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Croatian Chamber of Economy Annual General Assembly Integration as exit from stagnation leading towards global movements

Luka Burilović, Board President, Sladorana Županja In anticipation of an increase or the abolition of sugar production quotas

Croatian-Austrian economic symposium - biomass and biogas Green energy – an economic promoter

ECONOMY PAGES 2-3

INTERVIEW PAGE 4

ENERGY PAGE 5 2010

Croatian Business & Finance Weekly Established in 1953 Monday / 12th September / 2011 Year IV / No 0165 www.privredni.hr

S U P P O R T E D

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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

CROATIA RANKED 76 OUT OF 142 COUNTRIES

Public administration is smothering competitiveness Representatives of Croatian companies particularly resent constant changes in legislation, high tax rates and effects of the tax system as well as difficulties in accessing finance Igor Vukić he World Economic Forum places Croatia in 76th position according to competitiveness, from a selection of 142 countries. This is one step forward in relation to 2010, representing the end of the downward trend on the scale which started in 2008. This actually points to the stagnation of Croatian competitiveness which cannot satisfy anyone. Croatia requires a rapid and radical climb up the scale, evaluated Ivica Mudrinić, president of the National Competitiveness Council which publishes the report in co-operation with the World Economic Forum. In this year’s survey, Croatia registered a significant downfall in macroeconomic stability, innovation and labour market relations. The efficiency of the public administration and the judicial system are also poor, which the interviewed Croatian entrepreneurs described as the most significant problem in addition to corruption. The representatives of 97 Croatian companies participated in the survey. They particularly resent constant and ambiguous changes in legislation, high tax rates and effects of the tax system as well

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as difficulty in accessing finance. In addition to conversations with entrepreneurs, the report of the WEF is also based on statistical data. Croatia received the lowest score regarding the costs of agricultural policy, legal framework for foreign investment and the burden of the governmental regulations. Low scores are also

reserved for the protection system of minority shareholders, life-long education, existence of monopolies, financing through capital markets and the availability of risk capital. Reforms as a necessity On the other hand, technological promptness, infrastructure, health,

elementary and high-level education are underlined as being potential for Croatian competitiveness. According to these sectors, Croatia ranks amongst the top 50 countries globally. Croatia can also base its competitive advantages according to the number of mobile phone and land-line subscribers. The reduced period required for establishing companies was also praised, according to which Croatia ranks 21. However, analysts point out the number of procedures remains too high. The level of import duties was scored relatively high, 38th. The quality of roads, number of internet users and the speed of internet lines was also positively evaluated. The WEF report shows Croatia’s competitiveness trend has been declining year after year, especially in 2008 after the crisis hit. The best result was achieved in 2003, 53rd place. Ivica Mudrinić added Croatia must be more active in the implementation of economic policies which lead to sustainable and competitive progress, and at all levels, national and local. The result registered this year confirms that the necessary reforms have not been implemented, particularly the modernisation of the country and its economy, concludes Mudrinić.


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Privredni vjesnik Year IV No 0165

PROF. LJUBO JURČIĆ, PH.D, FACULTY OF ECONOMICS AND BUSINESS, ZAGREB

Anticipating a period of stagnation

e are currently witnessing the crisis of global political, economic and financial systems created at the end of the Second World War. It is a crisis of a neoliberal system which seemed to have been the definitive model of global financial, economical and political settings some twenty years ago. Nevertheless, we are currently aware both of the fact that socialism was not entirely negative and that capitalism is not entirely positive. The crisis underscored the weaknesses in the United States, stemming from consumption exceeding production, a low rate of saving, high foreign debt, insufficient regulation of financial markets and the decline in the dollar as the world reserve currency. The mortgage loan crisis on the US market transferred itself to Europe, yet merely accelerated the identification of the problems of European development and enlargement. The ultimate purpose of the integration process was the political unification of Europe. The principal motivation for this disappeared with the dissolution of the Soviet Union and the unification of Germany. The crucial problem currently is a lack of vision and incentive for further unification and development. In addition, there was

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the problem of the Euro as a single currency, whilst disregarding economic and political criteria. As opposed to competition between companies in the United States, Europe is witnessing competition between countries. Consequently, all EU countries do not share the same fate. Croatia has been largely affected by its own crisis as a consequence of its political system over the last twenty years. The impact of the world crisis is insignificant. Nevertheless, any recovery from the crisis would be considerably more plausible if there was no crisis and stagnation within the world economy. However, even if the world economy grew at a considerably faster pace, it would not suffice for the recovery in Croatia.

The world is searching for new political and economic systems A stringent modification of economic policy is an imperative. I anticipate a slowdown in economic growth through 2011 due to a plethora of problems impacting the largest economies and, subsequently, in the world economy at large. The world economy will see the end of 2011 with relatively high growth rates, irrespective of stagnation in the second half of the year. Nevertheless, as a result of its inability to solve critical problems, there is considerable uncertainty for 2012. It is plausible that the Croatian economy will enter a period of stagnation in the fourth quarter, following slightly improved results during the third. The annual growth rate will stand at near zero, which will rank as the lowest European growth rate after Greece and Portugal.

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( €1.16 billion

budget deficit for first six months

CROATIAN CHAMBER OF ECONOMY ANNUAL GENERAL

Integration as exit global movements

Meagre 1.5% GDP growth for 2011, according to cr Drago Živković he Croatian economy is stagnating irrespective of the 0.8% growth in GDP recorded in the second quarter, as there was an 0.8% decrease in GDP over the first quarter. According to crucial economic variables, there will be a meagre 1.5% growth in GDP for 2011, as assessed by the Centre for Macroeconomic Analysis of the Croatian Chamber of Economy. The situation in the real sector is currently serious, irrespective of stable inflation and of the exchange rate. Nevertheless, trends

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Positive movements in the labour market are always a consequence of significant economic growth are slightly more favourable than during 2009 and 2010, according to Jasna Belošević Matić, Director, Centre for Macroeconomic Analysis. Consequently, during the first six months industrial production was down 1.3% over the same period last year, and the physical volume of construction work 9.9% down over the first five months. The situation in the construction industry is not more favourable in the EU, where certain countries such as Slovenia, Spain and Bulgaria recorded a higher decrease in volume of work than Croatia. Irrespective of government attempts to mitigate the crisis through support and guarantees for housing loans, Croatia has not thus far witnessed any significant improvement,

since the current demand for housing is insufficient to encourage new investment. Slight recovery in retail Retail has seen a slight improvement, following slight sales recovery, with a 3.8% nominal growth over the first six months and 0.8% real growth over 2010. Tourism is also recording growth, particularly regarding overnight stays (10.4% up). Nevertheless, the financial impact is less favourable than expected, which can be illustrated by the decrease in foreign currency revenue from tourism in the first quarter in 2011. Regarding stagnation over the first six months and anticipating meagre growth over the forthcoming six months, the financial results of entrepreneurs will not significantly differ from last year, when the Croatian economy saw a €0.23 billion overall loss. Entrepreneurial activity is faced with increasing illiquidity; a 0.1% decrease in the settlement of outstanding liabilities was recorded in June. Nevertheless this negative trend is more clearly illustrated by the increase of 1,100 in the number of blocked company accounts, currently standing at 85,700. Positive movements in the labour market are always a consequence of significant economic growth. Subsequently, there was a shorter period of seasonal decrease in unemployment, lasting merely four months (from March to June). July saw an increase in unemployment, indicating a serious situation in other economic sectors which cannot be overcome by a satisfactory tourist season.


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( 1.3% decrease

in industrial production over same period

L ASSEMBLY

t from stagnation leading towards s

rucial economic variables As a result, there has been an increase in the number of unemployed for 30 consecutive months, whilst in July it was some 5,000 up over the previous year and almost 69,000 up over 2008. Nevertheless, a high unemployment rate is not as serious a problem as low activity rate of the population, pointed out Jasna Belošević. There has been an increase in the number of retired persons (standing at 1,209,277 in August), whilst the economically active population is decreasing. There has been an increase of about 70,000 in the number of retired persons, with the number of the active population decreasing by 91,000 over the last three years. According to Jasna Belošević, the fact that the number of both retired and unemployed persons has been exceeding the number of employed persons for almost two years is considerably discouraging. Salaries stagnating, debt increasing Salaries are also stagnating, although there was a slight increase in nett salaries in April and May, due to tax system amendments. Nevertheless, real

gross salaries have been decreasing since September 2009, even though the decrease has been mitigated in the last few months. Average nett salary stood at €729 in the first six months, 0.2% down over the same period last year. The average gross salary stood at €1,046, 1.2% down over 2010. Croatia has a reverse trend from most EU countries regarding exports, with an increase in exports over the first five months exceeding the results from 2010. Croatia has witnessed a slowdown in exports over the first six months, mainly due to lower exports from the shipbuilding industry, and a slight increase in imports, as a consequence of a meagre recovery in overall demand and the increase in prices glo-

bally. The import/export ratio has remained significantly high (60.6%) in relation to the precrisis period, as a consequence of increased exports exceeding increased imports. Total government budget revenue for the first six months stood at €6.93 billion (1.4% down over last year), with expenditure of €8.09 billion (an increase of 0.4%). The state initiated a more severe tax collection programme and the collection of dividend payments from companies where it is a shareholder, creating more satisfactory budget figures and, subsequently, a budget revision was considered superfluous. However, public debt has increased; exceeding €19.73 billion and when state guarantees and HBOR debt are

Vidošević re-elected President of Croatian Chamber of Economy Nadan Vidošević has been reelected President of the Croatian Chamber of Economy for the fifth consecutive time, for a term of office until 2015. He received 55 of 61votes by secret ballot at the Annual General Assembly. Vidošević presented his programme for his current term in office, propo-

sing the Declaration on Croatian society and a country of prosperity as its backbone. The Declaration consists of six articles, aiming to establish the international political and economic position of Croatia, which, according to Vidošević, is a country of ethics and aesthetics.

included, total debt now stands at 58.9% of GDP. Kuna liquidity in the domestic money market is considerable, with low transaction volumes, whilst interest rates are stagnating at low levels. Bank lending activity is weak, irrespective of the favourable setting, primarily due to low personal consumption, whilst the corporate sector is in a slightly more favourable position, with corporate loan increasing by 7.7%. Croatia failed to implement structural economic reforms at the start of the financial crisis and its lack of vision and a long term development concept is evident, concluded Jasna Belošević Matić. Concurrently the world has witnessed significant changes, whilst the current economic models are being brought into question. Uncertainties in the economic environment and various unresolved issues on the local market will have a significant impact on the future of the Croatian economy. Consequently following global trends and integrating them into the growth and development of Croatian economy are imperative. This has thus far been an unachieved goal for Croatia.


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INTERVIEW

Privredni vjesnik Year IV No 0165

( 430,000 tonnes ( about 75,000 tonnes sugar beet to be processed

anticipated output of sugar production

LUKA BURILOVIĆ, BOARD PRESIDENT, SLADORANA ŽUPANJA

In anticipation of an increase or the abolition of sugar production quotas Irrespective of the economic crisis, investment will exceed €8 million in 2011. High levels of investment are inextricably linked to risk and there are several requirements for Croatia to meet prior to EU accession although they have already been met prior to Croatian integration into the European market Drago Živković ladorana is the largest company in Vukovar-Srijem County and the backbone of the Županjska Posavina economy. The sugar beet season for 2011 commenced on 1st September as an introduction to the cycle of intensive sugar beet processing and sugar production. The main objective will be the production of about 100,000 tonnes of sugar, according to Luka Burilović, Board President of Sladorana Županja.

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What are your expectations for this season’s sugar beet? The commencement of the season marks the end of summer and the beginning of an intensive and continuous production period. Sugar beet is received from the resource base area of Sladorana, spanning three counties. The second drought affecting our resource base had a considerable impact on the decrease in sugar beet yield, yet there has been a slight increase in the quantity of sugar. Consequently, we are anticipating a minimal impact of the drought on overall product output. We are hoping for an autumn without too much rain, since we are dealing with a product largely affected by environmental conditions. What is the planned output for 2011? During the season we are planning to process 430,000 tonnes of sugar beet, from which about 75,000 tonnes of sugar will be

produced. In addition to sugar beet processing, we are planning cane sugar processing, which could increase our total output to 100,000 tonnes. How many sub-contractors are there? Sladorana co-operates with over 600 sub-contractors in the production of sugar beet, the basic raw material, and we have always maintained satisfactory business relationships. We have recently increased the purchase price of sugar beet from €33.78 per tonne for standard quality to €40.5 per tonne in compliance with movements on the sugar market. Sladorana co-operates with over 400 suppliers of various products and services during preparation and throughout the season.

What are your investment plans? Irrespective of the economic crisis, investment will exceed €8 million during 2011, of which about one third will be used for plant maintenance and the remainder as investment in problem solving and plant effectiveness. The current investment plan implies proceeding with investment and sustainable development. Significant investment is inextricably linked to risk and there are several requirements for Croatia to be met prior to EU accession although they have already been met prior to Croatian integration into the European market. What financial results do you anticipate for 2011? Sladorana is primarily an ex-

port-oriented company, creating over 50% of revenue on foreign, mainly neighbouring, markets. The trend towards increases in sugar prices, which commenced on the European market at the beginning of 2011, will have a positive impact on our financial results. The European sugar market reform has been completed. There were two main goals: a reduction in the size of sugar beet areas and a decrease in price to €404 per tonne. Since Croatia is currently not a member of the EU, the main objective of the reforms has not had a negative impact on our output thus far. On the other hand, any price reduction has been a burden to us, as our profitability had already been significantly affected by prices exceeding the price by 20% in 2010. We were delighted to find that, due to the deficit, the market agreed a considerably higher price which will impact on our financial results. What are the expectations for Sladorana regarding EU accession? In compliance with the EU Association Agreement, sugar exports to the EU market are regulated by quotas. We will be affected by production quotas from 1st July 2013 and the beet sugar quota for Croatia is 193,000 tonnes. Nevertheless, we are anticipating an alteration to the quota regime in the form of an increase in or the abolition of sugar production quotas, due to the poor success of reforms in the EU market.


www.privredni.hr Business & Finance Weekly

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CROATIAN-AUSTRIAN ECONOMIC SYMPOSIUM - BIOMASS AND BIOGAS

GREEN ENERGY – AN ECONOMIC PROMOTER 60,000 green jobs could be created in Croatia by 2020 through biomass, the production of machinery and plant maintenance Svetozar Sarkanjac carcer energy and raw materials, increases in prices, climate unpredictability and environmental pollution necessitate responsible and economically sustainable action, such as the use of biomass and biogas. This was the focus of the Croatian-Austrian economic symposium recently held in Našice during the traditional “Days of Slavonian forest” event. According to UNDP data from 2010, the use of biomass in Croatia could create 5,500 direct green jobs (machinery production and plant maintenance) and 55,000 indirectly (through accompanying industry) by 2020. Currently, there are over 2.3 million employed in renewable energy sources (RES), with almost one half in biomass and biogas.

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Sustainable forest management, sustainable agriculture and investment in renewable energy sources are crucial for Croatian economic development. Consequently, the symposium participants expressed their belief in the positive impact of the exchange of ideas and experiences amongst Croatian and Austrian exhibitors which would go some way in assisting in meeting the requirements for Croatia to exit from economic crisis and creat-

ing green jobs within the economy. Ample potential The creation of green jobs through investment in energy effectiveness and renewable energy sources as well as the exchange of experiences with exhibitors from Austria were the focus of this year’s economic symposium, according to Josip Dundović, Croatian Biomass Association President.

€57 million NEXE Group investment Davor Ergović, the Director of EKONEX, a company belonging to NEXE Group, announced the forthcoming start of plant construction for electrical energy production from biogas in Feričanci. Nexe Group will invest over €57 million in nine plants, five using biogas and four biomass. The anticipated annual revenue could be about €20 million until the expiry of the period of privileged electric power producer status, or 12 years from the commencement of the production.

CROATIAN NATIONAL BANK

“The main focus of the Sixth Croatian Biomass Days is to emphasise the significance of the potential of biomass energy, the legal framework, support and co-financing of biomass and biogas projects in Croatia at a time of global crisis, fossil fuel price increases and their negative impact on climate change. Biomass energy in form of electrical energy and thermal energy as well as the use of biogas are major assumptions for the exit from the crisis and economic promoters of the speedy recovery of the Croatian economy”, pointed out Dundović.

CROATIAN BANKING DATA

Lending reaches €38.2 billion €29.32 billion deposits in July According to the latest data provided by the Croatian National Bank, bank lending totalled €38.2 billion at the end of July, some 0.4% higher compared with the end of June and 7% higher compared with July 2010. Corporate demand for credit started to revitalise last year after a recovery in exporting markets. At the end of July, corporate lending totalled €15.32 billion, which is 8.1% higher year-on-year. In July, lending to the state, which totalled €4.78 billion, decreased considerably in relation to June, which makes the annual growth rate significantly lower compared with the past several months (+5.7%). Public lending reached €17.62 billion, where the growth in housing loans had the biggest effect on monthly and year-on-year levels. This is mostly a conse-

quence of a weaker Swiss franc and euro, to a slight extent, in relation to the kuna. Compared with late June, the Swiss franc fell by 5.65% in relation to the kuna, and the euro by 1.06%. Year-on-year the EUR/HRK exchange rate increased by 2.81%, and CHF/HRK by 21.64%. At the end of July housing loans totalled €8.2 billion, 3.1% more in relation to June. This year RBA analysts anticipate a mild recovery in lending, which is primarily a consequence of company demand. However, the increased demand mainly refers to large-sized companies with a greater possibility of collecting outstanding debts. In the public sector, demand for credit is limited by consumer pessimism and the questionable sustainability of real income in the mid-term and long-term. (V.A.)

According to the latest Croatian National Bank data, total bank deposits (savings accounts, kuna term deposit accounts, foreign currency deposits as well as demand deposits) stood at €29.32 billion by the end of July, some 1.2% up over June. It was a consequence of an increase in kuna and foreign currency savings and term deposits, whilst demand deposits recorded a monthly decrease. The monthly deposits increase was mainly due to a foreign currency deposits increase of €0.32 billion, which was seasonal and a consequence of foreign currency inflows from tourism. The annual rate of total deposits is moderate and does not significantly differ from annual growth rates over previous months (+4%). 79% of savings and term deposits are in foreign currency and, consequently, an-

nual growth is due to fluctuations in the exchange rate, as there has been a 2.8% weakening of the kuna against the Euro since the end of July 2010. Savings and term deposits in July stood at €19.35 billion, 2.9% up year-on-year, yet they recorded a decrease of 3% from the end of 2010. On the other hand, savings and term deposits in kuna recorded growth, yet due to the continuous decreases in 2009 and 2010, they are still considerably below the pre-crisis level, standing at almost €5.13 billion at the end of July, 9.1% up over the end of 2010. Subsequently, term deposits in kuna and demand deposits (€4.85 billion at the end of July) significantly impacted on total deposit increase in 2011. Central government deposits stood at €1.27 billion, €0.57 billion up over June. (V.A./RBA)


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Privredni vjesnik Year IV No 0165

CROATIAN FOREIGN CURRENCY MARKET Currency

AUD CAD JPY CHF GBP USD EUR Source: HNB

EUR

Kuna exchange mid-rate

7.51

5,509669 5,516668 6,660416 5,678773 8,814812 5,565746 7,382405

USD

5.44

6.9.

7.9.

8.9.

6.72

7.50

5.40

6.62

7.49

5.36

6.52

7.48

5.32

6.32

7.47

5.28

6.22

7.46 5.9.

WEEK SEPTEMBER 10, 2011

CHF

9.9.

5.24 5.9.

6.9.

7.9.

8.9.

9.9.

6.12 5.9.

6.9.

7.9.

8.9.

9.9.

::: news

HAAB - MACROECONOMIC OUTLOOK

Atlantic sees revenue increase

FASTER GROWTH THROUGH AGRICULTURE

Atlantic Group will see a 1% increase in revenue in 2011, to €0.62 billion, according to Zagrebačka bank and Raiffeisen teams of analysts following a credit analysis of the company. Operating profit is expected to stand on a par with last year or record a minimal increase of 1%, to €71.2 million by year end with an 11.6% margin. It will primarily be a consequence of the integration of Droga Kolinska into the company and its position in Croatia, where sales brands need to be developed. According to analysts, Atlantic is a stable company, nevertheless, it is burdened by high debt as a consequence of the Droga Kolinska takeover and with the disappointing macroeconomic situation on the market it depends on. Producer price increase

According to the Central Bureau of Statistics data, industrial product producer prices in Croatia saw a 0.9% increase in August over July, whilst they were 7.6% up over August 2010. Producer prices in the energy sector were 17.6% up over August last year, intermediary products 8.1% up, short shelf life mass consumption items 4.4% up, long shelf life mass consumption items 3.1%, whilst capital product producer prices were 2.3% down.

Markus Ferstl, Board President of HAAB, feels the Croatian market must increase its export orientation; it also requires more direct foreign investment Igor Vukić ourism, energy and the pharmaceutical industry as well as agriculture might act as generators of more rapid growth. This was the conclusion of the Hypo Alpe-Adria Bank Round Table held last week, where the 10th Macroeconomic Outlook analysis was also presented. The analysis was prepared by the Economic Research Department of HAAB Croatia, headed by Hrvoje Stipić. Tourism is the key since it has a strong ‘multiplier effect’. It can boost everything, from the wood processing industry to food production, pointed out Ivan Crnjac, CEO of Agrokor for Strategy and Capital Market. Croatia has great potential since only 30% of arable land is used thus far. Agrokor regards the shift from imports to local production as an opportunity. Crnjac points out it is unacceptable that there are shortages of local potatoes, onions and meat when there is ample room for other local entrepreneurs. Everyone should learn from top companies and adopt their standards. In many areas, Agrokor has already excelled in retail and the yields from its fields, said Crnjac. He also added that Croatian entrepreneurs are still not able to work with similar priced

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capital as western competition. Markus Ferstl, Board President of HAAB, feels the Croatian market must increase its export orientation and that it requires more direct foreign investment. Its banks will continue to finance good projects in the food sector and it also sees a considerable growth niche in the pharmaceutical and energy industries. A series of energy projects are on offer throughout the region and in future this sector will attract billions of Euros. In this kind of competitive environment, states need to consider subsidies, such as tax or other relief, in order to attract investors. According to Veljko Ostojić, Board President of Riviera Poreč, tourism should be boosted with differentiated VAT rates and investment in new hotels, to change the inherited structure of the accommodation portfolio. He underlined

the adoption of the Act on Tourist Land and the possibility of condominium conversion of tourist property as a positive move. This will make it easier for entrepreneurs to make decisions on new investment, pointed out Ostojić.


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WE PRESENT

BABIĆ APICULTURE, VRBOVEC

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CO-OP ĐURKOVIĆ, MARJANČACI

For longevity and eternal youth

The farm produces various apiary products, such as honey, pollen, propolis and royal jelly. Annual production depends on the pastoral conditions he family agricultural farm Babić Apiculture started work in 1989 in Vrbovec when the co-founder, Zvonko Babić wanted to increase family income with additional work. We started with only six bee colonies. It was difficult to increase the volume of work since the family at the time did not have sufficient experience in the production of honey. Their experience grew over years. Today they own around 300 bee colonies which move to different pastures throughout Croatia as necessary. For transporting bees they use personally designed containers. Interestingly, other beekeepers accepted these moving containers, in Croatia and abroad. Our farm produces various bee products, such as honey, pollen, propolis and royal jelly. Annual production of honey depends on the pastoral conditions, and this year we produced around 10 tonnes of chestnut, flower and black locust honey. We sell most of the products to re-purchasers, some of whom export our product to the west European market. We process some products into honey beverages and sell a small share directly to buyers, said Zvonko Babić.

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Speciality – Royal Jelly The production of royal jelly is the speciality of Babić Apiculture. Due to competition from Chinese jelly, Croatia lacks organised

repurchasing. Therefore, the Babić family sells exclusively and directly to users, and they sell around five kg per year. They also produce Hippocrates honey, which consists of honey, pollen, propolis and royal jelly. Royal jelly and other bee products may have a beneficial therapeutic effect or even cure illnesses. Our buyers most often use the products to strengthen their immune systems and to solve problems with fertility and malignant diseases. It is believed royal jelly slows down the ageing process and prolongs life, Babić pointed out. Babić Apiculture also produces honey beverages, such as medica, medovača and medovina (honey brandies), which they started to produces due to the demand for traditional and authentic products. In the

Annual production of honey depends on the pastoral conditions production they use honey cultivars of personal production, adding value to their products. The beverages are of extremely high quality and at a competitive price, but we are not satisfied with sales. We wish to achieve event better results since we have great capacity and work potential, concluded Babić. (S.P.)

Goat cheese exported across the ocean Due to circumstances and a high-quality product, their cheese ends up on tables in Canada and France hen Josip Đurković, and his wife bought their first goats 18 years ago, he did not dream that the production of cheese would become his main profession. Shortly after their births, their children were

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Even though there were many registered cheese producers a year ago, today there are only three diagnosed with an extreme allergy. We saw many doctors, spent a lot of money, and tried everything we were advised, from donkey milk to other preparations. We bought a farm goat. The children liked the milk, and more importantly it helped them. We decided to try, and that is how our love for the goats developed, explains Đurković. The main herd consists of 40 goats from which they produce goat cheese. Since production is four litres of milk per goat per day, their daily production amounts to 160 litres of milk from which they produce 15 kg of new cheese. This is their greatest success on the Slavonian market. Door to door sales The lack of organised marketing led them to sell most of the cheese

door-to-door. Furthermore, they have a regular clientele that come to them to buy cheese. However, this is not sufficient for more serious future development. As much as time allows him, he visits fairs and numerous Slavonian events where they sell their cheese. He also works with the association Croatian Farmers. Through them, he has participated many times at cheese fairs in most cases returning with recognitions, diplomas and medals. Their cheeses are sold in a dozen tourist centres on the Adriatic last summer. However, owing to circumstances and a high-quality product, their cheese also finds its way to tables in Canada and France. Even though there were many registered cheese producers a year ago, today there are only three cheese factories in Slavonia which produce goat cheese, including his. People give up because investment costs are extremely high. So far we have invested around €47,500, of which over €13,500 was spent on various papers and permits. This drives the people away from this kind of work, says Đurković. In addition to new cheese, they also produce a hard long-life smoked cheese. According to customer wishes and orders, they also produce cheese with herbs, such as dill, paprika or walnuts. (S.S.)


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Privredni vjesnik Year IV No 0165

Ethno-tourist story of flax

Part of childhood, youth and growing up Ravna Gora will soon have an eco-museum House of Flax which will present the production of flax, from planting and processing to tasting traditional food made with flax Sanja Plješa he Lujzijana Association, Tourist Board of Ravna Gora and the Plodovi Gorja Association decided to start a project, an ethno-tourist story on flax to remind everyone of old customs and to preserve the varied traditions of Gorski Kotar. Before the 1960’s flax was cultivated in Ravna Gora which inspired the idea of opening an eco-museum House of Flax. This museum will show its production, from planting and processing to tasting of traditional food made with flax as well as the medicinal qualities of this plant. In order to finalise it,

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those behind the project sought help from those who had already done much for the revitalisation of flax cultivation and processing. Representatives of the Faculty of Agronomy, ethnologists, curators, flax producers and owners of family farms participated at a Round Table organised under the aegis of the recently held event Stories on flax from Ravna Gora. Flax is used in the production of textiles and clothing, but it is not

well known that this plant may be used as a food ingredient. Flax seeds are one of the richest sources of Omega-3 fatty acids, and when ground they can be sprinkled over cheese, muesli or salads. Flax can also be added to bread, strudels or cheese spreads. In order to complete the revitalisation, the plan is to plant flax on several locations in Ravna Gora. The company Kota plans to erect replicas of the flax processing buildings and set up an exhibition of old tools and photographs on their estate. Natural medicine The planting of flax was revitalised within the project, but not on a large surface area.

The planting and processing are designed as a tourist attraction. However, in time, the owners of family farms might well become interested in the production and processing of flax, inspired by this presentation, said Blažica Sveticki, president of the association Plodovi gorja from Gorski kotar. During the research on flax, members of this association made an interesting discovery. Many years ago all households in Ravna Gora cultivated and processed flax during throughout the year. It was planted in spring, harvested in summer, dressed before or after the potato harvest, retted (soaked in dew or water) in late autumn, spun in winter, washed in February and then spun again. Flax was part of childhood, youth and growing up. Regarding the medicinal features of this plant, Blažica Sveticki pointed out that flax seeds are used for preparing medicine, which can be roughly ground and used as powder. It is the medicinal quality of flax that will be presented to the visitors of the eco-museum and other farms where they will be able to see flax products and preparations, pointed out Blažica Sveticki.

::: news Vindija award Vindija vanilla and chocolate milk puddings received this year’s prestigious DLG Classic status award, usually awarded to long-term awards holders by the German Agricultural Society. In addition, Vindija received 11 gold and 2 silver DLG medals for exceptional product quality. The DLG Food Testing Centre tests over 20,000 products annually, promoting quality products tested by approved scientific methods. Golden, silver and bronze medals

can be received exclusively for top quality products. Adris supports swimming pool construction Adris Group donated €0.13 million for the Delfin indoor swimming pool construction in Rovinj. The contract for the donation was signed by Ante Vlahović, Adria Group Board President and Ivica Šorić, the Delfin Water Polo Club Board Member. “The conclusion of this contract is the first step in the implementation of the indoor

swimming pool project”, pointed out Giovanni Sponza, mayor of Rovinj. Wine producers presented in London through Croatian Chamber of Economy 225 different Croatian wines from all regions were recently presented at a wine tasting event in London organised by the Croatian Chamber of Economy. 35 wine producers or their representatives participated. A much higher number of the

most reputable names in wine production participated at the event than last year, according to Rajko Ružička, Assistant Director for the Sector for Agriculture, Food Industry and Forestry of the Croatian Chamber of Economy.

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