The Hendal Survey What Croatian entrepreneurs think after two years in European Union: Not very useful membership
Labour mobility Workers who leave Croatia for other EU countries are mainly educated, young and have few problems finding work
Interview: Andro Tomić “There is not a single aspect of life on Croatia that has changed as much as wine production”
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Croatian Business & Finance Monthly Established in 1953 Monday / 6th July / 2015 Year VIII / No 0249 www.privredni.hr
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pvinternational pv international C R O A T I A N
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PRODUCTS SOLD IN 25 WORLD COUNTRIES
A RECIPIENT OF EUROPEAN BUSINESS AWARDS: DOK-ING The Croatian company DOK-ING won in the category The Business of the Year Award with Turnover of €0-25million. The company is an international leader, specialising in the production of equipment and systems for protecting personnel in the most dangerous situations, including mine clearing and fire extinguishing OK-ING won the prestigious European Business Award in the category of The Business of the Year Award with Turnover of €0-25million. The award was accepted by Board Member Ana Majetić during the final evening, held in May in London. The reason for celebration is even greater, since this is Croatia’s first participation, and won. In addition to DOK-ING, Zagrebačka banka also won an award, as a result of the highest number of votes in the category national winner according to the public in Croatia. The success of DOK-ING proves that even under difficult economic conditions, it is possible to achieve excellent results and acknowledgement on a global level, through hard work, innovation and creativity. “You are a milestonee of overall economicc progress, based onn new technologies, conntinuous production quality, investment in training and focus on exports. You have shown that Croatian quality can be ac-
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knowledged at an international level”, said CCE Vice-President for International Affairs and EU, Želimir Kramarić, who participated at the awards ceremony as a member of the panel in the category Customer Focus. The prestigious European Business Awards was sponsored sor by the seventh largest global netla work of independw ent audit, tax and consulting companies, RSM. After one year, the representatives of top European
companies finally met. A total of 110 companies in 11 categories participated in the final stage of the competition. DOK-ING is an international leader, specialising in the production of equipment and systems for protecting personnel in the most dangerous of situations, including mine clearing and fire extinguishing. Their products are present in 25 world countries; they are the first in Croatia to have designed electric city cars, and they constantly invest in innovation and new technologies. In addition to EU member countries, Turkey, Norway, Switzer-
In addition to DOK-ING, Zagrebačka banka also won an award land, Serbia and Macedonia also participated in the competition. Total income of all participants exceeds €1.5 billion, profits are in excess of €60 billion and they employ a total of 2.5 billion employees. The next competition will be held in 2015/2016, and its main goal is to support development and build a business society across Europe.
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Privredni vjesnik Year VIII No 249
( 2.4 rating
for current business operations in the EU according to Croatian entrepreneurs
THE HENDAL SURVEY CONDUCTED FOR PRIVREDNI VJESNIK: WHAT CROATIAN EN TWO YEARS OF EU MEMBERSHIP
EU membership has b neither damaging nor
A total of 400 entrepreneurs assessed Croatian business in the EU with grades ranging between 1 (the worst), and 5 sufficient (2), whilst over 20% evaluated Croatian business in the EU as negative. True, the transport of goods acros prior to accession. On the other hand, unfair competition has intensified Igor Vukić he first two years of Croatian full EU membership deserves a rating of 2.4. – according to the opinion of Croatian entrepreneurs. This is the average grade given by entrepreneurs who participated in the survey conducted by the Hendal Agency, exclusively for Privredni vjesnik in May. A total of 400 entrepreneurs (CEO’s and other leading people in companies) were questioned about the relationship between the EU and Croatia. A total of 173 entrepreneurs (43%) assessed business as good. However, 82 participants (or 20.4%) gave it a negative rating. A total of 116 of those surveyed (28.9%) assessed business as satisfactory, and less than 10% viewed Croatian entry on the common market as 4 or 5. 22 entrepreneurs (5.5%) opted for very good and only 9 participants opted for excellent (2.2%). Furthermore, 58% of those surveyed viewed the Croatian economy as not been fully included in EU streams after accession. The majority (173) responded that the Croatian economy is mainly excluded, and 131 gave a neutral response, not included and not excluded. Only 0.5% claimed that the Croatian economy is fully included in the EU market.
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Five main activities The survey was conducted on companies from five main areas of activity (production, construction, tourism, trade and transport), distributed according to size, from small-sized to large-sized, based on the proportions standard for the Croatian economy. The majority of those surveyed gave a neutral grade to the influence of EU policy on the Croatian economy (44%). An equal number viewed EU policy as damaging (30%), useful (26%). It is mainly useful for 96 entrepreneurs and very useful for 9 entrepreneurs. However, most of those surveyed think that stricter EU monitoring could help Croatia exit the crisis. 229 entrepreneurs opted for this answer, with 159 thinking that European directives could lead to stabilisation of the Croatian deficit and public debt as well as motivate GDP growth.
Most of those surveyed think stricter EU monitoring could help Croatia exit the crisis No significant changes occurred for Croatia, already present in the European market, not even during the two years of Croatian full EU membership, says Finance Manager, Marica Kesak from Tondach
Hrvatska, a company specialising in the production of roof tiles and other construction products. The transport of goods is simpler, but custom procedures for larger exporters and importers had been established prior to accession. On the other hand, competition is much stronger and many call it unfair. Actually, products are imported by the construction sector from the EU at extremely low prices, below any business calculations. Croatian producers find this strange, since they are familiar with the costs of production in Germany or France as their colleagues use almost the same technologies, equipment or raw
material. It is presumed that foreign producers aim at conquering the Croatian market with these extremely low prices or they are trying to get rid of their accumulated stock at low prices. Legalisation took the money for investment projects In any event, local producers find it hard to accept this type of practice, and it would be good if the state could introduce measures that would help overcome this situation, Marica Kesak suggests. Although almost everyone in the European Union supports the open market, other countries also
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( 58% of those surveyed
consider the Croatian economy is not included in EU streams
NTREPRENEURS THINK AFTER
been r useful
5 (the best). Of the 400 surveyed, 116 ranked business as s borders is simpler, but these procedures were established
Assessment of Croatian two-year EU membership 20,4
Unsatisfactory Satisfactory
28,9
Good Very good Excellent
43,0 5,5 2,2
Assessment of level of Croatian economic inclusion in EU Fully excluded
energy efficiency of buildings. The application procedure was not highly complex, and all in Tondach believe they will meet the conditions set out in the tender, opines Marica Kesak.
reacted to these price disruptions. The entire construction sector in Croatia has been hit hard by the crisis, and certain state regulations aggravated the situation even moreso. The legalisation of illegally built property is a valid example. Individuals paid a high price to legalise their buildings, and now they cannot afford to repair roofs or make other construction work that could boost the exhausted construction sector, says the Tondach representative. This company will try to compensate for a percentage of its income by applying for EU funding. The company participates in the programme for improving the
No progress without increased spending “We are more interested in a stronger increase in local spending than EU accession”, says Anton Lukić, Managing Director of Algros. The company specialises in the production and wholesale of leather products (purses, wallets, belts, travel and business bags). Only when local customers relax and start to feel their living standards are improving will they will spend more, and the situation in our industry will improve, Lukić says. The positive effect of EU accession is also noticeable in the growing number of tourists who have managed in part to take up the slack in weaker local wholesale spending. Lukić also agrees that it is now easier to transport goods and processed materials across borders. There is no more waiting and many customs formalities can be processed during the weekend. However, until the unemployment rate decreases and people stop fearing about how they will make ends meet, it will not be good for those working with products the customers do not need on a daily basis, Lukić concluded.
%
15,4
Mainly excluded
42,3
Neither included nor excluded
32,6
Mainly included Fully included
%
9,2 0,5
EU policy influence on the Croatian economy Very damaging
10,2
Mainly damaging
19,7
Neither damaging nor useful
44,0 %
Mainly useful Very useful
23,9 2,2
Impact of stricter EU monitoring aiding exit from the crisis Could help
57,0 39,6
Cannot help
I don’t know
3,5
%
4 ::: news Rapid money transfer
Privredni vjesnik Year VIII No 249
( more than 50,000
Croatians employed in EU countries in 2013
LABOUR MOBILITY Fina has recently introduced a rapid money transfer service through Western Union. Western Union enables money transfers across 200 countries globally and the sending or receiving money at over 500,000 Western Union agent locations rapidly and safely. Money transfer transactions in Croatia are performed solely in kuna, based on an exchange rate determined by Western Union. The maximum amount of cash transferable through Fina from Croatia is €3,300.
AROUND 217,000 W MIGHT LEAVE CROA
Workers who leave Croatia for other EU countries are mainly educated, young and have those countries. During the last two years they remitted back to Croatia over €702 millio
Gold medals for Citus The Croatian company Citus won three gold medals for innovation (solutions C@N eMotion and Body Recog – Fitness) at the INPEX 2015 International Invention Awards Programme, held in Pittsburgh for 30 years. During INPEX a large number of business relations were established aiming to promote Croatian innovations. Amongst a cross-section of arrangements were those with a representative of a company from the Sultanate of Oman, as well as with US companies. Startup Camp 2015
Ilijana Grgić ince July 2013, when Croatia joined the European Union, over 50,000 able-bodied Croatians found work in the 27 member countries. Even though this number cannot compare with the total population of one city, such as Sisak, for example or Varaždin, the European Commission finds no reason for concern since this is only 0.01% of the total EU population. Moreover, for them the labour mobility of Croatian workers is comparatively low. After accession, Germany and Austria remained the main destinations of Croatian workers, despite the applied limitations. Germany took in 68% of total Croatian workers and Austria 17%. Data from 2014 show that 229,000 economically active Croatians lived in 27 EU countries, which is 0.1% of the
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Startup Camp 2015 will be held by Step Ri at the Science and Technology Park of the University of Rijeka between 2nd and 6th September. During Startup Camp, American and Croatian entrepreneurs and investors will provide assistance to participants, aiming to promote their business ideas through individual counselling, as well as through group work. The most successful teams will win important awards and participation is free. Startup Camp project will be implemented in co-operation with the US Embassy, Step Ri and CRANE – the Croatian Network of Business Angels.
total EU work force. However, most left Croatia before 2000, before Croatia joined the EU. Workers who leave Croatia for other EU countries are mainly educated, young and find work easier in those countries than the local population. Mobility may represent an opportunity for both workers and economies of the host country, and this has been proven during prior accessions. The Commission is fully dedicated to promoting labour mobility, and wishes to secure equal rights for all, highlighted Commissioner for Employment, Social Affairs, Skills and Labour Mobility, Marianne Thyssen. Workers send money home According to the report by the EC, which will serve the EU Council as the basis for reviewing transitional measures for limiting access to the labour
market, the brain drain of young highly educated Croatian workers, even though it increased after accession, remains moderate, and there is no proof that the brain drain of young workers has caused lack of know-how in the Croatian economy. Moreover, it is stated that the impact of labour mobility on Croatia is positive and reflects in decreased unemployment and the remittances Croatian workers send home. According to data provided by Eurobarometer, 80% of Croatian workers go abroad for better pay; 31% leave to have better working conditions and 30% leave as they cannot find work in Croatia. During the last two years, Croatian workers employed in the EU sent over €702 million back to Croatia - this represents €500 per capita. According to data provided by the Croatian Employment Agency (HZZ), between 1st July 2013 and 31st May 2015, 6,642 people were deleted from the HZZ registry as they had found work in one of the EU member countries. In terms of destinations, most found work in Germany (70.3%), followed by Aus-
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5 CROATIA-KOREA BUSINESS CLUB
( 0.01%
of total EU population
WORKERS ATIA BY 2019
fewer problems finding work than the local population in on
tria (11.8%), Slovenia and Italy (2.5%), and these are mainly people who have completed secondary education. EU remains calm According to the European Commission, the labour mobility of Croatian workers will remain low in the future and will not cause disruptions to the la-
There is no proof that the brain drain of young workers has led to a lack of know-how in the Croatian economy, according to the European Commission bour market, even in the main destination countries and even if the limitations are eliminated. The Union of Autonomous Trade Unions of Croatia (UATUC) agrees with this opinion, highlighting that all four basic freedoms of the EU rests upon (free movement of goods, capital, workers and services) have to be
equally important, and that is it unjustifiable to limit the movement of workers inside the EU if it is not possible to limit the movements of capital. “At the same time, we are warning Croatia that is should not regard the freedom and possibility of employing Croatia workers in other EU countries as a way of solving the problem of high unemployment in Croatia. In other words, freedom of employment in other member countries presents only an additional reason, and the responsibility for Croatia and its institutions to allow the Croatian public to exercise their constitutional right to work and have conditions which provide a dignified life”, highlighted the UATUC President, Mladen Novosel. He also added that even if the Croatian brain drain could lower the unemployment rate in the short-term, the lack of educated young people would damage the development potential of Croatia in the long term, and jeopardise its economic and social recovery. Forecast for the period to 2019 In reality, the EC report, analysing the conditions in Croatia and containing surveys on the willingness of Croatian workers to leave the country, also estimates that if the limitations persists, 166,000 people could leave Croatia between 2013 and 2019. This number increases to 217,000 if the limitations are eliminated. It is also estimated that the highest number of people will go to Germany, Austria and Italy. For the sake of comparison, over 266,000 people are currently registered by HZZ as unemployed.
Growing interest in investment in Croatia
The Croatia-Korea Business Club has recently marked its first anniversary. “The Club was established at a most propitious time, during which a large number of Korean investors had shown an interest in investing in Croatia“, pointed out Suh HyungWon, Ambassador of the Republic of Korea to Croatia during a ceremony held at the Embassy of the Republic of Korea. He added that Croatia has become an attractive tourist destination for Korean tourists. As an EU member state, Croatia can exploit the opportunities provided by the Free Trade Agreement between the Republic of Korea and
the EU. Zoran Horvat, President of the Croatia-Korea Business Club, highlighted the long-term friendly relationship between Croatia and Korea that has been additionally strengthened by the activities of the Club, the penetration of Croatian companies on the Korean market and since recently, through the signing of the Air Transport Agreement between the two governments. Moreover, the Korean giant, Samsung, is currently returning to Croatia. During the first year of its establishment, the Business Club has attracted some of the most reputable Croatian companies and institutions such as Agrokor, Atlantic, Vindija and Kraš, to name a few. Moreover, it has organised a wide range of projects amongst which is the first appearance of Croatian companies at the Seoul Food 2015, the largest exhibition of food and beverage for the markets of Korea and Japan, held in May 2015. (I.V.)
DIRECT FLIGHTS BETWEEN TORONTO AND ZAGREB
Canadian tourists arriving in Croatia SkyGreece Airlines, a Greek airline, has recently introduced direct flights from Toronto to Zagreb and return. Until 12th October 2015, SkyGreece Airlines aircraft will provide direct flights from Toronto to Zagreb on Mondays and from Zagreb to Toronto on Wednesdays. The introduction of direct flights between the two cities is the result of co-operation between SkyGreece Airlines, the Croatian Ministry of Tourism, the Canadian and the Croatian Embassy, the Croatian National Tourist Board, the Croatian-Canadian Business Network and Zagreb International Airport. To mark the occasion of the first direct flight, Darko Lorencin, Croatian Tourism Minister, pointed out that arrivals and overnight stays of foreign tourists account for 90% of the total Croatian tourism traffic, with most tourists arriving from Europe. Nevertheless, the opening
of more distant markets, resulting in increased tourist arrivals, is one of the principal objectives of the Ministry of Tourism and the Croatian National Tourist Board. “The second most important feature is traffic connectivity and I can express my utmost satisfaction with this newly introduced direct flight, as our country will become a more approachable tourist destination for Canadian tourists”, stressed Lorencin. Mark Mocnaj, a representative of SkyGreece Airlines, emphasised that this aircraft operator is exploring the possibilities of introducing new flights between Canada and the US and Zagreb and several other Croatian tourist destinations. (S.P.)
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Privredni vjesnik Year VIII No 249
( €320 billion ( 25 projects Fund for Strategic Investment
with a value of €9 billion proposed by Croatia
INVESTMENT PLAN FOR EUROPE – AN OPPORTUNITY FOR CROATIA
The Juncker Plan: all projects with potential will be allocated resources Projects proposed by Croatia comply with the concepts of the founder of the fund, to encourage investment in transport, infrastructure, the energy sector and primarily in renewable energy sources and SME’s, pointed out Luka Burilović, President of the Croatian Chamber of Economy Igor Vukić xtension and full reconstruction of Dubrovnik airport is one of the four projects that have thus far been selected and will be allocated resources from the special Juncker Fund For Investment. The Fund For Investment has a value of around €320 billion and aims to revive the investment dynamics throughout the European Union, which has seen a substantial slowdown during the recession starting in 2008. “It is an innovative fund where no differences will be made between investors. Irrespective of the fact whether one is a public or a private investor, if you have a good project, you will be allocated resources”, emphasised Violeta Bulc, European commissioner for mobility and transport, during her visit to the Croatian Chamber of Economy, at a conference entitled The Investment Plan for Europe – an opportunity for Croatia. Croatia has already proposed 25 projects whose total value is estimated to be €9 billion, highlighted Luka Burilović, President of the Croatian Chamber of Economy. According to him, projects proposed by Croatia comply with the concepts of the founder of the fund - to encourage investment in transport, infrastructure, the energy sector and primarily in renew-
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The Juncker Investment Plan requires the abolition of obstacles to all types of investment throughout the EU
Digitisation, electrification, innovation Digital infrastructure will be encouraged through the Juncker Plan and hence the focus will be placed on investment in broadband network and products contributing to the development of the digital economy. Violeta Bulc, European commissioner for mobility and transport, pointed out the fact that transport infrastructure will be provided with the opportunity for a large-scale modernisation. The currently available funding of €27 billion of potential investment in transport could be increased to €70 billion through Juncker Plan funding. Moreover, road network for electric vehicles will be focused on and encouraged. In addition, hybrid aircraft will be developed, aiming to reduce the amount of carbon dioxide and other greenhouse gasses. The core of the European transport network comprises nine corridors of which two pass through Croatia, and hence the great potential for new projects. Nevertheless, efficiency, innovation and comprehensive planning are imperative: the EU Department for Transport has currently seen three times more projects compared with available financial resources, pointed out Commissioner Bulc. able energy sources and SME’s. Burilović added that a new wave of investment in Croatia is aiming to encourage her slow exit from the crisis. “Irrespective of the indicators showing Croatian exit from the recession, all economic activities are currently still happening at too slow a pace”, opined the President of the Croa-
tian Chamber of Economy. The Juncker investment plan demands the removal of barriers to all types of investment throughout the EU and it is likely to greatly help Croatia where the investment climate is unsatisfactory, concluded Burilović. Croatia has reversed the negative trend through increased exports
and greater investment is considered to be another important feature of GDP growth, stated Branko Grčić, Vice-President of the Croatian Government. According to him, the effects of investment implemented through EU funding were visible by the end of 2014. The continuation of investment in railways, new trains and water-supply systems in several Croatian cities is expected to be a more vigorous driving force for development. Investment in Dubrovnik airport is valued at €260 million, which greatly exceeds the value of investment in Zagreb airport. In addition to co-financing through European Investment Bank and EU Funds, the Croatian Bank for Reconstruction and Development will provide the remaining funding. Furthermore, the Croatian Bank for Reconstruction and Development will be the central venue for the allocation of resources concerning other projects from the Juncker Plan funding, as announced by Grčić. The revival of investment is the main prerequisite for the renewed achievement of higher growth rates, noted Vedran Šošić, Vice-Governor of the Croatian National Bank. According to analyses, the European economic slowdown was also caused by a substantial drop in private investment. Encouragement and a more vigorous launch of private investment, which, in the case of Croatia, applies both to public and private investment, will be a fundamental feature for the maintenance of positive economic trends in the forthcoming period, stated Šošić.
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( £14 billion BAT revenue in 2014
( £0,13 billion TDR revenue in 2014
TOBACCO BUSINESS
€505 MILLION FOR TDR British American Tobacco, the new owner of TDR, has pledged to keep its manufacturing facility in Kanfanar and provide an additional €50 million in the event of premature factory closure on its staff in Croatia, on tobacco industry development, as well as on our tobacco producers”, noted Majetić. It is important to point out that the TDR acquisition means the return of BAT to Croatia that it left in 2005. In 2014, BAT revenue stood at slightly below £14 billion, and BAT cigarette sales stood at around 670 billion. On the other hand, TDR revenue stood at £0.13 billion and it sold 8.7 billion cigarettes in 2014.
Boris Odorčić ollowing several months of negotiations, British American Tobacco (BAT) has acquired Tobacco Factory Rovinj (TDR). Mato Zadro, President of the Management Board of TDR and a member of the Management Board of Adris Group, and BAT representatives signed the Purchase and Sale Agreement in London. BAT will thus become the owner of TDR and the companies under the Adris Tobacco Strategic Business Unit – Istragrafika, Croatian Tobacco and retail chains iNovine and Opresa (the distributor in Bosnia and Herzegovina). It is important to highlight that TDR also sold to BAT its 25.86% stake in Tisak, whose majority owner is Agrokor. The transaction, after the deduction of TDR obligations, was valued at €505 million. In compliance with the contract, the new owner undertakes to retain the TDR manufacturing facility in Kanfanar for at least five years following the acquisition, and to provide an additional €50 million in the event of prema-
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ture factory closure, as stated by Adris Group sources. “We express our utmost satisfaction with the assessment of TDR and the employment protection provided. Nevertheless, I believe it is important to highlight the fact that a reputable company has recognised the added value in our integrated business model, which includes the purchase and processing of tobacco, cigarette production, packaging, distribution and retail. The fact that production in Kanfanar will continue is of extreme importance for all, as well as the fact that jobs will be preserved”, stressed Mato Zadro,
President of the Management Board of TDR. A step forward Davor Majetić, Managing Director of the Croatian Employers’ Association, believes that the BAT acquisition of TDR is excellent news for Croatia, both for Tobacco Factory Rovinj and for Adris Group owners. “I do not have a comprehensive insight into contract details, yet being acquainted with Adris Management Board and their intentions of selling TDR, I believe this is a step forward for TDR development, implying a positive impact
TDR acquisition is a return of BAT to Croatia, which it left in 2005 In accordance with the conclusions reached at the General Meeting of Adris Group held on 20th January 2015 – the shareholders – who were advised by both the Supervisory Board and the Management Board to accept the agreement – will reach the final decision concerning this transaction during the General Meeting to be held on 14th July 2015.
TRADING SITUATION FOR THE FIRST FOUR MONTHS OF 2015
Exports up by 10% and continuing to grow faster than imports
The total value of Croatian exports during the first four months of 2015 reached €3.6 billion, 10% up compared with the same period in 2014, according to data released by the Croatian Bureau of Statistics.
Imports stood at €5.9 billion, 4% growth. The export/import ratio stood at 60.8%. “The value of exports continues its highly dynamic growth of 10% on an annualised basis. The growth in import value has simultaneously seen a reduction in relation to the first three months. Consequently, the trade deficit in goods during the first four months of 2015 dropped by 4.1% on an annualised basis”, pointed out Zvonimir Savić, Di-
rector of the Sector for Financial Institutions, Business Information and Economic Analysis at the Croatian Chamber of Economy (HGK). Export and import growth rates will be additionally increased until the announcement of preliminary results, yet the conclusion on export growth dynamics significantly outperforming import growth dynamics will continue to apply, suggested the Croatian Chamber of Economy.
The Croatian Bureau of Statistics has recently provided data on exports during the first three months. The total value of exports during that period stood at €0.2 billion, which implied a 9.7% growth in relation to the first three months of 2014. The value of exports reached €4.4 billion, 7.2% up compared with the same period in 2014. The foreign trade deficit stood at €1.7 billion, or an export/ import ratio of 60.5%. (I.V.)
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Privredni vjesnik Year Yeear VIII No 249 Y
( 130,000 litres of wine annual production from Bastijana
Interview: Andro Tomić, Owner/Manager of Bastijana
Prošek production to inc
There is not a single aspect of life on Croatia or activity that has changed as much as wine production. On the island Dalmatia; today there are over 700. Market saturation is impossible since new generations of young wine lovers are Jozo Vrdoljak ne of the most renowned wine producers in Croatia is owner and Director of Bastijana, Andro Tomić who gained wide experience in France, the leading wine country. Thanks to his advice, many Dalmatian wine producers improved the quality of their wine. For several years now, Andro Tomić has been the owner of a wine cellar in Bay Mina in Jelsa. A couple of years ago he advocated the protection of prošek as a traditional Dalmatian and Croatian product. Privredni vjesnik spoke with him about the potential of plavac
O
Prošek is produced from selected grapes, and production is expensive since the fermentation process is timeconsuming mali, prošek and Croatian wines in general. Tell us something about your business activities? We have 12 employees. We produce around 130,000 litres of wine and own 10 hectares of vineyards on Hvar. We also cooperate with 50 subcontractors and produce wine from various varieties, mainly plavac mali and plavac veliki as red varietals, as well as pošip, bogdanuša, maraština and prč as white varietals. We also use dernekuša, cabernet sauvignon, merlot, cabernet franc, yellow muscat and other local varieties. Bastijana’s annual turnover totals around €0.8 million.
What was last year like? Compared with previous years, the harvest was bad for almost all wine producers. I know that some colleagues had a solid harvest, but 2014 was definitely one of the worst years ever. Considering you are one of the best-known prošek producers, tell us about the present situation of this varietal? There was a period when some attempted to dispute it or compare it with the Italian product with a similar name that is named prosecco. Prosecco is a sparkling wine and a completely different product compared with ours. It is true that in those times, I was very much engaged in trying to contest such an attempt, and I can say we managed to prove the point. Therefore, the present labels on the bottles of Croatian producers say that this is prošek. Prošek is more similar to the Italian Vin Santo or other high quality Mediterranean sweet wines, but not prosecco. Prošek originates from the coastal area of Dalmatia, the islands of Kvarner and Istria and it is produced only in those locations. During my recent visit to Brussels, I presented three packages of my Hektorović prošek that has won many global and local awards. I am able to say the presentation was very successful. In which stage is the protection of prošek? I do not find any problems in trying to protect it at a European level. The fact we, its producers, can sell it under its name shows that everything is in order. Its quality is obvious, and I do not think there should any problems
in this sense. Legally, prošek producers are considered only those producers that produce it from grapes, not from sugared must, as once was the case in massive production. To what extent did Croatian producers benefit from the fact that prošek is traditionally produced in Croatia? I would say, not enough. All of us produce small quantities of prošek. However, I am convinced that the present producers will soon increase production by several times, and that new producers may also appear. I expect, rather, I am convinced prošek will be produced on a more massive scale, but in a more sophisticated manner, using so-
lar energy. Of course, it will be produced from pure dried grapes without additives. The production process of prošek is costly, but justified by its quality. Prošek is traditionally produced from dried grapes, and rich families once had 1,000 litres of it. Is the production of prošek economically justified? I personally intend to produce larger quantities of Hektorović in conditioned facilities. As far as I know, some of my other colleagues will do the same. Therefore, as with the Italians and French, we will also produce dessert Mediterranean wines. The production price cannot be below €16 - €17.30 per 0.5 litre, since the production pro-
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( 10 hectares area of vineyards on Hvar
( €0.8 million annual turnover
rease several-fold of Hvar there are over 130 brands. Once, there were only a dozen in the whole of born every year How do you evaluate the Croatian wine sector? There is not a single segment of life in Croatia or activity that changed as much as the production of wine. On the island of Hvar we have over 130 brands. Once there were a dozen throughout Dalmatia; today, we have over 700. It is also true that many new producers find it hard to achieve success abroad, but they can compete on the regional market. Will market saturation occur? I think this is impossible since the number of wine lovers increases every year. Furthermore, it is a tradition to drink the wine from the destination you are in, regardless of where you come from. This is a huge capital for our wine producers since we are a tourist destination. This means when a Frenchman visits Dalmatia he drinks Dalmatian wine. cess is expensive and demanding. Of course, this relates to the purchase price. Prošek is made from selected grapes, and the production is expensive as the fermentation process is time consuming.
What is the global position of Croatian wine? We are not sufficiently organised. We do not produce enough to take a substantial share of a market. In general, Croatian wine producers sell their wines in Croatia and across the region.
Any kind of export success is mainly due to the efforts of an individual wine producer. We are predominantly oriented towards the local market. We export only small quantities and mainly to
I am convinced that prošek will be produced on a massive scale, but in a more sophisticated manner, using solar energy known buyers. The good news is that after EU accession, EU tourists from European countries can buy as much wine as they wish and take it home after their vacation. What is the future of Croatian wines? Only the persistent ones will survive and those who work on promoting their brand, but this is the case in any business. Dalmatia is expensive as far as grape production is concerned. Therefore, you cannot produce wine of medium and lower class. You cannot survive if you produce wine with an output price of €3.
If we did not have tourism, there would be fewer vineyards Is Croatia a wine country? It is hard to say. Hvar used to have 5,700 hectares of vineyards. It now has 300 hectares. They say we are a wine destination. It is true we have a tradition, quality awareness and a culture of enjoying wine, and most importantly, we have tou-
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rism. If we did not have tourism, there would be fewer vineyards. Currently, it is in our favour that every year a new generation of wine lovers is born, and Dalmatia has a lot to offer them. Nevertheless, it is very hard to achieve the numbers dating from a century ago.
Three requests for excellence labelling The Ministry of Agriculture has recently submitted to the European Commission three requests for the registration of Destination of Origin label for products granted a transitional national protection of Croatia – lamb from the island of Pag, olive oil from the island of Šolta and olive oil from the island of Krk. The registration of labelling will provide these products with protection from misuse that could mislead consumers concerning their true origin, throughout the European Union. Uljanik acquires MID Any long-term uncertainty concerning the future of the Rijeka-based company 3 May MID has been removed after the sale of shares by the Centre for Restructuring and Sales, the Pulabased company Uljanik and 3 May MID. The Uljanik shipyard has thus become the 100% owner following a payment of just HRK1, whilst accepting to take over all state liabilities in the completed Pre-Bankruptcy Settlement Agreement with MID and to pay all outstanding salaries. Agrokor acquisition of Adriatica.net The Croatian Competition Agency has recently approved the Agrokor acquisition of the tourist agency Adriatica.net. Prior to this recapitalisation, Agrokor owned a minority stake in the Gulliver agency. The market has not been negatively affected by this transaction since there are 1,100 branch offices currently on the market and a large number of travel agencies. Adriatica.net accounts for some 10% of the market and is currently facing a downward trend, concluded the Croatian Competition Agency.
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Privredni vjesnik Year VIII No 249
( 2,250 producers ( 50,800 ha of organic food registered last year
used for organic farming
HUGE PROGRESS MADE IN PRODUCTION OVER A DECADE
ORGANIC FARMING BOOM During the last 12 years, the number of organic food producers has increased substantially. The amount of land area used for organic farming has increased almost a hundredfold. Most organic food producers, particularly since EU accession, have seen substantial sales of their products KreĹĄimir SoÄ?ković ccording to statistical data, Croatia is currently faced with a boom in organic farming. Whilst in 2002 there were only two registered organic food producers, in 2014 there were 2,250 registered organic food producers. Moreover, the total area of agricultural land used for organic farming soared from 51.8 hectares to 50,800 hectares over the same period. By the end of 2014, according to data provided by the Ministry of Agriculture, the land area used for organic fruit orchards increased to 3,941 hectares, and organic vegetable growing accounted for 350 hectares. Walnuts and hazel trees have the highest level of organic fruit farming, with walnut trees covering 1,346 hectares and hazel 916 hectares. Organic plum orchards cover a total of 458 hectares of land, organic sour cherry orchards, 259 hectares, organic apple orchards, 256 hectares and organic aronia berry, 101 hectares. The remaining 606 hectares of organic orchards
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are used for multiple cropping. According to incomplete data, by the end of 2014 the percentage of organically managed agricultural land stood at a meagre 3.9% of total agricultural land. Nevertheless, the level of organically managed agricultural land is anticipated to reach 8% by 2016 through the Action Plan for Development
Number of organic food producers in Croatia between 2002 and 2014
of Organic Agriculture. A large number of training sessions and substantial assistance to organic food producers are imperative in order to implement the Action Plan that was passed last year. Moreover, creation and implementation of Croatian standards for organic food stores, organic restaurants and organic agro-
tourism and/or eco-friendly hotels have been announced, as well as the encouragement of institutional purchase of organic products to meet the requirements of food centres for the poor. Generous subsidies Whilst some ten years ago state institutions did not have an
Organically managed land in Croatia between 2002 and 2014
2500
2250
60000 50800
50000
2000 1494
1528
40576
1609
40000
1500
30000 1120
1000
31903
23282
817 506
500 2
0
30000
130
189
269
20000
628
356
2002. 2003. 2004. 2005. 2006.
Source: Ministry of Agriculture, March 2015
14193 6008
7577
2002. 2003. 2004. 2005. 2006.
2007.
10000
3506 51,8
2007.
2008. 2009.
2010.
2011.
2012.
2013.
2014.
0
2654
10010
3184
Source: Ministry of Agriculture, March 2015
2008. 2009.
2010.
2011.
2012.
2013.
2014.
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( 20% increase
in incentives for all producers transferring to organic production
adequate insight into organic farming and hence organic food producers were allocated subsidies for the purchase of mineral fertilisers, (which are never used in organic farming), organic food producers have since recently been able to rely on subsidies intended exclusively for organic production, in addition to customary subsidies allocated to them. Hence, organic growers are
farmers point out that, in addition to quality and security provided by organic products considering the additional control and supervision they undergo during the certification process, co-operation between stakeholders on the organic food market is fundamental. Furthermore, fair operating practices, as well as the protection from market imperatives imposed by large systems that threaten the weakest links in the chain, or in this case small organic food producers, are considered essential. Careful planning Marija Ševar, senior co-ordinator of Advisory services, highlighted the fact that amongst organic food producers there is a large number who have been allocated subsidies irrespective of their insufficient training and meagre background knowledge of organic farming. “Their biggest problem is the maintenance of organic farming methods, as well as the sales of their products”, stressed Marija Ševar. Nevertheless, advisers emphasise that there is potential for them in future. Most organic food producers with substantial experience normally do not face any problems concerning the sales of their products. The European market, both the neighbouring
eligible for subsidies for organic pastures of €258.28 per hectare for the maintenance of organic farming methods, €289.82 for arable crops, €480.78 for vegetables and €723.49 Organic fruit for perennial crops. Durorchards in 2014 ing the transitional period which normally ranges bewalnut mixed fruit tween one and three years, 606 in which producers replace aronia berry 101 conventional methods of food production with or1.346 apple 256 ganic food production, the subsidies are slightly high259 hectare (ha) er - €309.94 for pastures, sour €347.78 for arable crops, cherry 458 €576.94 for vegetable farming and €868.18 for 916 plum perennial crops. hazelnut Meanwhile, the number Source: Ministry of Agriculture, March 2015 of institutes supervising organic farming has risen con- Austrian market and the remainsiderably and there are currently ing European markets further diseight such institutions located tant, see a demand for top quality throughout Croatia, whilst one products such as those produced licensed supervision institute by Croatian organic food producis located in Slovenia. Organic ers, provided at acceptable prices
3.492
ONE FIFTH OF CROATIANS LIVING IN POVERTY
Food donations should be VAT exempt
Irrespective of Croatian twoyear EU membership, one fifth of the population currently live in poverty, which is one of the reasons for the launch of the initiative entitled Let’s exempt food donations from VAT. The most needy should not depend exclusively on random individual acts of kindness by individuals or retail chains, since their hunger is also an issue during the holidays, pointed out Zoran Grozdanov, the initiative co-ordinator, during a roundtable discussion entitled European models of food donation – experiences and perspectives for Croatia. The meeting was organised by the Croatian Chamber of Trades and Crafts in co-operation with the European Economic and Social both for producers and buyers. Zoran Vasić, Assistant Minister of Agriculture, stressed that Croatia is following European best practices. “There is substantial work ahead of us if we wish to keep abreast of Europe. Consequently, the Ministry of Agriculture has increased subsidies to all the producers under transition from conventional to organic agriculture by 20%. Those involved in organic food need to integrate through assistance provided by companies such as Biovega, since organic farming is our future”, pointed out Vasić. Zlatko Pejić, director of Bio zrno, highlighted the risks and the challenges of organic farming. “Posing the right questions and finding creative solutions is imperative during problem solv-
Committee and under the supervision of the Ministry of Agriculture. “The initiative is striving to establish a food donation system at state level, to ensure the meeting of the requirements of those most in need, in a timely manner, encourage food donations and prevent manipulation”, stressed Grozdanov. During the roundtable discussion, some 50 participants addressed the issue of an effective food donation system, whilst examples of best practices were presented by Yves Somville, a member of the European Economic and Social Committee. The specific objective of this initiative is the strengthening of social solidarity and combating poverty, without influencing market conditions. (K.S.) ing. The prices of conventional foods are 12 to 14 times higher compared with those we see in the final price of the products, as they do not include the costs of all the ecological resources: water pollution, fertile land pollution, impact on biodiversity as a result of monoculture farming, pollution caused by transport and warehouse processes, as well as a longer shelf life. Organic farming is not provided with such opportunities and is not striving towards them. Subsequently, production costs are significantly higher – ranging from the remediation of land pollution, continuous surveillance, as well as a distribution that provides protection from contamination to organic products”, pointed out Pejić.
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Privredni vjesnik Year VIII No 249
( €52.8 billion
level of bank assets at end 2014
( 21.4% total capital rate
ANNUAL REPORT 2014 CROATIAN NATIONAL BANK
Banks interest income still
Despite a recovery compared with relation to 2013, profitability indices remain low compared to previous years. This negative economic trends that caused negative outcomes in terms of credit risk and increased corrections in asset va Igor Vukić nterest income, a main source of profit for Croatian banks, continued to decrease through last year, according to the Annual Report for 2014, from the Croatian National Bank (HNB). In addition to weak credit activity and growing risky demand, new rules of consumer crediting, limiting the interest rate, also had a strong impact on the fall, HNB analysts pointed out.
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Clearance of foreign debt continues, but liquidity reserves remain high The report, representing a detailed X-ray image of the local banking system, shows that the bank assets mildly decreased for the third consecutive year, effectively by 1.1%. It stood at €52.8 billion at the end of last year. One the other hand, the assets of building societies increased 2.7% to €1.05 billion, although the percentage of building societies in the assets of all credit institutions remained unchanged. Weaker credit activity Despite the recovery compared with 2013, profitability indices remain low compared with previous years. This is a consequence of multi-year negative economic trends that caused negative outcomes of credit risk and increased corrections in asset values. Both bank and client levels of caution remain high. Credit activity is weaker, and the situation regarding bad loans motivated activities for resolving them, according to data provided in the Report. Business optimisation processes continued, such as
strict control of general costs and sale of non-core business areas. Clearance of foreign debt continued, even more so than last year, but liquidity reserves remain high. A percentage of foreign resources were partially replaced by local sources, mainly public and corporate deposits. The public also continued to clear their debts, for the sixth consecutive year, especially regarding housing loans. Only cash non-purpose loans in kuna saw a significant increase. Interest income decreased considerably in the public sector, especially related to housing loans in Swiss Francs, where the
Two banks fail to meet the end of 2014 At the end of 2014, there were 33 credit institutions in Croatia: 27 banks, 1 savings bank and 5 building societies, according to the HNB Annual Report 2014. In relation to the end of 2013, two institutions have fallen; Nava bank went into bankruptcy in December 2014, and Banco Popolare Croatia merged with OTP bank. This marks the fifth year of moderate falling trend of the number of credit institutions, according to data in the Report. interest rate was fixed at 3.23% at the beginning of 2014. Due to the fixed interest rate on these housing loans, the banks’ exposure to the interest rate risk increased considerable, although it managed to remain below
the prescribed limit. The number of corporate loans plummeted despite the new model for motivating corporate credit that HNB introduced at the end of 2013. Total loans issued by banks decreased effectively by
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( 0.5%
Croatian GDP Forecast 2015
WORLD BANK
falling More efficient and
is a consequence of multi-year alues 2.9% in 2014. Operating profitability (profitability before costs of reserves) increased after falling for two years, mainly due to lower interest rates and a lower expense of financing, where the fall of public fixed-term deposits remained especially highlighted. High level and quality of capital Business risks remained adequately covered by capital. The conservative approach of the past years provided high capital levels and quality, and the measures on capital protective layers were also introduced. At the end of 2014, all capital rates were significantly above the prescribed minimum. Overall, the capital rate moderately increased to 21.4%, due mainly to weaker loan activity by banks. In 2014, banks did not use short-term loans for liquidity. Last year, the highest nominal increase on an annualised level was noted by the banks investing in securities. The increase was 13.5%, and €0.8 billion was invested. Therefore, their share of 12.5% in total assets approached the highest value of that index, registered at the end of 2005, when it was 12.8%. Bank investment in bonds (local and foreign equally) increased by €0.9 billion (33.8%). As a result, this individually most important instrument increased its share to 54.3% of all debt securities. Regarding bonds, those of the Republic of Croatia remain dominant with 56.1% of all bonds and 30.5% of total debt securities. Banks also increased their investment in Treasury bills from the Finance Ministry (11.2%), and almost three-quarters of all securities related mainly to local securities.
equable property tax Property is now taxed through three systems (utility charges, holiday houses and real property transfer tax). The present system is costly, and brings little he World Bank anticipates an increase in spending and consumer trust this year in Croatia. It also predicts 0.5% GDP growth that should reach 1.2% during 2016, and 1.5% in 2017. The EU average anticipated for this and the next year ranges from 1.8% to 2%. On the other hand, the majority of EU member countries in Central and Eastern Europe will continue to see economic growth above EU average, which will be over 2.4% in 2015, due to higher personal spending, a gradual return in investment and an increase in exports, according to data provided in the World Bank EU Regular Economic Report, presented in Zagreb.
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Exports the main generator of economic growth In relation to other comparable countries such as Bulgaria, Romania and Poland, recovery is still weak in Croatia with ample room for strengthening. In order to establish macroeconomic stability, rapid consolidation meas-
ures should be implemented to improve tax collection, rationalise the mass of salaries and subventions, decrease misdirected social spending, finance capital expenditure from nonrepayable funds and privatise or sell assets that are not crucial, proposes the World Bank Senior Country Economist, Sanja Madžarević Šujster, adding that over the medium term Croatia should accelerate transfer to fullage pensions, discourage early retirement, rationalise healthcare expenditure and introduce a property tax. Three taxes A Property tax would be more equable and efficient than currently, where property is taxed through three tax collection systems - utility fees, tax on holiday homes and real property transfer tax. The present system is expensive and brings little, Sanja Madžarević Šujster highlights. She also added that it would be a direct challenge for Croatia
to maintain economic recovery oriented towards the re-establishment of fiscal and macroeconomic stability as well as promotion of the growth of the public sector and competition. According to data provided by the World Bank, economic recovery during 2014 was especially highlighted in Germany, Hungary, Ireland, Poland and the United Kingdom, and was finally seen in the countries of South Europe. Exports were the main generator of economic growth in many EU countries of Central and Eastern Europe, such as Poland, Bulgaria and Romania, and slightly less in Croatia, said World Bank Lead Economist and Poverty Reduction and Economic Management Sector Leader, Europe and Central Asia, Theo Thomas. He also added that now each country has to focus more on improving its business environment and decreasing regulatory obstacles in order to motivate new direct foreign investment and export growth. (I.G.)
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Privredni vjesnik Year VIII No 249
( €33.3 million value ( up to 800 tourists of resort on St Nicholas islet near Poreč
to be accommodated in 334 units in the resort
THE LARGEST TOURISM INVESTMENT THIS YEAR OPENS IN POREČ
Valamar Isabella Island Resort is a good example of co-operation between the public and private sector
According to Željko Kukurin, President of the Management Board, Valamar Isabella Island Resort is an eminent example of the success of measures of affordable financing through credit lines via the Croatian Bank for Reconstruction and Development (HBOR) and tax relief for strategic investment Jozo Vrdoljak he largest tourism investment this year – Valamar Isabella Island Resort – is located on the islet of St Nicholas near Poreč, is valued at €33.3 million and will employ 250 staff. Valamar Isabella Island Resort comprises 334 units and can accommodate up to 800 tourists. The hotel, the castle and Miramare outbuilding have been reconstructed and the bungalows have been converted into villas. Investment has also been into programmes, swimming pools, walkways and beaches. Furthermore, infrastructure for event organisation has been constructed and Isabella Resort and Villa Polesini together with the Riviera Hotel, will be presented as unique venues for weddings, conferences and similar events, according to Željko Kukurin, President of the Management Board of Valamar Riviera. “I believe this investment, as well as the previous Valamar investment, will show adequate returns for the shareholders and additionally enhance the tourist programmes in Poreč, as well as contribute to the development of both Istrian and Croatian tourism”, highlighted Kukurin. According to Kukurin, Valamar
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Total investment in tourism Darko Lorencin, Minister of Tourism, announced that investment in Croatian tourism will stand at €500 million and in the Adriatic region 25 new or fully reconstructed hotels will open, which is the largest figure across the last decade. He reiterated that 2013 saw investment of €230 million, with the value of investment in 2014 was €410 million. He stressed that during the forthcoming period the implementation of greenfield investment will begin, since there are only a few tourism facilities requiring reconstruction and renovation. “The Croatian government is currently focusing on the establishment of a more favourable investment climate through measures on tax relief for strategic investment, as well as through the Croatian Bank for Reconstruction and Development (HBOR). All the projects in Croatia are currently being implemented with assistance provided by HBOR”, noted the Tourism Minister. Isabella Island Resort is an outstanding example of the success of measures of affordable financing through credit lines of the Croatian Bank for Reconstruction and Development (HBOR) and tax relief for strategic investment, since it created 250 jobs in addition to 750 jobs during the two years of the reconstruction of the resort facilities. “During the last several years, Valamar has seen a vast array of challenges as a result of ownership and business reorganisation which will be completed this year. Following the recent merg-
er, Valamar Riviera currently has great potential. I am convinced we will see a bright future primarily concerning our portfolio development and new tourist experiences, and will become a leader in terms of innovation and growth in tourism both in Croatia and throughout the region”, emphasised Kukurin. Investment and acquisition Franz Lanschűtzer, the former President of the Management Board and currently Vice President of the Supervisory Board of Valamar Riviera, pointed out the challenges faced by inves-
tors, ranging from administrative hurdles to the highest tax rate on the Mediterranean. He explained that during the last 12 years, Valamar invested €0.3 billion in Croatian tourism and has seen growth across all areas of its business activity. It is aiming to continue investing. “We are planning to continue investing in our portfolio and aiming to expand through new acquisitions throughout the region. We are looking for high quality acquisitions such as the announced Valamar acquisition of Baška Hotels to bring added value to our shareholders, employees, partners and destinations in which we operate”, noted Lanschűtzer. In addition to Baška Hotels, whose acquisition is highly likely in the next several months, according to Ivana Budin Arhanić, Vice-President of Valamar Riviera for business development, acquisitions, strategic management and corporate relations, they are currently considering the potential of new acquisitions both in Croatia and outside. “Acquisitions depend greatly on circumstances; we are interested in campsites located in Northern Italy, as well as hotel operators in the Adriatic region, in Slovenia and Austria”, pointed out Ivana Budin Arhanić.
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New culture and tourism programme in Zagreb
Not an illusion but a Museum of Illusions The Zagreb-based Museum of Illusions has on display over 70 exhibits and visitors can expand their knowledge on human vision and perception, the human brain and science one appearing as a giant and the other as a dwarf. Furthermore, visitors are surprised by the sloping and endless rooms, as well as by levitating water, to mention but a few of the exhibits which constantly puzzle the visitors, as what the eye perceives differs greatly from reality. . “The Museum of Illusions also has a clever playroom that transforms itself into a brain fitness hall through a broad range of didactic concepts and dilemma games, whilst the Museum lecture hall is provided with 3D lighting, didactic toys for all generations and a large number
Sanja Plješa esisting gravity in a sloping room, increasing or decreasing in height the person standing in the other corner of the room and a bottomless pit, to name a few, are some of the exhibits in an extraordinary and recently opened Museum of Illusions. The museum provides interesting visual, sensory and educational experiences, and is an entertaining adventure for all generations. “The idea behind the Museum of Illusions was conceived following a long-term consideration on what and how to enhance the tourist programme in Zagreb. My colleague, Tomislav Pamuković, and I believed that there was sufficient room in the city for an extraordinary facility to provide additional education and entertainment and thus we decided to open this museum”, pointed out Roko Živković from the Museum of Illusions. He added that most of the exhibits on display were drawn and designed by the architect Juraj Kralj whose professional assistance was fun-
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damental for the establishment of the Museum. Furthermore, Kralj contributed significantly to the Zagreb conceptual design of the Museum premises, its rooms and overall design. Also, the importance of work by Dragan Vejnović, graphic designer, has to be highlighted, as he is the individual behind the visual identity of the Museum. The Museum of Illusions displays over 70 exhibits, based on natural science such as Mathe-
matics, Biology and Psychology. The visitors are given the opportunity to expand their knowledge on human vision and perception, the human brain and science, and thereby deepen their insight on why human eyes can see things that the human brain cannot comprehend. Consequently, one can experience the so-called Ames room in which two persons of almost equal height can appear to be of totally different heights –
Most of the exhibits displayed at the Museum were drawn and designed by the architect Juraj Kralj of souvenirs, aiming to expand the experience of wonder and discovery long after exiting from this Hall Of Illusions”, pointed out Živković.
SPLIT-BASED PARK HOTEL OPENS
Over €10 million invested in hotel reconstruction Following its 10-month long reconstruction, the Split-based Park Hotel has recently reopened and will accommodate its first visitors during the Ultra Music Festival from 10th to 12th July. Over €10 million was invested in the reconstruction, of which €3.5 million was provided via EU funding under the programme Enhancement of the economic activities of SMEs. “We prepared the entire project documentation
ourselves, submitted the project and obtained maximum resources through EU funding. In addition to the funding provided by the EU and being rated as the best, it is important to point out the fact
that the vast potential of Split as a tourist destination has been considered during the project evaluation”, noted Joze Tomaš, Director of the company Potestas which manages the hotel. During the reconstruction of the existing building of the Park Hotel, a further building was annexed and a fourth floor constructed, which expanded the hotel accommodation capacity from 57 to 73 rooms including six suites. Moreover, a new food
and wine concept has been created, a luxury spa centre with a fitness centre, an outdoor pool, a winter garden and a conference centre. In addition, the first electric car battery charging station in the city of Split is located at the hotel car park. Potestas, the company managing the hotel, had a turnover of €2.46 million in 2014. The hotel saw around 20,000 overnight stays prior to its reconstruction. (J.V.)
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Privredni vjesnik Year VIII No 249
“Restaurants are saturated; they have similar an ambience and an offer. But what we offer is a different experience of food.”
Martina Županić
YOUNG ZAGREB BUSINESSWOMAN AIMS TO START A NEW CULINARY TREND
Food that glows in the dark Luma Bites has developed recipes applicable globally, and most importantly substances that make the food glow are healthy and of organic origin Krešimir Sočković young Zagreb businesswoman, Martina Županić, has been working for a year on a project that she hopes will sell globally. The project is focused on a new method of preparing and serving ‘in-the dark-food’ under UV light.
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Patent protection that I am currently working on, is challenging Although this idea behind this business enterprise came spontaneously, it has great potential for selling globally, Luma Bites owner, Martina Županić, highlights. My boyfriend and I started to research online and found substances that glow under UV light, and one of them was quinine in tonic water. However, it was difficult to find it on the market since it is not sold in stores, so she continued to research and ex-
periment with food. She bought the ingredients, preparations, oils and spices from all over the world and tested them for different methods of food processing to achieve as much as an interesting effect and glow in the food as possible. She would like to create a culinary studio in Zagreb that would expand ideas and expertise on glowing food; tourists could come on request, taste the food and see what it looks like. Her second goal is to complete a full menu and create a franchise concept that could be sold to highend restaurants across the world. The menu would be adapted to the customs and habits of the restaurant country of origin that purchased the licence. This centre could also provide training for restaurant staff. Complex patent protection Luma Bites has developed international recipes applicable globally, and most importantly, the substances that make the food glow are both healthy and or-
foreign markets. We would like someone who could boost our marketing and who is financially stable. With this type of person we would be willing to enter joint ownership of the project”, Martina Županić notes. “The project is profitable since the food we prepare is edible and the project is unique, with immense interest.” ganic. The substances are added to other food to highlight its appearance under UV light. Trademarking was not a problem, but she is currently in the process of obtaining a patent and it is challenging. Writing patents demands co-operation with patent lawyers, which makes the process very expensive. She has had to stop for now, since all her savings have been used on concept development, trying to reach the point where she is currently. She is now working on collecting business expertise, at the same time trying to find an investor who would join the project. “It is very important to penetrate
Something different “Restaurants are saturated; they have similar an ambience and an offer. But what we offer is a different experience of food. I experimented a lot and organised events where I presented this type of food to receive feedback on its value. My conclusion is that people found it pleasant, fun, challenging and they left with their stomachs full”, Martina Županić said. If you are a food lover and you wish to experience it in different way, you will have to wait a while. However, we could see the first restaurant where we will see food in a completely new light and colours.