With more and more Croatian brands earning international respect, the founder and owner of the Croatian brand Carwiz reveals his plans to set Croatia's newest rent-a-car company on the path of the global market through franchises already agreed with five European countries.

As Marija Crnjak/Poslovni Dnevnik writes on the 28th of January, 2019, the newest car rental service in Croatia, Carwiz, is also the first to start a franchise business outside of the Republic of Croatia, with ambitious plans for the coming three years to be present on at least twenty markets across different parts of Europe, as well as in Africa and Asia.

At a recent press conference, the first five markets the Croatian brand Carwiz will take to this year were revealed, and Poslovni Dnevnik got to hear all the details of this important move and the current situation on the domestic market, which were revealed by Krešimir Dobrilović, the founder of the completely Croatian brand Carwiz, who has been in this business almost twenty years.

Which are the first markets you plan to go to with the franchise, and how have you decided on such a step?

I've been in this business for a long time and with the Carwiz project, I've been trying to apply all of my acquired knowledge, experience, and my business relationships, but also introduce an innovative approach, and the emergence of the global market is in line with such thinking.

I have significant support from the team we've gathered together for Carwiz there, and in 2018 we began to develop a franchise business in cooperation with partners who are already doing car rentals, but have the ambition to make a step forward in their business as well as increase their traffic. At this time, we have five signed franchise agreements with partners from Bosnia and Herzegovina, Greece, Serbia, Latvia, and Cyprus.

How does your model differ from those already on the market and what do you offer to your partners?

All models in Croatia are imported franchises, and our concept has been fully developed in Croatia, in cooperation with our team and our partners such as Vip Data who have developed our software. With this front desk product, the company which will be ''under our cap'' will also have a website, a main one and a local one, as well as a brand with the entire brand book and everything that goes with it, from the standard look to employee uniforms.

However, it's crucial that, with the whole philosophy of our business, we get access to our foreign partners who will fill up the reservations.

That was the key step in the preparation of this project. It was crucial to find out how much foreign partners are willing to accompany the realisation. That's why we've carried out research and received extremely positive feedback from all the partners we're working with.

Why is cooperation with foreign partners so important, and why do they need you to get that approach?

This [foreign] cooperation is very important because there are a number of good rent-a-car companies that can't make a breakthrough to the largest number of bookings, which can only be achieved in cooperation with global online partners, which makes up about 80 percent of our business. It isn't the case that just anyone can go to Rentalcars [website] and just ask them to put them on their web platform. Building trust with such partners takes a long time and is demanding.

Through all the projects I've been through, I've continued to build the relationship that we're continuing on with Carwiz, and that's the strongest asset we can offer through the franchise. Carwiz is, on the Rentalcars site and on the American website Autoeurope, recognised as the best rent-a-car in Croatia. That's what we want to convey to our franchise partners. In addition, we offer them a price strategy, a fleet strategy, plans, tracking, and so on. Moreover, at least in these close markets such as Bosnia and Herzegovina and Serbia, we'll also be able to help our partners with the purchase of vehicles.

How did you find partners? Can we expect any further franchise expansion?

So far, they've mainly been finding us. We're additionally teamed up for a stronger search for new partners, but we're careful about who we give the franchise to.

We check companies and their business, so we have refused some of them. This involves different markets, from Greece, which thanks to tourism has a highly developed fleet market of about ten thousand vehicles, to Latvia which isn't as developed tourism-wise as Greece is, but offers other aspects of opportunities with significantly smaller fleet vehicles.

By the end of the first quarter of the current year, we will finalise the signing of agreements with partners in Morocco, Romania, and Kosovo, and we plan to be present with our brand in more than twenty countries over the next three years.

How realistic is the prospect of doing that?

We saw that it's very realistic last year at the WTM London Tourism Fair, where we were the first Croatian rent-a-car brand to have our own stand. We talked with potential partners from a total of nineteen countries, including Morocco, Poland, Vietnam, Bahrain, the United Arab Emirates, Turkey, Brazil... I believe that in a year's time, we could close the complete Baltic region, we also have indications for Russia.

What are your plans for this year with regard to new investments?

We concluded 2018 with 48 million kuna in revenue, with a profit of around 600,000 kuna, which would have been even bigger without the major investments [we carried out] in business development, primarily for the franchises. This step, along with the increase in the number of fleets, should increase this year's [revenue] to more than 65 million kuna, with a projected profit of about 3 million kuna.

Because of that, we want to increase the availability of our services in continental cities, our fleet is fairly large in the winter, consisting of more than 600 cars. During peak season last year we had 1,400 vehicles, and for this year we plan to have about 2,000 cars operating during the summer months. Therefore, we're planning new employment, and we expect to reach over 80 employees in the peak season.

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

As Poslovni Dnevnik writes on the 24th of January, 2019, at this stage, the Croatian production company Dilj d.o.o. is set to invest significant resources in the overhaul of the plant, and the plan is to put additional resources in the next phase to raise and expand the capacity of their brick factory.

This Vinkovci-based Croatian production company is a manufacturer of brick, tile, grout and special roof elements, which exports 70 percent of its production to both European and non-European markets. Dilj d.o.o. rescued a small brick factory from Našice, which was in the process of going into liquidation. In the very process of bankruptcy, the move saw it successfully renew its production.

In addition to saving production, they saved fifty grateful employees from certain job losses, which would have meant that nearly fifty families would have been left without income. The director of Dilja d.o.o. Dražen Ivezić recalls that the Slavko IGM Našice brick factory went into bankruptcy at the end of 2014 due to problems that were the result of the crisis, which was felt the most by the construction sector, and as material producers, they were hit hard.

As Glas Slavonije writes, at the time of bankruptcy, about fifty workers were employed at the plant, manufacturing a production line of about fifty million units of normal sized and more than ten million block bricks.

The Croatian production company asked the bankruptcy trustee to take over the factory, hire the current workers and continue on with production, and got approval from the creditor council for that step.

''On May the 18th, 2015, we signed a lease contract and continued production. After less than a month and a half, as soon as July the 1st, production continued and everything went smoothly.

Production continued over the next three years, and at the end of last year, Dilj d.o.o. proposed to the bankruptcy trustee and the creditor council to complete the bankruptcy proceedings with the creditor settlement and to take over Slavonia's IGM. After the creditors accepted the bankruptcy plan, in late 2018 Slavonia IGM formally went bankrupt, meaning the preservation of production with a long tradition, as well as the preservation of jobs in the processing industry in Slavonia, which is of particular significance,'' stated Dražen Ivezić, the director of the largest tile factory in the Republic of Croatia with a 95-year-long line tradition of production, unbroken even during various wars.

He added that after the winter renovation phase, the plan for Slavonia's IGM is to be at full capacity by the end of this year, and they are planning to sell everything they produce.

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To briefly recall, Gredelj's bankruptcy began back on October the 1st, 2012, and an encouraging letter of intent from an Austrian railway company is a possible path to its end. Could an Austrian acquisition be the end of Gredelj's long list of problems?

As Poslovni Dnevnik/Suzana Varosanec writes on the 23rd of January, 2019, the Austrian company OBB-Technische Services GmbH operating in the Austrian Federal Railways has provided a letter of intent on expressing an interest in the possible purchase of Croatia's TŽV Gredelj d.o.o., which is in bankruptcy.

This information has now been officially confirmed, as have the decisions made by Gredelj following it, the company promptly authorised bankruptcy trustee Tomislav Đurić to initiate some preliminary talks. As the Austrians are, at least formally, the only interested party, perhaps this is the way for Gredelj to finally claw its way out of the dark tunnel of bankruptcy. Despite its issues, it wouldn't be right to exclude its importance, or that other interested investors, including those which are already familiar with the situation won't pop up at the last minute, the same can be said for the potential of Russian capital suddenly knocking at the door.

The first meeting between the aforementioned Austrian railway company and Gredelj's bankruptcy trustee should be held this month, but the final position on this possibility, which has suddenly been opened up as a possible solution to Gredelj's acquisition, will still have to be waited on for a certain period. This delay is key to assessing the viability of investing in TŽV Gredelj, but is also the determining factor on how to complete the bankruptcy proceedings which commenced back on the 1st of October 2012, Most importantly, this order of things needs to take place because of which the process which is being conducted - the plan to settle the company's bankruptcy and provide a final resolution to its creditors.

This manufacturing company and ex-component of Croatian Railways will not be sold below the asking price, but will also not be liquidated through the sale of large tangible assets. "TŽV Gredelj, with its 410 employees, is the only company in the region that can carry out all [types of] repairs on locomotives and wagons, both those that are simpler and those which are more complex," stated Đurić, dismissing the worrying Gredelj liquidation scenario.

Several meetings with representatives of the Austrian railway company are expected to be organised. Other important aspects, such as all the data on Gredelj's technological and production capabilities, first became known to the Austrians on the basis of their recent collaboration with LocoTech.

Just how things will proceed between the currently interested Austrian railway company and Gredelj is yet to be seen and the enfeebled Croatian company is far from out of the woods it entered back in 2012 yet. However, a concrete expression of interest from the Austrians, who are typically very serious in such matters, is a step in the right direction.

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Click here for the original article by Suzana Varosanec on Poslovni Dnevnik

The Varaždin-based Croatian company Varteks has been producing dresses, coats, jackets and other clothing for specialised purposes, including uniforms for the Croatian Army, the police and the like for 101 years now.

As Poslovni Dnevnik writes on the 23rd of January, 2019, in three production plants in a complex of red brick buildings in the centre of Varaždin, several hundred workers are working daily in one shift on quality garment collections. In Varaždin's Varteks, 24sata journalists were welcomed and hosted by Nenad Bakić, president of Varteks' administration. He took them through all three production facilities. That day, designers who came to Varteks presented Bakić and his associates the new women's collection - business elegance.

''First, we do prototypes of the clothing, then after consultations they go off for additional finishing should that be necessary. After that, we make a collector's sample, a hand-made version that is produced in a small number of copies. If there are no more changes to be made, we make and launch the product,'' explained Bakić. Currently, Varteks is launching its latest elegant collection made with younger people in mind, called Varteks Young.

''We can split production into several phases. Everything begins with the tailor, from the threading and onwards. There, the machine cutter does almost everything itself according to the instructions on the screen. After that, sewing begins. All the parts from the cutter are picked up and people connect them in smaller segments. Then everything is shifted into the assembly, the middle part of production, where some segments are assembled and come to the end with finishing and the final ironing. After that, what's most important to us is quality control. If everything is fine, the goods are sent to the warehouse and are made ready for shipping, to our stores or to our customers,'' explained Miljenko Vidaček, production manager at Varteks. He adds that it takes about four hours to make a suit.

Varteks produces a very wide range of merchandise, its production manager emphasises the fact that Varteks is among the most flexible companies in this part of Europe as a whole.

''We were coming to the end, pre-bankruptcy. We're incredibly grateful to Mr. Bakić for the fact that we're still here,'' Varteks' grateful employees conclude.

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As Lucija Spiljak/Poslovni Dnevnik writes on the 16th of January, 2019, the Republic of Croatia was the third EU member country to ratify the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union in 2017, opening up new opportunities for both Canadian and Croatian entrepreneurs and innovators, as well as promoting and increasing trade and economic development. Owing to that, Croatian exports to Canada doubled in 2018.

In addition to the abolition of customs duties for more than 98 percent of goods, according to data from the Croatian Chamber of Commerce (HGK) and state statistics, in the first nine months of last year, Croatian exports to Canada doubled to almost 80 million dollars.

This encouraging information was stated at Zagreb's Sheraton Hotel when marking the first anniversary of the implementation of the CETA agreement, in which Canada's Geoff Regan participated. The gathering at the Sheraton was organised by the Canadian Embassy and the Canadian-Croatian Business Network (CCBN).

As the President of the Croatian Chamber of Economy Luka Burilović pointed out, tariffs were abolished on some of the most important Croatian exports - food and pharmaceuticals.

"The possibilities are numerous and Croatian companies need to be proactive in taking advantage of all the advantages now offered by the Canadian market," Burilović stated.

The CETA agreement brings some enormous savings to entrepreneurs, and they are estimated at about 600 million euro. In addition to the abolition of tariff items, this agreement is an instrument for growth and a tool to promote European values, thus contributing to the betterment of everyone.

In addition to the Canadians wanting to invest in Croatia, an increase of over 25 percent of visits made by Canadians to the Republic of Croatia was recorded last year.

On the occasion of the gathering and the welcome news about Croatian exports to Canada, Croatian Parliament Speaker Gordan Jandroković also mentioned NATO, whose role was significant in the development of Croatian-Canadian relations because that way, as he stated, Croatia and Canada recognised and respected each other.

"The CETA agreement shows how states can help each other and contribute to their economies," Jandroković pointed out.

Geoff Regan of Canada's House of Representatives, said that Canada wants to increase its trade and investment with EU countries, including Croatia, which, he said, is an important trading and investment partner. He also mentioned that according to unofficial estimates in Canada there are 300,000 people there with Croatian roots, so the Croatian diaspora contributes to the strengthening of economic relations between Canada and Croatia.

"The comprehensive economic and trade agreement between Canada and the European Union is an important tool to help increase trade and investment with EU countries. By ensuring that businesses and people can maximally use the opportunities for increased trade that CETA will help to achieve, Canada and EU countries will establish lasting foundations based on a growing relationship which will contribute to our common progress,'' Regan concluded.

The 27th anniversary of Croatia's international recognition and Croatia's diplomatic recognition from Canada were also marked at the gathering in Zagreb.

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Click here for the original article by Lucija Spiljak for Poslovni Dnevnik

As Marta Duic/Poslovni Dnevnik writes on the 14th of January, 2019, at the end of last year, IMG Zagreb marked thirty years of hard work, this Croatian company is otherwise the only specialised manufacturer and servicer of shut-off armature, and producers of stainless steel products and other materials for the oil, gas, petrochemical, pharmaceutical and food industries in the country.

IMG Zagreb was founded way back in 1988 as a private company specialising in the production and service of pipe fittings, high pressure valves, and various other stainless steel products, as well as other materials for the petrochemical, pharmaceutical and food industries. Initially, they had only two employees, namely Čupić's, father and son, and they had just one machine. Today however, the story is quite different indeed, and their activities are divided into production and service management by the engineering department of this successful Croatian company.

"When we got a second machine, way back in 1992, we also got our first big order from INA for gas pumps and that's what really started the company's rise. Back then, we had three employees and we did our first big job with them, and soon we grew to six and later to nine employees. Thanks to our successful business, we also started doing business with other partners from the oil and petrochemical industries such as Siemens, Plinacro, Underground gas storage (Podzemno skladište plina), Crosco petroleum services, Pliva, Janaf, Petrokemija Kutina...'' stated Joško Čupić, the owner of IMG Zagreb.

By 2010, the number of purchased machines had risen, and the number of employees rose to 28. Today, this Croatian company has 26 machines and employs as many as 42 employees. "Our only true competition are imports, because in Croatia, besides us, there really isn't a single manufacturer of such equipment," noted Čupić. The expertise and the real specialisation of IMG Zagreb is readily recognised by their partners on foreign markets.

IMG Zagreb successfully operates on the markets of the former Yugoslavia, France, Germany, Belarus and over in the USA, where IMG Zagreb has delivered high pressure manometric valves on several occasions, while IMG Zagreb's largest turnover on the foreign market is realised in France.

"In America, we work with Alternate Energy Systems, Inc. for which we've already delivered high pressure manometric valves on several occasions. We have the largest turnover in France owing to our partner Siemens SAS, for which we have delivered goods over the last three years, with a total turnover of 561,000, 00 euro, which averages at around 187,000 euro annually.

''It's a newer fact that because of his business satisfaction with us, that partner recommended us to his partners over in Germany, so we've already received inquiries and are now working on getting work,'' said Čupić, who has the long-term goal of this Croatian company working to strengthen Croatian production in the field of pipe fittings and stainless steel products.

"The improvement of production, production facilities and the recruitment of new employees are all activities that we undertake for the purpose of the final quality and quantity of products, which is aimed at the expansion of the market,'' said Čupić.

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Click here for the original article by Marta Duic for Poslovni Dnevnik

As we reported recently, the Inter-American Investment Corporation will offer Croatian companies a chance to operate on the Latin American market.

As Marija Brnic/Poslovni Dnevnik writes on the 14th of January, 2019, about a year ago, the Croatian Government approved the signing of a contract for Croatia's entrance into the Inter-American Investment Corporation (IIC), which Croatia's ambassador to the USA, Pjer Šimunović, signed back in July 2018 over in Washington, and now, through a parliamentary procedure, the law which this contract confirms has been set in stone.

For Croatian entrepreneurs and Croatian companies, this is a significantly important move because it opens up far more new opportunities in the markets of Latin America and the Caribbean. IIC is a multilateral organisation, part of the Inter-American Bank for Development (IID) group, which finances the private sector and financial institutions in the countries of this region, and Croatia's membership was gained on the basis of succession. There are 48 countries in the IID, of which 26 are Latin-American.

In the IID capital of a massive 170 billion dollars, the United States alone has the highest individual share of 30 percent, while Croatia holds 0.05 percent. Loans, guarantees and other forms of financing can only be used by entrepreneurs from the above mentioned 26 countries, but for Croatian companies, the possibility of participation in tenders for the projects financed by the IID remains very much open. From past practice (IID has existed since 1959 and is the oldest regional development bank) the organisation invests around 11 billion dollars annually into its various projects, and the most common sectors to see investment are infrastructural projects, financial markets, as well as energy and water management.

In procurement procedures for corporate-donor companies such as those from Croatia, business opportunities are mostly open to Croatian companies who deal mainly with infrastructure-related businesses, as well as for consultants, and banks from all member states. Along with the Croatian Ministry of Finance, which is charge of communication with IID and IIC, the Croatian Chamber of Commerce (HGK) will obtain an important role, which will, along with HBOR, inform Croatian companies and entrepreneurs about these welcome new possibilities.

From the Croatian Chamber of Commerce, they state that they had organised education for Croatian companies for several years now, the main goal of which was to get better acquainted with this channel for non-traditional Latin American markets, and after the agreement is signed, Croatian companies and entrepreneurs will be more prepared to take advantage of these opportunities as a more active approach to preparations will take place.

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

Christmas might be behind us for another year (well, almost another year), but the heartfelt news of Croatian companies in all fields and sectors having paid out huge bonuses to their employees up and down the country is enough to bring the generous spirit of the season right back again.

As Poslovni Dnevnik writes on the 12th of January, 2019, while they couldn't pay themselves a tax free cash sum, Croatian companies and employers made sure to reward their loyal employees a total of 2.4 billion kuna in Christmas bonuses and similar rewards last month, and a further one billion kuna was paid out for their good work performance results, according to the findings of the Croatian tax administration.

When summed up as a whole, the amount of bonuses and other similar cash sums paid out to hard-working employees by Croatian companies reaches a massive figure of 3.4 billion kuna, as has been reported by Večernji list.

The results show that on average, each employee received about 2,500 kuna in untaxed benefits, but as is usually the case with any other average, this does not show the real state of affairs. The tax administration points out that back in December 2018, bonuses amounting to a massive one billion kuna were paid out by as many as 37 thousand Croatian companies for 422 thousand employees scattered across the country.

Work performance bonuses were paid only by the private sector and not by the public sector. Finance Minister Zdravko Marić freed up the payment of tax on the payment of bonuses of up to 5,000 kuna per employee, a measure which was readily taken advantage of by every fourth active private Croatian company.

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As Josip Bohutinski/VL/Poslovni Dnevnik writes on the 8th of January, 2019, the Croatian Government is set to propose an increase in the amount of PSO contracts Croatia Airlines receives for domestic flights to the European Commission (EC). Croatia's national airline Croatia Airlines (CA) should select a financial advisor to develop a recapitalisation model and find a strategic partner by the end of this month.

The two-time bidding was announced last September, and as has since come to be known, reputable world companies such as Deloitte, AT Kearney, PwC, the Boston Consulting Group and DBV, which are part of a consortium with Croatia's PBZ, have come to be involved.

From Croatia Airlines themselves, they stated that last year, the Croatian Government put the company back on the list of companies of strategic and special interest of the Republic of Croatia, and that in the national reform program, it was stated that the goal in respect to Croatia Airlines is to ensure the further development and strengthening of competitive advantages and positions in the air transport market through quality strategic partnership. That strategic partner, which is obviously yet to be found, should expand Croatia Airlines' transport network and increase market share, as well as successfully recapitalise the air company.

Just how much money is actually needed?

When asked about this, Croatia Airlines responds the bid is still in process and therefore the company isn't in a position to comment on its details at the moment. The selected advisor should assess the amount of money really needed for the recapitalisation of the airline. Croatia Airlines' provisional director, Jasmin Bajić, has already estimated that it stands at about 250 million kuna.

In the past year, the Polish national airline LOT and the 4K German investment fund, which has already taken over Slovenia's Adria Airways, have both been interested in entering Croatia Airlines. As is already known, some Chinese air carriers have recently shown a somewhat general interest, but air carriers outside the European Union can only have up to a 49 percent share in an airline from within the European Union at most. As potential buyers, the Chinese have also mentioned the previous sales attempts by Croatia Airlines, all of which have failed.

Nobody made any serious offers or even showed a great deal of potential interest back in the 2013 recapitalisation bid, although Indonesia's Garuda and China's Hainan Airlines were mentioned as potential buyers. Of course, nothing came of it.

The then government started looking for a strategic partner for Croatia Airlines once again back in 2015, they hired IFC, a World Bank fund that verified the interest of European and world air carriers for the Croatian national airline. At that time, Korean Air and Taiwanese Eva Air were mentioned as the most prominent companies. IFC was supposed to propose a proper privatisation model for Croatia Airlines, after which a public tender was to be launched. But yet again, nothing came of it, because parliamentary elections were held at the end of the year, and the powers that be were subsequently changed.

While the new advisor elaborates the model of privatisation of Croatia Airlines again, the government will, along with the European Commission, try to find a way and hopefully agree on how the state could further assist the still struggling Croatia Airlines.

The Croatian proposal will be to increase the amount of public service obligation (PSO) contracts that Croatia Airlines gets for domestic flights, currently amounting to 75 million kuna. In addition, this year the Croatian National Tourist Board will receive 7.5 million kuna for joint advertising.

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Click here for the original article by Josip Bohutinski/VL on Poslovni Dnevnik

Could a brand new Croatian flight company be on the horizon? According to Nino Borić, who has been working in international aviation for thirty years, yes it could.

As Sasa Paparella/Poslovni Dnevnik writes on the 6th of January, 2019, there could soon be a new Croatian flight company named Smile Air. Although the airline company's name was registered in Zagreb during the summer of 2017, its director and co-owner, Nino Borić, who has been working for over thirty years in the field of aviation, is in no particular hurry to set up the project, and is proceeding cautiously.

"We'd like go start work at the end of this year, but it's difficult to succeed in such a move because we need to find the right aircraft on the market and their prices are high at the moment. We're not under any real pressure for the project to be completed either this year or next year, but this does need to sustainable, longterm story in which there must be no mistakes. In addition to that, flight permits take some time, so we'd be happy with [beginning work at] the beginning of 2020. People are coming to us themselves and we've gathered together a good team,'' Borić told Poslovni Dnevnik.

He added that he follows the philosophy of Virgin's Richard Branson, who, as he says, knows that a good attitude towards employees also results in satisfied passengers. Borić is the owner of Avio Nova, headquartered in Florida, and for years he has been employed in high positions in the operations of various airlines. The other co-owner of Smile Air is Bernard Lukač, a 30-year-old pilot and former instructor in Croatia Airlines, who, for the last eight years, has worked as an inspector at the Croatian Civil Aviation Agency (CCAA).

The third member of the team is Krunoslav Dumlija, a pilot with fifteen years of valuable experience, who is also a former CCAA inspector. When asked about the amount of capital needed to start the business side of this entirely new Croatian flight company, Borić said he would start with two aircraft on operational leases, and for that between 3-5 million dollars would be required. The plan is to start with the Embraer E-190 Brazilian aircraft, with a capacity of 100 passengers, which is ideal for all-year operation. Later on, they would obtain the Airbus A321, which they would use for seasonal flights.

In the long run, the plan for this Croatian flight company focuses on getting an Airbus A330, and the aim is to have a fleet of five aircraft in the first three years. As quoted on the company website, Smile Air will deal with ACMI and wet lease business, regular charter and leisure lines, and ad hoc charters. They will have flights to Europe, the Middle East, Africa, and even to Iceland. They will also rent their crew to other companies, and combinations are also possible with such a scenario.

The idea has already had some initial support from the Croatian National Tourist Board (HTZ).

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Click here for the original article by Sasa Paparella for Poslovni Dnevnik