Slovenia Business Week no. 18, May 8th, 2006
Table of Contents:
HEADLINES ............................................................................................................................. 2
Slovenia and Germany Sign Deal to Avoid Double Taxation ............................................... 2
Euro Bill Ready for ECB Review .......................................................................................... 2
Companies Act Enters into Force ........................................................................................... 3
INTERNATIONAL COOPERATION ...................................................................................... 4
President Drnovsek Meets German Finance Minister............................................................ 4
New Slovenia-Croatia Border Crossing to Open on 10 May ................................................. 4
FM Rupel and Slovak President Praise Good Cooperation ................................................... 4
EUROPEAN UNION ................................................................................................................. 6
Bajuk Labels First 2007 Budget Proposal as Satisfactory ..................................................... 6
Slovenia and France Discuss Preparations for EU Presidency .............................................. 6
LEGISLATION .......................................................................................................................... 7
Collective Agreements Act Enters into Force ........................................................................ 7
STATISTICS/FORECASTS ...................................................................................................... 8
No Major Changes Two Years since EU Membership, Survey Shows ................................. 8
Slovenians Pleased with the EU, Survey Shows .................................................................... 8
FINANCE................................................................................................................................... 9
France's Experience Shows Double Pricing Has Little Effect ............................................... 9
Ljubljana Stock Exchange ...................................................................................................... 9
Foreign Exchange ................................................................................................................... 9
REGIONAL INFORMATION ................................................................................................ 11
Government Amends Legislation to Establish 5 New Municipalities ................................. 11
BRANCH INFORMATION .................................................................................................... 12
MPs Unanimously Pass National Transport Policy Resolution ........................................... 12
COMPANIES ........................................................................................................................... 13
TV Slovenija Journalist Becomes New Vecer Editor-in-Chief ........................................... 13
Post Preparing for Market Liberalisation, Its Chairman Says .............................................. 13
Droga Kolinska Posts Forecast-Beating Results in Q1 ........................................................ 14
Pharma Giant Schering Launches Lawsuit against Drug Maker Krka ................................ 14
Wizz Air Launches Flights from Ljubljana Airport ............................................................. 14
Competition Protection Office Okays Mercator's Purchase in Era ...................................... 15
Adria Resumes Regular Flights to Tirana ............................................................................ 15
Concrete Privatisation Talks to Get Underway .................................................................... 16
SLOVENIA IN BRIEF ............................................................................................................ 17
National Programme to Make Social Security System More Effective ............................... 17
Nedzad Grabus Appointed New Slovenian Mufti ................................................................ 17
European Prospects Should Motivate Balkan Reforms ....................................................... 17
Ministry Drafts Higher Education Programme Resolution .................................................. 17
HEADLINES
Slovenia and Germany Sign Deal to Avoid Double Taxation
German Finance Minister Peer Steinbrueck and his Slovenian counterpart Andrej Bajuk
signed a bilateral agreement to avoid double taxation
German Finance Minister Peer Steinbrueck and his Slovenian counterpart Andrej Bajuk
signed on Wednesday, 3 May a bilateral agreement to avoid double taxation.
In a statement for the press in Ljubljana, Bajuk said that the agreement, which replaces the
1988 agreement between West Germany and the former Yugoslavia, enables not only
avoidance of double taxation, but also free flow of capital and labour.
"The agreement has been upgraded in line with the convention of the Organisation for
Economic Cooperation and Development (OECD), and other similar agreements which
Slovenia has already signed with several EU member states," Bajuk also said.
Steinbrueck is convinced that the agreement will make it easier for Slovenian companies to do
business in Germany and vice versa, as well as strengthen bilateral economic cooperation.
According to Bajuk, all European finance ministers are aware of the concerns about
competition between countries in the field of taxation, therefore this should be subject to
discussions within the EU.
"If we wish to create an economy which would be up to the challenges of today, if we wish to
achieve the development of other countries around the world, we have to tackle the problem
of taxation. I believe simplification is a step in the right direction," Bajuk explained.
The two ministers also talked about current economic issues, structural reforms, and
Germany's and Slovenia's preparations for their respective stints at the helm of the EU (in the
first half of 2007 and the first half of 2008).
"Europe should enter the global market in a more unified and competitive way, which could
solve the problem of different taxation, avoid bureaucracy, and implement the principle of
subsidiarity," Steinbrueck said.
The German finance minister moreover praised Slovenia's progress regarding the euro
changeover, adding that the European Central Bank and the European Commission are to
publish their reports in the next few months.
Slovenia exported EUR 2.8bn of goods to Germany last year, which is 20% of Slovenia's
entire export. Meanwhile, Slovenia imported from Germany EUR 3.1bn of goods, which also
stands for 20% of Slovenia's import.
According to the data of the Bank of Slovenia, direct investment of German companies in
Slovenia stood at EUR 406.2m on 31 December 2004, which represents around 7% of all
foreign investment in Slovenia in 2004.
Germany is thus the fifth largest investor in Slovenia after Austria, Switzerland, Netherlands
and France, with investment from Bavaria representing a third of all German investment in
Slovenia.
As the Economics Ministry told STA, Slovenia is interested in development-oriented
investments in domestic economy. All German investments in Slovenia have proved
successful, however, there have been no new investments in recent years, the ministry added.
Euro Bill Ready for ECB Review
The Finance Ministry has published a draft of a euro changeover bill, which is currently
being reviewed by the European Central Bank (ECB)
The Finance Ministry has published a draft of a euro changeover bill, which is currently being
reviewed by the European Central Bank (ECB), the ministry told STA on Thursday, 4 May.
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According to the ministry, the ECB has one month to give its opinion on the legislation,
which will then be debated by the government.
The bill defines the procedures during the country's switch to the euro as a national currency,
planned for 1 January 2007.
The bill mainly deals with the procedure of substituting the euro for the tolar, sets the twoweek period when both currencies will be in circulation and the withdrawal of the tolar from
circulation.
The bill would also serve as a legal basis for a smooth transition from the tolar to the euro in
the public administration, judiciary and companies.
While Slovenia's central bank Banka Slovenije will exchange the tolar banknotes into the
euros indefinitely and without commission fees, it is only expected to exchange tolar coins
until 31 December 2016.
The bill also sets a 60-day period from the switch during which banks, savings banks and post
offices will have to exchange tolars for euros free of charge.
Tolar deposit accounts, securities, contracts, bills and other financial instruments will be
calculated into euros on the day of the switch free of charge.
Companies Act Enters into Force
The new companies act entered into force on 4 May, replacing the 1993 companies act and
thoroughly overhauling the system of Slovenian corporate law
The new companies act entered into force on Thursday, 4 May, replacing the 1993 companies
act and thoroughly overhauling the system of Slovenian corporate law.
Among the major changes, the act envisages the possibility for establishing a European jointstock company or Societas Europea (SE), a supra-national organisation that can operate in all
EU countries without having to establish subsidiaries or branch offices.
The second major change to existing legislation is that companies now have the possibility to
opt for a one-tier management system instead of the current two-tier system.
Unlike the existing two-tier system, there is no supervisory board in the one-tier system, with
the management board consisting of executive and non-executive members.
The provisions on single-tier management were the most disputable part of the act, which
otherwise enjoyed bipartisan support.
Most notably, the trade unions claimed it does not have sufficient safeguards to guarantee codetermination.
The final solution was to grant the workers a single representative on the board and an
additional one for every additional three members of the board.
The act introduces more strict provisions for supervisory board members. An individual will
now be able to sit on a maximum of three supervisory boards, instead of five.
The act also envisages a cut in the minimum start-up capital for a limited liability company
from the current EUR 8,760 to EUR 7,500. Moreover, it will no longer be necessary for at
least a third of the start-up capital to be in cash.
In line with the act, the Economics Ministry would draw up a standard form for a
memorandum of association, thereby facilitating the establishment of companies.
The act also includes provisions linked to Slovenia's adoption of the euro, which is scheduled
for 2007. As a result, companies will have to express their total capital stock in euros rather
than tolars.
Companies will have the option of converting the price of shares into euros or converting the
whole capital stock into euros and then dividing that into a new number of shares in order to
avoid problems with rounding up.
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INTERNATIONAL COOPERATION
President Drnovsek Meets German Finance Minister
President Janez Drnovsek stressed the need for sustainable economic, social and
environmental development as he met Germany's Finance Minister Peer Steinbrueck
President Janez Drnovsek stressed the need for sustainable economic, social and
environmental development as he met Germany's Finance Minister Peer Steinbrueck in
Ljubljana on Wednesday, 3 May.
Drnovsek and Steinbrueck also discussed Slovenia's readiness for the planned euro switch in
2007 and the economic situation in Germany, a key trading partner for Slovenia and a
prominent pillar of European financial and economic stability, the president's office wrote in a
press release.
Drnovsek also touched on Asia, which is competing with the European and the US
economies, especially through low prices and lower social and environmental standards.
He also pointed out that the EU should strengthen its position in the global economy by
abandoning the absurdly extensive agriculture subsidies and use its budget for developmentoriented programmes.
Steinbrueck, who was on a two-day visit to Slovenia, already med his Slovenian counterpart
Andrej Bajuk earlier in the day and signed a bilateral agreement on the avoidance of double
taxation. Bajuk told the press that the agreement, which replaces the 1988 agreement between
West Germany and the former Yugoslavia, enables not only avoidance of double taxation, but
also free flow of capital and labour.
New Slovenia-Croatia Border Crossing to Open on 10 May
The crossing will be open between 6 AM and 10 PM on weekdays and Saturday, while on
Sundays it will operate from 7 AM until 9 PM
A new local border crossing between Slovenia and Croatia, Sedlarjevo (Plavic), will open on
10 May under a decree that the Slovenian government adopted on Thursday, 4 May.
The crossing will be open between 6 AM and 10 PM on weekdays and Saturday, while on
Sundays it will operate from 7 AM until 9 PM, the Government PR and Media Office said
after the cabinet session.
Slovenia and Croatia have already exchanged the diplomatic notes necessary for the opening
of the crossing.
The border crossing was built in line with provisions of the bilateral cross-border traffic and
cooperation agreement, the SOPS, the aim of which is to facilitate the travels of people living
along the border.
FM Rupel and Slovak President Praise Good Cooperation
FM Dimitrij Rupel began a two-day official visit to Slovakia by meeting the Slovakian
President Ivan Gasparovic
FM Dimitrij Rupel began a two-day official visit to Slovakia on Thursday, 4 May by meeting
the Slovakian President Ivan Gasparovic. The pair assessed relations between Slovenia and
Slovakia as friendly and pointed out that the countries were successfully cooperating in the
economy and in other fields.
As members of the Slovenian delegation to Slovakia told STA, Rupel acquainted Gasparovic
with Slovenia's economic reform plan, whereas Gasparovic spoke about the reforms carried
out in Slovakia.
The pair agreed that the countries were also successfully cooperating in the framework of the
EU and other international organisations.
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They figured that Slovenia and Slovakia have both reached a level of development enabling
them to offer their experience to help solve the problems of other countries.
Rupel and Gasparovic also touched on the current situation in the Western Balkans, with
Rupel expressing optimism regarding future activities of Serbia-Montenegro linked to EU
accession prospects.
Rupel Hails Excellent Relations with Slovakia
Slovenian Foreign Minister Dimitrij Rupel met his Slovak counterpart Eduard Kukan in
Bratislava
Foreign Minister Dimitrij Rupel has hailed the "excellent relations" between Slovenia and
Slovakia after meeting his Slovak counterpart Eduard Kukan in Bratislava on Friday, 5 May.
Rupel used the meeting to outline Slovenian foreign policy and preparations for Slovenia's
stint as EU president in the first half of 2008 to Kukan.
The pair told a press conference in Bratislava that the two countries have progressed so far in
recent years that they can now help other countries with their experiences and know-how.
According to Rupel, Slovenia is doing its bit to help EU hopefuls by establishing the "Centre
for a European Future", and has already asked Slovakia to participate.
The centre will support the Slovenian presidency and offer assistance to EU hopefuls, Rupel
explained. Meanwhile, the pair also stressed that the EU constitution is not a dead document.
Meanwhile, Rupel echoed Kukan's concerns over Kosovo. "Serbia could accept a solution for
Kosovo if it were to get something from the EU - if something were to budge in its
relationship with the EU," Rupel said.
He believes the situation is extremely complicated: "A solution that is not the outcome of
negotiations, of an agreement between Kosovo and Serbia, could for years remain an alibi for
the many measures that Serbia should take in the future," Rupel said.
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EUROPEAN UNION
Bajuk Labels First 2007 Budget Proposal as Satisfactory
"The emphasis is nevertheless on boosting competitiveness and economic growth - in this
sense the budget is headed in the right direction," Bajuk said
Slovenian Finance Minister Andrej Bajuk has assessed the 2007 budget proposal presented
last week by the European Commission as overall satisfactory.
"The emphasis is nevertheless on boosting competitiveness and economic growth - in this
sense the budget is headed in the right direction," Bajuk said on Friday, 5 May on the margins
of a meeting of EU finance ministers in Brussels.
The minister could not offer any concrete figure with regard to Slovenia's share in the budget.
"This is only the first draft, the path to the final agreement is still long," he explained.
He added that in the first part of the 2007-2013 EU spending plan Slovenia is bound to remain
a net contributor and noted that efficient phasing of the funds at its disposal will be crucial.
"We are doing fairly alright when compared to other new member countries, but things are far
from perfect," he said in a reference to fund phasing.
The European Commission released on Wednesday a 2007 EU budget draft envisaging
spending commitments of EUR 126.8bn or 1.08% of gross national income (GNI), but actual
payments of EUR 116.4bn or 0.99% of GNI. Of the 126bn bundle, EUR 54.3bn have been
allocated for fostering competitiveness, cohesion policy and employment.
Slovenia and France Discuss Preparations for EU Presidency
Slovenia will be the first of the EU newcomers to chair the EU in the first half of 2008, while
France is scheduled to follow in the second half of the same year
Slovenian and French preparations for their respective stints as EU president were in the focus
of a separate round of talks between Foreign Ministry State Secretary Bozo Cerar and the new
head of the Government European Affairs Office (SVEZ) Janez Lenarcic with the director for
European cooperation at the French Foreign Ministry, Gilles Briatta on Friday, 5 May.
Slovenia will be the first of the EU newcomers to chair the EU in the first half of 2008, while
France is scheduled to follow in the second half of the same year.
According to the Foreign Ministry, Cerar briefed Briatta on Slovenia's preparations, listing the
future of the EU, the functioning of European institutions, EU enlargement, energy issues and
cross-cultural dialogue as the country's priorities.
Briatta confirmed that the French presidency's priority tasks also include Slovenia's.
The pair moreover assessed bilateral relations between the two countries on all levels as
excellent and agreed to organise follow-up meetings on various levels.
Cerar called for more visits by leading French politicians in Slovenia and expressed his
pleasure over the upcoming visit by Slovenia's Foreign Minister Dimitrij Rupel to Paris.
According to SVEZ, Lenarcic and Briatta meanwhile also exchanged their positions on
topical European issues, such as the services and energy policy directives.
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LEGISLATION
Collective Agreements Act Enters into Force
The collective bargaining agreements act, the basic principle of which is that concluding such
agreements is voluntary, entered into force on 6 May
The collective bargaining agreements act, the basic principle of which is that concluding such
agreements is voluntary, entered into force on Saturday, 6 May.
The act does not make collective bargaining agreements obligatory neither does it define their
contents, type or level at which such agreements should be made.
It does, however, define the parties to the agreements, the procedure of concluding such
agreements, their form and validity.
Only organisations with voluntary membership can conclude such agreements, yet, the bill
allows a three-year transitional period, during which organisations with obligatory
membership, such as the Chamber of Commerce, are allowed to conclude them.
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STATISTICS/FORECASTS
No Major Changes Two Years since EU Membership, Survey Shows
Most Slovenians feel that their standard of living is as good as it was two years ago
Most Slovenians feel that their standard of living is as good as it was two years ago, according
to a survey commissioned by the government at the polling agency Aragon upon Slovenia's
second year in the EU.
While 54.3% of the respondents believe their lives have not changed, 28.3% said that their
lives have turned for the worse and 12.9% noticed an improvement.
Accordingly, the standard of living has remained unchanged for 73.6% of the people
surveyed, 19.2% said that it has become worse and 7% claimed that it has changed for the
better.
Asked about the most important consequence of Slovenia's EU membership, 28.4% named
the fact that "we can now say that we come from the EU".
Other positive changes felt by the people are associated with better opportunities for
education abroad (23.8%), hassle-free border crossing (21.1%) and jobs in several other EU
members (19.9%).
The survey also shows that the support for Slovenia's membership in the EU has somewhat
dropped compared with the results of the 2003 referendum.
However, if the referendum took place today, 59.7% would still opt for Slovenia to join the
EU. 14.6% would vote against.
The survey included 917 respondents and was carried out in the middle of April.
Slovenians Pleased with the EU, Survey Shows
Slovenians are relatively happy with the EU two years after accession, and they have clear
expectations about the future, according to the latest Eurobarometer public opinion survey
Slovenians are relatively happy with the EU two years after accession, and they have clear
expectations about the future, according to the latest Eurobarometer public opinion survey.
Some 44% labelled EU membership a good thing, 12% said it was bad and others said it was
neither good nor bad, says the survey, which was released on Friday, 5 May .
At the same time, 56% of the Slovenian respondents said the EU was heading in the right
direction. Some 70% also expect more equal living standards.
About 33% of Slovenians would like to see the euro introduced across the bloc, whereas only
20% want a common constitution and 25% clearly defined external borders.
The results also suggest Slovenians are the most avid advocates of EU enlargement - 74% see
it as positive.
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FINANCE
France's Experience Shows Double Pricing Has Little Effect
Double price tags in the run-up to the introduction of the euro do little to alleviate the stress
at changeover, according to France's experience, which was presented at a Bank of Slovenia
seminar
Double price tags in the run-up to the introduction of the euro do little to alleviate the stress at
changeover, according to France's experience, which was presented at a Bank of Slovenia
seminar on Friday, 5 May.
France introduced double pricing one year before the euro, but the consumers paid no
attention to it until the last moment, said Dominique Lassarre of the University of Nimes, the
author of the survey.
According to her, the introduction of a new currency is a stressful change for the consumers,
with the stress level increasing in the immediate run-up to the switch and dropping a few
months afterwards.
Lassarre said that the new currency was accepted where the participation of consumer
organisations was best, and where the euro was presented through various games and
entertainment.
Two years after the introduction of the euro, a survey showed that only 13.2% still felt stress
related to the euro, Lassarre explained.
The survey also showed that older people were still afraid of counterfeits and converted the
euros back to francs, while the young no longer thought in terms of francs.
Ljubljana Stock Exchange
Pharma company Krka and fuel trader Petrol remained the dominant shares on the Ljubljana
Stock Exchange (LJSE) last week, pushing the SBI 20 main market index up 125.5 points to
5,045.09
Pharma company Krka and fuel trader Petrol remained the dominant shares on the Ljubljana
Stock Exchange (LJSE) last week, pushing the SBI 20 main market index up 125.5 points to
5,045.09. The SBI TOP blue chip index meanwhile added 47.98 points to 1,170.26.
The Novo mesto-based Krka added 4% to SIT 155,652 (EUR 649.66) despite a mild
correction on Friday, 5 May, with SIT 1.36bn (EUR 5.67m) worth of shares changing hands.
Krka also said on Thursday, 4 May that US pharmaceutical giant Schering-Plough
Corporation, has filed an EUR 1m lawsuit against its the German subsidiary, Krka
Aussenhandels.
The US company is accusing the Slovenian company of infringing Schering-Plough's patent
rights by selling the Floron drug in Germany. Krka denied the accusations.
Petrol meanwhile soared 7% to SIT 83,288 (EUR 347.63), a new all-time high, on a turnover
of SIT 454.2m (EUR 1.89m).
Deals totalled SIT 4.8bn (EUR 20.03m) with block trade accounting for half of the amount.
Popular investment funds took their cue from blue chips, pushing the PIX investment fund
index 16.98 points higher to 4,039.90.
The bond BIO index shed 0.29 points to 119.30.
Foreign Exchange
Mean exchange rate of the Bank of Slovenia
Euro (EUR) - SIT 239.59 (+0.00)
U.S. dollar (USD) - SIT 188.85 (-2.07)
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Swiss franc (CHF) - SIT 153.41 (+0.95)
British pound (GBP) - SIT 349.26 (+4.09)
10
REGIONAL INFORMATION
Government Amends Legislation to Establish 5 New Municipalities
The government has adopted changes to the act on local government in order to set up five
new municipalities in line with the recent local referendums
The government has adopted changes to the act on local government in order to set up five
new municipalities in line with the recent local referendums, the Government PR and Media
office said after the cabinet session on Thursday, 4 May.
The changes, to be passed by parliament in emergency procedure, determine five new
municipalities, namely Gorje, Log - Dragomer, Recica ob Savinji, Sveti Jurij v Slovenskih
goricah and Sentrupert.
Drafted by the Government Office for Local Government and Regional Policy, the
amendments are in line with the results of a non-binding referendum which was held in
several different parts of the country on 9 April.
They set the names, centres and the number of municipal councillors for the first municipal
council sitting, and define the territory of the new municipalities.
The office also revealed that it is very likely the new municipalities would not represent a
burden for the national budget.
If the new legislation gets parliamentary approval, Slovenia, a country of 2 million
inhabitants, will have 210 municipalities.
The amendments come after the parliament already gave a green light for creating twelve new
municipalities in March, based on the results of a previous non-binding referendum, held in
late January.
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BRANCH INFORMATION
MPs Unanimously Pass National Transport Policy Resolution
According to Transport Minister Janez Bozic the resolution defines the fundamental aims of
Slovenia's transport policy in a modern and concise package, including the starting points,
vision, aims and measures
Slovenian MPs have unanimously endorsed the National Transport Policy, a key document
regulating Slovenian goals in transport.
According to Transport Minister Janez Bozic the resolution defines the fundamental aims of
Slovenia's transport policy in a modern and concise package, including the starting points,
vision, aims and measures.
He stressed that the main goal of the long-awaited paper are improvements to transport safety,
efficient energy use and a clean environment.
Bozic added that the document takes into consideration fully the principles of sustainable
development and consistently sets down the aims and measures of transport policy to deal
with the three dimensions of such development - economic, social and environmental.
The resolution tasks the competent bodies with promoting the development of new transport
modes and technologies as well as promoting the use of more economical and
environmentally-friendly vehicles.
It also envisages the use of private funds in infrastructure projects. Suitable transport
infrastructure should moreover enable fluent and safe transport in the country, Bozic said.
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COMPANIES
TV Slovenija Journalist Becomes New Vecer Editor-in-Chief
Tomaz Ranc, a former journalist and news presenter at public broadcaster TV Slovenija, took
over on 1 May as editor-in-chief of the Maribor-based daily Vecer
Tomaz Ranc, a former journalist and news presenter at public broadcaster TV Slovenija, took
over on 1 May as editor-in-chief of the Maribor-based daily Vecer.
Building on the principle of plurality, Ranc would like to make Vecer more open to the rest of
the world and increase its presence in cities as well as villages.
He plans to choose a new editorial team by the summer, and draft a proposal for upgrading
the newspaper by the autumn, he said as he recently outlined his vision of the paper.
Ranc, who was selected by Vecer's director Milan Predan in March among a number of other
candidates, was backed by a vast majority of the daily's journalists on 21 April.
According to Predan, Ranc is a good compromise between someone who is not from Maribor,
but is still linked with Vecer (Ranc comes from the northeastern region of Korosko), and
someone who is ambitious to make "something good" out of the daily.
Predan, appointed to the post by the company's supervisory board on 17 February, announced
in early March that he would replace Darja Verbic, who then decided to step down as editorin-chief after a year and a half in office.
Post Preparing for Market Liberalisation, Its Chairman Says
Slovenia's state-run postal service is still preparing its privatisation strategy, which is to be
decided on by the government after it is confirmed by the company's supervisors, the
chairman of the Post of Slovenia Ales Hauc said in an interview for STA
Slovenia's state-run postal service is still preparing its privatisation strategy, which is to be
decided on by the government after it is confirmed by the company's supervisors, the
chairman of the Post of Slovenia Ales Hauc said in an interview for STA.
According to Hauc, the Post is well prepared for the liberalisation of postal services market,
which is to take place by 2009.
He said the company is to be privatised in two steps, with a strategic partner allowed to take
over 24% of the Post in the first stage through a capital injection.
After a transition period in which the cooperation with the partner and synergy effects would
be reviewed, the second stage would follow allowing the same or another strategic partner to
buy up to 49% of the company.
"We have taken up the privatisation project because numerous postal services in Western
Europe have already been privatised," Hauc added. He pointed to Germany as an example,
where the state owns only 46% of the postal company, while the rest is in the hands of private
investors.
Being an all-Slovenian company where national interests should be considered as well, the
Post of Slovenia should be kept in state-majority ownership, Hauc believes.
Asked about possible strategic partners, Hauc said the company has been in talks with a
number of European postal operators and has already been presented with good offers,
however, he refused to reveal further details.
He expects a strategic partner to ensure cheaper and easier access to international distribution
routes in addition to giving ideas about new services, knowledge and technology.
Hauc said that the company has been in talks with the Macedonian postal service on
cooperation and a possible takeover. This month they are to sign a memorandum of
understanding on capital and business cooperation, he revealed.
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The Post has also discussed such cooperation with postal services in Montenegro and Croatia,
with Hauc saying that memorandums of understanding with these two companies are also in
the making.
Hauc also said the company has been mulling buying or leasing its own transport aircraft in
order to secure cheaper transport. A study on economic viability of such a project is to be
carried out by autumn.
The management is currently assessing which offices are making the biggest loss, Hauc said
and added that non-profitable offices will likely be replaced by mobile ones.
Droga Kolinska Posts Forecast-Beating Results in Q1
The company beat sales plans in Slovenia by 26%, while sales abroad were 13% higher than
anticipated
Slovenia's largest food company, Droga Kolinska, has had a good start to 2006, posting
forecast-beating results. The company beat sales plans in Slovenia by 26%, while sales abroad
were 13% higher than anticipated.
Total sales at the company, which was created last May through the merger of food
companies Droga and Kolinska, were up 22% over what the two separate companies sold in
the same period last year.
Sales abroad were up by a whopping 56% compared to the first quarter of last year, while
domestic sales grew by 1%, Ferko told STA.
However, Ferko pointed out that the results were not completely comparable because of the
merger and because sale of coffee was now included in the operations of the parent company.
Meanwhile, the company, which last year acquired Serbian companies Grand Prom and Soko
Stark, plans a strong push on the markets of the EU, Russia and Turkey.
Ferko added that a large pate factory being built in Bosnia's Hadzici would be completed on
time, in October, allowing production to be moved from the plant in the Slovenian coastal
town of Izola.
Meanwhile, the Droga Kolinska boss announced that the company intended to invest SIT
10bn (EUR 42m) in production in Slovenia this year, although it has no plans for tie-ups with
other Slovenian companies.
Pharma Giant Schering Launches Lawsuit against Drug Maker Krka
Krka denies the accusation, and adds that it has never been selling this drug nor its
antimicrobial agent florfenicol in Germany
US pharmaceutical giant Schering-Plough Corporation, has filed an EUR 1m lawsuit against
the German subsidiary of Slovenian drug maker Krka, Krka Aussenhandels.
The US company is accusing the Slovenian company of infringing Schering-Plough's patent
rights by selling the Floron drug in Germany, Krka said in a press release on Thursday, 4
May.
Krka denies the accusation, and adds that it has never been selling this drug nor its
antimicrobial agent florfenicol in Germany.
The generic chemotherapeutical antibiotic Floron is used extensively in veterinary medicine,
and is, according to Krka, a product of its own knowledge.
Its sales account for several tenths of a percent of Krka's total sales, the company added.
Apart from Enroxil, Floron is Krka's best selling veterinary drug. The company sold SIT
4.8bn (EUR 20.03m) of veterinary products in 2005, which is around 4% of total sales.
Wizz Air Launches Flights from Ljubljana Airport
Wizz Air, the biggest no-frills airline in Central and Eastern Europe, launched flights from
Ljubljana airport to London's Luton and Brussel's Charleroi airports in May
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Wizz Air, the biggest no-frills airline in Central and Eastern Europe, launched flights from
Ljubljana airport to London's Luton and Brussel's Charleroi airports in May, the company told
the press on Thursday, 4 May.
Passengers from Ljubljana can take three weekly flights to both destinations, with Wizz Air
wanting to become the leading low-cost airline on the Slovenian market, Natasa Kazmer of
Wizz Air told the press.
The occupancy of the first flights to London and Brussels was 60%, and is expected to reach
80% by summer based on current reservations, Kazmer revealed.
Zmago Skobir, a management board member of the airport operator Aerodrom Ljubljana,
meanwhile said that the airport hopes to attract 90,000 additional passengers a year, also from
neighbouring countries.
Aerodrom Ljubljana also wants to open routes to other destinations, such as Scandinavian
countries, Russia, Spain and Italy, Skobir added.
The company wants to focus on opening new routes with one or two airlines, but would not
shun from cooperating with others, he added.
Established two years ago, Wizz Air operates 58 routes to 35 destinations with an average
occupancy rate of 80%.
Competition Protection Office Okays Mercator's Purchase in Era
The Competition Protection Office does not oppose Slovenia's largest grocer Mercator's
purchase of the retail and wholesale outlets of the Velenje-based retailer Era
The Competition Protection Office does not oppose Slovenia's largest grocer Mercator's
purchase of the retail and wholesale outlets of the Velenje-based retailer Era, as it is in line
with competition regulations, the office said in a press release on Thursday, 4 May.
Mercator has acquired 84.000 sq. metres of gross sales surfaces consisting of 47 retail outlets,
12 technical units and 3 warehouses. The deal, worth SIT 14bn (EUR 58.4m), also included
inventories and the rights and obligations from lease contracts for seven units.
The agreement on Mercator's purchase of Era's retail and wholesale units in Slovenia was
signed at the end of December, after the deal was confirmed by Era's shareholders at the
beginning of November.
Adria Resumes Regular Flights to Tirana
An Adria Airways Canadair Regional Jet with 48/50 seats will fly to Tirana every day of the
week except Saturday
Slovenian flag carrier Adria Airways relaunched regular flights between Ljubljana and the
Albanian capital of Tirana on Friday, 5 May. The decision to set up the connection again after
more than a year follows an increase in demand for the route and the importance of the
market.
Acting Adria chairman Tadej Tufek told a press conference in Tirana that the line will be
important for the ever more extensive cooperation between Slovenia and Albania in tourism
and the economy.
Tirana is an extremely important destination for Adria because of the passengers who intend
to fly from Albania via Ljubljana to destinations around Europe, Tufek added.
The route was welcomed by the director of the Slovenian Tourist Organisation Barbara
Guncar. While admitting that it was unlikely to increase the number of Albanian tourists
coming to Slovenia, she added that it would by all means help bilateral business ties.
Annual passenger figures for the carrier's 21st destination are expected to number around
11,500 and planes should be filled to 58% capacity, which is a little less than the airline's
63.5% average.
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The majority of passengers will be Albanians who work abroad, and business travellers. The
demand by tourists is also on the rise. A return ticket excluding taxes costs EUR 199.
An Adria Airways Canadair Regional Jet with 48/50 seats will fly to Tirana every day of the
week except Saturday. Adria previously operated the Ljubljana-Tirana route between 1992
and January 2005.
Although Adria carried 7% more passengers in 2005 than the year before, the company's
business figures did not improve. In 2005 the carrier recorded EUR 7m operating losses and
EUR 8.3m net losses.
Concrete Privatisation Talks to Get Underway
The presidents of coalition parties and the deputy group heads will meet on 8 May on the
initiative of PM Janez Jansa to discuss the privatisation of state-owned companies
The presidents of coalition parties and the deputy group heads will meet on Monday, 8 May
on the initiative of PM Janez Jansa to discuss the privatisation of state-owned companies.
The government has not yet taken any position on the reports of six expert groups which
analysed the privatisation of the two largest Slovenian banks, insurer Zavarovalnica Triglav,
the national telco Telekom Slovenije, the energy sector, as well as the withdrawal of stateowned funds KAD and SOD from active management.
The coalition parties expected to discuss the guidelines from these reports, which are to be
followed up be more concrete and serious debate.
After a delay in reaching the final decision about the privatisation of Slovenia's leading bank,
Nova Ljubljanska banka (NLB), telco Telekom Slovenije, which is 62.5% state-owned, is
currently the top privatisation candidate.
Economics Minister Andrej Vizjak stressed at the end of April that the privatisation of
Telekom was a priority. He explained that the harmonisation of the privatisation strategy was
already underway, which should make it possible for the final phase to begin at the beginning
of 2007.
As regards the privatisation of NLB and the possibility of Belgian financial group KBC
increasing its current 34% stake in the bank, experts believe that the view of Finance Minister
Andrej Bajuk, who is advocating for the state to keep a majority share, has prevailed.
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SLOVENIA IN BRIEF
National Programme to Make Social Security System More Effective
The resolution on the national programme of social security for the 2006-2010 period, which
was passed in parliament on 31 March, is designed to make the country's system of social
affairs institutions more efficient. The programme was produced by the government in a bid
to enhance the efficiency of social benefits and improve the quality of services and
programmes. Under this document, the government intends to revise the existing system of
social security services and its effects, and then tested certain services and programmes
through pilot projects.
Nedzad Grabus Appointed New Slovenian Mufti
The Islamic Parliament of the Bosnia-Herzegovina Muslim Community has appointed
Nedzad Grabus the new Slovenian mufti at the proposal of the Assembly of the Slovenian
Muslim Community.
European Prospects Should Motivate Balkan Reforms
Foreign Ministry State Secretary Bozo Cerar highlighted the importance of European
prospects as a motivating factor in carrying out political, economic, social and security
reforms in countries in the region, at a conference in Berlin on Wednesday, 3 May about the
forthcoming roles of the EU and NATO in SE Europe.
Ministry Drafts Higher Education Programme Resolution
The Higher Education, Science and Technology Ministry outlined the resolution on the
national programme for higher education for the 2006-2010 period on Friday, 5 May. One of
its main objectives is to create a unified higher education and research area by drafting a joint
bill for both fields.
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