PV International 0147

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 / 4th April / 2011Year IV / No 0147www.privredni.hr

20102010

Adriatic Sea Defence & Aerospace Exhibition, SplitIn addition to guns and assault rifles, Croatia can offer armoured fighting vehiclesDEFENCE INDUSTRY

PAGE 5

Ivo Usmiani, director, Jadran Galenski laboratorijWe avoided the global economic crisis by turning towards Russia and the CISINTERVIEW

PAGES 2-3

Still going downhillThis year RBA analysts anticipate a 2.3% increase in industrial production over last yearINDUSTRY

PAGE 7

Krešimir Sočković

The Trusted Brands award, presented by Reader’s Digest to Croatia for

the fifth consecutive year, awarded 21 local and 13 for-eign brands from 35 products. The survey was conducted in co-operation with the British agency Wyman Dillon, with over 33,000 respondents. The questions regarding trade marks are open-type questions, allow-ing respondents to nominate any brand they wish. The survey

also measures the level of trust in various institutions and pro-fessions. It has been conducted in Croatia since 2007. This year, additional attention was paid to public attitude towards the EU and euro. According to the survey results, Europeans have the greatest trust in brands which won in over seven coun-tries: Nivea (skin care cosmet-ics), Nokia (mobile phones), Visa (credit card), Canon (video and photo cameras), HP/HP Compaq (PC’s), Ariel (laundry

detergent), Kellogg’s (break-fast cereal), Nestlé (breakfast cereal) and Miele (home appli-ances).

Croatian favouritesIn various categories from dairy and canned meat prod-ucts to coffee, chocolate and water, the winners were Du-kat, Gavrilović, Franck, Kraš, Kutjevo, Cedevita; Lino in the baby food category, Jana (wa-ter), Pliva (in the category of analgesics) and Belupo Ne-

ofen (pain relief medicine). Some brands have won for the fifth year: local brands of Dukat, Franck, Konzum, Ina, Croatia osiguranje, Generaltur-ist, Gavrilović, Kraš and Cede-vita and 10 foreign ones: Nivea, Opel, Gorenje, Hewlett Pack-ard, Nokia, TCom, Sony, Ameri-can Express, Ariel and Lesnina.

Environment above politicsAlthough Croatians prefer lo-cal brands, they do not feel so strongly about their institutions

and politicians. However, trust in institutions is low in all 16 Eu-ropean countries. Croatians have the greatest trust in marriage (81%) and TV and radio (58%). More than half of Croatians have trust in the internet, euro, insti-tutions, companies and environ-mental activities and the least trust in their government (7%) and legal system (14%). According to EU euro countries, 51% have trust in this currency with Croatians scoring even higher (52%).

READER’S DIGEST TRUSTED BRANDS

Croatians trust local brands and the euroNine local brands have been considered the most trustworthy for five years

Croatians have the least trust in their government

and legal system

2

Igor Vukić

Jadran Galenski Laborator-ij (JGL) is a fast-growing pharmaceutical company

founded in 1991 in Rijeka. As a result of systematic investment into the know-how of almost 400 employees, today the com-pany has over 300 products, con-stantly developing and expanding its portfolio to existing and new markets. Since its beginning, JGL has grown at an incredible pace and exclusively organically. Total income, from €0.20 mil-lion in 1991, rocketed to €87.12 million in 2010. Average growth was 25% per annum during that period. Sales income from foreign markets grew accordingly, to an average rate of 40%, comprising 65% of total sales of JGL in 2010. Quite early, JGL became aware

that in addition to being small, the Croatian market was also under heavy pressure from continuous price cuts and severe competi-tion. It became clear that com-pany efforts should be oriented towards exports. An opportunity was recognised in the East, espe-cially Russia since they perceive Croatia as a western producer, and the fact the market was not as highly competitive as it is today. The achieved export growth of 50% last year shows that enter-ing these markets was crucial for JGL, and €41 million in exports puts JGL in 70th position on the scale of Croatian exporters. Af-

ter 10 years of being present on these markets, JGL still has high growth potential. In Moscow and other big cities it has 120 employ-ees, in the Ukraine 45, and 26 in Kazakhstan. Products are regis-tered and sold in Georgia and Az-erbaijan, actually on all markets of the ex Soviet Union. JGL’s di-rector, Ivo Usmiani described for Privredni vjesnik how JGL oper-ates on eastern markets.

What is the sales value in Kazakhstan and which products does it concern? - In Kazakhstan we mainly sell products from the category of

Privredni vjesnikYear IV No 0147

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]

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TRANSLATIONLučana [email protected] [email protected]

INTERNATIONAL OPERATIONS Ray [email protected]

HANS CHRISTIAN VALLANT, BOARD PRESIDENT,

RAIFFEISEN BANK HOUSING SAVINGS

There are ample house savings banks in Croatia

The system of house savings became popular in Croatia over 10 years ago, offering

the public favourable, long-term and stable financing for housing purposes. The model of housing savings was imported from Cen-tral European countries such as Austria and Germany. House savings banks deal ex-clusively with collecting house savings and placing the funds in housing loans. The difference in housing savings models depends on the legislation and mentality of the country, with significant discrepancies. Research shows that Croats still lack the habit of long-term saving, which is why the absence of the culture of sav-ing still poses a great obstacle to creating a brighter future. Huge differences in public attitudes and relations towards the economic crisis has also been recently vis-ible. In Austria, for example, it led to a greater number of sav-ings depositors, who recognised personal saving as the basis of security. The situation is different

in Croatia. A slight 6% growth in savings was registered last year, but also a considerable downfall in total lending (15%). On the other side of the Atlantic, after the collapse of several American banks within the banking system, the public realised the model of house savings, although con-servative and dull, is definitely worth attention since it cannot be jeopardised by dubious investing. Furthermore, it reflects positively on the local economy and micro-economy. This situation was also undoubtedly influenced by the re-cent report from the World Bank, which evaluated house saving as the most secure and optimal sav-ings model. There are currently five such banks in Croatia and this is completely sufficient for our market. Notwithstanding, even though more than 600,000 people deposit money in house

savings banks, only a few use the opportunity to take out favour-able housing loans. This has been recently recognised by West Eu-ropean countries and the state en-courages housing savings with in-creased state subsidies, which are higher in all countries compared with Croatia. This fact is a clear indicator of authorities ignorance on how to motivate the public to spend, which would ultimately benefit the society in general.

INTERVIEW: IVO USMIANI, DIRECTOR, JADRAN GALEN

We avoided the globRussia and the ComOur story starts in 1998. We entered these markets, Russiaoffices. It is evident today this was a crucial strategic and vis

JGL income in 2010

€87 millio(

The World Bank evaluated house savings

as the most secure and optimal saving model

It is not enough to have a quality product with

competitive prices - investment comes first

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www.privredni.hrBusiness & Finance Weekly

prescription-free drugs, since the demand is quite high. They include Aqua Maris, Dramina, Vagilak, Rozamet, Folacin, Feminal and others. However, this does not mean we will not enter - in the future - the area of prescription medicines and attempt to compete with hospi-tal medicine lists, subsidised by the state budget. Market growth is exceptional, up to 61%. Dur-ing the crisis years (2008-2010), our achievements were be-low planned, ranging between €600,000 in 2007 and almost €2 million in 2010. The plan for 2011 was extremely ambitious,

but achievable according to our anticipations. It was planned to hit €2.9 million.

Is the product structure the same as in the case of former sales in that country or have new products been introduced? - JGL has a similar product struc-ture for all CIS markets, con-sidering the uneven doctrine of treatment and consumer habits. Still, we pay a lot of attention to those minute, but quite important differences between individual countries.

How do you sell your products: through representatives, part-nership with local companies or directly to whole-sale com-panies?- JGL established its representa-tive office in 2006 in Almati as soon as it recognised the poten-tial of the Kazakhstan market. Our buyers there are big na-tional dispensary chemists with whom we have direct contracts. The distribution of goods is of quality and we have not encoun-tered any problems with pay-ment. Prices are one of the high-est, higher than in the Ukraine and Russia. Our representative office is focused on marketing and sales activities. We have 26 workers employed in marketing, and try to create recognisability in accordance with our corpora-tive values.

Does the state support your ef-forts, for example through sub-sidising marketing or fair exhi-bitions or helping to obtain the necessary documentation? - Unfortunately, even though we are the biggest exporter to Rus-sia, support is lacking and we

rely on ourselves and our judge-ments.

In your experience, what could the state do to help ex-porters to these markets? - The state should help us in way that ensures exports to CIS countries from potential payment and other risks. For example, we could harmonise marketing cam-paigns. Our Aqua Maris cam-paign promotes the Adriatic as the purest and most beautiful sea in the world!

What are the opportuni-ties for other Croatian com-panies on these markets? - Opportunities are equal for all. Our story started in 1998. We en-tered these markets, Russia in par-ticular, in the midst of the crisis, when most companies started to retreat, shutting down their repre-sentative offices. It is evident to-day this was a crucial strategic and visionary move which bore fruit. JGL’s export share in our sales structure exceeds 60%, whereas the export growth rate is almost

50%. Unfortunately, it is far more difficult to enter such markets. It is almost impossible since the competition is vast. In Russia, for example, there are around 800 registered local and foreign pro-ducers, and JGL ranks 50 accord-ing to sales. Our blockbuster Aqua Maris ranks 30 of 6,000 to 7,000 products, and takes first position in its segment. These positions

have been achieved through long and dedicated work and they must be maintained year by year.

What is the reputation of Croatian companies in these countries? Are we exploiting enough of their market poten-tial in terms of exports? - In general, Croatia enjoys a good reputation as do its products, the roots of which go back to the pe-riod of Yugoslavia. Market poten-tial is underexploited due to great obstacles. Legislation is complex and the registration process is time-consuming. It is necessary to accept that investment is high, which presents an obstacle. It is understandable that it is not enough to have quality and a competitive product. Investment comes first. We survived the first few invest-ment years. We were patient and we build our reputation on the market, primarily by investing into staff, which paid off in numerous ways. We used the same experi-ence for other markets.

NSKI LABORATORIJ

bal economic crisis by turning towards mmonwealth of Independent States

in particular, in the midst of the crisis, when most companies started to retreat, shutting down their representative sionary move which bore fruit

export earnings

€41 million(exports in the sales structure

over 60%(

Even though we are the biggest exporter to Russia support is lacking and we rely on ourselves

3

After success in Russia, the Ukra-ine, Kazakhstan and other CIS co-untries, JGL started to consider the possibility to enter US mar-ket. They established our repre-sentative office in January and are intensively considering the markets of Brazil, China and In-dia. According to JGL, these mar-kets are risky, since they are on opposite sides of the world, with a completely different business culture, but internationalisation is their fundamental challenge. JGL is preparing by investing a large percentage of income in re-search and development.

USA and BRIC countries

INTERVIEW

4 Privredni vjesnikYear IV No 0147

Real GDP falls by 1.2%Croatian gross domestic product (GDP) registered real GDP drop of 1.2% in 2010 over 2009, accord-ing to data provided by the Cen-tral Bureau for Statistics (CBS). In the last quarter of 2010 GDP decreased by 0.6% over 2009. These are slightly less intense fall-off rates in relation to the first estimate published by the CBS over a month ago, consider-ing the first estimate for the last quarter of 2010 pointed to a 0.7% drop, and 1.4% drop for the en-tire 2010.

€0.52 billion of profit for banks in 2010In 2010, banks in Croatia record-ed €0.52 billion in post-tax profit, 14.6% more in relation to the year before, according to data from the unrevised report published by the Croatian National Bank on Thursday. Total interest income decreased to €2.9 billion (some 7% down). Interest expenses reg-istered a more accelerated fall, from €1.82 billion to €1.40 bil-lion, almost 23%. This was fully

expected considering the plum-met in interest rates on savings in 2010. During 2010, nett non-interest income decreased from €0.79 billion to €0.65 billion. To-tal reserves stood at €0.49 billion in 2001, which is €8.2 million up year-on-year.

Census beginsA census covering the pub-lic, households and apartments started on Friday 1 April. This is the most extensive research in Croatia, and will be carried out between April1 and April 28. It will cost €23.96 million, and pre-liminary results will be revealed no later than June 30 of this year. The census is conducted regular-ly every ten years.

::: news

Jasminka Filipas

As a result of the continu-ous development of new technology in the design

and production of systems for equipping optician’s shops with anti-theft security systems, the company Presenta Nova from Zagreb has succeeded in selling its products in over 60 countries worldwide in less than nine years. The company project Increased competitiveness of exporting products in the European Un-ion has succeeded in obtaining a grant of €88,000 through the former pre-accession programme Phare 2006. “It is a large amount for a small company such as ours and we used it for further prod-uct development and advertising on foreign markets. In addition, the tender procedure in which we participated assisted us in gaining experience with Pre-accession funds which we are currently us-ing for higher quality applications for funds from the Ministry of Economy, Labour and Entrepre-neurship,” stated Iva Pintur, Head of Marketing. She added that they had to have a symbol stating Fi-nanced from EU funds along with every project, which increased a positive impact on potential cli-ents and that was important as the main competitors are from Ger-many and the Netherlands.

New jobsThe process for obtaining funds is rather complex. They learned about the tender via an email from HBOR and they found further details at an informative work-shop at the Ministry of Economy, Labour and Entrepreneurship. The project was written in co-operation with consultants to the company founded in Croatia by a Slovenian citizen with broad experience in applying for Pre-accession funds. According the

company, that co-operation was of significant importance to the company since prior to it, as op-posed to the Slovenians, they had had no such experience. Consult-ants ensure all forms are com-pleted and pay attention to other particularities relevant for project assessment. The company has to decide what activities will be in-cluded in the project as well as how they are to be performed once the project has started. The company experienced a slight de-crease in revenue in 2009, whilst in 2010, which was the most dif-ficult year for many companies, it had revenue growth of 15%. “The economic crisis resulted in indecisiveness from small buy-ers and we focused on creating more quality relationships with the larger buyers. Small buyers in Germany were given the op-portunity to lease-purchase,” explained Iva Pintur adding that in Germany there is a company Presenta Nova GmbH, which distributes their products in Ger-

many. They have achieved sig-nificant success there and have signed a three year fixed term contract with one of the largest optical chains in Germany, Apol-lo Optik. The two companies are establishing a partnership rela-tionship and the German partner always brings new orders. They have not laid off staff and there have been no salary cuts. This year they are planning to hire a mechanical engineer, a designer and several workers in produc-tion.

North American and Middle East marketsThe company exports mainly to Germany, France, Spain, Great Britain and Italy. They are plan-ning to promote their presence in North America and the Middle East. The have engaged an agent in Canada for market research and setting up the business and it has already made its first de-livery for Walmart. “Our success is based on innovation, modern design and excellent quality. We pay special attention to intel-lectual property as our greatest source of growth. We have a pat-

ent at European level (an Ameri-can patent procedure is ongoing), six protected useful models and 20 protected industrial features at the European level. Growth is hindered by the unrealistic Kuna/Euro exchange rate. Early EU ac-cession would enable our further expansion into new markets, the employment of new staff and in-crease sales revenue”, concluded Iva Pintur.

PRESENTA NOVA EXPORTS TO OVER 60 COUNTRIES

15% revenue growth in 2010 in the midst of a most serious crisisHaving witnessed indecisiveness from small buyers the company focused on larger buyers using Pre-accession funds for international promotion

Early EU accession would enable our further expansion into new markets

www.privredni.hrBusiness & Finance Weekly

Jozo Vrdoljak

The International Military Industry Fair, Adriatic Sea Defence & Aerospace

Exhibition (ASDA) was recent-ly held in Split, Croatia for the first time. 138 exhibitors from 23 countries attended with 54 exhibitors from Croatia. The or-ganiser was the American com-pany TNT Productions Inc.Opening the fair, Prime Minis-ter, Jadranka Kosor, expressed her belief that the fair would be-come a tradition. “An important aspect of the Adriatic Sea De-fence & Aerospace Exhibition is its regional focus. ASDA will give a significant contribution to regional dialogue and become part of the mosaic for promoting the regional stability and safe-ty”, she pointed out.Davor Božinović, Minister of Defence, emphasised Croatian co-operation with the most important armed forces in the world, as a member of NATO. “They are our allies and con-currently the largest producers of military hardware and weap-ons which gives room for the Croatian special-purpose indus-try”, he stated.

Economic impact of armed forcesNadan Vidošević, President of the Croatian Chamber of Economy, stressed the extreme impor-tance of the event for the Croatian econ-omy and reminded that in the past sev-eral companies had been founded, which currently have brands recognised globally. Vidošević particularly stressed the importance of the armed forces

and their interconnection with other areas of industry.“The Association of Croatian Military Hardware was found-ed in 2003 within the Croatian Chamber of Economy. It has been a most successful econom-ic segment as Croatia has not succeeded in obtaining world-wide recognition for its brands

in any other economic field”, stated Vidošević.Croatia exports of military hard-ware and weapons are organ-ised by mediation of the Agency Alan. According to Ivica Nekić, Director, total exports by the Croatian military industry stood at USD120 million, which was some 7% up over the previous year.“We succeeded in producing a gun that is competitive on the world market. To date some 13 million items have been export-ed to the US. We have also pro-duced an assault rifle of top qual-ity. We have managed to pro-duce one of t h e

best combat helmets in the world, which is currently sold globally. We also export patrol ships and a range of other mili-tary hardware and weapons. It is important to stress that the military industry is not subsi-dised and involves several other producers from other economic segments”, explained Nekić.

Together on third marketsA memorandum of understand-ing between Đuro Đaković and Patria Land Systems companies was signed at ASDA 2011, as these two companies will, in the future, penetrate third mar-kets together. The Ministry of Defence has appointed Đuro Đaković as its partner and there-fore every tender winner for the production of armoured fighting vehicles was obliged to produce its vehicles in co-operation with that company. That obligation applied also to Patria Land Sys-tems which won the tender. Bar-tul Jerković, Đuro Đaković Spe-cial Vehicles Director revealed

that he anticipates international market penetration as a result of co-operation with Patria. “It has been our objective since in-ception. The conclusion of the contract on the supply to our Ministry of Defence is ongoing with respect to the delivery of 126 armoured fighting vehicles with a value of €171 million. We are definitely competitive on world markets and have suf-ficient capacity for the sale of several types of armoured fight-ing vehicles abroad”, pointed out Jerković.

5

Croatian military industry export value USD120

million in 2010

138 exhibitors from 23 countries at Adriatic Sea Defence & Aerospace Exhibition, Split

In addition to guns and assault rifles, Croatia can offer armoured fighting vehiclesMilitary hardware is not only weapons - Croatian companies also specialise in high quality combat helmets and patrol ships

Geofoto also participated at ASDA, as one of the most succe-ssful Croatian companies in the world. It presented its ‘geoinfor-mation’ system which has been developed for the Croatian Mini-stry of Defence. “We have made two types of military maps of Cro-atia, in full compliance with NATO standards. This type of system has no boundaries and we are an-ticipating orders beyond the regi-on”, pointed out Mladen Rapaić, Geofoto Assistant Director.

Geofoto military maps

President of mber ssed por-for on-ded ev-had ich ave sed vićed of es

t h e

g a the 13

ort-ro-

ual-ro-

tems which won the tender. Bartul Jerković, Đuro Đaković Spe-cial Vehicles Director revealed

Weonficsevingou


The agency Marko Bubalo was founded in 2008 and its first project was the

branding of Cubus watches. In addition to branding the agency is currently dealing with graphic and web design, online promo-tion and guerrilla marketing. Bruno Smiljan, executive direc-tor, stated that the Cubus project was extremely extensive. It re-quired a variety experts and its objective was to present and po-sition the brand on the market. “Originally, the project faced scepticism from many part-ners and subcontractors, some even suggesting the branding of watches as ‘foreign’. Eventu-ally, persistence paid off and, as a result, we have an identifiable and strong Croatian brand,” he added. Marketing in Croatia is still in a stage of development, according to Smiljan and, consequently, the agency was originally faced with many companies whose owners were reluctant to invest in mar-keting, considering it an unnec-essary expense. “Nevertheless, local entrepreneurs’ awareness of the necessity to create an identifi-able brand is deepening”.

Delicacy on a plastic plateAccording to Smiljan, local products are normally criticised for their bad design. This is a consequence of the fact that entrepreneurs are often econo-mising on designer solutions,

often resulting in products with functional excellence which, because of their obsolete pack-aging or design, no one would purchase. “It is as if you served an exquisite delicacy on a plas-tic plate”, explained Smiljan picturesquely.The current economic situation has also had a great impact on this prosperous field of activ-ity. Nevertheless, the recession is merely cyclical, it comes and goes, leaving the market only to those who have invested into,

promoted and developed their brands. “The recession impact-ed on the critical importance of communicative solutions which result in sales increase and client revenue both currently and in the future.”The agency relies exclusively on financing from its own sources as this is the best motivation and incentive to always do the best. “State-owned institutions could definitely promote training for entrepreneurs and support for investment into marketing. We hope the importance of branding, design and product promotion will be recognised as critical ele-ments for the success of a compa-ny,” concluded Smiljan. (B.O.)

WE PRESENTMARKO BUBALO, CREATIVE SOLUTIONS, ZAGREB

Happy birthday - be a shepherd for a day

Design and marketing as keys to successIn addition to branding the agency is currently dealing with graphic and web design, online promotion and guerrilla marketing

Creating a unique T-shirt in co-operation with a well-known local designer

Robert Sever, a course in graf-fiti drawing with the best known Croatian artist, Slaven Lunar Kosanović, learning to dance at the Lana Jurčević dance studio or being introduced to the basics of oenology and cooking with Rene Bakalović, are only some of over 150 interesting gifts offered by the gift portal Pok-loniMe.hr. Additionally, these web pages feature gifts called Rent-a-sheep or A shepherd for a day for anyone wishing to be-come a shepherd. The Croatian public is particularly sensitised to the profession of shepherd as a result of the employment policy and Prime Minister Ko-sor’s personal intervention in banning the import of shepherds from neighbouring countries. People receiving these gifts will have the opportunity to socialise with a shepherd and goats by the river Zrmanja, milk them, learn to make cheese and enjoy the ex-quisite local food and nature, ex-plained Kata Barišić, co-owner of the portal, which is actually the first Croatian web shop for experiential and personalised gifts for all occasions.

First hand experienceIt has to be emphasised that this project did not come into ex-istence overnight. It appeared in February as a result of two

years overall preparation. “Pok-loniMe is a story which origi-nated in the faith that a happy life is not measured merely by bank account figures but rather a sum of experiences assisting us in learning something new about the world and ourselves. A detailed analysis of both for-eign and local market, consumer behaviour research, forthcom-ing trends and local suppliers throughout Croatian regions, were the first steps for initiat-ing the project on a sound foot-ing. Subsequently, there was the entertaining part to it – flying, cooking, instrument playing, climbing trees, adrenaline driv-ing, massage and similar expe-riences. In compliance with the

high quality and initial stand-ards of suppliers, the overall prospectus on the web pages needed to be tested and ana-lysed at all stages. This was fol-lowed by high quality options to make sure shoppers identify us as a venue with the best and the highest quality choices for all the occasions,” explained Kata Barišić. “The web shop offers also personalised chocolates and we are anticipating person-alised wines, sparkling wines and spirits”. (B.O.)

The web shop also offers personalised chocolates

Entrepreneurs are often economising on designer

solutions

These web pages feature specialised gifts such as “Rent-a-sheep” or “Be a shepherd for a day”

POKLONIME.HR, ZAGREB

www.privredni.hrBusiness & Finance Weekly 7CROATIAN FOREIGN CURRENCY MARKET

Source: HNB WEEK APRIL 2, 2011

Currency Kuna exchange mid-rate

AUD 5,509669

CAD 5,516668

JPY 6,660416

CHF 5,678773

GBP 8,814812

USD 5,565746

EUR 7,382405

Global Finance: PBZ – the best bank in CroatiaThe reputable financial maga-zine Global Finance has named Privredna banka Zagreb as the best Croatian bank in the catego-ry World’s Best Emerging Market Banks 2011 in Central & Eastern Europe. Global Finance has been selecting top banking perform-ers in emerging markets for 18 years. The report covers Asia, the Middle East and Africa, Latin America, and Central and Eastern Europe. Criteria for the selection of winners included financial in-dicators, strategic relations, cus-tomer service, competitive pric-ing and innovative products.

Zaba to no longer use Moody’s servicesZagrebačka banka (ZABA) will no longer use Moody’s rating serv-ices, according to Zaba’s state-ment. This decision was brought as the result of harmonisation of the Bank’s needs with a number of ratings and rationalisation. Zaba will continue with the direct rating from Standard&Poor’s and Fitch Ratings. In December 2010, Moody’s published their report on Zagrebačka banka, conclud-ing the annual rating cycle, with the following ratings:- financial power rating rank D+, global local currency deposit rating rank Baa2, foreign currency deposit rating rank Ba1. In their report, Moody’s underline that Zaba’s Outlook Sta-ble Rating was confirmed prior to the withdrawal of rating activities.

::: news

In concordance with the an-ticipations of RBA analysts, negative trends in industrial

production continued during Feb-ruary, which shows that recovery in foreign demand for Croatian products, fails to motivate the re-covery of the local real sector. In fact, since the Croatian economy is not overly export-oriented, the positive effects of recovery in more developed countries are limited. Simultaneously, local demand remains relatively weak, influenced by negative trends on the labour market and a high lev-el of consumer pessimism. Ac-cording to data provided by the Central Bureau for Statistics, in-dustrial production dropped 4.1% compared with February 2010. In the categories of the main in-dustrial groups (MIG), the pro-duction of long-life products for mass consumption continues to

register the highest annual down-fall. Its share in total production is relatively small and decreased by 25%. Notwithstanding, all other MIG categories registered a downfall on a year-on-year basis, except for intermediary products.

Downfall In terms of the national classi-fication of activities (NCA), all three main areas are in decline year-on-year. Mining and exca-vation as well as electric energy supply dropped 6.5%, and the processing industry 3.2% year-on-year. On a monthly level, sea-sonally adjusted data point to the growth of industrial production (+1.9%). In addition to interme-diary products, this was contrib-uted by the production of long-life and short-life products for mass consumption. Even though the negative trend of industrial

product supplies was interrupted in January after 19 months over 2010, supplies dropped again

7.5% in February. This year, we expect industrial production to increase 2.3% over 2010, mainly due to the influence of the base effect and foreign demand. Fur-thermore, the long-term and con-siderable downfall of industrial products supply point to the con-clusion that supplies are prob-ably almost entirely exhausted. Positive movements will be more intensive in the second half of the year when local demand starts to recover, conclude RBA analysts. (V.A.)

STILL GOING DOWNHILL

Industrial products supplies dropped 7.5%

in February

Industrial production Industrial production reduces by 4.1%reduces by 4.1%This year RBA analysts anticipate a 2.3% increase in industrial production over last year

28.3. 29.3. 30.3. 31.3. 1.4.

7.386

7.384

7.382

7.380

7.378

7.376

EUR 5.28

5.26

5.24

5.22

5.20

5.18

USD 5.72

5.70

5.68

5.66

5.64

5.62

CHF

28.3. 29.3. 30.3. 31.3. 1.4. 28.3. 29.3. 30.3. 31.3. 1.4.


::: news

More intensified promotion of CroatiaRecently, Minister of Tourism Damir Bajs and ECTAA presi-dent Irena Gueorguieva signed an agreement on marketing co-operation between the Croatian Tourism Association and the Eu-ropean Travel Agents’ and Tour Operators’ Association (ECTAA), for €50,000. The co-operation will last one year, until March 31, 2012. The agreement provides for the improved tourism promotion of Croatia, stronger competitive-ness in relation to other Mediter-

ranean countries and promotes Croatia as an ECTAA preferred destination of the year.

Summer flight schedule for Zadar AirportZadar Airport introduced a new flight schedule with the arrival of the “summer” time. As in the case of last year, low-budget air-lines Ryanair and Germanwings will have the greatest number of flights. Zadar - London flights will be five times and to Brussels four times each week. Further-more, Zadar - Dublin, Düsseldorf,

Frankfurt, Oslo and Stockholm flights are also planned. Last year, 275,000 passengers passed through Zadar Airport, and the number is expected to increase between 20% and 28% this year.

Winners of the Best Customer Service AwardRecently, the best companies of the award programme Best in Customer Service Award for 2010 were announced. The winners were AH Servis (auto-mobile industry), Aon Hrvatska (consulting), DHL International Hrvatska (postal and courier mail services), Hilton Imperial Dubrovnik (hotels), Holcim Hr-vatska (construction), and Inter-national Kindergarten Horizons in the category of small-sized companies.

Jozo Vrdoljak

Nautical tourism in Croatia has been record-ing constant growth.

Thus, in 2010 there were 58,394 registrations of foreign yachts, growth of some 2%, whilst the

number of visitors renting saw a 3.2% increase. “This year there are no alterations to regulations concerning nautical tourism and no new fee increases in nautical

tourism regulated by the state,” pointed out Mario Babić, State Secretary in the Ministry of Sea, Transport and In-frastructure, at a meeting on preparations for this year tourist season.In order to simplify the adminis-trative procedures, boat owners will be able to register the stay of visitors online via the e-Nau-tics system rather than in tourist boards as in the past. “It certainly is a big step forward over last year when tourist boards had to em-ploy additional personnel to deal with this task. Two years ago tour-ist registrations saw utter chaos.

On-line reg-

istrations for the nautical sector have significantly simplified the overall process,” pointed out Ivo-na Smoljić from Marina Kaštela.The possibility of registration of foreign yachts directly by ma-rinas and is anticipated in 2012, which is a further improvement of the system, as to date it has been done mostly by harbour master offices.

Anticipation of a better seasonThe Marina Association at the Croatian Chamber of Economy (HGK) has particularly wel-comed the decision to prepare a ruling to simplify registration for the temporary stay of for-eigners, which would enable a longer than 90-day stay to crew members of foreign mega-yachts as well as the longer stay of such vessels within Croatian marinas and shipyards. The Board Presi-dent of ACI and the President of the Marina Association, Anto

Vio l ić , anticipates

an even better sea-son in 2011 than 2010,

which was excellent.“According to recent bookings results and feedback from fairs, ACI could see a 10% more suc-cessful season than 2010. I am relaxed about this, since yachtsmen have recognised our investment into the largest Croatian marina chain and the level of interest in our services. We are anticipating an overall successful season as yachts-men have identified our part of the Adriatic as one of the most attractive destinations”, Violić pointed out.He warmly welcomes the intro-duction of simplified adminis-trative procedures in business, emphasising that it is a common wish of all those involved in nautical tourism. “In my opin-ion, several other issues could be dealt with and the respective Ministry has shown, with its lat-est measures, to be on the right path to tackling most hurdles which are slowing down the de-velopment of the nautical sec-tor”, concluded Violić.

Nautical tourism

Sailing made easierSimplified procedures for the registration of visiting vessels

58,394 foreign yachts registered in 2010

Whilst there has been a reduction in the number of boats sold, a slight uptick in demand for nautical services shows ACI are on the right track. “The number of inquiries from both foreign and local boat owners is ri-sing constantly” stated Serđo Dvornik, Head of After Sales Support and Services for Croatia for leading naval architects such as Mochi, Ferretti Yachts, Bertram, Dehler, Hanse and others. “I would welcome compa-ny initiatives such as NCP from Šibenik, who have been constantly inve-sting into infrastructure equipment and into the training of quality staff. ACI attempts to follow these trends are evident with the purchase of a 130 tonne trawler lift in ACI Komolac Marina, whose launch is anticipa-ted soon. Simplified administration will certainly result in strengthening of services offer in nautical tourism”, pointed out Dvornik.

Strengthening services

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PV International 0147

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