INTERVIEW WITH DIV GROUP

DIV Group Ltd is an affiliation of companies and an excellent example of thoughtful and long-term sustained growth in all areas. Today, DIV Group Ltd employs 4 000 workers and with its consolidated values (240 million euros of capital and more than 580 million euros of property value) finds itself among the ten largest private companies in Croatia. It is certainly a regional leader in the metal processing industry and beyond.

Easy Engineering: What are the main areas of activity of the company?

DIV GROUP: DIV Group Ltd is a structure of six companies (Croatia, Bosnia and Herzegovina, Serbia), the Brodosplit shipyard, and dozens of plants for the production and support of the shipbuilding industry. In addition, we have several representative offices across the EU and agents for Asia, Africa, and America.

E.E:  What’s the news for 2021 about new products? 

DIV GROUP: The coronavirus pandemic has negatively affected the results and operations of almost all companies, especially those that, like us, are struggling to find their place in world markets. Closing sales and supply routes, as well as decreasing demand, reduced up to 50 percent of revenues from exports of screws and other fasteners. As far as shipbuilding is concerned, we managed to maintain the production process and thus remain within the agreed deadlines with all new constructions.

We have built a series of vessels for cruising the polar regions, so we can freely say that Brodosplit has become the EU leader in the segment of medium-sized polar cruisers.

In April this year, we delivered a technologically advanced polar cruise ship “Ultramarine” to the client, Quark Expeditions, which was built despite COVID-19, lockdown, and all the other issues that the pandemic has raised.

After the delivery of the first polar cruiser in May 2019, we are currently completing the second one for the Dutch company Oceanwide Expeditions. Furthermore, we are working on the completion of the Dugo Selo-Križevci railway, Ston Bridge and the Prapratno Viaduct on the route of the access road to the Pelješac Bridge, and the Širina road project in Solin near Split.

We are building a series of four coastal patrol vessels contracted for the Ministry of Defense of the Republic of Croatia last year, after the prototype of the coastal patrol ship “Omiš”, which we delivered in early December 2018, successfully passed all tests. We can say without hesitation that thanks to the knowledge and skills of our workers and engineers, but also the support of experts from the Croatian Navy and the Ministry of Defense, we built the best coastal patrol vessel in its class in the world.

E.E: What are the ranges of products? 

DIV GROUP: The DIV Group specializes in shipbuilding, non-shipbuilding production of steel structures, processing, production of fasteners and fastening systems, production of railway infrastructure fasteners and other machine parts and metal products.

E.E: At what stage is the market where you are currently active? 

DIV GROUP: COVID-19 has slowed everything down, but we are very optimistic because the mass vaccination has restored optimism. In addition, the market segment for the construction of medium-sized cruisers, in which we are firmly positioned, has suffered a much smaller blow than the shipyards that built mega cruisers. Travel arrangements are already being sold for polar cruisers such as the ones we are building, they were the first to start traveling, and this immediately aroused greater interest from customers, so we expect to continue the negotiations that were stalled due to the pandemic and the book of orders to continue to grow.

E.E: What can you tell us about market trends? 

DIV GROUP: Our philosophy is to pay attention to absolutely every expense and optimize all production processes. The bolt factory in Knin, which is currently probably the largest of its kind in Europe, and is among the largest in the world, incorporates all the best technologies from Europe and the USA, but also China and Taiwan. Despite that, it is very challenging to fight these countries in the market because they have state incentives. For example, our input tax is deducted from VAT when we sell a product, and if VAT is overpaid, we can claim a refund. In China, the tax is refunded only when the goods are exported. The price of their products with VAT is therefore equal to world prices without taxes. However, when this product is exported by the Chinese, they receive a tax refund and are thus encouraged to export. This refunded tax covers the loss due to the export dumping price and makes a profit. Thus, they allegedly do not pay incentives but return the tax, which is legal.

However, after the coronavirus pandemic, the policy of Europe is changing. Europe is turning to domestic production and part of the previous production returns, so it is up to the regulator to resolve the dumping issues from China so that the productions in Europe are profitable again, as it happened with the manufacturing of masks and protective equipment.

E.E: What are the most innovative products marketed? 

DIV GROUP: We will soon start building the largest Zero-emission sailing ship with three masts, with electric motors as the main propulsion. The “Electric sailboat” i.e., the three-masted schooner, will be 63.50 meters long, it will have a class of passenger ships of unlimited navigation and it will be able to sail all the seas of the world. The project started in February 2020 and is co-financed by IRI 2 project funds, which are financed by EU funds. The project aims to research, develop and build an eco-innovation in the form of a passenger cruise ship for a minimum of 36 passengers. For this to be successful, it will be necessary to explore and develop alternative propulsion technologies and energy sources based on environmentally friendly design aimed at sustainable zero-emission mobility that supports environmental sustainability and reduction of greenhouse gas emissions, air, and noise pollution.

E.E: What estimations do you have for 2021? 

DIV GROUP: The EU has phased out all subsidies for shipbuilding, insisting that it be profitable. This is exactly how we do business. Our shipbuilding does not express results in tons, rather in revenues, i.e., the value of an individual vessel and profit realized after it has been delivered.

Objectives of DIV Group Ltd. remain unchanged, to be a strong European business entity with persistent development and progress in all areas of business – human resources, corporate, financial, technical-technological, and innovative area – all respecting the environment and the community in which we work and create.