Croatia’s Manufacturing Economy Has Come a Long Way

Croatia Manufacturing Economy

Croatia has come a long way in the last few years to establish its manufacturing economy. As a former state of Yugoslavia, it only became an independent country in 1991. Although it was plagued by hardship and war during the first few years, it is now a stable, safe, and productive member of the European Union.

After the collapse of the Soviet bloc and its war of independence, Croatia went through a process of economic transition. Its incipient market-based economy was slowly improving as the years went by. Before the financial crisis of 2008, Croatia grew about 4% annually. It became a member of the World Trade Organization (WTO) in 2000, and it entered the European Union in 2013.

Most of the economy of Croatia is based on services. In fact, the tertiary sector makes up 70% of the Croatian gross domestic product (GDP), which was about $94.24 billion in 2016 by purchasing power. However, manufacturing has an increasing role in the Croatian economy. The industrial sector makes up about 26% of the Croatian GDP, and that sector grew 2.7% in 2015 and 3.5% in 2016.

This European country has developed important branches of manufacturing such as the wood industry, food manufacturing, shipbuilding, paper manufacturing, textiles, and automotive manufacturing, among others.  Croatian manufacturing exports reached about 10 billion euros in 2015, which made up about 94% of total exports that year.

Two Main Manufacturing Sectors

Food and Beverage: The food and beverage sector makes up about 20% of the total manufacturing industry revenues. Among these companies is Cedevita d.o.o, one of the biggest brands in Croatia and Slovenia, famous for its orange flavored drink offering nine essential vitamins. Originally owned by a pharmacy company, the drink was developed in the same plant as the popular Ovaltine. Now, the favored beverage offers several new flavors and is available in nearly every cafe and grocery store in Croatia. Other popular Croatian food and beverage companies include Jamaica (bottled water), Zvečevo (chocolate products and alcoholic drinks), and Carlsberg Croatia (beer).

Automotive Parts: Like the rest of Europe, automotive manufacturing plays a significant role in the economy. 11.2% of all manufacturing revenues in Croatia come from motor vehicle production. Croatia mostly produces automotive parts and software. Some of the most important enterprises of this subsector are Đuro Đaković Holding d.d. (Boilers, railway vehicles), Rimac Automobili (high-performance electric cars, drivetrain, and batteries), DOK-ING (unmanned and electric vehicles) and KONČAR Group (rail transportation)

It is not easy for Croatia to have a prominent economic role in its region because of the highly competitive and diversified industries of neighbors such as Italy and France. However, Croatia has made a lot of efforts to improve its manufacturing sector after the difficult and tumultuous moments of its history. Today, it is one of the most prosperous countries of the former Yugoslavia.

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