It’s about quality! At the end of December last year there were 298,161 registered economic operators
Investment in Sisak Investors again discovering Sisak. Their investments stands at one million euro
Smart seating Solar seating that can be used as mobile phone chargers and a source of light.
PAGES 2-3
PAGES 18-19
PAGES 20-21
SUPPORTED BY THE CROATIAN CHAMBER OF ECONOMY
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PVinternational C R O A T I A N
B U S I N E S S
&
F I N A N C E
M O N T H L Y
October 2015, Year VIII, No 251
WORLD ECONOMIC FORUM
WE ARE IN STEP WITH OTHERS
F
or a further year, Croatia ranks 77 on the global competitiveness list of 140 countries, composed by the World Economic Forum. “We could say it is stagnating, but also that the long-term trend of falling competitiveness has stopped”, the President of the National Competitiveness Council, Ivica Mudrinić, evaluates. “We managed to keep pace with others, that is, we are moving at the same speed as them. However, we will need to accelerate structural reforms to move up the list”, opined Mudrinić during last week’s presentation of results. Government Vice-President, Branko Grčić, is surprised with this year’s ranking, since many of last year’s economic indices turned from negative to positive. Exports and industrial production are growing, which is certainly a consequence of improved competitiveness and measures taken over the past two years, Grčić highlighted. He also pointed out that Croatia currently has the highest business climate index in the European Union according to data provided by Eurostat Croatia.
EMPLOYERS ALSO WANT HIGHER STANDARDS AND SALARIES
He also reminded that around one hundred of both small and large investment projects were achieved, and 25 new hotels were built with the help of the state and CBRD. The result was a positive balance of payments with foreign countries for the first time after the crisis years. Even the percentage of EU funds use increased. The President of Independent Trade of Unions of Croatia pointed out the fact
croeconomic environment was assessed negatively due to the deficit and public debt increase. This was confirmed also by Vice-President Grčić who explained this was a consequence of measures taken by the Government during the stabilisation of the economy. “We did not listen to those who advised only cuts. We tried to find a measure to avoid excessive spending cuts, which is crucial for economic growth”, Grčić explained. Concerning other countries with whom Croatia is most often compared, Slovenia, Slovakia, Macedonia, Romania and Poland all saw better results. Similar to Croatia, Bulgaria, Greece and Serbia also affirmed their last year’s position. Hungary and Montenegro dropped three places. workers’ salaries and rights are considerably better in the majority of the more competitive countries. However, it is often required from Croatia to limit these to boost competitiveness, Sever reminded. Ivica Mudrinić replied on behalf of employers that Croatian employers also want higher standards and salaries and that overall welfare is their priority. Profit is not the only goal; it rather comes as collateral, Mudrinić said. This year’s competitiveness results point to improvements in higher education and training (51), labour market efficiency (109), technological competence (43) and innovation (93). On the other hand, macroeconomic environment (107) and financial market development (88) saw considerably lower results. The ma-
INTRODUCE NEW TECHNOLOGIES
Vice-President Grčić thinks it is obvious that the considerable improvement in competitiveness came with Croatian full EU membership. “The national reform plan Croatia adopted in co-operation with the European Commission is similar to the model of other countries in the new Europe”, Grčić noted. On analysing the recommendations of the World Economic Forum, Ivica Mudrinić said that introducing new technology is one of the key factors to faster development. The public sector is becoming increasingly digitalised globally, increasing the level of transparency and efficiency. “We still have not created conditions in which it would pay off to invest in Croatia”, Mudrinić concluded. (I.V.)
BUSINESS 2014
IT’S ABOUT QUALITY, NOT QUANTITY! At the end of December last year there were 298,161 registered economic operators (trade associations, companies, co-operatives and institutions, bodies, associations and organisations). Of this number, 171,046 were active, of which 144,363 are profit-oriented legal persons and 26,683 registered as non-profit. Darko Buković bukovic@privredni.hr
I
n Croatia it is common in analyses, but also in everyday communication related to the economy, to mention the number of legal persons (organisations), percentage point increases, the growing number of start-up companies or number of active companies, which led me to investigate the exact number of Croatian companies, their relation and also activities. According to data provided by the Central Bureau for Statistics, there were almost 43% non-active operators in Croatia at the end of fiscal 2014. However, if we look on the positive
LAST YEAR, 104,470 ENTREPRENEURS (EXCLUDING BANKS, INSURANCE COMPANIES AND OTHER FINANCIAL INSTITUTIONS) ACHIEVED PROFITS OF €1.3 BILLION side, there were 57.4% active operators of the total number of registered economic operators. More precisely, 298,161 economic operators were registered at the end of December last year (trade associations, companies, cooperatives as well as institutions, entities, associations and organisations). Of this number, a total of 171,046 were active. 2 | PVinternational | October 2015 | No 251
Of course, the largest share and level of activity is held by trade associations, 160,323 of which were registered and of whom 142,121 were active, with a share of 88.6%. Concerning institutions, bodies, associations and organisations, the number of those registered climbed to 71,133, but only slightly over one third of them were active (37.5% or 26,683). It is even more interesting that of a total of 66,705 companies and co-operatives not even 3.5% were active. To be exact, 3.4% or 2242 operators were active. According to statistics, 2014 ended with 80,911 crafts (artisans) and those working in liberal professions. It is also interesting that of 171,046 of active legal persons and companies, 144,363 are for-profit while 26,683 are registered as non-profit legal persons. Concerning the forms of ownership, it is evident that private property is the most common and includes 81.8% of operators. A total of 0.7% of operators are owned by the state; 0.8% are in combined ownership and 1.2% in co-operative ownership. For 15.5% of legal persons the ownership is not monitored, as statisticians point out.
OVERALL, A SUCCESSFUL BUSINESS YEAR
Based on income indices, from the number of employees to profit, businesses 2014 was better than 2013. It was not much better, but according to entrepreneurs’ financial reports col-
CROATIAN BUSINESS & FINANCE MONTHLY
lected and processed by the Financial Agency, 104,470 entrepreneurs (excluding banks, insurance companies and other financial institutions) made profits of €1.3 billion. This would indicate that the consolidated financial result was 15.5% better than in 2013. A total profit of €4.65 billion was achieved by 65,395 or 62.6% of entrepreneurs, and 39,075 or 37.4% of them registered losses. In relation to 2013, the number of legal persons – income tax payers – increased by 3,279 in 2014. Total number of those employed in all 104,470 legal persons was 830,116 (based on working hours), which is 1.8% more than in 2013. There is additional data that should be noted. For each €13 of total expenditure, €13.75 of total income was achieved, which is €0.13 more than in 2013. However, according to the data, the expenditure side increased more rapidly than the income side, which could be related to the movement of income on the foreign market. However, this is all mainly related to Croatian EU accession and changes in foreign trade that brought with it, and this had a significant impact on the improvement of last year’s financial result. Some of FINA’s more important data reveal that investment into new long-term assets point to a falling trend of 7.1% on a year-onyear level. In Croatian business life, almost 50% of the total income of Croatian entrepreneurs still relates to the three most important activities; trade, processing industry and construction.
In total number of entrepreneurs, they take a share of 48.4%; in the number of employees 57.2%; in total income 66.1%; in total expenditure 66.4%; in profit for the period 48.5%; in losses for the period 43.3% and in total investment 46.4%. According to the achieved business results, the activity of supplying electricity, gas, steam and air conditioning takes second place based on the generated nett profit in 2014. This is followed by information & communication (fourth place according to nett profit) and financial as well as insurance activities (fifth place based on nett profit). The impact of other activities to total business results is irrelevant.
PROFIT MAKERS ARE LARGE, BUT THERE ARE ONLY 354 OF THEM
Large-sized companies play a dominant role in the Croatian economy. Regardless of the fact
Business activities of entrepreneurs without employees based on size in 2014 description
number of entrepreneurs
total
small
medium
(in HRK’000) large
32.426
32.404
19
3
total income
14.089.413
12.043.106
1.243.186
803.121
total expenditure
17.016.328
14.951.388
1.307.864
757.075
2.173.317
1.893.872
234.837
44.608
5.219.734
4.921.517
297.894
323
-3.046.417
-3.027.645
-63.057
44.286
profit loss nett profit/loss
Izvor: Fina, Registar godišnjih financijskih izvještaja
No 251 | October 2015 | PVinternational | 3
BUSINESS 2014 Selected indicators of entrepreneurial business activities of Croatia based on type of ownership in 2014 0,5 0,6
100,0 90,0
combined
9,0
0,2
12,2
0,2
12,2
co-operative
0,2
12,4
private
0,1
8,4
0,1
state
14,0
0
80,0 70,0 60,0 50,0
98,0
78,6
77,9
78,4
75,4
12,2
9,7
9,2
12,2
employed
income
expenditure
profit
40,0
63,2
88,8
30,0 20,0 10,0 0,0
0,8
entrepreneurs
their number is small in relation to the total number of entrepreneurs, they are the generators of growth, as it should be. In 2014, such companies generated €1.41 billion of the consolidated financial result. For the sake of comparison, medium-sized companies registered almost €0.4 billion of nett losses. Small-sized companies accounted for €0.29 billion of nett
ALMOST A THIRD OF COMPANIES WHO SUBMITTED THEIR ANNUAL FINANCIAL REPORTS, 32,426 OF THEM (31%), HAD NO EMPLOYEES profit. Therefore, total result of economic activities was a credit of €1.3 billion. Large-sized entrepreneurs (354), with a total of 262,632 employees, dominate the Croatian economy based on their results, and even more with the sources with which they operate. Last year, they generated total income of €38.76 billion; total expenditure of €37.17 billion; profit for the period of €2.05 billion; losses for the period €0.64 billion and €1.41 billion in nett profits. In relation to 2013, they decreased the number of employees by 3.8%; total income by 0.6%; total expenditure by 2.3%, but increased profit over the period by 11.9%, and decreased losses by 40.6% as well as increasing nett profit by 87.6%. Based on the financial results, 2014 was 4 | PVinternational | September 2015 | No 250
22,7 2,7
loss
investment
less successful than 2013 for medium-sized companies, but small and large-sized companies operated positively and made higher nett profits. Medium-sized entrepreneurs employed 145,246 people in their 1,221 companies. They generated total income of €14.97 billion; total expenditure of €15.29 billion; profits of €0.72 billion; losses of €1.1 billion and almost €0.4 billion of nett losses. In relation to the year before, mediumsized entrepreneurs increased total income by 1.1%; total expenditure by 3.1%; profits by 20.7%; losses by 64.1%, and their nett losses increased 366.2%, while the number employed decreased 1.4%. Last year there were 102,895 small-sized entrepreneurs employing 422,238 staff. They achieved total income of €28.77 billion; total expenditure of €28.19 billion; profits of €1.88 billion; losses of €1.6 billion and nett profits of €0.29 billion. In relation to 2013, they increased the number of employed by 6.9%; total income by 10.3%; total expenditure by 8.7%; profit by 22.6%; they decreased losses by 3.8% and achieved nett profits as opposed to 2013 when they operated with nett losses. The EU nomenclature, it we apply it, shows Croatia has only 308 large-sized, 1,322 medium-sized, 9,566 small-sized and 93,274 micro-companies.
OWNERSHIP IS (NOT) THE MEASURE OF SUCCESS
The largest contributor to the results is due to the private sector that employed 652,298 people. According to data provided by FINA, this
CROATIAN BUSINESS & FINANCE MONTHLY Selected indicators of entrepreneurial business activities of Croatia based on size of entrepreneurs in 2014 small
medium
large
100,0 90,0 80,0
50,9
70,0 60,0 50,0
98,6
30,0 20,0
0,0
35,0
40,5
18,2
19,0
15,4
17,5
40,0
10,0
34,9
31,6 employed
sector generated total income of €64.25 billion; profits of €3.5 billion; losses of €2.97 billion and nett profits of €0.52 billion. Entrepreneurs in the private sector increased the number of those employed by 4.2%; total income by 5%; profit by 15.1%, while losses increased 19.3%, resulting in lower nett profit (-3.7%). This data points to the fact that the final positive result of the state sector (€0.48 billion) represents an increase of 313.3% in relation to nett profits from 2013. This mainly the result of positive business activities of the largest state companies, especially those of Hrvatska elektroprivreda. Therefore, HEP achieved almost €0.16 billion profit (63% increase in relation to 2013), followed by HEP Proizvodnja d.o.o. with €122 million profit (54% increase), and HEPOperator distribucijskog sustava d.o.o. with a profit of €82.68 million (5.3% increase). The state sector employed 101,654 people who achieved total income of €8.01 billion. The combined sector achieved total profits of €0.29 billion. With a total of 74,472 employees, this sector achieved total income of €10.08 billion, but the number of employees decreased 6%. However, it is worth mentioning that the companies in combined ownership decreased their losses by 52.3% last year, which resulted in a positive final financial result.
COMPANIES WITHOUT EMPLOYEES – ACTUALLY VERY BUSY
Almost a third of the companies (32,426 or 31%) who submitted their annual financial report did not have a single employee. The highest share of these entrepreneurs work in trade
14,1 33,2
47,0
46,1
53,3
44,1 19,2
1,2 0,3
entrepreneurs
47,6
32,6
income
expenditure
profit
loss
investment
(7,410). They are followed by entrepreneurs from professional, scientific and technical activities (4,705) and the construction sector in third place (4,350). The highest total income and expenditure was shown by entrepreneurs without employees, specifically in trade. They are followed by the construction sector and real-estate. Entrepreneurs without employees registered nett losses in all forms of ownership. The largest nett loss was by the entrepreneurs without a single employee in private ownership (€0.39 billion). It should be highlighted that companies without employees achieved €1.87 billion in income, almost €2.27 billion in expenditure, that is, over €0.4 billion of losses. The largest number of entrepreneurs without employees relates to small-sized entre-
THE LARGEST CONTRIBUTOR WAS THE PRIVATE SECTOR THAT GENERATED NETT PROFITS OF €0.52 BILLION preneurs (32,404 or 99.9%), followed by 19 medium-sized and 3 large-sized companies. In terms of the field of activities, entrepreneurs without employees, in 16 fields of activity, registered nett losses, whilst the entrepreneurs in four activities operated positively. According to form of ownership, the highest number of the entrepreneurs without employees was in private ownership (98.4%). No 250 | September 2015 | PVinternational | 5
BUSINESS 2014
RANKING LIST OF TOP 50 IN 2014 NAME, PLACE AND ADDRESS OF THE ENTREPRENEUR
2012.
2013.
2014.
RANKING BY TOTAL INCOME
1
1
1
INA D.D.
ZAGREB
AVENIJA VEĆESLAVA HOLJEVCA 10
2
3
3
KONZUM D.D.
ZAGREB
MARIJANA ČAVIĆA 1 A
3
2
2
HEP D.D.
ZAGREB
ULICA GRADA VUKOVARA 37
NUMBER OF WORKERS
8.147
TOTAL INCOME
25.442.703.500
11.886
13.454.641.100
447
11.438.198.800
4
5
7
HEP-OPERATOR DISTRIBUCIJSKOG SUSTAVA D.O.O.
ZAGREB
ULICA GRADA VUKOVARA 37
7.514
7.062.828.800
5
4
4
HT D.D.
ZAGREB
ROBERTA FRANGEŠA MIHANOVIĆA 9
4.728
6.228.471.000
6
8
15
PETROL D.O.O.
ZAGREB
OREŠKOVIĆEVA 6 H
7
6
5
HEP-PROIZVODNJA D.O.O.
ZAGREB
ULICA GRADA VUKOVARA 37
716
5.151.065.800
2.166
3.968.495.900
8
11
9
PLIVA HRVATSKA D.O.O.
ZAGREB
PRILAZ BARUNA FILIPOVIĆA 25
1.878
3.798.516.800
9
10
11
PLODINE D.D.
RIJEKA
RUŽIĆEVA 29
3.025
3.416.052.500
10
13
16
LIDL HRVATSKA D.O.O. K.D.
VELIKA GORICA
KNEZA POSAVSKOG 53
1.486
3.274.918.500
11
7
8
ZAGREBAČKI HOLDING D.O.O.
ZAGREB
ULICA GRADA VUKOVARA 41
8.435
3.217.451.800
12
14
13
VIPNET D.O.O.
ZAGREB
VRTNI PUT 1
1.064
3.019.137.500
13
16
18
KAUFLAND HRVATSKA K.D.
ZAGREB
VILA VELEBITA 6
3.041
3.000.871.300
14
69 240 PRVO PLINARSKO D.O.O.
VUKOVAR
KARDINALA ALOJZIJA STEPINCA 27
15
9
6
CRODUX DERIVATI DVA D.O.O.
ZAGREB
JOSIPA MAROHNIĆA 1
16
51
44
AGROKOR D.D.
ZAGREB
TRG DRAŽENA PETROVIĆA 3
222
2.748.644.700
17
12
10
TISAK D.D.
ZAGREB
SLAVONSKA AVENIJA 11 A
3.572
2.748.348.000
18
24
23
BOXMARK LEATHER D.O.O.
TRNOVEC
GOSPODARSKA ULICA 12
3.426
2.592.546.800
19
15
14
VINDIJA D.D.
VARAŽDIN
MEĐIMURSKA 6
1.014
2.575.334.000
20
19
21
ORBICO D.O.O.
ZAGREB
KOTURAŠKA CESTA 69
452
2.497.661.700
21
18
12
PETROKEMIJA D.D.
KUTINA
ALEJA VUKOVAR 4
22
20
19
MEDIKA D.D.
ZAGREB
CAPRAŠKA 1
23
23
25
SPAR HRVATSKA D.O.O.
ZAGREB
SLAVONSKA AVENIJA 50
2.642
2.211.519.200
24
25
29
PIK VRBOVEC-MESNA INDUSTRIJA D.D.
VRBOVEC
ZAGREBAČKA 148
1.832
2.190.644.500
51
2.884.135.600
117
2.882.483.600
1.938
2.242.157.500
346
2.229.871.700
25
21
22
HRVATSKE ŠUME D.O.O.
ZAGREB
FARKAŠA VUKOTINOVIĆA 2
7.967
2.114.164.200
26
26
33
TOMMY D.O.O.
SPLIT
DOMOVINSKOG RATA 93
2.217
2.064.909.900
128
2.032.210.400
27
28
38
PHILIP MORRIS ZAGREB D.O.O.
ZAGREB
SAVSKA OPATOVINA 36
28
22
26
PODRAVKA D.D.
KOPRIVNICA
ANTE STARČEVIĆA 32
2.983
1.957.916.000
29
32
36
BELJE D.D.
DARDA
SVETOG IVANA KRSTITELJA 1 A
1.437
1.952.438.800
1.109
1.921.483.000
33
1.861.263.500
30
17
17
MERCATOR - H D.O.O.
SESVETE
LJUDEVITA POSAVSKOG 5
31
30
31
AGROKOR - TRGOVINA D.O.O.
ZAGREB
TRG DRAŽENA PETROVIĆA 3
32
33
35
LUKOIL CROATIA D.O.O.
ZAGREB
CAPRAŠKA 6
389
1.828.108.100
33
29
30
METRO CASH & CARRY D.O.O.
ZAGREB
JANKOMIR 31
886
1.787.313.500
34
34
32
DUKAT D.D.
ZAGREB
MARIJANA ČAVIĆA 9
916
1.711.878.200
35
27
28
PHOENIX FARMACIJA D.D.
ZAGREB
OZALJSKA 95
256
1.682.672.700
36
46
54
M SAN GRUPA D.D.
BUZIN
BUZINSKI PRILAZ 10
123
1.680.248.700
37
44
50
PORSCHE CROATIA D.O.O.
VELIKA GORICA
ZAGREBAČKA BB
119
1.652.838.900
38
38
45
BILLA D.O.O.
ZAGREB
RIJEČKA ULICA 12
1.459
1.638.867.400
39
37
37
DM-DROGERIE MARKT D.O.O.
ZAGREB
BAŠTIJANOVA 52 A/IV.
1.156
1.631.432.200
40
35
34
CROATIA AIRLINES D.D.
ZAGREB
BANI 75 B
915
1.591.934.500
41
31
39
HP D.D.
ZAGREB
NIKOLE JURIŠIĆA 13
9.055
1.586.673.300
42
39
42
HOPS D.O.O.
ZAGREB
KUPSKA 4
1.010
1.564.428.800 1.548.663.300
43
43
43
MEDICAL INTERTRADE D.O.O.
SVETA NEDELJA
DR. FRANJE TUĐMANA 3
377
44
41
51
HRVATSKE AUTOCESTE D.O.O.
ZAGREB
ŠIROLINA 4
211
1.510.463.400
45
40
41
TIFON D.O.O.
ZAGREB
SAVSKA CESTA 41 /XIII
484
1.509.054.000
46
36
53
JAMNICA D.D.
ZAGREB
GETALDIĆEVA 3
1.205
1.505.293.800
47
45
40
ŽITO D.O.O.
OSIJEK
ĐAKOVŠTINA 3
494
1.483.641.600
48
70
59
HŽ INFRASTRUKTURA D.O.O.
ZAGREB
MIHANOVIĆEVA 12
5.224
1.473.097.900
49
47
48
HRT
ZAGREB
PRISAVLJE 3
2.992
1.395.996.000
50
48
27
ERICSSON NIKOLA TESLA D.D.
ZAGREB
KRAPINSKA 45
1.993
1.304.864.400
6 | PVinternational | October 2015 | No 251
CROATIAN BUSINESS & FINANCE MONTHLY amounts expressed in HRK’000 INCOME FROM EXPORTS
RANKING
AFTER-TAX PROFITS
RANKING
VALUE OF ASSETS
RANKING
CAPITAL AND RESERVES
RANKING
PROFIT SHARE OF TOTAL INCOME
PROFIT SHARE OF TOTAL ASSETS
EXPORT SHARE OF TOTAL INCOME
NET PROFIT MARGIN
IMPORTS
7.685.525.900
1
631.335.900
5
21.193.410.100
5
11.476.303.600
4
2,48%
2,98%
30,21%
13.502.798.100
179.104.000
98
108.802.500
33
13.234.649.700
8
2.877.380.500
13
0,81%
0,82%
1,33%
1.338.997.500
2,48% 0,81%
723.250.700
11
1.218.972.300
1
32.777.869.500
3
23.113.054.400
2
10,66%
3,72%
6,32%
1.765.981.400
10,66%
0
14.226
620.061.300
6
16.494.202.300
6
1.338.364.600
27
8,78%
3,76%
0,00%
300
8,78%
179.597.900
97
1.130.669.200
2
13.125.230.700
10
11.218.622.300
5
18,15%
8,61%
2,88%
1.032.624.800
18,15%
729.670.300
10
37.648.700
106
1.747.865.900
53
662.178.900
61
0,73%
2,15%
14,17%
4.608.500
0,73%
0
14.226
915.022.900
3
9.230.828.100
11
-1.088.009.000
98484
23,06%
9,91%
0,00%
27.241.100
23,06%
2.861.272.300
2
586.050.800
7
8.911.004.600
12
4.085.587.300
10
15,43%
6,58%
75,33%
1.732.016.200
15,43%
0
14.226
41.422.200
95
2.992.432.100
26
413.398.600
104
1,21%
1,38%
0,00%
348.738.100
1,21%
0
14.226
108.635.200
34
3.676.011.800
23
2.480.788.200
14
3,32%
2,96%
0,00%
1.478.413.400
3,32%
1.220.600
4.054
40.336.300
99
16.322.892.500
7
6.782.739.700
8
1,25%
0,25%
0,04%
1.802.400
1,25%
95.617.100
188
60.753.100
63
3.888.859.000
19
694.260.900
54
2,01%
1,56%
3,17%
483.836.000
2,01%
0
14.226
0
62.637
2.690.636.700
29
1.412.265.800
26
0,00%
0,00%
0,00%
27.766.300
0,00%
0
14.226
128.718.100
27
1.002.508.700
108
193.491.700
240
4,46%
12,84%
0,00%
0
4,46%
0
14.226
15.635.000
271
935.959.500
116
196.770.700
237
0,54%
1,67%
0,00%
1.136.463.300
0,54%
3.328.400
2.381
551.632.800
8
22.136.620.100
4
4.346.653.400
9
20,07%
2,49%
0,12%
0
20,07%
29.576.400
536
15.675.300
270
981.365.700
111
263.387.200
173
0,57%
1,60%
1,08%
146.453.100
0,57%
2.541.083.600
3
0
62.637
1.505.974.700
64
599.184.500
73
0,00%
0,00%
98,01%
999.223.800
0,00%
105.090.200
165
16.598.500
256
1.992.848.300
42
710.304.400
51
0,64%
0,83%
4,08%
231.241.900
0,64%
93.928.300
193
33.698.100
115
819.998.700
137
204.474.300
229
1,35%
4,11%
3,76%
0
1,35%
1.553.778.000
4
0
62.637
1.576.937.600
61
326.833.600
137
0,00%
0,00%
69,30%
457.661.200
0,00%
2.697.900
2.680
61.468.500
61
1.798.650.900
51
449.518.900
103
2,76%
3,42%
0,12%
879.389.600
2,76%
0
14.226
0
62.637
1.234.630.500
81
209.801.600
223
0,00%
0,00%
0,00%
300.380.600
0,00%
255.744.700
70
72.540.500
54
1.819.974.100
50
633.061.200
66
3,31%
3,99%
11,67%
387.767.400
3,31%
38.421.800
443
111.840.200
32
2.138.806.300
38
1.413.548.600
25
5,29%
5,23%
1,82%
5.505.500
5,29%
1.275.700
3.963
59.096.000
67
862.585.600
129
148.655.300
331
2,86%
6,85%
0,06%
151.393.700
2,86%
0
14.226
15.968.200
268
369.881.700
334
16.135.100
2205
0,79%
4,32%
0,00%
361.580.500
0,79%
819.076.000
9
201.673.800
16
2.582.722.200
31
1.337.863.900
28
10,30%
7,81%
41,83%
505.144.300
10,30%
136.288.400
129
0
62.637
3.789.180.300
20
599.006.400
74
0,00%
0,00%
6,98%
105.705.400
0,00%
523.000
5.884
0
62.637
2.765.634.400
27
579.262.200
81
0,00%
0,00%
0,03%
228.362.100
0,00%
361.217.800
41
23.004.500
176
1.367.060.800
71
32.029.600
1267
1,24%
1,68%
19,41%
544.304.900
1,24%
24.710.600
633
0
62.637
435.763.500
266
13.512.300
2508
0,00%
0,00%
1,35%
826.539.900
0,00%
0
14.226
3.476.900
1.118
343.634.700
361
34.808.700
1169
0,19%
1,01%
0,00%
250.845.000
0,19%
154.699.200
117
63.708.400
58
1.882.619.800
47
1.161.031.600
35
3,72%
3,38%
9,04%
290.395.000
3,72%
17.485.000
822
0
62.637
1.075.415.100
97
298.783.700
152
0,00%
0,00%
1,04%
634.089.100
0,00%
553.410.000
23
18.136.800
225
893.620.400
125
248.459.800
185
1,08%
2,03%
32,94%
1.301.665.900
1,08%
2.574.600
2.764
42.969.000
90
300.038.400
411
121.579.000
391
2,60%
14,32%
0,16%
1.312.660.400
2,60%
0
14.226
0
62.637
441.264.600
264
92.776.800
477
0,00%
0,00%
0,00%
151.793.800
0,00% 3,20%
9.548.600
1.260
52.185.600
77
388.484.200
308
174.373.300
269
3,20%
13,43%
0,59%
337.095.100
1.001.621.200
5
7.547.600
517
853.927.800
130
356.175.300
122
0,47%
0,88%
62,92%
61.876.800
0,47%
69.470.300
263
84.129.100
45
1.573.241.700
62
691.431.800
56
5,30%
5,35%
4,38%
5.475.100
5,30%
100.728.200
173
265.205.300
13
5.804.701.700
14
3.986.529.500
11
16,95%
4,57%
6,44%
0
16,95%
1.707.400
3.440
18.757.100
214
1.059.891.000
99
90.777.400
487
1,21%
1,77%
0,11%
596.700.600
1,21%
0
14.226
0
62.637
45.018.663.400
2
20.540.556.600
3
0,00%
0,00%
0,00%
0
0,00%
0
14.226
16.629.700
255
632.256.800
181
376.585.700
115
1,10%
2,63%
0,00%
0
1,10%
201.986.500
86
191.648.300
17
1.888.133.000
46
1.466.343.000
24
12,73%
10,15%
13,42%
252.114.800
12,73%
248.054.300
72
26.981.300
139
1.718.437.600
54
691.455.800
55
1,82%
1,57%
16,72%
67.963.100
1,82%
0
14.226
19.769.900
198
13.197.622.600
9
8.552.700.500
6
1,34%
0,15%
0,00%
49.804.800
1,34%
9.791.000
1.243
56.993.600
68
1.404.373.000
67
515.439.900
92
4,08%
4,06%
0,70%
111.648.600
4,08%
901.275.800
8
82.749.900
46
678.383.100
167
329.657.400
132
6,34%
12,20%
69,07%
423.311.600
6,34%
No 251 | October 2015 | PVinternational | 7
CO-OPERATION CROATIAN ECONOMIC DELEGATION AROUSES GREAT INTER
150 KOSOVAN COMPANIES LOOKING FOR CROATIAN PARTNERS The strengthening of co-operation between Croatian and Kosovan companies, an increase in trade and identifying investment opportunities, as well as of construction work by Croatian companies in Kosovo were the principal objectives of the visit to Kosovo made by a Croatian delegation headed by Luka Burilović, President of the Croatian Chamber of Economy Ivana Zobenica
T 69.7
€ million
the value of Croatian exports to Kosovo in 2014
2.5 million
€
the value of Croatian imports from Kosovo during the same period
he Croatian economic delegation, headed by Luka Burilović, President of the Croatian Chamber of Economy, has recently paid an official visit to the Republic of Kosovo. Senior officials from the Croatian Chamber of Economy and some fifty Croatian businessmen met Kosovan political leaders and businessmen. The strengthening of co-operation between Croatian and Kosovan companies, an increase in trade and identifying investment opportunities, as well as of construction work by Croatian companies in Kosovo were the principal objectives for this visit to Kosovo. The Croatian economic delegation attracted 150 Kosovan companies that have established contacts with Croatian companies through B2B discussions, aiming to strengthen co-operation. Moreover, representatives of Kosovan state institutions met with the Croatian businessmen who expressed their satis-
faction following the meeting. “Our company Pismorad is involved in making traffic signs and, since substantial infrastructure work is underway in Kosovo, such as motorway construction, we were extremely interested in this visit. Consequently, we established several contacts and I believe this visit has been extremely useful for us”, pointed out Damir Jurina, Technical Director of Pismorad. Stjepan Pavliša, Assistant Director of PAEL, a company involved in the design, production and maintenance of electrical installations and cathodic protection systems, noted that the Kosovan market shows potential for construction and reconstruction of railways and roads, oil and gas infrastructure and pipelines, amongst others. “I am delighted with the fact that the meetings with Kosovan institutions and the exchange of information on corrosion protection have been recognised as fundamental factors in the development
Co-operation agreements signed During the visit, the Croatian Chamber of Economy and Kosovo Chamber of Commerce organised the Kosovan-Croatian Economic Forum with the participation of some 200 companies. “One of the reasons behind the organisation of this forum was the fact that business results do not reflect the traditionally good political relations between the two countries. Current trade levels are modest –Croatian exports in 2014 stood 8 | PVinternational | October 2015 | No 251
at €69.7 million, whereas imports from Kosovo were €2.5 million – therefore I believe there is considerably more room for co-operation compared with current indicators”, emphasised Luka Burilović. Safet Gerxhaliu agreed with him, pointing out that “trade between our countries has not reached a satisfactory level and I am convinced we can increase it significantly. Moreover, we are hoping to accelerate our adaptation process to the European
commercial system through our co-operation with the Croatian Chamber of Economy”. Burilović and Gerxhaliu signed a Co-operation Agreement between the Croatian Chamber of Economy and Kosovo Chamber of Commerce, as well as Kosovo-Croatian Arbitration Agreement.
REST AMONGST KOSOVAN ENTREPRENEURS
and further exploitation of infrastructure projects. I hope that the implementation of European standards and norms here in Kosovo will result in a more intensive use of corrosion protection systems”, highlighted Pavliša. Fehmi Azemi, a Kosovan entrepreneur, Managing Director of Rima Engineering, believes there is ample room for co-operation with Croatian companies. “There is huge potential for co-operation, primarily in agribusiness, which I consider an area ready for joint investment, since Kosovo virtually exports new financial resources which it uses to meet her requirements, as its production is extremely limited. I believe forums like this need to be held more frequently and I would like the Croatian institutions to encourage the Kosovan government to enhance the legal safety and thereby ensure the arrival of Croatian companies to Kosovo”, he noted. The President of the Croatian Chamber of Economy attended a meeting with political leaders of Kosovo. Isa Mustafa, Prime Minister of Kosovo, encouraged a more vigorous and visibility of Croatian
Bilateral co-operation between the Republic of Croatia and Kosovo in million €
EXPORT
% change
IMPORT
% change
TOTAL
SALDO
2009
54.3
0
1.5
0
55.8
52.8
2010
54.7
0.74
2.8
86.67
57.5
51.9
2011
63.2
15.54
2.7
-3.57
65.9
60.5
2012
68.3
8.07
2.8
3.7
71.1
65.5
2013
69.1
1.17
2.7
-3.57
71.8
66.4
2014
69.7
0.87
2.5
-7.41
72.2
67.2
I-VI 2014
31.5
-
1.2
-
32.7
30.3
I-VI 2015
35.5
12.7
1.2
0
36.7
34.3
Source: DZS; Compiled by: HGK
businessmen on the Kosovan market. Lutfi Zharku, Minister of Infrastructure, shared the Prime Minister’s stance, welcoming the Croatian companies and expressing his hopes concerning their participation in infrastructure projects in Kosovo. “Kosovo has several large infrastructure projects, primarily construction of motorways, as well as the construction and reconstruction of railways, and thus I am inviting Croatian companies to become involved”, concluded Zharku.
Burilović: Kosovo welcomes co-operation with Croatian companies Luka Burilović, President of the Croatian Chamber of Economy believes that through the strengthening of co-operation with Kosovo, Croatia can achieve significant economic growth. “Kosovo has been investing substantial resources into infrastructure projects, which we see as an excellent opportunity for Croatian construction companies that suffered substantial losses during the financial crisis. Moreover, there is potential for co-operation also in the sectors of energy, information technology, as well as in food processing. The arrival of the Croatian delegation to Kosovo attracted over 100 Kosovan companies and the entire political leadership, which clearly showed they welcomed the idea of our co-operation”, concluded Burilović.
Burilović pointed out the fact that Croatian companies are competitive on the global market due to their high quality and are certainly able to contribute greatly to, and accelerate, the economic development of Kosovo. On the other hand, Minister Zharku presented the ongoing infrastructure projects implemented by the Ministry of Infrastructure, such as the construction of Pristina-Skopje and Pristina-Mitrovica motorways and the reconstruction of Lesac-Jedite Elezi railways. Burilović also attended a meeting with Hykmete Bajrami, Kosovan Minister of Trade and Industry, with whom he also talked about strengthening cooperation and increasing trade between Kosovo and Croatia. Minister Bajrami stated that she believed there was ample room for co-operation and increase of trade, which in her opinion is currently somewhat modest. The President of the Croatian Chamber of Economy invited the Kosovan delegation for an official visit to Zagreb in order to deepen the level of co-operation, which was gladly accepted by Kosovan colleagues. No 251 | October 2015 | PVinternational | 9
INTERVIEW MATEO TRAMONTANA, Board Member, Brodotrogir
10 | PVinternational | October 2015 | No 251
CROATIAN BUSINESS & FINANCE MONTHLY
JUMPING THE LEARNING CURVE WITH THE HELP OF A PARTNER We persisted in implementing measures prescribed by the restructuring programme; we invested in existing and new technology, but our limiting factors are adopting new knowledge and adjusting to business conditions Jozo Vrdoljak
P
rivredni vjesnik talked with Board Member of Brodotrogir Mateo Tramontana about the restructuring process and the plans of this shipyard after privatisation, and of course, about its business activities
What business results did you achieve?
In 2014, Brodotrogir earned €0.9 million in after-tax profit. Total revenue was around
AS OPPOSED TO OTHER SHIPYARDS IN THE RESTRUCTURING PROCESS, WE STOPPED RECEIVING STATE FUNDS SINCE THE END OF JUNE OF THIS YEAR €45.3 million. To date, Brodotrogir’s nett assets increased two and a half times since the start of the privatisation. We currently employ around 1,000 workers, which is more that we are obliged to employ according to the Privatisation Act. In addition to a workforce of some 400 people, we also employed around 200 new staff, changing our human resource structure largely.
Are you satisfied with the restructuring process?
Almost two and a half years have passed sin-
ce privatisation, and the same amount of time has passed since the start of the restructuring process. If we compare the planned restructuring dynamics, which entails its every aspect, and investment with achieved dynamics, we can conclude we are two years late. This delay is exclusively caused by objective reasons that no one from Brodotrogir or the ownership structure could have influenced. We should be satisfied despite everything since great things been planned for Brodotrogir and Trogir. Despite these difficulties, all planned activities and work in progress is according to the planned dynamics. We are currently working through five projects worth €8 to €9.5 million on the shipyard site. Of course, completed projects are excluded.
0.9 million
€
profit for Brodotrogir in 2014
45.3
€ million
total income of the shipyard last year
around
1,000
Have you experienced problems with the state?
There are problems in every contractual relationship from time to time, and the same applies with our relationship with the state. Until now, we have always managed to find a solution to our mutual satisfaction. As far as Brodotrogir is concerned, I can say everything is heading in the right direction, but we still need to work hard to achieve our goals.
Does this means you will be able to function without state help?
We already have to function independently. As opposed to other shipyards, undergoing the restructuring process and receiving subsidies on the basis of the restructuring programmes adopted by the end of 2017, we stopped receiving state funding since the end of June of this year. We have a different restructuring programme and conditions from when we were privatised. Our share, in relation to the state
workers
employed in Brodotrogir
43 million
$
value of the delivered chemical tanker
No 251 | October 2015 | PVinternational | 11
INTERVIEW share of subsidising the restructuring programme, is high. We committed to developing shipbuilding activities; establishing a shipping company we have never had before; achieving income and reorganising the overhaul differently, in a way to achieve profit from segments we have never had before. We also committed to build a marina with nautical, hospitality and other services. We have a series of other plans and many demanding projects we are developing and realising.
What are you particularly satisfied with since the start of privatisation to date?
Owning travel lifts, which will arrive in November, we plan to start constructing smaller ships that will no longer require a slipway for launching.
We started researching globally and found important partners for our projects that helps us compensate for our lack of experience in a certain business sector.
Great progress has been made in changing the structure of employees, which makes us more efficient. We persisted in implementing
WE INTEND TO BUILD THREE TO SIX OFFSHORE VESSELS FOR OUR COMPANY measures prescribed by our restructuring programme; we invested in existing and new technology, but our limiting factors are adopting new knowledge and adjusting to business conditions. Therefore, we started to research on a global scale, and found important partners for our projects, which helps us to compensate for our lack of experience in certain business sectors. I like to say we are jumping a high degree of the learning curve this way. It is very easy to invest in technology if you have money, but it is harder to train workers. The learning curve is very demanding. For example, we are negotiating with a Europe-
an builder of super-yachts on establishing a joint company under their name in Trogir. If we succeed, we will probably obtain larger reconstruction projects for super yachts. At the moment, similar contracts are beyond our reach since we do not have references for this type of work.
You delivered the first chemical tanker for your shipping company Trogir Maritime. What are your other plans regarding the construction of a corporate fleet?
For the first time in recent history, there is an active shipping company in Trogir – to whom the first chemical tanker was delivered. Another one is being built in the berth, also for Trogir Maritime, and it should be finished by the end of next year. The new build is specialised for transporting chemical and oil products, with a deadweight of 49,500 metric tonnes, length 184 metres and beam of 32.20 metres. The special type of engine combined with special propulsion design and new hull shape enables maximum saving on fuel consumption. This is a tanker of the new generation, which means the price of shipping one cubic metre will be cheaper compared with the price of our competition. The ship is worth $43 million: 40% of our funds and 60% provided by CBRD and PBZ.
What are your plans for this tanker?
The vessel will be handed over to a Norwegian company on a five-year lease. This makes us not only a shipyard, but also a shipping company. This was the first time we built a ship for ourselves instead of another owner. We installed in this ship everything we feel a ship should be equipped with, and it will pay off in the long run. We took into account the benefit of the shipyard and our shipping company.
We aim to achieve long-term sustainability on the market with a new business philosophy What is the difference between the European and Far East shipyards? The philosophy of European shipyards entails maximally investing in human resources and optimal technological investment. On the other hand, the philosophy of Far East shipyards consists of enormous investment in the technology for mass ship construction. European shipyards have a chance only if they are well organised and if their labour force is efficient and hard working. They are known for keeping expenditure accounts and focusing on sophisticated projects, so they build specialised ships. On the other hand, Far East shipyards specialise in mass production. We aim to achieve long-term sustainability on the market with a new business philosophy by learning from west European shipyards and using our own know-how. Of course, everything related to restructuring and what we discussed here would not be possible without new owners.
12 | PVinternational | October 2015 | No 251
CROATIAN BUSINESS & FINANCE MONTHLY
Will this ship be able to operate sustainably?
Considering the state of the market and the anticipated business expenses of the tanker as well as the fact that our vessel will leave the shipyard without any remark, this ship will manage to service its loan commitment on the basis of its business activities.
Will the fleet of Trogir Maritime expand further?
We intend to build three to six offshore vessels for our company. These would supply big pipe layers for constructing pipelines, oil pipelines and pillars for wind power plants. However, these ships are also specialised for transporting other special cargo. The vessels we intend to build have to remain relatively stable in relation to the pipe layer during transhipment, and they move together with the other ship according to weather conditions. The transhipment system in the open sea has to be safe, and it is performed without the crew so that lives are not in danger. This means they are sophisticated and highly specialised. We will not venture into this project alone since we will co-operate with a partner from the Netherlands. These ships are worth approximately the same value as the chemical tankers. However, they are much shorter and more sophisticated.
What is important is that this kind of ship does not have competition on the market since it is built specifically for this purpose.
Why do you look for partners for your projects?
We introduce partners to projects in which we have positive synergy effects and which help us jump up the learning curve, as I say. They bring us the knowledge we lack and vice versa. In order for a shipyard to survive, improvements have to be constantly made. Overall, it all comes down to a process and performance efficiency. We can learn a lot from our Dutch partners in this area.
What about overhaul and servicing in Brodotrogir?
In February, we commissioned a smaller dock purchased in Kraljevica. It was completely booked from February to June. It is intended for servicing and overhauling yachts up to 800 tonnes. The licence for our old dock expired in June so we replaced it with a 47 years younger dock with all licences for operating and which meets every class criteria. Notwithstanding, we still need to continue working on improvements. This means that during the past year and a half we have not been able to lift ships over 3,500 tonnes. After the replacement
of the dock, we will be able to continue overhaul activities of ships up to 8,500 tonnes. From next season both our docks will be active, which has never happened before. Therefore, we anticipate better overhaul results, and that equates to higher income. We have other news as well. During November, we expect a shipment of travel lifts that will enable us
FOR THE FIRST TIME IN RECENT HISTORY THERE IS AN ACTIVE SHIPPING COMPANY IN TROGIR AND THE FIRST CHEMICAL TANKER WAS DELIVERED TO THEM to lift ships up to 600 tonnes, mainly tourism ships, yachts and smaller commercial ships sailing the Adriatic. We will be able to simultaneously haul out multiple ships and repair them. Due to these travel lifts, we intend to start constructing smaller ships that will no longer require a slipway for launching. No 251 | October 2015 | PVinternational | 13
CO-OPERATION CROATIAN-ROMANIAN BUSINESS FORUM AT CROATIAN CHAMBER OF ECONOMY
FROM DRONES TO HEALTH ISSUES
Croatian and Romanian defence industries are top quality and there is ample potential for co-operation, according to Želimir Kramarić, Vice President of the Croatian Chamber of Economy for international affairs
C € 64,7 million
value of Croatian exports to Romania during the first six months of 2015
€ 76,3 million
value of imports from Romania to Croatia during the same period
ompanies from the defence and ICT sectors participated in the Croatian-Romanian business forum, recently held at the Croatian Chamber of Economy. Several Romanian companies of global significance in the defence industry were present at the forum, such as Lockheed Martin, an American corporation with branch offices in Romania, that presented its defence and security systems. The company Aerostar presented its overhaul capacities and the upgrade facility for military and civil aircraft, whilst UTI Group provided an overview of its information and telecommunications systems. Also present was the company Romarm which integrates the most prominent Romanian defence industry producers. Moreover, Teamnet, with branch offices in Croatia, has been developing systems for drones in Romania, as well as IT systems for hospitals and health promotion. Interactive SBC produces software for security, government agencies and cyber-security. Croatia also presented its companies Alan Agency covering imports and
THE MINISTRY OF DEFENCE CLOSELY CO-OPERATES WITH PRODUCERS IN THE DEFENCE SECTOR, POINTED OUT VIKTOR KOPRIVNJAK 14 | PVinternational | October 2015 | No 251
exports of military equipment, Šestan-Busch, a high quality helmet producer with a global reputation, Galko, a producer of leather holsters and bags, as well as Đuro Đaković and its Special Vehicles - armoured combat and transport vehicles. DOK-ING presented its special demining vehicles and King ICT provided an overview of its IT solutions. Vlahović Group was also present, as a provider of political analysis services, legislative and regulatory affairs for government relations. At the Forum, they acted as representatives of construction company Kamgrad and Croatia Airlines.
INCREASE IN TRADE
“The Croatian and Romanian defence industries are of top quality and hence there is ample potential for co-operation”, according to Želimir Kramarić, Vice President of the Croatian Chamber of Economy for international affairs. Cosmin Dinescu, the Romanian Ambassador to Croatia, expressed his utmost satisfaction with the organisation of the forum. “The Ministry of Defence has been closely co-operating with producers in the defence sector and providing considerable assistance”, pointed out Viktor Koprivnjak, Assistant Defence Minister for Material Resources. Tomislav Pokaz, Director of the Sector for Industrial Competitiveness at the Ministry of Economy, added that defence and ICT industries play a fundamental role in the Industrial Development Strategy of Croatia. In 2014, the value of trade between Croatia and Romania was €228.3 million. Croatian exports to Romania were €88.1 million, a growth of 21.8% compared with 2013 thus ranking Romania 22nd amongst countries for Croatian exports. On the other hand, imports were worth €140.1 million, up 27.6% ranking Romania 23rd amongst countries for Croatian imports. According to the latest data for 2015, exports rose by almost 57% in relation to the same period last year, reaching €64.7 million. During the same period imports increased by only 7%, reaching €76.3 million. (I.V.)
CROATIAN BUSINESS & FINANCE MONTHLY ZAGREB ENTREPRENEURSHIP INCUBATOR (ZIP) CO-OPERATING WITH PIONEERS VENTURES AND SPEEDINVEST
€3 MILLION FOR CROATIAN START-UPS
Zagreb Entrepreneurship Incubator has provided funding during the preseeding phase, the initial phase as well as the company growth phase, through co-operation with Austrian venture funds Krešimir Sočković sockovic@privredni.hr
S
tart-ups may secure funding provided by two international venture funds – the Austrian funds Pioneers Ventures and Speedinvest – through the Zagreb Entrepreneurship Incubator (ZIP) since October, following the strategic partnership contract that Zagreb Entrepreneurship Incubator signed with the two venture funds. Pioneers Ventures is a pre-seeding investment fund that focuses on assistance to excellent start-ups through its global network of companies, industrial experts and entrepreneurs and, in addition to funding, also provides a comprehensive support programme. Speedinvest is a leading venture capital fund for technology companies in the initial stage of development in Central and Eastern Europe. The fund provides financing for those companies in the initial stage of development that it considers as the best European start-ups and also provides active entrepreneurial support through its team of experienced and successful start-up founders. Thus, in March 2015, Pioneers Ventures and Speedinvest secured €58 million during the first round of closure of the fund Speedinvest 2, whose shareholder and partner is Pioneers.
THE BEST START-UP INCUBATOR IN THE REGION The start-up incubator, ZIP, was created in 2012. It helps young entrepreneurs from throughout the region to start their own businesses. During the last three years, it has become the best start-up incubator in the region and, according to the Ministry of Entrepreneurship and Crafts, it was declared the best entrepreneurial support institution in 2014 in Croatia. Start-up teams under ZIP programmes are provided with access to an empowering local and international network of mentors and entrepreneurs, as well as an opportunity to operate in joint premises. During a four-month intensive workshop pro-
gramme, start-ups are provided with project development assistance. As pointed out by Tihana Marelja, co-ordinator of Zagreb Entrepreneurship Incubator, the partnership with venture funds will secure broad access to the required funding for those start-ups that have completed the ZIP programme during the pre-seeding stage – up to €125,000, as well as during the initial stage and the growth stage of the company – up to €3 million. “In addition to the potential financial benefits, the strategic partnership contract will also provide support to successful start-up founders from Pioneers Ventures and Speedinvest networks for start-ups in South East Europe. The potential provided to Croatian start-ups will be available from the new generation of start-ups, which is currently the eighth generation in the ZIP programme. The selection process is currently under way and at the beginning of October companies will start operating at the incubator”, concluded Tihana Marelja.
up to
€125.000 available funding during the pre-seed stage
€3
up to million
available funding during the initial and growth stages
No 251 | October 2015 | PVinternational | 15
EU & CROATIA TRANSATLANTIC TRADE AND INVESTMENT PARTNERSHIP
AMERICA DOES NOT WANT TO DECEIVE THE EU AND VICE VERSA The public and entrepreneurs fear that large American multinational companies will overrun Europe and Croatia after the agreement has been adoption Boris Odorčić odorcic@privredni.hr
Non-tariff trade barriers between the EU and the USA cause a 41% price increase in goods and 31% in services. We want to eliminate this with the agreement, and this is important both for the entrepreneur and consumer Joško Klisović, Deputy Minister of Foreign and European Affairs
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s an EU member, Croatia participates in negotiations on the Transatlantic Trade and Investment Partnership (TTIP) with the United States of America. The negotiations have been continuing for two years in several rounds based on defined criteria and procedures. When will the agreement be signed is difficult to say - it was highlighted in the Croatian Chamber of Economy during the conference Influence of the Transatlantic trade and investment partnership on small-sized and medium sized entrepreneurs in Croatia. Head of the European Commission Representation in Croatia, Branko Baričević, evaluated that adoption of the TTIP is of strategic importance to the EU. The intention is to achieve an ambitious, but balanced approach that will generate growth, create new jobs, provide a better approach to the market, public procurement, enable transparency during procedures and contribute to the general welfare of individuals. As a result of the agreement, it is estimated that €70-€120 billion would be generated in Europe, Baričević said. Vice-President of the Croatian Chamber of Economy for International Affairs and the EU, Želimir Kramarić, pointed out it is extremely important to present this issue as transparently as possible so that Croatian companies could prepare in the best possible manner, and find out what they can expect and learn about possible business risks on the American market. In the short term, to know what position they should take in the future regarding this agreement. Of course, we are especially interested in exporters – the healthy tissue of the Croatian economy. They are able to generate new jobs, increase gross domestic product. In addition, the American market is one of those markets that could be significant to the development of economic relations, Kramarić highlighted.
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STANDARDS WILL NOT BE LOWERED
Deputy Minister of Foreign and European Affairs, Joško Klisović, mentioned there are many misunderstandings and fears about TTIP, especially regarding trade and investment. However, we can chase fears away if we talk openly about it. These are the first negotiations with a country led by the EU in which we have an insight into the European stands and documents that are negotiated. This is also the first public discussion where the European Commission systematises all comments, suggestions and objections coming from the Eu-
THE MOST IMPORTANT PRODUCTS EXPORTED FROM CROATIA TO THE USA DURING 2014 ARE REVOLVERS AND PISTOLS ropean public, and formulates the positions it advocates in negotiations with the USA together with the member countries, Klisović explained. The public and entrepreneurs fear that large American multinational companies will overrun Europe and Croatia after the adoption of the agreement since they would impose some of their regulations. This is not true. The European Union will not lower its standards regarding the safety of food and people, data protection and any other values we managed to create in the EU, Klisović said. He also added there are no deceptions here. America does not want to deceive the EU and vice versa. Both sides
CROATIAN BUSINESS & FINANCE MONTHLY
have to benefit from this kind of agreement. Otherwise it would have little sense, Klisović highlighted.
NON-REGULATED RELATIONS
Today, when a large share of the world regulates its trade relations, the EU and the USA, who jointly account for 40% of global trade, should do the same. The public will benefit the most from the agreement since we expect a greater number of vacancies, increased trade, production, sales and profits. We also expect lower prices. According to current analyses, non-tariff trade barriers between the EU and the USA cause a 41% price increase in goods and 31% increase in services. We want to eliminate this with the agreement, and this is important both for the entrepreneur and the consumer, said the Deputy Minister. From the point of view of the state, this agreement should boost investment, strengthen competitiveness and consequently increase GDP on both sides of the Atlantic. On the other hand, entrepreneurs want to harmonise business regulations, eliminate unnecessary procedures, harmonise standards without lowering already achieved levels, and simplify logistic entry of European companies to the American market. In other words, simplify and lower the costs of business to increase profitability and salaries, and decrease prices on these markets, Klisović pointed out. One of the basic goals of Croatia and the EU is to ensure better and more cost-effective business activities for SME’s. Large companies already oper-
ate on these markets. They have their affili- ates and know the rules. They tend to adapt quickly, and TTIP will not bring a big change for their business. However, for smaller enterprises, which make up 99.7% of the Croatian economy and for which this will make a huge difference for their business activities, we want to reduce costs, increase efficiency and recognise documents issued in the EU for the American market and vice versa. This is for the purpose of providing maximum relief to their business and preserving their interests, Klisović said.
as very positive and without any obstacles. We look forward to TTIP since we believe this agreement will additionally simplify our business on the American market. This mainly refers to overcoming tax and customs barriers and easier sales of products in the sense of bureaucracy, Klasić said. He also added that the CCE contacted them a year and a half ago and asked them for their suggestions and opinion on this agreement. Board President of Span Nikola Dujmović, one of the leading IT companies, which has been exporting to the USA for years, says that America presents great opportunities for Croatia and Span, which is significant in Croatia, but microscopic at a global level. However, these opportunities cannot be exploited precisely because of size. Notwithstanding, unlike the classic export of goods, the export of intellectual services from Croatia to the USA is burdened by obstacles. This mainly concerns work licences Croatians require to work there, and which are almost impossible to obtain. One of the biggest obstacles I must mention is the fact that Croatia is one of the few countries without an agreed Double Taxation Treaty with the USA, Dujmović says. He also adds that TTIP will remove some of the new barriers. However, others should also be eliminated; for example, Croatia still does not approve taxes paid in the USA and vice versa, which is aggravating for Span and other companies operating across the Atlantic.
INVESTMENT IN CROATIA
CROATIA DOES NOT HAVE AN AGREED DOUBLE TAXATION TREATY WITH THE USA Sandi Klasić from company Omco Croatia, specialising in producing tools for the glass industry, which has been present on the American market for years, says the company has been seeing continuous growth in this market. He evaluates his business with the USA
According to data provided by the Croatian National Bank, direct USA investment to Croatia total €68.1 million from 1993 to April 2015. This puts the USA in 26th place based on direct investment. The possibilities of co-operation between Croatia and the USA exist in the following sectors: energy, IT, shipbuilding, oil, pharmacy and metal processing industry, as well as tourism and electric power industry. The most important products exported from Croatia to the USA, during 2014, are revolvers and pistols, medicine, processing machines for rubber and plastic mass. On the other side, the most important products imported from the USA, during 2014, were tanks and other armoured fighting vehicles, antibiotics and compression-ignition piston engines with internal combustion. No 251 | October 2015 | PVinternational | 17
SISAK RENAISSANCE OF FORMER INDUSTRIAL CENTRE
MILLION EURO INVESTMENT IN SISAK Samobor-based DIV is planning to construct a concrete railway sleeper factory in the Southern Industrial Zone of Sisak, the first of this kind in Croatia. Zagreb-based EPI Consulting is anticipating the construction of a biogas power plant, and the Italian Mittelenergy a plant for gasification of wood biomass, whilst the fourth large investor, Zagreb-based Scateo is planning to construct green energy facilities Igor Vukićpiše Igor Vukić vukic@privredni.hr
80 million
€
to be invested by Mittelenergy
8 million
€
planned investment by DIV
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our significant investors are about to start the construction of factories in the Sisak Southern Industrial Zone. After a long time million €uro-worth of investment is likely for Sisak. Samobor-based DIV is planning to soon start the construction of the first railway concrete sleeper factory in Croatia. The factory will cover an area of 13 hectares and will comprise of a production facility, a warehouse and an area for the storage of concrete railway sleepers prior to delivery. The planned investment stands at €8 million and during the first phase, 50 jobs will be created. In a letter of intent, the investor undertook to invest €500,000 in the preparation of the site for the construction of the new production area during the first year, whilst the remaining investment will be implemented in a year and a half. “I reached Sisak and decided to opt for it due to its excellent road connections,
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its industrial tradition and its being a riverine port. Furthermore, also to the persuasiveness of its mayor Kristina Ikić Baniček, who showed persistency in convincing us to implement our new investment in that particular location”, noted Tomislav Debeljak, owner of DIV, during the signing of the contract. He anticipates the first concrete railway sleepers will appear on the market by the end of 2017. According to information provided to Privredni vjesnik by Brankica Grd, director of the Croatian Chamber of Economy – Sisak County Chamber, the second domestic investor will be Zagreb-based EPI Consulting, which has signed a contract with Sisak for the construction of a 300 kW biogas power plant in the Southern Industrial Zone. Following its exploration of the Sisak region regarding raw material quantity for the biogas power plant, a conclusion was reached that there was sufficient potential for a 0.3 MW power plant. According to Branki-
CROATIAN BUSINESS & FINANCE MONTHLY ca Grd, in addition to job creation, this also implies biodegradable waste management and further development of the local economy and agriculture. This method of biodegradable animal waste management through a biogas power plant is one of the most widely accepted environmental solutions both in Europe and globally. It is a €2.5 million investment resulting in the creation of 15 jobs.
GREEN ENERGY The third investor in Sisak is the Italian company Mittelenergy, which is planning to construct a 5 MW plant for the gasification of wood biomass, with an estimated total value of €80 million. The co-generation plant will also be constructed in the Southern Industrial Zone, covering an area of 113,500 m2. This investment will not only be for a co-generation plant and the creation of new jobs, but includes an additional contribution through subcontractors who will purchasers of the biomass that will be used as fuel for the co-generation plant. The value of investment during the first phase is €20 million and 80 new jobs will be created, and by the end of the investment cycle, the total planned investment will be €80 million, with the creation of 300 new jobs, including sub-contractors. The company Mittelenergy belongs to the Danieli Group that already owns the ABS steel factory in Sisak. The fourth large investor is the Zagreb-based company Scateo that has shown interest in launching an investment cycle for the construction of green energy plants, covering an area of 12,043 m2. There are plans for the construction of a large production fa-
cility with accompanying engines for electricity generation.
INVESTORS BECOMING INCREASINGLY INTERESTED
BRANKICA GRD:
Modified industrial structure
The construction of a production area covering an area of between 700 m2 and 1,000 m2 is planned during the first phase with all the required equipment. Moreover, 15 new jobs will be created during the first phase, whilst during the second phase, the construction of several similar facilities is anticipated, leading to the creation of some 60 jobs. The value of investment during the first phase is €0.5 million, whilst
FOUR INVESTORS IN THE SOUTHERN INDUSTRIAL ZONE SIGNED CIVIL ENGINEERING CONSTRUCTION CONTRACTS around €2 million will be invested in order to complete the second phase. All four investors in the Southern Industrial Zone have signed civil engineering construction contracts. It has to be noted that investors are also interested in investment in business zones located in other cities and municipalities, although these projects are currently not in such an advanced implementation phase, stated Brankica Grd.
Last fiscal year results: expenditure exceeded revenue During the fiscal year 2014 total entrepreneurial revenue of the overall area increased by 0.7% reaching €1.1 billion, whilst total expenditure was up 1.9% at €1.2 billion. Consolidated financial result of the County was negative, at €56 million negative balance. Nevertheless, most entrepreneurs showed profits. Hence, 1,109 entrepreneurs or 63% operated profitably, with 648 or 37% recording losses. Primarily those entrepreneurs operating in the area around Kutina (mainly Petrokemija) negatively affected the financial results.
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rrespective of the fact that over the last several years Sisak and Sisak-Moslavina County saw many severe problems, an increase in investment was recorded, says Brankica Grd, Director of the Croatian Chamber of Economy – Sisak County Chamber. These are investment projects for the modernisation of steel production in the ABS Sisak factory, investment in an aluminium smelting plant by the company Feliks produkti and there are plans for further investment in Vivera in Glina. Moreover, there is ongoing investment in Glina by BE-TO Glina, the company in the same ownership structure as the Glina-based Wood Centre, and investment is also being planned by a large number of other companies. Concerning public investment, it is important to highlight HEP Generation that is launching a new, third block at the Sisak-based Thermal Power Plant, which will secure the more affordable generation of electricity and thermal energy. It has to be noted that economic development of the whole area shows a modified industrial structure, which is obvious in the case of companies such as Applied Ceramics, the Popovača-based pharmaceutical company PharmaS, whilst several expected new investors could contribute to further modifications of the industrial structure, primarily in the energy sector. The most significant advances have been made in specific cities, hence arrival of new investors is excellent news, noticeably in the manufacturing sector, pointed out Brankica Grd.
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SMART CROATIA INCLUDE FROM SOLIN INTO EUROPE WITH SMART SEATING
OUR SOLAR SEATS ARE RAIN AND SNOW RESISTANT The first attempt in the business story of Mrvoš consisted of LED chairs. What he did not manage to do with them, he succeeded with solar seating that can be used as mobile phone chargers and a source of light. We want to raise public awareness on the importance of using renewable energy sources, Mrvoš says, adding that many European countries have already expressed interest in them Jozo Vrdoljak
For months we have been working on providing wireless mobile phone charging without cables. Considering we have many queries from countries with a colder climate and fewer sunny days, we are also trying to come up with specific solutions.
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nclude from Solin is a company established by Ivan Mrvoš, the creator of smart seating which can charge mobile phones or tablets and act as a public source of light at night. The seat is covered with solar panels and has an integrated hotspot for connecting to the internet, with an application on the seat displaying air temperature and quality. Prior to this invention, Ivan Mrvoš attempted to conquer the market with LED chairs for hospitality facilities, but received no appropriate response. He thinks the price was the greatest obstacle for marketing the LED chairs. They cost €160, which was too much for customers. He started to work more seriously in April last year entering the market with these chairs. Everyone was delighted. The chairs had switches, but the price was the reason they did not end up on the market, but could not lower the price since the chairs contained expensive elements. Overall, the idea did not prove to
cers before us. Notwithstanding, LED chairs opened many doors and we became known on the market, Mrvoš highlights.
ADVANCE PAYMENT
Ivan Mrvoš
THE TEAM AT MRVOŠ IS ALSO WORKING ON NEW AND MORE ADVANCED MODELS be successful, and it was the first attempt that rarely even succeeds as many people say. Therefore, the company shared the same destiny with our first product as many other produ20 | PVinternational | October 2015 | No 251
Mrvoš presented his LED chairs at an entrepreneurial camp, organised by the Entrepreneurial Centre in the Hotel President in Solin. With the help of his mentor, he developed a few ideas and won an award for this innovative product. This was the first time the media had noticed him. We installed our first seat in Solin when the mayor of Solin recognised our product and gave us his support. We had a successful project in Sarajevo, where the organisers of the Sarajevo Film Festival invited us to present and install six seats that have remained in Sarajevo. Then
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CROATIAN BUSINESS & FINANCE MONTHLY
we installed two more in Split, which was our first order, but the search for funding prolonged their payment. Actually, Split cannot process advance payments, and we do not have enough funds to fully finance our production. After Split, we installed seating in Poreč, then we will go to Rovinj for the Weekend Media Festival, followed by Crikvenica and Samobor (three seats) and three more in Tivat in Montenegro, Ivan Mrvoš explains. Include employs five workers. Some work in construction, and some are in charge of electronics. The production area is small, and hand tools and handwork are predominant. If we manage to develop by the end of the year, as we would want to, we could start with the redevelopment of production space. Naturally, we would then compete for subsidies. Similar products do not exist in Europe, which means that those mentioned Croatian cities and Sarajevo are the first to have these smart seating. True, a few months ago Boston installed wooden benches with a solar cube for electric charging, but our bench is more practical and electronically more sophisticated. These wooden seats are hard to service in different weather conditions, especially after rain. On the other hand, ours require a minimum of servicing. Therefore, the market is vast and promising. We have had already many enquiries from various countries, Mrvoš reveals. To a certain extent, Mrvoš neglected his studies because of these projects. For example, I had to spend four months in Zagreb for the sho-
THE TEAM AT MRVOŠ CONSISTS OF FIVE PEOPLE, THE PRODUCTION SPACE IS SMALL, AND HAND TOOLS AND HANDWORK PREDOMINATE oting of a show called Snaga volje (The power of will), but I am constantly on the production area or on the road, so my IT studies are suffering, Mrvoš says.
PERFECTING THE SEATING
For now, Mrvoš does not think about developing more similarly innovative products since he is convinced he will take over the European market with his smart seating. Naturally, his goal is to constantly upgrade them. His presumption is that previous customers will not return to classic seating, but rather order new ones. We will try to survive in this field and constantly work on development. Development is something we will definitely not overlook. For months, we have been working on providing wireless mobile phone charging stations. This is a demanding project since many mobile phones still do not have this facility. Considering we have many queries from countries with colder climate and fewer sunny days, we are also trying to come up with specific solutions. We want to raise public awareness on using renewable sources of energy, Ivan Mrvoš explains. No 251 | October 2015 | PVinternational | 21
NEW FASHION BRAND A NEW CROATIAN BRAND IN GLOBAL MARKETS
ZOE CONQ
Tamara Ivić has attracted and acquir and sports clothing. She develops al and Scandinavia and there a max Krešimir Sočković
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oe leggings is a fashion brand that is slowly attracting customers globally, and is becoming increasingly popular locally. Behind the name, there are popular leggings, yet their design is different and unique, as a result of the committed work of a young woman. Tamara Ivić is a fashion designer who has attracted and acquired a loyal and permanent customer base with her specific-designed leggings and sports clothing. She develops all her own products, with orders coming from the US, Australia, Asia and Scandinavia. Each garment is made to a maximum of 10 items of each piece of her original clothing. According to her, the idea behind these clothing items originated in a simple way, according to the law of supply and demand at the time. “As a sportswoman, I am a lover of leggings and top quality, but appealing printed and patterned leggings were hard to find. Consequently, following the completion of my studies in textile and fashion design, I decided to start producing them myself. I have always had many design ideas, they come naturally; I have always been fond of them and focused on developing them further”, she stressed, whose company Zoe also employs her brother. She frequently works as a model, wearing her own clothing items and posing for photographs to attract customer attention. Her clothing items became known both locally and on the global market almost instantly, due to the fact that she had managed to identify current market needs and as a result of top quality designer products, excellent presentation and marketing tools. Her clothing items are produced from fa-
Sportswoman, entrepreneur, a beautiful woman: Tamara Ivić is also a model for her own clothing creations 22 | PRIVREDNI VJESNIK | broj 3892 | 7. rujna 2015. 22 | PVinternational | October 2015 | No 251
CROATIAN BUSINESS & FINANCE MONTHLY
QUERING THE WORLD
red a loyal and permanent customer base with her specific-designed leggings all her products on her own. Orders have been placed from US, Australia, Asia ximum of 10 items of each piece of original clothing brics imported from Italy, but printed, tailored and sewn in co-operation with partners located in Rijeka and Zagreb.
SELLING GLOBALLY “Since our start, we have been selling products exclusively online. We believed it was a good idea to conduct specific market research in this way, and find out whether there was a requirement for a ‘bricks and mortar’ store. One of the reasons we focused exclusively on our online store was the fact that online selling ensures a much wider market access”, she noted. According to her, it is currently not difficult to launch an online store, as all the required information and tools are easily accessible. “Nevertheless, of paramount importance is a high quality product and appealing presentation. We dedicate a substantial amount of time to photo sessions and campaigns, as we are aware of its fundamental a large number of sports clothing brands and hence I would not wish to highlight any individually, yet it is important to stress our competitive advantage of a well-developed design and print with the perfect fit for your body. It is both simultaneously original and appealing, aiming to be easily identified”, she explained.
WE OPTED FOR ONLINE SELLING AS WE AIM FOR BROADER MARKET ACCESS
GROWING INTEREST
importance for online selling, mainly because our customers cannot try on Zoe clothing items. Thus, we needed to attract their attention and make them try them on and they subsequently willingly return to us”, emphasised Tamara Ivić. Thus, we managed to make our dream come true and our dream was a dream shared with an increasing number of others – 100% of our sales through an online store. “There is no tremendous competition for us in Croatia, with the exception of street-style brands that seasonally launch several designs of printed leggings. On the other hand, there is tough competition globally. Following the popularisation of healthy lifestyle and sports, which are yet again becoming increasingly fashionable, new sports clothing brands appear almost daily. There are
The highest level of interest in our products has been seen in the US, Great Britain, Australia and Scandinavian countries, as well as in Croatia. Almost half the clothing items produced by Zoe are exported to these countries and they are seeing more and more contacts from Asian customers. Customers are primarily women who opt for an active lifestyle, but are also aware of the latest fashion trends and are highly appreciative of high quality and good design. “We constantly focus on development and are aiming to become a recognisable brand globally. Furthermore, we consciously focus on quality-enhancement of all Zoe products through the development of new patterns and styles, makes and design. We aim to increase sales, primarily in North America, with its immense market and substantial interest in us”, concluded Tamara Ivić.
It is important to stress our competitive advantage of well-developed design and print with the perfect body-fit. We constantly focus on quality enhancement of Zoe products through the development of new patterns and styles, makes and design. Tamara Ivić
7. rujna 2015. | broj 3892 | PRIVREDNI VJESNIK | 23 No 251 | October 2015 | PVinternational | 23
MODERN BUYERS
N FASHIOE ON TH INTER NET
A CL FROM ATTRACTIVE C
One quarter of companies involved in the sale of clothing in Croatia is actually invo outlets, which greatly exceeds the European average of 15%. Fashion clothing pr Hippy Garden is sent to customers globally and it appears that the comp
H When we launched our online store, we presented several unique clothing items and they were those that sold first. Saša Momirović, Hippy Garden
ow to reach customers more efficiently, more effectively and in a more cost-effective manner are questions addressed by entrepreneurs aiming to provide top quality products. Against severe competition and substantial specific features in the world of fashion, it is becoming increasingly difficult to be recognised, and to find a way to reach customers. Until recently, the usual way of selling fashionable designer clothing was through stores, selecting and trying on clothing; this was then followed by purchase and the entire process raised clothing costs considerably, both for vendors and buyers. Nevertheless, according to data on modern buyers, in 8 out of 10 cases purchase decisions are made prior to visiting a store, which is of fundamental importance bearing in mind new sales channels, especially in the case of online selling, which now covers the selling of clothing, computer equipment, home furnishing and equipment, as well as package tours. One quarter of companies involved in the sale of clothing in Croatia is involved in operating online clothing outlets, a figure that significantly exceeds the European average of 15%. The figures would probably be even more satisfactory if all purchases could be made online, since more customers would be attracted, including those throughout the European Union and the rest of the world.
ETHNO MOTIFS FOR THE WORLD
A small, but well-known designer company, Etno Mara, became aware of the huge potential of online selling. The store has been operating since 1990 through one sales outlet. Their clothes have ethnic motifs and they often find their way to customers located in other parts of the world, such as Australia, the US, Canada or the Republic South African. The items sold in this boutique are designed by a mother and daughter team - Vesna and 24 | PVinternational | October 2015 | No 251
Marija Milković. Mother is Slavonian and grew up surrounded by national costumes, pointed out her daughter. “She became passionately fond of fashion and thus began working on some of her own patterns using her own motifs. Following the development and expansion of the business, she realised that production required substantial changes, patterns needed to be developed in order to make them more modern and urban, as well as of the importance of focus on presentation of interesting Croatian ethnic motifs from throughout the country”, she explained. “Word of mouth attracts the greatest number of customers and we have from the very beginning, considered online selling and advertising via social networks”. Nevertheless, they have not yet become involved in online selling, mainly due to technical issues and the fact that the company currently does not employ anyone who would be capable of addressing this issue. “It would help us greatly in new market penetration and our products
LICK AWAY CLOTHING
volved in operating online clothing roduced by the Croatian company pany Etno Mara is about to follow Krešimir Sočković sockovic@privredni.hr
Consumer rights on the Internet Internet retailers have obligations towards consumers as defined by the Consumer Rights Act, implying price transparency: prices listed need to include VAT and additional costs (such as delivery) need to be stated. Customers are entitled to renounce a purchase within 14 days provided they return the goods undamaged. The retailer is obliged to return the full amount paid by the
customer within the next 14 days from the day of delivery of goods to the delivery address. Online stores are obliged to provide clear information on the digital content they provide. Customers’ orders and guidelines need to be fully respected. However, it should be highlighted that customers’ rights are normally exercised only upon customers’ claims.
an interesting market niche, since their clothing items are appealing and appropriate for a wide range of occasions, and are also becoming popular in other countries. “We were faced with many problems at the start of our online venture. It was not easy decide on the selection of items to be presented online – which to choose and what type of public to address. Consequently, we employed two young people, an IT expert and a graphic artist and they currently function as a team. They make sure it functions in the best possible way, looking perfect”, stressed Momirović.
UNIQUE ITEMS AND HIGH FASHION
would become available globally. According to the experiences of our colleagues, I am aware of the fact that these things happen at rather a slow pace”, opined Marija Milković. Etno Mara provides a large number of unique clothing items, with an increasing number of fashion accessories and so it is not easy to identify items to be presented online.
A MODERN BRAND AND CUTTING-EDGE TECHNOLOGY
On the other hand, Hippy Garden has, since its inception, been aiming to attract a broad range of customers through modern technology. The brand has five outlets in Croatia with clothing being designed by Đurđica Vorkapić, and is available in 10 other stores. The company was founded in 2000 and their online store has been operating since 2015. The company sells far more items online than in-store, pointed out a company source. According to Saša Momirović, Executive Director of Hippy Garden, the brand occupies
After the launch of their online store, they opted to present several unique clothing items. Interestingly, these items were the first to be sold online. “That was an excellent indicator of how to work and think. Thereafter, we launched our range of gift products, a cosmetics line called Pure&Natural. In addition, we have a programme of couture outfits – haute couture dresses, sports clothing and wedding clothes – smart dresses for weddings and wedding guests”, pointed out Momirović. Irrespective of the fact that online selling is not simple and the costs can be substantial, primarily on start-up, we decided to opt for it, as we believe it is an excellent choice especially for those involved in the fashion industry, pointed out a source at Hippy Garden. “We have opted for online selling almost since the start and it has proved to have been an excellent decision”, concluded Momirović. Some two thirds of Croatians use the Internet and slightly less than two thirds use it for online shopping. The numbers using it for online shopping has risen at a rate of 2% to 3% annually. Nevertheless, online shopping in Croatia is still faced with several major issues such as data misuse or credit card identity theft, in addition to high delivery costs, when compared with other EU member states.
We hardly ever advertise. Word of mouth attracts most of our customers Marija Milković, Etno Mara
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CROATIAN BUSINESS & FINANCE MONTHLY SPECIAL HOSPITAL FOR MEDICAL REHABILITATION
NAPHTHALENE ATTRACTS NORWEGIAN PATIENTS Naftalan is one of a few specialist hospitals globally that uses a unique natural resource – naphthalene - in the treatment of skin conditions and inflammatory rheumatic diseases Sanja Plješa pljesa@privredni.hr
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unique natural resource, naphthalene, used in the Naftalan Special Hospital for Medical Rehabilitation has been attracting an increasing number of foreign patients, and the hospital has recently admitted the first organised group of Norwegian patients. The Croatian Naftalan hospital is one of a few specialist hospitals globally that uses a unique natural resource – naphthalene – a natural earth mineral oil - in the treatment of skin conditions and inflammatory rheumatic diseases. In addition to this hospital, this unique therapeutic resource is used only in hospitals in Azerbaijan. In the Naftalan hospital it is used in treatment of psoriasis and neuro-dermatitis, as well as in cases of inflammation in the joints, such as arthritis. Moreover, naphthalene helps
in the treatment of burns, as well as postoperative rehabilitation. As pointed out at the hospital, the arrival of the first organised group of patients from Norway is the result of a vigorous marketing strategy used on the Norwegian market by hospital representatives over the last several years. Due to the promotion of naphthalene as a natural resource, the Norwegians have recognised the beneficial effects of naphthalene therapy in the treatment of skin conditions and inflammatory rheumatic diseases.
NORWEGIAN FUND COVERS COSTS
As stated by hospital sources, an initiative has already been launched towards a Norwegian health insurance fund that will cover the costs of hospital treatment for future patients from that country at
Booked in-patient admissions and capacity for 2016 “I can express my utmost satisfaction with the arrival of the first group of patients from Norway to be treated at the Naftalan Special Hospital. It is a great honour for the hospital and its employees. We have already booked substantial hospital capacity for groups of patients announced for 2016, and we are certain to meet the needs of Norwegian patients with our top quality services. Our success will have a positive impact on the local economy, as well as on health tourism development in Croatia”, pointed out Goran Maričić, Director.
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Goran Maričić, Director of the Naftalan Special Hospital
the Special Hospital in Croatia. According to several estimates, over 100,000 people in Norway suffer from
NAPHTHALENE IS USED TO TREAT PSORIASIS, NEURODERMATITIS AND ARTHRITIS psoriasis and other skin diseases. They all now have the opportunity of treatment at the Croatian Naftalan hospital. The successful positioning of Naftalan Special Hospital on the Norwegian market provides access to the Croatian hospital also for the patients from other Scandinavian markets. The Naftalan Special Hospital is currently a 137-bed facility. Following successfully implemented therapy and positive experiences from former patients at the Hospital and in addition to attracting patients from Nordic countries, the hospital has to date also attracted visitors, primarily from Russia, as well as from Germany. Hospital capacity expansion has been announced in the forthcoming future through the construction of a new facility and its capacity will soon increase to 250 beds. Consequently, the hospital will have the potential to admit a greater number of patients from the European countries.