Interview: Ivan Vrdoljak Only one licence will be required for construction, says Minister of Construction and Physical Planning
Strategy of structural changes The majority of measures are related to the development of the business climate and economic operation framework
Croatian entrepreneurs Financial agency: Entrepreneurs generated a gross income of €1.24 billion
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Croatian Business & Finance Weekly Established in 1953 Monday / 3rd September / 2012 Year V / No 0211 www.privredni.hr
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STATE DECISION TO ENCOURAGE INVESTMENT
Incentives start with €50,000 investment Investors creating a minimum of 15 jobs and whose investment exceeds €3 million will be exempt from income tax Igor Vukić he government has substantially lowered the investment threshold for state incentives in its Bill on Investment Enhancement. As a result, micro-entrepreneurs will be eligible for incentives following a €50,000 investment and the creation of three jobs. They will also pay 50% VAT for five years. The investment threshold for large investment projects has been lowered to €3 million down from €8 million. Consequently, where investment exceeds €3 million,
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Micro-entrepreneurs will pay 50% VAT payment for five years after minimal investment and the creation of three jobs investors will be exempt from income tax for a ten year period, provided this investment creates a minimum of 15 new jobs. Investment incentives for tourism projects Investment incentives for tourism projects have been announced for the first time. In
addition, incentive grants irrespective of whether new jobs are created, is a further innovation. Investment in new technologies, plant modernisation and fostering competitiveness will be supported provided that the investor retains the current level of employment, explained Radimir Čačić, the first Vice-President of the Croatian government and Minister of Economy, during his presentation of the Bill. The investor is required to retain the employment level for a minimum of three years. Moreover, investors will be exempt from customs duties on imports of required equipment or machinery. Nevertheless, this will be in effect only until 1st July 2013, prior to Croatian EU accession. Investment Agency support The government has founded the Agency for Investment and Competitiveness, which will support large projects, again in order to enhance investment. Small companies will be supported through HAMAG Invest, which approved guarantees for 40 small investment projects worth €26.7 million in June. The government announced that there is ample work at all levels
€9,000 for job created The Bill proposes direct financial incentives for investors for the creation of new jobs. Incentives per job created in counties where unemployment is below 10% can reach a high of €3,000, whilst it proposes incentives of €6,000 per job created where unemployment ranges between 10% and 20% and incentives of €9,000 in areas with unemployment exceeding 20%. In cases where investors create over 500 jobs, direct financial incentives will be doubled. of public administration to foster a fair investment environment. Minister Čačić believes that administration is usually unwilling to implement new projects and reluctant to undertake risks. Hence, the national spatial plan
will encompass large investment and energy projects. In addition, local spatial plans, which have been slowing project implementation, will have to be compatible with the national spatial plan.
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Privredni vjesnik Year V No 211
Guest commentator: Krešo Perica, General Manager, IBM Croatia
Technology will transform business Directors invest mainly into assets providing a deeper insight into customers
What challenges await businesses over the next three years? Will we be tackling economic issues, globalisation or regulatory compliance? According to a recent survey conducted by IBM, company directors believe technology will radically transform their businesses in the near term. In addition, technologies connecting people will be fundamental and will have a significant impact. Social media, collective intelligence and analysis of substantial data generated during interactions have become a pivotal factor for successful business performance. According to the 2012 Global Chief Executive Officer Study, conducted by IBM Institute for Business Value, there are three principal strategies used by directors when overcoming challenges. The first involves the monitoring and an analysis of individual users, since every user has their own identity, due to the quantity and wide variety of accessible data. Consequently, directors have been investing mainly in tools allowing them to gain a deeper inIMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription
sight into customers. This type of investment exceeds investment in monitoring competitors, financial analysis or risk management. The second strategy focuses on openness in business. It is currently impossible for directors to predict the skills needed in three or four years, due to rapid and dramatic changes in the market. Hence, employers opt for staff who value teamwork, with highlevel communication skills and those who are highly creative and adaptable. In addition, employers focus on the creation of unconventional teams comprising staff of different professions and encourage them to form an extensive network of quality connections. The third strategy involves the development of partnership relationships. Establishing partnership relationships is currently an imperative. Hence, it is vital to
Partnership relationships fundamental highlight the importance of various changes that need to be implemented by businesses in order to differentiate themselves. Technologies are contributing to new ways of connectivity with employees and connectivity amongst employees, users and partners. Connectivity transcends merely having a new competitive advantage. Keeping abreast of innovations is fundamental for businesses and their directors who have grasped the immense importance of technology.
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
CROATIA IS DIVIDED INTO TWO STATISTICAL REGIONS
DOORS TO EU FUNDS OPEN TO EVERYONE The sum of €13.7 billion of European funds will be eligible for spending by 2027. Who fails to develop by then, has only himself to blame
Igor Vukić, Drago Živković he European Union accepted the Government proposal to divide Croatia into two statistical regions: Continental and Adriatic, so that it could use the money from the EU structural funds more easily. The previous division of three regions - northern Croatia being grouped with Zagreb - showed it could not apply for most of the money from the funds. Both regions are now below 75% of the European average gross domestic product. This way everyone in Croatia will have an opportunity to draw money from the Development Funds by 2027. They need to suggest appropriate programmes. By next year €430 million will be made available. The
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15%-25% of personal funds required for using EU funds sum will then grow over €1 billion a year, pointed out Minister of EU Funds Branko Grčić. €13.7 billion of European funding will be eligible for spending by 2027. Who fails to develop by then, has only himself to blame, said Foreign Minister Vesna Pusić. The Croatian County Association was taken by surprise with the new division of Croatia since no one consulted them. As the Association’s President and County Prefect of Vukovar and Srijem
Božo Galić says, they have been trying to schedule a meeting with Prime Minister Zoran Milanović since January. Deprived Slavonia Slavonia is the biggest opponent of merging Pannonian and northwestern Croatia. According to Galić, they fear they will lose out to more developed areas, for example Zagreb or Varaždin. Danijel Marušić, Count Prefect of Slavonski Brod and Posavina, is also displeased. He feels it is unfair to abolish the Pannonian region since it could be very active in joining counties on projects. County Prefect of Dubrovnik and Neretva Nikola Dobroslavić said it was disgraceful the Government decided to change the borders of statistical regions without previously consulting the county prefects. All three County Prefects are members of HDZ (Croatian Democratic Party). The Government response was that they, as Members of Parliament, had a chance to inform themselves with the changes in statistical regions. The Slavonian region, now merged with the Continental region, will still have the same opportunity to draw EU funds. The sum in question totals €300 per capita. It is required to invest between 15% and 25% of personal capital in order to be able to use EU funds, that is, invest €15 to obtain €85. Minister Grčić added the Government would help the most underdeveloped areas and give them money they must invest in preparing projects and accept EU funds.
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( 31,000 applications ( 90% applications for legalisation filed to date
rejected under the former law
INTERVIEW: IVAN VRDOLJAK, MINISTER OF CONSTRUCTION AND PHYSICAL PLANNING
Only one licence will be required for construction I have never understood why five or even six construction licences are required here, when some states require only one. Only one licence will be required for construction. There will be no decisions on construction conditions, location licences or certificates for the main project Jozo Vrdoljak e spoke with Ivan Vrdoljak, Minister of Construction and Physical Planning, about the new acts and provisions prepared by his ministry as well as ongoing and future projects.
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How far advanced is the project for renovating facades and increasing their energy efficiency? After a recent public tender, we signed new contracts on energy efficiency with Refleks, County of Varaždin and Centre for Monitoring Energy Sector and Investment Affairs. This will include two contracts for five high schools and one student home. The value of this investment is estimated at €2.19 million, VAT excluded. These are the first renovations within the programme for energy efficiency development of public sector facilities in Croatia. The estimated value of saving after renovation is 50% for both contracts, with annual savings of around €0.2 million. A new Act on Illegal Building was passed, and you stated you will opt for amendments to the Act concerning physical planning and construction. How can this speed up and simplify investing? It can and it must. The Act on Illegal Building will definitely introduce order into illegal construction. The public must understand the Government intends to introduce order. It started with
tax debtors and it will continue with illegally built buildings. We are faced with a great challenge, and I believe people will realise they cannot build illegally. In this sense, we find Geoportal very useful. It was created by the State Geodetic Administration which has recently been presented to the public. It is an excellent basis for a more efficient field survey. The e-licence system will speed up the process of issuing documentation for construction. We will simplify the procedure for issuing the licence. Only one licence will be required for con-
The system is complex and needs simplification struction and it will be called a construction licence. There will be no decisions on construction conditions, location licences or certificates for the main project. We are also working on a new act on construction inspection, which will simplify its work and give more authority. When will you start to demolish illegal buildings, and what are your priorities? We will start this autumn. Our priorities are illegal buildings built after June 21, 2011 in areas where building had been banned. All others will be given a chance to legalise. Those that already have a decision for removal provided by the Construction Inspection must apply for legalisa-
Significantly greater possibility for legalisation Will it be possible to legalise business facilities on agricultural and forestry land as well as wineries within the protected coastal area? The new law significantly increases the possibility of legalisation. It will be possible on forestry and agricultural land and the protected coastal area. Those that built wineries in their vineyards within the protected coastal area will also be entitled to legalise. Many of our small-sized wine producers appealed to us to allow this type of building since they want to compete with the best in the world. The law had allowed legal construction of these kinds of wineries; therefore, it is only logical to allow their legalisation. tion by the end of the year. There are 31,000 such cases. What will be new in the two mentioned acts? Are administrative obstacles only to be blamed for lack of investment? Administrative obstacles can unnecessarily prolong investment and exhaust the investor, but they are not the reason for giving up on an investment. The system is complex and it must be simplified. The essence of both acts is to ac-
quire that which one is entitled to in a simplified way. Pursuant to the old act on legalisation, practically 90% of applications were refused because the law was not implementable. You had the right to legalise, but only in theory. Our goal is to create legal solutions that are logical and comprehensible. I have never understood why five or even six construction licences are required in Croatia, when some states require only one.
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Privredni vjesnik Year V No 211
DIOKI AND DINA PETROKEMIJA ANTICIPATE DECISIONS BY TURKISH INVESTOR
( €13.3 million
invested every year in innovation projects
Strategy of structural changes
Current most important goal: start production Restructuring programme will provide answers to queries concerning the place and time for starting production, employee downsizing and the creation of new jobs Boris Odorčić ioki Group (comprising of the Dioki parent company and several subsidiary companies including Dina Petrokemija and Adriaol) employees have still not been paid their frozen salaries irrespective of promises they received. The Dioki Management Board has recently announced that the Turkish investor, Caliskan, signed part of the documentation, in order to obtain a bank guarantee to enable the advance payment for frozen salaries to Dioki and Dina Petrokemija employees, which will require a payment of €5 million by the Turkish company.
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Long-term unresolved issue In addition, there have recently been several additional positive developments regarding the payment of frozen salaries, when Dioki Management Board advised that the documentation required for the completion of the transaction was finally obtained. “Activities concerning the technical implementation of the transaction as a prerequisite to obtain the guarantee which will enable the advance payment for frozen salaries to employees of Dioki and Dina Petrokemija are currently in place”, as recently pointed out by Dioki, adding that the implementation of the transaction was expected at the beginning of this week. Questions concerning the place and time of production start-up,
as well as employee lay-offs and the creation of new jobs will be answered by the Turkish investor, according to Dioki. “The restructuring programme will provide answers to these points. We can only talk about the market, which we believe is still ample”, was highlighted by Dioki Management Board. Predrag Mihaljević, Dina Petrokemija Union Vice-President, stressed that the recent negotiations certainly achieved one goal and that was the thawing of frozen salaries. The second goal, which he deems to be more important, is the start of production. “Dina does not need to file for bankruptcy. There is still ample room in the market. Hence, we are anticipating preparations for the start of production following the payment of frozen salaries”, he stated. It has to be pointed out that Mihaljević is also anticipating the creation of new jobs, due to new investment and to the fact that some employees have already left the company. Bad year for rubber and plastics 2011 was the worst in the last 20 years for the largest Croatian polymer and petrochemicals producer. Irrespective of Dioki, this sector still has not reached results achieved in the 1980’s when Croatia produced around 370,000 tonnes of polymer materials. Annual production during the last several years has stood at around 200,000 tonnes.
New measures f
The majority of around fifty reform measures are related to t other things, there are also e-licenses for investors and im construction licenses from the present nine months to one m Igor Vukić rom next year, investors in Croatia could start their projects by obtaining an e-license, an electronic system which would speed up the process of issuing location licences, construction licences or use permits. The new system should speed up the process of issuing construction licences from the present nine months to one month.
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The state is planning to reduce debt by €3.3 billion by selling HPB and CO as well as issuing road concessions These are some of the announced structural reforms the Government intends to implement in an attempt to achieve stability in the growth rate. The Government adopted the Strategy of Structural Reforms in August. It is a document containing precise deadlines for implementing measures and the amount of money which will be spent. This will also allow the public to monitor and supervise its implementation more easily. Subsidy system as in the EU The Strategy lists around fifty reforming measures that are divided into ten fields the Government can regulate, from public administration to labour laws, education system, health and welfare as well as environmental protection and energy efficiency. Most measures concern the development of the business climate and economic operation framework.
In this area there are visible efforts to bring the subsidy system closer to the existing EU system. The share of total subsidies in GDP will gradually decrease from the present 2.4% to 1% in 2015. However, the funds will be oriented towards horizontal and regional subsidies. The majority of money (around 65%) is presently divided into several traditional sectors, for example agriculture and shipbuilding, but this is not productive. The share of horizontal subsidies should rise to 73% by 2015. The funds will be intended for research, development and export of products with higher added value. The inflow of capital to SME’s will increase and the use of alternative energy resources will be encouraged. Around €13.3 million will be directly invested every year in
www.privredni.hr Business & Finance Weekly
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( up to 73% by 2015 potential growth of horizontal subsidies
for attracting investment
he development of the business climate and economic operation framework. Amongst plementation of a new system that should speed up the process of issuing month
Rohatinski in Agrokor Željko Rohatinski, the former Governor of the Croatian National Bank, has recently become advisor to Ivica Todorić, Agrokor Board President. Rohatinski used to work in Agrokor prior to becoming Central Bank Governor. He was the Governor of the Croatian National Bank for 12 years and was also offered a post at Goldman Sachs investment bank following his resignation from the Croatian National Bank.
antee capital of HAMAG (Croatian Agency for Small Enterprises) and other guarantee schemes will help smaller companies to finally meet bank criteria for obtaining loans for their projects.
innovative development-research projects of the private sector, resulting in up to 70 applied innovations in 2014 according to Government estimates. Restructuring of public companies continues The process of restructuring public companies and companies in majority state ownership has continued. According to the Minister of Regional Development Branko Grčić, the state could reduce its debt by around €3.3 billion by privatising Hrvatska poštanska banka (Croatian Postal Bank) and Croatia osiguranje (insurance company) as well as issuing concessions for the highway system. This would also reduce debt by another €2.6 billion over the next 15 years. Reducing debt would create an opportunity to relieve
Reducing the debt would create an opportunity to relieve the tax burden of labour costs the tax burden of labour costs. Employers saved around €0.4 billion on health contributions, which were reduced this year by 2%. The Government confirmed the rate of health contributions would be reduced by another percentage point this year. VAT on tourist services will also decrease, which should increase competitiveness of the Croatian market. Programmes like Poduzetnički impuls (Entrepreneurial Impulse), promoted by the Minister of Entrepreneurship, Gordan Maras, will be additionally supported by SME’s. A higher guar-
Wish list or a realistic plan? In the second half of the year, the Government expects to start the announced projects of energy efficiency and other investments, for example, the water supply systems, they have been preparing for the past several months. The general illiquidity should reduce if local companies are hired and the earned income is repaid. The money intended for paying for the work is guaranteed through favourable loans via development banks. Thus the Strategy of Structural Reforms also mentions that, in addition to personal investment of €27.5 million in the modernisation of the water supply systems, another €63 million will be provided by foreign development institutions. Next year, this sector could receive €35.3 million from international sources, and a further €24.9 million in 2014. Prime Minister Milanović is convinced this is a realistic programme, the results of which will be visible next year despite p the fact some critics call this Strategy a ‘wish list’. The he list of measures is there for the he critics to carefully monitor what and how things are done, Milanović said. He also added they y do not have great many choices, es, but are also not looking for an excuse. We must be in charge rge of the situation and implement ement these reforms with a little luck and determination, n, said Prime Minister during the Strathe Stra att egy presentation.
Companies defaulting on loans According to data on banking activity provided by the Croatian National Bank, both state and general public regularly service their loans, whilst companies are facing dire straits. 22% of corporate loans indicate problems with servicing. Three months ago there were 20% of bad debts in the corporate banking sector and it is anticipated that every fourth loan will be in default by the end of the year. Public debt of €23.2 billion Public debt reached €23.2 billion at the end of April, according to data from the Croatian National Bank. In April, it saw an increase of 8% due to the issuance of government bonds on the American market. Central state public debt also compprises the debt of the Republic p of Croatia and non-budgetary funds.
6 WE PRESENT FRANJO BUČAR SECONDARY SCHOOL, ZAGREB
Privredni vjesnik Year V No 211
GRAFIKON DIZAJN, ZAGREB
Innovative and unique solutions “Design as an investment” is the catchphrase of a small and relatively recent design studio whose projects have been receiving awards and arousing increasing interest
School as an entrepreneurial venture A Zagreb-based school is a normal educational institution with a curriculum identical to those of language secondary schools plus enrolling pupils in sports programmes ranjo Bučar, a private sports and secondary school has been founded this year after obtaining the required licenses from the Ministry of Science, Education and Sports and following the its registration at the Commercial court. It has been called after a well-known local Croatian historian and sporting worker. Dominik Raca, a teacher and one of the founders, pointed out that the school is a normal education institution with a similar curriculum to language
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The school currently employs around 20 staff secondary schools, enrolling pupils in sports programme. “The school provides compulsory, elective, optional and additional tuition of foreign languages, with particular emphasis on the spirit of sport”, he stated. The idea behind the school originated from two different aspects. “It originated as a consequence of my work at school and also due to my involvement in sport. As a volleyball enthusiast, I was expected to pay undivided attention to my studies. Nevertheless, I was not given a wide range of choices. Unfortunately, only those sports implying high earnings are usually valued and given importance, which is inappropriate. Children train twice a day and usually have to renounce success at school, which substantially narrows their range of choices. Our objective is to
prepare young sportspeople for education, as well as for their sporting career. The idea behind this is to allow pupils to be involved in sports for as long as possible and simultaneously be given a wide range of choices, as a result of the high quality education provided by the school”, he explained. No competition According to Raca, the school is an entrepreneurial venture and it is not in a privileged position concerning financing via banks. Private schools are currently at a stage of inception in Croatia and several institutions have already been recognised due to the high quality education they provide. The term ‘competition’ is inappropriate in this context, as we are dealing with youth education which is a serious and an extremely responsible task and it needs to set mutual goals for all those involved. “There is no real competition. Competition regarding high quality programmes and curricula is insignificant without high quality and committed staff”, he stressed. The school currently employs around 20 staff and most teachers have already been appointed. Raca points out that the school is planning to place special focus on language learning. “We are also planning to provide tuition in the more exotic languages. In addition, we are planning to enhance co-operation between our school and sports clubs, unions and associations”, concluded Raca. (B.O.)
rafikon Dizajn is a small yet successful Zagrebbased design company. It is well-known to the Croatian general as a result of the theme music for two popular Croatian TV series. In addition, the company has worked on web application projects in marketing campaigns for DM and on the iPhone/ iPad application for H1Telekom and Deborah Croatia, as well as on iPad edition of VIDI magazine. Two years ago, it received an award for the android game called Žabolomac, created in co-operation with Vlado Banda from the Interactive1 company with whom it co-operates with on the creation of new apps and games.
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The first significant project was the design of a computer game King’s Quest VII: The Princeless Bride According to the director, Andreas Čogelja, the company has six staff. The first important project was the creation of the computer game King’s Quest VII: The Princeless Bride for Sierra. It has established long-term cooperation with a large number of clients for video clips (marketing campaigns for AutoZubak, Valvoline, Audi, VW, Kandit, Croatia insurance, UNICEF, and H1 Telekom to name a few) and on printed material, such as 3D movie posters for Skoda cars
(for which it won first award in the Mega-Board category), Interfilm posters for films directed by well-known Croatian film directors, as well as on printed advertisements (L’Oreal, Volkswagen, Weltauto and Porsche Leasing to name a few). Radical budget cuts “Croatia is facing harsh economic conditions. There has been a significant number of budget reductions in many areas of the economy, as well as ours”, emphasised Čogelja. “Innovation is fundamental against the backdrop of current circumstances, as well as a continuous quest for unique and more effective solutions. Our main objective is to adapt, provide the best solutions and position them on the market, focusing on creativity”, he pointed out. “Knowledge is our main competitive advantage, as well as 20 years of activity and acceptable prices. We have strengthened long-term co-operation with many clients and have successfully tackled a large number of serious challenges. Private companies are faced with higher risks”, he highlighted. He is anticipating design projects with increasingly interactive communication. “We would like to find an exit from the crisis rapidly. Hence, we are anticipating work on a large number of new projects, due to our high level of adaptability to client requests and changing trends on the market. We believe design to be primarily an investment”, concluded Čogelja. (K.S.)
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CROATIAN FOREIGN CURRENCY MARKET Currency
AUD CAD JPY CHF GBP USD EUR Source: HNB
Kuna exchange mid-rate
EUR
7.50
6,134921 5,996498 7,569470 6,220774 9,400855 5,943998 7,468039 WEEK SEPTEMBER 1, 2012
USD
5.98
28.8.
29.8.
30.8.
31.8.
6.25
7.49
5.97
6.24
7.48
5.96
6.23
7.47
5.95
6.22
7.46
5.94
6.21
7.45 27.8.
CHF
5.93 27.8.
28.8.
29.8.
30.8.
FINANCIAL AGENCY: GROSS INCOME FOR CROATIAN ENTREPRENEURS DOWN 50.4%
31.8.
6.20 27.8.
28.8.
29.8.
30.8.
31.8.
RBA Survey
€23.2 billion – state debt in April
A slight increase in exports continues According to the data provided by Fina, entrepreneurs eligible to pay income tax, with the exception of banks, insurance companies and other financial institutions, generated a gross income of €1.24 billion between January and June 2012 Vesna Antonić ntrepreneurs eligible to pay income tax, with the exception of banks, insurance companies and other financial institutions, generated a gross income of €1.24 billion between January and June 2012, which was HRK9.3 billion down from the same period last year or a decrease of 50.4%, according to data covering the business results of 97,787 entrepreneurs provided by the Financial Agency FINA. These entrepreneurs employed 841,396 staff, 1.8% up over the same period last year. Those members of staff required to pay income tax received a monthly nett salary of €623 on a par with
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salaries during the same period last year. During the first six months of this year, Croatian entrepreneurs generated total revenue of €38.8 billion, with total expenditure of €37.6 billion. Gross income (excess of revenue over expenditure) was €1.24 billion. Total revenues saw a 1% decrease year-on-year, with total expenditure up 2.3%. According to Fina, gross income and cost effectiveness in business decreased due to increased expenditure exceeding the increase in revenues. Majority of revenue from domestic market During the first six months of last year, total revenue to expenditure was €14.2 per €13.3, whilst for
the same period this year the figure was €13.8 per €13.3. The majority of revenue was via the domestic market, where sales were €28.8 billion, 0.7% up compared
Exports increased by 1.3%, generating income of €6.24 billion with the same period in 2011. Simultaneously, a 1.3% increase in exports and generated revenues of €6.24 billion, continued the positive trend of a slight increase in exports which began last year. During the first six months of this year entrepreneurs invested €2.42 billion in fixed assets, a decrease of 0.2% over last year.
According to data provided by the Croatian National Bank, state public debt, including the Republic of Croatia and nonbudget funds, increased by almost 8% at the end of April, reaching €23.2 billion. The increase is mainly a consequence of the higher foreign component which increased by €1.47 billion during April (20.8%), totalling €8.55 billion, generated primarily by state debt on the American market and $1.5 billion of issued bonds. In relation to April 2011, state debt increased by €3.95 billion or 20.5%, mainly due to the growing internal component of €2.12 billion. However, as a result of the growth in April, the foreign component contributed €1.83 billion. During the first four months of this year, state debt increased by €2.68 billion of which €1.55 billion relates to the foreign component. Almost the same as last year Total guarantees of Croatia continued to decrease in April, reaching €7.6 billion, which is 4.8% less than in March. This is almost the same amount as that registered at the end of last year. Foreign guarantees decreased by €0.17 billion and local by €0.21 billion in relation to the end of 2011. RBA analysts expect state debt to grow this year. In addition to an issuance of Eurobonds in April, any growth will be contributed to mainly by bonds issued in July as well as an increased issuance of treasury bills at the beginning of this year. In line with this, state debt could reach around 53% of GDP by the end of the year, and with guarantees included it could climb to 64% of GDP. (V.A.)
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Privredni vjesnik Year V No 211
::: news
APIPHARMA - NEW PRODUCTION AREA IN NAŠICE
British companies interested in investing into Croatian tourism Veljko Ostojić, the Minister of Tourism, and David Arthur Slinn, British Ambassador to Croatia, have recently discussed future cooperation in tourism, via potential investment by British companies in projects and to increase tourist arrivals between the two countries. It was stated that a British investor is interested in ZRC Lipik share purchase, but its identity remained undisclosed. Slinn pointed out that the British are interested in spending their holidays in Croatia during the pre- and post-season, and Ostojić informed him that prolonging the tourist season, as well as the development of specific forms of tourism are priorities for the Ministry of Tourism in the near future.
New factory, new positions
Game of Thrones in Dubrovnik again
from bee products, the new factory has been built closest to the source of raw materials.
Apipharma exports around €2 million of goods a year to Bosnia and Herzegovina, Kosovo, Albania, Montenegro, Kuwait, Hong Kong, Romania, Turkey, Azerbaijan and Iran he pharmaceutical company Apipharma, established 38 years ago in Zagreb, opened a new state-ofthe art production area in Našice. Since they produce their pharmaceutical products, food additives, food and beauty products exclusively on a natural basis, mainly
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Around 50 new workers in the new factory
The newly built area covering 1500 m², where around 50 new employees, mainly locals will HBO, an American Production Company, has confirmed that the third season of the award winning hit series Game of Thrones will be filmed in Dubrovnik again. Filming will begin at the end of September and will last throughout October. It will cover several locations in Dubrovnik, as well as the Arboretum Trsteno. Lovers of the popular series and the Dubrovnik-based tourism operators show great satisfaction at this news, since their city will use this opportunity for excellent tourism promotion globally. Colentum archaeological location restoration The Murter-based Argonauta Association has launched an initiative to restore the Colentum archaeological located near Murter, in order to increase the tourist value of Murter’s cultural heritage. According to the Association, archaeological tourism is a particularly complex aspect of cultural tourism that needs to comply with preservation standards of the locality, whilst simultaneously being accessible to tourists. The initiative launched by the Association will contribute to the creation of a new tourism brand for Murter.
work, has received all the necessary documentation and be focused primarily on exports. Apipharma exports around €2 million of goods a year to Bosnia and Herzegovina, Kosovo, Albania, Montenegro, Kuwait, Hong Kong, Romania, Turkey, Azerbaijan and Iran, says Tomislav Lalić, owner and Board President of Apipharma. He also added the entire investment is valued at €3.5 million. The new factory, which makes Apipharma a part of the pharmaceutical industry in the real sense of the word, was built according to the principles of Good Manufacturing Practice (GMP), following its principles also – a natural way to health, reassuring its customers they will buy a safe and quality product.
Four years to get the paperwork The new plant was opened by the President of Croatia Ivo Josipović, who expressed his satisfaction with the fact new jobs are being created during the crisis. When the owner of Apipharma said it had taken them four years to get the required documentation, President Josipović replied that investment into production is the only exit from these difficult times. He sees the new plant in the Našice Industrial Zone as an optimistic move and an important message for this area and the whole of Croatia. He believes the entire country must join forces to create more jobs and a positive entrepreneurial climate with less red-tape obstacles for all those willing to invest.
Croatian President Ivo Josipović opening the new factory
Apipharma’s new facility in Našice is currently the first industrial facility in Croatia with an Energy Certificate Group A. The entire lighting system uses LED diodes that reduce energy costs. For now, Apipharma is the first pharmaceutical company in the wider region that has installed antibacterial panels. They also installed special facilities for thermal processing and the production of syrup at 45° C, a method that preserves all the valuable natural ingredients. The entire procedure is under constant Industrial Process Control of the laboratory that analyses each phase of the production process. (S.S.)
CONFIRMATION OF TECHNOLOGICAL SAFETY
METAL PRODUCT PREPARED FOR NATO WORK etal Product has received certification for participation in NATO tenders which are classified as secret. Employees are required to undergo special security checks and the certification confirms the required level of business and technological safety. The certification is performed by the National Security Council within the project implemented in co-operation with the Ministry of Economy and the Croatian Chamber
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of Economy. According to Petar Mišević, Head of the National Security Council Office, around 40 Croatian companies are currently undergoing the certification process. Safety certification, valid for 5 years, enhances the opportunities for companies to sign new contracts with the NATO and with a wide variety of international institutions and companies. The company is marking its 45 anniversary and the recently obtained certification is an ac-
knowledgement of its high quality work. “We believe human assets are fundamental for high quality business, since they enable high quality and safe operations” pointed out Šafran during the NATO Certificate Award Ceremony. (I.V.)