Wednesday, 19 August 2020

HGK Warns Of Difficult Situation In Meat Industry

ZAGREB, Aug 19, 2020 - The slaughter and red meat processing group in the Croatian Chamber of Commerce (HGK) on Wednesday warned of the difficult situation in that sector and called for the continued support from the state, noting that it was high time for the industry to be declared a strategic priority for the country.

"The pressure of cheap imports has for years been suffocating Croatia's slaughterhouse and meat processing industry and the coronavirus crisis has added to the pressure on local companies in that sector, the majority of which, closed their slaughterhouses even before these turbulent times," the HGK said in a press release.

The president of the group of companies in this sector, Mario Ravlic, underlined that Croatian producers had found themselves in a difficult situation after Croatia joined the EU and fully opened its market to large European systems capable of production with significantly better conditions and that the most recent situation had additionally worsened that.

"The impact of the coronavirus crisis, loss of revenue from the sale of hides, and increased costs of managing by-products has brought the domestic meat processing industry to the very edge. And other challenges that await us could mean the end. In other words, it is high time for this industry to become a strategic state priority," said Ravlic.

HGK supported its arguments about the poor situation in this industry with foreign trade figures. Prior to joining the EU (2012), Croatia imported around 80,000 tones of various meat and around 10,000 tones of meat products whereas last year it imported 150,000 tonnes of meat and 24,000 tonnes of meat products.

Ravlic called for the state to urgently secure the continuation of state support for this sector.

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Monday, 27 July 2020

Bookings for Family Accommodation Down Despite Price Cuts - Survey

ZAGREB, July 27, 2020 - Despite lower prices, tourist accommodation for families in Croatia is seeing a steep decline in bookings and most providers of such accommodation are facing financial losses of up to HRK 50,000, a survey on the coronacrisis impact on the business operations of family accommodation providers shows.

The survey, conducted by the Croatian Chamber of Commerce (HGK) on a sample of 2,100 people, revealed that as many as 95 percent of respondents reported a decline in the number of bookings compared with last year, despite the fact that three-quarters of them had cut prices, mostly by up to 30 percent.

Nearly a third of those interviewed, or 31 percent, recorded a drop in bookings of more than 80 percent, while 90 percent also reported cancellations of bookings. The share of cancelled bookings for July and August was mostly up to 60 percent.

"The financial damage suffered by most of the accommodation providers, 77 percent, reached up to HRK 50,000 in the first six months of the year, while the estimate for the next three months climbs to HRK 100,000," the HGK said on Monday, noting that only six percent of the respondents said they did not have any significant financial losses.

A third of those interviewed were pensioners, with 75 percent of them saying that their livelihood would be threatened without this income.

Friday, 17 July 2020

HGK to Cull Staff by 30%

ZAGREB, July 17, 2020 - The Croatian Chamber of Commerce (HGK) said on Friday it was continuing its business reorganisation which includes downsizing staff by 30 percent.

"Due to the digitisation of internal processes and the fall in revenue caused by the coronavirus pandemic means, HGK is embarking on the next stage of reorganisation which means reducing the number of employees by 30 percent," HGK said in a press release.

HGK recalled that since Luka Burilovic took the HGK's helm the focus has been on reorganising business and improving efficiency to cater to the members' needs.

"Digital transformation, which we started two years ago, started not only with the Digital Chamber as a final product but also with the digitisation of internal processes which imply reducing the number of employees. Notably, digital transformation was one of the preconditions to rationalise and reorganise the Chamber which we planned to implement gradually, however no one could have foreseen the corona crisis," Burilovic said.

He underscored that like everyone else they had to adjust overnight to the new reality which is being felt the most by Croatian enterprises and consequently by all of Croatian society.

"As a result we have decided to embark on the next phase of reorganising the HGK which, unfortunately means reducing the number of employees by 30 percent. It's never easy to decide to lay anyone off but that is inevitable," said Burilovic.

HGKL currently has slightly over 500 employees. 

Sunday, 14 June 2020

Croatian Chamber of Commerce Seeks Lifting of Construction Ban in Summer

As Novac writes on the 11th of June, 2020, the Croatian Chamber of Commerce (HGK) has asked the Ministry of Construction and Physical Planning to send a recommendation to the local self-government unit on lifting the ban on construction works during the summer.

"We sent the request on behalf of construction companies whose working conditions were significantly hampered by the coronavirus crisis. During the pandemic, the Croatian Chamber of Commerce managed to prevent construction sites from closing and to open shops for construction materials and equipment as soon as possible, which preserved activity and jobs in this industry. The complete cessation of all earthworks and construction works would make it difficult to recover and realise the scheduled works, which would cause additional financial damage and consequently lead to the dismissal of a large number of workers,'' said Mirjana Cagalj, vice president of the Croatian Chamber of Commerce for construction, transport and communications.

According to the current Construction Act, cities and municipalities can make decisions on banning works, but the Construction and Utilities Sector of the Croatian Chamber of Commerce says that exceptional conditions have been met due to the coronavirus pandemic and that the necessary approvals and consents of local authorities must allow activities within this sector to continue.

"Lifting the ban would significantly help the construction sector and its related branches, and at the same time, it wouldn't seriously endanger the tourist season, which will be somewhat more modest due to objective reasons," explained Cagalj.

On behalf of the construction companies located in Split-Dalmatia County, the Croatian Chamber of Commerce also sent a letter to the Mayor of Split, Andra Krstulovic Opara, requesting that earthworks and construction works be allowed in the city throughout the summer (from June the 15th to September the 15th).

Opara supported the proposal and invited all interested investors and contractors to send their requests for the continuation of construction work during the summer months so that he could submit them to the City Council for discussion.

"At this moment in time, I consider it extremely important that the investments that can start the economy the most quickly are enabled and encouraged, so, I'm going to recommend a positive solution to all of the received requests to the Council," Opara said.

For more, follow our business segment.

Thursday, 11 June 2020

HGK Launches Platform for Virtual Meetings Between Business People

ZAGREB, June 11, 2020 - With the support of the Enterprise Europe Network, the Croatian Chamber of Commerce has launched "Go global - Go virtual", a project aimed at expediting the recovery of the domestic economy after the COVID-19 crisis, the HGK said on Thursday.

It concerns the organization of online B2B meetings for Croatian companies with foreign partners on markets in which Croatian business people, according to a survey, are most interested - Slovenia, Russia, Austria, Germany, the Czech Republic, Slovakia, Poland, and Hungary.

The first virtual meetings will be organized with business people from Slovenia, Ivan Barbaric of the HGK said. Croatian companies may apply for them by June 19 and the meetings with Slovenians will take place on July 2.

Monday, 8 June 2020

HGK: 2019 One Of Best Years For Investment Funds

ZAGREB, June 8, 2020 - Last year was one of the best years for investment funds with the value of their assets exceeding HRK 26 billion and this year despite the obvious fall due to the COVID-19 pandemic. the sector has been significantly maturing, it was said at the Top of the Funds award ceremony on Monday.

President of the association of companies for the management of investment funds within the Croatian Chamber of Commerce, (HGK) Hrvoje Krstulovic underlined that 2019 was one of the best years for investment funds and capital market with Undertaking for Collective Investment in Transferable Securities (UCITS) funds increasing by 18.5% to HRK 22.5 billion and a jump in alternative investment funds of 14.5%  to HRK 4.2 billion.

Those two figures, combined together, give the number of HRK 26.8 billion which is almost equal to the value of assets at the end of 2007, said Krstulovic.

Despite the crisis in 2020, 95% of physical entities retained their investments in funds, he explained and the decrease that has been recorded mostly relates to institutional investors, he said.

He underlined that a significant maturity has occurred in the entire sector from clients, to sales processes and on to regulators.

The strongest effect of the coronavirus epidemic was recorded in March when the value of assets of investment funds fell by 30% however in April an increase of 1.4% was recorded and the total value of UCITS funds at the end of April amounted to HRK 15.9 billion.

Top of the Funds awards in five categories

The Top of the Funds awards for the best management of investment funds in 2019 was conferred to Intercapital Bond for the best equity open-end investment fund (UCITS) while the best mixed open-end investment fund award went to Allianz Portfolio. The best open-ended investment fund was awarded to PBZ Equity while the particular open-ended investment fund award went to Intercapital Income Plus.

There are currently 23 companies managing investment funds in Croatia.

Saturday, 6 June 2020

HGK: Croatia Meeting Conditions For Entry To Euro Area As Planned

ZAGREB, June 6, 2020 - Findings of the ECB's assessment showing that all the major commercial banks in Croatia have met capital adequacy requirements and passed stress tests means that Croatia is a step closer to the European Exchange Rate Mechanism (ERM II), the Croatian Chamber of Commerce (HGK) said on Friday.

Therefore we can expect the country to join the euro area in 2023, as planned, the HGK says in a press release after the Croatian National Bank (HNB) stated that the comprehensive assessment conducted by the European Central Bank showed that the five leading banks in Croatia are well-capitalized and resilient to shocks.

Zagrebacka banka (ZABA), Privredna banka Zagreb (PBZ), Erste & Steiermaerkische Bank, OTP banka Hrvatska and Hrvatska Postanska Banka (HPB), which were covered by the comprehensive assessment conducted by the ECB, do not face any capital shortfalls as they did not fall below the relevant thresholds used in the asset quality review (AQR ) and the stress test, the Croatian central bank reported earlier on Friday.

The findings are also the confirmation of the stability and good quality of the Croatian banking system, the chamber underlines in its comment.

This is also an act of recognition of our members from the banking system and of the whole economy, says the HGK.

The chamber reiterates some of the advantages of the membership of the euro area such as the access to funding through the European Stability Mechanism, the fact that the HNB would no longer have to maintain the stability of the kuna, and the consequent higher credit ratings for the country.

Banks covered by ECB assessment make up four-fifths of total banks' assets in Croatia 

The five banks that fared well in the ECB comprehensive assessment make up 79% of the total assets of the banking system, the HGK notes.

Croatia sent its letter of intent to join the Exchange Rate Mechanism (ERM II) to the ECB on 4 July 2019.

The finance ministers of the euro area's 19 member states and Denmark, the president of the European Central Bank (ECB) and a representative of the Danish central bank's governor discussed the letter at a meeting in Brussels, after which the finance ministers issued on 9 July 2019 a statement in which they "welcome the intention of the Croatian authorities to put in place the necessary elements for a successful entry into ERM II."

The euro area statement said then that the ECB could complete its assessment of Croatia's compliance with the commitments outlined in the letter of intent in about a year's time.

In case of a positive assessment, a decision would be made on Croatia's ERM II participation, a sort of euro waiting area where it should spend at least two years, which means Croatia could introduce the euro in 2023 at the earliest.

Croatia would simultaneously join ERM II and the Banking Union.

Sunday, 31 May 2020

HGK Calls For aid To Winemakers Hit By Coronavirus Crisis

ZAGREB, May 31, 2020 - The Croatian Chamber of Commerce (HGK) has called on the Agriculture Ministry to amend the so-called wine envelope in order to help the viticulture and winemaking sector by allocating most of the HRK 43 million grants to be used to distill surplus wine and thus reduce unsold stock.

The HGK said last Thursday that the crisis caused by the coronavirus had strongly impacted the sector of viticulture and winemaking, too.

A survey conducted by the Chamber's Association of Wine Producers has shown that there are problems with the sale of about 50% to 60% of wine stock, and it is expected that sales will go down by up to 80% in the first six months.

"The Chamber has proposed that the biggest part of the HRK 43 million grants be allocated to reduce the unsold stock by distilling surplus wine," said the vice-president of the HGK Agriculture and Tourism Sector, Dragan Kovacevic.

He also noted that the proposal entailed favourable loans for winemakers through the Croatian Bank for Reconstruction and Development (HBOR) and the Croatian Agency for SMEs, Innovations, and Investments (HAMAG-BICRO), with good insurance instruments and interest rates, a five-year maturity and one-year grace period.

The HGK says that the reduced consumption, the unsold stock which has reached its highest level since 2009, additional import duties on European wines in the USA, which is the EU's main market, and the pandemic have all significantly destabilised the wine market in the EU, including Croatia's market.

Currently, wine stocks are accumulating, notably, with bigger wine producers, which also leads to a lack of storage capacity, the HGK said.

Wednesday, 6 May 2020

HGK: Five Years for Trade Sector to Recover

ZAGREB, May 6, 2020 - It will take five years for the Croatian trade sector to recover from the impact of the crisis caused by the coronavirus epidemic, the Croatian Chamber of Commerce (HGK) said on Wednesday.

"The public must be aware that the trade sector has borne a heavy burden on its shoulders, without increasing margins or prices, which helped all the citizens in this crisis," the HGK vice-president for trade, Josip Zaher, said at a meeting of the HGK's trade association.

Zaher said that retail trade had dropped by 25% in April.

The association's president Ivica Katavić said: "We've been through two difficult months. There have been problems in business, including inspections, shorter business hours and limited entry into the shops. But we managed to keep our heads above water."

Katavić said that the restrictions that had done the greatest damage were shortened shop opening hours and e-passes allowing travel. "With the lifting of these restrictions, the situation has improved considerably. The situation was most difficult at the start of April, but considering the circumstances we must be satisfied. We are also satisfied with our communication with the HGK, who were at our service," he added.

The CEO of the Konzum retail chain, Slavko Ledić, said that the sharpest declines had been recorded in large stores. "The key move was to extend opening hours, it was even more important than Sunday trading. The most important thing for us was to have opening hours extended and that we could pay wages," Ledić said.

The CEO of textile distributor Tekstilpromet, Hrvoje Šimić, drew attention to problems faced by the non-food trade sector, which has 90,000 employees.

"Over a period of 50 days our turnover was zero, while at the same time banks showed no sympathy. Some of the shopping centres also did not prove to be good business partners to Croatian traders because, for example, they sent their invoices for May already in mid-April," Šimić said.

More economic news can be found in the Business section.

Monday, 4 May 2020

Croatian Chamber of Commerce Seeking to Relax Measures for Driving Schools

Croatia has gradually begun to loosen up its formerly stringent anti-epidemic measures, and the Croatian Chamber of Commerce (HGK) is seeking more freedoms for driving schools and international drivers.

As Novac writes on the 4th of May, 2020, the Croatian Chamber of Commerce has asked the National Civil Protection Headquarters to relax some of the measures applicable to drivers in international road freight transport, as well as others which will provide better grounding for the start of driving school operations on May the 11th, 2020.

At the request of the members of the Road Freight Association, the Croatian Chamber of Commerce has proposed that quarantine and home/self-isolation measures for international drivers be carried out under the same conditions as drivers in domestic transport.

''According to the current regulations, a driver must not leave their house or their assigned accommodation where they're self-isolating, except in the case of a call from their employer for transport. On their return from a foreign country, they then begin a new cycle of self-isolation, and changing the driving and staying-at-home cycles in this regime can take up to a month, in some cases it takes even longer.

As the drivers operating under this regime don't have symptoms of illness, the Croatian Chamber of Commerce believes that they should be allowed to go to the store and pharmacy as needed and have a limited stay outside of their homes just like other people do,'' said the Croatian Chamber of Commerce's Vice President for Construction, Transport and Communications, Mirjana Cagalj.

The Association of Driving Schools of the Croatian Chamber of Commerce has also proposed that the measures for them be relaxed in order to enable the continued running of driving lessons from May the 11th onwards, with the application of horizontal and specific protection measures. They believe that with the education of staff and strict adherence to health regulations, both theory and practical teaching can be held smoothly, and they have been given specific suggestions on how to implement it by the National Cvil Protection Headquarters.

Make sure to follow our dedicated section for more on coronavirus in Croatia.

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