Slovenia Business Week no 22, June 5th, 2006
Table of Contents:
HEADLINES ............................................................................................................................. 3
Finance: Mercator Remains Biggest, Krka Best Slovenian Company................................... 3
PM Jansa Opens Slovenian-Russian Business Conference in Moscow ................................. 3
Petrol Spike Fuels Inflation Rise ............................................................................................ 3
INTERNATIONAL COOPERATION ...................................................................................... 5
Russia, Slovenia Seek Ways to Boost Cooperation ............................................................... 5
Privatisation, Gas Supply Top Vizjak's Agenda at Gazprom................................................. 5
Fontes: Spanish Investments in Slovenia Depend on Sale Terms ......................................... 6
FM Rupel Discusses Cooperation with Lavrov ..................................................................... 6
Jansa and Putin Discuss Business Prospects .......................................................................... 6
Slovenia and Moldova Sign Deal on Avoidance of Double Taxation ................................... 7
Russia to Pay off Clearing Debt in Five Years, Jansa Says ................................................... 7
Drnovsek and Prince Albert II Agree on Resolving Darfur Crisis ........................................ 8
Draft Agreement on Russia's Clearing Debt Outlined, Jansa Says ........................................ 9
Cukjati and Albanian Counterpart Call for Stronger Cooperation ......................................... 9
Rupel, Thai FM Discuss Bilateral Relations, International Issues ......................................... 9
FM Says EU Members to Jointly Recognise Independent Montenegro .............................. 10
EUROPEAN UNION ............................................................................................................... 11
EU Newcomers Want Review of Excess Farm Inventory Assessment ............................... 11
EU Reaches Deal on Services Directive, Slovenia Backs It ................................................ 11
EP Welcomes Slovenia as New Eurozone Member ............................................................. 12
LEGISLATION ........................................................................................................................ 13
Parliament Passes Act on Facilitating Purchase of Property................................................ 13
STATISTICS/FORECASTS .................................................................................................... 14
Unemployment Rate at 6.9% in Q1 ..................................................................................... 14
Economists Say Government Efficiency Holds Back Competitiveness .............................. 14
Share of Agriculture in Slovenia's GDP Drops to 1.8% ...................................................... 14
IMAD: Business Environment Not Conductive to New Companies ................................... 15
FINANCE................................................................................................................................. 16
Abanka Vipa Posts Higher Profit in Q1 than Planned ......................................................... 16
Adriatic Shareholders Confirm Capital Injection ................................................................. 16
Ljubljana Stock Exchange .................................................................................................... 16
Foreign Exchange ................................................................................................................. 17
REGIONAL INFORMATION ................................................................................................ 18
MPs Give Nod to Establish Five New Municipalities ......................................................... 18
BRANCH INFORMATION .................................................................................................... 19
Government Adopts Reform Model for Farm Subsidies ..................................................... 19
COMPANIES ........................................................................................................................... 20
Mlinotest Sees Profit and Revenues Drop in Q1 .................................................................. 20
Sava Profits Slump nearly 40% in Q1 .................................................................................. 20
Telekom Slovenije Acquires 75% in Kosovo ISP ............................................................... 20
Mobilkom Austria Becomes Sole Owner of Simobil........................................................... 21
Prevent Decides Not to Sell Maribor Airport ....................................................................... 21
Gorenje Sells Swarovski-Sprinkled Fridge for US$ 110,000 .............................................. 21
Port Operator Luka Koper Posts Q1 Profit of EUR 4.17m .................................................. 22
Intereuropa Plans EUR 8m-10m Logistics Centre Near Moscow ....................................... 22
Ham Gets Bank Austria Creditanstalt Business Award ....................................................... 22
Istrabenz Holding Reports Slump in Profits ........................................................................ 23
Droga Kolinska Exceeds Q1 Plans....................................................................................... 23
Father of Slovenian Mobile Telephony Dismissed .............................................................. 23
End of Rocky Road for Slovenia's Third Mobile Operator .................................................. 24
Postal Company Posts Record Profit in 2005 ...................................................................... 24
Government in Favour of DARS Taking EUR 300m Loan with EIB ................................. 25
SLOVENIA IN BRIEF ............................................................................................................ 26
Puh Award for Discoveries to Be Conferred for the First Time .......................................... 26
Jansa, Alexei II Stress Religious Dialogue .......................................................................... 26
MPs Generally in Favour of Changes to Social Security Act .............................................. 26
Geric Appointed TV Slovenija News Programme Acting Editor ........................................ 26
National Council Votes Against Veto on Amended Media Act .......................................... 26
FM Rupel Discusses UN Reforms with Thai Deputy PM ................................................... 26
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HEADLINES
Finance: Mercator Remains Biggest, Krka Best Slovenian Company
Retailer Mercator remained the biggest Slovenian company in 2005, while pharma company
Krka was, again, ranked as the best Slovenian company, according to the "101 Biggest and
Best Slovenian Companies" survey in business daily Finance
Retailer Mercator remained the biggest Slovenian company in 2005, while pharma company
Krka was, again, ranked as the best Slovenian company, according to the "101 Biggest and
Best Slovenian Companies" survey in business daily Finance.
Using weighted data on shifts in company results and size according to different factors
(revenues, profit, number of employees), the paper concluded that Mercator retained its
position as the biggest Slovenian company in 2005.
Ranked by size, Mercator was followed by Krka, pharma company Lek, national telco
Telekom Slovenije and car manufacturer Revoz, the survey published in Monday, 29 May's
edition also shows.
Meanwhile, Krka was the best Slovenian company of 2005, due to its return on equity and
growth in profit. The Novo-mesto based drug maker was followed by steel producer Metal
Ravne, Revoz, gaming company Hit and another steel producer, Store Steel.
PM Jansa Opens Slovenian-Russian Business Conference in Moscow
Prime Minister Janez Jansa opened a Slovenian-Russian business conference in Moscow,
labeling it as one of the opportunities to strengthen cooperation between Slovenian and
Russian companies, especially in the energy sector
Prime Minister Janez Jansa opened a Slovenian-Russian business conference in Moscow on
Tuesday, 30 May, labeling it as one of the opportunities to strengthen cooperation between
Slovenian and Russian companies, especially in the energy sector.
According to Jansa, who came to Russia on an official visit with a strong business delegation
on Monday, 29 May, Slovenia would like to see more investments from Russian companies.
He believes the second phase of privatisation of Slovenian steel, telecommunications, energy
and financial companies could be interesting for Russian strategic and institutional investors,
also within EU-sponsored programmes.
"Russia has been a reliable energy supplier, and Slovenia would like this to continue in the
future," Jansa said, adding that Slovenia is interested in making long-term deals on the supply
of natural gas, and energy infrastructure projects.
Slovenia and Russia also cooperate within the Forum of Slavic Cultures, whose main goal is
enhancing cultural cooperation between all Slavic countries, added Jansa.
He also said that one of Slovenia's main priorities during its presidency in 2008 will be
strengthening relations between EU and Russia, including the liberalisation of trade and
Russia's accession to the World Trade Organisation (WTO).
He stressed that Slovenia was the first EU country to end bilateral WTO accession talks with
Russia.
Petrol Spike Fuels Inflation Rise
Record petrol prices in Slovenia have pushed up annual inflation by 0.5 percentage points to
3.2% in May
Record petrol prices in Slovenia have pushed up annual inflation by 0.5 percentage points to
3.2% in May. The monthly inflation rate stood at 0.9%, the Slovenian Statistical Office said.
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May saw a continuation of the high monthly price growth in the recent period, the Statistical
Office said. Prices of goods led the way, while services were only a touch more expensive
than a month earlier.
Apart from dearer petrol, a rise in food prices also contributed to the fairly high monthly
increase in consumer prices, the office said as it presented Consumer Price Index data on
Wednesday, 31 May.
Although prices of food and non-alcoholic beverages rose more (1.7%), it was transport prices
(1.4%) that added more to inflation. According to statisticians, dearer petrol amounted for 0.4
percentage points of the monthly inflation, while food added 0.3 percentage points.
There were no major drops in prices in May - prices in the telecommunications sector edged
down 0.1% and were among one of only two groups to register a drop.
Meanwhile, the average annual inflation rate stood at 2.4% in May, which is 0.1 percentage
points more than a month earlier, but still below the convergence criteria for the euro
adoption, which stood at 2.7% in April.
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INTERNATIONAL COOPERATION
Russia, Slovenia Seek Ways to Boost Cooperation
Economic cooperation between Slovenia and Russia is good, but there are plenty of
unexplored opportunities
Economic cooperation between Slovenia and Russia is good, but there are plenty of
unexplored opportunities, Economics Minister Andrej Vizjak said after a session of the
intergovernmental commission on trade, economic, scientific and technological cooperation in
Moscow on Monday, 29 May.
Speaking for STA, Vizjak said this was also the opinion of Sergey Kruglik, the head of the
Russian Federal Agency for Construction, Housing and Public Utilities, who co-chairs the
commission.
"We have a range of proposals in the traditional field of energy as well as in research,
development and high technologies," said Vizjak, who is accompanying PM Janez Jansa on
an official visit to Russia.
He added that Slovenian companies doing business in Russia should look beyond the Moscow
region, as there are plenty of opportunities elsewhere, in particular in regional projects.
Vizjak said that he and Kruglik agreed that the intergovernmental commission's working
groups, which will resume their sessions tomorrow, have to be concrete in trying to upgrade
cooperation.
Considering that this was the first meeting of the commission in over three years, Vizjak said
that the sessions need to be more frequent.
Privatisation, Gas Supply Top Vizjak's Agenda at Gazprom
Russian gas giant Gazprom expressed its interest in the privatisation of the Slovenian refinery
Nafta Lendava and in gaining a foothold on the Slovenian oil retail market, Economics
Minister Andrej Vizjak announced after meeting Gazprom chairman Alexey Miller
Russian gas giant Gazprom expressed its interest in the privatisation of the Slovenian refinery
Nafta Lendava and in gaining a foothold on the Slovenian oil retail market, Economics
Minister Andrej Vizjak announced after meeting Gazprom chairman Alexey Miller.
Gazprom's desire to enter the oil retail market is a subject that needs to be discussed in greater
detail, Vizjak said in Moscow on Tuesday, 30 May. He added that the talks would continue in
two weeks when Miller comes to Slovenia to take part in a business conference.
The supply of Russian gas was also on the agenda. Vizjak said he presented Slovenia's efforts
to secure greater quantities of gas with long-term contracts, which he said would not present a
problem for Gazprom.
Talks also touched on the potential construction of a gas pipeline through Slovenia, whereby
Gazprom executives did not have a concrete proposal because such a project needs to be
coordinated with other countries in the region, Vizjak said.
Another issue - the delivery of Russian gas turbines for the Sostanj thermoelectric plant and
potentially for the Trbovlje steam plant - meanwhile depends on the settlement of Russia's
clearing debt to Slovenia, which amounts to US$ 129m.
The Slovenian government has brought to Russia concrete proposals for the repayment of the
clearing debt, one of them being the supply of gas turbines, Vizjak said.
He said he was pleased with the announcement of Russian Finance Minister Alexey Kudrin
that Russia would settle some of its clearing debt this year, including to Slovenia.
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Fontes: Spanish Investments in Slovenia Depend on Sale Terms
Spanish companies are interested in investments in Slovenia, however, this depends on the
terms of the sale of shares in Slovenian companies which the government plans to privatise
Spanish companies are interested in investments in Slovenia, however, this depends on the
terms of the sale of shares in Slovenian companies which the government plans to privatise,
Spanish Ambassador to Slovenia Carmen Fontes told STA on Tuesday, 30 May.
Spanish companies are mainly interested in investing in the field of energy, especially in
renewable energy sources, Fontes said.
She added that Spain was one of the leading European countries in the use of wind energy, as
well as bioethanol and biomass production, while it also has strong telecommunications and
banking sectors.
Touching on Slovenia's EU presidency, Fontes said that good coordination and
communication are needed between the ministries in the country as well as with European and
other partners, stressing the importance of experiences of Slovenian negotiators.
Given Slovenia's previous experiences in negotiations - during its EU accession talks as well
as earlier in talks on Slovenian independence - Fontes believes in the success of Slovenia's
stint as the EU president, although she sees it as a demanding task.
The Spanish Embassy in Slovenia was opened six years ago, with Fontes appointed
ambassador last July. The cooperation between the two countries is improving, and according
to Fontes, ever more students come to study in Slovenia, with their number doubling in a year.
FM Rupel Discusses Cooperation with Lavrov
Foreign Minister Dimitrij Rupel met Russian counterpart Sergey Lavrov in Moscow
Foreign Minister Dimitrij Rupel met Russian counterpart Sergey Lavrov in Moscow on
Tuesday, 30 May, with talks touching on the possibility that a gas pipeline be built across
Slovenia to Italy so that Italy would not have to build gas terminals at the Gulf of Trieste.
Talks on energy focused on how Slovenia and Russia can best take advantage of excellent
political relations, Rupel told STA after the meeting.
Rupel also asked Lavrov for assistance in speeding up the repayment of the US$ 129m
clearing debt owed by Russia as part of its succession to the Soviet Union.
This is political assistance, for experts will have to have their say as well, Rupel said, adding
that part of the clearing debt could be repaid with gas supplies.
Rupel said he presented Slovenia's preparations for the chairmanship of the EU in the first
half of 2008.
They agreed that the Forum of Slavic Cultures will play a major role, as Slovenia will be the
first Slavic country to hold the rotating presidency.
Cooperation in the forum is important from the vantage point of inter-cultural dialogue, which
is one of the priorities of Slovenia's EU presidency, Rupel said.
Talks also touched on the situation in the Western Balkans and the Centre for European
Perspective, which was recently launched by Slovenia.
Rupel was accompanying PM Janez Jansa on an official visit to Russia.
Jansa and Putin Discuss Business Prospects
Business ties between the two countries, especially prospects for further cooperation, were
topping the talks
Prime Minister Janez Jansa met Russian President Vladimir Putin on the last day of his threeday visit to Russia. Business ties between the two countries, especially prospects for further
cooperation, were topping the talks.
Addressing the press ahead of their meeting, the pair expressed delight with bilateral
economic cooperation, foremost with the fact that trade has surpassed US$ 1bn.
6
Moreover, Jansa and Putin called for greater Russian investment in Slovenia. According to
Putin, the two countries must diversify the goods they trade.
Putin also said that he was delighted that Jansa was being accompanied by such a sizeable
business delegation, which he believes is sure to breathe fresh wind in economic ties.
Putin pointed out that measured in per capita terms, Slovenia was Russia's biggest European
trade partner.
He said he expected Russian businesses would take part in the second phase of Slovenian
privatisation and be treated equally as companies from other companies.
Sharing Putin's view, Jansa said he believes the second phase of privatisation of Slovenian
steel, telecommunications, energy and financial companies could be interesting for Russian
strategic and institutional investors.
Several new business opportunities have arisen in recent years, especially in the field of
energy, therefore the Slovenian government will do everything in its power to use them, Jansa
said.
Slovenian businessmen have a great interest in cooperating with their Russian colleagues, so
Jansa came to Russia with representatives of 98 Slovenian companies, the strongest business
delegation ever to accompany a senior Slovenian official abroad.
He told his host that Russia has greatly improved in the last five years, with political and
economic bilateral relations between the two countries advancing as well.
Jansa stressed that the famous Russian Chapel under the Vrsic border pass, commemorating
Russian prisoners of war who died building it during the First World War, was also an
important bond between the two countries is also.
It will be 90 years this year since the construction of the chapel, which was recently
renovated. The area is to be declared a memorial park. Like every year, a high-ranking state
and church delegation is expected to attend the memorial ceremony in July.
Jansa, who was accompanied to Russia by FM Dimitrij Rupel, Economics Minister Andrej
Vizjak, Defence Minister Karl Erjavec and Agriculture Minister Marija Lukacic, met earlier
in the day Parliament Speaker Boris Gryzlov and Moscow Mayor Yuri Luzhkov.
Slovenia and Moldova Sign Deal on Avoidance of Double Taxation
As State Secretary at the Finance Ministry Andrej Sircelj stressed upon signing the deal, the
convention is the next step towards improving economic cooperation between the two
countries
Moldova and Slovenia have signed a convention on the avoidance of double taxation and the
prevention of evasion of capital gains tax.
As State Secretary at the Finance Ministry Andrej Sircelj stressed upon signing the deal in
Ljubljana on Wednesday, 31 May, the convention is the next step towards improving
economic cooperation between the two countries.
The agreement will abolish double taxation of companies and individuals; it regulates taxation
of profit, dividends, interests and incomes of individuals, Sircelj explained.
Moldovan Deputy Minister of Foreign Affairs and European Integration, Valeriu Ostalep,
meanwhile said that Slovenia was en extremely important trading partner, and that the
convention will further strengthen economic cooperation.
The convention is to enter into force with the beginning of next year, pending approval from
the parliaments of both countries.
Russia to Pay off Clearing Debt in Five Years, Jansa Says
"A deal on Russia's US$ 129m clearing debt to Slovenia will be closed soon, with the debt to
be settled in the next five years," PM Janez Jansa told the press after meeting his Russian
counterpart Mikhail Fradkov on the final day of his three-day visit to Moscow
7
"A deal on Russia's US$ 129m clearing debt to Slovenia will be closed soon, with the debt to
be settled in the next five years," PM Janez Jansa told the press after meeting his Russian
counterpart Mikhail Fradkov on the final day of his three-day visit to Moscow.
The prime minister, who mainly focused on economic topics and bilateral relations, shared a
view that there are a number of opportunities to enhance trade between the two countries,
however they feel the traded goods must be diversified.
According to both governments, bilateral trade should double in the next few years to US$
2bn, Jansa said, adding that cooperation could be strengthened in the field of energy,
technology, tourism, banking and insurance.
As Jansa explained, several Russian companies plan large projects in Slovenia, including the
supply of energy products to Slovenia. "Slovenia receives 40% of its natural gas supply from
Russia, therefore our cooperation is of strategic importance," he added.
Fradkov meanwhile said that Russia is prepared to secure Slovenia a sufficient amount of
energy, including through projects which will enhance Slovenia's energy efficiency.
He moreover labelled relations between the two countries as good, adding that the agreement
on economic cooperation, which representatives of both countries signed after the meeting,
will strengthen the ties between Slovenia and Russia.
The Slovenian prime minister again called on Russian companies to invest in Slovenia. He
believes the second phase of privatisation of Slovenian steel, telecommunications, energy and
financial companies could be interesting for Russian strategic and institutional investors.
Jansa also said that one of Slovenia's main priorities during its EU presidency in 2008 will be
continuing the strategic partnership between EU and Russia. Europe cannot be successful
without cooperating with Russia, he added, stressing that Slovenia counts on Russia's support.
He moreover briefed Fradkov on Slovenian plans within the Forum of Slavic Cultures, and its
preparations for a ceremony marking 90 years since the construction of the Russian Chapel
under Vrsic border pass, dedicated to Russian prisoners of war who did building it.
Drnovsek and Prince Albert II Agree on Resolving Darfur Crisis
The pair also agreed that cooperation between the two countries is excellent
President Janez Drnovsek and Prince Albert II of Monaco on Wednesday, 31 May repeated
their call on the need to solve the situation in Darfur, with the prince again expressing his
support for Drnovsek's endeavours to bring peace to the Sudanese region.
The pair also agreed that cooperation between the two countries is excellent, with Drnovsek
pointing out that the prince was accompanied by a strong business delegation, which
discussed improving economic relations with their Slovenian counterparts.
Prince Albert also revealed his wish that Monaco open up to Mediterranean countries which
are "practically my neighbours", stressing that the principality has been for the past five years
active in Slovenian projects on the preservation of cultural and natural heritage.
Drnovsek added that cooperation between the two countries is a proof that even small
countries can change things for the better. He also observed that Monaco is active in a variety
of humanitarian activities, including the support for Slovenian missionary Pedro Opeka in
Madagascar.
Prince Albert also commented on gaming, explaining that the industry has had a long history
in the principality and never caused excessive problems.
Jozko Cuk, the head of Slovenia's Chamber of Commerce (CCIS), revealed after the
Slovenian-Monegasque business conference that trade between the two countries totalled
EUR 750,000 in 2004, adding that there is room for improvement.
As this is the first visit of the principality's businessmen to Slovenia it will surely improve
economic cooperation, Cuk added after the event which was attended by representatives of
some 50 Slovenian and 30 Monegasque companies.
8
Draft Agreement on Russia's Clearing Debt Outlined, Jansa Says
Representatives of Slovenian and Russian governments have outlined a draft agreement on
the US$ 129m clearing debt of the former Soviet Union to Slovenia, PM Janez Jansa has said
upon arrival from a three-day visit to Moscow
Representatives of Slovenian and Russian governments have outlined a draft agreement on
the US$ 129m clearing debt of the former Soviet Union to Slovenia, PM Janez Jansa has said
upon arrival from a three-day visit to Moscow.
Speaking to the press at Brnik, Slovenia's main airport, Jansa also said that the details of the
agreement will be discussed by experts from both countries.
"Slovenia is interested in receiving debt repayment in the form of energy products and parts
for power plants, however, this too will be left to experts," he added.
The debt is not a big financial problem for Russia, mostly due to high oil prices. However, it
has not been repaid yet mainly due to Russia's red tape and the pause in the talks in the period
between 2002 and 2004.
Touching on his meeting with Russian President Vladimir Putin, Jansa said they focused on
Slovenia's EU presidency in 2008, one of the main priorities of which will be to strengthen the
dialogue between EU and Russia.
Putin briefed his guest on last week's EU-Russia summit, with the officials agreeing that
relations between the EU and Russia have greatly improved, the Slovenian prime minister
said.
According to Jansa, the Slovenian market has been closed for Russian investments because
Russian investors were somehow underestimated. However, it is also true that Russia has not
shown much interest. This will now change, he added.
Jansa moreover held talks with oil giant Lukoil president Vagit Alekperov, and gas giant
Gazprom chairman Alexey Miller, on the companies' possible investments in Slovenia.
Gazprom reassured the Slovenian side of a long-term natural gas supply, and Alekperov
reiterated that Lukoil is interested in strategic cooperation with refinery Nafta Lendava, port
operator Luka Koper and petrol retailer Petrol.
Cukjati and Albanian Counterpart Call for Stronger Cooperation
Parliament Speaker France Cukjati and his Albanian counterpart Jozefina Topalli assessed
relations between the two countries as good, but they believe that a lot can be done to
strengthen economic cooperation
Parliament Speaker France Cukjati and his Albanian counterpart Jozefina Topalli assessed
relations between the two countries as good, but they believe that a lot can be done to
strengthen economic cooperation, the National Assembly said after their meeting in Ljubljana
on Thursday, 1 June.
The pair moreover called for increased inter-parliamentary cooperation, with Cukjati pointing
out that "we are ready to share the experience we have gained in the EU accession process."
Topalli meanwhile stressed that Albania's priority was fighting corruption and organised
crime. She added that a stabilisation and association agreement is to be signed by Albania
next week, which marks a new step in the country's history.
Cukjati said that Slovenia supports the endeavours of the new Albanian government in
carrying out reforms which aim to bring the country closer to EU and NATO membership,
and in its activities to increase the stability in Albania and the broader region.
Rupel, Thai FM Discuss Bilateral Relations, International Issues
Slovenian Foreign Minister Dimitrij Rupel and his Thai counterpart Khantathi
Suphamongkon discussed bilateral relations as well as topical international issues as they
met in the Thai capital of Bangkok
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Slovenian Foreign Minister Dimitrij Rupel and his Thai counterpart Khantathi
Suphamongkon discussed bilateral relations as well as topical international issues as they met
in the Thai capital of Bangkok on Thursday, 1 June.
The ministers spent most of their time discussing the Human Security Network (HSN), an
informal group of countries which promote the resolution of open humanitarian issues, the
presidency of which Slovenia took over from Thailand on Friday, 2 June.
Rupel stressed at the meeting the issues of energy security, cultural and civilisational dialogue
and international migrations, the Slovenian delegation told STA.
Rupel moreover presented Slovenian initiatives and activities in those fields, including a
conference on energy security planned in Slovenia in 2008 and a meeting on cultural and
civilisational dialogue that is to take place in Ljubljana in June.
Suphamongkon meanwhile listed energy security and the response of the international
community to natural disasters and infectious diseases as his country's and regional priorities.
The ministers agreed that bilateral relations were friendly, stressing good multilateral
cooperation, especially within the Organisation for Security and Co-operation in Europe
(OSCE) and the HSN.
FM Says EU Members to Jointly Recognise Independent Montenegro
While the Slovenian government could actually recognise Montenegro at once, it is a member
of the EU and will try to persuade friends in the EU to jointly recognise this independent
state, FM Dimitrij Rupel said about Slovenia's steps regarding Montenegrin independence
While the Slovenian government could actually recognise Montenegro at once, it is a member
of the EU and will try to persuade friends in the EU to jointly recognise this independent
state, FM Dimitrij Rupel said about Slovenia's steps regarding Montenegrin independence.
Rupel, speaking for STA while on a visit to Vietnam on Sunday, 4 June, also announced that
Slovenia intends to open its embassy in Montenegro.
The minister reiterated Slovenia's support for Montenegro, with the Foreign Ministry and the
Centre for European Prospect willing to help with practical assistance in the new state's
integration into the international community.
In Rupel's view, the majority of Montenegrin citizens probably wanted independence because
they believe that on its own, Montenegro could join the EU sooner than together with Serbia.
The Montenegrins could well be right if Serbia delays its full cooperation with the Hague war
crimes tribunal, the foreign minister stressed.
He believes that the impact the declaration of Montenegrin independence on relations with
Slovenia or on further developments in the Balkans largely depends on the action of "Serbian
friends".
At the same time he stressed Slovenia's very good relations with Serbia, which the country
intends to maintain regardless of its good relations with Montenegro and Kosovo.
Rupel also believes this is a hard and decisive time for Serbia, during which Serbia needs
EU's encouragement and support, which is not easy either for the EU or Slovenia.
10
EUROPEAN UNION
EU Newcomers Want Review of Excess Farm Inventory Assessment
EU newcomers intend to express dissatisfaction with the way the European Commission is
evaluating excess inventory of agricultural produce and food products, Agriculture Ministry
State Secretary Franci But told STA during an informal meeting of EU agriculture ministers
EU newcomers intend to express dissatisfaction with the way the European Commission is
evaluating excess inventory of agricultural produce and food products, Agriculture Ministry
State Secretary Franci But told STA during an informal meeting of EU agriculture ministers
on Monday, 29 May.
In a letter addressed to European Agriculture Commissioner Mariann Fischer Boel, the EU10
will urge the commission to reassess the correctness of the procedure, which they deem to be
in violation of EU regulations, But said.
Slovenia insists that it does not have excess inventories, but the Commission demanded last
year that Slovenia pay damages, a claim that the agriculture minister has denied as unfounded.
All newcomers were told to pay even though they insist they do not have surpluses, which is
why they decided to act in concert against the Commission.
"This could be fatal for some countries," But said, adding that Poland would have to pay
hundreds of millions in fines, while the sum for Slovenia would be up to four million euros.
According to him, Slovenia has never had excess inventories, but the Commission has
different data and continues to name new products.
Slovenia has convinced the Commission to acknowledge that it has no excess inventories of
sugar, but the commission still insists that it has surpluses of vegetables, But explained.
EU Reaches Deal on Services Directive, Slovenia Backs It
The EU reached a political agreement on the controversial services directive which aims at
liberalising the services sector in the bloc, with Slovenia stressing its support of the
legislation
The EU reached a political agreement on Monday, 29 May on the controversial services
directive which aims at liberalising the services sector in the bloc, with Slovenia stressing its
support of the legislation.
What is dubbed the Bolkenstein directive, named after the 1999-2004 Internal Market
Commissioner Frits Bolkestein, was at first greeted with much opposition, and agreement on
it could only be reached after almost all controversial provisions were changed or dropped.
The most controversial provision in the legislation, also nicknamed the "Frankenstein"
directive, was the principle of the country of origin which could allow a company to perform
services in another country but under its country's legislation.
A compromise on the provision was first reached by the European Parliament and then
confirmed in March by the EU summit. The European Commission then presented the
proposal that was passed unanimously after eight hours of talks.
Peter Puhan, the head of the Internal Market Directorate at the Slovenian Ministry of the
Economy, believes that the compromise directive presents a good political solution, given the
limitations set by the European Parliament.
"But we have endeavoured to improve on the European Parliament compromise. The country
of origin principle was thus replaced by the screening process, meaning that member states
will have to notify the Commission on their legislation and obstacles in the services sector,
which would then be analysed by the Commission," Puhan explained.
11
Puhan moreover expects that the directive will be passed by the end of the year, while
member states would then have three years to transpose it into their national legislation.
The document lists the conditions under which individual members could prevent foreign
companies from entering their markets and includes services which shall not be liberalised,
such as social and health services.
"Today is a great day for Europe," Charlie McCreevy, the EU's internal market and services
commissioner, commented on the decision, while Martin Bartenstein, the Austrian Finance
Minister, who was chairing the EU Competitiveness Council meeting, expressed his pleasure
over the agreement.
EP Welcomes Slovenia as New Eurozone Member
The European Parliament adopted on 1 June a resolution on the expansion of the eurozone in
which it welcomed Slovenia as a soon to become new member of the European Monetary
Union
The European Parliament adopted on Thursday, 1 June a resolution on the expansion of the
eurozone in which it welcomed Slovenia as a soon to become new member of the European
Monetary Union.
The parliament also assessed that the enlargement will have a positive impact on the
European economy as a whole.
In its resolution the Parliament furthermore stresses that during the changeover phase the
countries in question should provide for the necessary consumer protection, especially with
regard to preventing unjustified price hikes.
Slovenian MEP Alojz Peterle (EPP/NSi) was also given the floor during the resolution debate
and took the opportunity to welcome the call for a clearly defined attitude towards consumers,
which according to him is a prerequisite for the expansion of the eurozone.
He expressed satisfaction over Slovenia's success on the path towards the euro and hope that
the euro zone would welcome new members in the future "as the future expansion of the euro
zone is also crucial for the EU's political development and its position in a globalised world."
While the formal political decision to expand the euro zone will come at the EU summit on 15
and 16 June, the legal platform for Slovenia's accession to the monetary union is expected to
be confirmed by the bloc's finance ministers on 14 July.
Slovenia was first given green light to enter the euro zone as planned on 16 May this year
when the European Commission and the European Central Bank confirmed that the country
meets all the criteria for the adoption of the euro on 1 January 2007.
12
LEGISLATION
Parliament Passes Act on Facilitating Purchase of Property
The National Assembly passed an act setting down the conditions under which physical and
legal entities from EU candidate countries can buy property in Slovenia under the principle of
reciprocity
The National Assembly passed on Tuesday, 30 May an act setting down the conditions under
which physical and legal entities from EU candidate countries can buy property in Slovenia
under the principle of reciprocity.
The new piece of legislation, passed in emergency procedure in a 53-to-4 vote, in turn gives
Slovenians the option to purchase property in these countries.
The law makes sure that those candidate countries which subscribe to the principle of
reciprocity - such as Croatia and Turkey - open their property markets to Slovenian citizens.
Slovenian citizens will not be allowed to buy property in Croatia unless Slovenia itself does
not introduce the principle of reciprocity or reaches a special international agreement with
Croatia.
"Given the great interest of Slovenians in purchasing property in Croatia, it is in their best
interest to make this possible soon," Foreign Ministry State Secretary Bozo Cerar has said.
As an EU candidate, Croatia has already said it will open its property market to EU countries.
13
STATISTICS/FORECASTS
Unemployment Rate at 6.9% in Q1
Slovenia's ILO- and Eurostat-compatible unemployment rate was 6.9% in the first quarter of
2006, down from 7.2% in Q4
Slovenia's ILO- and Eurostat-compatible unemployment rate was 6.9% in the first quarter of
2006, down from 7.2% in Q4. According to the latest data released by the Statistical Office,
Slovenia's labour force numbered 1,016,000, with 70,000 registered as unemployed.
The data also shows that while the average unemployment rate among men stood at 5.5%, it
was 8.6% among women.
59.1% of the general population was either employed or actively seeking employment while
55% of the population was employed during the January-to-March period.
Economists Say Government Efficiency Holds Back Competitiveness
Slovenia's 45th place on the latest competitiveness rankings of the International Institute for
Management Development (IMD) was mainly due to an increase in trade and high economic
growth, while government and business efficiency remained unchanged
Slovenia's 45th place on the latest competitiveness rankings of the International Institute for
Management Development (IMD) was mainly due to an increase in trade and high economic
growth, while government and business efficiency remained unchanged, Peter Stanovnik of
the Institute of Economic Research has said.
Slovenia gained 7 spots in the IMD's 2006 survey, mainly due to "good business results", but
"a lot could be improved in government efficiency," Mateja Drnovsek of the same institute
said upon presenting the survey's results in greater detail on Thursday, 1 June.
IMD measures a country's competitiveness by comparing it to that of the US. Slovenia has
achieved between 50% and 60% of the competitiveness of the US, she revealed.
For the first time, the survey included an analysis of governments' ability to adjust to changes
in business environment. Slovenia was put in group three, joining Italy and France among
countries in which IMD claims that the government has a negative impact on the economy,
Drnovsek added.
Indeed, Slovenia came last in the government efficiency index in comparison with the Czech
Republic, Finland, Ireland and Hungary, she revealed.
Drnovsek added that that the country has been similarly characterised in the World Economic
Forum's Global Competitiveness Report 2004-2005.
Slovenia placed 33rd overall, but in terms of macroeconomic environment it came in at 39th,
while the wastefulness of government spending put it in 53rd among the 104 surveyed
countries.
The country's best results, according to the WEF report, came in the field of strategic
activities in companies, the quality of the business environment and the technological index.
According to Art Kovacic of the institute, Slovenia also lags behind in foreign direct
investment and social development, including the flexibility of the labour market.
Share of Agriculture in Slovenia's GDP Drops to 1.8%
The share of agriculture in Slovenia's economy is steadily shrinking: whereas it accounted for
2.8% of GDP in 1995, the figure dropped to 1.8% last year, according to the latest data of the
National Statistical Office
14
The share of agriculture in Slovenia's economy is steadily shrinking: whereas it accounted for
2.8% of GDP in 1995, the figure dropped to 1.8% last year, according to the latest data of the
National Statistical Office.
The main reason why the share of agriculture has shrunk is the faster growth of other sectors,
according to the statisticians.
Agricultural revenues measured at man-work units have also dropped, shrinking by 4.2% in
2005 compared to the year before.
Subsidies managed to offset the lower prices of agricultural products, but they could not fully
compensate for the lost revenues.
According to the Statistical Office, Slovenia had 77,175 farm holdings last year, with an
average area under cultivation of 6.3 hectares.
While the average farm size has remained unchanged, the average number of heads of
livestock dropped from 5.9 to 5.4.
About 260,000 family members were included in farm work, or about 8% of the total
population, the figures indicate.
IMAD: Business Environment Not Conductive to New Companies
The Institute of Macroeconomic Analysis and Development (IMAD) lists poor payment
discipline, inappropriate tax policy and labour legislation, red tape and difficulties in
attracting the needed staff as the greatest obstacles
Slovenia's business environment is unfavourable to the establishment and development of
companies, according to a report by a government macroeconomic think-thank.
The Institute of Macroeconomic Analysis and Development (IMAD) lists poor payment
discipline, inappropriate tax policy and labour legislation, red tape and difficulties in
attracting the needed staff as the greatest obstacles.
Venture capital is scarce in Slovenia, and so is informal investment, which is a key source of
capital in early stages of business formation, according to the report, which adds that Slovenia
has also received "unfavourable marks" in foreign surveys.
The result is a low rate of early business activity and a high death rate of emerging
companies. A transition from the group of emerging companies to the category of new
companies is among the least effective, but the situation improves in the groups of older
companies.
The policy of business incentives has been inconsistent and unpredictable in the past few
years, which can also be seen in the analysis of trends of state aid for micro, small and
medium-sized companies, according to IMAD.
State aid in the period between 2000 and 2004 dropped in both absolute and relative terms,
the drop being much greater then the average drop in the EU.
Nevertheless, IMAD identified a positive development in measures facilitating registration of
companies and access of businesses to funds.
The country's business sector is lagging behind the most developed in the EU, so according to
IMAD business incentives should focus on the sectors which require a lot of knowledge and
produce a high value added.
15
FINANCE
Abanka Vipa Posts Higher Profit in Q1 than Planned
Abanka Vipa, Slovenia's third largest bank by assets, posted SIT 1.6bn (EUR 6.67m) of net
profit in the first three months of this year
Abanka Vipa, Slovenia's third largest bank by assets, posted SIT 1.6bn (EUR 6.67m) of net
profit in the first three months of this year, an increase of 146% year-on-year, and 3% above
plans, the bank said on Monday, 29 May.
The bank's total assets stood at SIT 604.4bn (EUR 2.52bn) at the end of March, which gave
Abanka a 8.3% market share measured by assets.
Abanka's total assets on Q1 were 17% higher than in the same period in 2005, and were only
0.1% below plans.
Meanwhile, loans (to other banks and clients) stood at SIT 435.7bn (EUR 1.81bn), up 24%
over the year before, the press release also reads.
Moreover, net interests amounted to SIT 2.7bn (EUR 11.27m), a 1% increase year-on-year,
while operating expenses stood as SIT 2.6bn (EUR 10.85m), up 3% over the year before.
Adriatic Shareholders Confirm Capital Injection
The supply of fresh capital will nearly double the total nominal capital of one of Slovenia's
largest insurers
Shareholders of insurer Adriatic Slovenica have confirmed a SIT 3bn (EUR 12.52m) capital
injection at a general assembly on Tuesday, 30 May. The supply of fresh capital will nearly
double the total nominal capital of one of Slovenia's largest insurers, which will now stand at
SIT 6.67bn (EUR 27.83m).
The company said on Tuesday, 30 May that the capital increase was a condition made by the
Agency for Insurance Supervision in clearing the merger of Adriatic and Slovenica late last
year.
According to the company's press release, Adriatic Slovenia will issue new shares in the
nominal value of SIT 1,000 (EUR 4.17) that will be sold to existing shareholders.
Meanwhile, the company's shareholders also decided to keep most of the SIT 1.53bn (EUR
6.38m) in distributable profit undistributed.
The company added that its revenues rose 12.2% to SIT 13.3bn (EUR 55.5m) in the first
quarter. Meanwhile, payouts in the period totalled SIT 7.5bn (EUR 31.3m), a 6.1% rise on last
year but 3.7% below plans.
Ljubljana Stock Exchange
New takeover speculations and government energy-related visit to Russia created much
anticipation on the Ljubljana Stock Exchange (LJSE) in the previous week, pushing the main
market SBI 20 Index up 143.23 points to 5,089.31
New takeover speculations and government energy-related visit to Russia created much
anticipation on the Ljubljana Stock Exchange (LJSE) in the previous week, pushing the main
market SBI 20 Index up 143.23 points to 5,089.31.
Pharmaceutical company Krka had a busy week, generating deals worth SIT 2.51bn (EUR
10.43m), with SIT 726m (EUR 3.02m) coming in block deals. Krka added 6.3% on the week
to SIT 152,028 (EUR 632.03).
According to Matej Tomazin, an independent finance analyst, Krka's growth was fuelled by
renewed takeover rumours of Croatian drug maker Pliva, as such speculations generated a
renewed interest in pharmaceutical companies.
16
Fuel trader Petrol was meanwhile the major beneficiary of the government visit to the Russian
Federation, rising 4.35% to SIT 87,111 (EUR 362.15) on deals worth SIT 3.28bn (EUR
13.63m), including SIT 2.05bn (EUR 8.52m) in block trade.
Tomazin believes that Petrol's rise can be mainly attributed to talks between Russian and
Slovenian governments and businessmen, with several Russian energy companies expressing
their interest to enter the Slovenian market.
He pointed out to the public speculation on a strategic partnership between Russian oil giant
Lukoil and Petrol, intensified by mid-May visit of Lukoil CEO Vagit Alekperov to Slovenia.
Retailer Mercator was the third most active item, yet it ended the week 0.69% lower on SIT
38,163 (EUR 158.66) on deals worth SIT 66.5m (EUR 276,500).
Volumes were moderate on the week with SIT 8.6bn (EUR 35.75m) worth of shares changing
hands, including SIT 3.4bn (EUR 14.13m) in block trade.
On significant gains by the big names the blue chip SBI TOP index added 38.61 points to
1,161.96. The investment fund PIX index followed suit, rising 64.3 points to 4,071.79. The
bond BIO index was also up on the week, gaining 0.46 points to 119.33.
The LJSE staged a roadshow in Germany's Frankfurt on Thursday, meant to attract foreign
portfolio investors. Krka, household appliance maker Gorenje, logistics group Intereuropa,
port operator Luka Koper, Mercator and hardware trader Merkur, alongside three brokerages
and the bank NLB took part in the event.
Foreign Exchange
Mean exchange rate of the Bank of Slovenia
Euro (EUR) - SIT 239.63 (+0.02)
U.S. dollar (USD) - SIT 187.06 (+0.02)
Swiss franc (CHF) - SIT 153.23 (-0.49)
British pound (GBP) - SIT 349.05 (-0.99)
17
REGIONAL INFORMATION
MPs Give Nod to Establish Five New Municipalities
The 45-to-5 vote in favour means that Slovenia will now have a total of 210 municipalities
MPs voted in favour on establishing five new municipalities as parliament continued its
regular May session on Tuesday, 30 May. The 45-to-5 vote in favour means that Slovenia will
now have a total of 210 municipalities.
The Gorje, Log-Dragomer, Recica ob Savinji, Sveti Jurij v Slovenskih goricah and Sentrupert
municipalities were endorsed by Slovenia's voters at non-binding local referendums in April.
The amendments to the act on local government will be valid the day after published in the
Official Gazette.
Based on available data, the government assessed that four of the five new municipalities will
have to receive funds from the state budget.
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 referendums, held in
late January.
18
BRANCH INFORMATION
Government Adopts Reform Model for Farm Subsidies
The government has adopted a model of reform for the EU's common agricultural policy in
Slovenia in the 2007-2013 period, opting for a regional payments scheme with productiontied subsidies
The government has adopted a model of reform for the EU's common agricultural policy in
Slovenia in the 2007-2013 period, opting for a regional payments scheme with productiontied subsidies.
"We have selected the model that is best suited for most Slovenian farm holdings,"
Agriculture Minister Marija Lukacic told the press after the cabinet session on Thursday, 1
June.
Lukacic acknowledged that a pure regional scheme would have been better for goat and sheep
breeders, but they account for only 6% of the farms so the option favouring cattle breeders
was chosen.
"Nine out of ten farms are livestock farms, of which 60% are pure cattle farms. This meant
that we had to construct a model which will ensure production at these farms continues," she
explained.
Stane Kavcic of the Ljubljana Faculty of Biotehnology agreed with Lukacic, saying that
nobody is losing with this model. "It is true, however, that extensive livestock farmers would
have gained much more with the pure regional scheme."
The model includes uniform regional subsidies for fields and meadows, combined with
permitted production-tied payments for bulls, oxen, goats and sheep, as well as hops.
There will also be historic-based payments for milk and sugar beet, for the rescue of sectors in
trouble (cattle breeding), provisions for special cases (new farmers), and additional payments
for new agriculture methods and quality improvement.
A special premium equivalent to 75% of the subsidies in the EU15 will be preserved for bulls
and oxen, while the rate will be 50% for sheep and goats and 25% for hops.
The model moreover introduces production-untied payments for fields (332 euros per hectare)
and meadows (137 euros), Lukacic said.
There will also be a premium for sugar beet, which however is not a part of the reform.
Instead, it was introduced as a special restructuring fund to help sugar beet farmers shift to
other crops, the minister said.
These farmers will receive annual compensation starting with 375 euros per hectare and rising
to about 550 euros by 2009. The farmers will get the compensation until 2013.
19
COMPANIES
Mlinotest Sees Profit and Revenues Drop in Q1
Bread and pasta maker Mlinotest reported unaudited net profit of SIT 37m (EUR 154,400) for
the first three months of 2006
Bread and pasta maker Mlinotest reported unaudited net profit of SIT 37m (EUR 154,400) for
the first three months of 2006, a drop of 4% year-on-year, yet 1% above plans. Net sales
revenues also dropped by 4% to SIT 1.414bn (EUR 5.9m) in the same period, the company
said Monday, 29 May.
According to Mlinotest, the sales results are in line with the annual dynamics, as sales
revenues are usually lower in the first quarter than at the end of the year. They do not expect
any problems which would affect this year's results.
The Ajdovscina-based company is successful in maintaining its position on an increasingly
competitive market by investments into technology and marketing.
Sava Profits Slump nearly 40% in Q1
Chemical and tourism conglomerate Sava posted a profit of SIT 862.62m (EUR 3.6m) in the
first three months of 2006
Chemical and tourism conglomerate Sava posted a profit of SIT 862.62m (EUR 3.6m) in the
first three months of 2006, 39.6% less than in the same period last year, the company said on
Monday, 29 May.
The group's net sales revenues in Q1 2006 meanwhile amounted to SIT 8.32bn (EUR
34.72m), 32% less than in Q1 last year.
According to Sava, the drop in profits was caused by the group's decision to change its sales
of financial investments in order to maximize capital gains in following quarters.
The group moreover explained this decision will not impact the company's planned annual
profits.
The changed investment sales plan also impacted the group's pre-tax profits, which totalled
SIT 993.9m (EUR 4.14m), a 41% drop in comparison with Q1 2005.
The sell-off also caused a change to the sales structure, with its tyre-making sector and tyreretail accounting for 58% of the total sales.
Investments meanwhile totalled SIT 2.7bn (EUR 11.26m) in this period, mainly in the tourism
sector.
Telekom Slovenije Acquires 75% in Kosovo ISP
Telco Telekom Slovenije has acquired 75% of Kosovo's Internet service provider (ISP) Ipko
Net, investing EUR 19.5m into the company, out of which EUR 10m will be used for
expanding and modernising the network of Kosovo's largest ISP
Telco Telekom Slovenije has acquired 75% of Kosovo's Internet service provider (ISP) Ipko
Net, investing EUR 19.5m into the company, out of which EUR 10m will be used for
expanding and modernising the network of Kosovo's largest ISP.
Telekom said on Monday, 29 May that it decided on the acquisition because Ipko Net
maintains its own fixed-line and wireless network and covers over 80% of Kosovo's territory.
Telekom sees the purchase as its third successful investment abroad, having acquired in
March Macedonia's second-biggest Internet provider, On.net, and signed in April an
agreement with German international phone services provider 01066.
Ipko Net generated revenues worth EUR 4.6m and posted a pre-tax profit on EUR 2.4m in
2005. The company employs 110 people.
20
Mobilkom Austria Becomes Sole Owner of Simobil
Austrian mobile operator Mobilkom has purchased the 7.8% of Simobil that it did not own
already, thus becoming the sole owner of Slovenia's second-biggest mobile operator
Austrian mobile operator Mobilkom has purchased the 7.8% of Simobil that it did not own
already, thus becoming the sole owner of Slovenia's second-biggest mobile operator. The
company bought the stake from two Slovenian companies in a deal worth EUR 12.6m,
Simobil has said.
Mobilkom, a subsidiary of Telekom Austria, bought 5.46% from electronics company Iskra
and 2.35% from investment company Medaljon.
Mobilkom first became an owner of Simobil in 2001; by the end of 2001 it had 75% plus one
share. In 2002, it signed a deal to buy out the rest of the shares by July 2007.
On 7 December, Mobilkom became a 92% Simobil owner by buying a total of 17.2% from
holding company Istrabenz, logistics company Intereuropa, bank Probanka and
telecommunications company UPC Telemach, in a deal worth nearly EUR 40m.
Commenting on the latest deal, chairman of the Mobilkom group Boris Nemsic said that
Simobil is a part of their growth strategy in Central and Southeastern Europe.
"With this transaction, all international companies within the group are now owned by
Mobilkom. We intend to increase our presence in Southeastern Europe, and continue with our
strategy," he added.
Simobil had 370,000 clients at the end of the first three months in 2006, which gives the
company a 23% market share.
Prevent Decides Not to Sell Maribor Airport
The management and the supervisory boards of car-seat maker Prevent decided not to accept
an offer by the Hoce-Slivnica municipality, which wanted to acquire the Maribor Airport
The management and the supervisory boards of car-seat maker Prevent decided on Monday,
29 May not to accept an offer by the Hoce-Slivnica municipality, which wanted to acquire the
Maribor Airport.
The northeastern municipality, where the airport lies, announced its bid earlier in the month,
offering SIT 800m (EUR 3.34m) for the airport serving Slovenia's second largest city of
Maribor.
Hoce-Slivnica Mayor Anton Obreht has said that the municipality wanted to buy the airport
operator and then establish a consortium that would build a EUR 100m logistics hub on the
premises of the airport.
Prevent, which acquired the airport for EUR 1m four years ago, meanwhile said that their
priority was to sign a contract with the state on the long-term management of the facility.
The company has entered into talks with possible partners from the fields of logistics,
passenger and cargo transport. Prevent also intends to appoint a new manager by 10 June.
Hoce-Slivnica Mayor Anton Obreht, while not yet having been officially notified about
Prevent's rejection of the municipality's bid, told STA that the decision would not have a
"negative impact on the development of the logistics hub".
Obreht is convinced that the municipality and the airport's owner would "definitely find
common ground", and is ready to continue talks on strategic cooperation.
Gorenje Sells Swarovski-Sprinkled Fridge for US$ 110,000
The refrigerator, sprinkled with 7,000 Swarovski crystals, was bought by a Russian
millionaire, with the proceeds going for charity
21
Household appliance maker Gorenje sold one of its top-of-the-line Premium Touch
refrigerators for a record US$ 110,000. The refrigerator, sprinkled with 7,000 Swarovski
crystals, was bought by a Russian millionaire, with the proceeds going for charity.
The fridge was sold to Russian millionaire Rustam Tariko at an auction held in Moscow's elite
night club Dagilev. Gorenje donated the money to a charity that helps homeless Russian
children, the company said on Monday, 29 May.
The Moscow sale comes on top of two other Premium Touch fridges which have already been
sold and proceeds donated to charity in Romania's Bucharest and in Slovenia.
The fourth in the series of five unique black refrigerators was meanwhile sold at London's
prestigious department store Harrods.
The last one will soon be auctioned in the Serbian capitol Belgrade.
Gorenje also sells the retail version of the fridge, which has 3,500 hand-mounted crystals.
Port Operator Luka Koper Posts Q1 Profit of EUR 4.17m
Luka Koper, the operator of Slovenia's only seaport, posted a net profit of SIT 1bn (EUR
4.17m) for the first three months of 2006
Luka Koper, the operator of Slovenia's only seaport, posted a net profit of SIT 1bn (EUR
4.17m) for the first three months of 2006, 10% above that of the same period in 2005 and
13% above plans, the company said on Monday, 29 May.
In the same period the company moreover generated sales of SIT 6bn (EUR 25.04m), 29% up
from Q1 2005 and 17% above its target.
The company managed to transport 3.98 million tonnes of cargo, a 27% improvement yearon-year, as well as increased the number of employees by 33 to 691.
Intereuropa Plans EUR 8m-10m Logistics Centre Near Moscow
Intereuropa wants to strengthen its presence in key markets, including Slovenia and Eastern
and SE Europe by 2011
Logistics company Intereuropa is planning to build a logistics centre near the Russian capital
of Moscow and the company's CEO Andrej Lovsin was looking at suitable locations for the
EUR 8m to 10m investment on Monday, 29 May, Intereuropa said on Tuesday, 30 May.
Intereuropa wants to strengthen its presence in key markets, including Slovenia and Eastern
and SE Europe by 2011, the company added, listing Serbia, the Russian Federation and
Ukraine as its most important countries in the area.
According to Intereuropa, which has a subsidiary in Russia, the new logistics centre could
already now be half-filled with Slovenian goods. The company is also ordering ten new
refrigerated lorries for transporting products such as medicine.
Intereuropa moreover wants to become a major player in the logistics market, not only for
Slovenian products but also for transporting goods from the Russian Federation into EU
member states.
Ham Gets Bank Austria Creditanstalt Business Award
The company Ham, a maker of advertising boards and chairs, has won this year's Business
Award, which is conferred by the Slovenian branch of Bank Austria Creditanstalt (BA-CA) to
small and mid-sized enterprises with business relations with at least one country from Central
and Eastern Europe
The company Ham, a maker of advertising boards and chairs, has won this year's Business
Award, which is conferred by the Slovenian branch of Bank Austria Creditanstalt (BA-CA) to
small and mid-sized enterprises with business relations with at least one country from Central
and Eastern Europe.
22
The jury was convinced by the company's flagship product, the Spinalis office chair, which
Ham is currently selling on eight markets abroad, the bank said on Tuesday, 30 May.
The award was conferred at the Europa Forum, a conference that the bank organised in
Ljubljana. Debates are focusing on the advantages and pitfalls of the adoption of the euro in
Slovenia.
Istrabenz Holding Reports Slump in Profits
According to a press release from Istrabenz, the group generated net revenues of SIT 46.27bn
(EUR 193m) in the first quarter
Istrabenz, the energy, food and tourism holding, has reported a 12% drop in its net profit for
the first quarter of 2006, which stood at SIT 371m (EUR 1.55m). Nevertheless, the company
said that it managed to beat forecasts.
According to a press release from Istrabenz, the group generated net revenues of SIT 46.27bn
(EUR 193m) in the first quarter. The operating profit stood at SIT 1.42bn (EUR 5.93m).
The group saw its tourism arm struggle as the number of overnight stays in the first quarter 68,052 - lagged behind plans by 13%. The tourism arm therefore made an operating loss of
SIT 700m (EUR 2.92m) in the period, which is somewhat better than planned.
According to Istrabenz, seasonal factors will mean that the tourism arm will begin operating
in the black as of July and should finish the year with an operating profit of SIT 862m (EUR
3.6m).
The energy arm of the group ended the quarter with an operating profit of SIT 1.44bn (EUR
6m), while the food unit saw an operating profit of SIT 1.24bn (EUR 5.17m) in the period.
Droga Kolinska Exceeds Q1 Plans
Food group Droga Kolinska posted a net profit of SIT 432.4m (EUR 1.8m) on net sales
revenues which exceeded plans by 4% to top SIT 17.8bn (EUR 74.3m)
Food group Droga Kolinska posted a net profit of SIT 432.4m (EUR 1.8m) on net sales
revenues which exceeded plans by 4% to top SIT 17.8bn (EUR 74.3m).
Droga Kolinska said in Wednesday, 31 May's press release that revenues were boosted by
sales of salt for roads, healthy food and warm beverages.
The successful launch of new products and expanded presence on supermarket shelves in the
EU leads the company to forecast that positive trends will continue.
The company did not provide comparable figures for the first quarter of 2005, as the company
was created with a merger of Droga and Kolinska in the second quarter of 2005.
The group expects 2006 sales to rise 11% year-on-year to SIT 81.2bn (EUR 338.9m) and a
net profit of SIT 2.8bn (EUR 11.7m).
The biggest investment in 2006 will be a new pate factory in the Bosnia-Herzegovina capital
of Sarajevo, an EUR 20m investment with an annual output of 4,500 tonnes, which is to start
operations in the second half of the year.
Father of Slovenian Mobile Telephony Dismissed
Chairman of telco Telekom Slovenije - the parent of Mobitel - Bojan Dremelj is to fill the
position until a new chairman is appointed
Chairman of Slovenia's largest mobile operator, Mobitel, has been sacked by the company's
supervisors after 15 years in the job that saw Anton Majzelj turn the company into a market
leader.
Mobitel's supervisors said the reason for Majzelj's sacking was a difference in views with him
on the future of the company.
23
Chairman of telco Telekom Slovenije - the parent of Mobitel - Bojan Dremelj is to fill the
position until a new chairman is appointed, the telco said in Wednesday, 31 May's press
release.
While paying tribute to a man he sees as "the father of Slovenian mobile telephony", Dremelj
said that "unfortunately our expectations about the future of the company are different".
"Changes are taking place on the market and Mobitel must adapt. The supervisory board (of
Mobitel) sees an answer in the appointment of a new management team," Dremelj said.
End of Rocky Road for Slovenia's Third Mobile Operator
On 19 April it sold its network to the two leading mobile operators in the country, Mobitel
and Simobil, for EUR 5m
Slovenia's third mobile operator, Vega, ceased operations on Thursday, 1 June following a
rocky five-year spell in Slovenia. This leaves only two mobile operators, Mobitel and
Simobil, as well as a handful of mobile services providers, fighting for a piece of the
Slovenian market.
Vega, owned by US mobile operator Western Wireless International (WWI), never managed
to get a foothold on the Slovenian market despite ambitious goals. On 19 April it sold its
network to the two leading mobile operators in the country, Mobitel and Simobil, for EUR
5m.
The sale was accompanied by an announcement that Vega would cease operations on 1 June.
Since then, some 30,000 Vega users have gradually been switching to other mobile operators
and service providers.
Meanwhile, some 120 Vega employees have been laid off in this time, Vega spokesperson
Tanja Zabukovnik told STA.
Vega explained at the time that it regretted having to pull out of Slovenia. "The company saw
no prospects in terms of changes on the Slovenian electronic communications market that
would justify additional investment," Vega said.
Apart from selling its network, Vega also offloaded its license to Tus Mobil, a new provider
of mobile services. The terms of the deal have not been disclosed.
Meanwhile, Vega signed in April a deal with telco Telekom Slovenije on the mutual
withdrawal of lawsuits.
Vega and WWI subsequently withdrew the SIT 48.8bn (EUR 203.7m) damages suit against
the state and Mobitel that it filed last year for obstruction of competition. Telekom Slovenija,
meanwhile, stopped legal action against WWI for unpaid bills.
Vega entered the Slovenian market in 2001 and immediately launched an aggressive
advertising campaign that was successful at first.
But after the initial boom, the company saw the number of its subscribers stagnate at 30,000,
which is only 2% of the Slovenian market, well below initial plans of 20%.
Vega often complained of not being given a fair chance because of a lack of competition on
the market. Government officials claimed that Vega's poor standing in Slovenia was a result
of poor decisions on Vega's part.
Postal Company Posts Record Profit in 2005
Posta Slovenija, the Slovenian postal company, made a net profit of SIT 3.6bn (EUR 15m) in
2005
Posta Slovenija, the Slovenian postal company, made a net profit of SIT 3.6bn (EUR 15m) in
2005, which is its best result ever, the general manager of the company said at Thursday's
press conference.
According to Ales Hauc, the company saw its sales revenues rise 10% to SIT 49.9bn (EUR
208m) in 2005, beating forecasts by 5%.
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Meanwhile, operating costs rose less than 1% to SIT 45.1bn (EUR 188.2m) in the year,
allowing the company to report a record-breaking profit, Hauc said.
He added that the strong performance is a result of an increase in the volume of mail carried
and improved productivity, as well as higher prices.
He said the company forecasts a 5% rise in revenues this year, while costs are to rise by 10%.
Consequently the net profit is to be somewhat lower than last year.
Hauc reiterated that the one of the priorities for this year was the selection of a strategic
partner and improved cooperation with postal companies in nearby markets.
Posta Slovenija is in talks with the Austrian, German and French postal companies and some
other postal institutions, he explained, adding that a decision on the strategic partner should be
known in the autumn.
However, the management believes that Posta Slovenija should remain Slovenian hands. He
also said that the company was looking to make a bigger stand on the logistics market.
The company is to spend SIT 8.6bn on investment this year, with most of it going for post
offices, IT and vehicles.
Hauc stressed that there was one post office for every 36 sq. kilometres of territory and 3,586
people in Slovenia, which is better than the EU average, where a post office covers 58.3 sq.
kilometres of territory and 4,509 people.
Government in Favour of DARS Taking EUR 300m Loan with EIB
The government gave the green light to the Motorway Company (DARS) for taking out a EUR
300m loan with the European Investment Bank (EIB)
The government gave the green light to the Motorway Company (DARS) for taking out a
EUR 300m loan with the European Investment Bank (EIB), as it held a correspondence
session on Friday, 2 June.
The cabinet moreover authorised the Finance Ministry to send a statement to that effect to the
EIB, the ministry wrote in a press release.
The EIB Council will stage its next session on 13 June, yet, it has to receive by 5 June the
government's statement that it does not oppose the loan.
According to the ministry, the statement does not mean that a contract between the EIB and
the loan taker will be concluded, nor does in presuppose a state guarantee between the country
and the bank.
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SLOVENIA IN BRIEF
Puh Award for Discoveries to Be Conferred for the First Time
"In addition to the Zois Awards, the highest national awards for science, so-called Puh Award
for outstanding discoveries and inventions for the promotion of enterprise will be conferred
for the first time this year," Minister of Higher Education, Science and Technology Jure
Zupan has said.
Jansa, Alexei II Stress Religious Dialogue
Slovenian Prime Minister Janez Jansa met Alexei II, the patriarch of the Russian Orthodox
Church, on the second day of his official visit to the Russian Federation, with Alexei II
stressing his support for the endeavours of the Slovenian government for religious dialogue in
Europe.
MPs Generally in Favour of Changes to Social Security Act
Parliament staged on Wednesday, 31 May a general debate on the government-sponsored
changes to the social security act and was generally in favour of the amendments. But the
MPs have also called for more consistent solutions.
Geric Appointed TV Slovenija News Programme Acting Editor
Rajko Geric has been appointed acting editor of news and education programmes at the public
broadcaster TV Slovenija, the broadcaster's PR office said on Friday, 2 June.
National Council Votes Against Veto on Amended Media Act
The National Council, the upper chamber of parliament, voted on Friday, 2 June against a
veto on the amended media act which parliament passed the previous week.
FM Rupel Discusses UN Reforms with Thai Deputy PM
Slovenian FM Dimitrij Rupel and Thai Deputy PM Surakiat Sathianthai discussed the reform
of the UN Security Council and management of the UN as they met on the final day of the
Human Security Network's (HSN) eighth ministerial meeting in Thailand's capital of Bangkok
on Friday, 2 June.
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