Page 85 - SE Outlook Regions 2022

More broadly, Croatia’s industry was affected by the coronavirus
pandemic in 2020 but started recovering in 2021.

Oil and gas company INA said on March 9 it plans to invest HRK4bn
(€530mn) in the upgrade of its refinery at Rijeka in a project that should
be completed by the end of 2023.

The project envisages construction of a heavy residues processing plan
and should improve the manufacturing scope of Rijeka refinery,
increasing the share of profitable “white oil” products in its output.

In June 2020, it announced plans to build a €250mn biorefinery in
Sisek, central Croatia, that will enable it to produce second-generation
bioethanol from biomass. INA is also investing €50mn into establishing
a raw material supply chain, growing the energy plant miscanthus.

Djuro Djakovic, one of the biggest industrial groups in Croatia, is
embarking on a restructuring, after the European Commission approved
Croatia's plans to provide a HRK430.6mn (€57.4mn) state aid to the
mechanical engineering company. Djuro Djakovic produces vessels for
the petrochemical industry, armoured fighting vehicles and equipment
for thermal and hydropower plants.

According to the restructuring plan, a consortium of Czech private
companies active in the same sector, DD Acquisition, will participate in
a share capital increase with cash and in-kind contributions of
approximately €64mn. After the capital hike, DD Acquisition will become
the controlling shareholder of Djuro Djakovic and will support various
aspects of its restructuring with cash and synergies.

Croatia’s shipbuilding industry has had a tough few years but there was
some better news in 2021 and 2022, boding well for the future. Despite
years of financial difficulties, the Uljanik shipyard remains in operation
and a small new ship has been contracted. In January 2022, the
Brodosplit shipyard in Split announced two new contracts to build ships
this year, worth over €200mn. Also in January, the 3.Maj shipyard said it
had been given the go-ahead to complete the construction of a bulk
cargo vessel for Canadia’s Algoma Central Corporation.

Another Croatian company – the shipping company Jadroplov – intends
to raise its capital by up to HRK350mn (€47mn) in 2022, after putting
plans to sell new shares on hold in September last year.

The company's supervisory board decided to give a green light to the
launch of preparatory works for a capital increase by between
HRK150mn and HRK350mn via a new share issue. The final price of
the new shares will be determined before the launch of their public
offering with the capital hike planned to be carried out in several
rounds. In the first round, existing shareholders will have priority.

In 2021, Jadroplov said it plans to use the funds to renew its fleet of
vessels in order to lower the average age of its fleet to between five
and eight years. However, the capital increase has been halted until the
company’s management decides whether the already completed

85 SE Outlook 2022 www.intellinews.com