The conference „Challenges of Croatian economic diplomacy“ was held in the Museum of Mimara and organized by Jutarnji list and the Croatian Chamber of Economy. It has gathered leading businessmen, economic experts, academics and government officials to consider possible moves towards the most important export markets in the region and around the world, the experiences of foreign trade chambers and the new role and significance of the Croatian Chamber of Economy and the Ministry of Foreign and European Affairs regarding Economic Diplomacy.

At the conference „Challenges of Croatian economic diplomacy“ President Kolinda Grabar Kitarović pointed out that the agreed and initialled agreement of the Ministry of Foreign and European Affairs and the Croatian Chamber of Economy represents the first step in the modernization of Croatian diplomacy, especially the one concentrated on the economy.

Participating in a panel discussion on the challenges of Croatian economic diplomacy, President of the Management Board of AD Plastik Marinko Došen spoke of the demanding entry on large markets such as Russia. He pointed out that without investment there is no growth, and economic diplomacy, says Došen, is a cog in the wheel. He considers that the most important task of economic diplomacy is to support the realization of capital investments in Croatia.

The AD Plastik Group’s report for the first three months of 2017 shows a successful beginning of the year. Group’s operating revenue in the reporting period amounted to HRK 268.8 million, which was by 4.1 percent higher than in the same period of the previous year. Continuous work on rationalization of costs and production processes is visible at the entire Group level.

„The results of the first quarter give us the reason for satisfaction and additional optimism. We have achieved enviable operating revenue, EBITDA has increased by 17.7 percent compared to the same period of last year, the net profit of the Group continued to grow and for the first three months it amounted to HRK 23.4 million,” said Marinko Došen, President of the Management Board.

EBITDA at the Group level amounted to HRK 42.3 million, which compared to HRK 35.9 million realized in the same period last year confirms continuous improvement in cost efficiency. There was also a decrease in credit indebtedness amounting to HRK 13 million in the first three months. The main reasons for the good results achieved are stable production and realized operational plans of all key customers, as well as the clearly defined business strategy and its realization. Good results of Russian plants indicate the final cessation of sales decline, i.e. the first indication of recovery in this market.

„We continue to focus our business on growth in existing markets, business optimization, and opening up new markets. The market value of our company has been constantly growing, which is an additional incentive and confirmation of the successful realization of the established business strategy. I am confident that we will achieve the set plans and goals and thus continue the trend of strengthening our company’s financial position,” added Marinko Došen.

According to recently published audited annual report, the net profit of AD Plastik Group is better than the announced one. By improving efficiency and by rationalization of business operations profitability has been improved, which is confirmed by realized net profit margin of 5.3 percent, that is a net profit amounting to HRK 49.7 million. The EBITDA margin amounted to 14.5 percent and showed an increase compared to 11.2 percent of the previous year. EBITDA amounted to HRK 135.9 million and was by 18.3 percent higher than in the previous year. Operating revenue in the reporting period was slightly lower and amounted to HRK 935.8 million.

 „The audited annual report shows even better results than the preliminary ones, which is why we are extremely satisfied. For the second consecutive year, we have been achieving very good business results and we are confident that we will continue this trend in the future. Despite a smaller decline in revenue, the decline in operating expenses is considerably higher, which is confirmed by realized EBITDA and net profit growth of the Group,” said President of the Management Board Marinko Došen.

By reducing loan indebtedness by HRK 38 million and liabilities towards suppliers by HRK 42.4 million, AD Plastik Group has additionally strengthened its financial stability. In 2016 new deals were sealed, whose total value in full production years will amount over EUR 20 million per year.

The share price at the end of 2016 was HRK 138, representing a growth of 40.2 percent compared to the end of 2015. The share price increase has continued in 2017, which is confirmed by reaching share price of HRK 165 in March. Despite the negative movements in the stock market, the stability of AD Plastik’s share price has maintained. Our goal is to increase revenue by 6 percent this year with a further increase in business efficiency. This will surely increase also the market value of the company to the satisfaction of all our stakeholders,” said Marinko Došen.

As part of the conference “Support to the Development of Centers of Competence” held in Zagreb, a ceremony took place where funding decisions were awarded within the public call of the Ministry of Economy, Entrepreneurship and Crafts “Increase of the development of new products and services which supervene from research and development activities”.

AD Plastik was awarded a grant of HRK 19.6 million from the European Union funds for the project for research and development of interior parts painting technology. This makes about 30 percent of the total investment in the research of this technology. The project will last 45 months, and the funds obtained will enable the development of new technology within AD Plastik Group, which will become the generator of sales growth in the medium term.

„The funds obtained mean research and development of the new interior parts painting technology, which will enable the expansion of production capacities in the future, create new jobs, ensure revenue growth through increased exports and competitiveness improvement,” said Marinko Došen, President of the Management Board of AD Plastik Group.

Painting interior plastic parts differs significantly from exterior parts painting, customer requirements are specific and it requires different equipment and procedures. Painting technology in automotive industry is the niche with the highest added value, and it has been present in AD Plastik for 20 years now. Combining the manufacturing process of injection-moulded components and painting ensures a comparative advantage regarding customers.

Prior to the decision to launch a new project, market research showed the presence of customers’ interest and thus the ability to seal new deals. Particularly in the segment of painting smaller interior and exterior parts that are easily packed and whose price can withstand transportation at a greater distance. This project will enable the adoption of interior parts painting technology that ensures entry into the new production painting segment as one of the generators of sales growth in the mid-term period.

Deals for PSA Group

AD Plastik Group has sealed several new deals for different vehicle models for PSA Group in the total amount of EUR 4,8 million. In this way, the Croatian plants will produce camera supports and covers for Peugeot 508, PHEV (plug-in hybrid vehicle) screens for Peugeot 508 and Peugeot 3008, air extractors for Peugeot 208 and glass run channels for Citroen Cactus. The start of serial production for all these vehicles is planned in 2018.

We experienced a long pause in cooperation with this customer, so the sealed deals are particularly significant for the company. “Our plan is to increase the realization for PSA Group by signing new deals, and this includes products and technologies that have not been represented regarding this customer so far,” said Almir Mahmutović, program manager.

The PHEV (plug-in hybrid electric vehicle) screens are a complete screen assembly under the chassis and AD Plastik will produce a complete module and the air extractors will expand the enviable list of AD Plastik’s products. AD Plastik Group has also sealed new deals in the Russian market amounting to EUR 4 million. Injection moulded exterior parts for the Renault Logan and Sandero Phase 2 vehicles will be manufactured at AD Plastik Togliatti, and the start of serial production is planned for mid- 2018.

Prime Minister Andrej Plenković participated at the conference “Croatia – a country desirable for business?”, held in the Croatian Chamber of Economy. On this occasion he presented the positive economic trends and Government measurements which, in his opinion, will help develop the business climate and strengthen the Croatian economy.

“If all three world credit rating agencies say that the prospects are not negative but stable, then this is a good message,” pointed out Plenković, adding that this is mostly the result of the work of Croatian entrepreneurs, those who produce and export and who are able to be competitive in their activities.

President of the Management Board of AD Plastik Marinko Došen participated in the panel discussion together with Assistant Minister and Director Geneal of the Tax Administration Zdravko Zrinušić, Assistant Minister of Regional Development and EU Funds Dragan Jelić, State Secretary at the Ministry of Economy, Entrepreneurship and Crafts Nataša Mikuš Žigman, President of the Management Board of Dalekovod Alen Premužak and President of the Management Board of Elka Ruđer Friganović. Among other things, the possibility of using EU funds to improve the business of small and medium-sized enterprises was discussed. They discussed the business climate in Croatia and the impact of tax reform on the economy.

Ambassador of the Federal Republic of Germany to the Republic of Croatia Thomas Eberhard Schultze emphasized that many German companies contribute to Croatian growth and that he respects the cooperation between the German and Croatian Chambers, which will continue in the future.

The Russian plant AD Plastik Kaluga has won the nomination for the development and production of injection moulded side trims for Nissan Qashqai. The total value of this deal in the four-year period amounts to EUR 2.2 million, and the start of serial production is planned in June 2018. The new Qashqai has been produced at the Nissan factory in Saint Petersburg since 2015.

For the first time, AD Plastik has sealed the deal as a development supplier for Nissan, which, apart from additional localization and increased realization, gives this project a special significance. “We are responsible for product and tool development. Past deals regarding the production of injection moulded parts for Nissan have been sealed in collaboration with the Japanese development supplier, while now we are sealing the deal independently, ” said Mislav Čelar, Sales Director for the Russian Market

The sale of this vehicle exceeds plans on value, so sales in March are expected to grow by almost 20 percent compared to the previous year.

The interim unaudited report of AD Plastik Group for 2016 shows good business results for the second consecutive year. Cost efficiency of the company has been significantly improved and financial stability has been strengthened. That is confirmed by the fact that EBITDA amounted to HRK 132.9 million, more precisely EBITDA margin was 14.1 percent, compared to 11.2 percent realized in the previous year. The net profit of the Group increased by 4.1 percent and amounted to HRK 48.1 million, while operating revenue in the reporting period was lower by 8.6 percent compared to the previous year and amounted to HRK 940.5 million.

 „Sales in the European market are slightly lower due to decrease in orders from customer Hella and the reduced volume of project activities, but the decrease in revenue occurred largely due to the impact of the exchange rate fluctuations. Despite this, the total produced and sold quantities of finished products were at the level of last year’s. The decline in operating expenses is significantly higher than the decline in revenue, which is confirmed by the realized EBITDA and the net profit growth of the Group itself,” said the President of the Management Board Marinko Došen.

By reducing credit indebtedness by HRK 38 million and liabilities to suppliers by HRK 46.2 million, AD Plastik Group has strengthened its financial stability. In 2016 a record dividend amounting to HRK 12  was paid, which confirms positive cash flows and good liquidity. The share price at the end of 2016 amounted to HRK 138, and that represents an increase of 40.2 percent compared to the end of the previous year.

„The growth of car sales is finally predicted in the Russian market and this is a great opportunity that we will know how to use. In the past year, we have sealed a series of new deals whose total value in years of full production will amount to over EUR 20 million per year. This year has started ambitiously and optimistically, and our goals are to increase revenue by at least 6 percent in 2017, to continue to increase business efficiency, to achieve growth in existing and new markets, and ultimately to increase market value of the company to the satisfaction of all our stakeholders,” said Marinko Došen.

In the automotive industry world, it is customary for car manufacturers to make a redesign of a certain model after some time, which in most cases occurs on the exterior part of the vehicle. Certain parts of Renault Twingo will soon also be given a facelift. A complete redesign of the front and rear bumpers has been made and a smaller chrome element has been introduced to give it extra glow.

After several months of negotiations, AD Plastik has sealed the deals for the production of full complect of front and rear bumper with components. At the moment, the complete exterior components for front and rear part of this vehicle, including front and rear bumper with components and engine cover, are produced in AD Plastik plants.

Most of the parts on the new Twingo model will be replaced with new ones and the start of its production is expected at the end of 2018.

AD Plastik Group has sealed the deals on the production of inner weatherstrip sets for the vehicle Audi Q3 and of front wheel arch shields for VW Tiguan in Russia.

Inner weatherstrips for Audi Q3, another vehicle from the VW Group, will be produced at the extrusion plant in Solin, and the start of production is planned in September 2018. “We produced extruded profiles for Touran model, we produce parts for Golf and we will produce parts for Toureg. Sealing deals for Audi, as one of the leading brands in the VW Group, represents a strengthening of AD Plastik as a development and strategic partner in profile production,” said Ivan Matić from Sales Department for VW.

The AD Plastik Group’s plant in Kaluga will produce front wheel arch shields for Tiguan, another vehicle from VW Group. The start of production was announced for February 2018, and the estimated project duration is four years. “This is the first deal directly contracted with Volkswagen in Russia and in this way we enter the panel of their serial suppliers,” explained Sales Director for Russia Mislav Čelar.