27 Croatian companies are also part of the historic Chinese international import fair.

As Marija Brnic/Poslovni Dnevnik writes on the 6th of November, 2018, China will continue to open its market for foreign products and cut import tariffs, this was the main message from China's President Xia Jinping at the opening of China's first international import-export fair entitled China International Import Expo (CIIE), an event which has already been rated historic and whose opening in Shanghai was attended by the leading people of fourteen countries, including Croatian Prime Minister Andrej Plenković.

More than 3,000 companies from 130 countries worldwide participate in this large gathering, and within the CIIE, the Croatian-Chinese Economic Forum will be held today, which will include 27 Croatian companies interested in entering into business cooperation with numerous Chinese partners.

Some of the companies have already established excellent market connections that include more than 1.4 billion people, such as Podravka, Badela 1862, and Pan Parket from Orahovica, which is the biggest advocate of turning Chinese customers towards the wood industry sector. Wood is also the main Croatian export product. In total, exports last year were worth a massive 126 million dollars. This year, exports to China are growing faster than they did in the previous record year, by as much as 44.5 percent.

PPS Galeković from Velika Gorica just outside of Zagreb is also representing the wood industry in Shanghai. Among the companies that want to enter the Chinese market are a significant number of smaller companies dealing with consulting, information projects and web design, such as Adricon Group, Mipesa, Provena, Gelt date, as well as a few industrialists - Meteor, a producer of detergents and chemical products from Đakovo in Slavonia, Kotka from Krapina, which specialises in the production of men's suits, and the well known Croatian special equipment producer, Lučko.

Partnership with Huawei?

Representatives of Luka (the port of) Ploče also attended the meeting, who, along with their counterparts from the port of Rijeka, which, during his speech on "Trade and Innovation", Plenković personally recommended to Asian companies operating in the European market. During the fair, the Croatian Prime Minister also had a working meeting with Huawei President for Europe, and Plenković stated that he expressed interest in intensifying cooperation and partnership with Croatia in the digital age.

In addition, the brand new Croatian Tourist Board (HTZ) office has been officially opened in Shanghai, with the aim of strengthening promotional activities on this market, from which Croatia continues to receive a growing number of visits. This year, Croatia will be visited by 250,000 Chinese tourists, which is a much higher figure than in previous years.

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Click here for the original article by Marija Brnic for Poslovni Dnevnik

Croatia is a paradoxical country in many senses, and that is a sentence that has been written many times over the years. Paradoxes can be seen across all spectrums of society, and when it comes to the Croatian economy, the paradoxes are enough to make one scratch ones head. 

You'll hear one (or more) of any of these things in relation to the Croatian economy: There are no jobs. There are jobs but the pay isn't enough. We can't find the staff. We're willing to give the staff good wages, food, accommodation and a decent amount of time off. We've got many jobs available but nobody wants to work. I can't find a job and I'll do anything... but not that (as Meatloaf might have said had he been searching for work in Croatia).

You get the point. Sadly it appears that this situation isn't one that is about to remedy itself anytime soon.

As Ljubica Gataric/VL/Poslovni Dnevnik writes on the 5th of November, 2018, migration can indeed go in both directions, but at the minute, Croatia's labour force is taking advantage of the EU's freedom of movement policy and heading abroad in search of better lives, better wages, more security and more opportunities, and only recently has the the import of workers from elsewhere to Croatia been discussed. But why would they come?

With the absence of young workers becoming an ever-increasing problem, domestic and foreign companies and institutions operating in the country are turning to the older population more and more to try to keep the Croatian economy afloat. The numbers are intractable and show that over the past ten years, Croatia has lost about 127,000 young people aged up to 29, corresponding to the population of an entire city, such as Rijeka.

Such a reduction in the number of young people has naturally seen the domestic labour market suffer, causing a dramatic shift in the age structure of employed workers. In ten years, which means long before Croatia joined the European Union, the number of employed persons in Croatia decreased by 122,419, measured by the number of insured persons registered in pension insurance, according to Vecernji list.

Most of this loss relates to the group of young workers aged up to 29 years, of whom there were 104,000 less employed at the end of 2017 than when compared to a decade ago, in 2007.

The remaining deficiency for the Croatian economy is in the next age group of workers aged between 30 and 34 years.

After the Croatian economy emerged from the recession, four years ago, the total number of insured persons increased by 95,000 to approximately 1.45 million. But, as Darko Orčić, an analyst at the Employment Service, recalls, the number of employees in the age group of 25 to 34 is still very much declining.

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Click here for the original article by Ljubica Gataric/VL on Poslovni Dnevnik

Croatian Telecom rides on the back of a good tourist season as their profitability continues to grow.

As Bernard Ivezic/Poslovni Dnevnik writes on the 1st of November, 2018, an excellent and highly successful summer is now behind Croatian Telecom. The communications company can now freely boast of its significant increase in profitability, as well as a change in the revenue structure which also aided the increases.

The widely used operator, which has the most liquid share of all on the Zagreb Stock Exchange, concluded that its net profits rose from 19.1 percent to 864 million kuna, or 18.6 percent to 872 million kuna in the first nine months of this year alone, when the the non-controlling share is also accounted for.

More importantly, Croatian Telecom's operating profits grew by 6.5 percent compared to the same period last year, to a massive 2.39 billion kuna. This also means that the operating margin has risen to 41.9 percent from last year's recorded 38.8 percent. The only indicator that continues to stagnate is the company's revenue. Croatian Telecom's total revenue for the first nine months of 2018 fell by 0.1 percent to 5 billion kuna and 897 million as a direct result of a good tourist season.

Although operators have been somewhat negatively affected by the abolition of mobile roaming this season, Croatian Telecom has seen its revenues slightly increase in the third quarter, from 2.15 billion kuna last year to 2.16 billion kuna this year. Profits gained before tax has also increased, from 388.4 million kuna last year to 516.3 million kuna this year.

When it comes to alterations within the revenue structure, the main news is that Croatian Telecom has started to rely more on mobile telecommunications again. In the first nine months of last year, fixed telecommunication within the company was stronger than mobile communications by nearly a quarter of a billion kuna. This year, mobile communications grew by 5.3 percent to 2.61 billion kuna, while fixed communication fell 4.7 percent to 2.57 billion kuna.

Croatian Telecom states they have invested up to 1.24 billion kuna in the modernisation of both fixed and mobile infrastructure.

Davor Tomašković, Croatian Telecoms's Chairman of the Board, praised the fact that they have now achieved their best results in the past five years.

"During the first nine months [of 2018], we've achieved excellent results, and according to the growth of all key financial indicators, it is one of the best quarters for Croatian Telecom in the last five years," concluded Tomašković.

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Click here for the original article by Bernard Ivezic for Poslovni Dnevnik

Despite Agrokor's many woes, things appear to be on the up owing to the extraordinary administration under government appointed commissioner, Fabris Peruško. Peruško has managed to dig the former biggest privately owned company in Croatia out of a very deep and very dark hole, and removed its threat to the domestic economy. Expectations are for Agrokor to finally return to normality next year.

As Marina Sunjerga/VL/Poslovni Dnevnik writes on the 2nd of November, 2018, the company's consolidated report shows that Ledo enjoyed 100 million kuna higher revenue than in it did during the same period last year.

Agrokor's biggest companies appear to have had a good nine months, as the consolidated results show significant increases in the profitability of Agrokor's Jamnica, Ledo and Zvijezda, and a jump in the profits of thecompany's  most prominent partners, including Atlantic Grupa, Kraš and the legendary Podravka. Of course, while this is obviously positive news, Agrokor's results should be taken with a dose of reserve as well as satisfaction, as they're still very much under the protection of insolvency proceedings, meaning that loans and debts aren't being paid for.

The great news however, is that Jamnica and Ledo, who both operate under the Agrokor Group's umbrella, earned a massive four billion kuna in revenue at the end of the main tourist season, which is typically the period in which the aforementioned companies make the best money.

Jamnica earned a but more than two billion kuna in revenue, which means that sales, at least in comparison to last year, fell pretty sharply.

The company explained that its revenue was affected by the abandonment of part of its less profitable assortment as a result of a strategic decision to optimise the company's sales portfolio. The consolidated report shows a net profit of nearly 250 million kuna, which is 16 million kuna higher than last year's recorded result, but based on a decline in value-based expense. Ledo on the other hand, enjoyed somewhat better results, and the company's revenues and net profits have also grown significantly.

The aforementioned consolidated report shows that Ledo enjoyed 100 million kuna more revenue than it did during the same period last year, and earned 379 million kuna, which is a massive 75 million more than last year.

A net profit jump of an entire 25 percent is unarguably very positive news for the company's future.

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Click here for the original article by Marina Sunjerga/VL on Poslovni Dnevnik

Money isn't something most people are usually that willing to openly discuss, but there are times when one needs to look at the situation and see what can be improved. Who better to do that than the tax administration?

As Poslovni Dnevnik writes on the 1st of November, 2018, while these figures don't reveal the amount of people in Croatia working ''on the black'', according to the tax administration's data reveal, more than half of the country's registered employees, all 847,750 of them, are grouped into categories with monthly net wages of 2,500 to 5,500 kuna.

According to the information provided, the average monthly net wage per person in employment in legal entities in the Republic of Croatia for August 2018 was 6,264 kuna, which is nominally 0.9 percent more than it was in comparison with just one month previously, in July 2018, the Central Bureau of Statistics reported.

The question of just how many people actually do receive this so-called average salary is a pressing one, and the data from the country's tax administration for the past year has now revealed the answer. They published a table of employee structures in 32 categories of net income for the year 2017.

A net salary of between 6,001 to 6,500 kuna seems to be being received by a total of 86,985 people in Croatia, out of a total of 1,592,215 registered employees across the country, according to a report from Novi list.

The tax administration reports that as many as 1,166,731 employees are receiving a salary lower than the average, and as a result of that, more than half of the country's employees, 847,750 of them, are grouped into categories with monthly net wages of 2,500 to 5,500 kuna.

It appears from the provided data that less than 300,000 employees in the entire country have ''take home'' net salaries in the amount of 9,001 to 14,000 kuna per month.

As far as very high salaries are concerned, 269 employees take home more than 100,000 kuna per month, 921 salaries are between 50,001 to 100,000 kuna, and just 789 are from 40,001 to 50,000 kuna per month.

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Doing business in Croatia is always a hot topic, especially when it comes to listing the long list of negative experiences people have endured and hoops they have had to jump through in order to get a basic task done. While this isn't always the case, it's certainly the rule more than it is the exception, but just when will Croatia learn that the ease of doing business is far more likely to attract potential investors than natural beauty is?

As Ana Blaskovic/Poslovni Dnevnik writes on the 1st of November, 2018, not much has come from the grandiose announcements made by Andrej Plenković earlier this year that 2018 will be the year of reforms for Croatia. 

Many people will simply make such a statement for the sake of making it, to keep up the tradition of disliking politicians and the political system, or simply as a protest against the current prime minister, but despite all of the above, this isn't a malignant interpretation, but a concerning one stated on the Doing Business World Bank scale. Croatia held 51st place last year when it came to the ease of doing business, but in 2018, Croatia returned to 58th place among 190 countries across the world.

The year of reforms indeed.

Discussions about methodology and criteria when it comes to doing business in Croatia can of course be debated and argued over, but they are the same for everyone and whatever conclusion one may arrive to, ultimately, nothing can change the fact that the number on the aforementioned scale is an unfavouravle one, and such scales are a very important tool when it comes to investors deciding whether or not to bring their capital, their skills and know-how, and open jobs here in Croatia, or simply to go somewhere else. The average start-up time for doing business in Croatia is a rather uninspiring 22.5 days, in neighbouring Serbia it is typically 5.5 days, and in Slovenia, it usually takes 8 days.

These figures perfectly illustrate the two areas that remain ''cancerous'' to the system and hinder any progress - the judiciary and of course, the public administration. Although a company's name can be electronically registered at a commercial court, that same court needs an average of two entire weeks just to issue a piece of paper confirming it, and without them and their pieces of paper, it's impossible to open a company bank account or design and make a company stamp.

The worst of the worst in this situation appears to relate to construction licenses (159th place in the world) where instead of simplification, four new procedures have conveniently been added, so that the process lasts for an utterly ridiculpus 146 days. In a rather embarrassing comparison, Serbia is at 11th place with a 40-day shorter process.

There is a proverbial sea, no, ocean, of such examples and the naked truth is simple yet brutal: Croatia is definitely going in the right direction and is making a lot of progress, but other countries are simply doing much more.

It's now high time that the Croatian Government realised that Croatia is not above any other country, and that investments don't come knocking at the door because of natural beauty, warm weather and a nice beach or two, but owing to the ease of doing business, which should be any normal country's top priority.

With investors frequently having nothing but complaints, red tape taking an insane amount of time to get through and money simply being lost in the ''Bermuda Triangle'' that is Croatia, all while trying to make a stamp as if we've taken a trip back to the 20th century, the question is - when will the penny finally drop?

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

As Darko Bicak/Poslovni Dnevnik writes on the 29th of October, 2018, in neighbouring Bosnia and Herzegovina, more than 40 percent of tobacco products end up being exported outside of the legal trade framework, and the main culprit for such a situation is poverty and disproportionately high yields on cigarettes and tobacco products. Could a potential move of production to Croatia provide a welcome economic boost for the country?

Even though British American Tobacco (BAT) have denied media speculation that they already started with the move of the production of their cigarettes from Bosnia and Herzegovina to their plants in both Croatia and in Serbia, they haven't gone as far as to totally exclude such a possibility in the forthcoming period.

Namely, the media in Bosnia and Herzegovina have announced that BAT's management board has decided that Aurora, Code and Diva cigarettes will be moved away from production in Sarajevo to neighbouring countries.

BAT, on the other hand, told Poslovni Dnevnik that producion at the Sarajevo Tobacco Factory (FDS) hasn't stopped.

"As BAT has bought FDS's brands, it is following the policy of producing and selling according to the smokers' preferences and in accordance with market conditions,'' they stated from the company.

Unfortunately, due to the large disturbances on Bosnia and Herzegovina's market caused by an increase in excise duties and the concerning collapse of the legal market by more than 35 percent in just three years alone, the sale and distribution of FDS former brands are not compromised, but all of BAT's other brands and other competitors on the market have been, and they therefore continue to face numerous unwanted challenges in this regard.

''On the illegal market itself, more than 80 illegally produced brands have appeared. Because of all of this, the future of production, the former brands of FDS, and of all the other legally produced brands on the Bosnian market is questionable,'' BAT explained.

They added that the black tobacco market is a major problem for this whole region, especially Bosnia and Herzegovina, where it exceeds a worrying 40 percent of the total market value. The main reason for this is the high tax burden because Bosnia and Herzegovina has the highest cigarette retail selling taxes in Europe, with the total costs representing 91 percent of the price of the cigarettes themselves.

Because of this, people in Bosnia and Herzegovina pay by far the most for cigarettes compared to the general standard of living in the rest of Europe, naturally leading them into a very tight corner, and then onto the illegal market, meaning that the economic repercussions of Bosnia's black market problems are dire, to say the very least.

BAT has estimated that Bosnia and Herzegovina's budget loses more than 230 million KM (about 115 million euro) per capita each year due the strong presence of the country's illicit tobacco market.

While Serbia, a non-EU country has been mentioned, could the safety of a European Union member state like Croatia be of some comfort to BAT and provide jobs and a possible economic boost to the domestic market if production was to be moved here?

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Click here for the original article by Darko Bicak for Poslovni Dnevnik

Croatian products are known for their high quality, and the jump from market stand to the leaders of the market is a praiseworthy one.

As Vedran Balen/VL/Poslovni Dnevnik writes on the 28th of October, 2018, as many as seven thousand pallets with more than six million lamps and candles are produced each year by this Croatian company. 

The products find themselves on both the domestic and foreign markets and originate from from the small settlement of Zadubravlje near Slavonski Brod, and the company in question, Primax, has been the leading manufacturer of these products in Croatia for a great many years.

On the eve of the All Saints' Day, the company has their hands very much full, as one can easily imagine. The company's co-owner and director Robert Pandža stated that although he doesn't know for sure whether or not his company is the first in Croatia, he knows it works extremely hard. He added that every European region has its own idea of ​​how such candles and lamps should look, and they therefore try to satisfy and adapt to the often varying needs of a large market.

The Slavonski Brod native started work in this field way back in 1994, when just he and his wife ran the business. They started out with very humble beginnings, more specifically with a small stall on the market, eventually establishing a different development phase and managing to successfully adapt these Croatian products to the often ever-changing and demanding market conditions.

They started to import cosmetics and supply perfumeries and similar types of stores, of which there were a great many in Croatia at that time. They started to work on plastic sheeting, and then continued to expand yet further upon seeing that such a move had been very well received and was doing well. After numerous business ventures, they eventually decided to focus exclusively on production.

Today, Primax does exceptionally well and has some fifty employees who work in three shifts, their own production and storage area covers a handsome ​​2,000 square metres. During the course of a quarter of a century of their existence, the company has even changed its location on seven different occasions, mainly when they were more engaged in commercial activities as opposed to production. Years of work and valuable experience made them realise that they needed some serious production capacity, and a very serious approach to such a business. Thus, five years ago, they invested 14 million kuna of their own funds in the construction and the proper equipping of a new production hall in the village of Zadubravlje. After that, the production was all set up and ready for business, quite literally.

"It's not easy to produce six million pieces. To increase production again, we'll need to invest a lot again because candles require a large storage space. In this business, the biggest percentage of sales takes place within a month or two before All Saints Day, but production is already going on in February. The rotation cycle is similar to that of agriculture,'' explained Pandža.

As they purchased land one year earlier, their application for a subsidy was denied on the grounds that they had already started investing. Namely, only those who hadn't actually invested at the time could be nominated for the tender, so they remained without support. The only incentives they received were 300,000 kuna from European funds for the introduction of new software, 250,000 kuna from the Ministry of Entrepreneurship and Crafts for the improvement of production, and 100,000 kuna from Brod-Poavina County for the purchase of new machines.

"In Croatia, the main problem is the relationship with entrepreneurship. If we managed to get forty percent of that multi-million investment, we'd have yet another new line and a better position on the market today, and the workers would be more satisfied and they'd also be better paid. Otherwise, the general trend is a positive one and the situation is much better today than it was a few years ago.We're just not satisfied with the outcome,'' Pandža stated.

In addition to candles and lamps, they also produce PE foil from recycled or original material and packaging, and their annual turnover stands at around thirty million kuna. Their EBITDA ranges from 1.3 to 1.5 million kuna, while pure profit is about 300,000 kuna. About 35 percent of the company's production is exported to the European market, including France, Ireland, Germany, Austria, Belgium, Denmark, and Finland, with a tendency for further growth.

Ultimately, exports should grow to more than fifty percent.

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Click here for the original article by Vedran Balen/VL on Poslovni Dnevnik

HEP's Distribution System Operator (ODS) plans for investing in Croatia include more than 60 million kuna by 2021 in Hvar alone.

As Darko Bicak/Poslovni Dnevnik writes on the 27th of October, 2018, in the period between 2018 to 2021, HEP Group will be investing in Croatia almost six billion kuna in the power grid throughout Croatia, as was recently announced in Stari Grad, Hvar.

HEP has pointed out that by investing in Croatia such a large sum, of which approximately four billion kuna will be poured into distribution and more than 1.8 billion kuna into the transmission network, HEP will create the proper preconditions for the further development of the Croatian economy, the country's tourism, and the security of the supply of both existing and future consumers throughout Croatia.

In the coastal areas and islands alone, HEP intends to invest about 1.2 billion kuna by 2021, this cash injection will directly contribute to the security of existing and future customers, have a significant impact on the development of tourism and the economy, and will also aid in the intended creation of a better quality of life and to the population survival of the country's many islands.

Of this huge amount, almost one billion kuna will be spent on the country's power grid, on renewable energy sources, and on more fueling stations for electric vehicles on the Adriatic.

HEP has emphasised that Croatian companies are very much involved in the implementation of the aforementioned large investments, and that these investments have been confirmed to be one of the most important drivers of the Croatian economy. The HEP-Operator Distribution System (HEP ODS) is planning to invest as much as 800 million kuna in the distribution network in the country's coastal areas in the period between 2019 and 2021, while over the coming decade, the plan is to invest a massive total of two billion kuna.

Investing in Croatia - and its islands

During the same period, HEP ODS plans to lay down 33 kilometres of submarine cables at a cost of about 43 million kuna, while for the period between 2022-2028, they plan to lay down 124 kilometres of submarine cables, totaling about 161 million kuna, or about 200 million kuna in the next 10 years.

An additional 339 million kuna will be invested by the Croatian Transmission System Operator (HOPS) by 2021, in exchange for high voltage submarine cables. In the Dalmatian network alone in 2018, HEP invested a massive 238 million kuna, and a total of about 500 million kuna was invested in the system of the entire coast.

HEP ODS plans to invest more than 60 million kuna into Hvar alone by 2021. These investments will include the reconstruction of TS Stari Grad, and then the reconstruction of the network on the southeastern part of the island with 15 TSs. The most significant investment of 40 million kuna will go to the construction of TS Hvar. In addition, the laying of the Podgorica submarine cable will also take place, at a value of 12 million kuna.

 Click here for the original article by Darko Bicak for Poslovni Dnevnik

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Is Eastern Croatia in for an economic boost thanks to a massive investment from a big company located just over the border in Bosnia and Herzegovina?