The borders may now be open in Croatia following its EU membership, but the AV industry continues to have to adapt to the country’s changing political landscape. Charlotte Ashley reports.
When InAVate last spoke to integration and distribution firm AVC Group in April 2012, the mood was optimistic in Croatia. Change was very much on the agenda for the country and the AV business, as it worked on finalising EU membership (achieved in 2013) in a bid to boost local trade.
More than four years later the country is once again in a state a flux following the creation of a coalition government by the centre-right alliance in January 2016. “For the first time in our history we had a ‘third option,’ and now the ruling party has had to make a coalition with this party,” says Edin Karamehmedovic, chief operating officer at the multinational company’s Zagreb division for the last 27 years.
After the economy suffered heavily during the Croatian War of Independence, the country then struggled more than some of its neighbours to recover from the global recession, leaving public debt accounting for 87% of its annual GDP. Prime Minister Tihomir Oreskovic recently unveiled 60 “difficult” reforms to boost growth to be rolled out over the next 18 months.
With the fragile Croatian economy dependent on government investment, this parliamentary change has created some uncertainty in the AV industry. Although since joining the EU “significant amount of funds” have financed local projects according to Karamehmedovic, funding came to a standstill for three to four months whilst the new government was established.
“Now it’s going quite slow, as they are learning how to do things in the coalition. The first quarter is always quite slow, but this year was especially slow because nobody wanted to issue any public tenders, because they were changing ministers, deputy ministers, and so on.”
“Last year we had a significant growth in the installation business, partly because finally the recession has stopped after six consecutive years in Croatia.”
In spite of the current instability in the country, business has been growing for AVC as the economy continues its recovery. “It’s been improving for the last two years after the crisis. Last year we had a significant growth in the installation business, partly because finally the recession has stopped after six consecutive years in Croatia.” Within this period the country experienced a decline in GDP of 12.5%.
“For the last year we have mostly been working on a couple of museums, some visitor centres for national parks, one sound system for a football stadium and some small business premises with conference rooms and presentation rooms.”
“Last year museums and visitor centres have been the strongest for us, and broadcast was also improving.” Karamehmedovic explains that some of this work came about in light of the elections taking place at the close of 2015. AVC’s recent projects include Alka Museum and a Game of Thrones-themed visitor centre in Lokrum, Dubrovnik. The former combined Barco and Panasonic projection, directive sound, touchscreens and aroma dispensers to create an immersive experience of the country’s heritage.
“In museums and visitor centres now the laser projectors are the must-have,” notes Karamehmedovic. “And of course, different kinds of interactivity, so we are using Leap Motion or the Microsoft Connect, or doing cameras, touch screens or touch overlays for video.” He adds: “In businesses, it’s the wireless collaboration system.”
The company have also been part of Croatia’s transition to digital cinemas. “The first and biggest stage of the digitalisation of cinemas is mostly finished. This has been done in the last three years.” AVC opts for a combination of Barco’s digital cinema projectors and a JBL sound system for these installations.
Karamehmedovic also expects the hospitality sector to soon be thriving again in the country, after busy periods in 2008-09 and 2012-13 where there was a “very strong wave of investment in tourism and congress hotels.” He says: “After a couple of calm years for tourism, I now feel, according to our enquiries, that the hotel business is waking up again.”
What problems does a company of AVC’s size face working in the country? “In Croatia, we are the biggest company in the field: which is on one hand good, on one hand bad. The good is there is not so much competition for big projects, although there is some competition from others in Europe. The bad thing is of course that smaller companies can be cheaper, because we have a service and rental department and everything.” He adds: “We are seeking to reach high standards, like everyone. The problem is that there is a lot of cheap equipment on the market.”
Like many other countries, Karamehmedovic says the public tender process still happens the “old-fashioned way,” with price taking precedence over quality. “They opened the doors for tenders to be the most economical offer, but very, very few tenders are organised in that way. Now they are promising to change the law for public procurement, which will help.”
Another challenge beyond the company’s control is hiring the right staff. “It’s not easy! We have forty employees, and at least ten of these are electrical engineers, and we do our own training.” He continues: “It’s very hard to find such people in the AV business, because right now 90% of the electrical engineers are in the IT business. We have advertised for some new people at the company and received something like 200 applications, but none of them are close to what we are looking for.” How can companies in Croatia tackle this issue? “We are trying to get people with some experience, someone who was working in the theatre, radio, television, or similar.”
Although it’s hard to predict what the future holds for Croatia’s coalition, Karamehmedovic expects the industry to take steps in the right direction in the next year and beyond. “We think that it is growing. This is growth on a slight level, it’s not huge, but I think it’s going to grow." He adds: “I think that in the next 18 months there will be some improvement, compared to last year.” With the International Monetary Fund (IMF) recently forecasting that the Croatian economy will grow by 1.9% this year – almost twice as high as its previous estimate of 1% – Karamehmedovic may just be right.