Monday, 9 December 2019

First Croatian Novotel Will Be in Resnik, Polyclinic Coming in 2nd Phase?

As Novac/Dora Koretic writes on the 8th of December, 2019, it will happen a little later than was initially announced last year, but the City of Zagreb and Croatia will get their first Novotel hotel at the beginning of 2021, just before spring, which should "sprout" in the eastern part of the capital city, more precisely in Resnik.

The investment, which was first introduced to the public back in October 2018, now finally has its first visuals, a conceptual design that Jutarnji list exclusively received from the investor of the project, the company Rox d.o.o, whose founder and owner is entrepreneur Ivo Kristić.

Judging by the visuals, the first Novotel in Croatia will be located right next to the Rox headquarters in Resnik, on the plot of land owned by that company, at the eastern entrance to the city, right next to Slavonska Avenija.

According to the description of the architects themselves, the facility will consist of a multifunctional ground floor building and a smaller tower that will house hotel rooms, and the centre of the ground floor should be a central green part, a kind of piazza, or space that will serve for the daily needs of guests who will hang out, have business meetings or rest there.

In addition, the idea of ​​the architects and investors was to build a hotel in the east of the city, which would also be visually attractive from a distance, especially considering the fact that it was planned along an extremely busy road.

What is also interesting is the solution of the façade of the construction itself: it consists of horizontal lines that round off the corners or act as if they "hug the building", and due to the numerous decorative elements they create special optical effects that should visually enrich that part of the city.

The intention is also to make the guests at Novotel feel at home, which is why the interior design will be based on natural materials and colours, especially when it comes to the decoration of the rooms.

"Our idea was to build a four-star hotel for business guests, which we found to be chronically missing from the Zagreb market. We haven't timed the investment with the Croatian presidency of the EU Council, since the construction of a hotel is an extremely demanding job, but we believe that the hotel capacities in Zagreb are lacking independently of the EU presidency and that we'll be able to offer quality content to the market,'' the hotel project manager, Matej Krištić, told Jutarnji list.

Zagreb's first Novotel will be mainly intended for business guests, given the number of stars it boasts, but Krištić says that no other types of guests are excluded here, in accordance with the wishes and needs of the hotel manager with whom Rox, as an investor, entered into a separate contract.

The investors are confident that they'll be able see a return on the value of the investment within a nine-year period, and also revealed that the construction of Novotel is only in its first phase, and given that, depending on the indicators and the operation of the future hotel, they will be interested to continue expanding their business in this segment.

All of this was shown to them in extensive research, for which they had hired a separate agency, which provided information on that location in Resnik. A possibility for the second phase of investment in a service centre and a health clinic (polyclinic), as well as additional facilities into which Rox would invest, but leave the running of the businesses to other interested partners.

"We had quite a lot of land at that location, so we thought long and hard about what purpose to use it for. The research showed us that it'd be profitable to invest in the hotel business, and in this segment we're interested in further expansion, not only in the Zagreb area, but also in other commercially interesting locations. As we have contracted for this hotel with Accor, which is a really respectable company in the hotel business, we're interested in continuing to cooperate with them, since the company has a lot of well-respected and successful brands,'' said Krištić, citing Ibis, Sofitel and many others.

Accor Hotels is truly among the world's leading tourism groups with more than 4,500 hotels and forty brands under its belt, the most famous of which are Ibis (one of the world's most famous three-star hotel chains), Novotel, Mercure, Sofitel, Fairmont, Rixos and many others.

Croatia's southernmost city of Dubrovnik, where the Rixos Libertas Resort was opened in 2009, was the ninth Rixos Hotel in the world.

In addition to Novotel, however, Croatian tourism was also glad to receive the announcement last year of an investment in the first Ibis hotel in Croatia, namely the Ibis styles hotel in Rijeka, which is a strategic partner of Accor, or the Orbis hotel group, working in partnership with Rijeka Property. According to the announcements, the first Croatian Ibis' door's should open for its guests in 2021, and the plan is to build a 15,000 square metre hotel.

It will have 150 rooms, including 18 family rooms, a bar, a restaurant, four conference rooms and meeting rooms, a wellness area and parking for guests and visitors of the hotel. The investment, which would employ 45 people from Rijeka, amounts to 18.5 million euros, and the new hotel capacity in Rijeka will emerge just twenty minutes away from the popular Korzo.

Unlike the Rijeka investment, which is well known for its value, Novotel's investors don't want to reveal the price tags associated with the project at this point in time.

According to the information Novac received, the architectural design of the hotel was entrusted to the Chapman Taylor International Architectural Office, which is recognised worldwide for its work on the Port Bak Business Tower in Azerbaijan, the modular Holiday Inn Hotel in Manchester, a Shanghai retail shopping centere for which they were awarded, as well as on projects they're about to work on, which include a futuristic eco resort in Vietnam with six hotels and 500 villas, or a smart hotel in China at over 63,000 square meters.

This office in particular has worked on over two thousand projects so far and received 250 awards for them, and it's interesting to note that one of their first projects, given that the office has existed for decades, was the New Scotland Yard building, designed back in 1959.

This will be the first ''trip into tourism'' for the Rox company since the company primarily operates in the wholesale and distribution segment of consumer goods, and operates on the markets of Croatia, Bosnia and Herzegovina, Serbia, Kosovo and Slovenia.

At the regional level, Rox employs a total of 200 employees, and according to Business Croatia, in 2018 it generated revenues of just over 107 million kuna and employed around 100 employees in Croatia.

In addition to the distribution of its own and foreign brands, Rox also owns several petrol stations (two in Croatia and three in neighbouring Bosnia and Herzegovina) that operate through a partnership with INA.

Despite frequent complaints by investors about the complexity of the bureaucracy and lengthy procedures in Croatia, this company's ''trip into tourism'' has so far gone smoothly, and if everything goes to plan, in 2021 the eastern part of Zagreb should finally receive a more respectable hotel complex.

Make sure to follow our dedicated travel and business page for much more.

Sunday, 8 December 2019

Medjimurjeplet Seeks Stronger Export Position With Significant Investments

As Darko Bicak/Poslovni Dnevnik writes on the 5th of December, 2019, although the Čakovec-based company Medjimurjeplet has built its brand and business on the production of quality furniture for outdoor spaces based on wood and metal, in recent years, an increasing part of their business has been the production of parquet, windows and doors.

So far, these assortments have in principle been separated through various presentation and sales channels, but today they have been integrated through their concept stores in Zagreb and in Munich. Just last week, an exhibition and sales centre was opened in Zagreb, which houses almost the entire collection of their companies - Međimurjeplet, Pana and Pana Windows.

Although the companies have not been formally consolidated as a group, it is a business “empire” created by Alojzije Sobočanac, which is increasingly being taken over by his daughters Nikolina Babić and Ana Marija Sobočanec Dalić.

“Our entire range is based on the concept of ''living with nature'', ie, high quality and natural materials, various combinations of wood and aluminum, while we have no PVC in our offer. Investments in the modernisation of the window and door factory, Pana Windows in Čakovec, and the new Pana multilayer factory in Turopolje, will greatly increase our capacity and competitiveness on foreign markets,'' says Ana Marija Sobočanec Dalić.

She added that 90 percent of their parquet flooring is currently exported, as are 50 percent of their windows and doors, while in the case of furniture, that figure stands at around 20 percent. In the coming period, they plan to put even more emphasis on exports, especially in the area of ​​doors and windows, which is why they have set up a company in Germany. Medjimurjeplet's most important export markets are those of Austria, Germany and Switzerland, and in the furniture segment, they also have significant cooperation with Italy, from which they import a part of their non-production range.

In the past year, they have invested 13 million kuna in the modernisation of Pana Windows, while a joint investment with Austria's Weitzer Parkett in the new Pana factory near Velika Gorica stands at more than 70 million kuna (10 million euros). Each partner secured half the amount, and the factory should start operating as of January the 1st, 2020. Although Medjimurjeplet was the base from which the expansion to take over Pana started some 20 years ago, today the furniture factory is actually the smallest member of this business family.

Namely, Medjimurjeplet has around 30 employees and 27 million kuna in revenue, while the Pana parquet factory already generates 70 million kuna with 160 workers, which will be further increased by a new factory and around 50 new employees. Pana Windows, on the other hand, has 55 employees and 20 million kuna in revenue, which will certainly be enhanced by modernising the factory and boosting exports. Here in Croatia, the company mostly cooperates with architectural offices and construction companies, although they also have more and more inquiries and orders from private individuals.

''We're most represented in the projects of high-end hotels, restaurants and residential and commercial buildings. One of our significant partners is VMD, which has used us for all its projects, and one of them is their Blok Bužanova on the ground floor in which we've set up our Concept store in Zagreb,'' pointed out Ana Marija Sobočanec Dalić.

Make sure to follow our dedicated business and Made in Croatia pages for much more.

Wednesday, 27 November 2019

Investment in Croatia: 22 Million Kuna Cash Injection for Umag

Investment in Croatia is often a set of words that makes people shudder. This country, while in desperate need of investment, be it foreign or otherwise, likes to put up as many draconian, outdated barriers as possible, often resulting in putting off would-be investors entirely. But it isn't all so bleak, and as usual, Istria is a shining example.

As Poslovni Dnevnik writes on the 27th of November, 2019, within the project "Umag - City of Children 2010-2020" The Istrian city of Umag has continued to invest in education and to ensure the best educational conditions and standards for its residents.

At yesterday's press conference, the Mayor of the City of Umag, Vili Bassanese, his deputies and others from the city's administration, as well as representatives from the local school on which the project is focused, and the project's contractor, presented the project.

"The energetic renovation of the building of Osnovna škola Marije i Line was officially presented to the public at Školska 14, City of Umag ", with a total value of almost 22 million kuna, according to a report from local portal Glas Istre.

This project was submitted to the tender of the Ministry of Construction and Physical Planning from the Operational Program of Competitiveness and Cohesion 2014-2020. The project is financed by the European Regional Development Fund with 7,147,248.16 kuna in grants, 8,815,698 kuna in grants from the fund for co-financing EU projects at the regional and local level of the Ministry of Regional Development and EU Funds, as well as 5,879,832 kuna from the budget City of Umag itself.

The main objective of the project is to save 61.45 percent of the school's heating energy on an annual basis when compared to the annual consumption before the energy renovation, which will be achieved by increasing the thermal protection of the roof and the exterior walls, installing new high-efficiency heating system and more.

Make sure to follow our dedicated business page for much more on investment in Croatia.

Wednesday, 27 November 2019

Investment in Croatia: Could EU Funds Help Croatian Roads?

As Novac/Kresimir Zabec/Dora Koretic writes on the 26th of November, 2019, investment in Croatia, while sometimes tricky, is on the rise. As much as three billion euros have been invested in Croatian transport infrastructure projects over the last few years, and even more could be made available in the next period by EU funds, Transport Minister Oleg Butković announced at the 7th Congress of the Croatian Road Society - VIA VITA in Opatija recently.

However, in order to use and properly implement these funds in time, the Public Procurement Act needs to be urgently amended, Butković pointed out.

''The biggest problem so far has been finding a source of funding. Now that we have the money, we have to wait more than a year to run the tender. That's really frustrating. Tender appeals are made by non-employee companies that deal with real estate and buy time. I urge the Minister of Economy, Darko Horvat, to move to amend the law. To raise the cost from 5,000 kuna to 100,000 kuna, and shorten the appeal deadlines,'' said the Minister of Transport, who publicly expressed his dissatisfaction with the current Public Procurement Act for the very first time.

The act puts a huge weight on the shoulders of investment in Croatia, and he was joined by Croatian Roads CEO Josip Škorić, who firmly shares his belief and has been pointing out the issues with that law for more than a year now. According to him, an equal or perhaps bigger problem to potential investors is the Construction Act. He believes that the amount of responsibility placed on the backs of investors is hindering investment in Croatia in general.

''Today, when we start the construction of a 20 kilometre road, we have to resolve all the boundaries of the plots along which it must pass in the land registry. Well, just let someone else handle the land registry! At one time, everything was handled by the contractor, and today everything has fallen on the back of investors,'' said Škorić, who demanded that the model be changed because the current law doesn't treat the construction of line infrastructure in the right way at all.

At the panel, which discussed the projects of the transport sector, Dario Silić, the director of Bina Istra, announced the construction of the second part of the Učka tunnel. According to him, agreements are underway to finance the project. According to rough estimates, construction would cost about 1.5 billion kuna in total. The construction would be financed by Bina Istra and the state would extend its concession period over the Istrian Ypsilon. Both Silič and Butkovič announced that construction could begin next year, and would take between three and three and a half years to complete.

The tender for the construction of the Vc corridor from Osijek to Beli Manastir should be announced by the end of the year, as was explained by the director of Croatian Motorways, Boris Huzjan. According to him, an agreement was reached that this project would be jointly funded by the EBRD and HBOR. However, as we has since been unofficially learned from the Ministry of Economy, for some time now, changes have been being considered, such as potentially introducing different rules during the appeal process.

Denis Vukorepa, the director of the Port Authority of Rijeka, spoke about the largest project in the Northern Adriatic. He said that seven major global companies that were interested in concluding the project in mid-January 2020 would be invited to submit their final bids. According to him, the Port of Rijeka is the only port in the Northern Adriatic that has excess free container capacity.

''This enables us to become the leading container ship port in the Northern Adriatic in the next five to seven years. We can even reach Koper in terms of traffic,'' Vukorepa stated.

According to Minister Butković, the forthcoming period should be the period of investment in Croatian railways. There are no major projects that are going without significant interest, but the actual realisation of these projects will make little difference without restructuring all of the companies operating within the sector.

A sector policy letter defining the restructuring model was due to be adopted in June, but of course, it has not yet been adopted. Butković has openly acknowledged that it's difficult to reconcile the restructuring model due to different interests within HZ Passenger Transport, HŽ Infrastructure and HZ Cargo. However, an agreement was indeed reached. Another problem is unions with which there is no consent and it is obvious that without union consent, things won't go well.

Make sure to follow our dedicated business page for much more on investment in Croatia.

Monday, 25 November 2019

Jarun Panorama Project to Begin After 12 Years of Controversy

As Novac/Dora Koretic writes on the 24th of November, 2019, the year is 2024. Zagreb's roundabout has long since been dealt with, and Zagreb's businessmen are laughing as they head off to work on ''that side'' of the Sava river. It's a good thing that the "old roundabout" is now a thing of the past, especially for the two thousand people who found employment in Zagreb's brand new city landmark - the 150 metre tall Jarun Panorama business tower from which one of the most beautiful views of Novi Zagreb is offered. Ambitious runners also spend their mornings on the banks of the popular Jarun lake.

This gorgeous 38-story illuminated building is an impressive sight indeed, it houses the offices of some of the most renowned Croatian and international companies, and it's also the tallest building in all of Croatia, which, due to its imposing character, has quickly become one of Zagreb's most famous architectural spots. The tower is not lonely here, however, and within its ''company'', there are six more separate buildings, among which a green park belt is arranged. Zagreb's brand new residential and business centre is called Jarun Panorama and as has been announced by investors, upon completion of construction, three thousand citizens should gravitate towards it daily.

Five years from now might seem like it's in the distant future, but given the fact that the investor spent almost twelve years engulfed in the “construction” of this project, it could be said that the actual construction of Jarun Panorama is almost within our sights. That is, of course, as long as good old Croatian red tape doesn't throw a spanner in the works before that.

The investor is Rotor South Ltd. d.o.o., which is 100 percent owned by the Oslo-based Norwegian Croatian development property II AS, managed by Robert Hagen. In Croatia, they are represented by consultants from Colliers International, which, after years, finally plans to present Jarun Panorama to the public next week, more specifically on Tuesday at REXPO.

There, visitors will be able to get better acquainted with the details of the project, which extends to just under 35,000 square metres in total, and in addition to the business tower, includes residential and hotel facilities, which is set to make Jarun Panorama the largest residential and business centre in Zagreb.

According to the ideas of the Norwegian investors, about 340 apartments with an average size of over 100 square metres would be built in the area near the roundabout, and Novi Zagreb would also get new hotel content along with this project, as Jarun Panorama also envisages one hotel under the management of a well-known international brand. The category will be a minimum of four stars, it will boast 240 rooms, a conference room and additional amenities such as a restaurant, wellness facilities and the like.

If realised, Jarun Panorama will be located right in the space currently encircled by new thoroughfares built to reconstruct the Zagreb roundabout. It will be located near the Arena shopping mall and the sports hall, and investors hope that the good traffic situation can contribute to the attractiveness of the building - which will be close to major city roads leading to Zagreb's exit, but also towards the city centre itself.

According to Vedrana Likan, director of Colliers International, which represents the Norwegians responsible for this project in Croatia, it is currently the most advanced mixed-use project in all of Croatia, for which two location permits have already been issued, and for which the Hagen-led fund has spent more their time and cash on arranging things and bringing the massive project to this stage of realisation for more than a decade now.

''For over twelve years, it was necessary to resolve the property-legal relations and to buy all the land on which Jarun Panorama would be built. According to our estimates, construction could start within a maximum of 18 months, and the completion date will depend on the pace of construction,'' she says.

The reason why the Jarun Panorama megaproject will be presented at REXPO next week is because the Norwegians have decided they need to find a construction partner, and it is entirely possible that they will acheive that goal, given that so far there is considerable investor interest.

"The search for investors began in October this year, and for the time being, there are interested investors from the Czech Republic, Slovakia, Hungary, Poland and Serbia, the United Kingdom, Germany and Austria. We're also targeting investors from the US and the UAE, and so far, we've continued negotiations with five of them,'' Likan said.

''The project is fully ready for the market and for further development, it's clear of any potential problems. Location permits have been issued and allow for a high level of construction and we're extremely curious about how the story will evolve,'' Hagen stated.

When he mentions that the project has been cleared of potential problems, Hagen is probably alluding to the numerous twists and turns that have surrounded Jarun Panorama since the very first announcement that the Norwegians would build something near the roundabout, which mainly concerned land ownership.

Make sure to follow our dedicated business page for much more on investment in Croatia.

Thursday, 7 November 2019

125 Million Kuna Investment for Crikvenica Company Jadran

With revenues up significantly after a rather negative business year in 2018, the third quarter was particularly successful for the Crikvenica-based company Jadran. In an explanation, Jadran's CEO Goran Fabris points out that this is largely the result of a new investment cycle.

As Poslovni Dnevnik/Suzana Varosanec writes on the 6th of November, 2019, the hotel company Jadran from Crikvenica unfortunately experienced a negative business last year (publishing significant losses 13.9 million kuna), but in the first nine months of 2019, it recorded a turnaround: with 22 percent higher revenues compared to the comparable period, and it generated 22 million kuna net.

With revenues higher than 26 percent, the third quarter of 2019 was particularly successful for the Crikvenica company.

In the first phase, 106.5 million kuna was invested, which, along with increased competitiveness - increased the overall quality of services within the company and raised the category of accommodation in its hotels and camps, all of which enabled a justifiable increase in prices. The head of Jadran's board confirmed the continuation of the cycle in which further investments in the amount of 125 million kuna are planned by the beginning of next season.

This autumn, the company will continue to work on its luxury Katarina Hotel in Selce, the Omorika Hotel and the Ad Turres Resort Complex, and on the Selce campground. With the planned end of the cycle, the company will maintain its existing growth dynamics and gain the prerequisites for year-round operations. From Jadran, they hope that with the opening of the Katarina Hotel, it will become their first year-round hotel.

''In the consolidation of the company, we also paid great attention to increasing efficiency at all levels. That is why good results were reflected in our employees' earnings. In addition to the 6 percent incentive pay supplement, we also paid each employee an additional 1,000 kuna in bonuses for June, July and August,'' Fabris points out.

Make sure to follow our dedicated business page for more on investment in Croatian tourism.

Wednesday, 6 November 2019

68 Million Euro Mega Project to Give City of Zagreb New Southern Entrance

Croatian Motorways (HAC) and the City of Zagreb have embarked on an extremely expensive joint project to give Zagreb a brand new southern entrance in order to attempt to relieve troublesome traffic issues and jams.

As Poslovni Dnevnik writes on the 6th of November, 2019, the construction of the viaduct above the Ranžirni kolodvor (station) should begin next year, giving Zagreb a totally brand new, southern entrance to the city.

This will relieve the Buzin junction and the Velika Gorica road, where huge traffic jams are often created, causing enormous and clearly needless traffic issues when entering the Croatian capital city by road. Those who have usually been using the entrance via Buzin to join or leave the bypass, will be able to do so at the Jakuševac junction after the construction of the viaduct above the Ranžirni kolodvor when the project is completed.

Croatian Motorways (HAC) expects that as much as fifty percent of the traffic from Buzin will be diverted to Jakuševac owing to the construction of this viaduct, which, as stated, will provide enormous relief for drivers entering Zagreb, as the average annual daily traffic between these two junctions is as high as 57,912 vehicles.

According to Vecernji list, HAC and the City of Zagreb are embarking on this joint project that, in addition to the construction of the overpass, of which HAC is in charge, includes the reconstruction of Sarajevo road, which will also receive a new tram line, with the City of Zagreb being responsible for that part. The implementation of the project will also improve the connectivity of the Croatian capital city with its international airport.

The estimated value of the investment stands at an eye-watering 68 million euros. Of this amount, the viaduct and junction on Sarajevo road are worth 48 million euros, while the reconstruction and extension of the road will cost 13.3 million euros in total. On top of all that, the construction of the new tram line would cost 6.7 million euros. Croatian Motorways say they want to launch a viaduct tender early next year and start work by the end of 2020.

Make sure to follow our dedicated lifestyle page for more. If it's just Zagreb you're interested in, give Total Zagreb a follow or check out Zagreb in a Page for all you need to know about the bustling Croatian capital.

Friday, 1 November 2019

Darko Horvat: We've Opened Path to Commercialisation of Croatian Innovation

As Novac/Adriano Milovan writes on the 1st of November, 2019, innovation is the basis of further economic growth, and Croatia is a land of huge potential when it comes to innovation, states a message from the conference "Croatia - a Place for Innovation and Smart Investment", organised yesterday by the Ministry of Economy and the Croatian Chamber of Commerce (HGK) at the Westin Hotel in Zagreb.

The aim of the conference was to connect innovative Croatian companies with investors and other partners. These involve more than 300 projects, which have crystallised on thematic innovation councils, with an estimated value of more than 5 billion kuna. They are all open to investment, which is why matchmaking meetings were organised at the end of the conference.

Although Croatia has a long tradition in innovation, the realisation of any of it has so far been stalling and lagging behind far more than it should be. Simply put, it lacked the path for the commercialisation of its innovation. However, Darko Horvat, Minister of Economy, is convinced that a step has now been taken in the right direction.

''Networking the real entrepreneurial sector, academia and local and central government officials and getting all of that through a maze relatively quickly, all this was done this year and in the future we'll talk no more about speed but acceleration,'' Horvat stated at the conference, adding that things are definitely changing for the better in Croatia.

Luka Burilović, President of the Croatian Chamber of Economy, recalled the long tradition of innovation in Croatia and said that Croatian innovators are stilling following global trends.

''Today, we have a new generation of minds, who are pushing our economy into a new, digital age,'' Burilović pointed out, pointing specifically to Rimac Automobili's owner, Mate Rimac.

Tomislav Sokol, MEP, warned that the EU is lagging behind the US, China and India in innovation. One of the main reasons for this, at least according to Sokol, is the overregulation of the European Union, which is why the aim is to reduce red tape by a third.

Despite its aspirations and goals, Croatia still lags behind others in R&D investment. For example, according to Eurostat's data for 2017, appropriations for this purpose in the EU accounted for 2.06 percent of GDP, and in Croatia, they amounted to 0.86 percent of GDP.

On the other hand, in Israel, these expenditures, according to Nili Shalev, director-general of the Directorate for Research and Development at the Israeli Innovation Agency, have reached 4.3 percent of GDP, with the largest share being provided by the private sector. The main driver of investment in innovation in Israel are large multinational companies, but the state, and especially the military, are both contributing, Shalev said.

Make sure to follow our dedicated business page for more.

Friday, 1 November 2019

Adris Group to Invest 4 Billion Kuna in Rovinj, Vrsar, Dubrovnik and Zagreb

As Glas Istre/Dubravko Grakalic writes on the 1st of November, 2019, Adris Group's operating results in the first three quarters of this year show a significant increase in revenues and great business development. In the first nine months of this year, Adris Group's total revenues amounted to a massive 4.92 billion kuna, which is 4 percent more than in the same period last year. Net profit amounts to 663 million kuna, which is 89 million kuna, or 12 percent less than last year.

Such business is the result of strong investment and acquisition activities in 2018 and 2019 with the aim of increasing the group's profitability and long-term sustainability.

In terms of business segments, Croatia Osiguranje is the leading company in the Croatian insurance market with a total share of 27.9 percent. The gross written premium, which includes foreign subsidiaries, stands at 2.7 billion kuna, up from last year's level.

Cromaris published sales of 6,761 tonnes in the first nine months of 2019, up eight percent. The export markets recorded a nine percent increase in volume.

The tourist section of the Adris Group, Maistra, posted a 1 percent increase in the sale of accommodation units, with an increase in the average price of overnight stays of 6 percent, which led to a 7 percent increase in operating income. Net profit was also up by 4 percent

The current booking confirms the positive trends of revenue growth so far. Adris Group's last major acquisition, HUP-Zagreb, d.d., generated one percent higher operating revenue.

Currently, the strategic plan for the tourist part of the group for the period until 2024 is worth almost four billion kuna. The plan includes construction of new and the repositioning of existing facilities in all tourist destinations in Croatia in which Adris Group operates - Rovinj, Vrsar, Dubrovnik and Zagreb.

A formal completion of the process related to the Marjan Hotel in Split is also expected, which will allow Adris Group to enter this growing Croatian tourist destination.

Make sure to follow our dedicated business page for more on investment in Croatia.

Friday, 25 October 2019

Croatia's Lack of Agricultural Development Strategy Repels Investors

As Poslovni Dnevnik/Marta Duic writes on the 24th of October, 2019, the very first results of an in-depth analysis conducted by the World Bank showed that the structural transformation of Croatia's agriculture is going in the right direction and should stimulate economic growth and create jobs. However, there's always a but.

The World Bank experts who authored the analysis conclude that Croatian agriculture and rural areas, as well as aquaculture and mariculture, have great potential for development. The structural transformation of these sectors is progressing, in particular, due to the fact that Croatia is an EU member state, and the agri-food sector contributes to the economy and income, and consequently to life in the rural parts of our country.

The analysis also showed that investments in agriculture are economically justified. It is estimated that an investment of 1 million US dollars in agricultural production generates an increase of 5.19 million dollars in the value of the total volume of production in the economy, including the effects of consumption by individual consumers. Public spending on agriculture in Croatia stands at around 1.3 percent of GDP, which is double the EU average.

According to the Smarter consulting company specialising in the agri-food sector, the biggest obstacle to investing in agricultural production, ie attracting investment in that sector, is the status of state agricultural land.

"State land that has not been settled by a long-term concession cannot be the basis for attracting and increasing investment in agriculture, this isn't long-term in its nature and, due to the long and slow turnover in agriculture, the return on investment is generally long and uncertain.

However, agriculture still depends on weather factors, ie, circumstances that the investor cannot influence, so this is one of the key risk factors that doesn't exist in a number of other activities. Additionally, it isn't realistic to expect to invest significantly in a sector where the basic business conditions change drastically with each government term,'' they explained from Smarter.

Croatia doesn't have a long-term and clear agricultural development strategy from which a potential investor would be able to understand what awaits him in the future, what will be and what is a priority in development, that is, where the state will be ready to accompany the investor in case of business difficulties.

Like any other investment, investing in agriculture requires stability of business conditions, predictability of sector policies and a long-term vision. Namely, all EU countries aim to produce their own food and accordingly encourage a range of investment measures, while in Croatia the potential investor is left to himself, there is no clear criteria for benchmarks, and raising productivity and competitiveness, for which investments are a prerequisite, is not a priority. In addition, the role of knowledge, new technologies and the need for continuous investment in agriculture is not adequately understood,'' they said from Smarter.

To briefly recall, Smarter is a company responsible for the strategy of agricultural production development in which the profession highlighted the challenges facing Croatia's agricultural production, as well as solutions to increase it. The team that worked on it held 150 meetings in a year and a half that resulted in 2,000 pages of material.

"The expert team has made an analysis of the state of Croatian agriculture, and our goal is to put it where should be, because alongside tourism, that is the main branch of the Croatian economy.

The value of Croatian agricultural production from 2008 to 2018 decreased from 22.5 billion to 16 billion kuna, it has fallen by around 3.5 billion kuna and has stagnated since Croatia's accession to the EU. The second pillar is raising production of a competitive export product, such as mandarins. We need the consensus of key stakeholders, intensive and extensive production, regionalisation... We also need integrators of agricultural production and research and development. This alone will lead to long-term sustainable agricultural production, and linking producers is crucial, only it can enable a change in the state of agriculture.

We lack R&D and EU funds are available for this, and we must not neglect that,'' said Denis Matijević of Smarter.

Smarter also points out that, so far, the promotion of investments in agriculture through the distribution of EU funds has been indiscriminate, insufficient, without adequate control and assistance and therefore without proper effects. Two Croatian companies, Belje and Osatina, are currently good examples of successful investments, but there is a lot to be desired for when it comes to Croatian agriculture on the whole.

Despite the aforementioned issues, investors are coming...

Croatia is an EU member state with the highest growth in organic production areas across the EU, and the withdrawal of EU funds for rural development has improved significantly in the last two years. In relation to the EU average, Croatia is still ahead of a number of new and old EU member states and is achieving some encouraging results.

One other positive story of how investors are investing in Croatian agricultural production comes from the island of Korčula.

Namely, ten years after the Smokvica winery ceased to exist, the doors of the new Black Island Winery were opened. With this, the Korčula winery, known for many years as the Smokvica Winery, began a new phase. The winery is experiencing a resurgence with the help of Swedish investors from the Zhoda investments financial fund, led by Robert Karlsson, who, in collaboration with oenologists Igor Radovanović and Nikola Mirošević, has opened a modern tasting room and a promising new wine destination from a neglected building.

It is a major investment of more than 5 million kuna, and they plan to further brand the location as an oenological destination and open a museum and presentation centre to educate tourists about these specific indigenous varieties.

Otherwise, it is a winery that produced almost a million bottles of wine a year during its golden period, but in the face of the crisis, it ceased operations and went bankrupt. In addition to renovating the premises and starting production, a wine tasting room and a gastronomic complex with local specialties were opened. With the exception of Croatia, the ultimate goal is to position itself on the European market, and the first packages of wine have already found buyers in Northern Europe, more specifically in Sweden and the United Kingdom.

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