PV International 0136

S U P P O R T E D B Y T H E C R O A T I A N C H A M B E R O F E C O N O M Y

pvpvinternationalinternationalCroatian Business & Finance WeeklyEstablished in 1953Monday / 17th January / 2011Year IV / No 0136www.privredni.hr

20102010

TRADE TRENDS IN 2010

Exports grow but imports trend upwardsImport/export ratio for the first 11 months of 2010 at a relatively low average year-on-year level of 58.8%

Stabilisation rather than anti-recession measures undertakenEconomy needs much more time to overcome the crisisDOING BUSINESS IN CROATIA 2009

PAGE 4-5

Daily shortage of medicineIn addition to shortages chemists are concerned by low compensation and of new legislationCHEMISTS

PAGE 2-3

Mirko Tunjić, Director, Split EHN, member of Spanish Acciona EnergiaEnergy independence and export a possibilityINTERVIEW

PAGE 8

Igor Vukić

The second half of 2010 saw continued growth in exports, yet with signs

of resumed upward trend in im-ports. According to the Croatian Bureau of Statistics data, for the first 11 months of 2010 to-tal Croatian exports amounted to €8.09 billion, some 16.6% more than in the same period in 2009. Total imports amounted to

€13.74 billion, 2.6% less than in 2009. Thus, the export/import ra-tio remained at a comparatively low year-on-year average level of 58.8%. The highest export/im-port ratio was seen in May 2010, standing at 65.6% but decreased to an average 53.3% in July and August. According to the Croatian National Bank analysis,

the trend of reducing imports, first recorded back in 2008, slowly petered out. Stagnating exports were recorded between July and September 2010, nev-ertheless exports (irrespective of shipping and oil) were notice-ably higher than at the same time in 2009.

Several sectors recoverThe most significant recovery in exports was in medical and phar-maceutical products, artificial fertilizers, electrical machinery, appliances and equipment. There were scarcely any economic seg-ments posting negative move-ments and the intensity of their year-on-year decrease was imper-ceptible. The most significant de-crease was recorded in various fi-nal products and electricity export.After slight growth in the second quarter, positive trends in imports (irrespective of shipping and oil) were noted, gaining strength be-tween July and September. Quar-terly growth levels came in at 3.1%. The import upswing was most prominent with engines, equipment and some chemical products, particularly organic chemical products and artificial

fertilizers. However, imports re-corded a year-on-year decrease in numerous economic segments, with the most prominent being in-dustrial machinery for general use and in specific machinery for par-ticular industrial branches. An im-port reduction was also apparent in energy products, natural and in-dustrial gas and electrical power.The moving trend of both exports and imports remained remark-ably stable throughout 2010, as was pointed out by the Croatian

Chamber of Economy analysts in the January edition of Economic movements. A slight dynamic in export growth can still be record-ed, with a corresponding dynam-ic of import slowdown. Thus, due to exports growing by 16.6% and imports decreasing by 2.6% the trade deficit decreased by 21.2% with respect to the same period of 2009.

Imports recorded a year-on-year decrease in numerous economic

segments, with the most prominent being industrial machinery for general use

EXPORTSIndex

2010./2009.IMPORTS

Index 2010./2009.

Shipping 8091 168,7 2301 80,1

Refining 6111 138,1 4481 138,2

Electrical goods 4475 99,9 4633 99

Chemical products 4304 141,6 9229 119,2

Clothing 2373 97,9 2890 92,1

Pharmaceutical products 2135 134,4 3976 102

Wood processing 2044 110,6 1186 34,8

Total 57.713 119,1 81.717 95,9

Import/export data for 11 months of 2010. (in kuna millions)

Source: CSO

2 Privredni vjesnikYear IV No 0136

IMPRESSUM:

Privredni vjesnikKačićeva 910000 Zagreb+385 1 [email protected]

www.privredni-vjesnik.hr/subscription

FOR PUBLISHERNikola Baučić+385 1 [email protected]

EDITOR IN CHIEFDarko Buković+385 1 [email protected]

EXECUTIVE EDITORSAndrea Marić[email protected] Antonić[email protected]

IMC MANAGERDea Olup +385 1 [email protected]

TRANSLATIONLučana [email protected] [email protected]

INTERNATIONAL OPERATIONS Ray [email protected]

Jasminka Filipas

According to the president of the Croatian Cham-ber of Chemists, Mate

Portolan, during 2009 the chem-ist market shrank 4%. On the other hand, reviewing the first nine months of 2010, there are no signs of either a decrease or increase. The biggest fall was observed in the area of non-prescription medicine, which is logical due to the crisis and the fall in public purchasing power. Since the beginning of 2009, the Croatian Institute for Health In-surance (HZZO) has paid chem-ists within a deadline of 180 or 190 days. Furthermore, after a long year of crisis and prob-lems, in 2009 and 2010 HZZO planned in the clause regard-ing medicine with prescrip-tion financing in the budget, totalling €0.41 billion in 2009 and €0.43 in 2010, which will provide more stable payment. The planned finance also corresponds to the real consumption of on-prescription medicine. For 2010, it was request-ed in the contract that the payment deadline be 180 rather than 120 days. “We ac-cepted this, since we feel more secure and regular pay-ments are better than faster but irregular ones, with outstand-ing debts of over 250 days. At the same time, payment for chemists’ services was separated from the purchase value. The service aspect

is paid within 120 days,” points out Portolan. He ventured that a big problem for chemists is the low level of compensation for dispensing on-prescription medicines. Its aver-age value amounts to 9%. Chem-ists are paid a fixed compensa-tion for each prescription, which is roughly €1.00 on average. This compensation is amongst the lowest in Europe, where margins range between 25% and 30%. At

ENTONI SOŠIĆ, KOZMO BOARD PRESIDENT

Drug store market expansionThe Kozmo example, with its growth rate of 30% and opening twice as many sales outlets as its competitors last year, clearly illustrates the real possibility of mar-ket expansion despite the economic crisis

Croatia, with its 200 drug stores is apparently lag-ging behind the Western

countries if compared with its neighbouring countries of the European Union, for example Austria with more than 1,000 drug stores. However, consider-ing the fact that drug stores in Croatia have been present for less than ten years and that their market share of about 40% of cosmetics and similar products has seen continuous growth, it is obvious that Croatian buyers are becoming increasingly aware of drug store shopping advantages over shopping in large chain stores and hypermarkets.Buyers can satisfy their needs for household articles, ranging from food, household paraphernalia, clothing to footwear in chain stores in one place and with greater ease. On the other hand, shopping in drug stores provides

the buyer with a different expe-rience. The range of products typical of drug stores is both broader and more specialised at the same time, thus enabling buyers to identify their favourite products more easily. There are differences between chain store and drug store shopping and both have their adherents in Croatia, notwithstanding the fact that some of their range is similar or identical.Consequently, there definitely is room for further drug store mar-ket expansion, and when consid-ering the example of Kozmo with its growth rate of 30% and open-ing twice as many sales outlets as its competitors in 2010, the conclusion is that market expan-sion is a real possibility despite the economic crisis can easily be reached.“We believe that the key to our success is market expansion as well as buyer availability and accessibility throughout Croatia. Our branch offices are located both in bigger towns and region-al centres and in smaller towns throughout Croatia, as well as on the islands.Buyers opt for drug stores rather than chain stores as they are fully aware of their needs and mainly look for a specific product or a group of products. Therefore, sales assistants must be profes-sional, trained and well-informed about products in order to pro-vide specific information, often even advice to buyers and pro-vide them with the highest pos-sible value for money.

Chemists

Daily shortage of aIn addition to a shortage of medicines they are also worried by

urope, where margins between 25% and 30%. At

PrPP ivredni vjesnYear IV No 013

mists

www.privredni.hrBusiness & Finance Weekly 3

earned by chemists from prescriptions and medicine sales income range in European countries

65% of income 85-90%( (

at least a dozen types of medicinelow-level compensation on prescription medicines, underhand competition and uncertainty in terms of new legislation

the same time, wholesale mar-gins of large chemists is 8.5%. HZZO’s share of the income of chemists is only 25% nett profit on average. Income from sales by hand is 35%-40%, and ex-ceptional income is 35% (cassa sconti, producers’ and suppliers’ discounts and allowances). In other words, from its main activi-ty of giving out prescription med-icine and selling medicine, chem-ists achieve 65% of income. This

amount ranges between 85% and 90% in European countries (ex-ceptional income comprises only 10%-15% of chemist income).

Shortage of medicinesChemists face many problems, and one of them is daily shortage of at least a dozen types of medi-cine, through no fault of theirs, since they depend on producers and suppliers. “We are the last in the chain, and when there is a shortage of medicine, we waste time calling everyone asking to provide us with medicine for ur-gent cases,” said one dispensing

chemist who wished to be anony-mous. The shortage might be caused due to the lack of ingredi-ents for a certain medicine, or be-cause more medicine is produced on the same production line, which producers are not inclined to admit, or when medicine gets stuck in the Agency for medicine and medical products. Accord-ing to medical legislation, each series of produced and imported ready-made medicine is subject

to regular inspection, as well as each series whether it is an ingre-dient in the producer’s original packaging or wholesalers pack-aging it personally. This means that inspection must be passed by wholesalers, who distribute imported ready-made medicine, and by importers of ready-made medicine. They are obliged to subject to inspection each series of imported ready-made medi-cines although there is an excep-tion. If a series had already been inspected in the EU, the Agency must receive a certificate cover-ing the performed quality check

of the producer for each series of the imported ready-made medi-cine as evidence.

Underhand competitionSpecial inspection applies to the first series of each ready-made medicine after obtaining ap-proval for distribution, in addi-tion to each series or ready-made medicine from blood or plasma and immunological medicine as well as other medicines approved by the Minister on the Agency

proposal. The Agency is obliged to perform an in-spection with-in 30 days from the receiving the sample. In practice, this means for lo-cal producers that inspection is performed for each first series

after regis- tration or renewal. It is thereby evident that deliv-ery could get stuck for objective reasons at many levels, but this is not comforting for patients in need of medicine. Most are quite frustrated, since they are forced to pay mandatory and supplementa-ry health insurance and in the end they do get their medicine. Another big problem is the un-derhand competition of special stores for orthopaedic aids. Por-tolan says that HZZO performs strict inspections of orthopaedic aids at chemists, but the same is not performed in special stores. He ventures there is constant pressure on the Chamber due to the chemist network; more pre-cisely, the criteria that chem-ists need to meet in order to ensure equal distribution and availability cancel each other out. “The number of chemists needs to be balanced with fi-

nancial and staffing possibili-ties. However, an insufficient number of dispensing chem-ists is another problem. This is only one aspect of the problem, whilst problems relating to the profession are an entirely dif-ferent story. I will only mention the policy of producers, accord-ing to which more medicine is registered as non-prescription medicine. They can be dis-

pensed outside of chemists’, jeopardising patient safety. We are supporting the implemen-tation of a greater number of OTC medicines to be dispensed only by dispensing chemists. Our business is jeopardised by low compensation and the sale of medicine and other produc-ers external to chemists,” noted Portolan. He ventures to explain details in his correspondence with the Ministry of Health, in terms of the new medicine law. In May 2009, the Chamber sub-mitted to the Ministry its bill and in April the guidelines on its drafting. The goal of the new law is to organise chemists on ethical principles and safety as well as to turn the industry into a health activity, ensure quality and expert work as well as the training of dispensing chemists. The Chamber bill is based on European legislation, applied in most developed countries. They are not satisfied with the Min-istry reply and negotiations are still in progress.

eve 65%

ty of givicine andi t chieists achie

p med-medicine, chem-

f income. This

p oducts. Accoring to medical legislation, eacseries of produced and importeready-made medicine is subjec

Chemists are paid a fixed compensation for each prescription, which is roughly €1.00 on average


M. Sc Economist Jasna Belošević Matić, Director Centre for Macroeconomic Analysis, Croatian Chamber of Economy

The intensity of the global economic crisis in 2009 can be most clearly il-

lustrated by the fact of global economic activity downturn for the first time in fifty years. 2008 saw a considerable slowdown in economic activity in Croatia and 2009 there was the first fall in GDP (-5.8%) for nine years. Any economic activity slowdown is on the one hand a reflection of imbalances in the world market and, on the other, of longstanding structural problems within the Croatian economy.Under significantly altered and intensified conditions on both the domestic and international markets, coupled with the lack of personal capital and general financial indiscipline, illiquid-ity in the real sector grew and by the end of the year it reached its peak over the last nine years. Entrepreneurs’ financial results were also considerably reduced with respect to the previous year, so in that context losses increased by one-third and achieved profits the lowest in the last eight years.We in Croatia have not reacted either adequately or in a timely manner, except for monetary policy, to the deepening of re-cessionary movements. In the deep recession in 2009 fiscal adjustment was insufficient. The measures undertaken within that context were more stabilisation measures than anti-recession measures.Considering the fact that eco-nomic policy did not react ad-equately or on time to the ap-pearance of the global economic crisis and that we did not succeed in solving structural economic

problems, the question as to how to deal with the serious problem of a high level of foreign debt remains for the future and in the cutthroat conditions of capital markets. The crisis in Croatia can easily change in shape from the assumed ‘V’ to ‘U’ or possi-bly ‘W’. Therefore, the Croatian economy will, in such circum-stances, need much more time to overcome the crisis and to achieve sustainable development than will be necessary for econ-omies with a macroeconomic policy moving in the direction of production, exports and increas-ing employment.

Enterpreneurs financial resultsIncreasingly unfavourable con-ditions on both domestic and foreign market throughout 2009 have made a visible impact on

the financial results of Croatian entrepreneurs. Their financial re-sults were considerably inferior if compared with the previous year. There was an increase in the actual number of entrepre-neurs (+1.9 %) and a decrease in numbers employed (-1.0%). Reductions in total revenue (-10.6%), expenditure (-8.9%), profit (-20.6%), long term asset investment (-13.3%) were seen together with an increase in loss-es (+29.8%). These figures relate to 91,320 entrepreneurs employ-ing 889,396 staff whose aver-age salary amounted to €634.80, some 1.8% lower than the year-on-year average.Total revenue, amounting to €84.02 billion, shows a steeper decrease trend with respect to expenditure - some 1.6 % higher than total expenditure (in 2008 the difference was 3.5%). Total

expenditure amounted to €82.73 billion.Only four of 20 fields of activity recorded any growth in total rev-enue with respect to 2008 (health care and social welfare 11.9%, public administration, defence, compulsory social insurance 10.8%, electricity, gas, steam and air-conditioning supply 7.3% and real estate business 0.6%).A faster drop in total revenue with respect to total expenses reduced profits ( the lowest for the last 8 years) which amount-ed to €3.62 billion, while losses amounted to €3.01 billion (an increase of 29.8%). The re-

DOING BUSINESS IN CROATIA 2009

Stabilisation rather thameasures undertakenCroatian economy will need much more time under current circumstances to overcome the crisis and achieve sustain

The crisis in Croatia can easily change in shape

from the assumed ‘V’ to ‘U’ or possibly ‘W’


an anti-recession

nable development

EXPORTS/IMPORTS BY SELECTED INDUSTRIES

Source: DZS, HGK

0

2.000

4.000

6.000

8.000

10.000

12.000

2008. 2009. 2008. 2009.

INDUSTRIAL PRODUCTION BY SELECTED INDUSTRIES

- index 2005 =100 -

Source: Eurostat, DZS, HGK

60,0

70,0

80,0

90,0

100,0

110,0

120,0

130,0

140,0

2006. 2007. 2008. 2009.

CONSOLIDATED ENTREPRENEURIAL FINANCIAL RESULTS

Source FINA, HGK

-5.135- 5.261

-1 .477

-5 .440 -6 .721-838

3.219

10 .765

7.6589.762

17 .47219 .885

24 .679

16 .314

4.397

-10.000-5.000

05.000

10.00015.00020.00025.00030.000

OUTSTANDING PAYMENTS 2003 - 2009

ISource FINA, HGK

0

5

10

15

20

25

0

5.000

10.000

15.000

20.000

25.000

30.000

XII 2003 .X II 2004 .X II 2005 .X II 2006 .X II 2007 .X II 2008 .X II 2009 .

sult of this dynamic of move-ments to profit and loss was a significant fall in consolidated financial result (-73.0%) with respect to the previous year, and amounted to HRK 4.4 billion. Profit growth was recorded in five fields of activity, yet their share in the profit structure was a meagre 5.6%. Concurrently, profit falls were recorded in five of the most significant fields of activity with respect to 2008, and their share in the structure amounted to about 79% - meat processing indus-try -12.3% having the highest share in the structure of 23.1%; trade -19.7% (share of 21.5 %) ICT with -29.7% (share of 13.3 %), professional, scientific and technical activities with -12.0% (share of 11.8%) and the con-struction industry with -17.4% (share of 9.1%).

Loss intensification was identi-fied in 15 fields of activity con-sisting of manufacturing industry (growth of 23.3% and share of 30.1%), trade (growth of 86.1% and share of 19.3%) and the construction industry (growth of 44.8% and share of 9.5%) whilst other fields of activity had, on average, shares below 8.0%.A positive consolidated financial result (higher profits than losses) was achieved by 14 fields of activ-ity having a value of €0.96 billion, with the highest share (77.6%) in three fields of activity: ICT (32.7%), professional, scientific and technical activities (24.2%) and trade (20.7%). Concurrently, higher losses than profits were recorded in six fields of activ-ity with the value of about €0.36 billion, the highest share (84.8%) related to three fields of activity (hotels and restaurants at 45.6%; real estate business at 30.8% and manufacturing industry at 23.6%).Total asset value by the end of the year amounted to €149.17 bil-lion (growth of 5.9%) and in its structure long term assets had the highest share (62.6%).

Liquidity and solvencyUnfavourable liquidity move-ment trends in the real sector of the Croatian economy were pro-longed from 2008 to 2009 and the highest level of total unset-tled liabilities for 10 years was reached, standing at €3.71 bil-lion. The principal reason for this growing illiquidity is to be found primarily in the structural eco-nomic problems and the fact that the legal framework is far from adequate (for instance, bankrupt-cy proceedings are not initiated in due time and last for too long). Illiquidity causes are certainly to be looked for in general financial indiscipline, liquid fund manipu-lation and other unwholesome activities.

Food

Textiles

Wood

Chemicals

Finished metal goods

Transport equip.

Food

Textiles

Wood

Chemicals

Finished metal goods

Transport equip.

No. illiquid co’s (l)

EXPORT IMPORT

Outstanding payments (r)

kn m

illio

nkn

mill

ion

kn b

n


TOP 50 RANKINGRANK

NAMENO. EMPLOYED

TURNOVER EXPORT INCOME RANK PROFIT AFTER TAX RANK ASSET VALUE RANK

20

09

.

20

08

.

20

07

.

1 1 1 INA, D.D. 10.061 19.735.301.802 5.831.970.767 1 0 307 28.064.289.614 2

2 2 2 KONZUM, D.D. 12.053 12.662.943.455 142.988.011 94 341.666.818 7 7.877.591.773 11

3 3 3 HEP D.D. 433 12.195.368.169 51.923.167 142 299.556.628 8 27.122.231.483 3

4 4 4 HT D.D. 4.894 5.450.332.040 360.107.282 31 896.079.447 2 11.018.449.905 6

5 6 7 ZAGREBAČKI HOLDING D.O.O. 12.108 4.529.798.649 6.377.080 210 22.574.890 101 21.987.285.886 4

6 5 6 T-MOBILE HRVATSKA D.O.O. 1.068 4.447.101.299 351.442.179 32 1.163.275.197 1 5.141.581.848 13

7 9 9 HEP-PROIZVODNJA D.O.O. 2.336 3.924.693.471 0 288 26.387.205 88 9.627.233.942 10

8 10 11HEP-OPERATOR DISTRIBUCIJSKOG SUSTAVA D.O.O.

9.553 3.653.149.367 0 289 0 377 14.886.872.542 5

9 8 8 VIPNET D.O.O. 1.031 3.611.547.857 437.575.870 28 612.089.376 3 2.900.811.435 25

10 7 10 OMV HRVATSKA D.O.O. 69 3.119.968.312 264.625.386 52 15.148.795 134 1.157.171.565 78

11 13 15 PLIVA HRVATSKA D.O.O. 2.395 2.882.538.266 2.021.901.704 3 51.927.469 48 4.243.947.443 16

12 14 14 VINDIJA D.D. VARAŽDIN 1.078 2.837.082.512 141.898.641 97 50.919.833 51 1.970.371.069 38

13 20 16 TISAK D.D. 3.877 2.812.212.207 711.510 258 13.587.767 143 959.266.191 100

14 27 43 ULJANIK BRODOGRADILIŠTE D. D. 2.079 2.479.197.474 2.126.200.061 2 17.621.530 120 1.994.834.678 36

15 25 41 PLODINE D.D. 2.546 2.466.458.790 0 290 32.182.556 73 2.268.761.347 33

16 24 31 DALEKOVOD, D.D. 1.494 2.414.215.686 614.549.022 16 89.247.794 25 2.165.641.161 35

17 17 17 METRO CASH & CARRY, D.O.O. 1.269 2.385.001.668 21.068.500 178 91.769.845 23 975.939.384 98

18 16 23 MERCATOR - H D.O.O. 3.023 2.278.568.419 2.125.612 236 0 362 3.431.754.543 21

19 22 19 H Š D.O.O. 9.172 2.219.311.866 99.593.264 110 11.094.511 158 2.317.699.082 32

20 11 21 AGROKOR - TRGOVINA D.D. 75 2.140.323.158 184.502.957 73 13.327.946 147 1.258.272.436 71

21 19 13 PODRAVKA D.D. 3.840 2.087.095.787 695.105.763 14 0 312 3.120.506.136 23

22 36 29 KAUFLAND HRVATSKA K.D. 1.967 2.045.324.803 0 291 0 378 1.759.595.027 47

23 34 27 MEDIKA, D.D. 371 1.996.206.981 1.616.678 242 15.486.468 132 1.598.866.030 53

24 PRIRODNI PLIN D.O.O. 29 1.993.982.828 3.484.792 229 0 360 645.889.905 130

25 31 39 PHOENIX FARMACIJA D.D. 301 1.969.799.002 200.590 275 0 373 1.188.999.005 74

26 12 22 PETROKEMIJA, D.D. 2.371 1.962.520.869 872.129.477 9 0 309 1.521.091.266 57

27 26 20 BRODOSPLIT-BRODOGRADILIŠTE D.O.O. 2.866 1.846.187.501 1.222.146.308 6 0 308 1.483.236.025 58

28 30 25 TDR D. O. O. 543 1.813.451.019 441.895.283 27 471.642.096 6 2.816.102.564 27

29 38 42 ORBICO D.O.O. 439 1.798.065.657 11.347.274 196 18.368.802 119 479.471.584 165

30 37 35 DUKAT D.D. 1.430 1.781.177.095 203.308.821 66 139.156.269 13 1.387.045.972 65

31 15 55 ENI CROATIA B.V. - HRVATSKA PODRUŽNICA 4 1.739.085.455 1.519.422.208 4 587.266.156 4 4.071.673.523 17

32 51 38 HP D.D. 11.393 1.693.404.873 34.744.787 154 53.285.241 47 1.361.311.781 66

33 28 32 M SAN GRUPA D.D. 120 1.658.123.773 472.315.451 24 19.760.455 115 843.082.430 107

34 67 107 LIDL HRVATSKA D.O.O. K.D. 1.146 1.649.111.379 0 292 0 379 2.386.015.054 31

35 46 50 MEDICAL INTERTRADE D.O.O. 429 1.627.563.317 5.686.659 217 31.816.633 74 1.059.430.010 87

36 18 12 P.Z. AUTO D.O.O. 135 1.600.424.159 0 293 14.732.332 136 433.435.170 178

37 43 37 BILLA, D.O.O. 1.812 1.588.887.939 0 294 0 380 575.842.760 141

38 56 72 DM-DROGERIE MARKT D.O.O. 982 1.569.414.408 20.674.651 180 109.100.086 19 416.987.522 186

39 52 70 PIK VRBOVEC-MESNA INDUSTRIJA D.D. 1.604 1.532.486.717 99.162.155 111 89.237.235 26 925.966.287 103

40 32 30 ERICSSON NIKOLA TESLA D.D. 1.661 1.479.228.989 918.317.579 8 128.447.089 14 1.552.442.614 55

41 50 47 HRT 3.630 1.463.763.764 17.367.244 189 0 352 1.135.517.726 79

42 42 36 HŽ INFRASTRUKTURA D.O.O. 7.187 1.446.606.184 0 295 469.031 281 10.530.603.273 8

43 40 46 CROATIA AIRLINES D.D. 1.132 1.439.481.934 821.145.442 11 0 310 1.704.707.925 49

44 39 48 EURO-PETROL D.O.O. 405 1.419.950.331 227.817 273 0 372 627.697.674 134

45 44 45 CROSCO D.O.O. 2.171 1.415.022.441 699.032.743 13 80.708.031 31 1.880.077.973 41

46 54 64 KERUM D.O.O. 1.104 1.371.996.177 0 296 12.678.664 150 1.398.744.381 63

47 35 28 GET NEKRETNINE D.D. 1.310 1.352.487.401 883.467 255 0 366 782.648.324 112

48 58 57 HRVATSKE AUTOCESTE D.O.O. 2.860 1.349.521.535 0 297 0 381 44.996.745.654 1

49 85 92KONČAR-ENERGETSKI TRANSFORMATORI D.O.O.

471 1.329.108.649 1.294.810.646 5 193.622.994 10 1.059.681.194 86

50 59 65 ŽITO D.O.O. 437 1.312.250.091 186.491.800 71 0 326 1.355.251.853 67


Corporate rankings for 20097x10

TURNOVER (000 kn)

1 INA, D.D. 19.735.301

2 KONZUM, D.D. 12.662.943

3 HEP D.D. 12.195.368

4 HT D.D. 5.450.332

5 ZAGREBAČKI HOLDING D.O.O. 4.529.798

6 T-MOBILE HRVATSKA D.O.O. 4.447.101

7 HEP-PROIZVODNJA D.O.O. 3.924.693

8 HEP-OPERATOR DISTRIBUCIJSKOG SUSTAVA D.O.O. 3.653.149

9 VIPNET D.O.O. 3.611.547

10 OMV HRVATSKA D.O.O. 3.119.968

PROFIT (000 kn)


2 HT D.D. 896.079

3 VIPNET D.O.O. 612.089

4 ENI CROATIA B.V. - HRVATSKA PODRUŽNICA 587.266

5 ADRIS GRUPA D. D. 506.324

6 TDR D. O. O. 471.642

7 KONZUM, D.D. 341.666

8 HEP D.D. 299.556

9 ZAGREBAČKA PIVOVARA D.D. 196.406

10 KONČAR-ENERGETSKI TRANSFORMATORI D.O.O. 193.622

EXPORTS (000 kn)

1 INA, D.D. 5.831.970

2 ULJANIK BRODOGRADILIŠTE D. D. 2.126.200

3 PLIVA HRVATSKA D.O.O. 2.021.901

4 ENI CROATIA B.V. - HRVATSKA PODRUŽNICA 1.519.422

5 KONČAR-ENERGETSKI TRANSFORMATORI D.O.O. 1.294.810

6 BRODOSPLIT-BRODOGRADILIŠTE D.O.O. 1.222.146

7 BOXMARK LEATHER D.O.O. 1.144.862

8 ERICSSON NIKOLA TESLA D.D. 918.317

9 PETROKEMIJA, D.D. 872.129

10 TANKERSKA PLOVIDBA D.D. 841.140

ASSETS (000 kn)

1 HRVATSKE AUTOCESTE D.O.O. 44.996.745

2 INA, D.D. 28.064.289

3 HEP D.D. 27.122.231


5 HEP-OPERATOR DISTRIBUCIJSKOG SUSTAVA D.O.O. 14.886.872

6 HT D.D. 11.018.449

7 AGROKOR D.D. 10.788.334

8 HŽ INFRASTRUKTURA D.O.O. 10.530.603

9 AUTOCESTA RIJEKA-ZAGREB, D.D. 10.467.028

10 HEP-PROIZVODNJA D.O.O. 9.627.233

CAPITAL & RESERVES (000 kn)

1 HRVATSKE AUTOCESTE D.O.O. 23.858.115

2 HEP D.D. 18.880.005

3 INA, D.D. 10.751.459

4 HT D.D. 9.498.199


6 HŽ INFRASTRUKTURA D.O.O. 5.496.875

7 ADRIS GRUPA D. D. 5.011.538


9 ENI CROATIA B.V. - HRVATSKA PODRUŽNICA 3.897.421

10 PLIVA HRVATSKA D.O.O. 3.650.653

IMPORTS (000 kn)

1 HEP D.D. 3.153.855

2 INA, D.D. 3.124.073

3 BAUMAX ZAGREB D.O.O. 2.128.629

4 KONZUM, D.D. 1.498.859

5 ULJANIK BRODOGRADILIŠTE D. D. 1.287.450

6 M SAN GRUPA D.D. 1.138.336

7 P.Z. AUTO D.O.O. 1.123.026

8 PLIVA HRVATSKA D.O.O. 945.343

9 MEDICAL INTERTRADE D.O.O. 918.356

10 PHOENIX FARMACIJA D.D. 910.163

No. EMPLOYEES1 ZAGREBAČKI HOLDING D.O.O. 12.108

2 KONZUM, D.D. 12.053

3 HP D.D. 11.393

4 INA, D.D. 10.061

5 HEP-OPERATOR DISTRIBUCIJSKOG SUSTAVA D.O.O. 9.553

6 H Š D.O.O. 9.172

7 HŽ INFRASTRUKTURA D.O.O. 7.187

8 HT D.D. 4.894

9 FINA 4.372

10 TISAK D.D. 3.877

Source: Fina, HGK


Dr. Žarko Primorac

The announcement indicat-ing that Croatian GDP increased by a minimal

0.2% during the third quarter of 2010, caused slight euphoria within government circles. Not-withstanding, economists are cautious in their evaluations of the long-term effects of modest economic growth. Most agree that final estimates should be put on hold, especially since move-ments in industrial production, investment, public consumption and employment still have not changed course.

Only 436 large companiesIn an attempt to briefly sum-marise expectations for 2011, this article focuses on a brief analysis of companies. This is extremely important since this sector is the only one with the power to change negative trends in the grim Croatian economic reality. Furthermore, I would like

to point out that deeper analy-ses of companies are quite rare in Croatian expert publications. Most publications and economic analysts are directed toward mac-roeconomic movements, whilst relatively little attention is paid to the economic processes within companies.There is no doubt that macroeco-nomic policies define the frame-work within which companies operate and they have great in-fluence on their business and be-haviour. However, there is some-thing autonomous going on in-side companies. Their strategies, politics of development, growth, restructuring, organisation and management are crucial to the success of the entire economy. The success of economic poli-cies is measured by the degree to which companies, as the most important segment of the real sector, accept them, adjust their strategies accordingly and im-plement them in their plans and activities.

The Croatian sector of companies (excluding banks) includes around 90,000 companies, which employ roughly 900,000 workers or 60% of total employees. The entrepre-neurial structure mostly consists of SME’s (some 99.5%), whilst only 436 are large companies. Total income of all Croatian com-panies amounted €83.97 billion in 2009, of which 33% covers the group of the biggest 100. Only 63 companies achieved total income of over €0.14 billion, and only four of those exceed total income of €1 billion. Overall, it is safe to say the Croatian entrepreneur-ial structure consists of a large number of SME’s and an extreme-ly small number of large compa-nies. Moreover, economic power is relatively modest in comparison with competitive countries.The important feature of Croatian companies is their relatively low capital base. Capital and reserves of the entire sector comprise 40%, and liabilities 56% of total balance, which points to modest

financial strength. Furthermore, the capital base is mainly repre-sented by infrastructure in public companies, whose market value is questionable, and the coeffi-cient of efficiency is relatively low. The weakening of the capital strength of Croatian companies is also contributed by a low level of accumulation. Nett profit of all companies amounted to €0.60 billion or 0.7% of total income in 2009, whilst losses in that same year were four times greater than nett profits. Unfortunately, move-ments during the first nine months of 2010 are even more negative.There is no need to point out that an improving condition of com-panies is an important precondi-tion for the development of eco-nomic affairs in their entirety. Primarily, liquidity, which is very poor, should be improved. The number of illiquid and insolvent companies is rapidly increasing, jeopardising the functioning of the entire economic system. In September 2010, the amount of

Brief Croatian company analysis

Cautious approach in evaleconomic growthThe success of economic policies is measured by the degree in which companies, as the most important segment of


luating effects of modest

the real sector, accept them, adjust their strategies accordingly and implement them in their plans and activities

RANK NAME LOCATION EXPORTS 2009EXPORTS AS A SHARE OF INCOME (%)

1 INA, D.D. ZAGREB 5.831.970.767 29,55

2 ULJANIK BRODOGRADILIŠTE D. D. PULA 2.126.200.061 85,76

3 PLIVA HRVATSKA D.O.O. ZAGREB 2.021.901.704 70,14

4ENI CROATIA B.V. - HRVATSKA PODRUŽNICA

ZAGREB 1.519.422.208 87,37

5KONČAR-ENERGETSKI TRANSFORMATORI D.O.O.

ZAGREB-SUSEDGRAD

1.294.810.646 97,42

6 BRODOSPLIT-BRODOGRADILIŠTE D.O.O. SPLIT 1.222.146.308 66,20

7 BOXMARK LEATHER D.O.O.TRNOVEC BARTOLOVEČKI

1.144.862.985 94,05

8 ERICSSON NIKOLA TESLA D.D. ZAGREB 918.317.579 62,08

9 PETROKEMIJA, D.D. KUTINA 872.129.477 44,44

10 TANKERSKA PLOVIDBA D.D. ZADAR 841.140.710 92,33

TOP TEN CROATIAN EXPORTERS

TOP TEN CROATIAN IMPORTERS

RANK NAME LOCATION IMPORTS 2009

1 HEP D.D. ZAGREB 3.153.855.841

2 INA, D.D. ZAGREB 3.124.073.605

3 BAUMAX ZAGREB D.O.O. ZAGREB-SUSEDGRAD 2.128.629.972

4 KONZUM, D.D. ZAGREB 1.498.859.183

5 ULJANIK BRODOGRADILIŠTE D. D. PULA 1.287.450.788

6 M SAN GRUPA D.D. ZAGREB 1.138.336.858

7 P.Z. AUTO D.O.O. VELIKA GORICA 1.123.026.218

8 PLIVA HRVATSKA D.O.O. ZAGREB 945.343.836

9 MEDICAL INTERTRADE D.O.O. SVETA NEDJELJA 918.356.468

10 PHOENIX FARMACIJA D.D. ZAGREB 910.163.874

CROATIAN PROFITABILITY IN 2009. (TOP 10)

RANKRANK BY TOTAL ASSETS

NAME LOCATION PROFIT

1 6 T-MOBILE HRVATSKA D.O.O. ZAGREB 1.163.275.197

2 4 HT D.D. ZAGREB 896.079.447

3 9 VIPNET D.O.O. ZAGREB 612.089.376

4 31 ENI CROATIA B.V. - HRVATSKA PODRUŽNICA ZAGREB 587.266.156

5 100 ADRIS GRUPA D. D. ROVINJ 506.324.212

6 28 TDR D. O. O. ROVINJ 471.642.096

7 2 KONZUM, D.D. ZAGREB 341.666.818

8 3 HEP D.D. ZAGREB 299.556.628

9 95 ZAGREBAČKA PIVOVARA D.D. ZAGREB 196.406.243

10 49KONČAR-ENERGETSKI TRANSFORMATORI D.O.O.

ZAGREB-SUSEDGRAD

193.622.994

TOP 5 GROUPS

Source: Delloite

(euro million)

Rank NAMETRADING

INCOMEPROFIT ASSETS

NUMBER

EMPLOYED

1 AGROKOR GRUPA 3.607,40 32,30 3.336,80 32.709

2 INA GRUPA 2.775,80 53,70 4.115,30 16.304

3 HEP GRUPA 1.625,70 40,80 3.712,20 14.197

4 HT GRUPA 1.160,40 275,80 1.980,80 6.116

5 ZAGREBAČKI HOLDING 601,90 5,30 3.107,60 12.968

outstanding debts stood at €4.60 billion, with 31,505 companies and over 40,000 crafts not fulfill-ing their obligations. If we add to this figure the number of those who fulfil their obligations on an irregular basis, then the level of this epidemic would significantly increase. The state can do many things to solve the problem of il-liquidity, as also can banks, the courts and primarily companies.

With a little bit of good will However, for the long-term re-vitalisation of circumstances, financial stabilisation and devel-opment processes require a series of long-term measures. In the present crisis, successful compa-nies restructure faster. They focus on their core business, off-load excess property, reduce expenses and employees as well as search for new markets. This kind of re-vitalisation is a basic part of the strategy for fighting the reces-sion for many global companies. Unfortunately, management of

Croatian companies is more pes-simistic in terms of overcoming the crisis. They fear that sales would continue to fall. They feel the same in terms of financing and they are insufficiently focused on restructuring. They failed to show enough know-how and confi-dence to overcome the crisis by restructuring and searching for new business opportunities. Similarly with investment into new products and new technolo-gies. The investment volume in Croatia, even though smaller than in other surrounding coun-

tries, is not generally meagre. Notwithstanding, the problem is that a large proportion of social investment goes to infrastructural projects, necessary of course, but not of high priority in comparison with economic investment. The technological level of companies is low, and we are increasingly lagging behind in this respect. Since companies’ accumulation is low, they lack sufficient finan-cial capacity for a serious techno-logical renaissance. It would thus be necessary to create a social model through which it would be possible to implement a serious technological revitalisation. It is also worth adding that the crisis does not necessarily have to be seen as a negative process. Company management and those responsible for economic policy need to understand the impor-tance of this period and use it. Use it not only in the fight for a positive GDP growth rate, but re-structuring and the revitalisation of the economic sector.

Total income of all Croatian companies amounted €83.97 billion in 2009, of which 33% covers the group of the biggest 100


of installed power accepted by the Croatian system level of sector investment needed

600 MW € 900 million( (

Jozo Vrdoljak

EHN is a company from Split founded 9 years ago dealing with project de-

velopment in the field of renew-able energy, aiming for wind farm investment as the currently most efficient energy source in the re-newable energy sector. The com-pany is a member of the Spanish group Acciona Energia, which has to date invested €10 million in de-velopment in Croatia through EHN. Privredni vjes-nik spoke with Mirko Tunjić, the Director of EHN, about wind farm construction problems and the ad-vantages of renew-able energy sources.

Which projects are you cur-rently working on in Croatia?We are currently working on sev-eral energy sector projects. How-ever, due to a slow and complex bureaucracy, numerous projects have been halted and their finali-sation is impossible at the mo-ment. We have recently obtained the first construction permit for one project for 30 MW power located in Seget Marina. Work

on this project should start at the begin-

ning of 2011.

How much can Cro atia achi-eve?Energy sector development in Croatia has so far been of a de-claratory nature. We have not yet accepted the fact that energy sector development is of stra-tegic interest for the country. If ecological standards are to be preserved and energy independ-ence achieved, renewable energy projects should become a prior-ity. Energy equipment manu-facturing should be developed which, upon investment comple-tion in Croatia, could be exported South-East.

Why is wind farm construc-tion not a possibility for the Croatian islands?An Ordinance on Coastal Area Protection was enacted in 2004, which prohibits the building of wind farms on islands. This de-cision cannot be justified either from the energy or engineering aspects as wind farms could be the most efficient way to supply electricity to the islands. I believe

this ordinance will be altered once wind farm construc-

tion in inland areas has been completed and

once everyone has been convinced of its advantages.

What problems are investors in inland areas faced with?It illogical that energy approval can be received if the project de-velopment on a location has been completed within 36 months, as in compliance with regulations; a project can be developed in about five to six years. The necessary conditions are the procurement of an Environmental Impact Assess-ment, its analysis and estimate, all requiring a certain amount of time to be completed. The fact that everything has to be submit-ted for public hearing and inspec-tion makes it more aggravating. The procedure takes at least be-tween two and three years. Cur-rently wind farm construction in Croatia requires 60 different per-mits and consents. Thus, if you receive one document monthly, you need 60 months for the En-vironmental Impact Assessment. There are over 40 different gov-ernment bodies and management groups participating in the proc-ess of location and building per-mit grants.

How much is your group will-ing to invest?Our group is willing to invest in all the projects we have started and which we intend to start in Croatia. Thus, investment value depends on the number of projects we can secure and achieve. Croatia is restricted by its territorial and energy capac-ity, which means that our sys-tem can accept about 600MW of installed power. That would constitute about 15% of the total installed power from renewable sources. It would mean invest-ment in this sector of over €900 million.

MIRKO TUNJIĆ, DIRECTOR, SPLIT EHN, MEMBER OF SPANISH GROUP ACCIONA ENERGIA

Energy independence and energy export a real possibilityCurrently wind farm construction in Croatia requires 60 different permits. If you receive one document monthly, you need 60 months for an Environmental Impact Assessment


Jasminka Filipas

The preventive bacterio-logical inspection of food, air, water and other bever-

ages is crucial, since they are the source of all bacterial diseases. When patients come to hospital, only the consequences of insuffi-cient preventive microbiological control are solved there, which is the most expensive scenario, says Antun Kovačiček, owner of the Komed company. He explains that he became and remained the only Croatian producer of equip-ment for microbiological inspec-tion of food, drinks, and blood amongst others. Komed started as a craft business in 1987, since at that time this activity was not permitted to be performed by a privately owned company. He soon became aware that social circumstances would change, so started to prepare for

a new business approach. He developed, with colleagues, di-agnostics for microbiological inspections, since at that time all such equipment had been import-ed - as it is today.

Local is three times cheaper, but… For example, Kovačiček de-veloped Hemosept, which the

Agency for Medicine verified. This is a haemoculture for con-trolling aerobic and anaero-bic bacteria in patient blood. It costs only €4.93 per bottle, but many in the health system pre-fer imported haemocultures, which cost €13.92. Furthermore Kovačiček is most displeased with the sales of his products and disturbed by the lack of ra-

tional thinking and saving in all health care segments. He notes that he and his eight employees have for years been directing development towards the production of such diagnos-tics capabilities so that labora-tories might have a prepared basis for testing. He points out that for the past ten years he and his colleagues have been warning through seminars and assemblies that Croatia cannot remain an importer exclusively. It could actually provide qual-ity production at a regional level. “Company capacity is full and I cannot produce more than I am currently producing. This is why I have been encouraging the idea of expanding production throughout the entire country, but it seems those responsible are interested only in saving,” con-cludes Kovačiček.

KOMED

WITH LOCAL KNOW-HOW TO SAVING IN HEALTHSolutions for production expansion were offered for the entire country but those responsible are interested only in saving

According to data published by the Croatian Employment Agency, at the end of 2010 there were 319,845 registered unemployed people, 2.4% higher than in November and 9.7% higher than in December 2009. A further 6,000 to 7,000 people should be added to this figure to include those who were deleted from the register, for example, due to irregular reporting. This brings the total number of unem-ployed above that of 1999, when it stood at 321,866. In December, 19,869 people lost their jobs, but in the same period 9,334 people were employed. Al-though the December data brings little if any hope of a slight sign of optimism, the Agency states that a higher employment rate and lower unemployment are still vis-ible on a year-on-year level. Fur-

thermore, between January and December 2010, 146,627 unem-ployed people found work, 19.4% more than 2009. 141,105 people were employed under a labour contract (19.3% up over 2009), and 5,522 on the basis of other types of work (registering com-panies, crafts, work agreements). On a monthly level, the unem-ployment rate continues to fall. It stood at 9.7% in December in comparison with 21.2% in the same month of 2009. However, as with 1999, the number of peo-ple who work but do not receive regular salaries remains a highly significant 80,000. (J.F.)

Labour market

Employment statistics during 1999

Dun&Bradstreet, the world’s leading source of insight on businesses, continues to rank Croatia among mild investment risk countries in the latest issue of its periodical International Risk&Payment review cover-ing risk in 132 countries world-wide, as has been reported by Bonline, the exclusive repre-sentative of D&B for Croatia in Bosnia and Herzegovina. D&B reviews the Croatian state budget, adopted at the end of 2010, with the Croatian government plan-ning economic growth of 1.5% in 2011 and a deficit of 4.3% of GDP. Specifical-ly, the budget envisages expenditure levelling off. The largest expend-

iture is for pensions and salaries to the public sector and a borrow-ing of €2.82 billion is planned to cover the debt. The government should not face difficulties with capital market borrowing, yet both foreign and public debt in-creases, as well as a lack of fis-cal consolidation, will increase the cost of borrowing and conse-quently increase the risk aversion caused through the debtor crisis in the Eurozone.

D&B believes the budget has been highly

influenced by forthcoming elec-

tions and that the government has not

started with a more re-strictive tax policy and struc-tural reform implementation

which would improve the investment climate.

Dun&Bradstreet

Foreign debt increase an obstacle for investors


CROATIAN FOREIGN CURRENCY MARKET

Source: HNB WEEK JANUARY 15, 2010

Currency Kuna exchange mid-rate

AUD 5,478636

CAD 5,556785

JPY 6,677165

CHF 5,730152

GBP 8,766596

USD 5,532280

EUR 7,401637

10.1. 11.1. 12.1. 13.1. 14.1

7,42

7,41

7,40

7,39

7,38

7,37

EUR 5,75

5,70

5,65

5,60

5,55

5,50

USD 5,95

5,90

5,85

5,80

5,75

5,70

CHF

10.1. 11.1. 12.1. 13.1. 14.1 10.1. 11.1. 12.1. 13.1. 14.1

::: news

Illiquidity continues its gal-lop throughout Croatia with unsettled payment orders in-

creasing by €113.55 million last November, reaching its record high of €4.80 billion, as specified in the latest issue of the Croatian Chamber of Economy publica-tion Economic movements.Companies involved in commer-cial activity and whose accounts

have been blocked have shown an increase of €37.89 million, with those in the construction industry showing an increase of €22.74 million. Together these have mainly contributed to the new record level. Company debt to the state comprises 44% of the

total value of recent due payment orders covering unsettled tax and contributions, the total value of which amounted to a record €1.88 billion.

Considerable downturnConcurrently, there has been a considerable increase in the number of business entities whose accounts have been blocked: an increase of 375 among craftspeo-ple and 800 among others (which is one of the sharpest monthly rises). The number of business entities unable to settle their cur-rent liabilities has also reached a record high of 74,778. The cur-rent situation is dire when cur-rent results are compared with the pre-crisis year of 2008. The level of blocked accounts has grown by 90% or €2.27 billion, with the number of blocked busi-ness entities’ increasing by 28 % or 15,500. Due to unsettled liabilities 33,065 insolvent companies

employing 45,505 staff owed €3.96 billion in November, some €10.55 million more than in Oc-tober of the previous year and €1.15 million more than in No-vember in 2009. On a monthly basis there has been an increase of 800 company insolvencies, with the number of employees being reduced by 953.

Debt piling upConcerning private individuals, some 41,713 employing 25,473 staff had over €0.84 billion un-settled debt in November 2010, an increase of €7.53 million over October 2010. Moreover, their unsettled liabilities have increased by €0.15 billion in one year. Furthermore, the number of staff employed by private individuals decreased by 271 employees in November 2010 when compared with October of that year, although the fig-ure showed an increase of 1,204 year-on-year.

INSOLVENCY

Inglorious recordsUnsettled payment orders amounted to €4.80 billion last November, with company debt for unsettled tax and contributions standing at €1.88 billion

Croatia ranked 82 on index of economic freedomAccording to the index of eco-nomic freedom from the Herit-age Foundation and The Wall Street Journal, and published for the region by their strategic partner Adriatic Institute for Pub-lic Policy, Croatia jumped from 92nd to 82nd position globally, and from 37th to 35th in Europe. This result is still below the Eu-ropean average and three key ar-eas are still marked as repressive (property rights, freedom from corruption and labour freedom), according to the American Herit-age Foundation.

Tehnomarket for saleInvestment fund Trans Balkan Investment announced the sale of the trade chain store for electron-ics, Tehnomarket, also operating in Croatia. The Fund did not

state a price for the chain store, but it had been previously an-nounced the transaction will be concluded by October 2011.

Đakovština sold for €26 millionAt a public auction held at the commercial court in Osijek, as-sets of the defunct milling and bakery industry Đakovština d.d. in bankruptcy, were sold for €26 million. The opening bidding price was €13.7 million. Most of the assets, divided into three large technological units, were bought by the Osijek company Žito, the former lessee of Đakovština.

On a monthly basis there has been an

increase of 800 company insolvencies


The company Xella po-robeton HR promotes and sells the construction ma-

terial Ytong. Since 2004, it has been part of the international consortium Xella Baustoffe, which employs over 8,500 peo-ple. In Croatia, they employ 20 people. Robert Vujnović, director of Xella porobeton HR, points out that in addition to Ytong, their portfolio also includes renowned brands such as Silka, Multi-por, Fermacell and Aestuver. Given the conservatism of the Croatian construction market, Xella and Ytong needed to in-vest a great deal of effort to achieve quality strategy and stable growth as well as take a share of the market. Moreover, our share of the market for con-struction material was 2%-3% several years ago. Today, we have reached around 8%, which is difficult in a country with a long tradition of bricklaying. Even though it was a relatively long process, it has paid off. This is confirmed by good mar-ket position of the Ytong con-struction system and the high level of customer satisfaction. We must say we have had no complaints about our products, and every day more people are becoming open to new ideas about the Ytong material, free of

any prejudice, opines Vujnović. He ventures that this year they expect to top their previous re-sults.

Possible plant constructionDespite the decline of the con-struction sector, caused by the crisis, the situation has im-proved. After a longer wait, they are now venturing into capital projects. However, debt collec-tion difficulties and poor real-estate sales remain a problem. This causes the development of the construction industry and an exit to the crisis, to depend on certain companies’ vision and new trends in construction, which have been increasingly affecting business processes and sustainable development of companies, says Vujnović. Regarding their future activi-ties, Vujnović believes that if the Croatian market shows signs of growth, there is the possibil-ity of constructing a plant. “We have already bought land, but whether this project become a reality depends on our owner. The company attitude is that our market is presently covered by the production capacity of plants in the neighbourhood, in which substantial funds were invested with the goal of mod-ernising plants,” concludes Vujnović. (B.O.)

XELLA POROBETON HR, ZAGREB ECOLOGICAL AGRICULTURE AND BEEKEEPING FARM

Stable growth despite conservative marketEvery day more people are becoming open to new ideas about Ytong material, free of prejudice

Lovro Krnić and his fam-ily planted an ecological garden and orchard for

their personal needs some thirty years ago. They started ecologi-cal beekeeping after discovering encouragement for ecological agriculture in Croatia. “When you love your job, it is not hard to comply with regulations” ex-plained Krnić. “You must truly love ecology in order to achieve satisfactory results” Krnić point-ed out. The ecological family ag-riculture farm beekeeping busi-ness was founded in 2002 and it contains a beehive enclosure with 50 hives, a bottling plant and a honey and honey product tasting room.In order to produce ecologi-cal honey, the producer needs to meet several strict criteria. The apiary must be placed in an ecologically clean area contain-ing sufficient nectar and pollen from self-seeding flowers and herbs and untreated herbs and trees. Beehives must be made of natural materials. Disease and parasite cures and treatment are exclusively natural and involve organic acids rather than chemi-cal veterinary medicines. “Honey must be analysed on a microbio-logical basis for pesticide resi-dues, antibiotics and hard metals year-on-year. Performance con-trol is done by the supervisory

station at least twice a year with expenses being covered by bee-keepers. The company authorised for certification, in compliance with the criteria, issues an at-testation of a Croatian ecologi-cal product, which we received in 2003 and all our products are covered by it” added Krnić.

Honey extraction and wax meltingIn addition to producing between 1,500 and 1,800 kilos of honey annually, the family also produce honey with red beet and bramble juice, honey with shiitake mush-room, honey with green wheat germ, honey with cinnamon, honey with honeycomb, honey with propolis and pollen and honey with dried fruit amongst others. Their eco-honey is sold through their family farm, at fairs throughout Croatia, in health food shops in Zagreb, Šibenik, Rijeka, Vukovar and Karlovac and may also be purchased by mail order. Visitors to their farm will witness the reliability of their programme. They can taste numerous products, understand the life of bees, rest and relax in the floral environment and for-get about their daily cares. Also visitors can join a range of work-shops on honey extraction, wax melting and honey and wax pro-duction. (S.P)

Sound, sight and smell encourage relaxationVisitors can help with the extraction of honey and take part in honey and wax production


Sanja Plješa

One of the most significant winter and also a tour-ist event is the Vip Snow

Queen Trophy slalom events for both men and women, held on Sljeme, just above Zagreb. Whilst some believe this event is not cost effective through high organis-ing costs, others say it is very important since these events pro-mote Croatia to the world. Due to the economic crisis, 2011 Snow Queen and Snow King events were

tailored to fit financial possibili-ties, with €3.22 million set aside for both races. The prize fund for the best skiers was also smaller compared with 2010, at €120,000. “Given the market crash in the USA, we knew the crisis would hit Croatia, so we made cuts, which also continued this year. The Vip Snow Queen Trophy joined in the general saving. This was achieved through the understanding of most of our partners and suppliers hired to organise the race and who agreed to deliver the same qual-

ity of service as in the past, but at a reduced price,” said Martina Pintarić, head of the press centre of Vip Snow Queen Trophy.

Tourism promotionThe arrival of the world’s ski-ing elite to Sljeme is extremely important for the Zagreb tour-ist programme and its global promotion. All FIS World Cup races, as with the one on Sljeme, are used for promoting tourism destinations, which cannot be bought with money. Last year,

races on Sljeme were broadcast live and were seen by over 300 million people, according to the FIS official ratings data. For the sake of comparison, the IFM company, specialising in sport analyses, conducted a survey over ten European countries, excluding all press media, radio stations and the internet. Their results show that the amount which Zagreb would have to pay foreign broadcasting stations for advertising during the race would be €7.5 million.

VIP SNOW QUEEN TROPHY 2011

::: news

Norwegians to build residential area The Norwegian company Verd-ispar International near Klinča Sela will construct a green city, an open area with urban villas and family houses, with an abun-

dance of greenery and a business zone with eco-friendly services. The opening of the new exit route on the motorway Zagreb-Rijeka will benefit this investment.

Ikea and Tvin soon to build joint factory The furniture producer Tvin from Virovitica and Swedish Ikea were scheduled to build a factory in 2008. However, the €25 million investment was postponed. Ac-cording to Tvin, the construction was postponed as Ikea needed to fill capacity in its factories. Since the construction of an Ikea store

with a trading centre near Zagreb is starting soon, Tvin expects the pace of construction to pick up, since they believe it would be more cost efficient for Ikea to produce furniture in Croatia.

IGH builds motorway in B&HThe public company Autoceste FB&H has been allocated work on the construction of the mo-torway leg on the V.c Corridor between Tarčin and Konjic, to a consortium which includes Croatian IGH. The Consortium, headed by the IPSA Institute and

consisting of IGH Zagreb and TZI Sarajevo, should finish the main 21.5 kilometres long proj-ect of the Tarčin-Konjic, The contract is worth in the region of €1.76 million. The leg consists of 13 tunnels and 15 viaducts and is one of the most demanding on the V.c. Corridor.

Budget restrictions but still a tourism showcase €3.22 million set aside for slalom races with a prize fund for skiers reduced to €120,000

PV International 0136

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Transcript of PV International 0136