Andre-Marc Prudent, Board President, Societe Generale Splitska banka Slow recovery of economy affects banking
UN procurement budget stands at $14 billion Croatian companies could supply UN with pharmaceuticals and support services
Analysis of the Croatian Banks Association Croatia is approaching point of balance on its current account
INTERVIEW PAGES 2-3
UN TENDERING PAGES 4-5
FINANCE PAGE 8 2010
Croatian Business & Finance Weekly Established in 1953 Monday / 3rd October / 2011 Year IV / No 0168 www.privredni.hr
S U P P O R T E D
CROATIAN NATIONAL BANK
Mild reduction in foreign debt After a glimpse of the recovery of local sector debt in the first quarter of 201, the trend continued in the second quarter, according to the latest Newsletter of the Croatian National Bank. During that period only banks managed to increase foreign debts, whereas the state as well as private and public companies decreased their obligations to foreign creditors. In addition to the mildly favourable effect of inter-currency changes (€-0.1 billion), a consequence of the Euro steep climb versus the US dollar, the state of total debt of Croatia in the second quarter decreased by €0.3 billion, to €47.2 billion. The decreased debt of the central state (by €0.4 billion) is mostly a consequence of the repayment of obligations on the basis of short-term instruments on the money market, bought by non-residents from local registers. In the second quarter, public companies decreased their foreign obligations by €0.2 billion, and since the debt of the CBRD did not change, total debt of the public sector decreased by €0.5 billion (excluding inter-currency changes). (A.M.)
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pvinternational pv international C R O A T I A N
C H A M B E R
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AGENCY FOR PROTECTING MARKET COMPETITION (AZTN)
Strengthening the fight against cartels AZTN has already gathered specific experience in revealing cartels in publishing, office supply trade, driving schools and residential construction areas n the forthcoming period, the Agency for Protecting Market Competition (AZTN) will direct all its forces against cartels, according to Olgica Spevec, Council President of AZTN. At last week’s Crocompete conference, dedicated to the development of market competition in Croatia, she revealed the Agency was researching the operations of potential cartels in the telecommunication and construction sectors as well as chambers of engineers and architects. There is a propensity of the chambers of engineers and architects to appear on the market
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Basic information on cartels supplied by consumer associations as collective bidders with a joint price. Architects who tried to offer lower prices independently, were threatened with exclusion from their chambers. The Agency will no longer tolerate this, she pointed out. AZTN established a special department for combating cartels. It consists of top lawyers, economists and other Agency experts, trained
to identify and discover cartel activities and proving their illegalities. According to the Market Competition Act, AZTN is empowered to pay unannounced visits to companies in order to obtain proof. AZTN may issue fines of up to 10% of company income achieved where a cartel agreement existed. According to the Council President, the stress on the anti-cartel fight was chosen as cartels cause tremendous damage to both consumers and buyers in the production chain. Arranging prices higher than the market and dividing the market jeopardises
economic standards, slows GDP growth and decreases overall competition. AZTN has already gathered certain experience in revealing cartels, specifically in the publishing, office supply trade, driving schools and residential construction industries. Basic information on cartels is supplied by consumer associations. In addition to sanctions, AZTN also gives suggestions on how to organise certain sectors in order to boost market competition. In 2004 they suggested liberalisation of taxi services, which has only recently been achieved in bigger Croatian cities. (I.V.)
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INTERVIEW
Privredni vjesnik Year IV No 0168
Grgo Miočić, ACM domain solutions expertise, IBM Croatia
Top quality management, rapid return on investment dentifying the creator of document management would be an extremely difficult task. Filing cabinets were the start point. They eventually crammed offices, obstructing movement and aggravated working conditions. Mainframes and client server architecture marked enormous progress, enabling file organisation in digital form as a prerequisite for specialised document and business process management platforms. Document oriented business process management software enabled the automation of activities related to the creation of content, alterations, approval as well as integration with current systems. Nevertheless, a specific category of business processes related to problem solving, requiring additional platform adaptability to content and busi-
ness process management has been an issue for some long time. An item is a range of business activities and information to be processed in order to reach a solution. Typical solutions in item management are the opening of a new account in a financial institution, providing telecommunication services, court trials or medical cards. These are solutions for specific business processes characterised by unpredictability, or variation in the nature of business rules and regulations IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription
ANDRE-MARC PRUDENT, BOARD PRESIDENT, S
Slow recovery o
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A wide range of business activities and information to be processed in order to reach a solution
will especially highlight “ We resources and co-financing
The Croatian banking industry is ready for consolid high, especially in the case of very small and strateg Jozo Vrdoljak rom this summer the head of Societe Generale Splitska banka is the long-term manager of the Societe Generale Group, Andre-Marc Prudent. Privredni vjesnik discussed Societe Generale-Splitska banka business and their future plans with the new board president. M. Prudent also spoke of global and local specifics which affect business for the banking sector.
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impacting on business process flow and on the activities leading to a solution. IBM advanced item management strategy incorporates information, processes and people providing a comprehensive perspective on items. There is the possibility of using best practices or templates in specific industrial branches such as health care, telecommunications or the financial sector, leading to a faster return on investment due to a considerable decrease in time necessary for the creation of solutions. Organisations are faced with item management challenges requiring deeper insight and cooperation in finding solutions to complex problems, as well as top quality services provided to end users. Advanced item management assists companies in the more effective use of information such as client requests, loan requests or complex industrial or regulatory processes.
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
What were Societe Generale group operations like during the previous period? Business results from the first quarter of 2011 are satisfying considering the challenging environment. Business income achieved growth in relation to the same period of 2010, and the correct level of profitability was maintained. What is especially motivating is the constant positive result for the entire period of the crisis and the growth of capital adequacy which stood at 9.3% at the end of June. We owe this to the business model of universal banking, which is extremely important for the stability of the SG Group, especially during
the financial crisis. The strength and diversity of this model shows extreme resilience regardless of all oscillations in the market, and all the advantages reflect in our robust income and profitability of current operations. We are all familiar with the results of the mandatory stress-test that has recently been in the focus of media and public attention. I am very pleased the SG Group passed all the stress-tests with ease. In accordance with the new circumstances on the market, various measures have been taken which will additionally increase Group stability through further optimisation and capital growth. And your views on Splitska banka? We do not notice any visible change in this year results of Splitska banka in relation to the previous. The market position is stable as well as business income. The continuous growth of interest expense benefited our result. As with the entire banking system, we still see pressure on the increase of reserves, but have managed to cope with this pressure successfully.
Strict regulation and stronger competition What is your evaluation of the Croatian banking market? It is difficult to express my view of this market. Strict regulation and strong competition simply and clearly describe the condition of the banking sector. The regulator prescribes high capital and liquidity demands, which to us as a conservative financial institution, suits quite well. Strong international financial institutions are present, and the weak credit demand additionally incre-
ased competitive pressure amongst banks, especially in the segment of public affairs. We are faced with the harmonisation of regulatory demands with the EU and the expense of the regulatory burden will be decreased by a nett amount. On the other hand we anticipate competition will continue to increase.
www.privredni.hr Business & Finance Weekly
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t the funding programmes for renewable energy g of entrepreneurs applying for EU funds.
� of economy affects banking
SOCIETE GENERALE SPLITSKA BANKA
ation especially the smaller banks. However, we are aware the integration costs could be relatively gically irrelevant banks Is lending growing, considering client cautiousness and the crisis effect on the economy? We are aware that Croatia, next to Romania, is an economy of the so-called new Europe which is recovering with the most difficulty and slowly. Such trends directly affect the trends in the banking sector. In the current cir-
cumstances, households are more inclined to reduce their indebtedness, rather than increasing it. Simultaneously, companies are extremely cautious when venturing into new investment due to uncertainty and extra free capacity. Which segments show improvements? Observing the credit growth of local sectors, we notice that a certain turn in trends occurred since the beginning of the crisis. Credit demand from the corporate sector indicates dynamic growth due to the fact the Croatian companies have no access to alternative sources of financing as they did before
We are aware that Croatia, next to Romania, is an economy of the “new Europe� in which recovery is most difficult and slow the crisis, such as direct foreign or local borrowing of capital through issuing commercial bills, corporate bonds or organising initial public tenders. On the other hand, this is the result of the known problem of illiquidity in the local economy. Simultaneously, continuous unemployment growth
in Croatia and stagnation of nett salaries in real terms in 2011, result in the change in behaviour of the public which especially delays the purchase of durables. Does Societe Generale-Splitska banka plan to expand its network of branches? It is a fact that Splitska banka started to develop its business later than its main rivals on the market. During the past decade it changed its ownership several times, and only when it was taken over by Societe Generale Group in 2006 did it start to develop. During the past several years truly brilliant work has been done in reaching the market competition in terms of growth, network development and business. We managed to reach s critical mass of branches that are strategically well distributed, which is especially evident in Zagreb. Of course, we will not and we must not forget the traditional market of Splitska banka - southern Croatia, where we will continue to invest in the network, mainly through an adjustment of the branches to cater to the stateof-the art demands of our clients. A lot of work remains ahead of us, as well as room for development. Are there any plans for possible acquisitions or mergers? It is evident that Splitska banka should continue to grow in order to achieve all its potential and reach economies of scale. That is why we actively monitor the affairs of the local banking market, and in the case of a favourable opportunity we will react appropriately. However, the most interesting opportunities may appear only as the result of certain global events. On the other hand,
the Croatian banking market is ready for consolidation, especially regarding smaller banks. However, we are aware that integration costs could be relatively high, especially in the case of very small and strategically irrelevant banks. At the same time funding which is no longer unlimited needs to be taken into account. In any case, my feeling is that the time of more dynamic M&A activities in the banking sector is yet to come in the southeast region. Which banking products do you intend to invest in? The SG Group has an ambitious medium-term development plan, and Splitska banka is part of it. Our long-term strategy is based on sustainable development. This is why the entire Group is developing a model of universal banking, which showed its advantages in the crisis period. However, we are aware of the specifics of the Croatian market. In the next few years we expect that stronger credit growth of companies will be maintained. Croatia is facing EU accession, which means local companies need to prepare to approach the joint market. Companies will need to increase the dynamics of their investment cycles, especially those directed towards the modernisation of production, increase of energy efficiency and environmental protection. Furthermore, we will try to additionally highlight our competitive advantages due to the know-how the Group has and the strengthening of synergy effects with other Group members - SG leasing, SG insurance and ALD that deals in financing and the car fleet management of most companies.
4
Privredni vjesnik Year IV No 0168
(
million debit and credit cards
OVER 9 MILLION DEBIT AND CREDIT CARDS IN CROATIA
Plastic is (not) fantastic
($4,000
value of Croatian purchases by the UN last year
UN PROCUREMENT BUDGET STANDS AT $14 BILLION
Croatia disrega
Croatian companies could supply the UN with phar various software support services and similar
€7.3 billion transaction value by end of June Boris Odorčić he number of bank cards has almost quadrupled, the number of ATM’s almost five times, and the number of EFT POS ten times since the end of 2000. Smart cards are currently increasing and there is a trend towards bank network expansion. In addition, the availability of EFT POS (Electronic Funds Transfer at Point of Sale) terminals is increasing, according to data provided by banks and credit card companies to the Banking and Financial Institutions Sector in the Croatian Chamber of Economy, pre-
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There are nearly 8.1 million debit and credit cards, and of those 11% or 993,326 are credit card company cards. Bank cards comprise 48.6% of the total number of credit cards (1.9 million), and 51.4% are credit card company cards.
€4.6 billion transaction value via ATM’s during first six months Overall financial volume of transactions at the end of June stood at €7.3 billion, nearly 8% up over the same period in 2010. The total number of
Igor Vukić n 1992 Croatian companies (Končar, Podravka, Ina and others) were amongst the top 10 suppliers to the UN. Currently, 20 years after being an independent country and a full UN member, Croatian trade with the UN is virtually non-existent. It stood at a meagre $4,000, whilst the UN procurement budget has increased to $14 billion. The UN allocates nearly $3 billion for supplies to peace keeping missions every year. The Ministry of Defence and the Croatian Chamber of Economy invited Dmitri Dovgopoli, Director of UN Procurement Directorate to
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UN invites tenders for a wide range of goods and services exceeding $40,000
sented at Smart Card 2011 at the 12th International Conference. There was slightly over 9 million debit and credit cards in Croatia at the end of June, a 1.7% increase over the same period last year. The growth trend of smart cards is continuing. These comprise 83% of the total number of bank cards, additionally contributing to a greater level of safety for bank card business transactions and the prevention of card fraud. In mid 2005, the figure was just 6.1%.
transactions stood at 136.4 million, indicating an increase of 10.5% over June 2010. Credit card transactions by tourists in Croatia over the first six months stood at €0.5 billion or 16.7% up over the same period last year. Tourists accounted for 4.9 million credit card transactions at the end of June or nearly 14% up over the same period last year. MasterCard (48.5%) and Visa (39.9%) have the largest share of the total number of cards.
hold a lecture at the Croatian Military Academy on methods of applying to UN tenders. He was in Zagreb at the beginning of the 1990’s and he remembered the tough negotiations with INA representatives. He speaks Croatian and has a considerable insight into Croatian economy.
“I would not be here if I did not believe in the competitiveness of Croatian companies and in their potential for doing business with the UN”, he pointed out, encouraging Croatian entrepreneurs to study the UN public procurement system and apply. Ample needs According to him, Croatian companies could supply the UN with pharmaceuticals and food (cereals, edible oil), fuel, mine clearance services, various forms
A large mine clearing services sector Otto Jungwirth, Director of the Croatian Mine Action Centre, showed interest in the possibility of engaging Croatian companies on mine clearance services, particularly after the war in Libya. Dovgopoli agreed there is huge potential for co-operation in the sector, where UN annual expenditure is $140 million. Dovgopoli visited several companies, such as Dok-ing, Kroko and Šestan-Busch and saw for himself the high quality of their products and confirmed that they are in compliance with UN requirements.
www.privredni.hr Business Busi sine si ine nessss & Fina Finance Weekly
5 ::: news
($3 billion
spent by the UN on supplies to peace keeping missions
rded a huge market
rmaceuticals and food (cereals, edible oil), fuel, mine clearance services,
$3 billion tenders in the near future The UN is inviting bids for 12 high value procurement tenders for the needs of 100,000 soldiers in various peace-keeping missions in the near future. Their value is $3 billion. In addition, the UN will procure food for the military as well as logistics services. The structure of the troops has to be carefully analysed and consequently the procurement of food needs to include western food, as well as Indian, halal and kosher and various other kinds. “The UN sector market is complex, yet it is profitable for those willing to take a risk”, stated Dovgopoli. There is a huge demand for dry-food for the military, for tinned food as well as other food products.
of software support (business process management, fuel consumption monitoring and similar). The UN uses a wide range of goods and services in their programmes and activities. Nevertheless, interested bidders need to be informed about the precise body of the world organisation on which they would like to focus, pointed out Dovgopoli. The UN does not possess centralised public procurement, as procurement is performed by specific branches and organisations. Tent producers, for example, have to address UNHCR or peacekeeping missions department; food producers need to address the WFP, food programme located in Rome. All information is available on UN websites. In order to do business with the UN, companies need to register (free) at the portal www. ungm.org, which provides
information on all tenders. The UN invites tenders for goods and services exceeding $40,000 in value, whilst registered companies are invited to bid for lower values. High value tenders are performed according to the best price and quality ratio. Acting in compliance with tender regulations is of crucial importance, pointed out Dovgopoli. The UN normally requires the technical segment of the bid to be enclosed in a separate envelope, with the financial segment in another, to avoid partiality in assessment. References submitted by companies are always validated. UN officials call business partners and assess the reliability of the company. Companies that have not been successful in tenders are provided with detailed information on their weaknesses, which is valuable feedback for success in future tenders, stated Dovgopoli. If companies are not satisfied with the feedback, there is an appeals council consisting of independent experts. No unpaid debts Companies are allowed to generate a maximum of one third of their total revenue from business activity with the UN. The UN introduced this
regulation in order to avoid potential company bankruptcies due to delayed collection of overdue liabilities. “The UN has been a reliable purchaser thus far”, pointed out Dovgopoli. Ethical business, satisfactory work relationships and respect of human rights are imperative in any co-operation. Davor Božinović, Minister of Defence stated that Croatian soldiers have been participating in UN missions since 1999, successfully accomplishing their tasks. Currently, there are 120 Croatian soldiers deployed within six UN missions. Croatian participation in missions is a significant reference for business people. “The range of UN procurement can be assessed according to the data on the allocation of $500,000 for procurement of electrical and industrial equipment and over $200 million on food”, pointed out Božinović. Vesna Trnokop Tanta, the Vice President at the Croatian Chamber of Economy added that Croatian businessmen should focus on similar export opportunities. She pointed out that the Croatian Chamber of Economy organised seminars on co-operation with the UN back in 2004 and in 2007, yet, unfortunately, any co-operation has not manifested itself thus far.
Lower real estate prices in Zagreb Asking real estate prices in Zagreb were 0.9% down over the previous month and recorded a 2.4% decrease year-on-year. Real estate prices have seen the largest decrease of below 100 in real estate price index since the start of measurements in May 2006. The average asking price for an apartment in Zagreb in September stood at €1,761 per m2, which is 0.8% down over the previous month and 3% down over September 2010. Jadran Invest without operating permit The Croatian Financial Services Supervisory Agency has revoked the operating permit of Jadran Invest following the owner’s decision to liquidate Jadran Kapital, the investment fund it managed. The decision to liquidate this closed-end real estate investment fund with €8.18 million assets was agreed due to the severe crisis in the real estate sector. New Dalekovod contract in Norway Zagreb company, Dalekovod has recently concluded a contract on the construction of 164 kilometres of 420kW power transmission line in Norway. The value of work, delivery of steel structures and equipment is €81 million. Erste Bank issuing new bonds Erste & Steiermärkische bank has announced a further issue of subordinated bonds, implying the issue of a maximum €50 million carrying a 6.5% annual interest rate according to the report published at Zagreb Stock Exchange. The maturity date is 2017. This is the second Erste bank bond issue this year. Tisak constructing new distribution centre The company Tisak is constructing a new distribution centre in Zagreb. The total investment value is €16.5 million and the completion of work is anticipated by mid-2012.
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WE PRESENT
KASIOPEA, ZAGREB
Privredni vjesnik Year IV No 0168
LIPOVICA, POPOVAČA
Health and beauty from Nature We do not support anything with adverse health effects
Tradition for the future Lipovica has sold over 100 million radiators to date aja Škrinjar and her sister Ana gave up their former well-paid positions in favour of returning to a family tradition; that of olive oil production, honey and herbal products and bee breeding. “We developed a family farm and a small business Kasiopea and with the assistance of other family members and knowledge acquired over many years in different parts of the world, we decided to create products containing 100% natural ingredients and through ecological breeding. We do not support anything giving adverse health effects. Consequently, our products do not contain preservatives, additives or other substances harmful to our environment”, pointed out Maja Škrinjar.
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Hand manufacture Olive oil is produced from the family olive grove on the island of Korčula, whilst bees are bred and herbs grown on 12 ha of farmland, near Bjelovar. They are planning to open a store in Zagreb in the near future, having created a deep customer database through product presentation at fairs or on the internet. “We transform our knowledge of the human body and nature into products, assisting us in an optimal way to reinforce our strength and invigorate energy
wasted on daily worries and lowered by stress. One such product for energy renewal is Immortalis Melis, a blend of honey and cinnamon, considered as an ‘immortality elixir’. It has been used to treat a variety of health conditions for centuries without any side effects, as well as to strengthen and boost the immune system. In addition, it hastens the metabolism and improves digestion, reducing blood pressure and restoring healthy cholesterol levels. We offer a wide range of similar products and we are planning to promote them to a large customer base in the forthcoming future”, she explained.
Original and tried recipes used in production - product testing imperative All products are hand manufactured and any ingredients that are not produced by the company are purchased from trusted suppliers who share their philosophy. The company uses original and tried recipes and product testing is an imperative. Kasiopea web pages feature informative articles on therapeutic components found in vegetables and various herbs. (J.F.)
ipovica is a factory making die-cast aluminium radiators, pressure casts and gravitational casts for various industries as well as die-cast aluminium pedestrian bollards. It currently employs 160 staff, of which 120 are in production. The company was founded in 1968 and it started serial radiator production
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55% of sales to foreign markets in 1972. Andrea Kujundžić, Head of Sales for Lipovica, stated that particular emphasis is on radiator production. “The main users are customers opting for quality, longlasting products and an optimum price, whilst simultaneously focusing on energy saving achieved by aluminium radiator use. The radiators produced by our company are made of high quality aluminium alloy, due to which they can heat a room three times faster than steel radiators. They are die-cast which makes them stronger and more impermeable. In addition, they are corrosion resistant due to aluminium and double glazed painting“, she explained, adding that Lipovica has sold over 100 million radiators to date. Steel competition The idea of starting aluminium radiators production in Lipovica was conceived during
the 1970’s, generating some adverse professional reaction. Consequently, they all proved erroneous, as the radiators produced at that time are still in operating condition. “Currently, we are not satisfied with sales results from the local market. We are aiming to reach the levels of 2007”, she pointed out. Serious competition to the factory comes from imported, steel radiators, which are more affordable due to a different production method and significantly more affordable raw materials. Irrespective of being a state owned company currently, Lipovica is not privileged in terms of contracting jobs in state institutions. “We participate in tenders on a par with other bidders. Public tenders are unfavourable, as they are normally written to opt for the most affordable rather than top quality product”, stressed Andrea Kujundžić. 55% of sales are currently achieved in foreign markets. “We developed a dry radiator for a foreign customer two years ago. In addition, we have recently produced a new type of radiator. We are planning to significantly focus on the development of new products also for the Croatian market, as soon as we have collected our receivables and achieved our sales goals”, concluded Andrea Kujundžić. (B.O.)
www.privredni.hr Business & Finance Weekly
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CROATIAN FOREIGN CURRENCY MARKET Currency
AUD CAD JPY CHF GBP USD EUR Source: HNB
Kuna exchange mid-rate
EUR
7.51
5,390763 5,306747 7,205660 6,143692 8,650120 5,539045 7,491004 WEEK OCTOBER 1, 2011
USD
5.56
7.50
7.48 7.47 26.9.
27.9.
28.9.
29.9.
30.9.
5.52
6.15
5.48
6.14
5.44
6.13
5.40
6.12 6.11
5.36 26.9.
27.9.
28.9.
29.9.
30.9.
26.9.
27.9.
28.9.
29.9.
30.9.
::: news
Pessimism a framework for opportunity Croatia is approaching a point of balance on its current account a logical consequence of decreased net capital
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Close to external balance Small corrections also relate to changes in foreign debt. Rather than the GDP ratio of 100.6%, according to the latest forecast a ratio of 103.9% is anticipated by the end of the year, which can be mainly justified by a lower GDP growth rate and weaker kuna. Important changes refer to the anticipated deficit in the balance of payments. In January the an-
6.16
7.49
ANALYSIS OF THE CROATIAN BANKS ASSOCIATION
ccording to the analysis of the Croatian Baking Association, specifically the Club of chief economists of the Croatian banks, Croatia is not faced with a bright future. They anticipated that GDP would increase between 1% and 1.8% in September, but that was an optimistic scenario. Now the economists anticipate a 0.7% growth rate, which means the forecast from the beginning of the year (1.5% in January) has halved. Furthermore, instead of the anticipated unemployment rate of 11.9% from January, the anticipated average now stands at 13.4%. In terms of the main GDP components, they all show a downward trend. Eight months ago, an increase in personal consumption of 1.6% was anticipated; now only 1%. Investment growth of 2.6% was also expected. However, it is now expected to drop to 0.8%. Real growth in exports was anticipated to increase by 4%, however, the anticipated fall is 2.1%.
CHF
Storm Group €20.27 million income Recently, companies within the Storm Group were presented . In 2010, these companies accounted for €20.27 million in total income, representing a positive trend in relation to 2009, when income totalled around €18.24 million, according to a statement from the Group. The growth in the services sector is especially highlighted. Raiffeisen Bonds without dividend The society for investment fund management Raiffeisen Invest will continue its promotion from October 1, according to which the dividend for those investing in the fund of Raiffeisen Bonds will be cancelled by December 31 of this year. The investment fund aims to achieve the highest possible yield by investing assets mainly into Croatian issuers bonds.
ticipated average totalled -3.6% of GDP, rather than the anticipated deficit - GDP ratio has been halved (to -1.7%). A smaller deficit is a logical consequence of decreased growth and imports. This
According to the market credit rating is directly threatened means Croatia is approaching a point of balance on the current account, which is a logical consequence of decreased nett capital flow. The economists were correct in anticipating (high) yields on government bonds. The growth in the risk premium has been monitored since May and
the yield on the kuna bond, due in 2017, is ranging according to the anticipated value of 6.6% at the end of the year. Events on the financial markets have shown that the Croatian yield, or risk premium, are the most susceptible to changes (next to those of Hungary) in a negative environment dominated by the expansion of the Greek crisis towards the south of Europe. This yield does not benefit our ‘BBB’ credit rating, and according to market participants the credit rating is directly threatened. This also means the Croatian fiscal deficit is unsustainable and that the country will probably need to decrease it at the worst possible moment - before touching the solid ground of a recession exit. (V.A.)
Restructuring of Brodotrogir At its 85th session, the Agency for Protecting Market Competition approved the state subsidy for restructuring, contained in the Restructuring Programme of Brodotrogir. The programme was drafted by the company Jadranska ulaganja. The subsidy, totalling slightly over €0.38 billion, was approved for the period between March 1, 2006 and the end of 2016. It consists of subsidies, state warranties, write-offs and debt takeovers by the Croatian government. The programme determined the restructuring costs of €0.62 billion, of which the contribution of the shipyard or the investor totals €0.24 billion.
8 ::: news Best companies increasing newly created value Newly created value of the 500 best Croatian companies (the sum of gross salaries and gross profit) stood at €8.5 billion last year, 10% up over 2009. Additionally, profits from these companies in 2010 saw a 5.2% increase over the previous year. Their total revenue in 2010 was €37.4 billion.
Privredni vjesnik Year IV No 0168
Innovators in business tourism
Promoting and connecting culture through tourism The project of the Belje company called In the heart of the counts’ vineyards is winner of the Association of Innovators Sigma CBTour award for the best complete programme of Croatian business tourism Sanja Plješa
Solaris Camping Beach Resort as the favourite camp Solaris Camping Beach Resort ranks on par with elite Croatian and Slovenian favourite camps in 2011, according to Slovenian campers choice. At the Festival kamping & karavaning fair held in Ljubljana, Solaris Camping Beach Resort ranked third in the category of large Dalmatian camps, preceded by Straško in Novalja and Šimuni camps on the island of Pag. SI Kvarner hosting Skal Council Skal International Kvarner will host the semi-annual meeting of International Skal Council, the International Association of Travel and Tourism Professionals. The Council will be meeting from 20th to 23rd April 2012 in Opatija. Management Board Members, Executive Board Members and Members of the International Skal Council as well as other members entitled to monitor the meeting will all be participating. Over 100 participants are anticipated. World Tourism Day marked
World Tourism day was marked by the theme Tourism – connecting cultures aiming to emphasise the importance of tourism in promoting diverse cultures and to promote global understanding through travel. According to Tourism Minister Damir Bajs, Croatia has been one of the most successful tourism countries in the Mediterranean area due to its ample and local offerings.
n conjunction with the World Tourism Day, held last week in the Croatian Chamber of Economy (CCE), on the subject of Tourism - Linking of Cultures, the most creative and most innovative tourist programmes received prestigious awards of the CBTour-Innovations in business tourism. These programmes are directed towards the development of business, scientific and conference tourism in Croatia. The Sigma Association of Innovators, in co-operation with the CCE European Entrepreneurial Network in Croatia organised this years World Tourism Day. Banco Popolare Croatia was the main sponsor, in addition to other sponsors, the city of Zagreb - city office for Education, Culture and Sports and Croatia Airlines. The awards of the CBTour - innovations in business tourism were awarded in nine categories: total programme, responsible programme, team building, creative programme, marketing programme, services, product, technologies and top manager. The project of the Belje company called In the heart of the counts’ vineyards was the winner of the Associations of Innovators Sigma CBTour award in the category of the best complete programme of Croatian business tourism. The company Coca Cola HBC Hrvatska received a special award for the project Our Beautiful Sava, for their sig-
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nificant contribution to the linking of cultures through tourism. Other winners included Hrvatski interijeri for the project Identity through Design – the Croatian hotel room; tourism company Kastavea for their project Najdi zlatnega petešića, Majstor kuhar for the project Journey through specific flavours of Croatian cuisine, and Rijeka Sport for the project Integrated marketingcommunication and programme strategies for the Centre for Astronomy in Rijeka. A foundation for sustainable development Habitat also received the CBTour award for the First Design Boutique Hotel in Zagreb, Hippy for the project Bags Holder in the conference industry and Applicon for the project Interactive PandoPad System in business tourism. The Centre for Business Tourism was awarded top
Promotion of business-tourism The CBTour programme has an innovative and a multidisciplinary feature and it also generates modern mechanisms for the development of Croatian tourism with special attention to environmental protection, biological diversity and the application of sustainable development principles This programme aims at motivating the development and promotion of new services, products and technologies in tourism activities, which will enable the better promotion of the Croatian business-tourism programme on local and international markets as well in terms of capital investment.
manager of the Croatian business tourism for the project Croatian Meetings – information onestop-shop for Croatian business and conference tourism. In the category of student works Edita Šanović of the Jurja Dobrile University won the award for the best business plan for Croatian business tourism, and Simona Horvat from the Rijeka University for the best marketing plan. Saša Vugrinec from the Association for the Promotion of Tourist Destinations, Products and Services received an award for photographic work on the theme Tourism connects cultures. Nataša Kozlica was awarded for the theme of European Forest. Tomislav Marjanović, president of the Innovators’ Association Sigma pointed out that the goal of the awards ceremony is to systematically encourage business communities in the tourism sector to develop a competitive, efficient and effective business, conference and scientific approach to tourism on the basis of an inventive approach and sustainable development. With these awards we wish to motivate tourist operators at a national level that offer or wish to offer different tourism services or products, enriching the entire tourist programme, said Marjanović.