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 / 30th January / 2012Year V / No 0184www.privredni.hr

Marinko Došen, CEO Mirna, Rovinj fish factoryLast year was the turning point of Mirna, according to the Board PresidentINTERVIEW

PAGES 2-3

Mario Sever, Owner, Eko SeverThe family began growing organic food products as a hobby which grew into a business ten years agoAGRICULTURE

PAGE 5

Inflation to remain low through 2012PBZ projection of average inflation is 2.3% over 2011INFLATION

PAGE 7

2008 20092010 2011

Krešimir Sočković

T he Ministry of Entrepre-neurship and Crafts is planning to create 5,000

new jobs and open 7,000 com-panies and 13,000 micro-com-panies by the end of 2013, as an-nounced by the Minister Gordan Maras during his presentation of the organisation and plans for his new Ministry. The Ministry will focus on the implementation of zero tax on reinvested profit for entrepre-neurs, the abolition of mandatory contributions during the first two years for every new job or every new employee, as well as raise the VAT threshold to €30,700.“Our goal is to create a more positive entrepreneurial climate. Investors submitting investment proposals to the value of €2.7 million will be allocated a per-sonal manager who will manage the investment until completion,

consequently facilitating the in-vestment process and shortening it from two years to a mere six months”, stated Maras.The Ministry is planning to al-locate around €40 million in subsidies for small and medium sized entrepreneurs represent-ing about 1,000 companies and micro-companies during 2012. In addition, it is planning to fi-nance entrepreneurial infrastruc-ture or entrepreneurial zones with the potential to attract some 50 investment projects worth €66.7 million. The Ministry has

also announced it will provide training for around 3,000 entre-preneurs, as well as construct a regional centre for entrepre-neurial development by 2015 at the latest. The investment will be entirely financed through EU funds, whilst the facility worth €30 million will most probably be constructed within the Uni-versity Campus at Borongaj. There are ambitions to upgrade the centre into a European centre for the development of entrepre-neurial competencies and com-petitiveness.

MINISTRY OF ENTREPRENEURSHIP AND CRAFTS

WE ARE PLANNING TO OPEN 7,000 NEW COMPANIES AND 13,000 MICRO-COMPANIES

CROATIA: READY, WILLING AND ABLE

Within the context of a mar-ket of 500 million people, the accession of Croatia (4.5 mil-lion) might be construed as of minor importance. Perhaps, but to us in Croatia, it is the culmination of six long hard years of work and the recently held referendum is confirma-tion that the country is ready, willing and able to take its rightful place inside the Euro-pean “tent”. But the job has not yet been completed; in fact it could be said that the real hard eco-nomic work has just begun. We in Privredni vjesnik con-sider that, as the leading busi-ness and economic weekly and the voice of the Croatian economy, we are extremely

well placed to continue and indeed deepen our m i s s i o n objectives. I would reit-erate one of my previous remarks in that our aim is to bring to you as wide a range of news,

views, analyses and informa-tion as we possibly can so that your dealings with our coun-try will be mutually fruitful. Challenges are an important part of everyday life; we will rise to the challenges that are before us and deliver the qual-ity that you need. We are Eu-rope.

Darko BukovićEditor-in-Chief

The Ministry is to launch a new credit line for entrepreneurs through HBOR commencing next month. One of the measures will be presented at the beginning of February when HBOR will be signing a contract with the European Investment Bank for a credit line of €250 million, mainly to be directed towards small and medium sized entrepreneurs. It is also planning to accelerate the issuing of guarantees through the Croatian Agency for Small Entrepreneurship.

New credit line for entrepreneurs

Ministry will focus on the implementation of zero tax on reinvested profit

admobI weramyremthatis toyou rrange

2

Jozo Vrdoljak

M irna, the factory for fishing, canning, deep-freezing and preparing

ready-made food from sea fish, increased sales by 50% in 2011 over 2010. Privredni vjesnik dis-cussed with CEO Marinko Došen their plans, what they need to change in the fishing industry and how they could increase ex-ports to demanding markets.

Regardless of the crisis and recession, it appears that 2011 was a successful year for you. How was business?Last year was the turning point of Mirna in relation to 2010. Re-lations with key suppliers were stabilised, production continu-ity was ensured and over 50% in sales growth was accomplished. We employed over 40 new work-ers in production and achieved over 80% of sales as exports. The present production capacity of Mirna is 45 million cans, 500 tonnes of frozen fish, 350 tonnes of fish flower and 80 tonnes of fish oil, which also represents an important share in Croatian as well as European production.Over the business year we in-creased sales and production by 50% so this cannot be regarded as a crisis year, even though the crisis seriously hit both lo-cal and European economies.

What are your business plans? Our business plans are related to the further development of mar-ket share and business income on existing markets as well as new ones. We believe the quality of our products and the value of the trade mark Mirna has its place in the EU market. Furthermore,

we plan to expand our produc-tion line and increase the share in total sales of delicatessen prod-ucts (fish salads and pâtés) We base our future plans on those we can realistically achieve, where exports present a vital role. Our capacity exceeds possibilities in the local market, which is why we rely on export markets for our future development. This year we plan to increase business income by 12% to 15%, enter the EU market and expand the line of our canned fish products.

How can entrepreneurs be helped to export more?The problems of all producers, especially exporters, are well known. We expect concrete

measures regarding the further-ance of employment in produc-tion, support to exporters through quality credit lines for capital in-

Privredni vjesnikYear V No 0184

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www.privredni-vjesnik.hr/subscription

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EDITOR IN CHIEFDarko Buković+385 1 5600003bukovic@privredni.hr

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TRANSLATIONLučana Baneklucanab@gmail.comMirjana Cibulkamirjana.cibulka@gmail.com

INTERNATIONAL OPERATIONS Ray Fletcherfletcher@privredni.hr

Krešimir Jung, owner and director, Jung Sky

The Sky’s the limitPrivate and business aviation is more accessible to frequent flyers

M any business people face problems when they need to travel to

meetings, especially when they are held in Milan, Strasbourg or any other European city for the reason that most mass-transport airlines do not offer direct flights to the desired destination. Sev-eral years ago Lufthansa, one of the largest airline companies, conducted a survey which re-vealed that 50% of their custom-ers return to this type of service. The trend towards travel through private aircraft has been increas-ing over time. Americans and Eu-ropeans, Japanese and Chinese even more, use private and busi-ness flights. This is confirmed by the fact that the highest number of private airlines, with similar or larger aircraft, is situated in these countries. Furthermore, there are companies (such as ours) with one or more aircraft that are expanding their fleet through dry-leasing or concession. A great ad-vantage of smaller jet planes is the ability for short take-off and landing at smaller airports closer to the destination of passengers. What makes the offer of Jung Sky special is that customers can select for themselves when and

where they want to fly, without crowds and waiting, in the com-fort of an aircraft suited to the de-mands of the professional world. Jung Sky’s customers arrive at the airport only ten minutes be-

fore flight time. They take their luggage with them which makes travelling easier and prevents baggage loss. Our company was founded on the basis of many years experience in aviation, know-how and the expertise of our employees and partners who made it possible for us to rapidly become a reputable company as well as setting the highest possi-ble quality standards.

We are seeing continuous demand

increase on all traditional markets

(achieved in 2011 over 2010

50% sales growth

INTERVIEW: MARINKO DOŠEN, CEO MIRNA

Exporters areLast year was the turning point of Mirna, according ensured and finally, over 50% in sales growth achie

The trend of travelling in private aircraft is

increasing

www.privredni.hrBusiness & Finance Weekly 3

vestment and a balancing of the Kuna/Euro on a more realistic and higher level, which will be the biggest development genera-tor for production and export ori-ented companies. Furthermore, one of the most im-portant factors of the existing sit-uation is the neglected personal production and the strong Kuna which “helps” importers and traders. The correction of cur-rency and direct support to local producers in terms of import bar-riers and protection are the only aspects that can motivate produc-tion, employment and export.

With what do you plan to open new markets? On what do you base your claims of high qual-ity of your products?Today, Mirna has five basic product groups. These products are based on the Adriatic sar-dine, mackerel and tuna and we also offer a line of fish salads and pâtés. Our goal for now is to ex-

pand into new markets with our present product range. It is no accident that Mirna was built at Rovinj on the coast. It is known that the predominant quantity of small oily fish in the Adriatic is found along the west coast of Is-tria. This fact is the base of Mirna’s excellence and certified qual-ity. The pace of technological processing, from the moment of catching to the beginning of pro-duction, is one of the key factors for preserving all nutritious ele-ments. This is confirmed by the certificates for the quality of the production processes in compli-ance with the highest criteria in the food industry. This is also confirmed by the many awards our products received at compe-titions and fairs. The most impor-tant prerequisite for our survival in such a demanding market is the preservation of high, existing standards as well as the introduc-tion of new ones. Continuous

marketing and promotional ac-tivities through our network of distributors in both local and for-eign markets are the basic direc-tion of our sales activities. Our campaigns and promotions are planned in accordance with spe-cial eating habits of individual markets.

How can Mirna clear its cur-rent debts?Financial restructuring is the precondition of achieving our five-year business plan. We will need to sell assets excluded from the main activity and partially repay our old debts as well as re-programme the remainder. We will need to establish mutually acceptable debt re-structuring in addition to partial debt repay-ment with the tax administration and other creditors, on which Mirna is currently working. This problem would be solved even faster in co-operation with own-ers and strategic partners.

How can fish consumption per capita be increased?Unfortunately, very low fish con-sumption compared with other European countries is primarily a consequence of poor eating habits in Croatia. Education and promotional campaigns, such as our recent excellent campaign Eat what’s worth eating with the Croatian Chamber of Economy, are the only long-term solution for increasing fish consump-tion. Fish needs to be constantly promoted as tasty, healthy and affordable food. This mainly concerns oily fish which is not overly expensive.

What is the situation on the market regarding the demand for fish preparations? What is the situation in Croatia and other markets?We are showing constant growth in demand on the traditional mar-kets of Mirna. In addition to the local markets, they also include the countries of ex-Yugoslavia. Furthermore, we are preparing to enter new markets, primarily

the EU. In 2011, we generated 35% higher growth in the local market in relation to 2010. Our plans for 2012 include increasing our share in both local and export markets.

(current production capacity of Mirna

45 million cans(through exports last year

80% of sales

The present production capacity of Mirna of 45 million cans, 500 tonnes of frozen fish, 350 tonnes of fish flower and 80 tonnes of fish oil is an important share of total European production

A, ROVINJ FISH FACTORY

e still waiting for a boostto the Board President: relations with key suppliers were stabilised, production continuity was

eved with exports accounting for over 80% of sales

Sardine is not branded effectively

Is there a possibility of a joint approach by Croatian companies on other markets? Regarding the fish processing indu-stry, there is definite potential for a joint approach, especially in mar-kets where Croatian producers are

not present in depth. The quality of the Adriatic sardine is not branded effectively. For example, campai-gns at fish fairs and fairs through economic diplomacy could defini-tely increase the share of Croatian products in markets of large con-

sumers, such as Spain and France. Changing eating habits in the direc-tion of increasing the share of he-althy food, which the Adriatic fish certainly is, would give a good per-spective for the fish processing in-dustry in Croatia as well as for Mirna.

4 Privredni vjesnikYear V No 0184

Drago Živković

The development of drones is one of the most chal-lenging aspects of robot-

ics since the use of such aircraft has been increasing in a number of different situations. Drones are mainly used in military purposes, yet are also used in crisis manage-ment situations, in natural disaster monitoring, in rescue missions under extreme weather conditions and generally in missions involv-ing an element of danger. Several project plans for drones are cur-rently being developed in Croatia, with Hipersfera, an aircraft for territorial monitoring purposes, being the most well-known. Ir-respective of their shape - be it egg shaped or elongated, with or without wings – all types need the most precise navigation technol-ogy. The Faculty of Electrical En-gineering and Computing-based Robotics and Intelligent Naviga-tion Systems Laboratory (LAR-

ICS) at the Institute for Automa-tion and Computing is currently participating in an international project for the development of drone navigation methods and technology called EC-SAFEM-OBIL, worth €9.2 million, where €4.5 million was received from the 7th framework programme for research and development, a spe-cial European Union programme.

The project officially began at the end of July in 2011 and its imple-mentation is estimated to last four years. The goal of the project is the development of accurate esti-mation of movement, as well as of navigation methods and technolo-gies in order to achieve a satisfac-tory level of reliability and safety

which would enable the use of autonomous mobile systems for a wide range of purposes.

A space agency According to Zdenko Kovačić, Project Manager of LARICS, scientists working on the EC-SAFEMOBIL project will de-velop the first demonstration systems of this kind in the world, for several different purposes, in-cluding the landing of drones on mobile platforms (such as ships) in extreme and challenging con-ditions, launching of drones from piloted aircraft, aerial monitoring of large areas and the automation of warehouse facility areas with a large number of autonomous vehicles. In addition to LARICS and EC-SAFEMOBIL, the con-sortium contains the most impor-tant organisations and companies within the European sector of research institutes and the main players in this area of industry. The project co-ordinator is the

Spanish space agency FADA-CATEC and the consortium team comprises the companies DLR, Astrium, Indra, SELEX GALI-LEO and Euroimpianti, as well as universities from Seville, Duis-burg-Essen and Zagreb. LARICS is in charge of the entirely decen-tralised movement estimate and simultaneous localisation and mapping with sensors, dynamic routing and autonomous manage-ment of warehouse facility ar-eas. LARICS has participated in many research projects thus far, in long-term co-operation with the Italian company EUROIM in developing advanced robots for pallet movement, autonomous trucks using dynamic routing and tested and installed numer-ous industrial facility plants throughout Europe. LARICS has also developed a visual localisa-tion system using markers for mobile robot platforms intended for office cleaning and video sur-veillance.

Ships sailing between Croatian and Italian ports achieved a record number of passengers, vehicles and transport in 2011, exceeding the results from 2010 by 9.5% for the number of passengers and 5.3% for the number vehicles. Last year, a total of 622,343 passengers and 86,420 vehicles were transported across the Adriatic. The high-est turnover was achieved by the national company Jadrolinija, on the Split-Ancona route, Zadar-Ancona and Dubrovnik-Bari as well as by a Panamanian com-pany Blue Line International on

the route Split-Ancona. Jadrolin-ija transported a total of 275,238

passengers and 49,494 vehicles, or 22.8% more passengers and 12.7% more vehicles than in 2010. Jadrolinija recorded the highest

turnover growth (50% of passen-gers and 34.4% vehicles) on the

route Dubrovnik-Bari. Blue Line also registered turnover growth, 9.6% for passengers (184,957) and 6.4% for vehicles (27,450).

The Italian company SNAV remains the leading shipping company for seasonal transport between the Italian and Croatian ports, with 58,196 transported passengers and 9,476 vehicles. However, the number of pas-sengers is 15% lower in relation to 2010, whilst the number of vehicles is 16.2% down. Ven-ezia Lines transported 44,413 passengers (14.1% growth) through Istria and Kvarner, whilst Emilia Romagna Lines transported 40,197 passengers or 16.1% more compared with 2010. (J.V.)

LARICS PROJECT

Project implementation envisages drones landing on mobile platforms, such

as ships

One of the leading shipping companies with

seasonal lines between the Italian and Croatian

ports is still the Italian SNAV

622,343 PASSENGERS AND 86,420 VEHICLES IN ONE YEAR

New traffic record across the Adriatic

Drones in Croatian Several project plans for drones are currently being developed in Croatia with participation from The Faculty Electrical Engineering and Computing-based Robotics and Intelligent Systems Laboratory

www.privredni.hrBusiness & Finance Weekly 5

Krešimir Sočković

What started as a hobby has developed into a full business covering

100 hectares, for the production of organic food products and sold through specialised outlets. The aim is to move into certain European markets in the foresee-able future even though working hours are long.

What is the level of interest in organic food products in Croatia?Interest is rapidly growing for our products and word of mouth advertising is an imperative in generating new buyers.

Has demand been adversely af-fected by the crisis, since prices are slightly higher than other food products?The crisis has impacted on our sales. Nevertheless, we have ex-panded production and product range and consequently increased sales turnover which in part has

mitigated the adverse impact of the crisis. Our vegetable produc-tion currently covers an area of 10 to 12 hectares. We grow prod-ucts under plastic greenhouses throughout the year, producing cereals and grain products, flour, fruit and in addition raise goats, pigs and poultry.

What is the level of competition locally?Unfortunately, there is minimal competition. We are co-operating and promoting joint market ap-pearance. Our export negotia-tions are drawing to a close, due to our competitive product qual-

ity and prices. We are thoroughly prepared for the European Union single market.

There has been minimal state institutional support and some legal solutions had a negative impact on producers. Has the situation changed?There have been contentious is-sues, yet they are not as serious as they were 12 years ago. The upcoming EU accession resulted in considerable legal adjust-ments. Unfortunately, these have not been completed. Neverthe-less, there are positive moves particularly at a local level. Or-ganic production is particularly promoted and subsidised in cities and municipalities.

What prompted you to move into organic food production?My wife and I began in 1994. Subsequently we decided to transform our hobby into a busi-

ness. Our products are now present in two markets, we pro-vide an internet delivery service for organic food products and we have recently opened our first store with long working hours.

You are currently planning to export. Which markets are you looking at?We are planning to penetrate Austria and in Switzerland in the near future. We have submitted samples and met the criteria of the distributors and buyers and are defining the quantities for the current season. I believe we are about to complete our negotia-tions which have been continu-ing for the last four years and that we are going to be a name in foreign markets. Croatian pro-ducers need to be aware that no one will wait for them. Unless we penetrate markets on our own initiative, we are going to lag be-hind Europe.

Mini dairy - best ideaThe idea of a mini dairy that would purchase milk from small family owned farms, in which bigger buyers are not interested, was the best social-entrepreneur-ial idea in 2011 according to the Social Entrepreneurship Forum, the Ministry of Labour and Pen-sion System, the Government Office for Associations and the British Council. Dragutin Vincek, director of Domaće mlijeko, who submitted the idea, points out that the social community would ben-efit from this through the possibil-ity of purchasing local products.

Multiple recognition for AgrokorAccording to Qudal Quality Sur-vey, QUDAL - QUality meDAL, conducted by GfK - Centre for Market Research, Agrokor took the top 18 places in various cat-egories, which no other compa-ny or brand in Croatia has ever achieved. For example, Konzum won the QUDAL Certificate for top quality supermarket chain as well as market chain with dis-count prices. Jamnica and Jana won in the category of top wa-ter quality and Ledo won in the category of ice-cream and frozen pastry, food and pizza.

Hoteliers on VAT rateThe Association of Employers in Croatian Hospitality is satisfied with the government decision regarding a reduced VAT rate for tourism and hospitality. The As-sociation believes an additional warranty is necessary to ensure

the lowered rate would start to be applied from the beginning of next year, that is, that the govern-ment guidelines becomes part of the legal amendments now, so that the industry could proceed with its long-term planning. A reduced VAT rate for tourism is the main prerequisite for achiev-ing considerably higher tourism income in the forthcoming period and starting an investment cycle which is of vital importance for the development of the entire economy.

MARIO SEVER, OWNER, EKO SEVER

We need to define our position in Europe The family began growing organic food products as a hobby which grew into a business ten years ago and now is considered important in the local market with the future aim of moving into markets in Austria and Switzerland

Competition for organic food products is minimal

::: news

6 WE PRESENT Privredni vjesnikYear V No 0184

The company Omnes Artes was founded in April in 2010 by Ljiljana Žunić and

Suzana Antonić, in order to join their creative forces. Prompted by the usual problems encountered by producers, particularly those with an artistic inclination who are expected to be both skilled traders and deeply aware of legal and tax

frameworks, they decided to man-age their business by themselves and create conditions for artists to be able to express themselves. “This is why we called our compa-ny Omnes Artes, Latin for copious arts. We wanted to group different types of artists and assist them in the further development of their products”, stated Suzana Antonić. Subsequently, they launched the internet portal OmnisArt to host a creative community.“Prompted by the problems en-countered by most artists, de-signers and creative people, we decided to group them and create a home for their work. We would like to enhance the awareness of the value of unique works of art by promoting all the products, as well as the artists themselves and the techniques they use”, she emphasised. She added that their

slogan is “Be who you really are, do what you really love”.

Co-operation with associationsBuyers on the portal are mainly people in search of a gift, or unique artwork enthusiasts. They also organise fairs and creative workshops in co-operation with various associations, particularly those whose field of activity is re-lated to life quality improvement, personal and creative develop-ment, as well as associations for disabled people. Nearly 500 artists, designers, craftsmen or enthusiasts, work-ing in a wide range of raw mate-rials, sell their products through the portal OmnisArt. The portal also provides information on production materials and tools and consequently several portal users also sell such items for ar-tistic production. In addition to these materials, the portal offers unique jewellery, fashion acces-sories, clothing, toys, traditional products, furniture, home décor accessories and other similar unique items. “We would like to emphasise the importance of choice and quality purchase as opposed to the mass-consump-tion imposed on us daily. The current way of working allows us to support local artists and crea-tive enthusiasts and, in a popular manner, to positively impact on peoples lives”, concluded Suzana Antonić. (S.P.)

The Rijeka-based as2con-alveus company is a fam-ily business of Nataša Go-

lik Klanac and Alan Klanac and their business partner Soren Eh-lers. Subsequently, they did some consulting work in shipbuilding and their business activity was from Ehlers’s office registered in Germany. Three years later the family Klanac founded the Croatian company Alveus and Nataša Klanac began in business management. The Dutch ship-yard IHC and the Finnish ship-yard Akeryards were amongst their first clients. Simultaneous-ly, they initiated a totally differ-ent type of investment by plant-ing an olive grove. Nataša and Alan returned to Croatia in 2008 and opened an office in Rijeka. In 2009 company revenue exceeded €0.13 million and they decided to participate in two projects under the 7th Framework Programme for Research (FP7) of the Euro-pean Union, achieving success with the project CO-PATCH (project of repair of damaged ar-eas of ship construction through the application of bonded com-posites).

Development projectsA year later they decided to par-ticipate in the Ulysses project, also within FP7 and in co-op-eration with the company BVB they developed the innovative CAFÉ software for ship design; they are also planning to partici-

pate in the construction project of the first Croatian trimaran VITAR23, in co-operation with their partners. They are also investing into the web portal www.nautica-portal.com, whilst simultaneously selling the first of their olive oil Oleum Alveus. Revenue currently stands at €0.4 million, currently employing some 30 staff, whilst the number of clients is increasing. as2con-alveus is currently participating in or leading several develop-ment projects. Green and Arctic

shipping is the name of the de-velopment project of ships with reduced harmful emissions and technology for navigating Arctic waters co-financed through two EU FP7 projects. Safewin (Safe-ty of winter navigation in dy-namic ice) is a research project in the safe navigation in frozen seas, whilst Ulysses is oriented towards development of ultra slow speed and complementary technologies through the design of the first ultra slow ships. The company is planning to cre-ate more than the current 30 jobs, currently employing mainly engi-neers and economists with Mas-ters and PhD degrees. (D.Ž.)

OMNES ARTES, ZAGREB AS2CON-ALVEUS, RIJEKA

A rich window display for gifts A chance to enhance the awareness of the value of unique works of art

Safer navigation and Ultra Slow Ships

The portal OmnisArt presents art works from some 500 artists

Investment into a web portal as well as selling their first olive oil

as2con-alveus employs mainly engineers and economists with Masters and PhD

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

Source: HNB WEEK JANUARY 28, 2012

Currency Kuna exchange mid-rate

AUD 6,14421CAD 5,76262JPY 7,485658CHF 6,279594GBP 9,053775USD 5,761306EUR 7,580726

According to data provided by the Central Bureau for Statistics, annual infla-

tion stood at 2.1% in December, indicating that average annual in-flation rate reached 2.3% during 2011. Inflation is primarily due to increased food prices. With an annual growth of 3.6%, food con-tributed to a rise of 1%, primarily a consequence of higher prices for bread, grain, milk, cheese and eggs. Food price increases were followed by an increase in the price of petrol (+13.3% on average year-on-year), a contri-bution of 0.7%. Trends in con-sumer prices are in line with last year’s dynamics of local produc-tion prices of industry and glo-bal prices for food and energy, according to PBZ analysts. Av-erage growth in total industrial production prices stood at 6.3%

(4.3% in 2010) locally. For food production it reached 7.7%, and 25.7% in coke and oil refining.

More expensive grainOn the other hand, even though the prices of produce and raw materials have been dropping on global markets since April, according to the HWWI price index (Hamburgisches WeltWirt-schaftsInstitut), in 2011 food

prices were on average 29% higher compared with 2010; grain prices increased by 42%, oilseed by 23% and beverages and sugar by 26%. At the same

time, the price of crude oil was 32% higher and industrial raw materials up 14%. Food prices stabilised in the last quarter of 2011, when the HWWI food in-dex was 20% lower compared with its peak in February 2011. However, average food prices widely exceeded the level of the pre-crisis period. In 2011, the FAO Food Price Index (FFPI) showed the highest level in nominal and real value since the measurements began in 1990. This explains the misbalance of supply in relation to strong de-mand from fast-growing econo-mies. Although the forecast for food production looks better for this year, projections of GDP growth and demand are lower, food price volatility will increase due to precariousness in financial and capital markets. (D.Ž.)

PBZ ANALYSIS

Average food prices widely exceed those of the pre-crisis period

PBZ projection of average inflation is 2.3% over 2011 with risks for a higher level from administratively regulated prices

INFLATION TO REMAIN INFLATION TO REMAIN

LOW THROUGH 2012LOW THROUGH 2012

PROPERTY PRICES

Property is burdened with five tax typesCroatian property is burdened with five different taxes, pointed out Marina Kesner-Škreb from the Public Finance Institute. They are mainly local taxes which collect a relatively small amount of money. For example, counties, cities and municipalities collected only €120 million in 2010 or 6.9% of total lo-cal taxes, or 0.8% of all Croatian taxes. Notwithstanding, this level of tax is at the very bottom of all collected tax income in the EU27. It actually collects six times less income than, for example, value added tax or income tax. During the 1980’s the property ownership tax in Croatia was broadly used for residential buildings, office space

and holiday homes. This tax did not yield the desired results since the tax base was unrealistic, prop-erty records were incomplete and the work of administrations for so-cial income of the present tax ad-ministration was flawed. Perhaps the experience of the last century will be useful today, concludes Marina Kesner-Škreb. (B.O.)

23.1. 24.1. 25.1. 26.1. 27.1

7.59

7.58

7.57

7.56

7.55

7.54

EUR 5.84

5.82

5.80

5.78

5.76

4.74

USD 6.29

6.28

6.27

6.26

6.25

6.24

CHF

23.1. 24.1. 25.1. 26.1. 27.1 23.1. 24.1. 25.1. 26.1. 27.1

8 Privredni vjesnikYear V No 0184

Sanja Plješa

The development strategy of Croatian tourism will provide answers regard-

ing the definition of the types of tourism that Croatia is planning to develop, as well as which ar-eas need to be targeted and how

effectively we need to manage the available tourist areas and address other similar issues. The goal of the development strat-egy is the on-going improvement of the well being of the general public and the sustainable use of resources and tourism attrac-tions, according to Siniša Horak, Project Leader at the Zagreb-based Institute for Tourism. The strategy will cover seven areas,

such as holiday tourism, business tourism, health, adventure or sports tourism, cultural, nautical and special interest tourism. A further goal of the development strategy is to attract the largest possible number of tourists to Croatia, as well as to boost over-all tourist consumption. Current-ly this stands at €7.28 billion, and the plan is to generate €10 billion to €12 billion.

Country imageIn order to create a detailed strat-egy, we have embarked upon various research projects, such as that on the image and percep-tion of Croatia and on public sec-tor and local public stance. “The research results indicate a direct correlation between the satisfac-tory image of a country and high-er prices of tourism packages. Less than 2% of Germans spend-ing their holidays abroad visit Croatia. We have conducted a survey in order to find out on the perception of Croatia amongst general public who have not vis-ited Croatia thus far”, pointed out Horak. He emphasised that 20% of those questioned, mostly

young people and people with lower general educational levels, had no views on Croatia. Just 1% of the general public thought of Croatia as a Central European country. Most of the more elderly British and Danish questioned re-called the war when Croatia was mentioned.

Competitive prices “Germans believe that Croatia is a country for a family summer holiday at the seaside, the Span-iards perceive Croatia as a coun-try for cruising, whilst the British believe Croatia is a country for active holidays. Of those ques-tioned amongst Germans, Brit-ish, Polish, Swedes and Danes, Croatia is the most satisfactorily perceived by Polish people, as they believe Croatia is entertain-

ing, exciting, optimistic, yet con-servative and slightly different from other countries”, stated Ho-rak. He added the survey results revealed that Croatia is perceived by foreign visitors as an “afforda-ble” country. This implies Croatia has competitive prices, irrespec-tive of the fact that her prices are slightly higher than those in Turkey. Croatian continental tourism is also competitive, with Hungary being slightly more af-fordable. The image of Croatia as a tourist country is overall sat-isfactory. Nevertheless, we need to modify the perception of our country. “Croatia is part of the general image of Europe where the situation is rapidly changing. Consequently, trends need to be followed and adjustments made”, concluded Horak.

Opinions of potential tourists to Croatia

A survey has been conducted to find out public opinion on Croatia of those who have not visited the country thus far

An entertaining and exciting but conservative countryThe development strategy for Croatian tourism is aimed at assisting the generation of higher

tourism revenue currently standing at €7.28 billion

The Centre for Business Tourism won the regional Meetings Star Award for 2011 for its project PoslovniTurizam.com - CroatiaMeetings.com. This award is given by the international specialised Kongres Magazine for outstanding achievements in conference tourism in SE Europe in the fi-eld of marketing destinations, conferences, events and meetings indu-stry service providers.

Meetings Star award for Croatian project