PV International 0164

Jasminka Biliškov, Director, Biliškov Real Estate Agency Islands and islets are our most valuable resources and using them is an imperative

Croatian pharmaceutical industry Local producers are under constant pressure to reduce medicine prices even below the limit of profitability

RBA analysis and indications The €750 million Eurobond issued in July will additionally contribute to further debt increase

INTERVIEW PAGES 2-3

PHARMACEUTICANS PAGES 4-5

FOREIGN DEBT PAGE 7 2010

Croatian Business & Finance Weekly Established in 1953 Monday / 5th September / 2011 Year IV / No 0164 www.privredni.hr

S U P P O R T E D

SLIGHT GROWTH IN GDP

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T H E

pvinternational pv international C R O A T I A N

C H A M B E R

O F

E C O N O M Y

IMMOPARK JASTREBARSKO

Investment in logistics creates new jobs Satisfactory tourist season The current tourist season has been quite satisfactory, as 6.2 million tourists have visited Croatia so far, 8% up over last year with 300,000 tourist entries during the first three week-ends in August, up over the same period last year, as Tourism Minister Damir Bajs has recently pointed out at the Senior government Commission Meeting for tourist season monitoring adding there are high erxpectations for September and October. The Government Commission meeting session President was Prime Minister Jadranka Kosor who prompted of the best endeavours used during the preparation phase for this tourist season by the whole tourist sector, whilst success is also due to the fact that Croatia has been identified as a stable and safe country. The Prime Minister commented on the latest data recording 0.8% growth of GDP in Croatia. She stated that it is slight growth, yet it indicates improvement and positive trends, whilst also matching several other EU countries. Particular attention at the session was paid to cruising visitors; 1.2 million are expected and the number of cruise passengers will be 100,000 more than in 2010.

Immorent Group has invested around €0.5 billion in real estate in Croatia over the last 10 years and will invest €55 million in Immopark Zagreb one of the largest logistics centres in Croatia Drago Živković ome 150,000 m2 of warehouse space has been constructed in Croatia in the last two years; nevertheless, the Croatian total of about 760,000 m2 is merely in the region of 50% of the Western European average.

Consequently, the logistics real estate market area has the greatest growth potential. Immorent Group, a member of Erste Group, is the Croatian leader in this investment area, having invested €0.5 billion in real estate over its ten years of operation, with €160 million of their own assets. Immorent will invest in Immopark Zagreb, one of the largest logistics centres in Croatia, located near Jastrebarsko. It will comprise

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Immorent striving to be a key player in Croatian logistics real estate market over 66,000 m2 of warehouse, production and office space. The completion of the first phase of construction is anticipated during the first quarter of 2012. Immorent’s partner is Niva, a company responsible for the projects

and supervision. Tomislav Matija Varga, the Board President of Erste Group Immorenta, pointed out that the new logistics centre will provide a complete service solution in an optimum location, 24 kms from Zagreb. The company is striving to be the key player in Croatian logistics real estate market and it has invested €70 million into a Konzum warehouse.

Local government support The Immopark construction is underway and Valentić announced the completion of the construction of a 13,000 m2 warehouse prior to the official laying of the foundation stone.

Irrespective of the recent stag-

nation in the real estate market, Valentić is optimistic about finding a user for the warehouse.

Varga added that finding a user has been made easier by the clear indication of completion. The company Zagorje Tehnobeton is the main contractor.

The new logistics centre could create about 100 new jobs, which is, according to Mihael Zmajlović, the mayor of Jastrebarsko, one of the most important aspects of this investment, as every job in logistics has a multiplier effect. The town of Jastrebarsko has invested €1.35 million into the infrastructure to enhance the largest investment in its business zone projected at 250 hectares.

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Privredni vjesnik Year IV No 0164

JOSIP JAGUŠT, CONSULTANT FOR PROJECTS ON THE PROTECTION OF GEOGRAPHICAL LABELLING ON FOOD PRODUCTS

“ Protected products are not created but recognised

he main goals of the protecting products with an origin label are: protection of the product name against misuse and imitation, helping consumers by giving reliable information on specific features and origin of the product and the development of diversified agriculture and sustainable rural development. Such labelling contributes to the commercial value of the product and increases the possibility of selling at a higher price. These products may affect the economic development of a region and the cultural heritage since they protect the identity of indigenous products, and the increased interest for them reflects greater demand for quality agricultural and food products. They can also improve local tourism with their reputation.

Protected products are not created, they are recognised. The key is to determine the authenticity and market cost-effectiveness of the product. After that it should enter the procedure for the drafting of the specification and fulfilment of criteria for a certain protection level (label of authenticity, geographical origin or traditional reputation; the procedure which

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IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription

is regulated by the Act on Geographical Indications and Designation of Origin of Products and indications of traditional reputation of agricultural and food products, and which complies with EU regulations.

There are over 1,000 protected products on the EU market, mainly from Mediterranean countries.

An example of successful protection is the Greek feta cheese, motivated by its expanding production in Europe. Its protection resulted in foreign investment, employment and concentrated regional production.

There are over 1,000 protected products on the EU market Protected Croatia products are: Lika potatoes, soparnik of Poljica and turkey meat from Zagorje (label of origin), as well as Dalmatian olive oil, Varaždin cabbage and Istrian prosciutto The procedure for the protection of origin of kulen of Baranja and authenticity of tangerines from Neretva is currently in progress.

Geographical origin for products is very important since there are many similar products in exYugoslavia. Labelling is necessary in order to avoid situations in which Croatian products might fall into a subordinate or even unsustainable market position on regional and European markets.

However, it is precisely this joint heritage that creates great potential for cross-border co-operation in the protection of indigenous products.

FOR PUBLISHER Nikola Baučić +385 1 4846661 uprava@privredni.hr

IMC MANAGER Dea Olup +385 1 5600028 olup@privredni.hr

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

TRANSLATION Lučana Banek lucanab@gmail.com Mirjana Cibulka mirjana.cibulka@gmail.com

EXECUTIVE EDITORS Andrea Marić maric@privredni.hr Vesna Antonić antonic@privredni.hr

INTERNATIONAL OPERATIONS Ray Fletcher fletcher@privredni.hr

Once, Hungarians were enthusiastic buyers of rea now the situation has changed as individuals from

INTERVIEW: JASMINKA BILIŠKOV, DIRECTOR, BILIŠKO

Islands and isle resources and

I believe Croatian islands should be sold and the go Jozo Vrdoljak asminka Biliškov, Biliškov Real Estate Agency Director talked to Privredni vjesnik about the situation on the Croatian property market, the latest trends and opportunities for attracting wealthier and more significant investors to the Croatian market. Jasminka Biliškov is the Vice-President of the Board of the Real Estate Agency Association at the Croatian Chamber of Economy at national level, the President the Commercial Real Estate Association of Split County Chamber, a member of Code Diplomatique & Con-

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Villas and small houses by the sea are the most appealing. They always achieve a satisfactory price sulaire (CD), a member of the Business Women Association (KRUG), Croatian Ambassador for Female Entrepreneurship at the European network and a member of the German-Croatian Chamber of Industry and Commerce. She participates in and visits significant business gatherings and fairs and has compelling attitudes on the real estate business and the prospects for its more successful development. Biliškov Real Estate Agency headquarters is located in Kaštela with branch offices in Split and in Zagreb. It employs nine staff and a wide range of outsourced staff.

What is your assessment of last year’s results compared with this year?

Last year we saw an increase in the number of inquiries and anticipated a slight market recovery, an increase in the level of interest in and demand for real estate. Nevertheless, we have recently witnessed slight stagnation once again. It might be a consequence of the season and the heat, yet we used to operate with significant success during the summer. However, we are succeeding in maintaining stability and operating sustainably. We are currently preparing for the Moscow fair which has considerably raised our expectations.

What is your perception of buyers and investors from that area? Are they interested in the Croatian market?

They are deeply interested in investment in real estate by the Adriatic. Nevertheless, not being a member of the EU, Russians are permitted to purchase real estate exclusively via a company and consequently they have to set up a company in Croatia. This increases the expense and additionally complicates the completion of the process of investment. Buyers from China, the United Arab Emirates and similar countries are faced with the same problem. I believe Croatia does not even have reciprocity with other countries. It is a well known fact that investors are offered a range of privileges in Montenegro and have consequently operated successfully there. In addition, as opposed to Split, the Montenegrin littoral is connected via direct airlines

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al estate; similarly with Czechs and Slovakians; m the European Union purchase less often.

”

“

Russians rate as the best buyers and I have ample positive experience in cooperating with them.

”

OV REAL ESTATE AGENCY

ets are our most valuable using them is an imperative

overnment, which has full rights, can evaluate potential buyers with several of the most important cities in Russia. Russians do not need a visa for Montenegro.

They are amongst the best buyers and I have ample positive experience in co-operating with them.

And your views on buyers from the EU? They can purchase property without restraint, yet currently there is something adversely affecting them and they do not venture into new purchases. Once, Hungarians were extremely enthusiastic real estate buyers, yet the current situation has changed.

It is similar with Czechs and the Slovakians and also similarly with Austrians and the Germans, who used to be more interested in Istria than in Dalmatia. People from the European Union simply purchase much less. There were positive expectations regarding the Italians which have not been realised. We depend on domestic buyers, who are mostly solving their own housing problems.

Subsidies and incentives are more commonly used in Zagreb than in Dalmatia.

currently real estate prices are satisfactory in the most appealing locations, whilst larger areas have become more affordable.

What is currently considered as the most appealing real estate? How large is the demand for such real estate?

There is always a large de-

mand for villas and houses by the sea. They still achieve satisfactory prices. In addition, there is demand for apartments in the centre of Zagreb or on Split waterfront and some of the more appealing streets.

Nevertheless, we have witnessed a certain ‘modification’ in prices even in the most appealing locations.

Is there interest in commercial space and office towers?

There is a higher level of interest in such real estate in the Zagreb area than in Split. Consequently, Licence an imperative What is the situation amongst your competitors in the real estate sector?

I believe over 30% of agencies has gone out of business and those that are still operating most probably deserve to. Competition is healthy, yet buyers are often faced with problems upon direct purchase – they most often face unexpected problems due to their evasion of commission payment amongst agencies. I would strongly advise all buyers to consult the Register at the Croatian Chamber of Economy and verify which agencies have a license for the sale and purchase of real estate and consequently avoid various problems such as losing both money and property.

What is your opinion regarding the sale of Croatian islands?

Islands and islets are Croatian most valuable resources and I believe using them is an imperative. Nevertheless, I believe building should be permitted specifically on the islets, albeit

Arrival of celebrities to a certain areas is a tested recipe for tourism success under severe monitoring. It has been permitted in other countries and I believe that our urban architects and the government will do the same in the forthcoming future. The building ban dampens most investors’ appetite. The arrival of celebrities to a certain areas is a tested recipe for tourism success. Many celebrities have shown interest in our islets, in their horticultural décor and wanted to build there, but were not permitted to do so.

Will this change in your opinion?

It most certainly is, as this situation is not in the best interests of anyone. I cannot see any obstacles to selling Croatian islands as the government, which has pre-emptive rights, can evaluate potential buyers. This has been illustrated by the situation on the lakes in the Alps and it must be possible by the Adriatic. If several celebrities bought some Croatian islets and built villas there with botanical gardens, it would prove beneficial for everyone.

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Privredni vjesnik Year IV No 0164

( 15-30%

of health budget allocated for medicine

(

CROATIAN PHARMACEUTICAL INDUSTRY

LUCK LIES IN FOREIGN MA

Local producers are under constant pressure to reduce medicine prices even below t Jasminka Filipas roatia is regarded as a medium poor country where 15-30% of the budget is spent on medicine. In comparison, rich Norway allocates only around 7%. Naturally, poverty does not mean heaven for producers in the pharmaceutical industry. This is visible in the data provided by Belupo and other companies. As opposed to other transitional countries, the share of foreign and more expensive products is still rising in Croatia and there is no significant increase in the share of generic medicine. During the past two years, local producers have shown an 8% drop in sales, and the reason behind it is that there are an increasing number of foreign producers who are also achieving sales growth on the market. There are 174 operating pharmaceutical companies in Croatia, said the spokeswoman of Belupo Snježana Foschio-Bartol. She added that less money for medicine is being set aside in the budget, and local producers are under constant pressure to constantly decrease medicine prices, even below the limit of

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ket, whilst dropping financially due to a large cut in prices, they began this year with both natural and financial growth. In the first six months, income is 2% higher, and in income 57% relates to the local market, and 43% to foreign markets. However, the local market earned 2% less over 2010, whilst foreign income is 9% higher. Belupo mainly exports to Bosnia and Herzegovina as well as Russia. Their plan is to conquer new markets, expand their range of medicines and find potential niches which large companies will not penetrate. They took good market positions ten years before, and their business was simplified by two new factories and a microbiological laboratory.

These plants and the laboratory complex, the most modern in the region, enabled them to venture into 12 European pharmaceutical markets, underlines Snježana Foschio-Bartol.

Pliva to create a further new 100 jobs In Pliva, a member of the Teva Group, they did not wish to comment on the deficit on the local market, but did point out that the problems have not change

During the past several years, the budget has envisaged less money for medicine

profitability, thus taking a significant share of the load of health reform.

For the past 40 years, Belupo has been producing medicine under 100% Croatian ownership. After several years, during which sales naturally grew on the local mar-

in years: illiquidity and constant price reductions. Pressure to reduce the prices remain very strong, stresses the director of communications in Pliva, Tamara Sušanj Šulentić. This year Pliva entered a new investment cycle in which around $120 mil-

lion will be invested during the next three to five years. Almost $100 million relates to a new production plant, and $21 million is intended for the expansion of production capacity for dry oral types of medicine as well as creams.

PharmaS: 10% lower prices There are currently 1,000 local suppliers of products and services in the Pliva production chain with a turnover in excess of €0.13 billion. Pliva is one of Croatia’s leading exporters, says Tamara Sušanj Šulentić, adding that the US, Russia and Croatia are their biggest markets. Last year they exported to the USA €0.07 billion of medicines, and the plan for 2011 is 80% higher.

Export share is increasing every year and totals almost 80%. During the following two years they anticipate further increases, primarily exports to the USA, by 20% in 2012.

Director of corporate communications in Farmal, Danijela Gašparović said they had slightly lower income last year, but 17% higher during the first six months of this year. The causes for the deficit in 2010 concerned a considerable price drop and the introduction of new medicines with slower growth rates. Furthermore, the German organisation, Dermapharm, became the majority owner last year. Everything that was announced concerning new markets and products is being achieved. There are many new medicines being prepared or documentation for registration already been submitted to the Agency for Medicinal Products and Medical Devices of Croatia, and the registration itself may take up to two years.

The situation is the same on foreign markets. Everything is in the process and the results will be visible in a few years, pointed out Danijela Gašparović. Regarding

www.privredni.hr Business & Finance Weekly

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8% drop in sales

of local producers over past two years

( $120 million

Pliva to invest in production in next 3-5 years

HZZO in the best position

ARKETS

the limit of profitability

TOO BIG A CROWD IN A SMALL AREA There are 31 Croatian companies registered for the production of pharmaceutical products and preparations and 220 pharmaceutical wholesalers and 440 dispensing chemists ast year there were 31 companies registered in Croatia for the production of pharmaceutical products and preparations. Four of them (Pliva Hrvatska, Belupo medicines and cosmetics, Jadran Galenski laboratorij (JGL) and the Institute for Immunology) fall into the category of large-sized enterprises; the same number relates to medium-sizes enterprises (Pliva Farmaceutika, Farmal, Veterina and Fidifarm), and others concern small-sized enterprises, six of which have no employees.

These are probably companies founded only recently which is why they have no employees or income, according to data provided by boniteta.hr. This over-crowding on such a small pharmaceutical market was contributed to by the new factory of generic medicines PharmaS that has already won the local market over and a large market share in Serbia and Bosnia and Herzegovina. Data on employment is interesting. Only JGL, Farmal, Hospira and PharmaS registered slightly more significant recruiting, whereas all others kept the same numbers or reduced them.

Pliva, on the other hand, downsized 474 workers.

Data on growth and downfall in total income show that 11 companies had a lesser level of income in 2010 over 2009 (3-80%), two of which (PhytoMedica and Akno-stop) had no income at all. Pliva Farmaceutika, Hospira, Labor test, PharmaS, Marina Lab Opus and others registered high growth rates.

Pliva registered the highest profit rise, from €9.16 million to €75 million. Belupo, JGL, Fidifarm

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business conditions, she points out they have not improve and all problems remain unsolved.

Over 1,000 suppliers in the Pliva production chain Medicine prices show a significant drop every year, payment deadlines are not shortened, and now we have additional expenses in compliance with the adopted Ethics Code, concluded Danijela Gašparović.

The new factory for generic medicine, PharmaS, owned by Luka Rajić, started work this year. In a very short period it has managed to place eight of eleven registered medicines on the list of the Croatian Institute for Health Insurance. According to PharmaS, the reason behind this is that they offered medicines at 10% lower prices.

and Trešnjevka laboratorij also registered higher profit.

222 pharmaceutical wholesalers and 440 dispensing chemists According to data provided by Belupo, Croatia has 174 pharmaceutical companies (producers and wholesalers). However, according to data provided by boniteta.hr it is visible that 222 companies are registered as wholesal-

Pliva profit rises the most, from €9 to over €75 million ers and there are 440 dispensing chemists. Nevertheless wholesalers include companies selling medical devices and other equipment, and some are registered as real-estate and motor vehicle traders. Therefore, it is realistic to say that the number of serious market players is the same or close to Belupo’s estimates. They include only five large companies (Medika, Phoenix Farmacia, Medical Intertrade, Oktal Pharma and Krka Pharma) and nine medium-sized (Teva Pharmaceuticals, L’oreal Adria, Novo Nordisk Hrvatska, Sandoz, Johnson&Johnson, Medi-Lab, Agmar, Abbot Laboratories and Hospital trgovina). Others have less than 50 employees and fall into the category

of small-sized organisations.

According to these numbers, the market, with over 4.29 million people according to the latest census, has a large number of companies whose business is connected with health, and they are mostly in foreign ownership.

Whether they are producers, wholesalers or dispensing chemists, the all have many problems (constant price reduction, long payment deadlines between 8 and 12 months), whilst the Croatian Institute for Health Insurance seems to be in the best position, since in this general crowded market, it can always ask for price reduction of medicines and other equipment. It is not surprising that producers look for a way out to foreign markets or the production of prescription-free medicine whose price cannot be affected by the Institute. (J.F.)

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Privredni vjesnik Year IV No 0164

PORTAL GRIC-GRIC, ZAGREB

TONI CARPENTRY, VIŠNJEVAC

Take a virtual bite...

To date the portal has published around 30 videos for preparing various meals and also offers a variety of information on gastronomy he idea of the Gric-Gric portal was created by its founder Bojan Hohnjec who wanted to transfer his longterm knowledge as a professional chef to lovers of good and delicious food. On the other side, in the midst of the crisis, Hohnjec lost his job, just as many other people in Croatia. He looked for a job for a year and then realised it was best to start his own business.

In January, he created the GricGric portal that he manages entirely on his own. Listening to the experiences of my friends, I realised visitors to gastronomic portals wish to watch videos on preparing dishes. This is exactly what my videos show on Gric-Gric.

For now, the videos are amateur, but they rank quite well according to the number of visitors, much better than I expected, said Hohnjec. So far he has posted around 30 videos for preparing various meals. The portal also contains interesting facts and news from the gastronomic world as well as announcements of food fairs and exhibitions which Hohnjec finds on the internet and in various printed editions.

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Combination of love for cooking and computers As a professional chef, he worked for the past 20 years in various well-known restaurants in Zagreb, for example Canzoni, Fellini, and Zlatna zvona. The experience helped him master the secrets and arts of cooking. When he started

the portal, he actually combined two life-long loves – one for cooking and one for computers.

When we asked how he came up with the name Gric-Gric, he said the name came spontaneously after having spoken with his family and friends. It sounded very catchy and appealing, and he believes it attracts many visitors.

Hohnjec adds new recipes and updates his webpage daily The content of the portal is entirely his idea, and if he wants to have an interesting portal, he says he must anticipate and know what is expected from him, what people like to read and what recipes should be found on the web pages. My wish is to lift the entire project to a higher level and include other partners and advertisers, but only with one goal – the portal has to be updated with new information and recipes on a daily basis, and it has to be interesting and useful. I believe everyone can find something for themselves, and my responsibility is to post new recipes and update the site each day. If the situation in restaurants improves, I would like to open my own kitchen, which might turn to a gastronomy academy. Everything depends on the portal, the economic situation and future living conditions, pointed out Hohnjec.

A masterpiece of carpentry Toni carpentry has a niche market in the manufacture of specific furniture replicas ear Osijek, the carpentry firm of the Liović family has been developing for over half a century. Not long after leaving Sinj, in search of a better life they arrived in Slavonija, Ante Liović opened his carpentry workshop. From modest beginnings, the workshop has developed significantly over the decades. At the beginning of the 90’s the workshop was inherited by his son Dušan. The workshop then expanded and a dozen modern wood processing machines are found today in the work and storage area of several hundred square metres. Each generation of the Liović family made a step forward in the family trade and so did Dušan’s 28-year old son Antonio.

Not far from Osijek the construction of the future production plant of Toni Carpentry started. For the

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Restoration work has become an important aspect past couple of years they have been working at base carpentry and interior design. They always work for known buyers, manufacturing elements according to exact measurements and space plans. Even though it is logical to expect the price of such bespoke products to be significantly higher compared with the norm, Dušan Liović claims it is not so. We are

all struggling to survive these days. Prices imposed by shopping centres are the price craftsmen cannot go above. People buy where it is cheapest. We are left to find ourselves in what is called high creativity, says Liović.

Church doors The Liović family finds its niche in the manufacture of what is too expensive to produce with machines in real wood and where creativity is necessary. The product line of this workshop contains true masterpieces produced mainly in oak. They are large church doors and the entire fit-out of several churches around Osijek. Furthermore, more buildings in the town centre have doors manufactured by this workshop. Toni Carpentry also produces replicas for catering facilities that require a rustic touch. They are kitchens in a combination of brick and oak or specific bars, tables and chairs as well as equipment for wine cellars and tasting rooms. The restoration of over 100-year old furniture pieces has become an important aspect. After a successful appearance at this year’s Osijek Expo Fair, where they presented a replica of an historical Baranja bedroom, Toni Carpentry will also participate at the craft fair in Pula in October where they will exhibit several models of retro-furniture appropriate for combining with stone. (S.S.)

www.privredni.hr Business & Finance Weekly

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CROATIAN FOREIGN CURRENCY MARKET Currency

AUD CAD JPY CHF GBP USD EUR Source: HNB

EUR

Kuna exchange mid-rate

7.49

5,616132 5,374374 6,835244 6,727637 8,509833 5,248765 7,478441

USD

5.26

30.8.

31.8.

1.9.

2.9.

6.80

7.48

5.23

6.70

7.47

5.20

6.60

7.46

5.17

6.50

7.45

5.14

6.40

7.44 29.8.

WEEK SEPTEMBER 3, 2011

CHF

5.11 29.8.

30.8.

31.8.

1.9.

2.9.

6.30 29.8.

30.8.

31.8.

1.9.

2.9.

RBA ANALYSIS AND INDICATIONS

::: news

€47.5 billion gross foreign debt in May

Erste Bank profit decrease Erste Bank achieved satisfactory financial results for the first six months of 2011. Total bank assets stood at €7.18 billion as at 30th June, 5.2% up over the end of last year. Total loans stood at €4.92 billion (5.3% up). Nett profit was €35.27 million, 3% down over the same period last year, according to unrevised bank results.

Croatian Post revenue increase Croatian Post has achieved €1.64 million in nett profit over the first six months. Total revenue stood at €108.3 million, 1.4% up over the same period of last year. Earnings before interest and tax (EBIT) over the first six months in 2011 stood at €3.12 million, whilst EBITDA was €7.58 million. Croatian Post achieved €4.08 million nett profit over 2010 and is currently highly liquid with no unsettled liabilities.

€750 million Eurobond issued in July will contribute to further debt increase ccording to the latest Croatian National bank data, May saw a moderate growth of gross foreign debt over the end of April. €47.5 billion was recorded by the end of May, which was €351 million or 0.7% up over April. There was an increase of €2.4 billion or 5.3% over May 2010. 2011 continued the trend in the moderate growth of annual foreign debt as opposed to the pre-crisis years when it recorded double-digit growth rates.

The first five months of 2011 witnessed over €1 billion growth or 2.2% in foreign debt, mostly as a consequence of an increase in financial sector debt. This increase stood at €14.7 billion at the end of May, which was 7.4% up over the end of 2010. Corporate borrowing (€11.3 billion), which stagnated in 2010, intensified through the first five months of 2011 and,

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consequently, the financial sector external debt stood at €0.5 billion, recording a 4.5% increase over the end of 2010.

Public sector slowdown The public sector, which with the financial sector comprises the largest share of total foreign debt and which made the largest contribution to the debt

Last year’s trend of moderate growth in foreign debt continued increase last year, is recording a slowdown. A growth of merely €6.76 million (+0.4%) was recorded during the first five months. State foreign debt stood at nearly €6.9 billion at the end of

April, which was slightly higher than April and 4.3% up over the end of 2010. The highest growth in 2011 was recorded in March (+€480 million), which was primarily the result of the impact of the repayment of a €750 million Eurobond with interest (about +€50 million) due in March and the issuance of a new dollar denominated Eurobond on the American market of $1.5 billion in the same month.

Nevertheless, a decrease of 7.3% in direct investment over the end of 2010 impacted on foreign debt decrease.

The €750 million Eurobond issued in July will contribute to a further increase in foreign debt this year, whilst corporate borrowing will remain slight amidst weak domestic demand and a lack of significant investment. (V.A.)

Hypo lowering interest rates Hypo Alpe-Adria-Bank has decided to facilitate Swiss Franc loan repayments by lowering interest rates. Consequently, Swiss Franc loan interest rates are 0.2% down for Hypo Bank clients reporting no income and 0.5% for clients receiving income on a monthly basis in Hypo Bank.

8 ::: news Mercator-H opens logistics centre Mercator-H has opened a new logistics and distribution centre with a value of €3.3 million.

The new 33,000m2 facility has space for 40,000 palettes for over 13,500 items. Also, Mercator has continued this year’s investment cycle which has so far totalled about €13 million, or €16.6 million including the LDC project.

KiK in Croatia

Privredni vjesnik Year IV No 0164

( 2 years

to create Gamersbook

Internet and games Vanja Bertalan, director of the web stock exchange, points out that Gamersbook is a project of this agency and a group of young men from Split. It was created in Croatia as a platform with all the characteristics of a social network and news portal, as well as a version of Wikipedia for computer games

he number of social network users is growing daily. The anticipation that the number will exceed one billion has already been reached, according to available data. There are currently around 750 million users of Facebook. Around 200 million people are connected by Twitter and some 130 million on

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Kraš investing millions in Karolina The first phase of the Kraš investment cycle of €5 million has been completed and Karolina Osijek is continuing production and launching a new product range. Two new production lines for the production of waffles have been finalised over the summer and the production of family-sized packs of Kraš Napolitanke chocolate wafers will commence in September.

A new distribution strategy for the production of biscuits in factories in Zagreb, Osijek and Prijedor was implemented prior to the acquisition of Karolina in February, in order to achieve quality segmentation of the entire product range and to meet to the requirements of specific markets.

users registered on the site

Gamersbook

Boris Odorčić

The largest European textile discounter KiK has recently opened five stores in Croatia and is planning to expand its branch network to 100 locations. Petar Borazon, KiK Director in Croatia is anticipating huge growth.

“Customers in Austria, Bulgaria, the Czech Republic, Slovenia and Slovakia have become loyal to the KiK concept. The Croatian economy is growing and we are looking forward to the challenge of promoting the KiK concept in this market, persuading customers that quality fashion wear and textiles for everyday use can be affordable”, stated Borazon.

( around 7,000

couple of years the professional playing of computer games has become a significant trend in the West and Gamersbook offers a lot of possibilities for satisfying this e-sport audience. Producers and publishers participate on Gamersbook by writing directly about their products. Gamersbook serves them as a community tool through which they may obtain feedback on a certain title. Players

European countries and North America. There are around 30% of users in the region, but Gamersbook primarily aims at the international market. The primary reason is that the Croatian gaming scene is quite underdeveloped compared with neighbouring countries. Luckily, this has been changing of late. Regarding competition, he stresses that there are a large number of individuals

have a unique opportunity to directly communicate with those who produce games, explains Bertalan. Gamersbook is intended for the world market and above all players of all genres and platforms as well as game producers and publishers. In addition to offering the users a social platform, it enables writing and reading blogs or articles, and users very often watch gamersbook.tv, a tool which distinguishes them from the competition.

and companies on the market working in web development.

However, they are not performing well. They are trying to break through by dumping prices and a large number of projects, which has a negative effect on the quality of Croatian web space. There are currently five companies in Croatia that are actively dedicated to web development.

This is probably the reason why prices in Croatia are considerably below the foreign ones, which makes it difficult to maintain a level of quality, he points out.

For this autumn, Gamersbook announces new changes. They are primarily working on all players finding their place on this social network, in accordance with their requirements.

We want Gamersbook to be unique and multifunctional

MySpace. Therefore it is possible to say the potential of social networks is far from being exploited and there are more people who wish to transfer similar ideas to the internet. The web stock exchange, a web agency for design, creation and the entire implementation of web pages, decided to venture into something similar with the Gamersbook project.

Passionate players Vanja Bertalan, director of the web stock exchange, points out that Gamersbook is a project of the agency and a group of young men from Split. It was created in Croatia as a platform with all the characteristics of a social network and news portal, as well as a version of Wikipedia for computer games.

Gamers have accepted it quite well since they are a special group of people that take their hobby – gaming – quite personally, and arguments about current and future titles and champions are often the case on Gamersbook. For the past

Autumn changes The process of creating Gamersbook, from concept to achievement, took over two years. Since its beginning, over 7,000 users have registered on the website, mostly from various