Untapped Potential of 432.8 Million Dollars of Croatian Enterprises

Lauren Simmonds

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As Poslovni Dnevnik/Darko Bicak writes, the global electrical equipment market is growing unstoppably, worth a massive 1180 billion US dollars last year and estimated at 1271 billion dollars this year. With an expected annual growth of 7.7%, by 2025 its value could climb to more than 1662 billion dollars. Where does Croatia stand in this regard, exactly?

Although Croatian electrical equipment manufacturers are already significant players in the export market, the analysis of the Croatian Chamber of Commerce’s Fit4Globe showed that the total untapped export potential of these Croatian enterprises stood at 432.8 million dollars and that the realisation of this potential would increase the sector’s exports by as much as 38.9%.

As Luka Burilovic, President of the Croatian Chamber of Commerce, explained, this is an industry that accounts for almost 4% of the total volume of Croatian industrial production with revenues of 8.6 billion kuna, of which 53% is realised on international markets.

Currently, 328 companies operate in Croatia in the sector of electrical equipment production and employ over 9,400 workers. Although 90% of business entities in the industry are micro and small Croatian enterprises, large companies dominate the industry’s revenues with a share of 55%, or a total revenue of 4.7 billion kuna.

The biggest player in this sector is unsurprisingly the Koncar Group, whose three companies are on the list of the 10 largest companies. It is led by Koncar – Distribution and Special Transformers with revenues in 2019 of 1.04 billion kuna, followed by Koncar – Power Transformers with 739.7 million kuna, then Elektrocentar Petek from Ivanic Grad comes in 3rd place with 680 million kuna, followed by Elka, a large cable manufacturer from Zagreb, which was taken over by Slovenia’s Iskra a few weeks ago.

Significant players in this market and whose individual revenue is measured in hundreds of millions are also E.G.O. Elektrokomponente from Zagreb, Siemens Hrvatska, Vertiv Croatia, Varazdin-based Solvis, which sells its solar panels to Google, and Istrian Estradex from Pican, as well as another Koncar company – Generators and motors, which had 220.5 million kuna in revenue back in 2019.

According to Fit4Globe analysis, the product groups with the greatest export potential are: insulated electrical conductors, cables for voltages up to 1000 volts (V), electrical transformers and static converters of more than 10,000 kilovolt amperes (kVA), parts for electrical transformers and static converters, boards , counters, tables and cabinets for electrical control or distribution of electricity, insulated electrical conductors and cables for voltages greater than 1000 V and permanent electrical resistors.

Mladen Puskaric, President of the Association of Electrical and Electronic Industry of the Croatian Chamber of Commerce, also Koncar’s manager, points out that electricity is an indispensable part of all technological changes, and the production of electrical and electronic equipment is an industrial activity with great potential for growth, development and employment.

A lack of staff

“This is one of the most important activities of the Croatian manufacturing industry, which manages to generate more than half of its revenues in demanding foreign markets,” he said, adding that the biggest challenges facing the industry are a lack of professional staff, digital transformation, productivity, an undeveloped sales network on foreign markets and the ubiquitous globalisation and economies of scale,” said Puskaric.

Ivan Barbaric, Vice President of the Croatian Chamber of Commerce for International Affairs, points out that of the total revenue of this sector, 4.5 billion kuna is generated from sales on foreign markets, which is 6.2% of total revenues from sales abroad of the entire manufacturing industry.

Over 50% of the sector’s exports in 2019 were transformers, which Croatian enterprises sell to as many as 104 global markets, and cables, which Croatia exports to 93 countries. The leading export markets are Germany with 213 million dollars and 19.1% share, Austria with 139 million and a 12.5% ​​share and Italy with 110 million in value and an almost 10% share.

Other important markets for Croatian enterprises are Slovenia, Bosnia and Herzegovina, the United Arab Emirates, the USA, the Netherlands, Sweden and Serbia, to which Croatia exported electrical equipment worth 33 million dollars back in pre-pandemic 2019.

“The untapped export potential for the 11 selected products on which the Fit4Globe analysis focused in particular exists in 193 countries for a total of 272.5 million dollars. If that potential was fully exploited, Croatian exports would increase by 42.3%. The greatest probability for an increase in exports lies on the markets of Serbia, the USA, Hungary, China and France,” said Barbaric.

The Chinese market

The Croatian Chamber of Commerce explains that as far as the global market is concerned, the leading exporters of electrical equipment in 2019 were of course China with the amount of 671 billion dollars, Hong Kong with 301 billion and the USA with 173 billion.

The same countries are also the largest importers, again led by China with 497 billion dollars in imports, while the US and Hong Kong swapped places with total imports of 352 billion dollars and 308 billion dollars, respectively.

In the European Union, there are 45,335 companies operating in this sector with a total production value of 303 billion euros, and they employ about 1.5 million people. The Czech Republic leads in the number of companies with 11,190, mostly small and medium-sized entities, followed by Italy with 7,860 and Germany with 5,916. However, German companies are the largest, employing a total of 515,000 workers, followed by Italy with 140,000 and Poland with 118,000.

German companies also generate the largest revenue, almost 110 billion euros, followed by Italy with 39 and Spain with 17.8 billion euros in revenue.

For more on Croatian enterprises, make sure to follow our dedicated business section.


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