Vineyards and production Over the past decade the number of vineyards has increased, new technology implemented and production better
Mirko Ćavara, Managing Director, Borovo We expect the new government to grant the right to purchase 50% of preferred shares
WINE INDUSTRY PAGES 2-3
INTERVIEW PAGES 4-5
PBZ analysis The level of loans with a date of up to one year currently stands at 37% up from 33% ANALYSIS PAGE 6 2008 2009 2010 2011
Croatian Business & Finance Weekly Established in 1953 Monday / 12th December / 2011 Year V / No 0178 www.privredni.hr
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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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NEW GOVERNMENT AND ENTREPRENEURS
Strong moves made by assertive majority imperative Drago Živković hanges to the executive and legislative government are an excellent opportunity for new beginnings. Such times are usually challenging, particularly amidst high expectations. The leaders of the new governing majority are attempting to burst the bubble of expectations following their election victory shown by one of the first statements of the future Prime Minister, Zoran Milanović saying “We are not in a Flash Gordon film to be given 14 seconds to save the world”. Apparently they are aiming for extremely high targets. The future Government Vice President, Radimir Čačić, has stated that his target for 2012 will be achieving gross domestic product growth up to 2% and to 5.5% by the end of his term in office. Branko Grčić, another SDP member, has been slightly more modest in his anticipations, of up to 1% growth in 2012. According to most analysts, this optimistic scenario has been used as the basis for Grčić’s budget estimate; the budget will see an increase of between €0.33 billion and €0.40 billion, and we will see a similar level of savings. Subsequently, the deficit will decrease by €0.68 billion over the year. According to Čačić, savings will increase due to reductions in
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social subsidies in certain cases, as well as the abolition of municipalities unable to settle their liabilities, plus rationalisation in public companies. Illiquidity is the major malaise in the economy and, according to Čačić, there are three steps which will eradicate this: the state will settle its outstanding liabilities, liquidate companies which are not operating and are piling up debts, whilst debts of companies with potential will be transformed into state owned stakes. According to Milanka Opačić, the future Government Vice President, the first government move in the New Year will be the new budget, considerably different from the current budget and, in addition, a series of laws to reduce the economic burden from
parafiscal taxation. The increase in financing of Croatian entrepreneurs by the Croatian Bank for Reconstruction and Development (HBOR) will be one of the major alterations in the new budget, since entrepreneurial development has been adversely affected by the current high interest rates in capital markets. A strong signal The new government made up of a stable and assertive majority, does not need to make the same compromises as with previous governments, whose politics have suffered a severe blow in the elections. It has been a significant signal to the governing structure, which is currently powerful and large, to make considerable moves and, according
to Nadan Vidošević, President of the Croatian Chamber of Economy, it could also be affordable. Croatia cannot rely primarily on its processing industry with a mere 240,000 employees to provide an exit from the crisis and the new government must be aware of the reality it is currently facing, warned Vidošević. He also expressed his hopes for new ministers to make several significant moves during their first year, since they must face the danger of a credit rating downgrade. There are high expectations also in the Croatian Employers’ Association. The new government will not have the usual ‘honeymoon’ period due to the dire circumstances in the economy, according to Ivan Ergović, President of the Croatian Employers’ Association and Davor Majetić, the Director. They are aiming to implement less popular, albeit necessary measures, primarily reducing the excessively high tax burden on entrepreneurs, transforming state administration into entrepreneurial services and enhancing entrepreneurial development in all spheres. Senior officials in the Croatian Employers’ Association stress the importance of constructive criticism, expressing their hopes to be identified as respected partners in the creation of a more benign and acceptable economic future.
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Privredni vjesnik Year V No 0178
Romana Šundov Armstrong, CEO of Nirs, Split
Investment accompanied by a crisis can be a heavy burden Over a longer period positive results impose the need to invest and develop or Nirs, a company which produces textiles and sells catering equipment, this year has been more successful than the previous two critical years. In addition to the sudden crisis, resulting in a slump in customer investment, reduced expenditure and decreased demand, we experienced another aggravating circumstance, since we had just finished investing into a new office building in conjunction with a hotel, restaurant, café, storage, sales and production facility. We ventured into this investment since the volume of work had been constantly increasing for the past decade and we had been constantly showing positive results that guaranteed us a brighter future. Over a longer period of time, positive results impose the need to invest and develop. The market is ruthless and you must constantly keep up with trends and predict customer needs. Considering we were the first in Croatia to venture into this type of business in 1992, our customers expect us to be ahead of others. We must not let them down under any circumstances. Furthermore, the goal was to increase our production capacity, developing at the fastest rate due to the closure of large textile companies. Purchasing raw material was difficult, since producers turned to safer products, without producing new decors or investing in new designs and textiles. As a consequence, we were unable to offer our custom-
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IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription
( 207,743 tonnes of gr produced in 2010
VINEYARDS AND PRODUCTION
Investmen Over the past decade the number of vineyards has exporting expensive local high quality Krešimir Sočković otal vineyard area in Croatia has increased from approximately 27,500 hectares to almost 34,000 hectares during the past decade, according to data provided by the Central Bureau for Statistics. Croatian wine producers currently cultivate over 122 types of vines which produce around
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ers’ quality finished products. The opening of the new business centre made it possible for us to equip any hotel or restaurant on a turn-key principle. However, the crisis turned this investment and development prospects into a heavy burden as we were forced to completely change our work methods. Rather than big hotel investment, we turned to smallsized customers, such as private apartments, cafes, restaurants and taverns. In order to reduce the impact of the crisis and survive under new circumstances, we invested all our capacities into field work and direct contact with customers. The extreme perseverance and dedication of all our employees contributed to the positive balance sheet for this year. We are proud to say that 2011 was the year of our recovery.
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
During the past ten years the number of productive vines has increased by 116 million 200,000 tonnes of grapes. For the past couple of years and depending on season between 1.20 million and 1.42 million hectolitres of wine have been matured in Croatian cellars. Although the country is a long way from the figures from the early 20th century, when vineyard area totalled 170,000 hectares, vine growers and producers admit the market is more organised. Although local vineyards remain too small for more serious production and approach to the international market, since over 45,000 of almost 60,000 producers cultivate on areas smaller than a hectare, many new Croatian cellars implemented new technology which has led to more success at international competitions. There are also more people for whom this is the only source of income. According to data provided by
the Central Bureau for Statistics, Croatia produced 207,743 tonnes of grapes and 1,433 hectolitres of wine in 2010. A decade of development Croatia produces more than local demand requires. Last year, it produced 1.43 million hectolitres, the biggest quantity for the past 10 years. During the past decade, yield per vine has been between 1.4 and 1.7 kilograms, and average yield per hectare between 5.8 and 6.8 tonnes. Last year a total of 207,743 tonnes of grapes were produced, almost 30,000 tonnes more compared with the middle of the last decade. Average yield per hectare amounted to 6.1 tonnes or 1.4 kilograms per vine. During the past ten years the number of productive vines has increased by 116 million (the same amount as in 2011) to a figure of 145 million. The expan-
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rapes
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( 1.43 million hectolitres of wine produced
nt and growth
increased, new technology implemented and production better whilst importing cheaper wines and sion of vineyards was followed by an increase in the production of wine. Wine makers produced 1.43 million hectolitres last year, 15% over 2004. Croatian production is dominated by the white wine varietal graševina covering an area of 22.3% of all Croatian vineyards. Plavac mali is the most important red wine varietal at 8.1% of total Croatian vineyards. Istrian malvasia has a 5% share. Over 2% of vineyards are planted with plavina, debit, rhine riesling, chardonnay, merlot, trbljan, babić, frankovka, cabernet sauvignon and kujundžuša. Over a quarter of total vineyard area is planted with other varieties or mixed plantations. According to data provided by the Central Bureau for
Vineyard Registry In the European Union the wine sector was reorganised in 2009 in conformity with the new common organisation of the Union wine markets and the common organisation of the marketing of agricultural products. The provisions for certain agricultural products and the EC Provision prescribe rules of mandatory registration in the vineyard registry in order to be able to monitor the wine market and control shipping documents as well as the relative registers. Statistics, in 2009 over 9% related to vineyards under three years old, and around a quarter of all vineyards were between three and nine years old. Over 14% of vineyards
The main reason behind the EU registry is the monitoring and supervision of each vineyard production potential within the Union. Registry data will help the wine market, serving the inspection bodies as a more efficient administrative and inspection tool. The vineyard registry includes all areas covered with vineyards. It is also a base for registering lists of vineyards, mandatory statements, data relating to wine market monitoring and the accompanying documentati-
on as well as cellar registries kept by the wine sector. Two years ago Croatia started to implement the Vineyard Registry. A unique data base of wine growing and production was created and will enable monitoring and verification of production capacity of the wine market. The registry should play a vital role in the system of wine market support and organisation which is why it was established within the framework of the Land Parcel Identification System (LPIS).
were between 10 and 20 years old with around 22% between 20 and 30 years old and 27% of vineyards were older than 30 years.
vineyards. However, this only concerns wine growers and producers who sell their wine on the market. Vineyard reform is currently ongoing in EU countries, according to which old vineyards will be extinguished by 2012 due to a considerable surplus of wine.
Smaller vineyards and smaller production There are around 150,000 registered vineyards, most covering an area of half a hectare, which indicates there are many people who find wine growing a tradition or hobby and the majority of the produced wine is not marketed. Local wine production is roughly the same, but it has almost halved over the past three decades. According to the completed Vineyard Registry, there are around 33,833 hectares of vineyards in Croatia. Before the project implementation, which began in 2003, it was believed that there were some 60,000 hectares. According to the Registry of Grape Producers, there are 17,732 wine and fruit wine producers who own 17,063 hectares of
Expensive exports, cheap imports In 2010 Croatia imported more than six times as much as she exported; in financial terms exports were US$11.8 million and imports US$21.1 million. Concerning this year to date, Croatia has imported wine to a value of US$13.6 million, some 4% down compared with gthe same period last year. Exports grew by 40% over 2010 equating to an addtional 9% financially. In 2009, cheaper wines were exported to Bosnia and Herzegovina whilst the more expensive wines went to Germany, Austria and North America. Imports came primarily from Macedonia, France and South America.
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INTERVIEW
( €300 million
Privredni vjesnik Year V No 0178
official estimate of direct material damage caused by war damage
( €166 million invested in renovation
Mirko Ćavara, Managing Director, Borovo
Future privatisation We expect the new government to grant the right to purchase 50% of preferred shares in accordance with their length of service to both current and former employees Svetozar Sarkanjac ome €16 million has been invested in the renovation of the factory and new technology after the war but nevertheless a huge area of the factory remains devastated. €5.5 million was invested in the restoration of leather footwear production and a further €5.5 million in the production of rubber technical goods. The amount invested was significant, yet it is way below the official estimate of €300 million of direct material damage caused by war damage to the state-owned Borovo plant at that time. Privredni vjesnik talked with Mirko Ćavara, Managing Director of Borovo, about the current situation in the company. We have 85 outlets in Serbia and a production facility in Sombor with an estimated value
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of €30 million. Our material assets in Serbia, comprising 28 stores, have been estimated at between €4 million and €5 million, whilst in Macedonia we own some 20 business premises worth around €3 million. Consequently, €35.36 million worth assets have been expropriated. Unfortunately, we have not been successful in reaching a satisfactory solution thus far, regardless of all our legal efforts and our correspondence with authorised institutions.
Currently there is still the Sombor-based Boreli factory. This used to be our factory and was called Borovo Sombor. We have attempted to address the issue several times, yet have been told we could negotiate exclusively only with the legal successor of Borovo, the current production facility and factory owner of Borovo in Serbia. We do not agree with this stance and have claimed property restitution. We have been faced with the proposal to divide ownership of expropriated assets in the ratio of 60% to Borovo and 40% to the current owners in Serbia. In addition, we would be obliged to assume liability towards the current 1,000 employees, as well as settle all outstanding liabilities of the current factory towards its suppliers plus all other outstanding liabilities. Such a solution would seriously jeopardise our business operations and, in addition, we are not authorised to accept such terms. In my opinion, all expropriated assets belong to the original company and this stance should also be taken by the Croatian government. There are prospects of privatisation in the near future. We expect the new govern-
ment to address the privatisation of Borovo in the way it has with other companies; to grant both current and former employees the right to purchase 50% of preferred shares in accordance with their length of service. In addition, the full privatisation of Borovo is imperative. Borovo is currently proceeding with its production amidst a plethora of adversities. We currently employ 1,182 staff with some 700 located in Borovo, whilst other employees are located in outlets throughout Croatia and in our Slovenian retail network. In addition to leather footwear, we focus on rubber technical goods and V-belts as primarily export oriented production, as we sell nearly 80% of our production to foreign markets. Around 70% of our footwear production output is sold on the local market and the remaining 30% is sold in Slovenia and in Bosnia and Herzegovina. You are normally reluctant to accept the so-called lohn production. The future potential of Borovo is in our own brands, technology and the human assets creating our products and models based on deep experience. Lohn production should only be resorted to in dire circumstances. We focus primarily on our own brands, starting with the well known ‘Startas’ sports shoes and Borosana shoes (orthopaedic shoes with open toe and heel segments, originally made in the village of Borovo) and our well-known footwear brands such as ‘Relax’ and ‘City’ footwear. We in Borovo believe our own brands have a crucial role in defining our future.
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FRANCHISING
A more effective legal system and loan availability would encourage more franchises Franchisors and franchisees anticipating new legislative framework bracing this business model to foster growth and create their own franchise network. According to data from the Croatian Association for Franchising, in Croatia there currently are 170 franchise networks indirectly employing around 16,500 staff.
Drago Živković ranchising is a model of corporate growth which significantly decreases uncertainty during the riskiest phases of growth: the inception phase and that of fast growth. Franchising is a highly developed business model in most western countries, particularly in the US, with 2,500 franchisors at 900,000 franchise locations in 75 different fields of activity. Consequently, the US franchises generate total revenue of around $850 billion and employ 9.5 million staff. For the EU one can merely talk about estimates due to the absence of a franchise registration system. Hence, according to estimates currently there are some 10,000 franchise systems in the EU. The Hungarian ‘Fornetti’ with 6,464 and the Czech ‘Bata’ with 5,000
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franchise locations are amongst the 500 leading European franchises and they are the only franchises from Central and SouthEast Europe to have achieved such a high level of success. Croatia is witnessing a significant increase in franchising both amongst upcoming entrepreneurs commencing their activity and amongst mature companies em-
Weak local franchise sector In Croatia there are just 35 local franchises, whilst in Hungary there are 240 local franchises from a total of 340. In Slovenia there are 52 local franchises in the network of 107 franchises. Addressing several major obstacles is imperative in order to enhance franchising in Croatia, as concluded at a recently held roundtable discussion at the Institute of Economics in Zagreb. According to Mirela Alpeza, the Director of the Centre for SME and Entrepreneurship Development Policy,
major obstacles comprise ignorance regarding the franchising business model, a lack of adequate loan programmes indispensable in financing the franchise purchase, the absence of a legal framework and franchising statistics, dearth of government support and weak legal infrastructure. Consequently, franchisors and franchisees are expecting the government to provide them with the legal framework for franchising in the near future, as well as to create a franchising register at the Croatian Chamber of Economy, loan programmes adapted to the needs of franchises and the franchising business model being included in University curricula. Franchisors and franchisees are expecting the government to provide them with legal framework for franchises in the forthcoming future.
CROATIAN NATIONAL BANK
BANKING INDUSTRY
Lending reaches €38.5 billion in October
Deposits reach €30.1 billion
According to the latest data provided by the Croatian National Bank, bank lending totalled almost €38.5 billion at the end of October. A mild increase of 0.7% was registered on a monthly level, and in relation to late October 2010, lending increased by €2.6 billion or 7.4%. In relation to the end of 2010, the amount increased by €1.6 billion or 4.4%, whilst the increase in total lending is primarily due to the growth in corporate lending which totalled €15.5 billion, 6.3% up over the end of 2010. A high proportion of the increase w a s to large-sized companies. On t h e
other hand, annual growth rates in public lending are considerably lower, reflecting a weaker rate of employment and the instability of the labour market in terms of generating future income. In October, public lending saw a mild downturn in relation to September, totalling €17.38 billion, 0.8% more in relation to the end of last year. Housing loans, the largest share of public lending (46%), totalled €8 billion, a 7.1% increase yearon-year. Notwithstanding, since the largest proportion of lending is approved with a currency clause, it should be noted that the kuna is 2% weaker in relation to the Euro year-on-year. State lending was the most significant contributor to the growth in total lending in October. It reached €5.2 billion, 11.9% more in relation to the end of last year.
According to latest data provided by the Croatian National Bank, total bank deposits (savings and term kuna as well as foreign deposits) increased mildly during October. By the end of October, deposits totalled €30.1 billion, 0.3% more over September. This was contributed to by increased savings and term deposits, whilst foreign deposits registered a mild downfall. The annual growth rate is no different this year, totalling 3.3%. Considering 78% of savings and term deposits are comprised of foreign deposits, annual growth is definitely due to exchange rate fluctuations since the Kuna/Euro exchange rate decreased 2% in relation to the end of October 2010. Savings and term foreign deposits in October remained almost unchanged, totalling €19.9 billion, up 1.3%
over October 2010, but decreased by 0.3% in relation to the end of 2010. On the other hand, savings and term kuna deposits (€5.57 billion) increased by 18.2% in relation to the end of 2010, but remain below the pre-crisis level due to a continuous decrease in 2009 and 2010. Private deposits amounted to HRK146.1 billion at the end of October, 4.1% more in relation to the end of the year. Corporate deposits decreased by 2.2% in the same period, standing at €3.98 billion.
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Privredni vjesnik Year V No 0178
CROATIAN FOREIGN CURRENCY MARKET Currency
AUD CAD JPY CHF GBP USD EUR Source: HNB
EUR
Kuna exchange mid-rate
7.31
5,681219 5,479504 7,206327 6,069222 8,771307 5,603545 7,500345
Beer producers rise with the help of Radler The Croatian beer market grew by 8.5% during the first 10 months of this year. Zagrebačka pivovara increased its share from 41% to 42%, said CEO Sergej Yeskov. Market expansion is mainly due to the huge success of flavoured beer (radler) that now generates 8% of sales by volume. Beer consumption per capita increased to 80 litres in Croatia. According to Yeskov this is a due to this year’s excellent season and long summer. This year, Zagrebačka pivovara produced around 1.5 million hectolitres of beer, of which it exported 120,000 hectolitres to Bosnia and Herzegovina, where it holds 6% of the market. HŽ losses reduced by a third Hrvatske željeznice (Croatian Railways) will generate total income of €0.55 billion by the end of 2011, 4.2% down in relation to 2010. Expenditure has been estimated at €0.57 billion (-4.7%). Full HŽ results might add up to a deficit of €5.65 million by the end of 2011. Although this does not seem positive, it is still 33.7% less than in 2010. The CEO of HŽ Holding Zlatko Rogožar, announced that 2012 might be their first year of profit, even if it is a symbolic amount of €80,000. Last year, HŽ invested around €47.84 million in transport capacity and €88.65 million in infrastructure.
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PBZ ANALYSIS
Short term corporate loans on the increase The level of loans with a date of up to one year currently stands at 37% up from 33% whilst the level of medium and long term loans is reducing ccording to a recent survey by the European Central Bank (Bank Lending Survey), increasingly stringent nett corporate lending terms in the Eurozone have seen a significant boost during the third quarter of 2011. In addition, banks have reported a significant fall-off in lending demand to the corporate sector loans for the first time in over a year. Loan terms have become significantly more stringent primarily for long term loans, whilst the demand for short and medium term loans has been static. Banks surveyed have indicated their expectations of a further tightening of lending terms during the next quarter, as well as a decrease in loan demand, which will considerably impact on long term loans. Thus the real and financial sectors are anticipating an economic slowdown throughout the Eurozone, pointed out
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Ana Lokin, PBZ Analyst. How have movements in loan terms impacted on corporate lending in Croatia? Analysts have analysed data from the central bank on corporate loans and due dates. Nevertheless, currently there is no benchmark survey and analysts have consequently emphasised their view being limited and exclusively focused on the data indicating movements, without being able to provide an insight into possible causes, leaving ample grounds for diverse interpretations. Economic growth promoters According to data on quarterly movements during the period from December 2007 to June 2011, the level of loans with an up to three months due date has increased from 10% to 16% of total lending, loans with a due date ranging from 3 to 12 months
have shown a slight retraction from 23% to 21%. Medium term loans, ranging from one to three years, are down from 18% to 15%, and long term loans (over three years) have been relatively stable. The level of corporate loans has soared from €11.6 billion to €15.2 billion. Up to 1-year loans have risen from 33% to 37% and this has had a negative impact on the level of demand for medium- and long-term loans. Corporate lending has not slackened and banks indicate a growing increase in demand. According to Ana Lokin, the extent to which demand changes (the macroeconomic environment particularly a slump in investment and corporate orientation primarily towards covering operating expenses) and amendments to loan terms have all contributed to an increase in short term lending trends, is yet to be determined.
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WE PRESENT 7
RURAL TOURISM LACKOVIĆ, BILJE
NEUROTH HEARING AIDS, ZAGREB
European quality level hearing protection
This years top host in rural tourism The Lacković family have been successful developers of rural tourism for a decade he Lacković family farm started operating in 2000, and the first rooms for visitors were opened in 2002 under the name Lacković Rural Tourism in Bilje. The first visitors were from Zagreb, and the family still remain in contact with them. Their first foreign visitor was an auditor from the World Bank who visited Baranja for a project. Even though he could stay in a five-star hotel, he always returns since he enjoys a family atmosphere and local food. Srđan
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Their first foreign visitor was an auditor from the World Bank Lacković is this year’s winner of the award Man – key to success in tourism, awarded by the Croatian Tourist Board for the best host in rural tourism. Only a 15 minute drive from the centre of Osijek, in the typical rural atmosphere of Baranja, the Lacković farm offers 16 beds. With an area of 6,000 kms2, the estate consists of vegetable and fruit greenhouses, numerous domestic and unusual animals, and there is also a lake as well as thick vegetation. In addition to the quality accommodation, categorised at three suns, and homemade breakfast
typical for Baranja (kulen, sausages, ham, eggs, cheese and cream with homemade jam), visitors can also order lunch and dinner, all according to standards of certified quality and quantity of Baranja. It is possible “We co-operate with other estates. Anything that we are unable to deliver to our customers, we arrange with other farms”, says Srđan Lacković. “Furthermore, the farm is mainly visited by families who wish to have a peaceful and relaxing vacation. Many visitors have been coming for years, spending two to three weeks on the farm. Lovers of cycling tourism come to enjoy the many cycling routes, and we are also visited by bird watchers. We are often asked if the business can support us. Considering the number of visitors, it can. However, it took a few years of investing, learning and developing to reach this level”, explains Lacković. A third of our visitors are foreign, mainly from Europe, but also America, Australia and Japan. They either contact us directly or through the internet or even the Tourist Board of Baranja. However lately, personal recommendation has been having the greatest influence, concludes Lacković. (S.S.)
Neuroth is planning to open hearing aid centres in the largest cities and in cities with general hospitals in the next year euroth provides solutions to those with hearing problems. Employees evaluate the level of difficulty for each patient and provide advice on a wide range of the most appropriate hearing aids. The company
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Neuroth idea originated some ten years ago provides state-of-the-art noise protection aids as well as protection from various other causes of hearing problems. In addition, it provides hearing aid care and maintenance, batteries, equipment and maintenance kits. Privredni vjesnik talked with the Director Svjetlana Podlesnik, who pointed out that the Neuroth idea originated some ten years ago. “Having spent over 30 years abroad, monitoring and adopting western business standards, I focused on achieving the same goals in Croatia. As a result of hearing problems in my immediate family I have gained firsthand experience and knowledge of the Neuroth philosophy and have excellent business relationships with the Neuroth/Schinko families. I am extremely pleased to say that the quality of Neuroth services in Croatia has kept abreast of Neuroth hearing centres in Austria, Switzerland, Germany,
Lichtenstein and Slovenia”, she pointed out. Comprehensive preparation The Croatian subsidiary of Neuroth employs some 20 staff. All employees have been comprehensively trained through various courses and have obtained other necessary qualifications at the Neuroth Academy in Austria, providing them with theoretical and practical knowledge in acoustics and audiology. “Our goal is to create a reputable network of professionals developing a cornerstone for successful solutions in hearing protection”, she explained. Regrettably investment in Croatia is inextricably linked with many administrative and other similar hurdles. Neuroth invested considerable foreign funding but nevertheless the company has faced various difficulties. “However, we have been adequately prepared and we are pleased to say we have succeeded in tackling all the obstacles in co-operation with state authorities and other institutions”, she reiterated. Neuroth is planning to open hearing aid centres in the largest cities and in those cities with general hospitals in the next year. “In addition, we are planning a concentrated expansion into Central and South-East Europe”, concluded Svjetlana Podlesnik. (B.O.)
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Privredni vjesnik Year V No 0178
Baranjka paprika – an original Baranja souvenir
Baranjka paprika as local souvenirs Attractive packaging with identifiable Baranja motifs is both a classical souvenir and useful ingredient in food preparation Svetozar Sarkanjac he cultivation of paprika and the production of ground paprika is a traditional and widespread activity amongst Baranja rural families. Nevertheless, Baranja paprika has only recently been identified as one of the officially protected Baranja souvenirs, called Baranjka ground paprika. The product seal and its name have been protected by the State Intellectual Property Office. The Baranja Association has been addressing human rights issues, primarily the issue of women victims of domestic violence. Several years ago it launched several projects dealing with economic independence of women. “We began our activity by providing training to produce vegetables in plastic tunnels. As a result we started production in 25 units and formed a social and entrepreneurial co-operative, providing women with the basic tools to generate their own earnings. We decided to focus on paprika as one of traditional Baranja prod-
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ucts, following an initial period of dealing with a variety of products”, explained Jasna Petrović, the Baranja Association Product Co-ordinator. In conjunction with various partners and smallscale producers we aim to increase ground paprika production as a high quality, cost-effective and regionally identifiable product. Hence, one hundred years of traditional production is enhancing development of a rural area and small-scale local producers’
sustainable economy, through a social entrepreneurship model. Kulen production The Baranja Association regards this quality local souvenir, produced by processing top quality raw material, as a major promoter to improve tourism and create all the necessary requirements to increase earnings at both an individual and community level. Attractive packaging with identifiable Baranja motifs make for
both a classical souvenir and a high nutritional value ingredient in food preparation as used in traditional recipes. Tourists and the general public can purchase this in the ‘Panona’ souvenir shop, and soon in several well known Baranja restaurants. In addition and depending on production capacity, the Baranja Association is planning to offer Baranjka paprika as a top quality ingredient to reputable kulen and sausage producers.