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ZAGREB BRAND FORUM 2018→ ZBF is an ideal and a real discussion platform for addressing the issue of interaction amongst all market participants PAGES 2-13

SUPPORTED BY THE CROATIAN CHAMBER OF ECONOMY

www.privredni.hr

CROATIAN CHAMBER OF ECONOMY→ New offices in Sarajevo and Mostar, Doors open to all entrepreneurs

INTERVIEW: MARIO PETROVIĆ→ In ten years from now, PR agencies will bear no resemblance to those of today PAGES 16-19

PAGES 14-15

PVinternational C R O A T I A N

B U S I N E S S

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F I N A N C E

M O N T H L Y

May 2018, Year XI, No 280

CROATIAN BUREAU OF STATISTICS

First government budget surplus for 16 years 2017 saw a €0.37 billion general government budget surplus, the first surplus since 2002, and public debt to GDP ratio dropped to 78%, the lowest level since 2012 by Ilijana Grgić

L

ast year was more than satisfactory for the national exchequer, which recorded a surplus for the first time during for 16 years.

According to data released by the Croatian Bureau of Statistics, the general government budget surplus in Croatia in 2017 exceeded €0.37 billion or 0.8% of GDP, the first general government surplus since 2002, when records began. It is important to note that in 2016, a deficit of €0.43 billion or 0.9% of GDP was recorded.

“A surplus compared with previous years is mainly due to considerable improvements in results from extra-budgetary users and public companies, as well as an increase in tax revenue. In 2017, tax revenue from manufacturing and imports reached €9.55 billion, 5.4% up compared with the previous year. Moreover, investment turned negative falling to €1.31 billion in 2017, 13.1% down compared with 2016”, noted Marko Krištof, Managing Director of the Croatian Bureau of Statistics.

He added that the surplus was the result of a reduction in interest charges, which

last year stood at €1.3 billion, or 9.7% down over the previous year. In addition, 2017 saw further growth in the general government primary budget surplus, reaching €1.67 billion (3.7% of GDP).

Furthermore, the Croatian Bureau of Statistics published data on public debt, which at the end 2017 reached €37.77 billion, or 78% of GDP, the lowest level recorded since 2012, when it was 69.4% of GDP. It has

to be noted that irrespective of the debt of €37.77 billion exceeded that recorded at the end of 2016 by 0.6%, the Croatian economy achieved more rapid development in 2017 compared with 2016. Moreover, public debt to GDP ratio dropped by 2.8% or 2.6% in relation to the end of 2016 when it stood at 80.6% of GDP. 2015 saw debt of €37.89 billion, or 83.8% of GDP, with 2014 showing €37.11 billion, or 84% of GDP.

TOPIC OF THE WEEK ZAGREB BRAND FORUM 2018

BRANDS EQUATES WITH EMOTIONS Zagreb Brand Forum is both an ideal and a real discussion platform for addressing the issue of interaction amongst all market participants, pointed out Buković photo Antonio Bronić, Jurica Galoić/PIXELL

H

ow can brand value be measured and what is the value of its intangible attributes?

Should a brand be built or made? How to compete with global brands? How are new brands created?

How do brands last and disappear? Have we built new brands over the last two decades or have we been positioning the old ones? Similar topics were tackled at Zagreb Brand Forum 2018, held on 9th May at Zagreb Fair in Zagreb, organised

by Privredni vjesnik. Its specific objective was to bring together tradition and modern trends.

Reputable keynote speakers, four brand sessions with 28 interlocutors, almost 400 participants and a Brand Academy-Clinic intended for those eager to find out more about the issue, were just a few of the events at ZBF 2018.

Brands are essentially emotions. They are created inside people’s heads, as opposed to products that are manufactured. In order for something to become a brand, it needs to become established

and confirmed on the market, according to the Director of Zagreb Brand Forum, Darko Buković. “Open discussion amongst reputable speakers – the creators of new values, provide the foundations for opportunities for co-operation and networking. Consequently, Zagreb Brand Forum is both an ideal and a real discussion platform for addressing the issue of interaction amongst all market participants, since both large companies and groups and small businesses have equal opportunities to publicly present their products or services through branding”, concluded Buković.)

The Director of the Regional Business Club named Biznis Plus, Svetlana Cenić, pointed out that the greatest threat to branding is “political interference, which is, unfortunately, difficult to avoid in this region. Hence, rather than focusing on the usual words starting with “P”, one needs to focus on other words starting with “P” – which (in Croatian) are words that refer to business, respect and friendship, since such forums are intend-

Ample congratulations extended A large number of entrepreneurs, representatives of state and social institutions, as well as local government representatives extended their congratulations to Privredni vjesnik on its anniversary, expressing wishes that it may continue being a serious and persevering media partner to the economy. The Croatian President, Kolinda Grabar Kitarović, has also sent a message of congratulation that included, amongst other things, her support to the publishing of the reputable weekly magazine for business and finance, expressing her gratitude for the contribution to the development of the Croatian economy.

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ed primarily for this specific purpose”.

The Vice-President of the Croatian Chamber of Economy (CCE), Josip Zaher, emphasised that the CCE has been focused on and is actively involved in the branding of the Croatian economy. “We are surrounded by brands, although we sometimes we do not refer to them as brands and we do not treat them as such.

It would perhaps be an overstatement to claim that we are living in a world of brands. Nevertheless, we are aware that both countries and economies are currently being branded. This can also be done with regions, cities, events and institutions, products, services, companies, as well as ideas. The CCE has been primarily focused on the strengthening of the Croatian products and services, both at local and international levels, since a good brand creates value amongst consumers. Consequently, our labels Croatian Creation and Croatian Quality provide additional support for these brands”, noted Zaher.

Zagreb is one of the largest Croatian brands, as well as the co-organiser of Zagreb Brand Forum. The Deputy Mayor of Zagreb, Olivera Majić, believes that against a backdrop of current circumstances, the brand building and branding process needs to be considered as an integral part of strengthening the competitiveness of products, countries, cities, as well as people. “Since brand value is created in people’s heads and emotions, as well as through their impressions, it is considered as added value and the intangibility of all the balances is also significant. This is the process of creation of new optimism and cohesion”, concluded Olivera Majić, adding that Privredni vjesnik can be considered a good example of branding in its segment.

ZAGREB

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65th anniversary of Privredni vjesnik Zagreb Brand Forum 2018, a unique conference concerning branding in this part of Europe, concluded with the ceremony to mark the 65th anniversary of the publishing of the first issue of Privredni vjesnik, the oldest Croatian weekly magazine for business and finance. Privredni vjesnik was founded in 1953 by the Croatian Chamber of Economy, which is still its owner. The newspaper has positioned itself as the first weekly magazine for business and finance that insists on credibility and professionalism, on which it has been focused and developed and enriched by a not overly large team of employees, led by only four Editors-in-Chief since its inception. Darko Buković has been its Director and Editor-in-Chief during the last 12 1/2 years.

The first issue of the magazine was published on 9th May 1953 and has seen 4,028 issues to date.

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TOPIC OF THE WEEK ZAGREB BRAND FORUM 2018

1ST BRAND SESSION: BRANDS ARE CREATED IN PEOPLE’S HEADS – HOW CAN TO BUILD A BRAND OR TO WORK FOR A BRAND? NEW DEVELOPMENT LIFECY

PRODUCTS CHANGE. BRAN Against the backdrop of a similarity in pricing and a corresponding level of quality, the difference between a global and a local brand lies in the emotional component, stressed Vranešević by Boris Odorčić products and they require long-term management. Hence, products are added to brands. “Products change, whilst brands can live forever. Products are manufactured, whilst brands originate in human heads. In order to create a brand, one requires specific skills. Brands transcend boundaries and social structures.

Products change, whilst brands remain unchanged and are subsequently managed”, stressed Vranešević, adding that one has to bear in mind the fact that all market activities affect brand value. “If an activity is in accordance with its brand mission and the core brand idea, it will

T

he Zagreb Brand Forum 2018 included a panel discussion entitled Brands are created in people’s heads – how can this be measured? To build a brand or to work for a brand? New development lifecycle of a brand Tihomir Vranešević, professor in the Department of Marketing at the Zagrebbased Faculty of Economics and Business, stressed that the importance of brands is immense. “In order to clearly illustrate their importance, let’s imagine that we are buying a new digital camera and there are currently 1,340 brands available on the market. Do we consider all of them? It is more likely that we will, like most people, select two or three brands that we trust and act in this well-known area of perception”, he stated, adding that brands can be developed in all the areas where there is demand – from ideas to products and services and people.

He highlighted that there are three basic dimensions to the total brand value.

“Firstly, there is the functional value.

In other words, to what extent a brand achieves its purpose. Let me give you some examples – how a car drives and how much one can speak using a specific 4 | PVinternational | May 2018 | No 280

mobile phone. This dimension does not currently provide reasons for a competitive battle and insisting on it is considered as a matter of the distant past. Moreover, the notion that a quality product sells itself and is successful on the market is a marketing myth”, he explained. The next dimension of value is the emotional one. “That is, how much we like a specific brand, whether it attracts attention, whether we love it and are satisfied with it. It is about a relationship at a “click”, reminiscent of when two friends “click””, he explained.

The third, but equally important dimension, which will be increasing in importance and cause competitive battles in the future, is symbolic value. “More specifically, the message that someone is working to convey, through a specific brand and the group they are aiming to belong to. This can be achieved with brands and is not possible with products”, noted Vranešević.

PRODUCTS ARE ADDED TO BRANDS A new perception of brand management suggests that brands are not added to products. Brands have been categorised as slightly more stable compared with

THE FUNDAMENTAL VALUES THAT THE BRAND HAS BEEN BUILT UPON ALWAYS NEED TO BE PRESENT, STRESSED SANJA GARAJ MILOŠ result either in brand value retention or in increase in brand value. On the other hand, if the activities one has become involved in are not in accordance with core brand ideas and have not been recognised by target groups, it is likely that the brand will lose value”, he explained.

Brand value can be determined in a large number of ways. “The most realistic estimate is how much someone is prepared to pay for a brand takeover”, he stressed, adding that, amongst other ways, it is important to point out also how much more the target group is prepared to pay for, say, a bottle of branded water compared with a bottle of water

ZAGREB

BRAND FORUM

2018

N THIS BE MEASURED? YCLE OF A BRAND

NDS REMAIN UNCHANGED

Tihomir Vranešević

Enzo Smrekar, Sanja Garaj Miloš

bearing an unknown label.

Brands are currently considered as assets; companies copyright their brands and brand ownership can be both protected and transferred to third parties. “It is a well-known fact that the value of a large number of brands exceeds the value of other assets owned by a company or factory”, he stated.

Strong local brands are currently faced with a wide range of challenges. Against the backdrop of a similarity in pricing and a corresponding level of quality, the difference between a global and a local brand lies in the emotional component, stressed Vranešević. “I would, consequently, recommend local brand owners to focus on ae relationship based on emotions and increasingly transfer into a virtual space which is becoming our reality. This may additionally strengthen the brand, yet it is a highly challenging task”, he emphasised.

Enzo Smrekar, President of the Management Board of Droga Kolinska and Managing Director of Strategic Business Unit in the Atlantic Group, believes that brand value can be measured in the easiest way by the answer to the question: how much cash does it generate at the end of the day?

Furthermore, he believes that behind strong brands, one will always find even stronger people. “There are no brands without them. Every company requires people who believe in marketing. These are the people who use marketing for ambitious, and, perhaps, bold strate-

Marjan Batagelj

gies for high quality task accomplishment. Marketing pushes boundaries irrespective of whether they are political, geographic, production or boundaries within ourselves. When one has done a good job, the excellence remains both within ourselves and within our teams.

It is only at that point that we can expect great things to happen and see good results”, pointed out Smrekar, adding that it is important for every company that all staff members, from production workers to the Management Board, gain the deepest possible insight into the brand.

“If one cannot speak about a brand with the same passion in New York or Beijing, then the brand will not be successful”, he believes.

SELLING REIGNS, MARKETING GOVERNS Sanja Garaj Miloš, Director of the Culinary Business Unit in Podravka, believes that one needs to be consistent in core brand ideas and values, those intrinsic to the specific brand throughout its lifecycle.

“Hence, the fundamental values that the brand has been built upon always need to be present”, she explained, pointing out that changes in accordance with market developments and customers present a huge challenge. “Vegeta has been around for almost 60 years. 60 years ago, consumers had completely different ideas about both the purpose of cooking and different cooking methods. In addition, 60 years ago no one took photographs of food first and then started eating. Thus,

Jadranka Primorac

it is important to keep abreast of trends and adapt to new consumers who will appear in the future, yet still remain faithful to core brand ideas and values”, concluded Sanja Garaj Miloš.

Marjan Batagelj, President of the Management Board of Postojna Cave, stated that selling reigns and marketing governs. “All staff members in Postojna Cave aim to care about this natural monument and heritage, as well as about visitors”, he pointed out.

Jadranka Primorac, co-owner and member of the Management Board of St. Catherine Specialty Hospital, stated that building a brand in healthcare is a huge challenge, as it is a highly sophisticated field. “The vision, service quality, avail-

BEHIND STRONG BRANDS, ONE WILL ALWAYS FIND EVEN STRONGER PEOPLE, BELIEVES SMREKAR ability, diversity, innovativeness, ethics and patient satisfaction are the parameters of which our brand value comprises”, she emphasised, adding that that value is eventually conditioned also by trust, since trust is the crucial factor and requires the best of reputations. The latter needs to be constantly in focus.

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TOPIC OF THE WEEK ZAGREB BRAND FORUM 2018

ENGAGEMENT BRANDING: SCOTT GOULD

BRAND, THIS IS ME Brand alignment or connection means you are emotionally, mentally and maybe even spiritually connected with your favourite brand, Gould says

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cott Gould is one of the top experts in engagement branding, author and consultant for Microsoft, Nokia, GAIN, Finland Tourist Board, Quilliam, the Church of England, ARM and F&W Media. He presented the subject of engagement branding at the Zagreb Brand Forum. His presentation was extremely interesting and fun, and he included all participants who were shy, but eventually accepted this type of presentation. He started with a little survey asking participants which kind of engagement they advocate. He offered several options: engagement in social networks or even Star Wars engagement which presented the highest level. It’s not a surprise that the majority voted for this latter type since it means something much more than engagement in social networks.

A person or a customer with some level of status means 23% more than a regular customer who is not that much engaged in the brand. He spends three times more and buys this brand 90% times more often than an average customer. He is also more loyal and it is likely he will buy new products of his favourite brand. When people like you, when your brand is in their heads and they relate to it, this means you have succeeded. But how to make people connect with your brand and be included in it.

BRAND INCLUSION LEVELS

EVERY BRAND WANTS YOU TO THINK ABOUT IT BEFORE GOING TO SLEEP, WHEN YOU WAKE UP AND FOR THE REST OF THE DAY, EVERY HOUR, GOULD SAYS

Naturally, Gould has a solution for this and he turned it into a book which he briefly presented to participants. He explained there are more engagement levels. The first is attention engagement or drawing attention to the brand, which in the today’s sea of brands, is quite hard.

The second is action engagement or action – it means you have already drawn attention and now someone becomes intrigued with your brand. The problem of this level is brevity, but it is the crucial

step for taking you to the highest level, which Gould calls the alignment level and means complete alignment with the brand or total connection. This is a level on which you are emotionally, mentally and perhaps even spiritually connected with your favourite brand, Gould says. This is what every brand wants to achieve. It wants you to think about it before going to sleep, when you wake up,

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and for the rest of the day, every hour – complete connection. Just remember the images of waiting in queue to buy the latest iPhone model. This is what every brand wants and some of the most powerful brands achieve it. When a person is connected to a brand on this level, it relates to it and it becomes a part of his identity. Brand, this is me, Gould concludes. (J.K.)

ZAGREB

BRAND FORUM SECOND BRAND SESSION: BRANDING COMPETITIVENESS OF COUNTRIES AND CITIES

Ismir Jusko

Olivera Majić

Matija Posavec

2018

Edin Jabandžić

SAFETY AND RECOGNITION STRENGTHENS CITY BRANDS General safety, as well as business safety are imperative to attract foreign investment. Cities, regions and countries need to be recognised both in their immediate and wider, extensive environment in order to ensure better living conditions for individuals by Krešimir Sočković

T

he second brand session entitled Branding Competitiveness of Countries and Cities, led by branding expert Božo Skoko, addressed the issue of branding of places, regions and cities in the modern age, as well as the issue of branding through events and the use of new technologies.

Zdenko Lucić, Director of the Agency for Investment and Competitiveness, emphasised the fact that Croatia is a tourism brand. “Concerning investment in some economic areas, such as the pharmaceutical industry or metal processing and tourism, Croatia certainly has been identified as a brand by investors. Nevertheless, all those involved in branding are aware that each brand needs to be focused and worked on as it cannot develop on its own. According to my experience, foreigners value Croatia considerably higher than we do. It is important to highlight the example of investment by IBM into Croatia, which certainly would not have occurred, had Croatia been identified as an unsafe country”, stressed Lucić, adding that Croatian EU membership has significantly contributed to the recognition of Croatia in the attraction of investment.

“It has provided us with added value in doing

business in the single market, which is priceless”, believes Lucić.

A CITY HAS TO BE LIVED IN ORDER TO BE RECOGNISED Ismir Jusko, Minister of Communications and Transport for Bosnia and Herzegovina, believes that the safety of a country is the basic prerequisite for investment. “In Bosnia and Herzegovina, we once had the reputation of an unsafe country, yet there is currently absolutely no reason for concern or fear of anything. During the last 21/2 years, tourism has soared by 40%, whilst the number of tourists who visited Sarajevo has exceeded the number of inhabitants, which is clearly an indicator of progress. Investors have been showing interest and many of them are prepared to invest into infrastructure. Hence, we are on a par with neighbouring countries, concerning this issue”, pointed out Jusko, adding that they had to face serious challenges in the middle of their term of office. “During our modern history, Bosnia and Herzegovina did not have a transport strategy. On the third day of my term of office I was told that we had a 48-day deadline to adopt a transport strategy if we were aiming to become involved in transport develop-

Zdenko Lucić

EACH BRAND NEEDS TO BE FOCUSED AND WORKED ON AS IT CANNOT DEVELOP ON ITS OWN, BELIEVES LUCIĆ

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TOPIC OF THE WEEK ZAGREB BRAND FORUM 2018

ment. They say that “if you are not at the table, you are on the menu”. Thus, we are planning to focus on infrastructure in the forthcoming years and I believe that the results will also be felt by businesses”, concluded Jusko.

Olivera Majić, Deputy Mayor of Zagreb, emphasised that knowledge and experience multiply through sharing, which has been clearly shown by all who have done that. “We need to position ourselves within the European area and towards the cities of the region. This forum can be a venue in which we exchange knowledge and experiences. Zagreb is a safe city located in a turbulent Europe and that is an immense potential that many require. Nevertheless, any potential requires solid management. The city needs to be lived in order to be under-

EACH REGION NEEDS TO EMPHASISE ITS ADDED VALUE, POINTED OUT POSAVEC stood by those visiting it, as well as by its citizens”, stated Olivera Majić.

Edin Jabandžić, President of the Association of Employers of Tešanj-Jelah 8 | PVinternational | May 2018 | No 280

Business Centre and CEO of MADI, a poultry producer, emphasised that Tešanj has become a brand in Bosnia and Herzegovina, irrespective of the environment. “The state provides assistance but presents obstacles. It is clear that we have the most modern slaughterhouse in the region, yet we still cannot transport our goods to nearby Slavonski Brod and export poultry, as we are on the EU blacklist, due to lack of legislation. We waited five years for the Commission to visit Bosnia and Herzegovina and enact the control. In addition, we have been waiting for a year now for ratification between Bosnia and Herzegovina and the EU. Such issues present huge obstacles to doing business”, explained Jabandžić. <mn> Branding of regions and cities provides benefits for all Tešanj is a small town located in north-eastern Bosnia. It has 46,000 inhabitants and has created 13,000 jobs, which is an increase of 4,000 compared with the 1990’s. “Every 17th exporters truck from Bosnia and Herzegovina is from that town. We have positive migration and population growth. I believe that the current situation in Bosnia and Herzegovina can be changed only through the economy. We have changed many governments, yet little has been achieved. Business people need to be the main “pushers” of growth and development in our country. When one has been provided with safety and a job, no one pays attention, for example, to one’s religion, as they keep focusing on their va-

cations, as well as on new construction projects and types of investment”, concluded Jabandžić.

Matija Posavec, Međimurje County Prefect, added that Croatia is a small country from the European perspective, yet it is highly diversified and thus a rich one. “This is the principal reason why it is impossible to provide a unified pattern of promotion and branding on a national level, as each region needs to highlight its

SAFETY IN A COUNTRY IS A BASIC PREREQUISITE FOR INVESTMENT, STRESSED JUSKO own added value. We have been acting in accordance with this principle for years and exploiting our competitive advantages. We need to focus on a productionoriented economy, education modified and based on requirements, natural facilities and closeness with neighbouring countries, as well as culture and history, in order to achieve previously mentioned goals, and people are the focal point. We have not completed our work, yet I believe we will manage to. Branding of cities and regions will provide benefits for all of us”, highlighted Posavec.

ZAGREB

BRAND FORUM BRANDING THROUGH FRANCHISING: MICHAEL EYRE

2018

FROM FRANCHISE TO SUCCESSFUL BRAND Franchises contribute to the building of a powerful brand through consistency, high quality services and quality products. I believe the best example of a franchise is McDonald’s, stated Eyre AMPLE POTENTIAL IN CROATIAN FRANCHISING The franchising scene in Croatia has not been thriving in the same way as in other European countries. Nevertheless, Mr. Eyre has identified its huge potential. “I am delighted that an increasing number of entrepreneurs in Croatia are becoming aware of all the advantages of franchises”, he added. The Croatian franchising scene comprises 200 franchises and 17,000 people employed, which is incomparable with the figures at a European level.

Mr. Eyre believes that a successful brand can more easily be built through a franchise. “This is the best business model through which one can build a successful brand within the shortest period possible”, he noted. He subsequently

M

ichael Eyre, Chairman of the European Franchise Federation addressed the issue of branding through franchising. He is the President of the Federation of National Franchise Associations of Europe whose members represent an industry with over 8,000 franchise brands, supporting over 250,000 franchisors throughout Europe.

“Brand building generates awareness of that specific brand”, he emphasised, adding that brand building is crucial for any company. According to him, there are three different types of branding. These are product branding, service branding or retail branding, which is the combination of the first two. “Examples of good product branding include Nike or Rolex, McDonald’s is a perfect example of service branding, whereas retail branding can be identified in all the large shopping centres throughout the world”, he noted.

Franchises contribute to the building of a powerful brand through consistency, high quality services and quality products. “I believe the best example of a franchise is McDonald’s. McDonald’s restaurants throughout the world provide identical services. You know exactly what you can expect and they always provide it. One does not see such consistency every day”, said Mr. Eyre.

In order to provide a deeper insight into the role of franchises in Europe, he pointed out some interesting information. “It is important to highlight that 14,000 franchise brands currently operate in Europe, as well as 7,000 singleunit franchises. Around 14 million people are employed in the European franchise business, generating €350 billion. This exceeds all the franchising activities in the US, Canada, Australia, Brazil and India combined “, he emphasised.

14,000 FRANCHISE BRANDS AND 7,000 SINGLE-UNIT FRANCHISES IN EUROPE explained why this is the case. Firstly, he mentioned investment capital, which is difficult to raise without a franchise. In a franchised business the capital is provided by the franchisor. Secondly, accelerated franchise expansion, where the franchisor also plays a crucial role and provides assistance. Thirdly, one needs to provide high quality premises. Moreover, franchisors provide assistance in marketing and the franchisee only needs to focus on the built brand.

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TOPIC OF THE WEEK ZAGREB BRAND FORUM 2018

3RD BRAND SESSION: GLOBAL VERSUS LOCAL BRANDS – OLD VERSUS NEW

BRANDS CANNOT BE REDEFINED Everything can be branded, and big changes contribute by the transforming digital society, but it is difficult to maintain customer attention piše Ilijana Grgić

A Leon Korošec

EVERYTHING FROM BEFORE SHOULD BE BUILT WITH THE CONSUMER OF TOMORROW IN MIND, KOROŠEC SAYS

good brand brings larger market share, it makes you different from the competition, it creates customer loyalty at a local and then global level, and it serves you as the basis for further development of products and services. This is not new, but the real question is how it can be achieved. This was the focus of the 3rd Brand session, Global versus Local Brands – old versus new, at the Zagreb Brand Forum 2018.

Everything can be branded, and big changes contribute by the transforming digital society, but it is difficult to maintain customer attention. It is important to recognise current changes brought about by digitalisation and social networks. You have to be very careful and know how to become a market leader from a poor position. It is important to work constantly on the brand value, said partner at Valicon and CEO of Adria regija, Kristijan Gregorić. He also said that modern customers look for personalised emotions before giving their trust to a brand.

The Telecommunication market in Bosnia and Herzegovina is very dynamic. BH Telecom is the leading operator with the largest market share in the field of providing telecommunication services (fixed, mobile or internet). We have to offer our users innovative services if

we want our brand to keep its position. There are two other operators on the market, but we know this market is very interesting to big players and they have already started to manoeuvre around BH Telecom, said General Manager of BH Telecom Mirsad Zaimović.

YOUR BRAND IS WHAT YOU ARE A brand is a promise you give your clients. It tells them what they can expect from products and services, and it distinguishes you from the competition. Your brand is what you are; what you want to be and what you want people to think of you. There are 75 years of tradition behind us. A brand is a living organism you can reposition, but you cannot redefine. Everything from before should be built with the consumer of tomorrow in mind, said Board Member of Elan, Winter Division Manager, Leon Korošec.

Executive Manager of Zagreb Fair, Dina Tomšić, set a task for herself and her team: to become once more a national and international centre of business and communication excellence and innovation. We are product of our Fairs’ tradition; we had good and bad days.

It was not easy to bring a dying business back to life since it is easier to build a new brand than to repair an old one. The hardest thing is, actually, to regain lost trust, Dina Tomšić said.

Curry Bowl Sri Lanka The Seneratne brothers shared their professional story Curry Bowl Sri Lanka at the Zagreb Brand Forum 2018. This is a restaurant in the centre of Zagreb that serves food from this exotic island. It was important for us to offer something new. We do not want to serve food only;

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we want our customers to get a feel of Sri Lanka – it is all about the experience, they noted. As well as the restaurant’s recognisable colours, the atmosphere itself it what gives you an authentic experience.

Brian Senaratne

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Branding creates a strong and long-lasting product and service identity; it personifies the company’s identity. Miroslav Kovač, co-owner and Managing Director of Mljekara BiZ Dairy, sees brand development as a solution to his

problems. We are now in the survival phase since we took over the dairy and all its problems. Our brands are our emotions, and this is the solution to our problem. The brand of Mljekara BiZ is created by courageous people, and I must admit this is the only way for us, Kovač stressed.

ONE HAS TO HAVE COURAGE

Mirsad Zaimović

WE HAVE TO OFFER OUR USERS INNOVATIVE SERVICES IF WE WANT OUR BRAND TO MAINTAIN ITS POSITION, ZAIMOVIĆ SAYS

Present customers are overloaded by various offers and products, so brands use visual identity and simplicity to get through to the customers, reminding them about the emotions these same products have created. Owner of SentiMental Bikes, Duško Ilijević, says he builds his brand from feelings, building handmade vintage bikes. I work in a kindergarten in the morning and in the afternoon I am in my workshop. My honesty finds its way to my patient clients. We should teach people, especially the young, not to be afraid. My experience proves that if you want to achieve something, you have to be brave and try it. If you don’t try, you will not achieve, Ilijević suggests.

President of the Croatian Association for Franchising, Ljiljana Kukec, says franchising drives local brands to a global level, but the concept is still not enough developed in Croatia, since there are only 12% of local franchise brands here.

Dina Tomšić

IT IS EASIER TO BUILD A NEW BRAND THAN TO REPAIR AN OLD ONE, AND THE HARDEST THING IS, ACTUALLY, TO REGAIN LOST TRUST, DINA TOMŠIĆ HIGHLIGHTS

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TOPIC OF THE WEEK ZAGREB BRAND FORUM 2018

4TH BRAND SESSION: PERSONAL BRAND – MYTH OR REALITY

NO-ONE THINKS OF THEMSELVES AS A BRAND The point is to be instinctive and rational and to do what you want and feel, and perhaps then you can become a brand, Mihočević says.

Varagić on the other hand says a brand equates to quality, long-life and authenticity by Jozo Knez

PERSONAL BRANDING IS VERY IMPORTANT IN COOKING, BUT DOES NOT APPEAR OVERNIGHT, SANJIN SAYS

H

ow to become a brand? Who among us is a personal brand? The answers were sought by the panellists of the last round table at the Zagreb Brand Forum moderated by journalist and PR expert, Drenislav Žekić.

The first to answer was the owner of Hotel Antunović HR, B&H Tomislav Antunović: “I have been building my brand for 50 years.

Today I have over 1,000 employees and have a turnover of €800. We have never had one of our company accounts frozen nor have we ever been late with payments. If that’s not a brand, I don’t know what is”. As well as being an hotel owner, Antunović deals in the oil business through his petrol stations. Four of his hotels generate just 10% of the revenue and

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90% comes from the oil business. Antunović also thinks a brand should be maintained in order to survive.

FAILURE GIVES STRENGTH From a city which is a brand in its self – Dubrovnik – came Mišo Petar Mihočević, the event organiser. “The point is to be instinctive and rational and to do what you want and feel, and perhaps then you can become a brand”.

Mihočević also stresses two things are required for a brand to survive and be sustainable: quality and credibility. He asked owner of IN Q and innovator, Ana Peruničić, whether she lives the healthy life she promotes. She responded: “Absolutely!” Ana Peruničić started in hospitality, but soon moved to a completely

ZAGREB

BRAND FORUM

2018

Ana Peruničić, Mišo Petar Mihočević

Moamer Kasumović

Braco Sanjin

Rajko Dujmić

Dragan Varagić

Tomislav Antunović

new direction – innovation. She patented the Q-bath which uses established scientific discoveries in medical treatment using frequencies, enabling the body to regenerate itself, rejuvenate and re-establish its balance. “I believe I live the healthy life I promote so that I could be authentic. Concerning the brand itself, I

I BELIEVE I LIVE THE HEALTHY LIFE I PROMOTE SO THAT I COULD BE AUTHENTIC, ANA PERUNIČIĆ SAYS

it throughout your entire life. In 30 years of my career I opened eight restaurants. I have been in Kadena for nine years now, but I am leaving soon”, Sanjin says. He commented on the chefs who try to brand themselves through the media calling them media chefs. “Their problem is they spend too much time in front of cameras which makes them forget about the kitchen. I think it is not good to compare a cook solely with the TV show in which he participates”, Sanjin opines.

A local composer, Rajko Dujmić, says “brand is another name for truth. I am not a brand. My songs are. I am just a man. I believe my songs last since they relate to my life”, Dujmić observed.

COMEDY IS THE MOST DIFFICULT GENRE think we all are brands that we need to constantly work on to become the best version of ourselves. You have to feel that what you are doing is good and positive which others should be able to recognise. Failure does not set me back, it makes me stronger”, suggests Ana Peruničić.

One of the panellists and a top chef with 30 years of experience in, as he says, one of the most difficult professions there is, Braco Sanjin, is one of the founders of the Association of Chefs of the Mediterranean and European regions, and a teacher at the Cooking Academy.

He compares cooking with mining, except that mining is more difficult, but cooking is more stressful. Sanjin believes a personal brand is very important in his business, but it does not happen over night. “You have to work on

Actor Moamer Kasumović suggests that many people believe it is easy to work as a comedian, but comedy is the most difficult genre to develop. “Acting is rather like sport. You have to train to stay in shape. No one believed in me at the beginning of my career. Hard work and desire brought me to where I am now. Many compare me with the character I play. I did not like it in the beginning, but then I let it go, and it all became better”, Kasumović says. Blogger Dragan Varagić talked about ‘selfies’ and how they are called svojke in Serbia.” I believe we live in times when people unjustifiably think of themselves as a brand. Just look at the people who take multiple ‘selfies’ a day and then post them online. They all think they are ‘something and someone’, but this is not true. A brand equates to quality, long-life and authenticity”, Varagić concludes.

I HAVE BEEN BUILDING MY BRAND FOR 50 YEARS. TODAY I HAVE OVER 1,000 EMPLOYEES AND TURNOVER €800 MILLION, ANTUNOVIĆ HIGHLIGHTS.

I AM NOT A BRAND. MY SONGS ARE. I AM JUST A MAN, DUJMIĆ SAYS

May 2018 | No 280 | PVinternational | 13

CURRENT ISSUES CROATIAN CHAMBER OF ECONOMY OPENS OFFICES IN SARAJEVO AND MOSTAR

DOORS OPEN TO ALL ENTREPRENEURS Business internationalisation is crucial for entrepreneurial development, which is why CCE aims at simplifying this process to the maximum, CCE President Luka Burilović highlighted

E

conomic development is a precondition for all progress, and that is why co-operation between Croatia and Bosnia and Herzegovina should not have an alternative. Quality economic co-operation is the focus for future work of the CCE Office in Sarajevo and key to improving all our relations, CCE President Luka Burilović highlighted during the opening ceremony of the CCE office in Sarajevo in conjunction with the Croatian Embassy in B&H, stressing that companies need institutional field support.

COMPLETE SERVICE FOR ENTREPRENEURS Of all the policies, I am only interested in the economic one, and that is why the doors of the Croatian economy are open to all entrepreneurs from Bosnia and Herzegovina through the CCE Office.

Entrepreneurial development raises the quality of life, and in a prospering environment people are open to the future, leaving problems behind them. We will stimulate our economies to compete together in third markets, since joint prosperity of our two countries is in our mutual interests, Burilović concluded.

The CCE Office will help existing companies operating in the B&H market in overcoming obstacles and will motivate new companies to export there. With the goal of cost/impact optimisation, future offices will be organised in conjunction with foreign chambers or Croatian diplomatic consulate representative offices, for the purpose of which CCE signed an agreement on co-operation with the Ministry of Foreign and European Affairs.

14 | PVinternational | May 2018 | No 280

Demand for the services of economic diplomacy is growing, so we aimed to unite those institutions working in this area. We decided to open joint representation office in strategic markets to manage resources more efficiently and to offer full services to entrepreneurs, Marija Pejčinović Burić, Government Vice-President highlighted. She also noted that relations between Croatia and B&H have to improve and the economy has to act as a generator of their development, which is why the CCE Office in Sarajevo is important for the prosperity of both countries.

The opened CCE Office should help overcome obstacles, open new commu-

nication channels for entrepreneurs and simplify trading. Bosnia and Herzegovina needs these types of initiatives on its way to becoming an EU member, said Vjekoslav Bevanda, Chairman of the Council of Ministers and Minister of Finance and Treasure of Bosnia and Herzegovina.

Business internationalisation is crucial for entrepreneurial development, which is why CCE aims at simplifying this process to the maximum. This is the reason we opened the Sarajevo Office a few days ago. We are now in Mostar and we want to send a clear message – our doors are open to all those who want economic development since it is the foundation of all other relations, from social to political,

and this will be the focus of our activities, Plenković said.

OPEN SPACE FOR INVESTMENT

said Burilović at the opening ceremony of the CCE Office in Mostar.

Croatian Prime Minister, Andrej Plenković said this CCE Office is the right way for strengthening trade relations between Croatia and B&H. As a government, we sent a clear message that B&H

is a state priority. I am sure these two CCE offices will serve as communication and services points for all those wanting to intensify economic co-operation. The Government will support the CCE in its aim and it will support B&H on its way to the EU. Croatia is B&H’s friend and ally,

Member of the Presidency of B&H, Dragan Čović, said the opening of the two offices is the best way of contributing to a more significant trading partnership. All of you here, the most reputable names in Croatia and B&H, together with us who should make your work easier, should make the distance of 1,000 kilometres feel as small as possible. Čović also added they want to create a completely different ambience for investing in B&H, but this will not be possible without friends from Croatia. Furthermore, on behalf of the Chamber Burilović gave Čović special recognition for his special contribution to economic development.

The opening of the two offices is an extremely important event and for us as an Embassy it simplifies our activities in economic diplomacy. Croatian companies invest here, and we have created space for companies in B&H to invest in Croatia, said Croatian Ambassador in B&H Ivan Del Vechio.

CCE OFFICE IN BELGRADE AFTER FIVE YEARS

Burilović: Capital is a shy beast Capital is a shy beast, repeated CCE President Burilović in each of his statements on 18 April in Belgrade where the CCE Office reopened after five years. Croatian and Serbian relations are complex but unbreakable. It is the politicians’ responsibility to remove the burden of the past, and the chambers are here help the economy on its way to a brighter future. The numbers also prove how much we correlate. Du-

ring the past 15 years Croatia has invested €750 million in Serbia, and Serbia is the 8th most important trading partner. In Croatia there are over 220 companies. This is why we reopened the office in Belgrade, to act as a support and represent our economic interest, Burilović said.

Croatian companies invested €800 million in Serbia and employ 14,000 people, and this is not even the start of its full eco-

nomic potential. This office guarantees every-day communication between Croatian and Serbian entrepreneurs. Our two chambers are good partners and friends, and it is precisely this kind of a relationship we wish to develop across the whole region, said President of the Chamber of Economy of Serbia, Marko Čadež. He also said that the Serbian Chamber will open an office in Croatia by the end of the year.

May 2018 | No 280 | PVinternational | 15

INTERVIEW

MARIO PETROVIĆ, CEO, MILLENIUM PROMOCIJA

THOSE WHO DO NOT CHANGE WILL PERISH In ten years from now, I believe PR agencies will bear no resemblance to those of today, just as the present ones are different to those 15 years ago.

This is mainly due to digital media and social networks

by Ilijana Grgić

The media and targeted public are the most sensitive area, and PR focuses mainly on them. You have to be honest, transparent, professional, punctual and precise. You need to know how the media work and you have to understand the public’s expectations.

Only when you look at the things from the right perspective, you are able to say you are ready to work in PR.

F

or the eleventh time, the Croatian Association for Public Relations held awards for top achievements in public relations. The Grand Prix was awarded over 13 categories and special awards for overall achievements in public relations as well as special contributions to the development of the profession was given to Mario Petrović, CEO, Millenium promocija, President of the Governing Council and majority owner of Edward Bernays University College for Communication and Tourism Management.

He was in charge of many communication projects in Bosnia and Herzegovina as well as Croatia relating to the economy and politics, and he is the ideal person to speak on subjects related to lobbying, crisis communication and strategic counselling.

You are one of the oldest experts in public relations in the Croatian market and cofounder of Millenium promocija, one of the leading Croatian PR agencies. What is your assessment of the past and present state of the profession?

- The profession has made great progress from its humble beginnings during the 1990’s, when the first agencies started to appear, together with Millenium promocija. Concerning an overview of the profession’s development, in the early years, agencies provided quite basic services for clients, clipping being one of them. However, they developed quite rapidly and the profession’s golden era started in 2004 and lasted until the crisis, which hit in 2008. The market reached its nadir in 2012,

16 | PVinternational | May 2018 | No 280

and the recovery has been on-going since then. However, we have still not reached the pre-2008 level, and it is a question whether we ever will.

What would today’s Mario say to Mario at the beginning of his career?

- I would say not to worry, and that everything will be fine, since problems become smaller with experience or at least solvable.

As a society, are we mature enough to distinguish a job done professionally from the person who did it?

PR EXPERTS ARE TREATED AS PROFESSIONALS WORKING FOR THE CLIENT’S BEST INTEREST. END OF STORY - In a political context, we have made great progress as a society, and a person who developed a campaign for a political party is no longer labelled as its member or sympathiser.

PR experts are now treated as professionals working for the client’s best interest, end of story. I hope we as an agency made some contribution to these changes.

May 2018 | No 280 | PVinternational | 17

INTERVIEW the public’s expectations. Only when you look at the things from the right perspective, are you able to say you are ready to work in PR. And this is only a small segment, you can learn the rest in our agency or at Bernays.

Millennium works in three markets – Croatia, B&H and Serbia. In what why are these markets specific?

- We have been working in Serbia since 2010 and in Bosnia and Herzegovina since 2002.

However, we also cover other neighbouring or near markets (Slovenia, Macedonia and Austria).

Markets in the region are different. The Croatian market is the most important one for us, and it is the most similar to the Slovenian which reached west European standards before Croatia. In the beginning, our progress was slow due to the war, but reached the same level just before the crisis of 2008. We caught up in terms of working methods, knowledge and budget. We own a company in Serbia and we often work there with our partners since this market is quite specific with a large number of media, which is not the case in Croatia. I would say that partnership with local PR agencies is a must in most cases owing to local habits and specific features that only local agencies know the best. This was probably one of the reasons why foreign marketing agencies have never managed to make serious progress in foreign countries. This scenario is best visible in Croatia.

OPERATIONAL PR CAN FALL INTO MANY DANGEROUS TRAPS. ONE OF THE BIGGEST IS WHEN YOU TAKE THE PUBLIC AND MEDIA FOR GRANTED

We should discuss why compensations for PR service are that low in Croatia and why PR is considered an unnecessary expense or good for budget cuts.

What are the biggest traps of this profession on the Croatian market?

- Well, it is possible you buy a PR product for a low or dumping price from incompetent people or an inexperienced agency. This can ruin you.

From the client’s perspective, this would be one of the problems on the communication market.

The other one is that you want to obtain ‘all for nothing’ which does not exist in PR or marketing. The better the service, the higher the price.

Just as in any other business. Operational PR can fall into many traps. One of the biggest is when you take the public and media for granted. The media and targeted public are the most sensitive area, and PR focuses mainly on them.

You have to be honest, transparent, professional, punctual and precise. You need to know how the media work and you have to understand

18 | PVinternational | May 2018 | No 280

How did the Agrokor situation influence the market? What can we learn from this case?

- The case of Agrokor posed an important issue: the price of hiring top PR experts in crisis situations. When the big fuss was made about the high level of compensation paid to consultants hired by Agrokor’s former commissioner, Ante Ramljak, the PR agency was also called out. I said it then, and I will repeat it, this compensation was not high for quality PR services and the considerable resources the agency offered its client 24/7. Moreover, we should discuss why compensation for PR service are so low in Croatia, and why PR is considered an unnecessary expense or being great for budget cuts. A typical example of this kind of lack of understanding is when Prime Minister Milanović forbade state institutions to work with PR agencies. Luckily, this ban has been removed.

We often encounter a crucial problem in Croatia – education. What guarantees a good job in public communications in general?

- Business never offers guarantees, but if you are well prepared, success is possible. Actu-

ally, the lack of educated PR experts was the reason we established our college 12 or 13 years ago. The idea became a reality and this year Edward Bernays University College for Communication and Tourist Management will honour the first generation which completed all five years of studies. Almost 25% of our students found work during their studies due to apprenticeships in over 80 of our partner institutions.

Please do not think that Bernays is the college of Millenium promocija – our partners are almost all relevant agencies for market communication and media in Croatia. Bernays’ doors are open to MPR’s competitors and many of them actually teach at our college. The original idea was for it to be a school for the entire profession, not merely MPR. How do you see present communication between companies/entrepreneurs and the public?

- Awareness of the importance of developing good public relations has risen in Croatian companies, and it is at a high level today.

Some may not even be aware they relate to the public, but even when the smallest company opens a Facebook account, it is doing precisely that. This opens up a big space for PR agencies and there are companies on the market who need solutions from agencies of various sizes and expertise. I am convinced there is room on the market for all of them.

This fact has become visible ever since PR agencies started to deal with work usually done by digital agencies. I mainly mean social networks, but also other segments of digital marketing and PR. In ten years from now I believe PR agencies will bear no resemblance to today’s, just as the present ones are different to those 15 years ago. This is mainly due to digital media and social networks In your opinion, how will public relations stand in 20 years? Will they be independent or integrated?

- The trend, already present in the Croatian market, will continue. Successful agencies creating over millions of Euros in annual turnover have integrated their services and now offer a full range of services, from public relations to digital platforms and events and lobbying. Those limited to public relations exclusively will find their place under the sun, but it will not be easy for them.

This is all what I can say from today’s perspective since it is ungrateful to predict what will change in the digital transformation in progress, which type of media will exist, what kind of services will be in demand and

which techniques will be partially or fully automated. With these fast changes we cannot predict what will happen in 20 months, let alone 20 years, but as I said, PR agencies are transforming. Social digitalisation is inevitable and leads to digitalisation of the PR agencies.

Those that do not change will perish. This is the only certainty – only change is consistent.

You are also active in tourism since you are in the supervisory board of a company on Lošinj, so this sector can give you an insight to the market situation.

- I have been on the supervisory board of the Jadranka Group for four years. Before that, Millenium promocija successfully took over this company in the sense of communications.

The problems within tourism are similar to the problems in other economic branches, but maybe the importance of this sector highlights these problems even more. In addition to the unnecessary administrative obstacles and excessive deductions, Croatian tourism suffers from a chronic and expressed lack of professional staff.

For the second consecutive season, tourist companies face problems filling their staff capacities and this problem will have to be solved in co-operation with the state. Here I mainly mean changes in the education of tourism staff and apprenticeships during their education. It is even more important that young people understand that tourism is not just a one-season job – it is an opportunity for a life-time career.

You have already won an award for lifetime achievement. Does that worry you?

Do you wonder about your future challenges? What else do you want to achieve?

- The Grand Prix for contributions to the PR profession in Croatia is certainly my most valued award, mainly because it was given by the profession.

Even though I have been in this work for a long time, I believe the time ahead of us allows us great creativity which is important in PR and communications. I like challenges and I set my own every day. I often venture into new business opportunities which relate to what I have been doing for the past 19 years. I believe this is how it is going to stay for many years.

Successful agencies creating over millions of Euros in annual turnover have integrated their services and now offer full range of services, from public relations to digital platforms and events and lobbying.

Those limited to public relations exclusively will find their place under the sun, but it will not be easy for them.

BUSINESS NEVER OFFERS GUARANTEES, BUT IF YOU ARE WELL PREPARED, SUCCESS IS POSSIBLE May 2018 | No 280 | PVinternational | 19

CURRENT ISSUES

21ST LET’S BUY CROATIAN, VUKOVAR

BURILOVIĆ: PRESERV STRENGTHEN ECONO The latest CCE research showed that 78% of Croatians have Croatian products in mind when shopping, and that 86% are ready to pay more for a good local product by Svetozar Sarkanjac

T OVER 80 LOCAL PRODUCERS PRESENTED IN VUKOVAR

he 21st Let’s Buy Croatian campaign started in Vukovar. It is organised by the Croatian Chamber of Economy and encompasses a large number of local producers.

Let’s Buy Croatian celebrates its 21st anniversary, and I am delighted that many of you are younger than this event. The future of our country is everyone’s responsibility, and we count on the awareness of young people who must be included in economic processes from childhood. I am also pleased that so many of our valuable producers are here, since they, as well as buyers, are crucial for preserving jobs and for progress of the Croatian economy, CCE President Luka Burilović highlighted.

HELPING LOCAL ECONOMY The campaign has made great progress in raising the awareness of how important it is to buy local products. The latest CCE research showed that 78% of Croatians have Croatian

products in mind when shopping, and that 86% are ready to pay more for a good local product. After Vukovar, the campaign will transfer to Rijeka, Zagreb and Bjelovar, and a special project Let’s Buy Croatian – Croatian products for Croatian tourism will take place in Zagreb at the end of the year.

Over 80 local producers were presented in Vukovar, and the goal of the campaign, as was stated, is not to discriminate foreign producers, but to promote quality local products.

Our goal is to promote local products, preserve jobs as well as our producers and to create new jobs, and strengthen the entire economy – which is CCE’s ultimate mission, said Burilović to Privredni vjesnik.

On behalf of the host – the city of Vukovar – which celebrated its city day exactly on the date of the opening of the campaign, the Mayor, Ivan Penava said “In line with the Let’s Buy Croatian campaign and on behalf of Vukovar, I want to say that it is our duty to rely on per-

Croatia in Vukovar The first festival of intangible heritage, tourist events, attractions and destinations SVI ZAJEDNO HRVATSKO NAJ, work of Aleksandar Kovačević was held between 3 and 6 May in Vukovar. Vukovar recognised this initiative, and it is our wish to brand the city in a positive light so that good things start happening. This is the first festival of intangible heritage, tourist events, attractions and destinations where over 30 events from across Croatia will be presented. It is a representative showroom of a known Croatian campaign and tourist events in one

20 | PVinternational | May 2018 | No 280

place – in Vukovar, said the Festival’s executive producer, Silvije Šimac, to Privredni vjesnik. In four days, local people and visitors to Vukovar were able to see and enjoy various Croatian events related to customs, food and other topics. It was arranged that this festival would be held continuously for the next five years, and to work systematically on making positive changes for Vukovar on Croatia’s tourist map, and Šimac says, adding that he hopes that during this period Vukovar will raise to the level of a top destination in continental tourism in Croatia.

VE JOBS AND OMY

IT IS OUR DUTY TO RELY ON OUR PERSONAL RESOURCES AND KNOWLEDGE AND USE THEM FOR THE BENEFIT OF THE LOCALITY, PENAVA HIGHLIGHTED sonal resources and knowledge and use them for the benefit of the locality. This campaign helps the local economy even though it is implemented at state level.

Economic issues are the foundation for all future changes. We have to know our potential and use it to the fullest since this is the only way to succeed”, Penava concluded.

LARGE AND SMALL RECOGNISE THE CAMPAIGN In addition to many established names of the Croatian economy, there were many presenters new to the Croatian market. One was the

Valens craft brewery from Vinkovci. “We participated in this campaign in Vinkovci and it was excellent.

Many visitors showed interested in our beer and this is excellent promotion for us. It is nice to see Croatian producers gathered in one place. Our beer is good and it is local, and fits perfectly into the story”, noted Matija Majhen from Valens.

Zdenka Šalić shares the same opinion.

She is the owner of a new Osijek company, Pannonian Grain, which specialises in cold pressed oil. “We are a n company and we know that only a high-quality product can secure a good market position. Based on present indicators, we are on the right track. Our work has been recognised by the CCE and this is why we presented ourselves at this campaign. Promotions of this type are used even by older companies, so we see it as most beneficial.

Visitors were presented with all 13 Croatian intangible goods registered on the UNESCO list of protected intangible heritage.

Students from high schools and elementary schools were given awards for their work on the importance of buying Croatian products.

May 2018 | No 280 | PVinternational | 21

PV ANALYSIS

22 | PVinternational | May 2018 | No 280

CROATIAN HOUSING MARKET

SELLERS DICTATING TERMS The demand for quality housing in attractive locations exceeds supply in Zagreb. Buyers are mainly interested in housing located within the periphery of the tramway zone. According to data for March provided by Crozilla.com, apartments in coastal cities, particularly those located in Dubrovnik, Opatija and Split, have sold at higher prices by Ilijana Grgić

F

ollowing the crisis and a fall in house prices, it appears that the housing market is about to undergo positive trends - its recovery is certainly a current issue. This is primarily due to several factors, most importantly tax stability and economic recovery, as well as a decrease in stress situations resulting in market paralysis, which was the case with announcements of a property tax and the subsequent abandonment of the idea.

AN ATTRACTIVE LOCATION AND NEWBUILD HOUSING STILL RANK AT THE TOP OF IN-DEMAND LISTS An attractive location and new-build housing still ranks at the top of in-demand lists, whilst those able to meet these requirements can sit back happily. According to the latest analysis published by Fina in 2016, Croatia saw 4,938 businesses involved in the property market, employing 14,366 staff, and generated a total revenue of around €1.43 billion. It is important to note that 2,067 businesses operated profitably, and 2,871 operated negatively.

The analysis of financial results over a fiveyear term, from 2012 to 2016, showed that businesses operating in property showed negative results. The highest nett loss was seen in 2014, at almost €0.24 billion, whilst the lowest nett loss was seen in 2016, at €37.8 million, some 52.1% down compared with 2015, and 518.8% down over 2014. It is important

to stress that total revenue generated in 2016 increased by 12.9% compared with the previous year. Average nett monthly salaries of those employed by the previously mentioned businesses stood at €821 2.2% up in relation to those for 2015. Notwithstanding the reported negative financial results, salaries of those operating in the property sector were almost 20% higher than nett monthly salaries paid by businesses involved in other activities in Croatia (€685). This primarily refers to average nett monthly salaries of those employed by large businesses. Market stabilisation began last year, and positive trends have continued. According to data released by the agencies, the property market has been growing, based on all relevant indicators, which is primarily evident in Zagreb and along the Adriatic coast.

4,938 businesses operated in the property sector in 2016

around € billion

14.27

total revenue generated in 2016

HIGHEST DEMAND IN ZAGREB Zagreb has the largest housing stock. It is both the largest housing market in Croatia and, in general, house prices exceed those in other cities in continental Croatia. According to the Team Leader and Manager in Opereta Agency, Jelena Kravoščanec Todorović, this is not a surprise when considering the vast housing demand in the capital.

“Apartments in Zagreb are highly in-demand. In addition to a demand for homes intended for either permanent or temporary stay, a large proportion of housing is purchased as investment for long- or short-term rental. Compared with interest rates paid by banks, a rental apartment yields a considerably higher return on investment, particularly in cases where they are rented on a daily basis”, stressed Jelena Kravoščanec Todorović, adding that the increase in the number of tourists visiting Zagreb has significant effects on

4,301

€

residential square meter price of apartments in Dubrovnik in March

1,480

€

residential square meter price of apartments in Zagreb currently

May 2018 | No 280 | PVinternational | 23

PV ANALYSIS

I am acquainted with people who have resorted to large loans in order to purchase or renovate villas that may be used for vacation rental.

Nevertheless, due to hyperproduction, and should current trends continue, I believe that trends are about to be reversed and owners will yet again start looking for tenants.

Jasminka Biliškov, VicePresident of the Real Estate Association at the CCE and owner of Biliškov Nekretnine agency

the housing market. Tourist turnover in Zagreb shows an average rise in annual rates of 12%, whilst apartments intended for daily or weekly rental are increasingly in-demand.

“Consequently, both in the Lower and Upper Town of Zagreb there are virtually no available apartments intended for long-term rental - or the supply is very weak, albeit at substantially higher rates compared with those seen over the last few years. The city centre is certainly the most attractive, yet short term rentals are available in other city districts, which is one of the causes of the currently higher rates for long-term rental”, she explained, emphasising that the average apartment rental rate has seen a 10% rise over 2016.

According to the Opereta Agency, the current changes on the market are primarily due to the fact that a buyers’ market has transformed itself into a sellers’ market and sellers are dictating the terms. In Zagreb, the demand for quality housing in attractive locations far exceeds supply. In addition, buyers are especially interested in housing located within the periphery of the tramway zone and the least in-demand districts are those lacking the requisite infrastructure required for family life.

According to statistics, the western part of the city has seen the smallest change in house prices (2.9%), as opposed to the new part of the city, New Zagreb, where the prices rose by around 6% compared with 2016. On the other hand, the eastern part of the city saw a 4% increase in prices on an annualised level.

The average residential square meter price in Zagreb is currently €1,480 for those interested in buying an apartment. For those requiring a family house, it is important to point out that square meter prices have not seen a significant increase. On the contrary, square meter prices of family homes are on average 20% lower compared with that of apartments. “Smaller family homes of modern design are the most

in-demand in the Zagreb area, yet their supply is the lowest. The supply includes traditional multi-storey family homes such as those that were once built many years ago; for these, interest on the market is currently low. Irrespective of low demand for family homes, sellers still have high expectations, which eventually results in incomparably lower sales in relation to apartments”, explained Jelena Kravoščanec Todorović, who expects to see additional of new- build residential property this year compared with previous years.

“Investors invariably opt for locations within the tramway zone or in landscaped

ACCORDING TO DATA FROM AGENCIES INVOLVED, THE PROPERTY MARKET HAS BEEN GROWING, BASED ON ALL RELEVANT INDICATORS districts with all the necessary infrastructure.

They are aware that obtaining the required documentation as well as quality construction are imperative for market competitiveness, which, unfortunately, has often not been the case during previous years”, pointed out Jelena Kravoščanec Todorović.

SPLIT KEEPING UP WITH ZAGREB TRENDS According to data from Crozilla.com for March, the same cities always rank high. The highest residential square meter prices for apartments are still seen in Adriatic coast cit-

Top 5 businesses generating the highest profit for the period, and the top 5 businesses that have shown the highest loss for the period in 2016 in the property sector (amounts expressed in HRK’000) Name of business entity Alpe-Adria Poslovodstvo d.o.o.

Profit for the period 241,760

Name of business entity MEJAŠI PRVI d.o.o.

Loss for the period 116,072

ZAGREBAČKI HOLDING d.o.o.

65,443

MARLERA GOLF LD d.o.o.

99,193

NIKMARK d.o.o.

42,646

ANDRE´d.o.o.

64,742

IVAMIL d.o.o.

36,595

UNITED EUROPE ULAGANJA d.o.o.

52,641

INPROX ZAGREB d.o.o.

33,652

MINACO d.o.o.

40,924

Total profit - top 5 entrepreneurs All entrepreneurs in sector Source: Fina

24 | PVinternational | May 2018 | No 280

420,096 1,169,287

Total loss - top 5 entrepreneurs All entrepreneurs in sector

373,572 1,452,577

Basic financial results of operations – property sector in 2016 (amounts expressed in HRK ‘000) Description

Real estate business 2015

Number of businesses Number of profit-making businesses Number of loss-making businesses

1,801

2016

Index

4,938

-

2,067

114.8

2,681

2,871

107.1

13,662

14,366

105.2

Total revenue

9,469,921

10,690,605

112.9

Total expenditure

9,963,178

10,824,485

108.6 135.4

Number of employees

Profit before tax Loss before tax Income tax Profit for the period

968,218

1,311,079

1,461,474

1,444,959

98.9

98,466

149,409

151.7

885,613

1,169,287

132.0

Loss for the period

1,477,336

1,452,577

98.3

Profit for the period (+) / loss for the period (-)

-591,723

-283,290

47.9

6,029

6,162

102.2

Exports

143,166

190,286

132.9

Imports

57,817

89,245

154.4

Average monthly salary per employee

Source: Fina

ies, with Dubrovnik, Opatija and Split ranking top. The highest price increase (19.1%ont an annualised level) was seen in Split where the residential square meter price reached €2,691, 1.6% up compared with February. Significant upward trends were also recorded in Dubrovnik where square meter prices of apartments rose by around 17%.

Dubrovnik showed the highest prices also in March when average square meter prices of advertised apartments reached €4,301.

On the outskirts of Split one can even come across square meter prices of apartments at €1,500, which is also the case in Solin and in Kaštela. Nevertheless, properties in attractive locations in Split achieve the highest square meter prices of €2,400 and above, whereas in the city centre and elite districts, residential square meter prices exceed €3,500.

Vice-President of the Real Estate Association at the Croatian Chamber of Economy and owner of Biliškov Nekretnine agency, Jasminka Biliškov, believes that the housing market has seen a revival, which is mainly due to local buyers.

“We are increasingly faced with an upward trend of house purchases hat is subsequently used as daily rental. Con-

sequently, in Split housing located near the centre or in attractive locations, such as Bačvice or Meje, are constantly in demand. I am personally acquainted with people who have resorted to large loans in order to purchase or renovate villas that may be used for vacation rental. Nevertheless, due to hyper-production and, if current trends continue, I believe that trends are about to be reversed and owners will once again start looking for tenants”, she estimated, highlighting that investment into housing is always welcome.

Since the beginning of the year, the lowest square meter prices of apartments have been seen in the continental part of Croatia. Bjelovar has ranked amongst more affordable cities, having recorded only a slight increase in prices (0.1%), and residential square meter prices reached just €786. The square meter price of apartments in Slavonski Brod rose by 3.4% to €892, as opposed to Osijek, with a price increase of 0.4% and an average square meter price of apartments of €964. Irrespective of the fact that the property market has been rejoicing in positive trends, one needs to be aware of the potential threats that include

COMPARED WITH INTEREST RATES PAID

BY BANKS, RENTAL APARTMENT YIELDS OFFER A CONSIDERABLY HIGHER RETURN ON INVESTMENT, STRESSED JELENA KRAVOŠČANEC TODOROVIĆ Still, one needs to carefully consider various borrowing methods and completely avoid the risks that one will not be able to handle, irrespective of success achieved during the tourist season.

increasingly unfavourable demographic trends and youth migration. Notwithstanding the fact that their consequences have perhaps not yet been felt, we do not know what the future folds.

May 2018 | No 280 | PVinternational | 25

FINDING WORK

MINI-FAIR OF SELF-EMPLOYMENT BUSINESS OPPORTUNI

Without ideas… develop a franchise Franchises are the generators of new entrepreneurship and employment. The giver and receiver of the franchise are not the same company but two individual operators working on the basis of a partnership contract, Ljiljana Kukec highlights by Sanja Plješa

T franchises in the world

million companies created by franchises

he brain-drain is still Croatia’s longlasting problem. Is everything so negative, or there are ways that individuals could find work in their country – this issue was discussed at the mini-fair of business opportunities for self-employment without a personal idea? Yes, with a franchise! The fair was held in the Croatian Chamber of Economy in Zagreb.

Nikola Oršanić, President of Franchise Operations Community within the CCE, spoke about two employment options: working in state/private company or personal craft or working in a company using a self-employment model. He evaluated that franchising is one of the more acceptable self-employment models, but it is not well enough developed in Croatia. Oršanić pointed out that people can be self-employed by renting a franchise for a certain period of time. On the other hand, young people can opt for a start-up. Research has shown that in the USA 90% of 100 startups operate unsuccessfully after a year. The reasons are a consumer lack of interest for the product, and competition and illiquidity.

FRANCHISING TAKES A STEP FORWARD

over

%

of global retail is via franchise operations

The franchise model can be viewed in many ways, but basically it is an enterprise which uses a verified business model with considerable lower level of risk. The receivers of the franchise continue working based on a networking model, Oršanić said. He added that one of the greatest achievements of the Franchise Operations Community is the contract on funding this self-employment model signed with the Croatian Employment Agency (HZZ).

Concerning the small value of HZZ’s selfemployment subsidies this institution has been providing since 2010, Ivana Mikek Ku-

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pres, Head of the Department for Implementing and Monitoring Active Policy Measures for Employment with HZZ, highlighted that by the end of the year 50% more people will be able to use these non-repayable subsidies compared with 2017. The subsidy totalled €5,000 last year, but this year it will be about

IT IS POSSIBLE TO RENT A FRANCHISE, ACQUIRE THE EXISTING KNOWHOW AND BECOME SELF-EMPLOYED, ORŠANIĆ POINTS OUT €7,300 or possibly €9,300 for those who wish to use the project to provide professional training for a young person who has completed education and they wish to employ in their company.

What is new, is that another unemployed person who wants to be a co-owner of an existing craft or company can be included in these subsidies. Ivana Mikek Kupres stressed there had been significant progress in franchise operations and self-employment and now there are franchises in Zagreb and Zadar (one for each city), two in Osijek and three in Rijeka.

President of the Croatian Association for Franchise Operations, Ljiljana Kukec, spoke about the possibilities of franchise operations and highlighted that this association has been active since 2002. She also noted that over

ROAD RECONSTRUCTION PROGRAMME

ITIES

Huge loan agreement signed

50% of global retailing is via franchise operations, and each of us are in daily contact with six franchises through various products we see or buy even though we do not realise they are franchises. There are 24,500 franchises in the world opened by 1.1 million companies.

Franchises are the generators of new entrepreneurship and employment.

A franchise contract contains everything required for a person to become a franchise owner; how many employees there should be and how the franchise should operate. The giver and receiver of a franchise are not the same company. They are two separate operators working on the basis of a partnership contract, Ljiljana Kukec highlighted. She also added that 95% franchises in Croatia are in the hands of micro, small and medium-sized enterprises, and micro-franchises can be established with the help of various subsidies, similar to HZZ non-repayable subsidies or with the help of HAMAG-BICRO. These types of franchise models do not require large investment, and new owners can refer to large companies, who already have this type of experience, and ask them how to develop such franchises, Ljiljana Kukec, said.

Pek-Snack, one of the largest franchises for baking bread and pastry was mentioned as a good example of franchise models. During their 20 years of working in Croatia, this company has opened over 500 stores.

For all those wanting to take over a franchise model, Pek-Snack will offer all the required logistic support by free-renting of refrigerators, stoves, counters, delivery, design of the store and servicing. Other successful franchise models in Croatia are: Surf’n’Fries, Eco Point, Laundry Lounge, My Laundry, Fish4wish, Dream Gym/Hard Gym, Body Creator and Diadema.

In the presence of the Minister of Sea, Transport and Infrastructure Oleg Butković and Finance Minister Zdravko Marić, Hrvatske ceste, Hrvatske autoceste and Autocesta RijekaZagreb signed contracts with representatives of eight Croatian banks (Zagrebačka banka, Privredna banka Zagreb, Erste banka, Splitska banka, Hrvatska poštanska banka, Croatia banka, OTP banka and Istarska kreditna banka.

This is the final step in the second round of financial restructur-

ing of the road reconstruction – the signing of a huge loan for debt reprogramming with the aim of saving over €50 million on previously arranged conditions on the international market, as reported by the Ministry of Sea, Transport and Infrastructure.

The loan is worth €1.8 billion and the Government has already approved it. Of the total of €1.8 billion, Hrvatske autoceste signed a contract for €1.141 billion, Hrvatske ceste for €467 million and Autocesta Rijeka-Zagreb for €202 million. (B.O.)

CROATIAN TOURIST BOARD

Over 70 new regular air routes Over 70 new air routes will be activated by 27 October and the total number of rotations will be increased by 15% over 2017.

In 2017, there were 29,843 rotations increasing to 34,400 in 2018. The defined key goals imply positioning Croatia as an attractive year-round tourist destination with quality air traffic connections, especially those routes which are a crucial segment for prolonging tourist traffic into pre- and post-seasonal periods. Hence the establishment of more in-

tense co-operation with airlines and international tourist agencies, said Kristjan Staničić, Managing Director of the Croatian National Tourist Board. In addition to stressing the quality of the entire tourist offer, we are also keeping up with market trends and expanding our demand into those markets with the highest growth potential. This is where airlines play an important role and allow Croatia to become an even more competitive and interesting world tourist destination, Gari Cappelli concluded. (B.O.)

May 2018 | No 280 | PVinternational | 27

CURRENT ISSUES PELJEŠAC BRIDGE CONSTRUCTION CONTRACT SIGNED

THE CROATIAN SOUTH WILL NO LONGER BE ISOLATED One of the most complex and valuable contract procedures that the Croatian road operator Hrvatske ceste has been involved in has recently been completed after the signing of the contract. It is a unique construction project of a bridge made of steel and concrete that needs to be able to withstand adverse weather conditions, stressed Škorić by Ilijana Grgić

I am delighted that this project will be implemented following a public tender, after the preferred bidder has been selected, all criteria have been accurately and transparently provided and based on the references of the Chinese corporation specialised in the construction of roads and bridges.

Andrej Plenković, the Croatian Prime Minister

T

he signing of the Pelješac Bridge construction contract by Hrvatske ceste and the Chinese consortium led by the China Road and Bridge Corporation marked the completion of one of the most complex contract procedures that the Croatian road construction operator has been involved in to date. In January 2018, Hrvatske ceste saw three bids submitted for the bridge construction tender, and the Chinese consortium was selected as the preferred bidder, with a bid of €0.28 billion, excluding VAT. A group of companies involved in a joint bid for the surveillance of the construction of the bridge connecting the Pelješac peninsula to the mainland, as well as of the construction of access roads, was selected at the beginning of April.

The group of joint bidders included Institut IGH (IGH Institute), Centar za organizaciju građenja (Centre for Construction Organisation) and Invest inženjering, whose bid was worth €6.6 million, excluding VAT. “This bridge is certainly amongst those construction ventures by which our generation will be remembered.

One of the most complex and valuable contractual procedures that the Croatian road

28 | PVinternational | May 2018 | No 280

operator Hrvatske ceste has been involved in has recently been completed after the signing of the contract. It is a unique construction project of a bridge made of steel and concrete that needs to be able to withstand adverse weather conditions. It has to be noted that the bridge will be constructed in a site where there is a substantial risk of earthquakes, and extremely strong winds are also very frequent”, noted Josip Škorić, President of the Management Board in Hrvatske ceste.

STRATEGIC GOVERNMENT PROJECT The incumbent government led by Andrej Plenković points out that the construction project is its most significant project during this term of office. Hence, it was not surprising that, in addition to the Croatian Prime Minister, most other ministers attended the contract signing in Dubrovnik.

“This is a project of strategic importance for Croatia as a whole. We are all aware of the importance of the construction of this bridge. It will provide a solution to a long-term strategic problem - road connections between the South and the rest of the country. The bridge

will also be a symbol of added value of the first seven years of EU membership. I am delighted that this project will be implemented following a public tender, after the preferred bidder has been selected, all criteria have been accurately and transparently provided and based on the references of the Chinese corporation specialised in the construction of roads and bridges”, emphasised the Prime Minister Andrej Plenković.

“We are turning a new page in our political relations and the project also shows the level of political confidence between the two countries. The value of Chinese investment into Croatia has grown 100-fold and last year saw an increase in Chinese tourist arrivals by over 60%. The Chinese consortium has certainly not accidentally been selected as the preferred bidder for the construction and most Croats believe that China needs to be considered as our most important economic partner over the next decade. We are witnessing a turning point in relations between China and Croatia”, stressed H. E. Mr. Hu Zhaoming, Ambassador of the People’s Republic of China to Croatia during the construction contract signing.

A LONG STORY BEHIND THE START OF CONSTRUCTION WORK The long story behind the construction of this bridge paints a realistic portrait of all the ma-

THE IDEA OF THE CONSTRUCTION OF A BRIDGE INTENDED TO CONNECT THE SOUTH AND THE REST OF THE COUNTRY BY ROADS DATES BACK OVER TWO DECADES

Pelješac Bridge in figures The project is of extreme strategic importance, and its value stands at €420 million. This includes the construction of the bridge, access roads and a bypass near the town of Ston. 85% of the costs, or €357 million, will be co-financed using EU funds. The European Commission reached the decision on co-financing in June 2017. It will be 2.4 kilometres long and 55 metres high, and it is expected to be completed by 2022. Pelješac Bridge was designed by Marjan Pipenbaher, who worked on the project in co-operation with Jure Radić. Mali Ston Bay will be crossed by the bridge with five superstructures, whose length will be 285 metres. 65,000 tonnes of steel and almost 70,000 m3 of concrete will be required for its construction. The central part of the bridge will be placed on pylons with inclined legs. laise within Croatian society. The idea of the construction of a bridge dates back more than two decades. Pelješac Bridge was integrated into the spatial planning of Dubrovnik-Neretva County 17 years ago. The work first started in 2005, irrespective of the fact that the contract had not been signed and no public tender had been invited or contractor selected, whilst the general public was informed that the bridge would be completed in three years.

Two years after that, Ivo Sanader, the then Prime Minister, ceremonially opened Pelješac Bridge construction works for the second time. The subsequent government, led by Jadranka Kosor, continued the story of construction and the expected date of completion was 2017. After that, the government led by Zoran Milanović, terminated the bridge construction contract, justifying it with a lack of financial resources in the treasury. The estimated value of the construction project at the time reached €0.25 billion and only 3% of the work had been completed. Against the backdrop of a crisis, solutions such as a Schengen road corridor were being considered, in the form of a rapid transit road through Neum and a bypass around Neum, as well as an undersea tunnel intended to connect Pelješac with the mainland. The feasibility study was provided in 2015. It considered the crucial technical criteria, legal risks and environmental protection issues of all solutions provided and it showed that the bridge was the best option. Moreover, it was established that the number of procedural risks was the lowest, as the bridge would not pass through the territory of another countr, y and the most significant advantage was its immense positive effect on the economic development of the Croatian South.

The Chinese consortium has certainly not coincidental been selected as the preferred bidder for this construction, and most Croats believe that China needs to be considered as our most important economic partner over the next decade. We are witnessing a turning point in relations between China and Croatia.

H. E. Mr. Hu Zhaoming, Ambassador of the People’s Republic of China to Croatia

May 2018 | No 280 | PVinternational | 29

A STORY WITH A MORAL SENTIMENTAL BIKES – AN (E)XPERIMENT

AN OPEN ROAD, A SMILE AND WIND IN THE HAIR After creating a wide range of custom-made models for clients internationally, Ilijević decided to achieve his dream for a small-scale electric motorcycle by Krešimir Sočković

I WOULD LIKE TO EXPERIMENT TO BE SEEN AS AN ELECTRIC VEHICLE, NOT A FUTURISTIC ONE, QUOTED ILIJEVIĆ

D

uško Ilijević is known amongst cycle enthusiasts for his products with the brand name SentiMental Bikes. These are reminiscent of early motorcycles that once raced on tracks of wooden planks in the 1930’s. He decided to show his latest product during the Zagreb Auto Show. After creating a wide range of custommade models for clients internationally, Ilijević decided to achieve his dream for a small-scale electric motorcycle.

He named his experimental project simply as Experiment. It is assembled on a unique frame personally designed by him and reminds of a bygone age, yet its propulsion system uses high technology.

30 | PVinternational | May 2018 | No 280

HIGH TECHNOLOGY “This experiment is a vision and a prototype of what I am aiming to manufacture on a larger scale. Orders have already been placed for the first items for the first 30 that I will produce”, stated Ilijević. “Experiment will essentially remain simple, even though it incorporates some serious high technology. The electric motor has been well-known and tested on cycle products, and the battery pack is manufactured in Croatia. The absolute range of the prototype is now about 50 kilometres. Amongst several available options, customers will be able to opt for a single or dual battery system in order to increase the range. It is provided with large profile tyres, so that the machine will not need shock-absorbers. Since this is a vehicle that is intended for urban use, this is sufficient”, explained Ilijević

An idea turned into reality SentiMental Bikes is a small manufacturing business that resulted from ideas conceived by Duško Ilijević, a kindergarten teacher by profession. He wanted to exploit a natural gift to create something and develop some ideas he had been considering for years. At the start he was making two-wheeled machines in the spirit of former times in his workshop. After years of searching, he reconstructed a garage near the residential building where he lives. He has been producing unique two-wheeled vehicles in his garage, intending to set off on a long journey, sometimes tens of thousands of kilometres away.

hicles will be delivered before the summer or within 60 days from the contracting of the price”, stated the company owner who is also the main designer and creator.

MODERNISATION OF AN HISTORICAL CONCEPT

Tested road models tested have shown their capabilities, having an affordable final price below €4,000.

The 500-watt electric motor (or 1 kW) maximum power intended for cycles is at the rear within the wheel hub. Batteries are situated in the centre of the frame and at the bottom, thus lowering the centre of gravity and hence improves manoeuvrability It has a steel welded tube frame, as well as LED lights and veneer composite pipes, all of which remind of a bygone age.

Experiment can reach a top speed of 25 kph with a speed limiter, and a speed of twice that when the label stating that it is intended for offroad use has been placed on it; thus, Experiment can be considered as a true motorcycle.

Ilijević has also announced the preparation of a project to enable the registration of this motorcycle as a road vehicle, together with subsidised sales of electric vehicles with incentives provided by the Environmental Protection and Energy Efficiency Fund, which may additionally reduce the sale price.

“Those who went the Fair where we presented it for the first time, were given the chance to get pre-sale vouchers enabling them to purchase a vehicle at a lower price. The ve-

As opposed to all previous models of Sentimental Bikes, this one has no pedals, although it has retained the main stylistic features, as well as the production method and, according Sentimental Bikes, it has identified the best way to modernise a valid historical concept.

“The preliminary design was created two years ago and I am delighted that we have currently developed functional prototypes.

By the end of the year we plan to become involved in the production of a new model with a step-through frame, intended more for ladies or those finding difficulty in putting a leg over the crossbar. We have several ideas, which I believe all those interested in our products will find appealing”, concluded Ilijević.

“I would like Experiment to be seen as an electric vehicle, not a futuristic one. The point in riding a motorcycle is to enjoy the solitude and one’s own thoughts, whilst also contributing to environmental protection. We will certainly not provide options like smartphone apps for tracking its running operations through data stored in the cloud, nor will we provide video cameras for live streaming of your journey. The only technology that will be available is that showing battery status, since you will need all the energy stored in the battery to enjoy the ride. It will be just you, the road and Experiment. And a smile. Perhaps even the wind in your hair, if you have it or if you are not wearing a helmet. Also, perhaps some bugs in your face and that’s all”, concluded Ilijević.

The preliminary design of this motorcycle was created two years ago and I am delighted we have currently developed functional prototypes. By the end of the year we plan to become involved in the production of a new model with a stepthrough frame, intended for ladies who go to work wearing a skirt or those who are not able to lift a leg over the motorcycle frame.

Duško Ilijević, owner, SentiMental Bikes

May 2018 | No 280 | PVinternational | 31

PRIVREDNI VJESNIK

HOTEL PALACE MARKS ITS 111TH ANNIVERSARY

TIME CAPSULE OF BYGONE TIMES A glass and copper capsule found in the hotel foundations includes a charter in both Croatian and German, as well as some newspapers and Kreutzer coins from the period of Emperor Franz Joseph I. by Sanja Plješa

T THE PALACE WAS CONSTRUCTED IN1891 FOR KARL SCHLESSINGER, AND IN 1907 WAS TURNED INTO AN HOTEL

he hotel business developed in Zagreb in the mid19th century, when in Ilica Street there were three hotels, which had just started operating. The Hotel Palace came into being at the beginning of the 20th century. It was a former palace owned by the Schlessinger family and the Hotel Palace has remained unique in terms of its construction and the comfort levels provided to its guests since then. The hotel has cared for a large number of reputable people - national and international – including the Croatian writer Miroslav Krleža who often enjoyed having coffee at the hotel coffee bar. This year Hotel Palace is marking its 111th anniversary. The hotel was renovated and modernised last year; heat pumps were installed and the hotel was then based on sustainable energy and eco-friendly principles. Thus, it was defined as a “green hotel”. According to the Director, Tomislav Kuliš, during the renovations a glass and copper ‘time capsule’ dating back to the end of the 19th century was found in the foundations. The 40-centimetre time capsule was placed in the foundations of what at the time was the Schlessinger Palace. It included a charter in Croatian and German which bears witness to the reign of Emperor Franz Joseph and Khuen-Hédervàry, in addition to a price list of goods and services and data on the investor

32 | PVinternational | May 2018 | No 280

and contractors, as well as blessing of the building and all those accommodated in it. In addition to the charter, the time capsule included a couple of newspapers issued on 30th May 1891, as well as Kreutzer coins from the period of Emperor Franz Joseph I. The Palace was designed by the architecture studio Hönigsberg&Deutsch, whose architects Leo Hönigsberg and Julio Deutsch, designed more than 90 buildings in co-operation with associates. The Palace was constructed in 1891 for Karl Schlessinger and was turned into an hotel in 1907.

FOR FUTURE GENERATIONS “Aiming to provide future descendants with valuable information about important events, time capsules similar to this were kept in hidden locations over the centuries. Due to the attention paid by contractors and the heritage sensitivity shown by the staff of the Hotel Palace, these valuable fragile testimonies of history have been conserved and restored at the Croatian Conservation Institute and so preserved for future generations”, noted Tajana Pleše, Director of the Croatian Conservation Institute. Hotel Palace is amongst the few hotels classified in two different ways, since it has been classified as a fourstar hotel and, in addition, in 2012, it was the first “heritage hotel” listed.