In Croatia: Helping Exports Expand

When the economic crisis hit Croatia a few years back, owners of HSTec – a metal fabrication exports company in the country’s northern Dalmatian region – did everything they could not to lose their highly-skilled employees.

But after paying salaries, there was nothing left to invest with, and most commercial credits were too pricy to accept, until chief operations officer and part owner Mladen Sarlija heard of competitive financing through a loan project for export companies run by the Croatian Bank for Reconstruction and Development:

“We used it for our long-term capital and cash flow to get out and start new growth after the crisis.  That is what the credit was for,” Sarlija says.

The favorable loan, he says, helped the factory better weather the crisis and hold on to its nearly 60 employees, who design and produce specialized metal parts and machines ranging from robots to motorized spindles.  Company sales are finally recovering, and there are even thoughts of expanding, Sarlija says.

“I don’t know by how much, but we will expand and specialize in other niches – main drives and high speed drives,” he says.

More than 72 million Euros in credit have been distributed so far under the Government’s export finance project, which is backed with World Bank funds.

The project’s objective is to support the preservation and growth of Croatia’s exports, through providing medium- and long-term capital to exporters and foreign exchange earning companies.

It focuses on helping the country’s exporters recover from the crisis, invest in their businesses, and create jobs for people like Kristina Verunica, a student of electrical engineering who is able to put her skills to work at HSTec – the specialized parts company.

“We need industry to evolve, to modernize, so I am hoping for a better future. I am hoping that tomorrow we will have small- and medium-sized companies like HSTec where young people can work and make some innovative products,” says Verunica, who is also perusing a PHD at a nearby university.

Until now, an estimated 57 companies have benefitted from the export project, with low-interest credits ranging from 34 thousand to 10 million Euros.

With his loan from the government project, Gordan Kolak’s Zagreb-based export company, Dok-ing, not only survived the crisis, but is rapidly expanding.  

“When we received that loan, we actually grew by, I think, 30 percent in labor.  And for this year, 2013, our plan is to grow ten percent in labor.  In the next three years, the plan is to grow and employ much more people,” says Kolak.

In addition to the robotic demining systems his company is known for, it’s now producing and exporting robotic systems for underground mining and firefighting as well, Kolak says, adding that export companies like his are imperative for Croatia’s gross domestic product.

“If you don’t have export you cannot grow.  Without export, we cannot live in Croatia,” Kolak says.