Slovenia Business Week no. 03, January 16th 2006
Table of contents:
HEADLINES ............................................................................................................................. 3
Reforms Coordination Office Expects Busy Year ................................................................. 3
Slovenia 14th Most Innovative Country in the EU ................................................................ 3
Central Bank Labels Fiscal Policy on Track for Euro Changeover ....................................... 4
INTERNATIONAL COOPERATION ...................................................................................... 5
Sava River Basin Commission Officially Launched .............................................................. 5
Slovenia to Help Montenegro With EU Bid .......................................................................... 5
State Secretary Receives New Cuban Ambassador ............................................................... 6
EUROPEAN UNION ................................................................................................................. 7
Slovenia Endorses Austria's EU Agenda, Rupel Says ........................................................... 7
Ambassador: Austria to Chair EU Pragmatically and Impartially ......................................... 7
Reforms Minister Presents Privatisation Plans to EBRD President ....................................... 8
Government Discusses Priority Tasks for EU Presidency ..................................................... 8
LEGISLATION ........................................................................................................................ 10
Parliament Rejects Wine Act in Renewed Vote ................................................................... 10
Lawmakers Overturn Veto on Changes to Trade Act .......................................................... 10
STATISTICS/FORECASTS .................................................................................................... 12
Trade Gap Soars in November ............................................................................................. 12
Factory-Gate Prices Up 0.4% in December ......................................................................... 12
Industrial Output up 7.3% Y/Y in November ...................................................................... 12
Slovenia Leads EU in Layoffs, Trade Unionist Says ........................................................... 13
IMAD: 3.9% Growth Target Likely Reached in 2005 ......................................................... 13
Foreign Debt at EUR 18.6bn ................................................................................................ 14
Households with Children Better Equipped with ICT ......................................................... 14
Broadband Internet Connection on the Rise in Slovenia ..................................................... 14
FINANCE................................................................................................................................. 16
Two Companies Bidding for Euro Calculator...................................................................... 16
Health Insurer Triglav to Have 193,000 Customers ............................................................ 16
Italian Bank Sells Stake in Slovenian Bank to Fellow Italian Bank .................................... 16
Ljubljana Stock Exchange .................................................................................................... 17
Foreign Exchange ................................................................................................................. 17
REGIONAL INFORMATION ................................................................................................ 18
Drnovsek Praises Dynamic Development in Maribor.......................................................... 18
BRANCH INFORMATION .................................................................................................... 19
VURS: Slovenia not at Risk due to Bird Flu in Turkey ....................................................... 19
National Review Commission Annuls Mobile Phone Tender ............................................. 19
Customs Enforce Stricter Control of Luggage from Bird Flu Areas ................................... 19
PM's Economic Body Says Energy Supply Stable............................................................... 20
Tourist Board to Focus on Advertising in 2006 ................................................................... 20
Passat Pips Clio for Title of Best Slovenian Car .................................................................. 21
Relaxed Poultry Ban Enters into Force ................................................................................ 21
COMPANIES ........................................................................................................................... 22
Renault Nissan Sees Drop in Sales, Market Share in 2005 .................................................. 22
Mercator CEO: All Former Yugoslav Retailers Potential Partners ..................................... 22
Ljubljana Airport to Increase Presence of Foreign Carriers................................................. 22
Tuerk to Run for ELES Director General ............................................................................ 23
Strong Year for Perutnina Ptuj, Chairman Says ................................................................... 23
Government Appoints Four Members to RTV Slovenija Supervisory Board ..................... 24
Mercator: Merger of Balkan Retailers Only Initiatives so Far ............................................. 24
Railway Company Posts Lower Loss than Planned ............................................................. 24
Slovenian National Telco Not to Buy Maltacom After All ................................................. 25
Adria Airways Increases Number of Passengers Y-on-Y, Posts Loss ................................. 25
Turkish Airlines to Launch Regular Flights from Brnik ...................................................... 26
SLOVENIA IN BRIEF ............................................................................................................ 27
Secretary for Slovenians Abroad Receives Representatives from Italy ............................... 27
Parliament Appoints RTV Slovenija Programming Council Members ............................... 27
New Zealand Sailing Champion Tests his New Boat in Portoroz ....................................... 27
European Commission Awaiting Slovenia's Answer on Fishing Regime ........................... 27
2
HEADLINES
Reforms Coordination Office Expects Busy Year
According to Damijan, the main objectives of the newly-established office are to increase
economic competitiveness, provide dynamic economic growth and curb unemployment while
maintaining social security
The new Government Office for the Coordination and Implementation of Slovenia's
Development Strategy, headed by reforms minister Joze P. Damijan, presented its team and
key areas of work on Wednesday, 11 January. Damijan said the office expected a busy year as
the government goes about implementing structural reforms.
According to Damijan, the main objectives of the newly-established office are to increase
economic competitiveness, provide dynamic economic growth and curb unemployment while
maintaining social security.
"A year of compromises lies ahead of us, a year of social dialogue, which will hopefully bring
a solution that in five-years time will make Slovenia one of the most successful European
countries," Damijan said.
He claimed he had a very strong team at his disposal. The office is composed of a sector for
economic and a sector for social reforms, and employs 15 people.
Andrej Horvat will act as state secretary, the cabinet will be run by Zivana Mejac, while
Lidija Apohal Vuckovic and Bostjan Vasle will head the economic and social reforms sector
respectively.
Damijan said the team has already been acquainted with the plans expert groups have
proposed for the privatisation of two major Slovenian banks, the national telco Telekom
Slovenije and the energy sector, and was in the process of forwarding an expert opinion to the
government.
He also explained the Finance Ministry was in charge of finding a contractor who would
design a simulation model forecasting the effects of the proposed reforms, adding he expected
the first results in March.
Slovenia 14th Most Innovative Country in the EU
Moreover, Slovenia came second among the ten new member states, being outperformed only
by Estonia
Slovenia has placed the 14th most innovative country among all 25 EU member states,
according to the European Innovation Scoreboard (EIS), which was published in Brussels on
Thursday, 12 January.
Moreover, Slovenia came second among the ten new member states, being outperformed only
by Estonia, according to the EIS report.
Slovenia's innovation performance is relatively well-balanced, with no major discrepancies in
different innovation categories, with the exception of intellectual property rights.
With improvements in several crucial areas and a good foundation in innovators, the country
has the ability to rapidly improve its performance, the report adds.
The EIS indicators which determine a country's rank are distributed among five categories
that measure innovation performance.
The report pinpoints Slovenia's best performance in the first category, namely the innovation
drivers, which measure the structural conditions required for innovation potential.
The country's excellent result is due to extensive life-long learning programmes and aboveaverage results for youth education.
3
Slovenia also did exceptionally well in the second category (knowledge creation), as its
business R&D stood at 0.90% of GDP in 2003 (71% of the EU average).
However, the country also faces several challenges, with the main issue pinpointed as the
below-average levels of ICT investment (83% of the EU average with no sign of
improvement).
Moreover, the country spends a below-average amount of money on innovation, reaching
61% of the EU average, in addition to being faced with a drop in numbers of science and
engineering graduates, which fell to 71% of the EU average in 2003.
Due to these troubles the country has been placed in the "catching up" group of countries, the
third best out of four categories.
According to EIS, Europe's most innovative countries are Switzerland, Finland, Sweden and
Denmark, while the worst are Spain, Poland and Slovakia.
Central Bank Labels Fiscal Policy on Track for Euro Changeover
The board of governors of the country's central bank agreed that the current interest rate
guarantees a stable tolar/euro exchange rate, while Slovenia also fulfilled all the euro
convergence criteria
The board of governors of the country's central bank agreed on Thursday, 12 January that the
current interest rate guarantees a stable tolar/euro exchange rate, while Slovenia also fulfilled
all the euro convergence criteria.
The Bank of Slovenia also expressed its hope that the country would remain on track for the
planned 1 January 2007 euro changeover in the future as well.
The board of governors also assessed that wage growth presents no impeding threat to a rise
in inflation, while macroeconomic risks are limited, due to upbeat data on the growth and the
structure of the GDP.
However, the governors agreed that a large rise in oil prices would present the biggest threat
to the inflation rate, according to the press release from the central bank.
The board of governors moreover discussed a bill on the euro changeover. The bill was
drafted by an inter-ministerial task force, and, according to the Finance Ministry, will be
discussed by the government in the first half of 2006.
The bill regulates the procedure for changing Slovenian tolars into euros, the period and the
course of the period when both euros and tolars are in circulation, and includes provisions on
how the companies should switch to doing business in euros.
The ministry added that the task force consisted from representatives of the Bank of Slovenia,
the finance, economics and justice ministries, the government's legal service and
representatives of the Securities Market Agency.
The expenses for the information campaign in 2006 and the beginning of 2007 being forecast
at SIT 330m (EUR 1.4m). A portion of this money is expected to come from the European
PRINCE programme.
Informative double pricing is set to start on 1 March 2006, the actual double pricing phase, on
the other hand, will start a day after the final tolar/euro exchange rate is set, and would end at
the end of June 2007.
The new currency will be introduced with 1 January 2007, with the changeover period, when
both euros and tolars are in circulation, lasting through 14 January 2007.
After February 2007 the exchange of tolars without commission will only be possible at the
Bank of Slovenia, with no time restrictions for the exchange of bank notes while coins will
only be accepted until 2016.
4
INTERNATIONAL COOPERATION
Sava River Basin Commission Officially Launched
The international commission was formally established on 27 June 2005 by Slovenia, Croatia,
Bosnia-Herzegovina and Serbia-Montenegro after a framework agreement on the Sava basin
was signed by the countries in 2002
The international commission for the Sava river basin, based in Croatia's Zagreb, launched
operations on Monday, 9 January, the Slovenian Ministry of the Environment and Spatial
Planning said in a press release.
A staff of eight headed by secretary Dragoljub Komatina of Serbia-Montenegro will now take
on the task of drawing up a plan for water management along the river, to be followed by
measures necessary for the establishment of a navigable route.
The international commission was formally established on 27 June 2005 by Slovenia, Croatia,
Bosnia-Herzegovina and Serbia-Montenegro after a framework agreement on the Sava basin
was signed by the countries in 2002. The accord committed the signatories to joint sustainable
management of the river's water resources.
The agreement is a first example of development cooperation among former Yugoslav
countries. According to the Environment Ministry, Slovenia as the only EU member in the
group, bears particular responsibility for upholding EU standards of environmental protection.
Slovenia to Help Montenegro With EU Bid
Slovenian Foreign Minister Dimitrij Rupel promised Montenegrin Foreign Minister Miodrag
Vlahovic that Slovenia was willing to help Montenegro with its bid to join the EU
Slovenian Foreign Minister Dimitrij Rupel on Tuesday, 10 January promised Montenegrin
Foreign Minister Miodrag Vlahovic that Slovenia was willing to help Montenegro with its bid
to join the EU.
Slovenia stands ready to provide Montenegro with advice and information on EU accession
and integration, Rupel told the press in Ljubljana.
Efforts will also be made to improve the already satisfactory economic cooperation, Rupel
told the press in Ljubljana.
The ministers also used Vlahovic's working visit to discuss the situation in the region but
focused above all on Montenegro's future including its accession to the EU and the upcoming
referendum on its status.
Vlahovic says Montenegro wants the referendum, planned for this spring, to be carried out
openly, peacefully and in accordance with the law.
He stressed that the authorities in Podgorica would not have decided to hold a referendum
were they not convinced of a positive outcome. Rupel said Slovenia would respect whatever
outcome, provided the referendum was carried out democratically.
Vlahovic said the referendum rules were clear and emphasised that "whatever is good for the
EU is good for us". He expressed the wish that Montenegro could then set out on the road of
Euro-Atlantic integration as a democratic and independent country. The referendum could
also serve to improve relations with Slovenia.
Slovenia intends to help Montenegro on its way to the EU by organising visits by
Montenegrin political, academic and other representatives to Slovenia, said Rupel. Slovenia
would also use its influence in the EU to promote Montenegro and highlight its achievements.
During the press conference Rupel also commended the fact that Montenegro and Croatia had
resolved their border dispute, albeit temporarily. "In the light of the unresolved dispute
between Slovenia and Croatia maybe our Serb and Montenegrin friends could teach us
something," added Rupel.
5
State Secretary Receives New Cuban Ambassador
The newly appointed Cuban Ambassador to Slovenia Norma Goicochea Estenoz presented
copies of her credentials to Foreign Ministry State Secretary Bozo Cerar
The newly appointed Cuban Ambassador to Slovenia Norma Goicochea Estenoz presented
copies of her credentials to Foreign Ministry State Secretary Bozo Cerar in Ljubljana on
Friday, 13 January, the Foreign Ministry said.
Cerar took this opportunity to express Slovenia's interest in solving the issue of Cuba's debt to
Slovenia.
He believes that this would be an important step for Slovenian companies and banks toward
reinforcing cooperation with Cuba in trade, the press release also reads.
Goicochea Estenoz and her host shared a view that cooperation could be strengthened,
however, the two countries should first find points of common interests.
"Slovenia is in favour of a constructive and honest dialogue between the EU and Cuba," Cerar
said. For Slovenia, which is to chair the bloc in the first half of 2008, the respect for human
rights is one of the pillars of foreign policy.
Ambassador Goicochea Estenoz, who is based in Austria's Vienna, succeeded Jose Ramon
Cabanas Rodriguez, who represented Cuba in Slovenia since December 2001.
6
EUROPEAN UNION
Slovenia Endorses Austria's EU Agenda, Rupel Says
Slovenia supports the priorities of the Austrian presidency of the EU, Foreign Minister
Dimitrij Rupel has told ambassadors from EU member states in Slovenia
Slovenia supports the priorities of the Austrian presidency of the EU, Foreign Minister
Dimitrij Rupel has told ambassadors from EU member states in Slovenia.
A meeting between Rupel and the ambassadors from the EU countries in Slovenia on
Wednesday, 11 January was aimed at debating Austria's agenda for its six-month stint as EU
president, the Foreign Ministry said in a press release.
According to Rupel, the agreement on the 2007-2013 EU spending plan has injected fresh
optimism into the EU, which should allow Austria to go about its tasks more optimistically.
"Slovenia will support Austria in efforts to implement the priorities of its presidency," Rupel
told the diplomats.
"Slovenia believes that bolstering trust in the EU, drafting the European budget, promoting
economic growth and job creation...are of great importance for the 21st century Europe,"
Rupel added.
He said that Austria's plans to try and revive the debate about the European constitution is
also a noble aim. "We are convinced that the European Constitution is far from dead," Rupel
said.
The time has come to start thinking about the constitution again, he added. "It looks very
likely that the debate on the ratification and implementation of the constitution will intensify
during Slovenia's presidency in 2008," he said.
Rupel also welcomed Austria's decision to include the Western Balkans among the priorities
of its presidency. "All countries in the Western Balkans made enormous progress towards EU
membership over the last year," he added.
Ambassador: Austria to Chair EU Pragmatically and Impartially
During its six-month stint as the EU chair, Austria wants to cooperate closely with the
European Commission and the European Parliament
Austria wants to chair the EU in a pragmatic and impartial way, Austrian Ambassador to
Slovenia Valentin Inzko told the joint session of the parliamentary foreign policy and
European affairs committees in Ljubljana on Wednesday, 11 January.
During its six-month stint as the EU chair, Austria wants to cooperate closely with the
European Commission and the European Parliament, Inzko stressed.
Increasing the trust in the EU and creating a positive atmosphere will be among the country's
priorities, said the ambassador. This should also help make progress on the EU Constitution,
which was rejected by France and Netherlands in 2005, he explained.
In answering National Party (SNS) MP Bogdan Barovic, Inzko, however, said he did not
believe that Austria could secure a breakthrough on the constitution. He added that a major
shift was likely during Germany's presidency in the first half of 2007.
He said that Austria would also support the EU accession of countries in the Western Balkans,
however not due to altruism but because of its own and Europe's interests, as stability in the
region is vital for stability in Europe in general.
Moreover, Austria counts on Slovenia's aid and support, especially in dealing with Western
Balkan states. The country is also already helping Slovenia as it gears up for its stint as EU
chair in the first half of 2008.
7
Apart from the ongoing exchange of diplomats, opposition Liberal Democrats (LDS) MP
Milan M. Cvikl called for both parliaments to cooperate in the same way.
Austria began its EU presidency on 1 January, succeeding Great Britain, whose Ambassador
Tim Simmons said at the session that his country had done a good job during the second half
of 2005.
Reforms Minister Presents Privatisation Plans to EBRD President
Reforms Minister Joze P. Damijan outlined the government's market deregulation and
privatisation plans to the head of the European Bank for Reconstruction and Development
(EBRD) Jean Lemierre
Reforms Minister Joze P. Damijan outlined the government's market deregulation and
privatisation plans to the head of the European Bank for Reconstruction and Development
(EBRD) Jean Lemierre on Thursday, 12 January.
According to a press release from the Government Office for the Coordination and
Implementation of Slovenia's Development Strategy, Damijan and Lemierre also discussed
possibilities for cooperation between Slovenia and the EBRD.
Lemierre meanwhile expressed his support for the government's plans and presented the
EBRD's views on cooperation, the press release says.
He also travelled to Maribor, where he held talks with Matjaz Kovacic, chairman of
Slovenia's second largest bank, the Nova kreditna banka Maribor (NKBM).
According to the NKBM, the bank acquainted Lemierre with its operations and plans. This
was "a good basis for building future cooperation between both banks", it added.
Lemierre met PM Janez Jansa and Finance Minister Andrej Bajuk on Wednesday, 11 January.
Bajuk said that the two sides discussed key EBRD decisions regarding Slovenia, "not only in
energy infrastructure but also in railways and state roads".
Lemierre said that he has not come to Slovenia with a set agenda, but rather to talk. He added
that the talks centred around modernisation of the banking sector, the privatisation of the
telco, railway infrastructure projects and on the energy sector.
Meanwhile, Damijan told the public broadcaster Radio Slovenija that he has doubts on
whether the EBRD is the right partner for Slovenia in the country's privatisation plans.
Although admitting that the EBRD has been doing a good job in helping market economies
get on their feet in former communist states, Damijan believes Slovenia is now highly
developed and may no longer need EBRD guidance.
"The EBRD enters into the fray in cases where it wishes to give credibility to a privatisation
process. This is no longer a priority in Slovenia," Damijan added.
Government Discusses Priority Tasks for EU Presidency
According to the Government Office for EU Affairs (SVEZ), the country has drafted an
overview of possible presidency topics, a proposal of Slovenia's priority tasks, a draft
calendar of main events and a plan of meetings with third countries
The government discussed on Thursday, 12 January Slovenia's priority tasks as the country
prepares to take over EU presidency for the first time in the first half of 2008.
According to the Government Office for EU Affairs (SVEZ), the country has drafted an
overview of possible presidency topics, a proposal of Slovenia's priority tasks, a draft calendar
of main events and a plan of meetings with third countries.
The possible tasks, outlined in the first report on Slovenia's preparations for EU presidency,
which was adopted by the cabinet at its session, include the bloc's institutional reforms and
EU expansion.
8
Moreover, the government wants to tackle issues existing between the bloc and its
neighbours, the Lisbon Strategy and sustainable development as well as EU's competitiveness
and the transfer of innovation into the economy.
Furthermore, Slovenia is working on initiatives regarding tourism, culture, environmental
protection, and an interim report of cohesion policy and Common Agricultural Policy, besides
thinking on the role of EU as a global power.
The cabinet also said that personnel issues have been all but addressed, as the government
adopted a staffing plan on 6 October.
According to the report, some 80% of the people needed to carry out the most important tasks
during the presidency have already been chosen. The government believes that these tasks
will be carried out mainly by Slovenian citizens, SVEZ said.
The cabinet also positively assessed the already drafted promotion and cultural programme, a
framework plan for public relations, and the draft document on promotion gifts.
As part of the country's preparations, the Slovenian permanent representation in Brussels will
move to new premises this spring, while the country's as yet unknown chief media
spokesperson is expected to arrive in Brussels early in 2006.
9
LEGISLATION
Parliament Rejects Wine Act in Renewed Vote
Most lawmakers now expect the government to draft a new wine act which would once again
divide Slovenia into three wine regions
In a renewed vote on the government-sponsored wine act, which was passed by the parliament
and then vetoed by the National Council in late December, the National Assembly failed to
muster an absolute majority to pass the legislation again.
In fact, 45 lawmakers shared the view that the proposal to divide the country into two wine
regions (Primorsko and eastern Slovenia) is bad and that it would be better to seek division
into three wine countries (Primorsko, Podravje and Posavje).
According to Agriculture Minister Marija Lukacic, the government initially drafted a wine bill
which would divide Slovenia into three regions. However, it then decided to go with two wine
regions in line with the proposal of the parliament's agriculture committee, she told the MPs.
Lukacic moreover said that the Agriculture Ministry was now holding a survey among wine
growers on whether they want two or three wine regions. As she explained, partial results
show that they would prefer three regions.
Most lawmakers now expect the government to draft a new wine act which would once again
divide Slovenia into three wine regions.
Several of them called for a better cooperation with wine growers, especially from the
southern regions of Dolenjsko and Bela Krajina, who were the loudest in opposing the two
region solution.
Lawmakers Overturn Veto on Changes to Trade Act
In line with the law, shops selling essential goods regardless of their size and location will be
allowed to open up to ten Sundays a year
The National Assembly has overturned a veto on the changes to the trade act dealing with
Sunday shop opening hours imposed by the National Council in late December.
The legislation that imposes a Sunday shopping ban with a number of exceptions was backed
by 46 lawmakers, while 23 voted against.
This was just enough for an absolute majority needed to overturn the veto. Parliament had
originally passed the law on 20 December.
The votes against the law came from the opposition Liberal Democracy (LDS) and Social
Democrats (SD), who were unhappy with the way the coalition parties had gone about
drawing up exceptions to the ban.
In line with the law, shops selling essential goods regardless of their size and location will be
allowed to open up to ten Sundays a year.
Moreover, shops smaller than 200 sq. metres and located at petrol stations, city or town
centres, pilgrimage sites, marinas, camping sites, spas, hospitals, hotels, airports, border
crossings, train and bus stations will be able to remain open all Sundays.
The large number of exceptions prompted the National Council to veto the act. The
representatives of the employers argued that the law failed to implement the will of the voters
expressed at the 2003 referendum on the issue, in which 56% of the ballots cast backed the
closure of shops on Sundays.
The unions have cried foul about the legislation because of the large number of exceptions to
the ban. The government, meanwhile, claims that the law is good as it protects Slovenia's
economic interests, especially the tourism sector, while implementing the will of the people
that shops remain closed on Sundays.
10
After being published in the Official Gazette, the changes will replace the trade act that
entered into force on 1 January that imposes a much more conservative ban on Sunday
shopping.
The list of exceptions to the ban under the currently valid act includes shops located at petrol
stations, hospitals, hotels, airports, border crossings, train and bus stations.
11
STATISTICS/FORECASTS
Trade Gap Soars in November
Slovenia's exports amounted to EUR 1.33bn in November, a 13.7% rise in comparison with
November 2004, while imports totalled EUR 1.52bn, up 15.4% over November 2004
Slovenia's exports amounted to EUR 1.33bn in November, a 13.7% rise in comparison with
November 2004, while imports totalled EUR 1.52bn, up 15.4% over November 2004.
The trade gap stood at EUR 192.1m, putting the export-import coverage at 87.4%, Slovenia's
Statistical Office said on Monday, 9 January.
The increase in the trade gap is due to a rise in Slovenian imports in November, when the
country imported a massive EUR 105m more than in October 2004.
The preliminary data shows that in the first eleven months of 2005 Slovenia's exports
increased by 11.7% to EUR 13.11bn, while imports increased by 9.9% to EUR 14.2bn.
In the January-to-November period the trade deficit reached just over EUR 1bn, and the
export-import coverage stood at 92.3%.
Factory-Gate Prices Up 0.4% in December
Factory-gate prices rose 0.4% in December compared to November, putting the yearly price
increase at 1.8%, according to data by the National Statistical Office
Factory-gate prices rose 0.4% in December compared to November, putting the yearly price
increase at 1.8%, according to data by the National Statistical Office.
The most substantial price increase in 2005 was recorded in manufacturing, where prices went
up by 2.2%. Meanwhile, prices in mining rose by 0.9% last year.
Forestry prices remained flat in 2005, while water supply and electricity prices dropped by
0.2% last year, the office said.
The prices of electricity and water saw the largest monthly price rise (2.1%), while
manufacturing activities cost 0.1% more in December. Forestry prices remained flat and
prices in mining fell 0.5% in comparison with November.
The prices of intermediate goods (energy products and raw materials) and consumer goods
increased by 0.8%, respectively, while prices of consumer goods were up 0.1%. Capital goods
were 0.3% cheaper.
Industrial Output up 7.3% Y/Y in November
Slovenia's industrial output rose by 5% in November over October, with annual growth at
7.3%, according to the latest report by the National Statistical Office
Slovenia's industrial output rose by 5% in November over October, with annual growth at
7.3%, according to the latest report by the National Statistical Office.
In the first eleven months of 2005, Slovenian companies produced 2.8% more in comparison
with the same period last year.
Output in mining rose 10.4% year-on-year, while manufacturing output recorded a 7.9% jump
in comparison with last year.
However, volumes in electricity, gas and water supply dropped by 2.1% in comparison with
November 2004.
Output of capital goods recorded a 12% increase, consumer goods grew by 9.34% year-onyear, while the output of intermediate products rose by an annual rate of 4.1%.
12
Slovenia Leads EU in Layoffs, Trade Unionist Says
According to Dusan Semolic of the Association of Free Trade Unions of Slovenia (ZSSS),
between June and September 2005, there were 2,690 layoffs in Slovenia caused by
restructuring
Data shows that Slovenia leads the EU in terms of restructuring-related layoffs, the head of
Slovenia's largest trade union association has said.
According to Dusan Semolic of the Association of Free Trade Unions of Slovenia (ZSSS),
between June and September 2005, there were 2,690 layoffs in Slovenia caused by
restructuring.
This amounts to 28.44 layoffs per 10,000 employees, he said as he presented the results of a
survey commissioned by the European Foundation for the Improvement of Living and
Working Conditions.
Slovenia leads by a wide margin: second-placed Sweden saw 16 jobs lost to restructuring per
10,000 employees, Semolic stressed.
Meanwhile, ZSSS executive secretary for international affairs Pavle Vrhovc said that the data
for Slovenia includes announced layoffs, including at grocer Mercator and car-seat coverings
maker Prevent.
Restructuring was the reason for four-fifths of all layoffs in European over past two years,
Semolic said.
The main reasons for this lie in technological advances and changes in consumer demand, he
said.
However, all of the lost jobs are replaced by new ones in Europe, Semolic said. And while
other European countries issue forecasts of anticipated new job openings, Slovenia has failed
to do so.
Moreover, elsewhere in Europe, workers are usually presented with an alternative job for the
one they are about to lose. "The unions will continue to argue with the employers and politics
until we achieve this in Slovenia," Semolic said.
IMAD: 3.9% Growth Target Likely Reached in 2005
The Slovenian economy grew by an average 4% in the first three quarters of 2005
The Slovenian economy grew by an average 4% in the first three quarters of 2005. Therefore
the 3.9% growth target for 2005 forecast by the Institute for Macroeconomic Analysis and
Development (IMAD) is likely to have been reached, IMAD director Janez Sustersic told the
press on Tuesday, 10 January.
Sustersic pointed out that exports in 2005 grew more than IMAD had forecast. Slovenia
exported 8.5% more in the first nine months of 2005 than in the same period in 2004, he said.
Exports to the EU grew even more, especially to France, where Slovenia exported a whooping
60% more in the January-to-September 2005 over 2004, he added. The country's main export
to France are Renault cars, manufactured by the Revoz factory in Novo mesto.
However, while IMAD forecast a 4% growth in investments for 2005, they only increased by
2%, mainly due to a drop in investments into machines and equipment.
According to Sustersic, industrial output also grew slightly less than IMAD predicted, with
the fastest growth experienced by the car and metal industries, while the output of labour
intensive sectors remained in decline.
According to IMAD, the number of employed persons in Slovenia was on the rise, although
the unemployment rate remained practically unchanged. This is because there had been an
increase in the active population, he noted.
Meanwhile, wages in the first nine months in 2005 grew by 2.3% in real terms, which is in
line with measures to keep inflation in check, Sustarsic said.
13
Private consumption grew by 3.4% in the first nine months of 2005, surpassing the growth of
wages, with the difference mainly being fuelled by loans, he added.
Inflation has meanwhile dipped by 1.1 percentage points and reached 2.5%, in line with
IMAD's forecasts. Slovenia therefore met all Maastricht convergence criteria as of November,
Sustersic explained.
He warned that for short periods in 2006 the inflation rate could peak above the rate set in the
criteria, however that would not pose a threat to the country's planned euro changeover in
2007.
According to Sustersic, IMAD kept its 2006 forecast unchanged, with the economy growing
by some 4%. However, such growth cannot be expected in years following 2006, unless the
government economic reforms are implemented, he warned.
Foreign Debt at EUR 18.6bn
Slovenian foreign exchange reserves totalled EUR 8.4bn at the end of October
Slovenian foreign exchange reserves totalled EUR 8.4bn at the end of October, EUR 10.2bn
short of the overall foreign debt, which then amounted to EUR 18.6bn, according to the latest
Bulletin of the Bank of Slovenia.
The bulk of Slovenia's foreign exchange reserves, EUR 6.5bn, was made up of the reserves of
the central bank, while the remaining EUR 1.9bn belonged to commercial banks.
Long-term debt accounted for EUR 13.7bn, while short-term debt amounted to EUR 3.7bn,
and debt liabilities to affiliated enterprises and direct investors to EUR 1.2bn.
Households with Children Better Equipped with ICT
In the first quarter of 2005 as many as 84% of the households with children had a computer,
whereas the share stood at a mere 51% in those without children
Children born in the IT era strongly influence how well-equipped a household is with
information and communication technologies (ICT), according to Slovenia's Statistical Office.
In the first quarter of 2005 as many as 84% of the households with children had a computer,
whereas the share stood at a mere 51% in those without children, according to the Office.
Almost a half of all households (48%) had Internet access, of which 96% used a desk top and
18% lap top to access it in that period. The share of households using a mobile phone to use
the Internet was also relatively high, at 45%.
Modem was used as an Internet connection by 45% of all households, followed by ISDN
technology (16%), ADSL broad-band connection (24%) and other broad-band connections
(18%).
The statisticians have also established that the share of households using broadband Internet
connections increased from 22% in the first quarter of 2004 to 40% in the first quarter last
year.
The survey has also shown that 96% of households has a TV set, 90% a fixed phone, 87% a
mobile phone, 61% a computer, 54% a cable TV, and 18% a satellite dish.
Broadband Internet Connection on the Rise in Slovenia
The leading Internet providers in Slovenia are Voljatel, Siol and Arnes
Broadband Internet access saw a true breakthrough in Slovenia in 2005, as the number of
broadband connections was three times higher in the January-October period over the year
before, the Agency for Post and Electronic Communications said.
According to the agency, the rise in broadband connections in Slovenia was much faster than
the EU average, which only doubled in the same period.
14
The agency moreover said that Slovenia has a number of possibilities for broadband Internet
connection to expand, which is a reason why operators have quite ambitious plans in this
field.
The number of broadband users increased especially after Telekom Slovenije unbundled its
ISDN digital telephony and ADSL broadband Internet packages in September 2005. After
this, customers are no longer obliged to buy an ISDN package if they want to get ADSL.
As part of this partnership scheme launched by Telekom together with Medinet, Perftech, Siol
and Voljatel, more than 20,000 new ADSL broadband connections were set up only in the
first two months after Telekom's decision.
According to the agency's latest data, there are a total of 371,000 Internet connections in
Slovenia. As many as 55% are phone connections, followed by ADSL with 28% and cable
connection with 16%.
The leading Internet providers in Slovenia are Voljatel, Siol and Arnes. Meanwhile, Siol,
Medinet and Voljatel lead in providing ADSL connection (which holds 63% of all broadband
connections), and Telemach, Arnes and KRS Tabor in cable access (36% of broadband
access).
15
FINANCE
Two Companies Bidding for Euro Calculator
The Bank of Slovenia has received three bids from two bidders in a public tender for
supplying 700,000 calculators for converting euros to tolars and vice versa to Slovenian
household in the run-up to the euro changeover in 2007
The Bank of Slovenia has received three bids from two bidders in a public tender for
supplying 700,000 calculators for converting euros to tolars and vice versa to Slovenian
household in the run-up to the euro changeover in 2007.
The opening of the offers by the Bank's commission showed that only one of the bids
provided all the required documentation, the bank's spokesperson Gordana Pipan told the
press on Monday, 9 January.
Upon examining the bids in detail, the bank will reject all the unacceptable and incomplete
ones and either choose the best offer or inform the bidders that the tender has failed, Pipan
added.
The Bank of Slovenia is ready to pay one euro for each calculator at the most, including tax.
According to Pipan, the households are to receive the calculators in September or October this
year.
The project will be funded by the Bank of Slovenia with funds allocated for the euro
awareness campaign. Similar initiatives were carried out in a number of euro-zone countries,
notably Germany, Ireland and Luxembourg.
Health Insurer Triglav to Have 193,000 Customers
Zdravstvena zavarovalnica Triglav will therefore hold a 14% market share in supplementary
health insurance on 1 March, when new legislation enters into force
Health Insurer Zdravstvena zavarovalnica Triglav managed in the past three months to sign on
185,000 additional customers for its supplementary health insurance scheme, raising the total
number of clients to 193,000, its CEO Gregor Strmcnik told the press on Tuesday, 10 January.
Zdravstvena zavarovalnica Triglav will therefore hold a 14% market share in supplementary
health insurance on 1 March, when new legislation enters into force, Strmcnik added.
The company has already sent two-thirds of the new insurance contracts to its customers, and
plans to send the rest by February at the latest, he added.
According to him, the company will also lower its premiums, currently at SIT 4,781 (EUR
19.96), to match the lowest on the market on 1 March.
Chairman of the health insurer's parent company, Zavarovalnica Triglav, Andrej Kocic said
that the company is pleased with the figures, as they surpass their goal of a 10% market share.
Kocic added that Zavarovalnica Triglav wants to expand to SE European markets, while its
health insurance subsidiary will rank sixth among insurance companies in Slovenia.
Italian Bank Sells Stake in Slovenian Bank to Fellow Italian Bank
Italian bank Banca Popolare FriulAdria, a subsidiary of Milan-based group Banca Intesa,
has sold its 5.5% stake in Dezelna banka Slovenije to fellow Italian bank Banca di Cividale
Italian bank Banca Popolare FriulAdria, a subsidiary of Milan-based group Banca Intesa, has
sold its 5.5% stake in Dezelna banka Slovenije to fellow Italian bank Banca di Cividale, the
small Slovenian bank said on Thursday, 12 January.
According to the press release, this move will help Dezelna banka realise its business plans. It
will offer the Slovenian bank new funds and open new possibilities for financing different
projects around Slovenia, the bank also said.
16
This deal concludes ownership changes in Dezelna banka Slovenije: the biggest owners are
now Slovenian investment firms Kapitalska zadruga with a 42.06% stake and KD Group with
a 22.98% stake.
Dezelna banka Slovenije, which emerged from a merger between a cooperative bank and a
group of savings banks at the beginning of 2004, believes it could speed up its growth with
the new owner.
At the end of 2005, the bank had an almost a 2% share on the Slovenian market, with total
assets of SIT 115bn (EUR 480m). It was ranked 13th among the Slovenian commercial banks.
Banca di Cividale with over 400 employees (80 Slovenians) is a member of the group Banca
di Popolare Cividale. In 2004, the total assets of the bank, which has 52 branches mainly in
the southeastern part of Italy, amounted to EUR 1.71bn.
Ljubljana Stock Exchange
The SBI 20 benchmark index ended the week up 30.87 points (0.67%) at 4,619.95
Grocer Mercator was the engine of an upturn on the Ljubljana Stock Exchange last week.
News that Slovenia's largest grocer was in talks with two Balkan rivals on a possible merger
breathed fresh air into the market.
The SBI 20 benchmark index ended the week up 30.87 points (0.67%) at 4,619.95, with a
total of SIT 6.34bn (EUR 26.4m) worth of stocks changing hands last week, including nearly
half in block deals.
Mercator made a big comeback last week after being out of the investors' spotlight since
September, following the sale of a nearly 30% state-controlled stake to beverage group
Pivovarna Lasko and holding company Istrabenz.
Shares of the grocer gained 3.4% to SIT 38,007 (EUR 158.63) on news that it had launched
talks with Croatia's Agrokor and Serbia's Delta on a possible merger that would create a
regional retailing giant.
Mercator was making headlines for other reasons, too: the Ljubljana Stock Exchange (LJSE)
issued a public warning to the company because it failed to disclose all relevant information
during its recent EUR 100m capital injection.
Meanwhile, pharmaceuticals company Krka was again the most active share on the week,
picking up 0.63% to SIT 105,379 (EUR 439.81).
Despite being the trailblazer on the market in recent weeks, fuel trader Petrol was unable to
keep up with Mercator and Krka last week, shedding 0.13% to SIT 70,530 (EUR 294.36).
Among other blue chips, Pivovarna Lasko surged 2.3% to SIT 7,550 (EUR 31.51).
The LJSE management decided on Monday, 9 January to list, at an as of yet unspecified date,
shares of holding Autocommerce. The company expects that trading with its 2,886,877 shares
will begin before the month is out.
Popular investment funds traded mixed in an unexciting week on the free market, with the
PIX investment fund index edging 2.47 points (0.06%) higher to 3,942.45. The BIO bond
index was 0.3 points (0.24%) down at 122.41.
Foreign Exchange
Mean exchange rate of the Bank of Slovenia
Euro (EUR) - SIT 239.59 (+0.02)
U.S. dollar (USD) - SIT 198.78 (+0.65)
Swiss franc (CHF) - SIT 154.79 (-0.22)
British pound (GBP) - SIT 351.10 (+3.33)
17
REGIONAL INFORMATION
Drnovsek Praises Dynamic Development in Maribor
Visiting Maribor, President Drnovsek said there has been great improvement in the economic
situation in the once-proud industrial base of NE Slovenia
President Janez Drnovsek has said that Slovenia's second-largest city appears to have made
great progress over the past few years.
Visiting Maribor on Tuesday, 10 January, Drnovsek said there has been great improvement in
the economic situation in the once-proud industrial base of NE Slovenia.
"Maribor is back on its feet. It looks like the right decisions were taken at the right time and
today there is evidence of dynamic development and the creation of new jobs," he said.
"There are now many new companies, particularly small and mid-sized enterprises, in places
where the former industrial giants Tam and Metalna once stood," he said.
Drnovsek stressed that Maribor had always been an important Slovenian cultural hub, while it
has also started taking steps to bolster its standing as a tourism and sports centre.
As part of the visit, the president met with Maribor Mayor Boris Sovic to discuss latest
developments in the city, especially related to development.
The collapse of the city's industrial base in the early 1990s meant Maribor had one of
Slovenia's highest unemployment rates.
However, Drnovsek believes that the picture is much brighter now and that the city has good
prospects for the future.
18
BRANCH INFORMATION
VURS: Slovenia not at Risk due to Bird Flu in Turkey
Turkey is still banned from exporting its poultry to the EU and therefore Slovenia
Bird flu in Turkey is nothing new for Slovenia and there is no need to panic, the director of
the Veterinary Administration (VURS) told STA on Monday, 9 January.
"In Turkey the disease spread among people who were living in close quarters with sick
animals," Vida Cadonic Spelic said, commenting on the recent deaths of three Turkish
children caused by bird flu.
Turkey is moreover still banned from exporting its poultry to the EU and therefore Slovenia,
Cadonic Spelic added.
Moreover, ornithologist Toni Trilar believes that migratory birds also do not pose a danger. A
possible infection through contact with contaminated birds, transport or equipment is more
concerning," Trilar added.
Similarly, the Slovenian Foreign Ministry told STA that there are no additional restrictions in
place regarding travels to Turkey.
They advised Slovenians who plan to travel to areas with reports of bird flu to heed the
instructions of the Health Ministry and other institutions.
"Kompas has so far seen no drop in travels to Turkey," Miso Mrvaljevic of the travel agency
told STA.
The story is different in Ilirika, which has experienced a 50% drop in the interest in Turkey in
comparison with last year, Andreja Gorse of this company told STA.
National Review Commission Annuls Mobile Phone Tender
The tender was published in September by the Public Administration Ministry
The National Review Commission for public procurement has ruled in favour of a complaint
by mobile operator Vega, which called for a review into the recent tender for mobile
telecommunication services for the public administration, Vega said on Tuesday, 10 January.
Vega, owned by mobile giant Western Wireless International, filed the complained in
October. It said that the conditions in the tender favour a specific mobile operator, although it
did not say which one.
The commission upheld all nine counts in Vega's complaint, Vega's PR Tanja Zabukovnik
told STA. The company, meanwhile, said, "It seems that there still exists an independent,
autonomous and impartial state body in Slovenia".
"We believe that the (Public Administration) Ministry will repeat its call for bids...and draft
non-discriminatory conditions for all mobile operators," Vega added.
The ministry has not received the commission's decision yet, so it cannot comment on it at the
moment, undersecretary at the Public Administration Ministry Saso Matos told STA.
However, the ministry will comply with the commission's ruling in publishing a new call,
which can be expected in February at the latest, Matos added.
The tender was published in September by the Public Administration Ministry. The winner
would provide mobile telecommunications services to over 7,000 public servants.
Customs Enforce Stricter Control of Luggage from Bird Flu Areas
Slovenia's Customs Administration has been instructed by the National Veterinary
Administration (VURS) to enforce a stricter control of luggage belonging to people travelling
from areas hit by bird flu
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Slovenia's Customs Administration has been instructed by the National Veterinary
Administration (VURS) to enforce a stricter control of luggage belonging to people travelling
from areas hit by bird flu, the Customs Administration said on Tuesday, 10 January.
In line with the instructions, customs officers will examine more thoroughly personal luggage
of passengers in cars and lorries coming from areas with bird flu infections, especially
Turkey.
A stricter control will also be enforced in the country's sole seaport of Koper and at its only
international airport, Brnik, the Customs Administration added.
The measures are targeted mainly at non-heat-treated poultry products, live poultry and
untreated feathers of other live birds.
PM's Economic Body Says Energy Supply Stable
Electricity production was in line with expectations and supply was stable, while the whole
electricity sector was well-synchronise
The prime minister's economic affairs college, a body debating topical economic issues, has
concluded that there were no major troubles in the energy sector in Slovenia last year.
Electricity production was in line with expectations and supply was stable, while the whole
electricity sector was well-synchronised, the body found at its meeting on Wednesday, 11
January. The body also established that supply of natural gas and crude oil was stable.
Despite general stability, new investment needs to be undertaken in transmission and
production, the body said.
According to a press release from the PM's office, the body underscored the importance of a
recently-adopted zoning plan for an 80.4km-long transmission line connecting the Krsko
Nuclear Power Plant with a central transmission station at Bericevo, near Ljubljana.
This is an important step towards the construction of the transmission line that will increase
the stability of the whole electricity network in Slovenia and the stability of supply from the
N-plant.
The body also stressed that a suitable strategy of efficient energy use and a plan for expanding
the natural gas and crude oil network need to be drawn up. Moreover, it pointed to the need to
promote investment in energy projects in SE Europe.
The economic affairs college includes Prime Minister Janez Jansa, seven cabinet ministers
and the head of the Institute for Macroeconomic Analysis and Development (IMAD) Janez
Sustersic.
Tourist Board to Focus on Advertising in 2006
Of the SIT 2bn (EUR 8.34m) allocated for the organisation in 2006, STO plans to spend SIT
1.28bn (EUR 5.34m) on promotion
The management of the Slovenian Tourist Board (STO) approved the operational plan for
2006. Of the SIT 2bn (EUR 8.34m) allocated for the organisation in 2006, STO plans to spend
SIT 1.28bn (EUR 5.34m) on promotion.
"We will focus more on communication, as well as close several information points abroad",
said STO general manager Marjan Hribar, who is also the head of the Tourism Directorate at
the Economics Ministry.
According to the plan, the STO will close its offices in Switzerland, Netherlands, Belgium,
Hungary, the US and in Croatia, while it plans to extend the contracts for its information
points in the UK and France, STO said.
STO's plan for 2006 has to be approved by the government, which will, according to STO,
decide on the issue in fortnight's time.
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The Slovenian Tourist Board plans to air a TV spot on global news network CNN as one of
the most costly projects planned for this year. The organisation failed to specify when the
spot, which will presumably cost SIT 200m (EUR 834,600), would start being shown.
Passat Pips Clio for Title of Best Slovenian Car
Third place went to the Mazda 5 minivan with 18 points
The Passat, Volkswagen's family saloon, has beaten Renault's popular compact, Clio, for the
title of Slovenian Car of the Year for 2006.
The Passat got 33 points from the jury made up of eight Slovenian car publications as well as
viewers and listeners of public broadcaster RTV Slovenija, the publishers of car magazine
Avto Foto Market said on Friday, 13 January.
The Clio finished only a point behind the winner. Third place went to the Mazda 5 minivan
with 18 points.
The Leon, Seat's hip hatchback, and the BMW 3 series finished fourth and fifth with 15 and
14 points, respectively.
Relaxed Poultry Ban Enters into Force
The national veterinary authority established there was hardly any danger of a bird flu
outbreak in the country
A relaxed ban on free-range poultry entered into force in Slovenia on Saturday 14 January
after the national veterinary authority established there was hardly any danger of a bird flu
outbreak in the country.
With the exception of 14 municipalities in the northeastern area of Ptuj, Dravsko Polje and
Ormoz, poultry does not need to be kept in confined spaces anymore.
The ban was imposed in October 2005 after it was confirmed that the bird flu virus discovered
in neighbouring Croatia was the lethal H5N1 strain.
The Veterinary Administration (VURS) decided to relax it earlier this month when it
established that there were no new cases of bird flu in Europe or near Slovenia.
VURS director Vida Cadonic Spelic also said that bird flu in Turkey was no cause for panic
because the disease spread among people who were living in close quarters with sick animals.
The relaxed ban is temporary, as VURS intends to monitor the situation in Slovenia, Europe
and the rest of the world until 31 May and then decide whether to extend or completely
remove it.
Cadonic Spelic told STA today that veterinary inspectors would begin field inspections next
week to see if the temporary ban is being observed.
21
COMPANIES
Renault Nissan Sees Drop in Sales, Market Share in 2005
Renault Nissan Slovenija generated sales revenues of EUR 260m in 2005
The authorised dealer for carmakers Renault and Nissan in Slovenia saw a 3.7% drop in sales
last year. Renault Nissan Slovenija generated sales revenues of EUR 260m in 2005, the
company's chairman Bernard Chretien told the press on Monday, 9 January in Ljubljana.
According to Chretien, the fall in revenues is a result of a drop in Renault's sales. Renault sold
15,400 vehicles in Slovenia last year, which is below the 2004 sales figure.
As a result, Renault's market share fell 1.5 percentage points to just under 23%.
Nevertheless, Renault continues to be Slovenia's leading car brand, Chretien said, adding that
he expected competition to heat up in Slovenia as car sales are beginning to drop off slightly.
The company's top priority is to expand its sales and service networks in Slovenia, especially
for the Dacia and Nissan brands. Chretien hopes that the company will manage to raise the
market share for the two brands from the current 0.6% and 1.14%.
Mercator CEO: All Former Yugoslav Retailers Potential Partners
Speaking for a Croatian business daily, the new chairman of retailer Mercator, Ziga
Debeljak, said that the company had not yet held talks about a possible tie-up with Croatian
Agrokor or Serbian Delta, but added the company was indeed taking interest in all retailers
on the markets of the former Yugoslavia
Speaking for a Croatian business daily, the new chairman of retailer Mercator, Ziga Debeljak,
said that the company had not yet held talks about a possible tie-up with Croatian Agrokor or
Serbian Delta, but added the company was indeed taking interest in all retailers on the
markets of the former Yugoslavia.
Debeljak confirmed for the Poslovni dnevnik on Tuesday, 10 January that the goal of
potential "integration" was to create a leading essential commodities retailer company in the
former Yugoslavia.
For Mercator, the Croatian, Serbian and Bosnian markets are a priority, providing it with the
opportunity for organic growth as well as new takeovers, he told the Zagreb-based daily.
In Slovenia, Mercator currently holds a 43.5% share in the grocery business. It is at 4% in
Croatia, 2% in Serbia-Montenegro and 1% in Bosnia-Herzegovina. According to Debeljak, it
is aiming to up its presence by 2010 to 12%, 10% and 5% respectively in these markets.
The Slovenian essential commodities market is worth EUR 2.5b annually, while the Croatian
exceeds EUR 5b. This is sufficient incentive for Mercator to already have 18 potential
Mercator centre construction sites in sight, according to Debeljak.
At present, Mercator's presence in Croatia is strongest in the capital Zagreb, while its network
in the rest of the country is expanding slowly, with all the centres doing fairly well, Debeljak
also said.
Ljubljana Airport to Increase Presence of Foreign Carriers
The company running Slovenia's main airport has concluded 2005 with a record 1,218,896
passengers, an increase of 16.3% over the previous year
The company running Slovenia's main airport has concluded 2005 with a record 1,218,896
passengers, an increase of 16.3% over the previous year. Aircraft traffic at Brnik airport also
went up by 6.5% to 37,765, Aerodrom Ljubljana said in a press release on Tuesday, 10
January.
22
Aerodrom Ljubljana expects the trend to continue in 2006, also due to a planned increase in
the presence of foreign carriers, which in 2005 accounted for 30% of the passengers.
The first step in this direction will come as early as 16 January, when for the first time a
Turkish Airlines plane will be landing at Brnik as part of a regular Ljubljana - Istanbul route.
According to Aerodrom management board member Zmago Skobir, this route, to be operated
three times a week, could usher in new opportunities for future connections to the Middleand Far East.
The coming days should also bring the tying up of a deal with low-fare airline Wizz Air,
which is expected to fly on two new routes from Brnik.
In 2006 Aerodrom Ljubljana plans to increase the number of passengers by 5% (to 1,280,019)
and increase its aircraft traffic by 4% (to 40,192). It also plans a 4% rise in cargo transport.
Tuerk to Run for ELES Director General
National grid operator ELES concluded the first eleven months of 2005 with a net profit of
SIT 3.95b (EUR 1.6m)
National grid operator ELES concluded the first eleven months of 2005 with a net profit of
SIT 3.95b (EUR 1.6m), acting general manager Vitoslav Tuerk told the press on Wednesday,
11 January. Tuerk also confirmed that he has applied for a full term in office.
ELES generated revenues of just over SIT 32b (EUR 134m) in the period mentioned, while its
expenses amounted to SIT 19.17b (EUR 80m), said Tuerk, who already headed ELES from
September 2000 to January 2001, when he was dismissed by the former government.
According to Tuerk, who replaced the dismissed Vekoslav Korosec in September 2005, at
least one other candidate entered the tender for the job of general manager issued by the
company at the end of last year.
Tuerk also touched upon the SIT 2.3b (EUR damages 9.6m) suit filled against him by ELES
for an allegedly harmful deal with Enron in 2001, saying it does not present an obstacle for
his nomination as it is entirely politically motivated.
According to Tuerk, ELES is facing a number of challenges and plans investments of SIT
10.5b (EUR 43.82) in 2006.
Supply to households will continue to be a priority of the company, but ELES will also have
to position itself in the broader environment, with the biggest potential coming from possible
deals with Italy and Hungary, Tuerk added.
"Italy is currently the biggest exporter of electricity in Europe and Slovenia as a neighbouring
country is an important element in its electric energy transmission line - ELES should make
use of this," Tuerk elaborated.
Strong Year for Perutnina Ptuj, Chairman Says
The Perutnina Ptuj food group concluded 2005 with SIT 37.2bn (EUR 155.26m) in net sales
revenues
The Perutnina Ptuj food group concluded 2005 with SIT 37.2bn (EUR 155.26m) in net sales
revenues. "Despite the bird flu scare and a difficult situation on the market, turnover went up
5% over 2004," its chairman Roman Glaser said.
Although data about last year's profit is not available yet, Glaser told the press on Wednesday,
11 January that Perutnina Ptuj doubled its revenues and equity between 2000 and 2005. The
company channelled SIT 1.5bn (EUR 6.26m) for investment in 2005.
Perutnina Ptuj, which employs 2,365 workers, increased its exports by 180% last year, mostly
on the markets in the EU and former Yugoslavia. This is a big step towards the company's
goal of generating 70% of its sales from exports.
"The company is the most important producer of poultry meat and products in the Western
Balkans and Slovenia," Glaser pointed out. Perutnina Ptuj, which marked its 100th
23
anniversary in 2005, would also like to become the main poultry producer in Central and SE
Europe, he said.
Glaser said that the company saw a 10% decrease in meat sales in October and November due
to the bird flu scare. However, sales picked up again in December.
He also addressed the issue of the government-sponsored flat tax rate, saying that its
implementation would not be favourable for Perutnina Ptuj. "We believe we would lose more
than we would gain," Glaser added.
Government Appoints Four Members to RTV Slovenija Supervisory Board
According to the Government PR and Media Office, the cabinet appointed journalist Janez
Cadez of insurer Adriatic; retiree Jozef Jerovsek; architect Matjaz Durjava, currently the
head of the housing fund in the municipality of Ruse (NE); and economist Sonja Heine of the
Post of Slovenia
The cabinet appointed its four members to the supervisory board of public broadcaster RTV
Slovenija at its correspondence session on Wednesday, 11 January.
According to the Government PR and Media Office, the cabinet appointed journalist Janez
Cadez of insurer Adriatic; retiree Jozef Jerovsek; architect Matjaz Durjava, currently the head
of the housing fund in the municipality of Ruse (NE); and economist Sonja Heine of the Post
of Slovenia.
In line with the new public broadcaster act, the supervisory board of the public broadcaster
consists of eleven members: five are appointed by the parliament, four by the government,
while the remaining two will be elected by RTV Slovenija's employees from among their own
ranks.
Mercator: Merger of Balkan Retailers Only Initiatives so Far
Although Slovenia's largest retailer Mercator began in-depth analyses of possible strategic
partners in Western Balkan countries, no specific talks are underway at the moment
Although Slovenia's largest retailer Mercator began in-depth analyses of possible strategic
partners in Western Balkan countries, no specific talks are underway at the moment, the
company told STA on Thursday, 12 January.
Mercator's statement after the business daily Finance, quoting unofficial sources, reported that
the three leading retailers in the Balkans (Croatia's Agrokor, Serbia's Delta, and Mercator) had
launched merger talks.
Mercator added that the company will try to reach its target market shares in Croatia, SerbiaMontenegro and Bosnia-Herzegovina with organic growth as well as with strategic
connections with major retailers in these three countries.
Agrokor meanwhile told STA that although initiatives on such a merger exist, no specific
deals have yet been discussed. Delta, on the other hand, refused to comment, saying that it
would undoubtedly inform the public on any such talks.
Igor Bavcar, CEO of holding Istrabenz, Mercator's largest single owner, repeated that the
company supports Mercator's plans on becoming one of the leading retailers in the region.
Railway Company Posts Lower Loss than Planned
Slovenian Railways generated SIT 68.82bn (EUR 287.24m) of revenues in 2005
Slovenian Railways generated SIT 68.82bn (EUR 287.24m) of revenues in 2005, 1.1% over
2004, yet still 0.9% behind plans. It meanwhile posted a loss of SIT 2.7bn (EUR 11.27m) of
the planned SIT 2.8bn (EUR 11.68m), the company's management told the press on Thursday.
"We tried to achieve in 2005 what we could, given the circumstances," director general Joze
Jurkovic said. Although final results will be known in a month's time, he believes they will
follow the plan.
24
"If the state had paid for all those services which the railways actually carried out, our
business results would be considerably better," deputy director general Igor Hauptman
meanwhile said.
Estimates show that the company generated SIT 27.2bn (EUR 113.53m) in transport
revenues, mainly because of relatively successful last quarter in 2005. This is 3.3% or SIT
0.3bn (EUR 1.25m) less than in 2004 and SIT 0.9bn (EUR 3.75m) below plans.
For the first time after 1991, more than 18 million tonnes of cargo were transported, a rise of
1% or 200,000 tonnes over the year before. In November alone, the company transported an
unprecedented 1.7bn tonnes of freight.
However, passenger transport was behind plans, generating only SIT 6.8bn (EUR 28.38m) in
revenues, which is SIT 71m (EUR 296,340) less than planned. The loss was generated in
national traffic during summer months, and could not be replaced in recent months.
Speaking about the infrastructure, deputy director general Branko Omerzu said they expect
the results to top the plans, although the proposal on increasing means for traffic management
has not been carried out.
Jurkovic moreover explained that the company was preparing a plan for 2006 and a new
strategical plan which would includes organisational improvements and quality of trains.
The company expects to be able to transport 22.5 million tonnes of freight and 17 million
passengers per year by 2010. Last year, it transported more than 15.7 million passengers.
Slovenian National Telco Not to Buy Maltacom After All
The management board of Telekom Slovenije has informed the company's supervisors that it
will not submit a binding bid for a 60% stake in Malta's national telco Maltacom
The management board of Telekom Slovenije has informed the company's supervisors that it
will not submit a binding bid for a 60% stake in Malta's national telco Maltacom due to
business risks associated with such an investment, Telekom Slovenije said on Friday, 13
January.
Several media outlets reported that Telekom's supervisors were expected to discuss today the
decision to purchase the majority stake in Maltacom, which has been put up for sale by the
Maltese government. However, they did not meet in the end, the company told STA.
The supervisory board of Telekom gave the management a go-ahead in August 2005 to file a
non-binding bid for Maltacom's majority share, which was estimated at EUR 180m to EUR
195m.
The company's main goal is expanding its operations in SE Europe, where it recently failed in
its bid to purchase the Montenegrin telco. The Slovenian company was also in talks to buy a
50% share of Gibraltar's Gibtelecom.
Adria Airways Increases Number of Passengers Y-on-Y, Posts Loss
Slovenia's flag carrier Adria Airways increased the number of flights and the number of
passengers by 7% in 2005 compared to the year before
Slovenia's flag carrier Adria Airways increased the number of flights and the number of
passengers by 7% in 2005 compared to the year before, the company has said.
In 2005, Adria carried as many as 944,000 passengers on 20,000 flights. However, this did
not stop the company from posting an operating loss of EUR 7m.
Almost 758,000 passengers (down 1% on 2004) flew on Adria's regular flights around
Europe. Meanwhile, the number of passengers on charter flights went up 56% to 187,000.
Adria's acting chairman Iztok Malacic told the press last week that the main reasons for the
loss lie in the inefficient organisation, inappropriate management and bad decisions in
previous years.
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The results were also influenced by an unfavourable situation on the market, such as high oil
prices, and competition from budget airlines and regional carriers, Malacic added.
Turkish Airlines to Launch Regular Flights from Brnik
In line with Aerodrom Ljubljana's plans to increase presence of foreign airlines, another
foreign carrier is to launch scheduled flights at Slovenia's main airport
In line with Aerodrom Ljubljana's plans to increase presence of foreign airlines, another
foreign carrier is to launch scheduled flights at Slovenia's main airport. The first Turkish
Airlines plane will be landing at Brnik on Monday, 16 January as part of a regular Ljubljana Istanbul route.
Aerodrom Ljubljana, the company running Brnik airport, expects in the future even more
foreign carriers, which accounted for 30% of the passengers in 2005, the company's
spokesperson Brigita Zorec told STA.
Brnik airport already offers regular flight routes to 24 destinations. For the last three years, the
company has also seen a rise in the number of charter carriers which mainly transport
customers to holiday destinations.
The first regular flight from Slovenia's main airport, which was built in 1963, was to SerbiaMontenegro's capital Belgrade, which was soon followed by Ljubljana - London route.
At first, Slovenian flag carrier Adria Airways (which still transports 70% of all passengers)
and the then Yugoslavian airlines JAT were the only ones to offer scheduled passenger
flights.
Turkish Airlines will be the eighth carrier to launch regular flights at Brnik. Customers can
also choose from JAT Airways, Austrian Airlines, Malev Hungarian Airlines, Air France,
Polish Airlines and low-budget EasyJet.
Furthermore, Aerodrom Ljubljana is also in talks with another low-fare airline Wizz Air,
which is soon to fly from Brnik to two new destinations either in Benelux countries,
Scandinavian countries or in the UK.
Aerodrom Ljubljana has concluded 2005 with a record 1,218,896 passengers, an increase of
16.3% over the previous year. In 2006, it plans to increase this figure by 5% to 1,280,019 and
increase its aircraft traffic by 4% to 40,192.
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SLOVENIA IN BRIEF
Secretary for Slovenians Abroad Receives Representatives from Italy
The new State Secretary for Slovenians Abroad Zorko Pelikan held his first meeting with
representatives of both Slovenian minority umbrella organisations in Italy on Tuesday, 10
January. Rudi Pavsic of the Slovenian Cultural and Economic Association (SKGZ), Drago
Stoka of the Council of Slovenian Organisations (SSO) and Pelikan discussed the current
situation of the minority.
Parliament Appoints RTV Slovenija Programming Council Members
Parliament appointed 21 members of the Programming Council of the public broadcaster
RTV Slovenija at its extraordinary session on Wednesday, 11 January.
New Zealand Sailing Champion Tests his New Boat in Portoroz
New Zealand's sailing champion Russell Coutts presented his new sailing boat, the RC44, in
the seaside resort of Portoroz on Thursday, 12 January. Slovenian boat designer Andrej Justin
helped design the new racer.
European Commission Awaiting Slovenia's Answer on Fishing Regime
The European Commission is awaiting Slovenia's answer to the proposal it gave in November
regarding the fishing regime in the Bay of Piran, the Commission told STA on Friday, 13
January. The proposal includes an interim solution on fishing in the Bay, which would remain
in place until Slovenia and Croatia resolved their border dispute.
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