Slovenia Business Week no. 09, March 5th, 2007
Table of Contents:
HEADLINES ................................................................................................................. 3
Deflation in January Pushes Annual Inflation Down to 2.1% .................................... 3
Majority Stake in Steel Group Sold to Russian Company Koks ................................ 3
Potocnik: Knowledge Key to Dealing With Globalisation ........................................ 4
INTERNATIONAL COOPERATION .......................................................................... 6
PM Jansa Pledges Further Support for Macedonia's NATO, EU Bid ........................ 6
Slovenia, Austria Discuss Future Cross-Border Cooperation .................................... 7
PM Jansa Opens Business Conference in Skopje ....................................................... 7
Jansa and Rupel Discus Kosovo with Ceku ............................................................... 8
Drnovsek Receives Outgoing Chinese Ambassador .................................................. 8
Slovenia Still Vying for OECD Membership ............................................................. 9
First Indian Ambassador to Slovenia Presents Credentials ........................................ 9
EUROPEAN UNION .................................................................................................... 9
Slovenian to Become Third Working Language During EU Presidency ................... 9
Lipponen: Slovenia and Finland Closer than it Seems ............................................. 10
Bajuk: EU Sees Slovenia's Public Finances as OK but Unsustainable .................... 11
Trichet: Eurozone Should Open Labour Market to Slovenia ................................... 11
LEGISLATION ........................................................................................................... 13
Government Tightens Antitrust Legislation ............................................................. 13
STATISTICS / FORECASTS ..................................................................................... 14
Survey Finds Preference for Cinemas on the Decrease ............................................ 14
Survey: Slovenians Happy About Present, Worried About Future .......................... 14
Unemployment at 5.6% in the 4th Quarter of 2006 ................................................. 15
Factory-Gate Prices Up 0.6% in January.................................................................. 15
Number of Overnight Stays Up 4% in 2006............................................................. 16
FINANCE .................................................................................................................... 17
KAD's Performance Exceeds Expectations .............................................................. 17
Petrol Prices Up, Diesel Down ................................................................................. 17
Profit at Abanka Soars, Total Assets up 15% ........................................................... 17
Banka Celje Beats 2005 Profit by 21% .................................................................... 17
Profit at NKBM 82% above Plans ............................................................................ 18
March Brings Excise Duties on Electricity .............................................................. 18
Commission-Free Exchange of Tolars at Banks Ends ............................................. 19
Ljubljana Stock Exchange ........................................................................................ 19
BRANCH INFORMATION ........................................................................................ 21
Slovenian Wines Praised in New York .................................................................... 21
Ministry Unveils Information Society Strategy........................................................ 21
Slovenia Places 44th in Global Tourism Competitiveness Survey .......................... 21
Government Passes Agriculture Grants Programmes Worth EUR 587M ................ 22
Farmers Oppose Government Decree on Subsidies ................................................. 23
Ski Resorts Hit Hard by Mild Winter ....................................................................... 23
COMPANIES .............................................................................................................. 25
Aerodrom Ljubljana Reports 10% Increase in Net Profit ........................................ 25
Pharma Wholesaler Salus Increases Revenues, Profit Down ................................... 25
Adria Airways Carrier Out of Red in 2006 .............................................................. 26
Telekom's Revenues up 9%, Profit Exceeds EUR 100m ......................................... 26
Gorenje Ups Revenues, Profit in 2006 ..................................................................... 27
Mlinotest Posts Profits but Misses Targets............................................................... 27
Merkur Posts Double-Digit Growth in Sales, Profits ............................................... 27
Istrabenz Publishes Takeover Bid for Droga Kolinska ............................................ 28
Terme Catez Increases Net Profit by Nearly 9% ...................................................... 28
HSE Shortlisted for Big Energy Deal in Macedonia ................................................ 29
Mercator's Profit, Sales Grow at Double-Digit Rates............................................... 29
Krka Ups Profit by 21% in 2006 .............................................................................. 30
Port Operator Luka Koper Increases Profit 3% to EUR 20.7m................................ 30
BTC Increases Revenues, Profit in 2006 .................................................................. 31
Droga Kolinska Beats Profit Target by 29% ............................................................ 31
Call for Bids Published for 50% Stake in Furniture Maker Lip Bled ...................... 31
Iskra Avtoelektrika Reports EUR 2.41M in Net Profit ............................................ 32
Intereuropa Posts Profit of EUR 6.7m in 2006 ......................................................... 32
Port Operator to Develop New Distribution Hub ..................................................... 32
SIJ Director: SIJ and Koks Complement Each Other............................................... 33
SLOVENIA IN BRIEF ................................................................................................ 35
Trade Union Unveils Proposals for Pension System Changes ................................. 35
Conference: Changes in Balkans Call for New Aid Strategies ................................ 35
Power Producer Sells Stake in Slovenia's Largest Bank .......................................... 35
President Meets Russian Culture Official Over Slavic Forum ................................. 35
Commission Fails to Back Nominee for Central Bank Governor ............................ 35
PM Promises Slovenians in Macedonia Easier Path to Citizenship ......................... 35
Slovenia Joins Academy of European Law .............................................................. 35
Minister Announces Defence Training Deal with Macedonia ................................. 36
Social Partners Fail to Approve Changes to Foreign Labour Act ............................ 36
HEADLINES
Deflation in January Pushes Annual Inflation Down to 2.1%
This is the second month in a row that Slovenia registered deflation
Consumer prices dropped by 0.2% in February to push the annual inflation rate to
2.1%, down from 2.7% in January, according to data released on Wednesday, 28
February by the National Statistics Office. This is the second month in a row that
Slovenia registered deflation. The 12-month average price growth remained at the
January 2007 level of 2.5%.
According to Janez Sustersic, the head of the government's Institute for
Macroeconomic Analysis and Development (IMAD), the absence of additional
pressure accompanying the introduction of the euro was the main cause of the
deflation.
Yet Sustersic believes that the consumer price index will start growing again. "We see
that petrol is getting more expensive and the end of spring sales will reflect on
increasing prices in March," he told STA.
According to the Statistical Office, the fall was a result of lower prices of both goods
and services: goods were 0.2% cheaper on average, while prices of services were
down 0.1%.
In February prices decreased in the groups communication (2.1%), food and nonalcoholic beverages (1%), transport (0.6%) and furnishing, household equipment and
maintenance (0.2%).
While prices of food and non-alcoholic beverages increased in the three months
before, in February a fall of 1% was registered. Food was 1.1% cheaper while prices
of non-alcoholic beverages remained level.
Lower prices of food pushed inflation down by 0.2 of a percentage point and lower
prices of liquid and motor fuels and of telephone services 0.1 of a percentage point
each.
Higher prices were recorded in the groups recreation and culture (0.7%), health, and
clothing and footwear (0.5%), restaurants and hotels (0.4%), housing, water,
electricity, gas, and miscellaneous goods and services (0.3%), and education as well
as alcoholic beverages and tobacco (0.1%).
As in the previous two months, prices increased in the group restaurants and hotels.
Catering services were on average 0.4% more expensive, while prices of
accommodation were 0.1% higher.
Higher prices of gardens, plants and flowers contributed 0.1 of a percentage point to
the inflation rate while all other hikes added a combined 0.1 of a percentage point.
On an annual comparison, services were on average 4.5% more expensive, while
prices of goods increased by 1%.
Majority Stake in Steel Group Sold to Russian Company Koks
The government confirmed the sale of a 55.35% stake in the Slovenska industrija jekla
(SIJ) steel group to the Russian industrial group Koks for EUR 105m, wrapping up
the biggest privatisation procedure in years
The government on Thursday, 1 March confirmed the sale of a 55.35% stake in the
Slovenska industrija jekla (SIJ) steel group to the Russian industrial group Koks for
EUR 105m, wrapping up the biggest privatisation procedure in years.
The state has given SIJ value added by joining it with a company whose main activity
is the production of inputs for the steel industry, Economy Minister Andrej Vizjak
told the press.
He said vertical integration was crucial for development, as SIJ was very sensitive to
all fluctuations in prices of raw materials, energy and products.
Koks was selected in an international public competition that opened in September.
Three bidders submitted binding offers, one of which was incomplete.
The main selection criteria were market expansion, preservation of production and
jobs, willingness to invest and the content of the business plan. The offer made by
Koks was by far the best, Vizjak said.
The commission for the privatisation of SIJ valued the company at between EUR
99.81 and EUR 191.64 per share, while Koks offered EUR 190.73 per share.
Koks pledged to invest some EUR 250m over the next three years and keep the same
number of employees in that period.
The state is retaining a stake of 25% plus one share in SIJ. Vizjak said Koks would
offer the same price to the remaining shareholders.
SIJ director Tibor Simonka was also pleased. "We are very happy with the selection
of Koks as well as the negotiated guarantees and other provisions of the contract."
According to him, the two companies are complementary and the arrival of Koks
provides to the best possible extent the conditions for the implementation of strategic
plans until 2012.
The arrival of private capital will enable SIJ to speed up the implementation of a
comprehensive investment cycle that is essential to competitiveness and stable
development, he said.
According to SIJ, Koks is a group of 15 industrial companies involved mainly in the
production of coke and metals as well as coal mining. Its net profit for 2006 is
estimated at EUR 171m, with sales at EUR 1.69bn.
The SIJ group includes 14 companies, the core companies being Acroni Jesenice,
which makes high-end flat steel products, and Metal Ravne, which specialises in the
manufacturing of high-speed steels and certain special and construction steels.
In December the group projected year-end sales of EUR 542.8m, up 16% over the
year before. However, profit was expected to drop by 34% to EUR 23m.
Potocnik: Knowledge Key to Dealing With Globalisation
European Science and Research Commissioner Janez Potocnik addressed the
inaugural conference of the EU's 7th Research Framework Programme in Ljubljana
Addressing the inaugural conference of the EU's 7th Research Framework
Programme in Ljubljana on Friday, 2 March, European Science and Research
Commissioner Janez Potocnik said globalisation was the biggest cause of change in
the world and that Slovenia's decision to deal with this change with the help of EU
research funds was a step in the right direction.
By boosting their research capacities, countries "strengthen the most vital part of their
economic and development potential," Potocnik said. He added that partnership in
science and innovation as put forward by the new framework programme was the
most important element in bringing about effective change.
Prime Minister Janez Jansa meanwhile pointed out in his address to the over 600
participants of the conference that the EU was lagging behind the US in terms of
research, with Slovenia falling behind even further.
According to Jansa, the basic problem of the EU and Slovenia is the failure to use
knowledge to create useful products and services that could be marketed.
"It is not only about knowledge, but also about business opportunities," Jansa
stressed, adding that the support of knowledge increases the competitiveness of the
economy.
According to Economy Minister Andrej Vizjak, permeating the 7th Research
Framework Programme is the basis for small and medium businesses forming the
backbone of Europe's economy.
The EU is losing jobs because it cannot compete with countries with a cheaper labour
force. Vizjak also believes the answer to this challenge lies in a knowledge-based
economy.
Potocnik meanwhile described the 2007-2013 programme as subscribing to the goals
of the Lisbon Strategy, which seeks to provide an answer to the question of how to
improve the quality of life and at the same time remain competitive.
The answer does not lie in the lowering of social and environmental standards, but in
knowledge. "To know more and to be better," Potocnik asserted.
The Slovenian commissioner and Minister of Higher Education, Science and
Technology Jure Zupan agreed that setting up the European Research Area, which is
to promote the exchange of knowledge across Europe, remained one of the priority
challenges for the bloc.
INTERNATIONAL COOPERATION
PM Jansa Pledges Further Support for Macedonia's NATO, EU Bid
Following talks with his counterpart Nikola Gruevski in Skopje, Slovenian Prime
Minister described Macedonia as the most serious candidate for membership of EU
and NATO in the region
Prime Minister Janez Jansa on Tuesday, 27 February reassured Macedonian officials
of Slovenia's support for the EU's open-door policy and enlargement to the Western
Balkans. Following talks with his counterpart Nikola Gruevski in Skopje, Jansa
described Macedonia as the most serious candidate for membership of EU and NATO
in the region.
Jansa, who addressed a joint press conference with Gruevski, pledged Slovenia's
further assistance to Macedonia in the accession process.
According to Jansa, Slovenia supports Macedonia's EU and NATO bids because of
both countries' common past and because Macedonia's membership would greatly
contribute to the long-term stability of the region.
Jansa also wants his visit to encourage the Macedonian government in taking further
reform steps and upgrade what it has already achieved.
Gruevski meanwhile told the press that Macedonia would do everything in its power
to "help Slovenia in its assistance to Macedonia".
The Macedonian prime minister added that the country was intent on meeting the
obligations and aligning its legislation with that of the EU by 2008.
Macedonia also expects to get a date for launching its EU talks during Slovenia's
presidency over the EU, scheduled for the first half of 2008.
Gruevski singled out Slovenia as the most fervent advocate of Macedonia's bid to join
the EU and NATO, while Jansa congratulated Macedonia on the rapid progress of its
reforms and its successful fight against organised crime, corruption as well as hailed
the speed with which the country is transposing EU legislation.
The pair of prime ministers praised bilateral relations at all levels, calling for their
further consolidation. They also told the press that they shared similar views on the
situation in the region.
As regards the plan for Kosovo that has been put forward by UN special envoy Martti
Ahtisaari, Jansa explained that both sides hoped for open issues to be resolved as soon
as possible so that the people there should get stability they need to attain prosperity.
Earlier in the day, Foreign Minister Dimitrij Rupel and Economy Minister Andrej
Vizjak signed with their opposite numbers several agreements, one on cooperation in
health and medicine, an agreement concerning a programme of cooperation in
European affairs for 2007, an agreement on the employment of seasonal workers and
an agreement on adoptions.
The agreement of cooperation in EU affairs provides the basis for Slovenian experts
to assist Macedonia in transposing EU legislation.
The agreement on adoptions will facilitate the ways for filing adoption requests, while
the agreement on seasonal workers will ease the hire of Macedonian labour for
Slovenian employers, especially in construction.
Slovenia, Austria Discuss Future Cross-Border Cooperation
Delegates from Slovenia and Austria as well as potential partners for cross-border
cooperation projects met to discuss cooperation between the border regions in the
EU's 2007-2013 budget framework
Delegates from Slovenia and Austria as well as potential partners for cross-border
cooperation projects met on Tuesday, 27 February to discuss cooperation between the
border regions in the EU's 2007-2013 budget framework. The conference in Brdo pri
Kranju also featured a cross-border project fair and a contact-making event.
Cooperation between Slovenia and Austria has been successful from the very
beginnings in 1995, when Slovenia became entitled to the pre-accession EU funds,
explained Edita Granatir Lapuh of the Regional Development Agency of Gorenjska.
According to development agencies, Slovenian cross-border regions have drawn EUR
30m of EU funds in 40 projects of cooperation with Austria, said Granatir Lapuh.
"The new financial perspectives are due and the cooperation we have had so far is a
good start for the future," she pointed out.
By the end of 2013, EUR 67m will be available for cross-border cooperation between
Slovenia and Austria, which is a significant rise over the last budget period, explained
Granatir Lapuh.
The goal of regional development agencies in the 2007-2013 perspectives is to
develop strategical projects that aim for increasing competitiveness of the crossborder region as a whole, she explained.
National Council President Janez Susnik, who also attended the conference, said that
Slovenia and Austria have good potential for cooperation in economy, tourism and
environmental protection.
Meanwhile, Austrian Ambassador to Slovenia Valentin Inzko pointed to the
possibility to learn from each other. "The exchange of good practices can be
beneficial to us all," he said.
Inzko also supports the EU's philosophy that neighbouring countries must work
together. "That way, Europe is being built bottom-up and that way citizens can feel a
part of it more easily."
PM Jansa Opens Business Conference in Skopje
Slovenian Prime Minister Janez Jansa and his Macedonian opposite number Nikola
Gruevski opened a Macedonian-Slovenian business as part of Jansa's two-day official
visit to Macedonia
Slovenian Prime Minister Janez Jansa and his Macedonian opposite number Nikola
Gruevski opened a Macedonian-Slovenian business conference on Monday, 26
February as part of Jansa's two-day official visit to Macedonia.
Jansa said in his address that the Skopje fair, acquired by the Slovenian company Era,
is becoming one of the most modern business, trade and entertainment centres in the
region.
So far EUR 5m has been invested into the facility which presents new opportunities
for the Macedonian economy, Jansa said at the event, which was attended by over 100
Slovenian executives who held over 300 meetings with their Macedonian
counterparts.
Jansa also touched on the agreements signed by the two countries. According to him,
the deals, including on employment of seasonal workers and on cooperation in health
and medicine, confirmed the intent of the two countries on strengthening their
cooperation.
He furthermore stressed the positive economic trends between the two countries,
especially the gradual balancing of trade.
According to him, another good example of bilateral cooperation was a coffee
roasting plant of Slovenian food company Droga Kolinska which was opened by
Economy Minister Andrej Vizjak after the conference.
The EUR 8m plant, opened by Vizjak and his Macedonian opposite number Vera
Rafajlovska, will employ 80 people and roast some 3,000 tonnes of coffee every year.
According to Vizjak, this is just one of the successful Slovenian investments in
Macedonia in the last three years.
Slovenia intends to boost cooperation with Macedonia in the future as well, he added.
Trade between Slovenia and Macedonia stood at EUR 151m in the first 11 months of
2006, with EUR 116m coming in Slovenian exports, mostly medicines.
Slovenia was the third biggest foreign investor in Macedonia in 2006, with projects
worth EUR 110.9m or roughly 3.8% of Slovenia's outgoing foreign direct investment.
Jansa and Rupel Discus Kosovo with Ceku
Primer Minister Janez Jansa and Foreign Minister Dimitrij Rupel met with Kosovo
Prime Minister Agim Ceku on the sidelines of their visit to Macedonia
Primer Minister Janez Jansa and Foreign Minister Dimitrij Rupel met with Kosovo
Prime Minister Agim Ceku on the sidelines of their visit to Macedonia on Tuesday,
27 February, voicing optimism that the future of Kosovo would soon be resolved.
Jansa and Ceku were united in the expectation that the future status of Kosovo would
be defined soon.
Jansa's office said in a press release that the Kosovo government had understanding
for the demands of the Serbian population in the province.
"I believe that the international community has found a very sensible partner for talks
in the current president of the Kosovo government," Jansa said after meeting Ceku.
Rupel, who also met his Macedonian counterpart Antonio Milososki, told STA that
everyone shared the view that "the time of confrontation in the region has passed,
giving way to a time of cooperation".
Rupel said that he and Milososki agreed that the plan for Kosovo put forward by UN
special envoy Martti Ahtisaari was appropriate and needed to be implemented.
Ceku meanwhile expressed to Rupel his "expectation that Ahtisaari's scenario would
run smoothly", with Rupel also pointing out that Slovenia wishes to have good
relations with everyone in the region, including with Serbia.
Drnovsek Receives Outgoing Chinese Ambassador
President Janez Drnovsek received the outgoing Chinese Ambassador Wang Fuyuan
President Janez Drnovsek received on Wednesday, 28 February the outgoing Chinese
Ambassador Wang Fuyuan, the president's office said. Drnovsek thanked Wang for
his work and excellent cooperation.
The relations between the two countries have improved in all areas during Wang's
term. Drnovsek said that China had a big responsibility and played an important role
in the global decision-making process.
Wang said that work in Slovenia was an interesting and pleasant experience for him.
Wang was appointed ambassador to Slovenia in 2004. It is yet unknown who will
replace him at the post.
Slovenia Still Vying for OECD Membership
Finance Minister Andrej Bajuk expressed Slovenia's desire to join the Organisation
for Economic Cooperation and Development (OECD) as he met the OECD's
Secretary General Angel Gurria
Finance Minister Andrej Bajuk expressed Slovenia's desire to join the Organisation
for Economic Cooperation and Development (OECD) as he met on Wednesday, 28
February the OECD's Secretary General Angel Gurria.
Gurria informed Bajuk of the debate between the OECD members concerning a
possible expansion of the organisation and the open issues that must be resolved first,
the Finance Ministry said in a press release.
Gurria is reported to have advised Slovenia to continue working with the OECD with
the same intensity, as the current level of cooperation is a good basis for membership.
The ministry said Slovenia has two main arguments for membership that give it
advantage over other applicants: membership of the eurozone and the presidency of
the EU in 2008.
Slovenia is already present in 38 OECD working bodies, where it acts as full-fledged
member, participating country or observer, the ministry said.
First Indian Ambassador to Slovenia Presents Credentials
President Janez Drnovsek on Thursday, 1 March received the credentials of the first
resident Indian Ambassador to Slovenia, Villur Sundararajan Seshadri
President Janez Drnovsek on Thursday, 1 March received the credentials of the first
resident Indian Ambassador to Slovenia, Villur Sundararajan Seshadri, with both
officials calling for tighter cooperation in all fields.
According to the president's office, Seshadri said Slovenia's EU, eurozone and NATO
membership, and its presidency of the EU in 2008, were a timely opportunity for the
strengthening of cooperation in all areas.
Seshadri said that the two countries could work together for example in the
International Centre for the Promotion of Enterprises (ICPE), which however needs to
be revived. He said India would appreciate Slovenia's contribution to the revival.
Drnovsek meanwhile noted that India's development was interesting in that the
country had managed to develop high technology yet at the same time preserve its
spiritual tradition.
This experience is important for India as well as the entire humanity, Drnovsek said,
hopeful that the EU would also succeed with balanced development.
The EU and India could work together towards the sustainable development of the
world, the president was quoted as saying.
The new ambassador also handed copies of his credentials to Foreign Minister
Dimitrij Rupel.
Before being posted to Slovenia, Villur Sundararajan Seshadri was in charge of trade
at the Indian embassy in Washington. His has also worked at embassies in Bangkok,
Tehran, Brussels and Nairobi.
EUROPEAN UNION
Slovenian to Become Third Working Language During EU Presidency
The number of official languages in the EU has risen from 11 to 23 in the past three
years, bringing the question of multilingualism to the centre of European politics
During Slovenia's presidency of EU in the first half of 2008, Slovenian will become
the third working language of the EU, together with English and French.
The number of official languages in the EU has risen from 11 to 23 in the past three
years, bringing the question of multilingualism to the centre of European politics.
Multilingualism is increasingly regarded as a key instrument for economic
development and efficient communication. Both consumers and citizens are most
efficiently addressed in their mother tongue, the newly-appointed European
Commissioner for Multilingualism, Leonard Orban, said at a press conference last
week.
Countries tend to heed his argument - a country's presidency is considered a powerful
chance to promote their language, and an efficient translation and interpreting service
is an essential element.
Slovenian, as the language of the presiding country, will be included in all the
informal ministerial sessions taking place in Slovenia and interpretation will be
carried out by the European Commission's interpreting service.
In the case of events below the ministerial level, the interpreting will be limited to
three working languages - English, French and Slovenian.
On average, every working language in the EU requires 80 interpreters per day.
According to the European Commission, 54 interpreters for Slovenian are available at
the moment, amounting to only 67% of the required capacity.
However, according to the data of the Commission, the demand for Slovenian
language interpreters was met almost completely (94%) in 2006, ranking Slovenia top
among the newcomers, right after Poland and Hungary.
The interpreter pool for English, French, Slovenian and German in the Slovenian state
administration consists of 23 interpreters - seven at the Government SecretariatGeneral, four at the Foreign Ministry, two at the Defence Ministry and ten at the
Interior Ministry.
Lipponen: Slovenia and Finland Closer than it Seems
Finnish Parliament Speaker Paavo Lipponen paid a one-day visit to Slovenia
Paying a one-day visit to Slovenia on Monday, 26 February, Finnish Parliament
Speaker Paavo Lipponen promised his country's full support to Slovenia during its
upcoming EU presidency and expressed optimism in regard to the fate of the
European constitution.
Received by his host, Parliament Speaker France Cukjati, Lipponen said that
Slovenian and Finnish positions concerning international issues were "much closer
than one would believe when considering the distance between the two countries".
According to Lipponen, Finnish-Slovenian relations are excellent, with two countries
cooperating successfully in EU matters as well as in other fields.
"Slovenia is an EU success story and is an example to other members of the bloc," the
Finnish official said.
The European constitution was a focal point of Lipponen's meeting with Cukjati. In
his view, the treaty can only be salvaged with the existing text serving as a basis.
"The essence needs to be preserved, however, we also need to be ready for certain
changes that would make the constitution more acceptable for the countries which
have rejected it," he said, adding that "we might even get a treaty from Ljubljana".
The pair also touched on the EU enlargement process regarding the Western Balkans,
agreeing that the inclusion of the region should remain one of the bloc's priorities.
Lipponen also met President Janez Drnovsek, with the pair agreeing that the
ratification of the EU constitution needs to continue despite the many obstacles, the
president's office said.
Talks touched on the status of Kosovo. Drnovsek said he supported the proposal of
the UN's Kosovo envoy Martti Ahtisaari, and added that it would be an illusion to
expect that all sides would be happy with it.
It is important that the international community takes a common stance on the Kosovo
issue and endorse Ahtisaari's proposal, Drnovsek was quoted as saying.
Lipponen's talks with Prime Minister Janez Jansa were dominated by bilateral
relations, with Jansa saying that the two countries had set good foundations for the
development of economic cooperation.
Touching on EU issues, the pair agreed, according to the prime minister's office, that
a basic consensus will have to be reached on the bloc's energy policy. This would
serve as a framework for individual solutions for individual member states.
Lipponen also met representatives of the parliamentary committees on foreign policy
and EU affairs, Foreign Minister Dimitrij Rupel, and the heads of deputy groups.
Bajuk: EU Sees Slovenia's Public Finances as OK but Unsustainable
The EU's Economic and Financial Council (ECOFIN) highlighted the problem of an
aging population as it assessed the sustainability of Slovenia's public finances
The EU's Economic and Financial Council (ECOFIN) highlighted the problem of an
aging population as it assessed the sustainability of Slovenia's public finances on
Tuesday, 27 February. Finance Minister Andrej Bajuk labelled the report as "positive
on the whole", but pointed to the need for an open public debate concerning
Slovenia's long term problems.
The report praises Slovenia for its effective curbing of the budget deficit in recent
years, while suggesting that the country should do more to meet its public finance
goals more swiftly and improve long term sustainability.
Scrutinising Slovenia's 2006-2009 stability programme, Europe's finance ministers
pointed to the fact that in the long run Slovenia could be among those hit hardest by
demographics, which is plaguing the sustainability of public finance systems
throughout Europe.
Bajuk explained that analyses showed serious problems could set in Slovenia after
2020, which had already prompted the government to act.
According to him, the first measures are already giving results, however an open
debate is needed to prevent Slovenians from working ever longer hours for ever lower
pensions.
He highlighted the problem of low birth rates, housing for the young and the need to
"normalise" the domestic capital market and secure rights for small shareholders.
Bajuk further explained in Brussels that Slovenia had postponed its 2008 target of a
1% budget deficit to 2009, but "only due to the decision to increase investments in
railway infrastructure".
Trichet: Eurozone Should Open Labour Market to Slovenia
Jean-Claude Trichet, the president of the European Central Bank (ECB), reiterated
that eurozone countries should open its labour market for Slovenian labour as the
country has joined the eurozone
Jean-Claude Trichet, the president of the European Central Bank (ECB), reiterated on
Wednesday, 28 February that eurozone countries should open its labour market for
Slovenian labour as the country has joined the eurozone.
It is not normal that obstacles for Slovenia still exist, when there is a single market,
Trichet added at a meeting of Economic and Monetary Affairs Committee of the
European Parliament and the corresponding committees of national parliaments.
Trichet made a similar call on 15 January when Slovenia staged its central euro
takeover ceremony. He said then that the free movement of labour is a "natural
feature" of the single market and the single European currency.
Attending the two-day meeting themed "Eurozone - Converging or Drifting Apart?" is
also a three-member strong Slovenian delegation. At the meeting deputy Franc Feri
Horvat called for harmonisation of macroeconomic policies.
Horvat said that the reform of the stability and growth pact was good as it called for
more flexibility. He also said that such meetings should be repeated in the future.
LEGISLATION
Government Tightens Antitrust Legislation
The amendments define new offences, introduce the concept of lasting offences and
extend the statute of limitations to three years, among other things
The cabinet adopted on Thursday, 1 March amendments to the prevention of
restriction of competition act, which provide for a more effective persecution of
restrictive practices.
The amendments define new offences, introduce the concept of lasting offences and
extend the statute of limitations to three years, among other things.
Drawn up by he Economy Ministry, the changes bring the act in line with European
law, which stipulates that restriction of competition should be treated as offences and
penalised with fines.
Hitherto, such practices were treated as violations, which made persecution virtually
impossible.
STATISTICS / FORECASTS
Survey Finds Preference for Cinemas on the Decrease
The Mediana poll found that 15% of Slovenian between the ages of 15 and 75
preferred the cinema to home movies, which is down from 20% in 2003
A survey has found that interest among Slovenians for the cinema is dropping as
people prefer to watch films at home. The Mediana poll, data for which was released
to coincide with the Oscars, found that 15% of Slovenian between the ages of 15 and
75 preferred the cinema to home movies, which is down from 20% in 2003.
According to the findings of the survey, the share of home cinema owners in Slovenia
is rising and now stands at 14% of all households. Moreover, the survey also found an
increase in the share of people using their computer to watch movies from 28% in
2005 to 30% in 2006.
A drop in interest in cinemas is also manifested in the statistics that show that only
10% of Slovenians went to the cinema on a monthly basis in 2006, down from 13% in
2003.
People of up to 35 years of age are the most frequent cinemagoers, while an above
average share of cinemagoers lives in cities, a logical conclusion given that most
cinemas are located in cities.
The survey of cinema in Slovenia was carried out as part of the TGI survey carried
out by Mediana on 5,500 brand names. A total of 7,738 Slovenians between the ages
of 15 and 75 took part in the survey.
Meanwhile, data from the Slovenian Film Fund says Slovenians paid 2.7 million
visits to cinemas last year, a rise of 10.8% over 2005. While the number of sold
tickets in 2006 rose over 2005, it was down compared to 2004 and 2003, when around
3 million tickets were sold.
The Council of Europe (CoE) reported that the number of visitors in cinemas around
the EU rose by 4% in 2006. The survey by the European Audiovisual Observatory at
the CoE found that the number of those visiting cinemas rose in 17 out of the 20
countries monitored.
Survey: Slovenians Happy About Present, Worried About Future
Slovenians are happier than most people in the EU and they are among the four EU
nations that value work the most
Slovenians are happier than most people in the EU and they are among the four EU
nations that value work the most. However, they are not sure if they will receive
adequate pensions, shows a Eurobarometer survey on Europe's social reality
published in Brussels on Monday, 26 February.
While 87% of EU inhabitants consider themselves lucky, the share is 2 percentage
points higher in Slovenia. Topping the list of the happiest EU nations are the Danes,
the Irish and the Dutch, while the citizens of the Baltic states, Hungarians and
Bulgarians are the least happy.
Work is treated as a value by 90% of Slovenians. The country shares first place with
France, Luxembourg and Italy, while the Irish and the British see it as a less important
value with 69% and 66%, respectively.
Despite holding work in such high esteem, the majority of EU citizens are not
convinced about the prospects for adequate pensions. While 42% of Danes, Finns and
the Dutch believe that their pensions would be adequate, the share of Slovenians
stands at 35%.
The Europeans meanwhile placed work fifth on the scale of important things in life.
Coming first was health, followed by family, friends and free time. Health is
important for all Slovenians, religion for some 50% and even fewer believe politics is
important.
Views about equal access to higher education vary significantly among the EU 27,
with Slovenians (58%) being at the forefront of the camp that believes that all
students should have access to higher education. However, the majority of people
across the EU believe higher education institutions must be able to select students.
Unemployment at 5.6% in the 4th Quarter of 2006
Unemployment among men was down 0.1 of a percentage point to 4.5%, but it
increased by 0.2 of a point among women to 6.9%
Labour Force Survey data shows that Slovenia's unemployment rate was at 5.6% in
the last quarter of 2006, on par with the previous quarter. Unemployment among men
was down 0.1 of a percentage point to 4.5%, but it increased by 0.2 of a point among
women to 6.9%, the National Statistics Office said on Wednesday, 28 February.
In the fourth quarter of 2006 there were 956,000 persons in employment in Slovenia,
18,000 fewer than in the previous quarter. The decrease was due to less student work
and a drop in the number of entrepreneurs and their employees.
The number of unemployed persons decreased by nearly 1,000 to 56,000 over the
quarter before.
Unemployment remains highest in the 15-24 age group (12.3%). The lowest
unemployment rate was registered among elderly persons (55-64 age group): it was at
3.0% and significant for men since there were almost no unemployed women in the
this age group.
Compared to the third quarter of 2006, the size of the inactive population increased by
almost 3% to 715,000. This was mainly due to students who started studying instead
of working. The number of retired persons increased as well.
The data is taken from the Labour Force Survey, which is based on internationally
adjusted definitions of the International Labour Organisation (ILO) and the EU's
Eurostat.
Factory-Gate Prices Up 0.6% in January
Factory-gate prices increased by 0.6% in January over the previous month
Factory-gate prices increased by 0.6% in January over the previous month, Laura
Sustar Kozuh of the National Statistics Office told the press in Ljubljana on
Wednesday, 28 February.
The office has introduced a new index - index of factory-gate prices - which consists
of the current factory-gate price index for domestic market and a new factory-gate
price index for foreign markets.
Prices of intermediate goods increased in January by 0.8% on both domestic and
foreign markets. The prices of capital goods went up by 0.5% on domestic market,
while the increase on foreign markets was 1.3%.
The difference in capital goods was due to market conditions, production costs and
prices of raw materials, said Sustar Kozuh.
The difference was also observed in consumer goods prices, which went up by 0.5%
on the domestic market and dropped by 0.2% on foreign markets, she added.
Number of Overnight Stays Up 4% in 2006
A total of 2,484,605 tourists accounted for 7,722,267 overnight stays last year
The number of guests at accommodation facilities rose by 4% in 2006, according to
the National Statistics Office. A total of 2,484,605 tourists accounted for 7,722,267
overnight stays last year, the office said on Wednesday, 28 February.
According to the data, 58% of the overnight stays were made by foreign tourists.
Italians topped the list with 20%, followed by Austrians (15%), Germans (14%),
Britons (7%) and Croatians (6%).
In January 2007 the number of overnight stays dropped by 1%, compared to the same
month in 2006. According to the data, the number of guests in January stood at
130,930, each of whom spent 3.5 nights on average.
While the number of overnight stays by foreign tourists increased by 7%, the number
of overnight stays of domestic guests dropped by 12%.
Croatians topped the list in January (27%) and were followed by Italians (24%),
Austrians (9%), Britons and Russians (5%).
FINANCE
KAD's Performance Exceeds Expectations
The Pension Fund Management (KAD), a state-run fund, posted a net profit of just
under EUR 13m for 2006, after transferring the bulk of its earnings (EUR 39m) to the
Pension and Disability Insurance Institute
The Pension Fund Management (KAD), a state-run fund, posted a net profit of just
under EUR 13m for 2006, after transferring the bulk of its earnings (EUR 39m) to the
Pension and Disability Insurance Institute. Its net revenues in 2006 have exceeded
plans by 6%, KAD said in a press release on Monday, 26 February.
In 2006, KAD sold shares in 54 companies. Ten were shareholdings in public
companies in the total value of EUR 24m, while 44 were shares in privately-held
companies worth a total of EUR 34m.
At the end of 2006, KAD had a portfolio of 132 active investments and 26
investments in the process of liquidation or bankruptcy, the press release reads.
By mid-February, KAD, the state-run SOD and the DSU management and
consultancy enterprise, sold stakes in nine out of 30 companies that they put up for
sale in October. Three procedures are ongoing.
Petrol Prices Up, Diesel Down
Petrol prices in Slovenia are adjusted every two weeks to prices of oil derivatives on
the global markets and the exchange rate of the US dollar
Regular unleaded petrol costs 1.3 cents more as of Tuesday, 27 February (EUR
0.967), while premium is being sold at EUR 0.979, up 1.4 cents.
On the other hand, diesel costs EUR 0.907, which is 0.2 cents less, whereas heating
oil went down by 0.2 cents to EUR 0.548.
Petrol prices in Slovenia are adjusted every two weeks to prices of oil derivatives on
the global markets and the exchange rate of the US dollar.
Profit at Abanka Soars, Total Assets up 15%
Abanka Vipa, a top-5 Slovenian bank, increased net profit by 53% in 2006 to EUR
26.25m and exceeded plans by nearly a third
Abanka Vipa, a top-5 Slovenian bank, increased net profit by 53% in 2006 to EUR
26.25m and exceeded plans by nearly a third. Total assets grew by 15.1% to EUR
2.862bn, suggest the bank's unaudited results, which were released on Wednesday, 28
February.
With a market share of 8.5% in 2006, Abanka Vipa was Slovenia's third-largest bank
by total assets, which are projected to expand by another 17% this year. Net profit is
expected to increase by 10% to EUR 28.8m.
For this year Abanka expects brisk growth in loans to companies and households, as
well as investments in securities.
The bank's biggest owners are insurer Zavarovalnica Triglav (21.27%), investment
fund Zvon Ena Holding (16.08%) and asset management firm FMR (9.84%).
Banka Celje Beats 2005 Profit by 21%
Banka Celje, one of Slovenia's larger banks, increased profit by 21% to EUR 16.7m
in 2006
Banka Celje, one of Slovenia's larger banks, increased profit by 21% to EUR 16.7m in
2006, while its total assets amounted to EUR 1.96bn, up 14% over 2005, the bank
said on Wednesday, 28 February.
The bank's management projects profit will rise by 8% in 2007 to reach EUR 18m.
Nova Ljubljanska banka (NLB), Slovenia's largest bank, remains Banka Celje's
largest single shareholder. It increased its stake in the Celje-based bank from 30.6% to
40.99% in 2006.
Banka Celje has the status of an associate member of the NLB group.
Profit at NKBM 82% above Plans
Nova Kreditna banka Maribor (NKBM), Slovenia's second largest bank by assets,
posted a net profit of EUR 35.93m in 2006
Nova Kreditna banka Maribor (NKBM), Slovenia's second largest bank by assets,
posted a net profit of EUR 35.93m in 2006, up 4.5% over 2005 and 82% above plans,
according to unaudited results published on Wednesday, 28 February.
Total assets meanwhile rose 22.6% to EUR 3.67bn and, according to plans, are
projected to expand by a further 15% this year.
The bank expects loans to households to increase by 25% in 2007, while liabilities to
banks are to expand by 36%.
Net profit is to top EUR 25.9m in 2007.
NKBM is also slated for privatisation, however no tangible plans have yet been
unveiled.
The state owns 90.4% of the bank, while the state-run KAD and SOD funds hold a
4.8% stake each.
March Brings Excise Duties on Electricity
Amendments to the excise duties act passed by parliament at the end of 2006 entered
into force on 1 March, introducing excise duty on electricity for households and
commercial use and reducing administrative barriers on the electricity market
Amendments to the excise duties act passed by parliament at the end of 2006 entered
into force on Thursday, 1 March, introducing excise duty on electricity for households
and commercial use and reducing administrative barriers on the electricity market.
The excise duty for electricity used by households is set at one euro per megawatt
hour, whereas the duty for commercial use is set at EUR 0.5.
According to electricity distributor Elektro Ljubljana, the excise duty will increase the
total electricity costs for households by 1.15%, given that there will not be any
additional price increases.
An average business user on the other hand can expect a monthly increase in costs of
about EUR 0.32.
The excise duty act amendments were originally planned to kick in with 1 January
2007 but where delayed until March in order to contribute to price stability during the
euro changeover. The two-month is estimated to have deprived the budget of EUR
1.3m.
Electricity prices will continue to be regulated by the state until 1 July, whereupon EU
members states will have to completely open their electricity markets.
While Economy Minister Andrej Vizjak has said that this would probably not entail
substantial increases in prices, distribution companies have already proposed an
increase of almost 10%.
Commission-Free Exchange of Tolars at Banks Ends
Banks, postal offices and savings banks are able to charge commission for changing
tolars into euros as 1 March marked the last day of two-month period in which they
had to provide the service free of charge
Banks, postal offices and savings banks are able to charge commission for changing
tolars into euros as 1 March marked the last day of two-month period in which they
had to provide the service free of charge.
Meanwhile the central bank will continue to convert tolar cash to euros for free.
While tolar coins will be accepted until 31 December 2016, there is no deadline for
the exchange of banknotes.
By next week Banka Slovenije will select one or more commercial banks to continue
to provide the service on its behalf for free. Pending its decision, most major banks
have not yet decided on the amount of the commission they want to charge.
According to data provided by the central bank, commercial banks, postal offices and
savings banks have so far collected some 93% of the tolar bank notes in circulation.
Coins have been trickling in more slowly - so far 33% of the coins in circulation at the
end of 2006 have been returned.
Following the 1 January euro changeover, all postal offices have fully switched to
euro stamps. Tolar stamps can be exchanged for the ones in cents in nine major postal
offices across the country until the end of the year.
Slovenia introduced the euro as legal tender on 1 January 2007, while it fully
scrapped the tolar - its national currency for 15 years - two weeks later as the period
of dual circulation ended.
Ljubljana Stock Exchange
The main market SBI 20 index shed 127.77 points (1.77%) to 7,075.97
Investors had another dismal week on the Ljubljana Stock Exchange (LJSE), as stocks
continued their plunge in sync with global trends. The main market SBI 20 index shed
127.77 points (1.77%) to 7,075.97 and the SBI TOP index of the six biggest blue
chips lost 49.67 points (3%) to 1,604.85.
The losses came on a moderate turnover of EUR 36.33m and despite upbeat 2006
results released by the majority of the big names last week. Block trade meanwhile
amounted to EUR 6.17m.
Pharma company Krka was the most popular blue chip last week, accounting for EUR
10.78m in regular deals and EUR 2.72m in block trade.
Krka shed 5.41% to a two-month low of EUR 835.74, despite double-digit growth in
2006, when it upped its net profit by 21% to EUR 113m.
Telco Telekom Slovenije meanwhile shed 1.98% to EUR 544.07 on a turnover of
EUR 4.46m with additional EUR 200,000 coming in block trade. The telco posted a
net profit of EUR 100.7m (up 5%) in 2006.
The third most popular item among the big names was logistics company Intereuropa,
which added 0.56% to EUR 27 on deals worth EUR 2.8m. Intereuropa posted a 2006
net profit of EUR 6.7m, down 30% on 2005.
Winners were few and far between last week, with pharmaceutical wholesaler Salus
soaring by 8.29% to EUR 758 and technical goods chain Merkur picking up 1.09% to
EUR 228.48, both on paper-thin volumes.
The free market saw deals totalling EUR 4.61m with furniture trader Lesnina adding
2.94% to EUR 1,811.33 on a turnover of EUR 280,000, while investment company
NFD shed 3.85% to EUR 2 on a turnover of EUR 590,000.
The PIX investment fund index shed 171.1 points (3.01%) to 5,518.95, while the BIO
bond index dropped 0.77 points (0.65%) to 117.58.
BRANCH INFORMATION
Slovenian Wines Praised in New York
Slovenian wines, which can boast numerous awards at international level, were given
another recognition as they were presented at the renovated Le Du Wines wine store
in New York's West Village
Slovenian wines, which can boast numerous awards at international level, were given
another recognition as they were presented at the renovated Le Du Wines wine store
in New York's West Village.
The store's owner, award winning sommelier Jean Luc Le Du, said that he found
Slovenian wines to be a pleasant surprise and that some of them have been graded as
top quality even on the international level.
Speaking for STA, Le Du highlighted the Batic Valentino 2003 desert wine, which is
selling at US$ 65 per bottle.
Some of the wines offered by Le Du, include the Graben Sauvignon Blanc 2003 from
the Bizelijsko-Sremic region and Santomas Vintner's Choice 2000 a blend of 80%
Refosco, 15% Cabernet Sauvignon and 10% Merlot.
Responsible for the import of Slovenian wines to the US is the Slovenian-born
businessman Emil Gaspari, who started the cooperation with Le Du five years ago,
when the latter was still the sommelier at the famous New York restaurant Daniel.
According to Gaspari, there is great interest for imported Slovenian wines. He ships
them to 40 stores and restaurants and three hotel chains.
Ministry Unveils Information Society Strategy
The strategy aims to facilitate the development of the information society
The Higher Education, Science and Technology Ministry unveiled Monday, 26
February a draft strategy for the development of the information society in Slovenia
through 2010.
The strategy aims to facilitate the development of the information society, which
would in turn boost the country's competitiveness, improve the quality of life and
provide for balanced regional development.
According to Andrej Flogie, head of the Information Society Directorate at the
ministry, the state will focus on projects in e-health, e-justice and open-source
solutions.
The strategy's aims include broadband internet access for all Slovenians, a transition
from analogue to digital broadcasting, increasing the availability to cultural heritage
in digital form and guaranteeing equal possibilities for inclusion into information
society to all social groups.
Slovenia Places 44th in Global Tourism Competitiveness Survey
The highest ranked among the 124 countries included in the survey are Switzerland,
Austria and Germany
Slovenia placed 44th in a survey on the most attractive environments for developing
the tourism industry published by the World Economic Forum (WEF) on Thursday, 1
March. The highest ranked among the 124 countries included in the survey are
Switzerland, Austria and Germany.
Slovenia received good grades for health and hygiene, safety and tourist
infrastructure, while its weaker points included its regulatory framework, airline
infrastructure and price competitiveness in tourism.
WEF indicators include data on legislation, environmental protection, safety, health
and hygiene, traffic, tourist and information infrastructure, price competitiveness,
human resources, and natural and cultural resources.
Among individual sub-indicators that make up the tourism competitiveness indicator,
Slovenia got the highest ranking for access to quality drinking water and sanitation,
and the quality of primary education.
On the other hand, Slovenia received poor rankings (below 100th place) in subindicators related to the regulation of direct foreign investment, restrictions to foreign
ownership, bilateral agreements in airline services, the number of airlines, and petrol
prices.
"Our study is not a beauty contest, or a statement about the attractiveness of a country.
On the contrary, we aim to measure the factors that make it attractive to develop the
travel and tourism industry of individual countries," Jennifer Blanke of the WEF said
about the survey in a press release.
"The top ranking countries demonstrate the importance of supportive business and
regulatory frameworks, coupled with world-class transport and tourism infrastructure
and a focus on nurturing human and natural resources, for fostering an environment
that is attractive for developing the travel and tourism sector," Blanke added.
Lagging at the bottom of the WEF rankings were Mozambique, Cameroon and
Ethiopia.
In the first response to the report in Slovenia, a government official has said that the
results confirm that Slovenia is becoming a developed tourist destination.
The director of the Tourism Directorate of the Economy Ministry, Marjan Hribar, told
STA on Tuesday, 27 February that Slovenia would pay close attention to its weakest
points and make efforts to increase tourism competitiveness with new investment,
innovativeness and introduction of new airlines.
Government Passes Agriculture Grants Programmes Worth EUR 587M
The cabinet adopted the regulatory framework needed to launch subsidy measures in
agriculture
The cabinet adopted on Thursday, 1 March the regulatory framework needed to
launch subsidy measures in agriculture. The measures allocate EUR 587.64m for the
2007-2013 period, Gvido Mravljak of the Agriculture, Forestry and Food Ministry
told the press following the cabinet's session.
The state secretary added that the countryside development programme for the 20072013 period would give farmers the chance to vie for EUR 282.39m (EUR 40.34m
per year) in balance payments for areas with less favoured conditions for agriculture
production.
Agriculture- and environment-related payments were meanwhile set at a total of EUR
305.25m (EUR 42.75m per year), Mravljak added.
The Agriculture and Forestry Chamber said in its reaction that the regulations were
not agreed with the chamber.
According to the chamber, while agriculture would get more money in general, the
amount for specific measures has been reduced in comparison with previous years,
while the chamber was not notified of the changes.
Farmers Oppose Government Decree on Subsidies
The decree on money allocated for agriculture grants between 2007-2013, adopted by
the cabinet was heavily criticised by farmers from the regions of Pomurje and
Stajersko
The decree on money allocated for agriculture grants between 2007-2013, adopted by
the cabinet on Thursday, 1 March, was heavily criticised by farmers from the regions
of Pomurje and Stajersko on Friday, 2 March. The squeeze will cause huge problems
for the farmers in Slovenia's most agriculture-intensive regions, they said.
The decree is unjust, as cabinet members promised farmers that their status would not
worsen as they toured the region a week ago, said Franc Meolic of the Murska Sobota
office of the Agriculture and Forestry Chamber (KGZS).
The decree, which envisages EUR 587.64m in grants, allocated less for the farmers
than the amount which had already been agreed with the Agriculture, Forestry and
Food Ministry, Meolic added.
This has severely worsened the position of the farmers in northeastern part of
Slovenia, which is still the country's poorest region, he said.
According to Franc Rezonja of the Agriculture and Forestry Institute in Murska
Sobota, farmers from Pomurje alone would get EUR 42m less in the period sevenyear period.
The Murska Sobota farmers were joined in their protests by their colleagues from Ptuj
and Maribor.
Ski Resorts Hit Hard by Mild Winter
Slovenian ski resorts have been hit hard by the unusually mild winter and lack of
snowfall
Slovenian ski resorts have been hit hard by the unusually mild winter and lack of
snowfall. It will be a while before hard figures are out, but the Association of
Slovenian Ski Operators estimates that the number of skiers will be almost 60% lower
than last year, when a record 1.94 million people hit the slopes.
Yet the picture is not all bleak: while many resorts lie at low altitudes and had to close
for the season already, big high-lying venues such as Kanin in the west of the country
are still open and have plenty of snow.
There is no reason for satisfaction, but nor is the season a disaster, as some of the
bigger resorts are still open, Dusan Bozicnik, the secretary of the association, told
STA.
"I cannot give any hard figures yet. But the number of skiers at the 44 Slovenian ski
resorts is almost 60% lower at the moment," said Bozicnik.
One of the resorts that was hit hardest is Stari Vrh, a small venue north of Skofja
Loka, which spend EUR 4m on a brand-new six-seat chair lift but only had 18 days of
skiing this year.
"We cannot be happy. We had 86,000 skiers last year but only 18,000 this year.
According to rough estimates, we lost EUR 600,000," said Matej Demsar, the director
of STC Stari Vrh.
However, Demsar remains an optimist. "There is a green winter every few years, but
we're counting on covering the shortfall in the coming seasons."
According to Bozicnik, there are also big differences by type of venue: small resorts
that attract mostly one-day guests took a beating, but big resorts saw almost no
cancellations due to mild weather.
His statement is borne out by figures for Kanin, Slovenia's highest-lying ski resort and
the only one with slopes higher than 2,000 metres above sea level.
The number of skiers is up nearly 45% over last year. ATC Kanin director Ales Ursic
did not wish to speak about the numbers, but he projects this will be the best season in
15 years for the resort.
Kanin currently has over two metres of snow and is expected to remain open into the
first week of May.
Overall, the resorts are optimistic despite growing warnings that climate change is
going to render skiing at low-lying resorts impossible, which will also affect banks'
decisions about providing loans.
A recent OECD suggests it is highly inadvisable to invest in slopes lying beneath
1,200 metres due to the impact of climate change on the Alps.
There will be green winters, but they will not have a significant impact on investment,
Bozicnik said.
COMPANIES
Aerodrom Ljubljana Reports 10% Increase in Net Profit
The company managing the Ljubljana airport generated EUR 28.7m in operating
revenues in 2006
The company managing the Ljubljana airport generated EUR 28.7m in operating
revenues in 2006, which marks an increase of 9% on the year before. According to the
figures released by Aerodrom Ljubljana on Tuesday, 27 February, its net profit was
up 10% to EUR 8.8m, while operating profit surged by 23% to EUR 9.9m.
The number of passengers was up 10% to 1.3 million, while cargo volumes went up
by 32% to 15,309 tonnes, the press release posted on the website of the Ljubljana
Stock Exchange says.
Last year one new air carrier joined companies operating scheduled flights from the
airport in Brnik, some 25km northwest of Ljubljana, as Turkish Airlines launched
three weekly flights between Ljubljana and Istanbul.
Low budget carrier Wizzair launched flights to London and Brussels in May, but
announced in January that it would close down the Ljubljana-London route on 1
March.
Slovenian flag carrier Adria Airways opened three new routes, connecting Ljubljana
with Rome, Barcelona and Tirana. At the end of December, the carrier launched its
first scheduled flight to Kiev.
In late November, package delivery company UPS launched a daily cargo flight
between Ljubljana and its hub in Cologne.
The new arrivals had prompted the airport to upgrade its infrastructure. Last year it
expanded the apron by some 5,800 square metres, and in July signed a contract with
SCT on the construction of the first phase of a new passenger terminal and giving the
existing one a facelift.
According to the press release, the plan for this year is to increase passenger numbers
by 9% to nearly 1.45 million and raise cargo volumes by 10% to 16,830 tonnes.
As a result the company expects growth in operating revenues as well as costs. Due to
expansive investment, which is to amount to EUR 28.4m, net revenues from financial
activities will be lower than last year.
This year's net profit is planned to increase by 9% to EUR 9.6m.
Pharma Wholesaler Salus Increases Revenues, Profit Down
Pharmaceutical wholesaler Salus generated sales revenues of EUR 188.7m in 2006
Pharmaceutical wholesaler Salus generated sales revenues of EUR 188.7m in 2006,
which is 7.4% up from the year before. According to the unaudited figures posted on
the company's website, the net profit decreased by 5.7% to EUR 6.3m.
The company believes that the main reason for the drop in profit is lower margins.
This reveals negative impact of the state drug prescription system that favours lowpriced generics and other state restrictions in health care, and also fiercer competition
among wholesalers, the press release on the Salus website says.
Adria Airways Carrier Out of Red in 2006
Adria Airways managed to end 2006 with a net profit of EUR 70,000
Flag carrier Adria Airways managed to end 2006 with a net profit of EUR 70,000, the
company said on Tuesday, 27 February. The paper-thin profit comes after the
company posted a loss of EUR 9m in 2005.
The national airline's revenues meanwhile increased by 17% to just under EUR 160m,
chief executive Tadej Tufek told the press in Ljubljana.
The company also increased the number of its passengers by 10% to over 1 million,
and boosted its occupancy rate to 64% in the past year.
Adria Airways moreover employed 49 new workers, pushing the number of its
employees to 592. It plans to open 108 new jobs by 2012.
Upbeat business results were buoyed by successful restructuring and effective costcutting as well as more favourable deals with suppliers and refinancing of debt,
management board vice-chairman Marjan Ravnikar added.
Adria also plans to add two Canadier CRJ900 to its fleet of 13 planes, buying one and
leasing the other, Tufek said.
The company will continue to bolster its position in the plane maintenance business
and begin construction of its third hangar for such purposes this year, Tufek revealed.
Telekom's Revenues up 9%, Profit Exceeds EUR 100m
The group around telco Telekom Slovenije posted operating revenues of EUR 733.6m
for 2006, an increase of 9% year-on-year
The group around telco Telekom Slovenije posted operating revenues of EUR 733.6m
for 2006, an increase of 9% year-on-year. Net profit increased by 5% to EUR 100.7m
in a year that chief executive Bojan Dremelj described as "full of challenges and very
successful for the group".
The parent company Telekom Slovenije, which runs the fixed-line business, increased
sales by 6% to EUR 406.2m, while profit before income tax, depreciation and
amortisation stood at EUR 67.2m. "This is a success," board member Filip OgrisMartic told the press on Tuesday, 27 February.
Telekom's wireless subsidiary Mobitel posted an operating profit of EUR 62.2m, up
11% year-on-year, with net profit at EUR 44.3m. Mobitel chief executive Klavdij
Godnic said the company managed to increase the number of users last year to 1.28
million.
Profits at internet service provider Siol meanwhile surged by 32% to EUR 2.2m. Siol
director Rudolf Skobe said the subsidiary would be fully integrated in the group at the
end of March.
The group spent EUR 160m on investments last year. Over half of the money was
invested in key projects by the parent company, while 40% of the total was spent by
Mobitel on infrastructure, according to Dremelj.
Dremelj said the group would have to integrate horizontally in the future. "I see the
group as a holding with clear roles for fixed and mobile telephony and a new segment
of content."
The company intends to establish a separate company in the coming months which
would provide the content currently generated by the individual companies in the
group.
For 2007, the group's main objectives would include increasing stakeholder value,
developing new services and expansion in particular to markets in Southeast Europe
and the Mediterranean.
"We have taken great strides, now we have to make sure these companies grow,"
Dremelj said. "This year we will invest more energy in the growth of companies that
we have already acquired than in the acquisition of new ones."
Dremelj said the group's big challenge this year would be the construction of a GSM
network in Kosovo, where Telekom won the licence for the second mobile operator
through its Kosovo subsidiary Ipkonet.
Gorenje Ups Revenues, Profit in 2006
The Gorenje group around the namesake household appliance maker increased net
revenues to EUR 1.1bn in 2006, up over 10% over 2005
The Gorenje group around the namesake household appliance maker increased net
revenues to EUR 1.1bn in 2006, up over 10% over 2005. Net profit was up 4.4% to
EUR 22.3m, the group said on Tuesday, 27 February. Gorenje generated net revenues
to the tune of EUR 340m in the last quarter alone.
Gorenje chairman Franjo Bobinac was pleased with the results. He told the press in
Velenje that the figures would have been even higher had it not been for surging input
costs.
According to Bobinac, the group performed better with almost the same number of
employees, which means that each of the 10,800 workers did more.
Gorenje plans to manufacture four million household appliances in 2007, Bobinac
revealed. It expects sales revenues to rise by EUR 100m while profit is to remain
virtually flat at EUR 23m.
The chairman also said that the group spent EUR 79m for investments last year, while
investments this year are to amount to EUR 47.8m.
Gorenje is also on track with a planned EUR 7.63m capital injection, endorsed by the
company's annual general meeting in December.
"I expect the capital increase to be completed by the end of April and we plan to use
these funds for takeovers," he said.
Bobinac refused to name Gorenje's takeover targets, but said that the company's
supervisory board has been notified of them.
He did stress, however, that Gorenje plans to construct factories where labour is
cheaper, for example in Eastern Europe.
Mlinotest Posts Profits but Misses Targets
Mlinotest, the bread and pasta maker, posted EUR 24.2m of sales revenues in 2006
Mlinotest, the bread and pasta maker, posted EUR 24.2m of sales revenues in 2006,
which is 1% more than in 2005, but 4% below the targets, according to unaudited
data.
The net profit was at EUR 509,000, which is 45% less than in 2005 and well below
the target, the company said in a press release on Tuesday, 27 February.
According to the release, continued pressure by retailers to reduce prices and the
increase in wheat prices in the last quarter of 2006 increased costs beyond projections.
Mlinotest was acquired by the financial firm Vipa in December. The company said
that plans for this year therefore depended on possible changes in ownership.
Merkur Posts Double-Digit Growth in Sales, Profits
Technical goods chain Merkur posted a net profit of EUR 21.59m for 2006
Technical goods chain Merkur posted a net profit of EUR 21.59m for 2006, up 44.3%
year-on-year according to unaudited results. Net sales amounted to almost EUR 1bn,
which is 27.5% more than in the year before, the company said on Tuesday, 27
February.
The management board labelled the performance as successful. "Even more
importantly, we have strengthened Merkur's role as the leading technical goods trader
in Southeastern Europe," the press release reads.
Sales across all segments grew at between 10% and 20%. The fastest growing
business was the sale of metallurgical products, which expanded by 35% and now
accounts for a third of the group's revenues.
Revenues on foreign markets increased by over 50%, increasing the share of revenues
generated abroad to almost 20%. Serbia was the fastest growing market, the revenues
there increasing almost threefold year-on-year.
Revenues in Slovenia were up 25%.
Merkur said activities were under way for the construction of new retail centres in
Maribor, Koper, Murska Sobota, Ljubljana and Skofja Loka.
Abroad, new centres will be built in Croatia's Zagreb and Split as well as in Novi Sad,
Serbia and the Bosnian capital Sarajevo.
The unaudited results were discussed by the company's supervisory board.
Istrabenz Publishes Takeover Bid for Droga Kolinska
The offer is worth EUR 16 per share
The Istrabenz conglomerate on Wednesday, 28 February published a takeover bid for
just under 40% of Droga Kolinska, Slovenia's largest food company, that it does not
already own. The offer is worth EUR 16 per share, which values the outstanding stake
at EUR 91m.
Even before it formally published the takeover bid (which runs until 28 March),
Istrabenz struck a deal with two of the largest shareholders, asset management firms
Poteza Nalozbe and Maksima Holding, which will sell their combined 14.85% stake
at the takeover price.
When it announced the offer on 16 February, Istrabenz said the move was a way of
taking responsibility for and control over restructuring at Droga Kolinska.
"The group faces a tough period of risky restructuring of the portfolio of programmes
and brands. This is crucial if we are to secure the long-term success of Droga
Kolinska as it competes with global corporations," Istrabenz CEO Igor Bavcar wrote
in a press release at the time.
Droga Kolinska was created with the merger of two food companies (Droga and
Kolinska) in January 2005, which was masterminded by Istrabenz. The merged
company, then in 55% ownership of Istrabenz, was taken public in October 2005.
Terme Catez Increases Net Profit by Nearly 9%
Spa manager Terme Catez posted EUR 26.5m in operating revenues in 2006, up
16.9% year-on-year, while the net profit was up 8.9% EUR 3.8m
Spa manager Terme Catez posted EUR 26.5m in operating revenues in 2006, up
16.9% year-on-year, while the net profit was up 8.9% EUR 3.8m, according to the
unaudited data released by the company on Wednesday, 28 February. The operating
profit amounted to EUR 5m, up 35.1% over 2005.
The company plans to post EUR 28.4m in operating revenues in 2007, up 9.1% over
the estimate for 2006, while the operating profit is projected to increase by 23.4% to
EUR 5.4m.
Terme Catez expects to post over 662,000 overnight stays in 2007, up 7% than last
year, and plans to spend EUR 12.5m on investments.
The company recorded 623,126 overnight stays in 2006, which is 6.5% more than in
2005. Slovenian guests accounted for 394,988 overnights, which is a 0.9% increase
year-on-year, while foreign guests accounted for 228,138 overnights, which is 18.1%
more than in 2005.
Last year, the company invested more than one million euros in the renovation of
various facilities, and spent EUR 2.3m to give Mokrice Castle a facelift. It also
completed the construction of 40 apartments in the Portoroz marina.
HSE Shortlisted for Big Energy Deal in Macedonia
HSE, which filed the bid together with German utility RWE, is one of the six bidders
that made it to the second round of the selection process for the construction of hydro
plants Cebren and Galiste
Slovenian power producer HSE has been shortlisted for an energy project in
Macedonia that involves the construction of two hydroelectric power plants,
Macedonian Economy Minister Vera Rafajlovska said after talks on Wednesday, 28
February with Slovenian counterpart Andrej Vizjak.
HSE, which filed the bid together with German utility RWE, is one of the six bidders
that made it to the second round of the selection process for the construction of hydro
plants Cebren and Galiste. The project is estimated at close to EUR 500m, STA has
learnt.
Rafajlovska and Vizjak said the governments and companies from both countries
were interested in upgrading cooperation, including through the formation of joint
ventures.
Vizjak added that energy was top of the list for Slovenian companies along with
wellness tourism considering that Macedonia was rich in thermal water sources. He
said spa operator Terme Olimia had expressed interest in investing.
Mercator's Profit, Sales Grow at Double-Digit Rates
Retailer Mercator posted net sales of EUR 2.1bn for 2006
Retailer Mercator posted net sales of EUR 2.1bn for 2006, up 18.1% over the year
before. The group's net profit soared by 121.3% to EUR 30.1m, according to
unaudited results released on Wednesday, 28 February.
However year-on-year results are not entirely comparable, as Era stores in Croatia
were included in the balance sheet in the last quarter of 2005 and the Serbian retailer
M-Rodic in the last quarter of 2006.
That taken into account, like-for-like net profit jumped by 23.6% in 2006 to EUR
26.6m, Mercator chairman Ziga Debeljak told the press.
This year the company plans net sales revenues to the tune of EUR 2.3bn, up 13.3%,
and a net profit in excess of EUR 30m.
Debeljak said the group wanted to remain the biggest retailer in Slovenia (its market
share was 46% last year), and become a market leader in Croatia, Serbia and BosniaHerzegovina.
Beyond 2010 Mercator wants to penetrate other markets in Southeast Europe
(Romania, Bulgaria, Macedonia, Albania and Montenegro), expand the non-grocery
segment (which now accounts for 15% of the sales) and improve performance, he
said.
In Croatia Mercator's revenues grew by 37.6% to EUR 261m through organic growth
as well as the integration of stores it bought from Slovenian retailer Era. Its market
share stood at 3.6%, while sales are projected to top EUR 280m this year.
In Serbia the subsidiary Mercator-S expanded its market share to 8% with the
acquisition of a 75% stake in M-Rodic. Sales grew by 177.2% to EUR 126m (like-forlike sales were up 22.2%) and are expected to top EUR 372m this year.
Debeljak does not expect any impact on business from a possible tie-up between the
Serbian and Croatian market leaders, Delta and Agrokor. They are already important
rivals, he said.
In Bosnia Mercator posted sales of EUR 56m, an increase of 16.1% year-on-year. The
revenues are projected to increase by 12% to EUR 63m, which would raise its market
share from 2% to 5%.
Mensud Lagumdzija, the head of the Bosnian subsidiary Mercator-BH, said small
retailers account for 80% of the retail market, which offers ample growth prospects
for Mercator.
Krka Ups Profit by 21% in 2006
Pharma company Krka generated EUR 586.1m in net sales revenues in 2006
Pharma company Krka generated EUR 586.1m in net sales revenues in 2006, up 20%
over the year before, while profit rose 21% to EUR 113m, according to
unconsolidated and unaudited business results released by the Novo mesto-based
company on Wednesday, 28 February.
The company managed to boost the share of exports, selling products worth EUR
510.8m abroad, 87% of all sales revenues.
Krka says it increased sales in all regions, with Eastern Europe the fastest growing
market (+35%). Its largest single market is Russia, where the company sold EUR
126.9m worth of products.
Eastern Europe accounted for 30% of Krka's sales. It was followed by Central Europe,
where the company sold EUR 136.1m worth of products, 22% more than in 2005.
Central Europe accounted for 23% of sales.
Western Europe and overseas countries accounted for 17% of the sales, the same as
Eastern Europe, while 13% of Krka's products were sold in Slovenia.
The lion's share of Krka's revenues came from prescription drugs, which accounted
for 82% of all revenues.
The pharma company invested EUR 88.9m in 2006, mainly in a new plant for the
manufacture of active ingredients in Novo mesto.
This year the company plans double-digit growth, mainly by boosting exports, whose
share is projected to exceed 90%.
Krka plans investments worth EUR 100m. Its workforce is to expand to over 4,600 by
the end of 2007.
Port Operator Luka Koper Increases Profit 3% to EUR 20.7m
The Luka Koper group, centred around the port operator of the same name,
generated operating revenues to the tune of EUR 105.7m in 2006
The Luka Koper group, centred around the port operator of the same name, generated
operating revenues to the tune of EUR 105.7m in 2006, up 14% over the year before.
The group's net profit meanwhile stood at EUR 20.7m, up 3% over 2005, show
unconsolidated results published on Wednesday, 28 February.
According to the management of Slovenia's sole seaport, the upbeat results were
underpinned by a record transhipment of 14 million tonnes of cargo in 2006.
The group managed to generate 77.6% of its revenues on foreign markets, mainly in
the EU.
This year's plans include an increase in transhipments by 2% and an expansion of port
and logistics services. The company also plans to launch construction of a car park for
10,000 vehicles.
Luka Koper's largest single shareholder is the state with 51%. The state-run SOD fund
meanwhile owns 11.1% of the company, while another state-run fund, KAD, holds
4.8%.
BTC Increases Revenues, Profit in 2006
The BTC group, the manager of the biggest shopping and logistics hub in Ljubljana,
generated sales revenues of EUR 42.4m in 2006
The BTC group, the manager of the biggest shopping and logistics hub in Ljubljana,
generated sales revenues of EUR 42.4m in 2006, up 11% over 2005. Net profit stood
at EUR 4.9m, the company said on Wednesday, 28 February.
Excluding one-off events, like-for-like profit meanwhile stood at EUR 1.8m, a 19%
increase over 2005, according to unconsolidated results.
The company invested EUR 3.5m in 2006 and will continue to upgrade its City retail
concept. It will focus on improving parking and transport in the complex, including
by introducing a free bus on the centre's premises.
Droga Kolinska Beats Profit Target by 29%
Food group Droga Kolinska posted a net profit of EUR 10.01m in 2006
Food group Droga Kolinska posted a net profit of EUR 10.01m in 2006, which is 29%
above plans and an improvement on 2005, according to unaudited results which were
released on Wednesday, 28 February.
Droga Kolinska recorded net sales revenues to the tune of EUR 192.37m, which is 4%
above the target and 22% more than in 2005.
The domestic market accounted for 51% of the company's net sales revenues. The EU
was Droga Kolinska's biggest foreign market with 57%, whereas SE Europe
accounted for 37% of the company's net sales revenues abroad.
Droga Kolinska's food products accounted for 72% of its net sales revenues, the rest
fell to beverages.
Call for Bids Published for 50% Stake in Furniture Maker Lip Bled
All potential buyers are invited to send offers by 30 March
The state-run Pension Fund Management (KAD) and Restitution Fund (SOD)
alongside the EBS Group, a business service firm, published on Wednesday, 28
February a call for bids for their combined 50.42% stake in furniture maker Lip Bled.
All potential buyers are invited to send offers by 30 March.
The state-run funds tried to sell their shares a year ago. According to Lip Bled
chairman Alojz Burja, three bidders expressed interest, but KAD and SOD decided
not to sell anyway.
Lip Bled is the largest exporter in the wood processing sector. After a profit of 0.85m
in 2004 it barely finished in the black the following year.
2006 was the most successful year for the company so far as its sales revenues
exceeded EUR 40m for the first time in its history, while profit was also above plans.
According to the company, the performance is a result of a comprehensive
restructuring process which concluded with the opening of a new production and
retail centre near Bled a month ago.
Iskra Avtoelektrika Reports EUR 2.41M in Net Profit
Iskra Avtoelektrika, a maker of electronic components for vehicles, generated EUR
2.41m in net profit last year, which is more than a ten-fold increase over 2005
Iskra Avtoelektrika, a maker of electronic components for vehicles, generated EUR
2.41m in net profit last year, which is more than a ten-fold increase over 2005,
according to unaudited and non-consolidated results.
Following the release of results on Wednesday, 28 February, the company's officials
told STA on Thursday, 1 March that the surge was due to an increase in sales and
successful cost management.
The company increased net sales revenues by nearly 25% to EUR 162.7m, while
labour costs were up by 5%. One of the challenges last year was the growing prices of
raw materials, in particular copper, steel and aluminium.
Officials expect the situation to gradually improve, which should have a beneficial
effect on the operating results of the group.
The target for 2007 is to increase sales revenues by 7% to EUR 174.8m and end the
year with a net profit of EUR 3m.
Intereuropa Posts Profit of EUR 6.7m in 2006
The Koper-based logistics group Intereuropa wrapped up 2006 with EUR 220m in net
sales revenues
The Koper-based logistics group Intereuropa wrapped up 2006 with EUR 220m in net
sales revenues, which is 6.3% up from the year before, while net profit was down
30% to EUR 6.7m, according to unaudited operating results posted on the website of
the Ljubljana Stock Exchange.
The results were reviewed at a meeting of the company's supervisory board on
Monday, 26 February, which established that the comparison of 2006 and 2005 results
did not give a clear picture on the trend in the company's performance due to one-off
impacts on operations.
These extra events excluded, last year's operating profit would have topped the 2005
figure by 99%, while net profit would have been 31% higher than the one generated
the year before, Intereuropa said in its press release.
It says the group posted improvement in operating results in all divisions in 2006;
logistic solutions by 18%, intercontinental transport by 13%, land transport by 2% and
other services by 9%.
One of the biggest investments last year was the purchase of 87 new haulage vehicles
for affiliated companies in Slovenia and the Intereuropa network abroad.
The group also invested in a warehouse in the duty-free zone of the Koper port,
opened a new company in Kosovo and launched activities to build new logistics
capacities in Croatia, Serbia, Russia and Ukraine.
The group is also studying options for expansion in the markets of Bulgaria, Romania,
Montenegro and Albania. In 2006 investment in infrastructure totalled EUR 18.8m.
The targets for this year include a 11.2% increase in net sales revenues to EUR
244.1m, operating profit of EUR 11.5m and net profit of EUR 27.2m, or EUR 9.2m if
the proceeds from the sale of the company's stake in the Koper-based bank Banka
Koper are excluded.
Port Operator to Develop New Distribution Hub
The facility, purchased for EUR 6.76m from logistics company BTC Terminali
Sezana, will be the first logistics hub that Luka Koper plans to develop
Luka Koper, the company managing Slovenia's sole seaport of Koper, aims to convert
a logistics hub that it recently purchased in Sezana into a distribution centre that is
expected to boost the port's transshipment capacity.
The facility, purchased for EUR 6.76m from logistics company BTC Terminali
Sezana, will be the first logistics hub that Luka Koper plans to develop, company
representatives told the press on Friday, 2 March.
According to Luka Koper officials, the hub in Sezana, which lies on the border with
Italy, has some 20,000 sq. metres of storage space (16,000 square metres of which are
covered areas) alongside a 13,000 sq. metre car park.
Luka Koper plans to invest a further EUR 2m in the facility, which it will manage
through the subsidiary Adria Terminali.
Adria Terminali general manager Viktor Orel told the press that the terminal lies in
the vicinity of the 5th and 10th pan-European transport corridors, and it has access to
a motorway and rail network.
SIJ Director: SIJ and Koks Complement Each Other
Slovenska industrija jekla (SIJ) steel group director Tibor Simonka told the press that
SIJ and the Russian company Koks, the new owner of a 55.35% stake in SIJ, were
"complementary to each other and not competitors, which is a good sign and a
guarantee for the future
Slovenska industrija jekla (SIJ) steel group director Tibor Simonka told the press on
Friday, 2 March that SIJ and the Russian company Koks, the new owner of a 55.35%
stake in SIJ, were "complementary to each other and not competitors, which is a good
sign and a guarantee for the future".
"The management sees the new relationship as a challenge and a chance for new
opportunities to strengthen our basic vision of becoming a successful, profitable,
globally competitive and socially responsible company," Simonka said, explaining
that the guarantees secured in the talks filled them with optimism.
According to Simonka, the state, which still holds a 25% stake and one share, remains
an influential owner and will be represented in an advisory body that will have an
important say in virtually everything concerning SIJ.
The group of Russian companies of which Koks is a part, led by the Industrial
Metallurgical Holding (IMH), produces raw materials, which makes its coupling with
SIJ a logical step on its way onto the finished products market, IMH general director
Yevgeniy B. Zubitsky explained.
Zubitsky said that the consortium for the sale of SIJ's shares included a Slovenian
bank. The details of the EUR 250m of investments promised for the coming three
years are to be determined between Koks and SIJ.
While 35% of the investments will be obtained through a loan, SIJ would decide on
what approach is to be taken with regard to the remaining 65%, Zubitsky added.
According to Simonka, Koks produces all the material of strategic importance to SIJ,
which will make SIJ completely independent in relation to the steel monopolies
emerging in the world.
Simonka also explained that while SIJ's physical output would only increase by a
modest 10% as a result of the investments, revenues are expected to increase by more
than 50%.
"This means we are investing in products with higher value-added as this is the only
way to tackle the competition from big steel makers," Simonka said.
Touching on other potential synergy aspect, Simonka highlighted the possibility of
SIJ entering the Russian market. At the same time SIJ could offer Koks the know-how
of its experts as Koks increases its foothold in western markets.
Simonka also responded to the disappointment voiced over the government decision
to sell the state stake by SIJ's small shareholders, actually SIJ's workers who are
seeking reimbursement from the state for their contribution to helping the SIJ back on
its feet in the past.
Simonka said that small shareholders were taken care of through provisions in the
takeover deal that commit the new owners to offer, within a certain period, to buy out
the shares of the small shareholders at the same price (EUR 190.73 per share).
"All potential reimbursement claims by the small shareholders or commitments of SIJ
or the state to the companies comprising the small shareholders are subject to judicial
procedures," Simonka explained, adding that Koks was informed of the claims before
it signed the deal.
The government confirmed on Thursday, 1 March the sale of a 55.35% stake in SIJ to
Koks for EUR 105m, wrapping up the biggest privatisation procedure in years.
SLOVENIA IN BRIEF
Trade Union Unveils Proposals for Pension System Changes
Slovenia's largest trade union confederation, the Association of Free Trade Unions of
Slovenia (ZSSS), has unveiled a set of proposals for changing Slovenia's pension
system in the face of an ageing population. The measures, ZSSS officials told the
press in Ljubljana on Monday, 26 February, are aimed at maintaining solidarity and
equality in the pension system.
Conference: Changes in Balkans Call for New Aid Strategies
An international conference examined strategies for development aid in the Western
Balkans on Monday, 26 February, establishing that now that most of the countries in
the region were on their way towards the EU, the bloc became the main provider of
development aid to the region.
Power Producer Sells Stake in Slovenia's Largest Bank
Slovenia's leading power producer Holding Slovenske elektrarne (HSE) confirmed on
Tuesday, 27 February that it had sold its 0.77% stake in NLB, Slovenia's largest bank,
to Raiffeisen Krekova banka.
President Meets Russian Culture Official Over Slavic Forum
President Janez Drnovsek met on Tuesday, 27 February Mikhail Svidkoy, the head of
the Russian Federal Agency for Culture and Cinema, for talks on the activities and
plans of the Forum of Slavic Cultures.
Commission Fails to Back Nominee for Central Bank Governor
The parliamentary Privileges and Credentials Commission has failed to back Andrej
Rant's nomination for the central bank governor. While the vote on Wednesday, 28
February is not final, it does not augur well for the candidate's chances at the plenary
session of parliament, as the three main coalition parties voted against him.
PM Promises Slovenians in Macedonia Easier Path to Citizenship
Prime Minister Janez Jansa promised ethnic Slovenians in Macedonia easier access to
citizenship. The government will this year look into the conditions for obtaining
citizenship and put in place changes that will facilitate the process for ethnic
Slovenians living abroad, Jansa said after talks with the Slovenian community in
Macedonia on Wednesday, 28 February. Prime Minister Jansa wrapped up his official
visit with meetings with President Branko Crvenkovski and Speaker of Parliament
Ljubisa Georgievski.
Slovenia Joins Academy of European Law
The government adopted on Thursday, 1 March an agreement under which Slovenia
joins the Academy of European Law, based in Germany's Trier. Membership of the
academy is seen by the cabinet as an important part of preparations for Slovenia's EU
presidency in 2008.
Minister Announces Defence Training Deal with Macedonia
Slovenia and Macedonia are expected to sign in spring a deal on the use of the
Macedonian military training grounds Krivolak, Defence Minister Karl Erjavec said
on the margins of a meeting of EU defence ministers in Germany's Wiesbaden on
Friday, 2 March.
Social Partners Fail to Approve Changes to Foreign Labour Act
The amendments to the act on employment of foreigners failed to get approval at a
meeting on Friday, 2 March meeting of the Economic and Social Council, the social
relations forum. While employers and unions were in general pleased with the
legislation, some issues remain open.