Foreign trade Trade between Croatian companies and CEFTA increased 10.7% or almost €0.13 billion
Jovan Glamočanin, Lenovo Croatia lies in a most important strategic position, on the crossroads of South, East and Central Europe
Tourism support in 2012 16% of €0.8 billion loans granted by Croatian Bank for Reconstruction and Development (HBOR)
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Croatian Business & Finance Weekly Established in 1953 Monday / 8th October / 2012 Year V / No 0216 www.privredni.hr
S U P P O R T E D
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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
PLIVA ON THE RISE
$200 million investment 98% of production in the new plants or 80% of production in the Zagreb plant to be exported Drago Živković he largest Croatian pharmaceutical company Pliva has seen its highs and lows since the inception of the Karlovac-based Kaštel factory in 1921, through the discovery of azithromycin in 1979, to its acquisition by Barr and subsequently by the Teva Group. The $200 million investment cycle marks the beginning of the new phase in the ascent of Pliva, following several years of severe difficulties. During socialism, when Pliva saw its most successful days, it employed 7,500 staff, whilst currently it employs around 1,800. It generated revenue of between €0.81 billion and €0.95 billion, prior to its acquisition by Barr, whilst currently revenue stands at around €0.34 billion. Nevertheless, its profits are high (€56.44 million in 2011), yet Teva decided not to pay a dividend to shareholders and opted for reinvestment. The share of exports in Pliva’s revenue is increasing, having reached 78% last year, with Russia and the United States being its largest export markets. Pliva still ranks amongst the top three Croatian exporters irrespective of the turmoil it has faced. Pliva currently operates in two locations, in Zagreb and Savski Marof. The construction of a new facility for the production of sterile and oral solid forms has started in Zagreb, whilst the current fa-
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cility is simultaneously being expanded and modernised. The current production of 6 billion tablets is to be increased by 2 billion, with the potential for an additional increase of 2 billion to reach a total of 10 billion tablets. Annual use of tablets in Croatia currently stands at around 2.5 billion. Environmental protection According to estimates made by Radimir Čačić, First Vice-President of the Croatian Government, 100 new jobs are created per each million tablets. In addition, since these are jobs in high technology, there are 6 or 7 new jobs in accompanying activities. Moreover, the construction of a new $100 million facility in Savski Marof for the production of the final phases of active pharmaceutical ingredients is currently in progress, in addition to a $200 million investment in environmental protection or waste water treatment, as well as in tail gas treatment processes. It is commonly highlighted that Pliva is the only pharmaceutical company in Croatia involved in the development and production of active pharmaceutical ingredients. Investment is entirely implemented through internal Teva funding sources. A remarkable 98% of production in the new Savski Marof-based plant or 80% production in the Zagreb-based plant is to be exported. During
the last six months Pliva has employed 111 experts, whilst new investment will create over 200 new jobs. Moreover, considering employment in services and suppliers, Pliva investment will indirectly create around 1,000 new jobs. Increase in receivables Irrespective of the fact that Pliva investment is the largest private investment this year in Croatia, Čačić claims that the state also contributed to its implementation by assisting in rapidly obtaining 7 construction site permits and 4 building permits. According to Čačić, pharmaceuticals are one of the few industrial branches where Croatia can achieve a leading global position. Consequently, the state will assist the
pharmaceutical companies Pliva, Belupo and JGL in defining the industrial strategy. Moreover, the state will assist the pharmaceutical companies with the new Law on Pre-Bankruptcy Financial Transactions and PreBankruptcy Agreement which Čačić deems indispensable in tackling severe problems. The issue of liabilities in the health sector also needs to be addressed, where payment deadlines significantly exceed the 60 days defined by the current legislation. The current situation has severely adversely affected Pliva (as well as other pharmaceutical companies), since, according to the financial report, total Pliva receivables from customers have soared from €50.54 million in 2010 to €114.86 million in 2011.
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Privredni vjesnik Year V No 216
Joško Kuzmanić, owner, Sat jahte
Business Council for co-operation with Russia
Small-sized companies sustain nautical sector To expand business we decided to invest in the construction of a service centre and dry marina
The nautical sector is one of the most prospective of tourism branches, continuously growing over the past couple of years. However, we are not satisfied with servicing of vessels and charter, since the number of vessels is growing, which would not be sot bad if prices were not lowered below the level of profitability. Those who venture into this sector in this manner, jeopardise serious companies that invest in the business and plan to stay in the long term. A fair price for charter services is possible to attain during the main tourism season, whilst prices are halved at the end of September and October due to an excess of vessels, when conditions for sailing are at their best and when many regattas are held, As a consequence, stronger and more stable companies have somehow managed to sustain themselves, while smallIMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription
sized companies have perished. It is obvious the situation is not ideal: we saw financial companies that a few years back agreed to finance the purchase of boats, now seize them on a daily base. This means this is no longer a lucrative business, since today, if a vessel is booked for 20 weeks, earns what it once earned in 14 weeks. Of course, there is a series of factors that negatively effected charter companies, and input costs increased considerably together with unfair competition. Dealer commissions increased, discounts for agencies are higher, insurance expense and servicing is also higher, whilst the prices of berths have reached their highest level so far. Servicing and input costs rose by 50%, while the price of services remained at the same or even a lower level. The purchase of new boats is in decline. Serious companies also experience problems since financial institutions introduced stricter terms and raised the prices of their services. Larger companies obtain greater discounts when buying boats, while small-sized companies do not since producers aim to sell more boats to bigger companies. Therefore, competition is unfair at the expense of small-sized companies. In order to expand our business and adapt to market trends, Sat jahte decided to invest in building a service centre and dry marina. We are currently looking for an adequate land area of 5,000 m2 near roads and sea.
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
WTO offers a new chance for exports to Russia Lately we have managed to overcome many prejudices about co-operating with Russia and we have showed we can be a serious partner to this great world economy, pointed out Nadan Vidošević he Business Council for Co-operation with Russia, founded within the Croatian Chamber of Economy, can be proud of its results. During the first eight months of this year, exports to Russia reached $312 million, which is close to the yearly result achieved in 2011 ($320 million). Since its founding two years ago, the Business Council, presided over by the former Prime Minister, Franjo Gregurić, motivated Croatian companies to participate at shows, offered technical advice and helped connect Croatian and Russian entrepreneurs. Many Croatian companies used the CCE Representative Offices in Moscow to present themselves to potential customers. The CCE Business Information Centre offered professional assistance to exporters in solving customs and other administrative problems that arise in export affairs. Recently, at the Council Meeting, the CCE President, Nadan Vidošević, thanked Council members for their work and indicated new possibilities for expanding their business cooperation. The Chamber is still planning to participate at shows and is open towards new Russian investment. Lately we have managed to overcome many preju-
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dices about co-operating with Russia and we have showed we can be a serious partner to this great world economy, Nadan Vidošević pointed out. Forthcoming meeting of energy experts In August, Russia became a member of the World Trade Organisation (WTO), which offers new export possibilities. The Director of the CCE Business Information Centre, advised members of the Business Council about cutting Russian duties on many products, which can be a significant boost for many companies. All interested exporters can obtain current information from the Business Information Centre regarding the benefits of Russian membership in WTO. The Economic Advisor to the Embassy of Russia in Zagreb, Georgij Mirzojan, confirmed that economic relations between Croatia and Russia are progressing. He announced a forthcoming meeting of energy experts who would define future co-operation in this sector. Georgij Mirzojan praised the Croatian Investment Promotion Act and evaluated it as an important factor for the growth of Russian investment in Croatia and strengthening cooperation. (I.V.)
www.privredni.hr Business & Finance Weekly
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( €4.77 billion ( 56.9% foreign trade deficit
import/export ratio
FOREIGN TRADE
€0.65 billion surplus with CEFTA
Goods exports totalled €6.31 billion or €2.3 million more compared with last year with imports reaching €11.1 billion Igor Vukić uring the first eight months of this year, trade between Croatian companies and CEFTA increased 10.7% or almost €0.13 billion. Total value reached €1.3 billion. Although imports from these countries increased 3.5%, totalling €0.66 billion, according to data provided by the Central Bureau for Statistics, Croatia still shows a significant surplus of €0.65 billion. The current highest level of exports to CEFTA countries is with Bosnia and Herzegovina (€0.78 billion), followed by exports to Serbia (€0.26billion) and Montenegro (€113.5 million), which is double that for the same period last year.
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Exports the same as last year Exports growth in CEFTA contributed to total results of Croatia
exports. Despite the fall of other economic indices (industrial production, spending and employment), exports remains at the
Problems in Italy led to a fall in Croatian exports by over €0.13 billion or 24.3% same level as last year. During eight months, total goods exported stood at €6.3 billion compared with the same period last year. With stagnating exports, imports increased 2.5%, totalling €11 billion, making the foreign trade deficit €4.77 billion, and giving an import/export ratio of 56.9%. With crisis circumstances taken into account, solid export results reflect the export of food and beverages totalling €0.65 billion, a 16.5% increase. Fuel and grease exports contributed positively with 8.8% to a resulting €0.91
billion. Exports of products for broader consumption increased 4.5%, reaching €0.93 billion. Transport remained a heavy burden, mainly due to the halt in shipbuilding. This showed a 30.5% fall. Exports of €0.55 billion was achieved, while during the same period of 2011 it stood at €0.80 billion. Export of sugar and grain grows The deficit in shipbuilding, and the production of chemicals and metal products led to a 1.7% decrease in exports within the overall processing industry. Exports balance reflects the export of pharmaceutical products (+9%), reaching €0.26 billion. Exports of clothing increased 6.7%, exceeding €0.26 billion, with electric equipment growing by 10.4%, and an overall result of €0.47 billion. Similar exports growth of 12.5% was achieved with machine and devices pro-
duction, standing at €0.46 billion. Exports of sugar increased by 46% (a total of €77 million), grain by 62% (€128.65 million), electric energy by 44% (€33.1 million), while the export of non-monetary gold increased to €121.89 million. Due to familiar problems in the eurozone, exports to the EU decreased 2.3% in these eight months. Problems in Italy led to a fall in Croatian exports by over €0.13 billion or 24.3%. However, this was partly compensated for with exports to Austria increasing by 29.2% and exceeding €101 million, reaching €0.45 billion. Exports to Germany grew by 3.5%, reaching €0.66 billion and to Slovenia a mild increase of 2.5%, totalling €0.53 billion. Concerning other countries, exports to Russia increased from €131 million to €0.24 billion. Exports to Asian countries also increased from €0.16 billion to €0.20 billion.
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Privredni vjesnik Year V No 216
( 14.2% growth
for Lenovo in Croatia in Q1 of 2012
JOVAN GLAMOČANIN, LENOVO REGIONAL MANAGER, SE EUROPE
Mobility is the key factor in computer industry Croatia lies in a most important strategic position, on the crossroads of South, East and Central Europe, making it an excellent centre for companies operating in Croatia and the region Boris Odorčić
ness from Croatia to Serbia. Why is that? I would not agree with this view. On the contrary, Our Croatian Office employs five people who cover much larger markets and regions. Furthermore, I would like to point out that Croatia lies at one of the most important strategic positions, on the crossroads of South, East and Central Europe, making it an excellent centre for companies operating in Croatia and the region. Moreover, Croatia has the advantage of developed infrastructure and highly qualified work force.
enovo is a $30 million technological company, founded in 2005, and currently the second largest producer of computers globally. Lenovo Regional Manager for SE Europe, Jovan Glamočanin, says the company opened its Representative Office in Zagreb on 1st August 2005. Its main activity includes sales and marketing support for partners.
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Are you satisfied with Lenovo position on the Croatian market? In industry, where the entire delivery of computers saw a 2% fall compared with 2011, Lenovo delivery during the first fiscal quarter increased by 24.4% in relation to 2011, representing our 13th continuous quarter of growth in relation to the total PC market, and the 11th consecutive quarter of growth faster than the growth of four leading computer producers. This is the result of our focus on balanced growth in all regions, consumer segments and product lines. According to data provided by the world’s leading company in market intelligence and consulting in the information and telecommunications sector IDC (International Data Corporation) for EMEA (Europe, Middle East and Africa), during the first quarter Lenovo had 14.2% growth in Croatia in relation to the same period of 2011, achieving a market share of 12.9%. What are the most common problems you encounter in your business? Illiquidity would certainly be one of our problems in Croatia.
What are your expectations from Croatian EU accession? The unique European market will offer many opportunities for Croatian companies and I hope that accession will have a positive affect. What I see as a risk is the low and insufficient technological level of Croatian companies, and therefore, unequal competition with European companies. Many things will change concerning Lenovo. Many of our partners are unable to develop their business and service quality or preserve quality people for the simple reason that they have unpaid bills. I expect the greatest progress in this area since this is the main precondition for most IT companies to stop looking at how to survive and concentrate on development. Another problem is that the Croatian IT market is not segmented, preventing us to plan systematically and create offers adapted to various segments.
What are the trends in the ICT field and does Lenovo keep up with them? Mobility is today’s key factor in the computer industry. The need for greater mobility changes the way people perceive electronic devices, and the success of tablets is quite noticeable. Users who are always in motion and want to have non-stop access to information, see tablets as the perfect solution. Recently more companies have started to transfer their busi-
Could you highlight some of the company’s future business moves and goals? Lenovo is dedicated to the computer industry and has an optimistic view of its future. I believe we are on the right path to become the world leading computer producers and that we will continue to grow faster than the market. At the same time we will invest in innovative products that will help in converging technologies and services in all four fields (smart phones, tablets, PCs and Smart TV).
www.privredni.hr Business & Finance Weekly
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Tourism support in 2012
€0.14 BILLION LOANS 16% of €0.8 billion loans granted by Croatian Bank for Reconstruction and Development (HBOR) Sanja Plješa total of €0.14 billion in loans has been granted for tourism sector in Croatia by 30th September 2012. Veljko Ostojić, Tourism Minister, stated that support for tourism was not accidental, since the Ministry of Tourism primarily focuses on competitiveness. Consequently, VAT rates for restaurant and catering services have been reduced to 10%. In addition, a zero tax on reinvested profit will be introduced from 1st January 2013. Loans for tourism projects account for 16% of the total of €0.8 billion loans in 2012 approved by the Croatian Bank for Reconstruction and Development (HBOR) or 27% up compared with last year, implying 83% more funding for tourism in relation to the same period last year. The tourism sector occupies the largest share in the HBOR loan portfolio, as over 90% of the projects are related to investment in tourism, whereas only 10% have
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been allocated for the current assets”, stated Anton Kovačev, Board President of HBOR. He added that applications for new loans totalling over €59.5 million are being processed. HBOR has approved over €1.49 billion for tourism, and this year the percentage of direct loans has seen a substantial increase, cur-
rently accounting for 52 % of total loans. Amended loan terms “This implies we are prepared to take on risk for the projects and is an indicator of our awareness of the fundamental importance of tourism and of the quality tourism projects for which we approved
loans”, emphasised Kovačev. In co-operation with the Ministry of Tourism, HBOR has amended loan terms for tourism projects. Loan repayment periods have been extended to 17 years, with a 4-year grace period, which is the longest loan repayment period within HBOR loan programmes. In addition, interest rates have fallen from last year’s 2%, 4% and 6% to the current 1%, 3% and 5%. There is also a local currency loan facility. Moreover, a risk-sharing model has been introduced. Concerning the plans for this year, Kovačev pointed out his expectations for a 7% to 10% increase or between €0.34 billion and €0.41 billion in new loans to tourism at the current interest rates. “Tourism is one of the fastest growing economic sectors in Croatia where investment activity has resulted in significant changes. I invite the entire tourism industry to take advantage of altered loan terms which have been fully adjusted to enhance growth”, concluded Ostojić.
Production and protection of pršut
Worldwide recognition Producers launch an initiative for defining product declarations Jozo Vrdoljak roatian pršut producers have succeeded in obtaining a definition of pršut product and the granting of rights. Assisted by the Croatian Chamber of Economy (HGK), they launched an initiative on amending the pršut product declaration. Pršut Was once defined as a portion of dry-cured (for only several months) boneless ham. Currently, it is defined exclusively as a whole on-bone dry-cured ham. In addition to an accurate definition, different local varieties of pršut will be recognised, such as Istrian pršut, Dalmatian, Krk and Drniš pršut and their recipes will
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also be fully defined. Representatives from four Associations of Pršut Producers are planning to form a cluster over the next several months. Producers believe product protection is a step closer to regulating the current situation in the market which currently provides a wide range of pršut products of dubious quality. Four protected varieties There are four protected varieties. Istrian pršut is the only product with Protected Designation of Origin (PDO) label, whilst Drniš, Krk and Dalmatian varieties are about to obtain Protected Geographical Indication (PGI)
labelling. There have been several attempts to obtain Protected Designation of Origin label for Dalmatian pršut but these initial attempts failed due to insufficient raw materials in the Dalmatian area. However, two years ago the Association of Dalmatian Pršut Producers, covering 17 producers, launched an initiative to be granted Protected Geographical Indication label, which will be obtained by the end of the year. Ivica Babić, President of the Association, stated that certification by the Ministry of Agriculture is to be obtained in the near term
and subsequently all documentation will be sent to Brussels which will then mark the completion of the entire procedure. Babić estimated that the annual production of Dalmatian pršut could rise to around 500,000 pieces, and for Drniš pršut it is estimated to reach around 60,000 pieces, in addition to several thousand from Krk and 25,000 from Istria. Consequently, overall annual pršut production is expected to reach around 600,000 units.
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Privredni vjesnik Year V No 216
CROATIAN FOREIGN CURRENCY MARKET Currency
AUD CAD JPY CHF GBP USD EUR Source: HNB
EUR
Kuna exchange mid-rate
7.47
5,880345 5,854514 7,314126 6,158883 9,28853 5,737936 7,463334
5.78
2.10.
3.10.
4.10.
CHF
6.17
7.46
5.77
6.16
7.45
5.76
6.15
7.44
5.75
6.14
7.43
5.74
6.13
7.42 1.10.
WEEK OCTOBER 6, 2012
::: news
USD
5.10.
5.73 1.10.
2.10.
3.10.
4.10.
5.10.
6.12 1.10.
2.10.
3.10.
4.10.
5.10.
BUSINESS ACTIVITY FOR THE FIRST SIX MONTHS
€1.26 BILLION GROSS INCOME BY ENTREPRENEURS Retail trade down 3.2% According to preliminary data provided by the Central Bureau for Statistics, retail trade in August was 3.2% lower in real value compared with August 2011. In nominal value, it grew by 0.5% a year, after four continuous months of negative rates. The indicators are slightly better for August due to a good tourist season, and in relation to July, retail nominally increased 1.9% and 1.2% in real value. Smaller nett profits from banks During the first half of the year, nett profits from Croatian Banks totalled €0.23 billion, 1.7% down compared with the same period in 2011, according to data provided by the Croatian National Bank. Banks earned €1.47 billion from interest (+3%), and paid €0.76 billion in interest on savings, a 17.3% increase. The €0.72 billion nett profit on interest was 8.7% lower compared with 2011. Average hourly fee of HRK30.95 The average monthly net hourly fee per employee in companies in Croatia stood at HRK30.95 in July 2012. In relation to June, this is 4.2% lower, and in relation to July 2011 this is 2.5% lower according to data provided by the Central Bureau for Statistics. Hourly fees are the highest in air traffic (HRK56.69 on average) and computer programming (HRK46.79). The lowest monthly net hourly fee was paid in clothing production (HRK16.45).
Gross income plunged by 63.8 % for large businesses, small businesses saw a drop of 2.2%, and gross income generated by medium-sized businesses plummeted by 62.3% over the first six months at a yearly level he 92,787 entrepreneurs eligible for income tax employed 841,396 staff, generating €39.32 billion total revenue and €38.07 billion total expenditure, and gross income of €1.26 billion, according to data provided by the Financial agency for the first six months of 2012. Total revenue dropped by 1% over the same period last year, whilst total expenditure increased by 2.3%, with gross income
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plumm e t ing by 50.4%. For each €13.5 invested, revenue of €13.95 was generated over the first six months, compared with €14.42 over the same period last year. This is primarily the result in the fall in revenue and higher expenditure. The results of entrepreneurial activity in Croatia during the first six months in 2012 for small, medium-sized and large
entrepreneurs appear inferior in relation to the results in 2011. Small businesses – leaders in business efficiency The highest gross income of €0.65 billion (51.4% of total gross income) was generated by large businesses, as opposed to small businesses at almost €0.54 billion (42.7% of total gross in-
come) and mediumsized businesses at €0.07 billion (5.9% of total gross income). Moreover, gross income plunged by 63.8 % for large businesses, small businesses saw a drop of 2.2%, whilst gross income generated by medium-sized businesses plummeted by 62.3% over the first six months on an annualised basis. According to indicators of business efficiency over the first six months of 2012, small businesses achieved the best financial results, generating revenue of €14.12 per €13.5 invested, as opposed to medium-sized businesses (€13.65) and large busi-
nesses at €13.97. Overall average for all Croatian businesses stood at €13.95. Business efficiency did not significantly affect employee salaries compared with average nett salary. The average monthly salary of those employed by small businesses, irrespective of the fact that small businesses achieved the best positive results in terms of the ratio between total revenue and total expenditure, stood at €520 per employee, 17.7% below the average monthly salary of €632 of those employed by Croatian businesses. Continuing previous trends, the average monthly salary of those employed by large businesses stood at €775, 22.8% above average. Salaries of those employed by medium-sized businesses stood at €665, 5.2% above the Croatian average. According to the analysis of accounts receivable from customers and liabilities towards suppliers as at 30th June 2012 amongst Croatian businesses, receivables exceeded liabilities by €0.45 billion, which is favourable. For large businesses, receivables exceeded liabilities by €0.64 billion, as opposed to medium-sized businesses with receivables exceeding liabilities by €0.49 billion. For small businesses liabilities towards suppliers exceeded receivables by €0.68 billion.
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WE PRESENT
THE RURAL TOURISM OF THE RAVLIĆ FAMILY, MUŽILOVČICA
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ZADRUGA ARTISTVITO, SPLIT
Seed capital not necessary
Oasis of culture and rejuvenation Visitors can enjoy ethnographic exhibition of folk costumes and tools, displayed in korablja (wooden house) over 200 years old. he Ravlić family are the owners of the first registered rural tourism business in the County of Sisak and Moslavina. It was founded in 1997 and the entire family runs the business. For the past six years, the family have been taking care of the estate, located in the Nature Park Lonjsko polje in Mužilovčica. The idea to start the business was born in the last generation when the father, then a young man travelled a lot. He was especially fascinated with the south of France - very similar to the area of Lonjsko polje. My parents ran a restaurant for many years and two flower shops in Sisak. In time they decided to replace classic hospitality for old tradition – the inherited estate. What
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The estate is protected by the Ministry of Culture and holds a collection of over 400 bells followed was a time-consuming and difficult renovation of the estate and struggle with administration. It is especially interesting that the Tax Administration did not know how to register rural tourism at that time, so they reg-
istered the estate as a bar. Today, we are proud to say we own one of rare estates for rural tourism revival, where the business was successfully transferred from one generation to other, Ravlić says. Bell collection The starting point was cultural heritage and its protection. Visitors can enjoy ethnographic exhibitions of folk costumes and tools, displayed in korablja (wooden house) over 200 years old. Furthermore, the estate is protected by the Ministry of Culture and holds a collection of over 400 bells. Visitors can also spend the night taste various gastronomic delicacies prepared according to traditional recipes, play football or basketball, ride horses, cycle or go on boat rides. Actually, foreigners account for 98% of overnight stays - Germans, Austrians, Belgians and French, Ravlić highlights. Every village in Lonjsko polje needs a couple of younger families involved in the tourism process. Only then we will be able to say Lonjsko polje is a tourism destination, Ravlić says. In the future, Jakša Ravlić intends to expand the accommodation capacity and preserve it as a small oasis of culture and rejuvenation. (B.O.)
We provide raw materials for jewellery production with a product range covering finished jewellery products, painting materials and paints he co-operative Zadruga ArtistVito was founded three years ago by Davor Perišić, his wife and his sister Vedrana Perišić. He wanted to start a business without any initial capital and thus opted for a cooperative. The number of co-operative members rose from three at start-up to seven after the first two years. As a marketing expert, Perišić decided to take advantage of the artistic potential and eco-
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Raw materials are supplied by Croatian companies, stated Perišić nomic expertise of the family. He is the sole employee in the cooperative and its Manager. “Initially we provided raw materials for jewellery production, and our product range currently covers finished jewellery products, painting materials and paints. We have achieved good results, being the only producer of ceramic products made of clay in Split. Consequently, we opened a small store, which we also use to exhibit our products. Nevertheless, the most significant area of our business is the co-operation with the Arts Academy at the University of Split, with primary and secondary schools, social institutions, various civil institutions, craftspeople producing jewellery, visual arts associations and independent artists, some of whom
are well-known to the general public in Croatia”, explained Davor Perišić. Creative workshops According to Perišić, they aim to organise creative workshops for both adults and children. “We have held several creative workshops thus far and are planning to continue focusing in that direction”, emphasises Perišić. Nevertheless, the demand in Split significantly exceeds supply, which is particularly evident against the backdrop of the current crisis. People have several options in tackling the crisis, one of them being jewellery production as a family business. “Initial capital was my principal problem. I cannot say I have started earning sufficiently to provide a living over these two years, yet I have succeeded in several aspects. We have managed to boost our product range from 130 items in 2009 to a current level of 1100 items and have also managed to source adequate quantities of material as stock, hence increasing our value. We currently provide jewellery repair services and we also produce unique hand-made jewellery. As opposed to a large number of similar small stores in Split, we do not achieve significantly better results during the tourist season. We primarily operate at the beginning of the school year. Raw materials are supplied from Croatian companies”, stressed Perišić. (J.V.)
8 ::: news Employment level in industry decreasing The total number of employed in Croatian industry in August fell by 0.6% over July and saw a decrease of 5.1% compared with the same period last year, according to data provided by the Croatian Bureau of Statistics. There was a significant decrease in employment in several areas; numbers employed in the metal industry in August this year plunged by 30.3% over the same period last year and petroleum refining saw a drop of 19.8%. In addition, employment in the clothing industry decreased by 12.7%. Motorway toll revenue higher Vehicle use decreased on motorways managed by Croatian motorways; the number of vehicles during the first eight months totalled 22.25 million, a drop of 3.1% compared with the same period in 2011. Generated revenue stood at €121.8 million excluding VAT, indicating 1.1% growth. The Zagreb-Macelj motorway concession holder recorded a use-rate of 4.44 million vehicles, 5.3% up over the same period last year. The rise in toll revenue was on par with the increase in use, amounting to €16.66 million.
Illiquidity looming The pinnacle of the crisis in Croatia is expected by the end of the year, according to Croatian managers. The most critical issues are rising unemployment and decreasing household consumption, substantially exceeding the European average, according to a survey conducted by Roland Berger strategy consultants in 80 Croatian companies. Illiquidity in local companies has reached the pinnacle and 22% of managers believe liquidity is critical, which is the highest percentage since records began. Around 82% of Croatian managers anticipate and fear a new credit crunch, which significantly exceeds the European average.
Privredni vjesnik Year V No 216
Continental tourism in Croatia
AQUA-PARK in Prigorje Aquapark Adamovec will be a state-of-the-art bathing and wellness oasis, one of the most innovative in this area
Sanja Plješa tjepan Culifaj and family returned from Germany in 1997 and founded their first company. A year later, they began the construction of an outdoor pool and accompanying facilities in Adamovec, near Zagreb. The construction was completed in 2010 and was soon followed by the reconstruction and construction of additional pool facilities. That was the idea behind the Culifaj family Aquapark Adamovec project covering an area of 15,000m2. According to the owner, it will be a stateof-the-art bathing and wellness oasis, one of the most innovative in this part of Croatia. “We have opted for this €5.4 million investment due to a long rainy season in the area and a lack of similar facilities in Zagreb. It has to be said that construction has not been completed thus far and hence construction expenses can currently only be estimated”,
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stated Andy Culifaj, Deputy Director of Aqua-Diamantum. He added that the entire system of the ecological facility is based on renewable energy sources, as it exclusively uses natural local
spring water. The construction of the central facility has been completed, as well as some 80% of the accompanying facilities. Nevertheless, the construction of the parking area, the surrounding area and the interior of the central facility are yet to be completed. The final construction work on swimming pools, restaurants and remaining facilities is to be completed over the next several weeks and the water park is to be officially opened in about two months time. Transformation to an hotel Aquapark Adamovec will comprise of 4 indoor and 2 outdoor pools with various water attractions, Jacuzzi facilities, laguna pools and pool waterfalls to name a few. In addition, there will be a
wide range of massage facilities and saunas, such as the Finnish sauna, Bio sauna, Kneipp Foot Massage, surprise water spray stations and a cold water dive. There will also be a gym for fitness enthusiasts. Visitors will be provided with a special gastronomic menu. The water park will also include two restaurants (a self service restaurant and an a la carte restaurant) and two bars (a bikini bar and a lobby bar). During the summer there will also be an outdoor pool bar, with wild river effects and artificial islands.
Culifaj told Privredni vjesnik that currently there are no plans for further expansion of the water park. Nevertheless, if the project proves successful, which is plausible considering a high number of inquiries by many potential visitors, Culifaj might consider expansion prospects “such as construction of additional outdoor facilities or perhaps even an hotel. There is huge potential”, he concluded.