Minister of Regional Development and EU Funds → Operational programmes will be prepared on site PAGES 4-7
SUPPORTED BY THE CROATIAN CHAMBER OF ECONOMY
www.privredni.hr
Start-up Oradian → Oradian has clients in Nigeria, Ghana, Liberia and the Philippines. PAGES 20-21
Branko Roglić, President of Orbico Group → Last year, Orbico’s revenue totalled €1.8 billion in 19 countries PAGES 16-19
PVinternational C R O A T I A N
B U S I N E S S
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F I N A N C E
M O N T H L Y
March 2017, Year X, No 267
INDUSTRIAL OUTPUT
ALMOST 15% GROWTH Against the backdrop of both local and international demand, industrial output grew almost 5% in 2016, the third consecutive year of positive growth, as noted by Zvonimir Savić from CCE by Ilijana Grgić
I
n December 2016, industrial output in Croatia soared by 14.9% compared with 2015, according to data released by the Croatian Bureau of Statistics. This was the highest growth rate since 2001, when the Croatian Bureau of Statistics started keeping calendar-adjusted data. Throughout 2016, industrial output grew by 5% over the previous year, the third consecutive year of growth. According to both seasonally and calendaradjusted data on a monthly level, output showed 4% growth compared with November 2016, now growing for 23 consecutive months. “Against the backdrop of both local and international demand, industrial output grew by 5% in 2016, the third consecutive year of positive growth. This year we are expecting this positive trend to continue, to
INDUSTRIAL OUTPUT GROWS FOR 23 CONSECUTIVE MONTHS
siness Information and Economic Analyses at the Croatian Chamber of Economy. In 2016, growth was seen monthby-month, last seen in 2006. In December 2016, durable goods were 17.2% up, non-durables increased by 6.5%, capital goods were up by 3%, intermediate goods showed an increase of 1.2%, although energy dropped by 1.6% compared with November 2016.
see a continuation of upward trends in production”, stressed Zvonimir Savić, Director of the Sector for Financial Institutions, Bu-
GROWTH EXPECTED TO CONTINUE “According to the report for December,
the trend of positive annual growth in industrial output has been recorded since February 2015”, as stated by RBA analysts. “Positive annual growth rates are expected to continue this year. Activities closely linked with tourism and trade are expected to be the drivers of growth. Hence, in addition to the projected continuation of growth recorded by the most important Croatian wholesale partners, a positive upward cycle in the processing industry is expected to continue also in 2017”, concluded RBA analysts.
GUEST COMMENTATOR KRUNO ŠKRINJAR
NEW SECTOR: IT-AS-A-SERVICE It is anticipated that the technology of machine learning, biometric security and automated braking will be applied on a more massive scale during 2017. IT-as-a-Service should become a global sector worth almost $US550 billion
C Kruno Škrinjar, Senior Manager at Deloitte, Business Consulting Department
OVER A BILLION DEVICES EQUIPPED WITH FINGERPRINT READERS WILL BE ACTIVE SOON
onsidering today’s mode of living, where smart phones, computers, social networks and internet are present everywhere, it seems realistic to say that only 20 years have passed since the start of the commercial work of the first GSM network in Croatia, only 13 years since the appearance of Facebook and 10 years since the first iPhone. Not so long ago (in 1995), only 1% of the population used the internet. After a period of exponential growth, the number of internet users reached almost 3.5 billion or around 40% of global population. In Croatia, the number of internet users is now at 75% compared with the beginning of the 21st century when only 6.5% of Croats used the internet. Only shares of the world changing technologies have been mentioned, but what about new technologies and their influence on the future? Based on the prognosis of the world’s largest audit-consulting company Deloitte, the technologies of machine learning, biometric security and automated braking, that have already changed the world around us, will be applied on a more massive scale. Furthermore, IT-as-a-Service should become a global sector worth almost $US550 billion. Deloitte anticipates that over 300 million smart phones, or over one-fifth of items sold in 2017, will include a machine learning function in the next 12 months. Mobile devices will be able to perform machine learning operations without being connected, which will substantially change the interaction between people and technologies in all sectors, on all markets and in every society. However, machine learning “to go” will not be exclusive to smart phones. These functions will probably be present in many millions or more drones, tablets, cars, devices for virtual or augmented reality, medical instruments and aids, devices for the so-called internet of stuff and new unknown technologies. Machine learning is fascinating, since it will revolutionise the performance of simple tasks, such as content translation.
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However, it will have a much greater influence on security, safety and health, and as such, every society in the world. For example, mobile machine learning is the starting point for better and faster response by rescue services when rescuing lives with autonomous vehicles. It could also lead to a turn in the rising number of attacks on information systems. For the first time in history it is anticipated that over a billion devices equipped with fingerprint readers will be active in 2017. This technology is becoming more accessible and widely used and it sets challenges in the context of defining other applications which will certainly use fingerprinting and biometric readers for instant and secure authentication, that is, confirmation of the user’s identity. There is another innovation which will change the world – automated braking. Deloitte estimates that by 2022 the number of deaths caused on the roads will decrease by 6,000 in the US alone (or 16% over 2017). The change, which will mark the start of the transformation of information technology related to the exchange of technological solutions between economic operators around the world, is the procurement of IT-as-a-Service. The technology, media and telecommunication sector will become even more mobile in 2017. In combination with smarter and faster functions, this sector’s innovations will force companies from private, public and state sectors, and their users, to adopt new methods of working and create possibilities for a thorough transformation of all areas. There are many companies in Croatia which base their business model on using the latest technologies. The development of electric cars, 3D navigation systems, cloud services in mobile applications are only some of the examples. The anticipated development of new technologies and the growth of the global market will create many new opportunities for Croatia companies, especially in the segment of machine learning and IT-as-a-Service.
NUMBERS, NUMBERS
NUMBER AND STRUCTURE OF ECONOMIC OPERATORS IN 2016 255.351 total number of economic operators in Croatia
56%
144.522 active economic operators
185.969
65.141
4241
companies
institution, body, association and organisation
cooperative
1,4% 16,9%
limited liability companies simple liability limited companies
81,6%
other types of companies
76.941
operators in crafts and freelance professions
THE MAJORITY OF ACTIVE PROFITABLE CORPORATE:
28.452
18.114
wholesale and retail, motor vehicles and bikes repairs
experts, scientific and technical activities
Source: DZS
13.634 processing industry
March 2017 | No 267 | PVinternational | 3
INTERVIEW GABRIJELA ŽALAC, MINISTER OF REGIONAL DEVELOPMENT A
Foto: Davor Javorović/PIXSELL
Counties, municipalities and cities are operating effectively and they have already identified the role of EU funds in the creation of high quality requirements for business activity, to attract entrepreneurs and eventually the creation of new jobs.
4 | PVint PV P PVinternational Viint in ntern nt errn er nat ati a tiiona t io on ona nal | March na Ma Ma Mar arrc ch h 2017 201 2 20 0117 | No 0 No 2 26 267 67
AND EU FUNDS
OPERATIONAL PROGRAMMES WILL BE PREPARED ON SITE I am aware of the fact that there are a large number of potential users who are insufficiently informed about the opportunities provided by EU Funds and so during my term of office I will transform the Ministry into the level of service intended to assist all high quality and wellprepared projects to absorb the necessary EU Funds by Svetozar Sarkanjac
ou have recently met Corina Crețu in Brussels, the European commissioner for Regional Policy. What are your impressions after your meeting and do you have any news concerning the absorption of EU funds? The Croatian government has a clear and a concrete plan and programme on how to in-
Y
as the contracting procedures and project implementation, in order to effectively exploit all the opportunities provided by EU funds over this financial period. Commissioner Crețu is satisfied with our work to date, and was particularly delighted with the fact that EU fund management has been upgraded to ministerial level. She showed her interest in the current circumstances in Croatia by announcing a new meeting in Zagreb on 27th April 2017.
THE CROATIAN GOVERNMENT HAS A CLEAR AND CONCRETE PLAN AND PROGRAMME ON HOW TO IMPROVE EU FUND ABSORPTION
You have recently concluded the first 100 days of your term of office. What are your impressions? Irrespective of the fact that I have been a Minister for only 100 days, immediately preceding this appointment I worked as the Director of the Administrative Department for International Co-operation and EU Affairs of Vukovar-Srijem County and was also the Director of Hrast Development Agency for VukovarSrijem County. Consequently, I am aware both of the upsides and downsides encountered by users when applying for EU tenders. I am aware of the fact that there is a large number of potential users who are insufficiently informed about the opportunities provided by EU funds and hence during my term of office I will transform the Ministry into the level of service intended to help all high quality and well-prepared projects to absorb the necessary EU funds.
crease the absorption of EU funds. Through its implementation, we aim to ensure the effective and homogeneous development of all regions in Croatia. The meeting with the European Commissioner, Corina Crețu, gave confirmation that we are pursuing the right path, since we agreed that the preparation and invitation of EU tenders needs to be accelerated, as well
The launch of Slavonia Project has ensured a preference for those projects from less developed counties concerning co-financing through direct allocations of funds, as well as the opportunity to collect additional positives as a result of the open project selection process for the allocation of non-repayable funds.
March 2017 | No 267 | PVinternational | 5
INTERVIEW
Croatia certainly can and must exert far more effort in order to absorb the entire amount of €10.7 billion at her disposal if she wishes to be compared with other EU member states whose EU funds absorption rates have been substantially superior.
Users need to be provided with an insight into EU funds and we have already started simplifying procedures and systems in order to make everything more accessible. I have already announced that operational programmes for the next financial period will not only be prepared in Zagreb, but also on site, in co-operation with our associates and partners. We began with small regulatory amendments aiming to reduce the number of intermediate bodies in guidance and control systems of the Competitiveness and Cohesion Operational Programme.
Is there accurate data on the proportion of the funding, of €10.7 billion available, that Croatia has absorbed to date and for what projects? During the financing period 2014-2020 Croatia has to date concluded contracts on projects whose value exceeds €1.6 billion, primarily on projects in agriculture, transport, employment, education, cultural heritage and environmental protection, as well as entrepreneurship development projects and those concerning investment in refurbishment of student housing and scientific institutions. What are the indicators for other EU members in that area, and what is the secret of the level of success achieved by Poland? Croatia is a young country and a much younger EU member state and so we can hardly be compared with other member states on this issue. Irrespective of the fact that 2016 was a largely successful year for Croatia and also that it was the first time that Croatia has received almost double the funds from the EU budget compared with those paid to the EU
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budget, Croatia certainly can and must exert far more effort in order to absorb the entire amount of €10.7 billion at her disposal if she is wishes to be compared with other EU member states whose EU funds absorption rates have been substantially superior compared with ours. Poland currently ranks amongst the most successful countries concerning the issue of absorption of non-repayable EU funds and it certainly needs to serve as a role model for Croatia. Poland has actively included her dukedoms in the planning of EU funds and adjusted her Operational Programmes in order to meet regional requirements. I believe that Croatia can and must follow suit, and hence we have launched the Slavonia Project inspired by the model provided by Poland.
On what does the Slavonia Project primarily focus? Through existing programmes, the Slavonia Project has enabled us to channel €2.5 billion for investment into entrepreneurship, education, health, culture, cultural and natural heritage, transport, inland waterways and energy exclusively in the area covered by the five Slavonian counties. The launch of this project has ensured the preference for projects from less developed counties concerning co-financing through the direct allocations of funds, as well as the opportunity to collect additional positives on the open project selection process for the allocation of non-repayable funds. In addition, other adjustments and measures have been implemented, striving to ensure a more significant contribution to growth and development in the five Slavonian counties whose development lags behind other counties in Croatia. Our specific objective is to ensure the highest possible absorption rate of ESI funds
and significantly strengthen the capacities of stakeholders at the levels of both local and regional government concerning the preparation and implementation of projects during this financial period, in order to create the backdrop for the implementation of a special regional Operational Programme for Slavonia, Baranja and Western Srijem and/or other mechanisms of decentralised implementation of centrally managed programmes during the forthcoming financial framework of the EU (20212027). Over 10% of funds, or around €265 million, has thus far been absorbed within this project through current Operational Programmes and through the Rural Development Programme.
What will Croatia be like at the end of your term of office? Some counties, primarily Slavonian counties, have unfortunately been unfairly neglected and this needs to be corrected without delay. Measures that will contribute to uniform development of all Croatian regions are imperative. Through the implementation of such measures, the conditions for the strengthening of competitiveness and the economies of these counties will be provided, and they will be given the opportunity to participate in the market competition on an equal footing with others. EU funds absorption provide immense potential towards the achievement of this objective. Counties, municipalities and cities are op-
MEASURES THAT WILL ENSURE UNIFORM DEVELOPMENT OF ALL REGIONS IN CROATIA ARE AN IMPERATIVE erating effectively and they have already identified the role of EU funds in the creation of high quality possibilities for business activity, to attract entrepreneurs and eventually the creation of new jobs. Regional co-ordinators need to play the most important role, as an indispensable and a crucial factor of regional development. They have a comprehensive insight into the actual state of affairs and are always available during the preparation and implementation of projects. We are at their
service to help them and ensure the required co-ordination and co-operation at all levels and establish an effective management system of EU funds in order to ensure that Croatia ranks amongst the successful EU member states concerning EU funds absorption rates by 2020, and to make it a country fully prepared for a new financial perspective.
Notwithstanding the fact that most Croatian politicians normally adopt the stance of considering everything primarily through the lens of a four year term of office, this period is certainly insufficient for systematic and long-term development. What is your opinion on this? Financial perspectives of the EU are planned for a seven year period and so all one’s initiatives, both effective and ineffective, will eventually impact on the systematic and long-term development of Croatia in a large number of areas. Short-term success has primarily been focused on to date, and so we are currently faced with a situation in which we have to change the system, the procedures and operational programmes in order to be able to use all the available resources within the specific time frame. My team and I are focused on long-term objectives and consequently we have decided to establish a strategic planning system, as well as a development management system at the national level in order to define the direction of development, as well as the priorities, objectives, desired results and the allocation of resources required for their achievement. All this is imperative to ensure social progress, a higher quality and more focused development of Croatia as a whole.
10,7
€ billion
available to Croatia from the EU
€
over billion
1,6
value of projects contracted by Croatia to date
€
2,5 billion
channelled through the Slavonia Project in 5 counties
March 2017 | No 267 | PVinternational | 7
PROJECTS SUMMARY OF WORK PERFORMED BY THE EUROPEAN INVESTM
EIB will participate in financing the LNG terminal In 2016, the European Investment Bank approved €530 million worth of loans and the European Investment Fund realised projects worth €16 million by Ilijana Grgić
I Last year was successful for EIB Croatia: contracted loans increased 50% compared to 2015. During the
forthcoming years, we will be focusing on simplifying the inflow of private capital and the implementation of riskier projects. Dario Scannapieco, EIB Vice-President
n 2016, the European Investment Bank Croatia approved loans worth €530 million, and the European Investment Fund, a member of the EIB Group together with EIB, realised projects worth €16 million. These projects were aimed at reducing variations in regional development, promoting economic competitiveness and improving the standards and quality of the people’s lives. “Last year was a successful one for EIB Croatia: contracted loans increased 50% compared with 2015. During the forthcoming years, we will be focusing on simplifying the inflow of private capital and the implementation of riskier projects”, said EIB Vice-President, Dario Scannapieco, when presenting last year’s results of the European Investment Bank in Croatia on 22 February in Zagreb. Scannapieco also highlighted that EIB Croatia will once again focus on the sector of small and medium sized enterprises as well as projects related to energy and infrastructure, including the construction of the LNG terminal. “The LNG terminal’s financial structure has yet to be agreed. We will see where and how we can participate in financing, but we will certainly do so”, Scannapieco said. He also confirmed this relates to the financing of an approved €102 million for the LNG project. The Co-ordination Board of the Connecting Europe Facility has recently approved €102 million for constructing a floating terminal for liquid gas on the Island of Krk. The project is now in the phase of final selection of strategic investors and implementation of the procedure for the lease of the terminal’s capacity. Total value of the investment is estimated at €363 million. Therefore, after airports in Dubrovnik
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and Zagreb, a dozen water-supply projects in Croatia, the Svilaj Bridge and railway Dugo Selo-Križevci, this would mean another big infrastructural project in Croatia which EIB would finance.
CONTRACTED FINANCING Last year, EIB Croatia, within the framework of the Investment Plan for Europe, contracted the first project to be secured with a guarantee of the European Fund for Strategic Investments. The guarantee, worth €50 million, was given to the CBRD to secure new funding for medium-sized capitalised enterprises and other priority projects in Croatia, in the future. The work is structured as an instrument based on risk division to cover up to 50% of the credit risk related to the portfolio of the existing unreturned loans in CBRD’s balance sheet. Also, in future, CBRD will be able to approve new loans to medium capitalised enterprises and other acceptable project holders and up to total value of €100 million.
EIB’S MAIN ACTIVITIES IN CROATIA RELATED TO SUBSIDISING SME’S AND YOUTH EMPLOYMENT The proposed guarantee is designed in a way to simplify CBRD, as a financial agent, approving new loans to medium capitalised companies.
ENT BANK CROATIA LAST YEAR
YOUTH INITIATIVE In 2016, EIB continued to subsidise SME’s and youth employment, the pillar of their activities in Croatia, where they contracted two new loans with CBRD worth a total of €400 million intended for subsidising projects of local small and medium-sized enterprises as well as medium capitalised enterprises. One of these new loans is part of EIB’s Youth Employment Initiative where EIB and CBRD offer additional subsidies to end-users if they are able to prove their investment projects, financed by this instrument, contribute to youth employment. Furthermore, EIB approved a €40 million loan to Privredna banka Zagreb, and they contracted a second one, also of €40 million, with Raiffeisenbank Austria to allow SME’s easier access to mid-term and long-term funds under favourable financial conditions. During the presentation of EIB’s work during 2016, it was mentioned that the EIB Group had made a strong contribution to the growth of Europe. In 2016, EIB contracted projects worth €83.8 billion for subsidising investments to total amount of €280 billion. In the context of Europe, they had record financing of small and medium-sized enterprises – over €33 billion.
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PROGNOSIS WINTER ECONOMIC OUTLOOK 2017
INCREASED GDP GROW The European Commission amended and increased its estimates for Croatia, placing it in that group of countries showing above average growth. Croatia should have a lower budget deficit, a further reduction in public debt and unemployment should fall to under 10% by next year by Ilijana Grgić
GDP growth estimates in Croatia
2.8% 2016. 3.1% 2017. 2.5% 2018. 1,8% this year’s estimated GDP growth across the EU
I
n their winter economic outlook, the European Commission increased their growth estimates for the Croatian economy. They assessed last year’s GDP growth as 2.8%. This year they anticipate it will be 3.1% and around 2.5% next year. In relation to the autumn economic outlook, released in November 2016, there is an obvious correction to higher values (growth predicted then was 2.6% for 2016, 2.5% for this year and 2.4% for next year). Croatia therefore belongs in that group of countries showing above average growth considering the European Commission anticipates 1.8% growth across the EU this year. The highest growth of this year in the EU is
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anticipated for Romania (4.4%), Malta (4%) and Luxembourg (3.8%), followed by Hungary (3.5%), Poland (3.2%) and Slovenia with anticipated economic growth of 3%. The weakest growth is anticipated for Italy (0.9%). The European economy proved itself resistant to many shocks last year. It is still growing, and unemployment and deficit levels are decreasing. However, due to the high level of uncertainty, it is more important than ever to support growth with every political tool. “Above all, we need to ensure that all parts of the European Union and all segments of society feel the benefits of that growth”, said Pierre Moscovici, European Commissioner for Economic and Financial Affairs, Taxation and Customs.
WTH ESTIMATES POSITIVE INDICES ACROSS THE ENTIRE UNION It could be said that the European Union as a whole is seeing encouraging results. For the first time in almost a decade, the economies of all member countries will grow during the entire period covered by this outlooks. Unemployment, even though it continues to fall, is still above the pre-crisis level. And personal spending is still the main growth generator. Economic recovery in Europe continues for the fifth consecutive year; however, in these unstable times it is important that European economies preserve competitiveness and the possibility to adapt to volatile circumstances. This demands constant investing of effort in structural reforms. “We need to focus on inclusive growth and ensure everyone feels the benefits of the recovery. Therefore, countries need to continue decreasing high deficit and debt levels to become more resistant to economic shocks”, said Valdis Dombrovskis, European Commissioner for the Euro and Social Dialogue as well as a Vice-President of the European Commission who is also in charge of financial stability, financial services and capital market.
SPENDING RISES, PUBLIC DEBT DECREASES Concerning Croatia, the European Commission anticipates that spending will increase 3.4% this year, especially due to tax reduction, and they also anticipate that corpora-
EUROPEAN ECONOMIES PROVED TO BE RESISTANT TO NUMEROUS SHOCKS, SAYS COMMISSIONER PIERRE MOSCOVICI tive investment will increase primarily due to the high level of liquidity and favourable financial conditions for credit expansion. EU
RISING TRENDS CONTINUE
Global recovery Over the past few months, the possibilities for advanced economies’ growth (those outside the EU) have improved. This is mainly due to the anticipated fiscal incentives in the USA which caused an increase in long-term rate interests and US dollar appreciation. It is also anticipated that the stabilisation of new market economies will strengthen by 2018, but to a different extent in different countries and regions. These movements could encourage the European export of goods and services after poor results in 2016.
funds should give additional incentive to public investment. Public spending should grow at a more modest pace, but it is anticipated that total local demand will boost real GDP growth. The Commission predicts slightly slower export growth, especially in services, whereas strong local demand will encourage import growth. The Commission also anticipates a smaller budget deficit and further decrease in public debt. It is predicted that the budget deficit of the state will be 1.8% for last year, 2.1% for this year and again 1.8% of GDP for the following year. The percentage of public debt to GDP is also decreasing. This is estimated at 84.1% for last year; it should decrease to 83% this year and to 81.3% next year. It is also anticipated that the unemployment rate last year should decrease to 12.8%, not only due to the total reduction of the workforce, but also to employment growth. For this year, the European Commission anticipates a 10.8% unemployment rate in Croatia and 9.3% for next year. After three years of deflation, the Commission predicts Croatia’s inflation rate for this year could be 1.7% or 1.6% next year.
EUROPEAN COMMISSION ANTICIPATES THAT SPENDING WILL INCREASE 3.4% THIS YEAR
WINTER OUTLOOK MARKED BY EXTREME RISKS During the presentation of this winter’s outlook, the European Commission pointed out that the outlook is extremely uncertain since the direction of the new administration in the USA and its key policies is still vague. The results of numerous elections, which will be held in Europe this year, are also uncertain as well as the results of the forthcoming talks with the United Kingdom on Article 50. March 2017 | No 267 | PVinternational | 11
AUSTRIAN INVESTORS IN CROATIA
Austrian optimism The Austrian Foreign Trade Office has conducted an online anonymous survey with the results being provided by 121 companies from around 650 Austrian companies operating in Croatia by Miro Soldić
The ratings concerning business expectations for Croatia are the highest amongst the countries
in the region in which the survey was conducted; they only need to be met. Sonja Holocher Ertl, Director of the Austrian Foreign Trade Office
met”, stated Sonja Holocher Ertl, Director of the Foreign Trade Office, commenting on the survey results. She pointed out that total Foreign Direct Investment from Austria prior to 2015 reached €128 billion, of which €5.1 billion or 2.7% was invested in Croatia. “Based on this investment, it was estimated that over 800,000 jobs have been created, of which around 30,000 were created in Croatia”, explained Sonja Holocher Ertl. Optimistic forecasts for this year provided by Austrian entrepreneurs are shown also through the expected growth of sales, capacity utilisation, the level of orders received, as well as an increase in the number of employees and investment volume. Sonja Holocher Ertl stated these breakthroughs were due to the late recovery from the crisis in Croatia that became evident only last year, as well as due to the increased absorption of EU funds.
T
he Austrian Foreign Trade Office has recently presented the results of their traditional annual survey on economic circumstances amongst Austrian investors in Croatia, and compared them with research conducted amongst companies from neighbouring countries. The research was conducted online, anonymously, with the results being provided by 121 companies from around 650 Austrian companies operating in Croatia. Substantial optimism was shown by those responding should be noted, since their answers to the question concerning the business climate in Croatia was that in their opinion it has either improved or, in the worst cases, stagnated (87%) over the past year, whilst only 13% of those questioned stated that it had deteriorated. Concerning the forthcoming 12 months, 55% of those surveyed expect to see an improvement, 39% believe the situation will remain unchanged, and 6% anticipated a worsening of conditions. “The ratings concerning business expectations for Croatia are the highest amongst the countries in the region in which the survey was conducted; they only need to be
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MAJOR PROBLEMS Three major problems are encountered by Austrian companies operating in Croatia - the regulatory aspects concerning legal safety, slashing bureaucracy and the predictability of economic policy. These are all well-known malaises in the Croatian economy and clear indicators to the policy pursued by the state concerning the recommended direction to follow. The major problems encountered include payment issues, the purchasing power of the general public and labour costs. Sonja Holocher Ertl emphasised that the issue of identifying qualified labour has become more serious, primarily for companies in the production sector, whose number is currently still rather insignificant in Croatia, yet this issue is slowly becoming more evident. Of 121 the businesses that participated in the survey, 49% are involved in the provision of services, 34 are subsidiaries for the distribution of Austrian products and services, and 17 are involved in production. The survey was conducted in 24 countries and, according to all indicators, the ratings concerning the optimism expressed by Austrian entrepreneurs operating in Croatia were amongst the highest.
ONE BELT, ONE ROAD INITIATIVE
HONG KONG - DOOR TO THE CHINESE MARKET Croatia is interested in strengthening economic co-operation between China and E.U. countries under the “One Belt, One Road” initiative, noted Želimir Kramarić, adding that the Representative Office of the Croatian Chamber of Economy in Shanghai will exert a significant impact on any improvement in business by Krešimir Sočković
T
he population of Hong Kong is about 7 million, it covers an area of slightly over 1,000 km2, and has a GDP per capita in excess of $42,000. In 2015, the total value of exports from the Republic of Croatia to Hong Kong was around $8.5 million, and the imports from Hong Kong to Croatia were around $3.8 million. Hong Kong is certainly an important financial market in the wider Asia-Pacific Region, particularly concerning investment into the Croatian economy, and is also a region from which the number of tourists coming to Croatia doubled in 2015 compared with the previous year. A seminar The Belt and Road Initiative: Opportunities for Business Co-operation between Hong Kong and Croatia, recently held at the Croatian Chamber of Economy, in co-operation with the Hong Kong Economic and Trade Office in Brussels, addressed the issue of opportunities for the strengthening of such cooperation. The CCE is particularly focused on economic co-operation between Croatia and China and Hong Kong, as well as the entire region, pointed out the Vi-
ce-President of the CCE for International Affairs and the EU, Želimir Kramarić. “We are currently doing all we can and will continue doing so in order to boost trade co-operation and provide business opportunities for Croatian companies in that market. Moreover, the strengthening of business internationalisation and expansion into new markets for the members of the CCE are amongst the priorities of the New Strategy of the CCE. Croatia is interested in the strengthening of the economic co-operation between China and European countries under the “One Belt, One Road” initiative, whilst the Representative Office of the Croatian Chamber of Economy to be opened in Shanghai this year will exert a significant impact on the improvement of business. It is intended primarily to establish stronger relations between China and Croatia and enable better and more effective business co-operation with Hong Kong”, stressed Kramarić. Sam Hui, a representative of the Brussels-based Hong Kong Economic and Trade Office (HKETO), stated that, irrespective of the huge geographical distance between Croatia and Hong Kong, the
two countries are prepared to establish and improve economic relations with overseas partners. “We are expecting an increased number of seminars and economic business missions and are striving to consider the opportunities for co-operation, as well as act in the best interests of Croatian companies”, noted Hui.
FOOD, BEVERAGES AND BRANDED GOODS The Chinese initiative “One Belt, One Road” comprises two physical routes of connections with Europe – a terrestrial route along the Silk Road and a southern maritime route towards Europe, which will be developed through infrastructure investment, the expansion of trade and services and co-operation in a large number of sectors. Paula Kant from Invest Hong Kong (InvestHK) highlighted the fact that there are ample opportunities for both food and beverage businesses, as well as for branded goods, that slightly differ from reputable brands in Hong Kong. “Food and beverages consumption in Hong Kong is significant and imports have soared 50% during the last five years”, she added. March 2017 | No 267 | PVinternational | 13
CROATIAN-FRENCH BUSINESS FORUM
French entrepreneur investing in Croatia We believe that current circumstances are most acceptable for business co-operation with Croatia, for several reasons: Croatia is an EU member, she has a new government and political stability, as well as a more favourable economic climate that encourages investment, noted the President of the Business Council of the Association MEDEF International, Charles Paradis by Sanja Plješa
O
ver the past several months, French companies have shown increasing interest in doing business with Croatian companies, resulting in a large number of bilateral business meetings, stated Luka Burilović, President of the Croatian Chamber of Economy during the Croatian-French Business Forum recently held at the CCE. He added that there is ample room for the strengthening of cooperation, primarily in construction, defence and automotive industries, energy, tourism and the IT sector. “Croatian and French companies are already co-operating on some projects, such as the construction of Zagreb airport. French companies have recognised the value both of Croatian companies and the local market, and they have also identified Croatian companies as potential high quality partners for third markets”, stressed Burilović. He added that he was delighted
with the fact that France, which is currently the fourth largest EU economy, is a friend to our country. According to the latest revised data from the Croatian National Bank, the value of investment from French entrepreneurs in Croatia to date is €1.4 billion and therefore ranks seventh according to the value of investment in Croatia. Burilović primarily highlighted the importance of tourism where he sees immense room for further co-operation and investment by French entrepreneurs, which is largely due to a constantly increasing number of French tourists. Last year Croatia saw around 500,000 French tourists. Moreover, Burilović has also announced the possibility of potential co-operation with French colleagues, primarily between French clusters and the Institute for Research and the Centre for Industrial Development which was founded by the CCE in co-operation with the Ministry of Economy.
TRADE VALUES
Around €700 million on an annual level In 2015, the value of the total trade between Croatia and France was €700 million. Croatian exports to France covered automotive equipment and spare parts, agricultural machinery, freight cars, electrical equipment, textile and leather goods, as well as wood products. On the other hand, Croatian imports from France include cars, pharmaceutical products, vessels, agricultural and food products, plastics, electrical and electronic equipment and cosmetics products. France is the 10th largest trading partner for Croatia.
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INVESTMENT INTO CROATIA Charles Paradis, President of the Business Council of the Association MEDEF International, was delighted with his arrival to Croatia and pointed out that the Association comprises of around 800,000 companies that employ the leading managers of top rated French companies. “We believe the current circumstances are most acceptable for business co-operation with Croatia, due to several reasons: Croatia is an EU member, she has a new government and political stability, as well as a more favourable economic climate that encourages investment,” emphasised Paradis. When journalists asked what projects in Croatia they find of particular interest, he replied that it was a broad question, since the delegation that visited Croatia comprised of representatives of 22 companies from seven different sectors. “They are all interested in something in Croatia, irrespective of whether we are dealing with aviation, infrastructure, water, environmental protection, roads, transport, food production or energy”, pointed out Paradis. He added that Croatia will be allocated a substantial proportion of financial funding through the European Structural Funds by 2020 and expressed his hopes that these resources will be used for large-scale projects in infrastructure, energy and water purification. When asked about how difficult it is to implement investment
rs interested in into Croatia, Paradis stated that it is not more difficult compared with any other country, yet one needs to use the fiscal stimulus. “Following Croatian EU accession, I believe investment has been slightly aided in relation to the situation from previous several years”, stressed Paradis. He added that there is an opportunity for investment into the Pelješac Bridge. Philippe Meunier, French Ambassador to Croatia, agreed with him and he thanked the CCE for having hosted the French delegation and provided an opportunity for B2B meetings between the representatives of French and Croatian companies. “Several of these companies have already visited Croatia, yet there are those for whom this has been the first visit here. There is clearly immense interest in co-operation and we are aiming to establish co-operation and conclude contracts primarily in order to achieve mutual benefits”, emphasised Meunier.
GOOD ECONOMIC AND TRADE RELATIONS Davor Ivo Stier, Vice-President of the Croatian government and Minister of Foreign and European Affairs, also addressed the issue of co-operation between Croatian and French companies. Moreover, he pointed out that the Croatian government is currently aiming to assist
Želimir Kramarić, Charles Paradis, Philippe Meunier, Davor Ivo Stier and Luka Burilović
business activities for entrepreneurs, reduce their economic load, continue focusing on increasing economic growth and reduce public debt, which will all result in fostering investment. The French partners were presented with the opportunities of investment in Croatia, whereas the representatives of regional development agencies AZRA and PANORA presented the potential of both Varaždin and Požega-Slavonija County. MEDEF International representatives met with the repre-
sentatives of the Croatian Employers’ Association. Bernard Jakelić, Deputy Managing Director of the Croatian Employers’ Association, highlighted the fact that potential barriers can be overcome more effectively by establishing a direct connection between employers in Croatia and in France, whilst simultaneously Croatian employers are given the opportunity for presenting both themselves and their companies in the best possible way to the EU market.
PRIME MINISTER ANDREJ PLENKOVIĆ VIEWS ON CO-OPERATION
Excellent relations between the two countries During the Business Forum, delegation of the Association MEDEF International also met with the President of the Croatian government Andrej Plenković and the Minister of Finance Zdravko Marić. On this occasion Plenković was delighted with the large number of representatives of French
companies who visited Croatia. “This clearly suggests excellent relations between the two countries that have been strengthened with our strategic partnership, as well as a confirmation of the quality of both our economic and trade relations”, noted Plenković. Furthermore, he highli-
ghted the fact that around 60 subsidiaries of French companies are currently operating in Croatia, employing around 6,500 individuals. In addition, he also noted the Investment Protection Agreement, as well as the Double Taxation Agreement (DTA) in force between the two countries.
March 2017 | No 267 PVinternational | 15
INTERVIEW BRANKO ROGLIĆ, PRESIDENT OF ORBICO GROUP
OUR POLICY IS BASED ON MODESTY Last year, Orbico’s revenue totalled €1.8 billion in 19 countries. Our profits were around €20 million. This year we plan to achieve revenue of €2 billion, says President of Orbico Group from Croatia which is also the biggest distributer company in Europe by Jozo Vrdoljak
in
19 9countries OrbicoGroupoperatesin
1.8 8 billion
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last year’s revenue of Orbico
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€ billion planned revenue for this year
O
rbico Group operates in 19 countries and it is the biggest distributer in Europe. Last year, Orbico expanded their business to the Ukrainian and the Russian market. A few days ago it took over Slovenian’s cosmetic product distributer – Everet Group. We talked with Branko Roglić, President of the Orbico Group, about the company’s business, plans, anticipated growth and measures for realising these plans. Furthermore, we also talked about the entrepreneurial atmosphere and the development of Dalmatia and Croatia.
What was the past year like for Orbico? Orbico’s revenue totalled €1.8 billion in 19 countries last year. Our profits totalled around €20 million. This year our plan is to achieve revenue of €2 billion. We are anticipating growth of €15 million in Poland and €100 million in Romania. Our turnover and profitability will grow in all of the countries we operate in so I anticipate profits of approximately €35 million. It is important to highlight that Orbico has never owed anything to anyone, including the state, the suppliers or workers. Our policy is based on modesty on all levels. This is our approach in addition to meeting the needs for long-term sustainability and our obligations. We also want our workers to be satisfied. This has been our business policy since the start.
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Do you plan to enter new markets this year? No we don’t. We did not plan to enter Russia last year, but with the takeover of the Polish Optimum Group we obtained six stores in Moscow in which this company had been selling Converse footwear. I should also point out that we took over the Optimum Group as a company which produces cosmetic products since we are the European leaders in this segment and we achieve around €200 million in revenue from cosmetic products. However, in the case of the Optimum Group we were not able to separate footwear and place it in the hands of someone else. This way we entered the market of Moscow where we plan to develop as much as we are able to. Was this of any help to our companies? It seems it will help Borovo. I actually visited Borovo and I hope we will start to export their products this year. Besides Russia, we will place Borovo’s products through the Optimum Group in Poland and in the Czech Republic. Actually, all of our workers wear exclusively Borovo’s footwear. However, you are not completely satisfied with the business in some countries. Why is that? Our plan for this year is to stabilise our business on Kosovo, in Macedonia, Montenegro
The workers expect from me that Orbico stays a longterm sustainable company and when I am convinced that Orbico will head in the safe direction without me, I will retire. But until I’m not sure this is the case, I will keep at least one eye on Orbico’s work
March 2017 | No 267 PVinternational | 17
INTERVIEW and Albania. The grey market is big in these countries and our companies, through which we distribute our cosmetic products to these countries, are barely profitable. It is true we do not achieve losses and our profits are low in these countries, but we expect more. We anticipate these countries will stabilise since we see potential in them. When they become stable, we believe our companies in these countries will reach the level of profitability of other countries we operate in.
Owing to know-how we acquired doing this work, especially with Procter& Gamble, we are the lowest expense for any company in need of distribution. We take over the goods in their warehouses and place it on the shelves at the lowest cost possible
You have conducted another acquisition lately. What was this about? We took over the Everet Group, one of the biggest distributers of perfumes and cosmetic products in the region. This is the second biggest company in the area we operate in, right behind us. The Everet Group distributes 120 brands on 12 markets. Its head office is in Slovenia and its companies are in Hungary, Romania, Bulgaria, Moldavia and Albania. It distributes prestige cosmetics and perfume brands. What we need to do now is take over the business and merge it with our companies in the countries Everet operated in. What is your plan for achieving growth? We plan to achieve €2 billion in revenue this year and €4 billion by 2020. We plan to do this through acquisitions, organic growth and entering new markets. Which other markets are you interested in? We are interested in west European countries. Primarily, Austria and Germany, followed by other countries as well. We also anticipate growth in the countries we operate in, especially in the Ukraine where we have a company once owned by Procter&Gamble and which specialises in distributing hair care products. How many workers does Orbico currently employ? Around 5000 workers work in Orbico, but I hope we will employ another 500 by the end
of the year. Our profitability allows us stable business and no debts. During the past three years we developed from €800 million to €1.8 billion in revenue. How do you control this kind of growth? We control it with excellent organisation and work quality. We are well organised and covered by the latest technology. Owing to knowhow we acquired doing this work, especially with Procter&Gamble, we are the lowest expense for any company in need of distribution. We take over the goods in their warehouses and place it on the shelves at the lowest cost possible. Is your ambition to become the biggest distributer in the world? At the moment we are the biggest distributer in Europe. I believe we are not that far away from the biggest one in the world. Actually, in
WE ARE CURRENTLY THE BIGGEST EUROPEAN DISTRIBUTER. I THINK WE ARE NOT TOO FAR BEHIND THE LEADING WORLD DISTRIBUTER big countries (USA or Brazil) the practice of the leading companies is to have their own distribution. They do have distributers in smaller countries since it is not profitable for them to establish companies or have their distribution in these countries. However, I am not familiar with the situation in China. It is cheaper for them to use us than to have their own companies in countries in which their revenue ranges from €100 million to €150 million. It is
Every year we buy a few yachts and build villas with pools You own companies dealing in other activities, not only distribution. Tell us something about the business of your Orvas company? Orvas is a company which manages two hotels, about 30 yachts, 18 villas for renting, a vineyard with 15 000 vines, an olive
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grove with 2000 olive trees, etc. Every year we buy a few yachts and build villas with a pool since Croatia’s future is tied to tourism. This business is long-term sustainable and registers continuous growth. Orvas’ head office is in Split and the company employs 57 workers. I also
helped with investments of some entrepreneurs. For example: the production of kulen in Baranje, goat’s cheese in Zagvozd, honey in Hrvatska Kostajnica, etc. Villages need to develop, and I intend to help these entrepreneurs to place their products.
Sales and logistics will always be present What is the future of logistics? Which direction will you take?? They say that cars will be found on the street in 50 years. The buyer of the car will receive a code and take the first car he finds. However, logistics will always be important. Regardless of the sales being electronic or door-to-door, sales and logistics will always exist. The only question is how and how much will they change in the future. There will always be those who want to place their product on the shelves or they will have to deliver it those who buy them through electronic delivery. E-sales already make up for 10% of our sales in Poland, and they will reach 20%. The one thing I know is that Orbico will react on time and adapt to any kind of trend.
cheaper for them to work with private distributer companies since they save more. For some time now you have been announcing to withdraw from operative business. How is the process of introducing a new heir to management proceeding? It is going according to plan. Of course, I want my sons and their colleagues to take over the company since I do not plan running it forever. The workers expect from me that Orbico stays a long-term sustainable company and when I am convinced that Orbico will head in the safe direction without me, I will retire. But until I’m not sure this is the case, I will keep at least one eye on Orbico’s work. My sons share the office with me. When talks are in progress, my sons are in the loop completely, as for myself, sometimes I am and sometimes I am not. I am present at all important meetings, especially if they concern long-term sustainability. Distributers are very sensitive to irregular payers. What is the present situation like? We have a developed system. We deliver the goods without any delay to those who pay on time. On the other hand, our delivery is slower for those who do not pay on time. We stop the delivery to those who do not pay at all or they receive the goods only if they pay in advance or offer a bank warranty. This kind of a model has proven to be successful. However, we do have problems even in Croatia, but I hope they will soon be resolved. Just to be clear: we understand the problems others might have, but we cannot put ourselves in danger. Therefore,
the payers receive the goods, and those who do not pay, do not. We wait up to a certain point, but then we are forced to react. We pay our principals regularly and timely and we also nurture good relations. We have never been late in meeting our obligations. You have become an important channel for placing Croatian products abroad. Can you tell us something about that? The reason for our expansion is not only Orbico. I have always wanted to create a channel for placing Croatian products. The Croatian processing industry received placement channels through Orbico and we have already
I HAVE ALWAYS WANTED TO CREATE A CHANNEL FOR PLACING CROATIAN PRODUCTS started to show results. I will mention only a few companies: Lola Ribar, Sardina, Kraš, Podravka, Iločki podrumi. Last year we formed a department specialising exclusively in connecting Croatian companies with Orbico’s companies abroad. I hope this year we will export great quantities of Croatian products through Orbico. With Orbico’s potential, I believe many Croatian products will appear on the shelves of 19 countries in which we have companies.
I also helped with investments of some entrepreneurs. For example: the production of kulen in Baranje, goat’s cheese in Zagvozd, honey in Hrvatska Kostajnica, etc. Villages need to develop, and I intend to help these entrepreneurs to place their products
March 2017 | No 267 PVinternational | 19
START-UP ORADIAN
FROM ZAGREB TO THE WORLD Oradian has clients in Nigeria, Ghana, Liberia and the Philippines. It successfully provides financial services for over 650,000 African and Asian end-users. Since their business is based on cloud computing, the founders, who come from all four corners of the world, chose Zagreb as their head-office by Boris Odorčić
W
hen considering Oradian, a start-up company which develops cloud solutions for financial inclusion, the well-known principle think globally, act locally, takes on a completely new meaning. Even though the company head-office is in Zagreb, Oradian is not limited by borders and thinks as well as acts globally. Moreover, the company was founded by people from different parts of the world. Antonio Šeparović is of Croatian origin, but comes from South Africa. Andrew Mainhart was born in the United States, Julian Oehrlein was born in Germany and Onyeka Adibeli comes from Nigeria. “Although I grew up in the Republic of South African and my work has never been related to Croatia, my origins and love drew me back to this beautiful country. I started to develop Oradian in my daughter’s room, four years ago. In addition to our office in Zagreb, we operate in Nigeria, the Philippines and we will open a regional office in South Africa. From there on our plan is to expand across Africa – our newly opened office is headed by Natalie Baatjies, former financial inclusion manager at Visa”, explains Antonio Šeparović, co-founder and managing director of Oradian.
STANDARD IN MICROFINANCING They met while working on similar projects in financial inclusion and very quickly decided to establish their own company. “Andrew and Onyeka were clients of a company I used to work for and Julian worked for a software company which was our competitor. A 20 | PVinternational | March 2017 | No 267
friend introduced me to microfinancing and asked me to help an organisation that wanted to expand internationally. Onyeka headed the IT department for six years in one of the largest African organisations involved in microfinancing”. After working in companies on the Fortune 1000 list, Andrew went on to work in AMK, one of the largest microfinancing organisations in Cambodia. His work MIS for Microfinance: An Evaluation Framework that he wrote for the World Bank in 1999 is still considered as a standard in the area of microfinancing. The fourth founder, Julian Oehrlein worked in microfinancing for Grameen
Bank in Bangladesh and the Ujjivan organisation in Bangalore, Šeparović remembers. It is important to note that Oradian offers services in countries where the population is comprised of three billion of the poorest people globally. Access to banks for these people is often not possible. Oradian’s simple and intuitive platform in the cloud gives microfinance institutions a solution which could connect billions of potential clients at the bottom of the economic pyramid who do not have access to financial services. “Our technological solution improves performance, enables access to data in real time, reduces expenditure
and increases the possibility of rapid and effective growth of services. Using Software as a Service model (Saas), our leading product, Instafin, enables microfinance institutions, banks, co-operatives and credit unions to provide costeffective and efficient services to clients”, Šeparović highlights. Oradian has clients in Nigeria, Ghana, Liberia and the Philippines, and successfully provides financial services for over 650,000 African and Asian end-users. The company has a global product based on cloud computing, meaning it can operate from any place in the world, and they opted for Zagreb as their headoffice due to its geographic position and traffic connections, which provide simple access to destinations in which the company works. “From here we are able to offer services globally within the same day and can also travel to any destination globally. Also, Croatia’s EU accession brought certain advantages, and living expenses in Zagreb are much lower than London or Ber-
lin”, Šeparović says. He also adds that the company could never have an office in London for example similar to that in the centre of Zagreb for the same price. The advantage of Zagreb and Croatia are also
GEOGRAPHICAL POSITION, TRAFFIC CONNECTIONS, CHEAPER BUSINESS AND TOP IT EXPERTS ARE THE REASONS THAT MADE ORADIAN OPT FOR ZAGREB highly educated and professional people from the IT industry who are the foundation of Oradian’s DNA”, Šeparović highlights. He also says that Croats also have
excellent English skills, which is crucial for business at a global level.
BUREAUCRACY IS NOT SO BAD When asked about Croatia’s poor bureaucracy, Šeparović answered that Oradian’s experience is somewhat different. “Business in Croatia is less burdened by bureaucracy than other countries we operate in”, Šeparović notes. Oradian’s ultimate goal is to create a comprehensive eco system for financial inclusion in the cloud. “We continuously invest in business development with the goal of bringing financial services to all. We use technology as a platform which enables us to develop solutions. Our goal is to reach to the millions of users at the bottom of the economic pyramid. Our international team achieves excellent results at a global level. Due to the expansion into new markets, we will employ more young experts from Croatia. We currently employ around 40 people and our plan is to double this number. We intend to employ in Zagreb experts in technical support, marketing and sales”, Šeparović concludes.
We continuously invest in business development with the goal of bringing financial services to all people. Our goal is to reach to the millions of users at the bottom of the economic pyramid. Our international team achieves excellent results on a global level. Due to the expansion on new markets, we will employ more young experts from Croatia Antonio Šeparović, co-founder and CEO of Oradian
March 2017 | No 267 | PVinternational | 21
PRIVREDNI VJESNIK
TOP REGIONAL BRANDS
CEDEVITA IN GOOD COMPANY Coca-Cola is the new brand leader in the Adria region, having deposed Milka to second position. Cedevita is third, overtaking Vegeta from last year by Miro Soldić
B
ased on the Valicon survey, Top 25 Regional Brands, Coca-Cola is the new brand leader in the Adria region, deposing Milka to second position. Cedevita is third, overtaking Vegeta from last year. Chipsy crisps, Kiki toffee candy and Sprite are some of the other brands included in the 25 top regional brands. On the Croatian list of the Valicon top 10 local brands there are four brands which managed to preserve their position from the year before, with Jana still leading. It is interesting that Coca-Cola is not first in any of the five individually analysed countries; It ranks second in every market except Macedonia, where it is third. Chipsy, original Serbian brand of
CHIPSY CRISPS, KIKI TOFFEE CANDY AND SPRITE AMONGST TOP 25 crisps, improved its position in Slovenia and Croatia, increasing its regional success. The result of this progress is the largest jump of all other analysed brands, from 26th to 13th place in the region. Another brand that also climbed is Colgate toothpaste, from 21st place to 11th. It is certainly worth noting that almost half of the top 25 brands are of regional 22 | PVinternational | March 2017 | No 267
origin, compared to the year before when this ratio was 15:10 in favour of global brands. This year’s results show this ratio is now 13:2 in favour of global brands. The regional group included Chipsy and Kiki amongst its top 25 brands, whilst the global group included Sprite. This obvious turn in the power ratio between global and local indirectly confirms that the trend of origin localisation is moving ahead, showing shows results in practice.
WEAKENING OF GLOBAL BRANDS The differences between brands ranking from third to ninth place are very small, which should be taken into account when
considering the weakening or growth of individual brands. Therefore, the situation on the scale could change drastically next year. Regarding individual markets which form the regional ranking, each local leader maintained its position. Argeta is the only brand which kept top positions on both markets. Regional and local brands remain strong in each country, whereas global brands hold just two (in Slovenia, Croatia and Serbia) and three (in Bosnia and Herzegovina) positions on the list of top 10 brands. Macedonia is the only exception, with five global brands on the list of top 10 local brands. Concerning individual country markets, the most interesting change in
CRO
TOP10 COUNTRY BRANDS (CROATIA)
Slovenia is the entry of Donat Mg to the Valicon list of top 10 local brands. This is the first time that a premium brand has found its place on the list of top 10 on any of the five markets. Barcaffe kept its position at the top of the Slovenian list of brands. In Croatia, Jana is still the leading brand and the sole representative of bottled water on the Valicon list of top 25 regional brands. Domaćica by Kraš is on the list of top 10 local brands this year. For Serbia, Moja kravica is the only brand in the region present on the list of local top 10 brands in two categories (Moja kravica milk and Moja kravica yoghurt). In Bosnia and Herzegovina two
regional brands entered the list of top 10 local brands (Chipsy and Pardon), with Argeta still being the local leader.
JANA STILL THE LEADER A closer look at the local market reveals that the Croatian list of top 10 leading local brands includes four which managed to preserve their positions from the year before. Jana is still the leader; Milka ranks six followed by Gavrilović and Nivea in last position. Cedevita, Vegeta and Jamnica hold positions three, four and five, whilst Domaćica ranks eight as a result of consistent expansion of the brand’s portfolio and in-house co-branding.
Franck ranks nine, and the new regional leader Coca-Cola recorded the biggest success by jumping from fifth to second position of the local top 10 list in Croatia. Valicon survey Top 25 Regional Brands has been conducted since 2012 and is based on analysing brands of fast moving consumer goods (FMCG) which includes five markets of the Adria region: Croatia, Slovenia, Bosnia and Herzegovina, Serbia and Macedonia. Brand strength is the main criteria for ranking and is calculated based on brand recognisability, experience with it and using the brand inside an individual category.
KRISTIJAN GREGORIĆ:
The size of the state influences the strength of the brand Kristijan Gregorić, partner at Valicon, highlights that it is a great privilege for a brand to be included in the Valicon top 25 list. The strength of the brand is calculated based on recognisability, experience and use. It is defined as consumer together with the extensions used for the product inside an individual category. Furthermore, if the same brand is used in different categories, for example Milka (in chocolate and cookies), we do not calculate the strength of the Milka brand together for all categories, but individually for each category. The survey was conducted in September and October 2016 on 1,000-1,500 individuals per country. The results are presented in a way which guarantees
representability for the whole region, Montenegro and Kosovo excluded. Therefore, the strength of the brand in Slovenia contributes to the strength of the brand in the entire region half as much as an equally strong brand, for example in Croatia, which is twice as large. The methodology used is mix-mode, computer assisted surveying which includes web surveying and additional field surveying of the population which does not use the internet, Gregorić says.
March 2017 | No 267 | PVinternational | 23
PRIVREDNI VJESNIK
HOW TO FOSTER YOUTH ENTREPRENEURSHIP
Jurica Reš etar
A MOST INNOVATIVE PROJECT: LUMINO WAY A touch-sensitive light panel or Lumino Way by Jurica Rešetar has already been implemented in a Boston-based school; other business ideas provided by Croatian participants for the project Build Your Future are certain to be implemented by Sanja Plješa
I
t is a known fact that entrepreneurship needs to be taught from an early age, and Croatian youth is provided with a broad range of professional development opportunities through the implementation of the EU project Build Your Future. It is a multiplier event with sh hip, How to foster youth entrepreneurship, attiv ve organised by the Institute for Creative ect, ec Education. The results of this project, o-financed through the Erasmus+ programme, have recently been presented in Zagreb. Build Your Future is a European project of youth em-d in powerment for entrepreneurship and, addition to Croatia, is being implemented in eight further countries. It covers five educational modules, with learning based on experience and best practice. The programme is intended for people aged between 19 and 29 and over the last 18 months it has been implemented in Zagreb aiming to encourage young people in using their knowledge and skills and launch their own businesses.
MULTIFUNCTIONAL LAMPS 22 young people from across Croatia were hoping to find the answers to a large number of questions through participation in the training – including issues such as what young people need to know about entrepreneurship, how to develop ideas and implement a marketing plan in one’s own business, how to develop presentation and sales skills, as well as how to acquire a basic knowledge 24 | PVinternational | March 2017 | No 267
o finance. Four of aspirin entrepreneurs best aspiring he business ideas presented th their in Turin, where Jurica Rešetar won first prize for the most innovative idea. He won the prize for his project Lumino Way. Whilst explaining his idea Rešetar explained that it is comprised of panels made from touch-sensitive lamps. “The lamps emit light only when required, for instance, when they are walked upon, in order to light a path in the dark. There is also a flexible version which can be used as a fashion accessory as it is powered by batteries”, he emphasised. Rešetar has already sold his invention to a Bostonbased school where the lamps have been installed under the handrails.
BINOCULAR BAR Another project that has been highlighted is the Binocular bar provided by Borna Pavičić. Visitors to his bar will be able to make a virtual tour around the world through a broad range of photographs
and music originating from the places they would like to visit. This will be accompanied by gastronomic delicacies specific to those destinations.
LUMINO WAY HAS A FLEXIBLE VERSION THAT MAY BE USED AS A FASHION ACCESSORY Ivan Mušlek developed a project CM training for young people with disabilities, in the form of training in digital marketing. The specific objective of the project is co-operation with private businesses interested in providing the financial resources for the training sessions and subsequently hiring people with disabilities.