December the 15th, 2022 - The Zadar Turisthotel is set to invest 113 million euros into its offer and facilities over the coming five years, aimed at not only improvement but sustainability.

As Marija Crnjak/Poslovni Dnevnik writes, over the next half a decade, the Zadar Turistihotel plans to invest 113 million euros in the renovation and construction of new accommodation facilities and entertainment, which was approved by the company's Supervisory Board and presented by the Management Board on Tuesday at the first open day for Turisthotel shareholders.

Financial strength

"Since we started with the construction of a new entertainment and catering and establishment on the beach, which is worth more than 8.7 million euros, Zaton has been a large construction site. At the Zadar Turisthotel, we haven't had any significant investments since back 2018, and we recently adopted a strategic capital investment plan for the next five-year period with the aim of increasing the quality of our offer and content, higher revenues and ensuring the further growth and development of the company.

The Zadar Turisthotel has managed to enjoy significant financial stability, liquidity and creditworthiness, and we're confident that, as long as there are no major global disturbances and instability, we'll manage to realise our plans. In order to ensure success and future growth, we must invest in our offer, our employees and the destination as a whole, all while making sure we're engaging in sustainable and socially responsible development,'' explained Meri Matesic Sicic, the president of the Turisthotel Management Board, adding that the legislative and tax framework is stable and encouraging, as is the financial stability of the company, which remains the basis for planning and implementing new investments in tourism.

Annual figures

The new investment cycle of the Zadar Turisthotel will include the additional improvement and raising the quality of its existing facilities, new catering, hospitality and entertainment facilities, the complete remodeling of the main street within the resort, the reconstruction of the remaining apartments from 3 to 4 stars, the construction and introduction of new facilities, and the Aenona Park project, which includes a new camp, hotel and sport and entertainment facilities in the northern part of the settlement in Zaton.

In Zadar, there are also plans to build a city hotel located within the city centre on the site of the former Pobjeda (Victory) cinema, and to convert the Boutique Hostel Forum into a hotel. According to the plan, Turisthotel will annually invest approximately 22 million euros in those new projects.

As is already fairly well known, the Zadar-based shipping company Tankerska plovidba entered Turisthotel back at the beginning of November, becoming the largest single shareholder of the company by purchasing 24.53 percent of the shares. With the transaction, former longtime director Frane Skoblar dropped to second place with 11.8 percent, and the rest of the shares are held by around 600 small shareholders.

Mario Pavic, the president of Tankerska plovidba, explained that the company wants to diversify its operations as part of its long-term strategy of alignment with the global direction of decarbonisation, although the core business remains shipping. As the largest single shareholder, they plan to coordinate with the co-owners the way the company will be managed as we go forward.

For more, check out our business section.

December the 13th, 2022 - The Croatian startup SimpleMatic has successfully designed a solution for one of the most irritating issues still faced by a large domestic pharma company.

As Poslovni Dnevnik/Josipa Ban writes, JGL, the very well-known Croatian pharmaceutical company, continues to face a very specific problem when it comes to the production process. Every four hours, as was explained by Mate Poropat, the director of JGL's pharmaceutical-technological operations, they have to change the sedimentation plates in the monitoring procedure. This process is still done manually and costs the company a lot of money and time.

"We want to automate that process in a simple way," said Poropat. Thanks to the Manufacturing Innovation Challenge (MIC) project, which is organised and implemented by the EIT Manufacturing Hub Croatia, they didn't have to wait very long for a solution to come running along. The Croatian startup SimpleMatic, consisting of Daniela Jaksic and Marko Brkljacic, came up with and designed a solution to this issue in a mere few weeks.

"Our solution is of great importance on a global level, because almost all pharmaceutical companies have to try and cope with the problem of manually changing sedimentation plates," explained Jaksic from the Faculty of Pharmacy and Biochemistry.

Knowledge and innovation

This example clearly shows how thin the line can be between a problem and a solution. However, it is only thin if the problem falls into the right hands - from industry to those of science. And they were brought together by the EIT Manufacturing Hub, one of ten such hubs in Europe whose goal is to create a network of European innovators in the field of manufacturing and to position Europe as a world leader in innovation in industry.

The EIT Manufacturing HUB in Croatia consists of the Centre for Research, Development and Technology Transfer of the University of Zagreb and the Faculty of Mechanical Engineering and Shipbuilding. They implement a wide number of projects, including MIC, which connects manufacturing companies and startups.

"One of the key problems with startup teams is that they create products for which there's no market. At the same time, manufacturing companies have to face real challenges. It was logical to connect them both,'' explained Miro Hegedic, the co-coordinator in the Manufacturing Hub and an assistant professor at FSB.

Thanks to this project, JGL came to the solution they had been looking for for a long time, and the Croatian startup SimpleMatic got the opportunity to implement their innovation and develop globally. Another award-winning team that participated in the MIC competition - Integrators - who designed a solution for the giant company Podravka and their optimisation of the size of their production orders, also has such an opportunity on its hands.

More money

Those teams, awarded with 10,000 kuna, are two of the nine that participated in the competition. "We want to encourage the development of innovations through projects, including in regard to this competition," Hegedic pointed out.

The Republic of Croatia, which is unfortunately at the very back of the European Union (EU) in terms of innovation, will have a lot of work to do in this field. However, Vesna Petrovic, the co-coordinator of the EIT Manufacturing Hub Croatia from CIRTT, pointed out that she is satisfied with the positive energy she's felt.

"Everyone would like greater access to financing sources," she concluded.

For more, make sure to follow our business section.

December the 13th, 2022 - The Croatian SysKit software company has managed to successfully attract an impressive nine million US dollars in investment, financed by the British.

As Poslovni Dnevnik writes, the Croatian SysKit, based here in the City of Zagreb, secured a nine million dollar investment that will be used for the internationalisation of its business operations and the further development of the company.

As part of this investment, which was financed by the British investment fund Cade Hill Investments, they opened an office in the affluent English city of Cambridge, which is where they moved their headquarters to.

"This investment will significantly facilitate our positioning on Western markets and open up stronger access to foreign knowledge and talent," said SysKit's CEO, Toni Frankola. Their British investors, with whom they first cooperated back in 2017, recognised that the company had successfully mastered a specific technological and market niche.

In addition to the financial growth achieved with the key product, SysKit Point, the company increased the number of employees to 75 in 2022, and additional growth is expected in 2023. The Croatian SysKit otherwise describes itself as a software development company primarily focused on creating high-quality enterprise governance and monitoring solutions for Microsoft 365, SharePoint, Windows Servers, Remote Desktop Services, and Citrix environments.

Their tools – SysKit Point, SPDocKit, SysKit Monitor, SysKit Insights, and SysKit Trace help administrators, IT professionals, managers, and business team leaders worldwide in achieving their goals. Our story began in 2009 in Zagreb, Croatia, with the idea to monitor servers. That’s how our first product, Terminal Services Log, was born. Today, more than 50 creative, diligent people work on this company's products which are used by more than 3000 companies worldwide.

Unless you've been living under a rock, you'll know that the IT sector across the Republic of Croatia has been blossoming (and rapidly) over the last several years, SysKit is just one of the many companies to have done exceptionally well in attracting foreign investment and penetrating Western European and American markets.

For more, follow our business section.

December the 7th, 2022 - After three (very long) decades of negotiations, the representatives of Croatia and the USA in Washington are finally set to conclude the Croatia-USA double taxation agreement today. Croatia is otherwise the only nation in the EU and NATO that hasn't yet regulated this relationship.

As Poslovni Dnevnik/Marija Brnic writes, back during previous years, analysts assessed that the signing of the Croatia-USA double taxation agreement, which will finally result in the avoidance of having to pay tax on income in both nations to both nations, will not result in a sudden rush of American investors to Croatia, nor will it open up new businesses for Croatian companies on the American market. What it will primarily do is result in considerable benefits for companies that are already operating, as they will be less burdened by tax payments. It will also increase their level of competitiveness overall.

However, circumstances have changed somewhat over more recent years, and it seems that the number of those who will benefit from the settlement of fiscal relations between these two countries on each side of the Atlantic Ocean will be more significant. What will this mean exactly, and who will benefit the most from the signing of the historic Croatia-USA double taxation agreement?

Climbing the ladder

The USA was not among the major investors in Croatia for a very long time, but that has changed quite significantly in recent years. Steve Bubalo, an American entrepreneur with Croatian roots, has the longest investment experience here. He invested in the Vrana agricultural farm near Biograd in Zadar, as well as in rural tourism in Baranja, and one of his big takeovers was certainly Barr's takeover of Pliva back in 2006, which was then taken over by the Israeli company Teva.

After Croatia joined the EU back in July 2013, and especially over the last few years, more serious investments followed, such as IBM's investment in the Technical Support Centre in Zagreb, two years ago New York's One Equity Partners invested 200 million dollars in Infobip, and this summer, Goldman Sachs, together with the Japanese SoftBank, invested 500 million euros in the remarkable Rimac Group.

At the same time, in Savski Marof, the start of work on the new production facility of the American company Pfizer for the production of innovative biological drugs, in which it is investing 100 million euros, was marked. The USA is thus climbing the investment ladder, and from 1993 to the end of the second quarter of this year, more than 595 million euros had been invested in Croatia, and thanks to the latest investments successfully ticked off, it took 15th place on the list of investors in this country.

It's also interesting to note that Croatian investments over in the USA over the past three decades, in Croatian circumstances at least, aren't insignificant. They amount to more than 73 million euros, and among those Croatian companies that started production in the USA is, for example, Podravka. HS Produkt from Karlovac has also been among the main exporters for years, along with Pliva.

Trade has also been growing in recent years, especially in the last year on the back of US LNG imports. In terms of trade, Croatia is mainly focused on the market of the EU and neighbouring non-EU countries, but thanks to LNG terminal on Krk, the USA has moved up to the seventh place among the main trade partners.

In the first nine months of 2022, imports from the USA into Croatia amounted to more than 2.07 billion euros and at the annual level they increased by 703%, and goods from Croatia were exported for 349 million euros (marking a decrease of 17%).

According to AmCham's estimates, the Croatia-USA double taxation agreement will have a positive effect on the transfer of knowledge, due to the costs of withholding taxes on the provision of certain services and royalties, and the costs of labour taxation, which is particularly important for the IT sector and small and medium-sized enterprises.

Croatian companies that establish subsidiaries over in the USA are currently subject to federal and state income tax, and dividend payments are subject to a 30% tax. Since the corporate tax rate in Croatia stands at 12 or 18%, AmCham estimates that the cumulative US tax rate is very discouraging for Croatian companies.

A company in Croatia owned by a larger American company pays profit tax at the rate of 18%, and according to the parent company in the USA, it must make three payments per year, for interest and royalties, and then for dividends, it pays withholding tax at rates of 12 and 15 %, and only the net after-tax amount can be paid to the US parent company.

This Croatia-USA double taxation agreement will make it possible to get rid of these payments once and for all, and make it so that the full amount is paid to the parent company, which makes Croatia more attractive as an investment and business destination overall.

"This is a significant step for the business community both in the USA and Croatia, which for many years advocated the initiation of negotiations on the signing of such an agreement. This step is particularly important for AmCham and its members, given that it prepared the initial arguments for the conclusion of the agreement back in 2018 and brings together companies that are most involved in trade and investment flows between Croatia and the USA," said Andrea Doko Jelusic, the executive director of AmCham Croatia.

The conclusion of this historic (and long-awaited) agreement will bring a lower financial burden for companies, and here on the Croatian side, it will be especially interesting for the IT sector, as well as for the food and pharmaceutical industry, while on the American side, it will open space for cooperation with small and medium-sized companies that haven't been represented in Croatia until now.

The Croatian Chamber of Commerce (HGK) also welcomes the signing of the Agreement on the Avoidance of Double Taxation between Croatia and the USA, and points out that, although there's still some time to go before its full implementation, it is to be expected that it will have a positive impact on the overall economic relations between the two countries, mutual trade, and will especially facilitate mutual investments.

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

December the 6th, 2022 - The well known Croatian company Koncar is an internationally recognised leader, and it has been working intensively on the creation of new or the revitalisation of old energy plants for around 100 years now. The revitalisation of a plant in Greece is now in the works.

As Poslovni Dnevnik/Darko Bicak writes, in very few segments of the global market does Croatia occupy such a large share as it does in the energy sector, especially in terms of transformers and hydropower plants.

The biggest name in this field is undoubtedly Koncar, which has been working on new or revitalising existing energy capacities for about 100 years, and the latest example of this is over in Greece. To speak more specifically, Koncar recently signed a contract with the Greek electricity company (Public Power Corporation - PPC) in the capital of Athens for the first phase of the revitalisation of the Messochora hydroelectric plant in Greece.

The first phase of the works

Several Koncar Group companies, led by Inzenjering/Engineering (KET), will participate in this Greek revitalisation project. As part of the first phase of the revitalisation of this plant, the testing and analysis of all of the equipment at the hydroelectric power plant will be carried out, and all of the preparatory work will be done for the first commissioning of this plant.

As explained by Gordan Kolak, the president of the Koncar Management Board, the HE Messochora project was initially contracted in the years following the end of the Homeland War, back during a period when the Koncar Group was working very intensively to return to its former markets, which included that of nearby Greece.

"We won't be exaggerating by saying that this particular project was particularly crucial for Inzenjering, but also for other companies from within the wider Koncar Group," said Kolak. It regards a plant with an installed capacity of 2x90 MW, the equipping of which (with all kinds of electromechanical equipment) was contracted by Koncar back in 1996 amid strong international competition on a "turnkey" basis.

The implementation of the project lasted from 1996 to 2002, with Koncar successfully fulfilling all of its contractual obligations, and the equipment was delivered and installed within the given deadlines. However, PPC faced certain administrative problems due to which it could not fill the reservoir with the water required for testing, and ultimately ensure the operation of this plant.

Therefore, in agreement with PPC, the equipment was finally taken over and preserved so that the project could continue when the conditions for it were properly created. Few expected that this would happen only after a twenty whole years, after Koncar, following several months of negotiations with PPC, finally signed the contract by which it returned to this Greek hydroelectric plant.

"Taking into account the attitude of our Greek partner who wants to put this plant into operation with as much originally produced equipment as possible, it's evident that this is an extremely large technological and engineering challenge, because in the meantime, several technological changes have taken place on the market for many types of installed equipment, which is typical for the passage of this amount of time. Therefore, members of Koncar's teams from the original phase of the plant's construction will participate in the work on the ''new'' Messochora. These kinds of challenges are at the very core of Koncar's expertise, performance according to special customer requirements and the adaptation of equipment and systems of different generations,'' said the Zagreb-based company.

To date, Koncar has secured references in as many as 130 markets around the world and delivered more than 400,000 transformers of various types, voltage levels and powers, fully or partially built and revitalised tens of thousands of transformer plants up to 400 kV, as well as 400 hydroelectric power plants, and produced revitalised about 700 generators.

The production of hydrogen generators in their facilities began back in 1947, and the first one was put into operation the following year at the HPP Mariborski otok, which operated successfully for more than forty years.

By 1957, 100 generators had been delivered, and in that very year, the first export job in Pakistan was achieved by Koncar for HE Chichoki Mallian. Their biggest turnkey project took place in 1988, when they delivered equipment for the 295 MW Bechme HPP in Iraq.

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

December the 6th, 2022 - The remarkable Croatian inventor Mate Rimac has rather unsurprisingly been nominated as businessman of the year by both Poslovni Dnevnik (Business Diary) and Vecernji list.

As Poslovni Dnevnik/VL/Tanja Ivancic writes, the expert jury nominated Croatian inventor Mate Rimac for businessman of the year this year, and even more is expected in the future from the young leader of the Rimac Group, who managed to create yet another Croatian unicorn through persistent work and dogged determination against everything thrown at him.

For now, Rimac can certainly boast of having produced an incredible hypercar – recently declared the fastest electric car in the entire world, which also holds the record for the fastest acceleration of any car. Namely, the Nevera reached an impressive speed of 412 km/h, which makes it the fastest electric production car on the face of Earth, while the record for acceleration was 8.582 seconds per quarter mile, which was set back in 2021.

The Nevera electric car is otherwise Rimac's premium product that has since entered into small-scale production. Back in June this year, the company revealed the release of the first Nevera on the roads, which was fitted with 000 plates and wasn't for sale, and then, they said, deliveries to clients from around the world began.

They also emphasised from the Rimac Group that the production of the Nevera required five years of development and testing, equal to an incomprehensible 1.6 million hours of deep research.

Along with the production of the stunning Nevera at the Jankomir plant in Zagreb, what marked this year for Croatian inventor Mate Rimac was the investment round that he closed back in March and the start of the construction of the Rimac campus in Sveta Nedelja. In June, Mate Rimac reported that the Rimac Group had successfully collected 3.78 billion kuna or 500 million euros in investment round D, which brought the market value of the Rimac Group company to over 2 billion euros in total.

The key new investors were SoftBank Vision Fund 2 and Goldman Sachs Asset Management, with participation from existing shareholders of the Rimac Group, including Porsche and Investindustrial. All of the investors now have a share in the Rimac Group, while Mate Rimac himself, the company's founder and executive director of the company, still owns the largest share of all.

"It's a total of more funds than we've ever previously raised, so it's really a huge thing for us,'' Rimac emphasised at the time, noting that they had five times more interested investors than they planned in terms of the raising of the money in this round, and as for the IPO, that is, public share offerings, they are thinking about it in a longer-term framework when the company becomes more predictable, so somewhere in the range of three to five years, according to Rimac.

This new investment is being used to continue the company's growth, increase production capacity and allow for additional employment. The capital raised will primarily be used for the further development of Rimac Technology in the field of large series production for global car manufacturers.

It should be known that Rimac Group is, namely, a holding company and consists of two companies; Bugatti Rimac, in which the Rimac Group has a majority share of 55 percent, while the other 45 percent is owned by Porsche, and Rimac Technology, which is 100 percent owned by the Rimac Group.

The company Rimac Technology is known as a technological partner of numerous global automotive manufacturers who choose it for the development and production of their high-performance battery systems, electric powertrains, electronic systems and user interface components. Mate Rimac then pointed out that the company has ambitious growth plans for the next two years, in addition to the issue of employees and the opening of new offices. They're present in four locations in Zagreb, and they also have offices in Split and Osijek, as well as elsewhere in Europe - in Germany, France and England.

The construction of the upcoming Rimac Campus in Sveta Nedelja is currently delayed, but considering the situation on the market, the deadlines set for it previously remain acceptable, and the plant should be ready in the next few months, with the administrative building and other facilities likely to be ready over the next year or so.

''It's a big investment and will be the largest industrial building in all of Croatia, spanning 100,000 square metres, and I believe that everything is progressing according to plan, and we're already planning the construction of Campus 2,'' Rimac reported back in June.

The Rimac Group employs a total of more than 1,500 people, with 500 of them working at Bugatti Rimac, 150 of them in France, while 1,000 people are employed at Rimac Technology. That's what the official figures from June of this year read. In the first half of this year, they employed 300 people, and by the end of the year they planned to employ another 700. As Mate Rimac wrote in a recent post on social media, they currently have a total of 2,000 employees.

Croatian inventor Mate Rimac otherwise started his business literally from his garage and back in 2009 he founded Rimac Automobili, continuing at this pace, doubling the number of employees, attracting strong investments, and breaking records and production despite the difficulties he faced. It's safe to say that the future should not be a problem for the talented and innovative Croatian inventor Mate Rimac.

For more, follow our business section.

December the 5th, 2022 - Moldova recently spent two hours without electricity owing to the horrendous actions of the Russians in Ukraine. Could Croatian companies easily solve such issues?

As Poslovni Dnevnik/Jerko Zlatar writes, Croatia is very much focused on Ukraine's ongoing strife. We only need to look at the debate being had in the Croatian Parliament on the training of Ukrainians, the commendable attempts made by numerous sectors in this country to help with the integration of refugees, and the excellent work of the Ministry of Foreign and European Affairs at the Crimea Platform and political support for Ukraine. That said, the Republic of Croatia continues to employ a chronically lacking approach when it comes to proactivity with sending humanitarian aid abroad.

The current situation in Ukraine and recently in neighbouring Moldova illustrates the passivity and disorganisation of the process of sending aid, and the involvement of Croatian companies in that process turned out to be minimal and somewhat spontaneous. This has consequences for future exports.

Moldova is currently facing an energy crisis due to the fact that Gazprom has significantly reduced its gas supplies. To make matters worse, the lifeblood of Moldova's electricity supply from the EU is the 400 KV transmission line, which runs from Romania, through Ukraine and the separatist enclave of Transnistria.

Due to the overloading of the system in Odesa Oblast, as a result of Russian missile attacks on the Ukrainian electricity supply system, Moldova was left without electricity for two hours. According to Bloomberg last month, advisory and professional help was sent to by Lithuania and Poland, because the local Energocom employs only seventeen employees.

As for Croatian companies, which could quickly build a new transmission line with appropriate transformer stations, and whose institutes (including HEP) could help a lot in the procurement of electricity - there were no such moves to speak of. The agreement for the new transmission line was signed back in 2017, the value of the project stands at 270 million US dollars. It was also planned to be co-financed by the European Investment Bank with 80 million dollars.

Another example is France, which, in the wake of Russian attacks on Ukraine's energy infrastructure last week, sent 100 generators with a power of 50 and 100 KVA. In total, 500 generators have been sent to Ukraine through the EU Civil Protection Mechanism.

However, among the sevetneen EU member states that have sent aid to Ukraine's electric power system, Croatia isn't among them - which produces almost everything needed in this situation, such as transformers, generators and transmission lines, and whose electricity industry has experience in staying up and running during a war.

In an interview with the Ukrainian channel Freedom TV, the head of the regional military-civilian administration of the Luhansk region, Serhiy Hayday, said that the area primarily needs water purifiers and help with demining, areas in which Croatian companies also have something to offer.

Regarding demining, help from Croatian companies has already been offered, but in the Luhansk region, literally everything is lacking, from electricity to windows and building materials. Regarding private initiatives, DOK-ING has already demonstrated its innovative demining and firefighting robots to the President of the Verkhovna Rada of Ukraine, Ruslan Stefancuk, during a visit to the meeting of the Crimea Platform in Zagreb.

Above all, it is necessary to create the most effective framework for bringing together businesses and the Croatian Government, which would be able to respond in a timely manner to crisis situations across the world, and which could become one of the main promoters of Croatian exports.

The Ministry of Foreign and European Affairs and the Croatian Chamber of Commerce would have to be included in that body, as would other stakeholders like the Croatian Employers' Association, in order not to need to wait for EC decisions, but to react immediately and raise Croatia's reputation across the world and actively promote domestic production. 

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

December the 1st, 2022 - The Fortenova profit has reached impressive figures during the first nine months of 2022, with the growth of all business indicators being helped along by an excellent post-pandemic summer tourist season.

As Poslovni Dnevnik writes, on Wednesday this week, the Fortenova Group (Grupa) announced its detailed business results for the first nine months of this year, according to which it achieved a profit from continuous operations of 534 million kuna, against a loss of 384 million kuna in the same period last year.

The greatest positive impact on the growth of all business indicators was the aforementioned excellent tourist season which finally took place as normal following two years of coronavirus-induced instability and stress, there were also significant operational improvements which helped the situation and even ongoing inflation did its bit.

In the aforementioned nine-month period, Fortenova profit margins went up, seeing the company achieve a total consolidated income from continuous operations of 30.3 billion kuna, (4 billion euros), which represents a 38 percent increase compared to the same period back in 2021.

Without the impact of the integration of Mercator, the total income from Fortenova's continuous operations is 15 percent higher in comparison to the same period back in 2021. At the same time, the consolidated adjusted EBITDA of that same period compared to last year increased by 22 percent, to 2.1 billion kuna, or 275 million euros.

At the end of September this year, Fortenova profit was eye-watering, with almost two billion kuna resting in its accounts. At the same time, it continued with the process of debt relief.

For more on Croatian companies, entrepreneurs and innovation, keep up with our dedicated business section.

November the 29th, 2022 - The Croatian company ETF Airways, which was born during the pandemic, has become the first company registered in Croatia to be able to fly to the United States of America.

As Poslovni Dnevnik/Marija Crnjak writes, following on from an excellent second summer flight season since its establishment, the Croatian charter carrier ETF Airways has become the very first Croatian airline to receive approval from the US Department of Transportation for flights to the USA, which will initially also open up the Caribbean market for them.

For next year, this company's main plan is additional growth, with an increase in the fleet from three to five Boeing 737-800 aircraft, which will depend on the dynamics of signing contracts for the next summer season, but things are looking very certain, Stjepan Bedic, the CEO of ETF Airways, revealed.

ETF Airways has transported 300 thousand passengers

As is already quite well known, ETF Airways was founded back during the global coronavirus pandemic at the beginning of last year by Croatian investors and bankers, investor Ratko Bajakic, economic analyst Velimir Sonje and banker Zdenko Adrovic, who is involved in the project through his own company - Korta. Among the founders are pilots Dragan Stefanovski and Marko Bankovic, a team of enthusiasts who have already collaborated with Bedic on several startup projects in the wider region, and spent a good part of their careers working for different foreign companies.

ETF Airways took to the skies last June and they aren't a liner company, they instead specialise in flights based on ACMI - aircraft, crew, maintenance and insurance contracts, and this year they mostly flew on the Paris - Greece route, Bedic stated, adding that 2022's summer season was excellent - this company which has about 60 employees will end the year with a profit, but they aren't ready to reveal any of the more detailed figures yet. The potential for growth is significant, and it would be much greater if Croatia made it easier for staff to be employed, explained Bedic.

"In one single year, we flew between 5,500 and 6,000 hours at 150 airports, and transported around 300,000 passengers to different destinations. With two planes in Paris and one in Pristina, we also flew to destinations such as Svalbard, Greenland, and Reunion in the Indian Ocean. We operate on the EU's very competitive market, where there are hundreds of such companies, but there is also a lot of demand. Therefore, growth is planned, but currently the biggest challenge for us is the employment of pilots, because Croatia has a significantly higher cost of labour than some other EU menber states, with a much higher tax burden. Slovakia, Bulgaria, Ireland and other countries are therefore much more competitive than Croatia, which, with a different tax treatment for pilots, similar to seafarers, could have a much more developed aviation industry, i.e. more companies like us," explained Bedic, who believes that and the payment of benefited seniority is outdated and redundant.

Conquering the Caribbean market

ETF Airways is currently hiring cabin crew, and then it will look for more pilots, which will be additionally challenging because strong companies such as Turkish Airlines and Qatar Airways are also in the process of hiring, and their impressive salaries cannot be compared to those offered by smaller companies such as ETF Airways. Although there are 60 employees employed directly by the company, that figure rises to 150 if external service providers in the entire ecosystem are added into the mix.

ETF Airways is entering the demanding American market through a joint venture company with a local French company, and their license to provide services across the pond in the USA will enable them to position themselves in the market of local flights to the Caribbean, as well as to popular American destinations such as Miami. There is a demand for their services there, and depending on the number of contracts signed during the winter for the next summer season, the acquisition of two new aircraft may also come to be. Namely, as Bedic pointed out, the situation on the market is still unstable in terms of last minute flight reservations, and ETF doesn't fly without signed contracts and deposits.

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

November the 29th, 2022 - The Croatian startup qSoft has worked alongside multiple other agencies and bodies and created a platform which works to uncover corruption, stating that the situation is far worse than we think.

As Poslovni Dnevnik/Suzana Varosanec writes, in cooperation with ICCrA - the Institute for Compliance, Criminal Compliance and Anti-Money Laundering, the WRAP (Whistleblower Reporting App) application was launched to achieve greater efficiency in the organisation of business, which serves both to detect and correct anomalies from the corruption zone, but also to improvement of work processes, regardless of the size of entities, type of ownership and industries.

How important WRAP now is for the overall Croatian economy and the domino effect in which whistleblowers massively report abuse and corruption was explained by ICCrA president Davor Iljkic, who is also the director of the Fraud Prevention Service at the Fund for the Reconstruction of the City of Zagreb, with previous experience of sixteen years with the Ministry of Interior (MUP) working on the detection of economic crime.

"Corruption is a vicious circle, and the situation is much worse than you think," claims Iljkic. This is confirmed by the results of the research of the International Association of Certified Fraud Investigators (ACFE) on the forms and types of fraud from 2014 and 2021, which show that the dominant forms are corruption and embezzlement of funds and fraud with financial statements, with the fact that 8 years ago 40% of detected cases were on the basis of a tip (TIP irregularity report), and in 2021, it stood at 42 percent.

"We need to strengthen the prevention and detection system, and WRAP can help with that," Iljkic believes.

The Croatian legislator also recognised that the system for the protection of whistleblowers needs to be strengthened. The new law on whistleblowers introduces the possibility that a professional, i.e. a third person from outside the organisation, can be appointed as a confidential person when establishing a channel for whistleblowers. Iljkic recommends this very solution in order to avoid a potential conflict of interest within an organisation itself in relation to the management body.

As far as WRAP is concerned, the application platform was born as an idea that integrates the aforementioned law, the EU ​​Directive 2019/1937 of the European Parliament and the Council on the protection of individuals reporting violations of EU law, and new obligations in the field of non-financial reporting (ESG) - environmental, social and personnel issues, as well as issues related to respect for human rights and the fight against corruption and bribery.

At that meeting, the Croatian startup qSoft, with headquarters in Zagreb and partner offices in Canada and Switzerland, decided to use these laws to help organisations become more efficient. Instead of just formally fulfilling obligations, a platform was created that contributes in various ways, including a modern version of business intelligence, to organisations with the aim of creating databases from which software analytics generate valuable information, on the basis of which business management can react in time.

"Organisations rely on a real wealth of data that they don't actually process themselves, and as it's dead capital for them, we see this as our greatest advantage. In its application, the platform hasn't been limited by industry, nor by the size of the entity in question," says Drazen Mrkonjic, the director of the Croatian startup qSoft. They started, he explains, from a process to which technology is adapted, and each entity can then use the solution within its own processes.

"It's important to obtain an effect in terms of meeting legal obligations, for which the information reported is needed. It's motivating for the employee that they can report irregularities without needing to suffer any consequences as a result, with guaranteed anonymity,'' states Mrkonjic.

Similar software services are being developed in Denmark, Sweden and Norway, meaning that this country and the Croatian startup qSoft is once again among the first EU member states in terms of the application being offered. The coronavirus crisis, the war in Ukraine and now inflationary pressures also pushed things along a bit, but so did Croatia's entry into the OECD.

"To provide an additional benefit for any company, we've also built risk management into the application, which allows each application to be evaluated from the aspect of how it affects the business itself,'' says Mrkonjic, who has specialised in this field through 24 long years of work experience in process management.

For Croatia's impending membership of the OECD and the recommendations of the organisation for the improvement of corporate governance bodies in the state sector, WRAP is, he says, just what the proverbial doctor ordered because the state is the first to be invited to tackle this. The state must show - by example - how such laws are applied in the state sector, not only technologically, but also procedurally.

Even the results published by the US Government across the pond easily prove that it is possible to achieve great results with the use of such advanced solutions. Just a decade ago, through the motivation of people to report irregularities to state authorities, they saved about 35 billion dollars by preventing corruption in the USA. What are known as neural networks are what gives the Croatian startup qSoft and its platform the edge.

"A neural network is a combination of a large number of methods used for connecting data and inferring what kind of data that is in order to obtain information and be able to manage it properly. The management of each organisation can then get better acquainted with which segments of the organisation has anomalies occur that must be reacted to and corrected. With the help of a neural network, numerous scams would be detected and prevented,'' explains Mrkonjic.

The system, he adds, is intended for administrations that run operational businesses. It was created as a combination of analytics and reports, a type of modern BI that, as a platform, receives data from various sources, while this is a platform that integrates within the system and creates data because employees feel safe and their reports create data that is categorised into information. The Kaizen methodology designed in Japan to manage efficiency within organisations in order to achieve continuous success was used, and it involves all employees so that every day, regardless of where they might be, they think about how they can improve their work and workplace. Through this platform, employees are motivated to report everything to the central system in an easy way.

"Through these reports, you get information about how your organisation functions. With this technology, we want to motivate people to say something and to create a pool of data, which will ultimately give a picture of how the organisation functions,'' says Mrkonjic.

For those organisations that want to connect with other data sources, the Croatian startup qSoft's platform also provides such opportunities. For example, at the moment of detection of an irregularity for a certain account, data can be pulled from Fina for that particular company and the owner, and the situation can be looked into. The platform also connects to other sources, and the more sources there are, the clearer and faster the picture of where problems arise can be obtained, and this includes the Register of Real Owners and the Tax Administration. It is an ideal tool for domestic anti-corruption organisations like DORH, which has access to all data, but it can be more effective through data processing in the detection of white-collar crime.

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