Interview: Philippe Bresson, Board President, Bricostore The huge economic potential of Croatia and Zagreb and EU accession, will provide impetus
Reforms to overcome red-tape obstacles Government wants to shed Croatia’s image as a country unwelcoming of investment
JASPERS technical assistance Investment value of projects eligible for grants under EU Structural Funds reached nearly €64 billion
INTERVIEW PAGE 3
REFORM PAGE 5
TECHNICAL ASSISTANCE PAGE 7 2008 2009 2010 2011
Croatian Business & Finance Weekly Established in 1953 Monday / 18th/26th June / 2012 Year V / No 0204/0205 www.privredni.hr
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REGIONAL BUSINESS PARTNER 2012 AWARDS IN BELGRADE
Privredni vjesnik – best partner to entrepreneurs in wider region The criteria included business excellence, professional etiquette and responsibility with companies suggesting and rating their business partners Ljiljana Lukić he Croatian economic weekly newspaper Privredni vjesnik received the award for Regional Business Partner 2012, for almost twenty years traditionally awarded by the Serbian company Mass Media International. When accepting this prestigious award in Belgrade, Editor-inChief Darko Buković presented the meeting with these words: “In 1953 Tito became President of Yugoslavia, Ernest Hemingway received the Nobel Prize for litera-
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Two winners, CEO Adris Group Ante Vlahović and Editor-in-Chief, Privredni vjesnik Darko Buković
ture, Audrey Hepburn received an Oscar for Roman Holiday, Stalin died, Cocta was born, Labello was packaged into tubes, the first edition of Playboy saw the light of day
- and Privredni vjesnik was born”. Privredni vjesnik gained the award in the category of Media Business Partner together with the Swiss company Ringier Axel Springer, which publishes the daily magazine Blic on the Serbian market, the weekly magazine Novi magazin and media houses Radiotelevizija Srbije and Radiotelevizija Vojvodine. The Business Person 2012 in the SE region was Emil Tedeschi, President of Atlantic Group. Adris Group was also one of the seven companies awarded as Regional Business Partner 2012. Recognition of excellence A total of 46 awards were presented to companies and individuals, and the ceremony was attended by the Serbian Minister of Culture and Information, Predrag Marković. For the past 18 years, the Business Partner award has been given to some 1,000 regional companies, some of whom have been awarded several times, for example Atlantic Group. The award has a regional character and is intended for all regional companies - Slovenia, Hungary, Romania, Moldavia, Croatia, Bos-
Business Person 2012 in SE region is Emil Tedeschi, President of Atlantic Group nia and Herzegovina, Montenegro, Albania, Macedonia, Bulgaria, Greece, Cyprus and Serbia – regardless of their activity, size and type of ownership, said General Director of Mass Media International, Milivoje Radovanović. He noted the criteria included business excellence, professional
etiquette and responsibility, and the companies themselves proposed and rated their business partners. The principle remained the same, and the criteria became more complex and severe. The winners of 2012 will receive all recognition. For excellence! They showed that a crisis can be turned into an opportunity, pointed out Radovanović. He also added the event slogan - Regional Business Partner 2012 - In business as in life, a partner is most important, highlighting two key words – region and partner.
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Privredni vjesnik Year V No 204/205
Sven Müller, Board Member, Stipić Group
Debt collection problems
The myths of green building
E-FORECLOSURES STARTING SOON
There is no green construction in Croatia or the region, which is discouraging ccording to global trends, sustainable construction has gone beyond environmental factors, since it has reduced operating costs, lowered the risk of future costs and uncertainty over future energy supplies, increased return on investment and market prices. In addition, it accounts for 40% fall in water consumption and up to 70% less waste. Nevertheless, certification is imperative as this sets guidelines for further development in sustainable construction.
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It is important to highlight important certification EU regulations regarding the construction sector are extremely strict and there is a wide variety of legal requirements and laws with which to comply. Hence, I would emphasise the importance of the 2006 Action Plan for Energy Efficiency whose principal objective is to reduce energy consumption by 20% by 2020. Croatia is adapting to EU legislation during the pre-accession period and has made significant progress in laying the foundations for meaningful development. From a global perspective, it is important to highlight important certification such as the American LEED, the British BREEAM and the German DGNB and it should be noted that the number of certified buildings is highest in these three countries. There is no susIMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription
Banks are hiring agencies to collect debts; Tax Administration will use automatic foreclosures Jasminka Filipas t the beginning of July a new trial system of eforeclosures should be operational, which all Tax Administrations should start using from September. This system will automatically detect and collect debts more than a month overdue regardless of the type of debt due to the Tax Administration, and according to the principle of equality for everyone. This was stated by the Head of the Foreclosure Department of the Tax Administration Central Office of the Ministry of Finance, Dinka Salmić, at the round table on debt collection and introduc-
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tainable construction in Croatia nor the region, irrespective of the motivation, which certainly is not lacking, yet there is ample need to encourage initiatives. The Green Building Council brings together Croatian green developers and has recently launched a training programme entitled Green Building professional to provide local companies with staff qualified for the management of sustainable building programmes. Sustainable building costs only slightly differ from classic building, yet its principal advantage is long-term cost-effectiveness. Nevertheless, we anticipate green building will be embraced by both investors and banks in the near term against a backdrop of the current market situation. In addition, construction design engineers will have a fundamental role to play in the process of implementation of energy efficiency and thus their awareness of their responsibility needs to be encouraged.
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
ing order into the payment system, organised recently by Banka
New law on financial operations should introduce order to entrepreneurial payments magazine with the goal of advising of the new regulations and bank practice of collecting debts. When the new act on financial operations is operational, it will define payment deadlines, rules of settlement and bankruptcy proceedings, Minister of Entrepreneurship and Crafts, Gordan Maras, revealed at the assembly of the Economic Council of the Croatian
Chamber of Economy - Zagreb Chamber, held simultaneously with the round table. Maras said the act will be discussed in Parliament in two weeks. It will organise payments amongst entrepreneurs and solve illiquidity problems. Individual approach Participants at the round table agreed there is intense pressure regarding the collection of debts, and the Board President of Badel 1862 Srđan Oreb, reiterated the government had created the groundwork for reducing illiquidity through HBOR. The representative of Zagrebačka banka Nenad Mećava and Raiffeisen bank Dubravko Ante Mlikotić both point-
ed out that banks use an individual approach in terms of debt collection. Through systems of early warnings about changes in the client financial status, banks are able to see which client will encounter problems and then act proactively, that is, they are able to offer timely solutions to the client. The banks have hired agencies to collect debts. Barbara Cetinski, Director of EOS Matrixa, one of such agencies, said they have been extremely busy in the past few years since Croatia is one the leading countries in Europe with payment problems. Greece leads (37%), followed by Romania and Spain, while it is estimated that 24% of the general public and organisations in Croatia experience problems with payment.
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( €25 million
invested in Zagreb-based storee
( 100
new jobs created
INTERVIEW: PHILIPPE BRESSON, BOARD PRESIDENT, BRICOSTORE
A five-year dream The huge economic potential of Croatia and Zagreb are favourable for business development, as well as Croatian EU accession, which will provide impetus and many opportunities recently seen a remarkable boom. Unfortunately, the crisis has negatively affected customers by lowering their purchasing power. Nevertheless, although the crisis is often perceived as a threat, we perceive it as a major challenge. We have adopted product price segmentation in order to adapt to the current economic environment. Our principal aim is to guarantee appropriate prices tailored to customer needs in order to preserve their confidence as well as to attract new customers.
Boris Odorčić ricostore, the French retail chain specialising in home and garden décor and furnishings, has recently opened a retail centre in Zagreb. In addition to the Kaštel Sućurac- and Pula- based centres this is the third retail centre in Croatia. Total investment value of the Zagreb-based store is €25 million and will create an additional 100 jobs. The stores in Split, Pula and the Croatian head office will employ a total of 300 staff. Philippe Bresson, Board President of the retail chain, has highlighted that the first Central
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Tourism development is also a fundamental factor in our business expansion European Bricostore centre was opened in 1998 and since that time he has been looking for new opportunities in many Central European countries, as well as in neighbouring regions. When did you decide to invest in Croatia and why? We believe the Croatian market has huge potential and we have been exploring investment opportunities for some time, which resulted in our opening of the first retail centre in Kaštel Sućurac near Split, followed by a further retail centre in Pula which opened in 2007. The land in Zagreb was purchased in 2007 and we are delighted to start operating in the Croatian capital.
More flexibility in licensing
How can Croatia enhance and attract foreign investment? We believe more flexibility is needed in obtaining licenses in Croatia. I would point out the fact that Croatia is noticeably more expensive than other countries in the region, specifically Hungary and Romania, primarily as a result of the large number of fees required which are perceived as business obstacles for foreign investors. You have had many administrative problems to overcome. In addition to administrative problems we have seen criminal activities in connection with our property after the land purchase. Nevertheless, our company with a tradition of over 160 years was determined to solve them and has now succeeded, albeit due to huge assistance from the govern-
ment and our business partners who believed in the project. We are certain our three Croatian stores will achieve excellent results and we are looking forward to further business expansion. How developed is the Croatian home and garden products market? The Croatian DIY market, as well as the market in general, has
Are products of Croatian origin or are they solely imported? Croatian products can also be found on our shelves. One of our principal goals is to build long-term quality relationships with Croatian suppliers, as well as provide an opportunity for expansion and doing business on other markets. Ferotehna is present in Bricostore in three countries and we are hoping to build similar co-operation with other local suppliers to which our Central European network can provide assistance in growth and development. Do you plan new investment and job creation? Croatia and Zagreb have huge economic potential for business. In addition, Croatian EU accession will account for further possibilities and many opportunities for us. The building of new and the reconstruction of existing housing is fundamental to the DIY market, whilst tourism development is another basic factor for our business expansion. We currently rank as the second DIY retail chain in Romania and plan to gradually increase our market share.
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Privredni vjesnik Year V No 204/205
( 3,500 tonnes
annual production of Elektroda
( 90%
of raw material for electrodes imported
ELEKTRODA ZAGREB, LEADING REGIONAL PRODUCER OF WELDING MATERIAL
Only those that develop will survive Those that survived Croatian transformation and privatisation have become so hardened that they do not see EU accession as a threat to their market position. Moreover, it can only get better, according to Elektroda Zagreb Drago Živković he Croatian metal industry was first struck down by transformation and privatisation and then the hurricane of global competition. The rare survivors of the Croatian transformation and privatisation have become so hardened that they do not see EU accession as a threat to their market position. Moreover, they think it can only get better. This is how Elektroda Zagreb, the leading regional producer of welding material regards EU accession. Established in 1948, until six years ago Elektroda was located in Zagreb. They have now built a new production plant in Zaprešić, where they employ around 80 people, a fifth of whom are engineers. Unlike the majority of metal companies, they are not worried by the shortage of trained workers. The
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They have not lost a single export deal for the past few years and are in the process of obtaining certificates for the Middle East education system does not recognise professions like electrode presser or wire rewinder, so Elektroda employs all those with a high school degree who are willing to learn. The training lasts from three to six months. Three shifts The shipbuilding industry is the largest buyer of electrodes. Until ten years ago Elektroda sold 50% of their products to local shipyards. Then they realised they were highly exposed to risk in local shipbuilding and turned
to exports and expanded their offer, says Director Adviser, Ante Krolo. In addition to local and foreign shipyards, their current buyers are also mines, power plants, the car industry, construction and processing industry. Thus, they have not been affected by the decrease in Croatian shipbuilding since they managed to replace it with exports. However, this does not mean they are not interested since they have sufficient production capacity to supply the shipbuilding industry as it once was, Leinert points out. Elektroda’s production capacity totals 5,000 tonnes, and production is currently roughly 3,500 tones, which is a maximum for the present number of employees. One production area (filled welding wire) is performing in three shifts, sometimes even on Saturdays. Sales did not decrease in relation to the pre-crisis period. Moreover, they saw growth of 5%-7% last year, depending on the segment. The reason for this lies in exports and opening of new markets. Their long-term plan is to become a strong regional player and double production by 2020, which includes employing new workers. For the moment, they cover all markets of ex-Yugoslavia, and export to Romania, Germany, Italy, Hungary and the Czech Republic. They are also in the process of negotiating with Bulgaria, Poland and Slovakia. Global and regional competition is very strong, and each country produces electrodes. Some EU members still have custom duties regarding the import of electrodes from Croatia, and all European producers are present on the Croatian market. Despite this, Elektroda’s product line consists of almost 100% electrodes for local shipbuilding. The reason is
Ante Krolo i Hrvoje Leinert
quality and not because local production is favoured, Leinert and Krolo point out. Considering they have worked with shipyards for a long time, Elektroda has certificates of foreign ship registers and ISO 9001 certificate. They have not lost a single export deal for the past few years. They will also obtain certificates for the Middle East since they have started to export to Saudi Arabia. They invest heavily in personal development and research, and every year they invest up to €100,000 into equipment. Base electrode Annually they launch a new product. The plan for the next few years is to promote five to six new prototypes. Last year, they launched a new base electrode since some of their customers
wanted a more flexible electrode for welding in small confined places. Even though they apply for tenders from the Ministry of Economy, the funds they receive are symbolic since patenting is often a prerequisite, which is difficult in the case of electrodes since they exist in a large number of variations. Concerning the purchase of raw materials, 90% are imported, with the excerption of limestone since Croatia does not have mines or steelworks. Even though this might not sound so bad, Krolo actually thinks this is excellent since it is a rare example in Croatian industry that imports raw material and exports finished products with added value. Therefore, Elektroda will continue to invest as they are convinced they can survive only if they develop. And this means exports.
www.privredni.hr Business & Finance Weekly
(
5
% decrease in investment due to the crisis
( H2/2013
should show effects of reforms
INVESTORS BETWEEN A ROCK AND A HARD PLACE
Reforms to overcome red-tape obstacles Government wants to shed Croatia’s image as a country unwelcoming of investment Due to insufficient investment into technological development, many local companies find themselves in a difficult situation. Reforms are a precondition, and not only fiscal consolidation, pointed out Grčić. He stated the government does not intend to change current conditions in the state with public investment, but that this type of investment functions as an automatic stabiliser. The cur-
Goran Šikić hat types of foreign companies are welcome in Croatia? Ideally, they would have to produce a lot, employ many people, have suppliers in Croatia and be environmentally aware. However, we know things are completely different in practice. Since the economy cannot make progress without investment, the government wishes to shed Croatia’s image as a country unwelcoming of foreign investment. Such an image was created by foreign investors who experienced many administrative obstacles, all requiring substantial reform. On the other hand, investment requires a more stable and predictive regulatory framework which enables investors to plan long-term. The government intention is to help
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Private sector is presently purgatory significant investment projects, the government Vice-President and Minister of Regional Development and EU funding, Branko Grčić, pointed out during the conference Globally & Locally held last week.
rent structure of public spending must change into an investment structure, on which the government has started working, Grčić stated. The crisis caused a 40% decrease in investment, to which the government desires
to respond with an investment promotion act, with Croatia developing and implementing a national reform programme by the end of the next year. Grčić admitted public companies are behind with restructuring programmes, and he highlighted they are working on decreasing parafiscal taxes and increasing financial discipline. Currently, the private sector is purgatory, and Grčić thinks the problem should be solved now, since Croatia will have to be better prepared and stronger when it joins the EU. The act on financial operations, which is in the preparatory phase, will open possibilities for all those with a chance for restructuring. “Sometimes amputation saves lives”, Grčić colourfully explained, adding they are doing their utmost so that results from reform could show during the second half of 2013.
CROATIAN ASSOCIATION OF MANAGERS AND ENTREPRENEURS CROMA SECOND CONFERENCE
Lower mandatory reserves Drago Živković overnment measures have lacked the strength to make decisive changes and hence unfavourable trends from the past several years have continued, thus it was concluded by the Croatian Association of Managers and Entrepreneurs CROMA at their second conference. However, the end of the third quarter is supposed to see the turning point promised by the government. In case this point does not occur, Vladimir Ferdelji, President of CROMA, will look into the causes and responsibilities, as announced also by Radimir Čačić, First Vice-President of the government. Ferdelji has compared the current situation with the master plan present-
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ed by CROMA at its first conference a year ago and has found data not overly encouraging with deadlines for implementing announced government measures constantly shifting showing meagre ministerial faith in their own pronouncements. Lower mandatory reserves According to Ivan Miloloža, President of the Croatian Employers’ Association, “the situation in which projects are left in drawers whilst we are simultaneously complaining about the lack of investment is more than tragic. Employers are not interested in politics; they are more focused on restructuring and settling liabilities”, added Miloloža. Illiquidity is the over-riding issue in industry, where the state and
entrepreneurs are expected to start settling liabilities, stated Siniša Županić, Director of Association CRO Industry. The state is expected to provide more support for industry, since it totalled only €21 million in 2011, whilst that for agriculture was €0.25 billion. Local trade needs competitive local raw materials and therefore investment into agriculture is crucial, pointed out Ljerka Puljić, Senior Executive Vice-President of Agrokor. She added it covers around 4,000 agricultural producers whose competitiveness is currently at the same level with the EU,
yet they need favourable loans. Small local banks can provide such loans in the case where their mandatory reserves are reduced, explained Marija Šola, Procurator of Karlovačka bank. The EU has recently announced the requirement to increase the capital adequacy ratio of large banks to 9% and to 7% for smaller banks. However, the capital adequacy ratio in Croatia is currently a very high 12% for all banks irrespective of size.
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WE PRESENT
VRT, BJELOVAR
Privredni vjesnik Year V No 204/205
OPG BABAC-DAMJANIĆ, ZADAR
Figs, quince and maraška The produce from OPG Babac-Damjanić is available in selected gift-shops and delicatessen
Yielding fruit in the first year Vrt operates to European standards on intensive production, from land preparation and crop rotation to irrigation he Bjelovar-based company, Vrt began in the 1960’s. Today, it is one of the leading companies producing plants and apples in north-western Croatia. In terms of agricultural production, it is amongst the leaders in the Bjelovar and Bilogorje area. With an apple orchard of 40 hectares, around 3,300 trees per hectare and an average yield of 15 kg per tree, it is the largest in the County. With their partners, they have planted a further 35 hectares near Vinkovci.
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Vrt has seven agricultural dispensaries “We produce over 90% of Class I apples, since only quality and quantity guarantee a stable market position. Our strategic base is quality through our trademark Bjelovarsko voće. The remainder (up to 10% Class II), is processed into juice and brandy. We sell our products on the local market through a large local buyer”, says Director Josip Belošević, pointing out they will plant an additional 40 hectares of apples, 30 hectares of plums and peaches and ultimately build a sorting and refrigeration unit with a capacity of 3,000 tonnes. They pay great attention to inte-
grated production, starting from soil preparation to applying protective agents in accordance with integrated protection principles. Nurseries and orchards are connected to a drop-by-drop irrigation system, which also provides additional nutrition to the fruit. Around 100,000 plants are monitored during their cultivation by the company’s expert team. Using different grafting methods, our goal is to achieve a branchy plant with as many new shoots as possible. This type of seedling will bear fruit during its first year, and the desired yield during the fourth year, explains Belošević. Free advice Vrt works to European standards on intensive production, from land preparation and crop rotation to irrigation. They are also involved in the production of seeds in co-operation with prominent Croatian and global companies, particularly wheat, soy and oil seed rape for sales, which decreases production costs. Their stores also include seven agricultural dispensaries where they offer all protection agents and material for agricultural production in addition to their own products. All our stores employ expert agricultural engineers, who offer free advice to our customers, concludes Belošević. (G.G.)
n the summer of 2003, Sandra Babac produced her first jam made from the figs that grew around her house near Zadar. She gave the first 100 jars, made according to traditional recipe, to friends whose feedback encouraged her. Soon after, the first customers appeared and three years later, the Šinjorina Smokva brand was created - tasty, delicious and organic jam made from fresh figs and reduced sugar. The uniqueness of this jam is that it is made with fresh ripe figs, and not dried as with other similar products. With the support of her family and friends, Sandra Babac and her husband decided to plant a further 500 fig trees over 3 hectares. However, the past cold winter damaged a high proportion of the young trees. Meanwhile, they decided to expand production. They processed quince from their own garden, and then planted another 160 trees, and thus Šinjorina Dunja was born. In 2008, they received a gold award at the Festival of jam in Dubrovnik for their quince jam, which further enhanced the Šinjorina Dunja quality.
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Market expansion Last year they performed a test cooking of maraška (Prunus cerasus), and currently own around 25 young trees, a characteristic of the Zadar area. Customer feed-
back was positive, so they intend to search for subcontractors from whom they could buy maraška. They plan to join forces with another farm and process organic tomatoes. Due to funding obtained under the IPARD programme, they are in their final stage of constructing and equip-
It took three years for Sandra Babac to turn her jam into a brand ping a plant for processing fruit and vegetables. This year should be “year zero” for us, when we should start our own production in the new facility, and intensify sales and marketing, that is, work on market expansion. Organic fig jam Šinjorina Smokva is our main product, and our intention is to also brand Šinjorina Maruška and Šinjorina Dunja, says Sandra Babac. The produce from OPG Babac-Damjanić is currently available in selected gift-shops and delicatessen, such as Ekoteka Agra, Kamenita vrata, Natura Eko Etno, Bakina kuća and Deliiicije in Zagreb. Their priority is to orient themselves towards exporting. Their organic jams are available in Sweden, and they are currently negotiating with Austrian distributors. (A.Š.)
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CROATIAN FOREIGN CURRENCY MARKET Currency
AUD CAD JPY CHF GBP USD EUR Source: HNB
Kuna exchange mid-rate
EUR
7.57
6,000658 5,849944 7,592744 6,283977 9,29592 5,977842 7,546428 WEEK JUNE 16, 2012
USD
6.06
12.6.
13.6.
14.6.
15.6.
6.04
6.29
7.55
6.02
6.28
7.54
6.00
6.27
7.53
5.98
6.26
5.96 11.6.
12.6.
13.6.
14.6.
JASPERS TECHNICAL ASSISTANCE EXTENDED TO CROATIA
Quality preparation generating up to €1 billion Investment value of projects eligible for grant assistance under the EU Structural Funds during the period between 2006 and 2011 reached nearly €64 billion Boris Odorčić ASPERS (Joint Assistance to Support Projects in European Regions), the technical assistance partnership between the European Investment Bank (EIB), the European Commission, the European Bank for Reconstruction and Development (EBRD) and Kreditanstalt fűr Wiederaufbau was extended into Croatia in 2011. Anton Rop, Vice-President of EIB, stated that the principal objective of JASPERS is to increase the quantity and quality of projects financed through EU Structural Funds, so that investment provided by the Funds can be used more efficiently and effectively. “JASPERS currently provides technical assistance in 13 countries – 12 EU member states and Croatia”, he pointed out, adding that it implies free technical assistance for investment in several areas. Irrespective of the fact that the principal focus is on environmental and transport projects, projects on renewable energy as well as on energy efficiency are also eligible, Rop added. “The increase in absorption of EU funds has been one of the major challenges of all countries prior to fully fledged EU membership”, reiterated Rop.
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Quality preparation of projects is of fundamental importance in order to attract up to €1 billion from the EU budget. In case Croatia does not succeed, absorption might total between 50% and 70%, which would leave Croatia without hundreds of millions of Euros of non-repayable funding. Tourism and health Investment value of projects eligible for grant assistance under the EU Structural Funds during the period between 2006 and 2011 reached nearly €64 billion. The European Investment Bank signed contracts to the value of €305 million during 2011. It is important to highlight a loan of €25 million for support to infrastruc-
6.30
7.56
7.52 11.6.
CHF
tural development in the Croatian coastal regions. In addition, a further loan of equal value is used for financing of several infrastructural development projects covering transport, reconstruction of cities, energy, the health sector, education and environmental protection in 13 counties in continental Croatia. The EIB co-operates closely with Croatian financial institutions to facilitate access to long-term financing for small and medium-sized entrepreneurs. It also co-finances minor projects mainly in production and services through intermediation of banks and leasing companies. The total loan value granted by EIB to Croatia from 2001 to 2011 reached some €2.7 billion.
15.6.
6.25 11.6.
12.6.
13.6.
14.6.
15.6.
MILLIONS FOR ECONOMY
€66.7 million for economic development During the first auction under the Economic Development Programme organised by the Croatian Bank for Reconstruction and Development (HBOR) corporate banks were offered a total of €66.7 million of which €13.3 million was earmarked for local currency loans and €53.4 million for loans with a currency clause. Anton Kovačev, Board President of HBOR, stressed that there were 12 bids from 10 banks with a total value of €101 million. Since the interest from the banks significantly exceeded the loan amount offered by HBOR, nine bids from corporate banks were accepted - from Erste & Steiermärkische Bank, Croatian Postal Bank, Hypo-Alpe-Adria Bank, Jadranska Bank, Privredna Bank Zagreb, Raiffeisenbank Austria, Societe Generale – Split Bank and two bids by Zagrebačka Bank. Weighted interest rates for end users range between 3.16% and 4.21%. Slavko Linić, Minister of Finance, stated there are plans concerning further lowering of interest rates by corporate banks in future bids irrespective of the fact that the interest rates offered during the auction greatly exceeded normal loan rates. (B.O.)
8 ::: news
Privredni vjesnik Year V No 204/205
( €30 million
invested in Tuhelj Thermal Spa reconstruction
Tuhelj Thermal Spa – one of the largest thermal spa centres Fewer building permits The number of building permits issued in April this year has seen a continuous double-digit fall for the fifth consecutive month. According to data provided by the Croatian Bureau of Statistics, 700 building permits were issued which implies an annual fall of 14.3% or 4.8% on a monthly level. The negative trend is the result of the lack of investment in the construction industry, primarily the residential sector. Third markets with Patria The Slavonski Brod-based company, Đuro Đaković, has signed a contract with the Finnish company Patria on their joint move into third markets. It has been agreed that Đuro Đaković will be the principal contractor and will also account for substantial vehicle production. Purchasing countries will be determined at a later date, during the contract implementation. Đuro Đaković has delivered 70 armoured combat vehicles to the Croatian Army thus far complying with the Patria license.
Wellness gardens on Zagorje hills spenders Investment in the hotel Well and the reconstruction of the popular Tuhelj Thermal Spa is one of the few major investment projects in tourism this year Sanja Plješa uhelj Thermal Spa is located in the heart of Croatian Zagorje and is one of the largest and most successful wellness and thermal spa centres. It has become one of the largest continental tourism resorts due to its recently opened four-star hotel, Well. €30 million has been invested in the construction of the new hotel, the reconstruction of existing accommodation, as well as in business operations and staff training. €12 million has been invested exclusively in the construction of the hotel Well, which was completed in slightly over one year. The investor was Tuhelj Thermal Spa with €2 million from its own funds with an additional €10 million being provided by banks. “The main aim of the development of Tuhelj Thermal Spa is to provide the first exclusive well-
markets and keep abreast of current trends. The hotel Well will employ around 30 new staff.
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Tuhelj medicinal mud is said to have some of the best healing properties in Europe ness and spa resort in Croatia. We would like it to be a unique centre to enhance the quality of life”, stated Ivana Kolar, Director of Tuhelj Thermal Spa. This investment is one of the rare major investment projects in tourism this year and Ivana Kolar emphasised it was of fundamental importance to prepare for new
Medicinal mud Tuhelj Thermal Spa currently has 264 rooms, as well as a multipurpose conference hall that can accommodate around 450 people. There is also an amphitheatre for concerts and theatre performances and wellness gardens with a thermal stream flowing between the old and the new hotels. “We plan to expand the existing wellness centre and provide an additional outdoor Finnish sauna, as well as two additional rooms for treatment in the beauty care centre. The idea behind the entire project is based on medicinal mud”, stressed Ivana Kolar. Medicinal mud at Tuhelj Thermal Spa develops in a natural manner at the bottom of a water spring and is said to have some of the best healing properties in Europe.
Vitality Hotel Punta opens in Veli Lošinj AmCham: C- rating for public administration Foreign companies operating in Central and Eastern Europe have given the public administration in Croatia a C- rating, which is worse than Romania and Bulgaria, according to a survey conducted by the American Chamber of Commerce, AmCham. Company managers participating in the survey are not pessimistic concerning any planned investment and the creation of new jobs. Nevertheless, according to the survey, Croatia still lags far behind countries such as the Czech Republic and Slovakia.
Hotel for healthy living enthusiasts The cuisine from local ingredients is oriented to healthy living
roatia is investing in tourism, irrespective of the economic crisis. The Mali Lošinj-based tourism company, Jadranka hoteli, has recently opened the restored Vitality Hotel
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Punta in Veli Lošinj. Investment into the restoration of the 235 rooms and wellness and beauty centre was €12.5 million, €9 million being a loan provided by the Croatian Bank for Reconstruction and Development (HBOR) and the remaining €3.5 million was the company investment. According to Damir Mlacović, Board President of Jadranka hoteli, the company was also investing at the start of the financial crisis when it opened a family hotel Vespera through financ-
ing provided by Erste Bank. The restored Vitality Hotel Punta is intended for healthy living enthusiasts, which is reflected in the hotel cuisine comprising local ingredients. During the next two to three years there are plans for the reconstruction of three hotels in Čikat Bay with an estimated value of investment of between €50 and €60 million. Mlacović stated that hotel reconstruction projects by Jadranka hoteli would be a mix of company funds and loans. (S.P.)