Slovenia Business Week no. 14, April 9, 2007
Table of Contents:
HEADLINES ............................................................................................................................. 3
Elan Wins Red Dot Award for Speedwave Skis .................................................................... 3
CCIS Opening Trade Office in Central Russia ...................................................................... 3
IMAD Upgrades GDP Growth, Inflation Forecast ................................................................ 4
INTERNATIONAL COOPERATION ...................................................................................... 5
Slovenia Opening Consulate in Karachi ................................................................................ 5
Ministers Sign Pan-European Oil Pipeline Declaration ......................................................... 5
Cukjati Talks Politics, Economy with Indian Ambassador .................................................... 6
Slovenia, Hungary Sign Deal on Joint Visa Representation .................................................. 6
EUROPEAN UNION ................................................................................................................. 7
EU to Confirm Slovenia's Strategic Cohesion Document in May ......................................... 7
Slovenia Fined by EU for Surplus Agricultural Stocks ......................................................... 7
Potocnik: Free Flow of Knowledge Should Become 5th EU Liberty .................................... 8
Ministers of EU Troika Meet to Discuss Transport Priorities ............................................... 8
Slovenia to Sign Partnership Deal with European Space Agency ......................................... 9
LEGISLATION ........................................................................................................................ 10
National Council Vetoes Amendments to Code of Obligations .......................................... 10
Government Adopts Bill on Tonnage Tax for Ships ............................................................ 10
Amendments to Workers Co-Determination Act Enter into Force ...................................... 10
STATISTICS/FORECASTS .................................................................................................... 12
Only a Third of Employees Receive Above-Average Wages .............................................. 12
Trade Gap at EUR 120.9M in February ............................................................................... 12
Report Says Slovenia's Development Successful, Ecology Patchy ..................................... 12
FINANCE................................................................................................................................. 14
Insurance Market Expanded by 11.4% in 2006 ................................................................... 14
Zlata Moneta 2 Fails to Acquire Etra 33 .............................................................................. 14
NKBM Profit 52% Above Plans in 2006 ............................................................................. 14
Largest Bank Unveils Management Board Members .......................................................... 15
NLB Acquires Majority Stake in Kosovo Bank ................................................................... 15
Abanka Gets EUR 260m Syndicated Loan .......................................................................... 15
Life Insurer Slovenica Zivljenje Ups Premiums by 84% in 2006 ........................................ 16
Insurer Triglav Says 2006 Was its Best Year Ever .............................................................. 16
Ljubljana Stock Exchange .................................................................................................... 16
REGIONAL INFORMATION ................................................................................................ 18
Government Tweaks Local Government Act in Run-up to Devolution .............................. 18
BRANCH INFORMATION .................................................................................................... 19
Vizjak: Slovenia Will Encourage Use of Renewables ......................................................... 19
Tests Confirm Eighth Case of Mad Cow Disease ................................................................ 19
One Hundred Riddles Wins Best Picture Book Award ........................................................ 20
Workshop Promoting Equal Opportunities in Entrepreneurship ......................................... 20
COMPANIES ........................................................................................................................... 22
Lasko and Controlled Companies Bidding to Take Over Delo............................................ 22
Employers Announce Lobbying Campaign ......................................................................... 22
Spar Continues to Grow Despite Losing Market Share ....................................................... 23
Apparel Manufacturer Faces Liquidation............................................................................. 23
Sava Consolidates Tourism Division ................................................................................... 24
Dairy Ljubljanske Mlekarne to Get out of the Red in Two Years ....................................... 24
Tool Maker Unior Ups Revenues, Profits in 2006 ............................................................... 24
Flights Set to Begin in June between Belgrade and Portoroz .............................................. 25
Krka Increases Q1 Sales by 13% ......................................................................................... 25
Cetis Generates Profit in 2006 ............................................................................................. 26
Posta Slovenije Expanding Ties with Postal Companies in Region .................................... 26
Perutnina Ptuj Planning to Open Factory in Bosnia-Herzegovina ....................................... 27
SLOVENIA IN BRIEF ............................................................................................................ 28
EU Presidency Dominates Defence Minister's Talks in Finland ......................................... 28
Swiss General Highlights Slovenia's Stabilising Role ......................................................... 28
Culture Ministry Presents Draft Bill on Agency for the Book ............................................. 28
Protection of Adriatic Sea Unites Neighbours ..................................................................... 28
Commission Stresses Importance of Economy for Slovenians Abroad ............................... 28
Government Adopts Zoning Laws on Zavrc Border Crossing ............................................ 28
Slovenia Gets Society for European Law ............................................................................ 28
Strel Completes Record Amazon Swim ............................................................................... 28
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HEADLINES
Elan Wins Red Dot Award for Speedwave Skis
Sports equipment manufacturer Elan has become only the second Slovenian company after
home appliance maker Gorenje to win a Red Dot Design Award, which is conferred annually
by the Essen-based Design Zentrum Nordhein Westfalen
Sports equipment manufacturer Elan has become only the second Slovenian company after
home appliance maker Gorenje to win a Red Dot Design Award, which is conferred annually
by the Essen-based Design Zentrum Nordhein Westfalen.
Elan received the prestigious award for its Speedwave series of skis, which were conceived
together with the industrial design studio Gigodesign.
"The product is a role model for results of the kind of development we want in Slovenia,"
Development Minister Ziga Turk told the press on Monday, 2 April.
Elan chairman Matjaz Sarabon said the award was very important, as the green winter meant
the market for skis would shrink by 20%, but sales of the Speedwave line were expected to
grow by 20%.
The skis, the results of three years of development work, surpassed projected sales by 60% in
the first year.
In the coming season all Elan skis will be based on the underlying WaveFlex technology,
Elan product manager Luka Grilc explained.
The winners of the Red Dot Design Award, which were selected among 2,548 registered
products from 43 countries, will be formally honoured in Essen on 25 June.
In 2005 Gorenje received the award for its Premium Touch series of household appliances.
CCIS Opening Trade Office in Central Russia
The Chamber of Commerce and Industry of Slovenia (CCIS) announced it would join a
consortium of six Slovenian companies in opening a trade office in the Russian city of
Ekaterinburg in May this year
The Chamber of Commerce and Industry of Slovenia (CCIS) announced on Thursday, 5 April
it would join a consortium of six Slovenian companies in opening a trade office in the Russian
city of Ekaterinburg in May this year.
"One of our goals is dispersing Slovenian exports and international cooperation, with Russia
still being an extremely big and not fully utilised opportunity for Slovenia's economy," CCIS
president Samo Hribar Milic said at the signing of the agreement between the CCIS and the
consortium.
Hribar Milic believes that the office could help Slovenia's trade with Russia reach around
EUR 2bn in the coming years - double what it is now.
The consortium is comprised of civil engineering company Riko, logistics company
Intereuropa, chemical company Pocinkovalnica, power engineering company Korona, metal
products manufacturer Mines IB and Impacto.
"We will not achieve EUR 2bn in trade by only operating in Moscow and Saint Petersburg.
We need to disperse and also cover other regions in this big country," Riko general manager
Janez Skrabec said.
The head of the office Esad Ajeti said that Slovenian companies have shown great interest in
cooperating with Russia. Around 70 Slovenian companies already have offices in Russia, but
they are concentrated in Moscow, which has prompted the CCIS to decide for a different
region.
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Ekaterinburg has a population of 1.5m, while its location in the central part of Russia gives
the office the possibility to also cover Western and Central Siberia, the south of Russia and
neighbouring Kazakhstan.
IMAD Upgrades GDP Growth, Inflation Forecast
The Institute for Macroeconomic Analysis and Development (IMAD) projects that Slovenia's
gross domestic product will grow by 4.7% this year, up from its forecast of 4.3% of six
months ago
The Institute for Macroeconomic Analysis and Development (IMAD), the government's
economic think-tank, projects that Slovenia's gross domestic product will grow by 4.7% this
year, up from its forecast of 4.3% of six months ago. Inflation is meanwhile expected to level
off at 2.2%, down from 2.7% projected in the autumn.
Exports were one of the major boosters of last year's GDP growth of 5.2%. It is expected that
exports will continue to grow at a rate of 9% to 10% this year, IMAD director Janez Sustersic
told the press on Thursday, 5 April as he presented the Spring Report.
"This is because global economic growth is not easing. What is more, Slovenia's share on
these markets is increasing every year, which maintains high export growth," Sustersic said.
The most important engine of growth in 2006 was investment, which expanded by 12% in
real terms on the back of lower inflation and subsequently lower interest rates, as well as high
spending on road infrastructure and housing.
IMAD expects investment growth to amount to 6% or 7% over the coming two years.
Households are projected to spend 3.8% more than last year, with the figure to level off at
3.5% in the subsequent years.
According to Sustersic, this projection is underpinned by lower income tax and the expected
growth in employment. The Spring Report also envisages annual real wage growth to the tune
of 3% and ILO-based unemployment rate of 5.7%.
IMAD has also upgraded the outlook for 2008: the economy is expected to expand by 4.4%,
0.2 percentage points more than forecast in the autumn, while inflation is to accelerate to
2.5% and remain at that level over the medium term.
In the subsequent years GDP growth is expected to stand at between 4% and 4.5%. Sustersic
said that the growth rates would depend foremost on reform measures and infrastructure
projects.
If growth is to exceed 5%, the pace of reform will have to accelerate, especially on the labour
market, investment in research and innovation.
The IMAD spring forecast serves as a guidance for the budget. Finance Minister Andrej
Bajuk said the figures were a good and realistic basis for the budget, but he believes GDP
growth could yet be faster considering that there are no signs of a slowdown in Slovenia or in
Europe.
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INTERNATIONAL COOPERATION
Slovenia Opening Consulate in Karachi
The consulate in Karachi, in the southeast of Pakistan, is in charge of promoting and
assisting the development of economic, cultural and scientific ties between Slovenia and
Pakistan
Slovenia will open a consulate in Karachi, which will be responsible for the whole of
Pakistan, in line with the government decree published in the Official Gazette on Tuesday, 3
April. This and the appointment of Humayun S. Mufti as honorary consul are effective as of
Wednesday, 4 April.
The consulate in Karachi, in the southeast of Pakistan, is in charge of promoting and assisting
the development of economic, cultural and scientific ties between Slovenia and Pakistan,
according to the Official Gazette.
The issue of the Gazette also carries a decree on the appointment of Eival Gilady as honorary
consul in Tel Aviv and a change of the decree on the opening of a consulate in that city which
says that the consulate is responsible for southern Israel.
Ministers Sign Pan-European Oil Pipeline Declaration
Economy Minister Andrej Vizjak signed along with colleagues from Croatia, Serbia,
Romania, Italy and the European commissioner for energy a ministerial declaration on the
construction of a pan-European oil pipeline connecting the Romanian port of Constanta and
Italy's port of Trieste
Economy Minister Andrej Vizjak signed on Tuesday, 3 April in Zagreb along with colleagues
from Croatia, Serbia, Romania, Italy and the European commissioner for energy a ministerial
declaration on the construction of a pan-European oil pipeline connecting the Romanian port
of Constanta and Italy's port of Trieste.
In a statement for STA Vizjak stressed that the declaration was non-binding for Slovenia and
that Slovenia would not take part in the project as an investor.
The minister explained that the document was but a statement that Slovenia was in principle
joining a project that diversifies the EU's access to energy and secures Europe with a more
reliable supply of oil.
"Slovenia clearly stated it was not ready to accept any international commitments related to
this project," Vizjak said.
"The declaration provides an impetus for those interested in investing. Investors will present
the entire documentation to responsible bodies, asking their opinion and approval. If the
project is approved by experts, Slovenia will support it in view of the common energy
policy," the minister added.
This project is a good example of close cooperation between the members of the Energy
Community, European Commissioner for Energy Andris Piebalgs meanwhile said.
Croatian Economy Minister Branko Vukelic described the declaration for STA as an
expression of political will by the signatories, but only as the first step towards the pipeline.
Vukelic said that some versions of the project also included the option of the pipeline
circumventing Slovenia, in case the country opposed it crossing the sensitive Karst region or
rejected it due to economic reasons.
Vizjak assured that special concern would be devoted to the analysis of the environmental
impacts of the pipeline. He said "there will be no project" in case potential risks proved as
unacceptable.
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Cukjati Talks Politics, Economy with Indian Ambassador
Parliament Speaker France Cukjati received the first resident Indian Ambassador to Slovenia
Villur Sundararajan Seshadri
Parliament Speaker France Cukjati received the first resident Indian Ambassador to Slovenia
Villur Sundararajan Seshadri on Tuesday, 3 April. The pair discussed the importance of the
Indian embassy in Slovenia, the role of the port of Koper in India's access to Western
European markets and relations between the EU and India.
Cukjati expressed satisfaction over India opening an embassy in Ljubljana, saying he was
convinced that Slovenia and India held similar views on important global issues. Cukjati
added that India also had good relations with the EU.
India's ambassador meanwhile said that the decision to open the embassy was not difficult as
India saw Slovenia as a successful country. He highlighted Slovenia's NATO and EU
membership, its accession to the eurozone and its EU presidency scheduled for the first half
of 2008.
Seshadri, who took office on 1 March this year, moreover expressed interest in deepening
cooperation between Slovenia and the EU. He highlighted Luka Koper, the operator of
Slovenia's sole seaport, describing it as India's access point to Western Europe, the press
release by Cukjati's office also said.
Slovenia, Hungary Sign Deal on Joint Visa Representation
This type of cooperation will first take place through the setting up a joint reception centre in
the Moldovan capital of Chisinau
Slovenian Foreign Minister Dimitrij Rupel and Hungarian Ambassador to Slovenia Jozsef
Czukor signed a deal on Wednesday, 4 April that allows the two countries to represent each
other in visa and residence permits procedures on diplomatic and consular missions in third
countries, the ministry wrote in a press release.
This type of cooperation will first take place through the setting up a joint reception centre in
the Moldovan capital of Chisinau. The centre is being set up by several EU countries, headed
by Hungary. Also taking part are Austria, Slovenia, Latvia and Denmark.
The centre presents one of the key forms of cooperation between EU states in visa policy and
will enable consular officials accredited for Moldavia in Kiev to process visa and residential
applications and carry out talks with the applicants, the ministry wrote.
This form of cooperation will also shorten the procedures and cut costs. Such forms of
cooperation are also important for Slovenia, because it has very few diplomatic and consular
representations abroad.
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EUROPEAN UNION
EU to Confirm Slovenia's Strategic Cohesion Document in May
Slovenia has already submitted to the European Commission the strategic documents for the
phasing of cohesion funds - the National Strategic Reference Framework and the operational
programmes
Slovenia has already submitted to the European Commission the strategic documents for the
phasing of cohesion funds - the National Strategic Reference Framework and the operational
programmes. The Commission is expected to confirm the documents in May, Regional Policy
Commissioner Danuta Huebner told STA on Monday, 2 April.
The member states have so far submitted all the National Strategic Reference Frameworks
and 311 of the 444 operational programmes. "Negotiations on programmes accounting for
90% of the total cohesion policy budget are now under way," Huebner said.
Slovenia is entitled to EUR 4.2bn-worth of funds in the 2007-2013 period. This is a fraction
of the record EUR 350bn earmarked for all 27 member states.
According to Huebner, the message of the strategies and the programmes which the member
states submitted is clear: the programmes will implement the EU's priorities such as growth,
jobs and sustainable development, but there will also be big investments in renewables,
energy efficiency and pan-European infrastructure projects.
Some EUR 80bn will be allocated for transport, EUR 70bn for human resources and EUR
60bn for research and development, innovation and entrepreneurship.
According to preliminary estimates, projects that directly contribute to Lisbon Strategy goals
are worth EUR 200bn, of which EUR 50bn will go into R&D and EUR 70bn into human
resources.
Huebner noted that the poorest regions must double their efforts in R&D. "The poorer you are
the more innovative you need to be," the commissioner is convinced.
Huebner said that unlike most other member states, Slovenia had not expressed interest in
Jeremie, an initiative designed to improve the access of small and mid-sized enterprises to
finance.
"Slovenia probably doesn't need this instrument for now, but it can use it any time in the
future," she said. "Maybe it is not interested because it has good results in support for SMEs."
Jeremie is a joint initiative of the European Commission, European Investment Bank and
European Investment Fund.
Slovenia Fined by EU for Surplus Agricultural Stocks
The European Commission has issued fines to nine 2004 newcomers, including Slovenia, for
building excess stocks of agricultural goods ahead of their accession to the EU
The European Commission has issued fines to nine 2004 newcomers, including Slovenia, for
building excess stocks of agricultural goods ahead of their accession to the EU. Slovenia will
have to pay a fine of EUR 393,000.
Slovenia was found by the Commission to have had excess stocks of fruit and rice, for which
it was fined EUR 375,000 and EUR 18,000, respectively. The fine incurred by Slovenia is a
small part of a total of EUR 41.1m of fines that will have to be paid by the nine countries over
four years.
In the run up to the 2004 enlargement, as with previous enlargements, the acceding countries
had to take measures to prevent the build-up of stocks of agricultural products in order to
prevent a significant impact on prices of these products in the EU.
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"Measures to prevent the build-up of surplus stocks are a normal feature of every EU
enlargement," Commissioner for Agriculture and Rural Development Mariann Fischer Boel
said on Wednesday, 4 April.
"It is our legal duty to make sure these rules are enforced, because they prevent companies
across the Union being harmed by excessive stockpiling."
The EU found excess stocks piles of meat and dairy products as well fruit and vegetables in
the countries that joined the EU in 2004. Hungary is the only country that did not have surplus
stocks.
Potocnik: Free Flow of Knowledge Should Become 5th EU Liberty
European Science and Research Commissioner Janez Potocnik presented in Brussels the
green paper on new perspectives for the European Research Area (ERA)
European Science and Research Commissioner Janez Potocnik presented in Brussels on
Wednesday, 4 April the green paper on new perspectives for the European Research Area
(ERA), saying that he was pushing above all for the free flow of knowledge to become the
"fifth EU liberty".
"Free flow of knowledge is a necessity and all obstacles for researchers have to be removed,"
said the commissioner, adding that this will not be possible without the support by the
member states and business.
The green paper presents the challenges Europe is facing today - modest investment,
dispersed research and increasing globalisation of science and technology.
Equipping the coming generations with knowledge and using this knowledge is of key
importance if the EU is to reach the economic, social and environmental objectives set out in
the Lisbon Strategy, the document says.
Referring to Potocnik's call for the removal of all obstacles to researchers working abroad,
Potocnik's spokeswoman Antonia Mochan told STA that the majority of EU countries have
not introduced visas for researchers. Potocnik explained that they had been given until
October to so.
The commissioner said that researchers had to expand their knowledge outside their own
country. "We have to remove all obstacles to those researchers who are aware that mobility is
a part of their life," said Potocnik.
The paper also pointed to the difficulties the EU is facing when it comes to the cooperation of
individual economies with researchers from abroad.
Although EU companies increased expenses for research and development by more than 5%
in 2006, the figure is still lagging behind those in the competing parts of the world, Potocnik
also said.
According to the document, investment by companies from the EU in the US is higher than
that by American companies in the EU.
The document therefore emphasises the need for an appropriate movement of competent
researchers, a research infrastructure on the highest level, access to knowledge and flow of
knowledge, connected research programmes, and for the opening of the European Research
Area to the world.
In addition, Potocnik said that universities must have free hands in the employment of
researchers, as the EU universities employ 37% of researchers, while the US and Japan
employ 15 and 26%, respectively.
Ministers of EU Troika Meet to Discuss Transport Priorities
Transport Minister Janez Bozic held in Portugal a meeting with his Portuguese and German
counterparts, Mario Lino and Wolfgang Tiefensee, on the 18-month programme of the EU
presidency in the area of transport
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Transport Minister Janez Bozic held in Portugal on Wednesday, 4 April and Thursday, 5
April a meeting with his Portuguese and German counterparts, Mario Lino and Wolfgang
Tiefensee, on the 18-month programme of the EU presidency in the area of transport.
Slovenia will monitor developments during Portugal's EU presidency and set its transport
priorities by the end of the year, Bozic told STA on Thursday, 5 April.
On the satellite navigation system Galileo, Bozic said that the agenda of Germany's and
Portugal's presidency should include a decision on the seat of the supervisory authority of
Galileo (Slovenia is among the candidates). The ministers accepted the proposal, while
Tiefensee said that he would try to establish criteria for making a selection of countries which
are bidding for the seat.
Lino meanwhile presented to Bozic the main priorities of Portugal's EU presidency in the area
of transport. Sea transport priorities include third safety package for shipping, motorways of
the seas, passenger protection and the green paper on maritime policy, on which Portugal is to
organise a conference in October.
The area of air transport will include a review of the third package for air transport, the Single
European Sky ATM Research (SESAR) project, airport capacity directive, airport taxes,
computer booking systems and safety, said Bozic.
The area of land transport will include the trans-European networks, the Galileo project,
regulation on public services of passenger transport, the logistics action plan, the green paper
on urban transport, and transportation of dangerous goods.
According to Bozic, an important part of land transport is rail traffic, where the priorities will
include interoperability, safety, recognition of technical standards, and the construction of a
separate freight transport network.
The meeting was concluded with an agreement on mutual support, while Bozic invited his
counterparts to the next working meeting which is to be held in Ljubljana in the autumn.
The EU is currently presided over by Germany, while Portugal is to take over the six-month
rotating presidency in July. Slovenia will be at the helm of the bloc in the first half of 2008.
Slovenia to Sign Partnership Deal with European Space Agency
The Government Office for Communication said the agreement would provide the framework
for systematic international cooperation in space research
The government on Thursday, 5 April endorsed the signing of a memorandum of
understanding with the European Space Agency (ESA), which is expected to make Slovenia
an ESA participating country in a matter of years.
The Government Office for Communication said the agreement would provide the framework
for systematic international cooperation in space research.
The framework agreement will not cost anything, but the status of ESA participating country
would involve annual costs to the tune one million euros, a visiting ESA official said recently.
Slovenia is forging closer ties with the ESA to improve its chance of being selected to host the
seat of the supervisory authority of the Galileo satellite navigation system.
Slovenia is one of ten EU member states vying to host the seat; of the ten, only Slovenia and
Malta are neither ESA members nor cooperating with the agency under a special agreement.
9
LEGISLATION
National Council Vetoes Amendments to Code of Obligations
The upper chamber of parliament vetoed the recently adopted code of obligations, arguing
that new provisions on arrears undermined the fundamental principle of equality before the
law
The upper chamber of parliament vetoed on Thursday, 5 April the recently adopted code of
obligations, arguing that new provisions on arrears undermined the fundamental principle of
equality before the law.
The amendments stipulate that the rule whereby interest stops accruing when it reaches the
value of the principal would apply only for contractual interest, while default interest would
be excluded.
The National Council, which vetoed the amendments in a 18:7 vote, endorsed the opinion of
the proponent that potential damages creditors could suffer due to a debtor's delay in the
payment of default interest could exceed the principal of the claim.
The councillors also voiced disagreement with the government's main reason for the
amendments - that payment discipline will be improved.
To enact the amendments, the National Council will have to confirm them in a re-vote with
the absolute majority of all votes.
Government Adopts Bill on Tonnage Tax for Ships
The cabinet adopted on Thursday, 5 April a bill on tonnage tax that will introduce a special
tax regime for shipping companies in a bid to keep them headquartered in Slovenia
The cabinet adopted on Thursday, 5 April a bill on tonnage tax that will introduce a special
tax regime for shipping companies in a bid to keep them headquartered in Slovenia, Finance
Minister Andrej Bajuk told the press after the session.
Bajuk said that the bill introduced taxation for shipping companies in relation to the tonnage
of their ships, instead of the previous system under which taxes were levied on the companies'
income.
While the EU considers this type of taxation as state aid, it also allows it under special
conditions, Bajuk said.
While shipping companies in the past ten years on average paid taxes to the amount of EUR
665,000 per year, income from the new taxation system is estimated at about EUR 100,000
per year.
The majority of EU maritime states have already introduced this type of tax, Bajuk added.
Amendments to Workers Co-Determination Act Enter into Force
The amendments place workers' representatives into management and supervisory boards,
depending on the way the company is run
Amendments to the act on worker co-determination that deal with the role of workers on the
management boards of companies with single- and dual-tier management systems entered into
force on Saturday, 7 April. The amendments place workers' representatives into management
and supervisory boards, depending on the way the company is run.
Workers must have at least one representatives per three members of the management board,
but the representative cannot hold the position of the management board president. The same
ratio must be observed for supervisory boards.
The amendments expand the requirements for sole proprietors with at least 50 employees.
The amendments to the act governing rescue and restructuring aid for companies in difficulty
also entered into force.
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The amendments are aimed at simplifying the act, making 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 small- and medium-sized companies (SMEs) as their
restructuring programme will from now on - bar exceptional cases - be confirmed by the
government and will no longer need to be presented to the European Commission.
11
STATISTICS/FORECASTS
Only a Third of Employees Receive Above-Average Wages
Just over 36% of all employees in Slovenia received above-average gross wages in 2006,
whereas the wages of the remaining 63.7% were below the national average
Just over 36% of all employees in Slovenia received above-average gross wages in 2006,
whereas the wages of the remaining 63.7% were below the national average (which was EUR
1,199.95 in September), according to data released by the National Statistics Office on
Monday, 2 April.
The best wages were in education, mining and quarrying, financial intermediation, electricity,
gas and water supply, and public administration, where above average earnings were received
by about a half to about two thirds of all employees.
Except in mining and quarrying, where earnings are higher due to difficult working
conditions, the situation in the other activities was the result of a more favourable educational
structure.
Wages were the worst in hotels/restaurants and agriculture, which is to a large extent the
result of the staff structure and unfavourable economic trends.
In six activities gross earnings below the national average were received by at least three
quarters of persons in paid employment; in hotels and restaurants the share was over 80%.
Between September 2005 and September 2006, gross earnings in the public sector were
17.6% higher than the national average, while in the private sector they were 9.6% lower than
the average.
In the private sector the share of persons in paid employment who received the lowest wages
was 3.9%, almost six times higher than in the public sector (0.7%).
Average earnings in the private sector amounted to EUR 1,087.04, which was almost a
quarter less than in the public sector (EUR 1,410.56).
However, in the private sector the share of the highest paid persons in paid employment was
0.4 percentage points higher than in the public sector (1.2%).
September was chosen as the representative month for the whole year, as there is not a single
bank holiday that month.
Trade Gap at EUR 120.9M in February
Slovenia exported EUR 1.47bn worth of goods in February
Slovenia exported EUR 1.47bn worth of goods in February, a rise of 16.5% year-on-year,
while imports were up 15.2% to EUR 1.59bn, according to preliminary data released by the
Statistics Office on Friday, 6 April.
This brings the country's trade gap to EUR 120.9m, up from EUR 81m recorded in January.
The export-import ratio declined from 94.7% in January to 92.4% in February.
Exports to EU member states were worth EUR 1.06bn, up 16.1% year-on-year, while exports
to other markets amounted to EUR 405.1m, up 17.5%.
Slovenia imported EUR 1.26bn worth of goods from the EU, which is up 15.9% year-on-year,
while imports from other countries increased by 12.5% to EUR 323.3m.
Report Says Slovenia's Development Successful, Ecology Patchy
Slovenia has developed successfully over the past few years, managing to preserve quality of
life and prosperity
Slovenia has developed successfully over the past few years, managing to preserve quality of
life and prosperity. However, it has been too slow to reduce pressure on the environment,
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according to a report by the Institute for Macroeconomic Analysis and Development (IMAD),
a government think-tank.
In the 2004-2006 period gross domestic product (GDP) growth accelerated significantly,
exceeding the average GDP growth in the EU by a whole percentage point more than in the
previous three-year period, IMAD's Rotija Kmet Zupancic told the press on Friday, 6 April as
she presented the Development Report 2007.
According to her, the brisk pace of growth was mostly a result of macroeconomic factors, but
it was also due to structural changes and reforms that were launched between 2004 and 2006.
The report, which the government confirmed on Thursday, 5 April, is a tool IMAD uses for
assessing the implementation of Lisbon Strategy goals in Slovenia. IMAD believes that
important steps were taken in the initial period of implementation.
"In the coming period, it is necessary to maintain the achieved stability of the economy,
ensure fiscal sustainability, boost factors of competitiveness that are based on innovation and
know-how, reduce the exposure of certain social groups to social risks and additionally ease
pressure on the environment," she said.
Kmet Zupancic added that the reduction of high energy intensity, and the expansion of
renewable energy sources, were too slow. As IMAD director Janez Sustersic noted, the
economy is heavy on industries that cause large greenhouse gas emissions.
The Slovenian economy is becoming more international, mainly through exports and outgoing
foreign direct investment (FDI). However, incoming FDI, which could speed up the
technological restructuring of manufacturing, is still modest, the report says.
IMAD has detected progress in the reduction of public spending and labour taxation. There
were also positive changes in regulation and the elimination of administrative barriers. Yet
progress has been too slow in areas that have a long-term impact on competitiveness,
especially in innovation.
The report identifies insufficient headway in the quality and efficiency of higher education,
but says the educational structure of the population is improving nevertheless.
Progress has also been made in activities that boost research and development and innovation,
especially the accessibility of the internet, but spending on R&D has not been growing fast
enough.
IMAD believes that privatisation has not been fast enough either. "In 2005 the state was still
one of the most important owners," Kmet Zupancic noted.
As for the standard of living, IMAD says life is improving and the risk of poverty remains
among the lowest in the EU at 12.1%.
The weaknesses include the low share of rental apartments, poor accessibility of housing for
young people and participation in lifelong education that is dropping with age.
13
FINANCE
Insurance Market Expanded by 11.4% in 2006
Slovenian insurance companies collected EUR 1.7bn in premiums in 2006
Slovenian insurance companies collected EUR 1.7bn in premiums in 2006, a 11.4% increase
compared to the year before, according to preliminary data of the Slovenian Insurance
Association.
Zavarovalnica Triglav held the biggest chunk of the market, 38.2%, collecting EUR 659.7m
worth of premiums.
Adriatic Slovenica ranked second with a 13.5% market share (EUR 233.2m worth of
premiums), followed by mutual health insurance company Vzajemna with a 12.7% share
(EUR 218.7m) and Zavarovalnica Maribor (12.2%, EUR 210.3m).
Property insurance premiums represented about two thirds of the overall premiums and
amounted to EUR 1.18bn, an increase of 9.2% compared to 2005, while life insurance
premiums accounted for EUR 540.8m worth of premiums, up 16.3% over 2005.
The increase in life insurance premiums can mainly be attributed to expansion in the
investment insurance segment. These types of life insurance accounted for more than 52% of
all life insurance premiums and amounted to EUR 283.7m, up 39.4% on 2005.
Zlata Moneta 2 Fails to Acquire Etra 33
Zlata Moneta 2 remains the owner of about 20% of Etra 33
Zlata Moneta 2, the Maribor-based asset management firm, has failed in its bid to acquire Etra
33, a maker of transformers. Following the noon deadline, the chief exec Zlata Moneta 2 Peter
Zoric told STA that the company had managed to acquire but 0.5%.
Zlata Moneta 2 remains the owner of about 20% of Etra 33, while Zoric did not rule out the
possibility that the stake would be offloaded.
Zoric said the failure of the bid in which Zlata Moneta 2 sought to exceed a 51% stake in Etra
33 was probably due to the too low price. The bidder offered EUR 446.5 per share for the
entire outstanding stake, worth EUR 16.2m in total.
Dissatisfied with the bid, small shareholders urged the state-run Pension Fund Management
(KAD) and Restitution Fund (SOD) last week not to sell their combined 21.14% stake in Etra
33. The funds said on Monday, 2 April they would not accept the bid.
Etra 33 was worth EUR 474 on the Ljubljana Stock Exchange on 14 February when the
tentative takeover offer was announced.
Etra 33 is specialised in the manufacture, installation and servicing of power, distribution and
special transformers. It has a workforce of 160 and posted sales of EUR 25m last year.
NKBM Profit 52% Above Plans in 2006
Total assets grew by 23% to EUR 3.67bn
Slovenia's second-largest bank, NKBM, posted a pre-tax profit of EUR 43.6m in 2006, which
is 52% above plans. Total assets grew by 23% to EUR 3.67bn, NKBM chief executive Matjaz
Kovacic told the press on Tuesday, 3 April.
Kovacic pointed out that pre-tax return on equity was up from 15.64% to 18.44%. The bank
has also managed to increase its market share in all segments by between 0.4% and 0.6%.
The NKBM group, which also includes insurer Zavarovalnica Triglav and PBS, the postal
bank, meanwhile strengthened its position as the second strongest financial group in Slovenia,
Kovacic said.
14
The group's total assets expanded by 21% to EUR 4.26bn, while pre-tax profit topped EUR
55.8m.
Total assets are expected to grow by 15% this year while profit is to drop to EUR 44.4m.
According to executive board member Manja Skernisak, growth in 2006 can largely be
attributed to successful work in the commercial sector and the effective use of the integration
within the financial group.
This-year's plans also include the continuation of the bank's expansion to foreign markets.
Largest Bank Unveils Management Board Members
The new members are still awaiting approval by Banka Slovenije
Nova Ljubljanska banka (NLB), Slovenia's largest bank, broke the silence on Wednesday, 4
April and revealed the names of the new members of its extended management board who
will join chairman Marjan Kramar and Matej Narat on 16 July and were appointed for fiveyear terms a week ago.
They are Claude Deroose of the Belgian financial group KBC, which owns 33% of NLB;
Miran Vicic, the chairman of investment fund NLB Vita; Gregor Kastelic, who comes from a
London investment company and was formerly employed by the European Bank for
Reconstruction and Development; and Slavko Jamnik, who heads the NLB centre for large
companies from central Slovenia.
The new members are still awaiting approval by Banka Slovenije, the central bank.
The supervisors also received a statement of resignation by Katja Bozic, the head of the
Financial System Directorate at the Finance Ministry, from her post as supervisor.
NLB Acquires Majority Stake in Kosovo Bank
NLB, Slovenia's largest bank, has acquired 50.14% of the Kosovo bank Kasabank
NLB, Slovenia's largest bank, has acquired 50.14% of the Kosovo bank Kasabank, which
marks its first move into the Kosovo market after a series of acquisitions over the years in
countries of the former Yugoslavia.
The acquisition is in line with the strategic expansion to Southeast Europe and opens the door
to tighter cooperation and the strengthening of economic relations between Kosovo and
Slovenia, the bank said in a press release on Wednesday, 4 April.
According to NLB, the Pristina-based Kasabank is the third-largest bank in the province.
Established in 2002, it boasted total assets of EUR 128.6m at the end of 2006 and commanded
12.3% of the market.
The NLB Group comprises 58 companies on 18 European markets, of which 15 are banks, 11
leasing companies, 11 factoring companies, four insurance companies, one asset management
firm and 16 other firms.
The group posted pre-tax profits of EUR 150.7m for 2006, up 43% year-on-year. Total assets
increased 16% to EUR 14.4bn.
Abanka Gets EUR 260m Syndicated Loan
The loan was organised by the Bank of Tokyo-Mitsubishi, Bayerische Landesbank, ING Bank,
Raiffeisen Zentralbank and Bank Austria Creditanstalt, a part of the Unicredit Group
Abanka, Slovenia's third-largest bank by assets, obtained on Wednesday, 4 April a EUR 260m
syndicated loan from a consortium of foreign banks, the largest such loan the bank has ever
got on the international financial markets.
The bank said in a press release that the loan was organised by the Bank of Tokyo-Mitsubishi,
Bayerische Landesbank, ING Bank, Raiffeisen Zentralbank and Bank Austria Creditanstalt, a
part of the Unicredit Group.
15
Abanka got the loan at the lowest interest rate so far and the starting demand was oversubscribed by 30%.
Life Insurer Slovenica Zivljenje Ups Premiums by 84% in 2006
Life insurer Slovenica Zivljenje collected EUR 38.59m in premiums in 2006
Life insurer Slovenica Zivljenje collected EUR 38.59m in premiums in 2006, 84.1% more
than in 2005 and 29.6% above plans, the insurer said on Friday, 6 April. Slovenica zivljenje
paid out EUR 4.81m in damages, a 7.2% increase year-on-year.
According to data from the Slovenian Insurance Association, Slovenica zivljenje held 9.1% of
the life insurance market in 2006, placing third overall.
The management of the company also said in the press release that it planned to open branch
offices in Ukraine, the Czech Republic and Serbia this year. The insurer already has offices in
Romania, Slovakia and Bulgaria.
Insurer Triglav Says 2006 Was its Best Year Ever
Zavarovalnica Triglav, Slovenia's largest insurer, posted a net profit of EUR 29.8m for 2006
Zavarovalnica Triglav, Slovenia's largest insurer, posted a net profit of EUR 29.8m for 2006,
up 22% over the year before. "This was the most successful year for us in history," chairman
Andrej Kocic told the press on Friday, 6 April.
The insurer collected EUR 661.7m in premiums, up 7% over 2005, while it paid out claims
worth EUR 343.5m, an increase of 6%, Kocic said.
Triglav and its health insurance arm increased their market share by 0.6 percentage points to
43.5%, he added.
Presenting the company's plans for the future, Kocic said that Triglav wanted to maintain its
market position at home, but its key goal was to become "the largest and the most powerful
insurance group in Southeast Europe".
Last year Triglav acquired Montenegrin insurer Lovcen and Serbia's Kopaonik. Triglav has
already performed due diligence at the Bosnian Krajina Kopaonik insurer and is poring over
the books of Vardar, a Macedonian insurance company.
Triglav is the largest single shareholder in Abanka, Slovenia's top 3 bank. Kocic said that the
Triglav management board was pleased with Abanka's results last year and assessed the
strategic partnership between the two companies as good.
Selling the stake in Abanka and a possible tie-up with NLB, Slovenia's largest bank, is
however an option, he said. "We will decide on that when these proposals come close to being
finalised," he said.
Ljubljana Stock Exchange
The main market SBI 20 index added 5.36% (412.09 points) to a new record of 8,103.53
The Ljubljana Stock Exchange was in a buying frenzy in what was the most bullish week in
years. Rumours of an impending takeover took logistics group Intereuropa up 30% and the
spillover effect pushed the other blue chips to new records, sparking ever louder warnings that
the inevitable landing might not be soft.
Even though the trading week was cut short by a day due to the Easter holidays, the main
market SBI 20 index added 5.36% (412.09 points) to a new record of 8,103.53, while the SBI
TOP index of the biggest blue chips closed 5.06% (85.89 points) higher at 1,784.48.
On news that it was being eyed by several potential bidders, Intereuropa soared 30% in three
days, but lost some of the gains after its biggest owner, port operator Luka Koper, said it was
not ready to sell its 25% stake in the logistics company.
16
Even though it shed over 6% on Thursday, 5 April, Intereuropa still closed nearly 23% higher
on a weekly comparison, at EUR 36.36 on an unusually high turnover for the item of EUR
5.6m. Luka Koper also profited from the speculations, adding just under 8% to EUR 71.37.
Drug maker Krka added 5.83% to EUR 882.91, buoyed by a buy recommendation from the
Austrian Erste Bank, which sees Krka at EUR 960 twelve months from now. Krka also posted
double-digit growth in sales for the first quarter of the year, but growth was not as robust as
some analysts predicted due to problems in Russia, its biggest market.
The spillover effect was good news for investors in other Slovenian blue chips: airport
operator Aerodrom Ljubljana was up 11.3% to EUR 75.82, beverage group Pivovarna Lasko
added 9% to EUR 51.97 and tourism-to-food conglomerate Istrabenz was up 8.3% to EUR
67.06.
Investment funds whose portfolios are heavy on blue chips had a field day, pushing the PIX
investment fund index 177 points (3.12%) higher to 5,847.39 points. The biggest winner was
Infond 1, which was up 6% to EUR 6.27.
Over the four trading days brokers wrapped up deals worth EUR 58.43m, of which EUR 12m
was done in block deals.
17
REGIONAL INFORMATION
Government Tweaks Local Government Act in Run-up to Devolution
Provinces will be dealt with in a separate set of laws that are currently in the legislative
process
The government adopted on Thursday, 5 April amendments to the local self-government
which involve the crossing out of provisions related to the formation of provinces. Provinces
will be dealt with in a separate set of laws that are currently in the legislative process.
The local self-government act now refers exclusively to municipalities, a term which replaces
the word "local community" throughout the act, Local Government and Regional Policy
Minister Ivan Zagar told the press.
The amendments further determine that a member of the municipal council cannot be deputy
mayor or employed at a municipal department.
Non-professional mayors will be entitled to 50% of the full-time salary under the
amendments. The same goes for non-professional deputy mayors.
The proposal also binds the government to determine general criteria based on which
municipalities will determine whether Roma communities living on their territory are entitled
to a post on the municipal council.
The government also adopted amendments to the local elections act to accommodate for a
Constitutional Court decision on the number of voter signatures required for nominations for
municipal councils.
18
BRANCH INFORMATION
Vizjak: Slovenia Will Encourage Use of Renewables
Speaking on the sidelines of a two-day energy conference, Vizjak also explained that in the
future, further liberalisation of the energy market was planned and that from 1 July this year,
households would be able to select their energy suppliers
Economy Minister Andrej Vizjak said in Portoroz on Monday, 2 April that Slovenia would
encourage more intensively the producers of energy from renewable sources, also by ensuring
the purchase of such energy.
Speaking on the sidelines of a two-day energy conference, Vizjak also explained that in the
future, further liberalisation of the energy market was planned and that from 1 July this year,
households would be able to select their energy suppliers.
One of the priorities of the Slovenian energy policy are the diversification of sources and
energy transport routes, Vizjak explained. At the opening of the conference Vizjak meanwhile
said that the EU needed a common energy strategy, which would reduce its dependency from
third countries.
He pointed out that Slovenia would be signing on Tuesday, 3 April a ministerial declaration
on the construction of a pan-European oil pipeline connecting Constanta and Trieste, which
would enable direct transport of oil from the Black Sea and the Caspian Basin to refineries in
Europe.
Meanwhile, Environment and Spatial Planning Minister Janez Podobnik told the press that
Slovenia had been adapting the national energy programme to the new goals based on
European needs.
Podobnik explained that this included projects for increasing the use of energy from
renewable sources, which would contribute to cutting greenhouse gas emissions in line with
the EU strategy and the Kyoto Protocol.
Podobnik believes Slovenia's reserves lie mainly in the areas of biomass, especially wood,
geothermal energy, and solar and wind energy on the coast and in the Karst region.
At the opening of the conference of managers in the energy sector, Podobnik explained that
energy will be one of the priorities of Slovenia's EU presidency in the first half of 2008. He
believes that big investments and good cooperation between the EU members are necessary
for a coherent EU policy in this area.
Tests Confirm Eighth Case of Mad Cow Disease
The seven-year-old cow from Celje region slaughtered the previous week was the eighth case
of Bovine Spongiform Encephatolopathy (BSE) found in Slovenia
The tests carried out at the National Veterinary Institute confirmed a new case of mad cow
disease in Slovenia, Slovenian Veterinary Administration (VURS) told the press on Monday,
2 April. The seven-year-old cow from Celje region slaughtered the previous week was the
eighth case of Bovine Spongiform Encephatolopathy (BSE) found in Slovenia.
The vets established the cow's family ties and banned all movement of animals to and from
the farm in question as soon as the case was suspected, VURS said, adding that all other
required measures will be put in place by Tuesday, 3 April.
None of the animals from the cow's cohort are still alive, while all the cow's calves born in the
last two years will be culled, explained VURS, adding that the breeders will be entitled to a
compensation.
VURS broke the news of the suspected case last week. The cow diagnosed with BSE was
slaughtered last Monday, 2 April at Celjske mesnine abattoir in Celje.
19
The first case of BSE was discovered in Slovenia in November 2001. Of the eight cases of
BSE discovered so far, one cow was imported from Germany, while seven were born in
Slovenia.
One Hundred Riddles Wins Best Picture Book Award
"Sto ugank" (One Hundred Riddles) by Anja Stefan and illustrator Jelka Reichman received
this year's Original Slovenian Picture Book Prize
"Sto ugank" (One Hundred Riddles) by Anja Stefan and illustrator Jelka Reichman received
this year's Original Slovenian Picture Book Prize. The prize was conferred on Monday, 2
April, the International Children's Book Day, at the Celje Museum of Recent History.
"One Hundred Riddles", published by Mladinska knjiga, demonstrates the author's excellent
poetical shape; despite the large number of riddles, scarcely any of them fail to reach the
author's high standards, the jury explained its decision.
Reichman, a master of illustration, creates convincing images of happy childhood in which
children, animals, plants, toys and everyday objects live in harmony, the jury said.
The short list included the brothers Grimm's Cinderella, illustrated by Alenka Sottler, and
Miklavz Komelj's "Zverinice" (Little Beasts), illustrated by Marjan Mancek.
"Kako sta Bibi in Gusti porahljala prepir" (How Bibi and Gusti Calmed a Quarrel) by Ida
Mlakar, illustrated by Kristina Krhin and Natasa Konc Lorenzutti's "Ravno prav velik" (Just
the Right Size), illustrated by Ana Zavadlav were also vying for the award.
The nominees were selected out of 46 picture books by 21 Slovenian publishers. The
competition was organised by the Publishing, Printing and Media Chamber, part of the
Chamber of Commerce and Industry of Slovenia (CCIS).
Workshop Promoting Equal Opportunities in Entrepreneurship
The workshop at the headquarters of the Chamber of Commerce and Industry of Slovenia
(CCIS) was organised by the Meta institute for woman and family entrepreneurship
Representatives of several NGOs from Bosnia-Herzegovina and Slovenia on Thursday, 5
April exchanged views on equal opportunities in entrepreneurship in a bid to share examples
of best practice. The officials highlighted that the economic status of women in Bosnia was
low, in particular in the predominately patriarchal communities.
Ales Inkret of Care International from Sarajevo explained that the biggest problem was the
recent war, which left many women widowed so they now had to support their families on
their own.
"I hope this visit is a beginning of cooperation so that we can transfer some good practice
from Slovenia to Bosnia, while I can also say that some things there work quite well so we
Slovenians can learn something too," Inkret said.
The workshop at the headquarters of the Chamber of Commerce and Industry of Slovenia
(CCIS) was organised by the Meta institute for woman and family entrepreneurship. Its
director Marta Turk said that woman entrepreneurship was pigeonholed into a social category
in Slovenia.
According to Turk, the institute worked mainly to promote solidarity and the transfer of
knowledge to new generations. The institute is involved in various EU projects, and in 2004 it
competed for funds for the promotion of equal opportunities in women entrepreneurship with
the project "Equal Vesna".
"The idea, which brings together nine partners in Slovenia and three international partners, is
to organise mobile counselling units that provide know-how, information and help to
municipalities outside of urban centres," said Turk.
The other transnational project, named Dion, is also focused on women entrepreneurship, with
an emphasis on young women who are starting a business and need help and guidance. The
20
project includes two institutions from the UK, the enterprise fund Gdansk from Poland, and
Malmo University from Sweden, said Marija Kokalj of the institute.
The Meta institute for the development of woman and family entrepreneurship, which was
established in 2001, is primarily aimed at providing better connections and equal
opportunities in entrepreneurship.
21
COMPANIES
Lasko and Controlled Companies Bidding to Take Over Delo
Beverage group Pivovarna Lasko, along with controlled companies Radenska and Talis
published a bid to acquire all of newspaper publisher Delo at EUR 135.50 per share
Beverage group Pivovarna Lasko, along with controlled companies Radenska and Talis, on
Monday, 2 April published a bid to acquire all of newspaper publisher Delo at EUR 135.50
per share. Given that the companies already hold just over 44% of Delo, the purchase of the
remaining share would cost a total of EUR 50.5m.
The bid, which is open until 3 May, is made out for all 372,726 Delo shares which are not yet
owned by the bidders, according to the offer posted on the Ljubljana Stock Exchange.
The three companies have agreed that all of the shares acquired will go to Pivovarna Lasko,
which will also fund the acquisition. However, the companies leave it open for the target
shares to be transferred to other affiliated companies in the future.
According to the bidders, the acquisition is aimed at consolidating the target company.
Nevertheless, restructuring, changes in the management, location or employment conditions
are not planned following the takeover.
The brewer has no long-term interest in Delo, although the management believes the
publisher to be a successful company, STA learnt from a source close to Pivovarna Lasko
under condition of anonymity.
According to the source, Pivovarna Lasko is devising a scenario to sell its stake following the
takeover. The stake is to be intended for a Slovenian buyer, rather than foreigners, the STA
was told by the source.
A report in the daily Delo on Monday, 2 April, published by the target of the latest takeover
bid, says that that the offer aims mainly at the major stakeholders of Delo, which are directly
or indirectly owned by the state.
The paper points specifically to the state-run SOD and KAD funds, which have a combined
stake of nearly 18%, Abanka (1.52%) and energy company Petrol (0.95%), while Infond
Holding, the single largest stakeholder of Lasko and the owner of 10.69% of Delo, is expected
to transfer the shares on paper.
The price per share is EUR 0.5 higher than initially planned and EUR 1.5 higher than what
Delo posted on the Ljubljana Stock Exchange on Friday, 6 April. Delo says that this makes
the bid attractive to minor shareholders as well.
Employers Announce Lobbying Campaign
Representatives of employers have decided for a lobbying campaign among MPs and
ministers in order to promote their proposals for changes to the employment relationship act
Representatives of employers have decided for a lobbying campaign among MPs and
ministers in order to promote their proposals for changes to the employment relationship act.
We cannot go on strike, so we will try to obtain our goals through other means, Samo Hribar
Milic of the Chamber of Commerce and Industry (CCIS) said on Monday, 2 April.
According to the stand-in president of the CCIS, the decision is a consequence of the trade
unions' "stubborn rejection of talks on certain topics".
"Because we have failed with our proposal to make all social partners equal and to talk about
everything, we have decided to try and implement in a different way the proposals that the
opposing side was not willing to discuss," Hribar Milic said following the latest round of talks
on the 2006-2009 Social Agreement.
22
He added that the unions managed to convince Labour, the Family and Social Affairs Minister
Marjeta Cotman to keep the proposal of the amendments to the legislation to those accepted
by them.
The proposal does not include discussions on lunch breaks, reduction in severance pay,
shortening of layoff periods and other issues contensted by the employers.
Asked what the decision means for social agreement talks - held between the government,
trade unions and employers' representatives - Hribar Milic said that the talks would take place
on topics that the trade unions allow.
"We will try to implement in a different manner the issues that the trade unions refuse to talk
about. We have no choice but to go past them and find other venues for talking," he added.
Employers have not yet made contact with deputy groups or deputies.
Spar Continues to Grow Despite Losing Market Share
Spar, Slovenia's No. 2 retailer, posted sales of EUR 553m for 2006, an increase of 12% over
the year before, but its market share dropped by 0.3 percentage points year-on-year to 20.5%
Spar, Slovenia's No. 2 retailer, posted sales of EUR 553m for 2006, an increase of 12% over
the year before, but its market share dropped by 0.3 percentage points year-on-year to 20.5%
according to a survey of consumers by Gfk Gral Iteo.
"It is important that we grow; as long as we grow we will be successful," Spar director general
Igor Mervic told the press on Tuesday, 3 April, adding that sales would continue to expand
this year and next.
Commenting on the recent survey which suggests that Spar's market share dropped from
21.3% in 2003 to 20.5% in 2006 Mervic said the company's turnover increased by 45% in that
period and that the measurements were not consistent.
The overall grocery market is shrinking, and sales of food dropped by 11% year-on-year in
December and 2% in January. "The euro has dampened consumption," Mervic explained.
The introduction of the single European currency did not raise prices in stores, which helped
keep inflation in check, but after four months of holding prices down hikes can be expected
soon, he said.
Spar earmarked EUR 45m for investment last year, expanding store area by 16.9% to 103,556
sq. metres with the opening of six outlets and the number of buyers by 12.3%.
This year investments are to top EUR 100m. Spar intends to open two megamarkets, in Nova
Gorica and Kranj, raising the total number of such stores to 11. It also intends to expand
existing shopping centres in Ljubljana, Maribor and Celje.
Mervic also announced the opening of a new bakery which will be launched at the end of
2007 and produce 7,000 tonnes of bread and pastry a year.
Spar will thus meet 85% of the demand for bread and purchase only the remaining 15% from
other suppliers.
The Slovenian Spar is a subsidiary of Aspiag, which is in charge of the Central European
business for Spar Austria.
Apparel Manufacturer Faces Liquidation
Izidor Bajec, the director of the Kranj-based apparel manufacturer, confirmed for STA that
continuous losses have prompted the company's owners to propose voluntary liquidation
Gorenjska oblacila has become the latest victim of Slovenia's textile industry to be hit by
fierce competition from cheap labour-force abroad. Izidor Bajec, the director of the Kranjbased apparel manufacturer, confirmed for STA on Tuesday, 3 April that continuous losses
have prompted the company's owners to propose voluntary liquidation.
Bajec explained that Slovenia's legislation made it impossible for Gorenjska oblacila to
remain competitive on a European and global scale.
23
Slovenia's only apparel manufacturer alongside Mura to have kept its production in Slovenia
has 108 workers. While a third of them are receiving minimum pay, their wages are still 30%
to 40% higher than those of tailors and dressmakers in Slovakia, Poland or Romania and tentimes higher than in China or India, according to Bajec.
The relatively high labour costs which account for as much as 70% of the company's expenses
have led to Gorenjska oblacila ending several years in a row in the red. While layoffs and
measures helped mitigate the trend, 2006 nevertheless again brought a loss of EUR 470,000.
Sava Consolidates Tourism Division
Sava, the Kranj-based tourism and chemical industry conglomerate, has consolidated its
tourism arm as AGMs of three Bled-based companies which it owns confirmed they would
amalgamate into one company
Sava, the Kranj-based tourism and chemical industry conglomerate, has consolidated its
tourism arm as AGMs of three Bled-based companies which it owns on Wednesday, 4 April
confirmed they would amalgamate into one company.
Golf in kamp, which operates the Bled golf course, the five-star Grand hotel Toplice and hotel
operator G&P Hoteli Bled will merge into the company Sava Hoteli Bled.
Sava said in a press release on Wednesday, 4 April that this was part of a broader strategy of
the development of the tourism division. The ultimate goal is to make the Sava Group the
leading tourism provider in Slovenia.
The three companies generates sales revenues to the tune of EUR 20m last year, up 6%, and a
net profit that was up 21% year-on-year to EUR 1m.
Dairy Ljubljanske Mlekarne to Get out of the Red in Two Years
The loss is to be halved to EUR 5.3m this year
Ljubljanske mlekarne, Slovenia's largest dairy, posted a loss of over EUR 10m for 2006, but
the management expects that the company will emerge from the red in two years. The loss is
to be halved to EUR 5.3m this year, chief executive Cvetana Rijavec told the press on
Wednesday, 4 April, saying that the plans were realistic.
The supervisory board confirmed the business plan on Tuesday, 3 April. It is actually an
upgraded version of the restructuring plan and envisages that business conditions this year
will be the same as in 2006, said supervisory board chairman Zoran Boskovic.
According to plans, the dairy will purchase some 220 million litres of milk, up 8.2% over last
year. Sales are projected to top EUR 134m, rising by 2.2% at home and 37% abroad.
Boskovic announced that the number of employees would be reduced by 40 to 650.
Rijavec said that boosting domestic sales by 3% would be a challenge, as the retailers have
very strong negotiating power. In the first three months of 2007 sales were up 17%, but they
increased by only 3% in Slovenia as opposed to 117% abroad.
The main objectives for this year include a revamp of the sales programme and the brand
composition. Rijavec said.
The company will also raise prices by 5% on average and seek to make it to the shelves of
discount chains such as Hofer and Lidl, but only if this gives it access to other European
markets.
Tool Maker Unior Ups Revenues, Profits in 2006
Tool manufacturer Unior Zrece increased sales revenues to EUR 130m in 2006
Tool manufacturer Unior Zrece increased sales revenues to EUR 130m in 2006, up 3.9% on
2005, while net profit increased by 6.1% to EUR 7.2m, Gorazd Korosec, the director of the
Zrece-based company told the press on Thursday, 5 April.
24
The company channelled EUR 20m for investment in 2006, while its plans for 2007 envisage
a 12% growth in revenues with net profit remaining on the 2006 level. The company plans to
invest EUR 15m this year, mainly into modernisation of equipment and manufacturing
processes, Korosec said in the town of Zrece in NE Slovenia.
The director was also hopeful that the company would remain in Slovenian hands, meaning
that the state-owned KAD and SOD funds would sell their combined 45% stake in the
company to a Slovenian buyer.
The head of the company's tourism division Damjan Pintar meanwhile said that the 2006/07
season was quite successful. The director of Unior turizem added that the Rogla tourist resort
attracted 442,000 visitors, who generated 95,000 overnight stays, despite poor weather
conditions.
Rogla, one of the most well-known tourist resorts in Slovenia, attracted 370,660 skiers this
season, Pintar said.
Flights Set to Begin in June between Belgrade and Portoroz
Aerodrom Portoroz is in talks with Serbian flag carrier JAT that is to operate flights with a
50-seat ATR 72 plane
Regular flights between the Serbian capital of Belgrade and the Slovenian coastal resort of
Portoroz look set to begin in early June, Ljubo Milic, the director of Aerodrom Portoroz, told
the press on Thursday, 5 April.
According to Milic, Aerodrom Portoroz, the company that manages the small tourist airport,
is in talks with Serbian flag carrier JAT that is to operate flights with a 50-seat ATR 72 plane.
Talks are also underway for extending the plane's route to Rome.
Milic expects the weekly flight to bring more demanding Serbian tourists to Slovenia. He also
wants the small international airport that he said operated in line with Schengen standards to
become a passenger airport.
Milic added that a regular link between Belgrade and Portoroz existed in 1988 and 1989. JAT
will be the first carrier after several years to commence regular flights to and from Portoroz.
He moreover said that a good season with 12 flights from Belgrade could present a basis for
successful future cooperation.
Krka Increases Q1 Sales by 13%
Drug maker Krka posted sales of EUR 204.6m for the first quarter of 2007
Drug maker Krka posted sales of EUR 204.6m for the first quarter of 2007, an increase of
13% over the year before. Exports surged 15% to EUR 178.9m and already account for 88%
of the sales, Krka chief executive Joze Colaric told the press on Thursday, 5 April.
Central Europe is the biggest market for the pharma company, accounting for 27% of the
revenues. Sales in the region expanded by 27% year-on-year, with the Czech Republic,
Hungary and Slovakia the fastest growing markets.
Eastern Europe is the second biggest market (25%), but sales there shrunk by 3% due to
poorer results in Russia, which remains Krka's biggest single market.
In Southeast Europe the company saw sales increase by 28% to EUR 35.2m, which means the
region accounted for 17% of the total sales.
Sales in Western Europe and overseas markets grew at a rate of 19% to total EUR 36.1m,
18% of the total sales. Slovenia accounts for only 12% of the total sales.
Prescription drugs accounted for 82% of the total, with the segment growing by 13% year-onyear.
The segment of over-the-counter drugs grew faster, by 23%, and now represents 11% of
overall sales.
The remaining revenues came from veterinary and cosmetic products and spa services.
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Colaric said end-year sales were projected to amount to EUR 750m, with net profit at EUR
130m.
According to Colaric, who did not disclose the net profit for the first quarter, the management
will propose dividends of EUR 8 per share at the annual general meeting in early July.
This is 16% more than last year and would set Krka back over EUR 27m.
Cetis Generates Profit in 2006
Cetis, the Celje-based graphic and printing company, generated EUR 947,000 in net profit in
2006
Cetis, the Celje-based graphic and printing company, generated EUR 947,000 in net profit in
2006, after posting a loss of EUR 2.72m in the year before, director Simona Potocnik told the
press on Friday, 6 April.
Last year the company posted EUR 27.12m in sales revenues, EUR 1.12m more than in 2005.
Out of the amount, EUR 18.77m was generated in Slovenia and EUR 7.92m abroad.
Cetis, which employs 412 people, established a lottery company in Albania last year and
started making biometric passports, Potocnik said.
She explained that Cetis wants to expand to South America, Africa and Asia. It is also
considering strategic partnerships in order to boost its competitiveness.
Cetis is planning a 16% growth in revenues this year. It hopes to start making passports, visas
and vehicle safety test stickers for Sudan this year, Potocnik told the press in Celje.
Posta Slovenije Expanding Ties with Postal Companies in Region
The management of the national postal company signed a letter of intent on business
cooperation with its Macedonian counterpart
The management of the national postal company signed a letter of intent on business
cooperation with its Macedonian counterpart on Friday, 6 April in what could be a prelude to
a tie-up. This is the fourth such agreement Posta Slovenije signed with akin companies in the
region.
Following the signing in Maribor, where Posta Slovenije is based, its director general Ales
Hauc said the agreement would improve the terms for the exchange of mail, something that
would enable both sides to offer competitive solutions to their clients. Posta Slovenije counts
mainly on Slovenian companies in Macedonia.
According to Hauc, the company will conduct due diligence in the Macedonian post in order
to examine its capacities and options to further enhance cooperation. The official would not
rule out the option of a tie-up, a decision that would have to be taken by the governments as
both postal companies are 100% state owned.
Decisions on further steps are expected to be taken by the end of August, that is only after
Posta Slovenije has pored over the books of the Macedonian company, the director general of
Posta Slovenije told the press.
His Macedonian counterpart Sadula Izairi said his company hoped to benefit from Slovenian
experience in investment in postal network and integration into the EU. The Macedonian post
became a joint stock company about two months ago. It employs 2,400 people in 351 postal
offices across the country. According to Izairi, the company has good potential for
development, good management and additional investment provided.
The signed agreement is the fourth such document after Posta Slovenija agreed cooperation
with the national postal companies in Croatia, Montenegro and Albania. "Our goal is to
simplify cooperation among postal offices in the region, which will eventually become part of
the EU anyway," the head of the Slovenian company said.
According to him, the plan is for the postal managements from what used to be a common
country to agree special terms of cooperation, that should be in line with European and
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international standards though. Hauc said Posta Slovenije was currently not considering any
new letter of intent.
Perutnina Ptuj Planning to Open Factory in Bosnia-Herzegovina
Perutnina Ptuj, Slovenia's largest poultry producer, is planning to build a factory in the town
of Breza near Sarajevo this year
Perutnina Ptuj, Slovenia's largest poultry producer, is planning to build a factory in the town
of Breza near Sarajevo this year. The products from the new factory will be sold in BosniaHerzegovina and other countries in the region, the company said on Friday, 6 April as it
hosted the Slovenian Mufti Nedzad Grabus.
The investment is estimated at EUR 17.1m, with the factory expected to employ 200 people.
Perutnina Ptuj will thus strengthen its position in both entities of the country, Republika
Srpska and the Croat-Muslim federation, the company said.
The company's chairman Roman Glazer explained that Perutnina Ptuj held the Halal
certificate, which ensured that products were made in line with Islamic laws, allowing the
company to enter Muslim markets.
Perutnina Ptuj holds a 70% stake in its Bosnian subsidiary Perutnina Ptuj - BH. In 2006 it
opened a poultry facility in Srbac near Banja Luka in what was an investment worth EUR
1.5m.
Perutnina Ptuj already acquired the Halal certificate in the times of the former Yugoslavia,
when it exported meat to Iran, being the first Slovenian company to do so.
In February, Droga Kolinska, Slovenia's largest food company, opened a meat pate factory in
Hadzici, west of Sarajevo. The factory was Slovenia's biggest investment in Bosnia in 2006
and the second-largest foreign direct investment in the country last year.
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SLOVENIA IN BRIEF
EU Presidency Dominates Defence Minister's Talks in Finland
Preparations for EU presidency topped the agenda as Slovenian Defence Minister Karl
Erjavec met Monday, 2 April his opposite number Seppo Kaariainen at the onset of his twoday visit to Finland.
Swiss General Highlights Slovenia's Stabilising Role
The Chief-of-Staff of the Swiss armed forces, General Christophe Keckeise, who is paying a
two-day visit to Slovenia, praised on Tuesday, 3 April the dynamic development of Slovenia
since its independence and highlighted its stabilising role in Kosovo, Bosnia-Herzegovina and
Afghanistan.
Culture Ministry Presents Draft Bill on Agency for the Book
The Culture Ministry has drafted a bill founding a Public Agency for the Book, which
presents a step towards "better affirmation of the book as a cultural good", minister Vasko
Simoniti told the press on Tuesday, 3 April as he presented the draft in Ljubljana.
Protection of Adriatic Sea Unites Neighbours
The Adriatic Sea Partnership (ASP) met for the first time on Tuesday, 3 April to discuss the
future of managing this fragile ecosystem. The six member countries of the ASP discussed at
their meeting in Sarajevo measures to protect the Adriatic from shipping accidents. The ASP
is made up of Albania, Bosnia-Herzegovina, Croatia, Italy, Montenegro and Slovenia.
Commission Stresses Importance of Economy for Slovenians Abroad
The parliamentary Commission for Slovenians Abroad endorsed on Wednesday, 4 April the
efforts of Slovenian minorities in neighbouring countries for the economic cooperation
between Slovenia and these countries and called on the government to consider the minorities'
proposals for the elimination of obstacles to cooperation.
Government Adopts Zoning Laws on Zavrc Border Crossing
The government adopted on Thursday, 5 April a zoning law for the Zavrc international border
crossing with Croatia, designed to replace the temporary facility with a permanent border post
in line with EU standards. The government also adopted decrees on border crossings Imeno,
Zgornji Leskovec, Ormoz, Razkrizje and Babno Polje, which represent the basis for
construction in those areas.
Slovenia Gets Society for European Law
A group of law experts has established the Slovenian Society for European Law. Headed by
Verica Trstenjak, advocate general of the Court of Justice of the European Communities, this
voluntary society aims to develop, implement and promote European law in theory and
practice, the association wrote on Thursday, 5 April.
Strel Completes Record Amazon Swim
Having previously braved the Yangtze, Mississippi and Danube, Slovenian adventure
swimmer Martin Strel is looking to book his fourth entry in the Guinness Book of World
Records after completing a nearly 5,300-kilometre swim of the Amazon.
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