April the 18th, 2023 - The Zagreb Loonapark company is young, and it is already looking at a very promising future after having doubled its income and with plans for further employment opportunities.

As Poslovni Dnevnik/Josipa Ban writes, there really is nothing missing in the already extremely thick catalog of promotional materials of the Zagreb Loonapark company. From indispensable cups of all types, colours and designs, the most sought-after bottles and thermoses, to lamps, pendants, bags, ecological ballpoint pens, this young company does it all.

In short, there's no promotional material that the Zagreb Loonapark company's team can't design and deliver to their clients. The richness of their offer and the individual approach they take has ensured their great success, because in just two years of being operational, they've managed to profile themselves as one of the leading companies for the production of promotional material in all of the Republic of Croatia.

The management of the company, founders Robert Bozic and Domagoj Vrdoljak, therefore have every reason to be satisfied. In the second year of their operations, the company's revenues doubled to a very impressive 6.6 million kuna, or 876,000 euros. Their number of employees also grew from the initial three to nine.

They offer more than 40,000 items from within their range and they also have a respectable number of clients, among whom are some of the biggest names of the domestic economy, from Atlantic Grupa, Infobip, Microblink and Allianz osiguranje to Infinum. Despite their obvious success, their beginnings were not at all easy because they started Loonapark's business in the middle of the unprecedented coronavirus crisis.

"Clients recognised us, and almost everyone we worked with would recommend us to someone else, so it wasn't really a question of whether we would grow, but by much we'd grow," stated Robert Bozic, the co-founder and CEO of Promo spot, under which the Zagreb Loonapark company's brand operates. Their clients come from various sectors, from trade, tourism, the HoReCa sector to the IT and the processing industry, and they're of all sizes - small, medium and large enterprises.

"The list of companies we work with is large and varied, which is good because we aren't dependent on any one in this way. For example, our five largest clients account for 25 percent of Loonapark's revenue," Bozic explained. A significant investment, in the amount of 40 thousand euros, in their web shop, i.e. online sales, also contributed to the growth of their business. Their web sales have been refreshed, optimised and their search engine has been improved, Bozic pointed out, adding that it's their main sales tool.

"It's precisely through the web shop that we get contacted by companies that we've never heard of and that we think are micro or small, but later it turns out that they are successful and respectable IT companies that just aren't very publicly known. Therefore, high-quality business cooperation often results from the contacts we make through the web shop," said the executive director of the Zagreb Loonapark company.

On top of all of the above, this company's wide array of clients, who are increasingly looking for recycled and degradable materials and custom-made products that are special and different, are won over and retained by their approach.

"In this segment, we've made the biggest step forward because we care that we approach each client individually and that they get everything they need in one place. In addition, through our graphic preparation and design department, we can offer them new and different solutions depending on the campaign they're working on and the message they want to send out," emphasised Bozic. In the end, it was precisely this approach that, in just two years of being operational, placed them among the leading companies involved in the production of promotional materials in the country.

The coronavirus crisis didn't really harm them either, and we all know that as a result of the public health crisis, most marketing budgets were drastically cut. In fact, in that first year of their business being up and running, they achieved an impressive 3.6 million kuna in revenue (478,000 euros). Their business wasn't affected by the increase in the prices of materials, for example paper by about 15 percent, by products purchased from China by about 40 percent (due to the increase in shipping costs), nor by the increase in delivery days by 30 to 45 days, to 120 days in total.

"We founded the company during the crisis, so we've become used to crises and as such we're optimistic", said the founder of the company, which mainly procures its materials from Europe, mostly from the Netherlands, Poland, Hungary and Portugal, while they procure a smaller part of the assortment from China, but that's mainly what is needed for making products to order.

They also aren't worried about their business results this year due to announcements of a slowdown in economic growth and even a potential crisis. It's well known that in every crisis, the budgets for marketing are cut first, but Bozic isn't afraid of that and expects that the Zagreb Loonapark company will grow by 20 percent this year, as well as the next. They're also planning to employ one to two people in sales. The company will try to achieve more visibility on the market and make even more contacts with the industry at the Days of Communications, one of the biggest events in the field of marketing in all of Croatia, which will soon be held in Rovinj. Loonapark will be a partner of this event this year, and as Bozic pointed out, this represents a good opportunity for them to connect more strongly with industry experts across the board and create new business opportunities.

The long-term plan of this ambitious young Zagreb company is to develop even further and turn into an agency that will offer their clients a very comprehensive approach, i.e. brand development, and then communication campaigns.

"At the end of this year or at the beginning of 2024, we plan to launch new departments within Loonapark,'' announced the CEO of the company, which is currently in one of the most intense periods of the year. Now, Bozic explains, companies are preparing their campaigns for the upcoming summer, so there is a lot of work and inquiries to deal with. The second most intensive period is, as expected, the end of the year, that is, the last quarter.

Bozic emphasised that the success of the Zagreb Loonapark company was definitely contributed by the employees and their intense engagement. In order for the company to be as high quality as possible, it invests a lot in employee education, which they receive through training sessions and various sorts of workshops. According to Bozic, they have no problems with finding and retaining staff, unlike the vast majority of employers in Croatia.

For more, make sure to check out our dedicated business section.

April the 13th, 2023 - The impressive Croatian ReversingLabs software company is aiming for the very prestigious unicorn status with its brand new product. It seems they have a very good chance of success.

As Poslovni Dnevnik/Josipa Ban writes, during these times when we do just about everything via the Internet - we communicate, pay for things, shop, work, study, and even count our steps using the web - the security of our data and software has never been more important, and it's also never been less secure.

''There are countless channels for attack, from messages, emails, links and documents we open, to the basic pages we browse. The methods these hackers and attacks use are constantly developing and improving,'' Igor Lasic, senior vice president for technology of the Croatian ReversingLabs software company explained. ReversingLabs otherwise specialises precisely in cyber security, and Lasic continued by noting that artificial intelligence (AI) will be another component that will further complicate the fight between the good and bad online.

For example, as he he explained, in the software supply chain, the bad guys are constantly looking for weaknesses, and the good guys are constantly looking for ways to eliminate them. "It's a dead race, although users today are still in a slightly better situation than they were ten years ago," said Lasic.

It's specifically in this area - the software supply chain - that the Croatian ReversingLabs company, with offices in Zagreb and across the pond in Boston, deals with. ReversingLabs is currently seeking an opportunity to achieve the goal they are striving for the most - to become a unicorn, that is, a company worth a billion US dollars. They're currently in the phase, he said, of starting to conquer the market with a brand new product.

The company founded by Mario Vuksan and Tomislav Pericin started its operations in Zagreb fourteen years ago with a focus primarily placed on cyber security. This focus is based on previous work experience in the American company Bit9, which was later renamed to Carbon Black. They have focused on developing technology to detect and fight against malicious software (malware), and today they have the best static analysis of software in the entire world that doesn't require any sort of access to the source code.

A turning point in the development of the Croatian ReversingLabs company was the attack by the Russian secret services on the American software company SolarWinds when there was a breach in the networks of tens of thousands of American companies and government agencies. Then, by chance, ReversingLabs turned out to be the only technology option possible for detecting advanced software supply chain attacks.

"Most of the components of today's software, about 80% of them, come from open sources, that is, the Internet. The primary tactic of the attackers is to get to open sources and insert their components into parts of the software, which the users then completely unconsciously incorporate into their own software," explained Lasic.

As terrifying as that sounds, there are more and more such incidents taking place, and heavily infected software packages are discovered on a weekly basis, with several major incidents occurring annually.

The biggest and most sophisticated such attack so far was the aforementioned "SolarWinds" attack, and nowdays we're witnessing another big attack - the one through the 3CX application for making calls over the Internet.

''Our task is to control open source repositories on a daily basis, and even more often, with the aim of detecting infected software components and preventing such incidents from taking place,'' Lasic pointed out. The quality of their solution was also quickly recognised by investors, and the Croatian ReversingLabs company received a second round of investment in the amount of 56 million US dollars back in 2021, while in total they have received 81 million dollars of investment to date, which makes them one of the most potent domestic startups that could take the title of the third Croatian unicorn.

According to Lasic, the latest investment was led by the private equity fund Crosspoint Capital, which is interesting for several reasons. It is led by some of the giants of the technology industry in the modern day, and one of the partners in the fund is Greg Clark, a big name in the world of cyber security who managed Symantec, a well-known American software giant, for several years.

"They recognised the potential of the technology that ReversingLabs has developed and believe that we can become a unicorn. They're also specific in that they provide us with both tactical and strategic assistance," says ReversingLabs' senior vice president for technology. ReversingLabs will really need that help, because the company is in the phase when it has to market its new product, and on the insanely competitive American market, that is certainly not easy, even with the best possible product.

"Sales and marketing must now capitalise on the technical excellence that we've developed and ensure our recognition on that market," emphasised Lasic, who replaced Zagreb with Boston during his studies and "stayed" there for a full 30 years. The majority of that investment was invested in the development of a product intended to provide security in the software procurement chain and to strengthen the team in charge of sales and marketing.

They increased that department in their American office located in Cambridge near Boston by about five times, and the number of people in Zagreb, who are engaged in engineering work, research and product development, by about 40. Today they have a total of more than 250 employees, and more than 170 of those people are based here in Zagreb. A significant spring in their step in terms of the conquest of the US market will surely be the fact that the analytical company Forrester included them in their overview of the most complete solutions of SCA suppliers (software composition analysis) for the year 2023.

This is important, according to Lasic, because based on that list, numerous companies decide which and whose solution they will implement. Their goal is to conquer the American market, where they currently generate 90 percent of their revenue with their first product, and those figures have been growing significantly for the past two years now. Europe is important to them, but it is a smaller market, and the general level of awareness of cyber security, as well as the budgets dedicated to it, are much lower.

Despite the difficult economic situation we all continue to find ourselves in, the Croatian ReversingLabs company isn't too concerned about the turbulence and crisis unfolding in the technology sector, which is currently in full swing in the USA and around the world.

"This is the best time to start something. Hard times either bring out the best in you or destroy you. In this situation, you have to focus all your energy on finding the best and optimal ways to make money," said Lasic, who led the development of as many as six startups across the pond in America before coming to ReversingLabs. He has been at ReversingLabs for eight years now, and what keeps him going is the founder's ambition and new projects, of which there is no shortage.

"The company is constantly growing, so my function changes accordingly, which is a big challenge for me. That makes me happy and it's really fulfilling. The worst thing is when the company stagnates because it's difficult to maintain the work ethic in such situations,'' concluded Lasic.

For more, check out our dedicated business section.

April the 13th, 2023 - The Croatian Orbico Group is aiming high for this year with its logistics and distribution centre, after rounding off 2022 with a fantastic turnover and earnings.

As Poslovni Dnevnik/Jolanda Rak Sajn writes, the Croatian Orbico group ended last year with an extremely impressive turnover of 3.2 billion euros, with EBITDA (earnings before interest, taxes and depreciation) of around 72 million euros in total.

The achieved growth stood at about 15%, and it was similar right here in Croatia, where Orbico achieved a record 520 million euros in turnover. In an interview with Vecernji list, Branko Roglic, the owner of the group which is currently the largest European distributor of consumer goods, announced that the construction of their LDC (logistics and distribution centre) in Zdencina will begin at the end of this month.

"The total cost of the construction should be around 55 million euros, while the necessary equipment and automation systems that are planned imply an additional 15 million euros of investment. As far as moving in is concerned, we're tentatively talking about the period from the 2nd to the 4th quarter of 2024. With an additional 42,000 m2 in the first phase in Zdencina, the total storage capacity of Orbico in Croatia and Slovenia will rise to 114,000 m2. We do business with more than 100 suppliers, and more than 340,000 pallets of various goods pass through our centres based in Croatia annually."

Roglic also stated that the Croatian Orbico group is working on a permit for the construction of a marina in Omis in Central Dalmatia, but that project is still in the early stages and it is necessary to obtain a permit first.

"Investments outside of the Republic of Croatia alldepend on the end of the war in Ukraine. I hope that will occur soon and that peace will return to Ukraine and its citizens. We do business in 20 countries, but due to the war in Ukraine, we froze our work in the Russian Federation, shut down our operations in Belarus, while we're continuing to work in Ukraine with a slight drop in traffic," said Roglic, revealing the Croatian Orbico group's current five-year plans.

"We're counting on great development. By the year 2030, if everything goes well, we will have a turnover of 6.2 billion euros, which would mean that we will double it in the next seven years,'' Roglic concluded.

For more, check out our business section.

April the 11th, 2023 - Jadrolinija is set to purchase both new and used vessels for use in its fleet, an investment on which it is going to spend as much as 99 million euros.

As Poslovni Dnevnik/Marija Brnic writes, back at the beginning of this year, after several years of criticism from the wider public and indeed from some experts, the Croatian shipping/ferry company Jadrolinija finally resorted to purchasing completely new passenger ships for the renewal of its temporary fleet.

They will be built for the company a few years after it chooses a contractor, until the end of the year 2026, but a decision is still awaited on who that company will be from the seven interested parties who submitted their respective bids for the job at hand with an estimated value of 45 million euros.

In the meantime, rejuvenation continues for Jadrolinija with the quick solutions that have been mostly resorted to so far, by acquiring used ships. A tender has just been announced for the purchase of two such catamarans, for which Jadrolinija is ready to pay up to 14 million euros without the inclusion of VAT.

However, while until now vessels up to 18 years old were acceptable to Jadrolinija, the condition for these ships is that they must be no more than 5 years old. Catamarans should be up to 40 metres long and up to 12 metres wide, each with a capacity of at least 300 passengers, and intended, as stated in the tender, for international lines operating in the waters of the Adriatic Sea. Offers for these high-speed passenger ships will be being accepted until May the 3rd, 2023.

It's also worth noting that Jadrolinija has planned to invest a total of 99 million euros in their business plans for this year. The two catamarans that are now being sought from the used boat market should replace the existing old-timers from the shipowner's fleet, which currently numbers 53 boats with an average age of 28.7 years.

There are four ships currently on the list of ships that Jadrolinija intends to decommission during 2023. Among them is the ship Tijat, which is arguably the oldest in the entire fleet, 68 years old and slightly younger than the company itself, which celebrated its 75th anniversary last year. The plan is also to dispose of the ships Olea, Valuna and Dubrovnik (all of which are now over 40 years old).

Before it is sent to scrap, ''Dubrovnik'' is trying to sell itself off. Although the news was not encouraging at first, Jadrolinija says that one offer was received and accepted, and work is being done to conclude a sales contract. The initial price, by the way, stood at 2.9 million euros. In addition to the construction of three electrically powered passenger ships, the plan for Jadrolinija is also to announce a tender for the design and construction of another newbuild in 2023, namely a ro-ro passenger ship, the capacity of which would be 80 vehicles and 500 passengers.

The tender for that should follow in June, and the intention is to acquire two more used ro-ro passenger ships, one for the reception of 110 to 120 vehicles and between 600 and 700 passengers, and the other for 90 and 100 vehicles and 800 to 900 passengers. According to that plan as it currently stands, the latter would replace the Lastovo vessel, which is over half a century old at this point.

The start of the activities on the procurement of another ro-ro passenger ship, one for international navigation, with a capacity of 500 vehicles and 1,200 passengers, is scheduled for April. This ship should join Jadrolinija's existing fleet at the end of the year. Just how important the rejuvenation and modernisation of Jadrolinija's fleet really is, is best shown by the fact that three ships are over 60 years old. Along with Tijat, these are Postira and Premuda. Fast passenger ships over 30 years old (Olea, Silba, Novalja and Karolina) and ships that will soon no longer meet ecological standards (Dora, Sis, Sv. Juraj, Mate Balota and Lastovo) are all also now scheduled for replacement.

For more, check out our business section.

April the 11th, 2023 - The Croatian Chiriboo platform is the very first regional digital tool for the purchase of cars, and after three months of experimental work, it has finally been made available for public use.

As Poslovni Dnevnik writes, Chiriboo is now available for public use, and with a very impressive database. The Croatian Chiriboo platform has the prices, photos, technical data and equipment composition for more than 3000 models of vehicle currently available here on the Croatian market.

From Chiriboo, which was started by well-known names from the automotive, financial and developer scene - Juraj Sebalj, Darin Jankovic, Marko Stojakovic, Mladen Herceg, and Damir Skrtic - they state several advantages of this tool. They claim that it is unique in how it actually works, because searching for a model with the help of an intelligent "Search Engine" is simple, because a smart "Comparator" enables the comparison of different models, and also because it is possible to find a car according to your own very personal preferences. On top of all of that, everything is made that much easier because the Croatian Chiriboo platform already has a database of cars, which was mentioned above, ready and waiting for quick delivery to customers.

"At the moment, users can use the Chiriboo tool completely free of charge, and in the near future we will offer the service of finding the best offer according to specific user criteria," they say.

The Croatian Chiriboo platform is otherwise a virtual address of sorts that will connect its users with various car dealers, car dealerships, financial services, insurers, and the offer will constantly expand to all domains of mobility.

For more on Croatian companies, startups, entrepreneurs and innovations, make sure to check out our dedicated business section.

April the 6th, 2023 - The Croatian company Span has successfully entered the market of one of the most demanding and digitally developed markets in all of Europe - Estonia.

As Poslovni Dnevnik/Suzana Varosanec writes, with this new acquisition, the Croatian company Span is set to enter the market of Estonia, now known as one of the most digitally developed countries in all of Europe. In their notification to the Zagreb Stock Exchange, they state that they have signed an agreement with the seller, the Estonian trading company Fairway, to purchase 100% of the shares in the limited liability company GT Tarkvara, which is based in Tallinn, and which is a leading Estonian software asset licensing and management company with more than 25 years of experience under its belt.

The estimated value of the transaction stands at a massive 11,377,457 euros, where, as they stated, part of the purchase price that depends on the business results of the acquired company in 2023 and 2024 is subject to adjustment. The Croatian company Span's latest acquisition was made just one year after the takeover of the domestic software company Ekobit, so this current takeover only confirms the company's strategic focus on further growth and expansion into new markets, while the Baltic and Scandinavian countries are extremely digitally advanced and, as stated, show a growing need for additional expertise in the areas of Cloud and Cyber Security, a field in which Span is internationally recognised.

"With this acquisition, the Croatian company Span is going to enter the Estonian market, and Estonia is one of the most digitally developed countries in Europe. The expertise and market position of GT Tarkvara in combination with our advanced cloud and cyber security services are an excellent basis for further growth and business development on the markets of Northern Europe", stated the founder and president of the Span Management Board, Nikola Dujmovic.

GT Tarkvara is otherwise a reliable partner to the largest companies in the software industry, as stated, for example, such as Microsoft, Adobe, Veritas, Citrix, Symantec, VMWare and other big names. They have been recording impressive and continuous revenue growth over the years, they're focused on projects related to the digital transformation, as well as on cloud and cyber security. In addition to the private sector, they are also strongly positioned in the public and educational sectors.

"The Croatian company Span and GT Tarkvara are both leading Microsoft partners who will combine their many years of knowledge and experience with this acquisition. I'm happy that our existing clients will now have access to advanced cloud and cyber security services based on Span's many years of experience working with large, global companies,'' said Taivo Remmelgas, the owner and member of the Management Board of GT Tarkvara.

This acquisition also confirms the Croatian company Span's strategic focus on the growth of its services with high added value with a focus on the areas of cloud and cyber security. According to the unaudited GFI for the year 2022, Span has recorded growth in all key business indicators. The Span Group's revenues in 2022 amounted to 829.7 million kuna in total, which represents an increase of 8 percent compared to 2021.

EBITDA before one-off items also increased by 48 percent and amounted to 72 million kuna at the end of 2022. EBITDA after non-recurring items increased in the observed period by 65 percent and amounted to 70.1 million kuna. The Span Group's net profit at the end of 2022 stood at 50.7 million kuna, which represents an increase of 113 percent compared to 2021. The share of revenues that the Group achieved in foreign markets in 2022 amounted to 68 percent. The most significant growth was recorded by the markets of Croatia and the USA, and the highest growth in income within the Span Group was achieved by services with high added value.

For more, make sure to check out our dedicated business section.

March the 30th, 2023 - The construction of a brand new Podravka logistics and distribution centre has begun as part of an enormous 48 million euro investment from this well known company.

As Poslovni Dnevnik writes, works have now officially begun on the construction of the brand new Podravka logistics and distribution centre (LDC) located in the Danica business zone in Koprivnica. This is the largest investment as part of the Podravka Group's overall business strategy until the year 2025, and the total value of the project stands at 48 million euros. The planned works will cover 26,000 m2 of gross floor plan area.

"The new Podravka logistics and distribution centre is being built on an area the size of three football fields. This is the largest planned investment within the investment cycle of the Podravka Group, which began back in mid-2021. By realising this investment, we'll raise the level of customer service we can offer to an even higher level, and make the work of workers working in logistics and in the warehouse significantly easier. It's extremely important because we'll be able to significantly reduce the need for internal transport and thus contribute to the reduction of CO2 emissions. The storage locations in Koprivnica and the surrounding area will now be consolidated into one," said Martina Dalic, President of the Podravka Management Board.

At the beginning of the works on the construction of the new LDC, the implementation of the logistics process optimisation project, which was launched in the middle of 2021, after detailed analyses of the supply chain and established measures to improve the aforementioned processes, is continuing. The completion of the works is expected at the end of 2024.

"The construction project will include a fully automated high-bay warehouse, another warehouse, an administrative building and accompanying roads with all the necessary infrastructure. The total capacity of the new Podravka logistics and distribution centre will be almost 62 thousand pallet places in different temperature regimes, and in the near future, the plan is to connect that with the main export warehouse, which is only a few metres away,'' said Tomislav Djuranek, Podravka's project manager.

The chosen location of the Podravka logistics and distribution centre is located in the immediate vicinity of the company's factories and enables connection with the existing export warehouse. The realisation of this project will consolidate a large number of current warehouse spaces used for the storage of finished products, raw materials and packaging, which are located in eight different locations.

The up and coming Podravka logistics and distribution centre will meet the expected needs for storage space on the Croatian market in the next decade, and if there is a need, it can be expanded even more in the future. It's also worth noting that the installation of solar panels on the roofs is planned.

Despite the pressure placed on operating costs due to the exceptional rise in raw material prices and spiralling inflation, the Podravka Group's investment cycle is progressing according to plan. After the IT and energy reconstruction and the modernisation of Podravka's business headquarters come investments in improving working conditions in their factories and the implementation of new production lines in the Kalnik and Kokteli pastry factories, the commissioning of a power plant, and the start of the works on the expansion of the soup and Vegeta factories.

For more, make sure to check out our dedicated business section.

March the 23rd, 2023 - The Croatian company Gepek, which came to life back during the pandemic-dominated year of 2020, has launched a brand new application (app), with which it aims to attract more users throughout this year.

As Poslovni Dnevnik/Darko Bicak writes, the Croatian company Gepek, an innovative startup that currently boasts 5,000 users, has announced the launch of its new application aimed at revolutionising the package delivery industry.

With the rise of e-commerce, the demand for fast, environmentally friendly and efficient delivery solutions has never been higher. the Croatian company Gepek, as stated by its founders, aims to respond to the current challenges faced by current delivery companies and provide users with a superior delivery experience.

At the end of last year, the Croatian company Gepek received half a million euros of initial pre-seed investment. The leading investor is John Lilic, one of the investors who, among other things, worked as an advisor to the board of Polygon, the tenth largest blockchain in the entire world. Before that, the Swedish-Hong Kong company Auki Labs, a leader in AR technology, invested in Gepek, which will allow them to expand their activities far beyond national borders using AR technology.

According to Carla Ferreri, the co-founder and CEO of the Croatian company Gepek, their newly launched app offers an end-to-end delivery solution that enables real-time tracking, eco-friendly packaging options and cost-effective pricing. Gepek's innovative approach eliminates intermediaries and fragmentation in the delivery process, making it the ideal solution for all package delivery needs.

“We're thrilled to be able to launch our new app and bring our innovative package delivery solution to the market. Our goal is to provide a superior delivery experience to our users, with savings for those who are sending those packages, and we believe that the new Gepek app is the first step in realising that vision," said brother and sister Carla and Dario Ferreri, the CEOs and co-founders of Gepek.

Kristijan Skarica, another co-founder of Gepek, emphasised that they're now starting a new chapter within Gepek's business and providing a platform that helps connect people with the things they love, whether it's sending gifts to family and friends, supporting local OPGs (Croatian family farms) by transporting their goods to their tables, or simply making life a little easier for working families.

"Our app is available 24/7 unlike traditional delivery companies and is now available for download on the App Store and in the Google Play Store," concluded Skarica.

For more, check out our dedicated business section.

March the 21st, 2023 - The Croatian Nexe is set to embark on a massive 400 million euro project which will see them boast the very first on shore CO2 storage facilities in all of Europe.

As Poslovni Dnevnik/Suzana Varosanec writes, with the already agreed upon cooperation on a globally unique project called CO2NTESSA between the Croatian Nexe Group and their international partner Thyssenkrupp Group, the Nasice cement industry was the first to jump on the train to apply for a CO2 neutral cement production project to the Innovation Fund for financing large-scale projects.

With an estimated value of 400 million euros, this will be one of the largest planned industrial projects in all of Croatia, which also represents the first on-shore CO2 storage in all of Europe. Namely, the Croatian Nexe Group would become the first user of the future infrastructure for the transport and storage of carbon dioxide that the Republic of Croatia plans to implement as part of the wider Croatia GT CCS project. The warehouse where the contained CO2 will be disposed of and transported via pipelines is located nearby at the Bockovci-1 location.

There, CO2 will be placed into the reservoir, which will be a saline aquifer. In addition to that, as part of cross-border cooperation on the Croatia GT CCS project, this deposit in Slavonia will be used by the neighbouring Hungarian cement industry, a move which is expected to be realised as part of the operational activities for which Plinacro and the Hydrocarbons Agency are in charge. The project of the Croatian Nexe and the German group, which otherwise has more than 70,000 patents, envisages the construction of a new plant based on Oxyfuel technology of the second generation, which repesents the only long-term current solution for the complete removal of harmful CO2 emissions.

The contract was signed last week here in Zagreb by Ivan Ergovic, the president of the Croatian Nexe Group, the largest company within this group which is the leading regional producer of construction materials, and Frank Ruoss, a member of the Management Board of the Polysius business unit in the ThyssenKrupp Industrial Solutions group.

By the end of 2024, the plan is to close the financial structure. At the same time, in 2025, the preparation of project documentation and the obtaining of all permits are planned, while the first "shovel" to hit the ground is expected to do so in 2026, and the full functionality of the new factory is expected in the year 2029. According to the current plans, at the turn of the next decade, the Croatian Nexe Group will produce CO2 neutral cement and be price competitive, with the aim to fulfill all of the guidelines of green construction and the European Green Plan implied.

As for the closing of the financial structure, the Croatian Nexe Group is counting on the support of the banks in the remaining part of around 200 million euros.

"We have a letter of support from the Croatian Bank for Reconstruction and Development (HBOR), and a letter of support from the European Bank for Reconstruction and Development, as well as several commercial banks, such as Erste and Nova Hrvatska Banka," Ergovic revealed.

The Croatian Nexe Group wants to be a leader in the green transition, according to Ergovic, and that is why it has been focused on the implementation of projects with the aim of reducing our carbon footprint, increasing energy efficiency and increasing the share of use of alternative fuels and raw materials for many years now.

In order to ensure the long-term development and sustainability of business, and to be more prepared for new market circumstances, at the end of last year, they defined a new Group Development Strategy for the period 2022-2030.

In the strategic pillars, the energy and green transition stand out as the main goals. The energy transition implies a series of projects aimed at reducing the energy dependence of their factories by investing in energy production from renewable sources, while the green transition implies a reduction of CO2 emissions by more than 50% by the year 2030 by investing in new technological solutions and through operational excellence.

Their cement factory in Nasice accounts for a third of all current Croatian production, with more than a million tonnes of cement made by year, and with 50 percent of it being exported. Cement production is an energy-intensive industry and one million tonnes of cement requires more than 900 GWh, with temperatures needing to be higher than 1400 degrees Celsius. This produces more than 700,000 tonnes of CO2 annually. More than 60 percent of these emissions cannot be avoided by using renewable energy sources, so this project represents an excellent solution.

Ergovic also pointed out that this is the future of the entire cement industry because this innovative technology enables the complete removal of CO2 from the production process, which would mean the removal of more than 700,000 tonnes per year. This is the amount emitted annually by more than 500,000 fossil fuel vehicles, and is the equivalent of 3 percent of the total CO2 emissions created here in the Republic of Croatia.

As Ruoss pointed out, the decarbonisation of the whole industry is one of the most important tasks of our time, and for the cement industry in particular, this means producing products in a more sustainable and carbon-neutral way in the future.

"This represents a great challenge that requires the use of new technologies. Our technology enables the optimal capture of CO2 generated in the production process, which
significantly contributes to the green transition of the cement industry," concluded Ruoss.

For more, check out our dedicated business section.

March the 16th, 2023 - Borovo has been swimming in troubled waters for a long time now, but could an otherwise wholly unpopular measure actually end up being the best solution of all for this enfeebled company? Maybe.

As Poslovni Dnevnik/Marija Brnic writes, a couple of years ago, it seemed that everything regarding the survival of Borovo had finally fallen into place properly, a restructuring programme was fully drawn up, of which the consulting company KPMG was in charge. Since then, the extension of the CERP guarantees has only been approved in order to postpone the repayment of loans to the state banks for yet another year, thanks to which Borovo is still keeping afloat, and the new deadline for another such decision is coming up in just a month.

In CERP, which is the 100 percent owner of this much loved Vukovar-based footwear manufacturer, the case of its restructuring is considered one of the top priorities in 2023, after several problematic cases in the state portfolio were finally closed over the past two years. At the same time, the process within Borovo stands stagnantly right where it was two years ago - the restructuring proposal prepared by KPMG clearly didn't meet the expectations of the relevant ministries.

However, on the other hand - when it comes to Borovo, no deadline was actually set in which the case should finally be closed, either through a new model of operational and financial restructuring, an attempt at privatisation or the worst case scenario - bankruptcy.

Although bankruptcy is something to be avoided like the plague in Croatia, there are those working within the ministries of economy and finance who see this very solution as the best one. In their opinion, the projections from KPMG's proposal fail to offer what is needed, and instead only work to postpone the solution of the problem and prolong Borovo's limbo and uncertainty. This is because it starts from some basic recommendations for improving business, such as reducing overhead costs and the number of employees, changing the production profile and focusing on more profitable programmes, and finally finding a good strategic partner. According to the assessment of the relevant ministries, Borovo will continue to remain in a difficult state in which it will hardly manage to attract any serious investors seeking a safe project.

For this reason, as has since been learned, it was requested that KPMG define much more clearly what it would to to ensure and enable a long-term solution without bankruptcy threats and then to find a strategic partner, and that the programme be organised so that it can receive the approval of the European Commission (EC). That something is simply not right with the existing solution was also confirmed by the President of the Board of Borovo, Gordana Odor, who said the following:

"KPMG prepared a restructuring plan one year ago, but it hasn't yet been adopted by the relevant ministry and will have to be refined by KMPG. The main complaint of the ministry is the lack of a strategic partner that would be a guarantee for the survival of Borovo,'' said Gordana Odor, adding that when it comes to Borovo, the bigger picture must be looked at.

First, as she explained, it's actually very difficult to find a private investor who is ready to take over Borovo with all of its accompanying problematic buildings on an area spanning 13 hectares. This is full of unresolved property-legal disputes that are being conducted on the territories of both Bosnia and Herzegovina and Serbia.

According to the current restructuring plan, the state should recapitalise Borovo with 92 million kuna, which would close its existing liabilities to the banks. The share capital of Borovo is at the level of 316.7 million kuna. The assessment of the Management Board and KPMG was that this would enable better positions for the search for strategic partners and investments in the modernisation of Borovo's production, which normally also takes place on machines from 1940, and for which the company could finally rely on European Union funds. In Borovo, they're convinced that, once the company is relieved of all of its loan debts, it can meet all of its obligations and conduct its business properly.

According to the first data for 2022, revenues compared to the previous year have increased by 2% and are at the level of 10 million euros. However, business expenses grew much more. On average, total material costs increased by 23%, wage costs by 6.5%, and the largest increase of 100% refers to gas, while energy costs increased somewhat more slowly, due to government measures, by 20%.

All other input resources had growth trends of 10 to 20 percent, especially leather. An additional cost was a 12% increase in workers' wages, which is a significant increase for a labour-intensive activity, which also increased costs of about 5 million kuna. Overall, the increase in costs resulted in a loss of 9 million kuna for Borovo.

"Under these circumstances, we had to adjust our operations and we placed the emphasis on optimising procurement, production, storage and transportation costs, with the goal of maintaining existing liquidity," explained Gordana Odor. As for the number of employees, currently their number has fallen to the lowest level so far - 563.

"Borovo is aware that in times of crisis it has to make business adjustments for the conditions ahead, but we certainly need help and the involvement of the state, which we have been talking about for several years now,'' concluded Gordana Odor, noting that we're still talking about the largest employer in the entire Vukovar area which employs mostly women, and that they have spent most of their working lives working for Borovo and have no other qualifications.

The problems faced by Borovo will be on the agenda of the CERP Board of Directors as early as next month, in order to consider another extension of the guarantees for loans that the company has in the amount of 6.1 million euros each, for which the state's shares in Podravka, Koncar and HT are pledged as insurance.

However, before that, representatives of the Management Board, KPMG, CERP and the relevant ministries will need to sit down together in order to shed light on the current ambiguities surrounding the preparation of the final proposal on which the future of the company depends entirely. The reason that no expedient solution has been found for many years lies in the fact that Borovo is not only a commercial and economic issue, but is also burdened by the political context and inter-ethnic relations between Croats and Serbs, as well as conflicting relations between local and state authorities, which further complicates matters.

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