[Business Travelogue]: How Pula Learns to Live and Work Without the Great Uljanik

We bring you the first installment of a major inventory of the Croatian business scene observed from a 'frog's perspective', from a local level. The series will last for 30 weeks, in both printed and digital editions of Lider. During this time, we will publish daily business travelogues on the most significant companies in all counties and the economically strongest cities, as well as companies with development potential.

The city on seven hills, with an amphitheater, Mars Field, and August Forum (and it is not Rome) has undergone the greatest changes in five years since we conducted the last major entrepreneurial inventory. Until a few years ago, the three largest companies were Uljanik, Arenaturist (now Arena Hospitality Group) and Uniline. The collapse of the large shipyard and the pandemic completely reversed the balance of power. In 2020 (the last year for which complete comparable results exist), the top positions were held by Auto Benussi, cement factory Calucem, and Alpha Adriatic (former Uljanik Plovidba). Nowhere at the very top of tourism or shipbuilding.

And while tourism began to recover last year, and tourism workers hope for a full recovery and return to record 2019 levels in 2023, Pula and the entire Istria will continue to suffer for a long time due to the collapse of Uljanik, which once employed 3,400 workers, and today its derivative, Uljanik 1856, has dwindled to 250 employees (and at the beginning of the 'new era' there were only 33), who are trying to save what can be saved and realize a new concept of shipbuilding, but within significantly more modest frameworks.  

Concentric Circles of Collapse

The collapse of Uljanik is explained by experts as a result of the state installing compliant managements that were not controlled by anyone (least of all the largest shareholder – the state), leading to money being ruthlessly siphoned off through cooperations, and Uljanik became an ATM. The end was logical when greed was added – from taking on more jobs than capabilities allowed, to the excessive appetites of Uljanik employees with the takeover of 3. Maj. Unfortunately, the total damage from the bankruptcy (which was preceded by a series of media-covered arrests) did not stop only within the circle of Uljanik, which directly dragged down related companies: Uljanik Strojogradnju Diesel, Uljanik TESU, Uljanik Pomorstvo, Uljanik PIS, Uljanik Production of Equipment… The concentric circles of collapse also expanded to cooperators such as the Sarajevo shipbuilder that provided workers from BiH for the Pula shipyard, and many other cooperators suffered – to a greater or lesser extent. For example, the neighboring shipyard, Tehnomont (which we wrote about in the last issue), used to work on up to 8,000 tons of ship sections annually for Uljanik and 3. Maj. Such work no longer exists, neither for Tehnomont nor for other cooperators from Pula, Istria, and Croatia.

The former warehouseman and shipbuilder at Uljanik, who by force of circumstances took the director’s chair, Samir Hodžić, remains optimistic, just as he was a year ago when he restarted production with the few remaining workers.

– I am not someone who likes to sell stories, and if I didn’t think it was possible, I wouldn’t have taken it on. People have left Uljanik but are working nearby, in Italy, and are eager to return home. At this moment, we have enough people, but the goal is to expand production and we will need more people. Of course, we then need to provide those people with security through contracted jobs and their salaries. The medium-term plan is to finish one larger ship per year and fill the gaps with smaller boats such as fishing vessels and jobs for other shipyards like the production of ship sections. We plan to continue operating on a market basis and maintain the shipyard – the optimistic head of Uljanik 1856, once one of the louder critics of the former leadership, stated.

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From Historical City to City of the Future

Once, the shipyard was a target for real estate speculators, who dreamed of tourist investments in that attractive area. The new Pula authorities would like to retain shipbuilding, and one of the prominent ideas is to transform the Uljanik area into an industrial incubator for small shipbuilding. Director Hodžić is aware that the space they have is enormous and generates costs for them as such. He is open to steps towards a possible shipbuilding hub and says that they are ready to immediately give everything they do not need, what they do not use, to subcontract to manufacturing companies.

The new mayor of Pula Filip Zoričić claims to have a plan for growth from 60,000 inhabitants to 100,000. He announced, among other things, a reduction in utility fees for shipbuilding, which would save Uljanik more than a million kuna a year. This measure will disappoint real estate speculators but will delight Uljanik employees and about 30 other shipbuilding companies in Pula.

Zoričić mentions digitalization, climate change, traffic, and green policies as key Pula themes on the path to transition into the 21st century and after Uljanik. He sees Pula as a center for freelancers and innovations, for the development of startups, and announces the presentation of a development plan in collaboration with the University, Infobip, Carnet, and other partners. In this context, Zoričić is confident that Pula 'as a historical City will become a City of the Future'.

Let us live and see!

You can read the complete report from Pula in the new printed or digital edition of Lider.