# Presentation: 042708

## CROATIA

## Country Profile

**Location:**  So. Central Europe
**Area:**  87,605 square km
**Land:** 56,538 square km
**Sea:**  31,067 square km
**Coast line:**  1,778 km
**Islands:**  1,185
**Capital:**  City of Zagreb

## Croatia – crossroads of Central Europe

## Population:  4.4 million    

- Population:  4.4 million

## Capital population: 779,145
Out of 1,185 islands, 66 are populated

**Out of 1,185 islands, 66 are populated**

**Total population**
**4,437,460**

**Notes:**
The demand for crude oil in Europe is proven and the EU has identified the need to secure strategic supplies for the future. A substantial market can be accessed via existing European pipeline networks from terminals in Trieste and Genoa

## Why export to Croatia?

- Geographically significant country – regional center
- Growing economy
- Plans to join both the European Union and NATO
- EU and World Bank-funded projects offer opportunities for consultants and suppliers

## Economic overview

- GDP of  $59.4 bil. in 2006
- Per cap is $13,200
- Unemployment rate 16.6%
- Total Exports:  $11 Billion
- Total Imports:  $22 Billion

## Export opportunity sectors

**Medical/**
**   ****Healthcare**
**Environmental**

** ****Energy/**
**   ****Electrical Power**
** ****Telecommunications**
** ****Tourism**

## From the Inside Out – Where does Croatia see its export potential?

- water
- small shipbuilding
- textile and clothing
- ICT solutions
- wood and furniture
- aquaculture

## Croatia’s Road to Accession

- June 1991		Croatia declares independence
- 1992	EU establishes diplomatic relations
- October 2001	Stabilization and Association 				agreement
- December 2001	EU adopts country strategy
- February 2003	Croatia submits application for 				EU membership
- June 2004		Official candidate status granted

- October 2005	Accession Negotiations started.  			Screening Process begins
- October 2006	Screening Process completed
- November 2006	EU Progress Report on Croatia 				asks for further reforms
- March 2007	Negotiating Chapter on IPR 				opened on March 29.
- April 25		EU Resolution cites 2009 as 				possible date for admission

## Status Report

- Still to be accomplished – reform judiciary, reduce subsidies, improve state administration and reduce corruption.
- Commended for cooperation with the ICTY, some lingering war crime issues
- Not cited, but to be resolved – border issues with Slovenia
- 8 chapters submitted for negotiation;  2 closed

## When?

- Politicians talk about 2009
- Many analysts see 2011 or 2012 as more realistic
- Companies seem more interested in keeping their share of a small local market than preparing for the fierce EU competition

## Medical / HealthcareTechnologies

## Medical: Market Overview

- Estimated at approximately $150 million
- No significant equipment production in Croatia
- Imports account for 95% of the market
- Dominated by imports from Germany, Japan, US, Italy, Austria etc.

## Medical/Healthcare Sector

**	****Key player – Ministry of Health**
- The main factor in executing any restructuring plans
- Develops principal health policies
- Creates health care budget
- Manages medical investment programs
- Oversees the work of all state-owned health institution

## Medical/Healthcare cont.

- The Ministry mostly finances
- 	Croatia’s medical sector through
- 	the Croatian Institute for Health Insurance (CIHI)
- CIHI covers the cost for most of health care and presently suffers financial difficulties caused by increased health expenditure

## Medical/Healthcare cont.

**Health care system reform:**
- Stabilize health care expenditure
- Restructure prescription patterns
- Improve health care services
- Improve education of health care workers

## Medical market cont.

- Market beginning to show growth
- Due to limited governmental resources market is still price-sensitive
- Ministry’s goal - to establish a well-equipped health care system that will provide faster and more accurate diagnoses and deliver better treatment

## Medical: Sales Potential 

- Diagnostic equipment:
- 	electrocardiographs, endoscopes, scanners, digitalized x-ray, computerized tomography (CT) scanners and imaging equipment
- Other: pacemakers, clinical laboratory equipment and dialysis equipment

## Medical: Export Opportunities

- The Ministry of Health administers procurement for capital equipment and other high-value items for hospitals
- Croatia’s improving economic situation – medical market increase
- Hospital market great prospect because of inadequate medical equipment

## Medical: Export Opportunities

**The emerging IT-health market **
- Ideal time for U.S. companies
- Identify a local partner and pursue upcoming IT-health projects in Croatia
- Ex.: The Institute for Health Insurance has been implementing a computerized prescription system.

## Environmental TechnologiesPollution Control

## Environmental: Market Overview 

- The government encourages local authorities to improve environmental protection infrastructures that meet European standards.
- Only about 0.2% of GDP has been directly invested in environmental protection, which is around 30-35 million annually.

## Market Overview

- Key player – Croatian Waters (state owned utility)
- Project:  Improvement of wastewater treatment
- - $106 million project to fight water pollution financed by World Bank
- Improving water quality
- Protecting ecology and public health
- Discharge infrastructure and sanitary conditions to 177 coastal towns and municipalities over next 10 yrs

## Water management system

**Wastewater Purification:**
- Purified in Croatia-35%
- Sewer system connection-60%
- Public water supply system-70%

## Water Management System

**Long term goals: **
- Conform water supply and sewage systems to environmental, social and economic development requirements
- Build 20 wastewater facilities by 2010
- Rehabilitate old and build new disposal sites

## Waste management system

- Croatia generates more than 1 million tons of municipal waste (about 253 kg per person) annually and more than 100,000 tons of hazardous industrial waste.
- Organized waste collection and disposal cover around 53% of the population.

## Waste management system cont...

- For the period 2001-2005 total
- estimated required funding:
- Waste management system - $2.2 billion
- Water purification needs - $5 billion
- Waste and water systems would together
- absorb $600 million of investment per year,
- 4% of GDP.

## Prospect sectors

- Water quality maintenance and monitoring
- Improvement of water supply systems and waste water treatment facilities
- Solid waste (urban and industrial) management
- Systems for waste separation, rehabilitation of waste disposal sites, treatment and disposal of hazardous waste
- Construction of incineration(s), air pollution emissions control.

## Tourism Infrastructure

- Resort Development
- Golf courses
- Architecture and Management Contracts
- Wellness Centers
- Equipment and Supplies
- Hotel projects and Re-furbs

## TelecommunicationsInformation Technology

## Market overview

- _Croatian telecommunication industry _
-   Fast growth in the past few years
-   Telecommunications companies are continually introducing state-of-the-art technologies, keeping up with companies operating in the Western European telecommunications market

## Market overview cont...

-   The leading telecommunications carriers and providers are Croatian Telecommunications (T-HT, re-branded HT)
-   T-HT majority owner is Deutche Telekom with 51% of shares and 49% is state owned
-   T-HT is among the largest companies in the region

## Market overview cont...

-  In 2004, total market was estimated at $950 million
- Imports account about $750 million
- Imports from the U.S. $5 million

## Fixed operators

-   In 2005 – full liberalization of telecommunication services led to new operators entering the market
-   Optima Telecom and Portus – new fixed operators
-   Licenses purchased for a 30 year period for $6.7  million

## Mobile operators

- Two leading mobile operators are T-mobile (re-branded HT Mobile) and VIPNet.
- Recently, Tele2 (Swedish –Croatian consortium) won the license for the third combined GSM/UMTS network
- Competition, and prices are plummeting

## Today, 3-plus million wireless subscribers

**Today, 3-plus million wireless subscribers**

## Opportunities

- Mobile communications – the most developed market with penetration rate 101%
- Internet penetration – 31%
- Broadband services – penetration rising rapidly
- Triple play service just launched

## Opportunities cont...

- Licensees for mobile networks are required to invest in order to achieve territorial coverage required by law.
- Two new fixed operators are required to invest 50 mil EUR each in network equipment in the next four years.

## Locate U.S. products, services, or business partners
Introduce your company to thousands of qualified U.S. companies at local and U.S. trade shows

- Introduce your company to thousands of qualified U.S. companies at local and U.S. trade shows

- PEOP - Pan European Oil Pipeline         Constanta to Trieste Oil ProjectMinisters of Romania, Serbia, Croatia, Slovenia, Italy & EU Energy Commissioner signed a ministerial declaration on the PEOP to supply oil from the Caspian to the European consumer market (Zagreb, Croatia, April 3, 2007)

**We can... **

- Trade specialists in 108 U.S. cities and more than 150 posts in 80 countries worldwide...

## How to contact us

**U.S. Embassy Zagreb**
**Tel: 661-2224**
**Fax: 661-2446**
**Email:  Zagreb.Office.Box@mail.doc.gov**
**www.buyusa.gov/Croatia**

**www.export.gov**