Friday, 17 September 2021

Alongside New Movenpick Split Hotel, More Projects in Works

September the 17th, 2021 - We recently reported on yet another hotel coming to the Dalmatian port city of Split, the Movenpick Split hotel, but that isn't the only thing the company responsible for that has up its sleeve for the Adriatic and the rest of the Mediterranean.

As Poslovni Dnevnik/Marija Crnjak writes, recent news that the first Movenpick Hotel in Croatia is opening in the second largest city of Split, which is one of the premium brands of the global hotel house Accor, presented a relatively new investor, the development company MPPD, which has great ambitions to develop projects throughout the entire Mediterranean.

Their company, Split Peninsula Properties ,will be in charge of the Movenpick Split hotel project, which is worth 25 million euros and which should be completed by 2023.

After the opening of the MGallery hotel a few weeks ago in the same city, this is Accor's second project in Split. As Andrija Antic, a partner in MPPD and the founder of Split Peninsula Properties explained, the works on the location have only just started.

Business partners

"After we've dealt with obtaining all of the permits and paperwork, we'll be ready to start the work that should get going in a month or two. This partnership with Accor fits perfectly into our vision and philosophy of creating comfortable, exclusive places for guests and the local community. We're proud to be able to bring such a top quality brand to Split and the whole of Dalmatia,'' Andrija Antic said.

On MPPD's website, among current and future projects, only this hotel in Split is mentioned so far, although the company presents itself as a developer in the Mediterranean. Antic's partners in the project are Janko Vrgoc, the former director of GPD Zagreb and the company Arena centar upravljanje (management), and Tomislav Mustapic.

“MPPD is a development company with a number of projects going on throughout the Mediterranean, Greece and Montenegro. These are commercial real estate projects (not residential ones), including logistics and mixed-use projects, but at this moment in time, we aren't ready to reveal any details.

Along with us, several partners from various sectors, from construction, finance and development, the project is accompanied by "High Net Worth" individual investors from outside the Republic of Croatia, who also participated in the Movenpick Split hotel project,'' explained Antic.

Located on Split's very popular Znjan neach, Mövenpick Split will have 156 rooms with stunning sea views, two restaurants and a spa, as well as an innovative workspace and conference facility. It will also have 110 underground and above-ground parking spaces with a large number of e-vehicle charging stations, a rooftop restaurant, a lounge and a terrace with an infinity pool.

The project is signed by local architect Alan Plestina from the Pulsar Architecture studio in collaboration with Accor's design and technical services team. Plestina is, among other things, the author of the projects of the Arena shopping centre complex and the Arena Zagreb sports hall.

Twelve active projects

The Movenpick brand itself is part of the more luxurious part of Accor's portfolio, which was founded back in 1973 and currently manages more than 90 hotels across 25 countries. In Northern Europe, Movenpick is currently implementing a total of twelve projects, and Eastern Europe is considered very attractive for further investment. Accor took over the brand back in 2018 from Arab investors for a price tag of 482 million euros.

"We're happy to be able to present another hotel in one of the most prestigious locations in Dalmatia and thus strengthen our portfolio in the segment of leisure facilities in the region. Movenpick is continuing to grow strongly in Eastern Europe thanks to the continuous expansion of the resort's offer and top facilities,'' said Dilek Sezer, the Accor Group's development director for Southeastern Europe, in a statement.

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

Sunday, 12 September 2021

Strabag Opens New Croatian Building, 10 Million Euro Investment

September the 12th, 2021 - Strabag, which is often engaged in building various structures across the Republic of Croatia, has opened a brand new Croatian building which comes with a huge investment price tag of ten million euros.

As Poslovni Dnevnik/Suzana Varosanec writes, on the occasion of the opening of the company's new Croatian building, Strabag director Veljko Nizetic says that this concludes their strategic project, which, he says, will certainly facilitate and improve the daily business of the company, which is continuously working on a number of key infrastructure and demanding construction projects across Croatia.

"Investments like this in the asphalt base and in ancillary buildings and plants, as well as the employment of new people and the expansion of production, we see as a logical step in the growth and development of the company," explained Nizetic.

Strabag, one of the leading construction companies in Croatia, at the company level with more than a billion total revenues in 2020, has completed its strategic project which additionally positioned itself in the vicinity of the City of Zagreb and Zagreb County.

On a little more than two thousand square metres, as part of the asphalt base in Donja Lomnica, the company has opened a new business - a new Croatian building. It is, as stated, a total investment of almost ten million euros according to a recent announcement from Strabag.

The new Croatian building was built near the asphalt base, which was put into operation back in May 2020, and is the ninth base that Strabag has here in Croatia. In addition to office space, the new Croatian building houses a central laboratory for the quality control of concrete, asphalt and other materials used in construction, and, as they say, a central workshop for the repair and maintenance of construction machinery.

In his opening statement, the director of Strabag, Veljko Nizetic, assessed the huge level of importance of this and similar investments, especially in the context of further expansion of production, as well as the growth and development of Strabag's business overall. Namely, according to the director, this concludes their strategic project which will certainly facilitate and improve the daily business of the company, which continuously works on a number of key infrastructure and some of the most demanding construction projects in Croatia."

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

Monday, 19 July 2021

British-Iranian Entrepreneur Ali Parsa Behind Enormous Prukljan Investment

July the 19th, 2021 - The wildly successful British-Iranian entrepreneur Ali Parsa is the face behind an enormous Prukljan investment, which the Croatian Government has, at its usual snail's pace, finally given the green light.

As Poslovni Dnevnik/Marija Brnic writes, one whole year after submitting the bid in the public tender of the Ministry of Physical Planning, Construction and State Property, and as many as seven years after being included in the list of strategic projects, the Croatian Government finally gave the thumbs up to a bid from the only bidder who applied for the Prukljan project in Skradin. According to numerous announcements, the move should result in more than 300 million euros of investment.

The aforementioned tender is for the sale and concession of land near Prukljan Lake and the company Dalmatia sport and health resort, based in Split, whose first founder in 2007 was the Dutch company Wittens Praktijk. The former left the company to a new owner a year ago, and The Dalmatian Resort Croatia was also registered in that same country.

In the background of the Prukljan investment project, as a guarantor through his companies, stands Ali Parsa, a British-Iranian entrepreneur with a rich career as an investment banker, who took his place in this challenging scene as the founder of Babylon Health, a system that provides 24-hour healthcare and video messaging via a mobile app.

Parsa founded Babylon Health Ali Parsa back in 2013, and with a system used in more than 60 countries, it has enabled him to rank among the most influential and wealthy people in all of Britain, and that Northern European island nation isn't short when it comes to rich individuals.

Ali Parsa doesn't actually appear directly in the offer for the project of building a golf course, hotels and tourist villas, nor is he mentioned in the plans for the nautical port and wharf in Prukljan, but his name does come up for the Split company Dalmatia sport and health resort. This verification is one of the main reasons why the process of assessing the acceptability of a bid that met all the required conditions took so long.

It turned out to be a problem that instead of a letter of intent from a bank that had to meet exactly the prescribed criteria, a certificate from Nedbank Private World from the island of Jersey was submitted in regard to the existence of money for the project in the amount of 100 million kuna.

As stated in the explanation of the government's decision, the money is owned by a legal entity that is in some indefinite relationship with the investor, who can obtain the said financing.

“In addition to not being familiar with the regulations governing banking on the island of Jersey, and due to the importance of the project for both the local community and the Croatian economy as a whole, the State Attorney's Office of the Republic of Croatia was asked to comment on whether we can invite investors to submit letter of intent.

The State Attorney's Office responded positively and continued to act, and at the request of the Ministry, the investor submitted the requested letter of intent, by which the bank confirmed that it will issue a bank guarantee in the amount of 14 million euros, which is more than the requested 100 million kuna. Noting that the bidder submitted a valid bank guarantee for the seriousness of the bid, also in excess of the required amount, by more than 20 million kuna, it ended up being practically uncollectible due to the swift address of the Croatian National Bank, which doesn't deal with payment traffic from private persons.

The problem was solved by changing the swift address and switching to Hrvatska poštanska banka, thus eliminating the last problem of accepting an offer for one of the largest investments in Croatian tourism.

Along the shores of Prukljan Lake, on an area covering nearly 200 hectares, the Prukljan investment project foresees the building of a golf course with 18 holes, hotels and urban villas with a capacity of up to 1500 beds and at least four stars, as well as a nautical tourism port.

For this purpose, the state is selling a total of 54 hectares of and, for which the investor will pay 46 million kuna, of which 29 million kuna for 30 hectares of land is intended for the construction of a hotel with 1,500 beds, and 17 million for land for the construction of tourist villas.

For the construction of a golf course (18 + 9 holes) with all of the accompanying infrastructure, the Croatian Government has approved the establishment of building rights for a period of 99 years on 136 hectares of land, which the investor will pay 2.6 million kuna per year.

The investor was also granted a 50-year concession on the maritime domain for the purpose of the economic use of two beaches and the construction and use of a nautical tourism port, for which a fixed fee was determined per concessioned area, and variable at 2 percent of annual revenue and a gradual increase of 0.5 percent every five years.

The contract for the Prukljan investment project will be signed within three months at the latest, and the realisation will follow in the next five years.

From available sources in government circles, it has been unofficially learned that health tourism will be developed in Prukljan, which correlates with the background in this investment, as it regards the founder of Babylon Heath, but it is interesting that the Prukljan investment isn't being strongly promoted, which indicates the Government's caution regarding, among other things, the Croatian public's sensitivities about golf courses and the issues that have surrounded them thus far.

For more, follow our business section.

Friday, 9 July 2021

Croatian Political Stability Main Condition for Foreign Investment

July the 9th, 2021 - Croatian political stability is key to sending out the message to the world that it is safe and worthwhile to invest in the country, as small countries like Croatia have little other choice in such a big proverbial pond.

As Poslovni Dnevnik/Vecernji list writes, inventions and innovations should be strongly encouraged in all sectors, and it is naturally necessary to accelerate the digitalisation of industry and the state at all levels, initiate rapid and effective public administration reform, reduce bureaucratisation, state apparatus costs and corruption, and shape a long-term strategy.

All of the above, and basing it firmly on activities related to blossoming sectors in Croatia such as robotics, biotechnology, artificial intelligence and applied cognitive science, is one of the conclusions of the recently held and fourth Rings of the Business Forum Zagreb 2021, where the Ring (Prsten) Association of Croats of Bosnia and Herzegovina discussed how to quickly and efficiently adapt and continue doing business in coexistence with the ongoing coronavirus pandemic.

Pavo Zubak, president of the Ring, which brings together more than 230 businesses operating across Croatia with about 11,000 employees and generating 5.5 percent of Croatia's GDP, said they were acting affirmatively, looking to the future, and trying to build partnerships with representatives of the executive branch and harbour a relationship full of trust.

"Behind us is a difficult and challenging period, and before us lie new challenges and opportunities that we can and must take advantage of. Therefore, it's important to communicate openly in order to jointly prepare projects that can mostly be co-financed from European Union (EU) funds,'' Zuban stressed, emphasising the importance of Croatian political stability for further economic progress.

Prime Minister Andrej Plenkovic (HDZ), the patron of the forum, said that Croatian political stability was the goal of the Government because it was the first indicator that investments could be safely made here.

On the topic of this year's Ring Forum Opportunities and threats facing the Croatian economy in the post-pandemic period, the Minister of Economy and Sustainable Development Tomislav Coric said that there are many challenges that we must overcome. One of them is the absorption of more than 200 billion kuna in various financial envelopes, available over the next ten years.

For more, follow our dedicated politics and business sections.

Tuesday, 15 June 2021

Is Croatian State Playing God by Making Investing Easier for Some Than Others?

June the 15th, 2021 - Is the Croatian state playing God by making it easier for some to invest than it does for others? In any case, a safe business environment stimulates economic growth, and without creating that, the Croatian economy won't be moving anywhere up any time soon.

As Poslovni Dnevnik/Darko Bicak writes, establishing a predictable and reliable business environment is a prerequisite for any sort of economic growth and the application of new technologies through the Industry 4.0, it was said at the Industry Day conference held on Friday in Zagreb, organised by the Croatian Employers' Association (HUP).

Mihael Furjan, President of HUP, pointed out that only investments in new technologies can lead to the creation of products and services of higher added value, and then to the accelerated growth of the economy.

Croatia doesn't produce the necessary staff

All enterrpises must change their mindset and turn to new technologies and modern business models, agreed the interlocutors of the panel.

Kristian Krpan warned that here in Croatia, we have the biggest problem with large companies because they're often neglected in relation to small and medium-sized companies, to which all EU funds are directed.

"The Croatian state is playing God, where it is decided which companies will be helped out and their investments and digitalization facilitated, and which will not get that help. Now we have a situation on our hands in which there is a much smaller difference between small and medium-sized companies in Croatia and Germany than larger ones,'' said Krpan.

He added that productivity among large Croatian companies is four times lower than it is in similar ones in Germany, and that this is a problem that affects salaries, staff and everything else. Jelena Festini Ugrina complained about the fact that the Croatian state has used bureaucratic maneuvers to allocate almost all the money from EU funds and the Recovery Plan to the public sector, while merely throwing a few crumbs to the private sector.

Zoran Gligoric pointed out the problem of an inadequate education system, which is almost in no way connected with the economy and the labour market and doesn't produce the staff that companies need - whether it is secondary vocational education or higher education.

Sergio Galosic said that it is difficult to precisely quantify digitalisation because it is a multidimensional process, and that we need to work harder to eliminate the gap between old and new

“We've been in Industry 4.0 for a long time now and we're comparable, perhaps even better in some cases, than EU companies. From my own experience, I can say that digitalisation has enabled us to grow by 25% and increase our levels of competitiveness. However, we're also aware that it isn't necessary to digitise absolutely everything, but only those processes for which it makes sense to do so,'' concluded Galosic.

A great opportunity to finance new technologies lie in European Union funds, and Natasa Cueic Martincevic from Apsolon tried to explain how we can better cope with the forest of European rules and sources of capital.

She pointed out that Croatia has almost 24 billion euros at its disposal over the next seven years, and mechanisms and opportunities must be created to use as much of that money as possible.

Marin Bek from Ascalia said that it must be clear that digitalisation in the industry will not necessarily increase, double or triple production for everyone, but that it will first of all give us more information from the production process itself. He added that in Industry 4.0, it is primarily necessary to eliminate the gap between new technologies and traditional production, and that everyone must assess what is optimal for production in their respective situations.

Dusko Radulovic from Sensum tried to demystify the term “adaptation to climate change” and explain how knowledge and management of our carbon footprint can reduce operating costs and the consumption of raw materials.

"The economic effects of climate change are already visible - insurance companies have more expensive premiums for houses closer to the sea due to floods, and also due to irregular rainfall, energy and water management interventions are changing," said Radulovic.

He added that the circular economy and energy efficiency will be the postulates of the industry in the coming years.

For more on the Croatian state and investments in Croatia, either from at home or from abroad, make sure to follow our dedicated business section.

Friday, 11 June 2021

Over €800m Invested in Islands in Last Five Years from State Budget

ZAGREB, 11 June 2021 - More than six billion kuna were invested from national funds into different activities and projects for the islands in the 2016-2020 period, the Regional Development Ministry's State Secretary, Spomenka Đurić, told the Croatian parliament,on Friday.

In addition, projects have been agreed whereby seven billion kuna will be withdrawn from EU funds for the development of Croatian islands, Đurić said while presenting draft amendments to the Islands Act under which the amount of water for island inhabitants at subsidised prices would increase from 45 to 85 cubic metres per year.

The government-sponsored draft amendments also provide for state subsidies covering up to 50% of the cost of transport of the water supplied to individuals and legal entities in communities still without connections to the public water supply network.

This state subsidy covers 4,234 households with more than 7,200 members, and in 2020, HRK 17 million was paid for that purpose, she said.

Croatia has 1,244 islands,  and 45 islands are permanently or temporarily inhabited, with 51 maritime routes, 58 community health centres, 102 primary and 13 high schools, and 23 care homes.

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

Saturday, 29 May 2021

Can Croatian Private Sector Reach Planned 8% Investment Growth?

May the 29th, 2021 - The coronavirus pandemic has dealt a heavy blow to investments in Croatia, but could the Croatian private sector ever truly manage to reach planned goals, despite how unrealistic they might seem?

As Poslovni Dnevnik/Jadranka Dozan writes, as is more than usual for the pre-election period, the past few weeks have bore witness to a mini-review of recent investment projects with occasional "ribbon cutting" taking place. The first estimate of GDP for the first quarter is expected, which will show how things are with the level of investment activity compared to the end of last year, as well as the comparable quarter of last year.

Gross fixed capital formation in the last quarter of last year, after an annual decline in the previous two, recorded a 4.2 percent increase. Thus, the decline in investments in 2020 was reduced below three percent, which is more favourable than the Government's expectations from the revisions of the projections with the outbreak of the ongoing coronavirus pandemic.

In the May rebalance, the original plan for investment growth in 2020 was turned into an expectation of a 9 percent decline, and in October a reduction of six percent was expected. The final minus 2.9 percent is primarily due to the double-digit growth of general government investment of as much as 18.7 percent

In contrast, Croatian private sector investment, which has lagged behind the state sector for some time now, sank by a concerning 8.5 percent last year. For this year, the Government's projections envisage 9.9 percent growth in terms of such investments, with a slightly smaller, but still double-digit growth in state ones (15.5 percent), counting on the recovery of Croatian private sector investment, at a rate of 8 percent.

Investment plans, and especially their implementation, are difficult to think of, let alone see in the business sector. Despite that, from some large companies, plans are on track to increase capital investment. Thus, for example, the Fortenova Group, which recently now finally includes Mercator, has planned to realise 125 million euros or close to one billion kuna in capital investments this year alone.

Among other things, with the integration of Mercator, significant investments in the retail network await them. After 192 million kuna of capital expenditures last year, Podravka intended 40 percent more than that for investments this year, ie 272 million, and for the next two years - about 200 million.

The Croatian Employers' Association (Hrvatska Udruga Poslodavca/HUP) points out that their members, in addition to the investments that will be encouraged by the recovery programme, have launched their own investment cycles that are taking place now or will be completed at some point this year.

One of the most attractive investments in the eyes of the Croatian media at this moment in time is that of Rimac Automobili, Mate Rimac's remarkable company which is in the phase of building a new campus, a factory and a test site. At the same time, HT and A1 are continuing their projects of modernising their network and embracing the much talked about 5G.

Following some tribulations, AT has been busy with work in Kanfanar and has invested over 200 million kuna in new lines for the production of heated tobacco products, and Vetropack Guard has started a new investment cycle. It is planning a greenfield investment on the HUM-Zagreb stretch, which will increase their production capacities, and it also intends to complete the project this year.

Furthermore, in the Porec zone, Pical Valamar will realise investments in the total amount of 1.5 billion kuna by the end of the year. This includes the Pinea Hotel, the largest single investment in the Croatian tourism sector worth a massive 790 million kuna, the construction of which began back in the autumn of 2020. Algebra is also completing investments in advanced IT infrastructure and international networks, and is also building a new University campus.

The above speaks volumes about the state of investments, at least those which have been pre-planned, in the Croatian private sector when compared to Government hopes and projections. That being said, the coronavirus pandemic continues to hold the keys to everything, and epidemiological changes for the worse could throw a proverbial spanner in the works.

"Part of the already prepared investments for this year have been stopped due to the coronavirus crisis, and members of the Croatian Employers' Association have expressed a total readiness for about 40 billion kuna of investments in high value-added projects that will stimulate economic growth and development, as well as create 100,000 jobs in the Croatian private sector,'' they pointed out from HUP.

However, as they have been warning for months now, they reiterate that without encouraging investment through the National Recovery and Resilience Plan (NPOO) and the EU Multiannual Financial Framework (MFF), many planned investments will not start because our country's investment climate is still not good enough to attract significant foreign eyes, and as such foreign investment. That is why, they say, the NPOO is an opportunity like no other that Croatia must not and cannot afford to miss.

Government projections

These sources of funding were also taken into account in the projections recently presented in the Government's Convergence Programme. In addition to the expected capital inflows from EU funds, and especially new instruments financed primarily by funds from the Recovery and Resilience Mechanism, it also envisages significantly faster growth of investment activities next year - at the general government level of more than 30 percent, and in the Croatian private sector, about 13 percent.

The Ministry of Finance expects, as they say, the continuation of favourable dynamics in the construction sector in the short term, largely due to the need to renew the housing stock after the earthquakes which rocked both Zagreb and Sisak-Moslavina back in March and December 2020.

"As a result of the projected effects of the NPOO, but also of the favourable base effect due to decent achievements from back at the end of 2020, expectations for the remaining types of investments have been significantly raised," the Programme states.

However, the ongoing coronavirus crisis has placed the focus primarily on preserving financial stability for many and threatening the balance sheets of many others. This is especially true for small and medium-sized enterprises. In any case, in the corporate sector, the forthcoming period will impose the need to strengthen those enfeebled balance sheets for many, if not for the vast majority.

Doing business in a global pandemic

When it comes to large companies, one of the largest Croatian investors for years is of course INA, with annual investments at the level of between 1.5 and two billion kuna in the last ten years alone. Last year was one of the most challenging for this massive company, as it was for the global economy amid harmful lockdowns and difficulties with imports and exports.

According to INA, business operations during 2020 were adjusted to preserve the company's financial stability and thus protect their long-term strategic investments, such as the project of building a processing plant in Rijeka, which will ensure the sustainability of INA's business in the future.

This is an investment worth about four billion kuna, and thanks to the new plant, the product structure of the Rijeka refinery should be improved in such a way that the share of profitable white products, ie motor fuels, will increase. Work on the plant is underway, they say, and completion is expected by the end of 2023.

This project is part of the INA R&M New Direction 2023 programme, which envisages the concentration of oil refining in Croatia at the Rijeka Oil Refinery.

At the same time, sustainable alternatives are planned to be developed at their Sisak site, including bitumen production, a logistics centre and a solar power plant and potentially a bio-component refinery, all of which fit neatly into the European Green Plan and increasing global aspirations towards a low-carbon society.

''The biorefinery is a strategic project with an estimated value of around two billion kuna. We're currently working on "further development and opportunities for additional co-financing of this project, which is a key prerequisite for making a final investment decision," they said from INA.

For more on the Croatian private sector, follow our business section.

Sunday, 23 May 2021

FinMin Says it's Very Good Fitch has Left Croatia in Investment Zone

ZAGREB, 23 May, 2021 - Finance Minister Zdravko Marić said on Sunday it was very good for Croatia that Fitch had affirmed its investment rating.

Fitch Ratings on Friday affirmed Croatia's rating at 'BBB-', with a stable outlook, highlighting big short-term risks related to the pandemic as well as the medium-term outlook for economic growth thanks to the EU's financial support.

Fitch also upgraded the projection for Croatia's economic growth in 2021 from 3.8% to 5.5%, forecasting GDP growth to accelerate to 6.1% in 2022.

"That's very good news, that according to the Fitch credit agency too Croatia's credit rating continues to be in the investment zone with a stable outlook," Marić told the press.

He said he was pleased that Fitch's report summed up objectively and well all the key circumstances that impacted the rating.

The agency's emphasis is on the process of joining the Economic and Monetary Union, he added.

"The report says what introducing the euro means for the credit rating. It would mean a jump of two notches up, which would bring us into a comfort zone. On the other hand, there's the National Recovery and Resilience Plan," Marić said, adding that emphasis was put on its implementation, which he expects to begin towards the end of the year.

Public finance is the third segment and it's good that rating agencies underline that in this crisis fiscal stimulants should last as long as necessary so as to save jobs and people's health, he said.

"When the pandemic is behind us, we will sum up the effects. When you look at it all together, the deficits, notably on the public debts of the EU member states, including Croatia, the debts are not small."

He said the effect of one year of the pandemic in Croatia had neutralised the four years when the public debt was being reduced, by about three percentage points every year.

Last year Croatia's public debt grew to over HRK 36 billion, mainly because of the costs of fighting the pandemic.

Fitch raised the public deficit forecast from 3.5 to 4% of GDP in 2021 and forecasts a fall to 3% in 2022, up by 0.8 percentage points from the forecast made last December. Public debt/GDP should fall to 82.7% of GDP in 2022 from 88.7% in 2020, Fitch said, forecasting Croatia's eurozone entry for 2024.

COVID aid for businesses in line with circumstances, trends

Asked if aid for businesses affected by the pandemic would continue after June, Marić said the measures were adopted in line with the circumstances and that trends both in Croatia and abroad were being followed.

Speaking of aid for travel agencies, the event industry and occasional transport, Marić said the coverage of fixed costs in force since December would be applied.

For those that are closed, other solutions are being sought and the relevant ministries are working on programmes to help them, he said, adding that the idea was to give them some incentive once the summer tourist season started.

Asked about reforms related to the National Recovery and Resilience Plan, notably in health, Marić said the Plan referred to the period until 2026 and that he hoped Croatia would be prompt and efficient in implementing it. He expects 13% of the advance to be drawn by the end of this year.

Speaking of budget revenues, Marić said they were as expected at the moment and that some tax revenues were very good.

Fiscalisation is at 99%, one percent less than at the same time in 2019, he said, adding that the indices in retail were over 100%, with some categories recording growth from five to eight percent.

Tourism and hospitality are markedly below and the key topic at the moment is expenditures, he said.

Asked about this year's possible inflation rate, Marić said that last year it was 0.1% and that some inflationary pressure could be expected, both globally and in Croatia, adding that in Croatia inflation had always been within sustainable levels.

Commenting on an economist's proposal to use European funds for new tax cuts in all segments instead of projects, Marić said the rules were set by the European Commission.

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Wednesday, 5 May 2021

557 Million Kuna Investment for Revitalisation of Senj Power Plant

May the 5th, 2021 - A new investment in Croatia totalling a massive 557 million kuna has been started on the path to fruition regarding the Senj power plant.

As Darko Bicak/Poslovni Dnevnik writes, HEP recently signed a valuable contract with a community of Croatian bidders involved with Koncar for the reconstruction of the Senj power plant (hydropower plant).

Recently in the City of Zagreb, Hrvatska elektroprivreda (HEP) signed an agreement on the replacement of the primary equipment of the Senj power plant with a community of Croatian companies led by Koncar-engineering for energy and transport and Koncar-generators and engines. The contract is worth as much as 330 million kuna and is part of the main project for the reconstruction of the Senj power plant worth 557 million kuna, which will increase the power plant by 20 MW.

Work on the Senj power plant will begin in 2022 and end in 2026. HEP expects that this large investment will increase the reliability and availability of the Senj power plant, extend the life of the power plant for the next fifty or so years and ultimately reduce the costs of maintaining and operating the plant in general.

Otherwise, the Senj power plant is located seven kilometres south of the town of Senj itself, not far from Sveti Juraj, and was initially put into operation back in 1965. The total available capacity of the power plant is 216 MW, and the average annual production stands at 970 GWh, which makes up about 20 percent of the production of hydropower plants in the Republic of Croatia, or 10 percent of HEP's total production.

In addition to electricity generation, the Senj power plant, as part of the Senj hydropower system, provides a secure water supply to part of the northern Littoral, including the islands of Rab and Pag. The reconstruction and revitalisation of the Senj power plant is being done as part of the cycle of the reconstruction, extension and revitalisation of HEP's hydropower plants, with a total value of 3.9 billion kuna, which began back in 2012 and includes 12 of the total of 26 hydropower plants owned by HEP.

For more, follow our business section.

Thursday, 14 January 2021

Construction of Aircraft Parts Factory Begins in Jakovlje North 2 Zone

January the 14th, 2021 - When it comes to getting the economy moving again, things are going slowly. The ongoing coronavirus pandemic and in Croatia's case, being hit with multiple devastating earthquakes has certainly thrown a spanner in the works, but in certain areas of the country - things are starting up. The construction of an aircraft parts factory in the Jakovlje North 2 zone has begun.

As Poslovni Dnevnik writes, the construction of an aircraft parts factory in the Jakovlje North 2 has now begun, in which 450 employees will be employed in the first phase. This information was confirmed by the mayor of Jakovlje, Sanja Borovec, adding that two more new investors in this zone are expected in the near future.

"Although there have been rumors for months that nothing will come of the construction of the aircraft parts factory, the machines on the construction site show that we were on the right track. The effort we've put in over the last three years has paid off. In early December 2020, the Austrian aeronautical company FACC (Fischer Advanced Composite Components), began the construction of a factory in the Jakovlje North 2 zone that will produce parts that will be installed in the world's most famous aircraft. According to the business plan, the company will employ 450 employees in the first phase,'' said Sanja Borovec (HDZ).

She added that this investment, worth a massive 33 million euros, means providing jobs to the residents of this area, a better livelihood, but also a spring in the step of the further economic development of the Municipality of Jakovlje. The arrival of the FACC in Jakovlje began back in mid-2019, when the greenfield investment of this Austrian aeronautical company was initially announced. In the first phase alone, the plan was to invest around 30 million euros and create 600 jobs, and in the second phase, FACC planned to open another factory for the production of interior parts for aircraft with a total of one thousand employees.

Given the coronavirus crisis that hit the aviation industry hard in 2020, it is difficult to estimate the exact volume of the total FACC investment and its dynamics, and the investors themselves haven't issued any comment on that. Upon arrival in the Jakovlje North 2 zone, it was pointed out that the pool of skilled workers was the most important for choosing the location for this large investment. For almost two years, the company negotiated the best location for its factory, which was supposed to be located within the EU, and all Eastern and Central European countries except Croatia were considered. In the end, Croatia was ahead of Slovakia and Poland.

Jakovlje was not the only location in Zagreb County, but it was chosen because of good traffic connections. A plus for Croatia was a good ten years of business experience with local companies, with which it will continue to cooperate intensively after the start of production. FACC is also satisfied with energy costs and other operating costs in Croatia, as well as investment incentives. In the first phase, the production of parts for Airbus is planned, namely parts for the interior of the aircraft from the luggage compartments and ceiling panels to the entrance part of the interior.

FACC will operate in Croatia under the name FACC Solutions Croatia. FACC otherwise has more than 3,400 employees in 38 countries and with revenues of 782 million euros. It is owned by the Chinese state-owned group AVIC Cabin Systems, which has 450,000 workers worldwide and generates huge revenues of 54 billion US dollars.

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