Chapter 3: Croatia

(continued)

3.4 Profile of the Environmental Business Sector

The recent war and a lack of government commitment to the environment have slowed the development of Croatia's environmental business sector. It is estimated that fewer than 200 companies provide environmental services or technologies. As shown in Table 3.2, most of the companies are young - 44 percent of them were established between 1990 and 1992. Only 12 percent of the companies were established after 1992, evidence of the negative impact the war had on the development of the environmental business sector. Almost all of the environmental businesses founded after 1990 are privately owned. From the 141 surveyed companies, 81 percent are privately owned, the highest share of private ownership of the four surveyed countries. Six percent of companies are state-owned and 5 percent are currently state owned but in the process of privatization. Table 3.3 shows the ownership breakdown.

TABLE 3.2: AGE OF COMPANIES
Year of Establishment	% of Respondents

After 1992	12%
1990-1992	44%
1980-1989	11%
Before 1980	33%

TABLE 3.3: OWNERSHIP STRUCTURE OF ENVIRONMENTAL BUSINESSES
Ownership	% of Respondents

Privately owned	81%
State owned	6%
State and privately owned	8%
In process of privatization	5%

As shown in Table 3.4, Croatian companies are generally outfitted with all types of modern office equipment. Telephone, personal computers, fax machines and printers are standard equipment in the firms surveyed. All of the companies surveyed are equipped with phone lines. Interestingly, 65 percent of respondents use cellular phones, and one out of five has an e-mail connection.

TABLE 3.4: OFFICE EQUIPMENT USED
Office Equipment	% of Respondents

Telephone	100%
Fax	98%
Personal computer	93%
Printer	92%
Photocopier	78%
Cellular phone	65%
Modem	45%
Mainframe computer	40%
E-mail	20%
On-line services connection	19%
Telex	18%
GIS computer	6%

For the most part, environmental companies in Croatia are small. More than half of the companies surveyed employ fewer than five full-time employees, while only 8 percent employ more than 50 full-time workers. The breakdown is shown in Table 3.5.

TABLE 3.5: EMPLOYEES INVOLVED IN ENVIRONMENTAL ACTIVITIES
Number of employees	Full-time Workers	Part-time/ Contractors

Up to 5	53%	-
6-10	17%	70%
11-20	14%	20%
21-50	8%	5%
More than 50	8%	5%

The surveyed companies listed annual environmental revenues exceeding USD 99 million in 1995. However, this only represents approximately 70 percent of the market because only 118 of the 141 surveyed companies responded to these questions. The breakdown of companies by amount of revenue in 1995 is shown in Table 3.6.

TABLE 3.6: BREAKDOWN OF COMPANIES BASED ON REVENUES FROM ENVIRONMENTAL ACTIVITIES IN 1995
Revenues (USD)	% of Respondents

Less than 100,000	47%
101,000-250,000	12%
251,000-500,000	10%
501,000-1 million	10%
1 million-5 million	16%
More than 5 million	5%

More than half of the total revenues of the surveyed companies were derived from technical services, followed by 30 percent from the manufacture of environmental technologies and 14 percent from testing and monitoring. The breakdown of revenues by activity is shown in Table 3.7.

TABLE 3.7: BREAKDOWN OF REVENUES BY ACTIVITY
Activity	% of Revenues

Technical services	51%
Environmental technologies	30%
Testing, monitoring and laboratory	14%
Other	5%

Analysis by media showed that the highest portion of income was received from waste-related activities (40 percent), followed by water and wastewater-related activities and air and energy related activities. Other activities, such as industrial noise and safety, EMS, EIA, etc., accounted for 17 percent of total annual revenues. The breakdown of revenues by media is shown in Table 3.8.

TABLE 3.8: BREAKDOWN OF REVENUES BY MEDIA
Media	% of Revenues

Water and wastewater	29%
Waste	40%
Air	7%
Energy	7%
Other (not media specific)	17%

Joint-ventures are more common in Croatia than in the other three countries surveyed - 14 percent of the survey respondents in Croatia had a joint-venture with a foreign company. The countries of the top three joint-venture partners were Germany and the United States (four joint-ventures each) and Austria (three joint-ventures). The three main foreign languages spoken by business representatives were English, German and Italian.

REC * PUBLICATIONS * EMERGING ENVIRONMENTAL MARKET 2 * CROATIA