S U P P O R T E D B Y T H E C R O A T I A N C H A M B E R O F E C O N O M Y

pvpvinternationalinternationalCroatian Business & Finance WeeklyEstablished in 1953Monday / 8th November / 2010Year III / No 0129www.privredni.hr

Jerko Jelić Balta, President, Plinacro BoardNew gas supply pipeline will end the final phase of constructionINTERVIEW

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ELECTRONIC COMMUNICATIONS Broadband Internet access increasing but Croatia is still behind the EU averageCOMMUNICATIONS MARKET

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Constructions for productionGrapes and olives are ready for harvesting but the wineries and oil refineries are suffering problemsAGRICULTURE

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CROATIAN EXPORTERS

LEADING CROATIAN EXPORTING COMPANIES

Croatian exporters require HBOR to provide financing for international customers with an interest rate below 3.5%

20102010

Igor Vukić

Croatian exports increased by 14% this September, with the processing indus-

try showing the largest increase at 15.7%. Despite exports show-ing a surplus of €0.75 billion, it has only reached the level that the Croatian economy stood at in 2006, pointed out Darinko Bago, President of Croatian Exporters, at a conference on export policy. The pharmaceutical industry, to-gether with furniture, leather and machinery production should, according to Bago, become lead-ing Croatian exporters. The wood and timber industry, shipbuilding

as well as the chemical industry also show promising results, pro-viding that the required reorgani-sation is implemented.If exports are to show a further increase, Croatian Exporters re-quire that the Croatian Bank for Reconstruction and Develop-ment (HBOR) provides €68.5 million per annum over the next decade.

No financial help for loss-making companiesIn addition, HBOR is also ex-pected to introduce loans for international customers with an interest rate below 3.5 % for a period of 10 years or longer.

Croatian Exporters believe sup-port should be provided for high-tech products rather than to loss-making companies. The Croatian Competition Agency needs to investigate the problem of imported goods whose manu-facture has been supported with a too high level of subsidies in the country of origin. In addition, the implementation of the strategy on the Croatian Export Offensive should be resumed with the help of a task force whose members coming from relevant depart-ments, would discuss export is-sues on a monthly basis and sub-mit their report to the Croatian Parliament. Croatian Exporters

supports not only export ac-tivities but also CEA (Croatian Employers’ Association) and CCE suggestions on improving the current general economy in Croatia, concludes Bago.Đuro Popijač, Minister of Economy, Labour and Entre-preneurship, points out that the Directorate for Economic Diplo-macy, Exports and Investment has been established within the relevant ministry in order to de-velop the corresponding diplo-matic network. Popijač expects the amount of export support to increase as this was applied to more than 1,000 companies dur-ing 2009.

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Privredni vjesnikYear III No 0129

NEVEN BADURINA, DIRECTOR, OSTREA FISH PROCESSING COMPANY

VIEWPOINTVIEWPOINT

Regulatory change a necessityIf additional subsidies are released from EU funds, regulations introduce a problem as one company can-not reapply for additional funds

ELECTRONIC COMMUNICATIONS MARKET

Mid-level devupper limitOstrea was founded 12

years ago in an improvised factory and employed

only 50 people at the time. The modern facilities, constructed through funding by the Croatian Bank for Reconstruction and De-velopment (HBOR) and a €10 million non-refundable loan from the SAPARD programme, today employs 260 employees and pro-duction has increased from 500 to 4,500 tonnes. It is the larg-est and most sophisticated fish processing company in Europe. Its final products are of high quality, supported by the fact that they are exported to 30 countries and together with its Italian part-ner Ostrea has more than 50% of the Italian anchovy market.

The construction of the new fa-cilities has been accompanied with sale of Ostrea products on the local market in many chain stores. Further development of manufacturing capacity should make Ostrea the leading Croatian factory in the fish processing in-dustry. In order to achieve this goal, additional EU funds would be more than welcome. However, the existing regulations impose a problem and need to be changed as soon as possible since the cur-

rent model does not allow for the application for more significant funds. This in particular, reflect-ed on Ostrea business activities.An additional €6 million should be invested in production. How-ever, current regulations exclude funds being invested in existing export quotas, but in a completely new programme. The Veterinary Administration Office within the Ministry of Agriculture, Fisheries and Rural Development, issues the required control number. If a company wants to be listed as an exporter, certain food regulations must be met. The proposal and guarantee of the Croatian author-ised office are then registered in the importing country, and only then can the actual export take place. Hence, if a company is to reapply for funding, it should be registered as another firm. The number granted to Ostrea has al-ready been “used” since it has al-ready received SAPARD funding and therefore cannot apply for IPARD programme funding.

Boris Odorčić

Due to the liberalisation of the Croatian electronic communications mar-

ket, operators have for several years been trying to find the right way to reach final customers. Although some have been quite successful, others are still trying to claim their share of the market through various special offers, market research and advertising.Experts believe that Croatia, with its sound heritage, has estab-lished the solid technical founda-tions for further development. In addition, Croatia has never been isolated in terms of the applica-tion of new ICT solutions. How-ever the liberalisation of the tel-ecoms market is not as dynamic as first expected.When considering individual seg-ments of this fast-growing sector, the Croatian Post and Electronic Communication Agency (HA-KOM) management believes that the Croatian electronic com-munications market is character-ised by extensive development in broadband Internet access. In addition, public land-line serv-ices have seen a decrease, which is a global trend. The mobile op-erator market is saturated whilst demand for data services as well as broadband Internet access via mobile networks shows an in-crease. The Croatian electronic telecommunications market has, according to HAKOM, reached the upper limit of mid-level de-veloped countries.

Switched roles of land-line and mobile servicesThe basic presumption for fur-ther growth and the approach to developed markets includes in-

vestment into high speed network access, based on the application of optical fibre (FttX) which are to provide advanced electronic communications services.Despite the increased use of broadband Internet access, the number of individual connec-tions in Croatia is still behind the EU average. Hence, further de-velopment of broadband Internet access is just one of the require-ments for the development of a knowledge-based economy and the reduction of the digital divide within Croatia and in relation to

Ostrea is the largest and most sophisticated fish-processing company in

Europe

Despite the increased use of brotions in Croatia is still behind th

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eloped countries to reach

EU members. On the other hand, the Croatian electronic telecom-munications market cannot an-ticipate any further increase in in-come and a larger number of final users unless existing services ex-pand. Hence, HAKOM believes mobile phone operators should offer more advanced services in order to increase their income level. One of the trends Croatia is currently facing is a switch in the roles of mobile and land-line services. “Although this trend will probably continue, it is not expected that it will significantly

decrease the share of land-line connections in Croatia, especial-ly when considering that a land-line is a necessity for access to broadband Internet. In addition, the convergence of services in land-line and mobile phone net-works provides final users with joint services, although mostly

for B2B users. EU membership will probably reduce internation-al roaming prices for the users of Croatian mobile phone operators when abroad, as the regulation of these services at the EU level will also impact upon Croatia,”, points out HAKOM.

Development of framework for further investmentHT, the leading Croatian provider of telecommunication services, also expects the broadband Inter-net access is to increase. “More than 50% of Western European households had access to broad-band Internet several years ago, but only around 30% of Croatian households can boast the same. The main precondition for its development is the construction of an optical network infrastruc-ture which requires a regulatory framework, as this would attract further investment in the sector”, according to HT.When considering telecommu-nications services, the concept of classic services slowly disap-pears. Both final users and opera-tors require access to all content at any time or place, via laptops or mobile phones. “Mobile phone Internet access is expected to grow and it is only a question of time when all users will be able to access Google or Internet via mobile phones”, says HT, which also believes that the Croatian telecommunications market as a whole is as developed as its European counterparts. In these terms, it is of utmost importance to ensure the framework for fur-ther investment which will avoid a gap between Croatia and the more highly developed European countries.Tomislav Makar, the Director of Access Network Development in

Vipnet, believes the Croatian tele-com market is currently undergo-ing a difficult period, influenced not only by the current global fi-nancial crisis but also by the 6% tax imposed by the government on mobile services profits. “In order to stabilise the industry and present Croatia as a safe destina-tion for foreign investment, we expect this tax to be rescinded as it is contradictory to EU principles by burdening only one part of the market”, comments Makar.

Applications to change perceptionMobile networks, according to Makar, are becoming more ori-ented towards data transmission. Hence, new trends will require more significant investment into new generation networks, which will be able to transfer larger quan-tities of data. “Almost 50% of mobile telecom traffic worldwide relates to data transmission and is expected to reach 90%, mostly due to the use of laptops, smart phones and innovative tablet or pad de-vices. The investment dynamics of Vipnet is oriented towards such segments which are expected to show the highest growth rate, such as wireless broadband. In addi-tion, land-lines are expected to be replaced entirely by mobile com-munication. However, the number of operators as well as the infra-structure in the European markets should be consolidated. Applica-tions will certainly find their place on the market and change user per-spectives of mobile phone servic-es”, believes Makar. Tele2 Croatia also believes that the Croatian mo-bile Internet market will continue to grow. It specifically relates to accessing social networks, such as Facebook, Twitter, My Space and YouTube via mobile phones.

oadband Internet access, the number of individual connec-e EU average

Operators need to provide more advanced

services to grow additional income

Croatia has never been isolated in terms of the application of new ICT solutions“ ”

Privredni vjesnikYear III No 01294

Jerko Jelić Balta, President, Plinacro Board

million to be invested by end 2014a further € 370(

New gas supply pipeline will end the final phase of construction

Boris Odorčić

Plinacro invested €210 mil-lion into further develop-ing the gas transmission

system since 2007. By the end of 2014, a further €370 million will be invested in the construction of a 2,775 kilometre long natural gas pipeline. Jerko Jelić Balta, President of Plinacro Board, emphasises that this will allow the transportation of 1.2 million m3 of gas per hour, or 5.5 bil-lion m3 per year, which will cater for the needs of all consumers in Croatia.

What is the situation on the gas market on the eve of winter?As usual, Plinacro will undertake all the required technological measures in order to ensure safe and reliable gas transportation, which means that the gas will be delivered to consumers by their supplier. Even in the extreme gas consumption period in the coldest winter days, the capacity and tech-nical availability of the Plinacro transportation system have proved to be the strongest links in ensuring

g a s

supplies. The same applies to its storage system.

What are the latest develop-ments in the construction of the Hungarian-Croatian GasI n t e r c o n n e c t i o n ?Given that the construction of the Interconnection gas pipeline between Croatia and Hungary is the most important project in 2010, all work on the Croatian side have entered their final phase. The construction of the interconnection will be complete

by the end of the year and will be opened in early 2011. Af-ter 30 years of using the sole existing interconnection with Slovenia which was opened in 1978, Croatia will gain access to a second natural gas sup-

ply pipeline, which will

alleviate the capacity of existing imports via Slovenia and Austria. This will also allow the import of additional gas supplies from Baumgarten, Austria, which is the largest gas trading centre in Central and South-Eastern Eu-rope.

What can you tell us about the development of the large-scale projects such as the LNG Terminal, the South Stream pipeline project or the Ionian-Adriatic gas pipeline?In line with the implementation of the Energy Sector Develop-ment Strategy in Croatia and with a view to diversifying supply di-rections and natural gas sources, Plinacro will continue to develop large-scale projects (LNG Ter-minal, the South Stream pipeline

project, the Ionian-Adriatic gas pipeline for connecting with gas supply systems in the area), so that the government can make a final decision in the best interests of Croatia.

What is Plinacro’s attitude to-wards potential new suppliers?As a national operator of the gas transportation system, Plinacro welcomes potential new natu-ral gas suppliers to the Croatian market, as it is in line with the principles of market liberalisa-tion and increases the efficiency of Plinacro’s transport capacity. On the other hand, we provide a public gas transport service in a non-discriminatory and transpar-ent way and treat all our benefici-aries equally in compliance with our legal obligations.

INTERVIEW

After more than 30 years and only one interconnection with Slovenia, Croatia will gain access to a second natural gas supply pipeline which will both alleviate the capacity of current imports via Slovenia and Austria and allow additional gas imports

Privredni vjesnikYear III No 0129

www.privredni.hrBusiness & Finance Weekly 5CROATIAN-INDIAN INVESTMENT SEMINAR

The The Indians looking for businessIndians looking for business partners partners

Indian companies Tata Group, Larsen & Toubro and ACG Worldwide employ more

than 300,000 people and their income reached the level of half of Croatian GDP. Their repre-sentatives visited Croatia re-cently with the aim of investing into the Croatian economy. They presented their ideas on invest-ment, joint-ventures, takeovers or production in Croatia for the European market at the Croatian-Indian investment seminar or-ganised by the Croatian Cham-ber of Economy, the Ministry of Economy, Labour and Entrepre-neurship and the Indian Embassy to Croatia. India is very attractive to investors and its big market potential is reflected in half a bil-lion middle-class consumers, In-dian Ambassador to Croatia Pre-

deep Singh said. “It is important to identify fields for economic co-operation and investment po-tential. Co-operation is possible in the fields of electrical equip-ment, oil and gas industry, petro-chemicals, textiles, leather prod-ucts, the pharmaceutical indus-try, tourism, ship construction, construction and food-processing industry”, added Singh.

Imports four times higher”Last year, Croatia mostly ex-ported electrical motors and gen-erators, turbojet engines, boards, counters, tables, cupboards, anti-biotics and electronic signalling equipment to India, and imported coffee, shoes, bed clothing, table clothing, toiletries and kitchen clothing, medicines and hetero-cyclic compounds from India”,

said Sunčanica Skupnjak Kapić, International Relations Direc-tor at the Croatian Chamber of Economy.“Total foreign trade between the two countries amounted to al-most US$157 million, of which Croatian exports stood at only US$32.4 million, whilst im-ports from India were almost four times higher”, Ms Skupn-jak Kapić said. Ms Gunveena Chadha, Director of the Confed-eration of Indian Industry, cites joint-ventures as a potential area of co-operation between Indian and Croatian companies, with investment desirable into infra-structure, energy production, the production of car parts and com-ponents, and the pharmaceutical and food-processing industries. (K.S.)

Future co-operation possible in electrical equipment, oil and gas industry, petrochemicals, textiles, pharmaceu-tical industry, tourism and ship construction

Meeting representatives of Swed-ish companies was beneficial as, from our experience, it is quite

difficult to enter the Swedish market, said Branimir Alujević, director of PC Engineer-ing in Dalekovod, at the Croatian-Swedish Business Forum organised by the Croatian Chamber of Commerce in co-operation with the Croatian-Swedish Chamber of Commerce, the Croatian Embassy in Swe-den, and the Swedish Embassy in Croatia.”Before establishing co-operation with the Swedish company, SAAB, three years ago, it was very difficult to discuss business oppor-tunities as the Swedes knew very little about Croatia, which is facing other problems. De-spite having successful companies and well-educated people, it is sometimes not easy to present the country abroad. In principle, I am happy with the latest developments, but it would be very useful if we could present our ideas to foreign business partners at a higher level”, said Alujević.

Swedes outnumber Croatians at the ForumAbout 50 Swedish companies and about twenty Croatian companies participated in the Forum, and HGK president Nadan Vidošević

stressed that there were good chances for some new investments and joint ventures, for example through an offset programme. “Croatian Adriatic ports could become an ex-cellent communication channel and corridor from the Mediterranean towards Europe, but also towards China and India in particular, and it could be a brigde between other coun-tries in the region and the rest of Europe”, said Vidošević. Sonia Albarello, Executive Director of Open Trade Gate Sweden, pre-sented the agency established in 2004 by the Swedish government as a one-stop informa-

tion centre assisting exporters from develop-ing countries. The Agency provides exporters with important information, organises work-shops in Sweden and abroad, aims to over-come trade barriers and provides technical assistance. The seminar How to Do Business in Croatia was organised for representatives of Swedish companies in order to gain insight into the legislative framework, investment opportunities in Croatia, foreign investment in the past, statutory exemptions for foreign investors and projects aimed at attracting in-ward investment. (J.F.)

Croatian-Swedish Business Forum

EXPORTING TO SWEDENInformation on how to enter Swedish market provided by the Swedish government

6 Privredni vjesnikYear III No 0129

CROATIAN FOREIGN CURRENCY MARKET

Source: HNB WEEK NOVEMBER 6, 2010

Currency Kuna exchange mid-rate

AUD 5,255976CAD 5,168678JPY 6,436613CHF 5,42887GBP 8,407756USD 5,199048EUR 7,344175

::: news

1.11. 2.11. 3.11. 4.11. 5.11

7.36

7.35

7.34

7.33

7.32

7.31

EUR 5.32

5.28

5.24

5.20

5.16

4.12

USD 5.43

5.40

5.37

5.34

5.31

5.28

CHF

1.11. 2.11. 3.11. 4.11. 5.11 1.11. 2.11. 3.11. 4.11. 5.11

Geofoto to provide services to JANAF and Agricultural Payment Agency Geofoto, one of the leading Eu-ropean companies in the area of geodetics and geo-information, has signed contracts with Jadran-ski naftovod (JANAF) and the Agricultural Payment Agency, for €1.78 million. The JANAF contract, which has a value of €0.41 million, regulates Geofoto services in the area of ortho-pho-tographic monitoring – the peri-odic restoration of digital ortho-photographic (DOF) maps for all JANAF routes. In addition, Geo-foto has signed a contract with the Agricultural Payment Agency for €1.37 million to provide serv-ices for the initial vectorisation of agricultural areas on DOF maps.

Unemployment and production both upThe total number employed with-in Croatian industry decreased by 0.4% this September in compari-son with August and showed a decrease of 6.3% over the same period in 2009. However labour productivity increased by 6.8% in the first three quarters of 2010 in comparison with the same pe-riod of the previous year. Statis-tics for specific areas of activity show that the greatest reduction in numbers employed for Sep-tember was in the mining indus-try

HOK and HZZ as employment partnersMato Topić, President of Croatian Chamber of Trades and Crafts, and Ankica Paun, the Senior Manager of the Croatian Employment Service, recently signed an agreement on business co-operation. The agreement reg-ulates mutual co-operation in the areas of economic development, unemployment reduction and en-couraging employment.

Despite the global finan-cial crisis, decreased consumption, reduced

interest rates for new deposits in local and foreign currencies and budgetary planning, Croatian in-dividuals still manage to save, as shown by the increasing number of private deposits in Croatian banks.September figures, published by the Croatian National Bank, show €18.7 billion has accu-mulated in private savings and fixed-term deposits, an increase of €0.89 billion or 5% in com-parison with the end of 2009. If current accounts are also consid-ered, private individual assets within banks amount to €20.77 billion.

Dominant populationAccording to figures published by the Croatian National Bank, private savings are still domi-nant in the total savings struc-ture as some 75% of all savings and fixed-term deposits in com-mercial banks relate to this par-ticular segment.Foreign currency savings re-main more popular as more than €16.03 billion or some 86% re-late to foreign currency deposits and €2.66 billion or 14% of all deposits are in local currency. The Euro, with an 81% share of savings and fixed-term deposits is the prime currency with de-posits in kuna standing at 12.3%.Most private funds in Croatian

banks relate to fixed-term de-posits, totalling some €16.05 billion or 77.3%. However, sav-ings and deposits stand at €2.64 billion or 12.7%. Funds on cur-

rent accounts exceeded €2.05 billion at the end of September, representing 10% of total private funds in Croatian banks which stood at €20.77 billion. (V.A.)

CROATIAN NATIONAL BANK

Money available on savings accountsSeptember figures show €18.7 billion has accumulated in savings and fixed-term deposits, an increase of €0.89 billion in comparison with the end of 2009

www.privredni.hrBusiness & Finance Weekly 7WE PRESENT

RECIRCLE, ZAGREBHOTEL PODRAVINA, RASINJA KOPRIVNICA

An active vacation paradiseHotel owners plan to capitalise on the comparative ad-vantages their hotel and the Koprivnica area have to offer in order to so that the town becomes a popular conference destination

2D, 3D and stop-motion animation all availableThe production market has also felt the recession but Recircle remains optimistic as all indicators point to a constant expansion of media

Koprivnica is not only fa-mous for its food and pharmaceutical industry,

but also for its growing tourism potential that is becoming more attractive on both local and in-ternational markets. The main tourist centre in the area is the Podravina Hotel, as its accom-modation capacity and menu of local Podravina dishes and drinks can cater for the needs of Croatian and foreign guests. “The Podravina Hotel has 60 rooms, and further investment in additional accommodation ca-pacity and conference rooms are planned due to increasing inter-est”, according to Boris Dvorski, hotel owner. Bearing in mind the importance of conference and in-centive tourism and the purchas-ing power of conference guests, the hotel owners plan to capital-ize on the comparative advantag-es their hotel and the Koprivnica area have to offer to ensure Ko-privnica becomes a popular con-ference destination. The Tourist Recreation Centre, situated in the vicinity of the hotel, is also owned by Mr Dvorski and offers a wide range of tourism opportu-nities. Rasinj is an active vaca-tion paradise, with its numerous vineyards, orchards, forests, and

particularly the lake and fish ponds. “Many Croatian and for-eign tourists enjoy the fishing, and those who prefer culture and religion can visit the castle that belonged to the Inkey family in the 19th century, and the Parish Church of St Cross”, Mr Dvorski mentioned.

Koprivnica regional gastronomyThroughout the year, Rasinja hosts many different events, in-cluding cycle and motocross paths for adrenalin-tourism fanat-ics, including cyclists and motor-cyclists from Croatia, Slovenia, Austria and Hungary. A special attraction of Rasinje is an estate with a farm and wild animals. The nearness of Kalnik and the Bilogora hills with hiking paths and wild species is more attrac-tive to the hikers and hunters, and the tributaries of the Drava River offer the opportunity for differ-ent types of river tourism. “Apart from the natural beauties of the Koprivnica region, the Hungar-ians also enjoy the river delica-cies. This is why we opened a Fisherman’s House. As a result the tourist recreation programme of the area is now complete”, Dvorski concluded. (S.P.)

Even though 3D film is technologically as old as 2D, many still see it as

something new. The main reason for that is that 3D is still quite rare; of all the films produced world-wide since the Lumière brothers only several hundred of them were made using 3D technology. 3D film production requires con-siderable investment into equip-ment. Thus the first Croatian 3D film was made only a few months ago, produced by Zagreb-based company Recircle, headed by Denis Valentić, creative director, Zvonimir Mikšić, film director, and Miljana Dragičević, produc-er. The film “Time Machine”, in which more than 160 characters retell the history of Dubrovnik, lasts 12 minutes. Recircle is a production company whose cli-ents include media houses and leading advertising agencies. Apart from advertising produc-tion, their activities include pro-duction and animation in 2D and 3D, as well as design. They have been awarded several interna-tional prizes, such as the Silver Bra Magdalene award.

Global villageAt the end of November, Re-circle will mark its 10th an-niversary, pointed out Miljana

Dragičević. In the early days of the company, their main area of expertise was in design and new media, but only two years later they expanded into the video and production fields. There have three permanent employees, but the full Recircle team consists of ten or more contractual employ-ees, depending on the project. In addition to regional co-oper-ation with colleagues from Slov-enia, Bosnia and Herzegovina, Serbia and Macedonia, Recircle has established good co-oper-ation with film professionals from America, Australia, Britain and Poland. Fortunately, as Ms Dragičević emphasised, high-speed Internet and the meeting of minimum technical condi-tions make film collaboration possible anywhere, regardless of distance. The production market has also felt the recession, but Recircle remains optimistic as all indicators point to a constant expansion of media. Due to new media enabling high resolution digital image transmission and the switchover from analogue to digital television which will undoubtedly result in the expan-sion of their product range, the Recircle team believes there is significant demand for film and video productions. (D.Ž.)

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CONSTRUCTIONS FOR PRODUCTION

Jozo Vrdoljak

Many years ago some entrepreneurs from the Croatian coastal region

leased farmland owned by Hr-vatske šume (Croatian Forests), in order to prepare permanent plantations of mainly olives and grapes. As EU regulations re-quire that top-quality vines are to be bottled on the vineyard of growth, some of them planned to construct farm houses on their plantations. However, this has caused a major problem.Some the entrepreneurs who signed contracts with the Minis-try of Agriculture, Fisheries and Rural Development, were per-mitted to construct farm houses whilst others were not, one of whom was Jurica Kapović.

Confusion Croatian style“I cannot understand why the Croatian government allows the construction of outhouses for some entrepreneurs and not for others. Personally, I planned the construction of an oil refinery on my olive farm to produce extra virgin olive oil, but was denied a

permit to construct it within the farm”, says Kapović. Mihovil Štimac, director and co-owner of Rizman, believes the main problem lies in the definition of a particular plot of land. “If a plot is leased for the purpose of growing permanent crops, such as olives and grapes, it cannot be defined as woodland but as a farm. On this basis, we require necessary changes to the Act on Farmland as well as the regula-tions on the construction of out-houses. It primarily relates to the construction of wineries, oil re-fineries and storehouses for farm machinery and the development of agro-tourism”, emphasises Štimac, adding that wineries worldwide are mainly situated within the specific vineyard. “We requested a permit to build on a site 1,300 meters from the coast and the protected coastal region. However, the Ministry of En-vironmental Protection, Physi-cal Planning and Construction refused to grant a permit since the plantation was considered to be situated in a woodland area”, adds Štimac whose company has already invested some €2.5 mil-

lion in the vineyard with plans to invest a further €1.5 million into the construction of outhouses and additional buildings.

Differing interpretationsDavor Meštrović, owner of Pol-jopromet from Opuzen, signed a contract which foresaw the construction of outhouses or a vinery on his plantation. How-ever, he was denied a permit. Ac-cording to Meštrović, the head of the district where his vineyard is situated, required a written

explanation from the Ministry of Environmental Protection, Physical Planning and Construc-tion, which has not yet arrived. Meštrović requested the explana-tion in person. However, he was told to visit the County Office for

Physical Planning and the rel-evant offices in Metković. “To date I have invested €1 million in my vineyard, which is currently bearing the first grapes which I will have to process elsewhere as I cannot construct appropriate outhouses”, points out Meštrović. He stressed that the ‘relevant of-fices’ never give exact answers but merely refer backwards and forwards to each other. Marija Mrgudić, a winemaker and her partner, American entrepreneur Robert Benmosch, have bought land and so far have invested €2 million into the land purchase and an additional €1 million into the vineyard whilst a fur-ther €1.5 million is planned to be invested in the winery. “The major problem is that Croatian regulations consider wineries as industrial buildings but no economic activities are allowed in the coastal region. A change in the relevant regulations is an absolute priority, since wineries and ironworks are not one and the same thing. However, both can only be constructed within industrial zones”, points out Mrgudić.

investment planned by Rizman in winery construction€ 1.5million(

Grapes and olives are ready for harvesting; wineries and oil refineries are not

Croatian regulations view wineries and oil refineries as industrial buildings so their construction in the coastal zone is not allowed

One authorised institution will often

send an entrepreneur to another institution which

is aggravating

Privredni vjesnikYear II No 0129

9 Privredni vjesnikYear III No 0129

Sanja Plješa

Conference tourism, as a very com-plex concept, comprises a variety of activities and reasons for a busi-

nessperson to visit a certain destination. Conferences, business meetings, various workshops, seminars and symposiums generate considerable income to the spe-cific town as well as the whole country. Unfortunately, a unique model which would show the expenditure of all busi-ness visitors in Croatia is still non-exist-ent as current figures show only data on business visitors staying in luxury hotels. Conference tourism is an integral part of other types of tourism as businesspersons usually use a range of services offered, such as visiting concerts or restaurants amongst others. Such tourism is one of the most profitable and most rapidly growing branches within the tourism industry, ac-counting for more than €30.14 million profit in Croatia on an annual basis. “Such visitors are prone to spend more than the “ordinary” ones, who visit Croatia on holiday. Businesspersons spend more money on additional services as their company has provided them with funds for accommodation. The level and style of such form of tourism is formed accord-ing to the general state of the economy in a specific country destination. Croatia is on the verge of setting trends in conference or-ganisation, as its proposals have been present on almost every international tourism market.

50% of all events held in ZagrebToday, Zagreb is as competitive as Vienna, Graz, Prague and even Bangkok, especially if the organisation of large conferences is re-quired”, says Zlatan Muftić, Head of the Za-

greb Convention Bureau at the Zagreb Tourist Board. Conference tourism does not comprise of the country solely as the convention centre, but a specific region or town. In addition, any destination should meet certain prerequisites for the preparation of the event, such as good transport and accommodation infrastructure as well as a sufficient number of hotels and con-ference facilities. Zagreb, Dubrovnik, Split and Opatija with Rijeka are considered as the main

conference destinations in Croatia, according to Muftić. Although the construction of the Za-greb conference venue has not been finished yet primarily due to the global financial crisis, the Croatian capital still welcomes 50% of all events. Figures for the first half of 2010 con-firm that 1,233 events of 2,587 were hosted by Zagreb. In 2009, some 2,648 events were held in Croatia, of which 1,216 were centred on Za-greb.

CONFERENCE TOURISM

EXPERIENCE AS IMPORTANT AS NEW IDEASCroatia setting trends in conference organisation, according to Zlatan Muftić

::: news

€630 million investment for HŽ-InfrastrukturaIn the first nine months of 2010, HŽ-Infrastruktura gener-ated a profit of €0.68 million, with government budget sup-port being reduced by €12.74 million.Liabilities also show a re-duction of €14.79 million, with payment terms reduced to 50 days. In addition, HŽ-

Infrastruktura management has identified the provider of a new €630 million loan to finance current and future investment.

Kandit Premijer plans to manufacture 75,000 tonnes of sugarKandit Premijer, the Osijek based sugar refinery, has man-aged to process 330,000 tonnes of sugar-beet as planned for

2010. It is expected that the sugar refinery will manufacture some 75,000 tonnes of sugar al-though management expects a slightly reduced amount.

Dubrovnik host to 12% more touristsDubrovnik registered a total of 563,751 tourists in the first ten months of 2010, an increase of 12% when compared with

the same period in 2009, with the number of overnight stays totalling 2.1 million or 14 % more than in the previous year. 93% of all visitors came from abroad.According to the Tourist Board statistics, 522,539 foreign visi-tors were registered in the first ten months of 2010, an increase of 14% when compared with the same period of 2009.

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