AGRICULTURE, FOOD INDUSTRY AND FORESTRY DEPARTMENT CROATIAN CHAMBER OF ECONOMY

AGRICULTURE, FOOD INDUSTRY AND FORESTRY DEPARTMENT CROATIAN CHAMBER OF ECONOMY

CROATIAN FOOD & DRINK INDUSTRY Vanja Kaludjer 8th October 2014.

CROATIAN CHAMBER OF ECONOMY established in 1852 more than 80,000 active members umbrella institution of the Croatian business community - represents and promotes Croatian companies interests at home and abroad 20 County Chambers, 9 Representative Offices abroad, 8 Departments, 6 Centers, 42 Professional Associations database on Croatian companies business opportunities exchange information about relevant regulations and laws in the field of economics trade missions and participation at fairs and exhibitions Permanent Court of Arbitration and Conciliation Centre - efficient system for the resolution of commercial disputes Member of ICC, Eurochambres

Trade balance of Croatian food industry (in 000.000 EUR) YEAR EXPORT IMPORT SPREAD COVERAGE 2012 1.241 1.980-739 63% 2013 1126 2.035-909 60% I-VI 2014 588 1.087-499 54%

Export/Import balance of food industry between Croatia and Germany (in 000.000 Eur) YEAR EXPORT IMPORT BALANCE 2012 52 229-176 2013 62 299-238 I-VI 2014 31 170-139 Source : Croatian bureau of statistics

10 most exported food products from Germany to Croatia in 2013. Product Tons EUR 1. Pig meat, fresh, chilled or frozen 27.191 61.188.617 2. Cheese 7.607 27.907.455 3. Chocolate and oth. products with cocoa 5.117 22.238.480 4. Malt extracts 9.018 16.994.619 5. Food products from CT 2106 4.977 16.777.965 6. Bread, bagels, cookies 6.230 14.458.353 6. Cigars and cigarettes 532 10.507.621 7. Animal feed 9.318 9.853.078 8. Etyl alcohol with less then 80% 1.940 6.508.155 9. Sugar products without cocoa 867 2.918.733 10. Live pigs 2.103 3.919.730

10 most exported products from Croatia to Germany Product Tons Eur 1. Malt extracts 4.182 16.342.424 2. Sunflower seed 25.344 7.150.387 3.Cigars and cigarettes 1.060 5.631.741 4. Sauces 2.038 5.338.636 5.Unprocessed tobacco 985 2.965.002 6.Herbs for farmaceutics 976 2.731.368 7. Rapeseed 5.853 2.315.878 8. Sugar 3.500 2.118.095 9.Jams, marmelades 1.216 2.032.056 10.Wine 477 1.608.495

10 biggest Croatian companies in food industry by revenue 2013. Company Business 1. Vindija d.d. Food processing, dairy 2. PODRAVKA d.d. Food industry 3. PIK-VRBOVEC d.d. Meat 4. BELJE d.d. Meat, wine, cereals 5.DUKAT d.d. Dairy 6. JAMNICA d.d. Water, soft drinks 7. ŽITO d.o.o. Cereals 8. KOKA d.d. Poultry 9. TDR d.o.o. Cigarettes, tobacco 10. LEDO d.o.o. Frozen food, icecream

MAIN IMPORTING COUNTRIES (FOODSTUFFS) GERMANY 14% ITALY 11% NETHERLANDS 8% Other 54% HUNGARY 6% BRAZIL 7%

MAIN EXPORT PRODUCTS TOTAL EXPORT OF AGRICULTURE & FOOD INDUSTRY PRODUCTS IN 2013 Mil USD 1,126 Share % 100 1 SUGAR 116 9,3 2 CIGARETES 70 6,6 3 CHOCOLATES 42 3,8 4 VEGETA 33 3,2 5 TUNA FISH 43 3,2 6 BISCUITES 27 2,7 7 BEER 27 2,7 8 CANNED FISH 22 1,6 9 SOUPS 21 1,6 10 WINE 12 0,9

FOREIGN DIRECT INVESTMENTS TOTAL = 24.5 bn EUR (1993 2011) Country FDI % of total 1. Austria 25% 2. Netherlands 15% 3. Germany 12% 4. Hungary 10% 5. Luxembourg 6% 6. France 6% 7. Italy 5% 8. Slovenia 5% 9. Dutch Antilles 4% 10. Belgium 2%

Introduction (1) ESI Funds EU

Financing possibilities EU ESI FUNDS Possibility for financing food industry -Cohesion fund (CF) - European fund for regional development (EFRD) - European social fund (ESF) - European agr. Fund for rural development (EAFRD) - European fund for fishery (EMFF)

Common agricultural policy EU (1) I Pillar CAP - Direct payments - Market mechanisms II Pillar - Rural development OTHER - Food safety - Quality politics - State aid rules - Environment protection - Animal welfare -... Financing CAP EAGF (cca 80% agr.budget) - (70%) - (10%) EAFRD (cca 20% agr.budget)

Common agricultural policy of EU (2) II pillar (rural development) Rural development fund Annual envelope 332 mln (EAFRD) Measures important for food industry (2014 2020): Support for investments in long term assets Grants Aid intensity (public support) up to 50% eligible expenditure Support for cooperation projects (R&D)

Usage of ESI funds of EU in Croatia (1) CF, EFRD, ESF 1.400 1.214 1.200 1.000 1.011 800 600 400 450 545 200 126 126 141 146 151 154 157 156 95 0 2005 2006 2007 2008 2009 2010 2011 2012 2013H1 2013H2 2013 2014 2015 PHARE,ISPA, IPA CF, EFRD, ESF

Agricultural production in figures Croatia has a total of 1.3 million hectares of cultivated agricultural land, whereof 66% relates to ploughland and gardens, 27% to permament pastures, 7% to orchards, vineyards and olive grows, 0.4% to vegetables and 0.1% Agriculture is complemented by tourism, which is another important economic sector. In addition to agriculture, Croatia has a diverse and well developed manufacturing and food processing industry.the capacity of this industry is sufficient to satisfy the needs of the domestic market as well as the markets of neighbouring countries. In the production of wheat, corn, poultry, eggs, honey and wine, Croatia has reached self-sufficiency.

Croatian agriculture in EU SUPPORT & RESTRICTIONS 373 mil euro for direct payments (I Pillar) 332 million euro for rural policy (II Pillar) Production quota for - milk, 750 thousand tons, sugar, 193 thousand tons) EU citizen are allowed to buy land seven years after transitional period (foreign companies registered in Croatia can purchase, rent, or take the land in concession)

www.investincroatia.hr Why invest in Croatia? Where to invest? How to invest? INVESTMENT PROJECTS CATALOGUE Assistance, information, databases

Example project 1 Biogas plant in Trpinja, Croatia The project is located in the Eastern part of Croatia, Municipality Trpinja, 12 km away from the City of Vukovar. The lot size is 18,660m2 and it is located 100 meters of air distance from the state road D2 (the main state road in the Northern Croatia, connecting the country with Slovenia on the West and Serbia on the East). The location intended for the power plant is a part of the construction zone owned by the Municipality of Trpinja and it is intended for economic projects. There are additional 33,947 m2 of construction land available. Economic category Energy - Renewable Energy Financial sources Estimated project value 3.700.000,00

Example project 2 Production of frozen & fresh food (Istria) PRODUCTION OF FROZEN AND FRESH FOOD Location Business zone Mala Huba, 52420 Buzet, Koparska 1 County Istria County Description :Offering partnership in production of fresh or frozen foodstuff. Primary bakery and confectionery products. Possible production of pasta and ice cream. The Croatian market is partially covered and it is expected that partner ensure foreign market. Financial sources Estimated project value 1.800.000,00 The project value is 1.8 million. 50% of the investment project is to be provided by the foreign partner into the new tehnologies, and 50% is the investment of the OŠO craft (real estate)

Example project 3 Spring water bottling plant PRIMA spring water bottling plant Location: Plaški, Croatia County Karlovac County Description Investment in uncompleted spring water bottling plant including building plot of 270.000 m2, with partial documentation, water concession and permits, 3 drills of total 100l/sec capacity. Estimated project value 10.000.000,00 Project involvement possibility Looking for investor Preparation of project documents Documentation status Partial project documentation For details please contact: investicije@hgk.hr

WHY CROATIA? Gateway to Central and Easter Europe Focal point of business activities in the region Final stage of the EU accession negotiations Legislation harmonized with the EU Modern infrastructure Business friendly environment Well educated and professional workforce Free trade agreements

THANK YOU FOR YOUR ATTENTION Contacts: Croatian Chamber of Economy Rooseveltov trg 2, 10000 Zagreb, Croatia e-mail: investicije@hgk.hr; hgk@hgk.hr