Untapped potential of $ 432.8 million from Croatian companies


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June 13, 2021 – Croatian companies have a lot of untapped potential begging to be tapped, and the global electrical equipment market is the place to focus.

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

Although Croatian manufacturers of electrical equipment are already significant players in the export market, the analysis of Fit4Globe of the Croatian Chamber of Commerce showed that the total untapped export potential of these Croatian companies is high. to $ 432.8 million and that realizing this potential would increase the potential of the export sector to 38.9%.

As explained by Luka Burilovic, president of the Croatian Chamber of Commerce, it 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% are made on international markets.

Currently, 328 companies operate in Croatia in the production of electrical equipment and employ more than 9,400 workers. Although 90% of the business entities in the sector are Croatian micro and small enterprises, large enterprises dominate the sector income with a share of 55%, total turnover 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 a turnover in 2019 of 1.04 billion kuna, followed by Koncar – Power Transformers with 739.7 million kuna, then Ivanic Grad’s Elektrocentar Petek comes in 3rd. place with 680 million kuna, followed by Elka, a large manufacturer of cables from Zagreb, bought a few weeks ago by the Slovenian Iskra.

Important players in this market and whose individual income is measured in the hundreds of millions are also EGO Elektrokomponente from Zagreb, Siemens Hrvatska, Vertiv Croatia, Solvis from Varazdin, which sells its solar panels to Google, and Istrian Estradex from Pican, as well as another company Koncar – Generators and Motors, which achieved a turnover of 220.5 million kuna in 2019.

According to Fit4Globe’s 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 over 10,000 kilovolts amperes (kVA), parts for electrical transformers and static converters, switchboards, meters, tables and cabinets for electrical control or electricity distribution, insulated electrical conductors and cables for voltages greater than 1000 V and electrical resistances permanent.

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

A lack of personnel

“It is one of the most important activities of the Croatian manufacturing industry, which manages to generate more than half of its income in demanding foreign markets,” he said, adding that the biggest challenges facing the industry are lack of professional staff, digital transformation, productivity, an underdeveloped sales network in overseas markets and pervasive globalization 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 turnover of this sector, 4.5 billion kuna come from sales in foreign markets, or 6.2% of the total overseas sales turnover of the whole manufacturing industry.

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

Other important markets for Croatian companies are Slovenia, Bosnia and Herzegovina, United Arab Emirates, United States, Netherlands, Sweden and Serbia, to which Croatia exported electrical equipment for 33 million dollars before the 2019 pandemic.

“The untapped export potential of the 11 selected products on which the Fit4Globe analysis focused in particular exists in 193 countries for a total of $ 272.5 million. If this potential were fully exploited, Croatian exports would increase by 42.3%. The greatest likelihood of an increase in exports is in the markets of Serbia, the United States, Hungary, China and France, ” Barbaric said.

Chinese market

The Croatian Chamber of Commerce explains that with regard to the world market, the main exporters of electrical equipment in 2019 were of course China with an amount of 671 billion dollars, Hong Kong with 301 billion and the USA with 173 billion.

The same countries are also the biggest importers, still led by China with $ 497 billion in imports, while the United States and Hong Kong have traded places with total imports of $ 352 billion and $ 308 billion. dollars, respectively.

In the European Union, 45,335 companies operate in this sector with a total production value of 303 billion euros, and they employ around 1.5 million people. The Czech Republic leads the number of companies with 11,190, mostly small and medium-sized, 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 turnover, nearly 110 billion euros, followed by Italy with 39 and Spain with 17.8 billion euros in turnover.

To learn more about Croatian businesses, be sure to follow our dedicated business section.

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