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SELECTIO FEMALE INDEX → An index of women on executive boards of companies (18.8%) is similar to the percentage of women in politics PAGES 4-5

SUPPORTED BY THE CROATIAN CHAMBER OF ECONOMY

www.privredni.hr

GEOGRAPHIC SPREAD OF BUSINESS HEADQUARTERS → Of 100 businesses operating in Croatia 33 are headquartered in Zagreb PAGES 10-13

BRANDING OF A 150-YEAROLD TRADITION → Hvar recently marked its 150th anniversary of organised tourism PAGES 20-21

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June 2018, Year XI, No 281

HUP SCORE 2017

Slow progress The burdens placed on the economy rated 20 out of 100, the labour market 24, with education, healthcare and the pension system receiving 26

by Krešimir Sočković

T

he HUP Score results for 2017, the tool used by the Croatian Employers’ Association to measure progress in reforms in 12 critical areas needed for a better quality of both business and life in Croatia compared with the EU10 nations, have shown a slight increase of 2 points over last year.

Nevertheless, this represents a lowly rating of 36 points. According to sources in HUP, this result is far below a rating that would indicate a substantial positive shift.

According to the analysis conducted by HUP, there are three critical reform areas where Croatia is currently lagging in relation to comparable countries: the burden exerted on the economy rated just 20 on a scale of 100, the labour market at 24 and education, healthcare and the pension system receiving only 26.

Employers expressed three requests concerning what they believe to be the priorities in order to accelerate economic growth and employment: a reduced labour tax burden by at least 2% of GDP with a rationalisation of budget expenditure, aiding

both employment and worker dismissal, as well as urgent modernisation of the education programme.

Croatia has the largest number of tax payment procedures amongst all EU10 countries, and the tax burden has seen significant continuous growth since 2013.

The ratio of taxes, contributions and similar levies to GDP rose from an average 34% before 2014, to reach 36% to 37%, and the minimal tax reform did not exert any significant impact over. Croatia currently has a positive fiscal balance, due to an increase in the structural burden, yet employers point out that this slows both employment and growth. This year the government has declared it as a year in which reforms will intensify, and these results show that Croatia certainly needs to accelerate changes, noted President of HUP, Gordana Deranja, emphasising that Croatia is currently showing extremely sluggish progress.

Employers have invited the government to make a significant breakthrough concerning the reduction in tax and other burdens that negatively impact business and decre-

ase the level of export competitiveness of Croatian companies. Executive Director of HUP, Davor Majetić, believes that the current situation and the current budgetary status provide room to continue the previously launched tax reform and a further tax reduction both for businesses and the general public. Additionally, employers have pointed out that the labour market has seen some improvement, yet it still restricts growth and development. Hence, greater flexibility in labour laws is imperative, primarily in terms of employment and dismissal procedures. Education, healthcare and the pension system have also received an unsatisfactory rating of just 26. The President of HUP stressed that urgent changes are imperative and need to be launched right across the education system, rather than merely discussing education reform.

The rating also showed a decline in judiciary (33), and a 2-point decline was also seen in public administration (45). Positive changes to be noted were: barriers to investment and business (up from 20 to 35 points) and fiscal consolidation (32 to 36 points).

KRUG ASSOCIATION REWARDS ENTREPRENEURS

Women have always been entrepreneurs Marija Maja Čebulc was selected entrepreneur of the year; Milena Perković manager of the year and Danijela Kasumović Maružin social entrepreneur of the year by Sanja Plješa company in Croatia employing disabled people in hospitality and agriculture. This practice highlights the importance of integrating the disabled and can serve many as an example of

GENDER EQUALITY ON THE LABOUR MARKET IS YET TO BE ACHIEVED, BARBARIĆ SAYS tearing down prejudices.

Krug has been active for 26 years and this is the 16th year of the awards. Entrepreneurs are those women who sacrifice a lot for work; they deal with housework; they have family obligations, but at the same time they are kind, friendly and patient, said Krug President, Gordana Restović.

WOMEN START BUSINESS MORE THAN MEN The biggest obstacles for women are lack of access to information, finance and training. Also, they are paid less for doing the same job Ivan Barbarić, CCE VicePresident for International Affairs and EU

O

n the occasion of the Women’s Entrepreneurship Day, the Croatian Association of Businesswomen Krug and the Croatian Chamber of Economy, with the sponsorship of President Kolinda Grabar Kitarović awarded successful businesswomen. Marija Maja Čebulc, owner of the first private chemist in Dubrovnik Ljekarna Čebulc, received the award for as entrepreneur of the year. Executive manager of Arena Hospitality Group, Milena Perković, won in the category of the manager of the year. Danijela Kasumović Maružin from Punkt was the social entrepreneur of the year. She developed a successful project for starting social change and employment of those marginalised groups on the labour market, the disabled. As was noted during the awards ceremony, Punkt is the only

2 | PVinternational | June 2018 | No 281

In his congratulatory speech, Ivan Barbarić, CCE Vice-President for International Affairs and EU said that female entrepreneurship had been the subject of discussions only a few years ago, even though history shows women have always been entrepreneurs. Notwithstanding, they are still fighting many social prejudices and stereotypes although they bring many comparative advantages to business. A woman’s role in business is changing, and the changes reflect within Croatia, Barbarić said.

He also mentioned statistics from the research conducted by Global Entrepreneurship Monitor, according to whom women tend to start businesses more often than men, with some 25% of the total number of SME’s. Also, compared with unemployed men, unemployed women find it easier to decide on starting their

Marija Maja Čebulc

own business. On average, 15 women/5 men start their own business. Things are changing for the better, but not fast enough. Gender equality on the labour market has not been reached. The biggest obstacles for women are lack of access to information, finance and training. Also, they are paid less for doing the same job, Barbarić highlighted.

HUP SUPPORT FOR FEMALE ENTREPRENEURSHIP Regrettably, only 20% of women are in managerial positions, and this must change. Barbarić highlighted the CCE will continue to promote a business environment which will help women

Milena Perković

Danijela Kasumović Maružin

en’s Entrepreneurship Day. She said this institution supports female entrepreneurship by promoting a base of women together with an ombudswoman for gender equality. Also, HUP and the Canadian Embassy have started a 30+ initiative on a voluntary basis. They want to achieve a 30% level of women in managerial positions on company boards. When looking at companies listed on the stock exchange, it was obvious there were 29% of women in managerial positions in 2015. This is a good percentage compared with the EU, but unfortunately it fell to 17.7% in 2017, but we have been growing again this year, and have managed to get to 18.8%, Gordana Deranja evaluated. She also added that it is said that over 50% of the companies listed on the stock exchange do not have a single woman on their board. However,

STATISTICS SHOW THAT COMPANIES IN WHICH WOMEN ARE IN LEADING POSITIONS TEND TO BE MORE SOCIALLY AWARE AND SUCCESSFUL THAN OTHERS, GORDANA DERANJA HIGHLIGHTS find their way to their deserved positions. “I live for the time when we will cease to talk about female entrepreneurship, and when there will only be entrepreneurship. This will mean we are living in a society with equal opportunities and conditions for all”, Barbarić opined.

The President of the Croatian Employers Association (HUP) also gave a speech on Wom-

this has been slowly changing and the percentage is now slightly below 50%. There are many associations for women in Croatia who need to work together since there is enough room for all. Statistics show that companies in which women are in leading positions tend to be more socially aware and successful than others, Gordana Deranja concluded.

June 2018 | No 281 | PVinternational | 3

SELECTIO FEMALE INDEX

MODERATE INCREASE IN FEMALE CEO’S An index of women on executive boards of companies, part of Crobex (18.8%) is similar to the percentage of women in politics in the present Parliament (19.9%) by Ilijana Grgić

Express your strength while building quality results. Learn since knowledge is the greatest power and value which will yield positive results.

Do not limit yourself and do not be afraid even if you think something will turn out badly because fear will hinder your development.

Gordana Kovačić, CEO of Ericsson Nikola Tesla

I

n Croatia, men and women are equal when it comes to leading managerial positions in companies - since any type of discrimination has been legally arranged.

Women are qualified for taking over the most responsible positions, especially when it is known that the share of graduated female university students as a percentage of the total number of graduates is 60%. Even though the statistics are on the side of women, the reality is far from the ideal number.

The Selectio Female Index, which measures the presence of women on executive boards of companies, in conjunction with the Crobex index at the Stock Exchange, has seen a moderate increase to 18.8% from 17.7% last year. This means it would take a decade for Croatia to become a country with a 30% share of women on executive boards. For example, the percentage of women on executive boards of the top 100 companies at the London Stock Exchange, is 27.7%, based on data provided by the Female FTSE Board Report for 2017.

The EU priority is to promote women in terms of the economy and to promote their work in senior positions. Therefore, based on the last available data from two years ago, the female average on executive boards across the entire EU is around 23%. Therefore, it is the general belief that the European Commission should re-introduce mandatory quotas of women on boards (first in public and then in private companies in the EU). One solution is that all those companies with a less than 40% female level on boards have to prefer women when selecting their candidates.

This is not the first attempt at introducing a 50% female quota. A similar case happened five years ago, but failed since Germany, the

4 | PVinternational | June 2018 | No 281

Netherlands and Sweden thought it was too much meddling in internal state issues. Hungary and Poland were against for ideological reasons.

THERE ARE COMPANIES WITH A 100% SHARE OF WOMEN IN BOARDS And while Europe thinks about legally increasing the number of women on company boards, there are companies in Croatia who have already come to the conclusion that women’s competency and capabilities in managerial

IT IS THE GENERAL BELIEF THE EUROPEAN COMMISSION SHOULD RE-INTRODUCE MANDATORY QUOTAS OF WOMEN IN BOARDS positions bring excellent results. The Selectio Female Index shows that the highest number of women on boards in Croatia is in Ericsson Nikola Tesla (100%). The executive board of this company is led by a woman, Gordana Kovačević, who has run the company for the past 13 years. She is on the list of the most successful business people in Croatia and often wins awards for promoting women into managerial positions. The CEO of Ericsson NT has won the title of the most powerful woman in Croatian business for the third consecu-

tive year, and the award was presented by the business weekly magazine Lider in co-operation with Bisnode.

THE NUMBER OF ZERO COMPANIES IS FALLING Men and women depend on each other, and a healthy society is based on their synergy. As a society we need to develop a culture in which leaders are selected based on their expertise, human and moral qualities, and which motivate this kind of attitude in their colleagues.

Business leadership is important to both men and women. Be brave, enterprising; be a person with integrity and high standards; surround yourself with quality people; create a motivational culture without stereotypes and turn your dreams into reality. Express your strength while building quality results. Learn, since knowledge is the greatest power and value which will yield positive results. Do not limit yourself and do not be afraid even if you think something will turn out badly, because fear will hinder your development. Work on yourself as a person, and this will reflect on your teams and colleagues, said Gordana Kovačić. AD Plastik, Arena Hospitality Group, Optima Telekom and Brodogradilište Viktor

Lenac (shipyard) are companies with a similar ratio of men to women (50%). The female rate on managerial boards of companies within Crobex is similar to that in politics, since the present Parliament consists of 19.9% of women. On the other hand, there are only 9.5% of women members of the Croatian Academy of Science and Arts.

The percentage of companies without a single woman are the so-called zero companies, and their number has decreased 9% over the same period of the previous year. Crobex currently counts 41% of such companies.

For 12 years now, Selectio has been issuing companies with the Employer Partner Certificate for excellence in Human Resource Management. The percentage of women on boards of companies with this certificate is 20.7%. Coca-Cola HBC Hrvatska, Laguna Novigrad, Philip Morris International, JGL, Ciklopea, HBOR, Pliva and Tele2 are on the list with 50% or more of women. It is also important to mention that as with men, in order to succeed, women have to be certain of their know-how, skills and capabilities and never go for anything less than the same opportunity and conditions for growth and developing.

THE SELECTION FEMALE INDEX SHOWS THAT THE HIGHEST NUMBER OF WOMEN ON BOARDS IN CROATIA IS IN ERICSSON NIKOLA TESLA (100%)

June 2018 | No 281 | PVinternational | 5

INTERVIEW MEDEJA LONČAR, President, Management Board, Siemens Hrvat

DIGITALISATION an imperative for all Our mission across all markets in which we operate is to enable immediate access to the most advanced and innovative technologies in electrification, automation and digitalisation by Ilijana Grgić

E Both in Croatia and the entire region I am fascinated with the large number of small and medium-sized engineering businesses that are not often mentioned by the media, irrespective that they are important global market players. Such companies have immense growth potential.

ach manager has their own specific management style. Since the beginning of April 2018, Medeja Lončar has been using her particular management style in the most senior position in Siemens Hrvatska. During her 30-year career, she has gained extensive experience in strategic development and sales and marketing. She has been employed by Siemens since 2007 and prior to that she was a management team member in successful Slovenian and international companies operating in a variety of sectors, including mobile communications, retail, industry and the energy sector. The new President of the Management Board of Siemens Hrvatska spoke with Privredni vjesnik about the changes resulting from her appointment to business activities of one of the leading technology companies in Croatia.

At the beginning of April 2018, you were appointed as the CEO of Siemens Hrvatska, yet you jointly remain CEO of Siemens Slovenia. How are you planning to run these two companies?

Siemens Hrvatska will be run from Zagreb and Siemens Slovenia will be run from Ljubljana. In my case, this means more logistics and, certainly, slightly more energy, with more frequent business trips that cannot be avoided.

Nevertheless, on the other hand, synergies from both companies can be used and I believe they are extremely complementary. It is important to stress the strong teams in engineering as a positive aspect and one of the strengths of Siemens Hrvatska that I did not have in Slovenia.

Moreover, I need to point out that I have already co-operated with teams in Croatia, in the same way as some colleagues from Croatia have been members of my team in Slovenia for years. We will be functionally more connected through synergies, which will enable us to be more agile and achieve higher quality growth in both markets. One has to bear in mind that

6 | PVinternational | June 2018 | No 281

both companies are relatively small compared with other Siemens units and yet we have more competencies concerning such a functional framework. The issue of location is currently becoming increasingly irrelevant due to currently available technology. In addition, the preparation of teams for on-going change is certainly amongst the top priorities of both companies.

What do you expect from your business activities in Croatia?

I am primarily focused on the implementation of our plan. We are currently working on several large-scale projects. During the last

I BELIEVE WE HAVE THE POTENTIAL TO EFFECTIVELY PARTICIPATE IN THE GROWTH OF THE CROATIAN ECONOMY THROUGH FURTHER INCREASES IN COOPERATION AND BUSINESS WITH OTHER CROATIAN COMPANIES. business year, our Digital Factory and Process Industries and Drives divisions generated an important share of total revenue on the Croatian market. Digital Factory showed a vigorous 15% growth rate compared with the previous business year. We have achieved vigorous

tska

June 2018 | No 281 | PVinternational | 7

INTERVIEW

There is certainly the greatest potential in businesses that export their products to demanding developed markets, since they are the first to face the requirement of adoption of new business models in order to remain competitive.

growth across almost all sectors, from micro automation, HMI devices and industrial computers, to the most complex PLC systems. In Croatia, we mainly co-operate with exporters in the food and beverage industries, as well as those involved in the energy sector, mining and the automotive industry. During the last business year, which is calculated alongside the German business calendar and ends on 30th September, Siemens Hrvatska independently exported goods and services worth €10.1 million. We have contributed to exports

by Croatian companies in several other ways.

Through the introduction of new technology and consulting on its implementation, we are globally committed to co-operation with our clients and focus on their transformation and upgrading of competitiveness. I believe we have the potential to effectively participate in the growth of the Croatian economy through a further increase in co-operation and business with other Croatian companies. Our global mission is to provide instant access to the most advanced and innovative technologies in electrification, automation and digitalisation. Hence, in the energy sector we expect to continue the successful co-operation between our Energy Management division with HEP and HOPS. Special emphasis will be placed on

the implementation of the latest technological solutions, such as systems intended to ensure stability and reliability of the power grid, compact high voltage facilities, distribution grid automation and the implementation of advanced smart grids.

Concerning the issue of implementation of advanced solutions, could you elaborate on self-healing smart grids?

Technological distribution abounds with new challenges. The project in question was imple-

OUR POSITIONING AS A SUCCESSFUL PILOTMARKET FOR NEW TECHNOLOGIES COULD PROVIDE BENEFITS FOR THE ENTIRE COUNTRY. mented by Siemens Hrvatska in co-operation with HEP ODS in the distribution area of Elektra Koprivnica. Our engineers developed a system that eliminates malfunctions and reconfigures the grid in under 0.3 seconds. Power outages have been reduced to the point where the device connected to the grid is not affected and continues functioning as if there had been no outage.

This is a step towards a fully autonomous systems using artificial intelligence within Smart Grid technologies. Moreover, this project is an excellent example showing the benefits for the whole country of our positioning as a successful pilot-market for new technologies.

What is the potential of Industry 4.0 in Croatia?

Initially, Industry 4.0 processes were globally implemented by the automotive industry. It is well-known that the automotive industry in Croatia is currently insufficiently developed, although there are businesses that have established highly successful co-operation with large international companies. There is certainly great potential for businesses that export their products to demanding developed markets, since they are the first to face the requirement of adoption of new business models in order to remain competitive. Nevertheless, this is only the first phase, as digitalisation is imperative. I consider it as natural, having experienced it during my extensive experience in the telecommunications sector. In the case of Croatia, industries working towards long-term development and growth have the

8 | PVinternational | June 2018 | No 281

greatest potential. Interestingly, digitalisation is increasingly becoming an integral part of traditional jobs such as those in construction. The use of the latest digital tools such as Building Information Modelling can result in savings of up to 10%.

Is digital transformation intended solely for large companies?

In Croatia, digital transformation is implemented mainly by large companies. Most small or medium-sized businesses are faced with a wide range of obstacles, certainly a lack of information, the high level of complexity of technology as well as implementation costs.

Once you have raised awareness that adapting to new trends and global market requirements is an imperative, you are on the right path. We have been living through the 4th Industrial Revolution, which means we are living in an extremely exciting age of digitalisation. As soon as one optimisation cycle has been completed, a new one needs to be launched. This is due to the fact that, as opposed to the first two Industrial Revolutions in which several generations worked without substantial changes, there are several large-scale changes each generation in the age of digitalisation. We are committed to keeping abreast with and adapting to these changes, which are on-going and there can be no breaks. Siemens is a company that has been operating for very many years. If we currently did what we did 170 years ago, in the same way that we used to do it at that time, there would be no demand for our services.

Both in Croatia and across the entire region I am fascinated with a large number of small and medium-sized engineering businesses that are not frequently mentioned in the media, irrespective of the fact that they are important global market players. Such companies have immense growth potential. Consequently, it is important to point out several examples, such as Montelektro, one of our most important partners in industrial automation, as well as Ato Inženjering, Novatec and Sintaksa.

Croatia is faced with a brain drain problem and a shortage of qualified staff. Do these problems affect Siemens?

These problems present a challenge throughout Europe and not just in this region. Engineers are always in-demand in Germany and are extremely interested in this “Balkan pool”.

They are interested in staff with an advanced knowledge of technology. According to some estimates, Europe is facing a shortage of 4.5 million engineers, and the demand for their skills is likely to increase in the future. Croatia traditionally implements quality study programmes and abounds in experts in energy,

computer science, mechanical engineering and mining. Nevertheless, against a backdrop of rapid changes in business, companies need to constantly invest into continuous learning at work in order to provide the best staff, after the completion of their formal education.

Hence, since the demand for engineers is very likely to rise, talented women also need to be valued highly. We need to actively work to increase the number of women in STEM fields, as there is currently a shortage of women there. Consequently, this technological sector

IN THE CASE OF CROATIA, INDUSTRIES WORKING TOWARDS LONG-TERM DEVELOPMENT AND GROWTH HAVE THE GREATEST POTENTIAL. will be further strengthened in the future. The potential of Siemens lies in that it can provide the best for those who are the best, which includes both access to and development of new technologies. That is why we do not need to be concerned about staff shortages. Nevertheless, due to the slow harmonisation of the education system with market requirements, we may be faced with a disequilibrium, which primarily affects medium-sized businesses.

Siemens Hrvatska currently employs 250 staff and, since they are a perfect mix of experience and youth, they are expected to achieve excellent results. My personal goal is to encourage maximum innovation, both within Siemens teams and in projects that we implement for our clients. I pursue an inclusive leadership style and I value highly commitment to personal development.

After more than a month, what is your opinion of Zagreb and Croatia as places in which to live?

I need to emphasise that I believe Croatia is a very good place to live. I have had a small cottage on the Istrian coast for years and for me Croatia is synonymous with a place where I “recharge my batteries”. Concerning work, I certainly do not have a feeling of working ‘abroad’. I realis that I feel as if I have been naturally integrated into this environment. So, in my experience Croatia is also a very good place in terms of business.

The potential of Siemens lies in the fact that it can provide the best for those who are the best, which includes both access to and development of new technologies.

That is why we do not need to be concerned about staff shortages.

Nevertheless, due to the slow harmonisation of the education system with market requirements, we may be faced with a disequilibrium, which mainly affects mediumsized businesses.

June 2018 | No 281 | PVinternational | 9

GEOGRAPHIC SPREAD OF BUSINESS HEADQUARTERS

OF 100 BUSINESSES OPERATING IN CROATIA 33 ARE HEADQUARTERED IN ZAGREB During the period 2007 to 2016 the number of businesses headquartered in Zagreb rose by 10,658 (38.8%) by Ilijana Grgić

O 114,483 businesses operational in 2016

38,127 businesses headquartered in Zagreb

95,652 businesses headquartered in one of 128 Croatian cities

ne specific objective of an urban environment is to boost competitiveness and the growth of entrepreneurship through the creation of conditions and circumstances that will assist economic development. This has been confirmed by an analysis conducted by the Financial Agency, Fina, based on financial results achieved. It has shown that of 100 businesses operating in Croatia, 84 are headquartered in one of the Croatian cities, with 33 headquartered in Zagreb, due to the proximity of sources of finance and all other benefits, such as infrastructure and labour which, taken together greatly assist a business. In 2016, from a total 114,483 businesses, 95,652 were headquartered in one of 128 Croatian cities, employing 739,966 staff, 33,725 up compared with 2015. The result was that of each 100 employed persons 87 were employed by businesses headquartered in Croatian cities, and 38 were employed by businesses headquartered in Zagreb. Of 114,483 businesses, 38,127 (33.3%) were headquartered in the Croatian capital. Of the 739,966 individuals employed by businesses headquartered in Croatian cities, 324,866 (38.1%) were employed by businesses headquartered in Zagreb. It should be noted that this figure excludes banks, insurance companies and other financial institu-

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tions. “Urban businesses” generated €75.4 billion in total revenue, (indicating that of every €13.3 billion revenue generated by businesses throughout the entire country, €11.9 billion was generated by businesses headquartered in the cities, and that €5.3 billion was generated by businesses headquartered in Zagreb.

In terms of export revenue, the ratios are almost identical – for every €13.3 billion of exports, €11.3 billion was generated by businesses headquartered in urban areas, of which €6.1 billion came from businesses headquartered in Zagreb. It has to be pointed out that in 2016 the total amount of exports achieved by urban businesses was €13.5 billion, with the share of businesses headquartered in Zagreb being 38.8% or exceeding €7.3 billion. During the same period, these businesses saw €11.8 billion of imports, within which the value of imported goods and services by Zagreb-based businesses was €7.5 billion, or 56%.

ZAGREB SHOWING THE MOST RAPID GROWTH The number of businesses headquartered in Zagreb shows a faster increase compared with the number of businesses headquartered in any other city. During the period 2007 to 2016 the number of businesses headquartered in Zagreb rose by 10,658 businesses or 38.8%. Moreover,

June 2018 | No 281 | PVinternational | 11

GEOGRAPHIC SPREAD OF BUSINESS HEADQUARTERS Preliminary financial results of business activities performed by businesses headquartered in 128 Croatian cities; cities, excluding Zagreb; in Zagreb and in Croatia during 2016 (amounts expressed in HRK million, salaries in HRK, shares expressed as %) Description

Number of businesses

cities

cities excluding Zagreb

Zagreb

the Republic of Croatia

% of cities % of cities, within the excluding Republic of Zagreb, within Croatia the Republic of Croatia

% of Zagreb within the Republic of Croatia

95,652

57,525

38,127

114,483

83.6

50.2

Number of employed persons

739,966

415,100

324,866

853,110

86.7

48.7

38.1

Total revenue

565,653

253,774

311,879

633,109

89.3

40.1

49.3

Total expenditure

537,900

243,880

294,020

602,064

89.3

40.5

48.8

34,526

14,454

20,072

38,696

89.2

37.4

51.9

Loss for the period

13,222

6,870

6,352

14,661

90.2

46.9

43.3

Consolidated financial results

21,304

7,584

13,720

24,035

88.6

31.6

57.1

Exports

101,389

55,041

46,348

119,434

84.9

46.1

38.8

Imports

88,607

32,382

56,225

100,350

88.3

32.3

56.0

Gross investment exclusively in new fixed assets

22,329

12,750

9,579

25,226

88.5

50.5

38.0

Average nett monthly salary per employee

5,279

4,715

6,000

5,140

-

-

-

Profit for the period

33.3

Number of businesses at the level of the Republic of Croatia, businesses headquartered in cities, businesses headquartered in Zagreb and their percentage of the total number of businesses operating in Croatia during the period 2007 to 2016 Description

2007

2008

Number of businesses in Croatia

83,532

89,656

Number of businesses headquartered in cities, excluding Zagreb

43,817

47,048

Share of businesses headquartered in cities, excluding Zagreb, within the Republic of Croatia

52.5%

52.5%

Number of businesses headquartered in Zagreb

27,469

Percentage of businesses headquartered in 32.9% Izvor: Fina - Registar godišnjih financijskih izvještaja Zagreb within the Republic of Croatia Source: Fina

during the same period, the number of businesses headquartered in cities, excluding Zagreb increased by 13,708 (31.3%). Businesses

2016 SAW 34,328 BUSINESSES WITHOUT EMPLOYEES headquartered in Zagreb, Split and Rijeka took the top three positions amongst Croatian cities, based on the criterion of the number of businesses, the number of persons employed, total revenue generated and profit for the period. The City of Zagreb, as the administrative, economic and cultural centre of the country, naturally ranks first across all categories, which is not surprising, since the largest businesses, primarily those generating the highest 12 | PVinternational | June 2018 | No 281

2009

2010

2011

2012

2013

2014

2015

2016

91,320

96,758

47,444

49,908

98,530

97,254

101,191

104,470

106,569

114,483

50,605

49,681

51,434

53,725

54,419

57,525

52.0%

51.6%

51.4%

51.1%

50.8%

51.4%

51.1%

50.2%

29,273 32.7%

29,362

31,554

32,144

32,026

33,329

34,336

35,089

38,127

32.2%

32.6%

32.6%

32.9%

32.9%

32.9%

32.9%

33.3%

Share of businesses headquartered in cities, business headquartered in Zagreb, number of persons employed, total revenue and expenditure as well as exports and imports (amounts expressed in HRK millions, salaries in HRK, shares expressed as %) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0

113,144

67,456

64,164

18,045

11,743

324,866

311,879

294,020

46,348

56,225

415,100

253,774

243,880

55,041

32,382

Number of persons employed

Total revenue

The remainder of the country profit, are headquartered there. It is important to mention companies such as Hrvatska elektroprivreda (HEP), Hrvatski Telekom (Croatian Telekom), Autoceste Rijeka-Zagreb (Rijeka-Zagreb Motorway), Pliva Hrvatska (Pliva Croatia), Ina or Janaf. since the activities of these large companies are performed in tan area far beyond their administrative headquarters. Large companies, both state owned and those under mixed ownership, as well as large retail chains and other large and medium-sized businesses are headquartered in Zagreb, where their financial results and the number of employees are recorded but not shown in other cities or municipalities where their business activities may also be performed, albeit in smaller proportions. Croatian towns or cities with the lowest number of businesses headquartered in them, are Vrlika (20), Hrvatska Kostajnica (31) and Komiža (41). There are six cities with between 20 and 49 businesses headquartered, and 25 cities with between 50 and 100 businesses are headquartered and over 100 businesses are headquartered in 97 cities. Over 1,000 businesses are headquartered in 15 cities, accounting for 60.1% of all businesses operating countrywide. Thus, it may be said that a high number of businesses are headquartered within a small number of cities.

HIGH NUMBERS OF BUSINESSES WITH NO EMPLOYEES FOUND IN TOURIST RESORTS Of 34,328 businesses with no employees, 28,751 are headquartered in one of city, although the highest number of businesses with no employees are headquartered in Zagreb, 11,705 businesses, (30.7%). Split is second with 2,061 businesses (30.9%), Rijeka third

Total expenditure

Zagreb

Exports

Imports Source: Fina

Cities excluding Zagreb

(26.6%). The largest percentage of businesses with no employees within the total number of businesses operating in 2016 was seen in Supetar na Braču (64.5%), Rovinj (55%) and Buje (54.3%). A business is entitled to operate without employees, or without signing an employment contract with anyone. If someone is employed in another company and they wish to run their own business, they are entitled to do so. Thus, they can start a private business and appoint themselves as director, without signing an employment contract. The business can operate regularly, issuing invoices for performed services. Consequently,

OF 739,966 PERSONS EMPLOYED

BY BUSINESSES HEADQUARTERED IN CROATIAN CITIES, 324,866 (38.1%) WERE EMPLOYED BY BUSINESSES HEADQUARTERED IN ZAGREB it is not surprising that the largest proportion of businesses with no employees are to be found in tourist resorts. Revenue per employee for businesses headquartered in cities was €101,900, and for those in Zagreb €128,000.

On the other hand, on a countrywide level it was €98,950.

Average nett monthly salaries paid by businesses headquartered in Croatian cities was €704, 2.7% up compared with those countrywide (€685) 12% down over those paid by businesses headquartered in Zagreb (€800.

June 2018 | No 281 | PVinternational | 13

CURRENT ISSUES SYMPOSIUM “DIESELGATE AND GAS STRATEGY IN TRANS

LIQUEFIED GAS IS A HUGE OPPORTUNITY If we proceed at this pace regarding alternative fuels, by 2030 we will not even reach a level of 3% to 4%, stressed Grozdanić by Jozo Vrdoljak

T Alternative fuels in Croatia have not shown significant results to date, irrespective of

he specific objective of the symposium entitled “Dieselgate and Gas Strategy in Transport”, held at the Croatian Chamber of Economy – Split County Chamber, was to identify the benefits of alternative fuels for road transport, with special emphasis on the possibility of using new technologies. An overview of the current situation was provided as well as trends in transport development both in the European Union and Croatia.

Igor Grozdanić from the Sector for Energy and Environmental Protection at the Croatian Chamber of Economy, stated that the previous series of workshops was intended to promote alternative fuels. “Alternative fuels in Croatia have not shown significant results to date, ir-

respective that the Strategy prescribes a share of alternative fuels of up to 10% as a target to be achieved by 2030. If we proceed at this pace with alternative fuels, by 2030 we will not even reach a level of 3% to 4%. Liquefied natural gas is a huge opportunity, being an excellent and entirely Croatian energy product. I would like to point out that we are not satisfied with the local community, as gas is currently insufficiently used as an energy product”, noted Igor Grozdanić.

AFFORDABLE ENGINE BULKHEADS Branimir Palunko, President of the Liquefied Petroleum Gas Association at the Croatian Chamber of Economy, stated that transition to

Gas pipeline infrastructure construction in Split

the fact that the Strategy prescribes a level of alternative fuels of up to 10% as a target to be achieved by 2030.

Igor Grozdanić, from the Sector for Energy and Environmental Protection at the Croatian Chamber of Economy

Against a backdrop of gas pipeline infrastructure construction in Split, Zlatko Budrovčan, representative of the concessionaires, EVN Hrvatska, was also amongst the symposium attendees. He emphasised that the first phase of gas pipeline infrastructure construction in Split covering an area of 5 kilometres is about to be completed. Budrovčan expects this whole area to be connected and to start operating by the end of July, when both Split-based hospitals will be connected to the gas pipeline. “It is important to highlight that public institutions, as well as residential users, have shown a high level of interest in being connected to the gas pipeline. The interest shown has significantly exceeded our expectations. Concerning Split inhabitants as residential consumers, we are expecting significant progress, mainly after the reconstruction of the heating plant in Blatine, which currently has 2,200 residential consumers. I believe that opportunities are also provided through subsidised housing construction in Korešnica. Moreover, investors have shown immense interest in new tourist facilities that are both expected to be and are being

14 | PVinternational | June 2018 | No 281

constructed in Žnjan area. Gas is certainly more affordable and in the case of public institutions, will provide significant savings”, pointed out Zlatko Budrovčan. Furthermore, Budrovčan stressed that Šibenik-Knin County has also recorded excellent results. “Šibenik is showing excellent progress and its industry is undergoing revitalisation. Following the pipeline connection of Solaris, TLM Impol and Aluflex in Drniš, we have been connecting other commercial and manufacturing facilities.

Aluflex plant has recently relocated to Drniš, due to the availability of gas infrastructure”, emphasised Budrovčan.

SPORT” natural gas as an environmentally friendly energy product is currently still comparatively expensive. Consequently, during any transition period he proposed opting for a mixture of propane and butane. “It is more affordable compared with diesel and during a transition period can be used to reduce both CO2 emissions and particle concentrations”, believes Palunko.

According to Palunko, public transport does not require substantial change, but needs upgrading, instead. Currently, used vehicles do not need to use only gas, as they can combine gas with diesel. Device installation, or the installation of an engine bulkhead is affordable, as this investment yields returns after between eight and nine months. Savings depend on diesel and gas prices. Nevertheless, savings are certain and the larger the difference in price between these two energy products, the higher the saving.

This was all significantly facilitated during the period in which the Environmental Protection and Energy Efficiency Fund provided resources for transition to alternative fuels. Notwithstanding the fact that funds are being reserved, the results have been worse than expected over the last several years. These are not budgetary resources. Gas is undoubtedly the fuel of the future, yet it needs to be implemented. Unfortunately, in our country there is currently no sensitivity concerning these issues. I believe it is time we focused on the implementation of investment in projects linked with the introduction of alternative fuels”, noted Palunko.

product. This should certainly be an incentive for a transition to natural gas that reduces CO2 emissions and can also be used in combination with diesel. This symposium provided us with insights into the technology required for the adaptation of diesel engines in order to dramatically reduce exhaust emissions. I can-

PROMOTION OF ALTERNATIVE FUELS AFTER THE SCANDAL Josip Kelemen, Vice-President of the Liquefied Petroleum Gas Association at the Croatian Chamber of Economy, pointed out that after the Dieselgate scandal, when the affair over the fraud concerning exhaust emissions in diesel engines in the US was revealed, global interest was aroused in diesel engines that had previously been presented as environmentally friendly. “Their adverse effects have been proved and following the affair, $22 billion has been paid as claim settlement to date. Over one million vehicles have been recalled. Europe has become a special niche for diesel vehicles, as 7 out of 10 vehicles in Europe currently have diesel engines. It was absolutely unbelievable that in the case of Euro 5 and Euro 6 engines, the parameters were several times higher than those stated in reports. Nevertheless, the scandal provided the opportunity for the promotion of environmentally-friendly fuels. It is important to highlight the importance of gas, as the best solution during a transitional period. The Croatian production of liquefied gas is currently double that required nationally. Croats are privileged, as liquefied gas is entirely a Croatian

A TRANSITION TO NATURAL GAS AS AN ENVIRONMENTALLY FRIENDLY ENERGY PRODUCT IS CURRENTLY STILL COMPARATIVELY EXPENSIVE, BELIEVES PALUNKO not see any justifiable excuses for the coach and bus fleet owned by the Split-based Promet, which on average is rather outdated, need not install engine bulkheads in order to start using a mixture of liquefied gas and diesel. Unfortunately, there is currently no strategy in Croatia intended to encourage the use of liquefied gas in transport”, explained Kelemen.

Croatian production of liquefied gas is currently double than required

nationally.

Croats are privileged, as liquefied gas is entirely a Croatian product.

Josip Kelemen, VicePresident of the Liquefied Petroleum Gas Association at the Croatian Chamber of Economy

June 2018 | No 281 | PVinternational | 15

BAKING AND CONFECTIONERY INDUSTRY

MORE WORK FOR BAKERS AND CONFECTIONERS In 2016, the production of bread and confectionery saw a 5% increase in revenue on an annualised basis, with profits 14.3% up. 72% of 850 businesses employing some 15,900 staff recorded positive results

by Krešimir Sočković sockovic@privredni.hr

A

ccording to data released by the Financial Agency from the annual financial statements analysed for statistical and other requirements, 850 businesses were involved in manufacturing bread, fresh pastry, confectionery and cakes in 2016. They employed 15,874 staff, an increase of 7.7% compared with the previous year.

Total revenue generated by the businesses involved in 2016 reached €0.56 billion, 5% over the previous business year; expenditure increased by 4.6%.

Overall, this area recorded positive results, generating a total profit of €20.7 million, an increase of 14.3% over 2015.

However, not all businesses were profitable as since 28% showed losses.

Over 2016, the average monthly nett salary was a relatively low €469, just 0.6% up compared with the previous period and 31.5% down over the average monthly nett salary of those employed in the private sector countrywide, (€685).

EXPORTS INCREASE Based on statistical data, the number of bakery exporters rose by 18.2% and there are currently 26 bakery businesses involved in exporting, four businesses more than in 2015. The number of those importing showed a higher increase – by 25.9% and so bakery and confectionery products are imported by a total of 68 businesses. The total value of exported goods reached €10.1 million, an 16 | PVinternational | June 2018 | No 281

increase of 20.7% compared with 2015.

Imports showed even faster growth, rising by 38.5%. Imports exceeded imports by €0.57 million, compared with a surplus of €0.68 million the previous year.

OVERALL, THIS SECTOR GENERATED A TOTAL PROFIT OF €20.72 MILLION IN 2016 THE LARGEST MARKET PLAYER IS MLINAR Within the 850 businesses operating in the baking industry, Mlinar is the market leader. It achieved €70.5 million in revenue and accounted for 12.6% of total revenue of all busi-

nesses involved giving a market share of 12.6%. At the time this company employed 1,491 staff, with the average salary paid by the company being €575, exceeding the average salary for this sector, albeit still below the national average. The company recorded positive operating results in 2016, of €7.8 million; the year the company generated profits of €6.5 million. Amongst the larger market players are the Zagreb-based Pan-Pek, (market share by revenue was 5.1%), Zagrebačke pekarne Klara (4.1% market share), Split-based Babić pekara (3.2%), Prehrambeno industrijski kobinat Rijeka (3.1%) and Zagreb-based Pekara Dubravica (3%).

Pan-Pek stands second according to generated profit of €4 million, and generated revenue of €28.3 million. Pekara Dubravica had an operating profit of €2.68 million and turnover of €16,87 million, and Pekara Babić saw a profit €0.56 of million and revenue of €17.62 million.

Mivit Pekara with a generated profit of €0.39 million also ranked in the top five most profitable businesses.

The percentage of the top 10 businesses by generated revenue in 2016 in total revenue generated by all businesses involved reached 40.7%.

ZAGREB – THE MOST PROFITABLE Based on data recorded by county, the highest number of businesses operating

Top 10 businesses by total revenue generated in 2016 (amounts expressed in HRK’000) No.

Name and place

528.971 212.742 170.621 132.231 130.270 126.502 116.071 113.552 92.348 85.020

Share in National Classification of Economic Activities 10.71 12,6% 5,1% 4,1% 3,2% 3,1% 3,0% 2,8% 2,7% 2,2% 2,0%

1.708.328

40,7%

4.195.133

100,0%

Total revenue

1.

MLINAR d.d., Zagreb 2.

PAN PEK d.o.o., Zagreb 3.

ZAGREBAČKE PEKARNE KLARA d.d., Zagreb 4.

BABIĆ PEKARA d.o.o., Split 5.

PREHRAMBENO INDUSTRIJSKI KOMBINAT d.d., Rijeka 6.

PEKARA DUBRAVICA d.o.o., Zagreb 7.

BOBIS d.o.o., Split 8.

RADNIK OPATIJA d.d., Lovran 9.

JEDINSTVO d.o.o., Starci 10.

PTUUO BABIĆ, vl. Ivica Babić, Split Total top 10 businesses by total revenue generated in the performed activity 10.71 Total businesses (850) operating in activity 10.71 Source: Fina

in this area were headquartered in Zagreb (160), as opposed to Split-Dalmatia County with 113 and Primorje-Gorski Kotar County with 68. The fewest number of such businesses was seen in LikaSenj County (10). Similarly, businesses headquartered and operating in the three above counties generated the highest revenue. According to generated profit in 2016, businesses in Zagreb yet again

ranked first, followed Istria and SplitDalmatia County. Zagreb-based bakers and confectioners generated profits of €14.8 million and growth of 18.2%, whilst those from Primorje-Gorski Kotar County showed a loss of €0.17 million, better than the loss of €1.06 million for 2015.

It is important to break down data on loss-making businesses by percent-

age according to county: Šibenik-Knin County (40.9%), 47.4% in Sisak-Moslavina County and 50% in Međimurje County. Those operating in Šibenik-Knin county generated a total loss of €0.13 million, athough irrespective of a high percentage of loss-making companies in the other two counties, a profit of €6,130 in Šibenik-Knin County and almost €120,000 in Međimurje County.

June 2018 | No 281 | PVinternational | 17

STORY WITH A REASON BURA I SOL PROSCIUTTERIA

TRADITION TO BE NURTURED Despite significantly higher production costs we decided to produce smaller batches and develop a personalised sales channel. Our business model is sustainable for now, but at a high price, says Marin, adding that prosciutto, pancetta and šokol are at the core of their production by Jozo Knez

D WE MAINLY IMPORT RAW MATERIALS SINCE IT IS DIFFICULT TO OBTAIN PORK HIND LEGS, MARIN SAYS

rniš prosciutto has a long history, and the first records on cured and smoked pork in the area of Drniš are found in the Statute of Šibenik dating from the 14th century. It was not until 1969 that the production of Drniš prosciutto as a brand started, and which received its label of geographic origin in 2014. Drniš prosciutto has been mentioned many times throughout history as a delicacy recognised by many figures.

For example, it is written that Emperor Franz Joseph enjoyed eating Drniš prosciutto at the opening ceremony of the Siverić-Šibenik-Split railway. It was also served during the coronation of Elisabeth II since the court sent many letters of thanks to Drniš.

Specific features of this prosciutto derive from certain characteristics, such as a mild smoky aroma, a less salty flavour and a degree of dryness, which results from traditional production. This prosciutto is also special since

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it is cured by the bura, (north-eastern wind), which is crucial in the initial phase of the curing process since it extracts moisture from the prosciutto in a natural and non-aggressive way. This traditional method is nurtured by owner of Bura and sol Domagoj Marin.

QUALITY OUTRANKS LARGER PRODUCERS Bura i sol was founded in 2013 with the aim of producing Drniš prosciutto and marketing it.

The company is an upgrade to the family farm founded twenty years ago. From the start they have developed traditional products with a modern approach and use, nurturing authentic production of prosciutto, but also developed new products and services.

The head office and production are in Drniš, naturally, but there is a store in Zagreb, currently employing two people. Strong support is received from friends and family without whom this project would not be successful.

Since competition is strong in prosciutto production and large producers adjust quality and price to suit the masses and turn to big centres and stores, smaller-sized producers are left with personalised sales channels. “We cannot compete with big producers, but our quality surpasses them”, Marin highlights. He also says their ultimate goal has always been to be different from others in terms of quality; to be in the ‘boutique zone’ of production and have an acceptable price policy. Despite high production costs, they have opted for smaller batches and personalised sales and their business model is sustainable for now, but at a great cost, Marin says.

WE DEVELOPED OUR OWN CONCEPT WHICH IN ADDITION TO PRODUCTION ALSO OFFERS OTHER SPECIALISED PRODUCTS FROM OTHER FAMILY FARMS, BUT COMPLEMENTARY TO OURSELVES MARIN ADDS The family ‘padrone’ - father Zvonimir - is in charge of all production. He is an experienced expert and also president of the association of Drniš prosciutto producers. “Our prosciutto production is still part of our family farm, but we want to expand. My father’s production is based on biodynamics and an open curing process. This method requires skills, experience, instinct and know-how which my father has in abundance. We also produce pancetta and šokol in Drniš. For those who do not know, šokol is a cured meat product made from pork shoulder. It is very tasty and very popular. Pancetta, prosciutto and šokol are the core of our production, Marin says.

The largest problem of prosciutto producers in Croatia, and also the problem of the Marins, is the inability to find high quality raw materials. “We mainly import raw materials since it is difficult to obtain pork hind legs in Croatia. You can only buy an entire pig or pig halves on the local market. However, we only need certain

parts, which is pork hind leg 90% of the time.

On more than one occasion we bought from Hungary, but the origin was Croatian. This is an absurd situation, but it depicts our reality: the local meat industry does not have a processing (slaughterhouse) chain”, Marin highlights.

INTERNATIONAL MARKETING PLANNED The market for specialised food stores is still limited, since business costs are extremely high so companies and family farms without a personal production process cannot survive.

“We do, since we developed our own concept which in addition to production also offers other specialised products from other family farms, but complementary to ourselves. We also developed various other services and offer other products related to prosciutto. We developed a line of special food products in co-operation with suppliers with the aim of creating a product platform for our web shop.

For example, we offer smoked salt, chocolate with our prosciutto, peppers stuffed with cheese, dried tomatoes and tapenades. We also offer unique products made by our partners, such as bread baked under an iron bell, cheese in a sack, lećevački cheese, travarica (grappa) from Skradin, and black garlic. All these products are produced by other family farms. They are all small artisans who produce original products in a traditional manner, and we owe them a great part of our success, Marin says.

Domagoj Marin has plans to venture into the international market. “This is our only option if we want to be sustainable. We know we have a quality product, but our capacity is still not enough for serious business. Until then we will remain in this branch and work diligently”, Marin concludes.

The company is actually an upgrade to the family farm founded twenty years ago. From the start we have developed traditional products with a modern approach and use.

Domagoj Marin

June 2018 | No 281 | PVinternational | 19

TOURISM 150 YEARS OF ORGANISED TOURISM ON HVAR

BRANDING OF A

150-YEAR-OLD TRADITION

We are now identified as a destination for tourists with higher purchasing power, yet all visitors are warmly welcomed on Hvar. That is the way it has always been and will always remain so in the future, pointed out Novak by Jozo Vrdoljak

H

var recently marked its 150th anniversary of organised tourism. In 1868, the Hygienic Association of Hvar was founded in the city of Hvar, the ďŹ rst tourism association in both Croatia and Europe to promote tourism, ranking tourism as the most important area of the economy. It

20 | PVinternational | June 2018 | No 281

is currently amongst the most interesting of destinations, attracting tourists globally with an eclectic selection of year-round programmes.

During the ceremonial session of the General Assembly of the Tourist Board of the City of Hvar, the Minister of Tourism, Gari Cappelli, said this year’s traditional reunion of tourism

workers named Days of Croatian Tourism will be held on Hvar. “Hvar has been identified as the hub of Croatian tourism and one of our most well-known destinations and has therefore been selected as host for Days of Croatian Tourism. We will be marking this important anniversary. The value and importance of this event, as well as the significance of tourism in the development of the whole country has been identified by the government. Therefore, the government has been focusing its activities primarily on the development of both continental and island tourism. Through government assistance and the synergy of public-private partnerships, we have been working to increase the quality of tourism as well as revenue generated and aiming to attract investor interest in Croatia.

Hence, we are successfully including Croatia on the map of the top global tourist destinations.

Local quality and sustainability are required and expected by tourists, and Croatia provides precisely that”, emphasised Cappelli, stating that the islands are adding value to Croatian tourism. “Throughout the past 150 years, Hvar has been promoting the highest values of Croatian tourism and it certainly shows that Croatia will be seeing excellent tourism results in the future”, concluded Cappelli.

According to the director of the Hvar Tourist Board, Petar Razović, pre-season potential has been fully exploited. “We have seen an increase in arrivals ranging between 6% and 12% and overnight stays have soared by 23%. According to all indicators, we are expecting the most successful season in the history of Croatian tourism”, stated Razović. “We have successfully launched the Hvar 150 project, which includes branding linked with the 150th anniversary of organised tourism on Hvar. Branding is intended to improve both pre- and off-season, as well as to promote activities that are not related to accommodation. Hvar, as the sunniest island has not exploited its full potential thus far”, stressed Razović.

winners were Ecija Duboković, grandniece of Bishop Duboković, Rada Domančić on behalf of the Avelini family, Tarin Meneghello, Jurica Domančić, Nikola Zaninović, Tanja Miličić and Sunčani Hvar Hotels.

President of the Management Board of Sunčani Hvar Hotels, Gordana Tomičić, pointed out that Croatian tourism began and can be traced back to the history of this hotel operator.

ACCORDING TO HVAR MAYOR, RIKI NOVAK, HVAR HAS BEEN NOMINATED THE BEST EUROPEAN HOLIDAY DESTINATION

A MOST SUCCESSFUL SEASON According to Hvar Mayor, Riki Novak, the island has been nominated for the best European holiday destination. “Hvar has always been a special place for visitors throughout the last 150 years in which it has been involved in organised tourism. We have currently been identified as a destination for tourists with higher purchasing power, but all visitors are warmly welcomed on the island. That is the way it has always been and will remain so in the future”, pointed out Novak.

During the ceremonial session of the Council of the Tourist Board, seven awards were presented both to tourism workers and members of the families who have been involved in tourism on Hvar since its inception in 1868. The award

It is important to highlight that the Hygienic Association of Hvar, under the patronage of Empress Elizabeth, launched the construction of the Palace Hotel, which subsequently resulted in the creation of Sunčani Hvar Hotels. “Sunčani Hvar, as the largest hotel operator, accounted for 80% of hotel capacity in Hvar, and pays great attention to providing assistance for destination development. Consequently, our investment, currently valued at €20 million, is mainly focused on growth and portfolio development towards the luxury end of the market. Hvar has ample growth potential, both pre- and off-season, as well as in different segments of tourism “, emphasised Gordana Tomičić.

June 2018 | No 281 | PVinternational | 21

PRIVREDNI VJESNIK

CROATIAN WINES IN THE CENTRE OF MUNICH

WINE EXPORTS TO GERMANY INCREASE Visitors tasted some of the best Croatian wines and food from 12 companies by Sanja Plješa

REGARDING WINE, GERMANY IS THE SECOND LARGEST EXPORT MARKET, BURILOVIĆ SAID

G

ermany is one of the largest foreign trade partners of Croatia. In fact, it is one of the largest five export markets of Croatian products and the most important market for the export of services. Regarding wine production, Germany is the second export market, after Bosnia and Herzegovina. Germans are good tourists, responsible for the majority of tourism activities, but these export activities have the potential to grow even further, opined CCE President, Luka Barilović, at the Vina Croatia – vina mosaica – event for promoting branded Croatian wines held at Wittelsbacherplatz in Munich, and organised by the CCE and the Croatian Tourist Board (CTB).

22 | PVinternational | June 2018 | No 281

Munich is one of the top destinations of the European and global wine and food scene.

Through such events the CCE wishes to help Croatian wine makers reach new markets and buyers. According to the CCE, this level of cooperation with the Croatian Tourist Board will continue in other countries from where tourists come.

In Munich’s central square, the visitors tasted some of the best Croatian wines and food presented by 12 companies - Aura Delikatessen, Baba delicije – Kuća pršuta, Badel 1862, Dingač Skaramuča, Kutjevo, Maraska, OPG Rajka Dvanajščak, Osilovac – Feravino, PP Orahovica, PZ Masvin, PZ Vrbnik and Zigante Tartufi. Traditional Croatian food

was prepared in a specially designed gastrohouse.

CTB’s Head Office Manager, Kristjan Staničić, said Croatian wines and food is the best way to represent country traditions which is why their authentic flavours and promotion is a step forward to having a full Croatian tourist offer on international markets. This especially concerns Germany, which is one of our most important home country markets from where almost three million tourists come every year, Staničić said. He also added that to date the number of arrivals from Germany has increased 19% on an annual level.

GERMAN NOSTALGIA FOR CROATIA Josip Pavičić from Feravino spoke in Germany about promoting Croatian wines. He said the Germans like our wines as the flavours are familiar to them, and they are quite nostalgic when they talk about spending their holidays

in Croatia. The Croatian wines and food offer is similar to that of Germany so I think we have good chances on this market. We should be assertive, and these events are a good opportunity, Pavičić said. Dingač Skaramuča was one of the first exporters of Croatian wines to Germany, 20 years ago. We are interesting to the Germans since they have a chance to taste our wines when they are on holiday. This motivates them to have them in their homes.

However, our ex-patriots still count as the biggest consumers, said Branimir Anđelić, Sales Manager at Dingač Skaramuča.

According to Poljoprivredna zadruga Vrbnik (agricultural co-operative), which delivers 6,000 bottles to Germany every year, this promotion is an opportunity to attract German tourists who have never visited Croatia.

Furthermore, in 2017 Croatia exported to Germany over €2 million in wine, at the same time Croatia imported €1.96 million of wine.

Based on these figures, Germany is fourth concerning wine imports. Master Of Wine, Ivan Barbić, commented on 2017 over 2016 when wine exports increased 13% and imports 2%.

Most of the wine for Germany is exported in bottles at €2.64 per litre. From Germany we import mainly sparkling and bottled wine. He also added that Croatia has several authentic wines recognised abroad (malvazija istarska and plavac). These can be unique wines, popular in highly competitive markets. Such events are good for making a breakthrough, but one should keep up with product promotion and be constantly present on the market, Barbić concluded.

IN 2017, CROATIA EXPORTED TO GERMANY €2 MILLION OF WINE, AND IMPORTED €1.96 MILLION

June 2018 | No 281 | PVinternational | 23

PRIVREDNI VJESNIK

AWARD FOR AMINESS HOTELS & CAMPSITES

Long-lasting relationships Aminess Hotels & Campsites, a tourism company from Novigrad, is the national winner in the category The Elite Award for Growth Strategy of the Year.

The competition was held in conjunction with the European Business Awards in Warsaw. Over 112,000 applications arrived from Europe, and the EBA award is awarded across 12 different categories, each with specific rating criteria. Amines hotels and camps won the award after entering the second round of the Ones to Watch competition, confirming once again their dedication to providing top service,

innovation, continuous development, building and maintaining long-lasting positive relations with visitors and employees. The European Business Award has been held since 2007 for companies in the European business community which promote success, innovation and ethical conduct. Sales and Marketing Manager for Aminess Hotels & Campsites Mladen Knežević, said the award confirmed the successful period behind them marked by increased business activity, the strengthening of its position on the market and the opening of new markets. The main

reasons behind company growth is their proactive approach to sales and marketing activities, investment during the last five years and their relationships towards their visitors, employees and partners – all of which are reflected in their logo long-lasting relationships, Knežević said.

Aminess Hotels & Campsites consists of four hotels, two in Istria and two in Dalmatia, together with camps in Novigrad in Istria. The company’s goal and standard of their success is to recognise demands, wishes, needs and expectations of their visitors and meet them. (S.P.)

53RD FLORAART AT BUNDEK

BEAUTIFUL FLOWER CITY OASIS One of the most beautiful flower exhibitions Floraart was held for the 53rd time at Bundek lake in Zagreb.

Over 220 exhibitors presented their flower arrangements and installations covering 300,000 m2. The show also included a music programme, interesting workshops, shows and traditional competitions such as the Croatia Florist Cup and the competition for the most beautiful home garden in Zagreb and the county. International competition from high school students was also held as well as a dog show organised to find homes for abandoned animals. Floragrad (Floracity) provided entertainment for the 24 | PVinternational | June 2018 | No 281

youngest visitors. This year’s 53rd Floraart was visited by over 350,000 flower lovers. At the opening ceremony, manager of the Zrinjevac affiliate and president of the executive board of Floraart, Igor Toljan highlighted that Zrinjevac has a 125-year old tradition of shaping, adjusting and directing their services to meet the needs of customers. Zrinjevac and Floraart both offer an insight into horticultural values, but they also try to offer what visitors are interested in. This show is not an exhibition of individual artwork, it is a comprehensive art work which turned Bundek into a beautiful oasis and place of enjoyment, Toljan said. (S.P.)