PV International 0218

Jozo Vrdoljak

T he Days of Croatian Tour-ism conference was re-cently held in Dubrovnik,

with around 1,000 participants discussing a large number of is-sues considered crucial for a sec-tor that is strategically important for the overall Croatian economy. The 12th Croatian Tourism Fo-rum, held during this event pri-marily focused on prospects for Croatian tourism following EU accession. Croatian tourism has been growing at an average an-nual rate of between 4% and 5%, exceeding the average European annual growth rate of between 2% and 3%. “This year we have become the Mediterranean leader in terms of the number of overnight stays and I would like to warmly congratu-late all those who have contributed towards achieving this goal. We can express our utmost satisfaction at this year’s achievements, which are due to excellent preparation, the application of our knowledge and expertise and the extreme ef-forts made by all those involved in the creation and development of Croatian tourism. We believe we can state that this tourist season will be the best in Croatian his-tory”, pointed out Veljko Ostojić, the Croatian Tourism Minister.

According to Luigi Cabrini, Di-rector of Sustainable Develop-ment at UNWTO, Croatia and Europe have achieved significant results in tourism irrespective of the severe European and global crisis. “We are anticipating an an-nual rise in tourist arrivals of 42 million by 2020, whilst by 2030 the annual rise in tourist arrivals is anticipated to be 45 million.

The proportion of tourists visiting Europe is expected to decrease in the future. In the 1980’s they ac-counted for 63%, whilst currently it stands at 45%. The level of tour-ists visiting Asia and the Pacific is expected to see a substantial

increase. The Mediterranean has a fundamental role in European tourism”, emphasised Cabrini. “The European Commission has highlighted the importance of planning concerning the alloca-tion of Tourism Enhancement Funds (TEF), which has not been strictly implemented thus far”, stated Mathieu Hoeberigs, Princi-pal Administrator of the European Commission Tourism Unit. “We need to wait until December for negotiations to be completed be-tween EU members on the budget for 2013, in order to be provided more information on the level of planned funds. These funds will be allocated to projects which will enhance tourism competi-tiveness and promote the entire tourism sector”, announced Hoe-berigs, who has advised senior of-ficials in Croatian tourism on the fact that the European Union is planning to allocate substantially higher funding in the near term.

pvpvinternationalinternationalCroatian Business & Finance WeeklyEstablished in 1953Monday / 22nd October / 2012Year V / No 0218www.privredni.hr

Gross profit from January to JuneThe main feature of the economy is the high concentration of entrepreneurs and employed in trade and processing

PAGE 2

Interview: Anđelka BunetaFina distraint orders prove to be efficient, says Board Presi-dent of Croatian Financial Agency (FINA)

PAGE 3

Food producersFood quality standards in Croatia are considerably stricter compared with those in the EU

PAGE 5

2008 20092010 2011

16TH DAY OF CROATIAN TOURISM / 12TH CROATIAN TOURISM FORUM

Croatia has becomethe Mediterranean leaderin terms of overnight staysCroatian tourism has been growing at an average annual rate of between 4% and 5%, exceeding average European annual growth rates of between 2% and 3%

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

According to Tourism Minister, this tourist

season will be the best in Croatian history

State subsidies for risk capital funds investing in small and me-dium-sized enterprises expanded their limit from €1.5 million to €2.5 million. The decision was made by the European Commis-sion, and Croatia has adopted it within its legal system at a recent governmental session. A similar decision on the rules for regional subsidies was also adopted. Ac-cording to Boris Lalovec, Deputy Finance Minister, these subsidies are worth over €50 million. Fi-nancial limits of this type of sub-sidies were stricter before. How-ever, the economic crisis moti-vated the European Commission to allow country members to evaluate the effects of individual cases under the defined rules.When evaluating subsidies, which could cover 10-50% of investor expenses, it must be taken into account whether the subsidised entrepreneur acquires a privileged position on the market. The region to which large subsidies are allo-cated must be considerably more underdeveloped than the European average according to GDP data, demographic development and

other economic indicators.

(I.V.)

Subsidies for risk capital funds

SUBSIDY LIMIT INCREASES

2

Beaches are one of the most valuable aspects of the Croa-tian natural heritage. Conse-quently, beach management is becoming increasingly important with a primary focus on responsi-ble and sustainable management. Moreover, the ‘blue flag award’ needs to become a prerequisite in order to be in the running for concession, which would great-ly impact on who is awarded a beach concession as well as on privately managed beaches. The ‘blue flag award’ implies compli-ance with specific criteria – satis-factory reports over 6 monitoring sessions with three secret moni-toring sessions performed by foreign assessors. Environmental beach management is essential, since the award guarantees water quality and beach cleanliness and impact on site choices. Beach management, primarily near to cities, is extremely demanding, since both the various require-ments of local residents and of foreign tourists (who normally require compliance with global standards) need to be met, which is often extremely difficult.The beach at Bačvice has intro-duced compliance such stand-ards. It also managed to retain the support of local residents who perceive it as a symbol of tradi-tion and local custom. It has been recognised as an attractive beach, with local residents benefiting from rental possibilities and pro-viding tourism services near at

hand. In addition, Bačvice beach, once ranking eighth amongst Split brands is now the leading Split tourism symbol. Its success is mainly due to the synergy between local and interna-tional regulations, recognised and valued by many Split residents. The Bačvice beaches have huge potential. The construction of an aquarium in an abandoned city area near the beach and the reno-vation of the pier (to provide a mooring for tourist boats trans-porting bathers from Split) could significantly enhance the attrac-tiveness of the beach. Thus attract-ing private investors is crucial. In addition, the projects would cre-ate around 200 jobs. Split would benefit substantially from similar projects not having to be financed through the budget. The imple-mentation of these projects would greatly affect both the social and age structures of visitors.

Privredni vjesnikYear V No 218

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]

EXECUTIVE EDITORSAndrea Marić[email protected] Antonić[email protected]

IMC MANAGERDea Olup +385 1 [email protected]

TRANSLATIONLučana [email protected] [email protected]

INTERNATIONAL OPERATIONS Ray [email protected]

Edo Unković, Director, Bačvice beaches

Aquarium at Bačvice – an intriguing conceptBačvice beach which used to rank eighth amongst Split brands, is now the leading Split tourism symbol

Financial Agency report on business over H1

A ccording to results of entrepreneur statistical reports from January to

June 2012, 92,787 entrepreneurs employed 841,396 workers. The results have yet again confirmed that the main feature of the econ-omy is a significant concentra-tion of the number of entrepre-neurs and the employment rate in trade and processing, according to the FINA analysis.The majority of entrepreneurs (25,795) are in trade, having a 27.8% share in the total number of entrepreneurs. Trade employs 186,387 or 22.2% of all employ-ees. The highest employment rate is in processing, with 229,783 employees (27.3% of all employ-ees), employed by 11,221 en-terprises (12.2% of all entrepre-

neurs). When all entrepreneurs and employees are combined, it is evident that the within the structure of the economy, trade and processing accounts for al-most a half of all employees (49.5%) and entrepreneurs (39.9%).These two activities com-bined achieved almost half of total income and expenditure: 61.7% of total income (€23.96 billion) and 61.4% of to-tal expenditure (€23.06 billion). According to size of total in-come and total expenditure, the largest share (over 30%), covers trade

with 35% of total income (€13.57 billion) and 35.7% of total ex-penditure (€13.43 billion), fol-lowed by the processing indus-try with 26.7% of total income (€10.37 billion) and 25.7% of total expenditure (€9.64 billion).

Relatively good businessAccording to the same period of 2011, entrepreneurs were rela-tively successful as income ex-ceeded revenue in terms of value; that is they achieved an overall gross profit, even though it was 50.4% lower. Notwithstanding, in four activities (accommoda-tion services, food preparation and catering, real estate, con-struction as well as agriculture, forestry and fisheries) expendi-ture exceeded income, achieving an overall gross loss. In the pro-cessing industry and trade, gross profit was over 50% down.After the past three years, when trade created the highest gross profit, this year the processing industry leads with the highest gross profit in the first half of 2012. During the first six months, entrepreneurs in processing

earned €0.73 billion (59.2% of total gross profit), trade

€0.16 billion (12.5% of total gross profit), with communications and information showing €0.19 billion (14.6%

of total gross profit). (V.A.)

PROCESSORS GROSS PROFIT OF €0.73BILLIONThe main feature of the economy is the high concentration of entrepreneurs and employed in trade and processing

Almost half of current entrepreneurs are active

in trade or processing

www.privredni.hrBusiness & Finance Weekly 3INTERVIEW: ANĐELKA BUNETA, BOARD PRESIDENT, FINANCIAL AGENCY (FINA)

Igor Vukić

T he new Financial Opera-tions and Pre-Bankruptcy Settlement Act entered

into force on the 1st October, giving Fina an important role to play in its implementation. Board President of Fina, Anđelka Buneta, explained to Privredni vjesnik the procedure of imple-menting a pre-bankruptcy set-tlement. We also talked about other services which the Agen-cy offers to the entrepreneurs.

Who files the pre-bankruptcy settlement procedure and on what conditions?The procedure can be filed by the debtor exclusively. This pro-cedure can be implemented on a company or an individual (indi-vidual trader or craftsman), but not on an individual who is not registered in the Crafts Register as a craft owner, or a Court Reg-ister as an individual trader. The debtor must file a request if he is unable to recover liquidity within 60 days, having taken the meas-ures of financial restructuring outside the pre-bankruptcy set-tlement procedure. The request is filed 21 days from the start of insolvency, and 90 days at the latest, from the date the law en-ters into force, if it was already insolvent at the moment the law entered into force.

What are the deadlines for pre-bankruptcy settlement and what if the bankruptcy pro-cedure was filed against the debtor?The proposal for opening the pre-bankruptcy settlement procedure is not allowed if a bankruptcy procedure has already been filed against the debtor. The pre-bank-

ruptcy settlement is an urgent pro-cedure and must be closed before a settlement committee within 120 days at the latest, or 60 days in case of a summary procedure. The settlement committee brings the decision on opening the pre-bankruptcy procedure within 8 days after receiving the debtor’s request to open the procedure. The Financial Agency will pub-lish on its website this decision as well as others brought during the pre-bankruptcy procedure.

Small and medium-sized entre-preneurs often complain about the collection of debts. How can the Fina distraint system help regarding this problem? What are the results of applying this system?The first two years since the implementation of the Distraint Act, the results are better than expected, and the Fina distraint system has proved to be success-

ful. Creditors can deliver promis-sory notes to Fina and decisions with final force and effect on the basis of which Fina will start the process. The bank has to report to Fina all funds that arrive into the account of the enforcement debtor, from which the distraint will be executed. This means that both the debtor and the bank can-not make any payments while the account is frozen. Therefore, if the money is arriving into the ac-

count of the enforcement debtor, the enforcement creditor will col-lect the debt. From 15th October 2012, the new Distraint Act enables creditors to re-quest direct collections from Fina based on a

judgement or settlement of the local court or an administration

without the need to place the distraint procedure

before a court as be-

fore.

The new Distraint Act enables creditors to

request from Fina direct collections on the basis

of a judgement or settlement

Fina distraint orders prove to be efficientCreditors can deliver promissory notes to Fina and decisions with final force and effect on the basis of

which Fina starts distraint process

What new services have you introduced this year and what are the re-sults of the Fina Infoblokada or Fina e-Account?Let us mention here our e-signature service, and state with great plea-sure that our solution Web e-signature registered over 21,000 tran-sactions in one year. User interest remains strong. Concerning the e-Account service, it must be pointed out it is a complex system that enables the exchange of e-accounts, and it is completely harmonised with legal regulations and international standards. This service is deve-loping slowly, but this is to be expected. According to our legal regula-tions, explicit good will and permission have to exist in order to exchan-ge e-accounts. This means no one is required to change their business habits (i.e. the habit of using paper still very much present on the mar-ket). We are currently dedicated in providing training on how this pro-cess enables efficient business and how much it is actually safe and se-cure, both from the point of view of information security, and tax control.Regarding the service of FINA Infoblokada, it was introduced less than three months ago, and we registered 3,000 messages. This service allows the receiving information via a mobile phone in real time regarding frozen accounts of any economic operator in Croatia.

We are preparing the market for e-accounts

4 Privredni vjesnikYear V No 218

Krešimir Sočković

Croatian products (choco-late, water, ice-cream and salami) will be pres-

sured by lower prices from for-eign brands, while EU accession will be a chance for growth and new markets for producers of prosciutto, milk and tea. This is the result of a study conducted

by the consulting company, A.T. Kearney, on the influence of the forthcoming EU accession on the Croatian food indus-try. The study com-pared prices across 19 food products in Croatia to those in four neighbouring countries already in the EU – Ita-ly, Austria, Slovenia and Hungary.The study showed, despite general opinion, that a majority of Croa-tian food prod-ucts are still cheaper than those from Europe. However, when Croatia joins the EU, this will change.Due to the weak spend-ing power in relation to the EU27, even the slightest change in price could cause significant changes in the behav-

iour of Croatian consumers. Upon EU accession, trade barri-ers will disappear in relation to the EU27, which will simplify importing for foreign producers present on the local market, and create more room for price re-ductions. Foreign products cur-rently here, will find their way to Croatia, and at the same time doors to new markets will open for Croatian producers. Even though Croatia will cease to be a CEFTA member when it joins the EU, which will create certain barriers for other members, this will influence local producers as much as the severe com-petition from the EU market. That is why it is extremely im-portant for the Croatian food

i n -

dustry to take the necessary steps to use this moment and out-perform the competition, explains Srečko Debelak, Senior Director at A.T. Kear-ney and an expert in the food industry.

Attackers and fightersLocal products, for example ground and instant coffee, fruit teas, long-life milk, yogurt and prosciutto, are not only cheaper than for-eign products in Croatia, but they are also cheaper than similar products from the observed EU countries. That is why they are for now in the best price posi-tion. This group of products,

that we named attackers, has a chance to achieve good

results on the EU market through a strategy of growth and reposition-ing. As a result, local prosciutto is consider-ably cheaper than the prosciutto in any of the studied EU country. In H u n g a r y, for exam-ple, there is

not a single large prosciut-to producer present on the market. This is a great oppor-tunity for local producers to penetrate the EU27 market, concludes Debelak.A large number of Croatian food prod-ucts have a good price position; however

when Croatia joins the EU, they will be pres-

sured to lower prices due to cheaper com-petition. These prod-ucts include choco-

lates, espresso coffee, cappuccino, green tea, natural water, ice-cream,

butter and Gouda cheese. Chocolate is an excellent example of the group we

named fighters. Croa-tian chocolate is still

much cheaper than foreign products; how-ever, foreign

chocolate is more expensive in Croatia

than in the EU. Croatian produc-ers will have to respond to the anticipated fall in prices of for-eign brands, in order to maintain margins by increasing operating efficiency, explains Debelak.

New strategiesSparkling water, which will probably be cheaper after EU

accession, falls into the category of local products jeopardised by cheaper for-eign products. Some for-eign products, for example winter salami, yogurt, chicken frankfurters, are already cheaper than lo-cal products. Therefore, when Croatia joins the EU and duties are abol-

ished for individual products, producers will increase produc-tivity and invest more in expand-ing their market share. A.T. Kear-ney recommends that Croatian food companies enhance operat-ing efficiency and/or growth and reposition their strategy.

Croatian food industry and the EU

Price pressure puts chocolate and water in jeopardyA study by A.T. Kearney shows that when Croatia joins the EU some Croatian products, like chocolate, water, ice-cream and

salami, will be faced with intense price pressure whilst producers of prosciutto, milk and tea will have a chance to increase theirs

Croatian chocolate still much cheaper than foreign produce but foreign chocolate is more expensive in Croatia than in the EU.

Exit from CEFTA will not affect Croatian producers

as much as severe competition from the EU

market

Srečko Debelak, Senior Director at A.T. Kearney”

“

www.privredni.hrBusiness & Finance Weekly 5

::: news

Valamar Group revenue 10% upConsolidated revenue for the Valamar Group was €126.9 mil-lion, 10.5% up over the same period last year. Valamar tourist facilities recorded a total of 3.9 million overnight stays, a 7.5% increase. The highest revenue per unit was recorded in Dubrovnik, at €11,990, with the lowest on the island of Krk, at €4,700.

M San ranked firstThe Zagreb-based company M San Group generated revenue of €246 million, and ranking first amongst the largest companies in the Adriatic region. The Bel-grade-based Comtrade Group, the Slovenian Avtera, IBM and the regional systems integrator, S&T Group, also ranked amongst the top five, according to a survey conducted by IDC Adriatics ana-lysts. The top 100 IT companies in the Adriatic region generated total revenue of €2.53 billion in 2011.

Finvest reduces borrowingFinvest Corp, the wood process-ing company, confirmed its settle-ment of liabilities and stated it is meeting planned business targets. Company borrowing has been reduced from €23.73 million to €17.2 million over the past five years, in addition to structural changes concerning long term as-sets with a total investment value of €8 million. A substantial loss was due to transferred losses from Finvest Drvar in Bosnia and Her-zegovina.

Almost €0.26 billion revenue generated by DM

The retail chain DM had turno-ver of almost €0.26 billion, with an anticipated profit of around €10 million. Its share in the re-tail pharmacy market accounts for 26.5%. DM has invested over €6.4 million mainly in opening new stores, now standing at 145 in Croatia. It is planning a fur-ther investment of €7.3 million to open 10 additional stores in 2013.

Svetozar Sarkanjac

The formation of co-opera-tives for small-scale farm-ers is fundamental to the

future, as was concluded during the conference recently held in Osijek to mark World Food Day. The principal topics covered in-cluded food quality and safety standards. “Food safety stand-ards in Croatia are in full compli-ance with safety standards in the EU and are also stricter in sev-eral areas. Nevertheless, absolute food safety can never be guar-anteed. However, I believe that the system applied and adopted in Croatia is fully functional”, stated Zorica Jurković, Direc-tor of the Croatian Food Agency (HAH) during the international conference entitled Croatia on its Way to EU Integration-Challeng-es and Expectations toward Food Safety and Agricultural Policy held in Osijek to mark World Food day. It was sponsored by the Croatian Food Agency (HAH), the Food and Agricul-ture Organisation of the United Nations (FAO), the Ministry of Agriculture and the Ministry of Foreign and European Affairs.

Huge potential for small-scale farmers Ivo Josipović, President of the Republic of Croatia, one of the conference sponsors, partici-pated via video conferencing. During his address to partici-pants, he emphasised the crucial

importance of exploring the po-tential for Croatian food produc-tion and enhanced competitive-ness, stressing that fact that small farmers need to be given prime focus. Božica Rukavina, As-sistant Minister of Agriculture, added that small farmers would benefit enormously from forming producer associations.

High quality standards“Small farmers become eligible for financial support by forming co-operatives and producer as-sociations, which subsequently fosters their competitiveness in the EU market. Cluster forma-tion also needs to be encouraged, since this significantly links pro-duction and sales. In addition to quality, small farmers can be competitive concerning the spec-ificity of their products. There is huge potential for ecological pro-duction, as well as for products awarded Protected Geographical Indication (PGI) and Protected Designation of Origin (PDI) la-bels, primarily concerning top quality products which can gain ample benefits from forming co-operatives”, highlighted Božica Rukavina. Conference topics also included the preparedness of the Croatian food processing in-dustry for the market race in the EU, as well as the harmonisation of current regulations in Croatia with those in the EU. Božica Rukavina pointed out for Privredni vjesnik the fact that Croatian food processing indus-

try has not had to tackle many problems during the reconcilia-tion with EU standards concern-ing food safety. On the contrary, it can be stated that in several areas, Croatian food producers are familiar with complying with significantly stricter standards than those applied in the EU.

“In Croatia there are several ad-ditional food quality standards for products, whereas in the EU similar products need to com-ply solely with health and safety standards. The Croatian meat processing industry required the setting of standards for meat and meat products in order to ensure the quality of local food prod-ucts”, stated Rukavina. Current standards and regulations on food quality and safety originated dur-ing the former Yugoslavia. On the other hand, the currently ap-plied and adopted standards and regulations throughout the EU are less detailed also due to the current use of new technologies in food production. Health stand-ards and food safety standards applied in the EU are not in ques-tion, yet there are several differ-ences in regulations on quality.

In Croatia there are several additional food quality standards for products, whilst in the EU similar products need to comply solely with health and safety standards.

A CONFERENCE TO MARK WORLD FOOD DAY

Croatian food producers are used to complying with significantly stricter standards than those in the EU

Food quality standards in Croatia are considerably stricter compared with those in the EU, and

there is huge potential in the EU for Croatian small farmers if they opt to create co-operatives

Božica Rukavina, Assistant Minister of Agriculture”

“

Croatian producers are familiar with a good quality


CROATIAN FOREIGN CURRENCY MARKET

Source: HNB WEEK OCTOBER 20, 2012

Currency Kuna exchange mid-rate

AUD 5,985824CAD 5,854666JPY 7,291422CHF 6,234449GBP 9,278359USD 5,777454EUR 7,534955

P roducer prices and con-sumer prices both in-creased in September.

According to the latest data pro-vided by the Central Bureau for Statistics, consumer prices grew 5% year-on-year in September, the highest growth rate since Oc-tober 2008. They also increased 1.4% on a monthly level.On an annual basis, as expected, price rises were mainly gener-ated by higher food and energy. Monitored on a monthly basis, the basket of consumer goods and services, excluding tax paid, the prices of food, housing, wa-ter, energy, gas and other types of petrol accounted for over 42%. Considering the high proportion of these prices in the consumer goods basket, it is not surpris-ing they have a strong influence on the movements of consumer prices despite weaker demand.

Consumer prices, energy ex-cluded, increased 2.9% year-on-year, and when food prices are excluded from the index, growth was 1.5%. The annual growth of food prices increased to 6%, with the highest increase in the price of fruit (18.2%) and vegetables (25.1%), which is probably the result of the long period of drought. Concerning housing, water, energy, gas and other types of petrol, the annual growth rate in consumer prices has also mildly intensified com-pared with August, standing at 13.5% with a 15.7% share of the total index.

Further price increases possibleIn this category, high annu-al growth rates were seen in the prices of electric energy (+22.1%) and gas (+30.5%),

where the annual growth rate in electric energy remained at the same level as August, whilst growth in the price of gas in-creased (in May, the price of electric energy increased by 20%, and the price of gas in-creased by 22%). However, other components are also see-ing price increases (water sup-ply (3.7%) and drainage (7%)), and at the same rate as in Au-gust. The price of liquid petrol increased by 11.6%, exceeding the level in August.On a monthly level, consumer price growth was mainly gen-erated by the cost of clothing and footwear, which increased 11.2% as a result of usual sea-sonal movements. Considering weak local demand and a lack

of economic recovery, demand-side prices are not increasing. However, the increased VAT rate, higher costs of electric energy and gas as well as food products will become visible in annual rates of growth. By the end of the year, we anticipate higher prices for heating, caus-ing the annual prise rise to ad-ditionally intensify, according to RBA analysts. (V.A.)

::: news

International reserves dip slightly Total assets of the Croatian Na-tional Bank (HNB) stood at €11.31 billion at the end of September, whilst international assets were €11.4 billion, indicating a decrease of 1.7% down over the end of August. Following an increase in April, international reserves have been dipping since May and in September reached the same level recorded in September last year. According to HNB projections, international reserves fully cover liabilities towards international creditors, which will be overdue by the end of the second quarter of 2013, implying they are sufficient to maintain a stable exchange rate.

Uljanik reducing subscribed capitalThe Central Depository & Clear-ing Company has recorded a re-duction in subscribed capital of the Uljanik shipyard. The decision on the reduction ordinary shares from €40 to €12 was reached during the General Meeting on 30th August, reducing the subscribed capital from €89.45 million to €26.8 mil-lion, comprised of 2,236,253 ordi-nary shares.

Hypo: €100 million of new savings

Hypo Alpe-Adria-Bank recorded a 7% rise in personal saving during the first

eight months, showing an in-

crease of €100 million. The bank has expanded its retail product range by providing a six-month incentive, with interest rates up to 4.3%. In addition, the bank has expanded its all-purpose loan range by introducing sea-sonal loans in local currency for amounts up to HRK110,000 at a variable interest rate of 9.3%.

CONSUMER PRICES

5% ANNUAL GROWTH

15.10. 16.10. 17.10. 18.10. 19.10.

7.54

7.53

7.52

7.51

7.50

7.49

EUR 5.80

5.78

5.77

5.76

5.74

5.72

USD 6.24

6.23

6.22

6.21

6.20

6.19

CHF

15.10. 16.10. 17.10. 18.10. 19.10. 15.10. 16.10. 17.10. 18.10. 19.10.

High annual growth rates achieved by the price of electric energy (+22.1%) and gas (+30.5%)

Year-on-year, as expected, price rises have been generated by higher energy and food prices, which is also the highest growth rate since October 2008

www.privredni.hrBusiness & Finance Weekly 7

A ltus IT was founded in February 2011 and cur-rently operates in five

countries throughout the region, as well as in Spain, Russia, Ar-gentina and the US. However, the company has been operat-ing for a longer period of time, continuing the operations of the Markoja company, founded in 1994. Altus IT has been a data service provider since 2005. Markoja as a data service pro-vider has been recognised as one of the leading telecom-munication nodes in Croatia through which many local tel-ecommunication companies connect with the world. Its data centre business was fully trans-ferred to Altus IT, including the infrastructure, services and em-ployees.

Currently Altus IT comprises a data centre with two server rooms located in the Zagreb-based Ericsson campus. Both are in full compliance with high security and quality standards. They are independent and yet can subsequently be used as a backup to each other.

Altus IT co-operates with a wide cross-section of companies, in-cluding financial institutions and virtually all telecom operators in Croatia, which greatly helps with peer-to-peer working and pro-vides ample opportunity to create communication routes.

Flex systemAltus IT has recently implement-ed new IBM solutions based on PureSystems to transform its operation from data service pro-vider to become a cloud service provider. “We assessed a wide range of systems and opted for IBM Flex system based on the concept of smart computing”, explained Goran Đoreski, Board President of Altus IT. “IBM Pur-eSystems is a fully integrated solution which can assist us in achieving growth and providing quality services for clients”, he added.Consequently, Flex system will accelerate the delivery of our services to clients by 60%. Fur-thermore, the implementation of a new, flexible, scalable and effective infrastructure will en-able Altus IT to explore room in existing data centres more ef-fectively, as well as provide the opportunity to deliver a wide cross-section of services con-tributing to much higher added value. (J.V.)

A modern lifestyle results in many negative effects such as alienation from

nature, which is an alienation from one’s inner self. Aromather-apists believe they can provide the optimum assistance to pre-serve health through aromathera-py which is in complete harmony

with nature. Katica Wolf, a nurse and the founder of Aromaterapija Viola, fully supports this view. She founded her micro business last year following several years of professional work experience. “Aromaterapija Viola was created to provide aromatherapy services for disease prevention, to help health preservation and alleviate and cure a wide range of health issues through massage and coun-selling on aromatherapy products. In addition, I organise workshops to provide information for both potential and existing clients, to popularise aromatherapy. My cli-ents are mainly women, aiming to improve the quality of life” stated Katica Wolf. She pointed out that she introduces them to the magi-cal world of aromatherapy and its flowery essences, which help

in healing, provide a cure and/or assistance in reaching a harmoni-ous psychophysical attitude. Each client undergoes a subtle transfor-mation, which enables them to exploit the full potential of life and assists in living a more re-laxed and healthier life. “Aroma-therapy scents go beyond relaxa-tion”, highlighted Katica Wolf.

Aroma cosmeticsAromaterapija Viola has organ-ised natural cosmetics workshops including the production of lip balms, cocoa butter bars for skin peeling and care, the prepara-tion and manufacture of facial creams and masks, as well as lanolin creams. In addition, many workshops have been organised on the preparation and produc-tion of natural deodorants and toothpaste. The workshops are intended for all who are aware of the adverse effects of chemi-cal substances and preservatives used in the manufacture of stand-ard commercial cosmetics and are striving to use products made from natural ingredients. She purchases top quality ingredients for aromatherapy products exclu-sively through specialised stores and is planning to organise sev-eral workshops on aroma cosmet-ics and enable both potential and existing clients to replace entirely commercial cosmetics. (S.P.)

WE PRESENTALTUS INFORMATION TECHNOLOGY, ZAGREB AROMATERAPIJA VIOLA, ZAGREB

A wide cross-section of clients

Scents for delight and healthAromatherapy services maintain health and alleviate and cure various health conditions

Altus IT centre encompasses virtually all telecom operators

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Svetozar Sarkanjac

Erdutski vinogradi has in-vested in the complete renovation of its vine-

yards covering some 400 hec-tares of its overall area of 470 hectares. Total cellar capacity amounts to 6 million litres.

Following a two year struggle for survival against the backdrop of excessive borrowing due to in-vestment in development, as well as significantly reduced purchas-ing power, the company has now found a solution to its problems. Restructuring has entered its fi-nal phase and the company will finally focus on enhancing its operations following its success in overcoming its previous finan-cial problems. “We expect yields across the entire vineyard over the next few years, which im-plies we will provide substantial quantities in addition to excellent quality”, stated Goran Dumančić,

the majority owner and Supervi-sory Board President, adding that there are plans for recapitalisa-tion which also implies changes in the ownership structure.

Plans for 2013There were concrete plans for the acquisition of the company by Russian and Spanish busi-nessmen, yet Erdutski vinogradi opted to merge with local strate-gic partners. “We are expecting to finalise all contracts and define the management strategy for the future by the end of 2012”, stated Dumančić who currently owns 87% of the company. Following the planned recapitalisation, the company will enter a more stable phase of business. It is planning to invest mainly into the com-plete renovation of the vineyards, the modernisation of the bottling plant, as well as the purchase of additional machinery. Thereafter, it plans a completely amended market development approach. 95% of annual production (some 3 million litres) is sold through the local market, which has on the one hand become weak, whilst on the other it is becoming increas-ingly saturated with imported

wines. It is extremely difficult to achieve a price that could recoup overall investment in viticulture and winemaking.

Exports are fundamental“Annual exports of about 1.5 mil-lion litres are essential for market survival. The average price of wine in Croatia ranges between €1.5 and €2 per 0.7 litre bottle, whilst on the global market the lowest price per 0.7 litre bottle currently stands at €3. Price posi-tioning of Croatian wines is cur-rently below average both in Eu-rope and globally. Nevertheless, Croatian wines are top quality. Consequently we are planning to focus on international markets over the next year. Our strategic goal is to achieve 50% exports of production, primarily in 0.7 litre bottles”, explained Dumančić.

Target markets are Poland, Ukraine and Germany, and we have great expectations from Chinese and Indonesian markets which are the new wine markets and have high potential. “Following the extremely posi-tive experience gained during our recent visit to China, we are anticipating excellent business arrangements. We are not aiming to “conquer the Chinese market”, since we believe we need to fo-cus primarily on individual prov-inces. Consequently, we have recently organised a visit of our economic delegation to the Chi-nese province of Anhui and its capital, Hefei”, stated Dumančić. He pointed out that he has recent-ly received an invitation to par-ticipate in a fair in Jakarta, whose market has shown increasing in-terest for quality wines.

ERDUTSKI VINOGRADI – RESTRUCTURING AND RECAPITALISATION

We expect yields across the entire vineyard over

the next few years

area of vineyards under cultivation owned by Erdutski vinogradi

470 hectares(

This year’s grape yields of Erdutski vinogradi and most Croatian wine-growers have been around 30% lower than average as a result of an extre-mely severe winter, followed by an extremely dry spring and summer. “Yields are lower, yet grape quality is extraordinary, whilst sugar-to-acid ratio is almost ideal. Hence, we are anticipating production of top quality wines. I believe there will be substantial demand for our wines from the 2012 harvest”, stated Boris Lovretić, Director of Erdutski vinogradi.

Demand for harvest of 2012

Erdut wines in the Far East soonTarget markets are Poland, Ukraine and Germany with Chinese and Indonesian markets having high potential

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PV International 0218

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