Friday, 22 October 2021

Croatian Entrepreneurship Decently Positioned on Global Monitor (GEM)

October the 22nd, 2021 - Croatian entrepreneurship is very decently positioned on the Global Entrepreneurship Monitor (GEM), which makes a change as Croatia sadly often finds itself at the very bottom of EU rankings for most things. This too, however, has a downside, as a lot of such business moves are made out of necessity rather than basic desire.

As Poslovni Dnevnik writes, despite the widespread perception of the poor status of Croatian entrepreneurship, according to the intentions to launch a business venture, Croatia is at the very top of the list of EU member states according to the latest Global Entrepreneurship Monitor (GEM), for 2019 and 2020.

This is otherwise the world's largest survey on entrepreneurship, which shows international comparisons of the frequency of starting up new entrepreneurial ventures, social attitudes towards entrepreneurship, fear of entrepreneurship and other determinants of entrepreneurial activity.

As many as 60 percent of Croatian respondents believe that being an entrepreneur is a good career choice, although at the same time, according to the attitude towards the social status of successful entrepreneurs, Croatia is at the back of the EU.

The highest growth of Croatian entrepreneurship has been recorded unexpected areas of the country, more precisely in Lika and Banovina

The findings of the latest research show that the perception of the opportunities in the immediate environment of the research participants tends to stagnate. To the extent that Croatia, while coming in first place among the member states of the EU in terms of entrepreneurial intentions, can say that this is attributed to doing so out of necessity, and not because of a mere opportunity being put on the table. The results of the world's largest survey on entrepreneurship were explained in this way by prof. Dr. Slavica Singer from the University of Osijek, who was also the leader of the research team.

The perception of their own ability to start a business venture among respondents from Croatia is significantly above the average of EU countries that participated in the GEM survey in the past three years, as well.

The gap between the high perception of personal abilities to start a business in Croatia (75 percent) and the lower level of perception of opportunities (47.2 percent) in 2020 raises the question of how it can be that those who think they are capable of starting a business don't see a business opportunity in order to do? This stands out in the analysis of the results. Is it because they don’t have the opportunity or maybe they don’t know how to recognise one when it comes knocking?

If the problem is in (non) recognition, then the question of the role of the Croatian education system arises. However, it should be noted that in 2020, all regions in Croatia except Zagreb and the surrounding area, despite the coronavirus pandemic, had an increase in starting business ventures.

The most intensive growth in terms of Croatian entrepreneurship last year was recorded in Lika and Banovina, the regions that still have the lowest entrepreneurial activity of all. At the same time, those who live there are those who see the least opportunities in their immediate environment, so the most common reason for entering an entrepreneurial activity is actually necessity, ie "earning a living''.

Is the so-called world of early entrepreneurial activity (which includes business ventures up to 3.5 years of age) as opposed to the activities of ''fully fledged'' entrepreneurs, in Croatia we have a growth of new business ventures and a relatively small share of fully fledged companies.

Last year, the growth of Croatian entrepreneurship continued throughout the country (from 9.6 percent back in 2018 to 12.7 percent), which is above the average of EU countries included in the GEM survey.

At the same time, in the period 2018-2020, the number of so-called adult (fully fledged) enterprises per 100 adult inhabitants in Croatia stood at at the level of about 4.2 percent, which is just over half (57 percent) of the European Union average for 2020. Entrepreneurial activity is most often abandoned due to unprofitability (17.5 percent, compared to to all of the reasons for leaving) as well the tax burdens and bureaucracy involved (16.1 percent).

The analysis of the results of the GEM research still confirms the pattern according to which people who are more educated tend to be more entrepreneurially active, which is the case in the EU as well. People with a higher level of education are more likely to see opportunities, are more confident that they have the necessary knowledge and skills to start a business, are better networked with entrepreneurs (meaning that they know someone who started a business in the last two years or so) and intend to start a business in the next three years themselves.

Croatian entrepreneurship levels are above the EU average

The results also suggest that Croatian entrepreneurship on the whole is strengthening, according to competitiveness criteria at both the national and international levels. At the same time, Croatia is largely building its competitiveness in the sectors of medium and high technological intensity, as evidenced by the fact that in these sectors, there was a 11.4 percent representation of all newly started business ventures and a 12.2 percent representation of fully fledged (adult) business ventures. Both of these indicators are above the EU average of the countries covered by the survey.

For more, check out our business section.

Friday, 15 October 2021

Over 28,000 Businesses Operated in Croatia's Wholesale and Retail Sector in 2020

ZAGREB, 15 Oct 2021 - A total of 28,615 businesses operating in Croatia's wholesale and retail sector in 2020, employing 192,367 workers and earning HRK 260.2 billion in total revenues, according to an analysis by the Financial Agency (Fina) for the years 2004, 2009, 2014 and 2020. 

By comparison, there were 27,044 wholesale and retail operators in 2004, 27,262 in 2009, and 26,260 in 2014.

The number of workers in this sector was 5.2% higher in 2020 than in 2004. The largest number was recorded in 2009 (198,988) and the lowest in 2014 (178,645).

The highest total revenues were generated in 2020, of HRK 260.2 billion, which was an increase of HRK 82.6 billion compared with 2004.

In 2020, the highest total revenue was reported by Konzum Plus (HRK 10 billion), followed by Lidl Croatia (HRK 6.1 bn), Spar Croatia (HRK 5 bn), and Plodine (HRK 4.5 bn).

The highest total profit was also generated in 2020, of HRK 10.2 billion, and was two and a half times higher than in 2004. The best earner was Lidl Croatia, with a profit of HRK 274.8 million.

The highest total loss was recorded in 2009, amounting to HRK 4.3 billion, which was 60.9% higher than in 2020 when it totaled HRK 2.6 billion.

The consolidated net result for last year was HRK 7.5 billion, compared with HRK 1.86 billion in 2004, HRK 1.44 billion in 2009, and HRK 2.3 billion in 2014.

The largest fixed capital investments were made in 2004, of HRK 8.9 billion, while in 2020 they totaled HRK 2.4 billion, which is 72.9% less than in 2004.

The largest trade deficit was reported in 2020, of HRK 37.4 billion, compared with HRK 25.6 billion in 2014, HRK 36.7 billion in 2009, and HRK 36.3 billion in 2004.

Last year, the biggest importers were Lidl Croatia (HRK 2.3 billion) and Medika (HRK 2.1 billion).

In 2020, the average net monthly salary in this sector was HRK 5,816, up by 84.3% compared with 2004 when it was HRK 3,157. It was 2.6% lower than the average wage in the enterprise sector, which amounted to HRK 5,971.

(€1 = HRK 7.5)

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

Friday, 24 September 2021

Three More Croatian Companies Obtain Halal Certification

September the 24th, 2021 - Three more Croatian companies have managed to obtain halal certificates which will open up more doors for them on the markets of Islamic countries, and as such increase their revenue.

As Poslovni Dnevnik writes, to date, 160 such halal certificates have been issued, and 84 Croatian companies who currently have a halal certificate, of which 52 are food producers, 32 are engaged in services. One educational institution, the Matija Gubac Elementary School, as well as the first manufacturer of halal disinfectants, Genox, have halal certificates.

After the introduction of the halal certificate, the export of products is growing as having the certificate has an impact on the increase of company income, as well as on the profit, as was highlighted by the research conducted among Croatian companies and producers which are holders of halal certificates before the pandemic.

The coronavirus pandemic has further increased demand for halal products and services worldwide, opening up numerous markets and business opportunities. Why and how the halal market is developing, what the challenges and perspectives are, what the role of halal in certification and standardisation is, how much and how it contributes to exports and tourism in Croatia and what foreign halal experiences are, were all topics discussed at the first Halal Business Forum, which was held on Tuesday, September the 21st, 2021, at the Westin Hotel in Zagreb.

As part of the Forum, three more Croatian companies were presented with their halal certificates, these include: Tammy craft, which provides services in the processing of hazelnuts as a raw material and for the production of hazelnut oil, flour and butter; Luxury Villa Subventus from the island of Krk and Uljari Vodice d.o.o., which owns a modern olive oil centre.

Mufti Academician Aziz Hasanovic of the Islamic Community in the Republic of Croatia, stated that the Islamic community founded the Centre in 2010, from the very beginning with the desire to increase the number of not only companies but also products and services with halal certificates. There is room for more cooperation, the expansion of production opportunities, as well as joint appearances in third markets, he believes.

For Sandra Herman, Secretary of State of the Ministry of Tourism and Sport, there's no doubt. Halal tourism will have its place in the Tourism Development Strategy until 2027, which is currently being prepared, not only seasonally, but also for the off-season and in the development of health and wellness tourism. She reminded that a total of 12 hotels have halal certificates, as well as one Croatian travel agency.

The ambassadorial panel, attended by Malaysian ambassadors Kennedy Mayong Onon, Iran's Parviz Esmaeili, Azerbaijan's Fakhraddin Gurbanov and the first secretary of the Indonesian Embassy in Croatia, Wasan Adi Nugraha, said that there was room and interest in developing foreign trade. The creation and operation of joint chambers and business associations, as well as the exchange of information, constant communication and the presentation and identification of potential, could contribute to acceleration. They also invited Croatian companies to freely contact them with inquiries about possible cooperation should they want to.

The value of the halal market in EU countries is estimated to stand at around 66 billion US dollars, with growth of between 2 and 3 percentage points each year. The EU produces a very large number of halal products for the needs of the domestic population, but at the same time, a lot of it is exported.

For more on Croatian companies, check our our business section.

Friday, 11 June 2021

Croatian Capital Takes Unenviable Place on List of Best Cities for Business

June the 11th, 2021 - Where would the Croatian capital of Zagreb be on a list of cities for doing business? Despite the city having attracted a lot of foreign business over more recent years, particularly since Croatia joined the EU back in 2013, it still holds an unenviable position.

As Poslovni Dnevnik/Ana Blaskovic writes, if entrepreneurs and business owners could choose anywhere in the world to start up a business, the Croatian capital city of Zagreb would be the 72nd choice of 75 cities. Unimpressive indeed. In a competition of 200 global capitals, Zagreb was shortlisted according to the Index of the Best Cities for Entrepreneurial Success with 52 out of a possible 100 points that measure what a particular place offers for success.

It won't come as much of a surprise to anyone that business owners would prefer to start a business in the British capital of London, a city which allows for the best factors; from the health of the technological and digital ecosystem, economic freedoms, the availability of human capital, the range of funding to government measures to help during a crisis such as the current pandemic.

Those who would choose the British capital were closely followed by those who chose New York, San Francisco, Sydney. Aside from London, a few other European cities are high on the list, Berlin is 9th place, Paris 12th, and in the top 30 are Munich, Madrid, Amsterdam, Hamburg, Milan, Zurich, Edinburgh and Brussels. Of Croatia's neighbours, above Zagreb come Ljubljana, Budapest and Bucharest.

A ranking in which only Lima, Bratislava and Sofia are worse than the Croatian capital should be seen as a concerning and extremely weak reflection of innovation potential, economic strength and the overall entrepreneurial environment. None of that will come as a shock to anyone remotely familiar with doing business in this country.

“The results are significant because entrepreneurs are reducing the volume of business in circumstances like pandemics,” they explained from Oberlo, a platform that allows entrepreneurs to find and sell their products online.The Croatian capital is sadly among the worst in terms of the number of days required start a business (19.5), the record holder is Auckland with a mere half a day. It is best rated in the tax sphere (although the score doesn't include consumption taxes or VAT).

The list of advantages and obstacles for entrepreneurship reflects known agonies for many, but it can also be a ''check'' list for the new government with Tomislav Tomasevic leading Zagreb in order to make it more attractive for entrepreneurs, attract innovation, new jobs and increase the Croatian capital's revenue.

For more, follow our dedicated business section.

Monday, 31 May 2021

Why Opening a Business as a Foreigner in Croatia is Almost Impossible

May 31, 2021 - Aaron Antwine of Hurricane Hostel in Split on the realities of opening a business as a foreigner in Croatia. 

To be upfront, if I had known that the combination of Covid and the Croatian government would screw my wife and me over so hard, I would have moved to any other country. 

My wife and I opened our hostel at the start of March 2020. A few weeks after opening, we closed our doors due to quarantine. Officially, accommodations were not required to close, but with so little information about Covid and a terrible amount of fear, we thought it would be the socially-responsible decision to close. Maintaining two meters of space in a dorm setting is next to impossible, and there were no tourists to be had anyway. We remained closed through all of April and reopened on May 18th. 

We filed for aid through HZZ during those first few months of Covid, and we did receive salary support for three months. Once the season became more active, filing for aid was much more difficult, and we were denied. Business was not that bad for a few months, and we were optimistic for the future for a time, but that all changed once we reached September. 

Small caveat. I am a U.S. citizen, and to maintain my own residence permit, I must employ three full-time Croatians, which we started in February 2020. Once the season started to slow, we requested salary support again to keep them employed. We were denied initially. Then we filed an appeal pointing out that our staff will be terminated if we do not get any help, and we were denied again. Due to no aid, the threat of a second wave, and greatly diminished sales, we were forced to terminate the staff in September. 

At this point, I was working by myself. My wife and I were hoping we could make enough money each month to cover our operating costs. I do not even pay my own salary. I pay the taxes and contributions for myself.  Every kuna I would pay myself, I put right back into the company anyway. We were trying to survive, and I was doing everything I could. Basically, to survive the winter months, my wife and I tapped into a lot of our resources so we could stay afloat. 

A new ordinance closed almost every business on November 27th, 2020. It did not exactly state that hostels were included as the wording was ambiguous and vague. Hostel owners across Croatia were questioning our lawyers and accountants to verify if we were included. Eventually, we decided that we could stay open. With so much uncertainty, it was too risky to close and have no income whatsoever. Several requests were sent to government offices in Zagreb to get clarification, and no official answer or response was ever given. We thought we were ok. 

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January 23, 2021, an inspector entered our hostel and, after looking around for 10 seconds, informed me that our hostel needed to kick out all the guests and close our doors immediately. Their interpretation of the ordinance is that all hostels in the country needed to close. No one in the hostel owners’ group in Split was aware of this. Not one hostel owner in the country knew this was a thing. We asked repeatedly. My attorney and I asked several other government offices, and not one office knew what was going on. The only office in the entirety of the Croatian government that said hostels were to close was the inspector’s office here in Split. My company and I were both fined, and we were forced to close immediately. We lost what small income we were making from January, and we had to remain closed all of February as well. 

Here is where it gets fun. We were the only hostel this happened to. According to Hostelworld and Booking.com, there were around 100 hostels open across Croatia during the winter months. At least 10 of them here in Split. Not one of them was asked to close or received any punishment for being open. We told the hostel owners about being closed, and some responded by closing their own properties until March 1st. None of us could afford fines, and it was safer to close. The other hostels in Zagreb and throughout the country were taking in guests with no problem. Hostels all over were still taking in digital nomads, while some sold “reservations” as a cover charge to go in and party. 

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My attorney and I planned on taking the fines to court to contest them. We were going to present information from several other offices, discussing the lack of clarity in the November decision and that hostels elsewhere were still open. Instead, we were hit with a larger fine for wasting the time of the court. I have discussed legal action for discrimination or something to that effect, but legal battles cost money I don’t have. 

Hostel owners and I here in Split deduced that we were now eligible for receiving some sort of support. It was determined that since our hostel was open in January, our business was not eligible to receive any aid, which was an understandable reason. It sucked, but we understood. We then asked for support for February during the month that we were explicitly closed by the government, and we were denied again. I am still not even sure why at this point. 

During the first three months of 2021, I worked on renewing my residence permit. Obviously, I could not maintain the requirement of three full-time Croatians. As part of our re-application process, MUP was kind enough to give me some leniency and work the process another way to ensure I could get a permit and stay open. We caught at least one break, and I am thankful for their help. Sadly, we learned something that nearly broke me almost immediately.  

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A new law was passed for foreign business owners in January. The employees I am required to have must be paid the median wage of all employees in the entire country. So instead of paying a net of 3.400,00 for a full-time minimum wage receptionist position, we were now required to pay over 6.700 kuna. In bruto, that is over 9.300,00 kuna per employee. 

I requested MUP asking for a better clarification on the salary law to see if it meant median wage for the receptionist job position. According to the website MojaPlaca, the top salary for any receptionist in the country is around 6.800 kuna. MUP stuck by the law, essentially making our three staff members one of the highest-paid reception staff in Croatia…. for a little 27 bed backpackers’ hostel.

The hostel reopened on March 1st. We made a few thousand kuna total for the entire month, so my wife and I had to dip into even more savings to help cover our costs again. As part of my residence permit process, we set up full-time contracts with three employees that would start working on April 1st. We were still optimistic that sales would increase, and we could get at least enough money to cover most of the bills. Also, we planned to ask for salary support from HZZ to help cover our costs. If we can get salary support, then that would help us cover our largest expense until we can get enough guests. Wrong again.

We filed our requests for aid during this latest March-April window. As our company is relatively new, instead of comparing our sales numbers to 2019, they allowed us to use our first full month of sales in 2020 to use as the basis of the 40% decrease in sales. Our first full month of being “open,” according to HZZ, was April 2020, the month we were closed. Hard to make 40% less than zero. We were denied aid again. I voiced my concerns with my accountants, and they were able to help me produce another complaint. We asked for a different method we could use to show our decrease in sales and our dire need for any type of support. Clearly stating that if we don’t receive some sort of aid, our employees will be terminated, and our company will have to close. I received the decision from HZZ a few days ago, and despite our plea, we were denied again.

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The highest-paid receptionists in the country, continuously denied aid from HZZ, closed, and fined by the government. We cannot win. I concede that some events were unfortunately timed, but the rest is going to destroy us. My wife and I will only be able to hold this business open for a short time, and if we do not get any aid or a massive influx of tourists, we are doomed to close later this summer, if not sooner. 

For anyone who might question how our business performs, we have been immensely successful by every metric we can track. According to Booking.com, out of the hundreds of accommodations in Split, from hotels, apartments, guesthouses, and other hostels, we are ranked 19th in guest nights booked over the last 3 months. We are working as hard as we can for every guest we can get, and we are still getting destroyed by a Covid economy and a government that not only refuses us aid but punishes us as well.   

Fundraiser by Aaron Antwine : Help Aaron and Ashley keep their hostel open (gofundme.com)

Do you want to share your experience of opening a business as a foreigner in Croatia? Email This email address is being protected from spambots. You need JavaScript enabled to view it.

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

Friday, 28 May 2021

HBOR Offering Favourable Loans to Help Businesses Recover from Pandemic

ZAGREB, 28 May 2021 - The European Investment Fund has approved a €35 million guarantee to the Croatian Bank for Reconstruction and Development (HBOR), allowing it to originate a portfolio of €50 million to mitigate the economic consequences of the COVID-19 pandemic, HBOR said on Friday.

HBOR will approve loans at interest rates reduced by 0.403 percentage points or only with bills of exchange and promissory notes as collateral.

The EIF guarantee stems from the Pan-European Guarantee Fund (EGF), a €25 billion guarantee facility set up by the European Investment Bank Group in 2020 to accelerate the post-COVID-19 recovery of the European economy.

The EGF guarantee will allow HBOR to offer loans to Croatian SMEs and small mid-caps under more favourable terms, including reduced interest rates or lower collateral requirements. The loans will available to SMEs and small mid-caps operating in some of the hardest hit sectors of the Croatian economy, including tourism and manufacturing.

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

Thursday, 27 May 2021

Comping to Expand Business With Acquisition of Megatrend

ZAGREB, 27 May 2021 - Comping, a leading Croatian IT company, has taken over Megatrend Business Solutions, to expand its business concerning high technological solutions, Comping's management board director Alojzije Jukić told a news conference in Zagreb on Thursday.

Both sides said that they were happy with the transaction, however, they stopped short of revealing the value of the transaction.

"The acquisition of the majority of Megatrend Business Solutions (about 90%) will help us to additionally strengthen our market position, particularly in the data center area, business analytics infrastructure. In that regard, we plan a data center in Buzin where we will invest about €2 million in the next two to three years," Jukić said.

He said that due diligence showed that Megatrend's business is similar to Comping, with intelligent people carefully developing its brand, and that cooperation had already been established with the Data Target company which has a data center, business analysis section, and infrastructure section with about 20 employees.

Responding to reporters Jukić presented some of Comping's business details, saying that in 2020 it generated a turnover of about HRK 200 million, that it employs 110 experts, and that it is focused on profitability, adding that each year it generates a profit.

With the planned investments, he expects revenue to increase based on its business operations and further development of its infrastructure and integrating services which account for about 25% of its business.

Comping has been doing business on the Croatian market for more than 30 years.

For more, follow our dedicated business section.

Sunday, 23 May 2021

Slovenian Iskra Company Acquires Croatia's Elka

ZAGREB, 23 May, 2021 - The Slovenian Iskra company is taking over the Croatian Elka company, and the transaction will be carried out upon fulfillment of conditions, including approval of regulators for the protection of market competition in the two countries, the two companies said on Sunday.

According to a joint press release, Iskra director and majority owner Dušan Šešok and Elka -Cotra group owner Miljenko Hacek on Saturday signed an agreement on the acquisition of the 100% stake in Elka, the largest producer of electric cables in this part of Europe.

In the press release, Šešok said that Iskra was doing extremely well, despite the coronavirus pandemic.

"Last year, we ended with a record €130 million in consolidated revenues, and this year we expect further growth of over 20%," Šešok said, noting that this is the result of European customers turning to European manufacturers when it comes to components, as well as system solutions for energy, telecommunications, railways, and automation in industry.

"Iskra continuously invests in research and development of new products to implement new technologies and innovative solutions, which we will certainly apply, as the new owners, in the further development of the Elka company which we are taking over," Šešok said, adding that both companies are a symbol of reliability and quality.

For the Iskra Group, the acquisition of Elka is the second significant investment in Croatia since 2019, when it acquired the Repair Shipyard Šibenik, the press release reads.

Elka owner Miljenko Hacek said that in the past two years Elka had undergone thorough financial and operational restructuring and functional reorganisation and implemented new management, which were basic preconditions for achieving very good business results and attracting potential investors interested in strategic partnership.

The acquisition is a mutually beneficial cooperation between Croatia and Slovenia, and it is a precondition for the progress of both companies and the economic development of both countries, Hacek said.

Elka was founded in Zagreb in 1927, and it produces power lines and different types of cables, including telecommunication and fiber optic cables, halogen-free and flame retardant marine cables, cables for the petrochemical industry and others.

The Iskra Group this years marks its 75th anniversary, and it has become the largest Slovenian company dealing with process automation, electrical distribution system, water purifiers, power line communication, rail and road transport automation and software solutions in the field of energy and logistics. The Iskra Group is owned by the Šešok family, it employs more than 1,300 workers, and its share capital is slightly over €28 million, the press release said.

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

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Wednesday, 24 March 2021

Zagreb Stock Exchange Indices Slip Into Red

ZAGREB, 24 March, 2021 - The main Zagreb Stock Exchange (ZSE) indices dropped by about 0.5% on Wednesday, with the Crobex decreasing by 0.48% to 1,853.53 points and the Crobex10 slipping by 0.54% to 1,161.91 points.

Regular turnover amounted to a mere HRK 3.8 million, about 2 million less than on Tuesday, and not one stock crossed the turnover mark of one million kuna.

The highest turnover, of HRK 770,100, was generated by the Atlantic food group. The price of its shares dropped by 0.68% to close at HRK 1,470 per share.

(€1 = HRK 7.570356)

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

Tuesday, 16 March 2021

Croatia Receives Second €510m Tranche From SURE

ZAGREB, 16 March, 2021 - The European Commission on Tuesday disbursed €9 billion to seven EU member states, including €510 million to Croatia, in the fifth instalment of financial support to preserve employment during the coronavirus pandemic under the SURE instrument.

This is the second instalment this year. Czechia has received €1 billion, Spain €2.87 billion, Italy €3.87 billion, Lithuania €302 million, Malta €123 million and Slovakia €330 million.

So far, 16 member states have received a total of €62.5 billion under the SURE instrument in loans which the Commission is taking out on financial markets at the best terms.

Croatia received the first instalment of €510 million on 17 November.

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

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