Transcript industrial development strategy of the republic of croatia 2014-2020

The Industrial Policy in Croatia
19 September 2016
Industrial Development Strategy
of the Republic of Croatia
2014 - 2020
INDUSTRIAL DEVELOPMENT STRATEGY OF THE REPUBLIC
OF CROATIA 2014-2020
THE REPUBLIC OF CROATIA
Area:
56,542 sq km
Capital:
Zagreb
Population:
4.4 million
Official language:
Croatian
Domestic currency:
Kuna (HRK)
INDUSTRIAL DEVELOPMENT STRATEGY OF THE REPUBLIC
OF CROATIA 2014-2020
Harmonized with EU
legislation
Croatia was a
non permanent
member of UN
Security Council
from January 2008
till January 2010
Croatia became a
full member in
April 2009
Negotiations ended
with EU by mid of 2011
Accession: July 1, 2013
BASIC MACROECONOMIC INDICATORS
INDICATOR
GDP per capita, €
2008
2009
2010
10,856 10,181 10,191
2011
10,453
2012
2013
2014
2015
10,300 10,213 10,129 10,364
-0.4
1,6
-2.2
-0.9
17.0
16,3
16.0
17.3
GDP growth, %
Unemployment rate (ILO) %
2.1
8.6
-7.4
9.2
-1.7
11.7
-0.3
13.7
Inflation rate, %
6.1
2.4
1.1
2.3
3.4
2.2
-0.2
-0,5
Export of goods and services, % of
GDP
FDI, billion €
38.5
34.5
37.8
40.5
41.7
43.0
46.2
50
3.6
2.3
1.0
1.0
1.1
0.7
2.9
0,5
Gross monthly salary, €
Exchange rate HRK/EUR
1,030
7.32
1,056
7.30
1,040
7.38
1,035
7.53
1,044
7.54
1,040
7.63
1,038
7.66
1,031
7.50
INDUSTRIAL DEVELOPMENT STRATEGY OF THE REPUBLIC
OF CROATIA 2014-2020
INDUSTRIAL DEVELOPMENT STRATEGY OF THE REPUBLIC
OF CROATIA 2014-2020
FDI – 29.8 BILLION € (1993 – I-III / 2016*)
FDI by sector
FDI by country
NETHERLANDS
20,20%
OTHER
24,51%
SLOVENIA
4,39%
AUSTRIA
17,71%
Trade
15,00%
Other
17,63%
FRANCE
4,79%
Financial
intermediatio
n
23,64%
Research and
development
0,14%
Hotels and
restaurants
3,07%
ITALY
4,84%
HUNGARY
6,97%
ICT
6,80%
LUXEMBOURG
7,41%
GERMANY
9,18%
Manufacturin
g
19,84%
Real estate
and
construction
13,88%
INDUSTRIAL DEVELOPMENT STRATEGY OF THE REPUBLIC
OF CROATIA 2014-2020
Industrial sectors
• Croatian industry – industrial sectors of the economy
defined by the areas:
- C Processing industry (includes 22 activities),
- F Construction (includes 3 activities) and
- J Information and Communication (include 6
activities) NACE 2007.
INDUSTRIAL DEVELOPMENT STRATEGY OF THE REPUBLIC
OF CROATIA 2014-2020
 The key obstacles of the Croatian economy:
– Institutional environment: non-efficient public sector (state
administration), legal insecurity, corruption, high and complex tax
burden, administrative procedures and incomprehensible regulations
– Low FDI rate in industry
– Low share of highly educated labour force in total labour force
– Insufficient investment in research and development (low level of
innovative capacity)
– Low level of labour productivity
– Difficult access to capital markets and high cost of capital
– Low level of technical equipment
– (Non)aligment of educational system with the industrial demands
INDUSTRIAL DEVELOPMENT STRATEGY OF THE REPUBLIC OF
CROATIA 2014-2020
KEY INDUSTRIAL ACTIVITIES
- Key industrial activities in the Republic of Croatia are:
• C 21: production of basic pharmaceutical products and
preparations,
• C 26: production of computers and electronic and optical
products,
• C 25: production of finished metal products,
• J 62: computer programming, consulting and related
activities (ICT),
• C 27: production of electrical equipment,
• C 28: production of machines and appliances
INDUSTRIAL DEVELOPMENT STRATEGY OF THE REPUBLIC
OF CROATIA 2014-2020
Strategic goals – Croatian industry in 2020.
Main strategic goal:
Repositioning of the identified strategic activities on the global value chain
towards production of the goods with higher added value.
Added economic value
Research and
Development
After sales services
Design
Marketing
Distribution
Logistics
Supply Logistics
Production
Base price
Pre-production
non material
Production
material
Activities that add value
Post-production
Non material
INDUSTRIAL DEVELOPMENT STRATEGY OF THE REPUBLIC
OF CROATIA 2014-2020
Strategic goals – Croatian industry in 2020.
Other strategic goals:
 Growth of the industrial production volume at the average
annual rate of 2.85%,
 Growth of the number of new employees by 85,619 by the
end of 2020, out of which minimum 30% with higher
education
 Growth of the labour productivity by 68.9% in the period from
2014-2020,
 Growth of the export by 30 % from 2014-2020 and change in
the export structure in favour of goods with higher added
value.
INDUSTRIAL DEVELOPMENT STRATEGY OF THE REPUBLIC
OF CROATIA 2014-2020
Priority areas
 Creation of the stimulating investment environment –
“long-term contract with investor”
 Encouragement of the strategic cooperation between
industry and education system – “new knowledge for
new employments”
 Increase of the efficiency of the public service and
administration – “proud to be working for public
service!
 Development of the capital market – ”alternative
financial sources”
The Operational Plan for the
Implementation of the Industrial
Development Strategy in Croatia
2014- 2020 in 2016
NEW PHILOSOPHY AND APPROACH
Traditional approach
MODERN APPROACH
•
•
•
•
•
a certain reduction of taxes for a certain capital invested
State is not a partner investor
State bears no risk
all countries have very similar incentives
State is not listening to the observations and is not actively
involved in their resolving
•
•
•
•
•
State is a partner and entrepreneur
placed in a position of an entrepreneur
takes care of his investment
through personal contact leads him through the bureaucracy
State bears a part of the risk and "shares" with entrepreneurs
a part of the profit (tax)
The Operational Plan for the Implementation of the Industrial
Development Strategy in Croatia 2014-2020
• 4 groups of activities:
1. Activities to increase employment and productivity,
2. Activities to encourage capital investments,
3. Activities to encourage research, development and innovation,
4. Other activities
•
a total of 13 horizontal and 5 vertical groups of activities with associated
sub-activities
The Operational Plan for the Implementation of the Industrial
Development Strategy in Croatia 2014-2020
13 horizontal groups of activities that involve more sub-activities:
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











H1. Activities to ensure stable and unchangeable business conditions
H2. Enabling the investment conditions "consultation” system
H3. Employment Promotion Activities
H4. Activities to keep the most talented human resources in the country
H5. Activities to support capital investment to maintain employees
H6. Activities to promote the use of inventions and copywright works in Croatia
H7. The establishment of the Industrial Development Fund or the organizational unit within the
Agency for Investment and Competitiveness
H8. Activities to promote occupations on which the "green economy„ is based
H9. Activity to establish database and create possibilities for financing projects in the area of
technology and innovation that could not find resources to finance development
H10. The establishment of the venture capital fund for industry
H11. Activities to promote the introduction of special exports funding programme (insurance) by
the Croatian Bank for Reconstruction and Development
H12. Activities to reorganize the Ministry of the Economy
H13. Activities to develop official documents
The Operational Plan for the Implementation of the Industrial
Development Strategy in Croatia 2014-2020
5 vertical groups of activities that involve more sub-activities:
• V1. Activities to promote the development and research (R & D)
projects
• V2. Activities to promote special education and training of workers
• V3. Industrial tutoring for disadvantaged workers
• V4. Activities to promote increased cooperation of employers and
educational and scientific institutions
• V5. Activities to promote the employment of persons older than 50
years
• will apply to strategic activities
INDUSTRIAL DEVELOPMENT STRATEGY OF THE REPUBLIC
OF CROATIA 2014-2020
The realization of selected indicators of industry - comparison with
the real scenario of the Industrial Strategy 2014-2020
1 INDUSTRIAL PRODUCTION VOLUME INDEX (2008 = 100)
year
planned
accomplished
2008
100.0
100.0
2014
83.5
81.9
2015
84.3
85.0
2016
86.1
2017
88.7
Indeks obujma industrijske proizvodnje
2018
92.2
2019 2020
95.9 100.7
2008 = 100
105,0
100,0
100,7
100,0
95,9
95,0
92,2
planirani indeks
88,7
90,0
83,5
85,0
80,0
81,9
85,0
86,1
stvarni indeks
84,3
75,0
2008
2014
2015
2016
2017
2018
2019
2020
INDUSTRIAL DEVELOPMENT STRATEGY OF THE REPUBLIC
OF CROATIA 2014-2020
The realization of selected indicators of industry - comparison with
the real scenario of the Industrial Strategy 2014-2020
2 RATES OF INDUSTRIAL PRODUCTION VOLUME
CHANGES as compared to a previous year (%)
year
2014
2015
2016
2017
2018
2019
2020
planned
1%
3.1
1%
3.5
2%
3%
4%
4%
5%
accomplished
Stope promjena industrijske proizvodnje u odnosu na
prethodnu godinu (%)
2020
2019
godina
2018
2017
ostvareno
2016
planirano
2015
2014
0
0,5
1
1,5
2
2,5
3
3,5
4
4,5
5
INDUSTRIAL DEVELOPMENT STRATEGY OF THE REPUBLIC
OF CROATIA 2014-2020
The realization of selected indicators of industry - comparison with
the real scenario of the Industrial Strategy 2014-2020
3 CONSTRUCTION WORKS VOLUME INDEX (2008 = 100)
year
2008
100
100
planned index
real index
2014
88.9
56.5
2015
88.9
56.1
2016
88.9
2017
88.9
2018
88.9
2019
88.9
2020
88.9
Indeks obujma građevinski radova
120
100
2008 = 100
100
88,9
88,9
88,9
88,9
88,9
88,9
88,9
80
planirani indeks
60
56,5
56,1
2014
2015
stvarni indeks
40
20
0
2008
2016
2017
2018
2019
2020
INDUSTRIAL DEVELOPMENT STRATEGY OF THE REPUBLIC
OF CROATIA 2014-2020
The realization of selected indicators of industry - comparison with
the real scenario of the Industrial Strategy 2014-2020
4 GROSS VALUE ADDED (000 HRK)
year
2014
planned (mil HRK)
accomplished (mil
HRK)
2015
68,763
71,480
58,648
60,644
2016
76,983
2017
86,476
2018
2019
100,600 118,089 141,555
Bruto dodana vrijednost (mil. kuna)
2020
2019
ostvareno (mil. kn)
godina
2018
2017
planirano (mil kn.)
2016
2015
2014
0
20.000
40.000
60.000
80.000
100.000
120.000
2020
140.000
160.000
INDUSTRIAL DEVELOPMENT STRATEGY OF THE REPUBLIC
OF CROATIA 2014-2020
The realization of selected indicators of industry - comparison with
the real scenario of the Industrial Strategy 2014-2020
5 NUMBER OF NEW EMPLOYEES
year
planned
accomplished
2014
2015
2016
2017
2018
2019
2020
2,209
2,992
6,098
10,604
16,005
20,132
27,579
-994
1,247
Broj novozaposlenih
2020
2019
godina
2018
ostvareno
2017
planirano
2016
2015
2014
-4.000
0
4.000
8.000
12.000
16.000
20.000
24.000
28.000
INVESTMENT POLICY
ELIGIBLE SECTORS AND COSTS
Sectors
Incentives
Eligible investment
costs
• Manufacturing activities
• Technology centers
• Strategic business support services
• Tourism (4 plus star hotels and resorts, sports and health centers,
etc.)
•
•
•
•
•
Tax incentives
Employment and education grants
Incentives for modernization of technology and R&D activities
Incentives for initial and capital expenses of the investment project
Incentives for labour intensive investment projects
• Equipment and machinery and intangible assets: patent rights,
licenses, know-how, or
• 2 year-gross salaries
INVESTMENT POLICY
Minimum investment: 150,000 € - SME’s and large size companies
Incentives
Tax incentives
Employment incentives
Incentives for Innovation and
Development
Incentives for Initial and Capital
Expenses of the Investment Project
0% - 10% profit tax rate
€3,000 – €18,000 per employee
20% of the eligible cost of buying the
equipment/machinery (up to € 0.5 million)
Cash grant in amount of 20% of the eligible costs (up to
€ 1.0 million)
Respective investment incentives are calculated on an individual basis.
STRATEGIC INVESTMENT PROJECTS
 Private, public or public- private investment projects
 Sectors:
Economy, energy, tourism, transport, infrastructure, electronic communications, postal services,
environmental protection, utilities, agriculture, forestry, water management, fishery, health care
system, culture, science, defense, judiciary, technology and education
 Main criteria:
 minimum investment value:
- ≥ 20 million EUR
- ≥ 10 million EUR(if co-financed from funds and programs of the European Union )
- ≥ 2.7million EUR (for the areas of special national concern)
 Significant employment
 Development /Improvement of the production standard of goods and services
 Introduction and development of new technologies
 Positive effect on economic activity and creation of added value
 Contribution to the Croatian economy competitiveness, sustainable development and
protection of environment
 In compliance with the obligations undertaken by international agreements and the
strategic documents of the EU and the Republic of Croatia
INVESTMENT CLIMATE
INVESTMENT CLIMATE
According to the current Doing Business World Bank report (2015), Croatia is in the
40th place out of 189 countries.
INVESTMENT CLIMATE
• QUICK OBTAINMENT OF BUILDING LICENCES
 Glass processing factory - Press glass SA
1 day
 Hotel Valamar President
2 days
 Factory for leather products - Wollsdorf components Ltd
5 days
 Washroom hygiene, mats, workwear and textile - Cws-Boco Ltd
8 days
 Industrial plant for the production of energy bars - Atlantic Multipower Ltd
19 days
The Program of Aid for Investment
in Production Technology
The Program of Aid for Investment in Production Technology
The total amount of resources and users
The total amount of funds intended for the implementation of the
Program: 40 million
• Small entrepreneurs that on 31.12.2015 employed minimally
40 workers
• Medium entrepreneurs
• Large entrepreneurs
The Program of Aid for Investment in Production Technology
Eligible applicants
•
•
•
entrepreneurs registered for economic activities for at least two
years before the date of application submission
entrepreneurs, as well as their affiliates, who do not have any
outstanding commitments to employees, public duties, as well
as obligations under previously awarded grants
entrepreneurs who are, along with the implementation of
investments, able to maintain or increase the number of
employees
The Program of Aid for Investment in Production Technology
The intensity, the level of support and measurable goals
The aid intensity:
• Small and medium entrepreneurs: 35% of eligible costs
• Large entrepreneurs: 25% of eligible costs
The maximum level of support per applicant: 1.5 million kuna
Measurable objectives of the Program are:
• employment growth
• revenue growth
• growth of export value
The Program of Aid for Investment in Production Technology
Method of projects evaluation
Value parameters
 Value for money that the project offers:
–
–
–
contribution of the project to the increase of employees,
increase in sales revenue and
Increase of the exports value
 The financial viability of the project
 Enforcement capacity of the applicant:
–
–
The expertise and capacity of the applicant,
Financial capacity of the applicant
 Design and project maturity
–
–
–
–
Identification and formulation of the project,
The feasibility plan of the project
The risk of project
Analysis of options
 Horizontal issues
 The contribution of the project to solving specific development problems
at the site of implementation
Shipbuilding in Croatia
SHIPBUILDING IN CROATIA
Industrial sector
• part of the industrial heritage of Croatia
• share of this sector in GDP is about 1.4%
• share in Croatian commodity exports in the last few years is
over 15%
• Croatian shipbuilding industry employs approximately 8,000
employees in four largest shipyards
• share of products and services produced in Croatia in the built
ship is between 50-65%
SHIPBUILDING IN CROATIA
The multiplier effect
• The value of the shipbuilding multiplier factor determined
according to the latest estimates is 2.83
• In addition to directly employed, shipyards provide
employment for about 3000-4000 subcontractors, while
more than 1500 companies (manufacturers of marine
equipment, and variety of materials and services) and more
than 20,000 employees are linked to shipbuilding
The importance of the shipbuilding industry, especially
in the area of ​employment, for Croatia is extremely
large.
SHIPBUILDING IN CROATIA
Shipyards
Two large shipyards of four (Uljanik, Pula, Brodograđevna industrija and 3. Maj d.d.
Rijeka) are located on the northern Adriatic (Istria and Primorje) and two (Brodosplit,
Split, Brodotrogir, Trogir) in the south
Shipyard 3. MAJ d.d.
SHIPBUILDING IN CROATIA
Plans and further activities in the implementation of the restructuring
process
Uljanik brodogradilište d.d., Brodograđevna industrija Brodosplit d.d.,
Brodotrogir d.d. and Brodograđevna industrija 3 MAJ d.d., the shipyards in
majority state ownership have been privatized by the Government. All of
them, except Uljanik are in the process of restructuring.
Brodograđevna
industrija Split d.d.
SHIPBUILDING IN CROATIA
Plans and further activities in the implementation of the restructuring
process
Croatia intends to preserve its shipbuilding industry, starting from the
knowledge, experience and tradition in the production of ships, its maritime
orientation, importance of this industry concerning employment and the impact
on the entire of the economy.
Brodotrogir d.d.
Ministry of the Economy
Sector for Industry and Investments
Robert Blažinović, Head of Sector
[email protected]
+385 98 95 28 502