Monday, 7 December 2020

Gripen Boasts Benefits As Croatian Fighter Jet Saga Continues

December the 7th, 2020 - The saga surrounding Croatia's purchase of fighter jets still isn't over yet. Despite the numerous options on the table from numerous countries, the Swedish offer is looking tempting indeed...

As Poslovni Dnevnik/Darko Bicak writes, we're finally nearing the end of the competition for the selection of new fighter jets for the Croatian Air Force, and Sweden with its Gripen, France with Rafale and the USA, which offers a new F-16 in its own arrangement, and a used Barak with Israel are all competing for Croatia's attention with more or less equal offers.

The decision should be made by mid-December, and the leaders of Saab and FMW explained just why they're so convinced their offer is the best for Croatia. Martensson immediately emphasised that the Gripen is designed to operate in one of the most demanding operational environments in the world, above the unforgiving Baltic sea.

For a relatively small country like Sweden, it is important that the Gripen is cost-effective in the sense of both purchase and use. With the Gripen, he pointed out, Croatia will get first-class capability at a long-term acceptable price, which will meet the requirements of the Croatian Request for Proposal (RFP).

''The Swedish offer is fully in line with the requirements of the Croatian RFP and is a truly comprehensive package that includes all of the elements needed by Croatia in order to manage Gripen aircraft.

All Croatia has to add is its staff, fuel and an air base. Furthermore, the package is offered at a fixed price, and includes support even after the acquisition phase. There will be no hidden or sudden costs. The package containing our offer is of the same type as the one successfully delivered to Hungary and the Czech Republic,'' explained Martensson, adding that although he's still choosing to remain secretive about the specific amounts, that he is convinced that their offer is cost effective, knowing that they offer a comprehensive solution aircraft and support at completely transparent and fixed costs.

FMW pointed out that they're fully prepared to meet all of the Croatian requirements regarding the fighter aircraft delivery deadlines, and that the Czech Republic and Hungary are proof that they are delivering the entire system, including trained and trained pilots and technical staff, within the agreed deadlines.

In response to criticism that the Gripen in the offered version of the C / D is a somewhat outdated aircraft with limited modernisation capabilities, FMW said that it is currently the backbone of the Swedish Air Force and it will be for a long time to come. Additionally, that the needs and operational environment of the Swedish Air Force will require that the Gripen C / D be regularly updated in order to better respond to new threats.

At Saab, they added that this aircraft will be produced with the continuous evolution and upgrading of the system and weapons it can use.

"It's constantly upgrading and adapting to the real situation, in the context of classic and electronic warfare. This setting allows pilots to execute mission objectives, rather than worrying about how to operate the aircraft.

All current operators can confirm the number of regular upgrades that make the Gripen C likely the best available such plane on the market today. The fighter jet will remain operational and competitive for decades to come as the manufacturer keeps all current Gripen C operators in mind, as well as their need to be competitive and use the latest technologies in their homeland security processes,'' emphasised Jonas Hjelm.

On the remark, which can often be heard in public, that Sweden, as a neutral country, is a somewhat risky partner for the supply of weapons to the far more ideologically aligned Croatia (NATO and EU), Martensson reiterated that there have been excellent successes to date. As an EU member, he pointed out, Sweden will respect all obligations towards its partner countries.

When asked whether the Meteor long-range air-to-air missile is part of the Swedish offer to Croatia, FMW diplomatically stated that the Meteor missiles are integrated into the Gripen C / D. However, respecting the process in Croatia, they cannot reveal the details of the offer.

Although classic offset is banned in the EU, some reciprocal industrial cooperation in military orders of this size is inevitable, and the Swedes are aware of that. Saab stated that Swedish companies, including Saab, already operate and have their products here in Croatia.

"To this day, when 50 Swedish companies employ more than 10,000 people in Croatia, I don't remember ever having heard about any failed, non-transparent or overvalued projects that came to Croatia from Sweden. For more than 20 years now, as long as Saab has been present in Croatia, our solutions have been successfully implemented and used in the military and civilian sectors without any problems. Saab's advanced air traffic control and guidance system can be seen at Franjo Tudjman Airport, as well as the Maritime Traffic Monitoring and Control System (VTMIS) which monitors Croatian waters, and a maritime border video surveillance system that enables the identification and surveillance of vessels up to 100 km away,'' said Saab's Vice President Jonas Hjelm.

He added that planned future projects have the opportunity to contribute to the sustainable development of security technologies across Croatia, while retaining valuable competency and knowledge here within the country, which could subsequently become the basis for the potential future establishment of a regional cyber security hub in Croatia. Among other projects, they say, Saab is also ready to transfer knowledge and technology to support the establishment of a Regional Aeronautical Aviation Support Centre right here in Croatia.

''Over time, with the development of capabilities for the maintenance and support of military and commercial aircraft and helicopters, and the parallel development of specific areas of technology related to the establishment of a local supply chain of spare parts and components, Croatia could become a regional hub for the supply, maintenance and support of military and commercial aircraft and helicopters.

This project would lead to long-term cooperation between Saab and the local defense industry, as well as the academic sector, generating around 500 high-tech jobs in the future and returning more than 50% of the total contract value over the life of the aircraft purchased,'' concluded Hjelm.

To the criticism that the Gripen C / D is a good aircraft, but that it may be too expensive considering the possibilities, and compared to, for example, the F-16 and the Rafale, Saab says that the most expensive aircraft is in the one sitting in the hangar.

“If you want to keep a strong air force, your pilots have to fly. They need to be out there in the air. We know that our Gripen customers here in Europe fly more often than other air forces that operate different platforms do (you can compare the Czech Republic and Austria, for example).

He added that the new Gripens don't have the burden of previous use in various conditions and climatic extremes, such as desert countries in Africa and that Croatia gets completely new aircraft with 100% of the resources intended solely for Croatia, without a 15-year history lurking behind them.

''There will be no unexpected repair costs due to earlier mileage. This makes it even more affordable. We expect our Gripen to fly for decades to come - if you decide on a solution other than a new plane, then you have to buy another set of planes in 10 years if you want to keep flying. Another possibility is to have them just for show - but if it doesn't fly, every plane is too expensive to just keep stored in the hangar,'' said Saab's director.

Saab itself pointed out that there is currently significant interest in Gripen around the world, both in South American nations and in other countries, some of which, they claim, are very close to Croatia, but they don't want to talk about such details for now.

Finally, Saab explained that it is difficult to compare prices for fighter jets as they depend on several factors such as the number of aircraft, the equipment, customer-specific solutions, contract terms and related services.

The comparison of the so-called "fly away" or "production cost of one aircraft" rarely provides a good reference basis, and isn't really that important for the customer because it excludes many important elements of the total acquisition and the life cycle cost.

Such a “unit price per aircraft” is also often confused with a more complete “unit price package” which is the total cost of procurement (including all associated support systems, weapons, sensors, services, etc.) divided by the number of aircraft.

"Compared to the latter type of 'price' between different candidates, it's still very much necessary to look at what is really involved," they concluded from Saab.

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Sunday, 20 September 2020

Background of Croatian Company Nanobit's Sale to Swedes

As Poslovni Dnevnik writes on the 19th of September, 2020, the story of the Croatian company Nanobit and its two founders, Alan Sumina and Zoran Vucinic, can be ranked among the most successful Croatian stories in the last five years. It started, as is often the case with IT startups - "romantically", without any capital, with only two computers, but with the idea and the will to gain global success in a very competitive industry - the mobile game industry.

The Croatian company Nanobit's founders have been building the company for a full 12 years now and have grown to 125 highly educated employees, their games have been downloaded more than 145 million times in total, and are played by more than 10 million active players worldwide on a monthly basis. And what has crowned their success is an extremely successful sale or, in startup terms, "exit". They sold the company for almost a billion kuna to the Swedish Stillfront group, which has 14 more gaming studios in its portfolio.

Namely, Stillfront, whose headquarters are in Stockholm and which is publicly listed on the Nasdaq First North Premier Growth Market, will pay 100 million US dollars in the first tranche for 78 percent of the Croatian company Nanobit's shares, and after two years, they'll buy the rest of Nanobit at a price that will depend on the movement of profit before interest, taxes, depreciation and amortisation (EBITDA) of Nanobit in the financial years of 2021 and 2022.

When asked why they decided to sell and not to further their independent development, Alan and Zoran answered for Vecernji list:

''The industry in which we operate is very fierce when it comes to competition and there's a real struggle on the global market. It's currently rapidly consolidating and the choice was to join those who will develop the company or stay alone against everyone.

True, we may have once had the idea that we will be the ones to buy other gaming companies, but we should be realistic considering that it's almost impossible to realise this operationally from Croatia, primarily because there is not enough capital. For such a thing we had to start things up in another country, for example, like our customer, in Sweden. As a Croatian company, even if we were listed on the Swedish stock exchange, we wouldn't get such visibility as we are now when we're a component of a Swedish company. It's much harder to do all this from Croatia because companies need a lot more capital for acquisitions, so we believe that this was the best we could do in the right timeframe, and the situation with the coronavirus crisis also contributed to this move,'' Nanobit's founders say, adding that they didn't just fall for the first offer they got and that they had at least a few bidders every year.

''There were various providers, from those related to this business to those who have nothing in common with Nanobit whatsoever. We chose the Swedish company because we estimated that we'd continue to work and develop with them, have knowledge and cooperation with all their components, or with 14 other gaming studios or specifically with 800 quality employees and experts in this field,'' added the founders of the successful Croatian company Nanobit.

What was almost crucial for them was that the company stays in Croatia and has high autonomy in decision-making, ie that everything stays more or less as it was before, with Nanobit's employees getting the opportunity for personal development that ultimately directly affects the company's results.

''During the negotiations with the Swedes, some new bidders appeared who offered us even more money. However, what our goal was is that the company still exists as it is, that it has its headquarters in Croatia and that its employees are safe and taken care of in the best way with the new owner,'' say Alan and Zoran, who will surely remain at the helm of the Nanobit for another two years and continue to work, although their contract doesn't stipulate that they must remain at the helm of the company.

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Saturday, 8 February 2020

Swedish Media Criticise Croatia: Don't Let Them Join Schengen

The Swedish media has launched some scathing attacks on the Croatian Government and the current Croatian EU presidency, referencing the treatment of migrants, multiple failures to align with EU law and the dire demographic picture.

As Index/Slobodan Mufic writes on the 8th of February, 2020, Croatian Prime Minister Andrej Plenkovic and several of his ministers have repeatedly called on the Croatian media in recent weeks to pay less attention to disgraceful scandals caused by Croatian politicians and more attention to the presidency of the Council of the European Union.

Although each EU member state at some point or another assumes the six-month rotating presidency of the EU Council according to a pre-determined timetable, the Croatian prime minister presented Croatia's EU presidency as some sort of remarkable success for his HDZ government and his diplomacy, and accordingly hoped for positive public recognition of that. The opposite happened.

For the most part, the Croatian media weren't all that engulfed in writing about Croatia's EU presidency, instead focusing on numerous political scandals. However, at the end of 2019, there was an increased interest in Croatian internal politics among the Swedish public.

A few weeks ago, the Croatian media reported criticism of Swedish MEP Malin Björk, who attacked Plenkovic at the plenary session of the European Parliament in Strasbourg following his presentation of the EU Council Presidency priorities, over the brutality of Croatian police against migrants and their forced return to neighbouring Bosnia and Herzegovina without following any of the proper administrative procedures.

"Don't let Croatia enter Schengen"

Björk also set out her arguments and remarks in a column entitled "Do not allow Croatia to enter Schengen", published on December the 31st, 2019, in the Swedish media outlet Svenska Dagbladet, traditionally inclined more to the right of the centre. In her text, Björk calls out Croatia over its poor treatment of migrants at the Bosnian-Herzegovinian border, and gives examples which she, as she says, has witnessed herself.

Her accusations of Croatia's violation of EU regulations and international conventions are also referred to by a journalist for the same Swedish publication in a text titled "A bitter winter in refugee politics" about ten days ago. Writing about the EU member states' disagreement on migration policy, Wiktor Nummelin points out: "Croatia is chest-thumping about taking care of its borders with police activities and not with the use of barbed wire, but instead of praise, it receives criticism because of the strict treatment of the border police."

Although interest in Croatia in the Swedish media has intensified significantly in recent weeks, they began writing in a harsh and critical manner about Croatian politicians back in September, when Dubravka Suica was elected Vice-President of the European Commission for Democracy and Demography.

Then, in a column for the daily Aftonbladet, traditionally close to the Social Democrats, the former Minister of Culture, and today an MEP for the Greens, Alice Bah Kuhnke, wrote the following:

"It's a worrying policy with the Commissioner who has spoken out against safe and legal abortions. Together with Hungary and Poland, Croatia has repeatedly argued that abortions should not be included in the protection of women's sexual and reproductive health as an EU priority.''

She then urged her Swedish counterparts in the European Parliament not to vote for Dubravka Suica (HDZ).

The last arrow aimed at Croatia as chair of the EU Council appeared a few days ago in Svenska Dagbladet, and refers to the problematisation of INA's sponsorship of the Croatian presidency of the EU Council, right at the moment when the EU is preparing the Green Plan, which foresees that the EU will become climate neutral by 2050.

"Croatia certainly expected to go unnoticed in choosing a relatively small national oil company to sponsor it, but this decision at the time of launching the Green agreement is scandalous. First of all, we don't know what the companies are getting in return for their sponsorships. There must be some counter-service," said Vicky Cann of the anti-lobbying Corporate Europe Observatory based in Brussels.

Emily O'Reilly, the European Ombudsman, thinks similarly. She told Svenska Dagbladet that "there is a risk that sponsors will have some influence over EU policy." It should be noted that other members also had sponsors during their presidency of the EU Council, Sweden had Volvo and Telia, Ireland was sponsored by Audi, Romania was sponsored by Coca-Cola and Croatia's predecessor, Finland, was sponsored by BMW.

"Aware of climate challenges, the Republic of Croatia strongly supports the ''Green Transition'' and actively participates in discussions on major initiatives of the European Green Agreement. During the EU2020HR, Croatia will encourage discussions on the transition to a resource efficient, circular and low carbon economy for the sustainable use of resources and the achievement of climate neutrality by 2050,'' reads the Ministry of Foreign and European Affairs' response to criticism from the Swedish and other European media outlets.

"One smaller town disappears in Croatia every year"

In the meantime, the Swedish media outlet Svenska Dagbladet has published another text on Croatia, this time about Croatia's demographic losses and emigration. The crux of the text, entitled "One smaller town disappears here every year" is that "Today, Croatia has almost 15 percent fewer inhabitants than it did in 1991".

Also interesting is the quote by Minister of Science and Education Blazenka Divjak, who said that Croatia "still has schools for the industrial society of the 20th century". To this, the author added: "She's dreaming of brain circulation instead of the brain drain."

As we can see, the Swedish media took the Croatian Government's appeal seriously (although it was not addressed to them) and focused on Croatia's EU Council presidency instead of politicians having magically appearing, undeclared houses and attacks on journalists, but it's unlikely that Plenkovic and his government expected heavy criticism and valid complaints from the Northern European nation.

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