Gordan Maras, Minister of entrepreneurship and crafts Priorities: energy sector, transport, tourism
CCE Conference The economy has been helped by reducing contributions and membership fees by €3.3 million
Croatian shipbuilding survival Even if no satisfactory agreement is reached shipyards will not face bankruptcy or winding up
INTERVIEW PAGES 2-3
CHAMBER OF ECONOMY PAGE 5
SHIPBUILDING INDUSTRY PAGE 7 2008 2009 2010 2011
Croatian Business & Finance Weekly Established in 1953 Monday / 20th February / 2012 Year V / No 0187 www.privredni.hr
S U P P O R T E D
B Y
T H E
pvinternational pv international C R O A T I A N
C H A M B E R
O F
E C O N O M Y
STATE BUDGET 2012
STRICT CONTROL AND CUTS TO BUDGET EXPENDITURE Government hopes for large investment into the renovation of rail infrastructure from foreign investors, banks and European funds Igor Vukić he Government will cut expenditure by €0.53 billion with the budget proposals for 2013. They have announced strict control over budget expenditure to achieve financial consolidation and preserve the country credit rating. “We believe the proposed budget is realistic. It also has ambitions for development, but most importantly it shows we want to be a rational and realistic government”, said Prime Minister, Zoran Milanović. He pointed out the state will fulfil all inherited obligations, as well as agricultural subsidies arranged last year. Obligations to agriculture from 2011 totalled €126.9 million on the expenditure side of the budget. Furthermore, additional funding of €31 million was provided for subsidising capital investment in agriculture. In 2012, agricultural subsidies will be reduced from €0.48 billion to €0.37 billion. Subsidises and capital aid to Croatian Railways have also been reduced by a total of €72.5 million. The government hopes for large investment into the renovation of the rail infrastructure with participation by foreign investors, banks and European funds. At the same
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time, they announce a thorough “cleansing” of the railway portfolio. According to government sources, there are some 15 companies in HŽ (Hrvatske željeznice - Croatian Railways) which are not related to passenger or goods transport (including nurseries and hospitality). If buyers for them are not found soon, they will file for bankruptcy or liquidation. Rational measures were implemented at all levels, the Minister explained. According to Finance Minister, Slavko Linić, cuts are vital for securing sufficient room to cover increased expenditure resulting from interest payments and pensions. In nominal value expenditure decreased by €0.45 billion compared with the 2011 budget. Minister Linić adds to this
figure a further €79.7 million that Croatia will obtain from non-repayable EU funds, meaning it will not have to spend its own money. Attract European funds The Croatian Employers’ Association (HUP) evaluated the budget proposals as a good strategy for the necessary decrease in public spending and levies on the economy. They suggested the proposed cuts are too small, and the deadlines for harmonising the proposed changes in the tax system are lacking and damaging to the economy. According to HUP, budget expenditure cuts should be more substantial. With these modest cuts, the state risks exceeding the budget deficit above the aimed-for 2.8%, which cred-
it-rating agencies and financial markets might resent, according to HUP. This year’s state budget deficit has been estimated at €1.32 billion or 2.8% of GDP. In 2013, the deficit should reduce to €1.21 billion or 2.5% and in 2014 reduce to €0.99 billion or 1.9% of GDP. It took an immense effort to reduce the deficit to 2.8%, and planned income is quite conservative, said Minister Linić. Many things will depend on the ability to attract European funds, which will be a task for all Ministries. Rating agencies have already asked what would happen if income should exceed that predicted. According to the government sources, any surplus would then be reinvested in decreasing the deficit.
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Privredni vjesnik Year V No 0187
Saša Cvetojević, Director, Insako
Health care in need of comprehensive reform Private health care system cannot flourish whilst state-owned hospitals are provided with a predetermined monthly allowance he health care system is under continuous reform due to unsatisfactory results from reforms thus far. Patients complain about endless waiting, poor treatment, low quality equipment and similar, whilst health care operators complain about low salaries, unsatisfactory career prospects, poor organisation and insufficient and unsatisfactory equipment. Employers constantly consider high operating a costs burden. Politicians unanimously agree on the health care system being in need of a comprehensive and unconditional reform, yet with a constantly excessive budget share, too high and inappropriately interpreted (sometimes hidden) previous indebtedness and other similar issues. Trade unions are dealing with health care sector employee rights and are stifling the scarcity of private entrepreneurship in health care. Professional associations and chambers are lobbying exclusively for their own interests. Hospital managers have complained to the Croatian Institute for Health Insurance about their inability to counter ‘privileged’ individuals within their organisations. The private health care system cannot flourish whilst state-owned hospitals are provided with a pre-determined monthly allowance. Any competition, even at lower prices with higher quality services provided, takes patients away from hospitals, thereby contributing to higher total expenditure, since hospitals need to be provided with funds irre-
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IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription
( 2% lower
mandatory employee contributions
GORDAN MARAS, MINISTER OF ENTREPRE
Priorities: en transport, to
The Ministry of Entrepreneurship and Crafts expects to implementation of new measures with savings of €0.25 Krešimir Sočković
spective of the amount of work performed. Hospital Information Systems (HIS) have not been standardised and are not connected to the Central Health Care Information System. The E-prescription system functions in the appropriate manner, since IT systems in pharmacies is satisfactory, they are well organised and promote e-prescribing, as it is in their own interest. In the real world, operating in compliance with different sets of rules and regulations, the owner and manager would agree on goals and start operating in a satisfactory manner, implementing a comprehensive IT system and agreeing on plans within a specific time frame. They would be looking for additional revenue and/or reducing expenditure, providing the same or even higher quality services to the market. Without a ‘joined-up’ approach to business, the manager and owner are working in a vacuum; if either party cannot or will not ‘join-up’ the whole edifice falls.
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
he new Ministry of Entrepreneurship and Crafts is planning to create 50,000 jobs by the end of 2013 by implementing substantial tax exemption measures for entrepreneurial business operations. Privredni vjesnik talked with the Minister Gordan Maras about the plans of the new Ministry.
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You have announced ambitious projects in your Ministry. Are you too optimistic? I believe I am not, as there is ample room for improvement within the economy. There is huge potential and substantial interest from all parties. Many entrepreneurs have presented interesting ideas and wishes and all they need is a competitive environment and the opportunity to work. I believe all our objectives will be met. Croatia has huge unexploited potential. We are focusing on creating the appropriate framework for growth and development in the economy in the future. We are primarily relying on small and medium sized businesses’ assistance, since their results are evident in the shortest time frame. Long-term large investment projects cannot reveal their profitability in the near future and cannot significantly impact on GDP growth. Nevertheless, small businesses, implementing their projects, can significantly affect their business operation within a six-month period. A range of such minor projects can considerably alter
the situation on the market in a short time frame. How are you going to create so many new jobs? We are planning to create jobs by providing the appropriate environment for economic development. The state cannot be the exclusive investor, yet it is able to provide room for project implementation. The state needs to be the regulator and provider of support, doing all it can to enhance company development. Several of the announced measures will lead to the creation of new jobs in the near-term future. We will ease the economic burden by lowering mandatory contributions by 2% which will have a significant impact on labour price. We have initiated cutting a plethora of parafiscal taxes which will save companies around €33 million year-on-year. The value of the comprehensive set of measures stands at around €0.25 billion year-on-year. Reinvested profits will be exempt from taxes and every new job will be exempt from the payment of mandatory contributions during the first year. We will introduce payment terms of 45 days after the receipt of invoice. In addition, we will prolong the VAT payment term, which should provide an additional boost to the economy. Will first employment exemptions apply also to self-employed jobs? Every new job, including selfemployed jobs, will be exempt from paying mandatory contribu-
www.privredni.hr Business & Finance Weekly
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( €47 million
savings for companies from parafiscal tax cuts
ENEURSHIP AND CRAFTS
nergy sector, urism
create 50,000 new jobs as a result of the 5 billion year-on-year tions. This proposal will be included in new legislation which is currently being prepared by the Ministry of Labour and Pension System and will be presented to the government in the next month. How competitive is Croatia and are there opportunities for reindustrialisation? Croatia currently ranks 78th globally and we
are hardly more competitive in the region. We have plunged some 30 places according to several criteria during the last three years, whilst other countries have maintained their positions or become more competitive. I believe there are opportunities for reindustrialisation following initial activities regarding unused potential. What are the priority sectors of Croatian economy? This year we will invest €1.1 billion. There are several priorities; investment in the energy sector – long term projects where results are not expected in the nearterm. Transport is also one of our priori-
ties. There is ample transport corridor potential and we need to exploit our position which can be achieved primarily by investment into infrastructure. Railways need to be reconstructed, since subsidies have been used for operating expenditure for several years now rather than for modernisation. Tourism is the third segment of critical interest. There are many hotels in Croatia which have not been privatised thus far, whilst we as owners have not made any investment in them and consequently their services are far from satisfactory. Agriculture and the food processing industry also have huge potential, yet we need to alter our stance on a multitude of issues in this area. We have been acting as if agriculture were a social rather than a market category. Subsidies have been granted exclusively for producer needs. Promotion of their activity and assistance in clustering are imperative in order to provide competitive products. Similarly, we need to assist them in settling their liabilities. The wood processing sector must not be neglected, as we have many companies providing top quality products. Nevertheless, we definitely have to alter the current situation where raw material exports considerably exceed final product exports. Focus on investment in new technologies and knowledge is
also crucial, since they are of vital importance to society. Do Croatian institutions have sufficient potential to assist the economy? I believe they certainly do. We need to redefine our goals and strengthen our institutions, irrespective of the time we have wasted thus far. We have decided to increase the Tier 1 capital of the Croatian Bank for Reconstruction and Development (HBOR) by €66.75 million. In addition, co-operation with the guarantee agency HAMAG is of extreme importance, as it needs to gradually provide guarantees for entrepreneurial projects. Focus on changes in public companies is also a necessity. Restructuring and competitiveness to boost public companies are also priorities, as well as providing investment funds and focusing exclusively on providing top quality services. What if some proposed changes reveal as unsatisfactory? Can plans be modified throughout the process? I am convinced that the end of 2012 will witness satisfactory results from our activities. One of our goals is also 0.8% economic growth which is the basis for the new budget. I believe our forecasts will become reality, irrespective of bank forecasts on economic downturn. We might have to redefine specific steps in our programme as we proceed if we identify problems. Nevertheless, I am optimistic and am convinced our goals are achievable.
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Privredni vjesnik Year V No 0187
( 40%
Of Croatians read one book per month
THE STATE OF BOOK PUBLISHING
How to organise a system in decay Around 90% of books in Croatia are published with subsidies from the Ministry of Culture with 85% more applications in 2012 over 2011 Goran Šikić lobally, 57% people read one book a month. However, Croatia is significantly below this average, at 40%, according to data provided by GfK. According to the latest survey conducted in December 2011, 56% of the general public read at least one book in the previous year. Those who do read, read three books a year on average. However, only a third of the public buys books, whereas others are mainly borrowed from libraries (45%) or friends (38%). Compared with the results of a similar survey conducted in 2005, the average price of the last purchased book dropped from €14 to €10. However, according to many indicators, the number of books sold did not increase despite the growing number of newsstands and bookshops in conjunction with large publishing franchises.
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Insist on payment deadlines Nenad Bartolčić from the Knjižni blok Association brings attention to the necessary education of future generations of readers and buyers, but also highlights the importance of changing the bookshops’ structure in Croatia since there are no more independent bookshops that are not owned by a certain publisher. The present situation is damaging to the broader book distribution of those publishers owning bookshops, and bookshop staff are unable to provide customers with appropriate informa-
tion. Neven Antičević, President of the Croatian Association of Publishers and Booksellers at the Croatian Chamber of Economy and Director of the publishing house Algoritam, says that such an unnatural “vertical integration” of publishing and bookshop activity as well as distribution is the result of a necessity since current independent bookshops failed to meet payment deadlines which is why publishers began opening their own bookshops. Antičević is convinced the state should solve this problem by insisting upon payment deadlines, which has not been resolved to date.
Even though it is not visible from the statistical data of the total number of published books and brochures, according to data provided by bookshops and book portals, compared with 2010, 30% less books were sold in 2011. Book market crisis A large number of factors affect the book market crisis. In addition to the poor general conditions in the economy, the sector also complains about the complete lack of cultural policies, minimal resources for repurchasing books for bookshops and local communities’ subsidises
for publishing books as well as an inconsistent policy from the Ministry of Science, Education and Sports (from drastic cuts of resources for books to lack of tenders for subsidies and repurchase of scientific books). They also complain about the chaos on the book market and the complete annihilation of independent bookshops, commission policy on book sales, late payments, the degree of illiquidity in the system, lack of common distribution, disappearance of cultural columns, especially book reviews, from the media and public television. Furthermore, many conclude publishing and bookshop guilds failed to self-organise and impose themselves as relevant middlemen of state bodies or set strict rules of the game within the sector. According to data provided by Dubravka Đurić-Nemec from the Ministry of Culture, around 90% of the book market goes through the Ministry and their programmes. Therefore, almost all publishers (and not only them) turn to the Ministry for subsidies. In 2012, this resulted in 1,740 applications, an 85% increase in relation to 2011. According to data provided by Dubravke Đurić-Nemec, 7,000 titles are published every year, of which 3,000 are books. From the total number of titles, 40% relate to translations, and an average of 500 are published. Furthermore, the Ministry of Culture offers subsidies for 250 public libraries, which use the money to repurchase books for their shelves.
www.privredni.hr Business & Finance Weekly
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CCE Conference
Investment wave will generate economic boost CCE has assisted the economy by reducing contributions and membership fees by €3.3 million and since the start of the recession these have been reduced by more than €11 million These should also make sacrifices so that the majority, comprise of the real economy, could feed them, Vidošević said.
Drago Živković t its first session, the new structure of the CCE Assembly predicted economic growth of 0.4% in 2012. However, according to Jasna Belošević Matić, Director of Macro-Economic Analyses, this minimum growth is actually stagnation, and if the government does not manage to start a new investment cycle, another recessionary year will follow. Even if it achieves the predicted growth level, it would not be enough for complete recovery, which is why such development of events could be referred to as stagnation, evaluated Jasna Belošević Matić. Croatian weak spots are low competition and an inadequate long-term development policy, and these problems are even more difficult to solve during a recession than in a period of economic growth, Jasna Belošević Matić warned. She commended the government budget policy and plans to decrease budget deficit, and pointed out Croatia’s total public debt is not high (43.9% of
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GDP). However, its structure and growth trend is something to be concerned with. Competition from Serbia CCE President Nadan Vidošević welcomes the start of concrete talks between the government and the Croatian National Bank (HNB). However, he feels the judiciary should also be involved in order to create new court practices and prevent future judicial decisions according to which the state would pay damages for the dif-
ficult choices it now must make. He brought attention to the importance of preparing for Croatian EU accession. Due to the specific agreement between Serbia and EU, the most competitive products from Serbia will appear on the Croatian market from July 1, 2013, Vidošević said. He warned about the Italian and Greek scenarios, since these countries are now under ‘forced management’ from Brussels. There are 2.5 million people in Croatia receiving salary or pension from the state.
Satisfied majority With the unanimous decision from the Assembly to reduce contributions and membership fees, the CCE has assisted the economy by around €3.3 million; since the start of the recession, the economy benefited by a total of €11 million on the basis of contributions. Vidošević repeated the CCE is making cuts at every step it takes, and that employee salaries, according to professional skills, are approximately 15% below the economy average. He also presented the results of the survey of the American Chamber of Commerce (AmCham), according to which 28% of Croatian entrepreneurs use CCE services, and almost 70% are satisfied with its work. He invited CCE employees to invest additional effort to establish closer contacts with the economy since many entrepreneurs do not know how to ask for help, Vidošević concluded.
::: news Valamar and Riviera profits up At the Zagreb Stock Exchange, the tourism companies Valamar Adria Holding and Riviera Adria published their preliminary annual unrevised business reports for the previous year which point to an increase in income. Consolidated income totalled €122.96 million, which is up 9.7% over 2010. Total expenditure amounted to €126.45 million (up 1.23%). The increase in consolidated income is mainly due to a successful tourism season.
Kraš net profit increases by 28% For 2011, the Kraš Group showed a nett profit of €3.32 million, which is 28.3% more in relation to 2010 according to data of the unrevised consolidated financial report published on the Zagreb Stock Exchange. Group income totalled €0.15 billion, 10.3% more in relation to 2010. Total expenditure was slightly over €0.12 billion, 10.1% up. Janaf nett profit falls Jadranski naftovod (Janaf) showed a nett profit of €9.67 million last year, down 31.8% in relation to 2010 according to data from the unrevised financial report published at the Zagreb Stock Exchange. Total income amounted to €59.32 million in 2011,
down 5.1% from 2010. Total expenditure increased by 5.3% to €46.95 million. ACI income of €25.3 million ACI managed a total income of €25.3 million, 6% up in relation to 2010. The increase is as a result in the stagnation of prices of services in ACI marinas in 2011 compared with 2010. At the same time, during 2011 ACI showed nett profit of €3.29 million or 7% more in relation to 2010. Regarding permanent berths, income was €12.46 million was generated or 4% more. Monthly berths generated €0.93 million, up 19% more. Transit berths brought in €6.33 million or 1% more. Leasing services generated €1.68 million (17% up). Other services resulted in €3.01 million, or 7% more in relation to 2010.
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Privredni vjesnik Year V No 0187
CROATIAN FOREIGN CURRENCY MARKET Currency
AUD CAD JPY CHF GBP USD EUR Source: HNB
EUR
Kuna exchange mid-rate
7.595
6,205744 5,790320 7,289286 6,275125 9,135776 5,765647 7,577213
5.840
14.2.
15.2.
16.2.
CHF
6.284
7.590
5.815
6.282
7.585
5.790
6.280
7.580
5.765
6.278
7.575
5.740
6.276
7.570 13.2.
WEEK FEBRUARY 18, 2012
::: news
USD
17.2.
5.715 13.2.
14.2.
15.2.
16.2.
17.2.
6.274 13.2.
14.2.
15.2.
16.2.
17.2.
HBOR
Profits increase overall for banking industry Pre-tax profits of 32 banks and savings banks in Croatia totalled €0.63 billion last year, according to unrevised data provided by the Croatian National Bank (HNB). Compared with the revised data for 2010, total pre-tax profits increased by €56 million last year. The largest profits were earned by Zagrebačka (€0.21 billion) and Privredna banka (€0.18 billion), followed by Erste (€107 million), Raiffeisenbank (€50.97 million), Société Générale-Splitska banka (€6.79 million) and OTP Banka Hrvatska (€16.38 million). Industry order up in 2011 In December 2011, industrial turnover increased by 0.3% over November. It also increased in relation to December 2010 by 14.3%. According to data provided by the Central Bureau for Statistics, orders decreased on a monthly level by 5.8% and by 26.1% year-onyear. In December 2011, industrial turnover increased by 7.5% on the local market. It also increased by 23.3% for foreign markets in relation to December 2010. Dukat Group profit down Dukat Group generated a nett profit of €15.5 million in 2011, 23.5% down over 2010, according to non-consolidated preliminary unrevised financial report from the company. Sales income reached 67.3% of total income on the local market. Furthermore, sales income increased by 3.6% in relation to 2010. On foreign markets, sales income increased by 13.9% to €105.9 million.
1% INTEREST LOANS Interest rates have been lowered for 8 credit programmes to help entrepreneurs and enhance investment Jasminka Filipas roatian Bank for Reconstruction and Development (HBOR) has lowered interest rates for 8 credit programmes in order to help entrepreneurs and enhance investment launch. As a result, it is currently possible for small or medium sized entrepreneurs to obtain loans at 1% or 3% interest (depending on the purpose). During the recent presentation of reduced interest rate loans and of two new programmes Production crediting and IPA III C, Ante Kovačev, Board President of HBOR, stated that room for lowering interest was found by reducing bank profit. The new interest rates are a temporary measure which is in force from 1st January. Borrowers obtaining loans at the beginning of 2012 can count on a 1% interest rate, provided they meet the conditions of regulations on low value subsidy grants. The inter-
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est rates have been introduced to enhance new investment in agriculture and fisheries, tourism, industry, energy efficiency, environmental protection and renewable energy sources, with interest rates ranging from 1% to 5%. The new programme Production crediting has been initiated to assist local exporters and producers as operating capital loans, which can be used for settling liabilities to suppliers and employees, to cover utility costs and other expenditure. The loans are granted by banks in local currency without a foreign currency clause with a 4% annual interest rate and a one year term with the possibility of renewal. More convenient than through usual bank channels The programme IPA III C has been directed at enhancing the competitiveness of small and medium sized entrepreneurs,
through a crediting programme of projects for the allocation of irrecoverable funds through the pre-accession fund IPA III C. The programme is also designed for financing investment in new technologies, production methods, green economy, environmental protection, energy efficiency, product certification and enhancement of competitiveness. The interest rate is 2% with the loan being obtained in kuna with a foreign currency clause and a repayment term of five years including a one year grace period. The new programmes, as well as the lowering of interest rates, were supported by the tourism minister, Veljko Ostojić, and the Minister of Entrepreneurship and Crafts, Gordan Maras, at a recently held press conference, as it implies new funding for far more convenient loans than in banks, which will certainly enhance investment and a speedier economic recovery.
www.privredni.hr Business & Finance Weekly
WE PRESENT 7
AGROTOURISM SAN MAURO, MOMJAN
ENERGY PLUS, LUDBREG
A successful blend of tradition and tourism An old Istrian house with mini apartments, a restaurant, its own distillery and olive grove from which it is planned to substantially increase olive oil production
Products for coexisting with nature The company is extremely innovative and all products and services reduce CO2 emissions particularly their developed local production of LED lights grotourism San Mauro is located on one of the highest hills of Northwest Istria, 350 m above sea level. Just 5 km away from Buje, visitors can enjoy the comfortable and unique ambience of family atmosphere and preserved countryside, one of the most significant requirements for the development of upper-end agrotourism. San Mauro belongs to the Sinković family who also manage it. This is an aristocratic family, first mentioned in 1656. It has always owned land and has subsequently preserved the tradition of producing grapes, wine, brandy, olive oil, fruit and vegetables and other agricultural products. “We have succeeded in blending tradition with tourism and thus our visitors can enjoy the rich gastronomy and wines, primarily Istrian, such as pršut, cheese, fuži (a traditional Istrian pasta), gnocchi and ravioli pasta, fritule (a type of doughnut), kroštule (a pastry also called ‘angel wings’) as well as local specialties made from Istrian boškarin cows”, stated Sinković.
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New customers opting for more expensive food San Mauro comprises a restored Istrian house with 10 mini apartments and a restaurant with two dining rooms for 50 people. During the summer season there is an
open terrace with space for 35. Local liqueurs and brandies are produced in their own distillery. In addition, wine, brandy and other product tasting is organised for visitors. The family also own an olive grove covering 1 hectare and from this they produce olive oil; plans are in hand to substantially increase production. “We co-operate with other family farms, particularly regarding cross-trade in food products. We will apply for pre-accession funds
As a result we need further investment into our agrotourism business in order to improve our production, irrespective of the difficulties”, explained Sinković. San Mauro operates throughout the year and visitors are primarily foreign. Sinković pointed out that they can feel the impact of the crisis and have hence cut costs. Nevertheless, there is a new type of visitor, opting for more expensive food. “As a result we need further investment into our agrotourism business, both interior décor for the Istrian house and exterior redecoration, since visitors require a comprehensive experience”, pointed out Sinković. (S.P.)
nergy Plus from Ludbreg specialises in the production, sales, fitting of components and devices of renewable energy sources systems. On the production floor covering 3,700m2, 84 workers produce for global companies, for example Vogt-electronic, Siemens, Kathrein, Bosch, Kannegiesser, Hydac, Ducati-energia, Osram, BMW, Rotax Bombardier. “Our production has always been 100% export oriented. The company is extremely innovative in searching for new products and all our products and services reduce CO2 emissions” said Daša Lorencin, responsible for company marketing.
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6-figure investment on hold The company has so far developed over 30 hybrid (combination of solar, wind and diesel generators) and photovoltaic systems, small power plants and small island systems used in areas without standard power supply and in large companies, for example Dalekovod, ACI Marina Žut, T-mobile or Bednja Elementary School. In co-operation with the companies Data link and IMP Metal product, they developed and started local production of LED lights. Their energy efficient lighting systems have already been installed by Podravka, Wienerberger Ilovac,
WAM Product, Šestan-Busch, Omega, Gumiimpex and Pana. The company also includes EE Info Centre, established in cooperation with the UNDP and the city of Ludbreg, intended for training seminars for children and adults. Daša Lorencin pointed out that some of the problems on the market regard unfair com-
Furthermore, when local administrations want to introduce energy efficient public lightning systems, they face problems petition from Eastern countries that use false declarations on their products. “We understand that the perspective of energy efficiency is closely related to the use of the ESCO model, but it has been made difficult by certain legal limitations. For example, people have been waiting two years for regulations to be adopted. As a consequence, our investment of 6-figures is on stand-by”, Lorencin pointed out. Furthermore, when local administrations want to introduce energy efficient public lightning systems, they face problems since they are not able to take loans exceeding 20% of their annual budget. (J.F.)
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Privredni vjesnik Year V No 0187
Shipyard privatisation
Croatian shipbuilding survival All shipyards except Uljanik are waiting for March when the Samobor-based DIV and Jadranska ulaganja will have completed the due diligence of their operations roatian shipbuilding will certainly survive, according to Radimir Čačić, the first Vice-President of the government and Minister of Economy, following his recent talks with trade union representatives on the privatisation process of large Croatian shipyards. Uljanik, Brodosplit, 3. maj, Brodotrogir and Kraljevica trade union representatives participated at the meeting. Uljanik was said to have gained the most advantageous position, as pointed out at the meeting and its privatisation plans will be presented to the government in 15 days. It has had satisfactory business results and the Board will be participating in its privatisation process, as well as workers through the Employee Stock Ownership Plan (ESOP). The plan implies alterations in the ownership structure through recapitalisation and the additional strengthening of the business position. Other shipyards need to wait
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for March when the bidders, the Samobor-based DIV and Jadranska Ulaganja will have completed the due diligence of their operations. The government will hold talks with trade union representatives, following the due diligence completion and final bids. No bankruptcy or winding up Even in the case that no satisfactory agreement will be reached with bidders, shipyards will not face bankruptcy or winding up,
pointed out Čačić. He explained that the government has been preparing a model to continue their operations based on market needs. This scenario might not cover all current employees, yet there are plans regarding severance packages and retraining programmes. Čačić added that there are new market niches for shipbuilders, such as wind power plant construction and other work in the hard metal industrial sector.
Ozren Matijašević, President of the Croatian Trade Union Association, expressed satisfaction with the outcome of the meeting. Trade unions have been assured by the government of the inevitable necessity of shipyard operations, as well as advised about concrete plans to preserve Croatian shipbuilding. The degree of shipyard preservation depends on the course of events in the near future and on the skills of all interested parties, stated Matijašević. (I.V.)
TEXTILE INDUSTRY REVITALISATION
Formula 5,000 – a last minute possibility of saving the textile industry ver 130,000 jobs have been lost during the last 20 years in the Croatian textile and leather and footwear industry and these two economic branches, together with the wood processing industry, used to be the main Croatian exporters. 13 years ago their share in the total processing industry exports stood at 19%, with the textile industry at 14.6% and leather and footwear at 4.4%. According to the statistical data
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for 11 months in 2011, the textile industry share of total exports was a meagre 5.52%, whilst leather and footwear saw just 2.9%, as stated at a presentation of the textile industry revitalisation project Formula 5,000, held at the Zagreb-based Faculty of Textile Technology (TTI). Darko Ujević, Dean of the Faculty of Textile Technology (TTI), explained the necessity of the implementation of the project and pointed out that
the objective of Formula 5,000 is the creation of new, and the preservation of existing jobs in the textile and leather and footwear industry, as well as to maintain the strategic level of these areas. Consequently, TTI and industry, as partners in the revitalisation process, will create and develop an institute of textile, clothing, leather and footwear. Nevertheless, state, government and line ministries support is crucial in order to
implement the project. “Future employees of the institute will need to connect with colleagues from the region and the European Union. The institute will provide scientific and professional assistance to small and medium sized businesses”, stated Ujević. He added that textile and leather and footwear industry revitalisation will be based on the creation of joint teams for new ideas, design and prototype development. (S.P.)