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20TH ANNIVERSARY OF THE “BUY CROATIAN” INITIATIVE → Buy Croatian all year

THE DEFENCE INDUSTRY → Huge potential for economic growth

THE CCE → “Vocational Education in Comprehensive Curricular Reform” Conference

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SUPPORTED BY THE CROATIAN CHAMBER OF ECONOMY

www.privredni.hr

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October 2017, Year X, No 273

CROATIAN BUREAU OF STATISTICS

Second quarter growth of 2.8% in GDP 2.8% GDP growth mainly due to increased personal consumption, especially retail, whilst industry showed slightly reduced growth, stated Marko Krištof by Ilijana Grgić

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uring the second quarter, Croatian GDP was 2.8% up over the same period last year, according to the preliminary estimates published by the Croatian Bureau of Statistics. It was the 11th consecutive quarter in which GDP grew and to have been at a faster rate compared with previous quarter growth of 2.5%. “2.8% GDP growth is mainly due to an increase in personal consumption, especially retail, whilst industry showed slightly reduced growth”, noted the Director of the Croatian Bureau of Statistics, Marko Krištof. Household consumption expenditure increased 3.8%;

domestic demand contributed 3.3%. Moreover, the second quarter saw upward trends in gross investment into fixed capital, for the eighth consecutive quarter, irrespective of the fact that growth slowed to 3.2% from 5.4% from the previous quarter. Furthermore, in the second quarter exports were 3.6% up, showing a slow-down compared with 8.6% of the previous quarter. Exports increased 4.3% on an annualised level and imports were 5.4% up.

GVA 2.2% UP According to preliminary estimates, quarterly gross value added during the second

quarter of 2017 increased in real terms by 2.2% over the same quarter last year, the main driver being both wholesale and retail trade. Furthermore, in the second quarter, Croatian GDP growth again exceeded the European average. According to seasonally adjusted data, over the second quarter GDP was 0.8% up in relation to the previous quarter, whilst compared with the second quarter of 2016 it increased by 3.4%, compared with the EU average of 2.3%. Romania had the fastest GDP growth rate of 5.7%, although Belgium showed the slowest growth of 1.4%. Croatia ranked 11th amongst EU member states.

CCE COMMENTS ON GDP GROWTH

During the first six months all categories of demand recorded growth According to preliminary estimates provided by the Croatian Bureau of Statistics, GDP growth during the second quarter of 2017 was 2.8%, on a par with the estimates provided by the Croatian Chamber of Economy. In the commentary provided by the CCE it was pointed out that “against a backdrop of the situation, GDP movements during the first six months of this

year were slightly accelerated in relation to the first quarter, yet GDP growth recorded was still slightly lower compared with the situation in 2016”. “The achieved GDP growth over six months was primarily due to the 6.1% increase in exports, or foreign demand, where exports exerted a greater impact, having increased by 9.6% in real terms. Domestic demand, primarily

personal consumption, which was 3.7% up in real terms, also significantly affected GDP movements, as well as gross investment into fixed capital, which was 4.3% up”, as noted in the commentary, in which it has also been added that a conclusion may be reached that in the first half of the year, all types of demand recorded growth.

20TH ANNIVERSARY OF THE “BUY CROATIAN” INITIATIVE

BUY CROATIAN ALL

At the start of the initiative, we were criticised both inside and outside the count imported products, which was definitely untrue, since we promote only high qu

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or two days, the “Buy Croatian” initiative marked its 20th anniversary in the promotion of high quality local products, in the heart of Zagreb. Over 300 Croatian companies, crafts and artisans, co-operatives, associations and family-run farms recently presented their products on stands at two locations – in the European Square and traditionally at Ban Jelačić Square. The initiative was launched in 1997 with the concept of identifying, labelling and highlighting high quality Croatian products. As a result, such products have been awarded the Croatian Quality and Croatian Creation labels since that time, whilst the project has expanded into a comprehensive national initiative of significant economic and social importance.

CROATIAN PRODUCTS HAVE A SPECIFIC VALUE AND QUALITY “We are marking the 20th anniversary of the Buy Croatian initiative, and during these two decades we have seen almost 300 campaigns and the participation of some 2,000 companies. At the start the initiative, we were criticised both inside and outside the country for promoting Croatian products and thereby discriminated against imported products, which was definitely untrue, since we promote only high quality Croatian products. The initia2 | PVinternationall | October 2017 | No 273

KOLINDA GRABAR KITAROVIĆ, THE CROATIAN PRESIDENT

Economy needs to be focused on production The Croatian President, Kolinda Grabar-Kitarović attended the celebration of the 20th anniversary of the initiative. “We need to provide support to the Croatian economy which needs to be focused on manufacturing. A huge value added is being created in tourism and we welcome any revenue generated bytourism. Nevertheless, the Croatian economy needs to be based on production, primarily export-oriented production and hence SME’s, crafts and artisans, as well as everyone else competing both on Croatian and international markets needs to be provided with support”, stressed Kolinda Grabar Kitarović, amongst other issues addressed. She congratulated the Croatian Chamber of Economy and Zagreb Chamber on the organisation of this initiative which “needs to be held more frequently”.

tive has been highly successful and after the global financial crisis, similar initiatives were launched in other countries, as this is the right path towards strengthening the local economy. We are delighted that all the retail chains have recognised that Croatian products have a specific value and quality”, noted the President of the Croatian Chamber of Economy, Luka Burilović, who pointed out the importance of raising the awareness of the significance of buying Croatian products to strengthen the local economy and preserve job. Burilović stressed the fact that the success achieved by the initiative was mainly due to producers, especially SME’s, which are the cornerstone of the Croatian economy. “They need to receive special recognition. It is due to them that people decide to buy Cro-

atian products”, noted Burilović, highlighting that buying Croatian products needs to be transformed into a lifestyle throughout the year and new generations need to be educated and raised keeping this in mind.

Marko Jurčić, Economic Affairs Advisor to the Croatian President, stated that this initiative needs to receive special recognition for its promotion of local products, job preservation, as well as its contribution to employment and economic growth. “The CCE has been actively promoting both local products and businesses on global markets, since international market presence is as always an imperative”, stressed Jurčić. The Mayor of Zagreb, Milan Bandić, focused only on conveying the following message: “Remember: local products are unique!”, adding that weather conditions

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ry for promoting Croatian products and thereby discriminating against ality Croatian products, stressed Luka Burilović by Ilijana Grgić will be ideal for touring around the product display stands.

CROATIAN UMBRELLAS FROM START TO FINISH Stands were crowded with visitors and it appears that Zagreb citizens have taken the Mayor’s advice. A small al fresco umbrella factory owned by Tabacco attracted immense attention. It was intended to publicly present the production process of its best known product – the Croatian umbrella. “Umbrellas have been manufactured in Croatia for over 150 years, mainly by old artisan families, and several years ago it was believed that umbrella manufacturing here would cease. Thus, we decided to ensure that their manufacturing here continues, and we have become actively involved in it”, stated the owner, Marin Rogić, who pointed out that the Croatian umbrella is specific due to its two features: first, for its quality and second, that 60 committed women workers in the Croatian textile industry assist in its manufacture.

Rogić emphasised that events like Buy Croatian exert a positive impact on product promotion of SME’s who are normally faced with insufficient financial resources for large-scale presentations and marketing campaigns. Galko, the leading manufacturer of bags and leather accessories, also participated in the initiative. The company employs over 70 staff. “It is extremely

important for us to appear at such events, to make our products visible – presence is imperative. The Buy Croatian initiative has been constantly expanding and I believe it could be further upgraded in terms of both organisational and spatial aspects”, stated the sales executive in Galko, Mladen Zorić.

EXCELLENT PROMOTION FOR FAMILY-RUN FARMS The CCE enables its members to participate in the initiative free of charge, whilst the others can do so by paying a partici-

pation fee. Irrespective of fact that membership in the CCE is not mandatory for family-run farms, Petar Rakošević from his family-run farm has voluntarily become a member of the CCE and has thus exploited one of the membership benefits – participation– for the promotion of its chokeberry products. “Last year I participated in the initiative held in Osijek and, being a member of the CCE, I am regularly invited. I am convinced that similar initiatives can greatly help all producers.

In my case, for instance, it is impossible to sell my products in any other way. I do not have sufficient financial resources for investment into advertising and so I definitely need to participate in similar events, which are an excellent opportunity for me”, noted Rakošević, adding that he is planning to present his products at other initiative events to be held in the near future. Furthermore, many large companies such as Podravka, Kraš, Vindija, Dukat and Borovo have exploited the opportunity for product promotion, whereas Robert Kurbaša, Vanna, Kostadinka Velkovska, Jelena Perčin, Ana Begić, Zoran Šprajc, Matija Vuica and Rene Bitorajac, amongst other Croatian public figures, have expressed their support for the initiative. The closing ceremony will be held in Vinkovci on 13th October, where a large number of Croatian companies will exploit the full potential of the initiative and present their products.

October 2017 | No 273 | PVinternationall | 3

INTERVIEW INGA KOVAČIĆ SINDIK, CO-OWNER AND DIRECTOR OF KRISTAL

INNOVATION IS THE GREATEST OF DEVELOPMENT DRIVERS Innovations with market value result in the creation of new products that are commercialised, and testing internationally also raises the level of competitiveness and economic value of a business and society

by Boris Odorčić

The orientation of the state towards R&D is still more words than action.

Once the social climate and relations have changed, and when projects are tackled in the adequate manner, the state will be truly oriented towards development and the situation will start changing in a concrete way, which will lead to measurable results.

K

ristalna ideja is a relatively young company, founded at the end of 2013.

Its primary aim is the development and implementation of advanced key technologies into modern smart systems, such as those for air or water purification, as well as tackling environmental problems. It is important to note that the company has so far shown a great deal of innovative potential, as during a period of just a few years it has managed to develop 11 innovations, two copyrighted products and two industrial design products.

This Split-based company, which is a member of the Croatian Association of Innovators, comprises of a team of six highly-qualified employees, of varying profiles, specialisations and personal preferences and hobbies.

Inga Kovačić Sindik, co-owner and Director, stated that the company only uses advanced and smart materials. Its system management is based on STEM trends that include the application of artificial intelligence and collection, analysis and graphic data processing.

In your opinion, how important is innovation for the development of a country?

Innovation is a consequence of human creativity, and is the greatest driver of development in any society. Currently global successful economies are based more and more on the implementation of innovation across multiple economic fields. Moreover, at any point in history innovation is the flywheel that changes the current situation from a technical or technological aspect, in addition to driving change in processes or relations, developing new products and new skills, encouraging the direction of technological, economic and social development of society towards totally new and perhaps inconceivable directions. In every

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society there are individuals with the ability to perceive and understand things and events in an original way. If that ability can create something material or intangible which also subsequently has a usable value that will be recognised by society, a successful innovation has been developed with breakthrough potential.

INNOVATION POTENTIAL CANNOT BE EXPRESSED SOLELY IN TERMS OF NUMBERS Similar innovations with market value result in the creation of new products that are commercialised; testing on the international market simultaneously raises the level of competitiveness and economic value of business and society.

How does Croatia rank in terms of innovation regionally, within the EU, and globally?

In every country there are innovative individuals and that is also the case with Croatia. The potential cannot be expressed solely in terms of numbers for several reasons. On the one hand there is statistical data published in different reports and on the other hand there is data about people working on a daily basis to meet their own requirements or the requirements of their employer in order to develop some small- or large-scale improvements of existing products, creating new value or subsequently new products. I have come across

LNA IDEJA

The application of high technology and innovative solutions is imperative for all industrial areas aiming to achieve global competitiveness.

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INTERVIEW that the path from an idea to implementation is fraught with risk, and failure lurks everywhere. As opposed to other countries, in Croatia everyone minds someone else’s business. Unfortunately, a “small-town mentality” is still deeply rooted and incredulity shows in questions such as “How did this come to your mind?” or “How come that it was you who developed an innovation?” If one leaves an impression of being an “ordinary” person, then others are confused.

If you appear as a maverick, they make fun of you and ostracise you. In addition to all the crucial resources required for the development and implementation of an innovation, the social climate is also critical. Hence, we need to work towards a social climate that encourages success and values work, the climate of optimism and welfare. I would also add the “no-lamentation” climate!

some data from the Croatian Bureau of Statistics stating that several years ago the number of patent applications and granted patents were significantly higher compared with those of 2016 and the year before. That is where disproportion can be seen. On the one hand it is clear that there is work on innovation, yet on the other hand it is normally not protected as intellectual property and has not been adequately commercialised in order to become visible in a statistical format Who are the owners of innovation?

80% of patents have been granted to natural persons and only 20% to businesses. International data show a balanced ratio concerning this issue. Since granted and registered intellectual property is considered as the m ost important long-term asset in a society, it is unclear why any businesses in Croatia would not be interested in having such an important and competitive value in their books and records. As opposed to Croatia, the number of applied patents has increased considerably, globally and primarily in China, Turkey and Korea, as well as in the EU, especially Poland, the Czech Republic, Slovakia and Estonia. I believe that Croatia needs to focus more intensely on encouraging innovation and resort to using various measures intended to motivate and encourage both individuals and businesses to be more 6 | PVinternational | October 2017 | No 273

creative and innovative. New measures need to provide motivation for creative work and encourage the protection of intellectual property, whilst simultaneously ensuring faster completion of pilot models and a speedier market appearance. Moreover, the new measures need to aim at simplifying the processes, enabling a more affordable application of intellectual property, developing a financial strategy, as well as enabling innovative businesses to find easier ways of providing fresh capital. Keeping all this in mind, one can easily understand the long and winding road travelled by Kristalna ideja on its way towards the development of some innovative projects.

What are the major obstacles to the development of innovative ideas and products in Croatia?

The path that leads from innovation to commercialisation is long and expensive and paved with failure. There are many steps from idea development to pilot product and there are many challenges, none of which can be avoided. Whilst developing a prototype of each innovation, one also needs to test functionality in the real environment and launch a trial series, as well as conduct market research, ensure marketing activities, an open supply chain and distribution channels, organise production and ensure maintenance, servicing and repairs. It is evident

Are innovative businesses and individuals recognised in Croatia?

During the last several years innovation has been very frequently mentioned in Croatia as the cornerstone of society and the economy. It is also important to highlight the importance for Croatia, being a member state of the EU, its decision to become a global frontrunner in science and technology through the attraction of the best minds and provision of assistance to scientists in co-operation and the exchange of ideas throughout the

80% OF PATENTS HAVE BEEN GRANTED TO NATURAL PERSONS AND ONLY 20% TO BUSINESSES continent. With regard to national subsidy tenders, one was called last year for innovations in newly-founded companies. A tender for commercialisation of innovations is currently underway which is open until the end of the year.

I believe there could have been many more such programmes, since, for example, we are no longer considered as

a newly-founded company, which is a company operating for three years, yet we are still a young company. We have developed a large number of innovations, yet we need to independently look for a “sponsor”, which implies a wide

yers and experts to focus solely on the preparation of the required documentation over a period of several months. We have already experienced all that, and I know that two of our employees had to deal exclusively with the preparation of

THE PATH FROM INNOVATION TO COMMERCIALISATION IS LONG AND EXPENSIVE AND PAVED WITH FAILURE cross-section of other issues. There are currently tenders for loans granted through the Croatian Bank for Reconstruction and Development (HBOR) and micro-loans granted by the Croatian Agency for SME’s, Innovations and Investments (HAMAG-BICRO). One could say there are opportunities and options, yet I am not convinced that all these can be used, as they may not be adapted to meet real needs and there are many entrepreneurs who share this opinion.

Amongst the important EU programmes that are currently under way and last until 2020 is Horizon 2020. It is the biggest large-scale programme for research and innovation in the EU. It is intended to result in an increased number of breakthroughs, discoveries and world firsts by taking great ideas from the lab to the market. During a seven-year period, from 2014 to 2020, almost €80 billion has been and will be available for financing, in addition to both private and national investment intended to attract the allocated funds. We are currently halfway through and I believe a larger number of companies need to become involved.

Is intellectual property sufficiently protected in Croatia?

According to some information available in the media, as well as following discussions with other entrepreneurs, I believe the number of currently existing innovations and innovative works greatly exceeds those entered into the State Register. The process of protection of patents or any other intellectual property is long-lasting and costly for small businesses. It has actually been designed for large companies, institutes and faculties who can afford to employ law-

the required documentation for the patent application and had no time left to do anything else. Consequently, the time needed for the proper preparation of the required documentation for patent application exceeded the amount of time we needed to develop our innovation.

I believe this is more than nonsensical.

One can certainly opt for a contract with a patent attorney who will perform certain aspects of this work in the best interest of the innovator, yet in this case a technical expert employed by the company needs to be available. I believe that, against a backdrop of rapid technological change, when disruptions happen overnight, this process requires drastic amendment.

Concerning investment into research and development, Croatia lags significantly behind Western Europe. Why is that so?

Unfortunately, Croatia lags behind Western Europe in many areas and consequently, the fact that it lags behind investment into research and development is not surprising. Keeping in mind that over the years the state apparatus has not managed to tackle fundamental social, health, education and demographic problems and challenges, no-one could expect satisfactory financial resource allocations for research and development. Nevertheless, Croatia needs to prioritise. There are available resources, yet one needs to focus on their use. The orientation of the state towards R&D is still more words than action. Once the social climate and

relations have changed, and when projects have been tackled in an appropriate manner, the state will be fully oriented towards development and the situation will start changing in a concrete way, which will lead to measurable results.

Once such criteria have been met, I am convinced the innovative potential will increase substantially from the individual level to society and the state, resulting in optimism and raising the awareness of self-worth. This is all that the current Croatian economy lacks. Consequently, significant changes are imperative for the sustainability of a competitive Croatian economy, against a backdrop of the strengthening of global competition.

Does the Croatian economy have the potential to provide Europe and the world with innovative ideas, products and services?

The best Croatian innovators and entrepreneurs participate annually in various international competitions globally and achieve valuable results. It is important to highlight the success yet again achieved this year in Japan. Innovation is a prerequisite for the competitiveness of a product, society and country. The application of high technology and innovative solutions is imperative for all industrial areas aiming to achieve global competitiveness. Croatia certainly has creative potential. It does have something to offer both to Europe and the world, yet it needs to be allowed to be innovative.

Moreover, co-operation and synergies are fundamental between science, technology development and entrepreneurial capacity. There is a degree of innovation

in each person. The state needs to invest in the right direction into science and research and development in order to maximise this creative potential. Subsequently, the Croatian economy will start pursuing a completely different direction. I am always inspired by Einstein’s famous quote – “imagination is more important than knowledge”.

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THE DEFENCE INDUSTRY

HUGE POTENTIAL FOR The Croatian defence industry has been globally recognised for its high quality and compliance with international standards. It is an important factor of economic development, as it contributes to the development of innovative solutions in complementary industries, stressed Krstičević

by Krešimir Sočković

T 224 4million

€

Croatian defence industry exports in 2016

he global value of annual military expenditure exceeds $1,700 billion. Irrespective of the fact that the largest percentage of this figure has already been taken by international manufacturers of sophisticated and expensive equipment, such as military aircraft or vessels, that the global military consistently requires products, provided with food, beverages, clothing and transport, as well as by weapons manufacturers, is frequently ignored. Thus, there are currently many local companies who are prepared to co-operate with, or are already co-operating with, a large number of partners in the North Atlantic Treaty Organisation, of which Croatia is also a member, as well as with other partners whose equipment they manufacture or repair. Tanks and other armoured combat vehicles manufactured by Đuro Đaković have been best-sellers for some years, a long time prior to Croatian independence. Šestan-Busch is a reputable military helmet manufacturer, whose products protect the heads of many soldiers and police officers globally, DOK-ING’s vehicles clear mine areas across the world, whilst the quality of handguns and assault rifles manufactured by HS Produkt have been internationally recognised.

SUPPORT TO ENTERING INTERNATIONAL MARKETS

around

3,000 people

employed in the defence industry

The issue of this unexploited potential was addressed during the recently held Conference Croatian Defence Industry as an Export Brand organised by Hanza Media, in co-operation with the Ministry of Defence and the Alan Agency, sponsored by the Croatian President who is also Commander-in-Chief of the Croatian Armed Forces. The Conference was primarily aiming to emphasise the huge importance of the Croatian military industry. The value of last year’s Croatian defence industry exports exceeded €224 million, which clearly shows the huge growth potential. Numbers employed in this industry stands at around 3,000, and exports recorded last year were double those recorded in 2015.

Croatian companies recognise this potential as

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one of the important generators of future economic growth: both NATO and European Union membership greatly help in the positioning of local companies in tendering for such jobs.

Hence, the first contingent armed with Croatian assault rifles has recently been sent to an international mission in Afghanistan and thus Croatian soldiers are fully provided for by Croatian weapons and equipment.

THE MORE WE MANUFACTURE, THE LESS DEPENDENT WE WILL BE ON GLOBAL CRISES NOTED PLENKOVIĆ The development of the Croatian defence industry needs to be closely linked with research and development, as well as co-operation between the private and the public spheres, as highlighted by the Prime Minister, Andrej Plenković. “The more we manufacture, the less dependent we will be on global crises. We will continue supporting the defence industry on the issue of its entering into international markets. In addition, we have reached a decision to increase budgetary allocations for this purpose. 2016 saw the enactment of the European Defence Action Plan intended to respond to all security challenges linked with Europe. Moreover, a Fund was created intended for investment into technology and innovation in the defence industry, whose budget is now €500 million.

Notwithstanding the fact that we have only one army and we will not develop a two-tier armed force, the Croatian defence industry needs to keep abreast of European trends, whilst simultaneously focusing on continuous development”, stressed Plenković.

ECONOMIC GROWTH

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THE DEFENCE INDUSTRY LUKA BURILOVIĆ, PRESIDENT OF THE CCE

The Croatian defence industry is an economic pinnacle The Croatian defence industry is an international brand and it has been our pinnacle since the 1990’s, noted the President of the Croatian Chamber of Economy, Luka Burilović. “We are hoping that during the procurement of military equipment, which has been announced by the Croatian Minister of Defence, attention will be paid to involve Croatian companies. The CCE advises entrepreneurs on all business opportunities available to them through NATO membership. It is important to highlight that through the website natonatjecaji.hr it has thus far published over 500 tenders and provided 70 expert opinions to meet the requirements of companies applying from the website register to the tenders invited by NATO. Furthermore, we have been strongly supporting and promoting the Croatian defence industrythrough exhibitions at major international fairs and we will continue to do so in the future”, concluded Burilović.

A strong defence industry is a fundamental aspect of internal security, since, against a backdrop of the complex international challenges (such as terrorism) that we currently face, an innovative economy needs to be a partner to the state.

Davor Božinović, Minister of the Interior

High quality equipment is vital for the operation of the Ministry of the Interior, stated the Minister of the Interior Davor Božinović.

“The Ministry of the Interior (MUP) employing 26,000 staff, is the largest end-user of weapons manufactured by Croatian companies. It has to be noted that investment implemented over seven years into the procurement of new police uniforms was worth €39.5 million and that amount passed directly into Croatian manufacturers. Similarly, we use the services of the Croatian IT industry, as well as those provided by the Croatian construction and shipbuilding industries. A strong defence industry is an integral aspect of internal security, whilst against a backdrop of complex international challenges (such as terrorism) that we currently face, an innovative economy needs to be a partner to the state”, added Božinović.

Krešimir Ćosić, President of the Supervisory Board of the Alan Agency, stated that Croatia is prepared and determined to modernise its defence industry, yet the strategy needs to be more flexible. Subsequently, research and innovation will assume a far more vital role compared with that assumed thus far, and assistance will be provided by many Croatian companies such as Alan Agency. The future belongs to those who are more innovative and so I am convinced that Croatian faculties and their scientists need to be actively involved in the development of the Croatian defence industry”, concluded Ćosić. The Ministry of Defence (MORH) has already established co-operation with Zagreb University and the Ministry of Science, Education and Sports.

Moreover, it has organised a Multidisciplinary Post-Graduate Specialist Study Programme, intended to contribute to the acquisition of new

CONTRACTS WORTH €30.6 MILLION Damir Krstičević, Vice-President of the Croatian government and Minister of Defence, emphasised that the Croatian defence industry has been recognised globally for its high quality and compliance with international standards. It is an important factor in economic development, as it contributes to the development of innovative solutions in complementary industries, noted Krstičević. “Irrespective of the quality and brand, it is realistic to expect further growth and development. Consequently, the defence budget is of vital importance, in order to be able to respond to new challenges of the modern world. The Ministry has initiated the procurement process of a multi-purpose aircraft, as well as the introduction of a new military tactical device, further development concerning using drones and we are considering the construction of an ammunition factory. Last year, the budget for equipping the army was €15 million, but January 2017 saw the signing of contracts worth €30.6 million and 34 companies will be involved in the production of footwear, clothing and weapons for the military”, pointed out Krstičević.

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CROATIA IS PREPARED AND DETERMINED TO MODERNISE ITS DEFENCE INDUSTRY, POINTED OUT ĆOSIĆ knowledge. In addition, within MORH there is the Institute for Research and Development of Defence Systems that is involved in scientific work. Interdisciplinary research projects have immense potential to transform into something significant and become a prerequisite for strengthening the competitiveness of the national defence industry, noted Ćosić. Such projects are a smart combat helmet, developed with the assistance of the Croatian Academy of Engineering; a combat drone and an unmanned submarine are currently being developed at the Faculty of Electrical Engineering and Computing.

INVESTMENTS AGREEMENT BETWEEN RIMAC AUTOMOBILI, GREYP BIKES AND CAMEL GROUP

INVESTMENT WORTH €30 MILLION The investment is intended to help us accelerate growth, launch new products and expand globally, stressed Mate Rimac by Boris Odorčić

R

imac Automobili has signed a contract worth €30 million with Camel Group, the largest Asian battery manufacturer. Of the total investment, €3 million will be allocated to Greyp Bikes, a subsidiary of Rimac Automobili.

This is the biggest large-scale foreign direct investment into a Croatian technology company to date, as noted on Rimac Automobili website. The investment will be intended to finance new products launches, an expansion to production capacity and global corporate expansion.

Mate Rimac, Founder and CEO of Rimac Automobili and Greyp Bikes, pointed out that, over many years, these companies have established their position as technology solution providers for a large number of international car manufacturers. “People contact us concerning electric drives, batteries, innovative infotainment and telemetry systems, as well as a broad range of other automotive systems. Simultaneously, our supercars push the boundaries of electric vehicles, showing that an electrified future will be exciting”, he emphasised, adding that, as opposed to many other companies, Rimac Automobili has adopted a verified and effective business model. Consequently, the company has operated profitably since 2012 and its organic growth has doubled annually. “This investment is intended to help us accelerate growth, launch new products and expand globally. The key areas we are focusing on are the construction of new cutting-edge production facility for our technology business and the launch of the next generation of our electric supercar, which will be presented across the world next year”, noted Mate Rimac. <mn> Rimac – an ideal partner Liu Changlai, CEO of Camel Group, stated that their strategy covers aggressive entry into the electric vehicle business, through the provision of advanced battery systems and other auto parts to the leading manufacturers

of both commercial and personal vehicles in China. “Following the performance of due diligence and a search for a technology partner, we have reached a conclusion that Rimac is an ideal partner for us, due to its being a leader in the development of electric vehicle technology in several areas. During our many visits to Croatia and after the completion of a financial operation analysis, what impressed us most was their deep vertical integration – the fact that both the development and the manufacturing of all crucial systems for vehicles are performed inside the company”, he stated.

Mate Rimac founded the company in 2009, and currently employs around 250 staff.

Camel Group is involved in the development, research, manufacturing and sale of batteries both in China and globally. In 2016, the company had sales revenue of $1.1 billion and employs 6,000 staff.

People contact us concerning electric drives, batteries, innovative infotainment and telemetry systems, as well as a broad range of other automotive systems.

Mate Rimac, Founder and CEO of Rimac Automobili and Greyp Bikes,

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CROATIAN-IRANIAN BUSINESS FORUM

HUGE POTENTIAL FOR BOOSTING CO-OPERATION Our task is to create opportunities and open the economy irrespective of obstacles to business. Croatia can offer Iranian companies an excellent geo-strategic position to the European market of 500 million consumers, stated Burilović by Krešimir Sočković and knowledge transfer”, pointed out the President of the Croatian Chamber of Economy, Luka Burilović, at the opening of the Forum.

“Our task is to create opportunities and open the economy, irrespective of obstacles to business, which are being tackled. Croatia can offer Iranian companies an excellent geo-strategic position to enter the European market of 500 million consumers”, highlighted Burilović, adding that a Co-operation Agreement has

26.4

$ million

value of trade between Croatia and Iran in 2012.

5

$ million value of trade between the two countries in 2016

T

he Croatian-Iranian Business Forum has recently been held at the Croatian Chamber of Economy in Zagreb in conjunction with a visit from an Iranian business delegation of representatives from businesses and institutions from construction, the petrochemical industry, the food industry, banking, veterinary products, the automotive industry, electric power industry, logistics, trade, as well as manufacturing of footwear, textile and carpentry.

“Both the Croatian and the Iranian economy have huge potential for the development of co-operation, in which both parties are interested, and there is room for co-operation in energy, railways, shipbuilding, metal industry, IT industry, pharmaceuticals, food industry, chemical and automotive industry, tourism

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CROATIA CAN BE OF VITAL IMPORTANCE FOR IRAN IN OPENING ITS ACCESS TO EUROPE, AS WELL AS IN RELATIONSHIPS BETWEEN IRAN AND EU MEMBER STATES, STRESSED SHAFEEI been signed between the Chamber and the Meshikhat of the Islamic Community in Croatia covering halal certification so far awarded to 100 Croatian companies.

Marko Pavić, Minister of Labour and Pension System, stated that this Forum provided an opportunity for further promoting relations between the two countries and establishing new focal points for further economic co-op-

eration for which there is ample potential. “The specific objective of politics is to solve problems and remove obstacles, such as the issue of payment operations which is a prerequisite for further strengthening mutual economic cooperation”, pointed out Pavić.

Mohammad Reza Sadegh, Ambassador of the Islamic Republic of Iran to Croatia, concluded that last year’s official visit paid by the Croatian President, Kolinda Grabar Kitarović, and Croatian businessmen to Iran and talks with the Iranian President, Hasan Rohani, provided encouragement to the further development of economic relations between the two countries. Moreover, he pointed out that the Iranian market covers 80 million consumers can be significant for the Croatian industrial sector.

REDUCTION IN TRADE “Croatia can be of vital importance for Iran concerning access to Europe, as well as relations between Iran and European countries”, stated the President of the Iranian, Commerce, Industries, Mines and Agriculture Chamber, Golamhossein Shafeei, emphasising that Iran

sees huge potential for co-operation with Croatia in energy, food industry, pharmaceuticals, construction, engineering, textile and other industries. “Co-operation in the financial sector needs to be developed. Furthermore, joint brand production needs to be established for placement in other countries. In addition, we need to focus on land and rail transport connections, as well as establishing direct flights between Tehran and Zagreb, accelerating visa issuance on both sides and promoting banking relations”, pointed out Shafeei.

Over the last several years, trade has stagnated and occasionally seen a drop. Whilst in 2012 trade reached almost $26.4 million, where Croatian exports accounted for almost $25.7 million, in 2016 Croatian exports to Iran were only $4.4 million. The value of Croatian imports from Iran reached $600,000. Croatia primarily exported blood for prophylactic and diagnostic uses, animal food products and geodesic instruments, and Croatian imports covered grapes, nuts, dates, figs and carpets.

Individual talks between representatives of Croatian and Iranian companies were held within the Forum.

Both Croatian and Iranian economies have huge potential to develop areas of co-operation, in which both parties are interested specifically in the areas of energy, railways, shipbuilding, metal industry, IT industry, pharmaceuticals, food industry, chemical and automotive industry, tourism and knowledge transfer.

Luka Burilović, President of the CCE

October 2017 | No 273 | PVinternational | 13

THE CCE: â&#x20AC;&#x153;VOCATIONAL EDUCATION IN COMPREHENSIVE CURRICULAR RE

14 | PVinternational | October 2017 | No 273

FORM” CONFERENCE

PARTNERSHIP BETWEEN ECONOMIC AND EDUCATIONAL INSTITUTIONS THE KEY TO SUCCESS High quality education is intended to develop an innovative and creative society in which young people are prepared for the jobs of the future, whilst the connection between the educational system and the economy is most prominent in the area of vocational education, highlighted Plenković by Sanja Plješa

A

n improvement in the education system is of strategic importance for the development of Croatian society and economy. Human assets are the critical national resource and thus a modern and competitive education system is crucial for economic development. The sustainable development of Croatia into the second decade of the 21st century needs to be based on the compatibility of a comprehensive education system with the requirements and potential of the Croatian economy and labour market, emphasised Andrej Plenković, President of the Croatian government, during the conference Vocational Education in the Comprehensive Curricular Reform, held at the Croatian Chamber of Economy. The Conference was organised by the Croatian Statehood Foundation, the Konrad Adenauer Foundation and the CCE. The Prime Minister emphasised that high-quality education is intended to develop an innovative and creative

society in which young people are prepared for the jobs of the future, whilst the connection between the educational system and the economy is most prominent in the area of vocational education. “High quality voca-

EMPLOYERS NEED TO BE PREPARED TO ACCEPT THEIR SHARE OF RESPONSIBILITY FOR THE EDUCATION OF PUPILS, NOTED PLENKOVIĆ tional education and training are very closely aligned with any success achieved in a specific economy. This is perhaps fully evident amongst the most successful European economies in which this factor is one of the drivers October 2017 | No 273 | PVinternational | 15

THE CCE: “VOCATIONAL EDUCATION IN COMPREHENSIVE CURRI

50% to 34%

from

youth unemployment slumps over the last several years

68% of young unemployed persons are medium- or low-skilled

70% of pupils attending vocational education programmes take state graduation exam

of economic development and labour market flexibility. Such examples show that, in addition to traditional lectures held in classrooms, work-based learning enables a facilitated acquisition of knowledge and skills in vocational education, resulting in harmonisation with labour market requirements and higher youth employment rates”, stressed Plenković. He added that during the last several years youth unemployment rate plunged from 50% to 34%. Nevertheless, the fact that 68% of young unemployed persons are medium- or lowskilled remains highly concerning. On the other hand, over 12,000 job vacancies have been advertised by the Croatian Employment Service which are not being filled. That clearly shows that vocational education does not entirely meet the requirements of the economy or industry. Consequently, Croatia is working to develop vocational education and training, which, on the one hand, will be high quality and effective, whilst on the other, highly attractive and innovative. Plenković stated that Croatia needs an education system that will provide each individual with the opportunity to acquire competencies for personal and professional development, as well as lifelong learning. Hence, the enrolment policy needs to be harmonised with education sectors based on supply and demand, as well as with knowledge and skills and in co-operation with the relevant institutions that follow the developments in the area of employment in different economic areas and in harmony with labour market dynamics.

NATIONAL CONSENSUS IN EDUCATION Speaking about the curricular reform as a prerequisite for high quality change and

16 | PVinternational | October 2017 | No 273

the modernisation process in the education system, Plenković pointed out that different approaches are currently being considered, combined and followed, and he called for a national consensus on education, since this

THE FACT THAT THE CCE HAS STARTED IMPLEMENTING DUAL EDUCATION NEEDS TO BE WELCOMED AS POSITIVE, STRESSED DIJANA VICAN is the key to forthcoming reform. He noted the modernisation of vocational curricula provided through a vocational system development programmes. “Dual education model focuses primarily on the pupils who, during the real work process, acquire knowledge, skills and competencies that will provide them with a faster and facilitated access to the labour market. Partnership between employers and educational institution is crucial concerning this issue. Employers need to be prepared to accept a share of the responsibility for the education of pupils. Pupils need to be provided with a standard of quality and quantity of practical class performance.

Moreover, employers need to understand the importance and purpose of investment into

CULAR REFORM” CONFERENCE

their future employees”, stated the President of the Croatian government, emphasising that the promotion of vocational education is imperative. In addition, he reminded that one of the steps towards more effective vocational education is the implementation of a package of measures that has been adopted by the Croatian governments several months earlier, as active employment policy worth €0.2 billion. It is important to highlight that five of a total of nine measures are intended to provide support for vocational training. Furthermore, the measures are intended to encourage the education of unemployed individuals, as well as workplace training. In addition, they are intended to provide unemployed people with the opportunity to work part-time, and education for public works. Plenković reminded fact that Croatia has thus far allocated over €80 million, provided by the European Social Fund for the development and improvement of vocational education.

ATTRACTIVE AND COMPETITIVE VOCATIONAL EDUCATION Two more projects will be implemented by the end of the year. One is the promotion of pupil competencies in vocational education through vocational competitions and exhibitions worth €5.5 million, whilst the other is the modernisation of professional training for vocational teachers. This is worth €1.6 million. According to Plenković, inter-institutional dialogue amongst all educational and economic institutions is the key to success.

The Prime Minister concluded that Croatia can provide its own high quality dual education model, inspired by Austrian and German models through which best EU practices

will be implemented. The issue of vocational education was addressed also by Marko Pavić, Minister of Labour and Pension System, who stressed that the introduction of dual education is one of the solutions to the problem of youth unemployment and labour force integration into the labour market. “Our next step is the strengthening of the Croatian Employment Service, since, in co-operation with the CCE, it will provide considerable assistance in the implementation of dual education”, noted Pavić. Furthermore, he highlighted the need to develop the Croatian dual education model, intended to meet the specific Croatian requirements. “Co-operation with industry needs to be strengthened, whilst simultaneously establishing a more dynamic system. In addition, vocational education centres need to be introduced, since youth competencies need to meet the labour market requirements”, pointed out Pavić. The Ministry of Science and Education is another ministry that is in the process of closely co-operating with the previously mentioned institutions. The Ministry will focus more intensely on the promotion of vocational education and on the improvement of the relevance of vocational education, as well as its quality and strengthening the excellence and internationalisation of this type of education.

Vlado Prskalo, Assistant Minister of Science and Education, emphasised that the Ministry will be working intensely on dual education system that can be implemented in the current conditions on the Croatian market, striving to make vocational education more attractive and competitive.

Concerning the issues faced in Croatia thus far, whilst working to implement curricular reform, Dijana Vican, President of the

High quality vocational education and training is very closely connected with success achieved by a specific economy. This is perhaps fully evident amongst the most successful European economies in which this factor is one of the drivers of economic development and labour market flexibility.

Andrej Plenković, the Croatian Prime Minister

October 2017 | No 273 | PVinternational | 17

THE CCE: “VOCATIONAL EDUCATION IN COMPREHENSIVE CURRI Special Expert Committee for the implementation of the Strategy of Science, Education and Technology, highlighted the research that will be implemented in 35 countries, aiming to provide a background for development of the idea of vocational education.

“The fact that the CCE started with the implementation of dual education needs to be welcomed with enthusiasm and considered as highly positive. Nevertheless, a combination of several measures, primarily being on a par with professional specialist study programmes in the national qualification system and removal of barriers are fundamental in order to provide a solution”, emphasised Dijana Vican.

Notwithstanding the fact that it has been several times reiterated during the Conference that upon the implementation of dual education system, Croatia needs to follow

LUKA BURILOVIĆ, PRESIDENT OF THE CROATI

DUAL EDUCA NOT A SILVER

Vocational education firstly needs to be made requirement for imported foreign labour will recently conducted amongst SME’s, 80% sup and the opinion of economic stakeholders can

A the example of Austrian and German models, Michael Lange, Director of Konrad Adenauer Foundation in Croatia, stated; it is recommended, yet Croatia needs to move to implement her own system. He also believes that the Croatian government is fully prepared for the implementation of educational reform and that the education system needs to be harmonised with Croatian labour market requirements.

A panel discussion entitled “What type of vocational education are we striving for in Croatia?” was held during the Conference. During the panel discussion it was stated that, irrespective of many polemics, the education system implemented thus far in Croatia has yielded good results. This was supported by the fact that 70% of pupils attending vocational education programmes take state graduation exam and most of them pass it successfully in order to continue their education by enrolling at university.

18 | PVinternational | October 2017 | No 273

nother academic year has recently started and we are yet again faced with the situation in which vocational schools lack pupils enrolled in occupational programmes for the most in-demand jobs in the economy. There is a shortage of around 20,000 workers in the most in-demand jobs on an annual level, primarily in construction, tourism and shipbuilding, whilst some around 170,000 unemployed people are currently registered at the Croatian Employment Service (HZZ), stressed Luka Burilović, President of the Croatian Chamber of Economy, during the conference Dual Education in Comprehensive Curricular Reform.

He added that society as a whole requires improvements in education, and the CCE advocates the idea of dual education in Croatia following the example of the successful Austrian model. Burilović explained it, in that Austria is one of the countries with the lowest unemployment rate and its dual education model significantly contributes to solving the issue of the incompatibility of the educational

system with labour market requirements, whose consequences are being felt throughout Croatian society.

“We are certainly aware that dual education is not a silver bullet with which we will be able to solve all the problems in vocational education, the labour market and the economy, yet it certainly provides an excellent opportunity to harmonise at least one segment of the educational system with corporate requirements”, pointed out Burilović, whilst noting that the Croatian government has recognised this model and integrated it into its programme.

POPULARISATION OF UNPOPULAR OCCUPATIONS Presenting the activities of the CCE concerning the launch of a dual education system, Burilović emphasised that during the last several months representatives of the CCE have actively participated in amendments to the legislative framework intended to regulate vocational education. Moreover, he urged the Ministry of Science and Education to consider the proposals

CULAR REFORM” CONFERENCE NCE

IAN CHAMBER OF ECONOMY

ATION IS R BULLET

e more attractive so that the reduce. According to a survey pported this educational model nnot be ignored put forward by members of the CCE who are actually active stakeholders in the Croatian economy. “Vocational education needs to be made more attractive and the ned for imported foreign labour will reduce. According to a survey recently conducted amongst SME’s, 80% supported this educational model and the opinion of stakeholders in the economy must cannot be ignored. The CCE, with its infrastructure and regional presence through its 20 County Chambers can provide businessmen with the opportunity to become involved in the educational system in a rapid and acceptable manner.

All employees will be given the opportunity to select a simple and financially acceptable way to become mentors to pupils”, highlighted Burilović. He pointed out that it was possible due to the implementation of the project Erasmus+ which the CCE has been implementing in co-operation with its partners, and whose value exceeds €0.5 million.

The President believes that vocational occupations that are the most in-demand need to be popularised. The resources available have been provided through the European Social Fund and stand at €1 billion. “Some of the re-

sources can be used for the promotion of currently unpopular occupations.

Unfortunately, no one is currently anticipating being a ceramist or a plumber, irrespective of the fact that these are excellent paying jobs. It is a large-scale

three levels of problem solution that need to be considered in order to improve the effectiveness, flexibility and attractiveness of our vocational education system. Firstly, at the national strategic and legislative level, followed by

THE CCE ADVOCATES THE IDEA OF DUAL EDUCATION IN CROATIA FOLLOWING THE EXAMPLE OF THE SUCCESSFUL AUSTRIAN MODEL social phenomenon that needs to be immediately addressed. This is imperative, since the best possible system for optimal curricular reform can only be provided jointly, and in case the shortage of pupils enrolling the vocational programmes for occupations which are expected to be in-demand continues in the future, it means we have seriously failed”, concluded Burilović. There are

assistance provided to employers concerning a more vigorous involvement in this educational area, in which the role of the CCE is crucial. Thirdly, there is the promotion of vocational education by attracting the largest possible number of pupils to enrol in vocational programmes for occupations that are the most in-demand amongst the employers. (S.P.)

October 2017 | No 273 | PVinternational | 19

FINANCIAL AGENCY ANALYSIS

LARGE COMPANY RESULTS According to data released by Fina, 2016 saw 63 companies from industry and 9 from the financial sector generate revenue in excess of €0.13 billion. However, results recorded by Agrokor Group were not included, as it has not submitted financial statements for 2016 by Ilijana Grgić

2 20.3 3billion

€

2016 revenue from 63 companies from the real sector

of which € billion

3.2 2

related to exports

0.28 8billion

€

pre-tax profit for Zagrebačka banka

0.33 3billion

€

revenue for Croatia osiguranje (Croatia Insurance)

016 saw 72 organisations generate revenue in excess of €0.13 billion.

According to the analysis conducted by the Financial Agency based on the financial statements submitted for last year, 63 companies from industry and 9 from the financial sector. It should be noted that the results recorded by Agrokor Group were not included, as it has not submitted its financial statements for 2016.

The 63 industrial companies employed 117,031 staff and generated revenue of almost €20.3 billion, with exports accounting for €3.2 billion. Their consolidated results showed nett profits of €1.01 billion. It has to be pointed out that 57 companies operated with profits that reached €1.1 billion, with 7 companies making a loss for the period of €64 million.

Their importance for the Croatian economy can be understood from the following figures: their percentage of the numbers employed was 12.5%, total revenue of 24%, as opposed to 23.7% in total expenditure, 20.9% in profits for the period, 3.3% of losses for the period, 20.2% of exports, 35.8% of imports and 26.3% of investment.

Considering the fact that amongst the 63 companies those involved in trade (27) was the highest, and their share of overall imports reached 35.8%. Overall, a negative trade balance of €1.57 was recorded billion, whilst companies nationally saw a positive balance of trade of €2.55 billion.

14 companies involved in the processing industry ranked second according to their share, whilst third were 6 companies involved in electricity, gas, steam and air-conditioning supply. There was 1 company in the sector of

20 | PVinternational | October 2017 | No 273

accommodation, food preparation and serving (Valamar Riviera), 1 company in the real estate sector (Zagrebački holding) and 1 in professional, scientific and technical activities (Uljanik); the remaining 13 were involved in

INA REVENUE GENERATED IN EXCESS OF €2 BILLION agriculture, forestry and fisheries, such as Hrvatske šume (Croatian Forests), Žito and Koka peradarsko prehrambena industrija (Koka poultry food processing industry), as well as construction, Hrvatske autoceste (Croatian Motorways) and Autocesta Rijeka-Zagreb (Rijeka-Zagreb Motorway), companies in transportation and warehousing industry HP Hrvatska pošta (Croatian Postal Services), Croatia Airlines, HŽ Infrastruktura (HŽ Infrastructrure) and the International Airport Zagreb, as well as those involved in Information and Telecommunications, such as Hrvatski Telekom (Croatian Telekom), VIPnet, Hrvatska radiotelevizija (Croatian Radiotelevision) and Tele2.

Of 7 companies that generated over €0.13 billion in 2016 recording losses, 4 were involved in trade - Kaufland Hrvatska, Metro Cash&Carry, Spar Hrvatska and Billa, 2 from the processing industry - Petrokemija and Boxmark Leather, and 1 in the telecommunications sector - Tele2. It has to be noted that Boxmark Leather recorded the highest loss (€17 million) and Billa (€13.35million).

October 2017 | No 273 | PVinternational | 21

FINANCIAL AGENCY ANALYSIS Comparison between the number of employed individuals and basic financial statements submitted by Croatian companies and 63 companies, each of whom generated revenue in excess of €0.13 billion in 2016. (Amounts expressed in HRK millions) Description

2015

2016

Index 2016/15

Number of persons employed by Croatian companies

811,607

853,110

105.1

Number of persons employed by the 63 companies generating revenue in excess of €0.13 billion

107,832

107,031

99.3

13.3%

12.5%

602,185

633,109

105.1

151,105

151,980

100.6

Share of 63 companies in the overall results of Croatian companies Total revenue generated by Croatian companies Total revenue generated by the 63 companies whose revenue exceeded €0.13 billion Share of the 63 companies in the overall results of Croatian companies

25.1%

24.0%

Total expenditure made by Croatian companies

579,471

602,064

103.9

Total expenditure made by the 63 companies whose revenue exceeded €0.13 billion Share of those 63 companies in the overall results of Croatian companies

145,316

142,675

98.2

25.1%

23.7%

Profits for the period recorded by Croatian companies

34,417

38,696

112.4

Profits for the period recorded by the 63 companies whose revenue exceeded €0.13 billion

6,854

8,071

117.8

Share of the 63 companies in the overall results of Croatian companies

19.9%

20.9%

Losses for the period recorded by Croatian companies

17,034

14,661

86.1

1,902

479

25.2

Losses for the period recorded by the 63 companies whose revenue exceeded €0.13 billion Share of the 63 companies in the overall results of Croatian companies

11.2%

3.7%

Consolidated financial results recorded by Croatian companies

17,383

24,035

138.3

Consolidated financial results recorded by the 63 companies whose revenue exceeded €0.13 billion Share of those 63 companies in the overall results of Croatian companies

4,952

7,592

153.3

28.5%

31.6%

112,454

119,434

106.2

Exports recorded by those 63 companies whose revenue exceeded €0.13 billion Share of those 63 companies in the overall results of Croatian companies

23,769

24,142

101.6

21.1%

20.2%

Imports recorded by Croatian companies

92,328

100,350

108.7

Imports recorded by those 63 companies whose revenue exceeded €0.13 billion Share of those 63 companies in the overall results of Croatian companies

31,766

35,947

113.2

34.4%

35.8%

Balance of trade (exports minus imports) recorded by Croatian companies

20,126

19,084

94.8

-7,998

-11,805

67.7

-

-

Exports recorded by Croatian companies

Balance of trade (exports minus imports) recorded by those 63 companies whose revenue exceeded €0.13 billion The share of those 63 companies in the overall results of Croatian companies Source: Fina

Banks Name

Number of staff employed

Total revenue

Pre-tax profit/loss

Assets

2015

2016

2015

2016

2015

2016

2015

2016

ZAGREBAČKA BANKA d.d.

3,844

3,719

7,122,424,875

7,229,544,262

-662,311,107

2,126,732,167

105,992,383,388

105,128,281,065

PRIVREDNA BANKA ZAGREB

2,870

2,855

4,099,857,970

4,518,256,980

210,423,427

1,984,993,190

69,709,263,885

72,180,409,874

ERSTE&STEIERMARKISCHE BANK

2,350

2,441

3,541,954,689

3,378,855,573

-1,241,391,735

830,177,093

58,995,199,845

56,118,727,346

RAIFFEISENBANK AUSTRIA

1,868

1,579

2,130,850,817

2,194,212,333

-310,632,327

584,832,309

31,197,833,142

31,423,726,853

SOCIETE GENERALE - SPLITSKA BANKA

1,168

1,165

1,668,381,240

1,538,806,252

155,254,632

467,942,533

27,048,508,817

27,035,692,432

HPB - HRVATSKA POŠTANSKA BANKA

823

833

1,353,981,695

1,342,788,033

126,585,550

161,726,290

17,713,166,474

19,357,719,867

1,195

1,108

1,283,291,702

1,271,513,891 -2,456,010,622

79,384,864

25,557,270,261

21,099,101,018

ADDIKO BANK A total of 7 banks

14,118

13,700

21,200,742,988

21,473,977,324 -4,178,082,182 6,235,788,446

336,213,625,812

332,343,658,455

Total for all banks (46)

21,100

20,740

25,854,715,373

26,020,871,836 -4,753,604,476 6,494,394,080

430,567,424,457

431,135,578,937

67%

66%

82%

78%

77%

The share of 7 banks

83%

88%

96%

Source: Fina

Insurance companies Name

CROATIA OSIGURANJE d.d.

Number of staff employed

Total revenue

Pre-tax profit/loss

Assets

2015

2016

2015

2016

2015

2016

2015

2016

2,581

2,273

2,464,054,233

2,446,203,996

72,295,676

93,719,561

8,480,992,388

8,764,480,126

ALLIANZ ZAGREB d.d.

1,081

544

1,272,061,721

1,193,855,985

125,631,495

100,457,083

4,640,992,956

4,936,010,530

Total for 2 insurance companies

3,662

2,817

3,736,115,954

3,640,059,981

197,927,171

194,176,644

13,121,985,344

13,700,490,656

10,400

9,500

9,713,475,113

9,718,112,868

682,057,578

776,676,328

38,734,145,979

40,206,681,666

35%

30%

38%

37%

29%

25%

34%

34%

Total for all insurance companies (26) Share of 2 insurance companies Source: Fina

22 | PVinternational | October 2017 | No 273

all, was the highest concerning pre-tax profit, (96%), in total revenue (83%), 77% of assets, numbers employed (66%).

Of these 7 banks, 2015 saw 4 record a pre-tax loss, the largest loss being made

by Addiko Bank, (€0.33 billion) and Erste&Steiermärkische Bank (€0.16 billion). In 2016 these banks recovered with Addiko recording a profit of over €10.5 million, and Erste reaching €110.7 million.

Furthermore, last year all seven banks recorded a pre-tax profit, the highest being by Zagrebačka banka at €0.3 billion and Privredna banka Zagreb (€0.26 billion). The 2016 Annual Report released by the Management Board of Zagrebačka banka stated that Zagrebačka banka Group achieved unexpectedly good results in 2016.

INA ABOVE ALL Concerning revenue generated, Ina was first with revenue exceeding €2 billion.

The company annual report for 2016 states that last year was a successful year and that, after a long period in a negative pricing environment and political turmoil in Syria, the situation in the second half of 2016, was relatively stable, which affected the financial results achieved and hence for the first time for several years, Ina did not record any significant decrease in value.

“Ina is currently a successful and effective company with a healthy financial basis and growth potential. Following a relatively extended period, 2016 was the first year without regulatory amendments affecting us, which we consider extremely important. We are hoping that the period of regulatory stability will continue during the forthcoming years”, noted the President of the Management Board of Ina, Zoltán Sándor Áldott, commenting on the company’s business results for last year.

According to form of ownership, 36 companies have been privately-owned since their foundation, 5 have been privately-owned after ownership transformation, 12 are state-owned, 8 have mixed-ownership with over 50% of private capital and 2 have mixed ownership with over 50% of state-owned capital.

The comparison showed that companies with mixed ownership with over 50% of private capital reduced staff numbers by

2,378. Ina reduced the number staff by 3,007, which was mainly due to the introduction of a new model of retail operations management that on 1st February 2016 was transferred to a newly-founded company, Ina Maloprodajni servisi (Ina Retail services) that employs 2,262 staff.

Hrvatski Telekom (Croatian Telekom) decreased the number of its staff by 236, and the remaining 6 companies increased staff numbers, Brodogradilište 3. maj (3. May shipyard) hired 44 new employees, Podravka hired 245 and Valamar Riviera 417.

The highest revenue per employee €44 million was recorded by a company that has been privately-owned since its creation, Prvo plinarsko društvo (First Gas Company); in 2016 employees numbered at 10.

A SOLID YEAR FOR THE FINANCIAL SECTOR Of 9 companies in the financial sector that generated revenue over €0.13billion, 4 companies are privately-owned, 2 have been privately-owned after ownership transformation; Hrvatska poštanska banka (Croatian Postal Bank) has a mixed-ownership structure with over 50% of state-owned capital, and Croatia osiguranje (Croatia Insurance) has a mixed-ownership structure with over 50% of private capital.

The percentage share of the 7 banks with revenue over €0.13 billion in 2016 within the results of the 46 banks over-

€44 MILLION - THE HIGHEST AVERAGE REVENUE PER EMPLOYEE BY PRVO PLINARSKO DRUŠTVO (FIRST GAS COMPANY) “The achieved results are based on a universal business model and a responsible approach to risk management. The capital adequacy ratio stood at 21.1% and the Group has solid potential to sustain credit activity over the forthcoming period. We have met most of our specific objectives, we have been constantly improving our business processes and introducing new digital technologies that enable us to provide clients with fast, high quality and personalised services tailored to meet their requirements”, pointed out the President of the Management Board of Zagrebačka banka, Miljenko Živaljić.

Of 26 insurance companies, 2 generated revenue of over €0.13 billion - Croatia osiguranje (Croatia Insurance) with €0.33 billion, and Allianz Zagreb (€0.16 billion). They accounted for 37% of total revenue generated, 25% of pre-tax profits, 34% of assets and 30% of the number of people employed.

October 2017 | No 273 | PVinternational | 23

IN DESIGN FESTIVAL OF MODERN HOME

HIGH ADDEDVALUE OF DESIGNER PRODUCTS This year the Community of Industrial Design at the CCE has, for the first time, been involved as a partner in presenting Croatian designers and their products as a result of co-operation between designers and manufacturers, emphasised Tomislav Radoš by Sanja Plješa

I Mirjana Mikulec

n Design – Festival of Modern Home, which has brought together over 60 exhibitors of modern furniture and household objects, has recently been held in Zagreb Arena. Exhibitors with a broad range of innovation and new concepts in interior design industry presented their products at the Festival. Moreover, members of the Community of Industrial Design at the CCE also showed their products at the Festival. At this occasion Tomislav Radoš, Vice-President at the CCE for Industry, IT, Energy and Environmental Protection, stressed that this year the Community of Industrial Design at the CCE has, for the first time, been involved as a partner presenting Croatian designers and their products, resulting from co-operation between designers and manufacturers. He added that this was an exceptional breakthrough for the Community of Industrial Design and that it marked the beginning of presenting Croatian innovative products with an integrated added-value added component, such as design.

“This Festival is a combination of design and the Croatian manufacturing sector, yet there is

still ample room for improvement for co-operation, as well as for connecting designers and manufacturers. That is also the specific objective of the CCE and the reason for the creation of the Community of Industrial Design, as a form of connectivity whilst working to provide a stimulating ambiance in industrial design, and to encourage an exchange of experiences, synergy and consensus of all relevant stakeholders in industrial design development”, highlighted Radoš. He added that co-operation between designers and manufacturers will continue into October, when members of the Community of Industrial Design will present themselves in an exhibition area covering 1,000 m2 at the international Ambienta Show at Zagreb Fair where all innovative products from the Croatian design industry will be presented.

EU FUNDS NEED TO BE INVESTED INTO DESIGN Concerning the issue of the current positioning of Croatian design in relation to European and international design, Radoš stated that, when the position of Croatian products is considered

ELGRAD

Presentation of technically innovative and decorative materials Elgrad, a company involved in the sale and distribution of panels and fittings for custom-made furniture, exploited the opportunity provided during In Design to present its new collection of technically innovative decorative materials. These are Fenix NTM, a super opaque nanotech material, Laminam, ceramic panels, as well as

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a decorative collection by one of the leading European board manufacturers, Egger from Austria. During the presentation of innovation Mladen Lovreković, a member of the Management Board of Elgrad, expressed his delight with all the products presented at the Festival. He added that he was convinced the products presented

will greatly help the company in retaining a leading position on the local market.

against a backdrop of the global value chain, Croatian designer products rank in the second half amongst designer products that originate from other European countries. Nevertheless, according to Radoš, that situation does not necessarily need to be considered as hopeless, since the awareness of what yet remains to be done has been raised and the current conditions are positive. Consequently, non-repayable grants from EU funds, in addition to being

I BELIEVE CROATIAN DESIGNERS ARE FIRST CLASS, YET THEY DO NOT HAVE MANY OPPORTUNITIES TO PRESENT THEIR PRODUCTS, NOTED MIRJANA MIKULEC used for other purposes, can also be used for the improvement of designer products. “The CCE needs to focus on co-operation between Croatian designers and manufacturers. The first step has already been made and it has resulted in the implementation of the “Croatian bathroom” project where the CCE brought together designers and manufacturers. Consequently, the “Croatian bathroom” brand has been created”, noted Radoš. He added that the role of the CCE is primarily of bringing together designers and manufacturers and he announced several similar projects that will be implemented during the next six months.

Speaking about the second edition of In Design – Festival of Modern Home, the designer Mirjana Mikulec, the organiser of the event, stated that the Festival was mainly intended

to present Croatian design and its huge potential. “I am convinced Croatian designers are excellent, yet they are faced with the problem of not being given the opportunity to present their products. We are finally able to give them this opportunity and provide space for them”, pointed out Mirjana Mikulec. Josip Zanki, President of the Croatian Association of Visual Artists (HDLU), also expressed his opinion about In Design – Festival of Modern Home.

He emphasised that the Festival is an occasion during which the Association can present the work of artists of the young and middle-aged generation and is also a venue intended for the promotion of the work and the activities performed by visual artists.

DIFFERENT FROM THE REST In addition to a large number of exhibitors, a unique exhibition area named Bazar saw the work of small-scale Croatian product designers whose products have been an integral part of the interior in many Croatian homes for some period. The design companies Markuss, Home Work Time, Arane Linta, as well as Deez Produkt and Regeneracija, Redox, A1 format, ZzID Concept, Keramika Modus-Design Lab and Tabushi presented their products within the Community of Industrial Design in the exhibition area covering 30 m2.

Moreover, In Design – Festival of Modern Home saw also a product presentation delivered by the company Era, whose Marketing Manager, Tatjana Kos, pointed out that expectations from the Festival are huge. “There is currently no other Fair or Festival of this type in Croatia where we would be given the opportunity to present high added-value products. The only right path towards success and survival on the market for Croatian manufacturers is product development resulting in products that are significantly different from all other products available on the market in terms of their design, processing quality and their long life”, highlighted Tatjana Kos.

The CCE needs to focus on co-operation between Croatian designers and manufacturers.

The first step has already been made and it has resulted in the implementation of the “Croatian bathroom” project where the CCE brought together designers and manufacturers.

Tomislav Radoš, VicePresident of the CCE

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VINA CROATIA-VINA MOSAICA IN VIENNA

CROATIAN WINE PRODUCERS IN AUSTRIA The CCE provided 12 Croatian wine producers an opportunity to present their products at the Vienna-based Am Hof square, plus a sommelierguided wine tasting event (Masterclass) for wine experts was held at restaurant Graben30 by Krešimir Sočković the distributors of Croatian products in Austria at the Vienna-based Am Hof square. Badel 1862, Degrassi, Dvanajščak, Kozol, Feravino, Iločki podrumi, Kozlović, Krauthaker, Kutjevo, PP Orahovica, Zigante, Zlatan otok, PZ Vrbnik, Delikroat and Aura Delikatessen were the wine producers that promoted their wines and food in Vienna.

Next to the wine producer’s presentation held at Am Hof square, a sommelier-guided wine tasting event (Masterclass) for wine experts was held at restaurant Graben30, during which wines already well-known to tourists were presented to experts, traders and wine distributors.

REMEMBERING THE TASTES OF CROATIA

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he Croatian Chamber of Economy (CCE) and its Association of Wine Makers organised a promotional event for wines brought together under a unique brand of Vina Croatia-Vina Mosaica at the Vienna-based Am Hof square, moving to strengthen the image of Croatian wines and producers, as well as the overall image of Croatia during the period of pre- and post-season in the most important of Croatian tourism markets, amongst which Austria is particularly significant for wine producers. It has to be highlighted that wine exports to the Austrian market have seen a considerable increase: during the first five months of 2017, Croatia exported 718,500 litres of wine to Austria, which exceeded exports for the whole of 2016, of 675,000 litres. 12 Croatian producers presented their products, as well as

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According to Nikola Drmić from the Krauthaker winery, through this presentation they were aiming to remind Austrians of the tastes of Croatia at this time, during the post-season, whilst their impressions of holidays spent on the Croatian coast are still vivid, and advise them that the same products can be purchased in Austria. “The Austrian market is important for us, yet there is also huge interest in our wines on the British market, since we have established long-term co-operation with Marks&Spencer. As continental wine producers, we are slightly less wellknown amongst tourists and so such presentations certainly help in opening new promotional and sales channels”, noted Drmić.

Ivo Peršinović, owner of Vino-Croatia, who represents several Croatian wine producers in Austria, noted that Austrians are patriots when it comes to wine consumption and they are normally loyal to their local wines. “The quality of Croatian wines needs to be presented to this market. The Austrians prefer light wines such

as Croatian Žlahtina which is well-accepted by the Austrian market primarily due to being a light wine. It has a low alcohol content and it can be consumed at lunchtime and be able to continue working afterwards. Even French wines are not so popular on the Austrian market and that can provide some consolation. We have managed to build good foundations for our wine sales in Austria and over the forthcoming years we can expect stronger interest in Croatian products. I anticipate Croatia will increase sales by 20% this year and am convinced such trends will continue”, added Peršinović.

EASIER PENETRATION OF DEMANDING MARKETS “We have warmly welcomed this opportunity for promotion”, noted Igor Hruška from PP Orahovica. “The fact that we are jointly presenting our products in order to assist in penetrating the demanding markets needs to be welcomed. Appearances in tourism markets is interesting, since consumers can recognise your product. Some of them are regular tourists and they had previously had the opportunity to taste our wines. Reactions of the Austrians are also interesting, when they talk about similarities and differences whilst comparing our wines with their own, as they are familiar with our wines”, said Hruška.

Vida Janeković from Badel 1862, highlighted that the company’s sales results in Austria

DURING THE FIRST FIVE MONTHS OF 2017, CROATIA EXPORTED 718,500 LITRES OF WINE TO AUSTRIA are far superior compared with those achieved last year. “Our top quality and quality wines have attracted customers and we are planning to continue strengthening our market position through promotional activities. This type

LUKA BURILOVIĆ, PRESIDENT OF THE CCE

Increase in exports is a good sign Good results and an increase in exports to the Austrian market are a good sign, as emphasised by the President of the CCE, Luka Burilović, who arrived in Vienna to provide support to Croatian wine producers. ‘’The results achieved are mainly due to good grape harvests for the last two years, as well as a broad range of marketing activities in EU markets through the Association of Wine Makers at the CCE under the brand Vina Croatia- Vina Mosaica. We are expecting further growth and increase in the sales of Croatian wines, not only to Austria, but also the EU, primarily due to the recognised quality of Croatian wines. This is a stepping stone event, intended to boost promotion and recognition”, concluded Burilović. of promotion, under a unique brand on a city square, is extremely interesting for all our wine producers, irrespective of size. I believe similar activities organised in other European cities would greatly improve the recognition of Croatian wines on the European wine exploration map”, concluded Vida Janeković.

THE CCE PROJECT CONTINUES Austria is one of the most demanding of wine markets, stressed Marina Rožić, Secretary General at the CCE. “Notwithstanding the fact that this market is highly demanding and that they are loyal to their local wines, Austrians are also open to Croatian wines. They are our regular tourists and are familiar both with our gastronomy and our wines. In conjunction with tourism, we have opted for a product launch presentation in Austria intended to provide a comprehensive overview of the wines under a unique brand Vina Croatia -Vina Mosaica.

The CCE will provide comprehensive logistics support to its Association of Wine Makers and, in co-operation with them, reach a decision on the markets that require more intense focus”, pointed out Marina Rožić.

The Austrian market is similar to that of Croatia. It is an important market for us, yet it is an extremely demanding one, pointed out the Secretary of the Association of Wine Makers at the CCE, Igor Barbarić. “If Croatian wines become identified on the Austrian market, by Austrians, who are wine connoisseurs, it will greatly help our penetration into the wider market. We are hoping for a successful continuation of this project and our vision is to promote Croatian wines throughout the European capitals and point out their advantages”, stated Barbarić

In conjunction with tourism, we have opted for a product launch presentation in Austria intended to provide a comprehensive overview of the wines under a unique brand Vina Croatia -Vina Mosaica. The CCE will provide comprehensive logistics support to its Association of Wine Makers and, in cooperation with them, reach a decision on the markets that require more intense focus.

Marina Rožić, Secretary General at the CCE

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BEST EUROPEAN HOLIDAY HOME

Croatia a complete winner Croatia had 12 of the 64 finalists in eight categories, winning awards in four

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illa Vista Zamask in Istria, Villa Sreser in Pelješac, Villa Falcon Rook in Konavle and Villa Vadediji from Žminj have recently been declared the Best European Holiday Homes at a ceremony in Brussels. The BEHH awards ceremony was organised by the European Holiday Home Association (EHHA), whose members have also been the Community of Family Tourism at the Croatian Chamber of Economy, since March 2017. Croatia has thereby become the absolute winner of the competition, having gained awards in four of the eight categories. Holiday homes from 18 European countries participated in the competition. Villa Falcon Rook was declared the Best Family-Friendly Holiday Home, Villa Vista Zamask the Most Unique Spot Holiday Home, Villa Sreser the Best Holiday Home Beach House and Villa Vadediji the Best Health and Wellness Holiday Home. It should be noted that Croatia was represented by 12 of the 64 finalists in eight categories, which is believed to be an excellent result, bearing in mind that Mediterranean countries like France and Italy had only two representatives in the final round of the competition. The United Kingdom was the only country whose number of finalists exceeded that of Croatia and they won three awards.

Danijela Čavlović, Vice-President at the Community of Family Tourism at the Croatian Chamber of Economy, who was a member of the expert assessment panel, and the only Croatian representative on it, emphasised that this was an exceptional success for the Croatian Family-Friendly Holiday Home Accommodation Sector, and confirmation that this tourism area has been developing in the right direction. “Croatia has certainly been increasingly pursuing the path towards becoming the most beautiful and 28 | PVinternational | October 2017 | No 273

most desirable European destination.

According to the latest statistics, Croatia currently provides 92,000 Holiday Home accommodation units. The increasing recognition of the importance of this type of accommodation confirms the significance of specialisation of tourism programmes, as well as of destination branding and host training. The Community of Family Tourism at the CCE has been intensely focused on addressing these issues”, stressed Danijela Čavlović. (S.P.)

CROATIA HAS CERTAINLY BEEN INCREASINGLY MOVING DOWN A PATH TOWARDS BECOMING THE MOST BEAUTIFUL AND MOST DESIRABLE OF EUROPEAN DESTINATION, NOTED DANIJELA ČAVLOVIĆ