Interview: Miljenko Brnić, Tehnomont Shipyard New contracts reviving the shipyard and restoring its successful operation
Six bids received in an international tender for oil and gas exploration in the Adriatic Sea Croatia aiming to become a gas exporter
International co-operation Mobile homes comply with various lifestyle concepts, th blending perfectly with the environment
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Croatian Business & Finance Monthly Established in 1953 Monday / 1st December / 2014 Year VII / No 0242 www.privredni.hr
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pvinternational pv international C R O A T I A N
C H A M B E R
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Institute of Economics, Zagreb
EUROSTAT DATA
0.6% drop in GDP
CROATIA RANKED FIRST IN TERMS OF PRODUCTION IN THE EU IN SEPTEMBER
The Institute of Economics, Zagreb announced a 0.6% drop in GDP for 2014, but 0.2% growth in 2015 Growth forecasts are gloomier compared with previous forecasts due to increasingly adverse economic conditions, mainly due to a more pronounced drop in investment activity compared with expectations. Following the first quarter, which saw slightly more favourable trends, the second quarter saw a decrease in overall activity and this is expected to continue throughout the year. Monthly indicators for the third quarter show a decrease in industrial production and construction activity, stagnation of retail turnover and a slowdown in export growth. Adverse weather conditions have also had a negative impact on agricultural production. In addition to the continuation of the fall-off in personal and government spending, positive investment movements are expected in 2015 as a result of EU funding absorption, as well as a further rise in exports. The principal risks to the fulfilment of these forecasts are those in the fiscal sphere concerning the credibility of implementation of fiscal consolidation. The fiscal deficit in 2014 will exceed that of 2013 and will be above the headline deficit target set within the excessive deficit procedure. Against a backdrop of parliamentary elections, the political will for reforms will further weaken. Nevertheless, unless vigorous actions are taken aimed at fiscal consolidation, there will be room for a vast number of options, including the requirement for the implementation of a stabilisation programme under EU and IMF auspices, according to analysts at the Institute of Economics, Zagreb.
Croatian producers have overtaken colleagues from the Czech Republic and Ireland as Denmark, Portugal and Holland saw the largest decrease in production Igor Vukić roatia saw the largest growth in industrial production among EU members in September 2014, according to data recently published by Eurostat, increasing by 4.6% over August. Croatian producers have overtaken companies from the Czech Republic and Ireland. The largest reductions in production were recorded by Denmark (5.6%), Portugal (4.1%) and Holland (2%). It would seem that Croatian companies have impacted also on overall growth of industrial production in the European Union, standing at 0.6%. According to data provided by the Croatian Bureau of Statistics, the industrial production growth rate was primarily achieved through production of consumer durables (10.1%), and other non-durable consumer goods (7.1%). Concerning the processing industry, the food industry saw the highest growth of 5.7%; the number of people in employment in September and those employed in production of intermediate goods was 0.5% up, and 0.4% up in the energy sector, compared with August 2014.
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3.8% annual growth The Eurozone showed a 0.6% growth in industrial production in September, as a result of a 2.9% increase in the production of capital goods, and a 0.3% increase in the energy sector. Croatia has shown satisfactory results compared with the same month of 2013. Industrial production growth stood at 3.8%. Ireland is the leader in this category, as its production has soared by 22%. The Czech Republic saw 5.6% growth and Hungary 5.1%. The average annual growth in European Union stood at 0.6%. The Croatian results rank highly in relation to results achieved by several more developed countries. Hence, Denmark showed a
2.7% drop, Holland saw a 1.7% decrease and Sweden was 4.1% down. Italy also saw a 2.9% decrease on an annualised basis, which is not good news for Croatian exporters, as any economic activity slowdown in Italy has generally negative results on the level of orders in Croatia. Germany, the other important Croatian partner, saw meagre growth in annual production of 0.1%. The stated results are far below the peak results achieved prior to the crisis in 2007 and 2008 and even into 2010. Industrial production in Croatia, irrespective of its showing signs of recovery, is still 7.4% down compared with 2010, according to data provided by Eurostat.
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Privredni vjesnik Year VII No 242
CULTURE AND THE MARKET: IS THERE A CONNECTION?
Investment in culture is not a waste
Funds allocated by the state for cultural funding are extremely low: in 2014, only 0.5% from the state budget was allocated to culture. Cultural industry is facing dire times against the backdrop of the financial crisis and a small number of potential investors in that area. During a roundtable discussion entitled “Culture and the market: is there a connection?” Hrvoje Laurenta, Executive Director of the Zagreb-based Europa Cinema, pointed out that currently culture is divided into two streams. “On the one hand there is a cultural stream whose products are focused on profit, such as blockbuster films which quickly fade away. On the other hand, there is a more sophisticat-
ed cultural stream whose products meet spiritual and cognitive needs. The crucial question is how to connect the two streams, as that would be the ultimate objective”, he stated adding that there are no differences between the cultural industry and any other production industry. Robert Waltl, Director of the Ljubljanabased Mini Theatre, emphasised the fact that a socialist heritage is one of the fundamental problems, as in socialism, production had a major share in GDP. Seid Serdarević at the Fraktura publishing house, highlighted that culture is often considered to be surviving solely through state support. On the contrary, according to several indicators, culture is an industry that creates a substantial number of jobs, encourages consumption and positively affects other industries such as the paper and printing industries through minimal subsidies, he pointed out. “Consequently, investment in culture is certainly not wasted and it can generate multiple returns”, he stated. (B.O.)
SPORT AS ECONOMIC DIPLOMACY
Business meetings and ice hockey
The Croatian ice hockey team, Medveščak, has shown for many years that sport is an effective economic diplomacy tool, stated Domagoj Juričić, Vice-President for International Affairs at the Croatian Chamber of Economy, during his recent announcement at the Chamber of a business meeting between Finnish and Croatian businessmen. The Croatian Chamber of Economy assisted by Medveščak will organise meetings for Croatian entrepreneurs in other countries where the team will be playing. The first such meeting will take place in January 2015, when Medveščak will play in Helsinki. Timo Rajakangas, Finnish Ambassador to Croatia, stated that his country has a positive reputation in Croatia and hence business
( €4.98 million
revenue generated in Croatia in 2013
MILJENKO BRNIĆ, MANAGEMENT BOARD
New contracts r and restoring its
We rank amongst the most successful companies in Croatia competitive advantage, as there are few shipyards involved i Croatian and European project engineers which implies high Marko Percan he Pula-based Tehnomont shipyard has recently delivered a new patrol vessel worth over €2.5 million, to the Royal Gibraltar Police. Tehnomont competed for this job with 5 other top European shipyards. Privredni vjesnik spoke with Miljenko Brnić, Management Board President, on the current situation in the shipbuilding sector and on the positioning of his company.
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What is Tehnomont current situation? We can say we have exited the crisis. We faced serious challenges in 2007 when work was becoming scarce and when we had to reduce the number of employees. Nevertheless, due to previous crisis periods in shipbuilding, we resorted to the construction of smaller vessels made
Exports have tripled compared with 2012 co-operation between the two countries needs to be strengthened. Consequently, Team Finland-Croatia comprising of companies and investors operating in both countries will be dealing with this issue. Damir Gojanović, President of Medveščak, stated that Croatian companies need to exploit the potential of the team and its popularity in the countries in which it plays. Subsequently, the team will also gain new sponsors. (I.V.)
from aluminium and steel. We have currently recovered from the crisis and we are successfully filling shipyard capacity, and employing 402 staff of whom over 300 work in Germany where we have been operating for over 50 years. During the business year 2013, we generated revenue of almost €4.98 million in Croatia and around €12 million overseas, in addition to a small profit we also managed to generate.
How would you position Tehnomont in relation to its competitors? Concerning competitors, I can say that we rank amongst the most successful companies in the Croatian shipbuilding industry or more specifically in the construction of aluminium vessels. We see it as our competitive advantage, as there are few shipyards that produce these types of vessels. Since we do not have our own project office, we use the services of the best Croatian and European project engineers, which implies high quality at competitive prices and this is obviously our competitive advantage. Amongst local project engineers, we cooperate with Brodarski Institute and some Rijeka-based design companies that originated from the company Brodoprojekt. In addition to aluminium vessels,
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( around €12 million revenue generated through exports
PRESIDENT, TEHNOMONT SHIPYARD
eviving the shipyard successful operation
n shipbuilding, or more specifically, in the construction of aluminium vessels. This is our in this type of vessel production. We use the services of several of the most successful h quality at competitive prices deliveries will be for companies from Southampton and from Norway.
we are also involved in the construction of steel vessels. We are currently constructing two steel ships: one for the Southamptonbased company Gosport Ferry, while the other is for a Norwegian company, Moen Marine, for which we are constructing a 25-metre ship for fish farm maintenance. Concerning ship construction, you have recently delivered a new patrol vessel to the Royal Gibraltar Police. We have, it is a 25-metre aluminium ship ‘Sir Adrian Johns’, worth over £2.2 million. It is intended for the maritime law enforcement. The ship has excellent capabilities and achieves a maximum speed of around 30 knots. Tehnomont shipyard competed for this job with 5 other top European shipyards. This is our first delivery in 2014, and the next
Are you currently negotiating with customers concerning new construction work and what is Tehnomont’s business plan for the forthcoming period? We are currently involved in serious negotiations with a Montenegrin customer concerning the construction of a steel ferry providing automobile and passenger transport services in Boka Kotorska bay. We are also negotiating for the construction of two catamarans with a capacity of 250 and 300 passengers for a domestic and a foreign customer. Moreover, we have submitted our bids for the construction of two ferries for a company from Northern Ireland, as well as for five high-speed patrol vessels for the Cypriot police. Should we manage to sign contracts for the construction of several of these vessels, our business will certainly be stable during the forthcoming years. It has to be stressed that we have tripled our exports compared with the business year 2012, which is a clear indicator of our recovery from the crisis. What are your most severe business challenges? What are, generally speaking, the most serious problems currently faced in domestic shipbuilding? Is the state able to provide any assistance to the shipbuilding sector after subsidies have been exhausted? I believe we are addressing similar problems as those working in
other companies and in other sectors. We are currently not faced with any serious problems in our business operations. We have a team of excellent young engineers and high quality staff. In our opinion, top quality is fundamental and we do not expect any assistance from the state. Although we occasionally submit bids for domestic tenders, we are primarily export-oriented. In addition to shipbuilding Tehnomont also constructs solar panels. Tehnomont has been involved in the production of solar collectors since 1975. We launched the production of solar panels only three years after the global oil crisis. We can say that our solar panels, whose effectiveness has been enhanced by 50%, is on a par with top quality collectors produced by European companies, against the backdrop of severe competition in this area. The construction of solar panels is incentivised by funding through the Environmental Protection and Energy Efficiency Fund, as well as EU funding, which results in price dumping. Nevertheless, we need to keep abreast with these developments and hence we intend to participate in tenders. Consequently, we are anticipating a tender concerning energy efficiency that would provide funding for the implementation of our products. This is primarily of importance for the tourism sector, as many camp sites and hotels are provided with our old collectors that need replacing.
::: news Co-operation between the Port of Ploče and the Croatian Hydrocarbon Agency The Croatian Hydrocarbon Agency and the Port of Ploče have recently signed an agreement on the port becoming a logistics centre for hydrocarbon research for all operators involved in oil and gas research in the Adriatic Sea. The logistic centre will rationalise all the costs of the supply process of research and enable the implementation of the highest quality standards in environmental and nature protection. The centre will accommodate inspection, construction and warehousing companies, as well as workshops for machine processing. In addition, it will provide overhaul services, maritime and port services, construction and transportation services, as well as accommodation and food. Average salaries decrease The average monthly nett salary paid per employee for September stood at €716. This is down marginally (€9), compared with August, according to the Croatian Bureau of Statistics. Mild nominal growth of 0.3% was recorded year-on-year. Fee reduction request by hospitality operators
Hospitality operators are requesting a 30% fee reduction for the use of restaurant terraces, as well as lower utility service fees. Additionally, they are requesting a reduction in the hospitality zone coefficient for hospitality facilities from 10% to 7%, as stated during the recently held professional meeting. Sandra Švaljek, Deputy Mayor of Zagreb, expressed her understanding of the problems, but the budget for Zagreb will be slashed by €52.6 million and thus it seems highly unlikely that their requests will meet.
4 ::: news Increase in the number of building permits
Privredni vjesnik Year VII No 242
( 750 million m
3
amount of gas extracted from gas fields in the Adriatic Sea
SIX BIDS RECEIVED IN AN INTERNATIONAL TENDER FOR OIL AND GAS EXPLORA
592 building permits were issued in September 2014 with an estimated value of €0.2 billion. This was an increase 13% over August. In addition, September saw the issuance of the highest number of building permits this year. However, negative tendencies were recorded in September for the first time this year yearon-year, and a sharp drop in both the number of building permits recorded (-15.9%) and the estimated value of work (-43.6%). Retail turnover stagnates Retail turnover during the first nine months stagnated, according to data provided by the Croatian Bureau of Statistics. The first four months showed an initial recovery in retail, yet a 1.5% decrease was recorded in May. Seasonally, retail and the fact that it is closely connected with tourist season, this year saw the phenomenon of the “July gap” where, as a result of exceptionally adverse weather conditions and the departure of a large number of tourists for the World Cup in Brazil, a 2% decrease in retail turnover was seen in July. Unemployment rises again
CROATIA AIMING TO A GAS EXPORTER
Around 15 billion m3 of gas were extracted in the Italian area of the Adriatic stands at around 5 billion m3 per annum. If only 5 billion m3 of gas were pr be double the level Croatia currently consumes annually Igor Vukić hould anticipations fuelling rumours at the Ministry of Economy as well as those involved in the gas business become a reality, it is highly plausible that Croatia will become a gas exporter over the medium term. Companies and the general public will both will enjoy the benefits of purchasing gas at the lowest price in the European Union. New quantities of hydrocarbons, primarily gas, are anticipated from new oil wells in the Adriatic Sea. Croatia is also likely to see surplus quantities of gas after the construction of the LNG terminal on the island of Krk, as well as the construction of the IAP gas pipeline that would reach the south of the country, across Albania and Montenegro.
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The gas revival began with six bids received in an international tender for oil and gas exploration in the Adriatic Sea. The bidders are aiming to explore 15 potenIn October 2014, Croatia saw a rise in registered unemployment rate from 17.7% to 18.7% an increase for the second consecutive month, according to data published by the Croatian Bureau of Statistics. As a result of seasonal employment, primarily in the tourism sector, the unemployment rate started a downward trend until August but in September started rising yet again. October saw the highest level since May, standing at 19.6%.
Advantages for on-shore warehousing and ports Following the signing of the contract on oil and gas exploitation, companies will undertake to deliver the found quantities of oil and gas to Croatian on-shore facilities, pipelines and ports. There was an initial idea for vessels to load gas at offshore platforms and transport direct to buyers. However, according to Ministry of Economy sources, the principal idea behind the project will be to deliver the found oil or gas to Croatian warehousing facilities for subsequent onward transport. Consequently, the project will positively impact on supporting activities and foster the development of the Croatian energy market. Based on exploitation contracts, drilling in the Adriatic Sea will need to comply with the strictest environmental and professional standards. innovative technologies and comply with the strictest environmental standards”, pointed out Ivan Vrdoljak, Minister of Economy, following the opening of the bids. The government is expected to reach a final decision on the selection of the best bidder by the end of the year. The contract signing on the allocation of gas exploration is expected during the first quarter of 2015. According to Ministry sources, the
Croatia received a €4.9 million subsidy from the European Union for the preparation of the required project documentation for Omišalj LNG terminal tial basins. “We are talking about serious companies with vast experience and who use the most
process of research and exploration implies a preparatory phase of research lasting between three
and s i x years. Exploitation commences only after an oil reserve has been proven. Italian success Hydrocarbon research and exploitation started in Croatia only after amendments to the legislation just over 18 months ago, and the invitation to tender resulted from legislative changes. The first public tender for the issuance of permits for research and exploitation of gas in the Adriatic Sea started on 2nd April 2014. Interested bidders had an opportunity to apply for a total of 29 exploration areas. The government has expressed hopes that research into new hydrocarbon deposits might be one of the projects to promote Croatia into the energy hub of Southeast Europe. Consequently, Croatia might become an important fac-
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(
arou und
m3
received from onshore sites
ATION IN THE ADRIATIC SEA
O BECOME
c Sea in mid-nineties, and currently production in that area roduced in the Croatian area of the Adriatic Sea, it would tor in shaping European energy security and stability. “A year and a half ago Croatian potential for research and exploitation of hydrocarbon was absolutely inconceivable. We have managed to dramatically change the status of Croatia during that period. The bids received indicate that the formal and legislative framework, which has been provided in a professional and transparent way, shows that Croatia can and should be one of the leaders in the energy policy in the region which is our specific objective”, added Vrdoljak. Croatian exploration areas are likely to achieve good results, according to research conducted in the Northern Adriatic. Irrespective of the fact that it is not a criterion for obtaining reliable estimates, those well-informed on the issue emphasised that on
the Italian side of the Adriatic Sea, there were 1,350 oil wells and considerable gas sources were found at around one hundred sites. Some 100 deposits have been drilled in the Croatian part of the Adriatic and results achieved in 20 of them. Around 15 billion m3 of gas were extracted in the Italian part of the Adriatic Sea in mid-nineties, and currently production in that area stands at around 5 billion m3 per annum. If only 5 billion m3 of gas be produced on the Croatian
Three new compressor stations will have to be constructed for the needs of a new gas pipeline. The expected value of investment per compressor station is €17.5 million.
Vigorous American and European players The names of the bidders at the tender for oil and gas exploration in the Adriatic Sea have not been published. According to unofficial information, in addition to INA in joint Croatian and Hungarian ownership, bids were submitted by the Italian company, Eni, and Austrian OMV. Bids were also submitted by MedOil (a subsidiary of the Scottish company Cairn Energy) and the American company Marathon Oil. It is assumed that Russian companies did not express a more significant interest due to strained geopolitical relationships following recent developments in Ukraine. Companies assumed to have submitted bids are considered serious and have extensive experience in sub-sea oil and gas research. Most have already been engaged in work in the Adriatic Sea and are acquainted with its geological strata.
side of the Adriatic Sea, it would double the amount Croatia currently consumes throughout the year. Croatia currently receives around 750 million m3 of gas from a field in the Adriatic Sea. About the same quantity is received from onshore sites, yet Croatia imports around 1.2 billion m3per annum. LNG terminal and Ionian Adriatic pipeline Huge quantities of gas may result from the new terminal for liquefied natural gas (LNG) which has been planned for years in Omišalj on the island of Krk, The terminal has been nominated on the list of projects of European interest. Furthermore, Croatia received a subsidy from the European Energy Efficiency Fund for the preparation of project documentation, a building permit and an elaboration of the financing model. The total costs of the preparation of documents would stand at around €10 million. The European Fund allocated Croatia a €4.9 million subsidy. In addition to project development, Croatia will focus on the search for potential terminal operators and potential gas buyers. The market for gas and LNG needs to be global, as it is more expensive, and the expected quantities received (around 5 billion m3) greatly exceed Croatian requirements. Croatia is also hoping to receive round 5 billion m3 per year
through Ionian Adriatic Pipeline (IAP). A new pipeline has already been constructed extending from the North of the country to Split and needs to be further extended from Split to the Montenegrin border to transport the gas across Croatia. Consequently, according to the company Plinacro sources, there are plans for the construction of 465 kilometres of gas pipeline routes, an investment worth around €470 million. In addition to a connection to the IAP, other gas pipelines will be constructed as required for the reception of the hoped-for large quantities of gas. Hence, there are plans for the construction of pipelines extending from Omišalj to the Slovenian border. Three new compressor stations will have to be constructed in order to achieve optimum pressure in the pipelines. The expected value of investment per compressor station is €17.5 million. These will enable a bi-directional flow in Croatian gas pipelines and hence gas exports will be greatly assisted. The level of optimism in the plans will depend on a vast array of circumstances – ranging from the research results on new fields, to funding availability and geopolitical circumstances. Should the plans be implemented, an era of gas abundance and affordable gas in Croatia could begin after 2020.
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Privredn vjesnik Privredni Year Y ar VII No 242 Ye
( €740 million
revenue from exporting livestock products since 2009
STRENGTH OF CROATIAN FOOD
Jakovina: we have been doing it wrong for 20 years Young producers should associate and create mechanisation rings; fight and work together. There is no chance or competing without associating, according to the Croatian Young Agriculturists Association Svetozar Sarkanjac ven though children are taught in schools that Croatia is a country of rich forests, meadows and pastures, and especially fertile and arable land, the reality is much different. According to available data, Croatia imports around 290.000 tonnes of fruit and vegetables each year, and every $1 of exported value is undermined by almost $9 of imports. For the past five years, since 2009, only €740 million worth of revenue came from exporting livestock products. At the same time, over €2.12 billion was spent on importing the same type of products.
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Croatia does not have a vision These devastating figures were presented at a recently held conference Strength of Croatian Food, organised by Poslovnik dnevnik in co-operation with the Ministry of Agriculture, Osijek and the CCE at the Faculty of Agriculture in Osijek. When Minister of Agriculture, Tihomir Jakovina, was asked why we import so much food, he answered that Croatia has been doing all the wrong things for the past 20 years; it neglected production; the land policy is poor, as well as the system for organising the market and subsidies. Croatia has become a consumer society and an import-oriented country, and has neglected
local production and potential. We are trying to change this day by day, and the results are seen in the balances and data on food imports. Among others, Ljerka Puljić from Agrokor, Toni Raič from the Beef Association, and Zvonimir Mršić from Podravka participated in a several-hour discussion, presenting the current negative data and offering their own opinions for the future of local agricultural production. Rather than the simple production of grain, developed EU countries base production on livestock farming, since it has the highest added value. Maps of the European market are divided, and we should think carefully about where we could be competitive or profitable. The strategy has to cover a period of 15 years, not 4, Ljerka Puljić highlighted, adding that the problems and a chronic lack of clear vision
as well as a development strategy for the Croatian agriculture and food industry, cannot be solved during a four-year term of a certain government. Cattle farming could boost the whole agricultural arena and the Croatia economy since the production of baby beef could serve as the engine that would drive primary production – and that is a reality, not merely optimism, said Vice-President of the Baby Beef Association, Toni Raič He said that Croatia exported $320 million of baby beef and beef at the end of the 80’s. Today it exports only €28 million. I sincerely hope we will increase the number of cattle from the present 400,000 to 1.5 million by 2030, especially since current technology allows us to process around two million head of cattle, Raič said.
Podravka Board President, Zvonimir Mršić, also warned about the problem of expensive and non-competitive local agricultural production. The European Union is a vast uniform market; and if someone in Denmark or the Netherlands has more efficient agricultural production, and they have, then they also have a lower final price of food. This food will arrive in Croatia and destroy local suppliers, Mršić pointed out, adding that Podravka also uses the uniform market, achieving 70% of revenue through exports. Notwithstanding, Mršić warns of another problem – a high kuna exchange rate, which reduces Croatian competitiveness on the global market even further. Don’t be afraid of the EU Former Austrian Agricultural Minister, Nikolaus Berlakovich, was invited as a special guest. He pointed out the time when Austrian farmers were afraid to join the EU, however wise the politics; an export orientation and ecoproducts helped them considerably improve agricultural conditions. Regarding those aspects from which Croatia could learn from the Austrian example of agricultural development, Berlakovich said that each country has to develop its own method in accordance with climate conditions, but it is always important to produce highquality food. Croatian agriculture has great potential, but it is vital to understand and apply its perspective in exporting good products, for example, the wine produced, Berlakovich noted.
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( 12% of 6,000 soya samples tested positive for GMO in Croatiakontrola laboratories
Round table on GMO in Croatia
Are soya products damaging health? Despite claims that GM soya is sown illegally in some parts of Slavonia, the Institute for Seeds in Osijek claims they found no GM in tested soya samples. However, results from Croatiakontrola differ significantly Sanja Plješa roatia is a GMO free country even though genetically modified soya has been imported over many years, and in some counties it is sown illegally. In fact, there are indications that GM soya was sown in some areas in Slavonia last year, the seeds being procured in Bosnia and Herzegovina. However, there were no official reports, said Aleksandra Sudarić, from the Agricultural Institute in Osijek at a round table GMO in Croatia – why and who is hiding data from the Croatian public, organised by the Assembly of Agricultural Journalists of the Croatian Journalists’ Association. She also highlighted that this is contrary to the decision of the Croatian Parliament in 1998 that states that it is prohibited to sow such seeds even for the purpose of experimentation. Head of the Department for Biotechnological Analyses of the Institute for Seeds in Osijek, Renata Hanzer, did not wish
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to comment on statements on GMO soya being illegally sown, but she did point out that laboratories of the mentioned Institute analysed samples which had been sown in the Osijek and Baranja region, but not a single sample tested positive. The Ministry of Agriculture also report (they were not present at the round table, although they were invited) that competent inspections has not found GM soya in Croatia for the past four years. However, participants at the round table determinedly stated otherwise. They also mentioned that GM soya, as well as other food products containing GM, are imported through Rijeka and Split. Such products cannot be imported except through the Port of Zadar, since this port has been GMO Free certified since 2013. Murky situation The State laboratory of the Croatian Centre for Agriculture, Food and Rural Affairs claims the samples they receive for analysis are negative. Nevertheless, Ivo Delonga, Director of Croatiakon-
trola, says his company laboratories tested 6,000 samples of soya produced in Croatia and intended for export, and found GMO in 12% of the tested samples, of which 7% contained GMO above the allowed limit of 0.9%. The majority of GMO products imported to Croatia are food products, and they are mainly soya-based products or even diet and rice products. Valerije Vrček, Professor at the Faculty of Pharmacy and Biochemistry in Zagreb, says that inspection departments working in conjunction with the Ministry of Agriculture and the Ministry of Health are competent for controlling these products. Geneticist, Marijan Jošt, agrees, and highlights that the current situation in Croatia is murky, and no one really knows anything or does anything about it. His fear is that the import of GMO food could lead to a situation similar to that in Argentina, where mass experiments on GMO food have been on-going for the past 15 years. He also added that accord-
ing to some research the percentage of cancer related illnesses is 400% higher in this country now than in the period before using GMO products. The biggest problem with GM soya and other GMO products, concerns herbicides known as glyphosates. If the use of glyphosates could be prohibited, the planting of GMO cultures would also be prohibited, Jošt said. He also added that multi-year research proved that glyphosate is activated in water and soil, tying itself to iron, magnesium and zinc. GMO crops containing these glyphosates are free of weed since they contain herbicides, but they have a lower nutritional value. Hence why the yield of GMO soya is low; its grain yield is smaller and is not disease-resistant and as such is damaging to health, Jošt says. It was also pointed out at the round table that in addition to soya, corn, cotton, sugar beet and rape could also be interesting cultures for testing for GM influence.
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Privredni vjesnik Year VII No 242
STRENGTHENING THE ATLANTIC GROUP RANGE OF PRODUCTS
( €2.64 billion
value of trade between Croatia and Visegrád Fo
ECONOMIC FORUM OF THE VISEGRÁD GROUP IN CCE
Atlantic takes over Serbia’s Foodland Atlantic Group, one of the leading food and distribution companies in the region has signed a contract to fully take over the company Foodland from Belgrade The takeover will become official when the Serbian Commission for the Protection of Competition gives its approval, which is scheduled for the beginning of next year. The acquisition, which anticipates a total turnover of €8 million in 2014, represents the strengthening of Atlantic Group’s branded range and is an additional boost to the internationalisation of the business. Foodland’s range, which includes its well-known brand Bakina tajna (Grandma’s Secret) and other products (ajvar, pasta sauces, jams, natural syrups, fruit and vegetable juice), is sold in more than 20 countries. Around one third of total production is exported to markets outside the region – west European, American, Australian, Russian and Japanese. Jewel in the food industry crown The future development of the company and the range of products demands substantial investment, and is the reason why we have been negotiating for quite some time now with many potential partners. Atlantic Group has proved itself as a serious negotiator that understands the
nature of our business, the value of brands, the need to invest in them and that has a development vision, said former majority owner of Foodland Vaso Lekić. Foodland’s products are the jewel in the food industry crown and the best ambassador for quality and potential for authentic regional food production globally. Bakina tajna offers jams, sweet products and juices made from local fruit with 100% traceability – blackberry, strawberry, dogwood or nettle –
Foodland’s products are the best ambassador for quality and potential for authentic regional food production prepared in a homemade style. Ajvar is definitely the crown jewel, recognised as a delicacy by many global store chains and premium traders. This brand has considerable influence in the region and beyond, and has already started to achieve excellent results. Therefore, this acquisition achieved the two goals set by Atlantic’s Development Strategy – expansion of the existing branded portfolio and internationalisation, said Board President of Atlantic Group Emil Tedeschi. (B.O.)
CENTRAL EU OF THE EUR
The greatest potential for co-operation between Croatia and Igor Vukić roatian companies have so far invested over €190 million in the countries of the Visegrád Group (Slovakia, Poland, Hungary and the Czech Republic). It was noted at the Economic Forum, recently held in the Croatian Chamber of Economics (CCE), that the potential for co-operation is far greater. Representatives of 24 companies from the V4 group participated at the Forum together with representatives from 40 Croatian companies. The countries of the Visegrád Group represent an area that could generate growth for the entire European Union during the next two decades, said Domagoj Juričić,
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the CCE Vice-President for international affairs. He highlighted that this group increased its GDP 1% over ten years due to its EU membership. Slovakia and Poland doubled their GDP per capita, and their purchasing power reached 65% of EU average, after Germany. Therefore, it is necessary to improve mutual trade and investment as well as explore options for better and closer linkages between the V4 and Croatia. HGK investment catalogue presented Participants were welcomed by the Ambassador for Slovakia, Juraj Priputen, who stressed the high potential and good business opportunities for co-operation
TURKISH COMPANIES SEEK CO-OPERATION WITH CROATIAN COMPA
Turkey – bridge to
Turkish investment in Croatia has reached €148.3 million to Croatia has recently become a favourite destination of Turkish companies. Representatives of five Turkish companies from the construction sector and automobile industry have recently visited Croatia to establish contact and co-operation with Croatian companies, organised by TUSKON. We held meetings with all-important institutions – from the Ministry of Economy, CCE and Zagreb Fair. We also visited companies like Ingra, Proklima
and Monter. For now, I am able to say that Turkish entrepreneurs are extremely satisfied with the contacts they established, said Ismail Korkmaz, TUSKON representative for Croatia, and he also announced new meetings with Croatian entrepreneurs who will visit Turkey. When Croatia joined the EU, the possibilities for trade increased for all companies operating in Croatia. Furthermore, Turkish companies now find it easier to position themselves on
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our countries
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( over €190 million
invested by Croatian companies in the Visegrád Four
UROPEAN ENGINE OPEAN UNION
d the V4 lies in the areas of industry, agriculture, food industry, tourism, energy and infrastructure
on the markets of the Visegrád Group and Croatia. In addition to meetings in the Chamber of Economy, companies may also obtain additional information and help regarding investment
within the embassies, Priputen highlighted. Ambassadors of the other countries in the V4 Group also participated in the Forum. Total trade between Croatian and the Visegrád Group is €2.64
billion a year. This is 10.2% of the total foreign trade between Croatia and externally. Managing Director of CCE Sector for International Affairs says the greatest potential lies in the areas of industry, agriculture, food, tourism, energy and infrastructure. Guests from the Czech Republic, Poland, Slovakia and Hungary were presented with the CCE investment catalogue, containing 130 private and public investment projects in Croatia valued at €6.9 billion. The company Subterra from the Czech Republic gave a presentation at the Forum. Its Manager, Alen Novosad, pointed out the company has gained experience in the construction of highways in Croatia and they expect their co-operation will continue into
the future. The company possesses vast knowledge in the construction of tunnels, railways and road networks, the renovation of infrastructure, construction of hydropower plants and similar. Novosel pointed out that bureaucracy is the greatest obstacle for business in Croatia as well as varying interpretations of regulations. Other participants included the Slovakian Smart Corporation, OTP Bank, UHY Consulting from Poland. The representatives of Dalekovod, Bilfinger Đuro Đaković Montaža and Podravka shared their experiences in working on the V4 market. Croatian, Czech, Slovakian, Hungarian and Polish companies were able to hold direct discussions at the Forum.
Due to its strategic position and level of economic development, Turkey is the 16th economic force globally and the 6th strongest European economy, with a total GDP of $820 billion achieved in 2013. The basis of the Turkish economy is the service sector (65% of GDP), industry (25%) and agriculture (10%). Turkey will probably end this year with a
3% GDP growth rate. In economic relations, Croatia could be the perfect bridge for Turkey between Southeast and Central Europe. On the other hand, Turkey could have an important role in the markets of the Black Sea countries, the Caucasus and the Middle East. The potential is there, we only need to use it, entrepreneurs highlight. (I.G.)
ANIES
o the East
o date, mainly in tourism and the financial sector the EU market through Croatia. Turkey ranks 15 in total trade between Croatia and the rest of the world. According to data provided by the Central Bureau for Statistics, in 2013 total trade between the two countries was €359 million, of which Croatian exports totalled €130 million and imports €229 million. This year the trade deficit trend with Turkey continued, totalling €63 million during the first six months. Of €131 million, Croatia exported only €34 mil-
lion, and imported a total of €97 million. Two-way help The most significant products that Croatia exports to Turkey are iron waste, iron semi-products, electric equipment, nitrogen, mineral and chemical fertilisers. Turkey, on the other hands, exports to Croatia mainly oil and petroleum oil, TVs, refrigerators and textile products. Turkey has invested €148.3 million in Croatia to date, mainly in tourism and the financial sector.
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Privredni vjesnik Year VII No 242
( 4.3%
EC anticipates export of goods and services will grow at 4.3%
AUTUMN ECONOMIC FORECAST
European Commission antici Croatia will start to recover in
Croatia is at the bottom of the table according to economic results of EU members. Furthermore, the this year’s anticipated GDP fall to -0.7% compared with the former 0.6%. It is anticipated that the remain at the same level next year, with marginal growth of 0.2% Igor Vukić more intensive recovery of the Croatian economy will happen in 2016 together with the pace of investment, according to analysts at the European Commission. In the autumn economic forecast, presented last week by Commissioner for Economic and Financial Affairs, Pierre Moskovici, in terms of economic results Croatia is at the bottom of the table of EU members. Furthermore, the Commission increased this year’s anticipated GDP fall to -0.7% compared with the former 0.6%. It is assumed that the Croatian economy will remain at the same level next year with marginal growth of 0.2%, and 1.1% growth should be achieved in 2016. Unemployment will grow this year to 17.7%, according to the European Commission. The Croatian entrepreneurial environment is still weak, and public finances are heavily taxed by an external and internal lack of stability. Local demand is still low, but what prevents the results from being even worse is a stronger export of services and goods to some point, after Croatia gained full membership. A fall in import prices accompanied with reduced local demand lowered inflation in Croatia from 2.3% in 2013 to 0.2% in 2014. In 2015, inflation will grow to 0.6% with a possibility of reaching 1% on a year-on-year level, due to
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growing import prices. In a certain way, inflation will follow the growth in personal spending. Next year Croatia will see an awakening in the local market, according to the Commission’s analysts. By the end of the year, any unemployment fall will stop, and it is anticipated it will decrease to a level of 17.3% in 2016. Nothing good until 2016 Household spending will not recover even in 2015, due to lower available income per capita. Discretionary spending will start growing in 2016, although posi-
Unemployment will grow this year to 17.7%, according to the European Commission tive trends will not prevail during the next year even in terms of investment. Certain large investment projects the Government had announced earlier will probably gather momentum in the second part of the year. A stronger effect from funds inflow from European structural and investment funds will also be visible in 2016. Only the export market will generate growth during the next year. The European Commission anticipated the export of goods and services will continue grow-
There will be no deflation In all EU member countries inflation decrease trend continued during 2014, as a result of lower goods prices and a high level of economic deceleration. By the end of this year, inflation should remain extremely low. However, with a gradual increase in economic activity and salaries, and with the help of the recent Euro depreciation, inflation should rise, the European Commission highlight. It is estimated that inflation will stand at 0.6% in the EU in 2014, 1% in 2015 and 1.6% in 2016. Based on the predictions, inflation, as measured by the Harmonised Index of Consumer Prices (HICP) in the Eurozone will be 0.5% this year, 0.8% in 2015, and will increase to 1.5% in 2016. ing at a rate of 4.3% and tourism income will grow 3% in 2015. EC analysts anticipate that Croatian companies will still benefit from the provisions of the agreement with Cefta; since other provisions from the agreement between the European Union and Cefta will enter into force, it is anticipated they will be probably used mainly by those Croatian
companies with a successful history of operating in this group of countries. According to the Commission’s evaluation, the Croatian state deficit will reach 5.6% of GDP by the end of the year. Next year, it will decrease slightly to 5.5%, but in 2016 it will increase to 5.6%. Croatia will find it hard to achieve the task set by the exces-
CCE: Seventh year of recession follows Considering the anticipated deceleration of economic growth of our most important foreign trade partners, we do not predict any economic recovery or GDP growth in 2015. This would mean, for Croatia, the seventh consecutive year of recession and decrease in economic activity, evaluated Director of the Sector for Financial Institutions, Business Information and Economic Analyses in CCE, Zvonimir Savić. The global and European economy is not recovering at the desired and hoped-for pace so the EC growth forecast is not optimistic, which is not surprising. However, the forecast could be important for determining the country credit rating, Savić said. Croatia is one of the rare member countries in which economic activity will slow this year. Other countries that will be in the same situation are Italy, Finland and Cyprus. The situation for Croatia will not improve even in the next year, considering it will achieve the lowest GDP growth in the EU, according to EU estimations.
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( 89% of GDP
Croatia public debt will increase to 89% of GDP in 2016
pates n 2016
e Commission increased Croatian economy will
sive deficit procedure, evaluated Moskovici. The Commission noted poorer results in collecting value added tax due to weaker economic activity and the narrow tax base. State spending was additionally burdened by the costs of renovating areas hit by floods. The Commission warns about the fiscal risks such as accumulated debt in the health sector and possible additional expenditure in other sectors, for example education and traffic. Other instabilities are also present in local policy, especially those relating to fiscal consolidation and the postponement of structural reforms, the Commission highlights. It should be mentioned that the autumn outlook for Croatia was drawn up prior to the adoption of the budget rebalance and changes in some tax acts, which will change the structure of state income to a certain degree. New rules, even worse figures New European regulations for rendering public debt showed that Croatian public debt will reach 81.7% of GDP this year; 84.9% in 2015, and grow to 89% in 2016. These data show it is vital to speed up the implementation of reforms and continue budget consolidation, according to the European Commission. Economic recovery throughout the European Union, which started in the second quarter of
2013, remains unstable. Economic dynamics are still weak in many member countries; in terms of GDP growth, Ireland takes the lead with 4.6%. German growth slowed to 1.3% and Austrian to 0.7%. Cyprus is the only country weaker than Croatia with -2.8% of GDP. This year average GDP growth will total 1.3% in the EU, and 0.8% in the Eurozone. GDP will continue growing during 2015 and in 2016, it is anticipated that economic activity will accelerate at average rates of 2% and 1.7%. This year the creation of new jobs was moderate, and the high unemployment rate decreased insignificantly. Since economic growth will probably gain momentum gradually, significant
improvements on the labour market should happen at the end of 2016 when the average unemployment rate of the EU should decrease to 9.5%. Foreign investment increases Branko Grčić, Government VicePresident, thinks Croatia lags behind related EU countries since it became full member later. He also evaluated that the first results of accession are visible after one year. Exports started growing at a rate of 20%, and foreign investment is four times higher this year compared with the year before. During seven out of eight months of this year industrial production showed growth, so
the progress of Croatian integration is already visible, Grčić concluded. The inflow from the European funds (€0.66 billion) should provide an additional boost through various types of investments. Even the European Union is trying to stimulate recovery with new investment plans. The new Commission, headed by Jean Claude Juncker will create a financial vehicle of around €300 million for stimulating and maintaining economic recovery. Investment promotion is the key to economic recovery says the European Commission who also sent an optimistic message according to which all EU countries will achieve a degree of growth in 2015 and 2016.
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Privre Privredni reed dn ni vj vvjesnik esn Yearr V VII No 242 II N II o 24
( €0.539 billion
revenue generated last year in the rubber and plastics sector
PLASTICSEUROPE TRADE ASSOCIATION MEETING
Rubber and plastics industry: a strategic pillar of European manufacturing The plastics industry in Europe is one of the most innovative industries and creates every 25th registered patent. Its annual revenue stands at €18 billion and it contributes tremendously to the development of other industrial sectors. The Croatian rubber and plastics sector showed growth of around 20% for 5.6% of all registered companies in the processing industry. Production of rubber and plastics products accounted for 0.4% of Croatian GDP. According to data for last year, the rubber and plastics industry generated total revenue of €539 million. The sector employs 6,303 staff, which accounts for 2.95% of the total number of people employed in the processing industry. Furthermore, the industry generated €205.5 million in exports, which accounts for 2.1% of overall Croatian exports. Irrespective of the crisis faced since 2009, it has seen continuous growth in production, and 2014 showed 20%. Nevertheless, during the last several years it has
Krešimir Sočković he plastics industry in the European Union is one of the basic and extremely important economic sectors creating a positive input of €18 billion. Furthermore, the European plastics industry ranks amongst the top five most innovative sectors in the European Union, as during the period from 2012 to 2013 every 25th registered patent originated from this sector. It is simultaneously also a strategic pillar of the European manufacturing sector, since plastics materials are used in all sectors. According to statistics, 10% of added value growth in industrial plastics generates 4.4% value added growth in the overall processing sector. These issues were discussed at the meeting of the EU Association PlasticsEurope of the Mediterranean Region, held in mid-November in Zagreb. The Croatian Chamber of Economy with its Plastics and Rubber Processing Industry Association, has been a fully-fledged member of PlasticsEurope since 2005. PlasticsEurope is an association of polymer material producers operating in five European regions. “Croatia is the newest European Union member state and is very active in our Association. Consequently, we opted for Croatia as the perfect venue for our meeting”, pointed out Karl H. Foerster, Executive Director of PlasticsEurope.
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“The European plastics industry is a highly competitive industry globally. It generates a robust export surplus, which clearly shows its competitiveness on the global market. In addition, it creates a large number of jobs - employing 1.4 million people and generating €300 million revenue, ranking it among the top five most innovative sectors of the economy in Europe. It is vital for the achievement of two principal objectives set by the European Union. Firstly, it aims at creating jobs. Plastics is a strategic sector primarily due to its multiplier effect: for each Euro, more than double is added in other sectors, and each job in plastics creates three additional jobs in other economic areas. Consequently,
it can assist Europe in achieving its objectives of job creation and economic growth. Secondly, there is the issue of ecology, as the second most important issue in the European Union. Our requirements for energy sources need to be reduced, and carbon dioxide emissions slashed. Plastics is indestructible and can be recycled so can significantly assist in the achievement of these specific objectives”, concluded Foerster. Lost Dioki According to official data for 2013, there are 615 registered companies in Croatia involved in plastics processing, comprising one large, 17 medium-sized and 597 small companies, accounting
One new job in the area of rubber and plastics creates three new jobs in another area lost its most important producer of plastics – the company Dioki – that has negatively affected the industry. According to expert opinion, the Dina Petrokemija plant on the island of Krk is expected to have the potential to sustain and revive production, as there is demand for its products. Moreover, there is also a good quality local experienced work force that has huge potential that needs to be fully exploited, primarily against the backdrop of the economic crisis.
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( €8.65 billion total debt reported
Financial agency
Pre-Bankruptcy Agreement reached by 1,609 companies The city of Zagreb saw the largest amount of reported company debt from those asking to initiate a Pre-Bankruptcy Settlement procedure – over €3.39 billion ccording to data released by the Financial Agency (Fina), on 7th November 2014, Pre-Bankruptcy Agreement was reached with 1,609 companies. The total amount of reported debt exceeds €3.48 billion and it has to be stressed that these companies employ a total of 25,535 staff. 653 companies employing 6,489 staff accepted financial restructuring plans, and the amount of their reported debt exceeds €1.5 billion. Generally, during the period from 1st October 2012 to 7th November 2014, in 2,262 instances a financial restructuring plan was accepted or a Pre-Bankruptcy Agreement reached, with the total amount of reported debt exceeding €4.63 billion.
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6,739 cases solved To date, 6,739 items have been solved. It has to be noted that these concern aspects including the rejected proposals to initiate Pre-Bankruptcy Settlement procedure, dismissed cases and procedures terminated by the acceptance of a financial restructuring plan. According to data provided by Fina, the amount of the reported debt stood at slightly over €6.95 billion and they employed 45,935 staff. 612 instances of companies employing a total of 12,778 staff are being processed, with the total amount of reported debt exceeding €1.69 billion. The amount of debt reported by debtors upon submitting the proposal to initiate Pre-Bankruptcy
procedure stood at €8.65 billion and this represents some 7,351 companies employing a total of 58,713 staff. The highest number of instances - 6,534 (88.89%) are those with individual reported debt under €1.3 million, whilst their total reported debt exceeds €0.86 billion. 817 instances account for the remaining 11.11% with individual debt exceeding €1.3 million. The total debt of these companies is slightly in excess of €7.79 billion. Based on activity performed, the highest level of reported debt was in construction – €2.15 billion, It was followed by the processing industry with a debt level of €1.80 billion, retail and wholesale trade (€1.46 billion) and accommodation services and food preparation (€0.88 billion). City of Zagreb at the forefront Concerning counties, the city of Zagreb is at the forefront with by far the highest level of reported debt by companies who have requested to initiate Pre-
Bankruptcy Settlement procedures – in excess of €3.4 billion. This is followed by companies and micro-companies located in Split-Dalmatia County (€1.26 billion), Osijek-Baranja County (€0.7 billion), Primorje-Gorski Kotar County (€0.64 billion) and Varaždin County with at €0.42 billion. On 7th November 2014 Pre-Bankruptcy Agreement was reached by a total of 1,609 companies. Most of the Pre-Bankruptcy Agree-
Financial restructuring plans accepted for 653 companies ments (432) were reached at the Commercial Court of Zagreb, followed by the Osijek-based Commercial Court with 417 agreements, the Varaždin-based Commercial Court with 231, the Commercial Court in Split with 189, Rijeka with 165, Zadar with 102 and the Bjelovar-based Commercial Court with 73 Pre-Bankruptcy Agreements. (V.A.)
HPB reduces interest rates The Croatian Postal Bank (HPB) will cut interest rates on all existing and new retail loans with variable interest rates, as from 1st January 2015. In accordance with a decrease in national base rates for Euro and Croatian Kuna, interest rates on currency clause loans will be 0.21% down, and for loans denominated in kuna interest rates will decrease by 0.16%. Facilitated certificate trading Starting on 31st January 2015, Erste Bank will cut the marketmaker spread at the Zagreb Stock Exchange (the difference between the bid price and the asking price), on all certificates with E-mini futures (S&P500), underlying assets and gold, aiming to assist access to certificate trading at the Zagreb Stock Exchange for small investors or its retail clients. During the same period the Bank will provide the opportunity for small investors to trade in Erste Group Bank certificates through the Erste Broker electronic trading platform, at a 0.15% trading fee (a minimum fee of €2.70 per order), rather than the current 0.40%. More affordable loans in Zaba
Zagrebačka banka will reduce interest rates on housing loans, where the six-month national base rate is used as a parameter for loans denominated in Croatian kuna, by 0.16%, and for loans denominated in Euro, the interest rates will be 0.21% down. Concerning other loans denominated in Croatian kuna where the bank uses a six-month national base rate as a parameter, interest rates will decrease by 0.14%, and for other loans denominated in Euro, the decrease in interest rates will be 0.22%.
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Privredni vjesnik Year VII No 242
AGRICULTURAL FAMILY FARMS
Strategy above politics A strategy is required to transform ourselves from a food dependant to a food independent country roatia needs a long-term agricultural strategy which will remain the same despite irrespective of any political changes – this is the main conclusion of a round table ‘Agricultural Family Farms as Key to Food Independence’, organised by Matica Hrvatska, Agricultural Family Farms Association Život and the expert group Živo selo. Croatia has conditions for producing agricultural products for three times more people than it actually has, says independent agricultural analyst Stipan Bilić. To achieve this, it is necessary to compensate for the lack of investment over the past 20 years, plan production and organise the market. To ensure a future for Croatian agriculture, it is necessary to invest €12-15 million. This is a vast investment that will pay off over a long-term period, Bilić says. He also warned about spending over €20 billion on unnecessary imports and subsidies without any effects, as well as
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inefficient measures. Professor Damir Kovačić from the Faculty of Agronomy, Zagreb added that the function of agriculture is to provide food, raw materials and producing green energy, as well as environmental protection and promotion, and to increase the appeal of the rural environment that would secure the survival of people living in it. The state must help Local administration has to work on strategic planning and organ-
ise operational counselling services at all phases. This has to be followed by entrepreneurial initiatives for the concentration and promotion of business organisation, distribution, marketing and export. If we do not do something, the rural exodus will continue and thousands of more villages will disappear, Kovačić warns. The Dean of the Zagreb School of Economics and Management, Đuro Njavro, warned about the
worrying pace at which family farms are perishing. He says that 70 years ago, Croatia was a country with an over-populated rural environment and poor technology, but managed to feed itself and others. The resurrection of small farms demands a new approach to financing agriculture. An agrobank, specialising in providing financial support, should be established, and it should be ready to step outside the framework of state subsidies, opines Njavro. The Secretary of the Agricultural Family Farms Association Život Miroslav Kovač says that during the past decade 200 villages have perished. “We are witnessing many negative things happening to villages where it is not easy to live or survive. However, we want to do everything to transform ourselves into a food independent country. What we need is a good agricultural strategy that will remain stable irrespective of political changes in Croatia”, Kovač highlighted. (K.S.)
CROATIAN APPLES – UNCOMPETITIVE PRICES OR POOR QUALITY?
Apple production brought to its knees The clustering of fruit growers and the strengthening of their partner relationships with agents and traders is imperative for the survival of fruit growing in Croatia and primarily for the survival apple production and sales. Regions and micro-locations appropriate for apple production need to be identified in order to achieve this, as was pointed out during the recently held roundtable discussion entitled “Croatian apples – uncompetitive prices or poor quality?”, organised by the Federation of Agricultural Journalists at the Croatian Journalists’
Association. Željko Banjavčić, President of Croatian Fruit Growers’ Association (HVZ), emphasised the fact that over the past twelve years, apple producers obtained state incentives and hence new apple orchards were sown. However, they were not monitored and consequently apple growing has been brought to its knees, stressed Banjavčić. He added that in Croatia there are no specific zones, as is the case in Italy, where everything is done to maximise apple production as well as other fruit. Croatian orchards grow across diverse conditions,
without consultation and on various types of soil. “Production in Croatia needs to be standardised. Also, a unified technology needs to be used to maintain and provide a standardised quality. In Croatia there are currently no classified apple varieties in accordance with European standards”, highlighted Banjavčić. Although there is currently no unified standardisation in Croatia, 2,500 hectares of apple orchards have been registered which are in compliance with European Union requirements. “Agents take advantage of the
situation as they reduce the price of first class apples and sell them as second class, which cannot be tolerated. 120,000 tonnes of apples were produced in Croatia in 2013, or slightly over 40 tonnes per hectare and is almost on a par with European productivity”, stated Frane Ivković, Croatian Fruit Growers’ Association spokesman. He added that in Croatia there are currently 3,500 hectares of registered apple orchards, which do not comply with European standards and hence cannot be relied upon. (S.P.)
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OUR BEAUTIFUL SAVA PROJECT
Sweet dreams of heritage Traditional heritage is certainly an important part of any tourism programme globally, and as a representative from the French Embassy pointed out, it is good Croatia started working harder on raising awareness and preserving the traditions and heritage of its people Sanja Plješa he collection of eco-linen and soft furnishings Lijepa naša Sava (Our Beautiful Sava) has been recently shown in Hrvatska kuća (Croatia House) in Zagreb. The collection from ethno-artist and its designer, Mina Petra Petričec, is specific for its composition: it is made from dried corn husks used for making bed linen some 100 years ago. This medium mainly comes from the area around Zagreb, Slavonski Brod and Županja. However, she has recently started receiving orders for this unusual collection from all parts of Croatia. Mina Petra Petričec announced she would soon present her unique
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Japanese Ambassador Keiji Ide, thinks Croatian ecological and traditional products will find their place in Japan collection in other countries too. She also added that this collection was created in conjunction with Our Beautiful Sava Project, an ongoing project for 7 years, implemented by Coca-Cola HBC Croatia. The Zagreb Office for
Agriculture and Forestry, the Croatian Chamber of Economy and Montex from Sveti Križ Začretje, where the final product is created, also participated in it. It is expected the project will be joined by other partners and users from the area near the river Sava. Over 56 partners have participated on the project so far.
forms of social entrepreneurship and employment of the local rural population near the Sava as well as other areas, without any considerable investment. It also has cultural significance since it contributes to the revival of old tradi-
Valued ecological production The concept of eco-linen provides potential for additional development through various
tions and heritage, Mina Petra Petričec pointed out. She also explained how people living in villages once used linen made of straw and cornhusks as well as other agricultural materials. Linen and soft furnishings made of natural materials offer a series of ecological and health benefits compared with synthetic materials usually used for producing these products. The Japanese Ambassador, Keiji Ide, was also present at the promotion, and he used the opportunity to point out that traditional production is highly valued in his country, which especially promotes traditional business. He also added he is convinced that Croatian traditional products will find their place on the Japanese market, and the products are particularly interesting to Japanese tourists who have started visiting Croatia in greater numbers. The representative of the French Embassy, Marijana Bobinac, said there is a strong tradition in preserving old crafts and rural households on which tourism programmes are based, so it is positive that Croatia has started working more on raising individual awareness about the value and preservation of traditions and cultural heritage of its people.
::: news New Sheraton near Dubrovnik When work on the Hotel Orlando is complete, it will become part of the Sheraton franchise. The investment is worth around €30 million and the main investor, Anđelko Leko, and his company HUP intend to invest €80 million in surrounding hotels and accompanying facilities. Leko started to invest 10 years ago and the new Sheraton near Dubrovnik will have 239 rooms and 11 suites as well as the largest conference facility in Croatia with a capacity of 1300 people.
450,000 visitors in houses and apartments During the first nine months of this year, a total of 452,703 tourists stayed in Croatia in noncommercial accommodation of whom 65.3% were foreign tourists and 34.7% local visitors.
According to data provided by the Central Bureau for Statistics, overall, tourists registered 7.85 million overnight stays. Of the total number of overnight stays, 53.6% were foreign tourists and 46.4% local visitors. Regarding accommodation payment, of the total overnight stays, 65% was paid by fixed payment. Croats are influential in the conference industry The 2014 list of the 30 most influential professionals in the conference industry in the Southeast Europe region includes 10 from
the Croatian tourism sector. This was published in the Slovenian magazine, Kongres. The Director of the Dubrovnik Tourist Board, Romana Vlašić, has been selected as the most influential person in the conference industry throughout the region.
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Privredni vjesnik Year VII No 242
( 70 mobile homes ( 15 year warranty already sold by Hosekra Group
on each home
INTERNATIONAL CO-OPERATION IN MOBILE HOME PRODUCTION
Products for various lifestyles Energy efficient Big Berry mobile homes were branded by Croatian company Apriori World, designed by Italian architect Alessandro Rado, with Slovenian company Hosekra Group as their construction and investor
Sanja Plješa fter almost 25 years of working on roofing and producing garage doors and several types of mobile homes, the company Hosekra Group from Slovenia started producing Big Berry mobile homes. In over two decades the owners of Hosekra Group, have been developing innovative products with their 27 employees, changing them to the needs of their customers. In 1989, our roofing products were a little ahead of their time since we wanted to produce roofs for extreme weather conditions. These innovative technologies improve the quality of life, since they always consider energy saving and environmental protection, said the CEO of Hosekra Group Boštjan Hostej. He says the company is ready for the international market since they follow trends and constantly invest in innovative products to
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become the leader in Slovenia and the region. Hostej said the company goal is to convince their customers that they do not produce only ordinary products – they produce products for ‘lifestyle’ people. Slovenian-Italian-Croatian cooperation Three years ago the company decided to produce mobile homes, but in a different way. As Hostej points out, these have to provide comfortable living both winter and summer – at any temperature. This is how they came up with the idea to make energy efficient Big Berry mobile homes, branded by the Croatian company Apriori World and designed by Italian architect Alessandro Rado, making it a Slovenian-Italian-Croatian co-operation in promoting branded mobile homes on the European market. Big Berry houses are characterised by comfort, design and the concept of contact with nature.
These are intended for tourism, but can also be used in camps and resorts or even in a complex of innovative hotels, Hostej highlighted. Big Berry homes are produced in three types: Blue Berry (intended for sea camps); Brown Berry (camps or areas near lakes and hills) and Orange Berry (intended for rest stops along highways).
Mobile homes comply with various lifestyle concepts, blending perfectly with the environment They can be personalised and adjusted to individual taste, since there are 20 colours and 400 variations. Moreover, the interior of the house as well as the terrace can be adjusted to customer requirements, Hostej pointed out.
Red line – trade mark It is important to mention that the exterior is made of aluminium, with an interior of maple, as well as the terrace, which has a guarantee of 15 years. The roofs also comply with energy efficiency criteria, since they have two shafts in which air constantly circulates, and air-conditioning turns on only when the outside temperature reaches 20o. They comply with various lifestyle concepts, blending perfectly within the environment. Each Big Berry home is marked with a red line. Customers are owners of camps in Europe, especially Slovenia, Italy, Austria and Croatia. Hosekra Group has so far sold 70 mobile homes (Magnolia, Cactus, Ginger and Cosmos) that the company used to make prior to Big Berry homes, some being sold on the Croatian market. The price of Big Berry mobile homes ranges between €30,000 and €35,000.