What is the key difference between the best companies and the rest of the economy? The answer to this question can be found in this week’s Lider, in the bilingual Croatian-English publication ‘500 Largest’, where we present the best companies in Croatia.
The magic word is export, and this has been especially true over the last ten years since Croatia joined the EU.
Before July 1, 2013, the share of exports in revenues varied depending on economic cycles, and there was no significant difference between the best and other companies. During times of prosperity, imports grew, the kuna strengthened (up to an average exchange rate of 7.3 kuna for one euro at the end of 2009), only to start weakening afterwards (to 7.66 at the end of 2014).
However, with the accession to the EU, the situation changed. With the opening of a single European market of nearly half a billion people, exports became more profitable. Even in 2013, the top 1000 exporters accounted for only 14.7 percent of revenues, while others were bolder with a 17 percent share of exports in revenues. Since then, it is precisely exports that have begun to make a difference. First, the best companies in terms of export share surpassed the rest of the economy, and then the difference grew year by year (with the exception of disruptions during the pandemic). Most companies raised their export share timidly, reaching a maximum of 18.9 percent last year (matching the share from 2017).
Meanwhile, among the top 1000, there were more and more exporters, who raised their share of exports in revenues to a respectable 28.8 percent last year. Thus, in ten years, the top 1000 changed their export share from 14.7 percent to 28.9 percent, while others increased their share symbolically, from 17 percent to 18.9 percent. Over those ten years, the number of exporters (who exported goods and services for at least one euro) grew from 622 companies to 760.
Among the 240 ‘non-exporters’ are 25 banks and insurance companies that do not export, as well as 36 companies from three sectors primarily focused on the domestic market, with symbolic exports – the real estate sector, utilities, and water supply and drainage. Thus, we arrive at a relatively small number of 179 companies that do not export but are involved in activities where export is possible. Otherwise, it can be said that 302 companies are primarily exporters, as they generate more than 50 percent of their revenues outside Croatia.
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Usually, the data about new players in the elite society is intriguing. Of the 102 new companies among the top 500, as many as 61 are returnees, and 41 are truly new companies that are here for the first time. Zagrebački holding is the largest creator of new value among the returnees, as it operated positively last year. Among those that reported losses in 2021, Croatia Air Traffic Control, Tankerska next generation, Petrokemija, Porsche Zagreb, Crosco… have emerged. The second group of returnees increased their NSV (primarily through profit growth) to more than 7.12 million euros, which is the amount of the 500th on the list, Rijeka’s IOLAP, owned by the eponymous American IT company, one of the 41 ‘debutants’. The best among them is Energija projekt, a company owned by Koneski Norinac, which ranked high at 29th place because its wind farm above Senj, the largest in Croatia, with a capacity of 156 megawatts, became operational. For the first time among the top 500 are Bugatti Rimac, EON gas, and Sunce hotels (after being purchased from Jake Andabak by Eagle Hills from the United Arab Emirates and after restructuring the company that previously operated each hotel as a separate entity). There is also a subsidiary of the Chinese CRBC, which built the Pelješac Bridge and this summer received a new major project worth nearly 75 million euros for the implementation of the first phase of the New Entrance to Split.
Among the newcomers is Bjelin of Croatian-Swedish Darko Pervan, who is not only growing through acquisitions but is also building the world’s largest wooden flooring factory in Ogulin, as well as another domestic parquet manufacturer – PPS Galeković. From the same sector, it is worth mentioning the only craft on the list, Stolarija i pilana Ratković. However, there are also debutants from new sectors, primarily IT, such as the companies Q and Photomata, and particularly promising could be the first domestic multi-currency cash wallet Aircash, which advertises itself as the only one that can transfer money to Croatia from anywhere in the world, even to places without ATMs.
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