PV International 0153

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 / 16th May / 2011Year IV / No 0153www.privredni.hr

20102010

Exclusive: Janez Potočnik, EU commissioner for EnvironmentRaw materials presently used for the production of all goods will become more expensiveINTERVIEW

PAGES 6-7

Cluster developmentMany small entrepreneurs will not receive money from EU funds if they are not cluster membersCLUSTERS IN CROATIA

PAGES 2-3

Industrial designCreate, make, produce, sellDesigner furniture can be unique for both small and large companiesCROATIAN DESIGNERS

PAGE 9

Igor Vukić

Lending to exporters for a period of 10 or more years at an interest rate of 3.5%

would be one of the strongest generators for Croatian exports, according to the Croatian Export-ers Association. In a similar way exports are now credited by the Croatian Bank for Reconstruction and Development, but it can offer credit to a period of seven years at the most. Hence why offers of Croatian companies through foreign tenders often cost several percentage points more and even then they do not manage to sign contracts. The Croatian Export-ers Association will hold its sixth convention this week, titled Our Exit from the Crisis. Their guest will be Prime Minister, Jadranka Kosor, to whom they will present their idea of the additional capi-talisation of CBRD during the

next ten years with €68.5 million in order for it to be able to ful-fil its role as long-term financier of exports. Darinko Bago, Board President of Končar and Presi-dent of the Croatian Exporters noted that 12,000 export-oriented companies achieve the highest profit per employee, representing a generator for the entire econo-my. Bago said exports decreased in the last quarter by 2.3% year-on-year. However, this result was mostly a consequence of the halt in shipbuilding which is in the process of privatisation accord-ing to the rules of the EU. Ship-building aside (which dropped by €95.89 million since new ships have not been built) and exports decrease of oil to B&H, other export companies increased their total by 2.5%. The state should support their efforts with ap-propriate programmes, pointed out Bago. Even though an active

role is expected from all areas of the macro-economic framework, exporters no longer require a change in the foreign exchange rate. This should have been done much earlier together with all ac-companying measures. With the present level of debt and euroised economy, the change in the ex-change rate might be more dam-aging than useful, opined Bago.

Subsidies Positive export results from last year are visible in the timber in-dustry, engineering, the produc-tion of electric equipment and ag-riculture as well as other special work in relation to shipbuilding, pointed out Ante Babić, Vice-President of Croatian Exporters. Some of these sectors include companies which will receive, at the convention, the traditional award of ‘Gold Key’ for excel-lent export results. The Associa-

tion of Exporters considers that the offer from CBRD should also include a programme for the systematic monitoring of the de-velopment of high-tech products which might secure a GDP in-crease above €20,000 per capita. He evaluates that Croatian entre-preneurs must also be protected in local public tenders since the conditions of tenders are some-times such that local companies are unable to meet them. If local companies were subsidised by such tenders, they would acquire references for their approach to foreign markets. They will try to convince the Prime Minister for the need to reform the system of state subsidies. Subsidies should be directed towards exporting companies. “Why not form a modern management team which would be in charge of millions in state subsidies” asked Darinko Bago.

CROATIAN EXPORTERS

Exports need long-term financingExporters suggest the CBRD to be additionally capitalised with €68.5 million every year during the next 10 years in order to fulfil its role as long-term export financier

2

CLUSTER DEVELOPMENT

Drago Živković

Clusters are not the final aim; they are a means towards increasing com-

petitiveness, particularly of small and medium sized entrepreneurs in the global market. At the 5th International Conference on clus-ters in Opatija the conclusion was reached that they are not created for the purpose of merely cluster-ing but the cluster market should primarily be considered. Accord-ing to the conference host, Đuro Popijač, Minister of Economy, Labour and Entrepreneurship, €3.7 million has been invested by state support for 46 clusters with 504 companies employing a total of 25,000 staff in Croatia over 2005. This averages about €0.68 million annually, which was considered by several cluster representatives at the conference as insufficient, particularly when set against support for agricul-ture. Most clusters are located in Zagreb, Varaždin and Osijek-Baranja County, whilst the Min-istry identified Hrvatski interijeri with 1,500 employees, In-parket, the textiles and leather cluster group KLG, Slavonian lavender with 15 producers and the Osijek cluster for agricultural machinery as the most successful. Tihana Kraljić, State Secretary presented the strategy for cluster develop-ment to 2020, adopted by the government in April.

Exporting consortiaAccording to data presented by her, two thirds of Croatian clusters have up to 25 mem-bers, whilst three quarters are organised as associations. She interpreted the fact that merely

15% of clusters are organised as companies as a lack of con-fidence among entrepreneurs and as a result of remembering negative experiences of social-ist co-operatives. The mapping of clusters, monitoring and as-sessment of their work, regional specialisation and co-ordination with the EU cluster policy should be singled out from the long list of objectives and measures of the Strategies. She anticipates that many small entrepreneurs will not receive money from EU funds unless they are cluster members.Since the existence of clusters is a considerably recent phenome-non globally, there is a vast array of models and solutions. Never-theless, clusters are a winning combination and a key element

Privredni vjesnikYear IV No 0153

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MARIJA KAŠTELAN-MACAN, PROFESSOR EMERITUS, FACULTY OF CHEMICAL ENGINEERING AND TECHNOLOGY AT ZAGREB UNIVERSITY

Dispensing chemists can reduce ecological risks

Ten years ago dispensing chemists were not consid-ered polluters, which is

why they were not included on the list of hazardous substances on the EU Water Framework Directive from 2001. Scien-tifically, the most interesting substances on the list refers to medicine, especially antibiotics, that end up in waste water and which are processed in clean-ing machines (if they exist) or are directly released into wa-terways or serve as fertilisers. This pollutes not only surface but also underground water, the main renewable source of sustainable supply of drinking water. Conventional machines for processing communal waste water remove only 20% of these substances and most end up in the environment. Even though the concentration of an-tibiotics in water is extremely low, they can be highly toxic.This discovery has resulted in intensified research into their presence and assessment of their influence on living organisms in the environment as well as the

development of techniques for their removal from communal waste and process water. Re-search into the oxidation proc-esses has also intensified as well as pressure membrane separa-tion processes, some of which are already applied. The focus is on the research of nanofiltration (NF) and reverse osmosis (RO) on which the majority of inor-ganic and organic compounds from non-processed water re-main on the membranes.Croatian scientists joined inter-national research of this type in 2002, expanding it with their co-operation on the programme of the fund Unity through Knowl-edge, founded by the Ministry of Science in 2007. The project is called Reduction of ecologi-cal risk caused by medicine and their degradation products in process waters using advanced membrane procedures. The re-search was carried out in co-operation with the Institute of Environmental Assessment and Water Research in Barcelona, and partner company Veterina from Kalinovica. A portable RO/NF device was tested on equalising pools of Veterina and it confirmed the high pres-ence level of antibiotics in ac-tual waste water. It is recom-mended to fit these relatively small and not overly expensive devices in plants before releas-ing waste water into the envi-ronment. However, considering the present state of economic affairs and non-regulated maxi-mum concentration of medicine in water, it is difficult to rely on any enthusiasm of the producer or users of this product.

Co-operationentrepreneuriMany small entrepreneurs will not receive money from EU fu

support for the clusters since 2005

€3.7 million (

3

n becoming a critical ial skillunds if they are not cluster members

in clusters receiving support

504 companies(

of sustainable development, ac-cording to Gerardo Patacconi from the UN agency for indus-trial development, UNIDO. Ex-porting consortia, supported by Patacconi, is the latest success in the world of clusters. He men-

tioned the example of Morocco, where there are 20 such con-sortiums and 13 more are being founded.In Turkey there is an exporting consortium for the textile indus-try, whose founding involved

its customers, global companies (Nike and H&M), from incep-tion. Patacconi advised a similar model of co-ordinating a busi-ness concept through cluster foundation to Croatian entrepre-neurs.Catalonia is known for its well-developed clusters, where even non-formal ad hoc associations of entrepreneurs are considered as clusters. Alberto Pezzi from the Catalonian Ministry of In-novations and Entrepreneurship warned that cluster policy should be continuously adapted due to constant changes in the market. There is, for example, a cluster of several hundred companies joint-ly offering children products, from toys to food. There is also in-novation in cluster management, as it is not necessary for a cluster to have a professional manager; there is the possibility to manage it through external consultants. The new generation of clusters envelopes entrepreneurs accord-ing to a common strategy, not by industry, since clusters are trans-national and more commonly do not depend on state support but are self-financing.

Innovation co-ordinatorA large number of clusters op-erate in other regions of Spain, stated the consultant Albert Sole, whose company works on some 30 cluster projects each year. Sole’s flow chart of cluster foun-dation begins with the definition of competitors, and ends with an action plan for co-operation. Defining the internal structure of clusters is the final stage, since the objective of each cluster should be identification on the global market. Western Europe

has seen cluster associations, super-clusters, with that in Linz, Clusterland, being the nearest to Croatia. The General Manager of Clusterland, Werner Pam-minger, does not see himself as a normal sales representative of all clusters, but rather as a co-ordinator of innovation aiming to increase productivity. There are over 1,700 companies gathered in Clusterland, creating over €50 billion revenue and employing 250,000 staff. Clusterland is fi-nanced by membership fees and employs about 40 cluster man-agers with a €5.5 million annual budget. Their aim is to look for the best partners for clusters and create projects to be supported from EU funds.They visit about 1,500 compa-nies per year and Pamminger il-lustrated the advantages of their work with the information on 343 projects receiving EU funding over 13 years. Co-operation defi-nitely is a critical entrepreneurial skill in Upper Austria, and co-operation is based on confidence, stated Werner Pamminger.For the European Commission, clusters are a business environ-ment encouraging innovation. €86 billion has been planned for innovation from the cohesion funds up to 2013, stated Maria Luisa Saldanha Sanches from the European Commission. The re-gions with developed clusters are able to attract foreign investment more easily, and it is not surpris-ing that every fifth Euro from EU cohesion funds reaches clusters. The objective of the European Commission is uniform develop-ment and the €86 billion will be allocated to as many regions as possible.

Regional cluster development is impossible without regional involve-ment or the involvement of counties. Robert Markt, the State Secretary at the Ministry of Economy, Labour and Entrepreneurship, gathered co-unty executives to present them the central state plans and the rôle of local government.The Ministry would wish to have at least one pilot project of regional clu-sters in every region of the three statistical regions of Croatia (NUTS 2) by mid 2012 so that in 2013 money could be received from EU cohe-sion funds. It is important that it is initiated by local government as in such instances funds can allocate up to 85% of the financial support, whilst in cases where it is initiated by the state, funding would alloca-te a mere 50%.

Regional involvement an imperative

4

in Optima over six years

€0.14 billion invested(anticipated in 2011

15% growth(

Boris Odorčić

Optima Telekom marked its fifth anniversary on the Croatian market towards

the end of last year. The appear-ance of this first (and largest) alternative operator in Croatia accounted for an opportunity of choice and i n i -

tiated price reductions. The anticipated growth of Optima Telekom is 15% and they are an-ticipating over 300,000 clients in 2011. Optima Telekom Board President Matija Martić pointed out that Optima Telekom ac-counts for about two thirds of al-ternative operator total revenue.

What is your opinion of the telecommunications market in Croatia?There are considerable diffi-culties due to protectionism of certain operators; nevertheless, in my opinion the telecommu-nications market in Croatia is developing satisfactorily. Even though market liberalisation was officially initiated in 2004, more significant advancement has been achieved only recently. Alternative operators have be-come more independent from HT dominance only in the last

two years, as HT has held a considerably more

favourable mar-ket position than its competitors. Alternative op-erators have accounted for 50% lower prices of tele-communica-tions servic-es and this fact makes me proud, as Op-tima Tel-ekom has prompted m a r k e t liberali-s a t i o n .

Initial investment in telecom-munications is huge and many alternative operators are looking forward to reaping benefits. I do believe they will be able to do that in about two years.

What about the consolidation of operators?The Croatian telecom market needs innovation and consolida-tion as certain market segments have been saturated. World trends have indicated an increase in integrated telecommunications operators. The advantages to in-tegrated telecoms are quadruple play integrated services, consid-erably larger market power and significant operating synergies. Fixed alternative operators oc-casionally develop their mobile network by themselves, which is long lasting and overpriced. In-tegration of existing mobile and fixed operators is much faster and much more effective. I am not keen on anticipating, yet market consolidation could occur by the end of 2011 or towards the beginning of 2012.

How important is the telecom-munications sector for the economy?The telecommunications sector is one of the few economic areas showing a high level of resil-ience in adverse economic cir-cumstances. Consumption saw a significant decrease; never-theless the telecommunications sector managed to avoid a deep downturn. Many jobs have been preserved as well as the continu-ity of investment in new servic-es. Optima managed to preserve its revenue level and witnessed a

significant increase in operating profit throughout the crisis peri-od. Several telecommunications companies have recorded a con-tinuous decrease, yet it is not as a consequence of the crisis but due to the activity of other oper-ators in the market. The impor-tance of the telecommunications sector for Croatian economy is best illustrated by the fact that the telecommunications market

value stood at €2.05 billion in 2010.

How much have you invested in development in Croatia to date and what have you mainly invested in?We have invested about €0.14 billion in Optima over six years. These funds were used for pur-chasing state-of-the-art telecom-munications equipment, the construction of 257 physical locations and the construction of 2,329 kilometres of own optical network based on IP technology which is a prerequisite for larger network and our presence in 100 towns. This investment initiated market liberalisation which led to competition in innovation and a reduction in prices of telecom services. Optima currently em-ploys 193 staff who deal with over 270,000 clients.

MATIJA MARTIĆ, OPTIMA TELEKOM BOARD PRESIDENT

We need innovation and consolidationInitial investment in telecommunications is large and many alternative operators are looking forward to reaping benefits

Privredni vjesnikYear IV No 0153

Alternative operators have accounted for

50% lower prices of telecommunications

services and this fact makes me proud

INTERVIEW

www.privredni.hrBusiness & Finance Weekly 5

Jasminka Filipas

More than 50 hospitals, 64 in total, do not have management systems

for medical and hazardous waste, yet they are the biggest produc-ers, more precisely, 740 institu-tions registered in Croatia as pro-viders of health protection. According to companies promot-ing the supply of waste manage-ment systems at the site where waste is produced, disposal runs smoothly and it is costly (prices range between €1.50 and €2.75 per kg), which is why many do not wish to terminate the con-tract. Another reason is that hospitals would need to invest substantially and additionally register for the activity of waste collection and management. However, experience has shown such investment pays off over five years at the most, whilst the practice is quite common in Eu-ropean countries.

ČAKOVEC: WASTE FUELThe best example how things may be solved is the hospital in Čakovec. According to the direc-tor, Dragutin Kopasić, in 2006 they introduced technology for the separation and processing of medical waste by turning it into valuable fuel. The machine, which then cost €124,000, was leased. In the past they would pay around €95,500 per year for disposal. In addition to solving their problem, the hospital earns extra money since it manages waste from other medical and veterinary institutions in the area. The director of Dubrovnik Gen-eral Hospital, Branko Bazdan, also confirmed waste disposal is not cheap. He separated the waste and hired an authorised

company for disposal, but since this is expensive (the waste is transported to Osijek) he plans to set up equipment with which the hospital will be able to manage waste as well as that from the In-stitute for Public Health and the

Health Centre. The waste is separated into in-fectious or potentially infective, pharmaceutical, cytotoxic, path-ological and chemical waste as well as waste from the develop-ing of X-ray films. Such waste makes up for 95% of all waste, explains Darko Katić, chief of the Technical Service in Du-brovnik’s hospital. They want to buy a machine for sterilisation in combination with vacuum, mi-crowaves and steam, as well as two machines for crushing and r e c y c l i n g which will decrease the volume by 70% and enable its disposal as communal waste.

NUCLEAR BOMBS

TRAVELLING ABROADThe director of the Split Clini-cal Hospital Centre (KBC), Duje Marasović, complained that the Centre spends €116,500 for the disposal of the accelerator from the recently dismantled radiation device for tumours in the clinic. “There are only two companies in Croatia specialising in radio-active waste management, and the accelerator is in fact a real small nuclear bomb. I am not sure whether it is transported to Hungary or the Czech Republic, but I know we do not have any management facilities”, said Marasović. He added they would also like to have their own system for the management of infective and other waste, but only with a subsidy from the Health Ministry.

The deputy director for technical services in KBC Dubrava, Antun Poletto, says their waste as well as waste from other institutions in Zagreb is disposed of by the company Ekologija Maržić. Fur-thermore, this centre had a waste incineration plant until 2009, but it shut down due to obsolete tech-nology. According to the explanation of Neven Radović, Head of Tech-nical Services in the hospital in Varaždin, they save hundreds of thousands every year with their machine for waste sterilisation and crushing. The sterilisation procedure, he explains, is quick, simple and lasts half an hour at the most. Other companies which manage and dispose of waste in the same way, but more expen-

sively, prove this procedure pays off, and in addition to disposal, transport must also

be paid.

TONNES OF INFECTED WASTE ON THE ROADS

MANAGEMENT OF DANGEROUS MEDICAL WASTE

Most Croatian hospitals do not have management systems for hazardous waste and pay millions for disposal annually. Rare examples show investment in in-house systems definitely pays off

The largest share concerns infected waste

- 95%

6 Privredni vjesnikYear IV No 0153

planned for 2050

80%-95% lower CO2 emission(

Lada Stipić Niseteo

He is on the road most of the week, managing to visit all 27 member

countries. His work compels him to know everything on na-ture parks, hazardous chemicals or energy saving. “As Commis-sioner I do not work for any particular national government. This means even if I am Slov-enian, nominated for this posi-tion by the Slovenian govern-ment, I am independent. I work for the Union and its people”, explains the former Slovenian head negotiator Janez Potočnik on his official website of the Di-rectorate General for the Envi-ronment.

You are in charge of one of the most sensitive EC departments and at the same time with one of the most ambitious goals - to create a green Europe by 2020. Is this goal achievable?One of the most important lessons we have learned during the past couple of years, implementing the environmental policy, is that funds invested in environmental protection may seemingly appear as a high-level expense in the short term, but

is really a long-term investment in the entire society. Ecosystem services are a good example: the entire society collects high dividends when people invest in environmental protection.

If swamps are appropriately protected, they will absorb water, preventing flooding, which subsequently requires significant funding. Protected natural areas are another example. They can guarantee the supply of clean water at a price lower than that of purification. Croatia has enormous tourism potential, but it must protect its environment if it wants tourists to return.

REACH, which regulates hazardous chemicals, entered a new, more mature phase of development and application. In which phase is the list of hazardous chemicals and your initiative for testing and

regulating compounds of different substances? Last year, EC Vice-President Tajani and I announced we would, by 2012, expand the candidate list from the current most suspicious 46 substances to 136. We also agreed to include all known and most dangerous substances by 2020. The purpose of the list is to motivate transition from the use of the most dangerous chemicals to their less risky alternatives, stimulating research, innovation and discovering new substances at the same time. The substitution of one for another will undoubtedly have a positive effect on the environment, but more testing is required. Therefore, a lot more research should be behind the data base which would help us make the right business and safety decisions. We would also need to offer appropriate subsidies for replacing the most hazardous substances. Of course, this process will benefit companies, simultaneously promoting innovation and competitiveness.Regarding chemical compounds, we are all exposed and their cumulative effect is a matter for concern. Before making the final decision, we must additionally investigate everything.

EXCLUSIVE FROM BRUSSELS: JANEZ POTOČNIK, EU COMMISSIONER FOR ENVIRONMENT

GREEN REVOLUTION WILL REACH CROATIA IN 2020Raw material we are presently using for the production of all goods, mobile phones, electric

devices, aircraft or wind power plants will become more expensive. Therefore, the revolution in

the way we use, recycle or manage our resources is inevitable

Croatian tourism potential is enormous. If Croatia wants tourists to come back, it must protect its environment

INTERVIEW


The Commission studies combined effects of chemicals in order to expand the basic data base created by REACH and

to verify the safety of certain chemicals by 2020. I believe the most difficult problem we will face in the future is trying to meet the goal of the World Summit on Sustainable Development – produce and use chemicals in a way which leads to a significant decrease of their effect on health and the environment.

One of the most intriguing actions of the EC regards acts on air pollution with the goal of simplifying their use. Air quality and pollution are crucial to European environmental laws, and I am trying to convince member countries that investment in clean air is an investment in the future. This is quite clear when you consider expenditure and profit from achieving our goals of the Strategy on Air Pollution by 2020. Expenditure is €7.1 billion per year, whilst benefits to public health are estimated at €42 billion. We also need to

find a synergy for the policies of our climate actions. The EC has recently presented guidelines for the transition to a competitive low-carbon economy by 2050 which represents a cost-effective method according to which we should lower emissions by 80% to 95% by mid-century. The guidelines remind us that the combined effects of lowered greenhouse gas emissions and measures for decreasing air pollution will reduce pollution by 65% by 2030 compared with 2005. This would improve health, cut expenditure on health welfare and reduce mortality in 2030 with benefits which are approaching €17 billion per year. I can only

encourage Croatia to develop its policies on air pollution in that direction in order to improve public health and limit the impact on the environment.

In your comment concerning the fact that 75% of small and medium sized companies complain about the price rise of raw materials, you said we must replace evolution with revolution, change our approach towards resources and that more efficient use of resources is necessary for business, whilst eco-innovations are the way this challenge will turn into a new opportunity.

The Eurobarometer research to which you are referring shows entrepreneurs rarely identify the problem of resources as a motive to invest more in eco-innovation. However many resources, our societies currently depend upon or which are overly exploited, as well as the raw materials we use for the production of all types of goods (mobile phones, electric devices, aircraft or wind power plants), will become more expen-sive. Therefore, we need to revo-lutionise the way we use, recycle and manage our resources. The step towards the more efficient use of raw materials is truly a challenge and requires balanced efforts.

The environment is part of acquis communautaire, 27th Chapter, quite difficult and expensive. What

are the greatest challenges of Croatia?

During environmental talks Croatia exhibited great professionalism and willingness to accept changes. Chapter 27 was temporarily closed on December 22, 2010 and to date Croatia has achieved a high level of harmonisation with the environmental part of the acquis. Some areas guarantee transient periods, such as waste and water. I am convinced all these transient periods are realistic, both technically and financially, and very much in accordance with everything previously approved to all accession countries. I believe it is important not to stubbornly insist on deadlines, but rather envisage sufficient time for the implementation of the acquis, avoiding future procedures in case they are breached. Experience has shown that member countries experience the greatest problems with the implementation of acts from Natura 2000 and the correct evaluation of environmental projects. The urban waste sector suffers from frequent discrepancies

since large investment is required in order to meet the standards completely. Members also have problems with the waste sector which sometimes requires new infrastructure. The key element behind a successful avoidance of penalty procedures is careful planning of infrastructure development, using European funds in particular.Involvement by local authorities is also another positive approach towards the appropriate implementation of environmental protection. My advice to Croatia is it should join the European pilot scheme for avoiding penalty procedures. This pilot system and the developed types of preliminary co-operation solve half the issues before the penalty procedure starts. If I am to compare personal experience from the Slovenian negotiating process, I can say ours and yours are quite similar. One of our mutual challenges is definitely the need to build stronger institutions with the capacity to implement the complexities of the acquis. In that respect, Croatia has already invested considerable effort in order to strengthen the administrative capacities in the country.

The greatest Croatian challenges: all members are struggling with waste and water

The most difficult problem will be to produce and use

chemicals with minimum effect on health and

environment


Sanja Plješa

When green hotels are mentioned, many people wonder the real mean-

ing. The term relates to ecotour-ism, sustainable development and energy efficiency. The main objective is to reduce energy and water consumption as well as carbon dioxide emissions by using different methods of effec-tive energy management whilst achieving significant savings. In addition, considerable attention is paid to solid waste disposal, with the use of classic detergents and other chemicals being re-duced to a minimum. Even though the number of green hotels is growing, the US has the greatest number. In such hotels, for example, lights, air condition-ing and TV turn off automatically when the visitor leaves and the water supply is movement-acti-vated with a time limit.

NATURE PROTECTION PROMOTING TOURISM INDUSTRY DEVELOPMENTWhat is the situation in Croatia? Croatia as a tourist destination

has unique potential and compet-itive advantage over other coun-tries as it has not made the same or similar significant mistakes made by certain other destina-tions. Sustainability and environ-mental management can make an immense impact on business ac-tivity and increase its resilience during a crisis period. “People still continue travelling in spite of the economic crisis and if Croatia wishes to be a sustainable coun-try, it must abandon its current way of thinking of the public sec-tor and its sluggishness”, stated Xavier Font, the Director of Study at the International Centre for Sustainable Development of

Leeds University in Britain. Pro-tection of natural resources is cer-tainly one of the key factors for Croatian tourism and therefore tourism industry development needs to be adapted towards sus-tainable destination management. Protection of natural resources is the unique potential of Croatia as a tourist destination and creates an immense competitive advan-tage over other countries.

VISITORS OPT FOR ECO HOTELSThe European tour operator, TUI, has conducted a survey on visi-tor satisfaction during their stay in different hotels throughout Ire-

land and Great Britain. According to the survey, visitors staying in green hotels showed a 9% greater level of satisfaction than visitors staying in other hotels. Font stat-ed that the owners of green hotels decided to focus on sustainability according to the premise – a bed is always a bed. When deciding on their destination, tourists are interested in the hotel location, the number of rooms on offer, the types of services and similar. Font pointed out the example of the Spanish tourism group, Sol Melia, which holds certification for its hotels and is also a green certificate holder.“If Croatia wishes to retain its regular, loyal tourists as well as attract new, focusing on the sus-tainable development of tourism is an imperative. The creation of new and more appealing tourism concepts will attract new tour-ists. Thus, those who used to go on walking tours to Kazakhstan can now come to Croatia, where there are also walking paths or other types of tourism”, stated Font concluding that new types of tourism offer must not be mo-notonous or obsolete.

In order be on a par with current trends, ten Croatian hotels and five camps have been recognised with the award of Environmental friendliness. This is a constituent part of the international policy of sustainable producti-on and consumption, whose main objective is to reduce the negative im-pact of production and consumption on the environment, health, clima-te and natural resources. It indicates high standards of environmental protection observed in the hotels above the prescribed legal minimum. In Croatia it is awarded according to the provisions of the Regulations on environmental protection label for a two year term. In order to be awar-ded this recognition, Croatian hotels must meet 30 mandatory criteria.

Croatia on the right path

GREEN HOTELS – A WORLDWIDE SUCCESS

A BED IS ALWAYS A BED In green hotels lights, air conditioning and TV turn off automatically when the visitor leaves, the water supply is movement-activated with a time limit


Croatian craftsmen at Priština fair The Croatian Chamber of Trades and Crafts will organise for the first time a joint presentation of ten Croatian crafts at the 10th Expokos international fair which will be held from the 18th to 21st May in Priština. The aim of the fair is to present the potential of Croatian crafts, craft products and services in one of the most important new markets - Kos-ovo. The Priština fair consists of four joint exhibitions - See-Tech (automation and robotics, trans-port, metallurgy, crafts and en-trepreneurship and non-metals), Energetic Fair (equipment and machines for production, trans-mission and distribution of elec-tric energy), PNM (construction) and Wood Industry.

Annual 2% drop in retailAccording to data provided by the Central Bureau for Statis-tics, retail turnover in March was nominally 16.9% higher in rela-tion to February. Year-on-year, it nominally decreased by 1.3%. On a similar basis, retail de-creased in 10 areas, mainly retail of electric household appliances (18.6%).

BeCROative exhibition in Sweden

At the 58th World ploughing com-petition (WPC) held in Lindevad in Sweden recently, the Croatian Chamber of Economy and the award-winning Be CROa-tive exhibition promoted qual-ity Croatian products, renowned Croatian inventors and inven-tions and Croatia as a country of innovative and creative people. Participation at this competition was evaluated as extremely im-portant, especially since Croatia will be host in September 2012 in Biograd na Moru (Biograd-on-sea). They presented all 235 prod-ucts carrying the labels Croatian Quality and 116 products with the label Croatian Creation.

Sanja Plješa

Industrial design in Croatia is currently of higher qual-ity than in the past. This

was particularly evident at the recently held designer furniture fair in Milan which saw the ap-pearance of many furniture de-

signers amongst which there were Croatian designers. The fair left a positive impression, whilst Croatian furniture design-ers met with approval for their work and quality of furniture. Privredni vjesnik talked to Luka Mjed, Director of the Centre for Design at the Croatian Chamber of Economy about the appear-ance of Croatian designers at the Milan fair. Some twenty Croatian designers exhibited products at the fair and their appearance was jointly organised by the Indus-trial Design Association at the Croatian Chamber of Economy, the Croatian Designers Society and ReAktor. Nevertheless, the greatest recognition for the ap-pearance of Croatian designers was to Zoran Jedrejčić, a Croatian designer living in Milan.“It was the first time that we have exhibited at the Milan fair and

after having made a tour of for-eign designer stands, we came to the conclusion that our designer furniture was of high quality. Nevertheless, we are faced with a problem with large furniture companies in Croatia who have still not identified the importance of designer furniture. Therefore,

several Croatian designers have become acquainted with technol-ogy and are themselves becom-ing producers of such furniture”, pointed out Mjeda.

Design emphasising brandsRegarding the Milan fair, Mjeda stated that it is the most interest-ing European fair for designers as it abounds with innovation, even in the sector of lighting and equipment. Certain companies order special products from de-signers exclusively for the fair so that design would emphasise their brand and make a greater impression on visitors, which was particularly obvious at the Japanese stall which exhibited exclusive lighting. “The aim of the project was to make visitors remember the lighting as a Japa-nese brand, rather than inducing them to purchase the lighting”,

stated Mjeda, pointing out that designer furniture can be unique, but can be both small and large scale production. The most obvious evidence of the extraordinary quality of Croatian designer furniture was an arm-chair purchased by a foreign company prior to the fair and ex-hibited at their stand. It was ex-hibited as an exclusive armchair with a suggested price of €1,300, almost double that in Croatia. Nevertheless, there was the pro-ducer brand on it, so no one could know where it was produced.

Recycled stockingsAmong Croatian designers, Maja Mesić made a special appearance at the Milan fair exhibiting three of her products and Filip Des-pot, Tihana Gotovuša and Ivana Pavić from Grupa, Filip Gordon Frank, Roberta Bratović, Nina Bačun and Tomislav Mostečak, Sven Jonke, Christoph Katzler and Nikola Radeljković from ForUse/Numen, Kesnija Jurinec, Ljiljana Kolundžić, Simon Mo-rasi Piperčić, Neven and Sanja Kovačić from Redesign, Antonio Šunjerga and Svjetlana Despot who exhibited a chair made of re-cycled stockings which was pur-chased by the Milan gallery Dil-mos also generated significant at-tention. Svjetlana Despot stressed the importance of this purchase since this gallery purchases only top quality products and presents known designer names. She talked about her collection Data by and stated that it is made up of about one hundred products which can be produced even on a large scale. One of her collec-tions is ‘Recycle Bin Collection’ and features recycled or faulty products. One example is also the hand-made chair she makes by us-ing faulty stockings received from the Jadran stocking factory.

::: news

INDUSTRIAL DESIGN

Create, make, produce, sellDesigner furniture can be unique and can be both small and large scale production


CROATIAN FOREIGN CURRENCY MARKET

Source: HNB WEEK MAY 14, 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

::: news

Imex bank savings increasePersonal savings in Imex bank totalled €0.14 billion by the end of April, which accounted for 74% of total deposits and soared by 35% over the same period last year. Profit came in at €1.15 million which was 26% up over 2010, whilst total assets were €0.24 billion, a significant increase of 25% over the end of 2010. Total revenue increased by 12%.

€5.89 million earned by pension fundsMandatory pension fund profits totalled €5.86 million in the first quarter. Profits of Allianz ZB, PBZ Croatia insurance, Erste and Raiffeisen were up 10% over the same period last year. Erste, which manages Erste Blue Pen-sion Fund, was the most success-ful in terms of increased profit, soaring 40.2%, totalling €0.60 million. Raiffeisen managing OMF was the least successful at €1.89 million and it outper-formed the first quarter of 2010 by a mere 1.6%. As in 2010, Al-lianz ZB had the highest profit, at €2.47 million, whilst PBZ/CO followed with a 17.8% increase, to €0.92 million.

Construction permits increasing899 construction permits were issued in March, 0.8% up over the same period last year. Never-theless, the total number of con-struction permits issued between January and March was down 5.9% over the same period in 2010. According to types of con-struction, 88.9% of permits were issued for commercial/residential and 11.1% for other types. With respect to the type of construc-tion work, 81.8% of permits were issued for construction of new buildings and 18.2% for the reconstruction of buildings.

According to the latest Croatian National Bank data the dynamics of the

recovery in lending is increasing-ly strong. Total loans amounted to €38.23 billion at the end of March, 8.4% up over the same period last year and 2.3% up over the end of 2010. The annual lending increase was mostly due to the corporate sec-tor, at €15.02 billion (+8.2% year-on-year), which could indicate the start of a new business cycle and new production processes. In addition there was a considerable increase in the import of indus-trial materials in the first quarter (+5.3% year-on-year). Neverthe-less, this applied mainly to large companies, whilst small and me-dium sized companies are still

over-burdened by illiquidity. Per-sonal consumer loans are still ex-tremely weak, mainly as a result of adverse movements on the labour market and a high level of pessi-mism. By the end of March such lending stood at €17.23 billion, 2.5% up year-on-year, although 1.3% down over the end of 2010.

Lending recovery in 2011Housing loans, which account for 45.2% of personal loans, stood at €7.79 billion, an an-nual growth rate of 6.1% ap-proximately in accordance with previous months, whilst it was considerably lower than the pre-crisis period and no significant recovery is on the horizon, as this lending recorded a decrease of 1.9% over the end of 2010.

The amount of government lend-ing was over €0.82 billion up in the first quarter in 2011, totalling €5.55 billion. The largest share of this increase was in March (+€0.7 billion over February), as a con-sequence of government lending of €825 million for the repayment of a mature Eurobond issue. RBA analysts are anticipating a lending recovery in 2011, pri-marily as a result of corporate demand. It could also be a con-sequence of the €850 million li-quidity release after the Croatian National Bank reduced the level of mandatory bank reserves from 20 to 17%. The intended use of these funds has not been made known, but may well result in an increase in corporate lending. (V.A.)

CROATIAN NATIONAL BANK

€38.23 BILLION LENDING IN MARCH Lending increase was mainly due to the corporate sector which could indicate the start of a new business cycle and new production processes

9.5. 10.5. 11.5. 12.5. 13.5.

7.384

7.380

7.376

7.372

7.368

7.364

EUR 5.21

5.19

5.17

5.15

5.13

5.11

USD 5.880

5.865

5.850

5.835

5.820

5.805

CHF

9.5. 10.5. 11.5. 12.5. 13.5. 9.5. 10.5. 11.5. 12.5. 13.5.


The company Vinovak from Zagreb is a subsidiary of the French company

Vinovak SARL. It was created from a wish to present French know-how and state-of-the-art technology in wine production to wine producers in Croatia and throughout the region. The founders of the company in Croatia acquired valuable experi-ence in reputable French wineries as well as in companies specialis-ing in both traditional and state-of-the-art technology and know-how in wine-production. “All our projects have been conceived by a multi-disciplinary team of experts who acquired their ex-pertise in the most reputable wineries throughout the world”, pointed out Irena Gržentić, Vino-vak Zagreb Director.Vinovak currently offers a range of 15 products. “In addition to a lengthy tradition and experience, our advantage lies in the quality and attractiveness of the cellar with barrique barrels. The bar-rique cellar has a critical role in the aesthetic experience of the winery and it is a prerequisite for the production of the highest quality wines, which take longer to age and reach maturity”, she added.It is for these reasons that Vino-vak co-operates with the best barrel producers with a long tradition, constant quality and who are fully acquainted with

the latest scientific research with respect to choice and supply of raw materials and the produc-tion itself. It co-operates with the leading cooperies in France and throughout the world, such as Nadalie, Seguin Moreau and Radoux.

Wide product range“We use the Oxoline structure for arranging barrique barrels ac-cording to current global trends and experience as it is the most appropriate way of arranging them regarding the ageing of wine, which was illustrated by a gold medal at the fair Vinitech in Bordeaux in 2002”, remarked Irena Gržentić.Vinovak offers a wide product range for technology improve-ment and enhancement of inno-vation in wine production, such as original Stelvin and Stelvin Lux closures, state-of-the-art technology in the maturing and ageing of Oenodev wine, wood chips (solely from the French sessile-flowered oak) for oe-nological use, which is one of the most significant patents for micro-oxygenation of the wine. In addition, the company offers a complete vinification process in barrique barrels and Nomblot concrete tanks created in compli-ance with wine producers’ stand-ards, as well as an extremely interesting ‘bag in box’ wine boxes. (J.V.)

VINOVAK, ZAGREB

Virtualisation of real space

Tradition and attractivenessThe competitive advantage of the company is in both the quality and attractiveness of their cellar with barrique barrels

After twenty years of work-ing in multimedia in Kon-dorcomm, in 2010 several

experts decided to establish Pan-dora Studio which specialises in the development of 3D space and entertainment software for a broad range of customers. One of their programmes, soon to see the light of day, is a computer game Gas Guzzlers. Andrej Levenski, technical director of Pandora Studio explains the game is a dy-namic race during which players may use weapons, increasing the thrill during playing. In addition to the computer game, one of the main products of this company, which employs 10 workers, is the virtualisation of real space. Ex-perts of Pandora Studio do this in a virtual city. The key to this solution is that people can access, from any location, a three dimen-sional space simulation with top graphic and interactive basis, and literally stroll through the centre of the town. They can also use all internet options, such as acquir-ing information on his- tor ic sights, hotel reserva-tions, and commu-nication with others who are virtually walking in the same space. Naturally, the most interesting thing would be to promote Croatian and world cities, as well as attractive local

and European historic and tourist destinations, explains Levenski. <mn> Subscription to gamesIn practice this would mean spreading information and bring-ing real city streets before the eyes of 1.6 billion internet us-ers, who can stroll down vir-tual streets and see other famous sights sitting in the warmth of their homes. With insight to the beauty and appeal of a certain city, users could select their next holiday destination, opines Lev-enski. Tomislav Pongrac, crea-tive director of Pandora Studio, stresses that one of the key prob-lems of the gaming industry is finding suitable staff. “It is dif-ficult to find educated people with certain experience, so we are primarily oriented towards employing youths who we train from project to project”, points out Pongrac. After Gas Guzzlers, Pongrac reveals, the company will venture into the MMO (Mas-sive Multiplayer Online) seg-ment, the development of games based on monthly subscriptions

for a large number of people who will play continually.

(B.O.)

PANDORA STUDIO, ZAGREB

The key problem of the gaming industry is finding suitable staff

eserva-mmu-thers tually

e same urally, esting e toatian es, as ve llllllllocoooooo ala

for a large number of people who willplay continually.

(B.O.)

WE PRESENT


Željezara Split must return €39 million of state subsidiesŽeljezara Split in bankruptcy must return €39.59 million of state subsidies for restructuring, according to the decision of the Council of the Agency for Pro-moting Market Competition, and the Ministry of Finance received instructions to take legal action with regard to this issue. The rea-son behind the decision concerns irregularities in the implementa-tion of Željezara’s Sustainability Plan, according to the explana-tion of the Agency. The amount refers to approved state subsidies for restructuring (€30.37 million) and default interest for the period May 28, 2009 to March 11 2011 (€9.22 million).

Great potential of Russian marketRussia is the most exciting mar-ket in the world, where one must be practical and flexible. This was the message from the Round Table Business and Eco-nomic Surroundings in Russia held recently and just before the international conference View to-wards Russia which will be held in Zagreb in late May. Russia is one of the biggest opportunities for Croatia to increase produc-tion and exports, especially since there is a positive perception of the country concerning Croatian products as technologically ad-vanced, said Darko Delač, Head of the Economy Department at the VERN College. However, in order to achieve this, investment in this regard must be multiplied, and the level of communication between Russia and Croatia im-prove, Regards Delač.

Slovenians have doubly better standardThe average Croatian has €4,828 per year for the purchase of goods and services, whereas Slovenians have €10,060. This was revealed at the forum on retail, organised by the magazine Ja trgovac re-cently. It was also concluded that those who invested in innovation and new products withstood the crisis better than those who cut expenditure. As opposed to the global market, where internet shopping has been rapidly grow-ing, in Croatia the rise is mainly as a result of numerous portals for collective shopping with big discounts.

::: news

Croatian shipbuilding is on its knees, many point out. There are few new

projects, and the European Un-ion prohibits the allocation of sizable state subsidies to this sector, which is why every new contract is important news. Dur-ing the Olympics in London, tourists will sail on the Thames in a catamaran designed at the Brodarski institut (Shipbuilding

Institute), and built in the Pula shipyard Tehnomont. The equip-ment within the boat, which will transport 599 passengers, will be manufactured by the Slovenian company Metalika, and a combi-nation of solar panels and biofuel will provide driving energy. The chief director of Brodarski insti-tut, Vladimir Koroman, points out that they were selected for the contract in strong competition

from British and West European designers owing to the quality of the project design as well as an acceptable price and time frame. According to his estimates, half the equipment will be of Croatian origin. The maximum speed is 12.5 knots, and the boat is 37 me-tres long and 14.6 metres wide. At only 1.45 metres, the vessel is shallow-draught. Its features include a modern interior and exterior design and low fuel con-sumption due to specially formed asymmetric hulls. The vessel will have integrated surveillance and control systems as well as automatic control of the ballast tanks which will en-able setting during rapid change of tide. It will sail during the day, turning into a restaurant in the evening. The multimillion pound project is designed for the company City Cruises from London.

CATAMARAN FOR LONDONA new, futuristic catamaran, designed and produced in Croatia will promote Croatian shipbuilding during the Olympics

SHIPBUILDING

PV International 0153

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