PV International 0158

Igor Vukić

�uro Đaković Montaža is participating in the construction of a fourth

nuclear power station in Fin-land. Technological co-operation between Croatian and Finnish companies and experts has huge potential, as has recently been concluded at the Croatian-Finn-ish business seminar. The Finn-ish delegation, comprising 15 members, was headed by Esko Hamilo, Under-Secretary of State for External Economic Affairs of Finland. Finland is a highly competitive country, with its knowledge-based economy. It is deeply aware of the necessity for environmental protection and is consequently not afraid of nucle-ar energy. According to Under-Secretary Hamilo, there are op-portunities for co-operationmany fields. Hamilo expressed his be-lief that the Finnish experience clearly illustrates how benefits of EU membership significantly outweigh drawbacks.

Zagreb nanotechnologyFinland and Croatia are also co-operating in nanotechnology. The Ruđer Bošković Institute and the Finnish research centre at Yjvasky-

la University organised the first summer school of nanotechnology and nanoscience in Dubrovnik last year. The Finnish Funding Agency for Technology and Innovation (TEKES), showed interest in co-operation with Croatian research institutes and production compa-nies and can connect Croatians with their potential partners in Finnish companies. The Finnish delegation also in-cluded Patria representatives, the company which sold Croatia the technology for the production

of military armoured vehicles. There are high expectations with regard to additional, offset jobs, created by such contracts in the military sphere. Co-operation is also improving in tourism: last year there were 27,000 Finnish tourists, 10% up over 2009.Trade between Finland and Croatia stood at $120 million be-fore the crisis. Croatian exports totalled $20 million, whilst from Finnish point of view it was about $10 million, mainly Nokia mo-bile phones and other telecom-munication equipment. Trade is increasing again due to the recov-ery of the Finnish economy and exports, supported by Finpro, an agency employing 3,500 staff, with subsidiaries in 40 countries throughout the world.

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 / 20th June / 2011Year IV / No 0158www.privredni.hr

20102010

Wheat harvestseason commences The best price in the last 20 yearsFARMING

PAGE 4

Mirko Grbešić, owner, Mepas GroupFirst step: strong and stable regional positionINTERVIEW

PAGES 2-3

Traffic investment€3.42 billion needed for railways, air transport in deficitTRANSPORT

PAGE 7

ĐURO ĐAKOVIĆ MONTAŽA IS PARTICIPATING IN THE CONSTRUCTION OF A FOURTH NUCLEAR POWER STATION IN FINLAND

Croatians constructing nuclear power stations in FinlandEsko Hamilo advised Croatian entrepreneurs and the public that the Finnish experience clearly illustrates how benefits of EU membership significantly outweigh drawbacks

Finland and Croatia co-operating in nanotechnology

The European Commis-sion did not suggest to EU member countries to intro-

duce a clause for a possible post-ponement of Croatia’s entry into the EU in case of non-fulfilled criteria, and the reason is simple - the candidate country is ready. For this reason the proposal does not include additional monitoring, except for the usual mechanisms and analyses every half year. “We possess solid evidence this will be the case for Croatia. Otherwise we would not postpone what we proposed,” stated the President of the European Commission Jose Manuel Barroso after his meeting with President Ivo Josipović in Brussels last Friday. The EC sees the procedure as a series of efforts which must not slow, let alone stop. The sense of the monitoring is apparently the ability to maintain the full reform drive. President Josipović points out this is an irreversible process. No-one can turn back the wheel of time or stop the anti-corruption fight since our views, mentality and the attitude towards crime have changed, said the President. By the EU Summit on 23 and 24 June it will become clear whether the opinion of the EC is accept-able to members. (L.S.N.)

Accession talks

Commission is convinced Croatia is ready

2

Mirko Grbešić, owner, Mepas Group

First step: stronWe must all reach higher quantities in production and sale

Privredni vjesnikYear IV No 0158

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]

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TRANSLATIONLučana [email protected] [email protected]

INTERNATIONAL OPERATIONS Ray [email protected]

Hrvoje Horvat, co-ordinator, World Bank project

Agricultural Pollution Control

Nitrates Directive for salvaging waters

Harmonisation with the new conditions of agri-cultural management is

an important process Croatian producers have been facing for quite some time. The set of new protective measures and norms for the environment and health of people as well animals is also known as cross-compliance. The Nitrates Directive has an impor-tant place in this set of meas-ures. Why is it so important for Croatia? Is it only a bureaucratic whim or something else? During the agricultural boom in the 60’s artificial fertilisers became popu-lar and massively used. Now it is known that artificial fertilisers are quite a perfunctory way for substi-tuting the lack of nutrients in the soil, and very different compared with natural fertilising. Their long-term use results in the de-crease of humus (the basic organ-ic soil substance), acidification of the soil, erosion, sedimentation of heavy metals and leaching of ni-trates into underground water. It is also known that nitrates have

a negative effect upon our health. They are responsible for cyanosis in small children (Blue Baby Syn-drome), reproductive problems, hyperthyreosis and the occurrence of diabetes. Undergoing meta-bolic processes, they turn into nitrates that are extremely toxic. In the stomach they then turn into nitrosamines that are extremely carcinogenic. The latest discover-ies confirm the suspicions accord-ing to which long-term exposure to small doses leads to mutations

in chromosomes and various types of cancer. Previous research confirmed that every third well in Croatia, in areas under intensive farming, has an increased con-centration of nitrates. The funda-mental act of the European Union, prescribing the method of fertilis-ing and preventive measures, is called the Nitrates Directive. To increase awareness and accept the necessary changes, we started a campaign in conjunction with the project of the World Bank Agricultural Pollution Control, which deals with analysing water in village wells. Present reports indicate a significant number of wells with increased nitrate con-centrations. The analysis is in its preliminary phase, and we will publish the first results in the

employed in the Mepas Groupover 2,600 people(

Svetozar Sarkanjac

Mirko Grbešić, an entre-preneur from Bosnia and Herzegovina has

quite a substantial influence on the Croatian economy with the Mepas Group. Mepas is majority owner of Koestlin from Bjelovar, Brodomerkur from Split, Mar-aska from Zadar, Saponija from Osijek, and has recently bought Kandit, the chocolate factory in Osijek, from the entrepreneur Marko Pipunić.

You have previous experience with Kandit. What is the concrete reason for your purchase?Our co-operation with Kandit spans more than 15 years. Mepas is the exclusive distributer of Kandit in Bosnia and Herzegovina and our co-operation is excellent in this segment. Koestlin and Kandit are two absolutely compatible programmes which complement one another in terms of their product line, and this merger has multiple mutual benefits. Kandit has always had the potential, quality and recognisable products. However, it has not always had the strength to position them appropriately and use this potential. Entering our group, it will acquire the strength that will enable it to transform into a modern factory with strong brands and market position.

What is the present state of Kandit and what are your business plans regarding the development of the brand?The situation in Kandit has met our expectations. There is much room for progress and improvement of the business in every sense. All aspects of the company are currently being

analysed. Afterwards, concrete marketing strategies will be defined, or rather the strategy of overall business. Kandit and its products have not been adequately supported for the past several years. That is why

our priority will be to restore its recognisability, invest in the brand and assume the appropriate market position.

According to available information you bought everything within Kandit, except for the premises. What are your future plans?We made an arrangement with the current owner according to which we have a three-year deadline to move to a location near Osijek. We are planning to build a modern factory which will fully comply with all market demands and our ambitions with Kandit.

The situation for Croatian confectionery producers is not great. The state of the “sweet” industry is very bitter, according to experts. What might be the solution of this absurd situation where local producers make high-quality and recognisable p r o d u c t s which they

We will need to increase the controls over the use of nitrates, not for the EU, but for the country and future generations

Present reports indicate a significant number of wells having an increased level of nitrate concentrations

We are planning to build a modern factory near

Osijek which will suit our ambitions regarding

Kandit

INTERVIEW

successfully export, yet at the same time the Croatian market is overwhelmed with

foreign and often lower quality products? The confectionery industry is faced with enormous competition from foreign producers, low purchasing power and total consumption as well as record high prices of imported raw materials. It is difficult to expect enviable results in such a state. I believe the solution to this present situation lies in the company itself, since we need to be efficient and remove all

internal flaws regardless of the difficult surroundings. If the company does not have a solid foundation for

competitiveness, then any kind of help from outside cannot be a long-term solution. The

state needs to use all those mechanisms other states

are using to protect their local production,

and we as a company need to constantly work on increasing competitiveness. Furthermore, the significance of using local products needs to be constantly brought into focus, since it is evident this kind of awareness is not at as high a level as in other countries that recognise and value their local products.

In addition to Kandit, you are also the owner of Koestlin from Bjelovar and Maraska from Zadar. Where do you see potential synergy effects in this food sector?There are many synergy effects, starting from cuts in supply,

logistics, knowledge exchange, stronger market position and the opening of new markets. Kandit is a new member and it is clear all our companies, especially Koestlin and Maraska, will do all that it takes to bring Kandit to the desired level in terms of organisation, production and market position.

Where do Saponia from Osijek and Brodomerkur from Split fit in this business story?Saponia does not have the same product line, but it has the same buyers and business processes. It must greatly contribute to marketing, organisation, logistics and any other kind of aspect. In every sense Saponia can be the waypoint for all our companies that produce and sell goods for wider consumption. Brodomerkur deals with other

types of goods that have little to do with Kandit, which is why the possibility of synergy is much smaller in relation to other members of the Group.

Certain economic experts advocate theory according to which the most important and the most realistic thing for Croatian producers is to take over the markets of ex-Yugoslavia. Is that sufficient?I agree that the most logical step is to take over the local and regional markets. The consumers from ex-Yugoslavia recognise our products; they have a habit of consuming them and they are familiar with their quality. There are no language barriers on these markets; transport costs are less; it is easier to support the products in terms of marketing and it is more cost-effective to direct our forces to these markets while there is still room for development. On the other hand, we must all reach much higher quantities in terms of production and sales if we want to survive and this is impossible without venturing into third countries. The first step is to assume a strong and stable regional position, and second is to take over other markets.

g and stable regional positiones if we want to survive; the synergy effects we are trying to achieve within the Mepas Group are a good start-point

3

united through the Mepas Group8 successful companies( Group income last year

€360 million(

www.privredni.hrBusiness & Finance Weekly

The state needs to use all mechanism that other countries use to protect local production

The Mepas Group consists of the following companies: Sapo-nia Osijek, Koestlin Bjelovar, Ma-raska Zadar, Brodomerkur Split, Kandit Osijek and Mepas HR. The distributing company Mepas B&H is situated in Bosnia and Herzegovina, as well as the me-tal construction factory Meta-lac from Široki Brijeg. The Group employs over 2,600 people. Last year it achieved €360 million in income.

What is the Mepas Group?

4 Privredni vjesnikYear IV No 0158

Svetozar Sarkanjac

Farmers, purchasers, seed producers and experts are all in agreement with the

estimate that this year will not witness record yields of winter crops. Last year 15% less barley was sown, missing the deadlines, without the use of appropriate agro-technical measures and using seed reserves. The same applies also for wheat and, ac-cording to estimates, between 100,000 and 120,000 hectares were sown in Croatia last year, some 50,000 hectares down over the regular sowing. In addition, below average seed yields are anticipated.

Nevertheless, all these nega-tive indicators are not alarming. Croatia will satisfy its wheat needs as local annual consump-tion stands between 540,000 and 550,000 tonnes, which can also be achieved with the areas cur-rently under crop.

Spring wheat sowing In addition, towards the end of 2010 and at the beginning of 2011, several instances of atypi-cal sowing were noticed. Rela-tively acceptable weather con-ditions in December and even into January contributed to an increase in interest for wheat amongst producers and spring wheat sowing was observed in

several areas. The increase in interest for wheat among pro-ducers was also a consequence of circumstances on world mar-kets which resulted in record high wheat prices of €0.30 per kilo at the beginning of the year. Prices have since fallen back, but they are still rather high.Drago Šurina, from the company Granolio, which will purchase about a quarter of this year’s wheat yields in Croatia, pointed out that this year’s prices will be determined by two agricultural markets – in Hungary and Paris. “In addition, we always have to be in accordance with our neigh-bours, who are large wheat pro-ducers, mainly Hungary and Ser-bia or Vojvodina”, stated Šurina. “The current prices, according to all market criteria, stand between €0.20 and €0.23 per kilo. Never-theless, there are constant chang-

es. Rain, for example, which was recorded in the area at the beginning of June, will certainly contribute to a price increase in the area. Experts believe we will record average yields this year”, concluded Šurina.

Disconcerting purchase model Everyone is interested in the pur-chase process, particularly small producers and in Granolio they stated that they were granted loans by banks and that produc-ers would receive their money upon presenting the required documents and invoices. “It has to be pointed out that this price is definitely the highest since 1991. Nevertheless, producers fear that such a high price could be reduced on global agricultural markets”, warned Drago Šurina.Antun Laslo, a farmer from

Đakovo area and President of Farmers’of Slavonia and Baran-ja Association, believes it is too early to anticipate harvest yields. In the end, it all depends on nature which was once again witnessed in the Đakovo area at the beginning of June when the area was struck by hail storms.“The model and standards of purchase are more disconcert-ing. There is no unique European standard but individual coun-tries create their own criteria and our purchasers are currently not willing to make any altera-tions. There is very little choice for farmers. Warehousing ex-penditure is high and farmers cannot afford it. Farmers need to organise themselves and form co-operatives owning storage si-los. Unfortunately, our farmers do not find this idea acceptable at the moment”, he concluded.

sown last year throughout Croatia120,000 hectare(

WHEAT HARVEST SEASON COMMENCES

THE BEST PRICE IN THE LAST 20 YEARSProducers are not rejoicing yet, as the yield will depend upon nature and prices will be determined by two agricultural markets in Hungary and Paris

Warehousing expenditure is high and farmers cannot afford it

4 PY

es

www.privredni.hrBusiness & Finance Weekly 5

Igor Vukić

In the vicinity of the Westgate shopping centre, there are plastic greenhouses where

salad crops are cultivated over 2.5 hectares. They are grown hy-droponically, using state-of-the-art technology with a daily yield of 5 tonnes. The greenhouse was produced by a company from Pitomača, Meta-plast, owned and headed by Damir Blažinčić. Their production range has re-cently been presented with some

40 exhibitors at the third exhi-bition of products and services Pitomača 2011, organised by the Pitomača Municipality Associa-tion of Craftsmen.The craftsmen in this region are very skilful in greenhouse con-struction. Dražen Hrvojić from DH plastenici stated that his com-pany exports greenhouses, made to customer order, to Bosnia and Herzegovina, Serbia and Austria. They produce the metal construc-tions themselves, whilst green-

house plastic sheeting is imported from Italy, Germany or France. There are only five or six produc-ers from these countries covering the global market for this type of plastic, explained Hrvojić.

Reaching customers via FacebookPitomača craftsmen nominated several colleagues for awards this year. They set high and clear standards: the settlement of all li-abilities and obligations towards the state, revenue and exports in-crease and a continuous presence on local and international fairs. Tapetarija Veličan, DH plasteni-ci and Merkur production textiles were on the short list. Tapetarija Veličan, owned by Ivan Veličan, specialises in chair and armchair production. This craft has ex-isted for 19 years, employs 26 staff and almost 80% of produc-

tion is exported. Matija Škrinjar from Merkur attracts custom-ers with quality production and materials. His company’s range of baby clothing for up to one year olds (everyday clothing for infants and babies, covers, special occasion wear for bap-tisms and similar occasions) is sold throughout Croatia and also abroad. The company had devel-oped its own brand Mali anđeo and their objective is to become a top brand and be recognised in this demanding market. It also reaches its customers via Face-book and has recorded online sales growth. It is currently pre-paring for trhe large international fair in Cologne where they will present their range. The company Gigant, dealing with plastic pro-duction and the floorer Željko Jakopec share the construction industry destiny. There is less

work, but quality, good reputa-tion and preparedness to travel on work related purposes, helps to create revenue even in a time of the crisis.

Together we are strongerPitomača craftsmen often help mutual development. Good ex-amples of this are the companies Jan Spider and Herba S: the former produces medicinal herbs and teas, the latter produces ma-chinery for processing. Vladimir Hrvojić, Herba owner, stated that increased tobacco and herb pro-duction must be accompanied by appropriate machinery. The com-pany therefore produced combine harvesters for pumpkins, equip-ment for the producing pump-kin oil, camomile flower cutters, packaging machinery and other equipment. Machinery in the Kloštar Podravski plant is pro-duced by 26 workers. About 30% of production is exported to Bos-nia and Herzegovina and Serbia and the company has been receiv-ing new orders from Hungary and Serbia. A new development area is the production of wood bio-mass boilers. The energy obtained will be used for tobacco drying and will be four times more eco-nomical than gas which is cur-rently used for this purpose.

Increased tobacco and herb production must

be accompanied by appropriate machinery

PITOMAČA CRAFTSMEN EXHIBITION

Reaching customers through knowledge and persistencePitomača craftsmen often help mutual development. Indicative examples of this are the companies Jan Spider and

Herba S: the former produces medicinal herbs and teas, the latter produces machinery for their processing

The largest proportion of ap-proximately 400 hectares of Croatian eco olive groves is lo-cated in Dalmatia, and for the past three years there has been an increasing interest from olive growers in ecological produc-tion, noted Snježana Mihinica, an associate for ecological ag-riculture of the COAST Project at a seminar on the Advantages of Ecological Olive Growing, held in June in Marina.

The seminar, which gathered several olive growers and other

farmers, is part of the implemen-tation of priority measures of the Action Plan for the develop-ment of ecological agriculture and food production in Dalma-tia within the scope of the UN COAST Project. Ranko Tadić, expert in ecological agriculture with the COAST Project, point-ed out that plantations of global ecological olive groves increased by 20% between 2007 and 2009, reaching half a million hectares.

A similar trend was also observed in Croatia. It still lags behind all Mediterranean countries accord-ing to the production of olives, and also some countries where olive growing is in its early stag-es, for example the USA, Argen-tine, Peru and Australia, pointed out Tadić. He explained to olive growers how to acquire an eco-label and referred to subsidies which ecological olive growers could obtain. (J.V.)

ADVANTAGES OF ECO OLIVE GROWING

Ecological olive growing on the increase

6 Privredni vjesnikYear IV No 0158WE PRESENT

The headquarters of the company Majon are in Pula and its business ac-

tivity is in Rovinj. In 2002 it adapted a beautiful old house in the old centre of the town in order to make it a branch of a law of-fice. Nevertheless, the company founders decided to adapt the house for tourist purposes. This was the inception of Villa Valdi-

bora, one of the most beautiful small hotels in Croatia. The Villa employs four full-time staff, al-though during the tourist season they are assisted by four addition-al seasonal workers. The hotel operates throughout the year and provides all facilities for business people. In addition, its particular advantage is the tastefully deco-rated conference hall for mini-conferences and business gather-ings. A further advantage of the Villa is its pet friendliness, for visitors bringing pets with them. “The hotel visitors are mainly business people but there are also antiquity enthusiasts and visitors who enjoy the antique atmos-phere. Nevertheless, visitors are also provided with all the advan-tages of today such as internet access, wireless internet, satellite television, projector, coffee ma-chine, microwave, toaster, dish-washer, a digital safe, automatic air conditioning, hydro massage

shower cabin with sauna and oth-er similar facilities”, pointed out Zvonko Nogolica, Majon owner.

Four star luxuryThe hotel is anticipating a new investment cycle since it has been granted an expansion loan by HBOR both for the expansion of its programme and for the adapt-ing of its kitchen and restaurant, spa and wellness centre. The in-vestment value is €500,000.“The facility is under constant re-pair and constantly monitored by ardent preservationists. We wish to present to our visitors the rich cultural and historical heritage of Rovinj and thus the 17th century baroque interior of this intimate-ly designed hotel. The rooms in this luxuriously restored Rovinj villa are furnished with care-fully selected antique furniture and decorated with works of art. Visitors can enjoy the service and kindness of staff bringing them breakfast to their suite, cleaning and tidying the rooms daily, pro-viding information on the cultural and gastronomic secrets of Rovinj and Istria, as well as offering bi-cycles for sightseeing, recreation or going to the beach”, promoted Nogolica. This four star hotel has 11 suites and its accommodation capacity could be expanded to 20 units. Villa Valdibora has been co-operating with Istrian wine producers, members of Vinistra, hosting them in its premises and enabling them to present their wines and provide training for Is-trian wine producers. (J.V.)

MAJON, PULA

Thinking GreenTo the artists from Hortiart each garden is equally big and equally important, turning it into a creative, functional, innovative, and most importantly, a pleasant living space

A Japanese garden in Tuškanac in Zagreb, a roof terrace in Perjavica,

a fountain of the Westin Hotel, the atrium of the Museum of Arts and Crafts and Hemingway bar are some of the designed projects of Hortiart, a rela-tively young craft founded two years ago by Darko and Tonko Katović, garden designers and horticultural engineers. Hortiart designs, executes and maintains private, public and business gardens as well as parks. Some 10 years ago, as students, they began gaining the knowledge and experience in working with plants and modern garden mate-rials. Each garden is equally big and equally important, turning it into a creative, functional, in-novative, and most importantly, a pleasant living space since their philosophy is Think green. They design all types of concep-tual and executive projects, dia-grams, sketches and concepts. They present their projects in 3D format with a detailed cost-estimate of individual work phases.

Recognisable brandAfter the client expresses his wishes, the Hortiart team ap-proaches the project solution. The first phase is performed in the field where they analyse the present state, after which they develop the idea from the first sketches to the executive project. Darko Katović says the competi-tion in this work is enormous.

There are many registered com-panies offering the same serv-ice. However, a bigger problem is the abundance of non-profes-sionals offering services below every price, undermining the credibility of professionals. An-other problem is that the culture of garden design is not on the same level as in other countries. In Croatia people rarely invest in the appearance of their gar-dens, while this is completely normal abroad, he explains. Some of their solutions can be browsed on their website www.hortiart.hr, created by the inter-national design studio Bunch.

Bunch designed a recognisable brand for us, known even be-yond Croatia. Hortiart was thus recognised by Russian investors who con-tracted to design the garden of a representative villa in Opat-ija, Katović points out. Horti-art continually invests in new know-how and technologies, offering services that might distinguish them from their competition. In autumn we plan to introduce ecological-innovative solutions in land-scape design which will raise the life-quality of the future us-ers, concludes Katović. (B.O.)

HORTIART, ZAGREB

Villa Valdibora for antique enthusiasts

Villa is suitable for visitors with pets

In Croatia people rarely invest in the appearance of their gardens

The hotel operates all year and provides full facilities for business people

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

Source: HNB WEEK JUNE 18, 2011

Currency Kuna exchange mid-rate

AUD 5,501691

CAD 5,298027

JPY 6,477479

CHF 6,145535

GBP 8,398665

USD 5,207054

EUR 7,399224

Lower premiums for insurance companiesAccording to cumulative data from the Croatian Insurance Of-fice for the first five months, 26 insurance companies had calcu-lated gross premiums of €0.57 billion, 1.5% less year-on-year. For non-life insurance, the cal-culated gross premiums amount-ed to €0.44 billion 1.6% less year-on-year, and accounted for 77.06% of total premiums. Life-insurance registered a 1.3% drop with calculated gross premiums of €130 million, 22.94% of total premiums.

Insurance against termination of employment

Allianz Zagreb is offering to all current and future insured a unique service on the Croatian insurance market. This insurance is against termination of employment and it is contracted in addition to manda-tory insurance against motor liabil-ity. If the client, or the insured, pre-viously employed for an indefinite period of time, is dismissed during the period of the policy for motor liability, Allianz will compensate the amount of the contracted pre-mium with 15% tax. This offer is special since coverage may be also expanded to include a spouse.

::: news

Drago Živković

Croatia should completely redirect its traffic strategy towards railways, which

require investment of at least €3.42 billion during the next 20 years. This was pointed out at the Round Table on traffic infra-structure in conjunction with the third conference New Model of the Croatian Economic Growth. Around €0.27 billion should be invested in the track Rijeka-Za-greb in the first phase. The same amount should also be invested in the line Dugo Selo-Novska, and around €119 million in the traffic junction of Zagreb, which would operate as Rijeka’s dry port. According to calculations of Tomislav Josip Mlinarić from the Faculty of Traffic, this would increase the transport of goods on the Rijeka route to 13 mil-

lion tonnes, whereas today it totals

around 6 million, and only one quarter is transported via rail.

Smaller ports benefitThe board president of Končar, Darinko Bago, is ready to par-ticipate in the development of the railway by designing prototypes. He regards the city-suburban route as the most cost-effective investment, for which he had already designed a prototype of the low-floor electro-motor train. Bago complained about poor co-ordination of Croatian Railways (HŽ), since some are announcing the purchase of 20 diesel loco-motives for the route Zagreb-Split, rather than investing in the electrification of the track. The Croatian air transport market is today worth €450 million, and by 2030 it will be worth at least €1 billion, stated the board presi-dent of Croatia Airlines, Srećko Šimunović. We need to decide whether we will keep this mar-ket or turn it over to others, he

warned. Croatia Airlines has 85 competitors today. In ten years it has accumulated a deficit of €47.9 million. At the same time Croatian airports achieved total profit of €82.19 million and the

national transporter is responsi-ble for 40% of the turnover. Even though Croatia Airlines receives state subsidies for local lines, this amount is significantly smaller compared with the member-ship fee it is paying the Croatian Tourist Association. Šimunović therefore wonders when the air transport system will finally be regulated better and he proposes a model of joint holding similar to that of the Czech Republic. If this problem is not solved, Šimunović is worried Croatia Airlines will end up as did the national sea transporter Croatia Line - bankrupt.

TRAFFIC INVESTMENT

€3.42 billion needed for railways, air transport in deficit

At the same time Croatian airports

achieved profit of €82.2 million

Croatia Airlines now has 85 competitors. In ten years it has accumulated a deficit of €47.9 million

13.6. 14.6. 15.6. 16.6. 17.6.

7.42

7.41

7.40

7.39

7.38

7.37

EUR 5.24

5.21

5.18

5.15

5.12

5.09

USD 6.16

6.14

6.12

6.10

6.08

6.06

CHF

13.6. 14.6. 15.6. 16.6. 17.6. 13.6. 14.6. 15.6. 16.6. 17.6.

8 Privredni vjesnikYear IV No 0158

The Association of Croatian Travel Agencies (UHPA) recommends Turkey for

holidays and business trips this year and in 2012. Last week, the director of UHPA, Željko Trezner signed a contract on marketing

co-operation with Derya Polat, attaché of the Office for Culture and Tourism of the Turkish Em-bassy. Discussing the reasons behind this contract, Trezner said that Turkey is a destination which deserves a boost in turnover and travel by the Croatian public to this country, as well as an in-crease in the number of arrivals of Turks to Croatia. The conclu-

sion of the contract was con-tributed by the extremely good co-operation between UHPA and the Association of Turkish Travel Agencies (Tursab). By the end of March 2012, Turkey will be shown as the UHPA destination of the year in all published infor-

mation and promotional material. This marketing co-operation is also supported by Croatia Air-lines, and soon the two countries will be connected by 12 flights a week on the route Zagreb-Is-tanbul and vice versa. Seasonal flights on the route Dubrovnik-

Istanbul-Dubrovnik will still op-erate. Regarding the value of the marketing contract, Trezner said this was a professional secret, adding that the intention of the Turkish Embassy and UHPA is to develop the partnership between the two countries and their travel agencies. However, the contract will not bring additional dis-counts on packages for Turkish resorts. Even though this is a uni-lateral process for now, since only Croatia is promoting Turkey, this contract will result in more Turk-ish tourists arriving in Croatia. Last year, a total of 37,590 tour-ist arrivals and 115,659 overnight stays were registered in Croatia, of which 15,080 Turkish tour-ists came via UHPA, registering 60,904 overnight stays.At the same time, 5,925 of Croatian tourist arrivals and 28,795 overnight stays were reg-istered in Turkey. (S.P.)

Last year Croatia was vis-ited by 165,000 Russian tourists, 35% more than in

2009. They registered 31% more overnight stays compared with the year before - around 1.4 mil-lion. It is expected this significant rise in traffic from the Russian market will continue this and the next year, said the Minister of Tourism Damir Bajs in Moscow at a meeting with representatives of some 15 leading Russian tour operators, including the biggest Russian tour-operations, for example In-terunion Travel Company, Atlan-tis Holiday and Ascent Travel. The Russians are specific since they visit our country in organ-

ised groups, via tourist agen-cies. Therefore, the Croatian government again approved to temporarily suspend visas for tourists from more distant mar-kets, including Russia. In order to attract more Russians to visit Croatia, this year the Ministry

of Tourism

and the Croatian Tourist Asso-ciation implemented a series of market activities worth over €1 million. Last week, at the meet-ing in Moscow, stronger tourism co-operation between Croatia and Russia was discussed as w e l l as more ac-

tive partici-pation of the

two countries at international tourist fairs. The representatives of Russian tour-ism companies expressed their wish to increase the number of tourists in

both countries, praising Croatia’s high level of security. For the Russians, security is the number one criteria in their selection of holiday destinations. Bajs rec-ommended the previously signed tourism agreement between Croatia and Russia to be ex-panded with new activities, and he invited Russian colleagues to participate at the first UNWTO international conference on tour-ism and media in Zagreb on 12 and 13 September. The event is organised by the World Tourist Organisation (UNWTO), and it will include representatives of media companies, PR and mar-keting agencies. (S.P.)

RUSSIAN TOURISTS WILL NOT NEED VISAS TO ENTER CROATIA THIS YEAR

Welcome Russian visitorsRepresentatives from Russian tourism praise Croatia’s high level of security

The Association of Croatian Travel Agencies promotes Turkish tourism

UHPA recommends Turkey for holidaysBy the end of March 2012, Turkey will be shown as the UHPA destination of the year in all promotional material

Contract will not bring additional discounts on

packages for Turkish resorts

PV International 0158

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Transcript of PV International 0158