addition, Croatian users are amongst the largest consumers of data services in the region. The number of mobile internet users is expected to increase and reach the West European market average. Mobile phones are frequently used in Croatia and in ways comparable with other West European markets. Nevertheless, Croatians do not have the habit of analysing their telecommunications expenses, finding out how much they are overpaying and how much they could save. Is the Tele2 Croatian market position satisfactory in your opinion? Our latest business results have again indicated that consumers have identified the quality of the products and services offered

by Tele2, which, in combination with very affordable prices, has resulted in strong growth, the number of users and successful business results. After over five years of presence in the Croatian market, we have managed to rank as the best deal quality telecommunications services provider at affordable prices. We are anticipating further growth in all the key indicators throughout the year. How satisfactory is the current legislative framework for the telecom sector? Tele2, as one of the leading investors in Croatia, focuses on the development of infrastructure

Croatians do not have the habit of analysing their telecommunications expenses, finding out how much they are overpaying and how much they could save which will offer the best data experience in combination with the most affordable price. Unfortunately, we are still in the position where we cannot make full use of the planned budget. This can be best illustrated by the example of Istria, where we planned to invest over €6.85 million. We

What level of investment in development has there been in Croatia thus far and how exactly? Tele2 has invested over €0.41 billion in infrastructure development to date. In addition, we have invested an additional €0.14 billion in our brand and retail network development. We have been investing in product and services development, opening of new points of sale and construction and maintenance of GSM and UMTS network. Initially, we had to make considerable investment, due to network construction, whilst currently we are investing in growth to attract and retain new customers. Is there room for another mobile operator? In my opinion, there is no room for another mobile operator. Nevertheless, the decision about whether to enter this market or not must be made by potential investors after market analysis which will indicate the profitability of any investment.

www.privredni.hr Business & Finance Weekly

CROATIAN BANKING IN 2010

Prudence is an imperative Banks must support production, trade, tourism, agriculture and all production projects, not to impact on the negative spiral, accelerating it and affecting an increasing number of companies Ĺ˝arko Primorac, Ph.D otal assets of banks saw an increase of 3.3% last year and its share in GDP is about 117%. A slight growth in total assets of banks is an indicator of fairly low business activity, particularly in the segment of lending compared with the pre-crisis years. Subsequently, the increase in banks assets last year was slightly exceeded 2009. The group of large banks recorded a slower average total asset increase, whilst some smaller

banks witnessed a more prominent increase, uncommon in an economy in depression. Nevertheless, the increase in total bank assets indicates the low intensity of lending, typical of bank behaviour in recession. Altered asset structure The structure of banking sector assets has slightly altered, primarily due to alterations in the lending system. Government lending is obviously increasing, whilst corporate and personal lending is decreasing. Banks proceeded

As a consequence of such conditions, companies attempted to find a way out by lowering their orders and prolonging payment deadlines, as well as by non-settlement of their own invoices, which further lowered their business activity and increased their illiquidity

following their prudent lending policy last year, even though they were slightly active in that segment over 2009, which is illustrated by the data on increased lending to government, as well as corporate and personal lending (totalling 6.88%). Throughout the year banks were under considerable pressure to increase lending due to the very slow economic recovery. Nevertheless, banks retorted that intense lending was impossible due to the lack of satisfactory projects. Even though such claims are partly true, high

Privredni vjesnik Year IV No 0161

FINANCE INDUSTRY 2009.

2010.

% change

377.361.109

389.943.193

3,33

Funds (nett total assets)

49.704.153

57.931.399

16,55

Leasing (assets)

33.634.131

28.078.061

-16,52

Insurance (assets)

15.491.766

14.800.911

-4,46

6.723.735

6.870.067

2,18

482.914.894

497.623.631

3,05

Bank (assets)

Housing Associations (assets) TOTAL

GDP growth, assets, loans and deposits (in billions kuna) 400 350 300 250 200 150

GDP*

Assets

Loans

Deposits

100 50 0

2004.

2005.

2006.

2007.

2008.

2009.

2010.

Source: HGK and bank balance sheets 2010.

Top 10 ranking (numbers indicate position) Bank / year 2010. 2009. 2008. 2007. 2006. ZAGREBAČKA BANKA 1 1 1 1 2 PRIVREDNA BANKA 2 2 2 2 1 HYPO ALPE-ADRIA-BANK 3 3 5 3 6 RAIFFEISENBANK 4 5 3 4 3 ERSTE UND STEIERMÄRKISCHE BANK 5 4 4 5 4 SG - SPLITSKA BANKA 6 6 6 6 5 VOLKSBANK 7 7 8 8 10 OTP BANKA 8 8 9 9 9 HRVATSKA POŠTANSKA BANKA 9 9 10 10 8 MEĐIMURSKA BANKA 10 10 13 11 12

interest rates and other lending costs were amongst the aggravating factors for an increase in entrepreneurial activities. As a consequence of such conditions,

The least risky way out from this vicious circle is that leading to increased productivity and employment. companies attempted to find a way out by lowering their orders and prolonging payment deadlines, as well as by non-settlement of their own invoices, which further lowered their business activity and increased their illiquidity. In addition, a negative spiral appeared and diversified into sev-

www.privredni.hr Business & Finance Weekly

7 Ranking of Insurance companies - 2010 2010.

2009.

Rank

9 10 10 9

Total Company

2009. 000 kn

2010. 000 kn

% change

Croatia osiguranje Euroherc osiguranje Allianz Zagreb Jadransko osiguranje Kvarner VIG Basler osiguranje Zagreb Triglav osiguranje Grawe Hrvatska Generali osiguranje Merkur osiguranje

3.029.486

2.895.417

-4,43

1.043.632

1.002.530

-3,94

986.164

983.968

-0,22

661.183

641.492

-2,98

540.536

511.421

-5,39

448.903

409.012

-8,89

400.090

405.504

1,35

416.428

398.384

-4,33

272.077

306.303

12,58

295.938

290.398

-1,87

Analysis of insurance by type 2010. Accident

Life

Health

27%

Auto (casco)

10% House

15%

Other

9% Auto liability

31% eral segments: decreased lending and expensive loans causing, amongst other consequences, a lowering in the dynamics of business activity, increase in debts and a decrease in loan collection risks. Consequently, such process motivates banks to be more prudent by further decreasing loans and increasing the share of bad loans on their balance sheets. Increased personal savings The least risky way out from this vicious circle is that leading to increased productivity and employment. Banks must provide maximum support to production, trade, tourism, agriculture and all production projects, not to impact on the negative spiral, accelerating it and affecting an increasing number of compa-

nies consequently affecting also banks. Last year witnessed a 6% increase in bank deposits. Interestingly, corporate deposits achieved a negative annual growth of about -2%. Nevertheless, personal deposit growth rate stood at over 8%, where foreign currency personal deposits saw more intense growth, which is logical, since in conditions of lower business activity, there is increased unemployment and, consequently, an increase in personal savings. Subsequently, total personal savings growth rate stood at 8.4%, with 5.90% in kuna deposits and 8.99% in foreign currency deposits year-on-year. Interestingly, the overall performance of the banking sector is recording relatively satisfactory profitability. In ad-

Total gross premiums 10.000 milion kuna 9.686

9.411

9.240

9.064

8.000

8.180 7.350 6.626

6.000

6.067 5.578 5.098

4.000

4.071

4.336

4.530

3.516

2.000

1997.1998.1999.2000.2001.2002.2003.2004.2005.2006.2007.2008.2009. 2010.

8 dition to the objective lowering of interest income, the banking sector, nevertheless, achieved an increase in profit before tax of slightly less than 4%, whilst profit after tax stood at almost 8%. Last year 9 of 33 banks witnessed total loss of €38 million and an increase in financial losses in the banking sector of 57.7% over 2009. A high increase in losses is a consequence of the crisis, yet it also indicates and warns of the suboptimal structure of the banking sector. The level of incurred losses is also a warning that a segment of the current banking sector will not be able to meet the increasingly more demanding success criteria and will have to find recourse in different mod-

Privredni vjesnik Year IV No 0161

els of mergers or acquisitions by stronger groups. Bad loan level at the end of 2010 is estimated to have been 11.2%, where personal

In addition to the objective lowering of interest income, the banking sector, nevertheless, achieved an increase in profit loans stood at 7% to 8% and corporate loans at over 17%; that is one of the huge challenges to be gradually overcome by the banks in the forthcoming future.

Leasing company ranking2010 Market share of funds (by value of financial (asset levels as at contracts) 31. 12. 2010.) 2010. HRK

Share %

Type of fund

AssetsHRK

Share%

36.328.053.778

62,71

1.093.371.669

18,83

Obvezni mirovinski

2 Raiffeisen Leasing

881.426.117

15,18

Otvoreni dobrovoljni mirovinski

1.472.212.752

2,54

3 Erste & Steiermärkische S-Leasing

556.797.284

9,59

4 VB Leasing

Zatvoreni dobrovoljni mirovinski

287.794.180

0,50

415.365.336

7,16

5 SG Leasing

339.639.318

5,85

Umirovljenički fond

1.856.448.478

3,20

Fond hrvatskih branitelja

2.005.077.311

3,46

Otvoreni i privatni investicijski

13.704.939.611

23,66

Otvoreni investicijski rizičnog kapitala

358.061.791

0,62

1.918.811.508

3,31

57.931.399.409

100,00

1 UniCredit Leasing

Leasing - financial Motor cars Heavy vehicles Heavy machinery Other machinery Real Estate Boats / ships Other Total

2010. No 41.217 15.765 10.661 55 1.080 740 892 70.410

Value 5.581.463 5.156.691 6.482.591 37.759 6.166.827 867.262 353.001 24.645.594

Leasing - operative Motor cars Heavy vehicles Heavy machinery Other machinery Real estate Boats / ships Other Total

2010. No 61.242 7.529 3.196 22 83 869 213 73.154

Zatvoreni investicijski TOTAL:

Market share of funds (asset levels as at 31. 12. 2010.) Type of investment fund

Value 8.934.296 2.298.391 1.799.166 43.430 1.198.720 1.911.123 62.621 16.247.746

Dionički

3.362.527.663

Share % 24,54

Mješoviti

2.096.310.798

15,30

Novčani

6.976.091.718

50,90

Obveznički

1.270.009.432

9,27

13.704.939.611

100,00

TOTAL:

HRK

www.privredni.hr Business & Finance Weekly

LARGE COMPANIES ARE THE GENERATORS OF ECONOMIC GROWTH AND DEVELOPMENT

Žarko Primorac, Ph.D ast years business analysis of Croatian companies was based on certain, even though weak, optimism since a modest 0.2% GDP growth was achieved in the third quarter of 2010 year-on-year. It seemed Croatia finally entered a zone of positive economic growth and an exit from the crisis and recession. However, last year’s fourth

quarter brought another disappointment and the full year ended in negative growth of -1.2%. Croatia thus remained in a very small group of transitional countries (four in total), which ended the last year in deficit. Depressing position What is happening to the Croatian economic recovery and why are we in such a depressing position? It seems illiquid-

ity is the primary problem in this period. Let us mention that the present number of blocked economic and other operators, which is permanently increasing, exceeds 80,000, and total figure of unsettled claims exceeds €5.20 billion. The potential number of unsettled claims is even bigger, since the Finance Agency (FINA) publishes only those registered, that is unpaid, whilst there is a huge mass of unregistered claims

of companies and state institutions. During the previous one to two years, as illiquidity increased, the government initiated the drafting of a programme for solving illiquidity (programmes A, B, C); the CNB released supplementary resources, whilst illiquidity continued to spread. It is evident that illiquidity is not a consequence of current corporate performance or insufficient offer of money on the market, but a result >> Page 14

Number of entrepreneurs and workforce numbers employed 2006 - 2010 Total no. entrepreneurs Total no. entrepreneurs operating profitably Total no. entrepreneurs operating at a loss Numbers employed

2006. 78.509 54.132 24.377 844.307

2007. 83.532 54.037 24.854 888.798

2008. 89.656 58.333 31.323 898.155

2009. 91.320 54.317 37.003 885.289

2010. 96.758 55.541 41.217 859.808

Privredni vjesnik Year IV No 0161

RANK OF TOP 20 LARGEST CO RANK BY YEAR NO. STAFF

2010.

2009.

2008.

NAME AND ADDRESS

INA D.D.

ZAGREB

AVENIJA VEĆESLAVA HOLJEVCA 10

9.507

KONZUM D.D.

ZAGREB

M. ČAVIĆA 1A

11.267

HRVATSKA ELEKTROPRIVREDA D.D.

ZAGREB

ULICA GRADA VUKOVARA 37

414

HRVATSKI TELEKOM D.D.

ZAGREB

SAVSKA CESTA 32

5.773

PRIRODNI PLIN D.O.O.

ZAGREB

ŠUBIĆEVA 29

HEP-PROIZVODNJA D.O.O.

ZAGREB

ULICA GRADA VUKOVARA 37

2.269

ZAGREBAČKI HOLDING D.O.O.

ZAGREB

GRADA VUKOVARA 41

11.789

DISTRIBUCIJSKOG SUSTAVA 10 HEP-OPERATOR D.O.O.

ZAGREB

ULICA GRADA VUKOVARA 37

9.185

ZAGREB

JOSIPA MAROHNIĆA 1

27 ULJANIK BRODOGRADILIŠTE DD

PULA

FLACIUSOVA 1

2.007

ZAGREB

VRTNI PUT 1

961

20 TISAK D.D.

ZAGREB

SLAVONSKA AVENIJA 2

3.310

17 MERCATOR - H D.O.O.

SESVETE

LJUDEVITA POSAVSKOG 5

3.337

13 PLIVA HRVATSKA D.O.O.

ZAGREB

PRILAZ BARUNA FILIPOVIĆA 25

1.804

14 VINDIJA D.D. VARAŽDIN

VARAŽDIN

MEĐIMURSKA 6

1.054

25 PLODINE D.D.

RIJEKA

RUŽIĆEVA 29.

2.368

12 PETROKEMIJA D.D. TVORNICA GNOJIVA

KUTINA

ALEJA VUKOVAR 4

2.371

22 HRVATSKE ŠUME D.O.O.

ZAGREB

LJUDEVITA FARKAŠA VUKOTINOVIĆA 2

8.404

18 METRO CASH & CARRY D.O.O.

ZAGREB

JANKOMIR 31

966

31 KAUFLAND HRVATSKA K.D.

ZAGREB

VILE VELEBITA 6

1.747

Source: Boniteti.hr

OMV HRVATSKA D.O.O.

VIPNET D.O.O.

new company

www.privredni.hr Business & Finance Weekly

OMPANIES TOTAL ASSETS

EXPORT INCOME RANK

PROFIT AFTER TAX

RANK

ASSET VALUE

RANK

CAPITAL AND RESERVES

RANK

GROSS PROFIT GROSS PROFIT AS A % OF AS A % OF INCOME ASSETS

24.301.655.721

8.561.063.979

1.767.154.801

30.215.963.512

12.535.124.599

5,848%

7,272%

12.710.921.658

169.198.980

412.794.136

7.905.188.758

2.148.108.297

5,222%

3,248%

12.615.054.119

257.446.361

986.751.220

27.762.432.692

19.891.609.877

3,554%

7,822%

8.325.514.959

673.364.973

1.864.032.217

13.592.618.985

11.200.479.437

13,714%

22,389%

5.868.209.622

20.238.088

188

295

1.928.295.294

-793.571.177

394

0,000%

3.969.381.309

297

428.754.151

10.268.450.381

349.410.116

4,175%

10,802%

3.804.279.396

4.451.358

230

295

21.285.873.161

6.232.542.457

0,000%

3.776.181.424

297

85.129.822

14.704.113.955

71.072.384

237

0,579%

2,254%

3.735.430.580

97.338.526

122

50.699.933

1.398.154.596

843.645.628

3,626%

1,357%

3.540.592.650

2.423.051.744

33.094.133

1.841.176.150

70.612.717

238

1,797%

0,935%

3.453.749.158

363.555.354

557.166.604

2.945.990.773

1.851.867.534

18,913%

16,132%

2.985.774.967

17.478

294

295

997.909.560

102

391.848.257

0,000%

2.962.202.673

235.765

274

295

3.833.550.144

1.706.182.692

0,000%

2.795.442.595

1.911.703.953

555.019.887

4.778.821.806

4.229.884.347

11,614%

19,854%

2.719.019.135

148.990.784

25.694.125

2.114.023.150

658.505.493

1,215%

0,945%

2.640.390.230

297

32.655.335

2.440.685.571

307.584.237

109

1,338%

1,237%

2.290.621.794

1.389.130.999

295

1.534.060.642

657.284.333

0,000%

2.272.163.128

123.399.485

107

23.536.006

2.263.463.489

1.286.805.435

1,040%

1,036%

2.261.867.651

416.481

265

91.311.617

1.049.546.263

692.035.130

8,700%

4,037%

2.203.118.083

297

295

1.776.517.241

1.035.450.511

0,000%

Privredni vjesnik Year IV No 0161

PART OF

8400 BEST

Krapinsko- 400best zagorska županija

(400 x 21 counties) in national economy

8,68%

Karlovačka županija

:::::: no. entrepreneurs ::::::

78,22% :::::::: total income ::::::::

84,10%

400best

21,68%

91,37%

85,78%

98,84%

Istarska županija

400best

4,40%

79,67%

64,89%

90,12%

92,31%

86,34%

97,67%

Grad Zagreb 400best 1,27%

74,04%

64,16%

81,21%

Zagrebačka županija

400best

6,73%

76,57%

61,54%

86,46%

Primorsko- 400best goranska županija

::::::::::::::: profit :::::::::::::::

4,58%

74,87%

64,53%

76,92%

70,70% 95,10% ::::::: no. staff :::::::

25,22%

400best Ličkosenjska županija 65,25%

99,44%

99,08%

100%

::::::::: investment :::::::::

95,85% 90,72%

::::::::::::::: exports :::::::::::::::

:::::::::::::: imports ::::::::::::::

source: Boniteti.hr

www.privredni.hr Business & Finance Weekly

Varaždinska 400best županija

13 Međimurska 400best županija

14,50%

89,43%

16,82%

87,51%

84,13%

93,88%

81,11%

96,24%

Virovitičko- 400best podravska županija

Koprivničko- 400best križevačka županija 29,39%

96,32%

92,52%

98,27%

Bjelovarsko- 400best bilogorska županija 28,13%

92,90%

88,88%

97,41%

94,28%

89,98%

97,26%

98,24%

96,53%

99,87%

400best Požeškoslavonska županija 67,00%

99,67%

99,21%

100%

400best Osječkobaranjska županija 9,99%

84,86%

77,12%

89,30%

Vukovarsko- 400best srijemska županija 26,32%

93,56%

88,68%

98,54%

400best Brodskoposavska županija

400best Sisačkomoslavačka županija 24,30%

49,50%

400best Splitskodalmatinska županija 3,65%

70,62%

60,44%

75,82%

26,67%

91,37%

87,39%

97,11%

:: legend:: number of entrepreneurs by county numbers employed by entrepreneurs by county entrepreneurs by gross profits entrepreneurs by income

Zadarska županija

400best

13,31%

86,22%

77,53%

95,36%

Dubrovačko- 400best neretvanska županija 400best Šibenskokninska županija 20,18%

92,04%

85,48%

97,85%

Dubrovnik

11,57%

83,87%

74,36%

90,82%

Privredni vjesnik Year IV No 0161

FINANCIAL OPERATING INDICATORS FOR ENTREPRENEURS Entrepreneur numbers

No. employees

Assets

Liabilities

Pre-tax profits

Losses after tax

Corporation tax

Income after tax

Losses after tax

Consolidated financial results

91.320

889.396

613.367

603.876

31.959

22.469

5.093

26.438

22.041

4.397

436

302.161

289.650

284.720

1.850

11.173

8.094

3.079

2010. 2009.

Number Large Medium

1.446

164.515

112.436

110.968

792

4.185

3.509

677

Small

89.438

422.720

211.281

208.188

2.452

11.079

10.438

641

Number

96.758

859.808

598.187

593.810

34.228

29.851

6.040

28.203

29.866

-1.663

375

287.341

289.358

281.635

16.266

8.597

2.876

13.450

8.603

4.848

1.379

157.147

109.531

112.782

4.984

8.192

773

4.184

8.209

-4.025

95.004

415.320

199.299

199.394

12.967

13.061

2.391

10.569

13.055

-2.486

Large Medium Small

of deeper structural disturbances in the entrepreneurial sector.

Profit - leaders 2010 (first 10 of the top 400) Rank

Rank by total NAME income

HRVATSKI TELEKOM D.D.

ZAGREB

1.864.032.217

INA D.D.

ZAGREB

1.767.154.801

HRVATSJKA ELEKTROPRIVREDA D.D.

ZAGREB

986.751.220

VIPNET D.O.O.

ZAGREB

557.166.604

PLIVA HRVATSKA D.O.O.

ZAGREB

555.019.887

109

ADRIS GRUPA D.D.

ROVINJ

474.199.308

128

SN HOLDING D.D.

ZAGREB

440.984.716

HEP-PROIZVODNJA D.O.O.

ZAGREB

428.754.151

KONZUM D.D.

ZAGREB

412.794.136

BOUYGUES TRAVAUX PUBLICS, PODRUŽNICA U HRVATSKOJ

ZAGREB

386.432.849

CITY

profit

EXPORT RANK 2010

Export - leaders (first 10 of the top 400) 1 2 3

NAME INA D.D. ULJANIK BRODOGRADILIŠTE DD PLIVA HRVATSKA D.O.O.

BOXMARK LEATHER D.O.O.

PETROKEMIJA D.D. TVORNICA GNOJIVA ENERGETSKI TRANSFORMATORI 6 KONČAR D.O.O. 7 BRODOSPLIT - BRODOGRADILIŠTE D.O.O 8 TANKERSKA PLOVIDBA D.D. 9 ERICSSON NIKOLA TESLA D.D. ZAGREB 10 CROATIA AIRLINES D.D.

CITY ZAGREB PULA ZAGREB TRNOVEC BARTOLOVEČKI KUTINA

EXPORTS VALUE 8.561.063.979 2.423.051.744 1.911.703.953

Investment decreases The next crucial moment is investment into the economy, which is decreasing. However, this investment amounted to €6.92 billion in 2009, but only €5.17 billion in 2010. Data cannot be more defeating: investment in long-term assets of the Croatian economy in 2010 was only around 41% of that in the pre-crisis 2009. The consequence of decreased investment into new plant, equipment and technology are catastrophic concerning the dynamics of economic activity and even more the technological development and modernisation of the economic structure. The worst thing is that strenuous

SHARE OF EXPORTS AS A % OF TOTAL ASSETS

35,23% 68,44% 68,39%

1.581.657.299

98,24%

1.389.130.999

60,64%

ZAGREB

1.280.897.549

96,33%

SPLIT ZADAR ZAGREB ZAGREB

1.256.872.246 1.009.714.679 879.167.087 842.561.899

82,61% 86,61% 68,92% 57,32%

Import - leaders 2010 (first 10 of the top 400) Rank

NAME

CITY

IMPORTS VALUE

HRVATSKA ELEKTROPRIVREDA D.D.

ZAGREB

2.338.974.612

KONZUM D.D.

ZAGREB

2.044.665.288

OMV HRVATSKA D.O.O.

ZAGREB

1.884.483.424

INA D.D.

ZAGREB

1.731.663.572

M SAN GRUPA D.D.

ZAGREB

1.519.810.723

ULJANIK BRODOGRADILIŠTE DD

PULA

1.113.947.949

P.Z. AUTO D.O.O.

VELIKA GORICA

981.217.026

MEDICAL INTERTRADE D.O.O.

SVETA NEDELJA

943.614.822

PLIVA HRVATSKA D.O.O.

ZAGREB

917.405.396

LIDL HRVATSKA D.O.O. K.D

ZAGREB

856.425.258

consequences are difficult to remove. Encouragement for investing in developmental projects must become a high priority for economic policy, as part of a long-term development strategy. The third problem is the constant decrease in corporate profitability. During the past several years, gross corporate profits have been plummeting, the number of companies operating at a loss rising, nett profit decreasing - or rather consolidated profit - which amounted to €0.33 billion in 2009, whereas the total Croatian

economy achieved a nett loss of €0.22 billion last year. We must also add that of the total number of entrepreneurs (96,748 at the end of last year), 41,217 or 42.5% achieved a negative financial result. Necessary modern entrepreneurial structure Illiquidity, investment and profitability are mutually conditioned and connected. Solving one contributes to solving the others. We simply must start, and ideas on how to do that are not lacking. We are missing determination and perseverance from the ‘carriers’ of economic policy. Regarding the appropriate institutional economic structure, we pointed out the rôle of large companies as the carriers of development. Croatia must make a more serious analysis of its regional potential and strategic interests. On the basis of that policy of strengthening, a regional approach must be constructed, especially in the SEE countries where we undoubtedly have comparative advantages. One of the significant engines of regional strategy concerns largesized companies and their development requires a systematic approach. Only a small number of companies implement successful regional strategies, for example in trade, the processing of agricultural products, construction industry, which are the generators of their development. However, Croatia must have at least 20 important regional leaders to achieve its economic and scientific potential. Sectors with the greatest possibility to create regional leaders are the pharmaceutical industry, the processing of agricultural products, the metal processing industry, production of electric and energy equipment, amongst others.

www.privredni.hr Business & Finance Weekly

CROATIAN FOREIGN CURRENCY MARKET Currency

AUD CAD JPY CHF GBP USD EUR Source: HNB

EUR

Kuna exchange mid-rate

5,590273 5,466410 6,626912 6,411222 8,451255 5,243693 7,426118

Four locomotives sold by Gredelj Gredelj from Zagreb delivered four locomotives to the American company National Railway Equipment which they will be using in Sierra Leone. The locomotives are intended for the transport of heavy cargo on nonelectrified and narrow-gauge railways. The locomotives are diesel, with a power of 2,250 kilowatts and the total cost is around $7 million. Additional capitalisation for Luka Ploče Luka Ploče successfully finalised their additional capitalisation with a public offer of new stock. All the offered shares were sold and the total value of additional capitalisation is €23.33 million. The interest was also high in the second round, and tenders for 28% more shares were requested than offered. Solar panels in Nova Gradiška The company Plin instalacije and the Austrian company Leo Solar signed a contract in Nova Gradiška on the construction of a factory for thermal and photovoltaic solar panels and supplementary equipment. The plant will be worth €3.3 million, and will employ 70 people, achieving an annual income of €54 million. The production of thermal collectors will start in a month at the latest, and preparations for the production of photovoltaic cells are in progress. A large proportion of production has been sold in advance.

13.7.

14.7.

15.7.

16.7.

CHF

5.32

6.42

7.44

5.30

6.38

7.42

5.28

6.34

7.40

5.26

6.30

7.38

5.24

6.26

7.36 12.7.

WEEK JULY 15, 2011

::: news

USD

7.46

5.22 12.7.

13.7.

14.7.

15.7.

16.7.

6.22 12.7.

13.7.

14.7.

15.7.

16.7.

CROATIAN NATIONAL BANK

Lending reached €38.85 billion in May This year RBA analysts anticipate a mild recovery in lending primarily a consequence of company claims ccording to the latest data provided by the Croatian National Bank, bank lending mildly intensified in May over April. At the end of May total lending amounted to €38.85 billion, 1.6% higher in relation to the end of April. The annual growth rate is slightly higher compared with the past several months, at 8.7%. All sectors contributed to this credit growth, where the highest annual growth relates to state lending according to RBA analysts. The same trends are present in relation to the end of last year, where the weakest movement concerned the public sector. Corporate lending reached €15.41 billion at the end of May, 4% higher than at the end of the previous year. Annual growth rates have remained stable for a year, ranging between

8% and 9.5%. On the other side, public lending, whose share of the total is 45%, shows a slight recovery (despite the monthly growth registered in May), which is expected considering unfavourable movements on the labour market and high rate of pessimism, explain analysts. Housing loans at a high Total public lending amounted to €17.58 billion at the end of May, 0.6% up over 2010, and which was mainly contributed to by the growth of housing loans, referring mostly to public lending (with a 46% share), and which registered 1.4% growth over 2010. During the first five months of this year, state lending increased by €0.77 billion, totalling €5.48 billion. The largest share this year relates to March

(up €0.70 billion in relation to February), and the consequence of state indebtedness of €825 million due to the repayment of the overdue Eurobond. “This year we anticipate a mild recovery in lending, primarily as a consequence of company claims. However, the modest monthly growth of corporate lending indicates that the increase in Euro liquidity in the system of €850 million, after the CNB reduced the level of required bank reserves has still not significantly reflected on lending of this sector. On the other side, any recovery in public lending will be slower. The labour market is still far from recovery, especially considering new jobs, which is why future income remains uncertain, limiting demand for loans, evaluates RBA. (V.A.)

Privredni vjesnik Year IV No 0161

ČULIĆ: NOT PLANNED, BUT GOOD

Indestructible as an olive tree After the restructuring of the company total turnover plummeted from €0.82 million to €0.20 million but the company is more efficient today operating with higher profits than before projects, documentation and financing since we took a loan, and the city of Kaštel did not issue permits for a year, while we needed to pay the credit. Thus the administration led us to a crisis. However, the construction of the facility is approaching its finale and a solution to this heavy burden,” points out Čulić.

Jozo Vrdoljak t is known that Dugopolje is one of the most successful business zones in Croatia, and one of the first to recognise its potential was the company Čulić, founded by brothers Ivica and Hrvoje Čulić in 1989. With a rough road behind it, the company Čulić needed to restructure partly due to the crisis and partly due to the lack of understanding from the bank of entrepreneurial needs, returning to their beginnings according to the number of employees.

Unpaid millions A step back in the company development was the shut down of the agricultural products trade. “We could pay all claims, which currently exceed €0.27 million but we could not cope with the dumping prices demanded by big supermarket chains. However, our workers did not end up on the street. They were all employed by our business partners and

friends,” pointed out Ivica Čulić, director of the company. Čulić says that after restructuring of the company total turnover plummeted from €0.82 million to €0.20 million, but the company is more efficient today, operating with higher profitability than earlier. The company rented part of its office building, and three employees, top experts, continued to work in horticulture

and planning. They decorated many gardens, villas and buildings, and they especially point out Knin, Supetar, parts of the municipality of Dugopolje and the hotel complex Zlatni rat. “It was a task of Sisyphus at the beginning, but we are now wanted due to our references and professionalism”. They started the construction of two buildings in Kaštel Lukšić. “We had ready

Production of olive oil The company will modernise its production of olive oil. “We have around 400 olive trees planted on Brač, and will soon plant at least another 800. We will not give up on the production of extra virgin olive oil without additives. This has been our method of work since our beginning and it will remain so,” said Ivica Čulić, who continues to complain their development plans did not go according to plan and they could not retain all their employees. They are now developing in a completely different direction, but it is important that they survived.

MODERN LOGISTICS

REHABILITATION ACCORDING TO MODEL C

Fast, cheap, cold

The government taking a 75% stake in Badel

RALU logistika, a company providing integrated logistical services in Croatia and the region, have opened a modern logistic centre in Zagreb. Covering 1,400 m2, it will offer services to the cold chain segment (maintenance at the same temperature from takeover to delivery of goods) or the

possibility to store them at -25 ºC. Over €0.68 million has been invested in the renovation of facilities and the installation of cooling devices; the capacity of the centre is 1,200 palettes. This provides logistic services in the cold chain segment with an additional capacity lacking in the Croatian market. Renato Radačić, board president of RALU logistika, says that after an investment of €27.4 million last year and this in the infrastructure and business development, another investment cycle of €27.4 million will start from June. During that cycle, over a period of two to three years, the company will invest in storage facilities and cold chain distribution, and open several logistics centres in the region, especially Croatia, Slovenia and Serbia. (B.O.)

The government share of Badel 1862 will be 75% after the restructuring, according to the government ‘model C’. The restructuring is to be performed at the General Assembly of shareholders, to be held on 20th August, as has been announced by Badel senior officials. This will successfully conclude the first stage of rehabilitation and restructuring of the tottering wine and spirits producer. According to the government decision, the restructuring will be performed through a capital reduction from €30.8 million to €10.3 million and by the conversion of a €32.67 million tax debt into 75% equity. Subsequently, any encumbrances on Badel assets should be removed and their sale will provide fresh capital for investment into production in the wineries

at Benkovac and Daruvar, as has been announced by Zvjezdana Blažić, Badel Board President. Badel has succeeded in solving most of its financial problems which last year almost lead it to bankruptcy. According to Srđan Oreb, a member of the Board, in the first six months of 2011 the company saw a 29% increase in revenue over the same period last year, exceeding the plan which anticipated annual revenue of €57.53 million and €1.1 million nett profit. (D.Ž.)

www.privredni.hr Business & Finance Weekly

WE PRESENT

OAZA RESIDENTIAL CARE HOME, KLJUČIĆ BRDO

KUNGFOOD RESTAURANT, ZAGREB

Old age spent in a luxurious care home The care home with an investment of €3.83 million will be able to accommodate some one hundred residents

Gan bei with bamboo brandy Some of the specialties include gongbao, crispy chicken, gan bian meat, and chicken Szechuan f you have sufficient funds, you can spend your old age in a luxurious care home even. The Oaza residential care home has been built near Velika Gorica, where accommodation costs and living expenses are between €860 and €1,315. The care home will be able to accommodate about one hundred residents and will employ about 50 staff. About 70% of rooms have an area of 27 m2, and rooms occupy a mere 60% of the entire care home. The rest consists of communal rooms for socialising and additional games and activities to promote quality life for residents. In addition to a hairdresser and pedicure parlour, there is a retail shop, a living room on each floor, entertainment and socialising, physical therapy and a range of other facilities. Oaza also offers excellent health care adapted to the needs and specific requirements of each resident. In addition, it has its own ambulance for transport to medical checkups and therapy, whilst there is a general practitioner and physiotherapist available daily within the care home.

One year to fill accommodation capacity “The investment was €3.83 million. 50% was invested by the European Investment Bank via HBOR, 10% by OTP bank,

with 40% being equity capital”, explained Mirko Žužić, the investor and owner of the care home. He added that he made the decision for the investment after having undertaken market research which showed that there is huge demand for such care homes both in Croatia and abroad, since prices are not onerous and it is much more affordable for foreigners than in their own countries. Accommodation costs and living expenses in care homes of this category in Europe, for example, are between €3,500 and €10,000. Consequently, Žužić is not overly concerned if there is a lack of local residents in the care home. He stated that he anticipates it will take a year to fill the care home accommodation capacity and has already received an offer from a Swiss agency interested in accommodation for their clients. The law provides full health care for foreign residents for €150 per month. Nevertheless, there is no regulation regarding palliative care specialists, who Žužić is planning to employ, to enable them to write prescriptions for residents. He is still hoping to find a solution to this problem. The care home is located in a beautiful area with various additional facilities in the vicinity, such as a park and a chapel. (J.F.)

n the immediate vicinity of Kvaternik Square in Zagreb a Chinese fast food restaurant with a catchy name Kungfood has recently opened. Visitors can choose a menu, including the main course with a side dish for €3.85 or order a dish called Wok ‘n’ Go for a price of €4.80. It is interesting that Kungfood also delivers. How did it all start? “After my studies in America, I came to live in Zagreb as my parents, textile retailers, had been living there for several years. I decided to open a Chinese restaurant with food at very favourable prices,” said the owner of Kungfood, Zhongren Ren Wei. The specialty of the restaurant is that the dishes are served on a buffet table and visitors can select what they desire. Every good main course is preceded by an aperitif, and Kungfood offers various types of brandies, bamboo, rose or Japanese sake – rice brandy. They also serve Chinese plum wine served in small porcelain cups. Those who do not drink alcohol can enjoy Chinese tea.

Traditional warm plum wine Kungfood has eight employees, with two Chinese cooks. Even though the selection of the main courses differs from other Chinese restaurants, this fast food does not lack a variety of flavours and visitors can select from

gongbao, c r i s p y chicken, gan bian meat and chicken Szechuan. Regarding the popularity of wine in China, Ren Wei said that the Chinese have never really preferred wine, but this is changing. The wine is enjoyed before, during and

They also serve Chinese plum wine served in small porcelain cups after the meal, depending on taste. For example, plum wine may be served warm or cold, but the traditional Chinese plum wine is served warm, pointed out Wei, adding the Chinese expression for ‘cheers’ is gan bei. Kungfood is also a place for holding business events, with the capacity to accommodate 60 to 70 people. The food is served on a buffet table and visitors can select from around ten different dishes and eat as much as they wish. This makes Kungfood the first Chinese buffet restaurant in Croatia. If the restaurant operates successfully, several more will probably open in Zagreb, one of which will be located near the student campus. (S.P.)

Privredni vjesnik Year IV No 0161

ECO TOURISM IS GROWING THREE TIMES FASTER THAN CLASSIC MASS TOURISM

Zlatna greda – first Croatian eco-tourist agency Canoeing on the Danube and the waters of Kopački rit, hiking and bicycle routes, photography of birds, deer and eagles’ nests are only a small part of this unique offer Svetozar Sarkanjac ccording to the Eurobarometer survey, nature was the most important factor for choosing a holiday destination in 2009. Latest research, shows eco-tourism is growing three times faster than classic mass tourism and it is anticipated its share of the tourist European market will exceed 20% during the next 20 years. It is precisely these facts and long-term management experience of the ecological association Zeleni Osijek that encouraged this group of people to establish the first ecological tourist agency Zlatna greda in 2006. The central office is the eco-centre Zlatna greda, in Baranja, on

accommodation in rural tourism facilities, catering services of the restaurant, salaši (field farms), riding and much more. In addition to the promotion of the natural values of this area where most of the activities take place, Zlatna greda promotes the offer of tradition rural households in Baranja.

the far northern edge of the nature park, Kopački rit, close to the Danube bank 30kms. from Osijek. The founder of the association Zeleni Osijek and director of the agency Zlatna greda, Jasmin Sadiković, explained the ethos of the ecological agency. “This means our services are adjusted to eco-standards; that we use engine-driven activities as less as possible; that we row, hike and use bicycle tours, and this is a sure ecological way of touring round valuable natural resources,” says Sadiković. Visitors are not only offered services and products but also connected to contacts with local residents, typical of tourism in Baranja: wine roads,

Unique in Croatia The manager of the agency, Dinko Pešić, explains the difference between the eco-agency Zlatna greda and others. “We are a fine addition to the tourist programme which already exists in this area. People mainly work in catering and offer accommodation, whereas we provide activities

in nature, such as whole-day canoeing trips, observing of birds and game, boat rides, bicycle and hiking routes The business sector is especially interested in some of the programmes, whilst elementary schools are interested in school programmes covering nature,” says Pešić. The team of this first Croatia ecoagency offers its customers service which other agencies currently do not. Canoeing on the Danube and the northern parts of Kopački rit is especially attractive, where observing big game is offered only by this agency. The ecoagency Zlatna greda is the only concessionaire in the nature park Kopački rit for providing tourist activities in its northern part.

Three hypermarkets opened in one day Last week, the company Plodine from Rijeka opened three new hypermarkets in one day. Total surface area of the three hypermarkets is 10,000 m2. New hypermarkets are the result of the continuous promotion of the company, rapid growth and development as well as the need for additional expansion of new sales capacity, according to a statement provided by Plodine.

Reports on waste The inspectorate for environmental protection filed 10 charges at the appropriate courts to the end of June 2011, due to irregularities in the management of landfill sites. A total of 61 solutions were issued and three emergency measures were ordered relating to the ban of waste disposal and extinguishing fires on the landfills. Inspections were performed at 369 locations and it was determined that 25 fires occurred at 20 sites this year.

CBRD loan for sports hall Last week in Opatija a contract was sign for the construction of a new sports hall. The Croatian Bank for Reconstruction and Development is participating with funds for the development of municipal infrastructure. The hall will cost €9.6 million and will be finished by the end of 2012. The financing will be repaid through the Erste Bank and Zagrebačka banka, with a life of 15 years and at 3.25% interest rate.

::: news New graduates of IGBS 18 students of the fifth generation of the MBA College graduated last week. The ceremony was held at the International Graduate School for Business Management Zagreb (IGBS). During their studies of advanced techniques of business management and earned certificates of the Kelley School of Business. The students were greeted by the dean, Zlatan Fröhlich, and the US Ambassador, James Foley.