Interview: Radwan Joukhadar I wish Vukovar were as it was, says owner of Medical Intertrade and a new factory Yasenka in Vukovar
Textile industry The scientific community and the textile industry are developing new special fibres, creating new markets
Croatian innovators At the MTE fair in Malaysia, 10 Croatian innovation exhibits received a total of 11 awards
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Croatian Business & Finance Monthly Established in 1953 Monday / 2nd March / 2015 Year VIII / No 0245 www.privredni.hr
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pvinternational pv international C R O A T I A N
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IMPORTS/EXPORTS FOR THE FIRST 11 MONTHS OF 2014
Exports to EU grew, to Cefta even more Exports to EU countries grew at a level of 11.9%, reaching €5.96 billion, but to Cefta by 12.2%, to €1.88 billion Igor Vukić roatian exports last year totalled €9.35 billion during the first 11 months. In relation to the same period of 2013, they increased 9.3%, according to data provided by the Central Bureau for Statistics. In addition to exports to the EU, those to Cefta grew at an even higher rate. Whilst exports to EU countries grew by 11.9%, reaching €5.96 billion, those to Cefta increased 12.2%, to €1.88 billion. Total aggregate export growth rate is high even within Europe. According to available data for the first 10 months, Croatia saw the highest export growth rate year-on-year, and only a few transitional EU members (Poland, the Czech Republic, Romania and Slovenia) were near, with export growth rates between 6% and 7%. EU accession has enabled an easier approach to the EU market, but it also increased the trade originating from other countries, which significantly increased the value of exports during the first half of the year, and which was used for comparison with the pre-accession period. Certain analysts warn that in ad-
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This year exports will slow and imports accelerate The export of goods showed a relatively high increase during the previous year, where the growth rate during the first ten months was the highest in EU countries. Such a movement was influenced by Croatian EU accession, that is, an easier approach to the market and increased trade of goods from other countries, Director of the CCE Sector for Financial Institutions, Business Information and Economic Analyses, Zvonimir Savić, evaluated. For 2015, we anticipate the value of exports will slow in relation to 2014, whilst imports could continue their moderate growth, Savić suggested. dition to other factors, the transit of goods from other EU countries through Croatian ports and border crossings also contributed to nominal export growth. The second half of the year was marked by a fall in the price of
crude oil and oil derivatives globally. This had a strong impact on trading movements, considering the significant export share of oil derivatives in total exports and a significant import of crude oil in total imports.
Reduced deficit During the first 11 months of 2014, imports totalled €15.68 billion, an increase of 4.7%. Due to higher export growth, the trade deficit decreased 1.4% year-on-year. The highest export growth was seen in clothing, electricity, machines and appliances, whilst the export of ships, computers and waste materials saw the highest decrease. Exports to other countries decreased 3% if we exclude EU and Cefta countries. The largest was seen with the Marshall Islands, where four ships were exported in 2013. Analysts at the Croatian Chamber of Economy highlight that in terms of imports, the import of oil derivatives showed the largest increase. This is a consequence of decreased local production,
Export growth rate is high even within Europe clothing, food products and vehicles, which are mainly related to EU accession (high import level of used motor vehicles). The import of crude oil decreased the most due to decreased production in local refineries.
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Privredni vjesnik Year VIII No 245
IDEX ABU DHABI ARMED FORCES AND DEFENCE EXHIBITION AND FAIR
Filling orders for the military
( 394 staff
employed by Medical Intertrade dee iin nC Croatia roatia
INTERVIEW: RADWAN JOUKHADAR, OWNER O
I spent 12 w Vukovar and
The factory in Vukovar is a gift to my city and its people so I Croatian student, now Master of Science in Medical Biochem Svetozar Sarkanjac he Association of Producers of Equipment for Special Purposes at the Croatian Chamber of Economy has participated for the third time at the leading international fair of armed forces and defence industry International Defence Exhibition and Conference IDEX 2015, recently held in Abu Dhabi. IDEX is the only international exhibition of weapons and military equipment held in the Middle East and Northern Africa every two years. It represents innovative technology for the military industry and defence by sea and air. The fair is a unique platform for the establishment and the strengthening
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The company ŠestanBusch has received an order for over 100,000 combat helmets of relationships with government departments, companies and the armed forces both throughout the region and globally, and is held under the auspices of the President of the United Arab Emirates and the Commander-in-Chief of their armed forces. The companies Šestan-Busch and Agencija Alan exhibited their products at the joint stand organised by the Croatian Chamber of Economy. They presented the programme by HS - product (weapons) and INKOP military boots, whilst the company DOK-ING showed its
any were baffled last year when a pharmaceutical factory opened in Vukovar. Unfortunately, only few entrepreneurs opt for production in Croatia. This is even rarer in the eastern part of the country, especially Vukovar – one of five municipalities in exYugoslavia in terms of industrial development. Moreover, the investor was born in the historical, but now destroyed Syrian city of Aleppo. Radwan Joukhadar studied in Croatia and is now Master of Science in Medical Biochemistry. This man, with joint Croatian and Syrian nationality, explained his move very simply during the opening of his factory: The factory in Vukovar is a gift to my city and its people so I could contribute to its progress and development, hoping it will become the centre it was before the war.
M products at a special exhibition space. ŠestanBusch received an order for over 100,000 combat helmets, which has filled its production capacity for the year with orders placed by clients from the UAE, Turkey, as well as from Bangladesh and the African market. Tajana Kesić Šapić, Director of the Sector for Industry at the Croatian Chamber of Economy, pointed out the fact that ŠestanBusch is currently the largest European (and the highest quality) combat helmet producer. Moreover, several meetings were held with other Croatian exhibitors and many companies who did not exhibit their products, such as Varteks, Čateks, PMTČ, Kapko, Šešir and Auto Safir visited it, since they were interested in the latest products in the military and defence sector and were also aiming to visit former clients. The Croatian exhibitors were visited by Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and a delegation of the Croatian Ministry of Defence headed by the Defence Minister, Ante Kotromanović. Over 2,800 exhibitors from 59 countries exhibited at this year’s exhibition covering 12 exhibition halls over an area of 133,000 m2, with 80,000 visitors. (K.S.)
You are a successful medicine and medical equipment trader who has been developing the family company Medical Intertrade for the past 25 years, with an annual income of over €0.19 billion. Why did you open a factory for producing medicines? I am a dispensing chemist primarily – this is what I wanted to become since I was a child. This is why I came to study pharmacy in Croatia. Considering the legal and financial possibilities at the beginning of my business career, I established my first private wholesale of medicines and med-
ical products in Croatia. Later I established a medical institution Ljekarne Joukhadar, which now consists of 35 dispensing chemists. With our present production we achieve fully vertical integration, from factory and wholesale to retail – we provide stability of the entire system and offer full support to our business partners. The company’s Head Office is near Zagreb. Why did you open the factory in Vukovar and how did you name it? I spent 12 wonderful years in Vukovar. My wife, a doctor of dental medicine, was born in Vukovar. We both started working in the former Medical Centre in Vukovar. We would never have left Vukovar had the war had not happen. The factory in Vukovar is my humble contribution to this city, its people and soldiers who represent the symbol Croatia. The decision was guided strictly by heart, since it would be much easier to open a factory near Zagreb for manufacturing and staff reasons. The factory was named for my wife, Jasenka. What do you produce, and what is your capacity?
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( 176 employed ( €10.5 million in Ljekarne Joukhadar
invested in Yasenka factory
F MEDICAL INTERTRADE AND A NEW PHARMACEUTICAL FACTORY YASENKA IN VUKOVAR
wonderful years in d I wish it were as it was
could contribute to its progress and development, hoping it will become a centre it was before the war, says former mistry Radwan Joukhadar. He named the factory after his beloved wife Jasenka. Production consists of three departments: the production of solids (capsules and tablets); production of semi-solids (creams, ointments and gels) –we can produce up to 15,000 metal or plastic containers of various sizes in one shift; and lastly, the department for the production of liquids (solutions and syrups) – we can produce 10,000 150 ml bottles in one shift. When the
second shift starts, the capacity will increase. Since all our production equipment was produced by the best global producers, and was installed and certified according to standards of pharmaceutical production, we can sell our products on any market.
problems we have are related to the economic situation of a given country.
You invested €10.5 million in the factory. When do you plan to repay the invested money? Everything I have, I owe to hard work and the investment in quality (know-how, services, business processes and equipment). One cannot achieve his goal overnight if you are guided by these principles, but one can achieve a longterm and stable business as well as positive results. If we succeed in completing our plans, the investment should see a return in five to seven years.
I came to Croatia to study. With my wife, I fell in love with this beautiful country and its hardworking people
What is your competition in Croatia? There are many pharmaceutical companies in Croatia. For example Pliva, Belupo, Jadran galenski laboratorij, Genera, FarmaS, Farmal… Who are your best customers in Croatia? Mainly chemists or hospitals and health centres. Do you have companies outside Croatia? In 2002, I established a wholesale medicines and medical products called Medical Intertrade in Sarajevo, and another in Ljubljana in 2003. Both daughter companies operate well. The only
Tell us about your entrepreneurial story. How did you develop your company?
Medical Intertrade started operating on 1st August 1990, in Vukovar with three employees. The year after, I had to shut down since the war erupted. I stayed in Vukovar at the request of Dr. Juraj Njavro, and worked as a dispensing chemist in Borovo for as long as the circumstances allowed me to do so. Actually, in one period I was the manager of a chemist whilst living in Vukovar. When it was no longer possible to survive in Vukovar, I transferred to Zagreb, and in 1992 I started a wholesale trade in a leased building. Our successful development, an increased number of suppliers and buyers, allowed us to buy a new business premises near Zagreb in 1998. At the beginning, wholesale concerned mainly humane drugs; medical, diet and cosmetic products, and over time, we expanded into diagnostic, dental and veterinary products as well as medical equipment. A larger market and the desire to provide better sup-
plies enabled us to open business units in Osijek in 1998 and in Solin in 2003 as well as wholesale units in Sarajevo and Ljubljana. In 2008, the business unit in Osijek was transferred into newly built premises in Vukovar where the factory has recently started its work. Medical Intertrade in Croatia currently employs 394 workers chemists. Ljekarne Joukhadar has 176 employees, and Yasenka 15. You are modest, you do not like media exposure and you are known as an extremely socially aware employer. What is your business and life philosophy? I firmly believe if you do good, you receive good. Furthermore, it makes me happy to make other people happy. I believe my employees are key factors of my success, and only motivated and satisfied employees can contribute to the company’s long-term success. You came from Syria to study in Croatia and raised your family. Did your plans and wishes come true? Everything I ever wanted came true when I opened the factory, but I still have plenty of plans. Firstly, I would like to return the investment as quickly as possible and expand the business beyond the region. I do not have any regrets. I came to study in Croatia, but my plan was to return home after graduating. However, with my wife, I fell in love with this beautiful country and its hardworking and kind people.
4 “ In 2014 we began a large number of projects arising from the development of new
Privredni vjesnik Year VIII No 245
materials. This year we will focus on these functional applications in the area of our civil product range. Stjepan Pezo, CEO of Galeb
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Textile industry
FUTURE MATERIA
The scientific community and the textile industry are developing new special fibres, functional materials and the int textiles. The increasing demand for functional textiles provides opportunities for a resumed development of a segme pointed out Sandra Bischof Ilijana Grgić alue-added textile products are currently being used in our daily lives. The Croatian textile industry currently produces antimicrobial socks or comfortable cotton suits that do not wrinkle. Digital fashion combines clothing items with electronic devices for the purposes of warming, protection, treatment or merely for the purposes of new fashion aesthetics. Functional textiles, which originate from a combination of actual production and new technologies in order to meet the demand for textile products used in atypical conditions, has been of crucial importance. Functional textiles are multifunctional; Croatian textile companies such as Varteks, Čateks or Jadran Stocking Factory are becoming increasingly aware of the importance of development of such textile items. Consequently, the Omišbased company, Galeb, has been producing a broad range of functional underwear with diverse features. Galeb underwear is made from new materials. In addition, it is resistant to temperatures up to 600oC and it is intended primarily for military, law enforcement and fire fighters. Its additional role is to provide protection to those wearing it and make sure they remain uninjured in situations of extreme heat. “In 2014 we began a large number of projects arising from the development of new materials. This year we will focus on these functional applications in the area of our civil product range”, stated Stjepan Pezo, CEO of Galeb. The
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development of new functional textile materials in Galeb resulted from its co-operation with the Faculty of Textile Technology. Modernity for tradition The scientific community and the textile industry are providing new developments in the area of special fibres, functional materials and the integration of microelectronic components into smart textiles, as well as advanced manufacturing technologies, including computer technology development and the creation of prototypes. A growing demand for high value added functional textiles provides opportunities for the resumed development of part of the traditional textile and clothing production. This contributes greatly to the modernisation of the manufacturing industry”, emphasised Sandra Bischof, Dean at the Faculty of Textile Technology. She also pointed out that functional textile materials, clothing, footwear and equipment need to be considered as a fundamental area of development in Croatia, as well as in the European Union, since they provide ample opportunities of application in diverse sectors ranging from the defence industry, wood processing and automotive industry. “A European textile industry which can ensure reliable and confidential procurement of military products is of strategic interest for the security of the EU, as well as for the creation of a European technological and
industrial defence base”, stressed Sandra Bischof. A wide range of scientific achievements has been integrated into functional materials, clothing, footwear and equipment that make them high valueadded products generating significantly higher revenue. Revenue is clearly a fundamental issue for the textile industry in both Croatia and the European Union whilst aiming for competitiveness a n d
sustainable growth at a global level. The fact that technical textiles are the fastest growing area of the textile industry globally has to be stressed. This is the result of its huge range of uses, from medicine, industrial biotechnology and nanotechnology to transport and civil engineering. Technical materials The Croatian textile industry develops a range of special purpose technical materials. The Varteks Group developed functional materia l s and
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5 CONSTRUCTION INDUSTRY IN CROATIA 2015-2030
No alternative to green building
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egration of microelectronic components into smart ent of traditional textile and clothing production, clothing items to meet the specific requirements of niche markets. These materials are fire resistant fabrics of extreme resilience, as well as being water repellent. These clothing items are intended to meet the requirements of clients such as fire fighters, petrochemical industry workers and law enforcement agencies who, against a backdrop of specific operational situations, need additional protection. Čateks also engaged in the development of a sophisticated polyurethane membrane whose principal feature is excellent transpiration - the evaporation of sweat and moisture, with simultaneous imperviousness to rain and wind. A water repellent, “breathable” textile technical material is created through laminating the membrane to a textile surface. In addition, there is the company Kroko International who is engaged in the development of functional rucksacks and vests of a modular military style. New materials were used also in the creation of functional military boots that are waterproof, slip- and steamresistant, with anti-shock insoles, microbicides and technical protection; they were developed by the companies INKOP diz Poznanovec and the Čakovecbased Jelen Professional. Employers value science Josip Pelin, President of the Competitiveness Cluster of Textile Industry emphasised that employers value highly and accept the opinion of the scientific community, yet the real value of these products shows primarily in their commercial value on the market.
“We need to enhance the competitiveness of our economy and need to form clusters. It has to be stressed that we need primarily to focus on our competitiveness on the domestic market, as if we are not competitive here, the same will apply globally”, stressed Pelin, who pointed out that Croatian economic development can be based on textiles, as this sector is one of the most active areas of the processing industry”. Croatian companies are slowly entering the world of new technologies and materials and their pace depends on their ability to group and connect, as well as on co-operation with scientific institutions and the quantity of invested funding. Nanotechnology to reate millions of jobs The financing of research in the field of nanotechnology at a global level doubles annually. Nanotechnology permeates a vast number of fields, ranging from electronics, robotics and new medicines to textiles and is aiming to create a material of specific features through manipulation at the level of atoms and molecules. The European Union has dedicated special attention to research and innovation in nanotechnology, as it is striving to rank amongst the leaders in this area. By 2020, nanotechnology will be integrated with most technologies and applications, impacting significantly on the quality of life. Market value estimates, which include nanotechnology, stand around €2 trillion by 2020, in addition to the creation of 2 to 6 million new jobs.
The future of the Croatian construction industry is not based on the construction of new hotels, endless kilometres of new motorway or new buildings, but in the reconstruction and renovation of existing hotels, motorways and buildings. This can be achieved only by using new materials, technologies and adopting new values, pointed out Anka Mrak Taritaš, Minister of Construction and Spatial Planning at the recently held Zagrebbased 7th Better Building Brunch. Speaking about the tradition of local construction, she primarily emphasised the fact that Croatian civil engineers have always had a reputation for being excellent and committed workers, global-
ly. She also mentioned the guidelines stated in the National Strategy on Energy Efficiency, implying that a limitation on the number of certified buildings needs to be imposed if Croatia is to keep abreast of global practices. “Urban transformation is an imperative for this country and Green Certificates need to be included in Energy Performance Certification, since there is no alternative to green building”, highlighted Anka Mrak Taritaš. Green building will result in a vast array of new occupations in the construction industry and hence secondary school programmes need to be adapted accordingly. She mentioned four Energy Efficiency Programmes that are already being implemented: family housing, multipurpose residential buildings, commercial buildings and public purpose buildings. The meeting was organised by the Croatia Green Building Council and sponsored by the Ministry of Construction. (S.P.)
THIRD HAMAG-BICRO ENTREPRENEURSHIP FORUM
Funding for innovation The Croatian Agency for SME’s, Innovation and Investment (HAMAG) recently organised the 3rd Entrepreneurship Forum HAMAG-BICRO, where new tenders for innovation programmes were presented with a total value of €4.8 million. The programmes are RAZUM programmes (Development of Knowledge-Based Companies) and an IRCRO programme comprising of co-operation between an industrial company and a research institution. The funding for the programme has been provided under the second project of technological development of the Ministry of Science, Education and Sport (STP II) through a loan granted by the World Bank. Co-financing of research and development projects under the RAZUM programme valued at €3 million is planned,
whilst the value of the funding under the ICRO programme is €1.8 million. “This year we have entered a period of allocation of substantial financial resources and support for entrepreneurship where, for innovation and technologies from 2014 to 2020, we plan to provide €0.18 billion”, stressed Gordan Maras, Minister of Entrepreneurship and Crafts. “The first tender for innovative entrepreneurs, worth around €29.9 million, will be invited over the forthcoming months.”, stated Maras. (K.S.)
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Privredni vjesnik Year VIII No 245
( 72.24% of entrepreneurs believe
that conditions for investment and business will be on a par with last year
Business sentiment edition and Gorazd Nikić award presented, a roundtable discuss
The time of catchphrase time for concrete measu
417 entrepreneurs questioned in the survey conducted by Privredni vjesnik do not expect any radically positive meas in the fact that the majority of entrepreneurs – 67.52% - believe that economic growth will be approximate with 201 Igor Vukić eljko Lovrinčević is the winner of Gorazd Nikić award for the best business analyst in 2014. The award is presented by Privredni vjesnik based on a survey conducted amongst owners and managers of leading Croatian companies. It was recently presented at the Croatian Chamber of Economy, during the presentation of the new edition of Business Sentiment 2015, a traditional publication by Privredni vjesnik that anticipates future trends. A roundtable discussion was held on the messages conveyed by the Business Sentiment: The time of catchphrases is over, now is the time for concrete measures for exiting the crisis. 417 entrepreneurs questioned in the survey conducted by Privredni vjesnik expect no radically positive measures. This is a year of elections when significant reform measures do not normally occur, certainly not measures which may negatively affect the status of specific social groups. Darko Buković, Editor-in-chief of Privredni vjesnik, pointed out that those questioned rated the general economic condition with grades ranging from the worst (grading 1) to the best (grading 5), with an average grading of 2.16. The highest proportion of business people (67.52%) believe that economic growth in 2015 will approximate with 2014, while almost an equal number
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(15.06%) believe it will see only slight growth or even drop slightly (15.26%). Almost two thirds of business people (73.24%) believe that investment conditions and business in 2015 will remain unchanged over4. Opinions on the priorities for managing exit strategies are divided. Nevertheless, several have been pointed out, such as more affordable entrepreneurial lending, a substantial reduction in state administration, lower taxation and contributions, restrictions to the duration of court proceedings upon bankruptcy, tackling illiquidity and the action of foreign direct investment. Small businesses most pessimistic According to Buković, small businesses are the most pessimistic, yet throughout the sectors, here are companies who are
confident in seeing results on par with 2014. That is the case also among companies in construction. Around 32% of civil engineers expect to see an improvement, 33% anticipate results identical to 2014, with around 27% anticipating a continued de-
crease in business activities. Significant changes are not expected concerning taxation and contributions. Around 67.54% of those questioned believe they will remain unchanged compared with 2014. More optimism has been expressed by business people concerning the impact of the crisis on the operation of their businesses in 2015. Thus, 45.84% believe they will be adequately prepared for and successful in tackling the impact of the crisis, 27% generally believe they will be successful concerning that issue, whilst 20.84% stated they would attempt to
tackle the impact of the crisis. According to the survey, one third of respondents believe that their businesses will tackle the crisis through an expansion of their product range, one third announced a decrease in production costs, whereas one third will resort to re-organisation. Luka Burilović, President of the Croatian Chamber of Economy, is also optimistic. During the roundtable discussion organised during the presentation, he pointed out that, irrespective of years of recession, there are still resilient business people who continue providing solutions against
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( 67.54% of those surveyed
do not expect any alterations in taxation and contributions
sion held by Privredni vjesnik
es is over, now is the ures for exiting the crisis
sures. This is a year of elections when significant reform measures do not normally occur. Pessimism is reflected also 14. Significant changes are not expected concerning taxation and contributions. No substantial positive changes
Economic populism needs to be avoided
The Gorazd Nikić award for economic analyst of the year was presented for the fifth time. Ljubo Jurčić, a triple laureate, has been declared the best over the first five years. Jurčić entered the short list this year, in addition to Damir Novotny, Zdeslav Šantić, Guste Santini and Željko Lovrinčević. None anticipates any significant changes this year. “The weather will greatly impact on the entire situation, as it significantly affects tourism and harvests which are fundamental”, stated Jurčić. Santini added: “Always the same people, the same stories, the same expectations. 2015 will be identical as last year”. Damir Novotny stated that Croatia has seen no substantial growth during the last three decades. Consequently, the reforms need to be comprehensive and challenging, yet it is highly unlikely they will be implemented. Zdeslav Šantić anticipates just 0.2% growth, which will not improve the current situation on the labour market. Nevertheless, prices will see a slight increase, which will prevent dangerous deflation. Affordable funding via the European Central Bank will provide a breathing of a year or two, which needs to be exploited to implement reforms”, believes Šantić.
Željko Lovrinčević, the economist of the year, warned the government, as well as the general public, of the fact that populist solutions to meet the requirements of specific social groups need to be avoided at all costs. The current situation is serious, the results of the Croatian economy are weak, whilst cheap populism and temporary solutions are likely to cause chaos with unforeseeable consequences. Export results that we continuously point out are in fact fictitious: half the growth or perhaps even more, has been achieved through goods in transit following Croatian EU accession. The real growth actually stands at barely 4% to 5%, as opposed to 9% stated in statistical data. Should irresponsible conduct and adverse business climate continue, foreign capital might start leaving Croatia aiming to find more favourable circumstances and homes. Lovrinčević pointed out that the private sector has managed to adapt to the crisis, as opposed to the state and the public sector. Consequently, it is high time to implement reforms to halt the situation that has led to a substantial brain drain during which the public debt has reached €13 billion and the standard of living of those opting to remain in Croatia has reduced by 10%, highlighted Lovrinčević.
a backdrop of adverse business conditions. He stated that he would be even more optimistic if Croatia had a concept of longterm economic development to rapidly boost the business climate, with the government and the Croatian Parliament accepting their responsibility more courageously. Burilović highlighted the fact that hasty legislative amendments need to be stopped, since entrepreneurs require a stable and predictable legal framework. EU funding absorption has been unsatisfactory thus far, the forthcoming elections are postponing
reforms, and against such unstable circumstances a large number of investors are unwilling to take any risk. “Foreign capital is often
According to Minister Grčić, public administration causes severe problems to both businesses and government ministers compared with bashful animals, such as hares. In my opinion, domestic capital is very similar and
can be compared with squirrels”, pointed out Burilović. Grčić: Surpluses higher than deficits Branko Grčić, Vice-President of the government, emphasised the transition from a ‘rent-seeking’ economy, from import and trade towards export and production, which is somewhat insignificant at this point, albeit certainly an important step forward seen on the domestic market. Integration with the EU greatly aids the operation of domestic companies globally. “Against a backdrop of the general conditions on the
domestic market, surpluses are higher than deficits. This year will see a continuation of positive trends in exports due to Croatian EU membership. Moreover, companies which have been given a new opportunity through pre-bankruptcy settlement agreements will also substantially contribute to growth”, stated Grčić. Grčić stressed that the government will provide incentives to the economy through available instruments in compliance with EU regulations. Nevertheless, it will not interfere in monetary policy or that of the Croatian National Bank.
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Privredni vjesnik Year VIII No 245
( 11 awards
at MTE in Malaysia won by 10 Croatian innovations
CROATIAN INNOVATORS SUCCESS AAT THE MALAYSIAN FAIR
And now going global At the MTE fair in Malaysia, 10 Croatian innovation exhibits received a total of 11 awards, and several companies signed contracts of co-operation and delivery of their products to Malaysiaa Sanja Plješa roatian innovators have achieved yet another significant success at the recently held innovations fair of Southeast Asia – 14th MTE – Malaysia Technology EXPO in Kuala Lumpur. 10 Croatian innovative exhibits won a total of 11 awards, whilst several Croatian companies signed contracts of co-operation and delivery of their products to Malaysia. The Zagreb-based company Citus received a gold medal. Citus is a Microsoft partner and is involved in consultancy, design, development and introduction of mobile and cloud IT solutions based on Microsoft technology. Three Citus employees are Microsoft Most Valuable Professional titleholders for Office 365, virtualisation (Hyper-V) and web application development. Citus has received over 40 international awards thus far, as well as several gold medals for innovations in ICT in the US, Russia, Korea, Taiwan, Malaysia and Croatia. It has recently received a gold medal for their product C@N eMotion, a software module that recognises facial expression, as well as for the www.ConferenceAtNet.com web site, which is an online mobile solution, for the management and organisation of workshops, conferences, and for the product C@N Motion, an innovative multimedia system managed by hand or body movement.
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Gold, silver and bronze Tomislav Bronzin, owner of Citus, pointed out that the company’s products are available globally. “Slovenia, Bosnia and Herzegovina, Israel, America, as well as Arabian and Asian coun-
tries are just a few of the markets we have penetrated and where our products are sold. Instead of thinking locally, we think globally, as technological developments have abolished all borders; the world has transformed into a global stage with 24 hours a day accessibility, as well as equal opportunities for success”, emphasised Bronzin. Since the company and its operations, products and services are primarily focused on innovations, it is of vital importance to be present at exhibitions that provide opportunities for co-operation with investors, as well as potential partners who will work on distribution in a country or region. “Participation at fairs and exhibitions is additionally helped when we appear with a group of innovators or entrepreneurs supported by the Zagreb Innovators Alliance, the Croatian Chamber of Economy, the Ministry of Economy and the Ministry of Entrepreneurship and Crafts. Our partners are primarily the leading companies in the areas covered by our products,
such as marketing, conferences, business process management, health status assessment and IT”, stated Bronzin. In addition to the gold medal from the exhibition in Malaysia, Bronzin and his team returned to Zagreb with several new contracts amongst which it is important to highlight co-operation with the University of Malaya. This agreement will enable them to deliver the first 10 software packages of C@N Motion to the Malaysian market following the successfully implemented pilot project. Business plus academic In addition to the company Citus, another Zagreb-based company – Live Good - achieved a significant success. Its founder, Anita Bušić, will be one of the leading researchers in a tripartite project, whose results will be incorporated into the Croatian product BodyRecog-Fitness Asia. It is an excellent example of connection and co-operation between business and the academic communities, which was the objective of
the exhibition in Malaysia. MTE this year covered a large number of innovators and innovations from Malaysia and the countries of Southeast Asia and Europe. The most successful Croatian exhibitor – innovator was Rosa Ferenčević from the company Marinalab Opus, who received Best Award for the innovation Acidosalus baby. The Best Award is given for one of the ten most successful exhibits at the MTE exhibition. Antun Drvar received a silver medal for his ionisation technology, for the lowering of the point of fossil fuel flow to 0oC without the use of chemicals. Moreover, the company Supernova received a silver medal for an innovation for dyeing hair samples in one or more colours at a single application. Additionally, the company Herbafarm-
The company Citus won a gold medal at MTE previously having been awarded for a software module that enables facial recognition Magnolija won a silver medal for its innovation Herbafertil, as did the innovation InfraredART by Nada Žiljak and the company CEI Mikroelektronika for the innovation of intelligent clothing with thermal insulation features. A bronze medal was awarded to the young innovators Jakov Soldić and Josip Horvat for the innovation Magreg, the company Priroda liječi (Nature cures) for its innovative cosmetics Nikel and Marinalab Opus for its innovation Toothpaste 3-in-1.
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( 252,442 people employed through HZZ last year
EU PROGRAMME FOR CROATIA: DEVELOPMENT OF SOCIAL NETWORKS IN HZZ
Welcome to cyber world The goal of the project is to improve the quality and efficiency of HZZ services through social networks and other internet tools Sanja Plješa uring the eight months of the project Development of social networks in the Croatian Employment Agency (HZZ), 1.1 million individual consultations were held and 14,000 unemployed people participated in training workshops, focusing on how the individual can present him or herself to employees, said Tatjana Dalić, Dep-
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Consultations and workshops were some of the activities that took place in conjunction with the Twinning Light Project worth €240,000 uty Minister of Labour and Pension System, at last week’s presentation of the project. Consultations and workshops were some of the activities that took place in conjunction with the Twinning Light Project worth €240,000, funded by the European Social
Fund from the EU programme. The goal of the project was to improve the quality and efficiency of HZZ services through social networks and other internet tools. This project motivated the process of offering information and specialised services to the unemployed, promoting opportunities for employment and training and supporting communication with clients through social networks. Social networks connect people Tatjana Dalić noted that 252,442 people found work last year
through HZZ (which did not happen in the past 11 years), of whom 107,000 were under 30 years old with 89,000 being employed without measures for subsidising self-employment. As an additional positive activity of this project, Deputy Minister of Public Administration, Leda Lepri, mentioned the introduction of e-Uprava (e-Administration) policies through the project e-Građanin (e-Citizen) which includes all services realised in the real world of the management-client relations. She also added that the drafting of the strategy e-Hrvatska (e-Croatia)
2020 is in its preparatory phase, and this strategy should clear all doubts regarding business activities. It still happens that a client cannot do everything through e-business, which forces him to come personally to the relevant institution. Concerning the project Development of social networks in HZZ, the Director of HZZ, Ankica Paun Jarallah, highlighted the project reached its goal of integrating social networks in the business activities of the institution. She added we are all a part of the cyber world we must not run away from, and state institutions have to adapt and offer information to clients through the internet or social networks. Social networks are a tool for connecting people since they are a part of the digital revolution. The precondition of business behaviour is that the channels in the social networks slowly enter companies, but they are mostly used by IT companies, which is logical. Gradually, all companies will use them, Ankica Paun Jarallah concluded.
EU FUNDED PROJECTS SHORT-LISTED
The list reduced from 77 to 25 proposals The Croatian list of 77 projects, to be funded by the Juncker Fund, has been reduced to 25 proposals. After the meeting of Government Vice-President, Branko Grčić, and Vice-President of the European Commission, Jyrki Katainen, in February, it was published that the European Fund for Strategic Investment would focus on subsidising private or public-private partnerships, and not on investment
projects that are primarily public. The Croatian short-list is valued at around €9 billion, of which projects worth €2.2 billion could
be realised over the course of the next three years, Government Vice-President Grčić said. The present list mainly includes projects to be realised through public-private partnerships. The point is to mobilise private money, which is why the focus is on private investment, Katainen said. The Fund will finance projects, not governments. This means everyone has a chance; each sustainable project, even if
high risk, has a chance to receive funding, the EC Vice-President concluded. Grčić announced the Government would call on private investors to express their interest in participating in this initiative. The Government and the Croatian State would provide support in communicating with the European Commission and the European Investment Bank in realising these projects, Grčić said. (I.V.)
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Privredni vjesnik Year VIII 245 Yeea Y eaarr V IIIII N No o2 45
( €13 billion ( 60 football fields total ITER project
the ITER construction site area
Fusion power
A drop of sun on Earth One of the biggest scientific experiments in the world was designed to obtain self-burning fusion plasma for the first time in history. Owing to the Ruđer Bošković Institute, Croatian scientists are a part of the research consortium EUROfusion, encompassing 27 countries around the ITER construction project Boris Odorčić cientists from the Croatian Fusion Research Unit (CRU) participate in one of the biggest projects of today – the project of obtaining cleaner and constant energy from nuclear fusion. Owing to the Ruđer Bošković Institute, Croatian scientists are part of the research consortium EUROfusion, covering 27 countries around the project for constructing the International Thermonuclear Experimental Reactor (ITER), which will allow the testing of a series of technologies required for operating a fusion power plant. To achieve these goals, scientists globally were provided with €850 million for the period 20142018, of which almost half will be provided through the Horizon 2020 programme. The sum of
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This is tremendous recognition for our scientists, co-ordinator of the Croatian Fusion Research Unit Tonči Tadić observes nearly €0.4 million has already been allocated to Croatian scientists for a period of five years – as pointed out during the visit of EUROfusion programme Director, Tony Donne, at the Ruđer Bošković Institute (IRB). “This is tremendous recognition for our scientists. The funds from the Horizon 2020 are allocated through extremely competitive tenders. To win a project in conjunction with this programme
means the EU recognises your work as competitive science, which can be compared with the work of other scientific institutions from countries with far more generous funds for science and research, such as Germany, France or Great Britain”, noted co-ordinator of the Croatian Fusion Research Unit and member of the EURATOM (European Atomic Energy Community) Scientific Technical Committee (STC) Tonči Tadić. Significant undertaking Croatian scientists from the Ruđer Bošković Institute, Institute of Physics and the Faculty of Mechanical Engineering and Naval Architecture (FESB), are participating in five work packages of the fusion programme, based on which IRB will assess
the retention of fusion fuel in the walls of fusion reactors with the help of ion beams; the origin of dust particles inside the fusion reactor (tokomak), and the construction of the chamber for the radiation of fusion materials with two ion beams, one of only four in the EU. FESB scientists will be dealing with the mathematical modelling of magnetic fields and plasma in the fusion reactors and colleagues from IFS will work on the development of a laser machine for damage control of the tokomak walls. The Institute of Physics and IRB together participate in the EU training programme, under which 300 students from all EU countries write their theses related to the field of physics. To create solar energy on Earth is a sub-
stantial undertaking. Everything relating to ITER is enormous. This biggest fusion reactor will be built in Cadarache in France, over an area equal to 60 football fields, and around 2.5 million metres3 of earth has been dug out to create room for the ITER tokomak and accompanying facilities, Donne explained. One of the largest scientific experiments in the world has been designed to obtain self-burning fusion plasma for the first time in history, literally a drop of Sun on Earth. The entire project is worth €13 billion and scientists from 34 countries participate in it. Each research laboratory has its task. “We are seriously counting on Croatian scientists, which are confirmed by their participation in the joint Horizon programme”, Donne concluded.
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( over 80 countries ( 6 people use Agrivi agri-tech system
currently tl employed l d by Agrivi
INTERVIEW: MATIJA ŽULJ, CEO OF AGRIVI
Agrivi used by farmers in 80 countries Until recently Croatia was known in the world mainly for its athletes or Dubrovnik, but today the word of successful start-ups has started to spread, says Matija Žulj whose Agrivi System won first prize at the World Startup Competition in Seoul How hard is it to find investors for start-up projects? Extremely hard in Croatia, since only a small number of people are motivated to invest in start-up projects. Therefore, they cannot invest in every good project. Moreover, we do not have venture capital funds that invest in ICT start-ups. Therefore, almost all projects have to turn to foreign investors for funds, especially when it concerns bigger investment projects.
Boris Odorčić roatian Agrivi, an agritech start-up system, is a system for agricultural production management that helps farmers secure production productivity and profitability. The system is currently used by farmers in over 80 countries, and the number of users is increasing monthly. Preparations for ex-
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We can offer west European quality at a lower price than western countries panding into the markets of Great Britain, France, Italy, Poland and Russia are in progress, and they have already started with the announcement of partnership with a distributor in Nigeria. The Board and development head office, which started work in 2013, is in the Croatian town of Kutina. Agrivi currently employs six people and several part-time staff. At the World Startup Competition, held in November in Seoul, Korea, Agrivi won first prize and $50,000. Matija Žulj, CEO of Agrivi, says that there is a market for software development is his field of expertise. Since he has been active in the ICT industry since the beginning of his career, it was only natural to proceed in the same direction. Žulj highlights this is an industry of high added value which offers many challenges, but also potential.
Is it difficult to compete on the global software market? The global market is full of various products, and it is difficult to stand out, let alone get attention from potential customers. Until you have enough references to give credibility, western markets will prefer products from more developed markets. When you have references, the story changes as they give your product credibility and you become an equal, that is, the entire story comes down to product and service quality. In your opinion, is the Croatian market of ICT product and services developed? Our ICT market is developing intensively. Until recently, only a small number of companies offered such products. Most of
them offered services of solution development, but now there are more companies offering ICT products they deliver internationally. I believe we have great potential and that the ICT industry has to become one of Croatia’s strategic determinants. What advice would you give your colleagues who wish to develop software for the global market? It is difficult to give general advice since each industry and niche is different, and a ‘secret recipe’ does not exist. However, it is crucial to identify your pilot market and focus on it. In some cases, Croatia can be an ideal pilot-market, but if you cannot acquire enough references, I would recommend choosing another market as a starting point.
To what extent is the ICT sector important for the economic development of any country? The fact that start-ups created over 50% of jobs in the USA during the past decade proves their importance. The ICT sector is one of the most crucial sectors in shortterm, mid-term and definitely long-term. Moreover, the rising success of Croatian start-ups is a positive promotion of Croatia. Until recently, Croatia was known in the world mainly for its athletes or Dubrovnik, but today the word of our successful start-ups has started to spread. What can Croatia offer Europe and the world in this industry? Croatia has a good ratio of labour/ price, quality and location. We can offer western European quality at a lower price than western countries. We are also close to these markets, so it is not a problem to travel for meetings with customers, which they appreciate. Most of our ICT companies know very well how to use this leverage, even this part could be communicated strategically, at state level.
12 ::: news Varteks revenue and exports increase
Privredni vjesnik Year VIII No 245
( 75 S3 employees in Switzerland, Spain and the USA
( 80 km
S3 shuttle laun
SWISS SPACE SYSTEM CROATIA Varteks Group generated €27.9 million revenue in 2014, of which €26.8 million was sales, 17% up in relation to 2013. Exports at €12.2 million were 8% up compared with 2013. Concerning costs, expenditure dropped by 61%. All key operating features in 2014 showed positive trends, yet the implementation of financial restructuring, given its partial progress thus far, will more significantly affect operational effectiveness only in 2015. Holcim increases operational effectiveness The company Holcim Croatia bettered its operational effectiveness by €4.5 million and implemented the first aspect of its plan entitled “2015 Plus”. In addition to business results shown in 2014 by Holcim employees, the importance of the start of construction projects and a €65,000 increase in the salary pool have been particularly highlighted. Ezpada takes over the Zagreb-based Proenergy
SPACE TECHNOLOGY
A Swiss company specialising in space technologies has opened an affiliate in Croatia. T and after 2020 start the assembly and launch of commercial space satellites Krešimir Sočković he Swiss company Swiss Space Systems - S3 confirmed it would open an affiliate in Croatia. The Croatian affiliate could play an important role in the business activities of their holding on a global level, since it would be focused on the completion of suborbital shuttles for launching satellites into orbit. It would also offer commercial space launching services. The first activities of the Croatian Swiss Space Systems affiliate will relate to ZeroG – flights simulating weightlessness – starting from next year. For the next phase (launching satellites, suborbital commercial flights), they anticipate support from Croatia to construct a spaceport at Udbina – which seems to be the best location. The spaceport itself could be based on the concept of the S3 spaceport in Swit-
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The Croatian affiliate of Swiss Space Systems should play an important role in global business activities zerland, which is already under construction. Udbina, however, is a small municipality in Lika,
known for its extremely beautiful nature and the Plitvička jezera National Park. Invitation to the European Space Agency Former President of Croatia, Ivo Josipović supported this project, and the General Director of Swiss Space Systems Croatia, Slađan Zovko, says that all countries inside the European Space Agency
GAMMA BAGS - THE FASHION ACCESSORY FOR BUSINESS WOMEN The Croatian Competition Agency (AZTN) has approved the takeover by Ezpada AG, with its headquarters in Switzerland, thus becoming the majority shareholder in Proenergy Zagreb. In addition to the takeover, Ezpada also took over the ownershiprelated companies Proenergyja in Serbia, Bosnia and Herzegovina and Macedonia. Ezpada operates as an umbrella company of the Ezpada Group that is involved in trading electricity in Switzerland, Germany, the Czech Republic, Turkey, Croatia, Romania, Macedonia, Serbia and Bosnia and Herzegovina. The core activity of Proenergy is electricity supply, as well as trade in electricity and gas.
High fashion and high tec
A combination of high technology and high fashion has resulted in a fashion accessory t desire – a bag equipped with mobile phone and tablet chargers, powered by sunlight t might seem a difficult challenge to combine high fashion and high technology, but this young businesswoman, with experience in fashion and with a sense of high technology, designed the ideal fashion accessory for businesswomen. How often does your phone battery die at crucial moments and places where it was impossible to recharge? This was the problem that served as the starting point for Mirta Udovičić. “I worked in fashion and computer
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programming, and graduated in fashion design. This allowed me to combine two things in which I am experienced – fashion and electronic accessories”, Mirta Udovičić says. The result of this work is an innovative bag equipped with a battery and charger, which can be charged in a conventional way (electrical socket) and with solar panels attached externally. Each bag is also equipped with a battery charge indicator. Total capacity of the battery is 5,000 mA
and it can charge a mobile phone multiple times. Future products will have a battery of even larger capacity. The bag also has something that many women would find useful– LED internal lighting. Ready for the world The process from idea itself to finished product was not easy. Three years passed from my initial idea until the finished product, but we finally reached our goal and the product is here now,
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high
nches the construction
13 ::: news
( 700 km high
small satellites sent into Earth orbit
FROM LIKA
The company wishes to construct a spaceport at Udbina,
Swiss Space Systems Swiss Space Systems has expanded its business and employs 75 people in Switzerland, Spain and the USA. They are currently working on the research-development phase of multi-use, flexible and safe systems for launching small satellites, based on the Airbus cargo plane and suborbital shuttle SOAR. The SOAR shuttle, developed by S3, will launch at a height of 80 kilometres, the upper construction that will deliver small satellites into Earth orbit up to 700 kilometres. After delivering the satellite, the third component of the delivery system combusts in the atmosphere and does not remain in orbit as waste. wish to strengthen and develop space activities. “I am inviting institutions to take all necessary steps so that Croatia could also join this institution. Swiss Space Systems Croatia will act as accelerator that will guide Croatia towards achieving this goal, and our space research centre will generate immense strategic value inside the country”, notes General Director Slađan Zovko.
chnology
that any businesswoman would Mirta Udovičić highlighted. She already has experience in selling conventional fashion accessories, and her new and innovative bag is approaching its moment of entering the market, first locally and then globally. Everything is almost ready for launch. This month we are preparing the first line of bags, and our plan is to launch new lines every few months, Mirta Udovičić says. She also added there are similar products in the world, but the combination
S3 Croatia announced their co-operation with Croatian universities and research centres on various research and training activities as well as the testing of airspace technologies for small satellites. Croatia’s important role This co-operation will also benefit Swiss Space Systems and Croatia, says the founder and CEO, Pascal Jaussi. S3 wishes of this type of high-tech and high-fashion still does not exist. There are solar bags of larger dimensions, like backpacks, intended for explorers and those who travel in places where they are not able to use other energy sources. However, a product for a business woman, student or anyone in an urban environment has not existed until now, Mirta Udovičić says. The production of the bags is still manual; they are
Everything is nearly ready for the market. This month we have been preparing our first line of bags, Mirta Udovičić says.
to develop long-lasting partner relationships, and the relation with Croatia is certainly a good example. Swiss Space Systems Croatia will play an important role in all main aspects of the S3 programme – ZeroG flights, development and production of the upper component for launching satellites, as well as research and training activities, Jaussi highlighted. manufactured in Croatia, but it is likely that production will move to the east when it starts to expand. As this young innovator and designer said, the bags will cost between €65 and €455, depending on the size, design, materials and capacity. However, what is important for future customers is that the bags are already available online in the MBS Store in Zagreb or at
www.gammabags. com. If you have
problems with a low battery on your cell phone, tablet or mobile computer then Gamma solar bag will be extremely useful. (K.S.)
Innovative services development programme The Science and Technology Park of the University of Rijeka has created a Development programme of innovative services based on existing products – PROTOS, which will enable entrepreneurs to focus their business operations on services arising from products through training and mentorship. The programme consists of three modules: development workshops, the development of services, and the preparation of the company for the commercialisation and the sales of the service. Marine experimental centre for biodiversity A structural project entitled Marine experimental centre for biodiversity – MORExpo is being conducted by the Rovinj-based Marine Exploration Centre of the Ruđer Bošković Institute and the Croatian Academy of Sciences and Arts (HAZU). The project is valued at €16 million and has recently been included in the infrastructure project list of the Ministry of Science Education and Sports (MZOS) for the European Regional Development Fund, for the period 2014 to 2020. The joint structural project between the Ruđer Bošković Institute and the Croatian Academy of Sciences and Arts will enable the establishment of a modern centre equipped with high technology and programmes, as well as a new research vessel. Park Hotel opening in Pula €6.5 million has been invested in the Park Hotel owned by the Pula-based tourist company Arenaturist. Following comprehensive reconstruction, the hotel will be renamed – Park Plaza Arena Pula - and will receive its first visitors by the end of May 2015. The Arenaturist investment cycle began in 2011 with the reconstruction of the Histria Hotel and continued with investment in the tourist resort Punta Verudela and the hotels Medulin, Palma and Belvedere in Medulin, following which all the reconstructed facilities were branded Park Plaza. The Park Plaza Hotel Group portfolio comprises 16 hotels including the art’otel brand. Park Plaza Arena Hotel will be the 22nd Park Plaza hotel.
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Privredni vjesnik Year VIII No 245
( over 500 participants showing huge interest in Croatian wines
ANNUAL WINE TASTING – VINA CROATIA VINA MOSAICA – NEW YORK 2015
New York showing huge interest in Croatian wines Annual wine tasting is the theme of the “The promotion of the Croatian wines in the USA”, co-financed through the European Agricultural Guarantee Fund and the State Budget State Budget of Croatia and the National Assistance Programme for the Wine Industry 2014-2018. The specific objective is to enhance the recognition of Croatian wines on the US market and substantially increase exports in terms of both quantity and value.
he annual tasting of Croatian wines, as well as two Masterclass tastings, were held on 24th February 2015 in the New York-based Astor Center, organised by the Association of Winemakers at the Croatian Chamber of Economy. Croatian winemakers presented four Croatian wine regions and the best wines with several international medals produced by the Croatian wineries such as Agrolaguna, Badel 1862, Benmosche Fam-
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Such events are a unique opportunity to present Croatian wines to a demanding and immense American market ily Vineyards, Bibich, Degrassi, Feravino, Galić, Grgić Vina, Korak, Korta Katarina, Kozlović,
Krauthaker, Lagradi, Markus, Matošević, Miloš, Pp Orahovica, Rizman, Rota vina, Saints Hills, Stina Vino, Suha Punta, Vinogradi Volarević, Zigante and Zlatan Otok. Annual wine tasting is the theme of the “The promotion of the Croatian wines to the USA”, was co-financed through European Agricultural Guarantee Fund, the
Good opportunities Over 500 participants – wine experts, media representatives, distributors, hotel owners and tour operators, registered for the event, which shows the wide interest in Croatian wines. Mrs Christy Canterbury, MW was in charge of masterclass tastings. Croatian winemakers established and strengthened a large number of contacts with potential buyers, which will certainly encourage exports. The promotion of Croatian wines is the principal aim of the comprehensive brand strategy of the
Association of Winemakers entitled Vina Croatia – Vina Mosaica. This unique visual identity of all the activities in the project has been defined through graphic solutions of the strategy comprising a logo for Croatian wines and four logos from the four Croatian wine regions – Slavonia and the Croatian Danube Basin, Croatian Uplands, Istria and Kvarner and Dalmatia. “Similar events provide a unique opportunity to present Croatian wines and introduce them to a substantial and demanding American market. I am aware of a large number of challenges, as well as immense opportunities for Croatian winemakers with a product of unique quality and recognition”, emphasised Ivica Matošević, Vice-President of the Executive Board of the Winemakers Association, speaking at the annual wine tasting.
Super Market Trade Show in Tokyo
Croatian wines in the Far East We optimistically believe that a new order of Croatian wines for the Japanese market will be placed in the not too distant future The order placed by the Japanese client Fuji Trading at the recently held Tokyo-based fair Super Market Trade Show, where several Croatian selected wines were presented, clearly shows that the quality of Croatian wines has been recognised in the Far East. The first contact with this Japanese client was established in September 2014, near Zadar, where, in addition to locally produced wines, Belje wines were also
presented. Nevertheless, Frankovka wine produced by PP Orahovica aroused specific interest. As stated by Kraljevski vinogradi sources, whose winemakers visited the Japanese fair, half of Croatian wines presented at the fair were sold instantly. “We optimistically believe that a new order of Croatian wines for the Japanese market will be placed in the not too distant future. We are prepared for a product range expansion with high quality and
top quality wines”, stressed Josip Tokić, Director of Business Unit for Fruit-Growing and Viticulture PP Orahovica. It is im-
portant to highlight that, as it is not easy to compete with the top quality wines from France, Italy, Spain, California and Chile. Super Market Trade Show was visited by almost 85,000 business people – retail centre owners, as well as owners of stores, restaurants and hotels. It has to be stressed that, in addition to Croatian wine sales in China and Japan, wine makers are expecting the sale of Croatian wines also to South Korea soon. (S.S.)
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( 1,713,355 members ( €8.9 billion off mandatory pension ffunds in January 2015
total nett assets
Mandatory pension funds
Croatia between Luxemburg and Finland According to global pension statistics, Croatian pension funds produced a real annual return of 3.09% between 2002 and 2013, which is better than German, Swiss, Belgian and Italian pension funds highlighted, adding that the pension system, which relies exclusively on the Pillar 1, cannot be sustainable long-term. This means that the Pillar II in Croatia is very important for the sustainability of the pension system, Štimac said. It is important to mention that according to the models that consider all relevant parameters, the present 75% of contributions paid to Pillar I result in 54.14% of total pension, and 25% of contributions paid to the Pillar II result in 45.86% of total pension income.
Boris Odorčić andatory pension funds (PBZ/Croatia osiguranje, Erste Plavi, Raiffeisen OMF and AZ fund) in Croatia had 1,713,355 members at the end of January with total net assets of almost €8.9 billion.
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Mandatory pension funds earnings stood at €2.7 billion at the beginning of 2015 Despite the general belief that the Croatian pension system does not achieve desirable results, it is positioned near the top in terms of produced real return amongst other European countries. Profit for members According to the global pension statistics of the Organisation for Economic Co-operation and Development (OECD Global Pension Statistics), since the beginning of their work in 2002 until 2013, Croatian pension funds produced an average real annual return (real being deducted from average by the inflation rate) of 3.09% (it totalled 3.75% by the end of 2014). This result is better than the average real return of German (2.56%), Swiss (2.34%), Belgian (2.9%) and Italian (1.62%) pension funds. On this list, on which Croatia ranks six, between Luxemburg (3.63%) and Finland (2.93%), there are Polish pension funds with average real annual return of 4.24%. President of the Association for the Management of Pen-
UMFO At the first presentation of this independent, non-party, non-profit professional association, it was highlighted that UMFO was established on the initiative of mandatory and voluntary pension companies. The goals of the association are to promote and represent the interests of mandatory and voluntary pension companies and their members, raise awareness on the importance of pension funds, and impart general information on the pension system and its long-term sustainability, UMFO Director Dijana Bojčeta Markoja highlighted. sion Fund and Pension Insurance Companies (UMFO) and Board President of PBZ Croatia Osiguranje – Mandatory Pension Funds – Dubravko Štimac, highlighted at the presentation of the Association that mandatory pension funds produced an average return of 11.36% during 2014. In other words, the funds earned over €1.50 for each €13 invested. During the past three years, average return was 9.32%. Now, af-
ter almost 13 years of work, the mandatory pension systems produced an average annual return of 6.06%, Štimac said. With this level of return, mandatory pension funds managed to produce by 2015 a total of €2.7 billion in new value, that is, profit for members. The average member from 2002 has €7,135 on his account, and deposited €5,365. Therefore, his current profit equates to €1,770, Štimac
Satisfied and not satisfied Furthermore, results of the survey, conducted by the Ipsos puls Agency covering 1100 participants in mid-2014, show that 30.7% of people believe that the contributions for Pillar I should reduce, and those for Pillar II should increase. Therefore, both experts and public feel that the state of Pillar I is extremely critical with uncertain stability and future, UMFO Director, Dijana
Bojčeta Markoja, pointed out. She also added that almost 40% of the survey participants are both satisfied and dissatisfied with the pension system.
The survey showed that the public, especially the young and middle aged, are not focused on planning their living condition after retirement. Therefore, 29.9% of the survey participants think about their retirement period only occasionally, and 24.1% never think about it, whereas 13.2% think about very often,
Dijana Bojčeta pointed out.
Markoja
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Privredni vjesnik Year VIII No 245
( 347,093 nautical charter tourists in Croatia in 2014
CHARTER TOURISM
A problem in sight: supply exceeding demand In 2014, Croatian ports saw the arrival of 3,305 charter vessels and recorded 61,085 charterers arriving. The 645 active charter companies registered in Croatia showed revenue of at least €0.17 billion Sanja Plješa ver the last several years, Croatia has been identified as one of the best yacht and charter destinations in the Mediterranean, confirmed by statistical data according to which the charter business has seen annual growth rates through all segments. According to data presented by the Ministry of Maritime Affairs, Transport and Infrastructure, 2014 saw the arrival of 347,093 charter tourists to Croatia who recorded 2.4 million overnight stays and over 60,000 charterers. Simultaneously, in 2014 Croatian ports registered 3,305 active charter vessels and 61,085 charterers. There are currently 645 active charter companies in Croatia that generated revenue of at least €0.17 billion. “Irrespective of the fact that growth is not substantial in terms of demand as it stands at around 2%, taking into account adverse weather conditions and the fact that Greek tourism has seen a recovery, I believe that charter companies here can consider
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2014 successful”, pointed out Branimir Mađer from the Tourism Sector at the Croatian Chamber of Economy. He warned of an anomaly recurring for 10 years that can create insurmountable problems for the charter business in Croatia – that supply exceeds demand. A charter destination This is not a major issue during the peak tourist season when the demand for charter vessels is at its height, yet during pre-season and post-season an increasing number of charter vessels remains in
port. In view of increasing operating costs, high investment and competition, Mađer also warned that, should this trend continue, it is uncertain how much longer charter companies will be able to operate profitably. A large number of charter companies have already made substantial investment in marketing and sales, in addition to normal quality upgrading. Nevertheless, without vigorous assistance provided by the state and competent institutions, a significant growth in demand cannot be expected. Consequently, charter companies
A Croatian product that conquered the world – MMKSystems software for booking equips 1,400 agencies and 200 companies The Zagreb-based company MMKSystems has been operating for 13 years, and its principal product is software for online booking intended for charter companies and agencies, the so-called booking manager system. This is used by 200 charter companies and 1,400 charter agencies globally. As pointed out by Martina Babić, Director of Marketing and Sales at MMKSystems, irrespective of the fact that at its start-up, its clients were exclusively Croatian charter com-
panies, currently over 50% are non-Croatian clients. MMKSystems organises workshops for charter companies and agencies as it did at the recently held Opatija-based charter fair. Martina Babić pointed out the fact that during each fair at which the company presents its product, it is customary to sign co-operation contracts with new clients who will be using its software. She added that the software is currently used by almost all charter companies and agencies in Croatia.
anticipate a robust, organised and planned promotion of Croatia as a nautical destination at the national level, stressed Mađer. One of the steps towards more effective promotion is certainly a recently held specialised nautical fair - International Charter Expo 2015 - ICE in Opatija which covered over 130 charter agencies from 25 countries, as well as over 200 local and foreign suppliers of equipment and service providers, all playing a vital role in chartering. Tino Prosenik, Director of Charter Expo 2015 – ICE fair, emphasised the fact that the first two fairs were organised solely for Croatian charter companies, whilst the recently held, Opatijabased fair, encompassed companies globally, which shows the strength and the rôle of Croatia as a charter destination. He stressed that over the last several years there has been increasing interest in larger vessels, with four or five cabins, as well as in catamarans. As a result, charter companies are adapting their fleets to client requirements.