Interview: Dr. Wilfried Haensel If Europe wants to be prosperous, it is extremely important to sustain the plastic industry, says CEO, PlasticEurope AISBL
Plans for 2013 The state disciplines, the banks are stable and entrepreneurs are fearful... But state rating should remain unchanged
Millions for energy projects Environmental Protection and Energy Efficiency Fund co-financing 60 projects
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Croatian Business & Finance Weekly Established in 1953 Monday / 29th October / 2012 Year VI / No 0219 www.privredni.hr
S U P P O R T E D
PVI BECOMES MONTHLY PUBLICATION
NINE MONTHS Please do not be alarmed at the heading – it has nothing to do with pregnancy. However, it does have everything to do with the amount of time left until Croatia takes its place as a member of the European Union. This means that as we start our sixth year of publication of PVInternational we are fully aware of the enormity of the challenges facing us and, as usual, it is our mission to bring you all developments inside the country. We have therefore reached the decision that with effect from the start of our sixth year, we will refocus our content. There will be greater emphasis on analyses from the finance industry, greater depth on our coverage of organisational developments (our ‘Top 400 companies) as well as additional data aimed at giving a deeper insight into Croatia and Croatian industry. Additionally, and in order to present this deeper analytical approach, PVInternational will become a monthly publication, issued at or near the end of the month. We feel sure this approach will enhance your understanding of Croatia. Sincerely, Darko Buković Editor-in-Chief
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The Governor of the Croatian National Bank (HNB) on exiting the crisis
Vujčić: We need to attract investment into production Macroeconomic stability as a prerequisite for growth. HNB will continue to focus on macroeconomic stability without a kuna devaluation as it would have an adverse impact on the crisis t the end of 2012, Croatia will see a 1.9% fall in GDP, whilst 2013 might see a slight increase 1%, according to Boris Vujčić, Croatian National Bank Governor, at the recently held Economic Conference organised by students of the Zagreb-based Faculty of Economics. Economic policy-makers need to create the prerequisites to attract manufacturing and export-oriented foreign investment to achieve more vigorous growth, highlighted the Governor. Companies in foreign ownership account for only 53% of Croatian exports, as opposed to 80% amongst other EU member countries. According to the Governor, the previously adopted growth model based on borrowing is unsustainable. He added that public and private consumption cannot be expected to be the principal levers of growth in the near term. Vujčić believes Croatians have excessive expectations from the state concerning investment. He pointed out that private investment needs to be encouraged in all sectors, according to surveys carried out by the World Bank. Improvement in the business climate, a more flexible labour market and a significant reduction
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in administrative hurdles would greatly encourage foreign companies to invest in Croatia. Radical moves, on which a consensus has been made within the social and political context, are fundamental to attract investment, added Vujčić.
According to Vujčić, private investment in all sectors is fundamental Macroeconomic stability is an additional important prerequisite for growth. HNB will continue to focus on macroeco-
nomic stability without a kuna devaluation, as it would have an adverse impact on the crisis. It is important to highlight the fact that the country credit rating has been preserved and investor confidence retained, as a result of fiscal consolidation and the announced deficit reduction. It was also due to the fact that the financial system in Croatia is stable and profitable, as a result of the policy of HNB prior to the crisis. Nevertheless, a significant reduction of budget expenditure will have a higher impact on growth than the creation of excessive tax pressure, emphasised Vujčić. (I.V.)
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Privredni vjesnik Year V No 219
Vedran Brničević, Board Member, Ekobit
No ICT company can be a stand-alone Focus on markets throughout the EU and the US is an imperative, as well as on China, India and Japan; ambitious software producers need to think globally. nsufficient support for exports, an over-arching role of the state in IT and a weak labour market with prohibitive costs are serious obstacles to competitiveness. As a result, a large number of small ICT companies in Croatia are primarily involved in imports or providing services exclusively for the local market and are uncompetitive at the global (or regional) level. I believe it is of fundamental importance to encourage local ICT companies and start-ups to target global markets and identify profitable niches. My own company has been successful for 20 years through its export orientation. We believe intense competition in global markets is increasing and exports are a crucial challenge. Nevertheless, the global
market is huge and each global buyer has more potential than those locally if one succeeds in tackling several hurdles. Cost control is fundamental. Our company primarily relies on internal funding, acquired exclusively through profitability. Our investment strategy tends towards knowledge and staff development as this is the way ahead and for growth and survival. Secondly, our golden rule is targeting profitable markets. We believe companies need to focus on markets throughout the EU and IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription
21st century – the era of polymers
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Global partnership with Microsoft
IMPORTANCE AND FUTURE OF POLYMER INDUSTRY
Sanja Plješa olymer materials have and will continue to be extremely valuable throughout the 21st century. They have had a significant impact on the world by promoting technological progress more than any other material thus far. Nevertheless, the innovative potential of polymer materials has yet to be discovered. However, polymer products become waste during their final phase. There is a wide range of possibilities for the management of such waste. It can be managed through mechanical and chemical recycling and used in energy generation. Consequently, polymers are a valuable secondary raw material, according to Gordana Pehnec Pavlović, Secretary at the Association for Plastics and Rubber at the Croatian Chamber of Economy. 8,300 people are employed in Croatian polymer industry, with 7,621 in processing and the remainder involved in production. Prior to 1991, annual production of polymer materials stood at over 370,000 tonnes, whilst in 2011 and 2012 production quantity was insignificant. This is primarily due to the fact that Dioki, the largest domestic producer of petrochemicals and plastics, has not been operating for over a year. Annual production over the last several years has been standing at around one hundred tonnes of
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the US, as well as China, India and Japan. Ambitious software producers need to think globally and this is the fundamental principle within the ICT industry. The idea behind the business model is a networked society with crossborder financed projects, whilst software needs to be developed and sold across multiple time zones simultaneously. No ICT company can be a standalone; companies need to identify adequate support and global partners or sponsors who simplify business significantly. Ekobit has established a global partnership with Microsoft, which provides excellent support for our marketing and sales activities. Start-ups need to identify assistance programmes that will provide them with the tools, business advice and even global recognition, due to their being selected for a particular start-up programme. Assistance can be provided by large technology partners, as well as by specialist companies such as 500 start-ups, Kickstarter or Seedfunding or venture capital companies.
FOR PUBLISHER Nikola Baučić +385 1 4846661 uprava@privredni.hr
IMC MANAGER Dea Olup +385 1 5600028 olup@privredni.hr
EDITOR IN CHIEF Darko Buković +385 1 5600003 bukovic@privredni.hr
TRANSLATION Lučana Banek lucanab@gmail.com Mirjana Cibulka mirjana.cibulka@gmail.com
EXECUTIVE EDITORS Andrea Marić maric@privredni.hr Vesna Antonić antonic@privredni.hr
INTERNATIONAL OPERATIONS Ray Fletcher fletcher@privredni.hr
various semi-finished and finished polymer products. 110,000 tonnes of polymer materials were produced in 2011. Production covers plastic packaging, pipes and fittings, construction products, car and tram spare parts, boats and various plastic products used in other industries. Four years ago, products made from rubber and plastics and with a value of over $1 billion were imported, emphasised the Secretary at the Association for Plastics and Rubber at HGK. “It has to be highlighted that these imports also included tyres, yet the value was still substantial. The Association for Plastics and Rubber at HGK has been considering the replacement of a significant amount of imports with quality domestic production, primarily concerning plastic pipes, the area
8,300 people employed in polymer industry in Croatia which has been seriously put at risk by unnecessary imports”, pointed out Gordana Pehnec Pavlović. Imports of plastic raw material, semi-finished and finished products stood at $1.8 billion in 2011. Nevertheless, irrespective of continuously rising exports (totalling around $654 million in 2011), imports are still significantly higher.
An increasing number of companies involved in polymer production The number of companies involved in the processing of plastics and rubber in Croatia has been rising since 2002. Currently 640 companies are involved in polymer material production or raw materials for processing of plastics have been registered in Croatia. In 2010, total revenue generated by these companies stood at €0.63 billion.
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( 120 kg
use of plastic in Western Europe per capita
( 40 kg
use of plastic in Croatia per capita
DR. WILFRIED HAENSEL, CEO, PLASTICEUROPE AISBL
There are no innovations without plastic If Europe wants to develop and be prosperous, it is extremely important to sustain the plastic industry. This is crucial if we want to achieve progress in innovation in other fields Croatia to Turkey. Our association is trying to unify all activities related to the industry of polymers. Our goal is to gather and include all existing associations related to plastics. In some countries, both producers of polymers and plastics processors are organised in clusters. In Croatia, both producers of polymers and processors of plastics are included, as well as companies with activities related to plastics.
Jozo Vrdoljak rivredni vjesnik met with Wilfried Haensel, CEO of PlasticEurope AISBL, when he visited Dubrovnik to participate at the conference of PlasticsEurope in the Mediterranean region, and talked about the future of European plastics producers, market conditions, management of plastic waste and growth of the plastics industry. Haensel talked about the future for Croatian producers, the role of national associations and organising a closed cycle for plastics production.
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What are the goals and activities of the association? Europe produces 25% of total global plastics, and PlasticEurope covers around 90% of European polymer producers with a production capacity of 260 million tonnes. Furthermore, our association is active throughout the entire plastics industry. In Europe, we have around 15,000 companies in this segment, which generates a turnover of â‚Ź300 billion and employs 1.6 million workers. What is the significance of the plastics industry? Many industrial branches depend on plastics. It is ubiquitous, in electronics, households, transport and medicine. Many other industrial branches depend on plastics as an advanced and relatively new material, and it is also important in innovation. Most modifications and innovations we see are based on plastics. I
If you throw away waste, you are wasting money We cannot only focus on the production of plastics, but we also have to think about the entire cycle where plastic waste is turned into raw materials and as an energy resource. I can personally prove that if this cycle is closed, we could obtain 10% more energy than is spent over the entire cycle. In short, the production of plastics should be combined with transforming plastic waste and waste oil into raw materials and energy. If you are not using waste in Croatia, it means you are wasting money. can say with all certainty there is no innovation without plastics. If Europe wants to develop and be prosperous, it is extremely important to sustain the plastics industry. This is crucial if we want to achieve progress in innovation in other fields.
In some states, both producers of polymers and plastics processors are clustered. Croatia is an example
How is your association structured? PlasticEurope covers the whole of Europe. We are found in the west, north, central, Mediter-
ranean and Iberian regions. All regions have national associations in individual countries. The Mediterranean region covers countries from Italy, through
What is the future of the plastics industry in Europe? When we observe the market in Western Europe, we can conclude it is very mature, since the use of plastics stands at 120 kilograms per capita. The situation in the rest of Europe and the world is somewhat different. For example, Asia is the most populated and fastest growing market where use is six times smaller than in Western Europe. This opens great opportunities since this level is growing, and could reach the level of Western Europe. What is the situation in other European countries? In some countries that have recently joined the European Union and in Croatia, the use of plastics stands at approximately 40 kilograms per capita, and we anticipate it will triple. Furthermore, we know from our experience that if GDP grows at a certain rate, the use of plastics grows twice that of GDP. These are all opportunities for growth in activities related to plastics in Croatia.
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Privredni vjesnik Year V No 219
2-3 years of stagnation anticipated by Vladimir Gligorov
PLANS FOR 2013
The state disciplines, the banks are stable and entrepreneurs are fearful Linić announced cost reduction of regulators and elimination of illiquidity within six months. State rating should remain unchanged in 2013 Drago Živković hen Minister of Finance, Slavko Linić, presented the first state budget in mid February, he anticipated a 0.8% increase in GDP based on a strong recovery in gross investment in fixed capital. Eight months later, at a conference the ‘Day of the Big Plans’, held in Zagreb, he presented his first budget draft for 2013, and remained optimistic. Even though his past prognosis of 0.8% growth was clearly a shot in the dark, the Minister now anticipates 1.7% growth in 2013. This time he does not rely solely on investment into the public sector, although he admits a setback of €0.8 - €0.9 billion was the governments’ greatest failure and the main cause of the fall in GDP, but also relies on investment into the private sector. Linić is relentless in reminding that the government had already helped the private sector by reducing health contributions from 15% to 13%, as well as parafiscal duties, and is now announcing cost reduction of the regulators and elimination of illiquidity within six months. With the visible interest reduction, for which Linić gives credit to the government, and the maintained state rating, this should motivate the private sector to
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take more risk when investing. The state rating should be maintained during 2013 since the Minister guarantees the budget deficit will not exceed €1.3 billion despite accumulating claims. The debt of the shipbuilding industry is still not included in the deficit; the interest expenses on state debt will exceed €0.4 billion in 2013; the European Union anticipates a membership fee of €0.23 billion, and an accumulated a debt of €0.53 - €0.67 billion in healthcare. Not everyone is optimistic By the end of the year VAT will also change since the zero rate will be abolished. It will be replaced by the lowest rate of 5% alongside an inter-rate of 10% (for tourist services among others) and a general rate of 25%. The Ministry of Finance does not intend to back down in its strict tax collection policy, since tax discipline is seen as a priority. All this creates conditions for a year more successful than this one. Vladimir Gligorov, from the Vienna Institute for International Economic Studies, does not agree with this. He anticipates stagnation will last for another two to three years, not only in Croatia, but across the entire region. The difference between a
1% fall and 1% growth is completely irrelevant for Gligorov since it is all stagnation. He does not even anticipate higher growth rates of 4%-5% in the medium term, since it will take a long time to pay back accumulated debt. Croatia’s position is also complicated by the policy of the kuna fixed current rate, which requires harmonisation either through decreasing salaries (which does not have a social consensus) or through a fall in employment, which is happening whether we want it to or not. Gligorov anticipates the financial shortfall to continue alongside a completely uncertain end to the Eurozone crisis. Bankers are not optimistic either, at least according to Petar Radaković, Board President of Erste Bank. He does not anticipate public lending to increase in 2013, and even though he sees investment opportunities in tourism, energy and agriculture, he criticises the state administration for inhibiting everything. The big unknown Even though the share of poor loans in Croatian banks is relatively high, capitalisation is also high, which leads Radaković to believe the banking system is stable and reliable. Therefore, if the real sector finally activates
itself, the banks will be able to keep up with it in terms of capital, the leading man of Erste Bank is convinced. 2013 will be a great unknown for the real sector, anticipates Board President of Atlantic Group, Emil Tedeschi. His opinion is that entrepreneurs must redefine their position according to the market, which is always painful. In the case of Atlantic, this type of pain is of local origin. Even though the entire group generated 6%
Minister guarantees state deficit will not exceed €1.3 billion despite accumulating claims growth in its 30 markets, it registered a 7% fall in Croatia. Tedeschi sees an opportunity for turning around this negative trend in strategic partnerships locally since, as he says, they must stick together against the surge of foreign competition. Radaković also pointed out that there are unused loans from the HBOR programme, with an interest rate of only 2%, which Tedeschi prescribes to excessive caution on the part of entrepreneurs. People are afraid; we need to be braver, promotes Tedeschi.
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Environmental Protection and Energy Efficiency Fund co-financing 60 projects
Millions for energy projects Project implementation at an annual level will reduce energy consumption by over 15 million kWh resulting in savings of some €1.3 million vited in 2010. “Similar situations must certainly be avoided”, he stressed. In addition to these tenders, Marija Šćulac Domac, Head of Service for Energy Efficiency and Use of Renewable Energy Sources at the Energy Sector at FZOEU, announced several new
Boris Odorčić he Environmental Protection and Energy Efficiency Fund (FZOEU) will be co-financing 60 energy projects with €3.5 million. The remaining funds will be provided by local government, public and religious institutions, associations and businesses, with a total project value at slightly below €7.2 million. 31 projects are related to energy efficient and ecological public lighting, 12 concern energy efficiency in building construction, 8 encompass education and research-related projects, whilst 4 are related to the use of solar energy. In addition, FZOEU will co-finance 2 projects related to the use of biomass and energy efficiency in industry, as well as an energy audit. Project implementation at an annual level will reduce energy consumption by over 15 million kWh, which will result in savings of some €1.3 million, as well
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Tenders for co-financing for the use renewable energy sources in households to be invited in the near future as reducing CO2 emissions by 20,000 tonnes. New tenders Alen Leverić, Assistant Minister for Industrial Policy, Energy and Mining, pointed out that the legislative and institutional framework in Croatia concerning energy efficiency and renewable energy sources has been amended in order to enhance investment in these
sectors. Consequently, there are currently 104 facilities generating energy from renewable sources, up from a past figure of 30 similar facilities. Mihael Zmajlović, Minister of Environmental and Nature Protection, emphasised that the Environmental Protection and Energy Efficiency Fund (FZOEU) has not been operating effectively for two years, as tenders for some projects were in-
upcoming tenders. Tenders for the co-financing of renewable energy sources for businesses and microcompanies are expected to be invited soon, for which, currently, there is a substantial lack of funds. In addition, Marija Šćulac Domac pointed out that FZOEU plans to invite tenders for ecological public lighting, renewable energy for household use and energy efficiency in industry and tourism.
2,997 exhibitors from 11 countries at SASO Fair in Split
Resilience of Croatian economy Renewable energy significantly affecting company development. 250% upturn in exhibitors over last year, according to organisers
2,997 exhibitors from 11 countries (Germany, Slovenia, Serbia, Austria, Italy, the Czech Republic, Poland, France, Slovakia, Hungary and Croatia) participated at the 17th SASO fair in Split, irrespective of the
severe economic crisis which has adversely affected primarily the construction and the metal sector. The fair confirmed the resilience and adaptability of the Croatian construction and metal sectors,
again showing that the SASO Fair has always been a good indicator of economic trends. This year saw renewable energy sources significantly affecting the development of entrepreneurship with the number of exhibitors rising by 250% over last year, according to fair organisers. “We have managed to bring together a wide cross-section of exhibitors, as a result of committed efforts by both organisers and employees of Split Fair, as well as the enthusiasm and innovativeness of entrepreneurs. We are extremely satisfied with turnout this year and particularly with their innovativeness and new
products against the backdrop of the current crisis. It has been proven yet again that the Fair is a unique regional economic event, due to its extremely varied professional programme”, emphasised Bogdan Šarić, Director of SASO Fair. The President of the Croatian Chamber of Economy - County Chamber Split highlighted positive balance sheet results in SplitDalmatia County over the first six months of 2012 following a long period of unsatisfactory results. Nevertheless, she pointed out that there are currently three Croatian Counties showing a negative balance sheet. (J.V.)
6 WE PRESENT SOCIAL CO-OPERATIVE HUMANA NOVA, ČAKOVEC
Privredni vjesnik Year V No 219
SOLUM GB, GORNJI BOGIĆEVCI
Huge potential for small producers and purchasers Etržnica offers the direct purchase of fresh local healthy and entirely natural products with prices deliveryy and terms, determined byy producers
Recycling clothes becoming more popular The co-operative collects and recycles textiles and footwear with some being redesigned or used to create new products he Čakovec-based social co-operative, Humana Nova, is a social enterprise creating jobs for handicapped and other socially excluded people through the production and sales of quality and innovative textile products made from ecological or recycled materials. The co-operative operates both locally and globally, and has a profound and positive impact on sustainable development within the local community, the environment and poverty reduction. According to the manager, Ivan Božić, the co-operative has 18 members and was founded last year starting operations in January 2012, employing 10 staff, of whom 3 are disabled, 2 are national minorities and 2 are longterm unemployed elderly individuals.
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Recycling and redesign Co-operative members collect and recycle old clothing, textiles and footwear. I then redesigns or produces new products such as leather slippers, handbags, aprons, laptop bags and mobile phone cases, to name a few. Some products are sold in two Čakovec-based stores with others being sold throughout Croatia and globally. “Our sales have been more successful in Čakovec, as it is a familiar environment. Unfortu-
nately, we are not currently in the position to afford on-going and more effective advertising and as a result we have not been recognised further afield. Second-hand shops, both in Croatia and globally, are extremely popular; however our capacities are currently insufficient to meet all necessary standards”, stated Božić. The idea originated from the understanding that textiles and textile waste rank amongst major environmental pollutants. It takes
Some clothing items decompose over hundreds of years hundreds of years for some clothing to decompose, whilst some fabric dyes contain heavy metals. Textiles are insufficiently recycled, with clothing quickly being discarded and production constantly increasing. Cotton products devastate agricultural land and watercourses (22.5% of all insecticides and 10% of all pesticides are used in cotton farming). Božić highlighted that the production of one cotton T-shirt requires the use of 150 grams of pesticides, to name only several adverse environmental impacts and it is of fundamental importance to raise the awareness of the public to these issues. (J.F.)
runoslav Šebeković, owner of the micro-company, S Solum GB, hhas recently l GB tl launched Etržnica. The idea behind the online purchase of natural healthy products provided by small local producers originated from the desire to connect small farmers and end buyers, and to provide direct market access of products. Etržnica allows the direct purchase of fresh local healthy and entirely natural products whose prices, delivery and terms, are determined solely by producers. “My principal target was to connect domestic producers and buyers and provide safe, simple and rapid purchase of products”, stated Šebeković. In addition, high margins and other expenditure for small producers when opting for retail chains can be avoided. Thus, a wide crosssection of top quality products that have not been recognised by the wider market are usually sold locally.
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From field to table “Our main aim is to present the products we sell. Producers have the opportunity to fully and directly show their products, whilst buyers can access producer profiles and a clear overview of the route “from field to table”. We introduce buyers to the total
production process – from harvesting to production methods and processing to the final product, ready for delivery”, highlighted Šebeković. Over 30 producers throughout Croatia are shown on www.etrznica.hr. Šebeković also pointed out the fact that there is an increasing number of producers interested in co-operating. As a result, buyers will soon be provided with a large range of products such as fresh fruit and vegetables, honey, olive and pumpkin oil, top quality wines, a wide variety of natural juices, tea blends and homemade jams to name a few, by a large number of producers.
Our main aim is to fully present the products we sell In addition to product presentation and direct sales, Etržnica provides a daily update of products, as well as products having an eco or other similar label, highlights of high demand products, with buyers able to rank and mark products, as well as follow their order via an application. (J.F.)
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CROATIAN FOREIGN CURRENCY MARKET Currency
AUD CAD JPY CHF GBP USD EUR Source: HNB
Kuna exchange mid-rate
EUR
7.57
6,034076 5,864940 7,310739 6,246139 9,417100 5,841807 7,553456 WEEK OCTOBER 27, 2012
USD
6.25
7.55
5.82
6.24
7.54
5.80
6.23
7.53
5.78
6.22
5.76 22.10. 23.10. 24.10. 25.10. 26.10.
6.21 22.10. 23.10. 24.10. 25.10. 26.10.
::: news
Inflation a surprise We anticipate 3% average rate of inflation in 2013
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6.26
5.84
PBZ WEEKLY ANALYSIS
report from the Central Bureau for Statistics on retail price movements in September revealed surprising, but expected data regarding a 5% annual rate of growth. An increased rate of inflation is the result of higher food prices due to an increased VAT rate, seasonal conditions (drought), higher food prices on global markets, and increased administratively regulated prices of electricity, gas and petrol. Year-on-year, higher food prices contributed to inflation by 1.6% , electricity 1%, gas 0.8% and petrol 0.5%. The annual average rate of inflation in September reached 2.9% in line with this year’s estimated average inflation rate of around 3.2%, says Ana Lokin, PBZ analyst. Even though the
CHF
7.56
7.52 22.10. 23.10. 24.10. 25.10. 26.10.
5.86
forthcoming 30% increase in the price of heating should not have a significant effect to rate movements considering its low weighting, prices of food and oil on the global markets in the third quarter registered different trends, and it is difficult to anticipate their movements by the end of the year, but negative trends are definitely pronounced. Food prices jump The index of HWWI (Hamburg Institute of International Economics) shows that food prices in the third quarter were on average around 13% higher in relation to the first and second quarters. Oil prices fell from the level reached at the beginning of the year, and compared with the first quarter
were 10% lower during the second and third quarters. In 2013, we anticipate an average inflation rate of around 3%, as
Brodomerkur revenue decreases Brodomerkur generated €88 million in revenue over the last three quarters. Profit before tax stood at €106,500, and gross profit was €36,300. Revenue decreased by 3% over the same period in 2011, according to the financial statement released by the Zagreb Stock Exchange. Nevertheless, revenue from its strategic partnership has remained unchanged in relation to the same period last year. Hypo Bank Eco-housing loans Hypo Alpe-Adria-Bank has expanded its product range with Eco-housing loans, intended for the purchase or renovation of property, the construction of lowenergy housing, as well as site purchase, and the purchase of equipment to improve energy efficiency. The green loans are adapted to the requirements of small and medium-sized entrepreneurs, for financing of solar systems for producing electricity and thermal energy, purchase of property or low-energy construction, as well as improvement of energy efficiency in commercial buildings. Saponia increases revenue
PBZ analysts anticipate an average rate of inflation of around 3% we expect local demand will not contribute to price increases, but rather higher energy prices (basis effect during one part of the year) and VAT (zero rate will be abolished) as well as food and petrol prices. The potential risk of higher inflation will be caused by the possible harmonisation of energy prices as well as volatile movements of food and petrol prices, concludes Ana Lokin.
The total revenue of Saponia Osijek, the leading Croatian producer of powder and liquid detergents and toiletries, stood at €64 million for the first nine months in 2012, which indicates 10.6% growth over the same period last year, according to the report released by the Zagreb Stock Exchange. Sales revenue came in at €62 million, showing growth of 10.1%.
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Privredni vjesnik Year V No 219
VALAMAR GROUP BUSINESS RESULTS
A decade of successful operations Valamar is planning to invest €22.7 million in the renovation of its facilities in 2013, with the largest investment value of around €8 million allocated for the renovation of Valamar Sanfior Hotel and the Rabac-based Appartments Lanterna Sanja Plješa alamar, one of the largest tourism groups in Croatia, has almost doubled its nett operating income during the last 10 years. In 2003, its nett operating income stood at slightly below €66.7 million, whereas during the first nine months in 2012
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Overnight stays of British tourists soared by 48% it reached €123 million, 12% up over last year. Moreover, Valamar Group has seen over 4 million overnight stays for the first time in its history. The recorded
4.75 million overnight stays indicated an 8% increase compared with the same period of 2011. Excellent results “Our excellent results are due to our continuous focus on enhancing the quality of our services, as well as a consequence of our carefully planned distribution of sales channels, effective income management and targeted advertising, which we believe is fundamental. In addition, we invest considerably in staff training “, stated Peter Fuchs, Board President of Valamar Hotels and Resorts. The excellent results were also a consequence of favourable weather, and as a result overnight stays in 9 Valamar campsites op-
Politin to become a naturist camping resort Valamar will be investing also in Camping Krk, an eco-friendly family camping resort, near the town of Krk. The investment is related to the renovation of the ex-naturist camping site formerly Politin, now called Camping Krk. The camping resort will become a naturist camp following renovation. erating under the brand ‘Camping on the Adriatic’ saw an increase of 11% over last year. Fuchs highlighted that Poreč and Dubrovnik, two crucial Valamar-branded destinations, recorded a substantial increase in overnight stays from all key markets. Overnight stays by British tourists soared 48% in the Dubrovnik-based Valamar facilities, whilst overnight stays of Swedish tourists increased by 18%, those of French rose by 11% and German by 10%. Moreover,
the number of visits by domestic visitors in Valamar has also seen a significant increase, since the number of overnight stays rose by 17% compared with last year. Fuchs announced an investment of some €22.7million for renovation of facilities in 2013, with the largest investment of some €8 million would be allocated for the renovation of the two-star Valamar Sanfior Hotel and the Rabac-based Appartments Lanterna.
DONKEY BREEDING
Milk for health and profit It has long been known that donkey milk is healthy, and the Ciganović family is one of rare breeders of donkeys for milk Probably people have always been aware of its benefits but the habit of drinking donkey milk is now almost forgotten. This makes the donkey farm of Katarina and Neven Ciganović, who produce donkey milk even more unusual. They started several years ago, moving to a house with poultry, a goat, a sheep and in the beginning, one donkey. “Donkey milk is very healthy and I used to give to my children. I noticed their immunity improved, and they did not fall ill so often. I gave milk to my relatives and neighbours, and then started to consider turning it into a business”, Ciganović says.
The family soon set up a real farm and invested over €12,000 to purchase some twenty donkeys. It seems they enjoy a good life on the farm: they are fed reg-
ularly, have shelter and company as well as freedom to roam freely. “I did not want to make a typical barn, so the roof is now closed on three sides, and the donkeys can eat and drink when they want to”, Ciganović says. Although the price of one litre of donkey milk is around €53 in Croatia, the family currently does not earn huge amounts. Donkeys give very little milk, and have to be milked every few hours to obtain only a few decilitres. In order to increase their income, they started to produce cosmetic products. More specifically, they produce creams for removing redness, acne, dermatitis that are also excellent as baby skin care
products. During three years of their work they managed to create a circle of satisfied customers. Cleopatra’s bath In addition to mare’s milk, donkey milk is the most similar to human milk, with a low level of lipids and high levels of lactose. It contains many fat acids as well as vitamins A, C, E and F. Thus, they have a beneficial effect to dry skin and wrinkles, tightening the skin, regenerating it and preventing ageing. The Egyptian queen, Cleopatra, was aware of that and that is why she bathed in milk every day, even though her servants had to milk 700 donkey every day for one bath.