ZAGREB, 14 February (Hina) – The total untapped export potential of machine and equipment manufacturing in Croatia is US$399.8 million, according to a study by the Croatian Chamber of Commerce (HGK) carried out as part of the Fit4Globe project.
The study has found that the product groups with the largest export potential are parts for gas turbines and turbojet engines, parts for lifting and moving machines and equipment and construction machinery, parts for air pumps, compressors and fans, combine harvesters, temperature control valves and parts for internal combustion devices.
The study dealt in detail with 12 products, 10 of which were selected based on their unused export potential, while two were chosen for their importance for the domestic mechanical manufacturing industry. These products have an untapped export potential in 34 countries, in the total amount of $127.8 million. The realisation of their full potential would increase exports by more than a third, or 37.2%.
A total of 634 companies operate in the Croatian machine and equipment manufacturing sector and as many as 94% of them are small and medium-sized enterprises. They employ a total of 11,400 workers and generate HRK 7.7 billion in revenues (4.4% of the gross value added of the manufacturing industry) and HRK 337 million in profits. With a total of $1.22 billion in exports, they make up 6.6% of the country’s total foreign trade.
Currently, the leading export markets for Croatian machinery are Germany with a share of 21.5%, Slovenia with a share of 12.5% and Austria with a share of 8.5%.
HGK president Luka Burilović underscored that by exploiting the full potential, total exports of machines and mechanical equipment would increase by almost a third (32.6%) from the present $1.22 billion, which is 6.6% of total exports. “The markets with the greatest likelihood of export growth are Germany, Italy, the United States and Hungary,” he said.
Željko Mažuran, the head of the Metal Processing Industry Association at the HGK, said that the biggest challenge for the industry was the need for greater and faster investment in plant modernisation.
As the biggest problem Mažuran cited the uncompetitiveness of the Croatian economy, as a result of which there are not many greenfield and brownfield investments. He said that the main causes of uncompetitiveness were an unfavourable monetary policy, an unrealistic exchange rate of the kuna against world currencies and a low level of technological processes, and that therefore EU funds should be directed at upgrading production and industrial plants. He also mentioned a shortage of skilled metal workers and called for adjusting school curricula.
Corporate financial statements for last year show that the five largest Croatian exporters of machinery and mechanical equipment generated approximately 40% of the industry’s total revenues on foreign markets, while the ten largest companies generated nearly 50%.
The world market in the manufacture of machinery and mechanical devices is dominated by the United States which, along with China and Germany, was the leading global exporter in 2019. These three countries are also the largest importers of machinery and equipment. Along with Germany, Italy is the largest manufacturer in the In the European Union.