Slovenia Business Week no 16, April 23, 2007
Table of Contents:
HEADLINES ............................................................................................................................. 3
Wages Down in February, Up 4.8% Y/Y ............................................................................... 3
Slovenian, Moldovan PMs Call for Stronger Ties ................................................................. 3
CCIS Says Economy Can't Remain Competitive Without Reform ....................................... 4
INTERNATIONAL COOPERATION ...................................................................................... 5
Foreign Minister Discussing EU-Latin America Summit in Chile ........................................ 5
Slovenia and Peru Confident about Success of EU-LAC Summit......................................... 6
Minister Sees Big Potential for Slovenian, Moldovan Cooperation ...................................... 6
FM Discusses Preparations for EU-Latin America Summit in Peru ...................................... 7
Drnovsek Receives New Chinese Ambassador ..................................................................... 8
Rupel Gets New Ideas for Lima Summit in Santo Domingo ................................................. 8
FM Says Tackling Climate Change Key Priority for EU, Slovenia ....................................... 9
Slovenia and Republic of Congo Establish Diplomatic Ties ................................................. 9
EUROPEAN UNION ................................................................................................................. 9
EU Agriculture Ministers Fail to Agree on Protection of Eels .............................................. 9
Agriculture Minister, EU Commissioner Discuss Illegal Fishing ........................................ 10
Official Believes EU Crisis Solvable with Constitutional Treaty ........................................ 10
New Border Post Brings Slovenia Step Closer to Schengen Zone ...................................... 11
Ministry Says Rail Legislation Proceedings Halted ............................................................. 11
Minister Wants Joint Schengen Entry if Criteria Met .......................................................... 11
STATISTICS/FORECASTS .................................................................................................... 13
Registered Unemployment at 8.4% in February .................................................................. 13
Factory-Gate Prices Up 0.2% in March ............................................................................... 13
People Spending More on Books, Statistics Show .............................................................. 13
FINANCE................................................................................................................................. 15
Bajuk Discusses Future Cooperation with IMF and World Bank ........................................ 15
Central Bank to be without Governor a While Longer ........................................................ 15
Istrabenz Sells Bulk of Stake in Banka Koper ..................................................................... 15
Insurer Triglav Opens Subsidiary in Slovakia ..................................................................... 16
Insurers Adriatic Slovenica and Vzajemna Halt Merger...................................................... 16
Bajuk Says Slovenia on Track to Meet Budget Objectives ................................................. 17
Ljubljana Stock Exchange .................................................................................................... 17
REGIONAL INFORMATION ................................................................................................ 19
Celje To Turn Waste into Heat ............................................................................................ 19
Maribor Starts Project to Help Companies Enter Foreign Markets ..................................... 19
BRANCH INFORMATION .................................................................................................... 20
Panel: Tourism Sector Will Have to Adapt to Climate Change ........................................... 20
Slovenian Publishing Market Dominated by Minnows ....................................................... 20
COMPANIES ........................................................................................................................... 22
Retailer Tus Reports 16% Rise in Operating Revenues ....................................................... 22
Gazprom Representatives Visit Petrol ................................................................................. 22
Iskraemeco Looking for New Owner to Help Guide it Out of Loss .................................... 22
Ryanair Happy with Bookings for Maribor-London Flights ............................................... 23
Gorenje to Start Building New Factory................................................................................ 24
South Korean Delegation Visits Koper Port ........................................................................ 24
Minor Shareholders to be Squeezed out from Droga Kolinska ........................................... 25
Kovintrade to Build Logistics and Retail Centre in Czech Republic ................................... 25
Gorenje to Move Kitchen Production from Austria to Maribor ........................................... 25
Government Looking for Investor to Rekindle Refinery ..................................................... 26
FAIRS, CONGRESSES ........................................................................................................... 28
Slovenia's Largest Advertising Festival Goes Beyond Horizons ......................................... 28
Slovenia to Have Joint Stall at Bologna Children's Book Fair ............................................ 28
SLOVENIA IN BRIEF ............................................................................................................ 29
Fakin Takes Over as Health Insurance Institute Boss .......................................................... 29
PM Says Knowledge Necessary for Development .............................................................. 29
Slovenian Book Days in Ljubljana ....................................................................................... 29
2
HEADLINES
Wages Down in February, Up 4.8% Y/Y
The average gross wage in Slovenia dropped 3% in February, to EUR 1,212.82
The average gross wage in Slovenia dropped 3% in February, to EUR 1,212.82, but was up
4.8% over the year before, the National Statistics Office said on Monday, 16 April.
Figures suggest that the average net wage was 2.8% lower on a monthly comparison, at EUR
792.97. In real terms, however, the drop was lower - 2.8% on a monthly comparison for gross
wages and 2.6% for net wages - as Slovenia posted deflation in February, the Statistics Office
said.
According to the office, the drop in wages can be attributed to a shorter working month in
February - 8.5 hours were worked less on average compared to January - and fewer bonuses.
The average gross wage in Slovenia for the first two months of the year stood at EUR
1,231.57, which is 5.6% more than in the same period last year.
Slovenian, Moldovan PMs Call for Stronger Ties
Slovenian Prime Minister Janez Jansa and Moldovan counterpart Vasile Tarlev called for
stronger business ties between the two countries in an effort to boost the currently modest
volume of trade
Slovenian Prime Minister Janez Jansa and Moldovan counterpart Vasile Tarlev on
Wednesday, 18 April called for stronger business ties between the two countries in an effort
to boost the currently modest volume of trade.
Trade is modest but it growing, Jansa told the press after the meeting, adding that a
memorandum of understanding between the two economy ministries, which was also signed,
would contribute to growth.
The visit - the first meeting of heads of government since the two countries established
diplomatic ties 15 years ago - would definitely boost cooperation, Tarlev added.
Tarlev said that Moldova was interested in cooperation in electronics, IT, pharmaceuticals,
and transport.
He said Slovenian businessmen willing to invest in Moldova would be offered assistance in
overcoming potential hurdles.
Talks also touched on EU enlargement and Slovenia's presidency of the bloc in the first half
of 2008.
Slovenia supports the EU's open-door policy and it encouraged Moldova to persevere on the
path of reform, Jansa explained.
The uniting of Europe will not be completed until countries which want to become members
do not achieve this goal - after fulfilling all the conditions, Jansa said.
Jansa said Slovenia also offered the services of the Centre for European Perspective, which
was established recently and specialises in offering assistance to EU aspirants.
According to Tarlev, Slovenia is a good role model for Moldova, as it carried out political and
economic reforms very successfully.
Tarlev also met Deputy Speaker of Parliament Vasja Klavora, with the pair agreeing that
relations between the two countries are friendly and that they cooperate well.
According to a press release from the National Assembly, Tarlev thanked Klavora for
Slovenia's assistance in the resolution of the Transdniester conflict and in setting up a new
customs regime between Moldova and the Ukraine.
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When he was the OSCE chairman-in-office in 2005, Foreign Minister Dimitrij Rupel said that
any acceptable solution had to fully respect the independence, sovereignty, and territorial
integrity of Moldova, while providing a special status for its Transdniester region.
Klavora meanwhile assured Tarlev that Slovenia would offer all the necessary assistance to
Moldova's EU aspirations during its stint as EU president in the first half of 2008.
Tarlev said Moldova wanted to join the EU as soon as possible and was carrying out reforms
to that extent. He called for a relaxation of the visa regime for Moldovans and thanked
Slovenia for being a member of the group of EU states that recently set up a joint visa centre
in the Moldovan capital of Chisinau.
CCIS Says Economy Can't Remain Competitive Without Reform
The Chamber of Commerce and Industry of Slovenia (CCIS) has reiterated its view that
Slovenia cannot remain competitive in the long term without structural changes, foremost
liberalisation of the business environment
The Chamber of Commerce and Industry of Slovenia (CCIS) has reiterated its view that
Slovenia cannot remain competitive in the long term without structural changes, foremost
liberalisation of the business environment.
Interim CCIS president Samo Hribar Milic told a press conference on Thursday, 19 April that
Slovenia's economy might be well-positioned at the moment, but the outlook for the future
was less rosy without changes.
Data shows that Slovenia lags behind other countries in terms of high technology products,
the creation of companies and the retention of jobs, which does not bode well for its
competitiveness, Hribar Milic said.
In his opinion, Slovenia must implement structural reforms if it wishes to realise its goal of
catching up with the most developed countries in the world.
The measures should include deregulation of the economy, cutting of red tape and the
promotion of knowledge from research institutions to business, said Hribar Milic, who also
specifically pointed to the need for more flexible labour laws.
According to him, the current labour laws bring no flexibility, while talks on the changes have
not made headway because of what he claims to be the stubbornness of the trade unions.
The CCIS also presented its economic forecasts, which predict that economic growth will
stand at 4.6% this year and 4.3% the next.
While growth stood at 5.2% in 2006, it did so on account of extensive growth in fixed capital
formations. Expansion in this field is expected to slow down somewhat this year, which will
result in slightly less intense economic growth.
Head of the CCIS economic trends department Irena Rostan explained that this year's growth
was expected to beat initial estimates because of the favourable trends in the beginning of the
year, including that brought on by the adoption of the euro and the warm winter.
Meanwhile, chief CCIS social talks negotiator Joze Smole said Slovenia still needed to cut red
tape, as the process of establishing a company took about twice as long (around 60 days) as
elsewhere in the region.
Moreover, Smole said the rigidity of labour legislation was another burning problem, as
manifested by Slovenia's ranking of 146th of 175 on the World Bank's indicator of labour
market rigidity.
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INTERNATIONAL COOPERATION
Foreign Minister Discussing EU-Latin America Summit in Chile
"The possible themes are social cohesion, climate changes and energy security issues. These
topics are deemed suitable for the agenda by Chile as well as by Slovenia and the EU," Rupel
said following his talks in Santiago de Chile
Foreign Minister Dimitrij Rupel, who is on a tour of Latin America ahead of Slovenia's
presidency of the EU in the first half of 2008, has established during his stop in Chile that
Slovenia and this country share similar views over the possible topics of the EU-Latin
America summit to be held in Lima during Slovenia's presidency.
"The possible themes are social cohesion, climate changes and energy security issues. These
topics are deemed suitable for the agenda by Chile as well as by Slovenia and the EU," Rupel
said following his talks in Santiago de Chile on Monday, 16 April.
Preparations for the EU-Latin America/Caribbean summit (LAC) are also expected to
dominate Rupel's talks on the next stop on his tour, Peru, the country to host the summit in
May 2008. Rupel arrived there on Tuesday, 17 April after the talks with Chile Vice-President
and Interior Minister Belisario Velasco and Deputy Foreign Minister Alberto van Klaveren
Stork on Monday, 16 April.
In a statement for STA Belisario Velasco said that the LAC summit on 16 and 17 May 2008
would be an opportunity for all sides. "This will be a good platform for further development
of political, cultural and economic ties," he said, expressing pleasure over the summit
coinciding with Slovenia's stint as EU president.
The theme that Chile finds especially important is social cohesion, the way societies cope
with social differences, van Klaveren Stork told STA. According to him, Latin America has
seen successful development over the past decade, but social inequalities remain immense.
This is a crucial issue to tackle for the Michele Bachelet government, van Klaveren Stork said
and added that Chile would hold a workshop on social cohesion as a challenge of Latin
American societies. "We can learn a lot from Europe and this is a very important topic."
Another possible theme of the LAC summit of interest to Chile is multilateralism. Europe is a
global player and its strong presence in the region is vital for Latin America, according to van
Klavern Stork. He said that climate change was another major issue and that both regions
could learn a lot from each other in this respect.
According to the official, Slovenia and Chile have similar positions on major regional
problems and international issues. "Slovenia is a successful country, considering the state of
its economy, social development and the way it has overcome its rather troubled past. In this
way it is like Chile."
Rupel added that both countries were keen on closing an agreement on cooperation in science
and technology, while they also wanted to support each other within the United Nations.
While bilateral trade is moderate, having amounted to less than 13 million US dollars last
year, Rupel announced initiatives to change this. Slovenia's lakeside resort of Bled is to host
in July a conference on small and medium-sized companies that will bring together officials
from Slovenia, the EU and Latin America.
Rupel also met Chile business executives and some ambassadors at the national Chamber of
Trade in Santiago de Chile on Monday, 16 April, while he was decorated by the national
university.
A country of 16 million people, Chile is the most open economy in Latin America. It also has
an association agreement with the EU. Last year Socialist Michele Bachelet became the first
woman at the helm of the state.
5
Slovenia and Peru Confident about Success of EU-LAC Summit
"Both Peru and Slovenia are serious about their international commitments. We will be
presiding over the European Union for the first time now, which is why we will make an even
greater effort to make the conference a success," Minister Rupel told STA following the first
day of talks with Peruvian officials
Slovenia and Peru will do everything in their power to make the EU-Latin America/Caribbean
(LAC) summit to be held in Lima during Slovenia's EU presidency next year a success. The
two countries made this commitment as Foreign Minister Dimitrij Rupel held talks in Lima on
Tuesday, 17 April as part of his Latin America tour.
"Both Peru and Slovenia are serious about their international commitments. We will be
presiding over the European Union for the first time now, which is why we will make an even
greater effort to make the conference a success," Minister Rupel told STA following the first
day of talks with Peruvian officials.
The EU-LAC summit, to be held in Lima on 16 and 17 May, will feature 60 countries: 27 EU
member states and 33 Latin American and Caribbean nations. While Peru will be responsible
for the preparation of the summit logistics-wise, Slovenia as co-chair will share the
responsibility for the content.
According to Rupel, Slovenia already has quite some experience in chairing international
meetings, while the talks in Lima showed that "we shall have very good partners in Peru".
On the first day of his visit to Peru, Rupel met Prime Minister Jorge de Castillo, Minister of
Production Rafael Rey and the head of the Congress Foreign Relations Committee Victor
Rolando Sousa Huanambal, who was confident about the success of the Lima summit.
"We can take this responsibility and I'm positive that will do the job well," the congressman
said after meeting Slovenia's foreign minister. According to Huanambal, the summit will also
be a big opportunity for Peru to make its debut on the international scene and to present its
positions to EU leaders.
De Castillo meanwhile expects the summit to boost relations between the EU and Latin
America, in culture, high technology and education as well as business ties, where the prime
minister sees considerable potential.
De Castillo also expressed hope for the success of talks on the EU-Andean Community
association agreement, which is expected to enhance bilateral economic cooperation. Apart
from Peru, this free-trade community also consists of Columbia, Ecuador and Bolivia, while
Venezuela is moving out to join the Mercosur group.
In preparing the EU-LAC summit, Slovenia counts on support of other countries. Since it
does not have an embassy in Peru, it has made arrangements with France to work closely with
the French mission there, Rupel explained.
France and Portugal, the countries to preside over the EU after and before Slovenia, are the
countries that Slovenia will cooperate with most, Rupel said. He was quick to add though that
it was not Slovenia but the EU which organised the summit, "which means we will be assisted
by 26 countries".
Rupel and the Peruvian prime minister also discussed bilateral relations. De Castillo was
particularly interested in options for cooperation with the port of Koper. Bilateral trade is
moderate and the countries exchanged but EUR 1.4m worth of goods last year.
Minister Sees Big Potential for Slovenian, Moldovan Cooperation
Trade between Slovenia and Moldova amounted to a mere EUR 13.5m in 2006
Trade between Slovenia and Moldova amounted to a mere EUR 13.5m in 2006, however, the
two countries have potential to greatly strengthen their cooperation, Slovenian Economy
Minister Andrej Vizjak said during a visit by Moldovan Prime Minister Vasile Tarlev.
6
Vizjak said that possibilities for strengthening economic cooperation abound in many areas,
especially in energy, as he and Tarlev addressed a business conference held at the Chamber of
Commerce and Industry of Slovenia (CCIS) in Ljubljana on Wednesday, 18 April.
The minister also called for more investment by Slovenian companies in Moldova and viceversa during Tarlev's first stop on his one-day working visit to Slovenia.
Tarlev stressed that political and economic ties between the two countries were good and
called for more economic cooperation. He said that Moldova sees opportunities in electronics,
information technology, pharmacy, transport infrastructure construction and transport.
He also promised the Moldovan government's assistance to Slovenian companies who decide
to invest in this Eastern European country.
Tarlev added that Slovenia was a good example for Moldova because of its successful
economic and political reforms. He added that Slovenian experiences in the transition from
the socialist into a market economy could benefit Moldova.
Vizjak and Moldovan deputy minister for economy and trade Viorel Melnic also signed a
memorandum on cooperation between the economy ministries of the two countries. The
memorandum binds the signatories to focus on developing and strengthening economic
cooperation, the ministry told STA.
It also binds the two sides to create conditions conducive for strengthening economic
cooperation by facilitating trade, concluding contracts between companies from both
countries and promoting foreign investment.
The memorandum moreover establishes a joint commission which is to draft proposals for
bolstering cooperation, determine areas for expanding business ties and exchange information
on legislation, economic situation and other relevant developments.
Trade between the two countries is on the rise, while Slovenia has a large surplus. The
country's companies exported EUR 12.33m worth of products in 2006, but imported goods
worth EUR 1.19m.
The main Slovenian exports include telephones, medicine, various steel constructions and
vehicles, while its imports include harvesting machinery, transmitters and casual clothes.
FM Discusses Preparations for EU-Latin America Summit in Peru
The ministers also signed a memorandum of understanding and an intergovernmental
agreement on the abolition of visas for the holders of diplomatic and service passports
Preparations for a 2008 summit of the EU and countries of Latin America and the Caribbean
topped the agenda as Foreign Minister Dimitrij Rupel held talks on Wednesday, 18 April with
Peruvian counterpart Jose Antonio Garcia Belaunde.
Two topics are crucial for Peru: social cohesion and climate change. The former is crucial for
Peru and the EU, which wants democratic governments in Latin America; the latter is
essential for the whole world, Belaunde told the press.
The summit, which will feature the 27 EU member states and 33 countries from Latin
America and the Caribbean, is to be held in Lima in mid-May 2008, when Slovenia will hold
the rotating six-month EU presidency.
Peru will take over the logistical aspect while Slovenia will share the responsibility for the
content, Rupel explained, adding that the two countries must work side-by-side for the
summit to succeed.
The ministers also signed a memorandum of understanding and an intergovernmental
agreement on the abolition of visas for the holders of diplomatic and service passports.
7
Drnovsek Receives New Chinese Ambassador
The new Chinese ambassador to Slovenia, Zhi Zhaolin, was welcomed here by President
Janez Drnovsek in a meeting that saw the pair reiterate the desire of their countries to work
closer
The new Chinese ambassador to Slovenia, Zhi Zhaolin, was welcomed here by President
Janez Drnovsek in a meeting on Thursday, 19 April that saw the pair reiterate the desire of
their countries to work closer.
In handing his credentials to Drnovsek, Zhi pointed out that cooperation between the two
countries during 15 years of diplomatic relations has developed across a variety of fields, the
president's office said in a press release.
Drnovsek recalled his visit to China and Tibet last year, when he was accompanied by Zhi on
the behalf of Chinese Foreign Ministry, saying that the visit convinced him of China's
impressive development.
The Slovenian president is also convinced that the political leaders of this vast country are
aware of the importance of finding the right balance between economic development and
environmental protection, which is a global responsibility, the press release adds.
Zhi meanwhile said that China sees cooperation with Slovenia as a priority in the framework
of its relations with the EU, which is China's main trade partner.
China ascribes great importance to steady political dialogue with the EU, in regards to which
it has high hopes for Slovenia's EU presidency in the first half of 2008, the president's office
wrote in the press release.
Rupel Gets New Ideas for Lima Summit in Santo Domingo
Foreign Minister Dimitrij Rupel held several bilateral meetings on the sidelines of the EULatin America session in Santo Domingo in which the EU urged the two biggest regional
communities to make a step forward in political dialogue
Foreign Minister Dimitrij Rupel held several bilateral meetings on the sidelines of the EULatin America session in Santo Domingo on Thursday, 19 April in which the EU urged the
two biggest regional communities to make a step forward in political dialogue.
Representatives of Mercosur and the Andean Community meanwhile said the negotiations on
association agreements with the EU had been slowed down by considerable differences
among their members.
The completion of talks on the association agreement between the EU and Mercosur will be
indirectly affected by the outcome of the Doha talks on the liberalisation of world trade, said
Frank-Walter Steinmeier, the foreign minister of Germany, the country which currently holds
the EU's rotating presidency.
According to him, the next phase in the association process could follow in the second part of
the year, but Steinmeier said that the signal must come from Mercosur, the trade community
of Argentina, Brazil, Paraguay and Uruguay. Venezuela is meanwhile waiting for
endorsement from Brazilian and Paraguayan parliaments to join.
The negotiations on the association agreement with the EU are coming to an end. According
to the Mercosur chairman, Paraguayan Foreign Minister Ruben Ramirez Lezcano, the few
remaining open issues include intellectual property, agriculture and industrial products, while
there is no legal obstacle.
The Andean Community has not yet started negotiations on an association agreement with the
EU, but says that the impasse is the result of differences among the member states; i.e. Peru
and Columbia on the one hand and Ecuador and Bolivia on the other. Venezuela left the
community last year.
Slovenia's foreign minister meanwhile met his counterparts from the Dominican Republic,
Bolivia, Paraguay, Ecuador and Mexico, while several more meetings are to follow. The
8
discussions focused on the agenda of the EU-Latin America summit which will be held in
Peru during Slovenia's EU presidency in the first half of 2008.
Speaking to STA, Rupel said that meetings in Santo Domingo "contribute a lot to better
understanding of Latin American issues". He added that his colleagues gave him "very useful
ideas on how to structure the agenda" on the Lima summit.
Mexican Foreign Minister Patricia Cantellano told STA that apart from climate change and
energy security another important theme for her country was migration.
Cantellano, who formerly served as an ambassador in Vienna and was also responsible for
Slovenia, said Slovenia and Mexico could improve trade relations as they had the sound
political basis for this. Mexico is the second most important trade partner for Slovenia in
Latin America.
FM Says Tackling Climate Change Key Priority for EU, Slovenia
Foreign Minister Dimitrij Rupel highlighted the importance of the joint fight against climate
change as he addressed an EU-Rio Group ministerial in the Dominican Republic
Foreign Minister Dimitrij Rupel highlighted the importance of the joint fight against climate
change as he addressed an EU-Rio Group ministerial in the Dominican Republic on Friday,
20 April. This remains a priority for Slovenia as well as the EU in the coming years, he said.
According to Rupel, the importance of the issue is adequately reflected in the 18-month
programme of the three successive presiding EU countries - Germany, which holds the
presidency now, and its successors Portugal and Slovenia.
Speaking more broadly about energy, Rupel said that despite differences in energy supply in
the EU and Latin America, there is a shared goal to decouple energy from political influence
and dependence.
This will require greater self-discipline in energy use and greater international solidarity and
cooperation in the promotion of technological development in energy, he said.
Rupel also met his counterparts from Costarica and Guyana, Bruno Ugarte and Rudy
Imfanally, in what is the conclusion of his multi-day tour of Latin America.
Slovenia and Republic of Congo Establish Diplomatic Ties
Slovenian Ambassador to the UN Sanja Stiglic and her counterpart from Congo, Basile
Ikouebe exchanged diplomatic notes at the United Nations to establish diplomatic relations
between the two countries
Slovenian Ambassador to the UN Sanja Stiglic and her counterpart from Congo, Basile
Ikouebe, on Thursday, 19 April exchanged diplomatic notes at the United Nations to establish
diplomatic relations between the two countries.
The ambassadors made a brief presentations of their countries at the ceremony, while Stiglic
primarily talked about Slovenia's plans for it's EU presidency in the first half of 2008.
The Republic of Congo gained independence from France in 1960.
EUROPEAN UNION
EU Agriculture Ministers Fail to Agree on Protection of Eels
EU's agriculture ministers failed on Monday, 16 April to reach agreement on a European
Commission proposal for measures to protect eels, with Slovenia's Iztok Jarc saying that
Slovenia was the only EU member to have in place legislation to protect these animals
9
EU's agriculture ministers failed on Monday, 16 April to reach agreement on a European
Commission proposal for measures to protect eels, with Slovenia's Iztok Jarc saying that
Slovenia was the only EU member to have in place legislation to protect these animals.
Jarc, speaking on the sidelines of a meeting in Brussels, added that Slovenia protected eels 13
years ago and that its catch of this fish was small.
The Commission proposed that countries draft national plans to manage eel populations.
These are usually caught when returning to the sea from rivers where they live until reaching
maturity.
"Slovenia has no problem with drafting a plan to manage the eel population," said Jarc and
added that he supported placing this type of fish on the list of endangered species.
France and Spain are among the main opponents the Commission's plans. Young eels fetch a
hefty market price of up to EUR 1,000 per kilogram.
Agriculture Minister, EU Commissioner Discuss Illegal Fishing
Jarc told STA that the subject would also be dealt with by Slovenia during its half-year stint at
the helm of the EU in the first half of 2008
EU agriculture ministers debated in Brussels measures to combat illegal fishing, with
Slovenia's Iztok Jarc also holding a short meeting with EU Fisheries and Maritime Affairs
Commissioner Joe Borg on the issue.
Jarc told STA that the subject would also be dealt with by Slovenia during its half-year stint at
the helm of the EU in the first half of 2008.
He said Slovenia had experienced cases of illegal fish imports through its seaport in Koper,
however, no such cases were registered recently. According to Jarc, this was the result of
increased cooperation between various services and tighter security on the entry points to the
EU market.
The Agriculture Ministry has said that the increased control already prevented a shipment of
illegally-caught swordfish from being offloaded in the Slovenian port of Koper "a short time
ago".
Borg meanwhile presented a draft strategy for fighting illegal, unregulated and unreported
fishing that the commission is to present after the summer.
The ministers also discussed eco-labels for fish and fish products. The introduction of the
labels should depend on individual member states and should be simple as well as not
hindering exports from developing countries, Jarc said.
Official Believes EU Crisis Solvable with Constitutional Treaty
European Affairs State Secretary Janez Lenarcic believes that the constitutional treaty, signed
by the then EU members in 2004 in Rome, presents a "good compromise for improving the
functioning of the EU" and should be "taken into consideration in drafting a new deal"
European Affairs State Secretary Janez Lenarcic believes that the constitutional treaty, signed
by the then EU members in 2004 in Rome, presents a "good compromise for improving the
functioning of the EU" and should be "taken into consideration in drafting a new deal".
Lenarcic, speaking on Tuesday, 17 April at a conference on the EU's future in Brussels, said
that a new document to replace all others was vital for the union's continued expansion and
improving its internal security and global influence.
Enlargement is to be one of the priorities of Slovenia's stint at the helm of the EU in the first
half of 2008 and Slovenia will stress the implementation of given promises during the 6month period, Lenarcic said at the "Observatory on Europe 2007" event.
"The process of enlargement should go hand in hand with strengthening the (internal) links, as
was the case throughout the history of European integration," Lenarcic said.
10
This means that the EU should wrap up a new contract on future as soon as possible or by
2009, the year of the next elections to the European Parliament, he added.
Slovenia is among the 18 EU members that have already ratified the treaty. The document is
opposed by several other states, most notably the UK and the Netherlands.
New Border Post Brings Slovenia Step Closer to Schengen Zone
The country is to join the passport-free zone at the end of this year
A new border crossing was inaugurated on the north-eastern stretch of Slovenia's border with
Croatia on Friday, 20 April in what officials say is another step towards Slovenia's final
accession to the Schengen area. The country is to join the passport-free zone at the end of this
year.
The EUR 4.54m facility at Sredisce ob Dravi is to guarantee that Slovenia meets the
Schengen requirements in protecting the EU's external border. While EUR 2.37m for the
project came from the PHARE programme, the rest was provided by Slovenia.
The new border post is located on the road between the Slovenian town of Ormoz and
Croatia's Cakovec, nearly two kilometres from the old one, which did not meet the EU's
regulations because it is situated too far from the border.
Addressing the opening ceremony, Public Administration Ministry State Secretary Roman
Rep said that the new facility put Slovenia one step closer to the Schengen zone. He
highlighted its significance during the 1991 war of independence, which would be marked by
a memorial plaque.
The locals do not share the official's enthusiasm though, in particular those living along the
road leading to the Zavrc crossing, where lorry traffic is much heavier than that at Sredisce ob
Dravi.
Some figures suggest that while the latter sees some 95,000 lorries a year, as many as 200,000
cross Zavrc some 10 kilometres south down the border. The affected locals are even
threatening to block the road to draw attention to the problem.
Commenting on the issue, Rep said the border crossing was planned to be overhauled by the
end of the year. The project will be funded from the Schengen facility resources.
Ministry Says Rail Legislation Proceedings Halted
The Slovenian Transport Ministry announced that infringement proceedings launched against
Slovenia over its failure to implement two key EU directives from the so-called "second
railway package" had been halted
The Slovenian Transport Ministry announced on Friday, 20 April that infringement
proceedings launched against Slovenia over its failure to implement two key EU directives
from the so-called "second railway package" had been halted.
European Transport Commissioner Jacques Barrot has addressed a letter to Transport Minister
Janez Bozic in which he says he undertook all activities necessary to stop proceedings at the
Court of the European Communities, the ministry said.
The letter comes after Slovenia notified the European Commission that the relevant directives
were in the process of being transposed to national legislation.
The two directives - one aims at strengthening rail safety and the other updates legislation on
technical interoperability - should have been transposed to national legislation by 30 April
2006.
Minister Wants Joint Schengen Entry if Criteria Met
Mate, presenting the schedule for Schengen entry at the sidelines of a ministerial in
Luxembourg, added that events were unravelling according to plan
11
Interior Minister Dragutin Mate said on Friday, 20 April that Slovenia supported the joint
entry of all candidates to the Schengen no-border zone, however the countries needed to meet
the criteria first. Mate, presenting the schedule for Schengen entry at the sidelines of a
ministerial in Luxembourg, added that events were unravelling according to plan.
The time line of meetings by ministers of the nine Schengen aspirants envisages the first
meeting in Poland in early May, the second at the end of July, the third in September and the
fourth and final one in October, just prior to the final decision regarding the Schengen
expansion, Mate said.
Such a schedule could prevent problems for the EU if any of the candidates failed to meet the
criteria, as it was currently unclear whether the EU would decide to accept all candidates
together or include them into the no-border zone on a case-by-case basis.
"Some countries were constantly mentioning package treatment, however Slovenia never
favoured such treatment. We believe that every country needs to do its job, and Slovenia has
definitely done it," Mate said.
He explained that a backup scenario, involving transitional periods similar to the ones
between Austria, Germany and Italy in the 1990s, was also in the making and added that the
Schengen expansion required consensus of all EU members, meaning that any country could
prevent it.
12
STATISTICS/FORECASTS
Registered Unemployment at 8.4% in February
Labour Force Survey data, based on internationally adjusted definitions of the International
Labour Organisation (ILO), meanwhile shows that Slovenia's unemployment rate in 2006 was
6%
Slovenia's registered unemployment rate was 8.4% in February 2007, 0.3 percentage points
down over January, the national Statistics Office said on Tuesday, 17 April.
Labour Force Survey data, based on internationally adjusted definitions of the International
Labour Organisation (ILO), meanwhile shows that Slovenia's unemployment rate in 2006 was
6%.
A total of 77,669 people were registered as unemployed in January, 2.9% down on January
and 17.5% down year-on-year. The registered unemployment rate was 7% among men and
10.3% among women.
Slovenia's labour force numbered 919,180 in February, out of whom 841,511 were employed.
The number of these rose by 0.4% in comparison with January and increased by 3.4% over
February 2006.
Of the employed, 88.624 were self-employed while of the 752,887 who worked for other
people 685,603 held jobs at companies and 67,284 worked for entrepreneurs, up 2.7 and 5.5%
year-on-year, respectively.
The number of farmers rose by 12.1% in the year to 36,109.
Factory-Gate Prices Up 0.2% in March
Factory-gate prices increased by 0.2% in March over the previous month mainly due to a
0.3% increase in prices of products on the domestic market, while prices of export products
were up 0.1%
Factory-gate prices increased by 0.2% in March over the previous month mainly due to a
0.3% increase in prices of products on the domestic market, while prices of export products
were up 0.1%, according to the National Statistics Office.
Highest monthly increase in prices was recorded in the furniture industry (1.8%), printing
(1.1%) and leather industry (1%).
Factory-gate prices in March increased by 4.5% year-on-year. The increase was 5% on the
domestic market and 4% for products targeting foreign markets.
Compared to March 2006, the highest increase in prices was recorded in electricity supply
(19.8%) and metal industry (19.2%).
The biggest decrease in prices in the same period was recorded in water supply (11.2%) and
production of office machines and computers (7.2%).
March's output prices of the non-domestic market were higher by 0.1%: in the euro area
output prices grew by 0.7%, while in the non-euro area they fell by 0.8%.
People Spending More on Books, Statistics Show
Slovenian households spent 0.4% of their outgoings (almost EUR 62) on books in 2004, 0.1
percentage point more than in 1995
Slovenian households spent 0.4% of their outgoings (almost EUR 62) on books in 2004, 0.1
percentage point more than in 1995, the National Statistics Office has said ahead of the Word
Book Day, celebrated on Monday.
Slovenia thus belongs among the EU countries with the lowest percentage of spending on
books.
13
According to the latest European data, households in the EU spent 0.5% of the outgoings on
books in 1999. Greece topped the list with 0.7%, while French, Luxembourg, British,
Portuguese and Finnish households spent 0.4% of their family budget on books.
The National Statistics Office also said that Slovenians borrowed 20.4 million books and
other items from libraries in 2004, a considerable increase compared to 1995, when the
number stood at 12.8 million.
The number of books in libraries was also on the rise. In 1995 libraries around Slovenia
acquired 308,000 units, while in 2004 their stock increased by 419,000 units.
14
FINANCE
Bajuk Discusses Future Cooperation with IMF and World Bank
Finance Minister Andrej Bajuk attended a session of the Development Committee of the
International Monetary Fund (IMF) and the World Bank
Finance Minister Andrej Bajuk attended on Sunday, 15 April in Washington a session of the
Development Committee of the International Monetary Fund (IMF) and the World Bank,
which concluded the two-day spring meeting of the two bodies. Bajuk also held several
bilateral meetings devoted to Slovenia's cooperation with the IMF and the World Bank.
Bajuk met among others the World Bank's regional vice president for Europe and Central
Asia Shigeo Katsu, the director of the European department of the IMF Michael Deppler, the
director of the IMF statistics department Robert Edwards, the director of the IMF fiscal affairs
department Teresa Ter-Minassian and the head of the IMF mission for Slovenia Piritt Sors.
Bajuk also shortly met the secretary general of the OECD Angel Gurria.
Talks focused on future cooperation between Slovenia and the IMF and the World Bank, with
financial support for Slovenia as a developed country decreasing and the country having to
turn to other forms of cooperation.
The IMF and World Bank for example both support the Slovenian Center of Excellence in
Finance (CEF), the Finance Ministry has said in a press release.
Central Bank to be without Governor a While Longer
The presidential office said on Monday, 16 April that President Janez Drnovsek would not be
able to put forward his nominee for central bank governor by the April session of parliament
The presidential office said on Monday, 16 April that President Janez Drnovsek would not be
able to put forward his nominee for central bank governor by the April session of parliament.
The National Assembly is scheduled to convene its regular session for April next Monday.
According to Drnovsek's office, the president notified Speaker of Parliament France Cukjati
of the situation on Monday, 16 April. The office also said that the president "will continue to
make the effort to find the best possible solution".
After parliament rejected both nominees he put forward, Drnovsek said he would try to
nominate his candidate for the post at the helm of Banka Slovenije in time for the April
session.
Slovenia has been without a central bank governor since Mitja Gaspari's term in office ended
on 31 March. About two weeks earlier Gaspari appointed vice-governor Andrej Rant as his
deputy, so that he now stands in for the governor to represent Banka Slovenije at meetings of
the European Central Bank (ECB).
Both Gaspari and Rant failed in their bids to become Slovenia's new central bank governor.
Drnovsek first nominated Gaspari, but the nominee fell out of favour after a leaked document
alleging that the central bank had painted an excessively negative picture of the public
finances at the ECB prompted several parties to withhold their support.
Drnovsek then named Rant, but he had no real chance of winning support in parliament after
the coalition parties said they would expect the president to name the candidate that had
applied for the job along with Gaspari first. The other candidate was Bostjan Jazbec, a
member of the board of governors.
Istrabenz Sells Bulk of Stake in Banka Koper
The Istrabenz holding sold a 8.3% stake in Banka Koper to Italian banking group Intesa
Sanpaolo, Banka Koper's majority owner, in a deal worth EUR 24.95m
15
The Istrabenz holding sold on Wednesday, 18 April a 8.3% stake in Banka Koper to Italian
banking group Intesa Sanpaolo, Banka Koper's majority owner, in a deal worth EUR 24.95m.
Istrabenz will retain a 1.67% stake, the company said in a press release.
This transaction is identical to the deals that logistic group Intereuropa and port operator Luka
Koper struck with Intesa Sanpaolo in February and April, respectively.
The three Slovenian companies retained 1.67% stakes each in order to maintain together more
than 5% in the bank, making it impossible for the majority owner to change the name and
headquarters of the bank under the current shareholder agreement.
SanPaolo IMI, the 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.
The Italian financial group now holds over 90% of Banka Koper.
Insurer Triglav Opens Subsidiary in Slovakia
Zavarovalnica Triglav, Slovenia's biggest insurance company by premiums, opened in
Bratislava its subsidiary Triglav poistovna, in another step towards becoming one of the
leading insurers in Southeastern Europe
Zavarovalnica Triglav, Slovenia's biggest insurance company by premiums, opened on
Wednesday, 18 April in Bratislava its subsidiary Triglav poistovna, in another step towards
becoming one of the leading insurers in Southeastern Europe, the company said in a press
release.
"With this step Zavarovalnica Triglav achieved the strategic objective of active expansion to
insurance markets of the EU," chairman Andrej Kocic said at the opening of the Bratislava
branch.
The subsidiary, which will be headed by Radovan Skultety, will deal in property insurance for
companies and in property, life and car insurance for individuals.
The Triglav group, which now operates on seven markets and has more than 4,500
employees, also held in Bratislava a strategic conference to discuss last year's results and
plans for individual markets.
The Triglav group, which holds a 43% market share in Slovenia, operates in the Czech
Republic, Croatia, Bosnia-Herzegovina and Montenegro. It is planning to enter the
Macedonian, Kosovo, Albanian, and other Southeast Europe markets in the future, the
company said in its press release.
Insurers Adriatic Slovenica and Vzajemna Halt Merger
Adriatic Slovenica, the Koper-based insurer, said that it would cancel the general assembly
that was to decide on a merger with mutual insurer Vzajemna
Adriatic Slovenica, the Koper-based insurer, said on Friday, 20 April that it would cancel the
general assembly that was to decide on a merger with mutual insurer Vzajemna. The move
that comes after the insurance market watchdog called on Vzajemna to cancel an
extraordinary AGM that was to discuss the same issue.
The Insurance Supervision Agency issued a decree to health insurer Vzajemna to halt the
AGM. It feared that the move actually represented another attempt of Vzajemna to bypass
legislation and demutualise.
Slovenia's lone mutual insurance company has tried to transform into a joint stock company a
little over a year back. The attempt was stopped by the insurance market watchdog and later
by the government and parliament.
Adriatic Slovenica said the watchdog's latest decision was unexpected but binding. While the
management had not yet read the decree, it believes that the document presents an important
new factor that would influence the merger.
16
Vzajemna's supervisory board met to discuss the document and agreed to cancel its AGM.
The supervisors moreover decided to launch a complaint against the decree that the company
received on 17 April.
The supervisors believe that the decree goes against the rules and could well be illegal. They
also agreed that the merger had been carried out transparently and in line with the law.
Vzajemna was to hold its general meeting on 10 May and Adriatic Slovenica on 14 May. The
meetings were to decide on transferring Vzajemna assets to Adriatic Slovenica whereupon
Vzajemna policy holders would get shares of the merged company.
Bajuk Says Slovenia on Track to Meet Budget Objectives
According to the agreement, countries with higher-than-recommended debt are expected to
use booming tax revenues to reduce their budget deficits by at least 0.5% of GDP a year
Finance Minister Andrej Bajuk has said that Slovenia is on track to meeting the budget
objectives as agreed by the ministers of the 13 eurozone members in Berlin on Friday, 20
April.
According to the agreement, countries with higher-than-recommended debt are expected to
use booming tax revenues to reduce their budget deficits by at least 0.5% of GDP a year.
That way most of them would reach the medium-term goal of putting their finances on track
in 2008 or 2009 - with 2010 set as the ultimate deadline.
Slovenia's convergence programme includes the mid-term goal of reducing the budget deficit
to 1% of GDP by 2009, Bajuk told STA on Saturday, the second day of the finance ministers'
meeting.
Bajuk is optimistic the country will be able to achieve this goal and contribute to the broader
objective of cutting the deficit across the eurozone.
Bajuk also said that improving the quality of public finances required a "change of mentality".
Budgets may not focus on funds alone, they must also consider what can be expected of these
funds, he said.
"This is a great challenge and we will dedicate more attention to this issue in the coming
months."
Ljubljana Stock Exchange
The benchmark SBI 20 index added 178.85 points to 8,237.53
The bullish run on the Ljubljana Stock Exchange came to a temporary halt last week, bur
hefty gains early in the week propelled most stocks higher. The benchmark SBI 20 index
added 178.85 points to 8,237.53 while the SBI TOP index of the biggest blue chips was up
nearly 39 points to 1,802.72.
The biggest winners last week included beverage group Pivovarna Lasko (+8.01% to EUR
55.00), conglomerate Istrabenz (+7.64% to EUR 71.42) and retailer Mercator (+6.71% to
EUR 272.24).
Drug maker Krka was not among the brightest stars this week, as it was up only 1.22% to
EUR 384.34. Yet it accounted for nearly a third of the EUR 50.5m in the week's turnover.
Oil company Petrol was also busy, clocking up deals worth EUR 6.6m. It remained almost
level, however, adding only 0.81% to EUR 574.46. Similarly, Telekom Slovenije added
1.10% to EUR 384.34 on deals worth EUR 4m.
On the losing side, household appliance maker Gorenje lost 1.57% to EUR 35.8 and food
company Droga Kolinska was down 0.52% to EUR 15.30, 70 cents below the price offered by
Istrabenz in the recent takeover bid.
Istrabenz has been busy of late: in addition to raising its stake in Droga Kolinska to over 90%,
it acquired 1.75% of Mercator to raise its total holding to 24.47%, just below the threshold
that triggers a mandatory takeover bid.
17
Popular investment funds had a patchy run to drag the PIX investment fund index 45.47
points lower to 5,765.65.
The bond BIO index edged 0.2 points higher to 117.43, but it looks set to climb higher after
some upbeat trading in bonds on Thursday and Friday, 20 April.
18
REGIONAL INFORMATION
Celje To Turn Waste into Heat
The foundation stone for a waste-fed district heating plant in Celje was laid alongside
another foundation stone for the second stage of the regional centre for waste disposal in
nearby Bukovzlak
The foundation stone for a waste-fed district heating plant in Celje was laid on Wednesday,
18 April alongside another foundation stone for the second stage of the regional centre for
waste disposal in nearby Bukovzlak.
The plant, which will produce heat from waste treated by the Celje water treatment plant,
should be built by the end of 2009, while the waste disposal centre should become operational
by 2010.
Environment and Spatial Planning Minister Janez Podobnik, accompanied by Celje Mayor
Bojan Srot and Maja Zabjek of the European Commission's Representation in Slovenia, said
Celje was extremely efficient in acquiring EU funds that are used to finance the major part of
the waste disposal centre.
The Celje centre for waste disposal is the first project of the kind in Slovenia, Podobnik
added.
Zabjek explained that the EU contributed 70% of the funds for the second phase of the
project, which amounts to around EUR 20m. The rest of the money came from 23
municipalities that joined the project, and the state.
Maribor Starts Project to Help Companies Enter Foreign Markets
The Regional Development Agency in Maribor presented Intra, a project which aims to boost
competitiveness of small and mid-sized companies from border regions and help them enter
foreign markets
The Regional Development Agency in Maribor presented on Thursday, 19 April Intra, a
project which aims to boost competitiveness of small and mid-sized companies from border
regions and help them enter foreign markets.
Project manager Vladimir Rudl told the press that the objective was to train 20 consultants
who would help companies enter foreign markets.
To avoid over-theorising, the participants in the EU-funded project would work on cases of
ten existing companies and draft prepare business plans for entering specific markets.
Seminars will take place between April and November, while the closing conference is
planned for March 2008.
The first module is already under way. The participants already listened to a lecture on an
analysis of companies and business environment by British professor Lynn Shaw.
The project is also carried out in Hungary and Greece.
19
BRANCH INFORMATION
Panel: Tourism Sector Will Have to Adapt to Climate Change
The panel was organised by the Environment and Spatial Planning Ministry, the Slovenian
Tourist Board, the Economy Ministry's Tourism Directorate and several other tourism
organisations
The participants of a panel on the impact of climate change on tourism agreed on Thursday,
19 April that certain consequences of climate change could not be avoided and all sectors,
including tourism, had to adapt accordingly.
Bogomir Kovac of the Ljubljana Economics Faculty said that tourism shared the fate of other
sectors. He thinks that it would be the first one to be stricken, however it would also be the
fastest in finding solutions.
Air traffic contributed greatly to the development of tourism, but it is also one of the biggest
polluters. Lucka Kajfez Bogataj of the Ljubljana Biotechnical Faculty said that air fares
would rise, including due to a carbon tax.
She added that beside ticket prices, tourism would be affected by higher temperatures and
smaller precipitation, which would without doubt strongly affect Slovenia and the
Mediterranean.
Mountains are among the most threatened environments. According to some analyses, only
ski resorts more than 1,400m or even 1,500m above the sea level would thrive in the future.
Drago Sever of the Maribor Faculty of Civil Engineering believes that Slovenian ski lift
operators know how to adapt and that fears are exaggerated.
Hot summers will also affect tourism in coastal areas. Dusan Plut of the geography
department at the Ljubljana Faculty of Arts said that the season would have to be prolonged
and that in the summer more tourists would travel to the Alps, which he sees as a new
opportunity.
With some ten tonnes of CO2 emissions per capita, Slovenia is on par with the European
average, but significantly above the world average of 3.9 tonnes, Plut said.
The panel was organised by the Environment and Spatial Planning Ministry, the Slovenian
Tourist Board, the Economy Ministry's Tourism Directorate and several other tourism
organisations.
Slovenian Publishing Market Dominated by Minnows
There are 1,741 registered publishers in Slovenia, but only two published more than 200 titles
in 2004, and eight more than 50 titles
There are 1,741 registered publishers in Slovenia, but only two published more than 200 titles
in 2004, and eight more than 50 titles. The majority of them (1248) published only one book,
according to data from the National and University Library.
The number of published books has not changed significantly in the recent years, as about
4,500 new books come out each year. However, that still puts Slovenia close to the top in
Europe relative to the size of the population.
On the other hand, translations of Slovenian authors do not reach such numbers, as data shows
that the number of translations funded by the Culture Ministry reached 38 in 2006.
However, the statistics for the 2003-2006 period indicate that the number of translations in
increasing.
Works by Slovenian authors were translated into 13 languages in 2006; the majority of books
were translated into the languages of former Yugoslavia (11), and German (6).
20
Slovenian authors who are the most widely read abroad are novelists Drago Jancar and Boris
Pahor and star philosopher Slavoj Zizek.
The Culture Ministry earmarked in 2006 EUR 6.18m for publishing, the most in the last four
years.
21
COMPANIES
Retailer Tus Reports 16% Rise in Operating Revenues
Slovenia's third-largest retailer by turnover, Engrotus, increased operating revenues by 16%
to EUR 525.9m last year
Slovenia's third-largest retailer by turnover, Engrotus, increased operating revenues by 16% to
EUR 525.9m last year. Engrotus general manager Aleksander Svetelsek told the press in Celje
on Monday, 16 April that his company had successfully restructured last year and was looking
forward to new challenges, including a push in the former Yugoslavia.
The company plans to see operating revenues rise by 18% this year to EUR 621m as the
company expands its network of shops and petrol stations. According to Svetelsek, the
company is investing in 24 projects this year, including eight new service stations.
Moreover, the company is making a push on the markets of SE Europe: it plans to build six
shopping centres in Bosnia-Herzegovina, Serbia and Macedonia, Svetelsek told the press
conference.
The total worth of investments this year will stand at EUR 120m, which is around 40% more
than in 2006. A total of 500 new jobs are to be created by the group, Svetelsek said, adding
that the company had 3,904 workers at the end of 2006.
Gazprom Representatives Visit Petrol
According to Petrol, which has been holding talks on a strategic partnership with Gazprom
for some time now, the meeting brought some preliminary talks on a number of projects
Representatives of Russian gas giant Gazprom paid a visit to Petrol on 14 April, the Slovenian
energy group confirmed for STA on Monday, 16 April. According to Petrol, which has been
holding talks on a strategic partnership with Gazprom for some time now, the meeting
brought some preliminary talks on a number of projects.
The visit of Gazprom was also reported on by the business daily Finance. As Petrol CEO
Marko Kryzanowski told Finance, Slovenia's trump card was the possibility of a connection
between the Hungarian gas pipeline and Italy.
There are several possible routes on the table, also the south route to Romania, Kryzanowski
said, adding that the talks were in a preliminary phase.
Representatives of Petrol and the government have held several meetings with Gazprom in
recent years, both in Slovenia and Russia.
Kryzanowski recently told weekly Mag that Petrol and Gazprom were also having talks
involving the wider region.
The Slovenian company entered last year into a joint venture with Russian oil company
Lukoil for petrol sales in central and SE Europe.
Iskraemeco Looking for New Owner to Help Guide it Out of Loss
Despite the bad state of finances, the management is confident that restructuring measures
are working, while the group has begun searching for a new owner to help it get back on its
feet
Iskraemeco, the cash-strapped electricity meters maker, sunk deep into the red in 2006 as it
posted losses of nearly EUR 30m, which is EUR 11m more than the management had
predicted in January. Despite the bad state of finances, the management is confident that
restructuring measures are working, while the group has begun searching for a new owner to
help it get back on its feet.
22
According to the chairman of the Kranj-based company, Janko Steharnik, the implemented
restructuring measures are bringing the first results: the loss for the first quarter of 2007 stood
at EUR 1.6m, which is EUR 1.3m better than expected.
Speaking at a press conference on Tuesday, 17 April, following a session of the supervisory
board, Steharnik said that the initial estimates of last year's results were overly upbeat. Much
of the losses were generated by irrecoverable claims to subsidiaries.
In response to this finding, the supervisory board tasked the management to check whether
any of the previous executives at the subsidiaries could be made to answer for the bad state of
affairs.
Meanwhile, Steharnik said that the massive losses last year were no reason for exaggerated
pessimism. "This is the past that we have to come to grips with - I believe the negative trend
is being turned around, something that is reflected by the first quarter results."
According to him, efforts to modernise their product line have brought effects, as there has
been an increase in demand for induction meters, which has meant that fewer jobs have had to
be cut than initially planned.
However, the road to restructuring is still expected to be long and difficult, as over 100
workers are planned to be laid off by the end of the year, bringing the total workforce at
Iskraemeco to around 1,200.
Chairman of the group's supervisory board Marko Pogacnik said that the next step in
restructuring was finding a suitable strategic partner. He said that potential partners had been
contacted and that the first offers were expected by July.
The group's majority owners, the state-run Pension Management Fund (KAD) and Restitution
Fund (SOD), will be keeping an eye out for bidders who promise to keep jobs and production
in Kranj said Pogacnik, also the head of SOD.
If such an offer comes, the two funds have indicated they would be willing to withdraw from
ownership by the end of the year.
The search for a strategic owner has been welcomed by the company's trade unions. Joze
Petek, who heads the most influential union at Iskraemeco, said that avoiding a speculative
buyer was crucial.
While Pogacnik believes that Iskraemeco's foreign competitors are among potential buyers,
the company has also contacted a number of domestic companies.
SOD and KAD came to Iskraemeco's rescue last July by injecting EUR 11m in urgently
needed cash to help it keep afloat. Pogacnik is optimistic that in spite of the huge loss made
by the group last year, the two state-run funds would nevertheless make a profit in selling
their stakes.
Ryanair Happy with Bookings for Maribor-London Flights
Budget airline Ryanair has sold more than 3,000 tickets for scheduled flights between
Maribor and London's Stansted airport even before these will be launched on 7 June
Budget airline Ryanair has sold more than 3,000 tickets for scheduled flights between
Maribor and London's Stansted airport even before these will be launched on 7 June, airline
officials told the press on Thursday, 19 April.
According to Ryanair marketing director for Central Europe, Tomasz Kulakowski, the
company is pleased with ticket sales so far. The air carrier began to sale tickets for three
weekly flights between Maribor and London on the internet at the beginning of March.
Speaking at a press conference at the Maribor airport, Kulakowski was meanwhile unable to
say how many of the 3,000 tickets were sold in Slovenia and how many in the UK.
The official drew attention to a special offer in which tickets will be available at EUR 10,
taxes included, for advance booking between 20 and 30 April.
23
The general manager of the company running the Maribor airport was pleased with ticket
sales too, saying it augured well for the development of the airport.
"The figures confirm the partnership with Ryanair was the right decision. It is now up to our
tourism providers to attract as many British visitors to the region as possible," Aerodrom
Maribor director Matjaz Sonc said.
According to him, the goal is to guarantee long-term success of the air link, something that
new routes will depend on. Sonc said the company was considering launching a new route
with Ryanair, possibly as early as next year.
Talks with other airlines, including Wizz Air, are under way too, but Sonc said he did not
expect agreement to be reached before 2008.
More at hand is an agreement with Slovenia's flag carrier Adria Airways, which is currently in
talks both on charter flights and scheduled ones. Aerodrom Maribor is keen to get a
connection with one of the world's major hubs as this would give the people of eastern
Slovenia a chance to travel anywhere in the world without having to travel to Ljubljana or
neighbouring countries.
Gorenje to Start Building New Factory
According to a Gorenje spokesperson, the company was expected to complete the 9,000 sq.
metre production facility, worth EUR 4m, by the autumn
Home appliance group Gorenje acquired last week building permits for the construction of a
new factory in Sostanj, 60 km NE of Ljubljana, which will produce, among other things, parts
for eight-wheeled armoured personnel carriers built by Finnish defence contractor Patria.
According to a Gorenje spokesperson, the company was expected to complete the 9,000 sq.
metre production facility, worth EUR 4m, by the autumn.
Ursula Menih Dokl told STA on Wednesday, 18 April that the factory would be used
primarily for the manufacture of industrial equipment, of which a part will include the
manufacture of parts for the armoured personnel carriers being built by Patria for the
Slovenian army.
Despite the new plant and new production line for industrial equipment, Gorenje intends to
continue focusing on the production of home appliances, its core business, Menih Dokl said.
Last year, the group generated 88% of the EUR 1.1bn in revenues with its home appliance
line, she added.
Patria was chosen late last year by the Defence Ministry to build 135 armoured personnel
carriers for the Slovenian army.
As part of the EUR 263m deal, Patria chose Gorenje to build certain parts for the vehicles, as
well as to assemble and maintain them.
South Korean Delegation Visits Koper Port
The delegation, headed by Park Gyeong Chel, director of international logistics office at the
Ministry of Maritime and Fisheries, said that South Korea was interested in investing in the
development of the port and a logistics centre in Sezana
A government and business delegation from South Korea, looking for reliable sea transport
connections with Europe, visited the Port of Koper on Thursday, 19 April, port operator Luka
Koper said.
The delegation, headed by Park Gyeong Chel, director of international logistics office at the
Ministry of Maritime and Fisheries, said that South Korea was interested in investing in the
development of the port and a logistics centre in Sezana.
The delegation was especially interested in possibilities of cooperation in logistics, the Luka
Koper press release reads.
24
The company explained that South Korea was already an important partner. A significant
share of South Korean car industry's imports to Europe, including the supplies for Kia's new
factory in Slovakia, are already shipped through the port.
Minor Shareholders to be Squeezed out from Droga Kolinska
Their shares are to be transferred to Istrabenz, the Koper-based energy-to-tourism
conglomerate that owns 93.6% of Droga Kolinska, in exchange for compensation of EUR 16
per share
The management of food industry Droga Kolinska has called a shareholders meeting for 21
May with a proposal to squeeze out minor shareholders. Their shares are to be transferred to
Istrabenz, the Koper-based energy-to-tourism conglomerate that owns 93.6% of Droga
Kolinska, in exchange for compensation of EUR 16 per share.
The compensation equals the price Istrabenz offered in its takeover bid. Even before this was
published on 28 February, Istrabenz controlled a 60.29% stake in Droga Kolinska, while it
acquired an additional 30.62% by 28 March to raise its stake to 90.91%.
The offer by Istrabenz was also accepted by Droga Kolinska chairman Robert Ferko, who
stepped down a few days later, quoting personal reasons. He was replaced by Slobodan
Vucicevic, until then Droga Kolinska executive director for SE Europe and general manager
of Grand Prom, the Belgrade-based company which is a member of the Droga Kolinska
group.
Droga Kolinska was created in January 2005 with the merger of two food companies (Droga
and Kolinska), which was masterminded by Istrabenz. The merged company was taken public
in October 2005.
Istrabenz said the takeover was a way of taking responsibility for restructuring at Droga
Kolinska. "The group faces a tough period of risky restructuring of the portfolio of
programmes and brands. This is crucial if we are to secure the long-term success of Droga
Kolinska as it competes with global corporations," Istrabenz CEO Igor Bavcar said in
February.
Kovintrade to Build Logistics and Retail Centre in Czech Republic
Kovintrade, a distributor of hardware and metallurgic products, plans to build a EUR 5.2m
logistics and retail centre near Ostrava in the Czech Republic to expand its business there as
well as in Slovakia and Poland
Kovintrade, a distributor of hardware and metallurgic products, plans to build a EUR 5.2m
logistics and retail centre near Ostrava in the Czech Republic to expand its business there as
well as in Slovakia and Poland.
The construction contract for the centre, which is to be completed next year, was signed in
Prague on Friday, 20 April, said the Slovenian Embassy in Prague.
Kovintrade has had a subsidiary in the Czech Republic since 1992. Kovintrade Praha posted
sales of some 773 million crowns (EUR 27.2m) in 2005, according to the company's website.
Gorenje to Move Kitchen Production from Austria to Maribor
Home appliance group Gorenje announced that it would relocate its facilities for the
production of kitchens from the Austrian town of Freistadt to Maribor, where the company
already has a modern technological and logistical centre for kitchen production
Home appliance group Gorenje announced on Friday, 20 April that it would relocate its
facilities for the production of kitchens from the Austrian town of Freistadt to Maribor, where
the company already has a modern technological and logistical centre for kitchen production.
As production is to be moved to Slovenia in June or August, a part of the workforce will be
transferred to other Gorenje subsidiaries in Austria, the company told STA.
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The rest will be laid off with severance pay in accordance with Austrian legislation, the
company said.
Gorenje opted for centralisation in order to streamline development and to achieve better cost
efficiency.
Production facilities in Maribor have an annual output of 500,000 kitchen elements, the
majority of which is exported to the EU.
Gorenje, which posted EUR 33m of sales in Austria in 2006, plans to hand over sales on the
Austrian market to its subsidiary Gorenje Austria.
The secretary of the trade union at the Austrian subsidiary, Stefan Meier, said on Friday, 20
April that the trade union had been informed about the relocation not by the management of
the company but by the employees.
Gorenje spokeswoman Ursula Menih Dokl rejected on Saturday reproaches by the trade
union, saying that the company informed the workers about the moving of the factory in time.
Government Looking for Investor to Rekindle Refinery
In line with government plans, the refinery is meant to be sold by the end of the year,
however, the Economy Ministry said it would give priority to finding a suitable investor
rather than selling in time
The government is looking for a strategic partner for the refinery Nafta Lendava. In line with
government plans, the refinery is meant to be sold by the end of the year, however, the
Economy Ministry said it would give priority to finding a suitable investor rather than selling
in time.
The ministry told STA the goal was to find a buyer that would invest in getting the refinery on
its feet again and ensuring its long-term operations.
The interest in the refinery in the northeastern-most part of Slovenia on the border with
Hungary has been expressed by a number of foreign investors, the ministry says.
In August last year, the state and Russian oil giant Lukoil signed a letter of intent on
cooperation in the privatisation. Economy Minister Andrej Vizjak and Lukoil CEO Vagit
Alekperov agreed at the time that the two sides would draw up concrete plans for the
privatisation of Slovenia's lone refinery.
No proposals have been unveiled to the public as yet, but the Economy Ministry explained to
STA that the letter of intent does not oblige "the state to sell Nafta Lendava nor Lukoil to buy
the company".
The ministry is tight-lipped about other potential foreign partners. According to the ministry,
time will tell how serious the expression of interest really are, which is why its does not want
to speak about names at the moment.
While the ministry says the privatisation procedure is moving ahead, daily Dnevnik wrote on
Thursday that the privatisation had been halted due to the possible entry of a foreign strategic
partner. The paper says the decision to suspend the procedure was taken by the commission
overseeing the sale.
Nafta Lendava chief supervisor Drago Siftar told the paper that the privatisation was halted
because of the arrival of a strategic partner that was willing to invest extensive funds into the
company. Siftar added that the company in question was from the EU, but was not a major
player on the global market.
The paper went on to write that the potential bidder could unveil its strategy of development
for Nafta Lendava in the near future, after which the government would decide on the offer.
The Economy Ministry denied these claims.
Nafta Lendava was established in 1945 and was a leading company in this part of Slovenia
before it ran into trouble during the period of intense economic restructuring that followed
Slovenia's independence in 1991.
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The company, which is wholly owned by the state, completed debt restructuring in 2005 that
has allowed it to relaunch operations.
The government confirmed privatisation plans for Nafta Lendava on 26 October 2006,
envisaging the sale of the whole stake by the end of 2007.
The government wants a buyer that will view Nafta Lendava a strategic investment and has
the funds to invest in the group's development.
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FAIRS, CONGRESSES
Slovenia's Largest Advertising Festival Goes Beyond Horizons
The 14th international advertising festival "Zlati boben" (Golden drum) will be taking place
between 14 and 19 October in Portoroz under the slogan "Beyond Horizons"
The 14th international advertising festival "Zlati boben" (Golden drum) will be taking place
between 14 and 19 October in Portoroz under the slogan "Beyond Horizons". The slogan
refers to catastrophic predictions about the environment, society and politics, which could
become true in our time, president of the festival Jure Apih told the press in Ljubljana on
Tuesday, 17 April.
Those predictions force us to look beyond horizons and to expand our views, thoughts and
expectations, said Apih.
The opening day of the festival, dubbed "Prologue", will be dedicated to all who have ideas
and thoughts on the theme "Beyond Horizons" and want to share them with others, he added.
The festival is also to include the competitive part, media meeting and creative workshop with
lectures held by foreign advertising experts, said Apih.
A new feature of the Golden Drum will be the "festival of festivals", an international
advertising award, which includes selected works from the Asian-Pacific advertising festival
AdFest, Iberian-American festival FIAP, the Art Directors Club of Europe festival and the
Golden Drum festival.
According to Apih, the award jury will review between 1,200 and 1,500 works, while the
awards will be conferred in Valencia in October.
The festival is being organised by the Slovenian Advertising Chamber and advertising
agencies Studio 37 and Festfest.
Slovenia to Have Joint Stall at Bologna Children's Book Fair
Slovenian publishers of books for children have joined forces and will for the first time ever
have a national stand at the 44th Bologna Children's Book Fair
Slovenian publishers of books for children have joined forces and will for the first time ever
have a national stand at the 44th Bologna Children's Book Fair, to be held between 24 and 27
April.
One of the criteria in selecting the books for the fair is awards, such as Best Picture Book,
Desetnica and Vecernica, the head of the project Matjaz Bizjak told the press on Wednesday,
18 April.
Riko Riznar of the Mladinska knjiga publishing house told the press that over the past few
years Slovenian publishers only occasionally participated in the Bologna fair, which is why
the decision for a joint presentation was made. The project is supported by the Culture
Ministry.
Riznar said the Bologna fair was extremely big so the competition there was strong. "The
"Slovenian stand will be only a drop in the ocean," Riznar said, however he hopes that it will
be successful and that some deals will be made based on the presentation.
The presentation will be accompanied by a catalogue, presenting all important Slovenian
authors and illustrators of children' books. In addition prize-winning authors will be featured
at a special presentation held as part of the fair on 24 April.
The Bologna fair is one of the most important international children's book fairs.
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SLOVENIA IN BRIEF
Fakin Takes Over as Health Insurance Institute Boss
Samo Fakin took over on Monday, 16 April as the manager of the Health Insurance Institute
(ZZZS), succeeding Borut Miklavcic who headed the health purse for the past four years.
PM Says Knowledge Necessary for Development
Prime Minister Janez Jansa said on Tuesday, 17 April that Slovenia needed knowledge and
information on best practices abroad in order to speed-up the pace of its development, as he
met recipients of grants of the public fund for employees and scholarships.
Slovenian Book Days in Ljubljana
Several cities across Slovenia will be holding Slovenian Book Days, an annual festival that
promotes reading, over the week. The 12th book festival in Ljubljana begins on Monday, 23
April, coinciding with the World Book Day, when awards will be conferred for the best short
story.
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