May the 17th, 2023 - The Republic of Croatia has been listed among the five countries most attractive for investment out of sixteen nations located in Central and Eastern Europe.

As Poslovni Dnevnik writes, the analysis of this year's economic research conducted by the German-Croatian Chamber of Industry and Commerce for the 18th year on 141 companies has found that more than 80% of companies would be ready to invest in Croatia again.

This is an extremely positive indicator that the willingness of companies to reinvest in Croatia has remained at the same level as it was back in 2021 and 2022. Croatia ranked highly at 5th place among the 16 countries of Central and Eastern Europe surveyed when it comes to the attractiveness of the location for investors. Almost 90% of entrepreneurs rated the business operations of their own companies as good or satisfactory despite the typically very complex economic conditions in which they operate.

Business expectations for 2023 are significantly worse than the assessment of the current economic situation, and those in business are pessimistic as a result - only 23% of respondents expect the business situation to improve during the remainder of 2023.

The availability of professional labour has been characterised as the biggest risk in business, followed by the high prices of energy and raw materials and the cost of labour. For the third year in a row, membership of the European Union, the qualifications of workers and the academic education of said workers have all been rated positively in Croatia. The suppression of crime and corruption has been cited as the biggest drawback of doing business in Croatia, followed by tax burdens, the overall tax system and public administration.

40% of respondents consider the work of the current Croatian Government to be poor, and the same percentage considers it to be satisfactory

"In an active dialogue with our members and state bodies, the Chamber, as the largest bilateral business community in the country, advocates for the strengthening of conditions that favour the greater attractiveness of Croatia as an investment location. This year, Croatia took a high fifth place among sixteen countries across the region with regard to the attractiveness of the country as a business location.

Croatia's entry into the Eurozone and into Schengen certainly contributed to it being seen as having a positive business climate. The Croatian Government is making great efforts to mitigate and prevent the spillover of energy price increases to both people and to business entities, but according to the results of the survey, entrepreneurs in Croatia as well as in other countries in Central and Eastern Europe cite the increase in energy prices as one of the biggest risks for their business. When we talk about the results in Croatia, those in business state that the first limiting factor in business is the lack of skilled labour," said Mr. Marjan Vucak, president of the German-Croatian Chamber of Industry and Commerce during the presentation of the results of this particular economic survey.

The current state of the Croatian economy has been rated as satisfactory for more than half of the respondents

Almost 60% of respondents rated the current economic situation in Croatia as satisfactory, which represents an increase of 5% compared to the previous year, while 20% of them consider the situation to be good. Comparing those percentages with those from back in 2022, 22% of respondents believed that the economic situation in Croatia is better. When it comes to the perception of the economic situation, the countries of Central and Eastern Europe (CEE) rate the economic situation of their own countries in almost the same percentage as the survey participants in Croatia.

Despite the polycrisis, entrepreneurs are optimistic when they talk about business in their industry

57% of the respondents to this survey rated the current business situation in their own industry as satisfactory and 32% as good despite the uncertain economic situation. Compared to 2022, the share of companies that consider the situation in their industry to be good fell by 10%. 50% of the respondents rated business in their own company as good and 45% deemed it satisfactory. Similar results were recorded in the other 15 CEE countries, among which, in addition to Croatia, an economic survey was also conducted. Only 7% of respondents in CEE countries rate their business situation as bad. Slightly more than 60% of entrepreneurs state that turnover has increased compared to the previous year, while exports have increased by 38% compared to 2021.

Economic expectations for next year remain somewhat pessimistic

When it comes to forecasts of the economic situation for 2023, the estimates continue to be pessimistic. Those in business estimate that the situation will remain unchanged (55%), and only 23% believe that it will improve at some point in 2023. We can look for and easily find the reasons for that sentiment in the very complex economic conditions caused by the ongoing war in Ukraine, the still record high inflation rate and the continued economic consequences of the global coronavirus pandemic.

The level of attractiveness of an investment destination

Croatia's entry into the Eurozone and the Schengen area is expected to create a more positive business climate, as was confirmed by the research results (71% believe that Croatia's entry into the Eurozone have a positive impact on business throughout 2023, while 77% believe that Croatia's entry into Schengen will have positive business consequences. The above is not surprising considering that more than 80% of Croatian trade is also done with Schengen countries.

Croatia was, as stated, ranked in the first 5 most attractive locations for investment among 16 countries of Central and Eastern Europe. Slovenia (1), Poland (2), the Czech Republic (3) and Estonia (4) were among the four most attractive countries. Back in 2021, Croatia was in 8th place, and this year's result is the best result since the Chamber has been conducting economic research. An encouraging 81% of the companies that participated in the survey would choose Croatia again as a location for investment. This means that the number of companies that would invest in Croatia again has been at almost the same level for three years.

Risks in business - the lack of skilled labour is a dominant challenge for companies

For the first time, companies surveyed stated that the availability of qualified labour is the biggest threat to the development of their company (51%). In a high second place are the prices of energy and raw materials (43%), then labour costs (41%), domestic demand (26%), which has been significantly reduced as a risk compared to last year's research (48%), the predictability of economic policy (25%) and payment discipline (23%).

Analysing the data across the CEE region, the increase in energy prices as a risk factor when it comes to doing business is most represented in Poland (82%), Macedonia (71%), Hungary (67%), Slovenia (62%), the Czech Republic (60%) and Latvia (58%). The availability of professional labour as a business risk was especially highlighted by companies operating in Macedonia (71%), Bulgaria (65%), Albania and Romania (61%), Hungary, Kosovo and Slovakia (57%).

Work and the workforce

47% of respondents stated that the number of employees in their company will increase, while an insignificant number (5%) estimates that the number of employees will decrease. Given that inflation back in 2022 stood at a high 10.8%, it's rather interesting to note that the largest number of respondents believe that salaries will increase by 10-20% during the rest of 2023.

Changes in the international division of labour are ubiquitous on a global scale. Survey respondents estimate that long-term changes in international supply chains will manifest themselves in increased political influence on supply chains (37%), changes in transport routes (30%), growth in protectionism (29%), changed risk assessments of business destinations (27%), moving production to new locations (27%) and moving production closer to the German/European domestic market (27%).

Expanding the offer for internal education (43%) is the most common measure that employers plan to take when talking about the lack of professional labour. This is followed by increased automation and the digitisation of business (36%), an increase in the average salary (32%), encouraging employees nearing retirement to stay with the company (29%), an increase in allowances paid alongside employee salaries (25%) and increased cooperation with various types of educational institutions (25%).

The dire economic consequences of the war in Ukraine

A little over a year after Russia's aggression against Ukraine began, the global economy continues to face various negative consequences. High prices for energy, raw materials and other such items (which are a concern for almost 82% of respondents) represent the greatest concern for business owners when it comes to the short-term consequences of this war. This is followed by disruptions in supply and logistics chains (46%), a shortage of raw materials (27%), increased legal uncertainty (19%), a reduction in incoming orders (14%) and the loss of business partners (14%).

The advantages and disadvantages of doing business in Croatia

Membership of the European Union, employee qualification(s), the adequacy of higher education, payment discipline, infrastructure, productivity and the commitment of employees to gaining better work results are all mentioned as positive aspects of doing business in Croatia. The insufficient fight against corruption stands out as the biggest shortcoming of business in Croatia. As disadvantages, entrepreneurs then cite tax burdens, the tax system, the poor public administration and the lack of transparency of public procurement.

The application of the EU taxonomy

Only 3% of respondents were familiar with the EU taxonomy, the EU classification tool that signals the success of companies in contributing to sustainability. 54% of them consider their own knowledge of the application of the EU taxonomy to be insufficient.

For more, check out our news section.

May the 1st, 2023 - If you've ever spent any time around Dubrovnik, you'll have no doubt noticed the enormous, now totally abandoned Kupari hotel. The former hotel has been standing like an eyesore on the southern Dalmatian coast for decades, and the saga surrounding it is almost as long.

As Poslovni Dnevnik/Marija Crnjak writes, on Thursday, the Croatian Government gave its consent to the Ministry of Spatial Planning, Construction and State Property to conclude Annex II to the contract on the implementation of the large Kupari project, with the aim of continuing the implementation and defining new deadlines with the investor, Kupari Luxury Hotels.

Interested parties may recalled that back in 2016, the government signed a contract with a group of bidders for the Kupari project, which foresees the construction of two new hotels at the Kupari location, the revitalisation of other buildings and the eventual renovation of the Grand Hotel.

In the meantime, a new investor, Hotel Properties Limited-HPL from distant Singapore, entered the project, and an urban development plan for the Municipality of Zupa Dubrovacka (the Parish of Dubrovnik) was adopted, and in March, an agreement was signed with Hrvatske vode/Croatian waters for the relocation of the watercourse route.

All of this requires a new contract with the state, which contractually obliged Kupari Luxury Hotels to invest with an extremely long 99-year concession. "With this decision, we oblige the investor to submit data for changes to the UPU within sixty days after signing the annex to the contract.

According to the current plans of the Parish of Dubrovnik, a period of twelve months has been prescribed in which the investor is obliged to obtain a valid building permit, and in a further period of four years to realise the project in Kupari itself,'' explained the Minister of State Property, Branko Bacic.

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

April the 27th, 2023 - The power of the Croatian Immunological Institute, which many have referred to over recent years, is set to make a comeback thanks to investments being made in Rugvica.

As Marija Crnjak/Poslovni Dnevnik writes, during the middle of next year, the snake bite antidotes produced in the new Croatian Immunological Institute's plant, which recently started being designed, should hit the market.

Preparatory work and the creation of a technological study for the construction of a new plant for the production of blood plasma and vaccines are now underway, for which a public tender is expected in two years. This project is no longer a precarious one and is now financially in an unquestionable state, because there is a market that is chomping at the bit to welcome vaccines with some of the parent strains that Croatia has. On top of that, the returns on investments will likely be relatively quick.

All of this more than encouraging information can be the basis for the further development of the Croatian Immunological Institute, which, later down the line, can also produce vaccines based on mRNA technology without much of an issue. This is how we can summarise the plan that, after many years of back and forth and beating around the bush by the government and administration, was finally devised in order to sustainably give the old Croatian Immunological Institute a new perspective and financial profitability. The realisation of the first steps in the construction of the new plant in Rugvica have now officially begun.

The best solution

As is already fairly well known, in June 2022, the municipal council of Rugvica made a decision to donate almost 70 thousand square metres of land to the Croatian Immunological Institute, for the purpose of building an entire plant dedicated to the production of biological drugs. They are also building a separate plant for the production of antitoxin against snake bites inflicted by venomous European snakes, and a biopharmaceutical facilities for the production of animal immunosera intended for both human and veterinary use.

This decision was preceded by a statement from the State Attorney's Office of the Republic of Croatia and the Ministry of Economy and Sustainable Development, as well as the Ministry of Spatial Planning, Construction and State Property, all of which determined that there are no legal obstacles to such a transaction. Rugvica turned out to be the best solution because the process of establishing property legal relations over in Brezje, where horses are still located for the production of antitoxin from snake venom, is still ongoing.

As announced by the Ministry of Health on this occasion, the construction of the entire plant was supposed to start in two years at the latest, while the construction time to the functionality phase is expected to be nine months from the positive end of the public tender, i.e. the selection of the contractor according to the conducted tender.

The construction method of the production facility itself will involve prefabricated modular segments of clean rooms designed and built outside the facility and connected and formed inside the facility, which is something that needs to be preceded by a series of preliminary works, from obtaining all of the necessary permits, the evaluation of the conceptual design and final development of the main project to defining the details of financing modalities. In the zero phase, therefore, the plant for the production of antivenom is being worked on, on a plot of land spanning 69,000 square metres.

After a tender was successfully held back in January for the suppliers of the assembly facility where the Croatian Immunological Institute will move the production of snake antivenom in Rugvica, the government gave the green light to the Ministry of Health and the Institute of Immunology to sign contracts with suppliers in mid-March. This is an important step in the first phase of moving the Croatian Immunological Institute to a location in which, in the future, the plan is to build a plant for procedures involving blood plasma, and in the third phase, possibly also vaccines.

As Marija Bubas, the State Secretary of the Ministry of Health stated back on February the 15th, the Administrative Council of the Croatian Immunological Institute came to a decision on giving consent to the director of the Institute to enter into a contract for the delivery of a prefabricated building and to create project-technical documentation and obtain the necessary permits.

The contract was then concluded with a selected community of bidders in the total amount of three million euros including VAT, and it regards documentation for the construction of a biopharmaceutical plant for the production of antivenom for the bites of European snakes. The funds for the payment of obligations are being provided from the state budget for 2023 and 2024.

The group of bidders consists of the companies Naya Life Sciences Slovenia and Skopje, the Finnish company Elomatic Consulting and Engineering, and the Turkish Poli Panel Group. At the same time, all of the preparatory work and the technological study are ongoing, which will be the basis for the tender for the construction of the new plant, and it will be ready for the launch of a public tender in around two years. During that period, some of the people will work in the antivenom plant, and some will remain in the old premises in Rockefellerova in the heart of Zagreb, in buildings that are owned by the state.

Namely, back in 2015, with the aim of solving the Croatian Immunological Institute's problems, the state separated the facility's operations into an institution of the the employees and then the business processes and the Croatian Immunological Institute itself, which took over the assets and debts.

Fortunately for the owner, the property is worth more than the amount of debts that have accumulated, so there should be no problem solving those issues. Although the plan is to eventually transfer everything to the Croatian Immunological Institute, for now the status quo will remain the same, because some of employees will not be able to move to Rugvica for some time.

''In Zagreb, an educational centre for exercises and the transfer of knowledge of the production of vaccines could be launched soon, given that knowledge is key in this business," Vedran Cardzic, the director of the Croatian Immunological Institute, explained.

The beginning of the antivenom production process is still located in Brezje, where the Croatian Immunological Institute has raw materials at hand, namely horses and snakes, and the construction of a biological laboratory according to GMP norms is also being planned there. Here in Zagreb, on the other hand, the reconstruction of the quality control laboratory is currently underway, where they have implemented the latest technology according to GMP norms for controlling the finished product in sterile conditions. This will all be portable and will be moved to the new space in Rugvica when it is built, and the third phase is the actual moving process itself.

The financial structure will be combined, and it's very likely that it will also include funds from both Croatian and EU funds, and by the middle of the year, all concrete plans on the basis of which funding can be requested may be ready. The construction of the antivenom plant will be financed from the Croatian Immunological Institute's own income from blood plasma products, in the total amount of about five million euros. It's interesting to note that the investments in the antidote plant, and one day the hefty investments in the vaccine factory, can be paid back in a maximum of four years.

What the Institute could produce as soon as tomorrow, if only there were space, are vaccines against measles and rubella.

"The market we'd be entering is that of the whole of South and Southeast Asia and some other underdeveloped countries in Africa. It can be done through UNICEF, where the prices are slightly lower, and it can also be done with strategic partners. We've come a long way with discussions with potential strategic partners over in India and other countries that lack raw materials.

We have an advantage here because we have the parent strains that remain owned by the Republic of Croatia and that is the base from which these vaccines are made. We will be in demand there, because we have good products that they need. We aren't interesting for Europe because there are multivalent vaccines on the European market already which work against several different diseases," explained Cardzic.

The Croatian Immunological Institute will be able to produce about 250 million doses of such vaccines, and it can easily be calculated that it is financially profitable.

"This is the basis for us to develop further and produce more mRNA vaccines based on the technology that, once adopted, you can produce vaccines for any pathogen. This is a good path for the Institute, which will return it back to its old glory with a lot of work, after a decade of presence on the market, acquiring young forces that should be given the freedom to work and be creative with it,'' concluded Cardzic.

For more, check out our business section.

April the 6th, 2023 - Poliklinika Aviva, one of the country's best known and leading private healthcare facilities, is set to open another brand new and larger space this month, in which four million euros was invested.

As Poslovni Dnevnik/Darko Bicak writes, following an investment cycle totalling over seven million euros over the last year and a half, one of the most famous Croatian private healthcare institutions, Poliklinika Aviva, will soon open its doors at a new location in Zagreb. After 44 years of operation in Nemetova Street, the polyclinic will open its doors in mid-April in a larger and more modern space spanning 2,600 square metres in Svetice near the stadium in Maksimir, Zagreb. The investment in the purchase of the new building and equipment, which was premiered to the Croatian public a few days ago, totals around four million euros.

Poliklinika Aviva is also a member of Arsano Medical Group, the largest group of private healthcare institutions in the wider region. As Dr. Nevenka Kovac, the director of Aviva, points out, by moving to a new location, this facility, which annually provides services to over 60,000 patients, will become the largest, most modern, and most technically equipped private polyclinic in one location in Zagreb and indeed in all of the Republic of Croatia.

In addition to the existing services and as many as 30 different activities, Poliklinika Aviva is also introducing new activities at their new location, which will further strengthen the clinic's market position as a pioneer of preventive medicine and systematic examinations.

"With new technology and services, as well as synergy with other sister institutions within the Arsano Medical Group and the Adria Dental Group, we're going to make an additional step forward on the market. Our new magnetic resonance device is certainly the best in all of Croatia, we're introducing a day hospital, which is a step forward for private polyclinics, we're introducing new departments such as anesthesiology, pediatrics and dental medicine, and in order to make a step forward in preventive medicine, we'll be the first on the market to introduce a dental examination as standard part of a systematic health review,'' said Dr. Kovac.

At Poliklinika Aviva's brand new location, patients will be greeted by three new state-of-the-art radiological devices: MR with 1.5 Tesla power, a new CT device and a new X-ray, and the laboratory will be additionally equipped and will be more accessible to everyone at the new location. As part of their modern day hospital, Poliklinika Aviva will provide patients with more complex treatment and several hours of therapy.

Given that Aviva is a member of the wider Arsano Medical Group, in which four other specialist healthcare institutions currently operate in Croatia - the Dr. Nemec Special Hospital for Orthopedics and General Surgery, the Arithera Special Hospital, Polyclinic Dijagnostika 2000 and Polyclinic Uro centar, as well as the Slovenian Diagnostic Health institution Digital Image Diagnostics DSD from Ptuj, patients can receive a complete service and more serious specialist procedures.

As if all of the above wasn't enough, they aren't stopping there. In addition to institutions within the Arsano Medical Group, Poliklinika Aviva cooperates with all members of the Adria Dental Group, which consists of seven dental clinics and five dental laboratories in the area of Zagreb, Solin, Rijeka and Porec.

Igor Cicak, the CEO and main partner of Provectus Capital Partners and Chairman of the Supervisory Board of the Arsano Medical Group, pointed out that the total investment in the consolidation of the Arsano Medical Group reached 45 million euros, which is the largest investment ever made in private healthcare in Croatia.

"With the Arsano Medical Group, we've created the largest private healthcare group in the Republic of Croatia with more than 400 employees, and over 100,000 patients pass through our healthcare facilities annually. But our ambitions don't end there. We're also continuously in discussions with other specialist polyclinics and will continue to grow through new investments in Croatia and the wider region," concluded Cicak.

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

March the 18th, 2023 - Algebra LAB, one of the oldest startup incubators in Croatia, provides young innovators with a symbiotic ecosystem in which business ideas are continuously maturing for the 11th year in a row.

Despite investors' caution towards risky investments, as much as 958.3 million dollars were invested in domestic start-ups in the first three quarters of last year alone – it was concluded at the Algebra startup meetup, which was held at Algebra's Zagreb campus, in the Algebra Spark Event Space.

Algebra LAB, as one of the oldest startup incubators in Croatia, has had an uninterrupted series of incubator generations since 2012, thanks to the systematic support available to them in the innovation ecosystem that combines higher education with entrepreneurship: 

“At Algebra LAB, we try to ensure that both sides profit symbiotically in development - our students from the fact that their incubator is located in the building where they study and listen to lectures every day, and that they can find themselves in the world of entrepreneurship in a short period of time, and our start-ups from the fact that some of their mentors and lecturers work in the higher education system, which means that they are constantly at the source of new knowledge and information. In such a collaborative system that combines cutting-edge innovation and science with entrepreneurship, we see the key to getting out of every crisis, of which there has been no shortage in the last ten years. Algebra LAB has spawned many successful entrepreneurial stories today – Farseer, Velebit AI, Sport React. We invite all those who are thinking about starting their own business and need support on the way to the realization of an innovative idea to join the new incubator generation for which the enrollment cycle starts at the end of the year," said Maja Brkljačić, head of Algebra LAB.

Startup Report magazine was also presented at the event. "The appearance of unicorns, Infobip and Rimac, as well as big exits such as Nanobit and Gamepires, and now Photomath, encourage the growth of investors' interest in Croatian startups, so last year a record number of startups received investments. However, due to the war in Ukraine and the hectic exit from the pandemic, investments are less than before, although the situation in Croatia is still very good. It was the second best year so far," said Bernard Ivezić, editor of the magazine.

Four new venture capital funds are coming to the Croatian market. In the next five years, the amount of money that will be available for start-ups will be 10 times higher than it was in the past period – about 300 million euros. A lot of money also means big problems for funds that have to start competing for start-ups, which makes the entire ecosystem quite dynamic and competitive, especially in an environment of crisis and economic uncertainty.

The impact of the economic crisis and the crisis caused by Russia's aggression against Ukraine on the investment climate is not negligible, which was discussed at the panel discussion, along with Maja Brkljačić, by Matija Nakić, the founder of the Croatian fintech Farseer, which flourished in Algebra LAB, Miryana Joksović, co-founder of Arcion Labs and member of the ACAP Board, and veteran of the Croatian startup investment community Vedran Blagus, principal of the oldest Croatian VC fund, South Central Ventures. Representatives of the start-up scene had the opportunity to hear first-hand useful tips for surviving a turbulent social and economic environment, as well as the importance of leadership from experienced start-up founders:

„In a crisis, it is important to always lead by example, and this is what the leaders of every start-up should focus on. Investors expect this period to last 24 to 36 months. It is the most difficult for seed stage startups that are not in the portfolio, because for them the risks are the greatest, as well as the dependence on investors. This is precisely why good networking with potential investors is most important – my advice is not only to look at them, but also at their portfolio companies and the companies they are connected to, because building that network of acquaintances is the key to future success," said Miryana Joksović from Arcion Labs and referred to the recent layoffs in the tech community: "Most of those who were previously employed in large companies can hardly adapt to the start-up culture, so the question is how to connect these talents to the start-up ecosystem because they are used to different work standards atypical for the dynamics of small entrepreneurs who are just starting to build their companies.

 The fact that every crisis, including this one, can be an opportunity was seen by Matija Nakić, the founder of Farseer, on her own example: "Our process of getting the investment was not dramatic and we managed quickly. Investments have slowed down if we look at the environment, while in the last two years there has been a lot of capital and there has been a significant jump in employment and funding in IT companies. I love crises and I think they are a good opportunity to rethink yourself and your business model. People who left large IT companies like Google will surely find a job quickly because they have excellent knowledge and will return to the ecosystem and bring this new knowledge to young companies. I believe that we have an interesting couple of years ahead of us, especially with the growing influence of AI."

"In 2021 and 2022, capital was cheap not only for start-ups but also for funds. In the last quarter of 2022, there was a significant drop in investment. There is money, the investments have been shaken, but they have not stopped" – emphasized Vedran Blagus from South Central Ventures.

Despite the data on the reduced investment wave as a result of global economic events, the panelists agreed that the challenging period facing the domestic and global start-up scene is only a prelude to the continuation of the prosperous period. Namely, start-ups now face new challenges in the form of investments in research and development, as the basis of new innovations that can help overcome the crisis:

"As far as the activities and interests of start-ups are concerned – there has been no reduction, in fact there are more of them than ever before. There is a large number of applicants and those interested in our Lab, and the so-called scene or material fatigue does not exist, according to what we see – and that is the reaction to the events and the applications themselves, you can see the liveliness of the scene. In Croatia, there are more and more investment funds that heal the wound of the lack of early capital, such as Fil Rouge Capital and South Central Ventures, which enable start-ups not to think about money, but about their product or service they are developing. I see no reason for concern for the Croatian start-up scene, except for the caution required when hiring new people – especially when changing culture and moving to scale-up" – said Maja Brkljačić, head of Algebra LAB, adding that the number of 500-600 of startups from the beginning of last year, according to some estimates, rose to as many as 900 as estimated at the end of 2022, thus signaling that the start-up scene is growing despite unfavorable circumstances.

At the event, two start-ups from Algebra's LAB (EcoWashers and TablePop) presented their innovative ideas to the public through five-minute pitches. EcoWashers allows the user to order a vehicle wash on a smartphone in a few steps, and through the dry ecological washing system, it uses a unique nano-technology that is safe for the environment and a minimum amount of water. TablePop is a platform that allows guests to order and pay contactless in restaurants by simply scanning a QR code. In addition to them, the start-up IoTaaP presented its innovations and experienced member of the start-up and technology community Ivo Spigel presented his new fintech project Pontyx to the attendees.

Algebra Spark Event Space and Algebra Spark Coworking, an innovative and unique space in the western part of the city, was introduced to the audience by Hrvoje Josip Balen, a member of the Board: "Unlike other similar co-working spaces, Algebra's rooms are specially designed and focused on business development and the creation of an entrepreneurial microclimate suitable for serious companies that focus on business growth. Algebra's innovative space enables companies to organize larger or smaller business events, lectures, workshops, as well as a number of other private or commercial events with all the necessary infrastructure. Interested companies and individuals can also rent additional space of over 12,000 m2 within Algebra Rent Space, which includes top equipment and technology with the aim of achieving the maximum level of functionality - through the synergy of office spaces with Algebra LAB, as a scientific research center intended for small and start-up companies."

Algebra's Spark Coworking Space is also used by Matija Matija, a young start-up who designed the Lanke website, which shows all available new real estate projects in one place. Matija reflected on his stay in Algebra's offices: "I was most impressed by the location, which suits me because I myself am in the western part of the city, and on the other hand, the quality and equipment of the office, which contains everything I need in one place. Last, but not least – I appreciate the peace that the office space offers, which I need to focus on work, which I'm not sure I would find in other similar coworking spaces in Zagreb."

Due to their focus on innovation in business, start-ups are one of the segments of the economy that will significantly influence the future development of the entire society, and their role is not only in their own progress, but also have the potential to significantly accelerate the growth of other economic branches. Today, start-ups are not limited only to the IT sector, but also appear in agriculture, hospitality industry, and banking, where they help accelerate the growth of entire ecosystems, and their incidence in Croatia is growing year by year, which, in addition to private investors, is mostly contributed by incubators such as Algebra LAB -a, who provide them with support in the early stages and beginnings of business ideas.

For more, check out our news section.

March the 6th, 2023 - A 120 million euro Zagorje investment has been announced by Knauf Insulation, bringing this part of Croatia to the level of both neighbouring Slovenia and Slovakia in one particular regard.

As Poslovni Dnevnik/Marija Brnic writes, Novi Marof received a new large investment of 120 million euros announced by Knauf Insulation in a close race with locations in Slovenia and Slovakia, which were shortlisted by the aforementioned German group. The group operates globally and is a leader in the production of building materials.

Before making the final decision, the main partner of the Knauf Group, Alexander Knauf, contacted the relevant state institutions, and a week ago, after a meeting with the Minister of Economy and Sustainable Development, Davor Filipovic, it was announced that the project will be realised in Novi Marof, where Knauf Insulation has been operating since the 1980s.

According to the answers we received from Knauf, the project is currently still in its preparation phase, and if everything goes according to expectations, the start of construction is expected at the end of this year and the beginning of next year. The start of production is planned for 2025 and most of this Zagorje investment will be in equipment and machinery, along with the expansion of Croatia's own R&D potential. The planned portfolio of products from the new line based in Novi Marof will be largely similar to the company's existing one.

However, according to Knauf, the production of some additional segments, such as products for green solutions, is also planned as part of this massive Zagorje investment. The expanded plant in Novi Marof will be one of the largest locations within the Knauf Group, which has more than 300 production bases worldwide, according to Dominique Bossan, Chief Executive Officer of Knauf Insulation for Europe, the Middle East and Asia and a member of the Board of Directors of the Knauf Group. Currently, Knauf Insulation has 236 employees in Novi Marof, and at least 70 more jobs are expected to be created with this new Zagorje investment.

The company operates in more than 40 countries, has 28 production facilities and 6,000 employees. Their annual turnover exceeds two billion euros but there is no data on the financial results for Croatia in the last year yet. According to the data for 2021, their revenues exceeded 64 million euros, and business has been seeing an upward trend.

The company is extremely export-oriented, with the share of exports in its total revenues standing at 81%. The main export markets are Italy, Germany and France, but they also export to other parts of the world much further away, such as South America. With this new Zagorje investment, the export potential will grow further, and their construction solutions will be marketed, according to Bossan, primarily in Italy, Slovenia, Hungary and Romania, and technical, industrial and green solutions systems will be delivered to all of Europe.

Priority is being given to local partners in the procurement of raw materials, of which there are more than 150. And when it comes to the selection of Novi Marof for the realisation of this investment in Knauf, they make it clear that the attractive location in the heart of Europe and a highly qualified workforce were decisive.

For more, check out our news section.

December the 21st, 2022 - An important Rijeka road investment has recently been announced by Transport Minister Oleg Butkovic, who stated his belief that properly positioning this Northern Adriatic city as strategically important port is paramount.

As Poslovni Dnevnik writes, the Minister of Maritime Affairs, Transport and Infrastructure, Oleg Butkovic, said this week that it is very important to position the City of Rijeka as a port with an exceptional geostrategic position and provide it with as much cargo as possible, saying that "Croatia had indeed managed to catch that particular train" and that large investments are now underway. One Rijeka road investment in particular stands out.

Minister Oleg Butkovic participated in a conference called "The Transformation of Rijeka/Transformacija Rijeke", organised by the Rijeka-based publication Novi list, which discussed infrastructure projects taking place in the wider Rijeka area, the position of Rijeka as an important transport hub and as one of the key European transit ports important for the development of trade, transport and economy.

In 2023, the D403, one of the most expensive roads in the history of the Republic of Croatia as an independent nation, will be completed and the conditions will be met for the terminal on the Zagreb coast, which is crucial for increasing cargo and all economic activities, to be operational at the beginning of 2024. This Rijeka road investment will be key in the further and firmer placing of Rijeka on the cargo map of Europe and the world.

The construction of the ACI marina in Porto Baros should begin next year, which will have an impressive 500 berths, and the opening of a new hospital is also expected, Butkovic emphasised.

He also said that there are other big projects ahead for the Rijeka area, for example; the railway, and that investments will be made in the railway in the coming years. He also noted, among other things, that the project of the lowland railway and the project of construction of the second track, as well as the modernisation and renovation of the Skrljevo - Rijeka - Jurdani railway.

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November the 16th, 2022 - The Israeli Brown Hotels group has taken over the Rijeka-based Jadran Hotels, becoming the new majority owner of the company which boasts numerous hotels and other facilities. Ambitious plans are now in the works.

As Poslovni Dnevnik writes, the Israeli investor Brown Hotels Group is officially the new majority owner of Jadran Hotels from Rijeka, which includes seven hotels, two restaurants and a campsite in the wider Kvarner area, including Rijeka, Kostrena and Kraljevica.

The investors intend to carry out a comprehensive rebranding process at all seven locations where facilities owned by Jadran Hotels are currently located. This is otherwise their second investment in the Republic of Croatia, they are the owners of Trogir's Brown Beach House Hotel, and they bought Jadran Hotels from Ivan Franolic and Zoran Lustica.

"The potential of Rijeka as a city are absolutely enormous, we are convinced that it can become an important tourist centre in both the Croatian and global contexts and a destination that will attract tourists from all over the world. This is strongly supported by the significant investments made by foreign investors in the wider Rijeka area," stressed Leon Avigad, the founder and co-owner of the Israeli Brown Hotels Group, which also operates in Germany, Cyprus, Greece and of course outside of Europe in Israel.

In the coming period, the Israeli Brown Group will implement its model of lifestyle, cultural and nightlife attractions, along with bringing in internationally famous restaurant chefs, attractive rooftop bars, clubs, swimming pools, spa zones and other similar recreational activities.

The first focus of the new owners will be on three hotels: Continental, which will be renamed Brown Continental Rijeka, Jadran, which will become Brown Beach Jadran Rijeka, and Neboder, which will become Brown Lighthouse Rijeka.

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November 11, 2022 - After two years of speculation, gossip and due diligence, on Thursday it was finally confirmed that the Turkish conglomerate Yildirim will buy a majority stake in Petrokemija

The only major Croatian petrochemical company produces mineral fertilizers, at such a rate that their production consumes a fifth of the total amount of gas consumed in Croatia. The Turkish company took over the Terra mineral fertilizers company from its previous owners, INA and PPD. That company owns 54 per cent of Petrokemija's shares. How much Ina and PPD earned from the sale to the Turks was not made public.

It was not easy sailing for the Petrokemija companies even before the Russian invasion of Ukraine, which started the global energy crisis. Just three months ago, the CEO of Petrokemija Davor Žmegač told Bloomberg TV that the problems started since the earthquake, the supply chain crisis and the increase in gas prices, and that it is not economically profitable for them to do business at all because their monthly gas bills reach one hundred million euros.

How the new Turkish owners will deal with all of these problems remains to be seen. Local farmers will wait to see if they're still able to count on the fertilizers produced domestically, without which there is no sowing or harvest. The good news is that Yildirim has a rich experience in everything the Kutina company might need at this point.

Although Petrokemija operates with an annual income of around 300 million euros and has 1,250 employees, it will be only a small part of Yildirim Holding, whose annual income is reported to be around two billion euros and employs more than 16,000 people. Yildirim has companies operating in various industries, where the most profitable ones are mining, ports, petrochemicals, logistics and energy. The company was founded in 1963 as a construction business by Garip Yildirim, but has been the fastest-growing Turkish industrial group since 2005. Its current owners are the sons of Garip Yildirim, Ali Riza and Robert, who entered international trade outside the borders of Turkey in 1993 by importing coal from Russia. 15 years ago, they made their first foreign acquisition by taking over the metals company Vargön Alloys in Sweden, and today they have companies in 53 countries on five continents. 

Their annual production capacity of all types of fertilizers exceeds two million tons, and Petrokemija produced one million tons of fertilizer in 2020. Given that Petrokemija's production capacity is respectable compared to that of the Turkish owner, serious investments in Kutina and the continuation of operations can be expected. We will soon see what the first steps of the Turkish owners will be and how the integration into the Yildirim group will proceed, but Petrokemija could be on the verge of a renaissance, especially if its plants are able to get some cheap gas, which is probably something new owners have already looked at, and which might be an ace up their sleeve.

November the 10th, 2022 - Americans are investing a huge sum of money in a brand new Zabok medical centre, but just how much of a role with the Croatian Health Insurance Fund (HZZO) play in it all?

As Poslovni Dnevnik/Marija Crnjak writes, although many details about the establishment of the new Zabok medical centre, which will be a centre for the treatment of malignant diseases, have yet to be defined, the University of Pittsburgh Medical Centre's (UPMC) investment of about 15 million euros in Hrvatsko Zagorje is the first investment of this magnitude by foreign investors in Croatian healthcare.

The announcement about the investment that will be realised in cooperation with the General Hospital Zabok and the St. Catherine Special Hospital (Sv. Katarina), owned by Dragan Primorac, comes at a time when the state seems to have decided to strengthen cooperation between public and private healthcare.

This is further evidenced by the public support that the founders of the future Zabok medical centre received when signing the cooperation agreement from the government representatives, and support for such projects will also be given by the new legal regulations that will direct patients to private institutions in the country instead of urging them to seek treatment abroad, regardless of whether they have contracts with HZZO or not.

However, we have yet to see how many services from the new Zabok medical centre will actually be made available to Croatia's residents who are HZZO insured individuals. Namely, as confirmed by them, HZZO wasn't officially contacted regarding the possibility of contracting services with the future Centre for Oncology.

For the American investors, however, this is certainly an investment in health tourism, considering that they will be able to gain the market of Croatia's entire wider region, as well as the whole of Europe. It is also the largest American healthcare institution that employs 92,000 employees and 5,000 doctors, with a massive annual budget of 23 billion dollars.

There are a total of 40 hospitals within the UPMC chain, and in addition to over the USA, they are currently present in Italy, Ireland, China and Kazakhstan. As they claim from St. Catherine, this large investment will provide Croatian patients with diagnostic and therapeutic services completely equivalent to those in the USA, in accordance with the existing prices set by HZZO.

The new Zabok medical centre will be located on the premises of the Zabok General Hospital, which the hospital has been renting out to the St. Catherine Special Hospital since back in 2008. It spans 2,200 square metres. In addition, two linear accelerators will be built for radiation purposes, the location has already been defined, and permits need to be obtained for this. The plan is to complete the brand new medical centre in a period of about one year.

"This is primarily about a huge step forward in the transfer of the latest knowledge and technologies from the USA, the kind of which we can only dream of. When we talk to Croatian oncologists, they believe that in a few years, with the support of UPMC, Croatia could be at the very top of the EU in terms of oncology services," Jadranka Primorac, a member of the administrative council of the St. Catherine Special Hospital stated.

She added that this type of therapy and treatment, as well as state-of-the-art diagnostics in cooperation with UPMC, must be available to every Croatian resident. "It is the beginning and the end of everything. If you look at EC strategies, one of the key steps forward is to make this kind of therapy available to everyone, regardless of their ability to pay. Among other things, this is why we have HZZO,'' she explained.

Zabok is apparently now preparing negotiations with the state insurer, HZZO, which so far has not quite fulfilled all the efforts of private institutions to offer their services to the Institute's policyholders in greater numbers. One of the key obstacles was often the too low price of the services covered by HZZO, and since these are new services that didn't even exist within the Croatian healthcare system, those prices have yet to be established.

Negotiations with HZZO will certainly be one of the most important steps for future partners. Director of the Zabok General Hospital, Tihomir Vancina, pointed out that there are still a number of operational and technical matters to be resolved, from space to personnel engagement.

"We agreed in principle that we want to build the Zabok medical centre, and now we need to see how to implement it all," stated Vancina, who believes that everything can be done in the space of one year, especially considering that the investment has been under consideration for four years since the UPMC team was in Zabok for the first time. "This will be a huge step in improving the quality of the treatment on offer.

In the Zabok General Hospital, we have departments where our oncology patients can have part of the procedure, but for the rest they have to go to Zagreb, which will not be necessary in the future. The cancer survival rate in the USA is significantly higher than it is here in Croatia, precisely because of the available therapy that we're now bringing to the country. For the state, this is an ideal model, because it doesn't have to invest in space, equipment and personnel, it only has to pay for the services," concluded Vancina.

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