In the past 15 years, not only have Germany’s exports to Croatia almost doubled but Croatia’s exports to Germany rose from 0.7 billion euro in 2002 to over 1.7 billion in 2017. Nevertheless, we think that there is still a lot of potential that needs to be unlocked. We are looking forward to working on these opportunities.
This year, the German-Croatian Chamber of Industry and Commerce celebrates 15 years of operations. The history behind these endeavours is certainly successful, but the road was sometimes a bit rocky. We spoke with Sven Thorsten Potthoff, Director of the German-Croatian Chamber of Industry and Commerce, about the work of his predecessors and his own, in making the Chamber strong, successful and ever evolving.
Three goals were singled out following the establishment of the German-Croatian Chamber of Industry and Commerce in 2003. Could you tell us to what extent have these goals been accomplished in the last 15 years, and how many German business people in Croatia are linked via the Chamber?
A German chamber of commerce abroad has three main functions, or goals, at its location. It is an official representation of the German economy, a membership organization and a provider of services for companies. Since 2003, the German-Croatian Chamber of Industry and Commerce has assisted hundreds of German businesses in entering the Croatian market, or expanding their already existing business relationships. But it is important to note that we have also acted conversely – we have promoted and still promote Germany as a business location and help Croatian companies to gain a foothold, or expand their existing businesses there. Our network of member companies is today bigger than it has ever been, and comprises of 415 members. This also makes us the biggest bilateral economic association in Croatia. This is a unique network that facilitates a quick market access and sustainable and reliable business relations. As providers of services to companies we have, in the past decade and a half, assisted many companies in expanding and maximizing their activities in Croatia and Germany. I would thus conclude that all of these goals have been accomplished.
How many German companies do business in Croatia compared to the time when the Chamber was established? How much do they contribute to Croatia’s economy in terms of export, GDP share and employment?
Well, it is pretty difficult to speak in exact numbers here, since many companies are technically more international than German per se, although they may be of German origin or are considered German. But I think it is safe to say that the number of German companies doing business in Croatia has without a doubt increased significantly in the past decade and a half. According to our estimates, there are around 150 „German“ companies active in Croatia today, but, as already indicated, this number may vary depending on how one defines what a German company is. The two countries have always had close cultural and economic ties, and many big companies have been here for many years. Croatia’s accession to the EU led to a huge increase of the German companies’ interest in the Croatian market, to the extent that our Chamber had a tough time satisfying their information requirements. German companies play a crucial role in the bilateral trade between Croatia and Germany, which reached a new record high in 2017, standing at around 5 billion euro. It is worth noting that not only have Germany’s exports to Croatia almost doubled in the past 15 years, but also that Croatia’s exports to Germany rose from 0.7 billion euro in 2002 to over 1.7 billion in 2017. Since the founding of our Chamber in 2003, German firms and individuals have directly invested roughly 1.5 billion euro in Croatia. As I have already indicated, we do not know exactly how many people „German“ companies in Croatia employ – but we know that the members of the Chamber provide work for approximately 80,000 people in this country.
How satisfied are you today with the level of cooperation with the Croatian businesses? How good is this cooperation? To what extent are German and Croatian companies linked through value chains and partnerships?
We are indeed more than satisfied. After all, more than half of our members are Croatian companies. Germany has in part benefited from the increased domestic demand in Croatia and the fact that Croatia is still eminently dependant on imports to supply the demands of its tourism sector, for instance. There are numerous partnerships between German and Croatian companies, not only among our members. Nevertheless, we think that there is still a lot of potential that needs to be unlocked. Croatia, for example, could produce much more than it currently does. We do promote German economic interests and German companies’ market entry, but a prosperous Croatian economy and society, and thriving Croatian companies are in our best interest as well.
How much did the Chamber’s internal work organization change? How much did the volume and scope of work grow?
As I have mentioned before, Croatia’s accession to the EU has resulted in a big increase of the German companies’ interest in its market and our employees did a great job providing all of them with, most importantly, services related to market entry, as well as valuable information. This has probably set the bar a bit higher, and it seems to me that this bar still remains at the same height. Furthermore, over the years, the Chamber has included other topics in its portfolio – for instance, the important topics like sustainable energy solutions and environmental technologies. More specifically, this means that we promote and support the market entry of German small and medium enterprises specialized in renewable energy systems and energy efficiency solutions, and companies specialized in technologies for protecting the environment and the climate. We have also launched a project which aim is to introduce the German model of dual vocational training in Croatian schools, which is strongly backed by the Croatian Government, as well as the companies involved. The German dual education model combines theoretical education at vocational schools with on-the-job training in companies. We have an agile and energetic team of 14 people who cover all these topics and have experiences in Croatia and Germany, which has accordingly grown over the years.
What is the next challenge for you, as the Chamber’s director, in terms of its development?
I consider the EU Council Presidency, which Croatia will assume in the first half of 2020 for the first time ever, and the German Presidency that immediately follows in the second half of the same year, as a big opportunity. We would be very pleased if Croatia would use the presidency to further strengthen the ties between the member states on the common internal market and to drive forward the development of both small and medium enterprises and big companies. There will be abundant opportunities in the energy sector, first and foremost, which is a field that our Chamber has specialized in over the years. Expanding our member network, which is one of the foundations of every German chamber of commerce abroad, and working towards their business success, has always been of great importance to us and this will remain unchanged. That being said, I also hope for an early and comprehensive implementation of reforms to improve the business and investment climate in Croatia. By this I mean reducing unnecessary bureaucratic obstacles to doing business, making the public procurement system more impartial and effective, in order to ensure non-discriminatory legal protection of all participants in public procurement procedures, and last but not least, responsible and predictable provision of public services, such as approval procedures. I am confident that these measures will create a better framework for trade, investment and economic growth in Croatia.