Wednesday, 1 February 2023

Pula Apartment Prices Shoot Up by as Much as 70 Percent!

February the 1st, 2023 - Pula apartment prices, much like most other things which are purchasable of late, have shot up by as much as seventy percent in some cases. 

As Poslovni Dnevnik writes, s fully furnished apartment in the attic of an Austro-Hungarian building spanning 48.57 square metres in Stoja (Pula) is currently for sale for 135,000 euros. At that price, it means that a single square metre of an apartment in Stoja costs a whopping 2,779 euros. A two-room apartment in the Sijana area spanning 75 square metres in a building built back in 2008 is being sold for 200,000 euros or, if it's easier for people to calculare in the old way - for one and a half million kuna.

There are also Pula apartment prices coming in at 2,666 euros per square metre, and the brand new residential area under development in Marina Veruda offers luxury apartments with a swimming pool, where a one-room apartment on the ground floor spanning 51.41 square metres on a turnkey basis, costs a massive 289,181 euros.

There are even some where the price per square metre will cost a buyer as much as 5,624 euros. A resident of Pula can hardly afford that even if they held a position in any one of the top paying local companies, but the location above Marina Veruda is probably not intended for locals. It's more than likely aimed primarily at foreign buyers who are perhaps more affluent, and who will be able to get from their yacht to their apartment easily, or rent it out while aboard their yacht, writes local portal The Voice of Istria/Glas Istre.

In a way, this is a picture of the Croatian real estate market as it currently stands, which, judging by the prices per square metre, is almost entirely intended for a buyer from Western and Central Europe, but not for a Pula local, who simply doesn't take home that sort of cash each month or year.

"Regardless of the interest rates, Pula apartment prices have jumped so much that our customers can't keep up with them," explained Sergio Ricchiuto, the owner of the Pula-based real estate agency Immobilia Nekretnine/Property, who has been in the business for more than forty years now. He says he doesn't know why square metres in Pula have become so expensive recently.

''The media claims that the prices went up by about 10 to 20 percent, which isn't quite the case because the prices of some properties jumped from 50 to 70 percent, depending on their location. For our locals, especially young people and young married couples who are thinking of buying an apartment, it becomes mission impossible because at these prices they simply can't afford it regardless of the current interest rate, which is a small item compared to the price,'' Ricchiuto concluded.

For more, make sure to check out our dedicated news section.

Wednesday, 1 February 2023

BCG Says Opportunities for Croatian ICT Industry are Numerous

February the 1st, 2023 - The ongoing conflict going on in Ukraine and its consequences have replaced the global coronavirus pandemic as the main issue for the growth of world trade exchange, and due to geopolitical circumstances, the Croatian ICT industry has some great opportunities before it.

As Darko Bicak/Poslovni Dnevnik writes, the Croatian ICT industry and the country's production of machinery and equipment could do well at the moment, as large companies are looking for opportunities to shorten their supply chains, according to the Boston Consulting Group's (BCG) analysis entitled "Protectionism, pandemic, war and the future of trade".

It was also emphasised that standard trade patterns will change, but not only as a result of the war in Ukraine, but also due to the decreasing reliance of Western countries on trade with China and the rise of economic blocs such as the Association of Southeast Asian Nations (ASEAN), assesses the BCG analysis.

Energy will be the sector that will be most affected by the slowdown in global trade, and it has been estimated that from 2023 to 2031, the European Union (EU) will increase energy imports from the USA by 338 billion dollars, and a huge expansion will also take place in trade with ASEAN countries - Africa, the Middle East and India.

BCG also estimates that trade between the EU and Russia will decline sharply as Western Europe seeks to reduce its dependence on Russian oil and gas. As a result, Russia will try to shift its trade flows from Europe to other regions, especially to China and India. Like the US, the EU has also taken an increasingly cautious stance towards China in general.

The growth of mutual trade is slowing down, to a modest rate of 2.3 percent by the year 2031, and it will amount to 72 billion dollars. Tomislav Corak, a partner within BCG, pointed out that we're currently witnessing a time of tectonic changes in global trade. BCG predicts that trade will recover from the slowdown caused by the coronavirus pandemic and grow at a rate of 2.3 percent per year, but it will no longer be in the form of the trade we've known so well for the past forty years.

Over the next decade or so, global trade will become more regionalised, mostly under the influence of geopolitical forces," believes Corak, adding that Croatia is well positioned to take advantage of these changes.

"Membership of the EU's internal market enables Croatia to trade under the same conditions as the other 26 member states, which already represent more than 70 percent of Croatian foreign trade. It's problematic that the greater part of this exchange falls on the import of lower-value goods and services, which doesn't make Croatia very competitive After the introduction of the euro, the currency risk for Croatia in foreign trade exchange with EU member states finally disappeared, which opens up huge opportunities for attracting direct foreign investments necessary for the transformation of the economy and the development of activities with higher added value.

However, Croatia will have to compete with Slovakia and Slovenia in that regard, which have already been identified by global companies as countries where they can diversify their supply chains. In this way, global companies will continue to reduce their dependence on China, while at the same time building production capacities for the entire EU market," Corak believes.

In this context, according to BCG, Croatia and the Croatian ICT industry has significant opportunities before it when it comes to development in the production of machinery and equipment, because it has knowledge and experience in engineering such technologies. However, this will require significant investments in infrastructure and professional knowledge and skills, as well as smart policies to attract foreign and retain Croatian IT experts.

In their analysis, the consultants estimated that the consequence of the slowdown in trade between Western countries with Russia and China will be an increase in trade between northern and southern regions, as these countries will find even more new trade partners in Africa, South America and Southeast Asia.

The clear winners, according to BCG, are the ASEAN countries, which are likely to see new trade opportunities, especially with China, Japan, the US and the EU as a bloc. According to them, they will increase trade by more than a thousand billion dollars from 2023 to 2031.

For more, make sure to check out our news section.

Wednesday, 1 February 2023

Fifteen Million Euros Being Poured into Sunce Hotels Investment

February the 1st, 2023 - A very welcome fifteen million euros is set to be poured into a Sunce Hotels investment as part of yet another such cycle. As things begin gearing up for the 2023 summer tourist season, it's a move that can't come too soon.

As Jadranka Dozan/Poslovni Dnevnik writes, Sunce Hotels (Hoteli) has taken yet another step towards the continuation of its investment cycle. At an assembly held recently, the proposal on recapitalisation was confirmed.

Along with the recalculation and adjustment of the share capital as part of the conversion to the euro (by reducing the nominal value of the share from 13.27 euros to 13 euros), the proposal to increase the share capital by slightly less than nine (8.86) million euros, from 92.88 million euros to 101.75 million euros was accepted.

This new increase will be implemented through the issue of new shares, which will be subscribed by the majority owner, the Arab Eagle Hills Real Estate, through its company in the City of Zagreb. Since the registration of new shares is planned at 22 euros per share, which is significantly above the "nominal value", 15 million euros of fresh capital will flow into the company through recapitalisation.

After about 45 million euros were invested last year, this will ensure financing for this year's planned investments. Sunce Hotels investments are already taking on a very firm shape, as the company has already announced the renovation of Hotel Afrodita in Tucepi on the mainland and of Hotel Bonaca in Bol on the island of Brac.

In addition to the above, there are also plans for several smaller operations within the new Sunce Hotels investment cycle to improve the overall offer and raise the quality of services provided in their other facilities. So far, it is not known whether Eagle Hills will also take over the state's stake in Brac Airport.

For more, make sure to check out our dedicated news section.

Tuesday, 31 January 2023

Sailing in Croatia, View from Above: Stunning Video from 45 Degrees Sailing

January 31, 2023 - And suddenly it is summer again, and time for sailing in Croatia. A spectacular video from the air by local specialists 45 Degrees Sailing. Meet the Croatia they love - wow!

One of the things I love about Croatia is that its sheer diversity attracts so many different people with different passions, who then become experts and artists in their niche.

I am not a sailor, but I seriously could be tempted by the incredible work of Nick Hathaway of 45 Degrees Sailing (and I am talking just about his videography, the feedback from his sailing tours is nothing less than outstanding).

So pull up a chair, pour yourself a glass of wine and dream of summer on the water in Croatia. What a gorgeous video and promotion of Croatia! Full details about the video below.

CROATIA IN 4K Video UHD - Relaxing Music with Sailing and Coastal Islands.

Flying Over Croatia in 4K with 45 Degrees Sailing See islands Šolta, Hvar, Badija, Brač, Vis, Bisevo, Zečevo Towns of Komiža, Vis and Stari Grad

Adriatic Sea and Dalmatian Islands Dobrodošli u Hrvatsku. Welcome to Croatia.

We bring to you Croatia in 4K video UHD. Set to relaxing music, fly over Croatia like a bird and see the islands Šolta, Hvar, Brač, Badija, Vis, Biševo, Zečevo. Peek from up high at famous attractions like the Blue Cave (or Modra Špilja as it’s known locally) and the Monk Seal Cave. Get a panoramic experience of the quaint coastal towns of Komiža, Vis, and Stari Grad. Enjoy this rich aerial perspective of the Adriatic Sea and Dalmatian Islands.

This is the Croatia that we love. And we want to share Croatia with you in 4K. Get lost in the relaxing music of the back track and transport yourself into our 4K video footage.

Filmed with Drones:

DJI MAVIC2 Pro (Buy DJI Mavic 3:

DJI Mini2 - Courtesy of AdriaticHero (Buy DJI Mini 2: )

Filmed and Edited by Mahina Hathaway and Nick Hathaway, 45 Degrees Sailing Drone:

DJI Mavic 3:

Come sailing with 45 Degrees Sailing! Check us out at:

Tuesday, 31 January 2023

"Taxation Needs to be Correlated to the Risk and Damage Products Produce."

January 31, 2023 - Taxation is always a hot topic in the Croatian economy. Professor PhD Fernando Pinto Hernández from Rey Juan Carlos University in Madrid with some thoughts on special taxation on energy and tobacco, in an interview in today's Jutarnji List, which is translated below in full.

We talked to a global tax expert, he says that the Croatian economy is at risk: 'You must not prolong this measure'

Decrease of taxation is important to stimulate economic growth. Equally important is the level of taxes and the tax burden, as well as the design of the tax system itself. In the field of special taxes, it is important to design a tax system that differentiates products according to their characteristics and harm to individuals, society and the environment. Such an approach is important because of the long-term social and economic effects, stated prof. PhD Fernando Pinto Hernández from Rey Juan Carlos University in Madrid, referring to special taxes on energy and tobacco.

What is your opinion on the tax policy at the EU level in the context of the energy crisis and inflation?

The problem with inflation, which partly stems from the rise in energy prices, must be accompanied by public policy decisions containing some taxes (progressive ones), such as personal income tax, and lowering others (regressive ones), such as VAT on some commodities or special taxes on consumption.


Due to the crisis, Croatia introduced a tax on extra profits for companies in 2022, regardless of whether they profited during the crisis. What do you think about such taxation and what is the situation in Spain?

I hope that these tax policy measures, which significantly increase the tax burden on companies in certain productive sectors, are temporary. In other words, they should not be prolonged for too long, as they will lead to significant efficiency losses in the Croatian economy, which is already experiencing difficulties due to both rising inflation and its recent entry into the euro area. In the case of Spain, very similar measures are being implemented and therefore the results could be the same if the fiscal policies are not very temporary.

Is it logical to significantly tax potentially harmful products such as tobacco?

It seems logical to tax those products that generate a negative externality of consumption, i.e. that cause damage to the health of others that is not reflected in market prices. However, we need to take into account the real health risk they pose in order not to over-regulate them and impose extraordinarily high taxes. In even simple terms: yes to taxing them, but the level of taxation needs to be correlated to the risk (and damage) these products produce.

What have the experiences of countries such as Sweden, Italy, and the Czech Republic shown considering they followed the principle of higher taxes for harmful products and lower taxes for less harmful alternatives?

What they have shown is that, by setting excise taxes according to the health risk posed by these products, efficient tax policy outcomes are achieved. It could be summarized as a tax policy whose slogan is that “the lower the risk, the lower the taxes”. From my point of view, these countries are an example of success in terms of taxation design.

France proved to be a negative example and what are the prerequisites for designing a good tax policy?

When taxes and public policies lack a technically based design, the desired outcome often turns out to be the opposite. In the case of France, this is exactly what has happened: in an attempt to reduce the prevalence of tobacco by raising prices, the population has opted for substitute goods of poorer quality and greater danger (e.g. illicit tobacco).

How to use taxation as a tool to stimulate growth?

Economic theory indicates that for a tax to have a positive effect on economic growth it must fulfil several premises. The first of these is to have a good technical design. The second is that it should aim to replace the efficiency loss caused by its introduction. And finally, the tax must entail the least possible loss of purchasing power for the taxpayer, as this is the only way for the taxpayer to feel free to consume, save or invest his or her money.

The fight against tax evasion and tax fraud is one of the priorities of the EU. Can this battle even be won?

It is very difficult to fight tax fraud. However, over the last ten years, the European Union and individual countries have implemented their anti-fraud policies very significantly. I would like to think that the battle can be won, but in order to do so, the tax burden and the tax effort of taxpayers must be reduced as much as possible while guaranteeing quality basic public services. This is particularly true when we think about the inefficiencies in re-distribution.

This article appeared originally in Croatian in Jutarnji List - you can read the original here.

Tuesday, 31 January 2023

Croatia Tennis Team Gears Up for Davis Cup Qualifiers in Rijeka

January 31, 2023 - Croatia's preparations have officially begun for the Davis Cup qualifiers against Austria, scheduled for this weekend in Rijeka. 

Croatian tennis players are currently training on new courts at Zamet hall in hopes it'll help launch them into the next stage of this competition.

"The impressions are excellent. The hall is beautiful, and I hope it will be filled on Saturday and Sunday. The boys are training, getting used to the conditions, and the surface, and we hope to be ready for Saturday," said Croatia coach Vedran Martić.

According to the latest data, the hall could be filled to capacity. Some of the most experienced Croatian tennis players are training in Rijeka, such as Ivan Dodig, who made his debut in this competition in 2002 for Bosnia and Herzegovina and in 2010 for Croatia. There are also some young players who are expected to take an essential role in the national team, like Mili Poljičak and Dino Prižmić. 

"We have young players with us, as well as Ivan Dodig, to whom I am very grateful for coming. He had health problems in Australia but gathered the strength to be with us in Rijeka. Young players gain experience and train with older players. These are our two talented juniors from whom we expect a lot in the future," said Martić.

Marin Čilić, who played his first Davis Cup match against Austria in 2006, will not be in Rijeka due to knee surgery. Will Borna Ćorić and Borna Gojo be safe selections in the singles matches? 

"Yes, they are prime contenders for the singles matches. In the last two years, they have played fantastically. Ćorić did his best, played brilliantly, and Gojo always plays outstanding tennis for the national team, and I hope it will be like that again," Martić said.

The Austrian national team is led by Dominic Thiem, once the number three tennis player in the world, and a player who can boast one Grand Slam title and three Grand Slam finals, as well as two entries into the Masters finals. 

"Austria is good; they are dangerous. It won't be easy to win. Thiem is an excellent player, and even though we do not know in what form he will be coming, it will be difficult to beat him in Rijeka. The next two players, Novak and the left-handed Rodionov are around the 100th in the ATP ranking but are very good players. As a doubles team, Erler and Miedler are getting better and better, and they play together all the time. We expect a difficult match, but we hope to win," Martić concluded.

Source:  HTS

To follow the latest sports news in Croatia, follow TCN's dedicated page.

Tuesday, 31 January 2023

CJA: SLAPP Lawsuits are Form of Journalist Abuse with Dire Consequences

January 31, 2023 - The problem of SLAPP lawsuits is an extremely important topic because they represent the latest form of abuse and attacks on journalists, according to the president of the Croatian Journalists' Association (CJA), Hrvoje Zovko. 

Something that Paul Bradbury has experienced himself, anyway.

As Index writes, speaking on the panel on the legal foundations and challenges in regulating SLAPP - strategic lawsuits against public participation, Zovko pointed out that CJA has been collecting data on the total number of lawsuits against media and journalists for damage to reputation and honour for years.

They are asking for almost HRK 77.5 million from journalists

According to the latest survey results from March last year, at least 951 lawsuits for damage to reputation and honour against the media and journalists were active in Croatia, from which the prosecutors claimed almost HRK 77.5 million.

"This is a very important topic for us and concerns all our members because SLAPP lawsuits are a new form of abuse and attacks on journalists," said Zovko.

The president of the European Federation of Journalists and the Union of Croatian Journalists, Maja Sever, emphasized that the fight against SLAPP lawsuits requires the joint action of professional journalistic organizations, legal experts, and judges.

"This is a joint fight. Unfortunately, the consequences of SLAPP lawsuits on any individual journalist are dire. "Most of our colleagues say that every attack, online harassment (abuse) is nothing compared to the fear of targeted SLAPP lawsuits," said Sever.

Lawyers specializing in media law and freedom of expression and members of the European Commission's expert group for SLAPP lawsuits, Vanja Jurić and Vesna Alaburić, emphasized the extreme importance of education for lawyers and journalists but also judges in the fight against SLAPP lawsuits.

They also assessed that a prerequisite for the successful application of European practices is an excellent knowledge of court practice, even to determine the groundlessness of SLAPP lawsuits, but they also called for caution in defining them.

"The goal of SLAPP lawsuits is not to win a dispute."

Alaburić pointed out that the goal of SLAPP lawsuits is usually not to win the dispute but to discourage journalists or the activities of civil society organizations that raise some sensitive topics.

Constitutional Court Judge Goran Selanec and Professor Dunja Duić took part in the discussion, as well as numerous journalists, including Drago Hedl and Ivan Pandžić, who offered their views on SLAPP lawsuits.

The panel is part of the project "Informed citizens monitor the prevention of future violations of human rights and the work of the Croatian Representative's Office before the European Court of Human Rights," supported through the Fund for Active Citizenship with money from Iceland, Liechtenstein, and Norway within the framework of EEA grants.

For more, make sure to check out our dedicated News section.

Tuesday, 31 January 2023

Meet Baby Lotta, the Newest Resident of the Zagreb Zoo

January 31, 2023 - Mom Inola gave birth to her baby pygmy hippo in the Zagreb Zoo just two months ago. The citizens chose the name for the new member of the crew through social networks.

As 24Sata writes, the little pygmy hippo, born two months ago in the Zagreb Zoo, has now been given a name. More than three thousand citizens were involved in selecting her name through social networks, and twelve volunteers chose the four best suggestions: Gloria, Pepa, LuLu, and Lotta.

The citizens voted for Lotta.


Zagreb Zoo Facebook

The little barrel

"Her name suits her perfectly! We are honoured that we participated in choosing her name. Lotta was really tiny when she was born, and now we nicknamed her our sweet little barrel! While we watched over her mom Inola in the last weeks of her pregnancy, we ensured that the birth didn't start in the pool. We were also worried about whether Inola would have a mother's instinct and whether the little one would be able to breastfeed. We are happy that everything went well. Now we enjoy watching the mother and the little one have a nice time hanging out and playing", said student Ana Cindrić, who has been at the Zagreb Zoo since last year.

Ana added that as a veterinary student at the Veterinary Faculty of the University of Zagreb, this was a valuable experience for her.

"Thank you to the volunteers for their selfless work! They spent hours and hours with the family of pygmy hippos. They notified us promptly of any change in the hippo's behaviour, thanks to which we could more calmly await Lotta's arrival. The little one is now growing and developing beautifully under their watchful eye. That's why we are glad they participated in selecting her name - said Damir Skok, director of the Zagreb Zoo.


Zagreb Zoo Facebook

This wonderful family of pygmy hippos is housed in the Rainy Africa pavilion. Lotta is constantly near mom Inola, and dad Otto is temporarily separated from the female part of the family by a special fence.

Otto is 28 years old, Inola is seven, and they both came to Zagreb from Germany.

Although Inola is a first-time mother, she takes excellent care of Lotta. She feeds her milk, and Lotta likes to try other things, from lamb's lettuce to hay. She is very playful and loves to frolic in the pool.

For more, make sure to check out our dedicated Lifestyle section.

Tuesday, 31 January 2023

Inflation in Croatia Follows EU Trends, Higher in Lower-income Households

January 31, 2023 - Inflation in Croatia is following the EU trends, being a lot more noticeable and, therefore worse for lower-income households. Inflation for those who earn more is lower. What is the difference exactly?

As Poslovni writes, the difference in inflation for the ten percent of households with the lowest income and the ten percent of the strongest households in Croatia amounts to about five percent. Marina Tkalec, a senior research associate at the Zagreb Institute of Economics, recently presented the estimate.

Individually, she added, there are also households whose inflation is 30 percent. These are highlights from the second phase of a three-year research project on inflation inequalities in Croatia. She is working with two other colleagues, Ivan Žilić and Ivica Rubil.

After the first results were published less than a year ago, new findings on inflation inequality are expected to be presented this week.

The extent to which recent inflation trends affect different population groups differently and how low- and high-income households face different inflation rates due to differences in consumption patterns is also addressed by the international think tank Bruegel.

These days, they published a comparative image for the countries of the European Union with data for the end of last year. However, this overview does not compare deciles, but the fifth of households with the lowest incomes and the fifth of the highest-income households.

In short, Croatia fits into the prevailing pattern among EU members: households with low incomes face a higher rate of inflation than those with high incomes. There are opposite examples in the EU, with higher inflation for more affluent households, but there are significantly fewer of them, and they are mostly the most developed EU members, such as Sweden, Finland, and Germany.

According to Bruegel's data, when it comes to inflation in Croatia, the difference between the lower and upper quintiles is less than two percentage points (1.86 pb). For the lower-income households, inflation at the end of last year was 14.55 percent, and for the higher-income ones, it was 12.7 percent. That difference may not look significant; however, there are considerable differences within these classes. The gap is mitigated to some extent by government interventions, especially in energy and food prices. In addition to that, it should be borne in mind that in order to influence inflation inequality, it is essential that the price of a specific consumption category changes and that it makes up a different share in the consumption baskets of low- and high-income households.

While, for example, a sharp increase in fuel price increases overall inflation, a household without a car will be less affected than one with a car or two. The same price increase has a different impact depending on the share of total household expenditure.

This is certainly the case with average food prices, which have risen by a fifth annually, and have a much larger share in the expenses of poorer households than in wealthier ones. The same applies to housing, electricity, heating, and water costs. However, the impact of price increases on transportation items is the opposite.

Households with high(est) incomes are more exposed to price increases for these services and goods (vehicles, fuel, maintenance, repairs). This is because they drive and travel more, often have more cars, and buy them more often, so their share of these expenses is many times higher than the lowest-income households (often without a car, relying on public transport).

For the same reasons, for example, the annual increase in the prices of clothing and footwear has a mitigating effect on the inequality of inflation; although price increases were smaller there, this category has a significantly larger share in consumption expenditures among households with high(est) incomes.

According to Bruegel's calculations, the difference in inflation in Croatia in the observed income classes is significantly smaller than in several countries where inflation is around 20 percent (Lithuania, Latvia, Hungary) and in Bulgaria, Romania, or Slovakia. In Latvia, for example, this difference is 7.6 points. At the same time, in the Czech Republic, Poland, and Slovenia, this measure of inequality is slightly lower than in Croatia.

Habits, circumstances...

In periods of high inflation, few households will recognize themselves in the official figure. In addition to the level of disposable income, the question of consumer habits, preferences, and other life circumstances is also important. Similar to average and median wages, higher-income households have a larger share in official inflation. "At that level, every kuna spent, and not every household, holds one vote," emphasizes Tkalec. The diversity of the spending structure is usually read in the CBS Household Consumption Survey.

According to the distribution resulting from the last available Survey conducted in 2019, ten percent of those from the lowest income bracket spend 40 percent on food and non-alcoholic beverages, while the top ten have half the share. There is a similar gap in housing, electricity, heating, and water costs; for the lower decile of households, 30% of expenses go to them, and for the upper decile, slightly more than 15%.

In contrast, in the basket of the best-off ten percent, ten percent is spent on clothes and shoes, and an average of only three percent in the bottom decile. The difference is much more pronounced in the share

ma transport costs; They take 1.4% from the poorest tenth (for many, only public transport), and for those from the top decile, this item makes up almost 16%.

All in all, the poorest ten percent (retired, single households) spend 70% on food and utilities, and the top ten spend less than a third on average.

Uncertainty and risks

However, even for those halfway between these classes, the "real" inflation is slightly higher than the official 13.1% for December. Everything indicates that the slowdown will be less than was calculated until recently. There are also some potential "distractions" on that track. Željko Lovrinčević from EIZ sees several of them in the coming months. One is the EU embargo on diesel imports that comes into effect on February 5.

At the beginning of March, spring sowing begins with accompanying questions (prices of diesel, fertilizer, planting material). A month later, it remains to be seen what the new framework will look like after the end of the period during which the Government limited the prices of some energy products to consumers. Finally, he says, certain uncertainties and risks in terms of prices are usually associated with the beginning of the tourist season.

For more, make sure to check out our dedicated News section.

Tuesday, 31 January 2023

Croatian Orbico Group to Open Largest Logistics Centre in Zdencina

January the 31st, 2023 - The Croatian Orbico Group, a well known company headed by entrepreneur Branko Roglic, is set to open its biggest logistics centre yet, in Zdencina near Zagreb.

As Poslovni Dnevnik/Suzana Varosanec writes, the largest European distributor of consumer goods, the Croatian Orbico Group is continuing strongly with its development policies this year. With new investments financed primarily from the company's own funds and carried out according to the proven best model of cooperation with developers, Orbico's largest logistics and distribution centre is starting to be realised.

"With the investment of the company Orbico Hrvatska (Croatia) in Zdencina, a place situated along the Zagreb-Karlovac route, the construction of the first phase of our new logistics centre covering approximately 40,000 square metres is now beginning. We plan to move into it at the beginning of 2024," announced Roglic after the contract with the contractor was signed.

In the continuation of the project at the same location, a second phase is expected through the expansion of the centre to include another 20,000 m2. With this, the Croatian Orbico Group is sticking with the characteristic transformation processes of its business, all led by digitisation and robotisation and investments in logistics.

The new logistics centre is in the function of business optimisation through cost reduction, and the location itself was chosen based on the same assumptions of economy, productivity and the profitability of business.

Record revenues in 2022

For more than half a year, they considered several locations for a new investment, including nearby Sveta Nedelja, the home of Rimac Automobili, as well as near the Hungarian-Croatian border. In the end, the calculations showed that Zdencina in Zagreb County is ideal for a number of reasons for the new momentum of Orbico's business in Croatia.

The company already owns a number of warehouses across the country, and since a few years ago a large logistics centre in Dugopolje, as their main one in Dalmatia. With the new centre in Zdencina and further on the link with the existing one in Dugopolje, Orbico is completing a concrete solution for the biggest distribution problem in Croatia, which manifests itself in highly pronounced seasonality.

"When it comes to the distribution of goods, the main issue in Croatia is how to solve seasonality in the ratio of 1:17. This means that you need 1 tow truck for distribution in the winter, and as many as 17 in the summer, and I think this is the most difficult problem for all distributors in general. Under these conditions, you should also have optimal human resource management," explained Roglic.

The investor in the new project is Orbico Hrvatska with around 1,250 employees out of a total of 7,500, and its activities in 2022 totalled a record 520 million euros in total revenue. The entire system boasts operations in 20 European countries, all of which also enjoyed business growth, generating an impressive 3.2 billion euros in total revenue last year.

In its expansion and development on the basis of the adopted business plan in the medium-term period, i.e. on the horizon of 2028, Orbico should generate revenues of 6 billion euros, which means that it will become twice as large as it is today. Within its current framework, growth is being achieved using the leverage of modern logistics, meaning that the Croatian Orbico Group is leading the way with investments in more than 200,000 m2 of storage space and a total of five LDCs. In addition to Croatia, there are also new logistics centres in Poland, Bulgaria, Romania and Hungary.

Around 40 million euros was pumped into this investment

For this investment, which is still in the stage of tendering for the selection of developers and contractors, it was stated that the amount involved was around 40 million euros. Roglic hasn't revealed how much the post-pandemic crisis with the additional factor of inflation affected the final amount of the investment for now, but he did make sure to clarify that the company will first work under lease in the new centre, and that after the lease expires, Orbico will take over the facility fully.

"Through the rent, we pay for the investment and realise more new projects in cooperation with developers who are building our new logistics capacities. This is the best way to develop a business, especially when it takes place in several countries. Orbico operates in 20 different European countries, and we're continuing to grow at a good pace, and I must highlight the fact that we don't take loans. After some time has passed with our lease of the new LDC in Zdencina, we will buy the logistics centre," concluded Roglic.

For more, make sure to check out our dedicated business section.

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