Monday, 4 April 2022

U.S. Market Represents Big Opportunity for Croatian Economy, Panel Hears

4 April 2022 - The U.S. market represents a big opportunity for the Croatian economy and the areas in which cooperation can increase include IT, tourism, and energy, it was said on Monday at a panel on trade, business and investment ties between the two countries.

The panel was held as part of the U.S.-Croatia Forum, organised by the U.S. Embassy on the occasion of 30 years of diplomatic relations between the United States and Croatia.

Croatia must find niches, five to ten products in which it can compete globally, and they can be sought in tourism and IT, said Mihael Furjan, CEO of the Pliva pharmaceutical company and president of the Croatian Employers Association.

Given the LNG terminal, there is also energy, he added, noting that Pliva is Croatia's biggest exporter to the U.S. and that HS Produkt is a major gun exporter.

The U.S. and Croatian governments must find areas in which we can cooperate. We must focus more, be creative, he said, adding that Croatia should learn from the U.S. where it is most successful, in innovation and business education.

U.S. business schools are among the best in the world and U.S. companies are the most innovative globally, Furjan said. 

Double taxation avoidance and visa-free travel

AmCham executive director Andrea Doko Jelušić said that Croatia, although a small country, had things to offer to the U.S. market. It's necessary to focus on high-added-value industries in which one can be competitive, not selling oneself cheaply but expensively, she added.

Many U.S. companies doing business in Croatia do so via a European centre, the Netherlands or Ireland for example, as a result of which official statistics don't show the real extent of their presence on the Croatian market, she said.

The Croatian and U.S. ministries of finance are still negotiating a double taxation avoidance agreement, whose adoption will make it much easier for small Croatian companies to enter the U.S. market, she said and underlined the importance of visa-free travel as of last October.

Končar exporting much more to US

Končar CEO Gordan Kolak said the company was exporting to the U.S. recently much more than before and that the U.S. was its main market for transformers.

He said increased investment in renewables would create new needs for electricity equipment and solutions for solar and hydroelectric power plants as well as wind parks. Emphasis will also be on digitalisation and grid modernisation as well as on more efficient energy management as consumers also become producers, he added.

Končar will invest much more in software development and smart grid management solutions, Kolak said.

Importance of U.S. investors in Infobip

Infobip is a global IT and communication company providing cloud mobile communication services for business clients. It also cooperates with WhatsApp, Snapchat, Google, and Microsoft.

It is the first Croatian company whose value exceeds $1 billion and in the last 18 months it has made four acquisitions on the U.S. market. Some U.S. investment funds have invested in it.

Infobip CEO Silvio Kutić underlined the importance of US investors. Speaking of enhancing U.S.-Croatia business cooperation, he underlined the importance of education and the need for an investment protection system.

Education for labour market

Coca-Cola HBC Adria general manager Ruža Tomić Fontana, too, underlined the importance of education, saying the education system must adapt to market needs in order to create a workforce with the necessary skills.

It's also necessary to enhance the communication between the public and private sectors on the business environment and to ensure the stability and predictability of doing business, said said, pointing to the problem of a too-high tax burden.

Anita Cvetić Oreščanin, Board member at Poslovna inteligencija, said Croatian companies should learn from U.S. companies and that everyone who had the opportunity should visit to get acquainted with the U.S. market.

Sunday, 20 February 2022

DZS: Croatia Has 168,200 Active Business Entities

ZAGREB, 20 Feb 2022 - There were 307,413 business entities registered in Croatia at the end of December 2021, and 54.7% of them, or 168,242, were active, according to data from the national statistical office (DZS).

The majority of the registered entities were trade companies (230,741), of which 133,928 of 58% were active.

There were 73,113 institutions, bodies and organisations, of which 34,844 were active, while the number of cooperatives stood at 3,539, including 800 active ones.

At the end of December 2021, there were also 88,205 crafts and freelancers in Croatia.

Broken down by activity, the majority of business entities were in wholesale and retail trade, and the repair of motor vehicles and motorcycles, accounting for 17.8% of registered and 16.1% of active entities.

Manufacturing accounted for 7.8% of registered and 9% of active entities, while 10.2% of registered and 12.7% of active entities were in professional, scientific and technical activities.16.3% of registered and 13.2% of active entities were in other service activities.

Most active entities privately owned

Most legal entities were privately owned, a total of 132,582 or 78.8%. The state owned 0.8% of the entities, 0.4% had mixed ownership, 0.5% were owned by cooperatives, and 19.5% of the entities had no information about ownership type available.

Most of the active legal entities, 88,220 or 52.4% had between one and nine employees, while 62,278 or 37% of the entities had no employees. Furthermore, 13,683 entities had between 10 and 49 employees, 3,470 between 50 and 249, 319 between 250 and 499, and 272 entities had 500 or more employees.

Limited liability companies accounted for the largest share of business entities, with 166,209 registered and 98,630 active entities. They are followed by simple limited liability companies, with 61,614 registered and 33,791 active ones.

The largest number of registered business entities were based in the City of Zagreb (32.3%).

For more, check out our business section.

Monday, 10 January 2022

Croatian Exports Jump, As Do Prices of Products Sold Abroad

January the 10th, 2022 - Some real pandemic growth can be seen when looking at the data for Croatian exports and their numbers for last year. Not only did Croatian exports jump, but the prices of various products sold abroad by Croatian enterprises also did.

As Novac/Jutarnji/Marina Klepo writes, last year, Croatian exports increased by more than a quarter: in the first eleven months of 2021, according to the CBS, they grew by 26.6 percent (25.4 percent in 2021's first ten months).

However, Croatian exports haven't increased significantly only compared to pandemic-dominated 2020, the Croatian Chamber of Commerce (HGK) pointed out, but their value in those first ten months of last year was 19.6 percent higher than back in the same period in pre-pandemic 2019. In addition, they added, Eurostat's data on the trade done by all EU member states shows that Croatia, both last year and a year earlier, was among the most successful EU countries.

"In the first ten months of last year, only Estonia and Greece had more dynamic export growth," they pointed out from the Croatian Chamber of Commerce. When we talk about the reasons for such good export results, we can mostly refer to the low base in the last, pandemic-dominated year.

Export structures

According to the Croatian National Bank (CNB), the high growth rates of merchandise exports and imports are only a small part of the positive effect of the base period. To a much greater extent, "they reflect the recovery of bith domestic and foreign demand, the partial re-establishment of supply chains, a stronger recovery of the manufacturing industry in relation to the service sector and a marked increase in global prices of energy and other raw materials," reads the latest publication. More detailed data on the structure of Croatian exports also reveal the reasons for their strong growth. When compared to the previous year, HGK analysts explained, the largest increases can be seen in the value of exports of energy - electricity, crude oil and petroleum products - which last year saw a significant increase in terms of prices on the vast global market.

Among the products whose export value increased the most were electrical equipment, followed by metals and finished metal products, whose prices on the global market also rose sharply. Available import price data for the Eurozone shows that crude oil imports rose by about 60 percent year-on-year in the first ten months of 2021, total refining industries rose by about six percent, petroleum products increased by about 40 percent, metals by about 30 percent and electricity by more than an impressive 150 percent.

"Therefore, even in the absence of more detailed data, it's more than noticeable that global prices last year had a significant impact on the growth of the value of Croatian exports," explained the Croatian Chamber of Commerce. Although strong growth is largely based on price increases, the Croatian Chamber of Commerce pointed out that there are a number of activities in which such price increases haven't been recorded, but which also record high export growth rates. These are, for example, the food, chemical and wood processing industries. In addition to that, a number of activities recorded significantly better export results than they did back in 2019, for example, agriculture, forestry and fisheries.

"This is at the same time a consequence of a strong recovery in global demand, but also a greater orientation of companies towards exports," the Croatian Chamber of Commerce said. The only activity that still recorded a significantly lower value of exports than in the same period in 2019 remained the production of motor vehicles and trailers.

Key markets

When it comes to the preferences of Croatian exporters, the figures suggest that last year they maintained their orientation towards the European Union's single market (EU) and what are traditionally the most important export markets. The share of Croatian exports to the EU market increased in the first ten months of 2021 from 68 percent in 2019 to 68.8 percent last year. The highest growth was achieved in the five most represented markets: Slovenia, Hungary, Italy, Bosnia and Herzegovina (non EU/EEA) and Germany.

For more, check out our dedicated business section.

Monday, 10 January 2022

Osijek Economic Centre Worth Over 687 Million Kuna on Horizon

January the 10th, 2022 - The Eastern Croatian city of Osijek is set to get a brand new Osijek Economic Centre worth more than 687 million kuna. This move will certainly work to boost entrepreneurship in this often wrongly overlooked city far from the coast.

As Poslovni Dnevnik/Suzana Lepan Stefancic/VL writes, the project for the preparation of documentation for the up and coming Osijek Economic Centre has been completed in its entirety, thus creating the preconditions for the construction of all buildings within the future complex. The design estimated value of the construction of the Osijek Economic Centre stands at the aforementioned figure of 687.50 million kuna.

''The preparation of project documentation for the Osijek Economic Centre is a complex and large project, and the design of it all as well as the securing of the necessary funds requires a lot of effort. In this project, funds are being jointly invested by Osijek-Baranja County and the City of Osijek. We've presented the documentation, ie the building permit for the entire project,'' said County Prefect Ivan Anusic at the final conference of the project.

The key to Eastern Croatia

He emphasised the fact that the future Osijek Economic Centre is of great value not only for Osijek-Baranja County and the City of Osijek but also for the whole of Eastern Croatia because, along with the Regional Distribution Centre for Fruits and Vegetables, it will become a key project for the development of this county and Osijek as a city. Osijek Mayor Ivan Radic said that the City of Osijek, as a partner in this project, donated land worth 26 million kuna, with another 15 million kuna provided through ITU mechanisms.

''I'm satisfied that everything is going according to the planned dynamics, and I'm convinced that the construction of the Osijek Economic Centre will encourage good economic trends in the city and county,'' said Mayor Radic.

Gabrijela Curkovic, Head of the Administrative Department for Investments and Development Projects of Osijek-Baranja County, pointed out that the recently completed task of dealing with all of the project documentation for the construction of the Osijek Economic Centre was co-financed by the European Union (EU), and that the work was done by the company Sirrah project from Osijek.

The total value of the project stands at 7,447,000 kuna, with 6,329,950 kuna having been co-financed by the EU, 756,525 kuna having been by the Ministry of Regional Development and EU Funds, and Osijek-Baranja County also provided 360,325 kuna.

The project holder is Osijek-Baranja County, and the City of Osijek is a partner.

''The Osijek Economic Centre will consist of several buildings, and the total area of ​​the closed building itself covers 73,000 square metres, while 35,000 square metres will cover an area of ​​open space,'' concluded Curkovic.

For more, check out our dedicated business section.

Saturday, 13 November 2021

FinMin: Credit Rating Important for Capital Price for State, Businesses, Citizens

ZAGREB, 13 Nov, 2021 - The credit rating is important for the price of borrowing for the state, businesses and citizens as its upgrade lowers the risk premium, which has a favourable effect on the price of capital, Finance Minister Zdravko Marić told Hina on Saturday.

The Fitch Ratings agency yesterday upgraded Croatia's rating to BBB, the best in Croatia's history, with a positive outlook.

Marić said the rating was first of all closely related to debt price and the capital price for the state and, directly or indirectly, for the interest paid by businesses and citizens.

The Fitch rating has a positive effect on those processes, he said, but added that the upgrade should be viewed in continuity, recalling that until not so long ago the state paid a considerable amount for interest.

In 2015, the budgetary expenditure for interest was HRK 12 billion, which at that time was almost the entire budget of the education ministry, whereas now that expenditure is HRK 4.5 billion lower.

"Interest used to be 5-6% and now it is about 1% on the ten-year bond," said Marić, adding that the credit rating assessment was important both in times of low and in times of higher interest rates on capital markets.

"We are talking about reference interest rates," he said, adding that the increased money offer in recent years led to a considerable drop in reference rates, but that the total interest paid by citizens, businesses and the state was a sum of the reference rate and the rate related to a specific country and to the risk premium.

"That's where the rating strikes because Croatia can't influence the trend of reference interest rates, but it can the risk premium it pays."

Marić said Croatia had a stable growth, public finances in order, a clear prospect of entering the euro area, and political stability.

"Those are all elements which have an effect on rating improvement, which is then reflected in a better perception and reputation of a country like Croatia in the financial world, and in the end comes the effect on the risk premium," he said. That is important both when reference interests are low and when they are high, he added.

The investment rating is very important, not just for debt and capital prices but also for capital availability, Marić said.

"The moment you are in the investment zone, you are interesting to many more good investors who can invest in securities," he said, adding that international investors had restrictions and were often not allowed to invest in a country below the investment credit rating.

"That's why it's very good that that has changed for Croatia in terms of Fitch and Standard & Poor's," Marić said, adding that it was also important that Fitch had a positive outlook on Croatia. "That sort of indicates the direction the rating could take."

He praised the media focus on the credit rating, saying that it was good that people became aware of how important it was to know how to manage public money well.

For more on business, follow TCN's dedicated page.

For more about Croatia, CLICK HERE.

Thursday, 11 November 2021

Croatia Has Almost 177,000 Active Business Entities

ZAGREB, 11 Nov, 2021 - At the end of September 2021, there were 303,535 business entities registered in Croatia, of which 58.2% were active, according to data from the national statistical office.

The majority of registered entities were trade companies (227,194), of which 140,976 were active.

There were 72,754 institutions, bodies, associations and organisations, including 34,844 active ones, 3,578 cooperatives, including 848 active ones, and 91,084 entities in crafts and trades and free lances.

Broken down by activity, the majority of entities were in wholesale and retail, with 54,417 registered and 28,990 active ones.

Services follow with 49,939 registered entities and 23,395 active ones.

There were 31,046 registered and 22,021 active entities in professional, scientific and technical activities, and 31,142 registered and 18,553 active ones in construction.

As for accommodation and food service activities, there were 24,428 registered and 14,213 active entities, while in manufacturing there were 23,720 registered and 15,629 active ones.

Seventy-nine percent of active legal entities (139,560) were privately owned.

Among active legal entities, 86,727 had between one and nine employees, 72,318 had no employees, 13,514 had between ten and 49, 3,502 between 50 and 249, 333 between 250 and 499, and 274 had 500 or more.

The majority of trade companies were limited liability companies, with 164,039 registered and 101,742 active ones, followed by simple limited liability companies, with 60,241 registered and 37,608 active ones.

The majority of registered legal entities was in the City of Zagreb (98,278), followed by Split-Dalmatia County (31,413) and Primorje-Gorski Kotar County (25,464), while Lika-Senj County and Požega-Slavonia County had the least, 2,547 and 2,627, respectively.

For more on business, follow TCN's dedicated page.

For more about Croatia, CLICK HERE.

Saturday, 23 October 2021

Close to 30% of Businesses Have No Employees

ZAGREB, 23 Oct, 2021 - Close to 30% of companies in Croatia did not have any employees in 2020 when of 139,009 businesses, 41,595  (29.9%) did not have workers, the Financial Agency (FINA) has said in a report which is based on processed annual financial statements.

A total of 37,865 of the 41,595 businesses without employees operated normally, 1,273 were undergoing liquidation, and 2,457 were undergoing bankruptcy proceedings.

A total of 17,438 businesses operated at a profit while 24,157 reported losses.

The share of businesses without employees in the total number of businesses was high, 29.9%, but it was small in relation to other positive indicators, with the share of businesses without employees in total revenue being 2.7%, in expenses 3.1%, pre-tax profit 7%, profit for the period 7.4%, exports 2% and investments 2.7%, FINA said.

Most of the businesses without employees operated in trade (8,280), followed by professional, scientific and technical activities (6,023) and construction (4,644).

Businesses without employees in trade had the highest total revenue (HRK 4.3 billion), followed by businesses in real estate activities (HRK 3.5 bn), and businesses in construction (HRK 3.3 bn).

Businesses without employees in 2020 incurred a net loss in 13 activities and operated in the black in eight activities.

The total financial result of all businesses without employees was negative, a net loss of HRK 2.1 billion.

The highest net loss was reported by businesses in real estate activities (HRK 755.7 million), construction (HRK 690.7 million), and manufacturing (HRK 403.2 million).

The lowest loss was reported by businesses in Other service activities (HRK 3.4 million).

Businesses without employees reported a net profit in only two counties - Međimurje County (HRK 16.8 million) and Virovitica-Podravina County (HRK 8.6 million) - while those in other counties reported losses, the highest having been reported in Istria County (HRK 436.1 million), followed by Split-Dalmatia County (HRK 433.1 million), and Zadar County (HRK 304.5 million).

The net loss of businesses without employees in the City of Zagreb, which had the largest number of such businesses (14,500 or 35% of the total number), was HRK 54 million.

Broken down by type of ownership, most businesses without employees were privately owned (41,165 or 99%) and they also reported the highest loss, of HRK 1.8 billion.

(€1 = HRK 7.5)

For more on business, follow TCN's dedicated page.

For more about Croatia, CLICK HERE.

Wednesday, 6 October 2021

Zagreb Stock Exchange: Crobex Indices Stable

ZAGREB, 6 Oct, 2021 - The main Zagreb Stock Exchange (ZSE) indices increased on Wednesday, the Crobex by 0.03% to 2,033 points, its highest level since February 2020, and the Crobex10 by 0.01% to 1,245 points, its highest level since March 2017.

Regular turnover was HRK 13.5 million. Another HRK 4.5 million was generated in a block transaction with Atlantic Group stock at HRK 1,550 per share.

The most traded stock in regular trading was Valamar Riviera, turning over HRK 3.6 million. It closed at HRK 31.2 per share, down 0.95%.

Forty-nine stocks traded today - 20 gaining in price and 13 losing, while 16 were stable.

(€1 = HRK 7.486388)

For more about business in Croatia, follow TCN's dedicated page.

Tuesday, 5 October 2021

Zagreb Stock Exchange Indices Close Mixed

ZAGREB, 5 Oct, 2021 - The main Zagreb Stock Exchange (ZSE) indices closed mixed on Tuesday, with the Crobex gaining 0.26% to reach 2,032 points and the Crobex10 shedding 0.23% to end the day at 1,245 points.

Turnover at the close of the trading session was HRK 14.7 million, which is 10.9 million higher than on Monday, and as many as six stocks passed the turnover mark of one million kuna.

The stock of the Valamar Riviera hotel company turned over HRK 2.2 million, closing at HRK 31.5 per share, up 3.3%.

The Podravka food company followed with a turnover of HRK 1.9 million. The price of its share fell by 3.27% to HRK 650.

The Koka poultry processing company saw the price of its share jump by 6.72% to HRK 470, turning over HRK 1.82 million.

The Atlantska Plovidba shipping company turned over HRK 1.77 million, with the price of its share increasing by 3.0% to HRK 550.

Telecommunications equipment manufacturer Ericsson Nikola Tesla saw the price of its share drop by 0.29% to HRK 1,710, turning over HRK 1.5 million, while the HT telecommunications company turned over HRK 1.4 million, with the price of its share remaining unchanged at HRK 190.

A total of 41 stocks traded today, with 21 of them recording price increases, 11 registering price decreases and 9 stagnating in price.

(€1 = HRK 7.490910)

For more about business in Croatia, follow TCN's dedicated page.

 

Wednesday, 29 September 2021

Gordan Maras' Post-Political Life: From Politics to Business

September 29, 2021 - Gordan Maras' post-political life sees the former economy minister and MP going into private business.

Croats often discuss politics, whether on social media or in bars over coffee or something stronger. As such, one could say they love politics but despise politicians.

If you regularly read TCN's political section, you can see why. Numerous instances of corruption among political elites or an inadequate bureaucratic system are just the tip of the iceberg. Add-in politicians (for a year, most notably President Zoran Milanović and Prime minister Andrej Plenković) spending more time insulting each other than dealing with the many problems Croatian people have, and you can really understand the constant trash-talking about politicians that Croats almost constantly do.

Some Croatian politicians, such as the late Zagreb Mayor Milan Bandić, despite heavy criticism, remain in power till the end of their lives. In contrast, others, such as former Prime Minister Jadranka Kosor, eventually retire from politics (and then spend time writing for TCN, no less).

One such politician who recently said goodbye to politics is Gordan Maras.

Many Croatian media outlets, such as Dnevnik.hr reported on Maras's social media post that his 20-year-old long political career doesn't mean the end of his working days.

After briefly being unemployed, Gordan Maras came with a business plan and became an entrepreneur. More precisely, he will be a consultant for European Funds, as well as a project financing advisor. Basically, if you have an idea to start a business, but you don't know how to start it, Maras is now the guy to talk to.

''I feel full of energy, thirsty to work and aware that I have a fresh start in front of me and I'll do everything I can to use this opportunity,'' Maras said, as noted by Dnevnik.hr

In general, apart from receiving edgy humour and cynicism at your expense from the public, the end of a political career may not be so bad after all. If your political endeavor brought you to parliamentary level politics, you're in line to receive a parliamentary pension. As Mirovina.hr writes, a parliamentary pension is 10,077 kuna, allowing for a more than pleasant life.

''If an MP has held office for three consecutive years, in each term longer than half, he may retire with 15 years of service. His pension is 55 percent of his base salary (parliamentary net salary), increased by two percent per year of service,'' informs Mirovina.hr when stating the conditions you need to satisfy for a Croatian parliamentary pension.

Gordan Maras, having been an MP from 2007 and economy minister from 2011 to 2016, certainly has the right to this luxurious pension. Not to mention the fact that his last job was being the head of Zagreb's local SDP branch.

Maras stated how ''a parliamentary pension was never an option'' and despite corruption scandals he was allegedly involved in, that is a praiseworthy decision on his part. But the downside is that he still received state aid for his new private business adventure. Let's just hope he will pay his taxes.

Gordan Maras's career change is followed by the tensions in the Croatian Socialdemocratic party (SDP) after new party president Peđa Grbin removed Maras and three other (in)famous party members: Rajko Ostojić, Zvane Brumnić, and Nikša Vukas. As TCN reported, this decision caused an unbelievable tremble within SDP, the second biggest political force in all of Croatia.

Despite the current president Zoran Milanović (who is also the former prime minister and the head of the government which had Maras as a minister) starting his career in SDP, the party hasn't won any parliamentary elections since 2015. Grbin hoped to improve SDP's rating by removing those associated with ''less than top quality'' political work (or alleged criminal affairs) in the past from the party. He also believes these individuals are the result of less than satisfactory election results with Rijeka being the only big city an with SDP mayor.

With Maras now retired, new faces came to the parliament. From the green-left Možemo! Party (currently ruling Zagreb) or the Centre-party Fokus (who earned their name in handling Sveta Nedelja ) to conservative star Marin Miletić from the Most party. With new names for every political preference, there may be a glimmer of hope that these new names will work honorably and convince Croats that politicians aren't so bad after all. Who knows, maybe the millionth time's a charm?

Learn more about Croatian politics and history from the 1990s on our TC page.

For more news from SDP Croatia, follow TCN's dedicated page.

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