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 / 2nd May / 2011Year IV / No 0151www.privredni.hr

20102010

New jobs lead to recovery of Osijek metal industryOLT agricultural machinery worth €1.4 million will be oper-ating in Africa INDUSTRY

PAGE 4

Štefan Kassay, economic theo-

retician, SlovakiaWe should not fool ourselves and count on state help but by raising productivity INTERVIEW

PAGE 3

Foreign Direct InvestmentLess than €440 million invest-ed into Croatia in 2010 a drop of over 70% compared with last yearINVESTMENT

PAGE 5

Jasminka Filipas

Between 2008 and the end of 2010, 122,351 jobs were lost in

Croatia. Higher employ-ment can only be expect-ed when GDP growth reaches between 3% and

4%, possibly in the second half of 2013. This was stated

at the round table Movements in economy and the labour mar-

ket - analyses and predictions, organised recently by the

Croatian Employment Service. As Zrinka Živković-Matijević from Raif-feisen Consulting said, anticipated GDP growth this year, which might range between 1% and 2%, will not be enough to create new jobs; and there are numerous other nega-tive economic i n d i c a t o r s . The share of foreign debt in GDP is

close to 100%; there are no es-sential structural reforms (lower expenditure was not envisaged in the budget, even though the tax

burden remains extremely high), and the deficit will exceed the planned 5%. According to analy-ses from RBA Consulting it will reach 5.8% of GDP.

Crisis tax stimulated grey economyIn the absence of consolidation, possible only after 2012, public debt might exceed the limit of 60% of GDP in two to three years and this might have many signifi-cant consequences, pointed out Zrinka Živković-Matijević. She also repeated that public debt be-low 60% is a precondition for EU accession. Everything that has oc-curred during the past, for exam-ple the introduction of the crisis tax which decreased consumption and stimulated the grey economy; jobs were lost; exports decreased;

debt accumulated; important re-forms were lacking; demographic trends were negative; inflation grew, all this left a heavy burden for future generations. Youth is currently in the most difficult of situations since after their educa-tion they do not have time to wait for economic recovery, and thus could lead to another migration of intellectuals.

Slowing of negative trendRapid accumulation dynam-ics of debt also means a share increase of expenses for inter-est in total state consumption as well as less chance for economic growth. Nothing much should be expected from tourism, said ana-lyst of Splitska banka Zdeslav Šantić. He evaluates we can anticipate higher income from tourism (around 6%), but this will not have a great impact on GDP growth. The Croatian Em-ployment Agency analyst, Darko Oračić, claims that unemploy-ment after the tourist season will increase by 3%, and that this rise might finally halt, since GDP growth of 2% is sufficient to stop an unemployment rise, which is exactly what is anticipated for this year.

Share of gross foreign debt in GDP is close to 100%

MOVEMENTS IN ECONOMY AND LABOUR MARKET

Higher employment will have to wait until the end of 2013Young people are currently in the most aggravated circumstances. They cannot afford to wait years until the economy picks up which might force them to leave the country

2Croatian Chamber of Economy annual awardsCroatian Chamber of Economy annual awards

Svetozar Sarkanjac

If Zlatna kuna, a reputable recognition for business excellence awarded by the

Croatian Chamber of Economy, could become the permanent property of those to whom it has been awarded it several times, the Croatian Chamber of Econ-omy – County Chamber Osijek would be faced with serious problems. Award winners for this year, the most successful compa-nies in Osijek – Baranja County according to results achieved last year are as follows: large com-

panies - Saponia from Osijek; medium-sized companies Poljo-privredna zadruga Osatina and small businesses Hemco from Đakovo. These three companies have been awarded the Zlatna kuna several times in the last 10 years since the ceremony was held in Osijek.According to all official data, these companies have achieved positive long-term business re-sults in all categories (total rev-enue achieved, profitability,

number of employees and invest-ment). In addition, all fully fulfil their obligations towards sup-pliers, employees and the state. They all have one additional point in common: a continuous and annual investment into de-velopment, market research, new products and particularly pen-etrating and expanding into new markets, each in its own field of operations.

Unfair positionThese companies are faced with many hurdles in the day-to-day business and the recession has impacted on their development plans. However, they are in the position where they are able to pay staff regularly and require no deferment of state taxation. This places them in a somewhat prob-lematic position; on the one hand they adhere to all current legisla-tion whilst on the other their hon-esty puts them at a disadvantage in terms of competitiveness when compared with other, less scru-pulous organisations.Damir Skender, Mirko Ervačić and Slobodan Mihalj, senior executives of Saponia, Osatina and Hemco, anticipate further investment, new products and new markets in 2011 as these are imperatives for development. All three companies are gaining in value as their results are being achieved under extremely diffi-cult operating conditions.

Privredni vjesnikYear IV No 0151

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MLADEN JAKOVČIĆ, PRESIDENT, CROATIAN METROLOGY SOCIETY

Conference Measuredly into Europe

Metrology is science which performs meas-uring with the goal

of assuring precise and com-parable result of measurement. “When you can measure what you are speaking about and ex-press it in numbers, you know something about it, but when you cannot measure it, when you cannot express it in num-bers then your knowledge is of a meagre and unsatisfying kind”, said Lord Kelvin, whose words are possibly the best de-scription of reasons to measure. Almost everything is measured today. Without metrology there is no trade, development of new products, weather forecasts, medical diagnostics or environ-mental protection. The history of metrology reaches into ancient times. Three thou-sand years before Christ, the stick the length of a forearm of the pharaoh, enlarged by the width of his fist, is the first known proto-type of measurement. Many years passed until the rulers’ body parts were replaced by a unique unit of length - meter. This occurred in 1875 in Paris when representa-tives of 17 countries signed the

Metric Convention with the goal of assuring international unity and perfection the metric system. This day is still celebrated as World Metrology Day. Metrol-ogy is divided into three main areas: scientific, industrial and legal. Legal metrology concerns the development of new meas-urement methods and standards. Industrial metrology is the most common part of metrology, com-prising the measurement in in-dustrial production with the goal of providing value, efficiency and quality of products. In most contemporary industries, the cost of measuring comprises between

10% and 15% of production costs. Legal metrology is regu-lated by the state, which passes laws and regulations with the goal of assuring precise meas-uring of special interest, such as measuring regarding trade, health protection, human safety and environmental protection. In Croatia, the main holders of metrology activities are the State Office for Metrology, Croatian Accreditation Agency, Croatian Metrology Institute and the Croatian Metrology Society. At a conference ‘Measuredly into Eu-rope’, to be held between May 19 and 21, participants will be intro-duced to legal metrology require-ments, the national metrology infrastructure and EU legislation within this area.

In most contemporary industries measurement costs comprise between

10% and 15% of production costs

Companies are faced with many hurdles in day-to-day business which the recession has not helped

Zlatna kuna for eastern Croatia: Saponia, Osatina and HemcoRecognition to companies achieving positive long term business results in all categories

www.privredni.hrBusiness & Finance Weekly 3

Igor Vukić

Slovakian economist Štefan Kassay has been an eco-nomic theoretician for

many years. However, his work has not stopped only at theory. As co-owner of a successful com-pany IDC Holding, whose 1,000 employees produce biscuits and sweets, he tested many of his ide-as in practice. He came to Zagreb to promote his second book from a series of five books dedicated to entrepreneurship and the econ-omy. The first book was promot-ed last autumn at Interliber and is entitled Enterprise and Entrepre-neurship – Entrepreneurial Envi-ronment. The second volume is entitled Economy and Finances, followed by Strategic Commu-nication, Internal Processes and Learning and Growth. Privredni vjesnik discussed with Kassay

the consequences of the crisis on entrepreneurship in Central Eu-rope.

Which lessons can Central Eu-ropean companies learn from last year’s economic crisis?Global economic tension has in-evitable consequences to coun-tries such as Slovakia or Croatia. It is important to recognise the cause of the crisis and the fea-tures of the country hit by it. On the basis of the Slovakian experience, a relatively speedy recovery might be expected with a tendency to increase productiv-ity and the systematic removal of damaging elements. It has been proven that it is important to be dedicated to activities which will be useful in the future. For

example, expand training and workshops for the development of new qualification capabilities required for the next stage.

How can companies adjust to the new, post-crisis situation?It is in unproductive to dwell on the effects of the crisis. The ini-tial trauma might be overcome through psychological indiffer-ence and concrete plans for fu-ture activities. Companies need to increase productivity, and this is possible only by greater work discipline, lower expenses and a systematic perfection of produc-tion processes. In that period not only technical equipment and impeccable work production technologies are important, but above all working with people and offering help to workers that need it.

What can the state do to help?In my opinion, companies help the state, not the reverse. A cri-sis cannot be solved by the accu-

mulation of public funds and its redistribution to people under the most aggravated circumstances, but only by preserving produc-tivity and the regular functioning of companies. This is a complex issue. We should not delude our-selves and count on state help. The priority is to concentrate on the elimination of squandering and non-productive activities. Simplification of administration should be demanded. Production and trade process as well as in-ternational co-operation should start.

How can we encourage peo-ple, especially young, to ven-ture into entrepreneurship?I would never impose anything on anyone. Entrepreneurial ac-tivity is as valuable just as any other profession. However, it re-quires certain features and habits which might not be intrinsic to all. Interest in entrepreneurship is based on personal features and personal motivation. It is quite

often that a successful entrepre-neur says he never intended to go into business. His entrepreneurial activities developed on the ba-sis of personal concrete interest, when ideas are transformed into practice and the individual who realised them became deeply in-volved in theoretical issues. Only afterwards, he was surprised to discover his business was devel-oping. It may be concluded that the emphasis is on the realisation of personal needs, ideas and ten-dencies. Another motive might be the idea of a better life quality. However, it is not always possi-ble to exactly predict the success of business since business condi-tions are in constant flux. If a per-son has the entrepreneurial spirit within him, sees acceptable busi-ness conditions and has an idea of what he would like to achieve, then it is probable he will become an entrepreneur. Therefore, I be-lieve it is possible to motivate, but it is not effective if the person is not interested in business.

INTERVIEW: ŠTEFAN KASSAY, ECONOMIC THEORETICIAN, SLOVAKIA

We should not fool ourselves and count on state helpThe crisis cannot be solved by the accumulation of public funds and redistribution to people in the most aggravated circumstances but only by preserving productivity and the regular functioning of companies

According to my opinion, companies help the state

not vice versa

4

contract signed between Morocco and OLT

€1.37 million (of agricultural machinery exported to Africa

152 items(

Svetozar Sarkanjac

The surviving fragments of the once powerful Osijek metal processing industry

which used to employ thousands of workers from Osijek and Sla-vonia are slowly coming back to life. The numbers are certainly not as large as they used to be, but nevertheless over the first few months of this year, OLT and MIO Standard receivables have shown positive indicators and their sales departments have seen a considerable increase in their

workload. Good news has come particularly from OLT, a one hundred years old ironworks and machinery factory from Osijek.OLT representatives, as part of a delegation of the Agricultural Equipment Cluster, have recently returned from Morocco where they signed a contract valued at some €1.37 million for the deliv-ery of various items of agricul-tural machinery from the OLT product range.The company pointed out that this agreement will have a sig-nificant impact on their achieve-ment and the overall production process will restore its normal flow or perhaps encourage the production of larger series of ag-ricultural machinery. New orders are anticipated after the deliv-ery of the currently ordered 152 items of machinery as well as the potential of North African market expansion. In addition, OLT has

been contacted by buyers from Russia, which would consider-ably increase total output. “The market has started pulsating and as we produce quality machin-ery we are not surprised. It was not easy to anticipate when this would happen but it happened just before spring sowing. We are particularly satisfied with our op-erations through the first quarter and in the first part of April. The good times are back, reminding us of the beginning of the year 2000”, stated Ante Ćerluka, Board President of OLT.

Cluster operations satisfactoryHowever, the contract in Mo-rocco was not a surprise. A year ago the Croatian Agricultural Equipment Cluster organised an

appearance of Croatian produc-ers at a large fair in Morocco where their agricultural machin-ery aroused unprecedented inter-est. After a year of negotiations, slowed by the political crisis in North of Africa at the beginning of the year, the contract was fi-nally concluded in Morocco very recently. The contract, signed

with the local distributor of ag-ricultural machinery, makes it a concessionary and a distributor of agricultural machinery pro-duced by the companies affili-ated to the Croatian Agricultural Equipment Cluster. The first con-tract is worth €3 million and the majority (€1.4 million) relates to Osijek OLT products. Prior to the signing of this im-portant contract, a consignment warehouse was opened housing a permanent exhibition of Croatian agricultural machinery and equipment. The project possibili-ties are increasing in importance since Moroccan farmers cultivate some ten million hectares of agri-cultural land.

Good marketsIn addition to penetrating new markets, the recovery of OLT has also had a significant impact on existing markets. “We are still operating in our existing markets. About 65% of our output is currently sold to the Croatian market and the remain-der is sold primarily to Serbia and Bosnia and Herzegovina. In addition to the recovery of the Croatian market, the recovery of regional markets is becoming increasingly evident. These are clearly indicators guaranteeing survival and further expansion”, stated Darko Marković, Com-mercial Director at OLT. Accord-ing to him, the contract signed in Morocco is a stepping stone for other countries in the Maghreb re-gion. Nevertheless, as he pointed out, the OLT sales function fol-lows events in North East Europe with deep interest, particularly in Russia and Ukraine, traditional markets for OLT products.

NEW JOBS LEAD TO RECOVERY OF OSIJEK METAL INDUSTRY

OLT agricultural machinery will be operating in AfricaA contract has recently been signed with Morocco for the sale of Croatian agricultural machinery with a value of €3 million most of which covers OLT products

About 65% of OLT production currently

used on the local market

Core OLT production covers agri-cultural operations from land preparation through sowing to harvest and its product range comprises both heavy and light machinery. The core products are pneumatic and mechanical sowing machines, harvesting machinery, cultivators, disc harrows and ploughs.

Range of products

Privredni vjesnikYear IV No 0151

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www.privredni.hrBusiness & Finance Weekly 5

largest foreign investment into Croatia in 2010 was from Belgium

€116.3 million(

Igor Vukić

Nett foreign direct invest-ment into Croatia to-talled €439.9 million in

2010, according to preliminary data from the Croatian National Bank.

The country saw a considerable plunge of 79% over 2009 when investment totalled €2.09 billion; a 90% fall-off was also shown over 2008 when investment hit a record of €4.2 billion. The largest foreign investment in 2010, from Belgium, was €116.3 million. Italy invested €112.8 million and Luxemburg €11.6. Slovenia ranked fourth with €86.6 million, followed by Ire-land with €70.4 million.The largest segment of foreign direct investment last year was considered as other business ac-tivities totalling €249.3 million, followed by financial mediation, other than insurance and pen-sion funds at €186.6 million. In-

vestment into real estate totalled €166.6 million. Nevertheless, concurrently, outflows covering the production of chemicals and chemical products amounted to €485 million and €132 million in post and telecommunications operations. After all inflows and outflows from all fields of activ-ity are balanced, there is a nett in-vestment into Croatia of €439.9 million.

Equity investment down 25% According analysts statements from the Croatian Chamber of Economy in the April issue of Economic movements, total eq-uity investment in 2010 was €521 million or 25% down over 2009 and the lowest result since 2004. On the other hand retained earn-ings totalled €540.5 million, or 57% up over 2009, the best result since 2006. Other investment saw an outflow of €604.4 million.The structure of investment was pointed out at the Croatian Cham-ber of Economy to be untypical:

financial mediation (€186 mil-lion) and trade (€99 million) did not rank as the first two in in-vestment, irrespective of the fact that they used to absorb most of foreign investment. Concurrently a negative nett investment value was recorded in the chemical in-dustry (-€485 million) and ranked as the seventh area of activity with respect to total investment over the last 17 years. “Invest-ment from the Netherlands re-corded the highest nett outflow of

€297.5 million and, concurrently, a decrease in Croatian investment in that country by €787 million. Pliva was the link between the chemical industry and the Neth-erlands”, as was explained in Economic movements. Accord-ing to Croatian National Bank data, foreign direct investment in

Croatia between 1993 and the end of 2010 totalled €24.47 billion.

Austrian investors – leaders in the long termAustrian investors have been leaders in foreign direct invest-ment into Croatia in the last 17 years with €6.22 billion, followed by investors from the Nether-lands (€3.7 billion), Germany (€2.9 billion), Hungary (€2.3 billion) and Luxemburg (€1.37 billion). With respect to the fIn terms of areas of activity the larg-est amount (€8.6 billion) was in-vested into financial mediation or banks, followed by investment in wholesale and mediation in trade (€2.8 billion). The production of oil derivatives ranks third at €1.6 billion. The highest Croatian in-vestment abroad in 2010 was in Slovenia (€315 million), Syria (€162.9 million) and Germany (€160.1 million). Nevertheless, due to those transactions with the Netherlands, the end result was that Croatia had inflows of €153 million.

FOREIGN DIRECT INVESTMENT

Under €440 million invested into Croatia in 2010Croatian National Bank preliminary data indicate a plunge in investment of 79% over 2009 when it totalled €2.09 billion

Slovenia ranks fourth among foreign investors with €86.6 million

Foreign direct investment slumped 90% over 2008 which saw a record €4.2

billion

Source: Croatian National Bank

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

1467,5 1137,9 1762,4 949,6 1467,9 2768,3 3679 4218,4 2095,6 439,9

Foreign direct investment in Croatia in the last decade (in millions of euros)

6 Privredni vjesnikYear IV No 0151

The former owner of the restaurants Argo-la and Terra, Bernard

Križanović, turned a new page in his business with the takeover of the Bekan trading company, owner of the Bekan restaurant in

Split. The restoration of Bekan restaurant and changing its name to Kadena were not only formal in nature; with its mod-ern style and range of food and drink, Kadena is a typical wine and lounge bar or an exclusive restaurant mainly visited by lo-cal business people and their business partners. The company employs 16 staff, and the well-known Croatian chef, Braco Sanjin, is responsible for the gastronomic menu. “We offer dishes which contain ingredients not usually combined in tradi-tional cuisine. We have visitors who wish to try something new. We also offer traditional dishes, especially dishes based on Med-iterranean cuisine,” points out Braco Sanjin.Kadena offers 410 wine varieties and the restaurant has recently become a place for promoting top

Croatian wine makers and their wine. Korta Katarina, Krauthak-er, Matuško, Matošević, Čamak have all promoted their wines here and the promotion of Korak and Arman wines is also under preparation.

A place for wine promotionThe restaurant is proud of its ex-cellent list of world famous and Croatian sparkling wines. In only a year after its opening, Kadena restaurant has become one of top 20 local restaurants accord-ing to the Croatian gastronomy guide Gastronaut. During its first year the restaurant achieved positive results even in the depths of the crisis which hit the cater-ing sector. Even though it is of-ten thought we instantly receive money for our services, debt col-lection of is one of our greatest problems since we are a favourite gathering place for many busi-ness people. It is a vicious circle, difficult to break. Therefore, sup-pliers and caterers suffer most, opines Bernard Križanović, owner of Bekan trading. He is convinced this tourist season will be able to ease the problems of caterers on the Adriatic coast and is preparing a new project in ad-dition to wine promotion. Chefs of the most well-known restau-rants from throughout Croatia and neighbouring countries will soon appear as guests in Kadena which is able to accommodate around 200 customers. (J.V.)

WE PRESENTBEKAN TRADING - RESTAURANT KADENA, SPLIT

Production and export of organic delicacies

People like trying out new thingsThe restaurant has 410 varieties of world and Croatian sparkling wine on offer

Training to be a cultivator and processor of medicinal and aromatic herbs opened

my eyes and changed my life perspective. My family became interested in planting the first plantations of medicinal herbs on land we had purchased a few years earlier. We planted English Laven-der (lavandula angustifolia) and are anticipating a top quality crop. In Daruvar we planted lavandin (Budrovka) and a test plantation of lavender Reverchon II (viška mod-rulja). This is where it all started, stated the director of the company Eco Terra, Valentina Galjer Jagod-nik, from Rijeka. She established the company a year ago in co-op-eration with David Kadlec. Their principal activity included the eco-production and representation of similar producers of medicinal and aromatic herbs, health- and organ-ic-food and other similar products in EU countries. They also estab-lished a representative company, Tempest sro, in Prague which rep-resented numerous Croatian com-panies and products at the recently held international fair Biostyl. 309 companies participated from that part of Europe and 14,000 visitors attended.

Internet shopCroatia was represented by the slogan Croatia – country of ecol-ogy, health and tourism. Some of the exhibited products included truffles, fig rolls, eco-products and cosmetics made from medicinal

herbs, raspberry and blackberry desert wine, marmalade, canned fruit, cod, olive oil, balm, bran-dies (travarica and loza), and wine (graševina and Rhine Ries-ling). The exhibition was sup-ported by the Croatian Chamber Of Economy, Zagreb, the Minis-try of Agriculture, Fisheries and Rural Development, the Ministry of War Veterans and the Croatian Embassy in Prague. Surprisingly, the Croatian venue was one of the most visited, pointed out Valentina Galjer Jagodnik. She ventured that she had hopes for similar regard-ing their recently created internet shop (www.ecoterra.hr). Howev-er, they have no intention of stop-ping there, since they are currently negotiating over the opening of a store in Prague and approaching the Slovak market. To start, they will participate at the Biostyl fair

to be held in September in Bratis-lava. “We are known in the world as the country of ecology, health, tourism, beautiful sea and an ex-quisite gastronomic range. We believe this is the way to further promote these qualities to EU countries,” concluded Valentina Galjer Jagodnik. (J.F.)

Negotiations in progress for opening a store in Prague and approaching the Slovak market

Chefs from the most well-known restaurants throughout Croatia will

soon appear as guests in Kadena

ECO TERRA, RIJEKA

In addition to their organic production, Eco Terra represents other eco-producers in EU countries

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

Source: HNB WEEK APRIL 30, 2011

Currency Kuna exchange mid-rate

AUD 5,405225

CAD 5,204040

JPY 6,074460

CHF 5,706354

GBP 8,245710

USD 4,947426

EUR 7,354349

::: news

EUR USD CHF

26.4. 27.4. 28.4. 29.4.

7.37

7.36

7.35

7.34

7.33

7.32

5.04

5.02

5.00

4.98

4.96

4.94

5.74

5.72

5.70

5.68

5.66

5.64

26.4. 27.4. 28.4. 29.4. 26.4. 27.4. 28.4. 29.4.

Atlantic Group achieved sales revenue of €133.7 million in the first quar-

ter of 2011, which is 93.6% up over the same period last year. Earnings before interest, taxa-tion, depreciation and amortisa-tion (EBITDA) was 116.1% up, nevertheless nett losses totalled €1.5 million. Atlantic Group ex-

plained the loss in terms of the linear impact of financial ex-penditure which increased as a result of the Droga Kolinska ac-quisition and the usual unfavour-

able seasonal impact on business activities.Sales revenue almost doubled, mainly due to added Droga Ko-linska revenue and there was an increase in revenue from Active sports nutrition, by 26.2% and Pharma division, by 14.7%.

Growth in Germany and Great BritainThe integration of Droga Ko-linska into the Atlantic Group structure was implemented by the merger of both sales and dis-tribution business activities on all regional markets, by signing new contracts with all key buy-ers, by broadening the product range as well as integrating lo-gistics processes. According to

Atlantic Group, additional inputs were made into an analysis of production processes aimed at in-creasing production capacity use. Total Atlantic Group sales on the Croatian market were 28.6%, Serbia (23.1%), Slovenia (11.6%) and Western Europe (10.3%). At-lantic Group recorded growth on the German market (22%) and in Great Britain (25%). The share of their own brands in sales af-ter the integration of Droga Ko-linska brands is now 69.3%, the distribution of principal branded products 18.1%, pharmacy 6.6%, whilst products produced by At-lantic Group as private brands for large business systems both in Croatia and abroad comprise 6.1% of sales. (D.Ž.)

THE PRICE OF ACQUISITION

Profit 116.1% up, yet nett loss of €1.5 million

Atlantic facing loss due to Droga Kolinska€133.7 million in sales revenue achieved in first quarter by Atlantic Group

Kraš profits down as raw material prices increase The Kraš Group achieved total consolidated income of €27.96 million in the first quarter of 2011, some 7% less year-on-year. Nett profit plummeted by 63%, to €0.22 million. Local market sales income totalled €15.32 million, and €11.96 million on foreign markets. During the first quarter the prices of main raw material continued to rise, affecting a rise in business expenditure, accord-ing to Kraš.

Poorer results from Janaf During the first quarter Jadran-ski naftovod showed business income of €13.40 million, which is €0.14 million less over 2010, whilst nett profit dropped by 24.8%, to €2.32 million. Income was 9.3% lower than planned. Business expenditure reached €10.56 million, up €0.86 million year-on-year.

Underground gas storage makes profit Underground gas storage (Podzemno skladište plina - PSP) achieved total income of €21.56 million and profits of €4.86 mil-lion in 2010. The upgrade of the existing underground storage in Okoli enabled a record supply of gas - 280,000 m³ per hour in February 2011, and gas stor-age of 630 million m³, which exceeds the former 553 million m³. The director, Dragica Krpan, announced PSP will continue achieving good results with the upgrade of the plant in Okoli and the construction of new under-ground gas storage.

8 Privredni vjesnikYear IV No 0151

New success of Bolfan wines at Decanter Bolfan wines achieved great suc-cess at the Decanter World Wine Awards 2011 in London. Ac-cording to unofficial data, which will be published on May 17, pinot grey Bolfan Libertin 2010 won a silver medal. Four other wines from Tomislav Bolfan and his wine cellar in Hraščina took bronze medals. This is the second year Bolfan wines participated at Decanter, and they also achieved great success last year, winning two medals.

40 top Dalmatian restaurants selected At the Dalmacija Wine Expo, gastronomic experts selected the top 40 restaurants in Dalmatia. The winner is Pojoda restaurant from Vis. The top ten includes: Nautika, Dubrovnik; Gil’s, Du-brovnik; Kapetanova kuća, Ston; Foša, Zadar; Pelegrini, Šibenik; Nikola, Stobreč; Boškinac, Pag; Cantinetta, Skradin and Kod Marka, Šipanska luka. The panel making the selection over the past three months consisted of gastro-nomic experts recruited amongst chefs, restaurant owners, wine and gastronomic journalists as well as renowned gourmets.

Fashion.hr becomes regional leader In only one season, the Fashion.hr Industrija fair has become the focal point of the entire fashion scene, the lo-cal clothing industry, footwear, jewellery and leather accesso-ries. In addition to well-known brands, the fair also presents young fashion designers who exhibited their collections under the LIFT label. The next Fashion.hr In-dustrija fair will be held September 30 – Oc-tober 2 at the Zagreb Fair and Slovenian de-signers will also par-ticipate. In mid-May the Slovenian version (Fashion.si) of the fashion portal Fashion.hr style community will begin work.

::: news

Sanja Plješa

Pre-season in Croatia is normally considered to commence with Easter

holidays, which were rather later this year, only one week prior to 1st May, International Workers Day. Nevertheless, it was per-haps for the fact that these holi-days were at the end of April or due to the current recovery from economic crisis in Europe, tour-ism results for Croatian destina-tions were very satisfactory, even promising, for the continuation of a good pre-season and the beginning of the main tourism

season. Most tourist facilities in Istria and Dubrovnik have recorded satisfactory capac-ity, with full capacity in Istria, the Opatija Riviera, Kvarner and in Southern Dalmatia and Dubrovnik

Good progress madeIva Bahunek, Croatian Em-ployers Association for Hotel

Management Director, agreed on the optimistic beginning of the pre-season. “The Association hopes the satisfactory results will continue at the beginning of May when a larger number of tourists is anticipated from neighbour-ing Slovenia. Dubrovnik-Neretva County, for example, recorded 11,985 tourist arrivals and 41,184 overnight stays. This means that

arrivals were 83% up and over-night stays 88% up in 2010 over the Easter holiday in 2009, al-though it was three weeks earlier. In Dubrovnik-Neretva County there were 10,937 foreign tourists over this Easter holiday, 87% up, with 37,955 overnight stays, 89% up over 2009. Most tourists came from France, Spain, Bulgaria, Greece and Great Britain.“The arrival of some 2,000 tour-

ists to 17 hotels on the Crikveni-ca-Vinodolski Riviera is a satis-factory start and a good indicator of a satisfactory pre-season in 2011 and the main season out-performing the results for the last few years. These hotels recorded a satisfactory number of both do-mestic and foreign tourist stays. There are satisfactory indicators also inland, particularly in the

mountains near Novi Vinodol-ski”, pointed out Iva Bahunek.

Still too earlyIn addition to Kvarner where tourist destinations were full with Italian and Slovenian tourists, Southern Dalmatia, particularly Makarska, recorded a satisfac-tory tourism results this Easter. Local hotels recorded stays mainly from Great Britain and France. Iva Bahunek stated that it is still too early to anticipate the tourist season as it is about one month in advance. She pointed out that the trend towards last minute arrangements still con-tinues and it cannot be predicted with certainty how the season will play out. Nevertheless, all current indicators give grounds for optimism. Istria has for years been the most successful tourism area in Croatia and a leader of its kind in national hotels, yet Iva Bahunek emphasised the need for investment into continental Croatia where cities such as Za-greb, Varaždin and Osijek stand out for their tourism, historical and cultural programmes.

Zagreb, Varaždin and Osijek tourism programmes prominent in continental Croatia

Zagreb recorded 5,800 tourist arrivals over the Easter holiday, 48% up over the same period last year. There were 8,835 overnight stays (37% up over 2009). Zagreb Tourist Board expressed extreme satisfaction with the results achieved and anticipated a continuation of positive re-sults over the forthcoming months.

Outstanding results for Zagreb

Positive anticipation irrespective of the current trend towards last minute arrangementsMost tourist facilities in Istria and Dubrovnik have recorded satisfactory capacity, with full capacity in Istria, at the Opatija Riviera, Kvarner, in Southern Dalmatia and in Dubrovnik

Expectations for the tourist season