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Croatia Shipping Report Q3 2011
Business Monitor International, May 2011, Pages: 85
BMI View: Moderate-to-Good Growth
BMI is predicting a moderate-to-good year for the Croatian ports and shipping sector. General economic conditions in 2011 will be moderately supportive, with specific industry factors playing a slightly stronger upside role. This will be a year of political transition, with elections due in November. Against a background of protests and popular dissatisfaction, this report believes the incumbent centre-right administration is on its way out, likely to be replaced by the centre-left. However, after two years of falls in GDP, 2011 will see a return to moderate growth, led by stronger foreign trade, a tourism revival, and a recovery in household consumption. This report predicts GDP growth of 1.7% this year, rising to 1.9% in 2012.
Croatia's ports and shipping sector has a number of specific upside factors working in its favour. One of the most important is the country's position as a Mediterranean gateway to south-eastern Europe, serving neighbouring countries as well as Croatia itself. This report believes this is attracting new business and investment and bodes well for the medium-term future.
Key Headline Industry Data:
- Croatia's foreign trade will grow by 5.8% this year in real terms, up from 2.0% in 2010. Exports are expected to reach US$25.09bn, marginally behind imports of US$25.55bn.
- Gross tonnage will grow 12.9% to 5.112mn tonnes at the Port of Ploce, and by 8.6% to 11.059mn tonnes at the larger Port of Rijeka.
- Box traffic set to grow 3.4% in Ploce and 5.1% at Rijeka in 2011.
Key Industry Trends:
Philippines Operator ICTSI Gains Rijeka Concession - ICTSI acquired at 51% stake in the Bradjica Container Terminal at the Port of Rijeka (now renamed Adriatic Gate Container Terminal, AGCT). Expansion work is currently under way at the terminal, which is seen as a gateway to south-eastern Europe, with the facility's quay to be extended and its draft deepened to 14.5m to increase its annual throughput capacity to 600,000 20-foot equivalent units (TEUs).
Port Of Ploce Operator Doubles Profit - Luka Ploce said that its Q111 consolidated net profit rose to HFK4.4mn (US$885,900), more than double the HFK2.1mn achieved in the comparable year-earlier period. The operator said freight traffic was up by 12% during the quarter, led by a 39% surge in bulk cargo.
Profits Down At Port Of Rijeka - Rijeka Port said it had posted a Q111 profit of HRK2.50mn (US$502,864), a fall of HRK0.5mn on the year earlier period. This port's total quarterly income had dropped from HRK55.8mn in the first quarter of 2010 to HRK50.9mn in the first quarter of 2011.
Key Risks to Outlook:
BMI is expecting a change of government this year, with the country shifting from centre-right to centreleft rule. Although this is already factored in to our ports and shipping forecasts, there is a potentially significant risk around a future Social Democratic Party (SDP) administration's policies towards the European Union. If Croatia's EU accession negotiations are not completed before this year's elections, an SDP administration could move more slowly on the process, leading to delays in Croatia's planned entry into the EU. That in turn would lead to slower GDP and trade growth, with therefore lower than expected throughput at the country's main ports.
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