Neven Staver, Plava laguna Plava laguna has become a symbol of tourism and an approach that puts the visitor and environment first
The arrival of delegation from Sichuan Huang Xiaoxiang: our companies aim to promote investment in Croatia
Business for the first half year Processing industry companies earned €1.54 billion, trade €0.35 billion and ICT €0.18 billion
INTERVIEW PAGE 3
CHINA DELEGATION PAGE 5
ECONOMY PAGE 7 2008 2009 2010 2011
Croatian Business & Finance Weekly Established in 1953 Monday / 21st November / 2011 Year V / No 0175 www.privredni.hr
S U P P O R T E D
::: news External debt increase Croatian external debt stood at €46.9 billion at the end of July 2011, which is a nominal growth of 1.92% over July 2010. According to data from the Croatian National Bank, external debt in July 2011 was 0.66% down from the end of June. Total external debt saw an increase of €397.4 million or 0.85% in the period from end 2010 to July 2011. Inflation rate increasing The annual inflation rate according to Consumer Price Index in June stood at 2.6%, according to data from the Croatian Bureau of Statistics. Consumer prices saw an increase of 0.6% on a monthly basis. Inflation uptick was primarily due to soaring energy and food prices, irrespective of the weakened intensity of the annual oil price rate increase in October. Similarly, the impact of local demand on soaring prices is currently still non-existent. Employment encouragement programme Erste bank has presented its employment encouragement programme, comprising three basic aspects: investment loans with a reduced interest rate in case of additional employment, microfinancing with a, pilot project in Osijek and in the nearby area and encouragement of social entrepreneurship recently implemented by the bank in co-operation with the Association for Inclusion Promotion in Zagreb.
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pvinternational pv international C R O A T I A N
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THE IMPORTANCE OF PRODUCTION FOR CROATIA
Croatian industry is dying due to weak business framework Production encouragement is imperative as it is crucial for the effective use of resources and job creation roatian production is insignificant at a European scale and even more insignificant on a global scale. Nevertheless it must be encouraged as it is crucial for the effective use of resources and job creation. This was the thesis with which the economist Ljubo Jurčić opened the second Lider Business club on the topic of ‘The importance of production for Croatia’. According to Jurčić, production in Croatia is not dying as a result of the import lobby,
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If the company Elektrokontakt burned down tomorrow, cooker production would halt throughout the world for a month but due to weak fiscal and monetary framework, where Croatian production costs are constantly increasing and, consequently imports are more convenient. The stance of Vladimir Ferdelji, Elektrokontakt Board President on the topic was different. He took
the example of his own company, whose world market share is 35% in producing electric cooker switches. If the company burned down tomorrow, cooker production would halt throughout the world for a month, claims Ferdelji. He believes the greatest hurdle to industrial development is an overvalued kuna which, according to him, could be tackled without devaluation. Catastrophic state management system Zdravko Stipetić, Đuro Đaković Holding Board President opined that a solution will not be found until we have abandoned the
widespread stance that all successful entrepreneurs are dishonest, whilst Ivo Usmiani, Jadranski Galenski Laboratorij Board President believes that a catastrophic state management system is the crucial problem. Pavo Zubak, AutoZubak owner sees a major obstacle in insufficient expertise, explaining that he was looking for a bus production manager for two years and finally had to recruit one from Končar. According to Damir Vanđelić from Adris, Croatian industry is not in need of any particular state support, it merely needs a stable and predictable business framework. (D.Ž.)
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Privredni vjesnik Year V No 0175
Zoran Šuster, Progreso Group Director
TOURISM AND EU FUNDS
Credit intermediation: free and extremely useful
Clusters are the route to resources
30 companies are currently credit intermediation licence holders with the first licence granted to the Progreso Group in 2010 redit intermediation is highly related to real estate intermediation. The general idea is to have all credit lines of all banks presented in one place in order to provide information to clients concisely, accurately, efficiently and supported by additional advice and warning. The general public often wonders about the reason for our existence, since almost all credit lines may be found on the internet. That is where the real added value of a credit intermediary becomes clear. Banks usually present merely an outline draft of their product range, struggling against the competition and targeting a specific client group. The Progreso Group collects filtered information, relevant to the client if they wish to ascertain the actual realisation of a credit. In addition, a credit intermediary provides consulting services covering the various combinations of credit for individual clients. After having selected the most appropriate bank, we collect all documentation and submit a request to the bank on behalf of the client. Subsequently, we coordinate the processing of the credit request and communication between bank and client. Finally, the client merely has to sign a contract in the bank. We collect all documentation and engage in a detailed and comprehensive communication with the client, consequently saving a considerable amount of time also to the bank. A credit intermediary merely has to technically submit the request through a bank appli-
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IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription
Regional clusters are one way to develop tourism in the EU and Croatia Sanja Plješa ourism is the third most important economic sector in the EU, followed by construction and distribution. However, the EU has not developed a common tourism policy for all member countries even though this sector employs around 10 million people and another 10 million in tourismrelated activities. Therefore, after Croatia joins the EU, it will be able to decide for itself on the business conditions for tourism as well as determine its tax policy. EU countries only determine that the general VAT rate cannot fall below 15%, whereas a reduced VAT rate cannot fall below 5%. Croatian tourism will have to adapt to that and use all the benefits of European funding. Marija Rajaković, from the Ministry of Economy, Labour and Entrepreneurship, discussed this subject at the seminar ‘Legislative Framework of Tourist Agencies’ Operations’, held in conjunction with the assembly of the Independent Travelling Agencies’ Association (Unpah) in Makarska. Regional clusters based on the Triple Helix model are one way to develop tourism in both the EU and Croatia. The Triple Helix system actually implies networking of three related clusters and their co-operation is based on the exchange of know-how and consolidating the private and public sector. The formation of clusters is subsidised by EU funds, and as Marija Rajaković said, Croatia has drawn down approximately €1.3 billion since 2000.
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cation and perform the payment. We provide free services to the working general public. We work on a commission basis through banks whose services and products we present as intermediaries. Currently, there are 30 credit intermediation licence holder companies, with only some 10 operating in such a manner. The first licence was granted to the Progreso Group in 2010. We and the Tata Group were the sole credit intermediaries in Croatia during the first six months. The increase in the number of credit intermediaries was not merely due to the enactment of the Consumer Credit Act. Various structures, mainly insurance company associates, finally formally founded companies for intermediation. Unfortunately, it made a modest impact, since most have met merely the formal conditions without having actually changed their business activity. Unfortunately, a large number of individuals, without a licence to work in this activity, are adversely affecting the attitude of the general public of the role of credit intermediaries.
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
Obtaining resources According to the Regional Competition Programme that began in 2007 and ends in 2013 when Croatia joins EU, Croatia will obtain only half the funding, or €20 million. However, until then we can still draw down resources for six cross-border co-operation
programmes, she noted. But what awaits Croatia when she joins the EU? She must contribute around €600 million each year to the European budget. However, she can draw down around €3 billion each year from EU funds intended for the
Triple Helix implies networking of three related clusters development of rural and cohesion policy. The cohesion policy was introduced to the EU due to unevenly developed regions since only 10% of Europeans live in the most developed regions, with Luxemburg being the most and Bulgaria the least developed. Therefore, Croatia will obtain €800 million for the development of agricultural and cohesion policy for the first half of 2013, says Marija Rajaković. She added there must be an improvement to the Operative Programme of Regional Competition through working groups for regional clusters, the development of an analytical base for regional specialisation as well as guidelines for cluster development. It is expected Croatia will develop 15 clusters. During 2012 travel agencies will be invited to join seminars related to cluster networking since their co-operation represents one method of obtaining EU funding, concluded Rajaković.
www.privredni.hr ww.privredni.h Business Busine neess ss & F Finance i an Weekly in
INTERVIEW
( almost 55 years ( of Plava laguna
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% visitors to Plava laguna are traditionally foreign
INTERVIEW: NEVEN STAVER, CEO OF PLAVA LAGUNA INTERV
Nature enthusiasts return to the Istrian lagoon Plava laguna has become a symbol of tourism in Poreč and an approach that puts the visitor and environment first lion. During that period Plava laguna achieved 6% more overnight stays than in the same period of 2010. We could say this business year has been more acceptable.
Sanja Plješa he tourist company Plava laguna from Poreč is the successor to the camphotel founded in 1957. The camp was founded by the members of the French club of nature enthusiasts Polynesie from Paris who had been the only visitors to the camp for a couple of years. Managed by Anton Štifanić, Plava laguna had built several accommodation and catering facilities by 1976. The company was then oriented towards mass tourism, especially sports and recreation. However, many things changed since then, and Plava laguna has become a symbol of tourism in Poreč and an approach that puts visitors and environment first. Privredni vjesnik talked about current business with the CEO of Plava laguna Neven Staver.
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Plava laguna is under the majority ownership of Sutivan Investments Anstalt owned by the Lukšić Group. What is the actual ownership structure?
The camp was founded in 1957 by members of the French club of nature enthusiasts On 26th October of this year, Plava laguna (blue lagoon) had 2,858 shareholders and 546,318 ordinary as well as 105,000 preferred shares. Sutivan Investment Anstalt owns the majority of ordinary shares (438,899 or 80.34%), followed by Deutsche
We are preserving the beauty and cleanness of nature Do you keep up with sustainable development and implement green technologies in your business? Maintaining an ecological balance is one of the special goals of this company. In addition to continuous nurturing, enrichment and protection of green, floral and other areas which our company manages, we are investing great effort into the application of new technologies and beach design, trying to reduce pollution and waste as well as save in terms of natural resources management. The quality of the sea and coast, informing the public, education on the subject of environmental care, safety and quality of services represent criteria for obtaining and keeping the ‘Blue Flag’ for the beaches and marinas, awarded by the European Foundation for Environmental Education. Our 10 ‘Blue Flags’ to date confirm our superior results in this field. Bank Trust Company Americas (23,939 or 4.38%). Sutivan Investment Anstalt is the owner all of the preferred shares.
What is your evaluation of this business year? Operational income for the period of nine months was €58 mil-
What are the plans for 2012 and the next few years? The main future investment concerns the renovation of the Parentium Hotel. The hotel has been the crown jewel of Plava laguna for decades, and now we wish to renovate it and turn it into a 4+ star hotel. It will have 269 rooms, two pools, three restaurants, fitness, wellness and a conference centre. After the renovation, the name of the hotel will be changed into Laguna Parentium. Furthermore, we plan investment envisaged by the master plan for the resort Zelena laguna (green lagoon). Other important projects concern the reconstruction of the restaurant and terrace of the pool in the Laguna Galijot complex, modernisation of the bar and pool terrace of the Laguna Materada Hotel as well as landscape and beach design. We plan to build a pool complex covering 6,000 m2, a large central park of 5,000 m2 and six kilometres of walking routes and a similar length of cycling routes. Are you planning to orient more towards local tourists? Plava laguna has always been open to all markets. However, the share of foreign markets totals 98%, which means that 98% of our visitors have been foreign during the nine months of this year. This is quite common for Plava laguna.
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Privredni vjesnik Year V No 0175
CHAOS ON THE REAL-ESTATE MARKET
How a legislator unintentionally crea When controversial regulations entered in force, almost all real-estate operations were into question the survival of many construction companies and subcontractors as well Drago Živković onstruction, especially residential, and realestate agents have taken a heavy blow during the recession. As if that was not enough, they took another blow as a result of the amendments to the Law on Physical Planning and Construction as well the new law on the method of dealing with illegally built buildings. These regulations have yet again confirmed that the road to hell is paved with good intentions. No one doubts the intentions of the proposers and the legislator was good: to finally balance the situation on the field with the situation in the land-registry books. This is a pre-condition of EU legislative harmonisation as well as a required criterion for using subsidies of international programmes for agricultural development. However, new regulations created more damage than good according to construction companies and real-estate agents. The practice showed their application creates unsurpassable obstacles and the government is under pressure to immediately do something about the situation regardless of any pre-election campaign.
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Various interpretations The new regulations opened the old wound of the land-registry system in Croatia: the tendency
to interpret legal regulations in a completely different way. fferent way The idea of the legislator to demand the inspection certificate from all property owners turned out to be controversial since it would make it impossible to sell property without this document. Even though this represents a limitation to private
How can you sell your apartment? What about the people who wish to sell their apartment in this chaos? The answer is clear and unambiguous: it depends. According to the director of the land-registry department of the Municipal Court in Sesvete, Ana Marija Končić, if the apartment is present in the Registry of Deposited Contracts, where the apartments in undivided buildings are registered, everything remains the same. If the building is divided and the apartment is registered in the main land-registry, every owner must collect apartment documentation (construction license, inspection certificate) in order to obtain positive registration and then sell the apartment so the buyer can be registered as the new owner. Of course, under the condition the Constitutional Court does not abolish the controversial provisions.
ownership rights, due to which the legal profession finds these provisions unconstitutional, the creators of this law called this solution ‘rebuttable presumption’ in the interest of legal safety. Rebuttable presumption refers to all buildings, and some land-registries apply it also to new ones, whose construction started proceeding from a valid construction act, whilst the investors want to sell them before construction is completed, which has so far been possible. If the building is not completed, it is impossible to obtain a construction certificate as well as registration. This means it cannot be sold, at least according to some land-registry books. Other land-registry books (including that of Zagreb – the largest) are considerably more flexible since they regard that the purpose of
the law is to stop the traffic in illegal buildings buildings, not iinterrupting economic activities. The final result is a situation that construction companies, agents and some jurists regard as a ‘circus’. Immediate termination When the controversial regulations entered into force, almost
The government is under pressure to act immediately irrespective of pre-election campaign all real-estate operations were immobilised, bringing into question the survival of a large number of construction companies, subcontractors, real-estate agents and employees of these companies. Under the conditions
www.privredni.hr Business & Finance Weekly
5 HUANG XIAOXIANG: OUR COMPANIES AIM TO PROMOTE INVESTMENT IN CROATIA
ted chaos immobilised, bringing as real-estate agents No one knows anything What is the experience of realestate agents? No one knows anything, says Boro Vujović from Opereta in Zagreb. The Ministry says one thing, the courts another, and the banks something completely different. While some land-registries refuse to register new owners without positive registration, others (including that in Zagreb), do not, but they do demand a certificate which proves the inspection did not start a demolition procedure. The final interpretation of the competent Ministry is that that only property submitted for registration between 1991 and 2007 is controversial. Others do not require registration. This new instruction obviously did not reach everyone. For example, there is an apartment in a particular building built in 1975 for which the bank demands a construction license in order to approve the loan for its purchase, says Vujović. of the present economic crisis, this might create long-term damage, including state budget income cuts, points out the Vice-President of the Croatian Chamber of Economy, Jasminka Trzun. According to the CCE, the controversial provisions directly limit the entrepreneurial freedom of real-estate agents and the construction sector as well as its production. The limitation of real-estate traffic should not have been prescribed before the presumed date for completing the legalisation process and before it was believed the positive registrations will be solved. In memoranda sent to the government and Ministry of Environmental Protection, Physical Planning and Construction, the CCE suggested the controversial provisions should be abolished since that would be crucial for any investment into Croatia.
THE ARRIVAL OF DELEGATION FROM SICHUAN We will encourage our companies to explore the traffic potential of Croatia and would also like to increase our purchase of Croatian products Igor Vukić very other iPhone has been produced in Sichuan. This Chinese province with 90 million people and a GDP of $249 billion (with a 13.7% average growth rate annually), is currently ranked eight amongst Chinese provinces regarding development. A delegation from Sichuan recently visited Croatia. Nadan Vidošević, President of the Croatian Chamber of Economy and Li Gang, President of CCPIT, the China Council for the Promotion of International TradeSichuan, signed a Memorandum of Understanding to strengthen co-operation between Croatia and Sichuan. The Cantonese delegation recent visit to Croatia and the arrival of a delegation from Sichuan indicates the huge interest from China for opportunities arising in Croatia following EU accession. “We will encourage our companies to explore the traffic potential of Croatia and would also like to increase our purchase of Croatian products. Our companies are aiming to promote investment in Croatia”, stated Huang Xiaoxiang, Sichuan Vice-
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Governor. Xiaoxiang pointed out that Sichuan has a railway network connection with Europe and direct air connections with many European cities. In addition to developed industrial production and agriculture, Sichuan is an important traffic node. China is currently constructing a network of high-speed trains, which will, in 10 years’ time make it possible to reach Beijing from London in just two days at speeds of 350 km/h. Investment projects presented Croatia is planning the construction of a rail network particularly that between Rijeka and the Hungarian border, pointed out Nadan Vidošević. Sichuan goods could be transported via Croatian sea ports, as this is the fastest route into Europe. Croatia is located on the river Danube, which is the fastest connection between the European waterway network and the Adriatic Sea. The planned construction of the canal network and irrigation system creates opportunities for co-operation in agricultural development. Croatia is divided into 5 climatic zones with huge water resources, added Vidošević. “Croatian an-
nual exports to China once stood at $700 million. Our goal is to achieve the same result again and subsequently, exceed it”, explained Vidošević. The current level of Chinese imports into Croatia is $1.47 billion, whilst Croatian exports stand at a lowly $38 million. The delegation from Sichuan consisted of leading representatives of the largest telecommunication and construction companies and representatives of the largest bank. Representatives from the Ministry of Economy, Labour and Entrepreneurship, the Croatian Bank for Reconstruction and Development (HBOR) and Croatian Telecommunication Agency representatives participated at the meeting, in addition to the hosts from the Croatian Chamber of Economy. Marija Vukelić from the Ministry of Economy, Labour and Entrepreneurship presented the Croatian investment project plan. She advised participants on the opportunities of investment in the Šibenik business zone and the Nova Gradiška based industrial zone, announcing the anticipated construction of a new thermoelectric power plant valued at some €800 million.
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WE PRESENT
MODO INTERIJER STUDIO
Privredni vjesnik Year V No 0175
ALDI, SOLIN
Ample orders, poor collection of receivables Aluminium locksmithery combining glass, steel with new materials giving increased end-user energy efficiency
Branded furniture Slavonian solid wood furniture, created in conjunction with a London designer has become coveted by sophisticated customers he success story of an Osijek entrepreneur, Miroslav Mršo began in a garage, as many success stories do. Several years ago he created some bathroom fittings in a garage with borrowed tools. Many of his friends liked it and consequently he started creating furniture for more people. He soon realised that demand was high for tailor-made furniture and in 2006 he left his job and founded his own company Modo interijer studio. Initially, he made tailor made furniture, mainly for kitchens, which made him wellknown in Osijek and throughout Slavonia. Finally, he specialised in wooden furniture production. Modo interijer studio has exhibited designed furniture pieces made from solid wood at two international fairs in Ljubljana and Cologne. Subsequently, serious interest in his furniture has arisen throughout the European market. The company initiated a serious and demanding investment cycle following preliminary orders. It acquired stateof-the-art technology, with the support from the Croatian Bank for Reconstruction and Development (HBOR) and the Croatian Agency for Small Entrepreneurship (HAMAG) and started work
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on the construction of a brand new furniture factory. London design The new factory is underway near Osijek. According to Miroslav Mršo, the first construction phase is worth between €0.54 million and €0.60 million, on a par with expected factory turnover, with production capacity having been sold out in advance. “We have recently obtained the design rights from a London designer for individual furniture items, such as
Orders exclusively from Germany, Sweden and Great Britain tables, dressers, beds and similar items. These are branded furniture units. On the one hand we are aiming for our own brand development, and on the other we are focusing on high quality production services for large orders. We have no market problems thus far, as current demand for our products exceeds production”, explained Mršo. In addition, they are currently seeing exclusive orders from Germany, Sweden and Great Britain. (S.S.)
he company Aldi was founded in 1990 by entrepreneur and engineer Ljubo Đula. He was amongst the first to have identified the quality of new materials and new technologies used in aluminium, glass and PVC material processing. In 2000 the company completed the construction of a stateof-the-art production and sales premises in Solin, followed by another in a business zone near Split, due to increased demand and technological advancement. The company employs 50 staff, with 10 highly educated employees. In addition, it has a representative office in Zagreb. “The company has ample orders and a satisfactory amount of work, due to its long experience and satisfactory rating, irrespective of the current investment plunge in the construction sector. Nevertheless, we are currently addressing serious problems with the collection of receivables and illiquidity which are the most challenging issues in the construction sector”, stated Ljubo Đula, Director of the company. “We purchase raw materials from German producers by advance payment, whilst in Croatia we are faced with a long collection expiry period. In addition, we are normally contacted by investors following the 90 day collection expiry period, offering us various methods of compensation in which we have no interest”, explained Đula.
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Ample scope for energy efficiency Investors and those constructing single-family homes give us hope for the real possibility of improvement in the market in the near future. “Investors have lately been ordering highly demanding and technologically complex products, contributing to energy efficiency and providing the highest possible noise protection. There is a significant increase of highly informed investors, giving us the feeling of passing an important ‘knowledge test’, which is highly promising and encouraging”, pointed out the Director. In the area of aluminium locksmithery, Aldi produces various types of cold profile systems without an interrupted thermal bridge and various thermal profiles with interrupted thermal bridges, special aluminium profiles such as loggias, winter gardens, sheds, roof constructions, various types of fences and similar items. In addition, there are various façade profiles used in modern architecture, combining aluminium and steel, PVC materials, ceramics and other types of façade facing, products for exterior protection, roller blinds, window shutters, façade face veneers, garage doors, aluminium window benches, profiles made from combination of various types of materials and the most demanding, products made from glass.
www.privredni.hr Business & Finance Weekly
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CROATIAN FOREIGN CURRENCY MARKET Currency
AUD CAD JPY CHF GBP USD EUR Source: HNB
EUR
Kuna exchange mid-rate
5,555391 5,396025 7,215851 6,057484 8,778664 5,536492 7,486445
€
7.490
USD
CHF
6.06
7.485
5.54
6.05
7.480
5.52
6.04
7.475
5.50
6.03
7.470
5.48
6.02
7.465 14.11. 15.11. 16.11. 17.11. 18.11
WEEK NOVEMBER 19, 2011
5.56
5.46 14.11. 15.11. 16.11. 17.11. 18.11
BUSINESS FOR THE FIRST HALF YEAR
6.01 14.11. 15.11. 16.11. 17.11. 18.11
::: news Croatian Postal Bank (HPB) pensioner loans The Croatian Postal Bank (HPB) has expanded its product range with a new all-purpose cash local currency loan for pensioners. The loan has been designed for all pensioners, irrespective of their client status at the bank and is granted in the amounts ranging from €405 to €6,100, with an expiry date ranging from 1 to 4 years. The interest rate is 8.49%, whilst for pensioners without bank client status the interest rate is 1% higher.
Total gross profits 105% higher than last year Processing industry companies earned €1.54 billion gross profits, trade €0.35 billion and information and communication sector €0.18 billion roatian entrepreneurs achieved better results during the first half year in relation to the same period of 2010 since income exceeded expenditure. In relation to the first half of 2010, a gross profit of €2.5 billion represents a 105.5% increase, according to data published by the Finance Agency (Fina). According to the results of entrepreneurial statistical reports for the period January to June 2011, 90,668 entrepreneurs employed 840,399 people, which is 0.3% up year-on-year. The results
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have yet again confirmed that the main feature of the Croatian economy is a high concentration of the number of entrepreneurs and the employment rate in trade and processing industries. The largest share of entrepreneurs relates to the trade sector, 25,818 (28.5% of all entrepreneurs) employ 187,560 workers (22.3% of total employees). The processing industry has a higher employment rate with 229,555 employees (27.3% of total employed) working in 11,075 enterprises (12.2% of all entrepreneurs). Within the
Lower salaries regardless of results It has become customary that year by year employees in the processing industry, trade, construction, accommodation services and catering register average monthly nett salaries lower than the average of Croatian entrepreneurs. This was also the case during the first half of 2011. In relation to the average of Croatian entrepreneurs, average monthly nett salaries for employees were 0.9% lower in the processing industry (€625), in construction (€625, down 13.7%), trade (€573, down 9.1%) and accommodation services and catering (€518, down 17.9%).
structure trade and processing industry combined have approximately half of all entrepreneurs and employees; 36,893 entrepreneurs (40.7%) and 417,115 employees (49.6%). In terms of employees in other activities, construction has 10.2% (85,916 employees), transport and storage 7.2% (60,540), expert, scientific and technical activities 5.5% (45,902). All activities achieved gross profits with the exception of accommodation services, catering, real-estate, mining and excavation. After the past three years when trade had the highest gross profits, this year the processing industry took the top spot. During the first six months entrepreneurs in the processing industry earned €1.54 billion (61.4% of total gross profits), trade €0.35 billion (14.3%), overtaking communications and information at €0.18 billion (6.9%). (V.A.)
Increase in housing loans Bank loans stood at nearly €38.2 billion at the end of September, according to Croatian National Bank data. Housing loans, with the highest share in general public loans, stood at €59.4 billion at the end of September. A slight increase of 0.2% was recorded on a monthly level, whilst there was an increase of €2.3 billion or 6.4% in housing loans over September 2010. The last several months have seen annual growth rates slightly lower over the first six months in 2011. OTP Consulting OTP Consulting, a new subsidiary of OTP Bank, has recently been formed. The company will provide consulting services in preparation and use of EU funds for both public and state administration and companies, consulting services in project financing and management, development strategy preparation, strategic planning and preparation of project proposals with all the relevant and additional annexes for successful application of EU funds.
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Privredni vjesnik Year V No 0175
Stype CS: instant success through quality and innovation
Graduated two years ago and already exporting to Belgium Stjepan Čajić surmounted the market with his information technology system for the management of cinematic systems in video production, an innovation which occurred accidentally Jasminka Filipas he company Stype CS began operating in February 2011 is located in the Development Agency Zagreb (RAZ) since mid-June. The story eliminates all the usual prejudices about difficult operating conditions in Croatia and the obstacles to foreign market penetration, indicating yet again that quality and innovation are critical for success. The company exports to Belgium and it is currently making inroads into North American markets. The owner, Stjepan Čajić, holds a degree in IT engineering and has overcome the market with the development and production of IT system for the management of cinematic systems (mechanical cranes) in video production, which occurred to him accidentally. “The idea for the product I am exporting occurred to me when a friend and colleague began producing camera cranes. I wanted to enhance this concept, and consequently the idea to revolutionise the use of cranes occurred to me”, he stated. His colleagues at the Development Agency Zagreb added that he received numerous state awards for his achievement in IT whilst a high school student and that last year he won a gold medal for his graduation thesis from 2009 at the Zagreb Faculty of Electrical Engineering and Computing at an innovation fair in London and also at the Inova fair in Osijek.
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Development agency identified the potential Stype CS deals with robotic technology for the film and TV industry. “I found out about the Development Agency accidentally, surfing the internet. I
thought it was the centre of creative life, full of positive energy and I was not wrong. I applied to join and I have to admit that my expectations were modest and I was pleasantly surprised to have been invited to an interview. I moved in several days later”, explained Čajić, adding that be-
Huge export potential, yet it still requires comprehensive improvement ing located at the Development Agency in Zagreb has many advantages. Firstly, there is a large expert database with whom he can meet and relate to. They are all engaged in original work and are not in competition with each other and, consequently they enjoy sharing their experiences and advice in various areas. In addition being in the company of cre-
ative people is a priceless experience, as well as the opportunity to share more than satisfactory business premises where you can meet business partners. Optimism an imperative Regarding his innovative product, Čajić explained that his device enables automatic directing and focusing of the camera on the crane, implying that the job which used to be done by two people can now be successfully performed by one. He pointed out that the gold medal had no impact on contracting the job, yet he was extremely pleased and honoured to have received recognition for his work. In addition, he believes business expansion is an option. “There is huge export potential, yet the product needs comprehensive improvement”, he pointed out. The company currently employs three staff and is not planning staff expansion. Čajić did not request any state support, since he
did not need it to be able to operate. He admitted he avoids taking loans which might promote his advancement but also create further pressure. Scarce funds foster creativity and make employees consider carefully every business move, which has ample advantages. “I am not in inclined to constant criticism and I have to admit that the current situation is not extremely serious. I believe a pessimistic work environment is a serious problem. It has become an underlying motif in our society and is extremely discouraging. In my opinion the administrative aspect of imports of electronic components is one of the major obstacles, yet Croatian EU accession will address this issue”, concluded Čajić. He emphasised comprehensive improvement of all current products, development of new ones and meeting client needs as some of his priorities in the near future. Regarding market expansion, he believes his next contract will be in the US.