Friday, 26 April 2019

Darko Horvat Discusses Prospect of Chinese Investment in Uljanik

Next week, a delegation of eighteen people from the largest Chinese shipyard, the China Shipbuilding Industry Corporation, are set to visit Croatia's ailing Uljanik.

As Poslovni Dnevnik writes on the 26th of April, 2019, this is the second day is the National Economy and Entrepreneurship Consulting conference, organised by the Ministry of Economy and Entrepreneurship in Vodice. Economy Minister Darko Horvat told N1 televizija that the Republic of Croatia ''wants to become a country of investment and development, even if it isn't there yet".

"What I do dare to say, and with full certainty, is that Croatia has an innovative network, we have to make every effort to create positive trends, but we can't expect a big boom in just one or two intensive years, but the trends are changing. What makes me happy is that our own accumulation which has been earned by entrepreneurs is slowly returning back into circulation, that this money is no longer sitting in banks, in accounts. This gives us the encouragement that we'll gain that momentum this year, too,'' Darko Horvat stated.

How much have the problems with Uljanik slowed the economy down?

"They stopped any acceleration. Given the fact that so far, we've spent nearly three and a half billion kuna on guarantees,'' Horvat said.

The Dredging and Maritime Management company, owned by the Jan De Nul Group, requires Uljanik to refund all advance payments plus interest on a dredger which is being built in the Pula shipyard, whereby a refund of part of the advance has been secured by state guarantees. Such an outcome could cost the Croatian state almost one billion kuna.

"The contracted period is seven days, but I'm not sure that will happen in that time because Uljanik has no liquid funds and we'll have to continue talks and negotiations with Jan De Nul. And Mr. De Nul is aware that these talks end up going nowhere if he decides on the forcible charging of advances, he's aware that the shipyard in Pula isn't ready to complete that vessel. 

If the Chinese do decide to invest in Uljanik, then there are two variants, Horvat said: "to enter as a strategic partner, or to buy one shipyard, and the other, and become the 100 percent owners."

The court decision in Pazin has, for the third time, postponed the bankruptcy hearing for Uljanik. 

"Regardless of the court's decision, we'll continue talking with the Chinese," Horvat said.

Make sure to follow our dedicated business page for more on Chinese investments in Croatia, Chinese-Croatian business relations, Chinese projects in Croatia and much more.

Monday, 22 April 2019

Zagreb Searching for Investors for Project Worth 750 Million Kuna

The Croatian capital city unfortunately has many worn facades and buildings, and the bid for Zagreb's Blok Badel will be opened in just one month and will run until May the 15th, and the selected investor should be known early on in June.

As Poslovni Dnevnik writes on the 22nd of April, 2019, the City of Zagreb issued a public call for potential investors in the realisation and development of the Blok Badel project. This is a space located near the very centre of the city, about 30,000 square metres bordered by Vlaška, Šubićeva, Martićeva and Derenčinova. The expected value of this investment is about 750 million kuna, according to Tocka na i.

Potential investors are required to have a total value of their realised projects of at least 1 billion euros, have adequate experience in the reconstruction and conversion of historical or protected facilities over the last ten years, and also have experience in the realisation of public-private partnership projects of a minimum value of 75 million kuna.

Bids which do not provide evidence on the development of similar projects over the last ten years and proof of their completed projects for the development of residential, office, hotel and multifunctional facilities will not be considered.

"The location has some great potential with regard to its position, it's very well connected with public transport, it's close to a car park (garage), the city centre, city squares and historical and cultural sights. The realisation of this project will involve the restoration, construction and redoing of the entire block as the only block in this part of the city that hasn't been completed and has no clearly defined urban structure and purpose.

 

Make sure to follow our dedicated lifestyle and business pages for much more. If it's just the Croatian capital you're interested in, give Total Zagreb a follow. Heading to Zagreb? Find out everything you need to know and more with Zagreb in a Page.

Monday, 22 April 2019

Is Croatia Really That Important on Chinese Investment Map?

Just how important is Croatia on the Chinese investment map?

As Iva Grubisa/Novac writes on the 21st of April, 2019 China's investment in European Union countries has grown steadily over the past ten years, and the European Commission (EC) has recently referred quite openly to the Chinese as a "systemic rival" and "a strategic competitor," the BBC reports.

The European Union has thus introduced a new mechanism for the strict overseeing of foreign investment, in order to promptly react should they assess that foreign investment could harm the security of EU member states.

According to the EC's report, a third of total EU assets are in the hands of foreign companies and 9.5 percent of companies in the EU have owners based in China, Hong Kong or Macau. When compared with 2007, when this share was only 2.5 percent, it's a significant increase, although the share of European business in Chinese hands is still relatively small. By comparison, back at the end of 2016, 29 percent of EU companies were controlled by Americans and Canadians.

Chinese investment in Europe reached its peak back in 2016, when it amounted to an enormous 37.2 billion euros, followed by a visible slowdown.

"This is mainly a result of stricter control over Chinese capital, but also changes in the global political climate when it comes to China's investments,'' explained Agatha Kratz of the Rhodium Group for the BBC.

Just where are the Chinese investing the most? Although a recent visit by a large Chinese delegation has been accompanied the news of the growth of Chinese investment and ambitions here in Croatia, according to the Rhodium Group, the Republic of Croatia is not even in the top ten countries in which China is the biggest investor in terms of capital.

Between 2000 and 2018, most Chinese investments took place in the largest European economies, such as the United Kingdom, Germany, Italy, and France. The top ten were ranked in the Netherlands, Finland, Sweden, Portugal, Spain, and Ireland.

According to Bloomberg's survey last year, they have owned or used to own shares in four European airports, six naval ports, and as many as thirteen football clubs.

Nevertheless, one must not forget the new big Chinese project, the Silk Road, known as the "One Belt, One Way" Initiative, in which the Chinese plan large investments in European infrastructure to strengthen trade links between China and Europe. Croatia is along that ''road'', and therefore the Chinese are investing in Rijeka Port, the Rijeka-Karlovac railway, mentions of investments in Croatian airports have been floating around, and there's almost no need to mention the fact that the Chinese are building Peljesac bridge, although its cost is mostly paid for by European Union funds.

The Chinese are also investing in Croatia's neighbouring countries, building roads and railways in Serbia, Bosnia and Herzegovina, and even in Northern Macedonia. In addition, Montenegro, as Novac.hr reported earlier this week, provided part of its state territory as a guarantee for the repayment of credits for the construction of part of the Bar-Boljari motorway to the Chinese Exim bank.

Since Montenegro has less of a chance of repaying this loan, it's not an entirely unbelievable option to remain without part of the state's territory, as bizarre as it might sound at first, and in that context, it's possible to understand some Croatian fears about entering into partnerships with the Chinese. This example is often cited as a warning to European countries to be extremely cautious when concluding economic agreements with China, to make sure they don't eventually fall into becoming a slave to the debts.

Trump's administration is much more closed to Chinese investment activities in the United States, and the authorities of other non-EU countries are much more cautious in entering into such partnerships, especially in the areas of telecommunications and defense. In any case, positively or negatively, China is certainly an extremely important player in Europe.

Make sure to follow our dedicated business page for much more on Chinese presence in Croatia. Chinese investment in Croatia, Chinese projects in Croatia and more.

 

Click here for the original article by Iva Grubisa for Novac/Jutarnji

Wednesday, 17 April 2019

Number of Companies Which Would Reinvest in Croatia Falls Significantly

Croatia hasn't done the best job of showcasing itself in the investment world, with investors often referring to it as the ''Bermuda Triangle'' and with the phrase ''ABC'' having come to mean ''Anything but Croatia'', things aren't looking all too bright. Things can be altered, but as the old British saying goes; mud sticks.

As Ana Blaskovic/Poslovni Dnevnik writes on the 16th of April, 2019, when compared to 2018, the share of companies that would reinvest in the Republic of Croatia dropped from 68 down to 54 percent. If they were asked to do so again today, almost half of the German companies operating here would decide against investing here again, and over sixty percent of those investors have an extremely poor economic picture of the country.

This is the result of a survey by the German-Croatian Chamber of Commerce conducted between February and April of this year among 150 of its member companies. In almost six years since joining the European Union, investors first had high expectations which quickly fell, but that was apparently somewhat expected. Following Croatia's accession to the EU, there was a period of transition in which investors were waiting anxiously and looking forward to seeing European practices come to life here, but that wasn't quite the case here.

Unlike former new member states of the EU who were given the green light to join during previous wave of the EU's enlargement, Croatia stalled, at least that is the overall impression one gets when asking members of the German Chamber of Commerce, including huge names such as Allianz, Siemens, Bauerfeind, Knauf, Müller, Spar, RWE...

"The survey is a perception, but it speaks about the overall impression of companies doing business [in Croatia], and that's that nothing important is changing,'' said Thomas Sichla, president of the Chamber. As stated, when compared with the previous year, the share of companies that would reinvest in the country dropped from 68 percent to 54 percent, which speaks volumes about perception and just how mud really does stick.

The fact that this isn't just an isolated case of pessimism, but is the contour of very worrying trends is best illustrated by the fact that eighty percent of the respondents had already previously responded to the survey.

While in Croatia almost half of investors would say "Auf Wiedersehen" to investing here again, in other countries in Central and Eastern Europe where parallel research was conducted, only one fifth of the companies who responded would say the same, so it shouldn't come as any surprise whatsoever that investments and their investors simply bypass Croatia entirely. Things aren't changing in Croatia, and if they are, it isn't fast enough at all.

Out of twenty Central and Eastern European countries, Croatia is still "relatively attractive" in eighth place on the list. Siemens' leader Medeja Lončar says that "more flexibility and speed in Croatia for a better economic and investment climate are needed", adding that Siemens will continue to invest in Croatia, depending on the business environment. If one scratches the surface, the companies that make up the German-Croatian Chamber of Commerce are almost repeating some very well-known criticisms that many have about Croatia.

At the top of that ''criticism list'' lies an insufficient fight against corruption and crime, followed by the burden of high taxes and general dissatisfaction with the tax authorities and the system despite the three waves of ''tax relief'' under Finance Minister Zdravko Marić. The top five barriers are Croatia's below par public administration and lack of legal security.

On the other hand, as a business advantage, investors pointed out the fact that operating in Croatia opens the door to the EU's single market and to infrastructure. Despite the ever-burning workforce problem that is rapidly evolving into an enormous problem of epic proportions for Croatia, employee qualifications and the quality of higher education continue to be among the main benefits in Croatia, are are productivity and employee motivation. However, in Germany the Chamber notes that the Croatian state should engage and talk much more to the private sector about the demand for labour and adapt its education system to that need.

With Croatia's continually deteriorating growth prognosis, which without reform is falling more and more, more than sixty percent of the surveyed companies find Croatia's economic environment to be very poor, and only a third claim it to be satisfactory.

Make sure to stay up to date by following our dedicated business page for more information on doing business and investment in Croatia.

 

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

Saturday, 13 April 2019

Why Do The Chinese Really Want To Invest So Heavily In Croatia?

From the construction of Pelješac bridge to planning to build a car factory in southern Dalmatia's Neretva valley, to displaying interest in potentially rescuing the enfeebled Croatian shipyards Uljanik and 3 Maj, the Chinese are no strangers to showcasing their investment interest in Croatia.

Croatia has earned itself a less than positive reputation among foreign investors, alright, let's not be so politially correct and say that Croatia is a burning hot mess in the eyes of foreign investors. ABC has come to mean ''Anything but Croatia'' in foreign investment circles, and many are simply bypassing the country entirely. That's not to talk about local, Croatian investors who have been dragged through the proverbial mud twice or even thrice the amount. Given the somewhat depressing statistics, just why are the Chinese suddenly so deeply interested in investing such huge sums of money in Croatia?

While many have welcomed the money-laden offers of the Chinese, others have remained cautiously optimistic, and some have made no qualms about being vocal in their dismay at the thought of the Chinese coming and ''taking over'' by investing heavily in Croatia's many pressing strategic projects. The motives that push the Chinese towards closer and closer ties with Croatia tend to end up as mere hearsay and solacious gossip in the comment sections of various portals, but what do the experts believe?

As Novac/Marina Karlovic Sabolic writes on the 12th of April, 2019, the Chinese are truly incredible people. They come to Croatia every ten years, and the Croats immediately forget about all of the Chinese "bofl" goods they've spent their lives purchasing and throwing away. They suddenly become blissfully unaware of the dreaded "Made in China" mark that everyone gets so sick to the back teeth of seeing plastered all over basically anything. Instead, their innermost desires display blurry images of an ailing Uljanik, of Tito's rotting memorial complex in Kumrovec, of Rijeka's port, and even football stadiums, Slobodna Dalmacija writes.

Does anybody bother to ask in this country what the Chinese will ask for in return, however? Entering into the dubious and somewhat unpredictable world of Croatian shipbuilding, constructing a much needed railway line and maybe rescuing a port in Rijeka all before dinner time will come with a price tag, and likely a hefty one. The situation when that bill inevitably arrives is one that tends to be what fills the militant online naysayers with fuel, and dread.

''Don't be afraid, China will not demand that the Communist Party be established in Croatia or that it rules the country,'' prof. Dr. Vlatko Cvrtila, one of the most prominent Croatian geopolitical experts, stated. He also added that in its long-term strategic plans, China really doesn't have any sort of idea of ​​introducing a single-party system in the countries in which it invests its money. Their interest, claims Cvrtila, is of quite another nature.

''The Chinese don't invest because they have a lot of money and they want to go around giving it out. There's no philanthropy in international relations. All they invest in is related to their global strategy of creating influence and linking the Eurasian world in a continental way. By investing in infrastructure, ports, roads and railways, they enable their goods to reach their customers more easily,'' says Cvrtila.

Such an approach, he points out, is legitimate for a country that has boasts such great economic potential at this time like China does. Their mega-project, the Silk Road, which would increase the possibility of land transport, aims to reduce overall dependence on maritime traffic restrictions.

Cvrtila notes the US administration's estimates and warnings that China will one day turn its massive economic influence into strategic power as well. This is something that United States, which is already competing with Russia, doesn't think well of. However, China is now quietly placing all of its cards on the economic side of the story.

''In order to maintain its economic growth, China must have a market. In infrastructure projects, they actually make the market more widespread. China can't stop, while it's riding the bike it needs to rotate the pedals. The Chinese are present everywhere where they can create prerequisites for the distribution of goods. In Greece, they're in the ports, in Montenegro, they're dealing with the construction of a motorway, in Croatia, they're building Pelješac bridge. This is a win win situation for everyone, because in the long run, any investment in infrastructure can improve a country's economic performance,'' says Cvrtila.

China has, therefore, created the 1 + 16 formet in Southeastern Europe where its usually large-scale investments help countries that otherwise don't have a lot of foreign investment.

''Europe has survived a difficult financial crisis and there is no "free finance" which would enter JI Europe. China's investment is actually beneficial for Europe, because along with China, the European Union has developed non-competitive but increasingly strategic economic relations, realising in time that they [the Chinese] can contribute to its economic growth,'' emphasises Cvrtila.

Croatia, according to him, is fortunate because it is strategically quite well positioned: it is closer to the heart of Europe than it is to Northern Europe. And, de facto, it is located at the intersection of the roads between the East and the West.

Unfortunately, Croatia hasn't used its geostrategic advantage yet. LNG terminal stands, as do the new train lines. It's also important to revitalise the Port of Rijeka so that Croatia can profit in the fast transport of goods to European consumers. We don't have our own investments, Europe has no capacity anymore, which is why the Croatian Government is seriously considering deals from China,'' concludes Cvrtila.

Therefore, there's no need for Croatia to be afraid of the Chinese, but rather actually use them for its own interests.

Make sure to follow our dedicated business page for more information on Chinese-Croatian relations, Chinese business plans in Croatia, and much, much more.

 

Click here for the original article by Marina Karlovic Sabolic for Novac/Jutarnji

Thursday, 11 April 2019

ACI Achieves Massive Revenue, Biggest Investment in History Completed

As Poslovni Dnevnik writes on the 10th of April, 2019, Croatia's ACI has published its revised annual financial statements for 2018. The company's revenue growth trend thankfully continued in 2018, its total revenue grew by seven percent when compared to 2017, amounting to 216 million kuna, while the company's operating income increased by eleven percent to 211 million kuna.

Revenues have been growing in almost all of ACI's marinas, and the company's profit also grew by 54 percent to a massive 38.4 million kuna, while its EBITDA increased by 22 percent to 93.9 million kuna.

The largest single investment project in ACI's history was also completed. In March, a new license was issued for the new ACI marina in Rovinj. This is a project that in which over 150 million kuna has been invested and can be briefly described in just four words: beauty, luxury, innovative solutions and security. The new marina's categorisation is now underway.

The new ACI marina has 1,400 m2 of commercial space available, and special attention has been paid to providing high level services on the premises, including catering facilities, restaurants and café-lounge bars, grocery stores, wellness centres, world-renowned brands, reputable sales offices for luxury yachts, charter agencies, a service centre for boats, etc.

The Rovinj ACI marina is equipped with the latest generation of WiFi systems, and luxury boats are provided with the most advanced video surveillance and access control system available. Particular care was taken to protect the surrounding environment and maintain the purity of the marine environment, construction materials and energy systems that provide maximum energy efficiency were used during construction, and all the benefits of LED lighting technology and lighting management were properly and readily applied. The official opening of the marina will be at the end of April this year.

The modernisation of the business that ACI has been intensively pursuing over the last few years is primarily focused on raising the quality of its services, attracting new clients and exploring the market potential of the Adriatic region as a whole.

Back in 2018, the company first published its own ACI No1 magazine, both in print and in digital format. It is a magazine which combines an ACI marina catalog, information for boaters, exclusive reportages and lifestyle themes, and a 2019 issue is just been made available.

ACI also achieves excellent results in the area of ​​digital business with its own reservation system. From last season, boaters have also had ACI's mobile application that provides easy and quick access to information and booking links available to them. For the third year in a row, ACI has also been using a digital sailing system with the help of special applications and devices used by sailors.

Given ACI's steady growth, 2018 was also marked by market research and a look into the development potential of the company, following which, a decision was made to embark on the development of new products and services, which will contribute to the diversification of the company's business.

Business cooperation includes the purchase of six ClubSwan36 sailing boats, and a range of marketing activities aimed at creating a recognisable image, regatta organisation, promotion and the creation of a tourism product aimed at raising the quality of ACI's services and the overall image of the Republic of Croatia as the world's leading nautical destination.

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

Tuesday, 9 April 2019

From Dalmatia to Karlovac and Rijeka, Chinese Eye Up Croatia

As Gordana Grgas/Novac writes on the 8th of April, 2019, if there was a European tender held solely to attract Chinese investment, the champion would certainly be Great Britain, followed by Germany, and then immediately by Italy and France. Croatia might not be anywhere near the top of China's European ''wish list'', but despite that, the Chinese interest just keeps on coming...

The countries which make up Central and Eastern Europe are low on the aforementioned European scale, even though with China, at least since the year 2012, they have enjoyed a special relationship through the China + 16 initiative, which, as a parallel diplomatic format, tends to irritate the larger, more powerful members of the European Union, as well as the European Commission itself. One of lowest on the list is Hungary with its Eurosceptic government led by Viktor Orban, and Croatia is at the very bottom, but the desire is to alter that.

This week, there is an official visit by Chinese Premier Li Keqianga to Croatia, and the eighth summit of sixteen countries of Central and Eastern Europe with China down in Dalmatia's southernmost city of Dubrovnik, and it might be the easiest thing to look at it all as part of a political show that could act as bait for investment. Whether or not this investment will really happen and what shape that might take, whether it will be done mainly through private projects, for example in tourism, or through major state projects in the rail and port sector, is not yet clear at all.

Croatia will sign nine general memoranda with China in the areas of trade, investment, agriculture, transport, science, technology and innovation, education, sport and tourism, and the most convenient customs administration protocol that will enable the export of Croatian dairy products, which are greatly loved in China. Croatia also intends to join the Asian development investment and infrastructure bank headquartered in Beijing, how much that will cost Croatia however, is not yet known.

How large European countries cooperate with China was demonstrated just ten days ago by the Italians and the French. For the visit of Chinese President Xi Jinping, Rome signed 20 agreements (and joined One Band, a one way system that connects China with the rest of Asia, Europe and Africa, and expands its trade and influence). In Paris, 15 such agreements were signed, where either contracted or announced transactions amounting to billions of euros were dealt with, covering a wide range of areas - from exports of Sicilian red oranges and French frozen chicken to the opening of Italian ports for Chinese investors, sales of 300 Airbus aircraft, energy projects, shipbuilding, etc.

After the construction of Croatia's much anticipated Pelješac bridge, which is funded primarily by European Union money, Croatia hopes for more Chinese investments in national transport projects. This regards the port of Rijeka and the entire Rijeka traffic route, including the line from Rijeka to Karlovac, as well as projects such as airports.

According to data which takes the whole of Europe into account, during the period from 2000 to 2018, almost 47 billion euros of direct investment from China was invested in Britain, Germany saw 22 billion euros, Italy saw 15.3 billion euros, and France saw 14.3 billion euros. Hungary saw a significantly smaller figure of 2.4 billion euros from the Chinese, Poland saw even less with 1.4 billion euros, Romania saw 900 million euros, and Croatia saw just 300 million euros. A stark contrast to the United Kingdom, which is by far one of Europe's most powerful nations.

In the region, the intensity is getting stronger, and in neighbouring Serbia, Chinese loans have come in handy when building transport infrastructure and energy projects and, but that medal, like any other, has two sides, and the takeover of companies hasn't always been met with welcome arms by the Serbs.

The aforementioned data report shows that the culmination of Chinese investment in the EU was reached back in 2016, largely through the take over of companies, and over the last two years, it has fallen, which is attributed to more stringent rules implemented by some EU member states, as well as increased capital controls conducted by Beijing.

For Zagreb, it was a bit uncomfortable to get closer to Communist China in the above mentioned period, as the common policy of overseeing and limiting the Chinese penetration of the ''Old Continent'', especially in strategic and technologically sensitive areas, was being undermined. That chapter however, appears to be well and truly over in Croatia's eyes.

While large investments and projects are anxiously anticipated here in Croatia (and the Chinese interest in Rijeka and the Rijeka-Karlovac line is at least nine years old), data on trade relations show that there is a deficit. State Secretary Nataša Mikuš Žigman notes that there has been a noticeable increase in the volume of trade between Croatia and China, but imports are growing more than exports are. Last year, exports of goods amounted to 133.4 million euros, an increase of 19 percent when compared to 2017, while imports amounted to 803 million euros, an increase of 15.6 percent.

Croatian companies might be able to export more to China in the future, and the business forum being held in Dubrovnik is an excellent chance to showcase some innovative Croatian export ideas, but for now, the main export products continue to be raw or semi-finished products such as stone, leather, untreated wood and polymers, while when it comes to imports, we can see the reign of traditional Chinese consumer goods, white electronics and telecommunications equipment, as well as a constantly increasing number of Chinese tourists visiting Croatia, too.

As the Chinese continue to ramp up their business in Croatia, from Pelješac bridge to Rijeka's port, more announcements continue to appear, and just recently we reported on the Chinese plan to open up a car factory tucked away among the citrus trees of southern Dalmatia's fertile Neretva valley, more precisely in the Nova sela business zone near Kula Norinska in Dubrovnik-Neretva County. While many remain concerned about Chinese influence in Croatia, many others are much more occupied and lured by the promise of an economic boost and employment opportunities.

Make sure to follow our dedicated business page for more information on China-Croatia relations and much more.

 

Click here for the original article by Gordana Grgas for Novac/Jutarnji

Saturday, 6 April 2019

Invest Croatia: New Data Source for Investment Launched

At the beginning of April 2019, the Ministry of Economy launched a new website dedicated to investors - Invest Croatia.

As Poslovni Dnevnik writes on the 5th of April, 2019, Invest Croatia is available in both Croatian and English language and contains an abundance of useful and necessary information for the preparation and eventual realisation of investment projects in the Republic of Croatia, from general macroeconomic indicators, all the way to the examination of entrepreneurial zones and a list of available incentives for investors.
 
After making a decision or selecting Croatia for the realisation of an investment plan, the next step for the investor is to find an adequate location and set about completing the investment project. In addition, on the brand new Invest Croatia page, a map of available entrepreneurial zones by county - http://investcroatia.gov.hr/zone/, with a very detailed view of the size of the available land, its purpose and prices, all the way up to information about communal connections and companies which already operate in this area are readily available.

Furthermore, would-be investors will have a detailed overview of the steps and necessary actions that need to be taken in realising their respective investment projects http://investcroatia.gov.hr/investirati-pregled-koraka-realizaciji-investijskih-projekta/.
 
In addition to this, Invest Croatia has several very useful tools, such as the Investment Calculator, which allows you to calculate the amount of incentives an investor can get for their project. The calculation is based on the introduction of a number of specific variables - the type of investment, foreseen investment costs, the planned number of new jobs, employee average salaries, the investment location, and the enterprise/company size.
 
Publications posted on the new Invest Croatia page will offer proper assistance to investors in decision-making, as well as during the actual investment project implementation process. They include an investment guide, a catalog of investment opportunities and sector publications, as well as an array of successful stories of companies who are already operating in the Republic of Croatia, and official statistics claim there are almost 16 thousand such companies at the moment.

Make sure to follow our dedicated business page for more on investment in Croatia, the investment climate, doing business here, and much more.

Wednesday, 20 March 2019

Pula's Arena Hospitality Group Announces 500 Million Kuna Investment

As Barbara Ban/Novac writes on the 19th of March, 2019, Pula's biggest hotel group, the Arena Hospitality Group announced the continuation of its large investment cycle yesterday, the amount of which will be about half a billion kuna. These are investments in the hotel Brioni (Brijuni) and the apartment resort of Verudela Beach in Pula, the Kažela camp in Medulin, and the doing up of the Art'otel Berlin Kudamm over in Berlin, Germany.

Namely, this Pula hotel company is the only one which owns hotels in Germany and Hungary at the moment. The Arena Hospitality Group recalled that by mid-2017, via a public offer on the Zagreb Stock Exchange, they raised about 750 million kuna to continue their investment cycle.

''We're continuing with our investment cycle, which will be around half a billion kuna from 2018 to 2022. Some of the investments have already been done, some have started, and some are just beginning. Last year we renewed camp Pomer, which became the first glamping site in the country, and we believe it's one of the best in the world. That investment stood at 70 million kuna,'' said the Arena Hospitality Group's Reli Slonim.

With that move, the path to rejuvenating their camps is definitely wide open, which is a sector of theirs which they haven't invested significantly in before last year, as they devoted themselves to raising the quality of their hotels and apartment resorts, as well as their numerous acquisitions in Europe. Part of their facilities are also branded as Park Plaza.

''This year we started with the complete doing up of the Kažela camp in Medulin, and this investment is worth 128 million kuna, which is our biggest investment in the camps. After the completion of the investment, the camp will offer its guests 1,300 spacious places and 164 new luxury mobile homes. In addition, the camp will get a new entrance and reception, new beach bars, and entertainment and sports facilities,'' Arena Hospitality Group's Reli Slonim said.

It is interesting to note that mobile homes in this camp will be made up of ecological and recycled materials, and each of them will be about 40 square metres in size. This will be one of the biggest investments in camps this year in the country, and it should be finished by this [tourist] season.

A member of the management of the Arena Hospitality Group, Manuela Kraljević, also added that along with all of their current investments, they are preparing for the renovation of the Verudela Beach apartment complex too, which will begin in autumn this year. As of now, they have refurbished a ten-unit building, which is an example of how the other apartments will look when finished.

In the tourist resort of Verudela Beach, the plans are to invest about 60 million kuna during the second half of 2019. Ten accommodation units will be upgraded by this season, while the remaining 146 units and 20 villas will be renewed in time for the 2020 summer season. After the completion of the investment, the resort will be under the brand of Arena Hotels & Apartments, Kraljević said.

They also announced the reconstruction of Hotel Brioni, which for the time being, remains the only hotel in Punta Verudela that hasn't been given a ''fresh face''. It is a cult hotel which was built back in the 1970s, primarily for American guests. So far, only two showrooms have been done up, which will be somewhat larger than the existing ones, but this won't change the number of rooms.

''We have decided that we're not going to change the size of this hotel, but we will rebuild it as it is, and the room sizes will be about the same. We will invest 190 million kuna into it, and we'll start doing it up in 2020 after the [tourist] season. The hotel will be finished in one year and [everything] will be completed by 2022,'' Slonim said. In addition to investments in Croatia, this year the Pula hotel group is also renovating its hotel in Berlin, investing the equivalent of 53 million kuna into it. The hotel is located in Berlin's famous Charlottenburg district and is dedicated to the works of the famous pop art artist Andy Warhol. The investment will include a total accommodation capacity of of 152 rooms, as well as all of the other hotel facilities one might expect.

As Luka Cvitan said, the German part of the portfolio is extremely important to the Arena Hospitality Group because it gives them stability and doesn't depend solely on tourism flows in Croatia. Last year, hotels in Germany saw the largest growth, while in Croatia, things unfortunately stagnated somewhat. Business last year amounted to 758 million kuna, and was higher than last year's gain by 30 percent. That is why the Arena Hospitality Group is also thinking about further acquisitions in Belgrade in Serbia, as well as in other countries in the region.

''Also, since we have a portfolio abroad, we can offer our employees full-time employment,'' said Cvitan.

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

 

Click here for the original article by Barbara Ban for Novac/Jutarnji

Monday, 18 March 2019

Kolinda Grabar-Kitarović Discusses Investment at InvestCro Conference

The InvestCro conference was opened by the editor-in-chief of Poslovni Dnevnik, Vladimir Nišević, who stressed the fact that this project opens up discussions topics that are of great importance to our society.

As Poslovni Dnevnik writes on the 18th of March, 2019, the "InvestCro: Investment in (Non) Opportunities in Croatia" conference, whose central theme is rather depressingly inspired by missed opportunities, ie planned investments that have not been realised, as well as obstacles investors encounter and also possible improvements to the arrival and treatment of foreign investors, is being held at the Westin hotel in Zagreb.

This conference is the second in a series of four conferences as part of the all-year-round multimedia project headed by Croatian news and media outlets Večernji list, Poslovni Dnevnik and 24sata entitled "InvestCro: Kako do ulagača" which discusses how investors can be attracted.

The President of the Republic of Croatia, Kolinda Grabar-Kitarović, stated that the current results of foreign investments don't match the desired image. She said that lessons should be learned from the mistakes alreayd made to avoid repetition.

President Kolinda Grabar-Kitarović said that Croatia was missing out on so-called Greenfield investments and has proposed five specific guidelines to the Croatian Government in order to attempt to tackle that problem.

"The results of direct foreign investment don't match the desired image. In 26 years, 33.5 billion euros has been invested in Croatia, but the problem is that the investments were mostly Brownfield [investments] and focused on ''nontradeable'' sectors. We're missing out on Greenfield investments, investment in the production of goods and services that will create quality jobs and be more export-oriented,'' said the president at the InvestCro conference in Zagreb.

She feels that the direction of development can be directed in the desirable direction if the appropriate lessons learned from the mistakes made are properly taken into consideration. "First of all, I'm thinking of investment woes, the shortage of people involved in attracting investors, the lack of approach planning and coordination," she said.

On their way directly from Pantovčak to the Croatian Government are five key guidelines for the faster and easier growth of investments in Croatia. It is necessary to consolidate the competences of all those responsible for attracting FDI (foreign direct investment) at a single national level, to create an investment attracting strategy aligned with other economic strategies, to focus on new models and soft investment incentives for added value and to constantly create an attractive investment climate.

The five recommendations include the continuation of work on a better overall image of the Republic of Croatia and the promotion of the country as a destination for investment, not just a tourist destination. In this regard, Grabar-Kitarović announced that the working group who deal with branding Croatia will come out with guidelines within a month.

"We decided to do something for our society, as well as for those who will still be here when we're gone. Without healthy investments, we will remain without investors, and for this reason we have just decided to speak [on the subject] through various conferences, just like this one today.

''I hope this conference will contribute to the progress of Croatia,'' Niševic said.

'' the last two years, two-thirds of greenfield investments in the EU took place in just six European countries. I believe that Croatia will raise its rating in 2019 and come over to the side of these six countries, with the help of new laws and a better quality framework for stimulating investment,'' said Minister of Economy Darko Horvat at the InvestCro conference.

"The share of investment in GDP is growing, we're at the average of EU countries. The third quarter in 2018 was, according to current information, optimistic, as there was a 4.9 percent rise. Croatia needs economic growth of five percent. Step by step, we're strengthening competition, there is no instant solution, and changes need to be deeply rooted.

We should help entrepreneurs to retain as much of their own funds as possible for the new investment cycle. We're digitising business and the state, in order to reduce the burden on entrepreneurs. Therefore, I expect growth in production, especially in the private sector. Through the Investment Incentive Act alone we attracted 16 billion kuna, with 12,750 new jobs being planned. We know exactly what kind of educational profile we need, we need to make sure we've got young people who will be employed there. We need a synergistic effect with cities and counties," the minister said, hinting at the need to all be on the same level.

"We want investments with new technologies and added value. Despite the global boom in the digital economy, less than 20 percent of such investments fell into the ICT sector. We are not only looking at the volume, but also the character and type of investment, as well as the quality of jobs which is what our young people who are leaving are looking for abroad. We need a bit of courage and some enthusiasm in order to turn these issues into a chance.

The Ministry of Economy has announced five new tenders, which is an innovation opportunity for domestic entrepreneurs. I'm sure that 303 million euros will be invested in Croatia's investment potential and that this year will end with development,'' concluded Horvat, adding the encouraging fact that this week, the representatives of several Swiss companies are browsing northwestern Croatia and looking for business zones that are ready for them to move part of their business to.

Mladen Fogec, president of the Association of Foreign Investors in Croatia, noted that Croatian pessimism could affect foreign investors very much.

"The rating agencies are constantly positioning us at the end of the second-third on the doing business scale, but they all get their perceptions from talking to our political parties, non-governmental organisations, and we're very inclined to being negative - we have to turn to optimism. When it comes to the perception of corruption... we're not in the best position, but when you ask a person whether or not they bribed someone, the answer is always that they didn't. Please spread optimism because Croatia has a lot of potential. In principle, there's an enormous problem with our mentality, the capacity for change isn't big enough, we're still not ready to start to change, and we're living in the era of digitisation and computerisation,'' Fogec said.

"We've spent far too much time wrestling with the past, we spent an actual minister of economy on Agrokor, and her successor is now spending most of his time trying to deal with Uljanik, which is also grappling with the past. We need to deal with the future. It's good that we have introduced a law on strategic planning. It's not a question of whether foreign investors want to come to Croatia, but whether or not we actually want foreign investors,'' claims Fogec.

He noted that the association he leads didn't issue the so-called ''white book'' for business for 2019 because the problems still remain exactly the same as they were before. "Nothing has changed, or it has changed at a slower rate compared to changes in neighbouring countries, so our latest edition is still valid," he concluded rather sarcastically.

For those of you who understand Croatian, here's a video of what has been said, suggested and discussed at the conference:

Make sure to follow our dedicated business page for more on doing business and the overall investment climate in Croatia.

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