February 11, 2021 – The total untapped export potential of Croatian mechanical engineering machinery and equipment production is a staggering $399.8 million, according to an analysis by the Croatian Chamber of Commerce
The total untapped export potential of Croatian mechanical engineering machinery and equipment is 399.8 million US dollars, according to an analysis by the Croatian Chamber of Commerce (HGK) as part of the Fit4Globe project.
According to this analysis, the Croatian mechanical engineering groups with the greatest export potential are parts for gas turbines and turbojet engines, parts of machines and devices for lifting, moving and construction works, parts for air pumps, compressors and fans, agricultural machines for use in harvesting, valves for temperature control and parts for internal combustion devices.
The analysis dealt in detail with 12 Croatian mechanical engineering products. 10 were chosen specifically because they hold unused export potential and two were chosen for their importance to domestic Croatian mechanical engineering. The untapped export potential of these Croatian mechanical engineering products exists in 34 countries, in the total amount of 127.8 million US dollars. The realization of the full potential of these Croatian mechanical engineering exports would increase by more than one-third, or 37.2 percent.
634 companies operate in the Croatian mechanical engineering sector of machinery and equipment manufacture. As much as 94 percent of them are small and medium-sized enterprises. They employ a total of 11,400 workers, generate HRK 7.7 billion in revenue (4.4 percent of the gross value of the manufacturing industry), and their annual profit is HRK 337 million. With a total of $1.22 billion in exports, they make up 6.6 of Croatia's total foreign trade.
Currently, the leading export markets for Croatian machinery are Germany with a share of 21.5 percent, Slovenia with a share of 12.5 percent and Austria with a share of 8.5 percent.
In response to the findings, the President of the Croatian Chamber of Commerce, Luka Burilović, pointed out that by exploiting the full potential, the total export of Croatian mechanical engineering machines and devices would increase by almost a third (32.6 percent) from the current 1.22 billion US dollars, which is 6.6 percent of total exports.
"The markets most likely to increase exports are Germany, Italy, the United States and Hungary," said Burilovic, while the president of the Metalworking Industry Association Zeljko Mazuran said that the biggest challenge for the industry is the need for greater and faster investment in plant modernization. He attributed a lack of investment to an unfavourable monetary policy, an unrealistic exchange rate of the kuna against world currencies and the low level of technological processes, industry retardation being compounded by a lack of educated metalworking workers.
According to financial reports submitted for last year, the five largest exporters of Croatian mechanical engineering parts and machines generated approximately 40 percent of total revenues in the foreign market within their sector. The top 10 largest exporters accounted for almost 50 percent.
The world market in the production of machines and devices is dominated by the USA, which in 2019, along with China and Germany, was also the leading global exporter. These three countries are also the largest importers of machinery and equipment. In the European Union, along with Germany, the largest producer is Italy.
