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Interview: Snježana Španjol, Deputy Minister of Agriculture Production development and increase is in the interest of everyone

Food processing companies in search of a more satisfactory business framework CEFTA and survival on the EU market are critical issues

Agro-tourism: the right path towards improvement The sea is not completely indispensable for higher revenues



TOURISM PAGE 8 2008 2009 2010 2011

Croatian Business & Finance Weekly Established in 1953 Monday / 6th February / 2012 Year V / No 0185




pvinternational pv international C R O A T I A N





BANKERS ANTICIPATING A NEW RECESSION Avoiding European recession might change Croatian economic outlook for the better Boris Odorčić he club of chief economists of the six largest banks in Croatia predict a new wave of recession this year. According to the survey of the Croatian Banking Association ‘Don’t kill the messenger, Second Recession Wave’, real GDP will decrease by 1.3% this year. This outlook is strongly influenced by the pessimism of two banks that anticipate a relatively strong recession. The other four banks predict GDP will fall by 1% or less. It is worth mentioning that four of the six economists blame external factors (EU


crisis) as the main cause of an anticipated recession in 2012. Two give priority to local fiscal harmonisation. If the majority of them are right then the Croatian economic outlook might change for the better if we manage to avoid the European recession. Little good news Furthermore, the greatest optimist amongst the economists anticipates an unemployment rate of 13.1% at the end of 2012, and the greatest pessimist is convinced it will be 16.4%, according to the internationally comparable ILO method. Any further rise in unemployment should be interpreted in

Pessimists were right Often criticised in the public as excessively conservative and pessimistic, chief economists of Croatian banks in the HUB analysis, published a year ago, anticipated GDP growth of 1% and 1.8% in 2011, growth in unemployment between 10.5% and 12.8%, and a kuna/euro exchange rate of between 7.3 and 7.45. The revision of the anticipations showed that last summer that they were excessively optimistic. Growth projections decreased to 0.2% or 1%; the anticipated unemployment rate increased between 13% and 13%, and the anticipated exchange rate ranged between HRK7.4 and HRK7.5 / €1 by the end of the year. Allegedly overly pessimistic, the economists actually turned out to be overly pessimistic at the beginning of last year. Even though we do not own many of the statistics for end 2011, it turns out the pessimism of chief economists represented a significant framework for the future. In other words, last year’s pessimism came true.

the context of where the highest contribution for GDP fall is down to the continuous contraction of investment activities at an average rate of 2.7%. If the predicted recession should become reality, this will inevitably debilitate more serious fiscal harmonisation. Whatever the government does, poor budget replenishing will cause a relatively high fiscal deficit. The average state balance over 2012 is estimated at the aggravating -4.9%, where the differences in predictions are indicatively small. The most optimistic anticipates -4.5%, and the most pessimistic -6% of GDP. Stable exchange rate The economists do not feel external price shocks will generate recession since they predict average inflation of 2.5%, with anticipations of a relatively tight range between 2% and 3.2%. The current account balance of payments is in balance, which is fully in accordance with recessionary out-

look. Logically, those economists who anticipate a stronger recession also anticipate a surplus on the balance of payments (up to 1% of GDP), which should be in-

Economists do not think external price shocks will generate recession terpreted through decreased imports, albeit not increased export. The economists stand by their prediction of a stable exchange rate, similar to the current level: between HRK7.5 and HRK7.6 to €1. However, interest rates in the money market will slightly increase compared with 2011. Regarding the introduction of euro in Croatia, the anticipations are equal with the period in 2010. The most optimistic mentions 2018 with the pessimists mentioning 2023, since they expect stricter criteria from Eurozone accession.


Privredni vjesnik Year V No 0185

Nikola Marinković, Director, Eurus, Split

World Bank Support

It is better in the energy sector


During the next few years, construction might fall into a deeper crisis which is why we turned to projects in the energy sector he primary activity of Eurus is planning and development of civil and building construction as well as energy. The crisis has had a serious impact on construction. It is estimated that the level of work plummeted by 70%. The construction industry might well fall into a deeper crisis and face serious consequences over the next few years. This is why we turned to projects in the energy sector, where we are recognised as a quality and reliable partner of a big global holding company that is developing a series of energy projects in Croatia. At first glance it is noticeable that excellent potential investors often encounter problems, since they cannot find reliable partners in Croatia with experience and professional enough to develop their projects and obtain the required permits. I must say


Croatia has great potential in renewable energy resources it is not true that it is difficult to obtain the Study on Environmental Impact; an expert knows how to do it since the rules are fully transparent. However, what impedes investors in finalising their projects, on the side of the state, is the problem of a lack of capacity, that is, a quota for connecting to the electro-energy sysIMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 subscription

rgent fiscal consolidation, stronger competitiveness and benefits from EU accession are the three significant economic challenges for the Croatian government, stated World Bank Director, Peter Harrold, recently in Zagreb.


Optimism is growing in Croatia

tem. Part of this capacity or quota has been taken over by profiteers who had no intention of investing in energy. They rather intended to resell the location and connection to other potential investors. Even though there was an attempt to put a stop to this with time limits, they still manage to postpone deadlines for obtaining permits. Regarding the administrative obstacles in the development of energy projects, in addition to the lack of quota, a further aggravating circumstance is the complex procedure for changing spatial plans. Despite the promise of the representative bodies authorised for making decisions regarding such plans, these promises have not been fulfilled, which makes investors nervous and sends a negative message. This is a shame, since Croatia has great potential in developing projects and attracting investment into renewable energy resources.

FOR PUBLISHER Nikola Baučić +385 1 4846661

IMC MANAGER Dea Olup +385 1 5600028

EDITOR IN CHIEF Darko Buković +385 1 5600003

TRANSLATION Lučana Banek Mirjana Cibulka

EXECUTIVE EDITORS Andrea Marić Vesna Antonić


According to European regulations, fiscal consolidation must gravitate towards a 3% GDP deficit. However, the deficit cannot be reduced to zero since it would cause severe shock. Expenditure should be reduced to create room for financing growth and to protect vulnerable groups. According to the World Bank, stronger investment is required for Croatian more stable growth and it should be enhanced by reducing bureaucratic procedures. It is important to develop the prerequisites for accepting money from future structural

funds. He pointed out that he had noticed greater optimism in Croatia compared with last year. EU accession will present many opportunities for Croatia. Many countries used this as generator for development. Croatia has a new government that started its work under difficult conditions. However, if reforms are quickly implemented, the situation might turn in favour of development, pointed out Harrold. Budget

cuts are one of the elements for evaluating the seriousness of the implementation of reforms. Increased investment and other measure could turn around negative GDP rates. However, Harrold added, Croatia will still have the support of the World Bank regarding stabilisation and speedier development. (I.V.)

Conference on public-private partnership


large share of planned state investment, in total some €1.1 billion, will be realised this year through public/private partnership (PPP). This will mean hundreds of new schools and sports halls as well as cultural and justice facilities and student homes, announced Vice-President of the government and Minister of Economy, Radimir Čačić, at the opening of


the conference on private/public partnership, organised by the Canadian Embassy. Another area, where Čačić sees an opportunity for PPP, is in energy. There is already experience with the power plant Plomin, which is a good base for the Plomin 3 Project, worth between €800 million and €1 billion, which could also be realised through PPP. The government welcomes all interested in public/private partnership, says Čačić. He is convinced that during the following four years Croatia will realise the biggest investment in PPP in this part of Europe, not only proportional to its size, but also to its absolute amount. (D.Ž.) Business & Finance Weekly



Production development and increase is in the interest of everyone Our programme is savings and rational use. We cannot promise higher subsidies as we cannot promise what we cannot deliver Krešimir Sočković he new governmental structure in the Ministry of Agriculture found emptied accounts and debts twice as large as expected. Agriculturists will certainly worry about the announced cuts in subsidies. At the same time the Common Agricultural Policy is marking its 50 years of existence and is preparing for serious reform that will also impact on Croatia. Privredni vjesnik discussed these topics with the Deputy Minister of Agriculture Snježana Španjol.


A short analysis of the state of the Ministry of Agriculture after the new government assumed power revealed debts

We can achieve a lot in the EU if we are optimistic

short period of time. However, I fear it will take some time to reduce debts to a reasonable sum in order to start clearing them.

higher than expected. Were you surprised by these figures? I must admit we did not expect such a state. Instead of starting with reforms and realising plans with which we won the elections, we will lose a few more weeks analysing the current state. The interest of all agriculturists is to make use of the subsidies in a

Is there any money for subsidies? The Ministry of Agriculture will try to maintain the same level of subsidies as in 2011. Reorganisation and restructuring in the Ministry and institutions that accompany this sector (Agricultural Land Agency, Paying Agency for Agriculture,

Small, but active The EU is marking 50 years of common agricultural policy. How much can a small country like Croatia participate in drafting this policy? Since the signing of the Accession Agreement, we will proceed to work with groups of the European Council and Commission. Our colleagues from the Ministry of Agriculture will actively participate in the work groups and they will be entitled to share their opinion. They will monitor everything relating to the reforms prepared by the EU – Common Agricultural Policy, reform of the market for agricultural products, reform of direct payment and reforms of the fisheries policy. From the very start, they will participate in making changes to the existing regulations and they will be able to signal to our colleagues the direction of the reforms so we can prepare ourselves and forward the information to all agriculturists and the general public.

Croatian Agricultural Agency and others) should maximally reduce expenses. In this way there would be more subsidies for farmers. Our programme is savings and rational use. We cannot promise higher subsidies since we cannot promise what we cannot deliver. Will the control of using subsidies increase? Our strategy and priority is to bring control to the level of other institutions. Until now all these institutions played a passive role, at the same time being considerable users of budget funds. All these agencies, institutes and centres should monitor the producers, help them prepare projects and inform them of their rights and options according to laws and regulations. However, it is necessary they also monitor production. Production development and increase is in the interest of everyone. We will do everything to encourage all institutions to perform quality monitoring of agricultural producers in addition to the agricultural inspections.

Croatia is a small country, on the level of a “statistical error” of the entire EU. How can we protect our interests? Although we are small, we are very interesting for the European Union. We have already held meetings with the representatives of neighbouring countries at the initiative of our colleagues. We maintain good relations with Polish colleagues, and the presiding Danish president gave us support, and announced they would represent our interests even before we gain the right to vote. Croatia has a lot of potential even though it is a small country, and we find everything to be a great challenge. We can achieve a lot in the EU if we are optimistic, especially with our special features. Originality and branding of our products may show our diversity from the Adriatic to central Croatia and Slavonia. We really do have a lot of potential and we should turn the tables and present more creative ideas. We can do a lot if we join forces and offer it to Europe.


Privredni vjesnik Year V No 0185



CEFTA and market as t Pharmacists promoting Malaysian co-operation In addition to the Immunology Institute, the Institute of Naval Engineering and Rijeka-based JGL, Končar and Infotehna other companies interested in co-operating with Malaysian partners he Immunology Institute and Belupo have started co-operating with Malaysian companies and the amount of contracted work could increase significantly, following a recent delegation visit to the Croatian Chamber of Economy. According to Darko Dvornik, Immunology Institute Board President, the company is planning to invest in development and production facilities, where there is ample room for co-operation with Malaysian partners. The Institute of Naval Engineering, as well as Rijeka-based JGL and Končar, Infotehna and other Croatian companies, have also found partnerships in Malaysia. The Malaysian delegation was headed by Yoke Heng Yean, Malaysian Ambassador to Croatia. He pointed out that his Embassy is willing to provide a plethora of information on business opportunities for Croatian companies. The delegation members were from Perak province, with has achieved significant development in biotechnology, pharmaceuticals and the renewable energy sector.


Rapid energy sector growth Enis Arnaut, the Director of Perak Hi-Tech Industrial Park, and the Director of Nova Beta Technologies, believes that Croatian and Malaysian companies can work on new product development through joint initiatives and sell them on the market. Arnaut

is originally from Bosnia and Herzegovina and has been working in Malaysia for 17 years. He encouraged the co-operation between the Immunology Institute, Belupo and Institute of Naval Engineering and Malaysian partners.

Croatian and Malaysian companies can develop new products through joint initiative Askar Mohamad, the Chief Operating Director of SEDA, the renewable and sustainable energy development authority, explained that Malaysia is attempting to boost energy sector growth with relatively high energy prices. Solar power plant energy currently stands at €0.08 per kilowatt hour for up to 4 kilowatts. Their goal is to attract foreign investors since their plan is to use nearly 75% of renewable energy by 2050. The current value of trade between Croatia and Malaysia stands at around $60 million, with Croatian exports around $1.7 million. According to Sunčana Skupnjak Kapić, the Director for International Affairs at the Croatian Chamber of Economy, the recently held meeting is likely to boost co-operation and improve the Croatian balance of trade. (I.V.)

State needs to assist Croatian neighbours in speeding up th Chamber of Economy Igor Vukić n the forthcoming week Croatian food processing companies are planning to continue discussions on the situation they will face following Croatian EU accession. On 1st July 2013 the CEFTA agreement, which fostered their favourable


Irrespective of long term negotiations, EU accession implies a plethora of uncertainties for many market positioning on Eastern markets, will be terminated. The largest Croatian companies participated in the first meeting: Agrokor, Adris, Podravka, Franck, Vindija, Zvečevo, Dukat, Badel 1862, Gavrilović, Pivac, Atlantic and Granolio, as well as Croatian Chamber of Economy representatives. The companies are planning to complete the “final preparations for the future of Croatian economy in the EU” adopting an open dialogue approach. It has been

agreed that in the forthcoming future there will be a meeting at the Croatian Chamber of Economy with the government representatives and relevant ministries, where there will be a discussion on concrete expectations from the government and other state bodies. Irrespective of long term negotiations for Croatian EU ac-

Large Croatian companies are enquiring about production transfer to Bosnia and Herzegovina The Foreign Trade Chamber of Bosnia and Herzegovina has confirmed having received enquiries from several Croatian companies, mainly in the food processing sector, on opportunities to transfer production to Bosnia and Herzegovina. Whilst on the one hand foreign companies from Bosnia and Herzegovina are fearful that Croatian EU accession might halve their exports to Croatia, Croatian companies are concerned about exiting from CEFTA and uncertain about the outcome of their competitive edge with producers from the EU. In addition, Croatian companies are fearful of large European shopping chains penetrating the Croatian market and offering goods at more affordable prices. Kraš, Agrokor, Podravka, Zvečevo, Dukat, Gavrilović and Badel 1862 are some of the companies who have been enquiring about the transfer of production to Bosnia and Herzegovina or Serbia. (Z.L.) Business & Finance Weekly



d survival on the EU the critical issues

heir EU accession in order to abolish business barriers, according to Nadan Vidošević, President of the Croatian status with CEFTA countries will not be obtained exclusively by Croatian companies, but also by all EU companies. Hence, even in the case of Croatian companies succeeding in retaining the current customs duties under CEFTA, they will be faced with strong competition from EU companies under the same conditions. Consequently, food processing companies will by joint action attempt to negotiate with the government on business conditions in line with their European competitors. They will also require similar support in order to retain current production levels.

cession, many companies are faced with many uncertainties. Controversial information on alterations in business activity following an exit from CEFTA has caused considerable public reaction. During the meetings last year with exporting companies, the government claimed that, on several levels, there would be no significant change, as CEFTA countries are planning to gradually reduce their trade barriers by the time Croatia has become a fully-fledged EU member. It was stated simultaneously that for Serbia this would take slightly longer, yet it would not exceed a six month period. Higher customs duties Irrespective of the fact that the information is accurate regarding comprehensive exports, nevertheless several products could see higher customs duties with Bosnia and Herzegovina, Serbia and other CEFTA countries. Cus-

toms duties for industrial products have been considerably lowered and brought into line with the EU level, yet it is likely to see new customs duties for several agricultural, confectionery and tobacco products. Tobacco Factory Rovinj (TDR) has announced they will be faced with tripled cigarette export prices to Serbia, whilst in Bosnia customs duties will increase to 15% from the current 0%. Exports duties on Kraš exports to Bosnia and Herzegovina will be 45% per kilo of biscuits. In addition, milk producers will become uncompetitive, warned Alen Fontana, the Board President of Dukat. In accordance with EU regulations, Croatia is entitled to a requirement to maintain the current preferential status, regarding customs duties and quotas under CEFTA. Bulgaria and Romania have acted similarly upon their EU accession. Nevertheless, the problem is that the preferential

Survival methods According to Stipan Bilić, Director of Kondin, the confectionery association, confectionery products imports have exceeded local production during the last several years, irrespective of a certain level of customs pro-

Agrokor has established its position in Serbia and Bosnia and Herzegovina by founding its own companies and is able to operate there almost as a local player tection (ranging from 12% to 18%). Most Croatian exports are to CEFTA countries. “It is not merely a question of how to preserve CEFTA exports, but also a question of survival on the EU market”, pointed out Bilić. He warned that Croatian companies are burdened by increasing energy prices, higher taxation, weaker bank support and scarcer raw materials. The country needs to define its objectives for local

agricultural and food processing industry and consequently adapt its relief and subsidy policy. Experts in customs issues claim there is no need to panic regarding alterations with CEFTA; nevertheless each exporting company needs to be thoroughly informed on the ways that Croatian EU accession will impact on export results. Information on customs duty alterations for individual goods will be available at the Croatian Chamber of Economy and can also be provided by the appropriate bodies and CEFTA countries Chambers of Economy. Agrokor acted accordingly two years ago, considering alterations following Croatian EU accession. Irrespective of the fact that it has currently joined the confectionery association, it has established its market position in Serbia and Bosnia and Herzegovina by its takeover and the formation of companies in these countries. Ample time In addition, there is the issue of assistance potential provided by the state to companies in the food processing sector. The European Union is not inclined towards state assistance to individual sectors, as it distorts market competition. Nevertheless, something can be done with horizontal support and improvement in the framework for the use of EU funds. Yet, according to Nadan Vidošević, President of the Croatian Chamber of Economy, it is primarily the responsibility of individual companies to prepare for the EU business framework. He believes that there has been ample time for adapting and the state needs to assist Croatian neighbouring countries in speeding up their EU accession in order to promptly abolish business barriers.




Privredni vjesnik Year V No 0185


30 new products each year

Rich heritage attracting tourists Project conceived in the spirit of Dalmatian heritage including an ethnic house depicting Dalmatian family life from the past gro-tourism Roca, the House of Dalmatian pršut was opened in the summer of 2011. Irrespective of the fact that agro-tourism has been attracting an increasing number of tourists opting for local gastronomy and wines the main activity of the Roca family is Yorkshire, German Landrace and Duroc pig breeding and meat processing, plus traditional local production of top quality pršut. They currently own 200 pigs and meet European standards for pig


€1.4 million was invested in the project fattening in an enclosed system. The farm also has a dried meat processing facility with particular emphasis on the traditional method of pršut dry curing, complying with hygiene and other HACCP standards. Visitors can taste various gastronomic products in the Dalmatian wine cellar and olive grove. The project includes a shop with a wide range of Roca agro-tourism products and a comprehensive range of Dalmatian hinterland food products. The wide product range includes pršut, two types of sausages – Dalmatian red and Dalmatian rosemary - bacon, lard spread, dry chuck of pork and smoke-dried pork loin. The project

Producing a range of PVC granules for extrusion and injection used in their own production as well as sold as raw material he Buzet-based company Drvoplast produces different types of granules for extrusion and injection which are used in their own production of plastic profiles and also sold on the market as a raw material. The company produces over 600 different plastic profiles such as seal profiles for all types of building carpentry, aluminium facades and thermal bridges. Also included are PVC shutter lamella ranging from 37mm to 50 mm, profiles for the furniture industry (decorative profiles) and internal equipment profiles (housing containers, camping trailers and prefabricated houses). Additionally the wide range of products includes profiles for boats and ships (boat fenders, vessel side shields, ves-


was conceived in the spirit of Dalmatian heritage and includes an ethnic house depicting Dalmatian family life from the past. Without electricity or water supply “The idea of agro-tourism and a House of Dalmatian pršut was conceived six years ago after the purchase of an area of 8,000 m2. We planted an olive grove where there are currently 50 trees yielding around 1,000 kg of olives annually. The olive grove is also a terrace which can accommodate 150 people. Next to the olive grove there is a vineyard with 1,400 vines of three types: Dalmatian Debit, Marastina and Plavina”, explained Ante Roca, the owner. “€1.4 million was invested in the project, mainly through loan financing and also using our own funds, whilst the Ministry of Agriculture and Zadar County subsidised a minor project. Velim is within an area of Special State Care, an agricultural area where there used to be no electricity or water supply. It has been reconstructed and modernised and can currently accommodate organised groups of visitors or tourists throughout the year”, noted Roca.

Company producing over 600 different plastic profiles sel handrails and similar), traffic bollards and ‘snow-on-the road’ poles. In addition, there are various tubes and pipes and profiles for miscellaneous purposes (ceramic tile edge profiles, profiles for tents, awnings and tarpaulins, seal profiles for shower cubicles and basins, shelf price holders, edge profiles for tennis courts, sun shields for trams and rail carriages and optical cable profiles).

New product development is highly dictated by market demand. The company produces some 30 new products each year (plastic profiles and granules), exclusively for regular customers. Employment rather than layoffs Drvoplast flexibility in meeting customer requirements and needs is due to quality and its 40-yearlong tradition, according to Božidar Kadoić, Board Member. Around 50% of products are exported, mainly to Slovenia, Italy, Austria, Switzerland, Germany, France, the Czech Republic, Serbia, Latvia, Hungary and Bosnia and Herzegovina. Its’ products are present also in Swedish, Romanian and Polish markets through regular customers. There have been no lay-offs in the last two years. Drvoplast saw turnover volume increase 46% in 2010 over 2009, whilst turnover volume for 2010 was continued into 2011. “We are anticipating a slight growth of 3% over 2011. In addition, we are planning to invest in modern production lines for the production of hard and soft plastic profiles which has a value of €350,000; this would slash our expenditure and foster the competitiveness of several existing products. We are also planning to launch several new products, which are currently under development”, pointed out Kadoić. (I.V.) Business & Finance Weekly





Kuna exchange mid-rate


6,158527 5,760629 7,547737 6,289885 9,115568 5,752321 7,578683




















7.55 31.1.



5.70 31.1.







6.26 31.1.





An excellent January Some 18 investment funds grew by over 5% in January, and three grew by over 10%. The results of all funds ranged between -3.16% and +12.28%. This year has had a positive start, and all important global indexes showed increases in value, growing around 4% on average up to almost 16%, as in the case of the Russian RTS index. Podravka profit increase

According to unrevised data, in 2011 Podravka Group generated a total income increase of 3.8%, to €0.50 billion. Company nett profit increased by 44%, to €16.1 million; sales by value climbed to €0.49 billion, up 3% over 2010. Group operating profit stood at €33.56 million in 2011 (+23%).

Movements in monetary and credit statistics will not change substantially in 2012 ast year, Croatian banks generated a total profit of €0.49 billion, according to non-consolidated statistical report of the Croatian National Bank. In relation to 2011, profits are 3.3% lower.


The growth of total bank lending should slow since the state will decrease its demand Last year, bank assets increased to €54.5 billion or 4.3%. Total lending increased by €1.7 billion, to €37.4 billion, or 4.86%. Corporate lending increased by 7.94%, to €14.7 billion. State lending increased by slightly less than €0.2

billion (+17.52%), €1.33 billion. Other corporate lending exceeded €13.3 billion (+7.08%).

€0.61 billion. Credit card finance also decreased, by 6.5%, to €0.53 billion.

Mortgages in decline According to the report, €5.26 billion was lent to state and local administrations as well as the republic funds, which is up 14.10% over 2010. Public lending stagnated (+0.17%). At the end of 2011, it totalled €16.22 billion, €26.7 million more in relation to the end of 2010. Housing and non-purpose loans slightly increased, whereas mortgage, car and credit card loans declined. Housing loans increased by 2.33%, to €7.8 billion, whilst non-purpose loans increased by 1.73%, to €6.88 billion. Car finance decreased by 27.36%, to

Lending at the same pace Compared with 2011, movements in monetary and credit aggregates will not change substantially during 2012. The growth of total bank lending should slow since the state will decrease its demand for financing after implementing fiscal consolidation, according to HNB Newsletter. The anticipated decrease in budget loss in 2012 and preconditions for long-term economic growth should gradually slow the rise in interest rates and thus the private sector demand for loans in 2013, according to the HNB Newsletter.

Salaries rising In November last year, average monthly nett salary per employee in Croatian companies stood at €764, according to data provided by the Central Bureau for Statistics. In relation to October, this was €28 higher. Compared with the average nett salary in November 2010, the average net salary was nominally 2.6% higher. However, it remained at the same level in terms of real value. The highest salaries were paid in computer engineering (€1,364), and the lowest in clothing production (€376).


Privredni vjesnik Year V No 0185


Sea not indispensable for high revenue Potential for Slavonia and Baranja is huge even exceeding Istria suggests Robert Baćac Svetozar Sarkanjac uropean agro-tourism experiences reveal significant differences. The share of agro-tourism facilities in the total number of agricultural estates throughout France, Ireland, and Germany is currently some 3%, with just 0.3% in Italy. Some 8% of farmers in Austria provide tourist accommodation. Nevertheless, in Europe there are some 100,000 such facilities with 1.3 million beds generating annual revenue of €12 billion. Croatian agro-tourism is of significant importance for two regions – Istria, which attracts tourists with its sea and the continental region of Slavonia and Baranja. The percentage of farms within Istrian tourism is 1.6%, which might appear a modest figure, yet has a significant economic role. Istrian tourism revenue in 2010 stood at €6.7 million, generated by 18,727 tourist visits.


Using Istrian experience “Istria has a long tourism tradition and can provide a huge amount of useful information”, stated Antonio Sobol, the Director of Tourism Office of OsijekBaranja County Tourist Board.

“Nevertheless, we are talking about conceptually diverging areas ranging from personal habits, geographical characteristics and primarily accessibility, since Istria is significantly closer to affluent markets. We need to learn from them, yet without copying them. Promoting tourism is imperative, as well as the promotion of a wide range of events, enriching the experience and attracting attention with quality and identity”, he added. Robert Baćac,

Tourists visiting Istria for its sea and sunshine not interested in agrotourism Director of the Istria-based tourism consortium of agro and rural tourism Ruralis and a UNDP agro-tourism national consultant, shares this opinion. “The potential for Slavonia and Baranja is huge. I believe it even exceeds Istria with its depth of tradition, significant traditional products and active agriculture. The success of the Istrian tourism industry is due to significant support provided by the County some 15 years ago, a continuous focus on

human asset motivation, as well as permanent efforts to connect Istrian agro-tourism to other markets. The initiatives in Slavonia and Baranja are competitive and of high quality and it is the appropriate path to follow”, he added. Agro-tourists not interested in the sea Workers in Slavonia and Baranjabased tourism often claim that Istria has a huge advantage with its wealthy Italian and Slovenian neighbours. Nevertheless, their Istrian colleagues claim this is not entirely true. “The fact that Slavonia and Baranja do not have a coast line is not such a huge disadvantage. Tourists visiting Istria for agro-tourism are not interested

in the sea and vice versa – tourists visiting Istria for its sea are not interested in agro-tourism. In addition, the fact that the neighbours of Slavonia and Baranja are not Italians or Slovenians is not such a disadvantage. The level of both Italian and Slovenian tourists in Istrian agro-tourism is virtually insignificant. Amongst Istrian tourists who are interested in agro-tourism these are mainly tourists from Germany, Great Britain, France, the Netherlands, as well as from Japan, USA and Australia”, explained Baćac. He believes that attractive traditionoriented services, adequate information of the market and a wide initiative are of paramount importance for the continental region.

PV International 0185  

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