Slovenia Business Week no 13, April 2, 2007
Table of Contents:
HEADLINES ............................................................................................................................. 3
Revoz Tops List of Exporters, Gorenje Inching Closer ......................................................... 3
New Discount Chain Enters Slovenian Market...................................................................... 3
Inflation Up to 2.3% in March ............................................................................................... 4
INTERNATIONAL COOPERATION ...................................................................................... 5
Slovenia and Spain For Strategy on Mercury Mines Closure ................................................ 5
Slovenia and Netherlands Sign Agreement on Oil Reserves Usage ...................................... 5
Government Okays Cohesion Aid Accord with Switzerland................................................. 5
EUROPEAN UNION ................................................................................................................. 7
Jansa: EU Constitution Deal Important for Slovenian Presidency ........................................ 7
Parliament Passes Declaration on Slovenia's Activities in EU .............................................. 7
Dutch and Slovenian PMs: June Crucial Month for Constitution .......................................... 8
LEGISLATION ........................................................................................................................ 10
MPs Pass Changes to Financial Operations of Companies Act ........................................... 10
Government Adopts Amendments to Compulsory Insurance in Transport ......................... 10
Parliament Amends Act on Return of Investments in Telecoms ......................................... 10
Parliament Passes Spatial Planning Act ............................................................................... 11
STATISTICS/FORECASTS .................................................................................................... 12
Central Bank Projects GDP Growth of 4.6% for This Year ................................................ 12
Business Sentiment Down in March .................................................................................... 12
Strategic Council Believes Ageing Could Affect Economic Growth .................................. 13
Industrial Output Up Nearly 10% Y/Y ................................................................................ 14
EU Survey: 95% of Slovenians Say Euro Adoption Successful .......................................... 14
General Government Deficit Estimated at 1.4% of GDP ..................................................... 14
Statistics Showing Low Level of Employment Among Older People ................................. 15
Slovenia Narrowing Development Gap to EU25 ................................................................. 15
FINANCE................................................................................................................................. 17
Outgoing Central Bank Governor Pleased with His Achievements .................................... 17
Insurer Triglav Entering Slovakian Market ......................................................................... 17
Bajuk: Banks Should Expect More Competition ................................................................. 17
Bank Austria Creditanstalt Advances One Spot to 4th ........................................................ 18
EBRD to Supply EUR 7M to Pension Fund Prva Pokojninska Druzba .............................. 18
NLB Takes out a EUR 850m Syndicated Loan ................................................................... 19
Ljubljana Stock Exchange .................................................................................................... 19
REGIONAL INFORMATION ................................................................................................ 21
Maribor, Graz Mayors Call for Better Rail Links ................................................................ 21
BRANCH INFORMATION .................................................................................................... 22
Food Industries Association Calls for Consolidation ........................................................... 22
Krvavec, Kope and Celjska Koca Selected Top Ski Centres ............................................... 22
EU Says Telecoms Market on Track, but No Fixed-Line Competition ............................... 23
Development of ICT in Slovenia on Track, Report Says ..................................................... 23
Electricity Prices Up by 5% ................................................................................................. 24
COMPANIES ........................................................................................................................... 25
Casino Operator Earns EUR 238.1m in Revenues in 2006.................................................. 25
Trimo Boasts Double-Digit Growth ..................................................................................... 25
Top Slovenian Glassworks to Provide Miss USA Trophies ................................................ 25
Poultry Producer CEO Upbeat Despite Lower 2006 Profits ................................................ 26
Turk to Replace Maierhofer as Simobil Chief-Exec ............................................................ 26
Sugar Plant Generates over EUR 2m in Losses in 2006 ...................................................... 27
Elan Announces Layoffs Due to Mild Winter ..................................................................... 27
Istrabenz Ups Revenues, Profit in 2006 ............................................................................... 28
Food Company Droga Kolinska Beats 2006 Targets ........................................................... 28
Meat Processor MIP Ups Profit by over 250% in 2006 ....................................................... 28
Sava Group Reports Profit of EUR 34M ............................................................................. 29
Telco Supervisors Hold Session in Kosovo ......................................................................... 29
ACH Doubles Net Profit, Sales up 19% .............................................................................. 30
Indian-German Joint Venture to Secure over 100 Jobs in Ruse .......................................... 30
Mercator Unveils Plans for Tie-up with Serbian Food Company ........................................ 31
Istrabenz Raises Stake in Droga Kolinska to 91% ............................................................... 31
Pivovarna Lasko Sees Sales Edge Up, Profit Drop .............................................................. 32
Etol Group Sees Sales Drop ................................................................................................. 32
Zito's Revenues Level, Profits Quadruple ............................................................................ 32
Revenues, Profit at Helios Grow at Double-Digit Rates ...................................................... 33
Telekom Launches WiMax Trial ......................................................................................... 33
FAIRS, CONGRESSES ........................................................................................................... 34
Tourism and Leisure Fair Gets Underway in Ljubljana ....................................................... 34
SLOVENIA IN BRIEF ............................................................................................................ 35
Ljubljana Councillors Confirm EUR 253m 2007 Budget .................................................... 35
Eighth Case of Mad Cow Suspected in Slovenia ................................................................. 35
Government Adopts National Border Control Bill .............................................................. 35
Slovenia to Sign Pan-European Oil Pipeline Declaration .................................................... 35
Boris Vezjak Becomes New Member of RTVS Programming Council .............................. 35
Samo Fakin Appointed Health Insurance Institute Director ................................................ 35
Lenarcic and Winkler Discuss EU Constitutional Treaty .................................................... 35
Cotman Signs UN Convention Protecting Persons with Disabilities ................................... 35
2
HEADLINES
Revoz Tops List of Exporters, Gorenje Inching Closer
Renault-owned car maker Revoz was the biggest Slovenian exporter for the 14th year in a row
in 2006
Renault-owned car maker Revoz was the biggest Slovenian exporter for the 14th year in a row
in 2006, its exports amounting to EUR 973.7m or 5.8% of the Slovenian total, according to a
survey by the daily Delo.
Yet household appliance maker Gorenje, the perennial runner-up, is inching closer to the
leader, with exports worth EUR 905.3m, 5.4% of the country's total exports.
Following Gorenje in the top ten are drug makers Lek (EUR 658.2m) and Krka (EUR
510.8m) and steel group Slovenska industrija jekla (SIJ) with EUR 381m, shows the survey,
which was published on Monday, 26 March in the supplement Delo FT.
Aluminium maker Impol (EUR 378m), automotive company Cimos (EUR 328.3m),
aluminium maker Talum (EUR 295.7m), tyre manufacturer Sava Tires (EUR 279.4m), and
logistics group Viator & Vektor (EUR 246.8m) round off the top ten.
According to the survey, the car industry is still the most important exporter, as ten companies
in the sector exported goods worth EUR 2.7bn last year, 16% of the country's total.
The metal industry was second with nearly 12%, followed by the pharmaceutical industry
(meaning Lek and Krka) with 7%.
Data by the National Statistics Office suggests that 68% of Slovenia's exports went to the EU,
which also accounted for 80% of all imports.
Germany was by far the biggest destination for Slovenian exports (EUR 3.3bn), followed by
Italy (EUR 2.16bn), Croatia (EUR 1.46bn), Austria (EUR 1.45bn) and France (EUR 1.14bn).
Countries of the former Yugoslavia are some of the fastest growing export markets. The
biggest exporters to the region are Gorenje (EUR 187.2m), technical goods chain Merkur
(EUR 85.2m) and food company Droga Kolinska (EUR 70.7m).
*Ten biggest exporters in Slovenia, 2006:
Company – Exports - Share of total (%)
Revoz - EUR 973.7m - 5.8%
Gorenje - EUR 905.3m - 5.4%
Lek - EUR 658.2m - 3.9%
Krka - EUR 510.8m - 3.1%
SIJ - EUR 381.1m - 2.3%
Impol - EUR 378m - 2.3%
Cimos - EUR 328.3m - 2%
Talum - EUR 295.7m - 1.8%
Sava Tires - EUR 279.4m - 1.7%
Viator & Vektor - EUR 246.8m - 1.5%
New Discount Chain Enters Slovenian Market
German discount chain Lidl opened on 29 March 15 stores throughout Slovenia, becoming
the sixth discount chain on the Slovenian market
German discount chain Lidl opened on Thursday, 29 March 15 stores throughout Slovenia,
becoming the sixth discount chain on the Slovenian market. Lidl will capture a 10% share of
the market in the next three years, as it is very ambitious in terms of expansion and
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advertising, so the share can be increased to 15% and more, according to a survey by Gral
Iteo, a market research company.
Lidl will join foreign discount chains Hofer and Eurospin, and Slovenia's Hardi, Plus and
Hura. The company announced intensive expansion of its sales network, and is to soon open
another ten stores, according to Gregor Kosi, the director of sales of Lidl's Slovenian
subsidiary.
The company was reluctant to reveal what market share Lidl could take. "We are yet to
convince Slovenian shoppers," Kosi said on Tuesday, 27 March, adding that the company's
biggest competitive advantage was fresh fruit and vegetables.
The share of the market occupied by discount chains increased from 3% in 2005 to almost 5%
in 2006. "It is an average figure from the aspect of total sales of consumer goods, while
considerably higher shares can be reached within individual product groups," Gral Iteo has
told STA.
The biggest market share among discount chains is held by Hofer (2.1%), which is planning
to have 80 stores in Slovenia by the end of 2009. Other discount retailers each hold less than
1% of the market.
More than 80% of the Slovenian grocery market is currently held by the three biggest
retailers, Mercator (45.8%), Spar (20.5%) and Tus (16.4%).
A Gral Iteo survey of November 2006 shows that discount stores only attract consumers
whose main guideline in making their purchases is the price, and those who are not ready to
spend much money on consumer goods although they can afford it.
Inflation Up to 2.3% in March
The monthly inflation rate for March was 1%, the first month this year that prices rose
Higher prices of clothes and housing in March pushed Slovenia's annual inflation 0.2
percentage points higher to 2.3%, the Statistics Office said on Friday, 30 March. The monthly
inflation rate for March was 1%, the first month this year that prices rose.
According to the statisticians, prices of goods rose by 1.6% on average in March, whereas the
prices of services edged 0.1% lower on average. Semi-durable goods contributed most to the
overall rise in the consumer price index, as their prices rose by 5.1%.
The biggest price increase this month was registered in the clothing and footwear group,
where prices rose by 7.2% on average due to the end of the seasonal sales. Meanwhile, prices
in the housing group rose 1.2% due to higher heating and electricity bills.
According to head of the Statistics Office Irena Krizman, the trend in price increases this
month is in line with the general trend for this time of the year.
Moreover, prices rose by 1.1% in the group of health products and services due to dearer
medicines. The Statistics Office also noted a rise in bread and cereal prices, which contributed
significantly to 0.9% rise in average food prices.
Meanwhile, prices in the recreation and culture group of products and service fell 0.6% in
March, while communications products and services were 0.1% cheaper on average.
The average annual inflation rate remained unchanged at 2.7%, while the consumer price
index according to the EU's harmonised index was at 2.6% for the year to March.
4
INTERNATIONAL COOPERATION
Slovenia and Spain For Strategy on Mercury Mines Closure
Environment Minister Janez Podobnik took part in a European conference on mercury in
Spain's Almaden
Environment Minister Janez Podobnik took part in a European conference on mercury in
Spain's Almaden on Wednesday, 28 March. The event saw a debate on the closure of mercury
mines and on the drafting of a EU strategy on ending the use of mercury.
Slovenia and Spain are pushing for the strategy to also include financing and other measures
aimed at supporting the recovery of areas affected by the closing of mines, Emil Ferjancic of
the Slovenian Environment and Spatial Planning Ministry told STA after the conference.
Unlike other countries, which mostly deal with the consumer side of mercury, Spain and
Slovenia still have former mercury mines - in Almaden and Idrija, respectively.
According to Ferjancic, the drafting of the strategy in question will enter its most important
phase just as Slovenia will be holding the EU presidency.
While Slovenia has been successful in terms of mitigating the economic consequences of the
closure of the mine in Idrija, Spain is facing a big problem in Almaden, as half of the town's
population has already moved out in search of new employment.
Also present at the conference was Timo Makela of the European Commission Directorate
General for Environment, who expressed satisfaction about the cooperation between Spain
and Slovenia and his expectation that Slovenia's EU presidency would give the issue enough
weight, Ferjancic said.
Meanwhile, the talks also examined the joint bid by Slovenia, Spain, Mexico and Peru to put
the mercury route on the list UNESCO world heritage sites.
With their experience, Slovenia and Spain will be able to assist other countries, especially in
Latin America and Africa, both as regards mercury in general as well as with the closure of
mercury mines, Ferjancic added.
Slovenia and Netherlands Sign Agreement on Oil Reserves Usage
The document is part of an initiative for enhancing economic cooperation between the
countries
Economy Minister Andrej Vizjak and his Dutch counterpart Maria van der Hoeven signed in
The Hague on Wednesday, 28 March an agreement on the mutual use of crude oil reserves
and products. The document is part of an initiative for enhancing economic cooperation
between the countries.
"Further possibilities for economic cooperation between the two countries are open," Prime
Minister Janez Jansa said after the signing, according to a press release from the PM's office.
Jansa added that economic cooperation between the two countries was very good: trade
exceeded EUR 900m last year, while the Netherlands is the third biggest investor in Slovenia.
The Slovenian PM also pointed to new investment opportunities in Slovenia, as the
government is pushing ahead with the privatisation of telco Telekom Slovenije.
Government Okays Cohesion Aid Accord with Switzerland
The programme earmarks almost EUR 14m from the Swiss federal treasury in development
aid to Slovenia for the period of five years
The government adopted on Thursday, 29 March an initiative for the signing of an agreement
between Slovenia and Switzerland on the launch of a cooperation programme aimed at
5
reducing economic and social disparities in the expanded EU, the Government
Communication Office said in a press release.
The programme earmarks almost EUR 14m from the Swiss federal treasury in development
aid to Slovenia for the period of five years.
While contributing to closing the development gap between Slovenia and the more developed
EU members, the aid is also expected to decrease the development disparities within Slovenia.
The proposed agreement includes detailed provisions concerning the areas of cooperation and
the ways the funds are to be used.
The basis for the agreement is a memorandum of understanding signed by the Swiss
government and the EU in February last year.
In exchange for access to the expanded EU market Switzerland will commit a total of EUR
625 for development aid to the ten EU newcomers. The green light for the move was given by
Swiss voters at a referendum last November.
6
EUROPEAN UNION
Jansa: EU Constitution Deal Important for Slovenian Presidency
It is in Slovenia's interests that procedures on resolving the EU constitutional crisis are
launched during Germany's EU presidency and Slovenia will strive as best it can for a
compromise solution to this issue at the June EU summit, Prime Minister Janez Jansa said
It is in Slovenia's interests that procedures on resolving the EU constitutional crisis are
launched during Germany's EU presidency and Slovenia will strive as best it can for a
compromise solution to this issue at the June EU summit, Prime Minister Janez Jansa said on
Tuesday, 27 March.
Jansa, presenting in parliament the declaration on Slovenia's activities in the EU in the
January 2007-June 2008 period, added that failure to reach such a compromise could mean
that the Slovenian EU presidency in the first half of 2008 would take place in an atmosphere
that would not be good.
He added that the EU could face a deepening crisis at the next EU parliamentary elections,
which would be manifested in a low turnout, a drop in the reputation of EU institutions and
rise of euroscepticism.
According to Jansa, EU presidency the biggest challenge for the country after it won
independence. It is not only the government's project but one of national importance, he said.
Slovenia wants to make some decisive steps in enlargement towards Western Balkans during
its stint, but none of these processes could come to a close during Slovenia's presidency. The
EU needs a new constitutional foundation prior to the enlargement, he added.
Jansa said that Slovenia would also focus on liberating the full potential of the EU's internal
market as some restrictions still apply. This is also true for the eurozone, which primarily
needs an open and competitive market, he said.
He also highlighted Slovenia's key achievements such as the adoption of the euro and the key
role the country has been playing in seeking solutions to the delay in expanding the Schengen
no-border zone.
Slovenia is also a successful economy, and the prime minister expects GDP per capita to rise
above EUR 20,000 in 2006.
Jansa also called for an agreement with political parties on cooperation before and during the
presidency to prevent the period from being used for domestic policy tensions.
Parliament Passes Declaration on Slovenia's Activities in EU
Parliament unanimously passed the declaration on Slovenia's activities in the EU between
January 2007-June 2008 which states that the country's main priority would be preparations
for the EU presidency in the first half of next year
Parliament on Tuesday, 27 March unanimously passed the declaration on Slovenia's activities
in the EU between January 2007-June 2008 which states that the country's main priority
would be preparations for the EU presidency in the first half of next year.
According to the document, the key issues facing Slovenia's presidency include the
strengthening of the European area of freedom, security and justice and the debates on the
future of the EU, the European constitution, enlargement and the Schengen zone.
Slovenia will also continue to strengthen its cooperation with EU institutions and other
member states, especially with Germany and Portugal, the two countries that with Slovenia
make up a trio of countries successively holding the EU presidency over the next 18 months.
The implementation of the Lisbon Strategy and efforts to carry out institutional reforms of the
EU will also be at the top of the agenda, while Slovenia will strive for headway in the process
7
of Croatia and Turkey joining the EU and work towards setting a date to start the EU
accession talks with Macedonia.
Prime Minister Janez Jansa told parliament that it was in Slovenia's interests that procedures
on resolving the constitutional crisis should be launched during Germany's stint; failure to
reach such a compromise could mean that the Slovenian EU presidency would take place in
an atmosphere that would "not be good".
According to Jansa, Slovenia wants to make some decisive steps in enlargement towards the
Western Balkans during its stint, but none of these processes could come to a close during its
presidency. The EU needs a new constitutional foundation prior to the enlargement, he added.
Jansa said that Slovenia would also focus on liberating the full potential of the EU's internal
market as some restrictions still apply. This is also true for the eurozone, which primarily
needs an open and competitive market, he said.
Foreign Minister Dimitrij Rupel stressed that Slovenia would be making efforts to speed up
the progress of candidate countries, given their fulfilment of entry requirements and
commitments. He noted that Croatia had made the commitment to resolve issues with
neighbouring countries and refrain from unilateral moves.
The vote was unanimous and the only grievances expressed by the deputies involved the role
of the parliament and the fact that the EU Affairs Committee sessions were held behind closed
doors.
Dutch and Slovenian PMs: June Crucial Month for Constitution
The Dutch and Slovenian prime ministers shared the view in their meeting in The Hague that
June would be a crucial month for deciding on a solution to the EU's institutional crisis
The Dutch and Slovenian prime ministers shared the view in their meeting in The Hague on
Wednesday, 28 March that June would be a crucial month for deciding on a solution to the
EU's institutional crisis.
According to Jan Peter Balkenende and Janez Jansa, decisions will have to be taken by the EU
in June on the matter in order to ensure that a solution could be found ahead of the elections to
the European Parliament in 2009.
The pair met during Jansa's visit to The Hague aimed at establishing contacts ahead of
Slovenia's stint as EU president in the first half of 2008.
A decision needs to be taken as soon as possible, while the decisions at June's EU summit will
determine how far down the road to a final decision the bloc will be by the time Slovenia
assumes the presidency in the beginning of 2008 - perhaps a final decision could be adopted
then, Balkenende said.
The Dutch PM believes that this would be possible if "the right decisions" are taken in June a clear timetable set and an agreement reached to call a speedy intergovernmental conference.
The decision on a compromise must be "taken together" - that is the lesson learnt by the
Netherlands when its citizens rejected the EU constitution in a referendum in June 2005,
Balkenende added.
The Dutch PM believes a compromise solution could be a document that is based on the Nice
Treaty supplemented with elements of the proposed EU constitution.
Jansa stressed that in searching for a compromise, the EU needed to look for a "middle
ground and focus on the content rather than formality, which has so far failed to yield a
solution".
"We have a choice to act as if there is no problem or to show readiness to talk. Our position is
that looking for a compromise is the right direction," he said.
Moreover, the Slovenian PM stressed that compromise was the EU's "strongest weapon",
adding that he and Balkenende are of equal opinion on the "general nature of such a
compromise and the importance that the matter be dealt with quickly".
8
"Slovenia hopes that the next elections to the European parliament will take place in an
atmosphere that will give the citizens the feeling that things are moving forward," he added.
Jansa said that Slovenia "is happy with the step in the right direction taken by the Netherlands
and we are also ready to take this step".
According to Balkenende, Slovenia's view is "very constructive". "Slovenia has already
ratified the document, but is nevertheless ready to take part practically in a search for a
solution."
He added that the Dutch and French rejections of the proposed EU constitution was not the
only spanner in the works of the constitution. There is no guarantee that citizens in other
countries would not have done the same if asked to vote on the constitution, he added.
The two prime ministers also touched on EU enlargement, saying that the two countries share
the position that future expansion should be carried out on a case-by-case basis.
Jansa said that EU enlargement and neighbourhood policy would be in the focus of Slovenia's
presidency and that the country wanted to keep the doors open to countries looking to join the
bloc.
While Netherlands agrees with Slovenian position that the EU "should not forget about
Serbia", the country's representatives also said that the Western Balkan country has to meet its
obligations for successful EU accession talks.
Slovenia's EU presidency will meanwhile enjoy full support by the Netherlands, said
Balkenende. According to him, Slovenia will hold the presidency at a very important moment
for the bloc.
Jansa thanked his Dutch opposite number for the promised support and added that Slovenia
and the Netherlands often held similar views when interests of small and medium-sized EU
members were at stake.
The pair moreover pointed to the importance of implementing the Lisbon Strategy for
increasing EU's competitiveness and its latest commitments to reduce greenhouse gas
emissions.
9
LEGISLATION
MPs Pass Changes to Financial Operations of Companies Act
The National Assembly passed in a unanimous vote changes to the financial operations of
companies act, which abolish the liability of shareholders of companies erased from the
companies register
The National Assembly passed on Tuesday, 27 March in a unanimous vote changes to the
financial operations of companies act, which abolish the liability of shareholders of
companies erased from the companies register. The MPs also passed amendments to the act
governing rescue and restructuring aid for companies in difficulty.
According to the government, the old act on financial operations of companies involved an
unfair treatment of so-called inactive shareholders and could have become subject to a
constitutional court challenge.
The amendments to the act governing rescue and restructuring aid for companies in difficulty,
meanwhile, aim at simplifying the act, make it more effective and do away with some of the
dilemmas which arose especially with regard to the interpretation of the definition of
companies in difficulty.
The changes are especially important for SMEs, the restructuring programme for which will
from now on - bar exceptional cases - be confirmed by the government and will no longer
need to be presented to the European Commission.
Government Adopts Amendments to Compulsory Insurance in Transport
The cabinet adopted amendments to the act on compulsory third-party liability in transport
which raise the minimum insurance premiums for vehicle insurance and transpose relevant
EU directives into Slovenian legislation
The cabinet adopted on Thursday, 29 March amendments to the act on compulsory third-party
liability in transport which raise the minimum insurance premiums for vehicle insurance and
transpose relevant EU directives into Slovenian legislation.
The amendments set the minimum third-party transport liability at EUR 5m for cases resulting
in death, injury and health problems. The current amount is set at EUR 510,000.
The proposed legislation moreover raises the minimal premium to EUR 1m for liability
arising from the destruction or damage to items (currently EUR 102,000).
The amendments define ways to continue raising minimum insurance premiums, expand the
system of mediation for all types of liability and allow injured parties to get data on their
claims from electronic police records.
Parliament Amends Act on Return of Investments in Telecoms
People who between 1974 and 1995 invested their own money in what is now the fixed
network of Telekom Slovenije will be reimbursed before the telco is privatised under
amendments to the act on the return of investments in the public telecommunications network
that parliament passed on 29 March
People who between 1974 and 1995 invested their own money in what is now the fixed
network of Telekom Slovenije will be reimbursed before the telco is privatised under
amendments to the act on the return of investments in the public telecommunications network
that parliament passed in a 51:8 vote on Thursday, 29 March.
The original act, which was adopted in 2002, stipulated that the thousands of claimants would
get their money when Telekom Slovenije is privatised.
Under the amendments, however, the state will transfer a 10% share in Telekom to the
Restitution Fund (SOD), which will start disbursing the money immediately.
10
The privatisation of Telekom Slovenije has been years in the making, but it is expected to
move along this year as the government has decided to sell a 39% stake to a strategic investor
this year.
The amendments also simplify the procedure for filing the claims, transferring the obligation
to prove entitlement from the claimants to the State Attorney.
Parliament Passes Spatial Planning Act
The proponent of the act, the Ministry for the Environment and Spatial Planning, claims that
the amendments will facilitate balanced spatial and economic development by speeding up the
adoption of zoning laws
Parliament wrapped up its plenary session for March on Friday, 30 March by passing the
spatial planning act. The law, which were passed in a 42:24 vote, are designed to make it
easier for municipalities and provinces to adopt zoning laws.
The proponent of the act, the Ministry for the Environment and Spatial Planning, claims that
the amendments will facilitate balanced spatial and economic development by speeding up the
adoption of zoning laws.
Environment Minister Janez Podobnik told MPs on Thursday, 29 March that the act would
enable spatial planning documents that would determine clearly and unequivocally what may
and may not be built on particular land.
Under the new law, national zoning regulations will only provide the main outlines to
guarantee appropriate zoning, while detailed planning will be left to the investors.
11
STATISTICS/FORECASTS
Central Bank Projects GDP Growth of 4.6% for This Year
Inflation is to amount to 2.7% this year and next
The central bank projects that the Slovenian economy will expand by 4.6% this year, slowing
down to 4.4% in 2008 and 4% in 2009. Inflation is to amount to 2.7% this year and next, and
2.6% in 2009, according to the report on price stability which Banka Slovenije unveiled on
Monday, 26 March.
"The basic scenario indicates a continuation of the favourable economic climate. There are
risks, which however can be prevented or mitigated with a reasonable combination of
economic policies and timely action," Banka Slovenije Governor Mitja Gaspari told the press.
According to Gaspari, supply-side shocks such as labour costs, oil prices, excise duties and
administered prices are the main factors which could affect gross domestic product (GDP)
growth in the coming years.
"These elements can have a relatively strong impact on changes to what we believe is a good
basic scenario," Gaspari added.
The biggest uncertainty is the price of oil: if it increases by 5 US dollars per barrel on average,
it would push inflation higher by 0.5 percentage points at the initial stage.
There is also a "moderate probability" of deviation from the basic scenario for labour costs
and effects of fiscal policy on prices, said Gaspari.
"This has to do with uncertainty over hikes in excise duties, administered prices and value
added tax (VAT). The government is saying it will not raise VAT, but it leaves the option
open in the 2008 budget."
A hike in excise duty combined with a VAT increase would contribute 0.7 percentage points
to inflation the year that it is raised, he said.
According to Gaspari, free prices will have a bigger impact on inflation trends and
administered prices a smaller impact than they used to.
Gaspari warned against calculating the "expected stronger adjustments of electricity prices
and excise duties" into wage policies, saying that it will be crucial what the next Social
Agreement brings in this respect.
It is also crucial to keep an eye on headline inflation, which increased from a very low level to
significantly over 2% last year. According to Gaspari, this would not be a problem had it not
been for the knock-off effect on prices of services.
"To a certain extent this was expected due to the introduction of the euro, but it also indicates
that the services market is underdeveloped...which could lead to problems in securing the
competitiveness of the Slovenian economy in relation to other eurozone members."
The outgoing central bank chief, whose term expires at the end of March, believes that the
economy will be pulled forward more by domestic demand than external trade in the coming
years.
He believes that the share of investment in GDP growth will contract, while private
consumption will expand, but not to the extent that it would jeopardise growth.
Business Sentiment Down in March
The business climate in Slovenia has deteriorated slightly due to decreased confidence in
manufacturing, according to the National Statistics Office
The business climate in Slovenia has deteriorated slightly due to decreased confidence in
manufacturing, according to the National Statistics Office. The seasonally adjusted business
12
sentiment indicator was down 1 percentage point in March over the month before, but it is
still up 7 points year-on-year and 13 points above the long-term average.
Compared to February, the confidence indicator in manufacturing dropped by 2 percentage
points, primarily due to rising inventories of finished products and a decrease in production
expectations.
Meanwhile, it improved by 3 percentage points on an annual comparison, and it is 14 points
above the long-term average.
In retail the confidence indicator rose by 2 points over the previous month, and was up 9
points year-on-year.
The construction sector is equally upbeat, with the indicator up 3 points compared to last
month, reaching the highest value in the whole observed period.
In the services sector the confidence indicator remained level.
The consumer confidence indicator went up by 1 point compared to the month before. This is
a consequence of more optimistic consumer expectations regarding savings in the next twelve
months, according to the statisticians.
The business sentiment indicator is a weighted average of the confidence indicators in
manufacturing, retail and the consumer confidence indicator, which are in turn calculated with
the aid of surveys on business trends in the fields.
Strategic Council Believes Ageing Could Affect Economic Growth
The Strategic Council for Economic Development believes that EU projections which see the
Slovenian population drop from the current 2 million to 1.9 million by 2050 would mean a
drop in the number of the employed by 0.8% a year between 2025 and 2050 and, as a
consequence, a slow down in the economic growth
The Strategic Council for Economic Development believes that EU projections which see the
Slovenian population drop from the current 2 million to 1.9 million by 2050 would mean a
drop in the number of the employed by 0.8% a year between 2025 and 2050 and, as a
consequence, a slow down in the economic growth.
Marjan Senjur, the president of the economic think tank, said as the council debated the issue
on Thursday, 29 March that the anticipated 5-year increase in average life expectancy would
also cause the ratio between over 64-year olds and those between 15 and 64 years of age to
change from the current 20% to over 50%.
According to EU projections, the potential economic growth rate between 2030 and 2050 in
Slovenia could dip below the EU average, Senjur said.
To offset such a scenario, Slovenia should lead a policy to increase its population by 0.5% a
year and a policy of increased employment.
The retirement policy should meanwhile promote retirement at a later age and supplementary
pension plans.
Senjur called for a more flexible employment relationship act, as the current one is more
tailored towards industry workers as opposed to services, which need to be adjusted more to
the timetable of their users.
Senjur also criticised the strong social component of the act, whose result is lower flexibility
and higher costs for employers.
Council member Ivo Boscarol said that the labour market in Slovenia did not change much
compared to the break-up of the former Yugoslavia. It still operates on the same basis of
maximum protection for the worker, something that is not an option under the conditions of
global competition.
Boscarol therefore called for solutions in the direction of flexible security (flexicurity).
He said that Slovenians only work for 75% of their working time. Of the remaining 25%,
6.3% were spent on lunch breaks, 5% on sick leave, 9.6% on vacation and 4.2% on holidays.
13
Boscarol believes that eliminating two holidays would increase effective working time by 1%,
while the German model of maternity leave would increase it by another 5%.
Industrial Output Up Nearly 10% Y/Y
Slovenia's industry expanded by 6.7% in January over December 2006, while it surged by
9.7% year-on-year
Slovenia's industry expanded by 6.7% in January over December 2006, while it surged by
9.7% year-on-year, according to a report from the Statistics Office on Friday, 30 March.
At the annual level, the most substantial increase in output was generated by the
manufacturing sector (10.9%). While electricity, gas and water supply industries expanded by
only 0.5%, the volume of production in mining was down 1.8%.
Considering the products, the output of intermediate goods rose by 12.7% y/y, while
consumer goods production expanded by 7.6% and that of capital goods by 6%.
Stocks increased by 1.3% at the monthly level and by 4.2% on January 2006.
While industrial sales revenues increased by 6.4%, the value of new orders went up by 21.5%
at the monthly level. Orders from the euro zone increased by 16.7%, while those from other
markets soared by 36.7%.
EU Survey: 95% of Slovenians Say Euro Adoption Successful
Slovenian consumers are mainly afraid of unwarranted price hikes caused by price
conversions (59%), with 22% believing that prices will be rounded unfairly very often
The overwhelming majority of Slovenians (95%) believe that the euro switch was a success, a
special Eurobarometer survey on the issue has found. According to the results published on
Thursday, 29 March, 96% of those polled said they had no major troubles in converting the
former currency, tolars, into euros.
Slovenian consumers are mainly afraid of unwarranted price hikes caused by price
conversions (59%), with 22% believing that prices will be rounded unfairly very often. Just
over a half of those polled expressed fear that the switch would cause inflation, while 35%
believe that euro will actually stabilise prices.
Over 80% believe that listing prices in tolars and euros was useful, while a tenth of the
respondents believed otherwise.
The poll moreover showed that Slovenians still used tolars to calculate the value of smaller
purchases, while the euro has already gained a foothold in deals with a larger value.
A month after the euro switch, 75% of Slovenians said they had no major problems in
understanding values in euros, whereas 14% said they did.
A total of 87% of Slovenians are satisfied with the information provided by the Slovenian
institutions and 68% bought euro starter kits.
Slovenians also had more trouble distinguishing between euro coins than banknotes.
The survey was carried out between 29 January and 3 February on 1,004 respondents.
General Government Deficit Estimated at 1.4% of GDP
Preliminary estimates by the Statistics Office indicate that the general government deficit for
2006 stood at SIT 100.04bn (EUR 417m) or 1.4% of GDP, which is down 0.1 of a percentage
point over the year before
Preliminary estimates by the Statistics Office indicate that the general government deficit for
2006 stood at SIT 100.04bn (EUR 417m) or 1.4% of GDP, which is down 0.1 of a percentage
point over the year before.
The country's consolidated debt amounted to SIT 1983.32bn (EUR 8.28bn) or 27.8% of GDP,
Andrej Flajs of the Statistics Office told the press on Friday, 30 March.
14
The general government deficit at the central level is estimated at SIT 94.51bn (EUR 394m)
or 1.3% of GDP, down 0.3 of a percentage point over 2005.
The estimated deficit at the local level is SIT 8.28bn (EUR 34.5m) or 0.1% of GDP, while
social security funds posted a surplus of SIT 2.74bn (EUR 11.4m), which is less than a year
before, according to Flajs.
The revised general government deficit for 2005 amounted to SIT 97.69bn (EUR 407.6m) or
1.5% of GDP, while the revised debt stood at SIT 1,879bn (EUR 7.84bn) or 28.4% of GDP.
The total expenditure as well as revenue of the general government relatively to GDP in 2006
declined: expenditure by 0.8 of percentage point of GDP (44.8% of GDP in 2006, 45.6% in
2005) and revenue by 0.7 percentage point of GDP (46.3% of GDP in 2006, 47.0% in 2005).
Gross saving of the general government relatively to GDP in 2006 increased by 0.1
percentage point to 2.7% of GDP due to a slight decline of current expenditure behind current
revenue.
Within expenditure, gross capital formation expenditure increased the most: from 3.4% of
GDP in 2005 to 3.7% of GDP in 2006, mainly due to the substantial increase in the second
half of the year.
The total revenue of the general government for 2006 is estimated at SIT 3,195.89bn (EUR
13.34bn), 6% up on 2005 in nominal terms. Its share in the GDP was 44.8%, down 0.8 of a
percentage point. Capital transfers from EU budget and funds increased by 0.1 percentage
point to 0.2% of GDP in 2006.
Deficit with the rest of the world in 2006 estimated at SIT 187.33bn (EUR 781.7m) or 2.6%
of GDP, 0.7 percentage points less than a year before (1.9% of GDP).
Statistics Showing Low Level of Employment Among Older People
The employment rate of the active population aged between 50 and 69 is fairly low in
Slovenia, reaching only 42.3% in the second quarter of 2006
The employment rate of the active population aged between 50 and 69 is fairly low in
Slovenia, reaching only 42.3% in the second quarter of 2006, according to data from the
Statistics Office. The EU average employment rate of persons in a comparable category of 50to 64-year-olds was almost 55% in the same period.
The employment rate of the entire active population meanwhile stood at 56% in Slovenia in
this period.
The employment figures for 50- to 69-year-old men and women in Slovenia were just under
50% and 35%, respectively, whereas the EU had 63% for men and 46% for women aged
between 50 and 64.
Slovenia's active-retired ratio is also shifting in favour of retired persons, standing at 1.82 in
1992 and at 1.67 in 2005, according to official data.
Also increasing is the average age of new old-age pension recipients. In 1992 the average new
pensioner was 54 years and three months old, whereas the average retirement age in 2005
stood at 59 years and ten months.
The majority, almost 40% of the active population that already meets the criteria for old-age
pension benefits plans to retire before turning 60, according to the Statistics Office. Just over
30% plan to retire aged between 60 and 64, and just under 20% after they turn 65.
Slovenia Narrowing Development Gap to EU25
Gross domestic product (GDP) per capita in purchasing power standards in Slovenia was
82% of the average for the 25 EU member states in 2005
Gross domestic product (GDP) per capita in purchasing power standards in Slovenia was 82%
of the average for the 25 EU member states in 2005. This means that Slovenia has narrowed
15
the development gap to the EU-25 by more than 4 percentage points since 2003, the National
Statistics says, quoting data from Eurostat.
GDP per capita in purchasing power standards in Slovenia was 77% of the EU-25 average in
2005, but increased to 80% in 2004 and 82% in 2005. Compared to the EU-15 (the old EU)
average, Slovenia's GDP stood at 75%, while it reached 85% of the average of the EU-27 in
2005.
Eurostat's report on GDP per capita in purchasing power parities covers 35 countries, 33
European plus the United States and Japan, for the period between 2003 and 2005.
The countries that posted the most substantial increase compared to the EU-25 average were
mostly the ones with a relatively low GDP per capita (Baltic countries, Romania, Slovakia
and Turkey). The biggest leap was made by Estonia, which went from 51% to 60% of the EU25 average.
The countries closest to Slovenia in terms of GDP per capita in purchasing power standards
are Greece (84% of the EU-25 average), Cyprus (89% of the EU-25 average) and the Czech
Republic (74% of the EU-25 average).
The most-highly developed neighbouring country is Austria, whose GDP per capita in
purchasing power standards in 2005 exceeded the average of EU-25 by a quarter and
Slovenia's by 50%. Italy, just on the EU-25 average, topped Slovenia in this indicator by more
than 20%.
Slovenia's GDP per capita in purchasing power standards was 30% above Hungary's, which
was at 63% of the EU-25 average, and by 70% above Croatia's, which was at 48% of the EU25 average.
The US and Japan are both above the EU-25 average; the former by 50% and the latter by
10%.
16
FINANCE
Outgoing Central Bank Governor Pleased with His Achievements
He pointed to the "fact that we had changed over to the euro, that the adoption did not worsen
the economic trends, that the switch was well organised and that it brought no side effects"
Outgoing Central Bank Governor Mitja Gaspari said on Monday, 26 March that he was
pleased with his achievements during his six-year term at the post. He pointed to the "fact that
we had changed over to the euro, that the adoption did not worsen the economic trends, that
the switch was well organised and that it brought no side effects".
Gaspari, whose term in office runs out on 31 March, put these successes down to the
appropriate mix of economic policies during his term in office.
He did not want to reveal where he would go now after failing to get another term at the helm
of Banka Slovenije. Asked whether he would go abroad, he said "you will see soon".
Gaspari failed to secure the necessary majority in parliament in early February, after being
nominated for the post by President Janez Drnovsek. As Drnovsek's second pick for the post,
vice-governor Andrej Rant, also failed to secure the 46 votes necessary, the central bank is
left without a governor as of 1 April.
Gaspari therefore appointed on 21 March Rant as his deputy. "Banka Slovenije did everything
it could in the existing legal framework to prevent a vacuum in leadership," Gaspari said.
While saying that no major problems in relations between Banka Slovenije and the European
Central Bank (ECB) would arise from the Slovenian central bank being without a governor,
he nevertheless called for this vacuum to be "resolved in the shortest amount of time
possible".
He also said that he would not change any of his decisions if he were to turn back the time at a
news conference at which he presented the central bank's projections on the growth of
Slovenian economy.
Insurer Triglav Entering Slovakian Market
Zavarovalnica Triglav, the biggest Slovenian insurance company, is entering the Slovakian
market as its subsidiary Triglav poistovna is to be opened on 18 April in Bratislava
Zavarovalnica Triglav, the biggest Slovenian insurance company, is entering the Slovakian
market as its subsidiary Triglav poistovna is to be opened on 18 April in Bratislava, the
company said in a press release.
The subsidiary, which was registered on 1 December, will be headed by Radovan Skultety,
the company said on Monday, 26 March.
A total of 28 insurance companies operated in Slovakia in 2005, with the leading 10 insurers
holding about 90% of the market.
In the same year, the country reached the highest economic growth in its history, the press
release reads.
In 2005 Zavarovalnica Triglav held a 42.8% market share in Slovenia (40.4% of the property
insurance market and 49.9% of the life insurance market).
The company operates in the Czech Republic, Croatia, Bosnia-Herzegovina and Montenegro,
the release also reads.
Bajuk: Banks Should Expect More Competition
Slovenian banks should get ready for tougher competition in numerous financial services
which they have gotten used to providing alone, Slovenia's Andrej Bajuk said after a meeting
of EU finance ministers in Brussels
17
Slovenian banks should get ready for tougher competition in numerous financial services
which they have gotten used to providing alone, Slovenia's Andrej Bajuk said after a meeting
of EU finance ministers in Brussels on Tuesday, 27 March.
The ministers agreed to ease cross-border payments by credit and debit cards as well as
electronic bank transfers across the bloc.
Along with the directive that enables the establishing of a Single Euro Payments Area (SEPA)
by 2010, the ministers backed a directive aimed at curbing the powers of national bank
regulators to block mergers in the financial sector.
Bajuk agrees with the assertion of EU Internal Market Commissioner Charlie McCreevy that
the financial sector directive will require a far more transparent and open conduct.
He points out, however, that the state will continue to have the final say in the acquisition of
shares in the financial sector.
Bajuk said that Slovenia was not under threat from anyone when it came to potential
purchases of stakes in the financial sector.
"Takeovers are also interesting from our perspective, this is dual-lane situation," the minister
said, adding that the directive opens new opportunities as opposed to posing a new threat.
He meanwhile announced that the "position on these matters will change completely in three
years" when the European Commission looks back on the impact of these directives.
He added that the move would nevertheless have a positive effect on the EU as a whole.
Bank Austria Creditanstalt Advances One Spot to 4th
Bank Austria Creditanstalt, the Ljubljana-based member of Italian-Austrian Unicredit
financial group, increased total assets to EUR 2.2bn in 2006, up 16% over 2005
Bank Austria Creditanstalt, the Ljubljana-based member of Italian-Austrian Unicredit
financial group, increased total assets to EUR 2.2bn in 2006, up 16% over 2005, making the
bank the 4th largest in Slovenia, Bank Austria Creditanstalt chairman France Arhar told the
press on Thursday, 29 March.
Arhar was pleased with the bank's results. He said that assets rose mainly due to a 46%
increase in loans to individuals. The bank also managed to up loans to small- and mediumsized companies, by 78% and 46% respectively, the chairman said.
The bank's pre-tax profit amounted to EUR 14.7%, up 3% year-on-year, while its market
share remained unchanged at 6.5%, Arhar added.
The bank's mid-term goals see the company taking a 20% market share in mortgage loans and
expand its network from the 14 branch offices it has today.
EBRD to Supply EUR 7M to Pension Fund Prva Pokojninska Druzba
The European Bank for Reconstruction and Development (EBRD) signed a EUR 7m-worth
capital injection agreement with Prva pokojninska druzba, thus acquiring a 20% stake in this
pension fund management in what is the institution's first venture into the additional pension
insurance market in Slovenia
The European Bank for Reconstruction and Development (EBRD) signed a EUR 7m-worth
capital injection agreement with Prva pokojninska druzba on Thursday, 29 March, thus
acquiring a 20% stake in this pension fund management in what is the institution's first
venture into the additional pension insurance market in Slovenia.
The move will make the EBRD the third-largest shareholder of the fund, after companies Dej,
which will now hold a 32%, and Poteza Skupina, which will command a 30% share. The
EBRD will hold 48,948 newly-issued shares.
The capital injection has already been endorsed by the supervisory board of Prva pokojninska
druzba, a decision that the shareholders' meeting, due in May, can no longer reverse as it has
18
already been backed by both majority stakeholders (Dej and Poteza Skupina), which so far
commanded a combined 77.68% of voting rights.
This is what Jurij Giacomelli, a member of the fund's management board, told reporters at a
press conference in Ljubljana on Thursday, 29 March. According to him, the EBRD
representative on the supervisory board will be Stefani Milton, an EBRD banker who headed
the Prva pokojninska druzba capital injection project.
Following the signing of the agreement with the EBRD, the fund's Alenka Znidarsic Kranjc
was upbeat that the entrance of a major international institution into the ownership structure
would reduce the risk in penetrating new markets as the EBRD guaranteed easier access to
business partners.
The EBRD regional director for Hungary, the Czech Republic, Slovakia and Slovenia,
Francois Lecavalier, who signed the agreement on behalf of the bank, was pleased with
cooperation with Prva pokojninska druzba and added that the EBRD had always advocated
pension reforms in the countries where it operated.
At the end of last year, Prva pokojninska druzba acquired the leading position among pension
insurance providers in Slovenia in terms of members. It currently has three subsidiaries
outside Slovenia. Apart from the one in Macedonia, where it commands 53.3% of the market,
it also has offices in Kosovo and Serbia, while it is also preparing to enter Ukraine and
Albania.
The fund managed a total of EUR 100m at the end of 2006, when it generated a net profit of
EUR 1.2m. Its members in Slovenia, Macedonia, Serbia and Kosovo paid in a total of EUR
30m last year.
NLB Takes out a EUR 850m Syndicated Loan
This is the largest international loan ever for a Slovenian bank
Slovenia's largest bank, NLB, signed in London on Thursday, 29 March a contract with a
group of international banks on a EUR 850m syndicated loan. This is the largest international
loan ever for a Slovenian bank, NLB said in a press release.
The bank intends to spend the loan for banking operations, in particular for the financing of
companies.
The amount by far surpasses the sum that the bank initially sought, NLB said.
NLB believes this is the result of long-lasting business ties with international banks, good
results, good credit rating and the successful euro changeover in Slovenia.
Ljubljana Stock Exchange
The main market SBI 20 index soared 339.11 points (4.6%) to a new record of 7,691.44
Investors were all smiles last week as a bull run on the Ljubljana Stock Exchange propelled
prices to new records. The main market SBI 20 index soared 339.11 points (4.6%) to a new
record of 7,691.44, with the blue chip SBI TOP index up 50.74 points (3.08%) to 1,698.59.
Drug maker Krka was the busiest item with deals worth EUR 7.26m. It closed at EUR 834.24,
but with a weekly gain of 3.24% it was not among the biggest movers.
Home appliances maker Gorenje was up 7.34% to EUR 33.2 on deals worth EUR 3.24m and
energy company Petrol added 4.67% to EUR 566.11 on the back of deals worth EUR 4.2m.
Istrabenz, the food, energy and tourism conglomerate, was not among the busiest shares, but it
was the biggest mover with a weekly gain of 12.6%.
Istrabenz closed at EUR 61.93 after revealing that group revenues were up 21.3% year-onyear in 2006 while profit trebled to EUR 40.5m.
Hot on their heels were port operator Luka Koper (+11.03% to EUR 71.37), logistics
company Intereuropa (+10.19% to EUR 29.62) and airport operator Aerodrom Ljubljana
(+8.42% to EUR 68.12).
19
Telekom Slovenije was the only big item to close in the red, shedding 0.62% to EUR 384.96.
Investors were banking on the impending privatisation of the telco, but they seem to be
disappointed with the government's decision to sell only 39% of the share capital.
The free market was all Helios, as the maker of coatings added 4.31% to EUR 1,312.88 on
deals worth EUR 660,000.
Popular investment funds took their cue from the blue chips, pushing the PIX investment fund
index over 2% higher to 5,670.39 points.
Total volumes topped EUR 45m last week, with another EUR 11.9m done in block deals.
20
REGIONAL INFORMATION
Maribor, Graz Mayors Call for Better Rail Links
The mayors said that the two cities needed a fast Intercity rail link that would reduce travel
time to under 55 minutes
Franc Kangler, the mayor of Slovenia's second largest city of Maribor, and Siegfried Nagl, his
opposite number from Austria's Graz, called on the transport ministers of both countries on
Thursday, 29 March to improve transport links between the two cities.
The mayors, speaking to the press in Maribor, said that the two cities needed a fast Intercity
rail link that would reduce travel time to under 55 minutes.
"If we want to reach this goal, we will need to construct new railroad lines on both sides of
the border...and build a dual-rail line" between the two cities, the mayors wrote in a letter to
Slovenian minister Janez Bozic and his Austrian counterpart Werner Fayman.
Kangler and Nagl also called for the strengthening of an "axis of knowledge" between the
Maribor and Graz universities and discussed cross-border projects that would allow the cities
to vie for EU funds.
The mayors moreover touched on Maribor's bid to become the European culture capital in
2012.
21
BRANCH INFORMATION
Food Industries Association Calls for Consolidation
Slovenian meat industry is facing price cuts and fierce competition and will soon have to
consolidate and increase cooperation with the government and retail chain
Slovenian meat industry is facing price cuts and fierce competition and will soon have to
consolidate and increase cooperation with the government and retail chains, Boris Jez of Food
Industries Association said at a press conference on Monday, 26 March.
In order to adapt to the market developments, the association will strive to establish
cooperation with all retailers and will not allow anyone, including retail chains, to treat any
Slovenian company in a discriminatory manner, Jez told the press in Ljubljana.
The association's secretary general also criticised government tenders for supplying nurseries
and schools with food. Despite a good nutrition strategy, price is still the deciding factor, he
warned.
The association has 23 members that account for some 90% of the country's meat industry.
Their combined revenues stood at EUR 470m in 2006.
In the past two years, its members have invested EUR 10m in advertising and worked with
retail chains to promote Slovenian meat and meat products, explained Jez.
In 2004, Slovenia became a net importer of meat and meat products. For 2006, exports were
assessed at EUR 117m while imports amounted to EUR 145m, explained agrarian economist
Ales Kuhar.
Almost half of Slovenian exports (47%) last year were meat products (poultry products,
exported mainly into Austria), 35% of exports was meat (mostly beef and fowl, mainly for the
Italian market) while livestock (18%) was exported mainly to Austria.
In imports, Austrian and Italian meat (mostly pork) represented 67%, meat products added
20% and livestock 15% of imports, explained Kuhar.
Krvavec, Kope and Celjska Koca Selected Top Ski Centres
Ski centres Krvavec, Kope, and Celjska koca were proclaimed the top Slovenian ski resorts in
the 2006/2007 season
Ski centres Krvavec, Kope, and Celjska koca were proclaimed on Wednesday, 28 March the
top Slovenian ski resorts in the 2006/2007 season at the award ceremony in Rogaska Slatina,
the organisers said in a press release.
Krvavec, the ski resort that lies only 20 km north of Ljubljana, won among the big ski centre,
followed by Cerkno (western Slovenia) and Rogla (NE).
Kope (NE) was meanwhile selected the best mid-sized ski centre. The second place in this
category went to Stari vrh (N), while Soriska planina (N) placed third in the category.
For the fourth year in a row, Celjska koca (near the city of Celje) won in the category of small
ski resorts. It was followed by Pokljuka (N) and Rudno (W).
The awards for the best Slovenian ski resorts was organised by the Slovenian Ski Association,
the Ski Instructors Association, and the Association of Slovenian Ski-lift Operators, which
also conferred awards for the best skiing club, skiing school and ski-lift operators.
The winners were selected by the listeners of the morning radio programme "Dobro jutro,
Slovenija" (Good Morning, Slovenia) on public broadcaster Radio Slovenija.
22
EU Says Telecoms Market on Track, but No Fixed-Line Competition
A report by the European Commission on the implementation of the telecommunications
regulatory package says that the Slovenian market seems to be "on the right track", with
competition improving on the broadband market and in mobile telephony
A report by the European Commission on the implementation of the telecommunications
regulatory package says that the Slovenian market seems to be "on the right track", with
competition improving on the broadband market and in mobile telephony. Yet the fixed
telephony market "remains largely non-competitive."
The report, which was released on Thursday, 29 March, says that the fixed incumbent
operator, Telekom Slovenije, maintained its dominant position in local access, national access
as well as in fixed-to-mobile calls, with market shares close to 100%. "International calls
remain a niche for smaller market operators."
The competitive situation is generally poor, with only one alternative operator interconnecting
at local level (as this is not feasible for very small operators), three operators regionally, while
three operators interconnect nationally, the report suggests.
On the mobile market, competition between operators and service providers is more balanced
than in the fixed market, and penetration is very close to 90%. The market share of the main
operator, Mobitel, stands at 71%, while the main competitor, Simobil, controls 22.5% of the
market.
Even though access to the incumbent's mobile arm network is mandated by the market
analysis outcome, negotiations with alternative operators appear to be lengthy and
cumbersome, the report points out.
Broadband penetration is the second highest amongst the new member states (12.6%), second
only to Estonia (17.2%). XDSL remains the predominant technology, with such connections
constituting almost 68% of all retail broadband lines.
Cable operators, who have almost a third of the market, "ensure that there is increasing
infrastructure competition." Alternative operators' overall broadband market share grew from
38% in October 2005 to 45% in October 2006.
For the European Commission, one of the key issues in broadband is the risk of margin
squeeze and predatory pricing by the Telekom Slovenije ISP subsidiary Siol. Other issues
include limited access to information about freed local loop unbundling capacities, and "firstmover advantages for the incumbent's daughter company".
Development of ICT in Slovenia on Track, Report Says
Slovenia shows good development in the information society indicators, although it is
generally just behind EU averages, the European Commission said in its recently published
annual information society 2010 report
Slovenia shows good development in the information society indicators, although it is
generally just behind EU averages, the European Commission said in its recently published
annual information society 2010 report.
Broadband take-up among households is just below the EU average (61.7% in Slovenia vs.
62.1% in the EU-25) and is growing at similar rates as Europe as a whole, the report says.
Overall internet use is also average (40.8%/42.6%), and the same applies to the share of
household connections that are broadband.
Citizens are using internet and online services at normal rates to the connection level. Use is
close to the EU average for utility services, and above the EU average for media use. With
47% in regular internet users Slovenia is just in the EU average placing 13th among 25 states.
Thus, Slovenians are not sending as many e-mails as their EU colleagues and are less ardent
internet shoppers, they year however above average when it comes to downloading games and
music, streaming radio and TC, as well as reading online papers and magazines.
23
The number of eGovernment services fully online is above the EU average, and especially
good for citizen services. Enterprise use of eGovernment is above average at both basic and
advanced levels.
Whereas the number of broadband connected schools is fairly high (85% vs. EU average of
67%), the number of computers (7.5%/9.9%) and the actual use by teachers (67.6%/75%) lags
behind.
ICT skills levels in the workforce are slightly above average both for user-level and specialist
skills and the number of specialists employed shows continuing improvement.
Investment in R&D is lower than average as is the relative share of ICT-related R&D
activities. Enterprise connectivity levels have not grown significantly the last year and are
now just above average.
Use of eBusiness applications is lagging behind and eCommerce growth has been slower than
the EU average.
Electricity Prices Up by 5%
Slovenian electricity distributors increased retail prices of electricity for households by nearly
5% on average in order to bridge the gap between wholesale and retailer prices
Slovenian electricity distributors on Sunday, 1 April increased retail prices of electricity for
households by nearly 5% on average in order to bridge the gap between wholesale and retailer
prices. Electricity distributors currently make a loss in supplying electricity to households.
Household electricity prices are still regulated by the government, which cleared the latest
price increase at its session on 22 March.
The aim of the decision, said the Economy Ministry, is to take a step closer to market prices
and bridge the gap between wholesale and retail prices.
Under the cabinet's decision, households will be paying between 4% and 5.1% more
(depending on the power rating) for their electricity as of 1 April.
According to European Commission data for January, Slovenian households get their
electricity 25% cheaper than the EU average.
In previous years, the government kept a lid on electricity prices in order to keep inflation in
check as Slovenia sought to join the eurozone.
24
COMPANIES
Casino Operator Earns EUR 238.1m in Revenues in 2006
Casino operator Hit earned EUR 238.1m in gross operating revenues in 2006, 4% more than
in 2005 and 10% above plans
Casino operator Hit earned EUR 238.1m in gross operating revenues in 2006, 4% more than
in 2005 and 10% above plans, Slovenia's largest gaming group said on Monday, 26 March.
According to the Nova Gorica-based Hit, the company paid EUR 65.1m of the amount in
gaming tax last year, a 5.3% increase on 2005 and 9% above plans.
The group subsidiaries in Slovenia and abroad also had a successful year, as they surpassed
plans.
The group employed some 2,700 workers in 2005, 1,838 of those in its core company Hit.
The upbeat results came despite extensive investments, worth EUR 45.4m in 2006.
Trimo Boasts Double-Digit Growth
Trimo, the Trebnje-based maker of prefabricated components for the construction industry,
posted sales of EUR 134.2m for 2006
Trimo, the Trebnje-based maker of prefabricated components for the construction industry,
posted sales of EUR 134.2m for 2006, an increase of 31% year-on-year and significantly
above plans. Net profit soared 38% to EUR 4.8m, Trimo chief executive Tatjana Fink told the
press on Tuesday, 27 March.
Productivity per employee increased 6% to EUR 47,154, which Fink said was a crucial
indicator for the company in terms of securing growth, shareholder value and appropriate
wages.
Sales expanded on all markets, but growth was fastest on the domestic market, which Fink
attributes to the greater number of engineering projects, mainly for shopping centres.
Together with its subsidiaries, Trimo earmarked some EUR 12m for investment. It also
launched subsidiaries in Romania, Bulgaria and Spain, which the company considers as key
growth markets.
In 2007 Trimo plans to increase sales by 7% and net profit by 6%, especially as a result of the
growth of subsidiaries.
The production of construction panels in Russia will be upgraded, a new factory in Serbia will
be launched and a new facility for the manufacture of containers built in Dubai in a joint
venture with a Danish partner.
Top Slovenian Glassworks to Provide Miss USA Trophies
The Steklarna Rogaska glassworks will provide the crystal statuettes for the winners of this
year's Miss USA beauty pageant, Steklarna Rogaska spokeswoman Judita Vrecar told STA
The Steklarna Rogaska glassworks will provide the crystal statuettes for the winners of this
year's Miss USA beauty pageant, Steklarna Rogaska spokeswoman Judita Vrecar told STA on
Tuesday, 27 March.
The trophies are hand-made of high-quality crystal using traditional techniques. They are 33.5
centimetres high and weigh 2.24 kilos.
Steklarna Rogaska's status of an official sponsor of the competition brings certain advantages,
as the company will be mentioned in the official TV coverage and the organiser's website,
said Vrecar.
The sponsorship status also presents a new step in the promotion and establishment of the
Rogaska 1665 trademark, she added.
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Steklarna Rogaska is also an official sponsor of the Miss Universe 2007 and Miss Teen USA
2007 beauty contests.
Poultry Producer CEO Upbeat Despite Lower 2006 Profits
Despite the adverse circumstances, the company did not lose too much in comparison with
2005, posting a gross profit of EUR 4.2m
Perutnina Ptuj, Slovenia's largest poultry producer, faced bird flu and rising costs of fodder in
2006, chairman Roman Glaser told the press in Ljubljana on Tuesday, 27 March. Despite the
adverse circumstances, the company did not lose too much in comparison with 2005, posting
a gross profit of EUR 4.2m, down EUR 0.2m.
The group's consolidated gross profit stood at EUR 5.6m, Glaser added, with net revenues at
EUR 156.9m. The revenues of core company Perutnina Ptuj amounted to EUR 112.6m.
Glaser said that the company suffered an EUR 1.1m loss because of bird flu. One of the
consequences of the disease was a ban on imports of poultry products from Slovenia by
Bosnia and Serbia.
The losses were reimbursed partly by the state and partly with EU funds.
Glaser added that the company was aware of swine fever. It has imposed all the necessary
measures and warned small-scale farmers.
The company plans to continue strengthening its position on foreign markets and plan new
investments, he added.
Turk to Replace Maierhofer as Simobil Chief-Exec
Dejan Turk, the marketing and sales director of Simobil, will replace Andreas Maierhofer as
the chairman of the Austrian-owned wireless provider on 1 May
Dejan Turk, the marketing and sales director of Simobil, will replace Andreas Maierhofer as
the chairman of the Austrian-owned wireless provider on 1 May, company officials told the
press on Wednesday, 28 March.
While Maierhofer is to take up a position in the management of the Bulgarian Mobiltel, where
he will be responsible for marketing, sales and services, he will become a member of the
Simobil supervisory board.
His seat on the Simobil management will be filled by Walter Goldenits, who will be
appointed technical and sales director. Milan Zaletel meanwhile remains the third member of
the management board.
Boris Nemsic, the CEO of Mobilkom Austria, the majority owner of Simobil and Mobiltel,
told reporters in Ljubljana that Maierhofer had successfully managed Simobil.
According to Nemsic, the company has posted strong development since 2001 and has been a
leading force in the Slovenian telecommunications market and a source of good managers.
Moreover, Simobil was one of the most successful companies in the group in terms of growth
in 2006.
Nemsic was confident that Maierhofer would continue to serve well in Bulgaria, the biggest
market for Mobilkom with 4.3 million users, and that Turk along with Goldenits and Zaletel
would ensure Simobil's success in the future.
Maierhofer expressed pleasure that years of work had paid out, making the company a success
story and a powerful market player that could offer a number of high-quality services.
Maierhofer, who was appointed to the Simobil management in 2004 and became chairman in
June 2006, also called for further liberalisation of the Slovenian telecommunications market.
His successor in office, Turk, said he was proud of the opportunity offered by the company.
He believes he has learned a lot in the past three years with the company and will focus on
further expansion of the company's market.
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As of 1 May the management team will be joined by Peter Curk, as marketing director, and
Andrej Spik, director for regulative, wholesale and legal matters.
Simobil is the second largest mobile provider on the Slovenian market, right after Mobitel, the
wireless subsidiary of the national telco Telekom Slovenije. According to the company's data,
Simobil commanded nearly 25% of the market in 2006.
The company generated EUR 131.2m in operating revenues in 2006, up 30.2% on 2005,
while operating profit meanwhile soared by 149.6% to EUR 11.2m.
Sugar Plant Generates over EUR 2m in Losses in 2006
Tovarna sladkorja Ormoz, Slovenia's sole sugar factory, incurred a loss of nearly EUR 2.2m
last year, which is 20% more than in 2005
Tovarna sladkorja Ormoz, Slovenia's sole sugar factory, incurred a loss of nearly EUR 2.2m
last year, which is 20% more than in 2005, according to unaudited results released by the
company on Wednesday, 28 March.
Net sales revenues totalled EUR 41.2m in 2006, which is around 2% less than the previous
year.
In line with the 2005 EU sugar reform, which made sugar production in Slovenia
unprofitable, the plant will stop producing sugar from sugar beet in 2007 and it has already
started with restructuring.
The company's management drew up a restructuring plan late last year and handed it to the
Agriculture Ministry. A programme of layoffs has also been adopted. The company also said
that talks with prospective buyers of the factory's equipment were drawing to an end.
The European Commission said at the beginning of March that the fund for the restructuring
of the EU's sugar industry contained enough funds to pay out aid to all who requested it.
Elan Announces Layoffs Due to Mild Winter
Ski equipment manufacturer Elan is facing layoffs after an exceptionally mild winter that
pushed production down 20%
Ski equipment manufacturer Elan is facing layoffs after an exceptionally mild winter that
pushed production down 20%. Skimar, the owner of Elan, announced on Tuesday, 27 March
that the company was planning to fire 17 people.
Skimar management board member Matjaz Sarabon said that apart from the 17 redundancies,
the company is not planning further layoffs, unless the next winter is as mild as this one,
leading to further cuts in production.
Dusan Ferjan, the president of Elan's trade union, meanwhile told STA that Skimar initially
planned to fire 30 people, but after talks with the union decided to dismiss only 17. "We are
fighting for every individual in talks with the management board," he said.
Some of the redundant workers have also been placed to jobs at boatmaker Elan Marine, a
member of the Elan group, Ferjan explained.
Elan, which currently employs 930 people, opened 200 new jobs in 2003, and was planning
additional placements in the near future in order to increase production, Sarabon explained.
Due to mild winter, there are an estimated one million of skis left unsold all over the world,
prompting Elan to fall back to last year's production of 640,000 skis, which is 20% below the
target for the year.
Elan is not the only company in trouble as the global ski industry is also expecting a sales
decrease of between 15% to 20% this year, Sarabon explained when the company posted
business results in the beginning of March.
"Elan is certainly in a better position than other producers because we have our own
trademark, while at the same time produce skis for foreign trademarks," Sarabon said then.
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Istrabenz Ups Revenues, Profit in 2006
The food, energy and tourism holding Istrabenz generated revenues of EUR 704m in 2006
The food, energy and tourism holding Istrabenz generated revenues of EUR 704m in 2006, an
increase of 21.8% over 2005. The holding also tripled its unconsolidated profit to EUR
40.5m, the company said on Wednesday, 28 March.
The management board of the Koper-based holding said the company met its goals and had a
very successful year.
While all of the holding's divisions met or surpassed their goals, Istrabenz singled out its food
division which ended 2006 in the black after making a loss the year before.
The group plans EUR 635m in net revenues in 2007. The drop in comparison with 2006 is
expected to come from the sale of a 50% stake in its energy arms, Istrabenz's Energetika.
The operating profit this year is meanwhile expected to stand at EUR 32.8m and net profit at
EUR 26.3m.
Food Company Droga Kolinska Beats 2006 Targets
Droga Kolinska is in majority ownership of the Koper-based food, energy and tourism
holding Istrabenz
Food company Droga Kolinska beat its sales and profit targets in 2006, chairman Robert
Ferko said in Ljubljana on Thursday, 29 March. He did not want to disclose the results due to
stock market rules but promised to reveal the numbers in the coming days.
Ferko did say however that the company sold more than EUR 340m worth of goods and
posted a profit larger than EUR 22m.
Market shares of the company's brands are growing, Ferko added and pointed to coffee brands
Barcaffe and Grand, soft drink Cockta and the Argeta pate.
Droga Kolinska representatives also pointed to their line of 1001 cvet tea blends, which holds
a 60% market share in Slovenia. Droga Kolinska manufactured a total of 623 tonnes of the
blends in 2006.
The company moreover began marketing its products on foreign markets, such as Russia,
Bulgaria and Romania last year and is closing the procedure to get a permit to begin selling
Argeta in Turkey.
A milestone for the company was the Argeta factory that opened in Bosnia last year, said
Ferko
The company's plans for 2007 see sales revenues of EUR 360m, while profit should be above
that in 2006.
Droga Kolinska is in majority ownership of the Koper-based food, energy and tourism
holding Istrabenz. Ferko expects that Istrabenz will acquire an over 90% stake through its
recently published takeover bid for Droga Kolinska, which closed on Wednesday, 28 March.
Meat Processor MIP Ups Profit by over 250% in 2006
MIP, Slovenia's largest meat processing group, increased its net profit to EUR 750,000 in
2006
MIP, Slovenia's largest meat processing group, increased its net profit to EUR 750,000 in
2006, EUR 542,000 more than in 2005, MIP chairman Marko Volk told the press in Nova
Gorica on Thursday, 29 March.
The group, which employs 830 people, also generated sales revenues of EUR 75m in the same
year.
MIP also presented some of its investments at the news conference, including a computerguided manufacturing line for the mortadella salami, one of the most important products of
the Nova Gorica-based company.
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The capacity of the EUR 2m new production line (3,000 kg) would be 30% larger than its
current line which is 30 years old, director of manufacturing and procurement Robert Soban
said.
The company also plans to open in the spring an EUR 1m storage and distribution centre in
Ljubljana.
Sava Group Reports Profit of EUR 34M
Sava, the Kranj-based chemical-to-tourism conglomerate of 30 companies, beat the forecasts
for all major indicators last year, according to a press release posted on the web site of the
Ljubljana Stock Exchange
Sava, the Kranj-based chemical-to-tourism conglomerate of 30 companies, beat the forecasts
for all major indicators last year, according to a press release posted on the web site of the
Ljubljana Stock Exchange on Friday, 30 March.
The group generated EUR 169.3m in sales revenues, which is 9% above targets and 19%
above what it posted in 2005. The net profit of EUR 34.1m is 17% above forecasts.
As a major event in 2006, the press release highlights the acquisition of some 20% in
hardware retailer Merkur as part of plans to restructure its retail division and become a key
owner of one of SE Europe's biggest hardware chains.
The bulk of the group's revenues was again generated by the rubber division, which accounted
for 57% of the overall revenues. The tourism arm contributed 33%, while 8% of the revenues
were generated by the real-estate sector.
All Sava companies posted strong investment last year. A total of EUR 37.1m was invested in
construction and modernisation, of which 70% went for expansion and renovation of tourism
facilities. The Sava holding company invested EUR 87.9m in the capital market, so that the
total of investments stood at EUR 125m, which is up 66% on 2005.
The group employed 2,564 workers at the end of the year, which is down 16% on 2005 due to
the offload of the retail arm and the rest of the chemical division. This aside, the number of
employees rose by 151.
The strategy for 2007 is to increase the company's assets. Sava intends to sell the financial
investments that are running the risk of shedding their market value, which means that the
volume will be much lower than last year, a development that will reflect on the profit as well.
The forecast for the group is EUR 185m in sales revenues and EUR 30.6m in net profit.
Investment in real estate, machinery and equipment is to top EUR 40m, while that in the
capital market is to exceed EUR 75m. The number of employees is set to increase by 29,
mainly in the tourism division.
Telco Supervisors Hold Session in Kosovo
The supervisors decided to hold the meeting abroad after the telco won a bid for the second
mobile phone license in Kosovo
The supervisory board of telco Telekom Slovenije held on Thursday, 29 March a meeting in
Pristina, in the province of Kosovo. The supervisors decided to hold the meeting abroad after
the telco won a bid for the second mobile phone license in Kosovo.
Apart from holding their meeting, Telekom Slovenije supervisors met director of the Kosovo
Telecommunications Agency Anton Berisha and the management of Ipkonet, its Kosovo
subsidiary that recently won a bid to become the second mobile operator in the province.
The supervisors said the group plans to invest EUR 120m in its mobile network in the
province, apart from the EUR 75m already paid for its license fee. Telekom is eyeing a 50%
market share, meaning some 1 million subscribers, in the coming 5 years.
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The supervisors moreover accepted the resignation of Ziga Turk as the chair of the
supervisory board and elected Damijan Koletnik to the post. Turk was recently appointed
minister without portfolio for development.
The telco generated net sales revenues of EUR 733.6m in 2006, 9% over 2005, and increased
its net consolidated profit by 4% to EUR 103.4m.
ACH Doubles Net Profit, Sales up 19%
The ACH conglomerate, formerly Autocommerce, posted net sales of EUR 613m for 2006
The ACH conglomerate, formerly Autocommerce, posted net sales of EUR 613m for 2006,
up 19% on the year before. Net profit more than doubled to EUR 20m, the company said on
Friday, 30 March, adding that all key performance indicators improved significantly last year.
The conglomerate's main activities are car dealership, production (including Adria Mobil,
which makes motor homes), investment banking and brokerage, hotels and IT.
According to the company's press release, car sales and production were the main engines of
growth in 2006. What is more, subsidiaries abroad generated 44% of the total revenues.
Indian-German Joint Venture to Secure over 100 Jobs in Ruse
A joint venture between Indian industrial giant Moser Baer and German solar-grade silicon
producer Solarvalue will soon begin production of silicon wafers in a factory near Maribor
A joint venture between Indian industrial giant Moser Baer and German solar-grade silicon
producer Solarvalue will soon begin production of silicon wafers in a factory near Maribor.
John R. Mott, Solarvalue chief operating officer, told the press on Friday, 30 March that the
facility would provide over 100 jobs when it gets up to speed.
The plant is owned by TDR Metalurgija, the Ruse-based maker of ferro-alloys and calcium
carbide. TDR Metalurgija itself has been acquired by Solarvalue and its Slovenian partner.
The plan is to begin production in mid-2007 after the first production line is converted.
Mott told the press that production will amount to about 850 tonnes of solar-grade silicon by
the end of this year. According to Mott, it will ramp up production to 4,400 tonnes by the end
of 2008, while the current plans envisage a final number of 5,300 tonnes of silicon wafers that
are used for solar cells.
Ravi Khanna, chief executive officer of Moser Baer Photo Voltaic (MBPV), a subsidiary of
Moser Baer, did not want to disclose the value of the investment, but added that the "numbers
will be pretty significant at this stage". "This is a very capital-intensive industry," Khanna
added.
According to him, the Ruse plant will produce silicon wafers, which is the predominant
method for producing solar cells in the world.
Mott said that Solarvalue opted for the Ruse plant because of the "existing supply trains and
the large number of already trained and experienced personnel who are on site".
Solarvalue and Moser Baer also announced that the latter had acquired a 40% stake in
Solarvalue Proizvodnja, the German part of the Slovenian-German holding that in December
acquired a 90.78% stake in TDR Metalurgija.
According to the press release by the two companies "the acquisition will guarantee MBPV an
assured supply of high grade solar wafers and help Solarvalue increase the production
capabilities of its silicon production plant in Ruse".
The final capacity of the Ruse plant means that its wafers could provide for some 500
megawatts of power. Global estimates for installed photovoltaic capacity in 2010 are assessed
at 6 gigawatts.
Moser Baer India is the second largest blank optical media company in the world.
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Mercator Unveils Plans for Tie-up with Serbian Food Company
Slovenia's leading retailer Mercator said it had signed a letter of intent on a strategic
partnership with Swisslion-Takovo, a big Serbian food company, which both companies see as
a way to strengthen their positions on the respective markets
Slovenia's leading retailer Mercator said on Thursday, 29 March it had signed a letter of intent
on a strategic partnership with Swisslion-Takovo, a big Serbian food company, which both
companies see as a way to strengthen their positions on the respective markets.
The letter of intent, which was signed in Belgrade on Thursday, 29 March by Mercator chief
executive Ziga Debeljak and the owner of Swisslion-Takovo Rodoljub Draskovic, stipulates
that Swisslion-Takovo would partner with one of Mercator's food production companies while
Mercator would join forces with Swisslion-Takovo's retail division.
According to a press release from Mercator, the two companies will sign a contract on longterm cooperation in purchase and sale of food products, which will give Swisslion-Takovo
access to Mercator's shelves throughout the region.
Mercator said the long-term strategic partnership could make a significant contribution to the
development plans of both companies in the region.
The relevant preliminary procedures are to be completed in the first half of this year.
Swisslion-Takovo is a leading food company in Southeastern Europe, with revenues in excess
of EUR 350m from food production and another EUR 140m from retail, the press release
reads.
The company's product portfolio includes confectionery, baby food, processed fruit and
vegetables as well as alcoholic beverages and soft drinks.
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.
The announcement comes less than a year after Mercator entered a joint venture with the
Serbian holding Rodic M&B, which increased its share of the Serbian retail market to 8% to
make it the second biggest retailer in Serbia.
Istrabenz Raises Stake in Droga Kolinska to 91%
The newly-acquired share is worth around EUR 70m
The Istrabenz holding has revealed it managed to acquire 30.62% in food company Droga
Kolinska in a takeover bid running until 28 March to raise its stake to 90.91%. The newlyacquired share is worth around EUR 70m.
Istrabenz chairman Igor Bavcar expressed his satisfaction with the takeover in a press release
issued by the Koper-based energy-to-tourism conglomerate on Friday, 30 March. "We are
happy with the outcome of the takeover bid, as the consolidation of ownership allows us
greater control of strategic business decisions at Droga Kolinska."
Istrabenz had published the offer of EUR 16 per share (about 10% below what Droga
Kolinska had been trading on the Ljubljana Stock Exchange) on 28 February for the 40% of
shares it did not own already.
In announcing the bid in mid-February, Istrabenz said it had already signed a pre-contract
with two undisclosed shareholders for the purchase of their combined 14.85% stake in Droga
Kolinska.
Droga Kolinska was created in January 2005 with the merger of two food companies (Droga
and Kolinska), which was masterminded by Istrabenz. The merged company was taken public
to great fanfare in October 2005, but it has struggled to fulfil the expectations of investors.
Istrabenz said the takeover was a way of taking responsibility for 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," Bavcar said in February.
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Droga Kolinska chairman Robert Ferko announced on Thursday, 29 March the company had
beaten its sales and profit targets in 2006. Ferko said the company sold more than EUR 340m
worth of goods and posted a profit larger than EUR 22m, but refused to specify the figures
due to stock market rules.
Pivovarna Lasko Sees Sales Edge Up, Profit Drop
Beverage group Pivovarna Lasko posted net sales of EUR 279.16m for 2006
Beverage group Pivovarna Lasko posted net sales of EUR 279.16m for 2006, an increase of
5.1% year-on-year according to unaudited results released on Friday, 30 March. Net profit
meanwhile dropped by 12.8% to EUR 24.2m, which the company attributes to increased
taxes.
Volume sales increased by 3.7% to just over 5m hectolitres this year, but the group failed to
achieve the sales targets due to lower sales of mineral water and beer abroad.
For 2007, the group - which includes brewers Pivovarna Lasko, Pivovarna Union and
Jadranska Pivara, and soft drinks makers Fructal and Radenska - plans sales revenues of EUR
307m and an operating profit of EUR 34m.
In volume terms, the group plans to boost sales to 5.3m hectolitres, up 6.7% on last year.
Etol Group Sees Sales Drop
The group, which includes the parent company and nine subsidiaries in Slovenia and abroad,
says it intends to focus on increasing its share of the market for high-end products and
services
Etol, the Celje-based maker of flavourings and essential oils, saw sales drop by 5% in 2006 to
EUR 29.84m. Net profit was down nearly 14% year-on-year to EUR 3.2m due to rising costs,
the company said on Friday, 30 March.
The group, which includes the parent company and nine subsidiaries in Slovenia and abroad,
says it intends to focus on increasing its share of the market for high-end products and
services.
It will also work to improve the brand image, establish new subsidiaries abroad and optimise
sales, the press release reads.
Etol, which is quoted on the Ljubljana Stock Exchange, spun off its financial services
division, Finetol, in mid-March.
Zito's Revenues Level, Profits Quadruple
The Zito group, a maker of bread and pasta, posted sales of 116.8m for 2006
The Zito group, a maker of bread and pasta, posted sales of 116.8m for 2006, a fraction less
than in the year before. However, profit soared 352% year-on-year to EUR 4.5m, suggest
unaudited results released on Friday, 30 March.
The group projects sales to grow marginally, to EUR 117.3m this year, with net profit
expected to top EUR 2.1m.
The reason why profits are expected to fall is the move of production at its subsidiary Zito
Sumi to a new central location.
However, this is expected to eventually boost productivity and efficiency, the company's press
release reads.
EUR 10m is to be allocated for investment this year, most of which will be spent on moving
Zito Sumi.
The group had 1,852 employees at the end of 2006, down 225 from the year before.
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Revenues, Profit at Helios Grow at Double-Digit Rates
Chemical company Helios, which specialises in coatings, increased net sales by 13% in 2006
to EUR 259.3m
Chemical company Helios, which specialises in coatings, increased net sales by 13% in 2006
to EUR 259.3m. Operating profit increased by 11% to EUR 15.9m, with net profit up 6% to
EUR 13.2m, the company said on Friday, 30 March.
The group's volume sales amounted to 143,000 tonnes last year, with decorative and industrial
coatings the fastest-growing segments. Exports accounted for 86% of the total sales.
The company said 2006 was a challenging year given high prices of inputs and the volatility
of the purchase market.
The business plan for 2007 sees sales increasing by 12% to EUR 291m, while net profit is to
go up by 13% to EUR 14.8m.
Helios has been one of the stars on the Ljubljana Stock Exchange. Closing at EUR 1,312.88
on Friday, 30 March, Helios has gained over 38% so far this year.
Telekom Launches WiMax Trial
The national telco Telekom Slovenije set up the first trial connection to the broadband
wireless network WiMax at Gradisce nad Pijavo Gorico in central Slovenia
The national telco Telekom Slovenije set up the first trial connection to the broadband
wireless network WiMax at Gradisce nad Pijavo Gorico in central Slovenia on Friday, 30
March, the company said.
Telekom was awarded a 10-year WiMax licence from Slovenia's telecommunications
watchdog, the Agency for Post and Electronic Communications (APEK), in October 2006.
Telekom paid EUR 417,000 for the licence and pledged that in three years the signal would
reach 98.4% of the Slovenian population (55.4% of Slovenian population in rural areas).
WiMax is wireless radio technology that enables broadband internet access and other IPbased services. It is especially useful in rural areas, where poor infrastructure makes wired
broadband unviable.
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FAIRS, CONGRESSES
Tourism and Leisure Fair Gets Underway in Ljubljana
The fair also included two independent events, a boat show and a two-day congress market
The Tourism and Leisure Fair opened on Thursday, 29 March at the Ljubljana fairgrounds,
featuring 116 exhibitors. The fair also included two independent events, a boat show and a
two-day congress market, according to the organisers.
The Tourism and Leisure Fair was organised by Gospodarsko razstavisce, the company
running the fairgrounds, and Higher School for Tourism in Portoroz, in cooperation with the
Slovenian Tourist Organisation and the Slovenian Tourist Board.
The fair is an upgrade of the former Vacation Fair, while the organiser's guideline for the
event was the slogan "Live Slovenia". The fair presented Slovenia and the countries of
interest to Slovenian tourists.
The Boat Show, first time organised as an independent show in 2005, featured 22 exhibitors
presenting about 60 sport and tourist vessels up to eight metres in length, plus other goods and
services, and a number of accompanying events.
The Ljubljana fairgrounds also hosted a two-day congress market, featuring 57 exhibitors and
about 100 representatives of congress, conference and seminar organisers.
The Tourism and Leisure Fair and the Boat Show conclude on Sunday, 1 April.
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SLOVENIA IN BRIEF
Ljubljana Councillors Confirm EUR 253m 2007 Budget
The Ljubljana municipal councillors voted on Monday, 26 March in favour of the city's
budget for 2007. The EUR 253m budget was drafted with a sight on a supplementary budget,
which could come after the city concludes a deal with the state, Mayor Zoran Jankovic said.
Eighth Case of Mad Cow Suspected in Slovenia
The National Veterinary Institute on Wednesday, 28 March informed the Slovenian
Veterinary Administration (VURS) about a new suspected case of mad cow disease. A sevenyear-old cow slaughtered at Celjske mesnine abattoir on Monday, 26 March tested positive
for BSE in preliminary tests.
Government Adopts National Border Control Bill
The government adopted on Thursday, 29 March a bill on the control of national borders that
is to guarantee thorough control of the border and transpose the provisions of the Schengen
Borders Code, Interior Minister Dragutin Mate told the press.
Slovenia to Sign Pan-European Oil Pipeline Declaration
The government authorised on Thursday, 29 March Economy Minister Andrej Vizjak to sign
a ministerial declaration on the construction of a pan-European oil pipeline connecting
Constanta and Trieste. The declaration is expected to be signed on 3 April in Zagreb by
ministers from Slovenia, Croatia, Serbia, Romania and Italy and the European commissioner
for energy.
Boris Vezjak Becomes New Member of RTVS Programming Council
Parliament appointed Boris Vezjak, a professor at the Maribor Faculty of Education, member
of the programming board of public broadcaster RTV Slovenija in a 50:8 vote on Thursday,
29 March. Vezjak was proposed for the post by the parliamentary parties.
Samo Fakin Appointed Health Insurance Institute Director
The National Assembly appointed Samo Fakin director general of the Health Insurance
Institute (ZZZS) on Thursday, 29 March.
Lenarcic and Winkler Discuss EU Constitutional Treaty
European Affairs State Secretary Janez Lenarcic met his Austrian counterpart Hans Winkler
in Vienna on Friday, 30 March to discuss the progress made in informal talks on the EU
constitutional treaty and cooperation between the countries presiding the EU and the
European Parliament.
Cotman Signs UN Convention Protecting Persons with Disabilities
Labour, the Family and Social Affairs Minister Marjeta Cotman was among the more than 40
ministers from around the globe to sign on Friday, 30 March at the UN headquarters in New
York the UN Convention on the Rights of Persons with Disabilities as well as a protocol to
the convention.
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