Slovenia Business Week no. 15, April 16, 2007
Table of Contents:
HEADLINES ............................................................................................................................. 2
Slovenia Makes it among Advanced Economies in IMF Report ........................................... 2
Corporate Sector Deems Reforms Too Slow ......................................................................... 2
Think-Tank: Slovenia Is Advanced Economy Thanks to Euro .............................................. 3
INTERNATIONAL COOPERATION ...................................................................................... 4
Chinese Delegation Stresses Importance of Bilateral Relations ............................................ 4
Cukjati and Spanish Ambassador Discuss Euro-Mediterranean Issues ................................. 4
Rupel and Argentinian Counterpart Discuss EU and Cooperation ........................................ 5
Rupel Meets Slovenian Community in Argentina ................................................................. 5
EUROPEAN UNION ................................................................................................................. 7
A Thousand Slovenian Students to Join Erasmus Programme This Year ............................. 7
EU Affairs Officials Meet Over EU Presidency in 2008 ....................................................... 7
Slovenia's Contribution to EU Budget Cut by EUR 5m ........................................................ 8
STATISTICS/FORECASTS ...................................................................................................... 9
Industrial Output Drops 3% in February ................................................................................ 9
Unemployment Rate Down by 0.5% in 2006 ........................................................................ 9
Panel: Strong Slovenian Companies Essential For Development .......................................... 9
Slovenians Worked 173 Hours a Month in 2005 ................................................................. 10
FINANCE................................................................................................................................. 11
Insurer Adriatic Slovenica Gets EUR 233.3m in Premiums in 2006 ................................... 11
Petrol Considerably More Expensive ................................................................................... 11
Wiener Staedtische Ups Premiums by 14% in 2006 ............................................................ 11
U-Turn Sends Market Index Back Over 8,000 Points ......................................................... 11
REGIONAL INFORMATION ................................................................................................ 13
Retailers Interested in Supermarket-Football Stadium Combo............................................ 13
PM Believes Podravsko Could Improve Its Position Among Regions ................................ 13
Mayors Discuss Key Issues for Development of Municipalities ......................................... 14
BRANCH INFORMATION .................................................................................................... 15
Culinary Books Honoured with Special Awards in China ................................................... 15
COMPANIES ........................................................................................................................... 16
Incoming Lek CEO: Cost Cutting Chance for Generics Makers ......................................... 16
Luka Koper Sell Bulk of Banka Koper Shareholding .......................................................... 16
Droga Kolinska Chief Executive Resigns ............................................................................ 16
New HSE and Dravske Elektrarne Management Centres Inaugurated ................................ 17
Steel Group Gets New Supervisors ...................................................................................... 18
State-Run Funds Offload Stakes in Etra .............................................................................. 18
Petrol Joins List of Bidders for Montenegro Bonus ............................................................. 18
Ljubljana-Helsinki Flights Aiming for 25,000 Passenger Turnout ...................................... 19
SLOVENIA IN BRIEF ............................................................................................................ 20
Slovenia, Macedonia to Continue Cooperation in Fighting Crime ...................................... 20
Government Moves Towards Banning Smoking in Public Places ...................................... 20
Government Refers Draft Bill on Alternative Medicine to Parliament ............................... 20
Government Appoints Taskforce to Phase Out Internal Border Posts ................................. 20
Fire at Boat Builder Seaway Caused EUR 7m in Damage .................................................. 20
European Poetry Prize Goes to Tomaz Salamun ................................................................. 20
Controversial Theatre Director Returns Home after 11 Years ............................................. 20
HEADLINES
Slovenia Makes it among Advanced Economies in IMF Report
The International Monetary Fund (IMF) has ranked Slovenia among advanced economies in
its world economic outlook
The International Monetary Fund (IMF) has ranked Slovenia among advanced economies in
its world economic outlook in what is the first time ever. The document, released on
Wednesday, 11 April, forecasts that Slovenia's economic growth will slow down to 4.5% in
2007 and 4% in 2008, from 5.2% in 2006.
The IMF also projects that the country's unemployment rate will stay level at 6.4% both in
2007 and 2008. Likewise, inflation is to stay put at 2.7% this year and edge down to 2.4% in
2008.
During their last visit to Slovenia in March IMF experts warned of the challenges facing
Slovenia following the euro changeover.
The IMF delegation then urged the country to undertake substantive reforms of the pension
system in order to ensure its sustainability.
It also highlighted the need for Slovenia to maintain prudent fiscal and wage policies, and
increase economic flexibility and productivity so that the economy can continue to grow
without building up inflationary pressures.
The IMF world economic outlook forecasts that the global economy will expand by 4.9% in
2007, a slow down compared to 5.4% in 2006. The euro zone is to post 2.3% growth this year.
Corporate Sector Deems Reforms Too Slow
Samo Hribar Milic, the interim president of the Chamber of Commerce and Industry of
Slovenia (CCIS) called for speeding up development-oriented reforms
Samo Hribar Milic, the interim president of the Chamber of Commerce and Industry of
Slovenia (CCIS), on Thursday, 12 April called for speeding up development-oriented reforms.
However, Development Minister Ziga Turk believes that Slovenia is doing just fine.
Addressing a CCIS-sponsored conference on the Lisbon goals, Hribar Milic put the main
blame for the slow development of competitive economy on the labour market, welfare state,
red tape and the system of public expenditure. According to him, the Slovenian public sector
is comparably one of the biggest in the EU.
In implementing the Lisbon goals, Slovenia often tries to follow the example of countries that
have developed efficient use of expertise, but we have to realise these countries have
overcome the so-called class struggle, Turk, Slovenia's MR Lisbon, told the same conference.
"If Slovenia's development goal is compared to the Lisbon Strategy, the target would be to
reach the EU average by 2013," Turk said. To attain this, Slovenia's economic growth should
be 3 percentage points higher than the EU's.
Turk believes much has been done reform-wise, while many things are still ahead. The
official is nevertheless optimistic: the economic situation is good, given the 5.2% growth in
2006, we have achieved 82% of the EU25 average and the outlook for the future is good.
According to him, Slovenia "is doing just fine - the shops are full, people are buying, while
wages and pensions are going up slowly".
Polona Domadenik of the Faculty of Economy quoted figures from a survey on the difficulty
of hiring workers and work time rigidity which ranked Slovenia 145th among 176 countries.
Lay-off costs in Slovenia amount to an average of 10 monthly salaries, four times as much as
in Denmark.
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This is why Domadenik believes Slovenia will attain Lisbon goals only if it reforms
employment legislation, while people need to be convinced such changes are pressing.
Labour costs increased by 37.8% from 2000 to 2004, while the bulk of the costs goes for
salaries, Miran Zavbi of the National Statistics Office said, quoting a poll on labour costs. The
basic gross pay represented 58% of the labour costs in 2004, which Zavbi says is comparable
to other EU countries.
Think-Tank: Slovenia Is Advanced Economy Thanks to Euro
The International Monetary Fund (IMF) placed Slovenia among advanced economies in its
2006 economic report mainly because all countries of the eurozone belong to the group, Maja
Bednas of the Institute for Macroeconomic Analysis and Development (IMAD) said
The International Monetary Fund (IMF) placed Slovenia among advanced economies in its
2006 economic report mainly because all countries of the eurozone belong to the group, Maja
Bednas of the Institute for Macroeconomic Analysis and Development (IMAD), the
government's think-tank, said on Thursday, 12 April.
Bednas, IMAD deputy director, added that Slovenia's development level in terms of GDP per
capita did not play such an important role in the country being labelled an advanced economy.
The country's GDP has been increasing and now amounts to over 82% of the European
average, she said.
According to her, other EU newcomers would also make it among the world's most developed
countries if they managed to adopt the euro, despite being much less developed according to
other indicators.
"However, this does not diminish the importance of the placement. Especially in the sense
that we will now be compared mainly to developed states, which brings greater challenges
and responsibilities," she said.
Development Minister Ziga Turk meanwhile said that the "results of recent development were
confirmed by figures...I hope that this will soon translate into wages and that we will create a
dynamic environment in which low-paid jobs will make way for better-paid ones".
The IMF released its world economic outlook on Wednesday, 11 April, forecasting that
Slovenia's economic growth will slow down to 4.5% in 2007 and 4% in 2008, from 5.2% in
2006.
The IMF also projected the country's unemployment rate would stay level at 6.4% both in
2007 and 2008. Likewise, inflation is to stay put at 2.7% this year and edge down to 2.4% in
2008.
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INTERNATIONAL COOPERATION
Chinese Delegation Stresses Importance of Bilateral Relations
The visiting delegation of the Commission for Foreign Affairs of the Chinese People's
Congress met the president of the parliamentary Foreign Policy Committee Jozef Jerovsek
and Deputy Speaker of Parliament Vasja Klavora
The visiting delegation of the Commission for Foreign Affairs of the Chinese People's
Congress met the president of the parliamentary Foreign Policy Committee Jozef Jerovsek
and Deputy Speaker of Parliament Vasja Klavora, emphasising the importance of friendly
relationship between the countries and suggesting ways for their improvement.
The eight-member delegation, headed by Jiang Enzhu, wrapped up its return visit to Slovenia
on Tuesday, 10 April. Jiang and Klavora said that the next month would mark 15 years since
the two countries have established diplomatic relations, the parliament said in a press release.
The officials expressed their satisfaction with the fact that bilateral relations have improved
greatly during that time and said they hoped they would improve further.
Jiang was quoted as saying that friendly relations with Slovenia was of a particular
importance to China and expressed gratitude for Slovenia's support of the one-China policy
regarding Taiwan and Tibet.
He wished Slovenia a successful presidency over the EU in the first half of 2008, expressing
hope that Slovenia would make efforts for a solution of two open questions in the relations
between China and the EU - the lift of the embargo on arms export and recognition of China's
status of a market economy.
Jerovsek meanwhile pointed out the importance of China's role during Slovenia's EU
presidency, saying that the two countries had successful economic relations and connections
in culture and education.
Jiang also emphasised three key issues for enhancing relations between the countries - the
mentioned market economy status, simplification of visa procedures for Chinese citizens and
Slovenia's participation at World Expo in Shanghai in 2010.
The delegation also met the Foreign Minister Dimitrij Rupel, who said that Slovenia would
make efforts for enhancing strategic partnership between the EU and China during its stint as
the EU president, the Foreign Ministry said in a press release.
Rupel also said that the relations between Slovenia and China were constantly improving,
while an important challenge in bilateral relations was balancing trade between the countries.
Cukjati and Spanish Ambassador Discuss Euro-Mediterranean Issues
Parliament Speaker France Cukjati received Spanish Ambassador Carmen Fontes Munoz
Parliament Speaker France Cukjati received Spanish Ambassador Carmen Fontes Munoz on
Thursday, 12 April. The pair focused on the Euro-Mediterranean Parliamentary Assembly
(EMPS), with Fontes Munoz expressing her wish that Slovenia supported the proposal that
the next EMPS meeting be held in Spain.
Fontes Munoz argued that choosing Spain as the host of the next meeting made sense because
the country had been a target of terrorist attacks, which posed one of the central problems in
today's world, Cukjati's office said in a press release.
Cukjati said he would forward Spain's proposal to Slovenia's parliamentary delegation to the
EMPS.
Fontes Munoz meanwhile said that Spain would be glad to support Slovenia's proposal to
establish a Mediterranean University seated in Piran.
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Rupel and Argentinian Counterpart Discuss EU and Cooperation
Foreign Minister Dimitrij Rupel launched his official visit to Argentina with a meeting with
his counterpart Jorge Enrique Taiana
Foreign Minister Dimitrij Rupel launched on Thursday, 12 April his official visit to Argentina
with a meeting with his counterpart Jorge Enrique Taiana. Rupel and Taiana discussed
Slovenia's upcoming EU presidency in the first half of 2008 and the EU, Latin America and
the Caribbean summit scheduled to take place just then.
Taiana expressed satisfaction over Slovenia's upcoming stint at the helm of the EU.
"Slovenia's EU presidency will be very friendly for Argentina," the minister said in a joint
statement following the meeting, confident that Slovenia would perform its job "excellently".
Although the priorities of Slovenia's presidency focus on Europe, they are important for Latin
America and Argentina too, Taiana said. He pointed to the EU-Latin America/Caribbean
(LAC) summit to be held in Peru in May 2008, while he said the period would also be
important for talks on an association treaty between the EU and Mercosur.
Rupel said that he sought the opinion of his Argentinian opposite number on the possible
items on the agenda of the EU-LAC summit. Slovenia will listen carefully what Latin
American countries propose. "Slovenia will not force its agenda, we'll try to adapt to what is
most topical for all of us." Rupel added that the topic of the declaration to be adopted in Lima
was still open.
According to Rupel, Latin America is interested in new agreements with the EU. "They
consider to be disadvantaged over standards we have in Europe, and I intend to report on this
discussion in detail to my colleagues in Brussels."
The pair also touched on bilateral relations, agreeing that economic cooperation could be
strengthened via Slovenia's Luka Koper port - Rupel described Luka Koper as an entrance
point for Central European markets.
Slovenia and Argentina are thinking about stepping up cooperation between Koper and the
port of Mar del Plata, 450 kilometres southwest of Buenos Aires.
Rupel also highlighted opportunities in the energy sector. "Argentina is a well-known as
biodiesel producer and as such possesses considerable expertise and production facilities. At a
time when energy is becoming a rare asset, such discussions are important for Slovenia and
the EU," said Rupel, reiterating that energy security was one of the priorities of Slovenia's EU
presidency.
Argentina is Slovenia's third largest trade partner in Latin America after Brazil and Mexico,
with some US$ 30m in goods and services exchanged last year.
Rupel also said that Argentina and Slovenia were bound by a special thread - the Slovenian
community in Argentina.
Rupel Meets Slovenian Community in Argentina
Argentina is home to nearly 30,000 ethnic Slovenians and their descendants
Foreign Minister Dimtrij Rupel continued his visit to Argentina on Friday, 13 April by
meeting representatives of the Slovenian community there. Rupel said he thanked his
Argentinian hosts for everything Argentina offered to the Slovenians who were looking for a
new home.
"It is worth noting that the Argentinians I spoke with thanked Slovenia for the Slovenian
community having contributed so significantly to Argentina's achievements," Rupel stressed.
"The Slovenian community in Argentina is not only a symbolical supplement of Slovenia. It
is the most important element of Slovenian life in Latin American and plays an important role
in helping us understand this society and the problems that are to be dealt with by Slovenia as
the presiding EU country," Rupel said after the meeting in Buenos Aires.
5
He said the representative of the community acquainted him with their problems, "which are
not major problems and can all be fixed".
Argentina is home to nearly 30,000 ethnic Slovenians and their descendants. Slovenians
moved to Argentina in three major waves: economic migrants came in the 1870s and during
both world wars, while those who came the immediate aftermath of the Second World War
mostly fled Slovenia to escape persecution by the Communists.
The community representatives highlighted among their problems a lack of bilingual
dictionaries and publications about Slovenia in Spanish. One of them expressed a wish to
receive an official invitation to return to Slovenia.
The Slovenians in Argentina recently elected Andrej Fink and Tone Mizerit as their
representatives in the Council for Slovenians in Neighbouring Countries and Abroad. The
establishing of a federation of Slovenian associations in Argentina is planned for next year.
6
EUROPEAN UNION
A Thousand Slovenian Students to Join Erasmus Programme This Year
Seven Slovenian higher education institutions will send some 1,000 students and over 140
professors to foreign universities within the Erasmus student exchange programme this year,
while 700 foreign students are to come to Slovenia
Seven Slovenian higher education institutions will send some 1,000 students and over 140
professors to foreign universities within the Erasmus student exchange programme this year,
while 700 foreign students are to come to Slovenia, Higher Education Minister Jure Zupan
told the press in Ljubljana on Tuesday, 10 April.
When Slovenia joined the programme in the 1999/2000 academic year, four higher education
institutions sent 171 students and 42 professors abroad, while 20 foreign students came to
Slovenia.
The number increased to 900 students in the last study year, Zupan said at a press conference
marking the 20th anniversary of the Erasmus programme.
Due to the increasing number of participating students the state earmarked about EUR 2.9m
for the programme this year, or seven times more than in 2000, said Zupan.
The head of the European Commission's Representation Office in Slovenia Mihela Zupancic
meanwhile said that Erasmus was one of the programmes in which the results of European
unification were most visible in practice.
After initial doubts by the member states, which were concerned about losing jurisdiction
over education, the programme now includes 90% of universities from the participating
countries (EU-27, Norway, Iceland, Liechtenstein, Turkey), said Zupancic.
Student organisations played a key role in the process, giving the programme a certain
elements of a bottom-up initiative, she added.
About a million and a half students participated in the first twenty years of the Erasmus
programme, while the aim of the European Commission is to double the number in the next
seven years as the EU budget framework is to earmark EUR 7bn for the programme.
EU Affairs Officials Meet Over EU Presidency in 2008
European Affairs State Secretary Janez Lenarcic met French Secretary General for European
Affairs Pascale Andreani to discuss the EU presidency in 2008, which will be held
successively by Slovenia and France
European Affairs State Secretary Janez Lenarcic met on Wednesday, 11 April French
Secretary General for European Affairs Pascale Andreani to discuss the EU presidency in
2008, which will be held successively by Slovenia and France.
The officials discussed issues which are expected to top the agenda in the EU next year,
including the future institutional make-up of the EU, the Lisbon Strategy, energy policy,
climate change, EU enlargement and the budget reform, the Government Office for European
Affairs said in a press release
Andreani also met chairs of the parliamentary EU affairs and foreign policy committees,
Anton Kokalj and Jozef Jerovsek. The officials discussed cooperation between the parliament
and the government in the EU-related issues in both countries and the role of both parliaments
as regards the principles of subsidiarity and proportionality.
They also touched on the future of the European Constitutional Treaty, which French citizens
rejected in the 2005 referendum, the parliament's press service said in a press release.
Andreani and Jerovsek agreed that some kind of document was necessary. Andreani explained
that France's standpoint on the issue would be clearer after the presidential election.
7
The pair discussed the preparations for Slovenian EU presidency in the first half of 2008,
especially in the light of the fact that France will succeed Slovenia at the helm of the bloc.
Jerovsek also told Andreani that Slovenia supported Croatia's EU accession as well as the
European prospects of other countries in the region. The pair discussed the future status of
Kosovo and Jerovsek expressed support for the plan put forward by UN special envoy Martti
Ahtisaari.
Kokalj and the French official discussed EU expansion, the question of two-tier Europe and
the future of the EU energy policy.
Slovenia's Contribution to EU Budget Cut by EUR 5m
Because of the 2006 surplus and due to active budget management the surplus in the EU
budget is to amount to EUR 1.8bn this year, thus cutting the members' payments
Slovenia's contribution to this-year's EU budget will be EUR 5m lower than planned, the
European Commission said on Friday, 13 April. Because of the 2006 surplus and due to active
budget management the surplus in the EU budget is to amount to EUR 1.8bn this year, thus
cutting the members' payments.
The surplus in the EU budget has been decreasing. In 2005 it was EUR 1.077bn, while in
2006 around 1% of the budget, some EUR 950m, was not spent.
The commission also said that the management of the budget would be especially important
in 2007, because this was the first year of the 2007-2013 financial perspective.
In the first years of a new perspective projects and programmes are usually being drafted,
increasing the possibility of lower expenditure, and the actual spending of the budget money
follows later.
8
STATISTICS/FORECASTS
Industrial Output Drops 3% in February
Slovenian industrial output fell by 3.1% in February over January, but expanded by 9.3%
year-on-year
Slovenian industrial output fell by 3.1% in February over January, but expanded by 9.3%
year-on-year, the National Statistics Office said on Tuesday, 10 April.
The annual comparison shows that output expanded the most in mining (18.2%) and in the
manufacturing sector (11.1%), while it dropped by 15% in electricity, gas and water supply
industries.
The most substantial increase in terms of products was meanwhile achieved by capital
industries (19.8% y/y), consumer goods production expanded by 7.4% and that of
intermediate goods by 6.8%.
Stocks increased by 1.9% at the monthly level and by 4.9% over February 2006.
Unemployment Rate Down by 0.5% in 2006
The unemployment rate was 4.9% among men and 7.2% among women
The Labour Force Survey-based unemployment rate in Slovenia stood at 6% last year, down
0.5% percentage points over 2005, according to the National Statistics Office.
The unemployment rate was 4.9% among men and 7.2% among women. The number of
unemployed men dropped by 1.2% percentage points, while it increased by 0.1% percentage
points among women.
The number of unemployed persons was down by over 5,000 to 61,000 year-on-year due to an
increased number of employed men; there was no major change in the number of unemployed
women.
The highest unemployment rate (13.9%) was recorded in the 15-24 age group. In line with
expectations, the lowest rate (2.6%) was meanwhile recorded among people aged between 55
and 64.
The number of working age people (aged 15 or more) increased by 10,000, while the number
of persons under 15 dropped by 3,000.
Slovenia's labour force numbered 961,000 in 2006, which is 12,000 more than in the year
before, while the total number of working-age people increased by 7,000 to 1,022,000.
The size of the inactive population went up by 3,000 to 701,000 in 2006. The number of
inactive men increased by 5,000 to 288,000, while the number of inactive women was down
2,000 to 413,000.
Panel: Strong Slovenian Companies Essential For Development
Participants in a panel on the "Sale of State Property" organised by the National Council
agreed that if Slovenia was to stay competitive, it must not rely solely on foreign investment or
investment abroad, but also needed powerful companies seated at home
Participants in a panel on the "Sale of State Property" organised on Thursday, 12 April by the
National Council agreed that if Slovenia was to stay competitive, it must not rely solely on
foreign investment or investment abroad, but also needed powerful companies seated at home.
The president of the Strategic Council for Economic Development Marjan Senjur said that in
order to enter the ranks of the most developed European countries, Slovenia also needed
strong companies at home that would be capable of successfully competing with foreign
companies.
9
He said that foreign capital was very welcome, however at a scope that would be still healthy
as Slovenia had to both import as well as export capital.
Joze Mencinger, a former economy minister and chancellor of the Ljubljana University,
meanwhile believes that Slovenia is wise not to have sold the key elements of its economy
during transition as, according to him, foreign ownership of companies does not contribute to
economic growth.
Mencinger said that while the outflow of revenues from Slovenia to countries abroad was
already higher than the country's entire trade gap, Slovenia was still much better off than
Eastern European countries, which had sold to foreigners most of their companies, and
especially the financial sector.
Peter Glavic of the Maribor Faculty of Chemistry and Chemical Technology, who is also a
former state councillor, said that no Slovenian government had a long-term strategy, and that
the incumbent government was planning to invest in projects abroad. According to him, this is
not good, as the export of capital also means the export of jobs.
Slovenians Worked 173 Hours a Month in 2005
A person with full employment - Slovenia has a 40-hour work week - has the right to a 30minute break, with the legislation moreover envisaging at least four weeks (20 working days)
of regular annual leave of work
Workers in Slovenia were on the average paid for a total of 173 hours of work per month in
2005, with the number of hours actually spent working standing at 128 hours, the National
Statistics Office has said.
A person with full employment - Slovenia has a 40-hour work week - has the right to a 30minute break, with the legislation moreover envisaging at least four weeks (20 working days)
of regular annual leave of work.
Slovenia had 113 work-free days in 2005, 105 being Saturdays and Sundays and eight bank
holidays.
The data moreover shows that the average monthly use of sick leave per worker in 2005 was
five hours within the category of sick leaves shorter than 30 days (covered by the employer)
and three hours of sick leave within the category for the periods exceeding 30 days (covered
by the state).
10
FINANCE
Insurer Adriatic Slovenica Gets EUR 233.3m in Premiums in 2006
Adriatic Slovenica took 14.5% of the market and solidified its position as the country's second
largest insurer
Adriatic Slovenica, the Koper-based insurer, said on Tuesday, 10 April that it managed to
collect EUR 233.3m in premiums in 2006, 16.5% more than last year.
Adriatic Slovenica took 14.5% of the market and solidified its position as the country's second
largest insurer, the company wrote in a press release.
Net profit amounted to EUR 13.4m in 2006, over three times as much than in 2005.
Adriatic Slovenica paid out damages of nearly EUR 150m in last year, up 24% over 2005.
The company collected EUR 40m in premiums in the first two months of 2007, up 14% over
the same period last year.
Petrol Considerably More Expensive
Petrol prices are adjusted every two weeks to oil prices and the exchange rate of the US
dollar
Petrol prices are higher as of Wednesday, 11 April. Regular unleaded costs EUR 1.046, up 3.9
cents, while premium is being sold at EUR 1.055, 4 cents more.
Diesel went up by 3.1 cents to EUR 0.954, whereas the price of heating oil increased by 3
cents to EUR 0.593.
Petrol prices are adjusted every two weeks to oil prices and the exchange rate of the US
dollar.
Wiener Staedtische Ups Premiums by 14% in 2006
The company is pleased with the results as it grew faster than the Slovenian insurance market
overall
The Ljubljana subsidiary of Austrian insurer Wiener Staedtische increased its premiums to
EUR 5.74m in 2006, up 14% year-on-year. The company is pleased with the results as it grew
faster than the Slovenian insurance market overall, director Tomo Mrdjen said in Ljubljana on
Thursday, 12 April.
The market share of the insurer stood at 0.81% in life insurance and about the same in
property insurance last year.
The life insurance segment grew by 86% and the property insurance business doubled,
Mrdjen told the press.
Mrdjen hopes the company will increase its market share to over 1% this year.
Wiener Staedtische Ljubljana employs 16 people.
U-Turn Sends Market Index Back Over 8,000 Points
Volumes were moderate in the week with brokers exchanging a total of EUR 54.65m worth of
deals, EUR 24.85m of which was in block trade
Another four-day trading week on the Ljubljana Stock Market brought sinking prices early in
the week, yet the items recovered towards the end to bring the main market SBI 20 index to
8,058.68 points, down 44.85 points on the week.
There was no takeover story last week to fuel the blue chips and they went into a free fall as
investors cashed in their profits on Tuesday, 10 April, the first trading day following the
Easter holidays.
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Volumes were moderate in the week with brokers exchanging a total of EUR 54.65m worth of
deals, EUR 24.85m of which was in block trade.
Beverage group Pivovarna Lasko was the most traded item in the week, with 80% of its EUR
14.94m in volumes coming in block trade. Pivovarna Lasko shed 2.02% to EUR 50.92.
Pharma company Krka meanwhile saw EUR 8.2m worth of deals and lost 2.9% to EUR
857.27. Energy group Petrol accounted for EUR 4.44m in turnover, dropping 1.55% to EUR
569.84.
Logistics company Intereuropa, the motor of last week's growth following takeover rumours,
shed over 10% this week in the absence of any further developments. It closed at EUR 36.86,
still considerably higher than before the takeover story broke out.
The SBI TOP index of the six biggest blue chips shed 20.65 points to 1,763.83.
The PIX investment fund index ended the week 36.27 points lower on 5,811.12, while the
BIO bond index remained virtually flat at 117.41 points.
12
REGIONAL INFORMATION
Retailers Interested in Supermarket-Football Stadium Combo
Slovenia's top retailers as well as Swedish furniture giant Ikea expressed interest in building
a supermarket on the outskirts of Ljubljana
Slovenia's top retailers as well as Swedish furniture giant Ikea expressed interest in building a
supermarket on the outskirts of Ljubljana, Mayor Zoran Jankovic told the press on Tuesday,
10 April. The city would supply a 40,000 sq. metre plot but the investor would also have to
build and manage a football stadium.
Jankovic said that Slovenian grocers Mercator, Spar, Tus and foreign retailers, including Ikea,
expressed their interest in constructing what would be Slovenia's largest supermarket near the
Ljubljana ring road.
According to the mayor, Ikea has already sent its wish list regarding the required size of the
plot and the Ljubljana municipality will send its proposals in April.
The plan envisages a shopping centre with a surface area of 60,000 sq. metres and a car park
for 4,000 cars. The investor will also have to construct a stadium with 16,000 seats, a multipurpose sports hall and two practice football fields.
The project, however, entered a snag, as the Sitar family, which owns some 8,000 sq. metres
of the land on the plot, backed out of an agreed compensation and now wants more money.
According to Jankovic, one of the options is expropriation.
The story was launched by daily Dnevnik on Saturday. The paper wrote that the value of the
40,000 sq. metre plot was estimated at between EUR 14m and 20m, while the planned
buildings would cost between EUR 14m and EUR 26m.
PM Believes Podravsko Could Improve Its Position Among Regions
Prime Minister Janez Jansa believes that the NE region of Podravsko could become the
fourth or even third most developed of Slovenia's 12 statistical regions by 2013
Prime Minister Janez Jansa believes that the NE region of Podravsko could become the fourth
or even third most developed of Slovenia's 12 statistical regions by 2013. However, the region
has to develop its full potential and discover new opportunities, Jansa told the press in Lenart
on Wednesday, 11 April.
The prime minister said that the region, currently ranked seventh, could benefit from the
planned establishment of provinces.
The 22 municipalities in the region are already doing better in some areas than indicated by
their position, especially regarding the number of newly-established companies, tourism and
reducing unemployment, Jansa said during the cabinet's visit to the region.
He added that the passed changes to the municipalities financing act netted Podravsko EUR
18m more in funds on the annual level.
Furthermore, Jansa said that several important projects from the 35 listed in the government's
resolution on national development projects between 2007-2023 were located in Podravsko,
with a combined value of EUR 1bn.
According to Jansa, another boon for the region is the increased amount of money available
from EU funds. The region will get four times more funds in the 2007-2013 EU budget
framework compared to the previous EU budget.
The news conference was also attended by Local Self-Government and Regional
Development Minister Ivan Zagar, Economy Minister Andrej Vizjak and Education and Sport
Minister Milan Zver with Vizjak highlighting the EUR 160m construction of a business centre
in the region.
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According to Vizjak, the project includes a logistics centre close to the Maribor airport, a
centre for managing light materials in Slovenska Bistrica and the Ormoz industrial park.
Zver said that the ministry invested EUR 25m in the development of the network of schools in
Maribor, the largest ever investment cycle in education in Slovenia's second largest city.
Zagar meanwhile pointed to the importance of direct investment for the development of the
region. He stressed that the scope of such investments increased from EUR 2.1m in 2004 to
the current EUR 21m.
Prior to the news conference, Jansa, Vizjak and Katja Lautar, state secretary at the
government Development Office, also made a stopover at the Mariborska livarna (MLM)
foundry, Maribor's largest industrial facility.
According to MLM chairman Branko Zerdoner, the company, which managed to break even
in 2003, outlined its achievements and plans.
Zerdoner said that the company wanted the state to "stand by its side" in the implementation
of its programmes by providing a stable and stimulating macroeconomic environment.
Mayors Discuss Key Issues for Development of Municipalities
Local Government and Regional Development Minister Ivan Zagar opened in Bled a two-day
meeting of mayors and other local officials by presenting three key areas for the development
of municipalities and state: the funding of municipalities act, direct incentives and the
establishment of provinces
Local Government and Regional Development Minister Ivan Zagar opened in Bled on Friday,
13 April a two-day meeting of mayors and other local officials by presenting three key areas
for the development of municipalities and state: the funding of municipalities act, direct
incentives and the establishment of provinces.
According to Zagar, new legislation is aimed at the regulation of funding so that
municipalities can have more operating space and use the funds for their development
autonomously.
A step further was also made in the area of direct incentives, as municipalities can
autonomously decide on which projects the funds will be used for and set their own priorities,
said Zagar as he addressed the "Mayor Days" meeting.
The establishing of provinces, a move that aims at decentralising the country and is based on
devolution of powers, is well under way. The first legislation package is in its last phase,
while we are still facing a lot of work, said Zagar.
He added that while the draft bill on provinces was already on the table, it would also
consider proposals made at Bled. This meeting is important as it will instigate exchange of
opinions which can contribute to a better legislation, said Zagar.
The minister expressed hope that the drafting of the legislation would be formally finished
this year so that provinces can be established in 2009 and contribute to the development of the
country.
Vesna Juvan Gotovac of the Government Office for Local Self-Government and Regional
Policy meanwhile said that the introduction of provinces entailed changes in the management
of public affairs in the country. Many public offices which are centralised will be managed at
a different level, she added.
The Mayor of Ptuj Stefan Celan said that municipalities could only be successful if they
managed to secure the cooperation of all key elements of development.
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BRANCH INFORMATION
Culinary Books Honoured with Special Awards in China
Two Slovenian culinary books, "Tartufi in Vino" (Truffles and Wine) and "The Cuisine of
Slovenia, 100 Selected Dishes", were honoured with special awards at the Gourmand World
Cookbook Awards in Beijing
Two Slovenian culinary books, "Tartufi in Vino" (Truffles and Wine) and "The Cuisine of
Slovenia, 100 Selected Dishes", were honoured with special awards at the Gourmand World
Cookbook Awards in Beijing on Saturday, 07 April.
The author Dino del Medici as well as the publishing house Mladinska knjiga and The
Slovenian Knights of Wine were awarded for "Tartufi in Vino", a book with 160 truffle dish
recipes and recommendations on most suited wines for each of the dishes.
A Special Award meanwhile went to the publisher Rokus for their guide on Slovenian
gastronomic masterpieces "The Cuisine of Slovenia, 100 Selected Dishes".
Rokus announced that the book "Wines of Slovenia, 100 Selected Wines" received a silver
award in the category of the best wine guides. This was the fourth time a book by Rokus won
an award at this event.
Gourmand World Cookbook Awards was organised for the first time by Edouard Cointreauin
in 1995 under the name World Cookbook Awards. This year over 3,000 books in 46
categories competed in 2006, Rokus added.
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COMPANIES
Incoming Lek CEO: Cost Cutting Chance for Generics Makers
Vojmir Urlep is to assume the post on 1 August
Vojmir Urlep, the incoming chairman of pharma company Lek, believes that cost cutting
measures by the health purse could benefit makers of generic drugs. Sales of generics are on
the rise, Urlep says in an interview for daily Delo's financial supplement on Tuesday, 10
April.
Urlep, who is to assume the post on 1 August, added that this is also why large pharma
companies such as Novartis want to control the market for generics as well. Lek was acquired
by the Swiss-based Novartis in late 2002.
He believes that the cost cutting measures, acquisitions and changes to legislation, have led
the companies to believe that changes are the only constant.
Urlep moreover told Delo FT it is a fact that the share of generic drugs is rising faster than the
share of original drugs, resulting in a partial restructuring on the market for medicine.
Urlep also touched on the relations between Lek and rival Slovenian pharmaceutical company
Krka and assessed that the two companies were not as comparable as in the past.
"There are more than enough competitors in the area where Krka and Lek operate, so the
domestic market is no longer the area where the two companies could be compared. They are
compared on all the markets on which they are present," he said.
Urlep, who currently heads drugs wholesaler Kemofarmacija, will replace Janja Bratos in the
post. Bratos, who became Lek's top manager in mid-2005, is retiring.
Luka Koper Sell Bulk of Banka Koper Shareholding
Port operator Luka Koper sold 8.3% of Banka Koper to Italian banking group Intesa
Sanpaolo
Port operator Luka Koper sold on Tuesday, 10 April 8.3% of Banka Koper to Italian banking
group Intesa Sanpaolo, the bank's majority owner, in a deal worth just under EUR 25m. Luka
Koper will retain a 1.67% stake.
The move comes after Luka Koper and the only two other major Slovenian owners of the
bank, logistics group Intereuropa and conglomerate Istrabenz, announced they would pull out
in line with a 2002 sell option.
The transaction is identical to the deal Intereuropa struck with Intesa Sanpaolo in early
February. Istrabenz retains its 10% stake for now.
The reason why the Slovenian owners are keeping 1.67% each is the shareholder agreement
of 2002 which says that the name and headquarters of the bank may not change without the
consent of small shareholders even if they own merely a combined stake of 5%.
SanPaolo IMI, the legal predecessor of Intesa SanPaolo acquired 62.1% of Banka Koper in
2002 but only 32.9% of the voting rights. Last year it obtained the go-ahead from the central
bank to get full voting rights for its entire stake.
Droga Kolinska Chief Executive Resigns
Droga Kolinska, Slovenia's largest food company, got a new chief executive as the
supervisory board accepted the resignation of Robert Ferko and appointed Slobodan
Vucicevic his successor
Droga Kolinska, Slovenia's largest food company, got a new chief executive on Wednesday,
11 April as the supervisory board accepted the resignation of Robert Ferko and appointed
Slobodan Vucicevic his successor, the company said in a press release.
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Vucicevic is currently the executive director for Southeast Europe and the general manager of
the Belgrade-based coffee producer Grand Prom which he set up in 1998 and which Droga
Kolinska acquired in September 2005.
The new boss will be joined on the management board by Milena Stular, the current director
of Unilever Slovenija and director of marketing at Kolinska for 15 years before she joined
Unilever.
The company said Ferko, who resigned citing personal reasons, would become an adviser to
the management board whereupon he would be put in charge of a new as yet undisclosed
project in the framework of the Istrabenz Group, the majority owner of Droga Kolinska.
"The new board ensures continuity of management. The complementarity of the professional
experiences of the new board members is a guarantee of future growth," Istrabenz chairman
Igor Bavcar said in a press release.
The board reshuffle comes just two weeks after Istrabenz raised its stake in Droga Kolinska
from 60% to 91% in a takeover bid worth EUR 71m.
Istrabenz said it was seeking to consolidate ownership of Droga Kolinska because the group
faced a tough period of risky restructuring of its 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 at the time.
Droga Kolinska recently put up for sale several brands, including the Viki chocolate and
cream spread, Salatina and Talis vinegars, Belsad jams and Cunga Lunga chewing gum, all
households names in Slovenia.
Just the previous week the company announced it would stop producing and distributing
Unilever's brands Knorr and Hellmanns when the licence agreement with Unilever expires in
2008.
The food company generated sales revenues of EUR 338m last year, a rise of 44% over the
year before, posting a profit of EUR 21.3m.
New HSE and Dravske Elektrarne Management Centres Inaugurated
Economy Minister Andrej Vizjak and Development Minister Ziga Turk opened in Maribor
new management centres of power producer Holding Slovenske elektrarne (HSE) and its
subsidiary Dravske elektrarne Maribor, which manages the chain of hydro plants on the
Drava
Economy Minister Andrej Vizjak and Development Minister Ziga Turk opened in Maribor on
Wednesday, 11 April new management centres of power producer Holding Slovenske
elektrarne (HSE) and its subsidiary Dravske elektrarne Maribor, which manages the chain of
hydro plants on the Drava.
The centres, which are located at the Dravske elektrarne Maribor headquarters, are to enable
modern, optimised and high-quality management of electricity production from one place, and
provide reliable and optimal operations.
Vizjak, who inaugurated the centres as part of the government visit to Podravje region, said
that the investment was a step towards better efficiency of the Slovenian electrical energy
system, which would help reduce the costs of electricity production.
Meanwhile, HSE director general Joze Zagozen explained that the centre would help the
company improve the reliability and safety of electricity supply as well as maximise
economic benefits.
HSE invested around EUR 2m in the project, while Dravske elektrarne Maribor paid EUR
1.3m for the centre.
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Steel Group Gets New Supervisors
Shareholders of Slovenska industrija jekla (SIJ) elected a new supervisory board after the
steel group was recently sold to Russian company Koks
Shareholders of Slovenska industrija jekla (SIJ) elected a new supervisory board on
Wednesday, 11 April after the steel group was recently sold to Russian company Koks. Koks,
which acquired a 55.35% share in SIJ in early March for EUR 105m, has five representatives
on the board.
Interests of the state, which retained a stake of 25% plus one share in SIJ, will be represented
by Marija Zagozen, the head of the government commission in charge of the sale of SIJ, and
Borut Frantar, a member of the same commission.
The Russian representatives meanwhile are Vyacheslav Korchagin, Ales Rojs, Igor
Malevanov, Vladimir Lomberg and Dmitry Bochkarev.
According to unofficial information, the Russian company has already paid up the acquisition
fee.
The meeting also passed some changes to the company's statute, one of which is that
important decisions have to be passed with a three-quarter majority of all votes. According to
the Economy Ministry, the changes "underline the importance of voting rights of the Republic
of Slovenia".
Important decisions include increasing or decreasing share capital, changes to the status or
dissolution of the company and on issuing bonds.
The Competition Protection Office meanwhile said that the acquisition of SIJ by Dilon, the
company set up in Slovenia by Koks to carry out the takeover, was in line with legislation.
State-Run Funds Offload Stakes in Etra
The state-run Pension Fund Management (KAD) and Restitution Fund (SOD) closed a deal
with investment firm Pom Invest to sell their combined 21.14% stake in Etra 33
The state-run Pension Fund Management (KAD) and Restitution Fund (SOD) closed a deal
with investment firm Pom Invest on Wednesday, 11 April to sell their combined 21.14% stake
in Etra 33, a maker of transformers. The funds said they were selling at EUR 540 per share,
which means Pom Invest will pay EUR 5.18m for the entire stake.
The price is considerably higher than the one offered by Maribor-based asset management
Zlata Moneta 2 in its takeover bid. Zlata Moneta 2 however managed to acquire but 0.5% of
Etra 33 at EUR 446.50 per share by the time its bid closed on 3 April.
Zlata Moneta 2 remains the owner of about 20% of Etra 33, while the company did not rule
out the possibility that the stake would be offloaded later on.
It was small shareholders, dissatisfied with the price offered by Zlata Moneta 2, which urged
KAD and SOD not to sell their stakes in Etra 33.
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.
Petrol Joins List of Bidders for Montenegro Bonus
Slovenian energy company Petrol said it would submit a bid to forge a joint venture with
Montenegrin oil company Montenegro Bonus under a public invitation for bids published by
the Montenegrin government on 6 April
Slovenian energy company Petrol said on Thursday, 12 April it would submit a bid to forge a
joint venture with Montenegrin oil company Montenegro Bonus under a public invitation for
bids published by the Montenegrin government on 6 April.
In the 45-day period for the submission of bids Petrol will examine in detail the tender
conditions, Petrol spokesman Aleksander Salkic told STA.
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The Montenegrin government is inviting bids for a 50:50 joint venture. The bidders must have
profits in excess of EUR 5m a year, a retail network of at least 100 service stations and
storage capacities of at least 100,000 m3.
In September 2006 Petrol and Montenegro Bonus signed a letter of intent on cooperation in
the storage and sales of oil derivatives, and the construction of service stations.
At the time Petrol expressed interest in participating in the privatisation of the Montenegrin
oil company.
Interestingly, media in Serbia and Montenegro have reported that Russian oil giant Lukoil
was also interested in establishing a foothold in Montenegro through a tie-up of its Serbian
subsidiary Lukoil - Beopetrol and Montenegro Bonus.
Petrol and Lukoil are in the midst of talks on a joint venture which would pool together their
petrol retail network in the Balkans.
Ljubljana-Helsinki Flights Aiming for 25,000 Passenger Turnout
Finnish carrier Finnair has launched scheduled flights between Helsinki and Ljubljana on a
route that is expected to carry 25,000 passengers a year
Finnish carrier Finnair has launched scheduled flights between Helsinki and Ljubljana on a
route that is expected to carry 25,000 passengers a year. Embraer 190, which touched down
on Brnik Airport for the first time on Easter Friday, will fly between Ljubljana and Helsinki
four times a week.
A member of the board of Aerodrom Ljubljana, the company that manages Brnik Airport, told
the press on Thursday, 12 April that Ljubljana had been without an airlink with Finland since
the 1980s.
Zmago Skobir added that the arrival of Finnair was a "piece in Aerodrom's strategy to expand
passenger numbers and Slovenia's connections with the world".
Finnair regional director Ralf Massermann said the company would offer leisure and business
passengers in Ljubljana flights not only to Finland but also to other Scandinavian countries
and the Far East.
Since the air carrier operates flights to Asian destinations, such as Japan, China and India,
Slovenia can also expect visitors from those countries, who have so far been arriving in
Slovenia mainly by bus from Venice, the press was told as the flights were officially
launched.
The new air link was hailed by Finnish Ambassador Birgitta Stenius Mladenov, who had
recently noticed a considerable increase in relations between Slovenia and Finland, at the
political as well as cultural and economic level.
The great interest in flights to Finland has contributed to a substantial increase in the fare,
which is to exceed EUR 300 for the round trip. First flights have been fully booked, while the
company expects to enjoy about 65% occupancy rate on the average.
If the interest would exceed the expectations, Finnair is ready to send a larger plane to
Slovenia. The brand new Embraer 190 can seat 100 passengers. Officials say the plane is fuelefficient and as such environment-friendly.
19
SLOVENIA IN BRIEF
Slovenia, Macedonia to Continue Cooperation in Fighting Crime
Macedonian Interior Minister Gordana Jankuloska and her host and opposite number Dragutin
Mate agreed in Brdo pri Kranju on Tuesday, 10 April that Slovenia would share its EU
accession experience in preventing organised crime, terrorism and illegal migration.
Government Moves Towards Banning Smoking in Public Places
The government adopted on Thursday, 12 April amendments to the anti-smoking act, which
introduce bans on smoking in all indoor public and work places. Also being sent to parliament
are amendments to the health insurance act and the bill on quality and safety of human tissues
and cells for the purposes of medical treatment.
Government Refers Draft Bill on Alternative Medicine to Parliament
The government on Thursday, 12 April adopted a bill on alternative and complementary
medicine, a branch of medicine that has so far not been regulated by law.
Government Appoints Taskforce to Phase Out Internal Border Posts
The government on Thursday, 12 April appointed an inter-ministerial team that will take care
of border crossings along the internal EU borders once Slovenia joins the Schengen passportfree zone and border control there is eliminated.
Fire at Boat Builder Seaway Caused EUR 7m in Damage
The fire that completely destroyed the premises of boat builder Seaway between 11 and 12
April caused EUR 7m in damage, according to preliminary estimates. The fire destroyed the
production hall, all boats in the making and machinery, Kranj police have said.
European Poetry Prize Goes to Tomaz Salamun
Slovenian poet Tomaz Salamun and the translator of his poetry into German, Fabjan Hafner,
are the recipients of this year's European Poetry Prize of the city of Muenster (Preis der Stadt
Muenster fuer Europaeische Poesie). They will receive the award on 6 May, says the official
homepage of the poetry festival "Lyrikertreffen Muenster".
Controversial Theatre Director Returns Home after 11 Years
Tomaz Pandur, who has made his mark in the international theatre community with his
extravagant projects, is coming back to his hometown after spending eleven years abroad.
Pandur, a genius for some and a charlatan to others, will stage his latest show, "Tesla Electric
Company", in Maribor in early May.
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