PV International 0178

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 / 12th December / 2011Year V / No 0178www.privredni.hr

Vineyards and production

Over the past decade the number of vineyards has increased, new technology implemented and production betterWINE INDUSTRY

PAGES 2-3

Mirko Ćavara, Managing Director, Borovo

We expect the new government to grant the right to purchase 50% of preferred sharesINTERVIEW

PAGES 4-5

PBZ analysis

The level of loans with a date of up to one year currently stands at 37% up from 33% ANALYSIS

PAGE 6

2008 20092010 2011

Drago Živković

Changes to the executive and legislative govern-ment are an excellent op-

portunity for new beginnings. Such times are usually chal-lenging, particularly amidst high expectations. The leaders of the new governing major-ity are attempting to burst the bubble of expectations follow-ing their election victory shown by one of the first statements of the future Prime Minister, Zoran Milanović saying “We are not in a Flash Gordon film to be given 14 seconds to save the world”. Apparently they are aiming for extremely high targets. The fu-ture Government Vice President, Radimir Čačić, has stated that his target for 2012 will be achieving gross domestic product growth up to 2% and to 5.5% by the end of his term in office. Branko Grčić, another SDP member, has been slightly more modest in his anticipations, of up to 1% growth in 2012. According to most ana-lysts, this optimistic scenario has been used as the basis for Grčić’s budget estimate; the budget will see an increase of between €0.33 billion and €0.40 billion, and we will see a similar level of savings. Subsequently, the deficit will de-crease by €0.68 billion over the year. According to Čačić, savings will increase due to reductions in

social subsidies in certain cases, as well as the abolition of mu-nicipalities unable to settle their liabilities, plus rationalisation in public companies.Illiquidity is the major malaise in the economy and, according to Čačić, there are three steps which will eradicate this: the state will settle its outstanding liabilities, liquidate companies which are not operating and are piling up debts, whilst debts of compa-nies with potential will be trans-formed into state owned stakes. According to Milanka Opačić, the future Government Vice President, the first government move in the New Year will be the new budget, considerably differ-ent from the current budget and, in addition, a series of laws to re-duce the economic burden from

parafiscal taxation. The increase in financing of Croatian entre-preneurs by the Croatian Bank for Reconstruction and Devel-opment (HBOR) will be one of the major alterations in the new budget, since entrepreneurial de-velopment has been adversely af-fected by the current high interest rates in capital markets.

A strong signalThe new government made up of a stable and assertive major-ity, does not need to make the same compromises as with pre-vious governments, whose poli-tics have suffered a severe blow in the elections. It has been a significant signal to the govern-ing structure, which is currently powerful and large, to make con-siderable moves and, according

to Nadan Vidošević, President of the Croatian Chamber of Econo-my, it could also be affordable. Croatia cannot rely primarily on its processing industry with a mere 240,000 employees to pro-vide an exit from the crisis and the new government must be aware of the reality it is currently facing, warned Vidošević. He also expressed his hopes for new ministers to make several signifi-cant moves during their first year, since they must face the danger of a credit rating downgrade. There are high expectations also in the Croatian Employers’ As-sociation. The new government will not have the usual ‘hon-eymoon’ period due to the dire circumstances in the economy, according to Ivan Ergović, Presi-dent of the Croatian Employers’ Association and Davor Majetić, the Director. They are aiming to implement less popular, albeit necessary measures, primarily reducing the excessively high tax burden on entrepreneurs, transforming state administration into entrepreneurial services and enhancing entrepreneurial de-velopment in all spheres. Senior officials in the Croatian Employ-ers’ Association stress the impor-tance of constructive criticism, expressing their hopes to be iden-tified as respected partners in the creation of a more benign and ac-ceptable economic future.

NEW GOVERNMENT AND ENTREPRENEURS

Strong moves made by assertive majority imperative

2

Krešimir Sočković

Total vineyard area in Croatia has increased from approximately 27,500

hectares to almost 34,000 hec-tares during the past decade, ac-cording to data provided by the Central Bureau for Statistics. Croatian wine producers cur-rently cultivate over 122 types of vines which produce around

200,000 tonnes of grapes. For the past couple of years and de-pending on season between 1.20 million and 1.42 million hectoli-tres of wine have been matured in Croatian cellars. Although the country is a long way from the figures from the early 20th cen-tury, when vineyard area totalled 170,000 hectares, vine grow-ers and producers admit the market is more or-ganised. Although local vineyards remain too small for more seri-ous production and approach to the inter-national market, since over 45,000 of al-most 60,000 produc-ers cultivate on areas smaller than a hectare, many new Croatian cellars im-plemented new technology which has led to more success at international competitions. There are also more people for whom this is the only source of income. According to data provided by

the Central Bureau for Statistics, Croatia produced 207,743 tonnes of grapes and 1,433 hectolitres of wine in 2010.

A decade of developmentCroatia produces more than lo-cal demand requires. Last year, it produced 1.43 million hectoli-tres, the biggest quantity for the past 10 years. During the past decade, yield per vine has been between 1.4 and 1.7 kilograms, and average yield per hectare between 5.8 and 6.8 tonnes. Last year a total of 207,743 tonnes of grapes were produced, almost 30,000 tonnes more compared with the middle of the last dec-ade. Average yield per hectare amounted to 6.1 tonnes or 1.4 kilograms per vine. During the past ten years the number of pro-ductive vines has increased by 116 million (the same amount as in 2011) to a figure of 145 million. The expan-

Privredni vjesnikYear V No 0178

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INTERNATIONAL OPERATIONS Ray [email protected]

Romana Šundov Armstrong, CEO of Nirs, Split

Investment accompanied by a crisis can be a heavy burdenOver a longer period positive results impose the need to invest and develop

For Nirs, a company which produces textiles and sells catering equipment, this

year has been more successful than the previous two critical years. In addition to the sud-den crisis, resulting in a slump in customer investment, reduced expenditure and decreased de-mand, we experienced another aggravating circumstance, since we had just finished investing into a new office building in con-junction with a hotel, restaurant, café, storage, sales and produc-tion facility.We ventured into this invest-ment since the volume of work had been constantly increasing for the past decade and we had been constantly showing posi-tive results that guaranteed us a brighter future. Over a longer period of time, positive results impose the need to invest and develop. The market is ruthless and you must constantly keep up with trends and predict customer needs. Considering we were the first in Croatia to venture into this type of business in 1992, our customers expect us to be ahead of others. We must not let them down under any circumstances.Furthermore, the goal was to increase our production capac-ity, developing at the fastest rate due to the closure of large tex-tile companies. Purchasing raw material was difficult, since pro-ducers turned to safer products, without producing new decors or investing in new designs and textiles. As a consequence, we were unable to offer our custom-

ers’ quality finished products. The opening of the new business centre made it possible for us to equip any hotel or restaurant on a turn-key principle. However, the crisis turned this investment and development prospects into a heavy burden as we were forced to completely change our work methods. Rather than big hotel investment, we turned to small-sized customers, such as private apartments, cafes, restaurants and taverns. In order to reduce the impact of the crisis and sur-vive under new circumstances, we invested all our capacities into field work and direct contact with customers. The extreme perseverance and dedication of all our employees contributed to the positive bal-ance sheet for this year. We are proud to say that 2011 was the year of our recovery.

During the past ten years the number of productive

vines has increased by 116 million

(produced in 2010

207,743 tonnes of gr

VINEYARDS AND PRODUCTION

InvestmenOver the past decade the number of vineyards has exporting expensive local high quality

www.privredni.hrBusiness & Finance Weekly 3

sion of vineyards was followed by an increase in the production of wine. Wine makers produced 1.43 million hectolitres last year, 15% over 2004. Croatian production is dominated by the white wine varietal graševina covering an area of 22.3% of all Croatian vineyards. Plavac mali is the most important red wine varietal at 8.1% of total Croatian vineyards. Istrian malvasia has a 5% share. Over 2% of vineyards are planted with plavina, deb-it, rhine riesling, chardonnay, merlot, trbljan, babić, franko-vka, cabernet sauvignon and kujundžuša. Over a quarter of to-tal vineyard area is planted with other varieties or mixed planta-tions. According to data pro-

vided by the Central Bureau for

Statistics, in 2009 over 9% re-lated to vineyards under three years old, and around a quarter of all vineyards were between three and nine years old. Over

14% of vineyards

were between 10 and 20 years old with around 22% between 20 and 30 years old and 27% of vineyards were older than 30 years.

Smaller vineyards and smaller production

There are around 150,000 registered vineyards, most

covering an area of half a hectare, which indicates there are many people who find wine

growing a tradition or hobby and the majority of the pro-duced wine is not marketed. Local wine production is roughly the same, but it has almost halved over the

past three decades. Accord-ing to the completed Vineyard Registry, there are around

33,833 hectares of vineyards in Croatia. Before the project implementation, which began in 2003, it was believed that there were some 60,000 hectares. Ac-cording to the Registry of Grape Producers, there are 17,732 wine and fruit wine producers who own 17,063 hectares of

vineyards. However, this only concerns wine growers and pro-ducers who sell their wine on the market. Vineyard reform is currently ongoing in EU coun-tries, according to which old vineyards will be extinguished by 2012 due to a considerable surplus of wine.

Expensive exports, cheap imports In 2010 Croatia imported more than six times as much as she exported; in financial terms ex-ports were US$11.8 million and imports US$21.1 million. Con-cerning this year to date, Croatia has imported wine to a value of US$13.6 million, some 4% down compared with gthe same period last year. Exports grew by 40% over 2010 equating to an ad-dtional 9% financially. In 2009, cheaper wines were exported to Bosnia and Herzegovina whilst the more expensive wines went to Germany, Austria and North America. Imports came prima-rily from Macedonia, France and South America.

(produced

rapes 1.43 million hectolitres of wine

In the European Union the wine sector was reorganised in 2009 in conformity with the new co-mmon organisation of the Union wine markets and the common organisation of the marketing of agricultural products. The provi-sions for certain agricultural pro-ducts and the EC Provision prescri-be rules of mandatory registration in the vineyard registry in order to be able to monitor the wine market and control shipping documents as well as the relative registers.

The main reason behind the EU re-gistry is the monitoring and super-vision of each vineyard production potential within the Union. Regi-stry data will help the wine mar-ket, serving the inspection bodies as a more efficient administrative and inspection tool. The vineyard registry includes all areas covered with vineyards. It is also a base for registering lists of vineyards, man-datory statements, data relating to wine market monitoring and the accompanying documentati-

on as well as cellar registries kept by the wine sector. Two years ago Croatia started to implement the Vineyard Registry. A unique data base of wine growing and producti-on was created and will enable mo-nitoring and verification of produc-tion capacity of the wine market. The registry should play a vital role in the system of wine market sup-port and organisation which is why it was established within the fra-mework of the Land Parcel Identi-fication System (LPIS).

Vineyard Registry

nt and growthincreased, new technology implemented and production better whilst importing cheaper wines and

4 Privredni vjesnikYear V No 0178

official estimate of direct material damage caused by war damage€300 million (

invested in renovation€16 million 6(

Svetozar Sarkanjac

Some €16 million has been invested in the renovation of the factory and new

technology after the war but nevertheless a huge area of the factory remains devastated. €5.5 million was invested in the res-toration of leather footwear pro-duction and a further €5.5 million in the production of rubber tech-nical goods. The amount invested was significant, yet it is way be-low the official estimate of €300 million of direct material dam-age caused by war damage to the state-owned Borovo plant at that time. Privredni vjesnik talked with Mirko Ćavara, Managing Director of Borovo, about the current situation in the com-pany.We have 85 outlets in Serbia and a production facility in Sombor with an esti-mated value

of €30 million. Our material as-sets in Serbia, comprising 28 stores, have been estimated at be-tween €4 million and €5 million, whilst in Macedonia we own some 20 business premises worth around €3 million. Consequently, €35.36 million worth assets have been expropriated. Unfortunate-ly, we have not been successful in reaching a satisfactory solu-tion thus far, regardless of all our legal efforts and our correspond-ence with authorised insti-

tutions.

Currently there is still the Som-bor-based Boreli factory. This used to be our factory and was called Borovo Sombor. We have attempted to address the is-sue several times, yet have been told we could negotiate exclu-sively only with the legal suc-cessor of Borovo, the current production facility and factory owner of Borovo in Serbia. We do not agree with this stance and have claimed property restitu-tion. We have been faced with the proposal to divide ownership of expropriated assets in the ra-tio of 60% to Borovo and 40% to the current owners in Serbia. In addition, we would be obliged to assume liability towards the cur-rent 1,000 employees, as well as settle all outstanding liabilities of the current factory towards its suppliers plus all other outstand-ing liabilities. Such a solution would seriously jeopardise our business operations and, in addi-

tion, we are not authorised to accept such terms. In my

opinion, all expropri-ated assets belong to the original company and this stance should also be taken by the Croatian government.

There are pros-pects of priva-

tisation in the near future.

We expect the new

govern-

ment to address the privatisa-tion of Borovo in the way it has with other companies; to grant both current and former employ-ees the right to purchase 50% of preferred shares in accordance with their length of service. In addition, the full privatisation of Borovo is imperative.

Borovo is currently proceeding with its production amidst a plethora of adversities.We currently employ 1,182 staff with some 700 located in Borovo, whilst other employees are located in outlets throughout Croatia and in our Slovenian re-tail network. In addition to leath-er footwear, we focus on rubber technical goods and V-belts as primarily export oriented produc-tion, as we sell nearly 80% of our production to foreign markets. Around 70% of our footwear pro-duction output is sold on the local market and the remaining 30% is sold in Slovenia and in Bosnia and Herzegovina.

You are normally reluctant to accept the so-called lohn pro-duction.The future potential of Borovo is in our own brands, technology and the human assets creating our products and models based on deep experience. Lohn produc-tion should only be resorted to in dire circumstances. We focus pri-marily on our own brands, start-ing with the well known ‘Startas’ sports shoes and Borosana shoes (orthopaedic shoes with open toe and heel segments, originally made in the village of Borovo) and our well-known footwear brands such as ‘Relax’ and ‘City’ footwear. We in Borovo believe our own brands have a crucial role in defining our future.

INTERVIEW

Mirko Ćavara, Managing Director, Borovo

Future privatisationWe expect the new government to grant the right to purchase 50% of preferred shares in accordance with their length of service to both current and former employees

www.privredni.hrBusiness & Finance Weekly 5

Drago Živković

Franchising is a model of corporate growth which significantly decreases un-

certainty during the riskiest phas-es of growth: the inception phase and that of fast growth. Fran-chising is a highly developed business model in most western countries, particularly in the US, with 2,500 franchisors at 900,000 franchise locations in 75 different fields of activity. Consequently, the US franchises generate total revenue of around $850 billion and employ 9.5 million staff. For the EU one can merely talk about estimates due to the absence of a franchise registration system. Hence, according to estimates currently there are some 10,000 franchise systems in the EU. The Hungarian ‘Fornetti’ with 6,464 and the Czech ‘Bata’ with 5,000

franchise locations are amongst the 500 leading European fran-chises and they are the only fran-chises from Central and South-East Europe to have achieved such a high level of success. Croatia is witnessing a signifi-cant increase in franchising both amongst upcoming entrepreneurs commencing their activity and amongst mature companies em-

bracing this business model to foster growth and create their own franchise network. Accord-ing to data from the Croatian Association for Franchising, in Croatia there currently are 170 franchise networks indirectly employing around 16,500 staff.

Weak local franchise sectorIn Croatia there are just 35 lo-cal franchises, whilst in Hungary there are 240 local franchises from a total of 340. In Slovenia there are 52 local franchises in the network of 107 franchises. Ad-dressing several major obstacles is imperative in order to enhance franchising in Croatia, as con-cluded at a recently held round-table discussion at the Institute of Economics in Zagreb. According to Mirela Alpeza, the Director of the Centre for SME and Entre-preneurship Development Policy,

major obstacles comprise igno-rance regarding the franchising business model, a lack of ade-quate loan programmes indispen-sable in financing the franchise purchase, the absence of a legal framework and franchising sta-tistics, dearth of government sup-port and weak legal infrastruc-ture. Consequently, franchisors and franchisees are expecting the government to provide them with the legal framework for franchis-ing in the near future, as well as to create a franchising register at the Croatian Chamber of Econo-my, loan programmes adapted to the needs of franchises and the franchising business model being included in University curricula. Franchisors and franchisees are expecting the government to pro-vide them with legal framework for franchises in the forthcoming future.

According to the latest data pro-vided by the Croatian National Bank, bank lending totalled al-most €38.5 billion at the end of October. A mild increase of 0.7% was registered on a monthly lev-el, and in relation to late October 2010, lending increased by €2.6 billion or 7.4%. In relation to the end of 2010, the amount increased by €1.6 billion or 4.4%, whilst the increase in total lending is prima-rily due to the growth in corporate lending which totalled €15.5 bil-lion, 6.3% up over the end of 2010. A high proportion of the increase w a s to large-sized

c o m p a -nies. On

t h e

other hand, annual growth rates in public lending are considerably lower, reflecting a weaker rate of employment and the instability of the labour market in terms of gen-erating future income. In October, public lending saw a mild down-turn in relation to September, to-talling €17.38 billion, 0.8% more in relation to the end of last year. Housing loans, the largest share of public lending (46%), totalled €8 billion, a 7.1% increase year-on-year. Notwithstanding, since the largest proportion of lending is approved with a currency clause, it should be noted that the kuna is 2% weaker in relation to the Euro year-on-year. State lending was the most significant contributor to the growth in total lending in October. It reached €5.2 billion, 11.9% more in relation to the end of last year.

According to latest data provided by the Croatian National Bank, total bank deposits (savings and term kuna as well as foreign de-posits) increased mildly during October. By the end of October, deposits totalled €30.1 billion, 0.3% more over September. This was contributed to by increased savings and term deposits, whilst foreign deposits registered a mild downfall. The annual growth rate is no different this year, totalling 3.3%. Considering 78% of sav-ings and term deposits are com-prised of foreign deposits, an-nual growth is definitely due to exchange rate fluctuations since the Kuna/Euro exchange rate de-creased 2% in relation to the end of October 2010. Savings and term foreign deposits in Octo-ber remained almost unchanged, totalling €19.9 billion, up 1.3%

over October 2010, but decreased by 0.3% in relation to the end of 2010. On the other hand, savings and term kuna deposits (€5.57 bil-lion) increased by 18.2% in rela-tion to the end of 2010, but remain below the pre-crisis level due to a continuous decrease in 2009 and 2010. Private deposits amounted to HRK146.1 billion at the end of October, 4.1% more in relation to the end of the year. Corporate deposits decreased by 2.2% in the same period, standing at €3.98 billion.

FRANCHISING

A more effective legal system and loan availability would encourage more franchisesFranchisors and franchisees anticipating new legislative framework

CROATIAN NATIONAL BANK

Lending reaches €38.5 billion in October

BANKING INDUSTRY

Deposits reach €30.1 billion


CROATIAN FOREIGN CURRENCY MARKET

Beer producers rise with the help of Radler

The Croatian beer mar-ket grew by 8.5% dur-ing the first 10 months of this year.

Zagrebačka pivovara increased its share from 41% to 42%, said CEO Sergej Yeskov. Market ex-pansion is mainly due to the huge success of flavoured beer (radler) that now generates 8% of sales by volume. Beer consumption per capita increased to 80 litres in Croatia. According to Yeskov this is a due to this year’s excel-lent season and long summer. This year, Zagrebačka pivovara pro-duced around 1.5 million hectoli-tres of beer, of which it exported 120,000 hectolitres to Bosnia and Herzegovina, where it holds 6% of the market.

HŽ losses reduced by a thirdHrvatske željeznice (Croatian Railways) will generate total in-come of €0.55 billion by the end of 2011, 4.2% down in relation to 2010. Expenditure has been es-timated at €0.57 billion (-4.7%). Full HŽ results might add up to a deficit of €5.65 million by the end of 2011. Although this does not seem positive, it is still 33.7% less than in 2010. The CEO of HŽ Holding Zlatko Rogožar, an-nounced that 2012 might be their first year of profit, even if it is a symbolic amount of €80,000. Last year, HŽ invested around €47.84 million in transport capacity and €88.65 million in infrastructure.

Source: HNB WEEK DECEMBER 10, 2011

Currency Kuna exchange mid-rate

AUD 5,681219CAD 5,479504JPY 7,206327CHF 6,069222GBP 8,771307USD 5,603545EUR 7,500345

::: news

According to a recent sur-vey by the European Cen-tral Bank (Bank Lending

Survey), increasingly stringent nett corporate lending terms in the Eurozone have seen a signifi-cant boost during the third quar-ter of 2011.In addition, banks have reported a significant fall-off in lending demand to the corporate sector loans for the first time in over a year. Loan terms have become significantly more stringent pri-marily for long term loans, whilst the demand for short and me-dium term loans has been static. Banks surveyed have indicated their expectations of a further tightening of lending terms dur-ing the next quarter, as well as a decrease in loan demand, which will considerably impact on long term loans. Thus the real and fi-nancial sectors are anticipating an economic slowdown through-out the Eurozone, pointed out

Ana Lokin, PBZ Analyst. How have movements in loan terms impacted on corporate lending in Croatia? Analysts have ana-lysed data from the central bank on corporate loans and due dates. Nevertheless, currently there is no benchmark survey and ana-lysts have consequently empha-sised their view being limited and exclusively focused on the data indicating movements, without being able to provide an insight into possible causes, leaving am-ple grounds for diverse interpre-tations.

Economic growth promotersAccording to data on quarterly movements during the period from December 2007 to June 2011, the level of loans with an up to three months due date has increased from 10% to 16% of total lending, loans with a due date ranging from 3 to 12 months

have shown a slight retraction from 23% to 21%. Medium term loans, ranging from one to three years, are down from 18% to 15%, and long term loans (over three years) have been relatively stable. The level of corporate loans has soared from €11.6 bil-lion to €15.2 billion. Up to 1-year loans have risen from 33% to 37% and this has had a negative impact on the level of demand for medium- and long-term loans. Corporate lend-ing has not slackened and banks indicate a growing increase in de-mand. According to Ana Lokin, the extent to which demand changes (the macroeconomic en-vironment particularly a slump in investment and corporate ori-entation primarily towards cov-ering operating expenses) and amendments to loan terms have all contributed to an increase in short term lending trends, is yet to be determined.

PBZ ANALYSIS

Short termcorporateloanson theincreaseThe level of loans with a date of up to one year currently stands at 37% up from 33% whilst the level of medium and long term loans is reducing

5.12. 6.12. 7.12. 8.12. 9.12.

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EUR 5.08

5.06

5.04

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4.98

USD 4.96

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5.12. 6.12. 7.12. 8.12. 9.12. 5.12. 6.12. 7.12. 8.12. 9.12.

www.privredni.hrBusiness & Finance Weekly 7WE PRESENT

The Lacković family farm started operating in 2000, and the first rooms for vis-

itors were opened in 2002 under the name Lacković Rural Tour-ism in Bilje. The first visitors were from Zagreb, and the family still remain in contact with them. Their first foreign visitor was an auditor from the World Bank who visited Baranja for a project. Even though he could stay in a five-star hotel, he always re-turns since he enjoys a family atmosphere and local food. Srđan

Lacković is this year’s winner of the award Man – key to success in tourism, awarded by the Croatian Tourist Board for the best host in rural tourism. Only a 15 minute drive from the centre of Osijek, in the typical rural atmosphere of Baranja, the Lacković farm offers 16 beds. With an area of 6,000 kms2, the estate consists of vegetable and fruit greenhouses, numerous domestic and unu-sual animals, and there is also a lake as well as thick vegetation. In addition to the quality accom-modation, categorised at three suns, and homemade breakfast

typical for Baranja (kulen, sau-sages, ham, eggs, cheese and cream with homemade jam), visitors can also order lunch and dinner, all according to standards of certified quality and quantity of Baranja.

It is possible“We co-operate with other es-tates. Anything that we are un-able to deliver to our customers, we arrange with other farms”, says Srđan Lacković. “Further-more, the farm is mainly visited by families who wish to have a peaceful and relaxing vacation. Many visitors have been com-ing for years, spending two to three weeks on the farm. Lovers of cycling tourism come to enjoy the many cycling routes, and we are also visited by bird watchers. We are often asked if the busi-ness can support us. Consider-ing the number of visitors, it can. However, it took a few years of investing, learning and develop-ing to reach this level”, explains Lacković. A third of our visitors are foreign, mainly from Europe, but also America, Australia and Japan. They either contact us di-rectly or through the internet or even the Tourist Board of Baran-ja. However lately, personal rec-ommendation has been having the greatest influence, concludes Lacković. (S.S.)

Neuroth provides solu-tions to those with hear-ing problems. Employees

evaluate the level of difficulty for each patient and provide advice on a wide range of the most appro-priate hearing aids. The company

provides state-of-the-art noise pro-tection aids as well as protection from various other causes of hear-ing problems. In addition, it pro-vides hearing aid care and main-tenance, batteries, equipment and maintenance kits. Privredni vjes-nik talked with the Director Svjet-lana Podlesnik, who pointed out that the Neuroth idea originated some ten years ago. “Having spent over 30 years abroad, monitoring and adopting western business standards, I focused on achieving the same goals in Croatia. As a re-sult of hearing problems in my im-mediate family I have gained first-hand experience and knowledge of the Neuroth philosophy and have excellent business relation-ships with the Neuroth/Schinko families. I am extremely pleased to say that the quality of Neu-roth services in Croatia has kept abreast of Neuroth hearing centres in Austria, Switzerland, Germany,

Lichtenstein and Slovenia”, she pointed out.

Comprehensive preparationThe Croatian subsidiary of Neu-roth employs some 20 staff. All employees have been compre-hensively trained through various courses and have obtained other necessary qualifications at the Neuroth Academy in Austria, pro-viding them with theoretical and practical knowledge in acoustics and audiology. “Our goal is to cre-ate a reputable network of profes-sionals developing a cornerstone for successful solutions in hearing protection”, she explained. Regrettably investment in Croatia is inextricably linked with many administrative and other similar hurdles. Neuroth invested con-siderable foreign funding but nevertheless the company has faced various difficulties. “How-ever, we have been adequately prepared and we are pleased to say we have succeeded in tack-ling all the obstacles in co-oper-ation with state authorities and other institutions”, she reiterated.Neuroth is planning to open hear-ing aid centres in the largest cities and in those cities with general hospitals in the next year. “In ad-dition, we are planning a concen-trated expansion into Central and South-East Europe”, concluded Svjetlana Podlesnik. (B.O.)

RURAL TOURISM LACKOVIĆ, BILJE NEUROTH HEARING AIDS, ZAGREB

This years top host in rural tourismThe Lacković family have been successful developers of rural tourism for a decade

European quality level hearing protection

Their first foreign visitor was an auditor from the World Bank

Neuroth idea originated some ten years ago

Neuroth is planning to open hearing aid centres in the largest cities and in cities with general hospitals in the next year


Svetozar Sarkanjac

The cultivation of paprika and the production of ground paprika is a tradi-

tional and widespread activity amongst Baranja rural families. Nevertheless, Baranja paprika has only recently been identified as one of the officially protected Baranja souvenirs, called Baran-jka ground paprika. The product seal and its name have been pro-tected by the State Intellectual Property Office. The Baranja Association has been addressing human rights is-sues, primarily the issue of wom-en victims of domestic violence. Several years ago it launched several projects dealing with eco-nomic independence of women.“We began our activity by provid-ing training to produce vegeta-bles in plastic tunnels. As a result we started production in 25 units and formed a social and entrepre-neurial co-operative, providing women with the basic tools to generate their own earnings. We decided to focus on paprika as one of traditional Baranja prod-

ucts, following an initial period of dealing with a variety of prod-ucts”, explained Jasna Petrović, the Baranja Association Product Co-ordinator. In conjunction with various partners and small-scale producers we aim to in-crease ground paprika production as a high quality, cost-effective and regionally identifiable prod-uct. Hence, one hundred years of traditional production is enhanc-ing development of a rural area and small-scale local producers’

sustainable economy, through a social entrepreneurship model.

Kulen production The Baranja Association regards this quality local souvenir, pro-duced by processing top quality raw material, as a major promot-er to improve tourism and create all the necessary requirements to increase earnings at both an individual and community level. Attractive packaging with iden-tifiable Baranja motifs make for

both a classical souvenir and a high nutritional value ingredient in food preparation as used in tra-ditional recipes. Tourists and the general public can purchase this in the ‘Panona’ souvenir shop, and soon in several well known Baranja restaurants. In addition and depending on production ca-pacity, the Baranja Association is planning to offer Baranjka pa-prika as a top quality ingredient to reputable kulen and sausage producers.

Baranjka paprika – an original Baranja souvenir

Baranjkapaprika aslocal souvenirsAttractive packaging with identifiable Baranja motifs is both a classical souvenir and useful

ingredient in food preparation

PV International 0178

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