The manufacturing of basic metals and fabricated metal goods has a long tradition in Croatia. Much of the basic metals industry is owned by state funds and banks, whereas private ownership dominates in the manufacture of fabricated metal products. Domestic companies' financial potential in this branch is limited, increased foreign investment of all types is both needed and expected.
There are four machine engineering and three electrical engineering faculties in Croatia which are (colleges) annually producing some 1.000 graduates in the fields of engineering and information technology. Supported by the technology centres of the engineering faculties at the Universities of Zagreb, Rijeka and Split, these experts have the opportunity to develop attractive, entrepreneurial focused manufacturing programmes.
The number of companies possessing ISO 9000 certificates is growing, which is one of the conditions for co-operation and export to industrially developed countries, and also for establishing subcontractor and strategic partnership, especially with domestic manufacturers of machines and equipment.
Companies, which produce machines, appliances and vehicles, actively participate every year in many specialized fairs within Zagreb Fair. The Croatian Chamber of Economics organises national joint attendance of their members on both domestic and international fairs depending on the interest of their members.
Prior to Croatian independence Zadar with it’s companies SAS and BAGAT stood out in this sector. These companies employed a large number of people and operated with customers from Germany to Russia.
1. Proximity of EU countries
Croatia and Zadar County offer a significant advantage, the proximity of the EU market, especially in comparison to the Asian countries whose main competitive advantage lies in their low labour costs. Relative vicinity to the automotive factories in the EU-15 countries, good geographic position and intensive investments in modernisation of infrastructure give domestic producers a great initial advantage.
Apart from lower transportation costs, vicinity to the customers is lately becoming increasingly important, because of the focus on synchronous delivery of parts to customers, according to their daily needs in order to decrease, as much as possible, the storage costs before vehicle assembly.
2. Quality of domestic suppliers is on European Standards level
Majority of domestic suppliers hold all relevant certificates, primarily ISO 9001, but also, more and more the TS16949 certificate. Quality of the products meets high standards set in the automotive industry, which is proven by the fact that most part of the production is exported to the European Union markets. The European level quality and, at the same time, lower labour costs than in other Western Europe countries, are factors creating a significant comparative advantage for Croatia.
3. Strong cooperation of Croatian producers with clients in the area of research, design and planning of new products
Numerous Croatian companies have successfully developed new product lines or services, or upgraded existing ones in past years. Use of AutoCAD and other software for design and development of components is relatively spread in comparison to the situation in other countries of the region.
According to an OECD study, numerous Croatian suppliers already cooperate with their clients in areas which demand deep, stable and medium to long-term business relations, such as product development, product design and production planning. The level of cooperation is much better than in other parts of the region. In addition, majority of the companies use web sites for communication with their clients and regularly participate in on-line public procurement.
All these elements are a clear proof of deep and strong relationships between local suppliers and international clients.
4. Competitive costs and workforce productivity
The Republic of Croatia is still a country with competitive costs compared to EU countries. However, workforce productivity in Croatia is higher than in most countries of Central and Eastern Europe, which is presented in the following graph.
5. Skilled workforce
An important advantage is the quality and availability of highly skilled workforce, or engineers.
6. State support to the development of automotive industry
Although state subsidies are limited in terms of time, since these are direct sectoral state subsidies to producers, they largely contribute to technological modernisation and competitiveness of companies operating in Croatia. CBRD (Croatian Bank for Reconstruction and Development) loans provide additional funds intended for acquiring working capital at favourable terms.
Croatia has a proactive approach to attracting FDI in automotive industry, which include not only tax reliefs, but, also, access to industrial zones and speeding up the procedure of acquiring the necessary licenses.
7. Possibilities for connections with producers in other countries
Good geographic position and globalisation of the automotive production opens for producers in Croatia possibilities to connect with companies in surrounding countries which have significant capacities for production of automotive parts, especially Austria, Hungary, Italy, Slovenia and Romania.
Examples of cross border cooperation already exist, and further possibilities exist for creation of international clusters with producers in Member states and candidate countries. In spite of a high level of industrial rivalry on the international level, current trends in automotive industry force producers to intensify cooperation.
8. Strong tradition
One of the automotive industry crucial heritages in this area is the high level of specific training in automotive sector and availability of skills, including skills which are closely connected with the production of automotive parts, for example metal processing industry, welding, plastic products production, electric equipment production, machine engineering, production of high precision components.
Zadar has a rich and long tradition in metal processing industry. Before Croatian independence, Zadar based companies SAS and BAGAT were among the most successful companies, employing a large number of people and dealing with clients from Germany to Russia. Foreign investors already present in the region pointed out in an OECD study that the presence of skilled workforce in automotive industry was the decisive factor when they selected Zadar county as a location for their investment. According to them, this was not the case in other emerging markets.
LTH Metal Cast d.o.o
LTH Metal Cast in Croatia was founded in 1980 and joined the LTH Castings Group in 1999. After resuming the production in the early 1990s, the company focused predominantly on raw parts production.
Benkovačkih bojovnika b.b, 23420 Benkovac
Tel: + 385 (0) 23 684 810
Fax: + 385 (0) 23 681 032
SAS Strojogradnja d.o.o.
SAS machine tools company was founded in 1961. Today it is a very successful member of the RIKO group. The production programme of SAS machine tools company includes:
- Special machine tools
- Machining centres
- Flexible manufacturing systems and lines
- Transport and manipulating equipment
Hstec (formerly SAS-HSTEC d.d.) was founded in the year 1997 for development, design and production of high speed precision motor spindles, direct drives and other high speed technology, as well as for engineering, design and automation of special machine tools and systems.
Zagrebačka Ulica 100, 23000 Zadar
Tel: +385 (0)23 205 405
Fax: +385 (0)23 205 406
ALUFLEXPACK is a Croatian company founded in June 2001 as successor of former Folijaplast founded in October 1981, with head office in Zadar, 23000, Murvica bb. AFP has two production plants, in Umag and Zadar, and it employs 400 people. The company uses the state of the art technologies for printing, lacquering, extruding and laminating. Our main activity is flexible packaging and conversion of aluminium foil and flexible films.The plant in Zadar is specialized for the aluminium program – UV flexo, conventional flexo and is orientated towards dairy and pharmaceutical industry. The company is certified according to the ISO standard 9001:2000.
Murvica bb, 23000 ZADAR
Tel: +385 23 205 205; +385 (0)52 703 300
Fax: +385 23 205 155; +385 (0)52 741 217