Friday, 15 March 2019

Vienna Highlights That Croatia's Awareness of Digitalisation is Lacking

As Bernard Ivezic/Poslovni Dnevnik writes on the 14th of March, 2019, the Austrian capital of Vienna boasts as many as 5,830 IT companies currently in operation, which is more than are in operation on the entire territory of Croatia.

The Croatian Chamber of Commerce (HGK) took with them as many as 32 Croatian companies, mostly from the IT sector, to Vienna's fifth international B2B Software Days.

Among them, the conference was participated in by King ICT, Megatrend business solutions, Mediatoolkit and Ekobit. Tajana Kesić Šapić, the director of the Croatian Chamber of Commerce's industry sector, said that the visit was organised in cooperation with the Austrian Chamber of Commerce, Advantage Austria, and the European Entrepreneurship Network who are interested in the Croatian IT sector.

"Over the last five years, IT companies' revenue in Croatia grew by 7.4 percent, and exports rose almost twice as fast, to 11.3 percent per year," stated Kesić Šapić.

Although the startup scene in the Croatian capital of Zagreb has been ''coming to life'' over the last few years, the same sector in Austria's capital city has been growing stronger at double Zagreb's rate. In Vienna alone, there are more IT companies than are in operation in the whole of the Republic of Croatia, an impressive 5,830 of them.

Vienna is investing more than the equivalent of a quarter of a billion kuna per year into the city's startup scene, and just like in Zagreb, the city readily provides all the necessary support for the free establishment of startups, up to half a million euros worth.

Goran Mrvoš, director of Infosite, one of the Croatian IT companies at the fair, said that in Vienna he realised that the overall awareness of digitalisation in Croatia was low, and that it created a market advantage for foreign competition.

Make sure to follow our dedicated lifestyle and business pages for much more.


Click here for the original article by Bernard Ivezic for Poslovni Dnevnik

Saturday, 2 March 2019

Fewer Tourists in 2019? Croatia Must Work Harder for Results this Year

In foreign markets last month, the results of tourist bookings in Croatia for all of 2019 were weaker than expected due to slowed down or reduced demand, but also from the increasing number of competitors in the Mediterranean. Thus, the Croatian tourism sector will have to put in more efforts to get the results this year, reports on March 2, 2019. 

President of the Association of travel agencies at the Croatian Chamber of Economy, and the president of the management board of tourist company Uniline, Boris Žgomba, added that the information on reduced bookings this time of the year is from virtually all channels and from many of their Croatian and foreign partners.

"There has been a reduction in foreign demand, which could be seen already in the summertime when there are empty capacities. It was then clear that the dynamic overhead we had from 2016 to 2018 will not last forever. I am sure that many in the Croatian tourism sector are aware of this and are working on adjustments,” Žgomba said to Hina.

The current lower demand for domestic and foreign travel agencies and tour operators, means that they will have to invest in additional marketing and promotional activities to fill in their programs, almost immediately, because in Croatia, they account for about 70 percent of the total pre and post-season tourism , which largely depends on their total annual business results.

"By selectively looking at the tourism segment, some of the hotel capacities are now poorly filled for all of 2019, with the fact that the backlog of the previous bookings in hotels compared to the same period last year was lower than in private accommodation and camps. It is important to note that all this is not another reason for panic, because the time of more intense foreign bookings is on the way, but it is very likely that this year will be more ‘last minute’ and we will have to fight for every guest,” says Žgomba.

He points out that such trends do not only apply to Croatia, but also many other destinations in the world. Žgomba added that it is caused by the increased supply of competitive capacities in the Mediterranean, their more intense marketing efforts followed by significant price advantages, and partly the recession in some European countries. Europe’s demand for shorter and longer vacations is being redirected to other destinations, such as Turkey, Greece, North African countries and their own countries.

Due to all this, Žgomba believes that more needs to be done this year in terms of tourism promotion at the national level, and it is good that the Croatian National Tourist Board recently raised 10 million kuna for marketing and PR activities in 16 markets, because, as he says, “it is not time to wait, but for prompt actions".

Important campaigns are also targeted through social networks and all other channels and communication platforms for all periods of the tourist year, and Žgomba believes that it is necessary to continue opening regular and charter flights and introduce other combined measures.

Regarding the dynamics of sales, which, as well as the price depends on the policy of each individual subject, Žgomba thinks that the prices should be mindful, but that lowering them is not a solution. Instead, it should be about what value we give for the money and whether we have customers at all.

"I consider it a key factor - and not that domestic tourism is viewed exclusively through the prism of price, which is only one of the factors of competitiveness. Tourists to Croatia do not come only because of low or high prices, but because they get adequate value for their money and I am convinced we are globally competitive here,” said Žgomba. 

Žgomba, therefore, expects that in the foreseeable future, certain price corrections may be made. He added that it is high time to reduce the VAT rate in tourism to the level of competitive Mediterranean destinations and to adequately regulate the special procedure of taxation of tourist agencies, which still puts them in an inequitable cost market position.

To read more about travel in Croatia, follow TCN’s dedicated page.

Monday, 25 February 2019

Croatia-Russia Economic Relations Strengthening

ZAGREB, February 25, 2019 - There is a lot of potential to strengthen Croatia-Russia economic relations, particularly in the energy, tourism, pharmaceutical, construction and agriculture sectors, it was said on Monday at a meeting of the Business Council for Cooperation with the Russian Federation and a seminar on how to successfully do business on the Russian market, held at the Croatian Chamber of Commerce (HGK).

HGK president Luka Burilović underscored that due to sanctions between the EU and Russia, there were certain restrictions and obstacles to economic cooperation between the two countries and that it was necessary to focus on the sectors that were not covered by those sanctions. "Business has to be a bridge and channel of dialogue between countries, particularly in times of political tension," he said.

He said possible areas of cooperation were energy and tourism as well as the chemical and pharmaceutical industries, mechanical engineering, shipbuilding, construction, infrastructure projects, wood and manufacturing industry, agriculture and food industries, textile industry and the like.

Burilović added that figures show that relations between the two countries have stabilised and that foreign trade is slowly growing. Burilović said that in 2012 trade between the two countries totalled more than 2 billion US dollars, however, due to the sanctions it has decreased. Now, its recovery is noticeable and the aim is to get back to the level of 2 billion US dollars as soon as possible and reach 3 billion.

Russia's Ambassador to Croatia Anvar Azimov underscored that economic relations always had the role of an engine and that that was why they had to improve.

We have to learn to develop economic relations regardless of the sanctions, Azimov said, adding that Russia's economy had suffered 50 billion euro in losses because of the sanctions and that the EU had lost up to 200 billion euro.

We want those relations to grow while Americans want them to decrease so that they can achieve more, he said and added that relations between Russia and Croatia had to be better given the great potential for cooperation.

He said that last year Croatia imported more than 2.5 billion cubic metres of Russian gas and added that gas deliveries would continue regardless of plans to build an LNG terminal on the island of Krk, which he sees as healthy competition.

Azimov said that Russians were prepared to invest in Croatia but were not always successful because it was not wanted by some strategic partners in Croatia, who, he said, believed that increasing Russia's share in the energy sector was undesirable.

Croatia-Russia trade in the first eleven months of 2018 amounted to 600.6 million dollars, up 16.6% from the same period in 2017.

Croatian National Bank (HNB) data shows that in the period from 1993 to the end of 2017, Russia invested 416.9 million euro in Croatia, which makes it the 14th biggest foreign investor in Croatia. In the same period, Croatia's investments in Russia amounted to 98.1 million euro.

Asked about the LNG terminal on Krk and if it could affect Croatia's relations with Russia, Burilović said that Croatia had to have a backup solution that was competitive in price and ecologically acceptable.

"I see the construction of the LNG terminal primarily as an alternative to the only existing supply route and the market will show where we will supply gas from. Our primary concern are Croatia's interests and the interests of consumers," Burilović said.

More news on the relations between Croatia and Russia can be found in the Politics section.

Saturday, 23 February 2019

Investment in Croatia - More Legal Security Attracts Foreign Cash

Investment in Croatia is at an all time low. With the phrase ''ABC'' having become the term for ''Anything But Croatia'' in investor circles, the country needs to do some serious work in order to redeem itself. In order for Croatia to become much more attractive to foreign strategic investors, more concrete and clear steps need to be taken, and high on the agenda lie the proper preparation of public finances and more legal security.

As Ana Blaskovic/Poslovni Dnevnik writes on the 21st of February, 2019, despite dramatic headlines, the economy is growing and Croatia's level of public debt is falling. It is commonly forgotten that Croatia is growing at a pace below three percent - the slowest of all. Neighbouring Slovenia experienced 4.9 percent GDP growth, Hungary experienced growth of 4.1 percent, and Bulgaria saw 3.8 percent growth. There's no such great wisdom to be spoken of in Croatia's case here, the economy will grow as much as it has, or is given, the power to do so, and its momentum is the only thing that can make Croatia look much more friendly to investors, a move it desperately needs to make.

Even if there was a real willingness and the capacity for proper reforms existed, which are both evidently lacking, the key question is what moves should be made first to garner the fastest results in terms of investment in Croatia.

In that regard, there are no real dilemmas in the mind of respected economist Velimir Šonje, and what needs to be ensured are business climate reforms which include the Doing Business Report of the World Bank's recommendations for Croatia.

"By moving to around number 30 on the Doing Business Report, we've entered the club of countries like Poland, we're visible on the Eastern European map (which isn't the case today) and we have a marketing tool to attract investors," said Šonje, adding that these concrete measures would have a direct impact on Croatia's ability to properly facilitate business and investment, such as issuing building permits or reducing the number of steps required when paying taxes.

At the very top of the Croatian Government's priorities lies the transparent privatisation of state-owned companies through their listing on the stock market within the wider revitalisation plan of the capital market in order to better stimulate foreign investment in Croatia.

"It's no accident that investments are at a relatively low level since the capital market has died in Croatia. Without its revival through several major privatisations and listing and strengthening programs to attract medium-sized businesses in some of the simpler stock quotes, there will be no better investments, as capital market development has positive spill-over effects and attracts the interest of foreign investors,'' stated the esteemed economist.

Following the liberalisation of the internal market, the strengthening of the protection of equal market competition (so that there are no already protected existing players), the transparency of public procurement and the abolition of parafiscal charges and other obstacles to strengthening competition, especially in the service sectors where there are significant area of potential such as the health, education and IT industries,''

When it comes to better attracting investment in Croatia, the proper and decent handling of public finances also ranks very high on the list of consultant Andrej Grubišić from Grubišić and partners, with a very specific goal.

"It's necessary to reduce government spending, ie, a 30 billion kuna budget over a five-year period, and thus leave more money to a private initiative that will drive the development of small and medium-sized enterprises for their own economic interests (independently and without the help of the state),'' said Grubišić. This would become more attractive for investment by foreign strategic investors through takeovers and/or recapitalisations through which intensified internationalisation would continue.

The hope is that the state will cease their classic style of favouring particular sectors or industries, such as IT or renewable energy sources, as this approach almost always promotes unwanted crony capitalism. Moreover, treating everyone in the same way is a clear signal to a foreign investor that he does not have to fear that his industry will be considered less desirable tomorrow and lose his privileged status to someone else who is deemed closer to the wishes of the political elites and those who are better lobbied.

In this context, there is a real need for adequate judicial protection. In the Croatian Chamber of Commerce (HGK), the emphasis is placed on attracting investors to production and opening up an investment space that would be geared towards the design of high value added products, investments in research, and in development and exports.

"We need to create a business climate that will stimulate domestic entrepreneurs, thus creating the conditions for the stronger engagement of foreign entrepreneurs and investments in Croatia," stated HGK's Luka Burilović.

He added that entrepreneurs have the most objections in the area of ​​legal certainty, justice, taxation and public administration.

"Here we can take the appropriate concrete measures that could immediately show results. Investors are becoming more demanding, they're looking for solutions, not just locations. One of the options for a change of approach is to put the focus on Croatia's "portfolio", and not on the entire territory,'' Burilović stated.

When asked how Croatia will look in the eyes of an investor, the answer remains very the same according to Burilović: "We're relatively unknown to investors, we don't have a brand built, and we're mostly recognised as a tourist destination,''

Make sure to stay up to date with our dedicated business and politics pages for much more on investment in Croatia.


Click here for the original article by Ana Blaskovic for Poslovni Dnevnik

Friday, 22 February 2019

Is Continental Tourism Croatia's Future? Zagreb and Slavonia Presented

The stand of the Croatian National Tourist Board (HTZ) with its 24 exhibitors is the largest at this year's Munich Tourism Fair, with the tourism potential of both Zagreb and Slavonia having special emphasis placed on them. Gari Cappelli believes that continental tourism is the future for Croatia's tourism offer.

As Poslovni Dnevnik writes on the 21st of February, 2019, through the variety of Croatian snacks prepared by famous Croatian chefs, master chef Branko Ognjenović and the chef of the Croatian football team, Tomica Đukić, numerous visitors to the International Tourism Fair 2019 - which, as we reported recently, is being held in Munich, Germany, from the 20th to the 24th of February this year, had the opportunity to get better acquainted with the gastronomic offer of Slavonia and the City of Zagreb yesterday at the stand of the Croatian Tourist Board.

The Slavonian gastro scene showcased Ilok cellars (Iločki podrumi), Kutjevo, Belje, Brzica and Feravino. The promotion of Croatian tourism also includes some of the legends of FC Bayern - Slavonia native Ivica Olić, Giovani Elber, and Andreas Jung.

The tourist fair is otherwise the largest and most visited tourist fair in Bavaria, stretching to over 88,000 square metres, and this year, boasting as many as 1,300 exhibitors from 70 countries across the world, it is bigger than ever before.

The Croatian Tourist Board's stand, with its 24 exhibitors, was the biggest at the fair. Unlike in previous years when Croatia promoted its popular destinations on the coast mostly, this year the often overlooked Croatian continent, more specifically the capital of Zagreb and the Eastern region of Slavonia, which both have a lot to offer to tourists, are taking the limelight. The promotion of Slavonia as a desirable tourist destination is an excellent move for the Days of Croatian Tourism, which is set to be held on 4th to 9th October in the Slavonian region of Osijek.

Croatian Minister of Tourism Gari Cappelli, and Director of the Croatian Tourist Board Kristijan Stančić participated in the presentation of the Croatian tourist offer along with the director of the Zagreb Tourist Board, Martina Bienefeld, Osijek-Baranja County Prefect Ivan Anušić and the domestic manager of the tour operator for Croatia, Selimir Ognjenović.

''Of the three million tourists coming to Croatia from Germany, 1.2 million of them come from Bavaria. So I can say that the Munich Fair is always some sort of indication for us to know what's going to happen this year in regard to tourism. The Germans are the type who appreciate the quality of Croatian tourism, because when those three million tourists return home to Germany, there's a lot to talk about.

Interestingly, we're not presenting the coast but the continent, because I think that's the future through health tourism, special forms of tourism, hunting, fishing, cyclotourism...'' Gari Capelli told Poslovni Dnevnik.

Nera Miličić, head of HTZ in Germany, says that there is a sense of pride in announcing the expansion of the Croatian tourist offer with "The most beautiful Croatian tourist secret" - Slavonia, and the triple winner of the most beautiful European advent - the Croatian capital city of Zagreb.

''We're especially delighted to have organised the largest presentation of the Croatian continent in Bavaria with our partners so far,'' noted Miličić.

''Given that for Croatian tourism, Germany is the emitive market from which we have the largest tourist turnover, we've created a rich and original event program at the Croatian stand that is attracting the attention of numerous visitors.

This is also the confirmation of a well-founded cooperation with FC Bayern Munich which gives us additional promotional value on the Bavarian market, where every other German tourist comes to us from,'' commented HTZ director Kristjan Staničić.

As a tourist destination, Croatia is a serious competitor on the German market. During these times of major changes, an increase in the amount of airline passengers from Germany to Croatia has been recorded, which has positioned Croatia among the most competitive destinations, alongside Spain, Turkey, Greece, Portugal, Egypt and Tunisia, countries which many tourists seeking package deals are usually attracted to.

Although Croatia was otherwise perceived as a destination to drive to from Germany, through the country's camping and private accommodation offer, it has also entered into the package holiday segment (hotel, transfer, flight) which is sold through a tour operator network. All in all, the interest of German tourists for Croatia remains very high indeed.

Numerous tour operators are continuing to expand their programs, smaller operators have begun ''selling'' Croatia, and some airlines are continuing to announce new lines.

The Germans are still in the leading position when it comes to the number of overnight stays realised by foreign tourists in the Republic of Croatia. In addition, the largest number of tourists from Germany come from the regions of Nordrhein-Westfalen, Bavaria, and Baden-Württemberg. However, the Germans typically enjoy more family oriented holidays, often bypassing potentially more ''specialised'' types of tourism on offer.

Therefore, the presence of Croatia's more specialised tourist offers at such fairs is crucial to boost the awareness of German tourists to the country's more numerous tourist offers, and in particular to awaken tour operators to Croatia's more luxurious package of arrangements,'' stated Dragan Kovačević, Vice President of Agriculture and Tourism at the Croatian Chamber of Commerce (HGK), who is also representing Croatia's tourist offer in Munich.

Make sure to stay up to date with more on continental tourism, the Croatian Tourist Board and Croatia's various tourist offers by following our dedicated travel and lifestyle pages.

Wednesday, 13 February 2019

Croatia and Montenegro Developing Closer Economic Cooperation

ZAGREB, February 13, 2019 - There are numerous possibilities for strengthening economic cooperation between Croatia and Montenegro, notably in the energy sector, transport, construction and tourism, it was said at a Croatian-Montenegrin business forum, held at the Croatian Chamber of Commerce (HGK) in Zagreb on Wednesday.

"Cooperation possibilities between Montenegro and Croatia have not been adequately used so far. Even though it has been growing, their trade is too modest considering their proximity to one another. But as evidenced by the presence of representatives of more than 100 companies at today's forum, opportunity always prevails over difficulty in the business sector," said HGK vice-president Ivan Barbarić.

Barbarić said that despite connectivity problems, there was room for closer cooperation in energy and transport, notably the renovation of railway carriages, as well as in construction, port and marina reconstruction, the IT sector and tourism.

"About 20 Croatian companies and representations are active in Montenegro. In the first 11 months of 2018 we recorded a 15% increase in exports, but we believe that we can do much better," said Barbarić.

The head of the Montenegrin Chamber of Commerce, Ivan Saveljić, said that he was confident that there were numerous business opportunities that should be used to promote the economic cooperation between the two countries.

"Montenegro is oriented to the region and naturally, to European integration processes, and on the path of Euro-Atlantic integration we can use the experiences gathered by Croatia, which has just completed that process," Saveljić said, underlining the possibility of cooperation in environmental protection and energy efficiency and joint participation in NATO tenders.

The Zagreb forum, organised by the HGK and the Montenegrin Chamber of Commerce, also included business-to-business talks.

More news on the business and other relations between Croatia and the neighbouring Montenegro can be found in the Business section.

Thursday, 22 November 2018

Zlatna Kuna Business Awards Presented

ZAGREB, November 22, 2018 - Karlovac-based arms manufacturer HS Product was voted best large company by the Croatian Chamber of Commerce (HGK) and was presented with the Zlatna Kuna (Golden Marten) Award at a ceremony in Zagreb on Wednesday evening.

The award-giving ceremony brought together many business people and public and political figures, including President Kolinda Grabar-Kitarović, Prime Minister Andrej Plenković, Deputy Prime Minister and Agriculture Minister Tomislav Tolušić, Economy Minister Darko Horvat, Zagreb University Rector Damir Boras, former President of the Croatian Academy of Sciences and Arts Zvonko Kusić, representative of the Speaker of the Croatian Parliament Branko Bačić and Deputy Mayor of Zagreb Olivera Majić.

HS Produkt CEO Željko Pavlin said that the company generates 98 percent of its revenue from exports and innovates its own products. That's why this award belongs to the company's engineers and to all of its employees, he added.

Passenger and charter cargo airline Trade Air received the Zlatna Kuna Award as best medium-size company, while the award for best small company went to IT consulting firm Kod Savjetovanje.

Privredna Banka Zagreb (PBZ) was voted best bank and Croatia Osiguranje best insurance company.

The Microblink computer vision technology company was awarded for innovation, while Photomath, whose mobile application for solving mathematical problems has been downloaded more than 100 million times, was voted best post-startup company.

The lifetime achievement award went to Franco Palma, a prominent professional in the tourist industry.

Zlatna kuna - Grabar-Kitarović: We need more determination, proactivity and optimism

President Grabar-Kitarović said that the event is important for acknowledging those at the forefront of the country's economic development.

As an indicator of the success of Croatian companies, she said that last year they increased the number of employees by 5.8 percent and overall revenues by 9.5 percent, generating a total of 21.9 billion kuna in net profit. She said that Croatian entrepreneurs have proved for decades that they can be successful in all business circumstances and cope with different challenges.

"Just as we recognise these qualities of yours and celebrate your achievements, so we respect the fundamental values and principles that you represent, those being innovativeness, creativity, hard work, commitment, persistence, competence, the values that are deeply rooted in the fabric of the Croatian people," the president said.

She said that she is a great optimist because she knows that Croatia can advance in improving its economy and stand side by side with those countries that are now more developed than it.

"We are wise and smart enough, but we need more determination, proactivity and optimism. My vision of Croatia as a prosperous and functioning state, a competitive economy in which we all work together for the general good and for the wellbeing of every person, remains unchanged and I am ready, in accordance with my powers, to contribute to these goals," Grabar-Kitarović said.

Zlatna kuna - Plenković underlines importance of ICT sector

Prime Minister Plenković said the government based all its economic activities in order to support entrepreneurs and business people and that they rested on fiscal consolidation, structural reforms and attracting investment. "Only in that way can we ensure lasting and sustainable economic growth... and keep up with what we call the foundation of the fourth industrial revolution, i.e. innovation, digitisation and competitiveness."

Plenković said last year's surplus of 3.15 billion kuna showed that the government had planned expenditures and revenues wisely, and that the 1.6 billion kuna surplus in the first half of this year showed that it had continued to do so with the same intensity.

He said the three rounds of the tax reform would relieve the business sector and citizens by 6.3 billion kuna, announcing that the tax relief would continue next year and that businesses would feel it.

Plenković said the digitisation of public administration and the judiciary would continue, and that a new public procurement law would result in more transparent and faster procedures.

He said the government measures had reduced the number of indebted citizens with frozen bank accounts by over 50,000, and that a pension reform was expected to make the system sustainable and more fair and raise pensions.

Speaking of investments, Plenković said this year they reached a record high of 2 billion euro, including 1 billion euro in tourism. He added that tourism must not be the only growing industry and that ICT was a sector in which new steps forward must be made to catch up with the companies and countries at the forefront of global trends.

HGK president Luka Burilović said the digital age had changed communication, doing business and lives, but that he did not agree with announcements that artificial intelligence and robots would take over people's roles. "It's true that the digital transformation will profile the winners and the losers, and which side we will be on depends less on governments and luck and more on us and our ability to accept changes. It's up to us to be their active creator and not a passive observer," he said.

We must decide whether we want to be a country with a rentier economy which loses its population or if we will focus on new technologies, excellence, innovation and quality jobs, he added.

For more on the Croatian Chamber of Commerce, click here.

Saturday, 20 October 2018

Can Croatia Go Digital?

Can Croatia follow the shining examples of Denmark and Estonia and move forward in digitisation?

Friday, 19 October 2018

Sustainable Tourism in Split: "We Have to Measure to Manage"

From October 16 to 18, the 1st Joint Conference of the Fora of the Adriatic and Ionian Chambers of Commerce, Cities and Universities gathered more than 120 people and institutions from three civil society networks.

Wednesday, 17 October 2018

Split Hosts First Joint Conference of Adriatic and Ionian Chambers of Commerce, Cities and Universities

The conference began today at the Radisson Blu Hotel in Split. 

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