Slovenia Business Week no. 25, July 16, 2007
Table of Contents:
HEADLINES ............................................................................................................................. 3
Trade Deficit in May at EUR 162.3m .................................................................................... 3
Industrial Output Up 3.9% in May ......................................................................................... 3
Parliament Passes 2007 Supplementary Budget .................................................................... 3
INTERNATIONAL COOPERATION ...................................................................................... 5
Economy, Foreign Ministers Praise Cooperation with Italy .................................................. 5
Rupel Discusses Cooperation with Serbian Province ............................................................ 5
Slovenia and Vojvodina to Cooperate in Agriculture ............................................................ 6
Slovenian, Hungarian Governments to Meet in October, FM Says ....................................... 6
FM Rupel Reiterates Support for Croatia's EU Bid ............................................................... 7
EUROPEAN UNION ................................................................................................................. 8
Slovenia Takes Over Presidency of Eureka R&D Network .................................................. 8
FM Discusses EU Presidency With Portuguese Ambassador ................................................ 8
FM Rupel Asks Miliband for Assistance in EU Presidency .................................................. 9
Jansa Meets European Commission Officials over EU Presidency ....................................... 9
LEGISLATION ........................................................................................................................ 10
Ministry Moves to Amend Tax Law for Casino Resort ....................................................... 10
Caterers File Constitutional Complaint Against Tobacco Act ............................................. 10
Rail Safety Act Enters into Force ......................................................................................... 11
Amendments to Crafts Industries Chamber Act Pass First Reading .................................... 11
Government Adopts Law to Promote Enterprise ................................................................. 11
STATISTICS/FORECASTS .................................................................................................... 13
Railway Cargo Up 4.3% in 2006 Y/Y.................................................................................. 13
Statistics Show 62% of Slovenians Went on Trips Last Year ............................................. 13
Ljubljana Gets 12% More Visitors in First Half of 2007 ..................................................... 13
FINANCE................................................................................................................................. 14
Employers Recommend Lower Taxes for Greater Competitiveness ................................... 14
NKBM Group Posts Q1 Profit of EUR 13m ........................................................................ 14
KAD AGM Satisfied with Results for 2006 ........................................................................ 14
Ljubljana Stock Exchange .................................................................................................... 15
REGIONAL INFORMATION ................................................................................................ 16
PM Upbeat about Development Prospects of Savinjsko ...................................................... 16
BRANCH INFORMATION .................................................................................................... 18
Clearance Sales Kick Off Throughout Slovenia .................................................................. 18
COMPANIES ........................................................................................................................... 19
Borut Mesko Takes Over as STA Editor-in-Chief ............................................................... 19
EU Funds Consultancy Sells Franchise to Croatia ............................................................... 19
Retailer Tus Enters Bidding for Istrabenz Stake .................................................................. 19
Merkur Executives Acquire 15% Stake in Company........................................................... 20
Petrol Decides to Exit Race for Italy's IES Refinery ........................................................... 20
Airport Gets New Terminal and New Name ........................................................................ 20
Steel Group AGM Decides to Keep Distributable Profit ..................................................... 21
DARS Signs EUR 80.13m Deal for NE Motorway Section ................................................ 22
Lek Board Expanded to Six Members ................................................................................. 22
Merkur Exec Says MBO Possible ........................................................................................ 22
Boat Builder Recuperates after Fire ..................................................................................... 23
Government Changes Telekom Privatisation Programme ................................................... 23
Home Appliance Maker to Build EUR 7m Plant ................................................................. 24
Telco Invests EUR 4.5m in Bosnian Internet Provider ........................................................ 24
Serbian Company Enters Bidding for Istrabenz ................................................................... 25
SLOVENIA IN BRIEF ............................................................................................................ 26
Virant's Brussels Talks Focus on E-Government ................................................................. 26
MPs Amend Ownership Transformation of Insurance Companies Act ............................... 26
Solvit EU Mediation System Gaining Popularity, Minister Says ........................................ 26
Minister Sees Step Forward in Regional Security Cooperation ........................................... 26
Crafts Chamber Signs Deal on Employment Relationship Act ........................................... 26
Government Official Visits Slovenians in Bosnia-Herzegovina .......................................... 26
Defence Minister Discusses Kosovo with Portuguese Counterpart ..................................... 26
2
HEADLINES
Trade Deficit in May at EUR 162.3m
Slovenia's exports in May stood at EUR 1.67bn, up 15.6% over the same month last year,
while imports amounted to EUR 1.83bn, up by 17.8% year-on-year
Slovenia's exports in May stood at EUR 1.67bn, up 15.6% over the same month last year,
while imports amounted to EUR 1.83bn, up by 17.8% year-on-year. The trade deficit for May
stood at EUR 162.3m, while the export-import ratio stood at 91.1%, according to preliminary
data from the Statistics Office.
In the first five months of 2007, Slovenian exports were up by 17.7% year-on-year to EUR
7.93bn, while imports increased by 19.2% to EUR 8.54bn. The trade deficit stood at EUR
611.74m and the export-import ratio was at 92.8%.
The value of imports from the EU countries in the first five months stood at EUR 6.75bn, up
16.8% year-on-year, while imports from third countries were up by 29.5% to EUR 1.79bn.
In the same period, EUR 5.68bn of all Slovenia's exports (up 18.1% year-on-year) was
destined to the EU countries, while the remaining EUR 2.25bn (up 16.7% year-on-year) went
to third countries.
Industrial Output Up 3.9% in May
Industrial output was up 3.9% in May over April and increased by 3% year-on-year
Industrial output was up 3.9% in May over April and increased by 3% year-on-year, the
national Statistics Office said on Tuesday, 10 July. The working day adjusted index
meanwhile shows a 3% increase over the previous month.
Compared to May 2006, production increased in manufacturing by 4.1%, in mining and
quarrying by 8.3%, while falling by 16.4% in electricity, gas and water supply.
The most substantial increase in terms of products was meanwhile achieved by capital goods
industries (8.1% y/y). Production of raw materials expanded by 6.1%, while that of consumer
goods was down by 0.8%.
Moreover, inventories increased by 1.7% at the monthly level and by 8.3% over May 2006.
Parliament Passes 2007 Supplementary Budget
Parliament passed the supplementary budget bill for 2007 and an amended budget
implementation act (45:22), which envisages two changes that raise the projected budget
deficit from 1% to 1.2% of GDP in 2007
Parliament passed on Thursday, 12 July the supplementary budget bill for 2007 and an
amended budget implementation act (45:22), which envisages two changes that raise the
projected budget deficit from 1% to 1.2% of GDP in 2007.
The supplementary budget is needed because certain activities in the domain of the Public
Agency for Rail Transport will be transferred to the newly established Directorate for the
Management of Investment in Public Rail Infrastructure.
The second change is a supply of fresh capital to NLB, Slovenia's leading bank, in the amount
of EUR 50m. The money will come from the proceeds from the recent sale of the majority
stake in steel group SIJ.
Overall, budget revenues will remain unchanged at EUR 7.76bn while expenditures will
increase by EUR 60.5m to EUR 8.087m. The general government deficit is expected to
remain level at 1.4% of GDP.
3
Explaining the supplementary budget, Prime Minister Janez Jansa said that the reducing the
general government deficit and retaining the public debt at a low level remained the priorities
of the government's public finance policy.
Slovenia is committed to the mid-term goal of the EU's Stability and Growth Pact to keep the
cyclically-adjusted general government deficit below 1% of GDP. "Due to pressing
investment in rail infrastructure, we will reach this goal in 2009," Jansa said.
Despite the increased spending on rail investment, public spending will have been reduced by
3% of GDP during this government's term, he said.
According to Finance Minister Andrej Bajuk, given annual GDP growth of 4.7% the budget
deficit will be at 24.7% of GDP in 2007, dropping to about 23% of GDP in 2009.
4
INTERNATIONAL COOPERATION
Economy, Foreign Ministers Praise Cooperation with Italy
Economic cooperation with Italy was the main item on the agenda of separate meetings
between Slovenian Economy Minister Andrej Vizjak and Foreign Minister Dimitrij Rupel with
Undersecretary at the Italian Foreign Ministry Milos Budin
Economic cooperation with Italy was the main item on the agenda of separate meetings
between Slovenian Economy Minister Andrej Vizjak and Foreign Minister Dimitrij Rupel
with Undersecretary at the Italian Foreign Ministry Milos Budin on Monday, 9 July.
According to a press release from the Economy Ministry, Vizjak and Budin, the only member
of the Slovenian minority in the Italian government, praised the extent of trade between the
countries. The trade rose from EUR 4.34bn in 2004 to EUR 5.57bn in 2006, making Italy
Slovenia's second biggest trading partner.
They also agreed that a Slovenian-Italian coordinating committee, anticipated by a
memorandum of understanding between the two governments is to meet in the autumn. The
committee meeting is expected to set up a working group for economic issues, the ministry
also wrote.
Rupel meanwhile expressed his hope that the Italian cabinet would adopt the list of 32 Italian
municipalities and that the country's president would sign a decree as soon as possible to set
the area where the minority protection law is to be enacted.
He stressed strong economic ties with Slovenia's western neighbour and pointed to the need to
boost transport ties between the Slovenian port city of Koper and Italy's Trieste, the Foreign
Ministry wrote in a press release.
Rupel also met Donato di Santo, undersecretary at the Italian Foreign Ministry, responsible
for Latin America. The pair mainly discussed Italy's and Slovenia's cooperation ahead of the
2008 EU-Latin America summit, taking place during Slovenia's EU presidency.
Rupel Discusses Cooperation with Serbian Province
Foreign Minister Dimitrij Rupel met in Ljubljana President of the Executive Council of the
Autonomous Province of Vojvodina Bojan Pajtic
Foreign Minister Dimitrij Rupel met in Ljubljana on Monday, 9 July President of the
Executive Council of the Autonomous Province of Vojvodina Bojan Pajtic. The pair
discussed EU topics and Slovenia's role in Serbia's accession to the NATO and EU, the
Foreign Ministry wrote in a press release.
Rupel expressed satisfaction with the strengthening of ties between Slovenia and Vojvodina,
primarily in economy, agriculture and EU topics.
He emphasized the letter of intent on training Vojvodina's officials in EU affairs, signed
between the province's highest executive body and the Slovenian Centre for European
Prospects in Menges near Ljubljana.
The minister said that Slovenia traditionally had many ties with the province, adding that he
was happy that the ties had been enhanced recently.
Trade between Slovenia and Vojvodina in 2006 stood at EUR 112.5m, which is 15% of the
total trade with Serbia. Vojvodina's exports to Slovenia meanwhile stood at EUR 60.5m,
according to the release.
Slovenia and Vojvodina also cooperate in culture, education and science, while there are also
three active Slovenian associations in Vojvodina, the release also says.
5
Slovenia and Vojvodina to Cooperate in Agriculture
Slovenia and Vojvodina will organise a business conference in the autumn, while companies
from Vojvodina will exhibit at the Celje Trade Fair and at the International Fair of
Agriculture and Food in Gornja Radgona
Agriculture Minister Iztok Jarc met with the head of the regional government of Vojvodina
Bojan Pajtic in Ljubljana on Tuesday, 10 July to explore opportunities for cooperation in food
processing and agriculture.
Slovenia and Vojvodina will organise a business conference in the autumn, while companies
from Vojvodina will exhibit at the Celje Trade Fair and at the International Fair of Agriculture
and Food in Gornja Radgona.
The cooperation between Slovenia and Vojvodina in agriculture can be increased through
trade and investments, Jarc and Pajtic agreed according to an Agriculture Ministry press
release.
Slovenia has also offered assistance to Vojvodina in terms of training of agricultural experts
and setting up of an agriculture and forestry chamber and an agricultural advisory service.
The Serbian province encourages Slovenian companies to invest in its food processing
industry. Therefore Slovenian companies with subsidiaries in Vojvodina already have special
customs advantages, the ministry said.
Slovenian, Hungarian Governments to Meet in October, FM Says
They are expected to discuss numerous topics and sign 13 bilateral agreements, Rupel said
after meeting his Hungarian counterpart Kinga Goncz in Budapest
Foreign Minister Dimitrij Rupel said on Tuesday, 10 July that the governments of Slovenia
and Hungary would hold their first joint session on 17 October. They are expected to discuss
numerous topics and sign 13 bilateral agreements, Rupel said after meeting his Hungarian
counterpart Kinga Goncz in Budapest.
The governments will touch on cooperation in energy, economy, transport, minorities and
Slovenia's priorities during its spell at the helm of the EU in the first half of 2008, Rupel said
at the close of his one-day official visit to Hungary.
Rupel and Goncz also discussed Slovenia's priorities, including EU enlargement, Western
Balkans, energy security, climate change, intercultural dialogue and the Lisbon Strategy.
Rupel said they agreed that Hungary's network of diplomatic representations will aid Slovenia
during its stint.
Goncz meanwhile assessed the relations between the two countries as excellent. Asked if
there was a chance that the Slovenian minority would get a representative in Hungary's
parliament - the Hungarian minority in Slovenia is represented by an MP - Goncz said that
hope still remained.
She explained that the issue was being dealt with by a working group and added that
minorities in Hungary were organised as parts of local communities that provide support for
the minority's culture, education and media.
The ministers also discussed the future status of Kosovo, with Rupel saying that Slovenia
completely accepts the decisions and directions of the European Union but is at the moment
"afraid of some alternative solutions or proposals". "It would be best if the EU remains
united" on the Kosovo issue, the minister said.
Rupel also met Prime Minister Ferenc Gyurcsany and President Laszlo Solyom as well as
visited the International Centre for Democratic Transition (ICDT) and met its director Istvan
Gyarmati during what was the first official visit by a Slovenian foreign minister to Hungary in
six years.
6
FM Rupel Reiterates Support for Croatia's EU Bid
Speaking at a conference on Europe's readiness for global changes in London, Rupel said he
hoped Croatia would retain its current pace so that it could join the bloc by 2011 at the latest
Foreign Minister Dimitrij Rupel has reiterated Slovenia's support for Croatian efforts to join
the EU. Speaking at a conference on Europe's readiness for global changes in London, Rupel
said on Thursday, 12 July he hoped Croatia would retain its current pace so that it could join
the bloc by 2011 at the latest.
Answering a question by a member of the audience at the conference held in London's Centre
for Reform, Rupel said Slovenia had always supported Croatian efforts to join the EU and
would do so during its stint as EU president in the first half of 2008.
"Croatia is doing a good job and we wouldn't like other countries to remain in its shadows,"
Rupel told the conference at the conclusion of his one-day visit to Great Britain, during which
he also met British counterpart David Miliband and Minister for Europe Jim Murphy.
Rupel stressed that it should be the EU's goal to shore up its "southern flank" by ensuring that
the countries of the Western Balkans can join the bloc as soon as possible. This will be one of
Slovenia's priorities during its spell as EU president.
He added that another priority of European foreign policy should be solving the Kosovo issue.
According to him, the best solution would be an "Ahtisaari plus" plan coupled with strong
support for Serbia's efforts to join the EU, so that Serbia is not forced to choose between
Kosovo and Europe.
Rupel added that the Middle East was another key challenge facing the EU. In this respect, he
pointed to the letter that the foreign ministers from the ten Mediterranean members of the EU
sent to new Middle East envoy Tony Blair last week, proposing a new approach to solving the
crisis in the region, including by deploying peacekeepers.
The letter has been criticised by Germany, however Rupel said he was not acquainted with the
details of Germany's grievances, but believed that they were not justified. "We underscored a
problem that is taking place in our backyard and in which we have an interest and with which
worries us," said Rupel.
He said the aim was to express support to Blair and remind him that it was high time to act
since the roadmap had been the subject of discussions for too long. The letter contains some
proposals in this direction, Rupel added.
7
EUROPEAN UNION
Slovenia Takes Over Presidency of Eureka R&D Network
Slovenia took over in July the presidency over the international network of industrial R&D
Eureka, during which it will focus on four areas, including the expansion of Eureka to
Western Balkans
Slovenia took over in July the presidency over the international network of industrial R&D
Eureka, during which it will focus on four areas, including the expansion of Eureka to
Western Balkans, the network's new communication strategy and the results of finalised
projects, head of the presidency Ales Mihelic told the press on Monday, 9 July.
According to Higher Education Minister Jure Zupan, the one-year presidency, running under
the motto "Creating the Future", presents "a great challenge". Eureka was established in 1985,
and currently joins 37 countries.
The aim of the network is enhancing technological development and competitiveness, and
promoting cooperation among countries, R&D institutions, industry, and small and middlesized companies, said Zupan.
The network has so far carried out individual projects worth EUR 2.2bn and strategic projects
worth EUR 1.8bn. Slovenia, a member since 1994, participated in 69 finalised projects worth
EUR 402.7m, and is currently taking part in 74 projects, worth EUR 98.8m.
The top priority of Slovenia's presidency is making Eureka the main technological programme
within the European R&D area. During the presidency, Slovenia expects to launch Eurostars,
a new programme for small and middle-sized R&D companies, and draft the network's
strategy for the next ten-year period, said Mihelic.
As the second priority is rationalisation and synchronisation within the network, Slovenia will
make efforts to organise meetings aimed at establishing contacts between companies, he
added.
The third priority is the expansion of the network to the Western Balkans. Talks with
Macedonia, Montenegro and Bosnia-Herzegovina are already under way, said Mihelic. The
fourth priority will meanwhile be a new communication strategy of Eureka and a review of
the results of finalised projects.
During the presidency, Slovenia is to host four meetings, the first of which will be held in
Maribor in October. The presidency is to conclude with a ministerial, which is to be held in
Ljubljana on 5 and 6 June 2008.
FM Discusses EU Presidency With Portuguese Ambassador
Portuguese Ambassador to Slovenia Maria do Carma Allegro de Magalhaes acquainted
Foreign Minister Dimitrij Rupel with the priorities of Portugal's EU presidency
Portuguese Ambassador to Slovenia Maria do Carma Allegro de Magalhaes acquainted on
Monday, 9 July Foreign Minister Dimitrij Rupel with the priorities of Portugal's EU
presidency, emphasising the successful conclusion of the intergovernmental conference on the
new EU treaty, implementation of the Lisbon Strategy and strengthening of relations between
the EU and Africa, the Foreign Ministry said in a press release.
Portugal will place emphasis on economic and social dimensions in striving for the
implementation of the Lisbon Strategy, aimed at boosting competitiveness of the European
economy, the ambassador said.
The country is also to pay particular attention to the Western Balkans in terms of EU
enlargement, she told Rupel.
8
Portugal will also make efforts to prepare the ground for the expansion of the Schengen noborder zone before Slovenia takes over as the EU president in the beginning of 2008, she
added.
FM Rupel Asks Miliband for Assistance in EU Presidency
The priorities of Slovenia's EU presidency topped the agenda as Foreign Minister Dimitrij
Rupel held talks with British Foreign Secretary David Miliband
The priorities of Slovenia's EU presidency topped the agenda as Foreign Minister Dimitrij
Rupel held talks on Thursday, 12 July with British Foreign Secretary David Miliband, with
Rupel asking for the UK's assistance in climate change, the Middle East and the Western
Balkans. "We will need British help here," Rupel said.
Great Britain wishes to work closely with the Slovenian presidency, Rupel said after the talks.
"They are a lot more experienced than we are in presiding the EU, and they expect us to tell
them what we know about the "Balkans quarrels" and issues underway regarding the UN
Security Council resolution on Kosovo."
Rupel also invited Miliband and Gordon Brown, the new British prime minister, to attend
several events taking place in Slovenia during its stint as EU president. Miliband received the
invitation with interest, Rupel said.
Asked whether he noticed any changes compared to his talks with Miliband's predecessors at
the Foreign Office, Rupel said he "felt a more lively and committed interest in European
cooperation," especially in climate change.
The British foreign minister knows this issue well and is highly interested in it, as he was
previously the environment minister, Rupel explained.
Jansa Meets European Commission Officials over EU Presidency
Prime Minister Janez Jansa met Joao Vale de Almeida, head of cabinet of the President of the
European Commission, and Secretary-General of the European Commission Catherine Day
Prime Minister Janez Jansa met in Ljubljana on Friday, 13 July Joao Vale de Almeida, head
of cabinet of the President of the European Commission, and Secretary-General of the
European Commission Catherine Day. The officials discussed Slovenia's plans for the EU
presidency in the first half of 2008.
According to a press release from the prime minister's office, Jansa acquainted the highranking officials with the topics Slovenia has set as its presidency priorities.
These include the reform of the institutional basis of the EU, energy, climate change,
intercultural dialogue, the Western Balkans, and the Lisbon Strategy.
The officials also discussed the intergovernmental conference on the EU reform treaty, which
is to start on 23 July.
Slovenia is hoping that the treaty will be signed during Portugal's EU presidency, which
would provide enough time for ratification. Slovenia will closely monitor the ratification
procedure, the press release reads.
9
LEGISLATION
Ministry Moves to Amend Tax Law for Casino Resort
The Finance Ministry has released draft amendments to the gaming act and the tax on gaming
act, which pave the way for the construction of a huge casino resort by US casino operator
Harrah's Entertainment and Slovenian gaming company Hit
The Finance Ministry has released draft amendments to the gaming act and the tax on gaming
act, which pave the way for the construction of a huge casino resort by US casino operator
Harrah's Entertainment and Slovenian gaming company Hit.
The proposal, which has been put to public scrutiny, raises the limit for foreign ownership of
gaming establishments from 20% of the share capital to 49%.
A casino resort is defined as a facility with at least 100 game tables and at least 1,000 fourstar rooms plus sports, convention, health and wellness programmes.
Taxes will be progressively lowered: revenues up to EUR 110m will be subject to a 32%
taxation rate, which will drop to 14% for EUR 110m-EUR 150m and to 8% for revenues in
excess of EUR 150m.
Under the current legislation, casino operators pay gaming tax and concession fees, which
brings the effective tax rate to anywhere between 23% and 38% depending on the type of
games.
The ministry also commissioned an analysis of the impacts of the gaming resort, which is to
be built near Nova Gorica.
The analysis concludes that the overall economic impact will be favourable at the regional
and national levels, as casino guests will use other tourist infrastructure in the country.
The ministry says the analysis proves changes to the gaming tax legislation are justified
considering the overall benefits.
Harrah's and Hit, which will operate the 49:51 joint venture, value the project at EUR 750m.
It will include top-class hotels with 1,500 rooms, a convention centre, swimming pools,
restaurants, a casino and numerous other facilities.
Its location is still unclear, as is the exact date when it will open its doors. According to the
best-case scenario, it could open in three-year time.
Hit estimates that the resort will create 3,200 new jobs directly and another 1,000 indirectly,
and boost tax revenues by EUR 120m. An additional EUR 165m would be spent each year on
goods and services.
Caterers File Constitutional Complaint Against Tobacco Act
The caterers are unhappy with several aspects of the legislation that is to prohibit smoking in
indoor public and work places where employees can be exposed to second-hand smoke
The association of caterers filed on Tuesday, 10 July a complaint with the Constitutional
Court against the recently passed amendments to the tobacco act, calling on the Court to stay
the act until it makes its final decision. The caterers are unhappy with several aspects of the
legislation that is to prohibit smoking in indoor public and work places where employees can
be exposed to second-hand smoke.
The association believes that the amendments, which are to enter into force on 1 August,
directly encroach on the legal position and economic activity of restaurants, bars and other
facilities offering food and drinks.
The amendments also restrict the economic freedom of catering companies, task them with
obligations and responsibilities and directly encroach on their rights and interests.
10
By prohibiting the work of minors in facilities that sell tobacco products, the legislation
moreover encroaches on the rights of employees as well as employees.
Furthermore, by not allowing for a transition period, the act is constitutionally deficient, the
association also wrote.
The act, passed on 22 June, allows for exemptions to the general smoking ban, such as open
public areas, special smoking hotel rooms, special smoking areas in elderly care centres and
jails, and special smoking rooms in bars and other work places.
The smoking rooms, which will have to meet strict technical standards, will however not be
allowed to occupy more than 20% of an establishment. The amendments also raise the age for
buying cigarettes from 15 to 18.
Rail Safety Act Enters into Force
The legislation, passed on 22 June, sets conditions for individual subsystems that guarantee
safety and regulate railroad transport, including inspections
The act on rail transport safety entered into force on Wednesday, 11 July. The legislation,
passed on 22 June, sets conditions for individual subsystems that guarantee safety and
regulate railroad transport, including inspections.
The main aim of the bill is to maintain and improve rail safety by taking into account the
development of EU legislation and technical progress.
It clearly defines the obligations of individual subjects in developing and guaranteeing
railroad safety and defines their relations and ways to improve safety.
The act also brings Slovenian legislation in line with the relevant EU directives. Slovenia has
already been reprimanded by the European Commission for failing to transpose the relevant
EU directives.
Amendments to Crafts Industries Chamber Act Pass First Reading
Parliament confirmed unanimously (66 votes) in first reading amendments to the act on the
Chamber of Crafts Industries, which lowers the chamber's membership fees and relaxes
provisions on crafts permits and qualifications
Parliament confirmed unanimously (66 votes) in first reading on Wednesday, 11 July
amendments to the act on the Chamber of Crafts Industries, which lowers the chamber's
membership fees and relaxes provisions on crafts permits and qualifications.
The most important goal of the amendments is to facilitate entry into crafts industries and
enable this part of the economy to prosper, Economy Ministry State Secretary Tomaz Jersic
told parliament.
Membership of the chamber will be mandatory, but the fee has been capped at 50 euros.
The amendments eliminate the so-called craft permit for activities classified as crafts
industries, which will lower costs.
Aspiring business owners in crafts industries will no longer have to pass a master exam,
instead a completed secondary school will suffice, Jersic said.
The amendments received broad endorsement from all deputy group and were welcomed in a
letter to the parliament by the president of the Chamber of Crafts Industries Miroslav Klun.
Government Adopts Law to Promote Enterprise
The new enterprise support bill will help micro, small and medium-sized companies overcome
key obstacles, Economy Minister Andrej Vizjak told the press
The government has adopted a bill aimed at promoting the creation of conditions conducive to
enterprise. The new enterprise support bill will help micro, small and medium-sized
companies overcome key obstacles, Economy Minister Andrej Vizjak told the press.
11
According to Vizjak, the new law deals with entrepreneurial, research and financial
conditions important for the development of enterprises. Its main aim is to create nonfinancial mechanisms for promoting enterprise.
While financial support of enterprise is conducted through the Slovenian Enterprise Fund,
there is a lack of effective non-financial support for enterprise and innovation, the minister
told the press after the government's session.
This promotes the implementation of strategic development goals for small businesses by
forming national development programmes aimed at development of enterprise. Additionally,
the one-stop-shop concept will be applied at local level to help small businesses deal with key
challenges.
The Public Agency for Enterprise and Foreign Investment is to be in charge of conditions for
innovation and enterprise, carrying out local and regional programmes in cooperation with
enterprises.
Measures to create conditions conducive to innovation will include the establishment of
innovation centres, enterprise incubators and technological parks. The law will also enable the
state to endorse new forms of enterprise supports mechanisms, such as enterprise networks
and technological platforms.
The financial measures in the bill build on the solutions enacted with changes to the existing
enterprise support act. These solutions include funding through venture capital funds and
leasing as well as other forms of financing.
According to Vizjak, the law takes into consideration Slovenia's plans to establish provinces,
providing a framework for provincial activities aimed at promoting enterprise.
12
STATISTICS/FORECASTS
Railway Cargo Up 4.3% in 2006 Y/Y
Railroad operator Slovenske zeleznice transported over 17 million tonnes of cargo in 2006
Railroad operator Slovenske zeleznice transported over 17 million tonnes of cargo in 2006,
4.3% more than in 2005, according to data from the National Statistical Office.
The railways made 3.37 billion tonne-kilometres, a 3.9% increase over 2005. Almost 80% of
the goods were transported in international haulage, the office said on Thursday, 12 July.
The amount of transported hazardous cargo remained unchanged year-on-year at just over 1.5
million tonnes.
Statistics Show 62% of Slovenians Went on Trips Last Year
Slovenians went on a total of 4.8 million private trips in 2006
A total of 62.2% (over one million) of Slovenians aged 15 years or more went on holidays in
2006, according to data published by the Statistical Office.
Slovenians went on a total of 4.8 million private trips in 2006. Out of these 62.1% were
shorter and the rest longer, defined by the statisticians as consisting of at least four
consecutive overnight stays.
While 72.4% of all longer private trips were to abroad (45% in Croatia, the favourite
destination of Slovenians for the summer holidays), shorter trips were mainly taken in
Slovenia (70%).
An average Slovenian tourist spent 4.3 nights on a trip and spent EUR 141.9 during that time about EUR 33 per day.
While trips in Slovenia on average included 2.8 overnight stays and cost EUR 66.8 (EUR 25 a
day), the number of overnight stays on trips abroad stood at 6.1 nights, with expenses rising to
EUR 233.7 (EUR 37.6 a day).
Ljubljana Gets 12% More Visitors in First Half of 2007
A total of 274,235 overnight stays were recorded in the Slovenian capital
Ljubljana was visited by 12% more tourists in the first half 2007 over the same period last
year, according to data by the Ljubljana Tourist Board. A total of 274,235 overnight stays
were recorded in the Slovenian capital, the Ljubljana Tourist Information Centre meanwhile
said on Thursday, 12 July.
The information centres in the city were visited by 98,082 tourists in the same period, a 30%
increase over the same period last year.
Meanwhile, the number of overnight stays stood at 63,225 in June, a 14.6% increase over
June last year, while the tourist centres were visited by 29,003 guests in the same month, up
27% over last year.
13
FINANCE
Employers Recommend Lower Taxes for Greater Competitiveness
In a letter to Prime Minister Janez Jansa, the Employers Association calls for the abolition of
payroll tax as of 2008
The employers have addressed to the prime minister a set of proposals aimed at what they say
is raising the competitiveness of the Slovenian economy. The proposals are based foremost on
lower taxes and welfare contributions.
In a letter to Prime Minister Janez Jansa, the Employers Association calls for the abolition of
payroll tax as of 2008. The employers say that the savings would be used for investment in
research and development and the creation of new jobs and higher wages.
The employers also suggest the government pass a law to exclude overtime pay from welfare
contributions and to allow part-time employees to top-up their welfare cover with self
contributions.
The employers recommend to the prime minister that the government make it easier and
cheaper for companies to resort to work at home by simplifying tax regulations in this field.
In order to promote companies to take on older workers, the proposal includes a set of
measures that would provide breaks in welfare contributions for older workers. The
employers also want all contributions for non-work related pay to be abolished.
Furthermore, the employers are calling for tax breaks for the training of workers and for lower
taxes for prizes given out for inventions and for royalties paid out for technical work.
The period of abundant economic growth should be utilised to take measures that will bolster
the competitiveness of the economy. The chief aims are to reduce the cost of labour and
increase flexibility of labour legislation.
NKBM Group Posts Q1 Profit of EUR 13m
The NKBM financial group, centred around Slovenia's second largest bank, Nova kreditna
banka Maribor (NKBM), said it posted a gross profit to the tune of EUR 13.1m in the first
three months of 2007, 30% of the planned profit for this year
The NKBM financial group, centred around Slovenia's second largest bank, Nova kreditna
banka Maribor (NKBM), said on Tuesday, 10 July it posted a gross profit to the tune of EUR
13.1m in the first three months of 2007, 30% of the planned profit for this year.
The results, discussed by the supervisory board in Maribor, also show that the group upped its
assets by EUR 76m to EUR 4.33bn.
The group, including NKBM, insurer Zavarovalnica Maribor and Postna Banka Slovenije
bank, also increased its return on assets by 3 percentage points to 17.31%.
The supervisors discussed the bank's results in the first six months of this year. According to
preliminary data, the bank had a pre-tax profit of EUR 44.6m and increased its assets by EUR
101m to EUR 3.77bn.
KAD AGM Satisfied with Results for 2006
The AGM of the state-run Pension Fund Management (KAD) reviewed the annual report of
KAD and the KAD Group for 2006 and decided to allocate the EUR 10.5m distributable
profit to reserves
The AGM of the state-run Pension Fund Management (KAD) reviewed the annual report of
KAD and the KAD Group for 2006 and decided to allocate the EUR 10.5m distributable
profit to reserves on Tuesday, 10 July.
14
KAD increased assets under management by 26% year-on-year to EUR 1.57bn in 2006.
Assets under management of its pension funds were up 27% to EUR 640.2m, the fund said in
a press release.
KAD said it increased assets with a successful sales strategy and efficient management of all
investment portfolios, and ensured the funds assets necessary for the financing of statutory
pension insurance, which amounted to EUR 39m in 2006.
The number of active investments under management decreased by over 50% since April
2005, while the portfolio value went up by some 50%.
The AGM was satisfied with the results, which enable KAD to meet its obligations towards
the Pension and Disability Insurance Institute, said Gregor Gomiscek, head of the KAD
AGM.
KAD cooperates in the process of consolidation of ownership structure - the results of which
will be visible over the coming years - which is crucial for Slovenia's competitive position,
added Gomiscek.
Once the pillar of Slovenian privatisation, KAD has become the biggest pension insurance
provider in Slovenia, and is planning to strengthen its position in the insurance sector in the
future, KAD chairman Tomaz Toplak said.
Ljubljana Stock Exchange
The benchmark SBI 20 index posted heavy gains to end the week level at 10,959.78 points
The Ljubljana Stock Exchange was in for a roller-coaster ride last week, as heavy losses that
shaved one billion euros off the market capitalisation mid-week were entirely offset by
exceedingly bullish trading on Thursday, 12 July and Friday, 13 July.
After shedding over 6% on Tuesday, 10 July and Wednesday, 11 July, the benchmark SBI 20
index posted heavy gains to end the week level at 10,959.78 points. Similarly, the SBI TOP
blue chip index added 5.98 points on the week to 2,373.38.
The market was dominate by news surrounding the tourism-to-energy conglomerate Istrabenz
following the disclosure that three companies offered bids for nearly a third of the stock that
is held by the state-run funds KAD and SOD.
Non-solicited offers were made by Infond Holding, the biggest owner of beverage group
Pivovarna Lasko, as well as retailer Tus and Serbian retailer Delta holding.
In break-neck pace, Istrabenz shed over 17% on Tuesday, 10 July, only to gain nearly 14%
two days later, which made for a cumulative weekly loss of 2.04%. Istrabenz closed at EUR
118.57 on Friday, 13 July, significantly above the bids of both Infond Holding and Tus. The
price of the Delta offer has not been disclosed.
Technical goods chain Merkur was also busy, as 23% of the stock changed hands in three
block deals on Wednesday, 11 July, including 15.64% acquired by a company established by
Merkur's top management. Merkur closed 3.18% lower at EUR 369.24.
Other blue chips had mixed fortunes, with energy company petrol up 3.96% to EUR 840.54,
drug maker Krka down 1.2% to EUR 997.89 and Telekom Slovenije adding only 1.47% to
EUR 472.24 despite news that 49% would be sold to a strategic investor rather than 39% as
originally planned by the government.
Brokers wrapped up deals worth EUR 58.3m last week, with an additional EUR 131.12m
coming in block deals.
15
REGIONAL INFORMATION
PM Upbeat about Development Prospects of Savinjsko
Prime Minister Janez Jansa is optimistic about the development of the eastern Savinjsko
region, which has retained fourth place among the statistical regions from the government's
visit two years ago and is considered as one of the most industrially developed parts of
Slovenia
Prime Minister Janez Jansa is optimistic about the development of the eastern Savinjsko
region, which has retained fourth place among the statistical regions from the government's
visit two years ago and is considered as one of the most industrially developed parts of
Slovenia.
In the two years, the number of the unemployed fell by nearly a quarter, the number of
companies rose and the project of the third development axis is becoming reality, Jansa told
the press as the government wound down its two-day visit to the region on Wednesday, 11
July.
"This is an industrially developed region, but there are some reserves in services. Tourism is
also doing traditionally well and some big investments are showing that this trend will
continue," he said.
According to the prime minister, all this means that demand for workers continued to increase
this year. The region is facing structural unemployment, but some technical professions are in
short supply, he said.
Among the projects that were in the starting phase two years ago but are now nearing
realisation, Jansa mentioned the third development axis, a North-South road link crossing the
region from the Austrian to the Croatian borders.
Jansa said that a zoning plan needed to be made first, whereupon the project's realisation
could commence. In the long term, the project will provide additional development
opportunities, but in the short term, the region can expect the most from the hi-tech centre
Tehnopolis and investment in tourism infrastructure.
Additionally, local communities will get more money thanks to the new act on the funding of
municipalities, as the 23 municipalities in the region can expect about EUR 11m more
annually.
The establishment of provinces will be a new development opportunity as well, he said,
adding that the Celje region will be among the biggest in the country, with 200,000 people, so
he is confident that it will be successful.
There will also be more EU funds available. Between 2004 and 2006 the region carried out
over 800 projects worth EUR 14m, but ideas for new projects may not dry up, he said.
Economy Minister Andrej Vizjak meanwhile noted that in addition to having a strong
industrial base, the region had above-average entrepreneurial initiative, as it was in third place
by the number of entrepreneurs in Slovenia.
In a meeting with local politicians and businessmen, Jansa heard mostly grievances about
poor roads.
Aleksander Svetelsek, the boss of retailer Tus, meanwhile noted that the region's development
was hampered by a lack of workers. He said he expected the government to provide
systematic support in this respect.
Jansa also held talks with Celje Bishop Anton Stres, who told the press that the debate
revolved around the upkeep of cultural monuments, which requires a lot of energy that the
Church would like to spend on education and other Church activities. Stres said he expected
help with the new act on the protection of cultural heritage.
16
As part of the visit, Health Minister Andrej Brucan visited the Celje general hospital. Brucan
said an emergency ward should be built there as soon as possible. He said completion in 2009
was feasible, but money needed to be secured first.
The government wrapped up its two-day visit with a traditional charity football match with
local politicians and businessmen.
17
BRANCH INFORMATION
Clearance Sales Kick Off Throughout Slovenia
Two-week summer clearance sales of clothing and footwear kicked off in Slovenia on 9 July,
offering discounts of up to 50%
Two-week summer clearance sales of clothing and footwear kicked off in Slovenia on
Monday, 9 July, offering discounts of up to 50%.
Goods on sale have to be tagged with both old and new prices, while at least 25% of all goods
have to be sold at the highest discount, the Chamber of Commerce said in a press release.
In accordance with the consumer protection act, information on the clearance sale has to
include the type of goods, discount and duration of the clearance sale.
The Consumer Protection Office said that goods on sale have to be flawless, except in case
they are labelled as defective.
18
COMPANIES
Borut Mesko Takes Over as STA Editor-in-Chief
Mesko has been appointed by acting STA director Alenka Paulin for a four-year term
Borut Mesko took over as the editor-in-chief of the Slovenian Press Agency (STA) on
Monday, 9 July, succeeding Nadja Podobnik, who will henceforth be his deputy. Mesko has
been appointed by acting STA director Alenka Paulin for a four-year term.
"STA has become established over the years as the central information service for the
majority of Slovenian media and other public. Yet this cannot be reason for complacency, as
the expectations of our users are important as well," Mesko said in a statement.
According to him, the press agency can "improve responsiveness and quality of reporting on
key political, economic and social events in Slovenia. We are also interested in events in the
region and Slovenia's role in the EU and international politics."
Mesko, who comes to STA after six years at the POP TV news portal www.24ur.com, had
previously worked for the student newspaper Tribuna (1986-1987), political weekly Mladina
(1987-1990) and public broadcaster TV Slovenija (1991-1992). He was also editor of the
business desk at the newspaper Republika (1993-1996).
Between 1996 and 1998 he was a freelance journalist, spokesman for the NGO Umanotera
and contributor to the magazine Podjetnik. He started working for POP TV in 1998 as
journalist for the prime-time news programme 24ur and the current affairs show Preverjeno.
EU Funds Consultancy Sells Franchise to Croatia
RR&Co, a Slovenian company specialising in consultancy on EU grants, signed a franchise
agreement with a Croatian partner as part of its drive to expand to the Balkans
RR&Co, a Slovenian company specialising in consultancy on EU grants, signed a franchise
agreement with a Croatian partner on Monday, 9 July as part of its drive to expand to the
Balkans.
The franchise agreement was signed with Apriori komunikacije, whose director Danijel
Koletic said that countries in the Balkans were not yet prepared to draw EU funds.
The EU Partners franchise provides assistance to potential recipients of EU funds. "People
can design a project, but they are unable to manage costs," said consultant Mojca Dusica Zajc.
The Croatian partner will pay EUR 30,000 for the franchise for the first year, EUR 12,000 for
each five years afterward and EUR 20,000 in the subsequent years.
The commission for the services depends on the amount of funds. It is about 10% for projects
worth EUR 100,000.
The Ljubljana-based company intends to expand its franchise to Serbia, Montenegro, BosniaHerzegovina and Macedonia.
Koletic noted that EUR 11.4bn in EU grants will be available for the Western Balkans in the
next five years.
Retailer Tus Enters Bidding for Istrabenz Stake
Retailer Tus has made a bid for a 28.23% stake in conglomerate Istrabenz that is held by two
state-run funds, KAD and SOD, as well as 7.3% owned by beverage group Pivovarna Lasko,
upstaging a similar bid by Infond Holding
Retailer Tus has made a bid for a 28.23% stake in conglomerate Istrabenz that is held by two
state-run funds, KAD and SOD, as well as 7.3% owned by beverage group Pivovarna Lasko,
upstaging a similar bid by Infond Holding.
19
Tus is seeking to acquire the stake because Istrabenz is a key shareholder in all the main
industries that Tus is involved in, Aleksander Svetelsek, the chief executive of the Tus group,
told STA on Monday, 9 July.
If KAD and SOD decide to sell, Tus does not rule out the possibility that it might increase the
stake further, Svetelsek added.
The non-solicited bid, in which Tus is offering EUR 81 per share, comes four weeks after
Infond Holding sent an offer to KAD and SOD at EUR 80 per share.
Infond Holding is the main shareholder of Pivovarna Lasko and pundits say its bid is designed
to give Lasko control of Istrabenz.
Pivovarna Lasko and Istrabenz are furthermore the two major owners of Mercator, Slovenia's
leading retailer.
Merkur Executives Acquire 15% Stake in Company
Executives of hardware retail chain Merkur purchased a 14.75% stake in Merkur through the
Merfin company, increasing Merfin's stake in Merkur to 15.64%
Executives of hardware retail chain Merkur purchased on Monday, 9 July a 14.75% stake in
Merkur through the Merfin company, increasing Merfin's stake in Merkur to 15.64%, the
management wrote in a press release.
By investing its own funds in purchasing an important share in the biggest Slovenian
hardware retailer, the management undertook to responsibly manage the company, the press
release says.
Merfin, owned by 65 of Merkur's executives, was planning to buy additional shares in Merkur
in order to acquire up to 25% of the company.
Together with their privately owned stakes, Merkur executives hold a nearly 19% stake in
Merkur.
Merkur also reported that retailer Engrotus sold its entire remaining 6.43% stake in the
company.
Engrotus acquired 24.32% of Merkur from the state-owned KAD and SOD funds in
December last year and sold the majority of it to Banka Koper in January.
Petrol Decides to Exit Race for Italy's IES Refinery
Petrol, Slovenia's biggest energy company, has decided not to continue with procedures to
acquire Italy's Italiana Energia e Servizi (IES) refinery from Mantova
Petrol, Slovenia's biggest energy company, has decided not to continue with procedures to
acquire Italy's Italiana Energia e Servizi (IES) refinery from Mantova. The decision,
announced by Petrol on Monday, 9 July, comes after the company studied all of the facility's
business and financial indicators.
Petrol declined to comment on any information regarding a call for bids to acquire the
refinery, as it is bound to secrecy.
Petrol assessed the value of the refinery at EUR 800m, including EUR 300m of the refinery's
debts.
Airport Gets New Terminal and New Name
Prime Minister Janez Jansa opened a new passenger terminal at the Ljubljana Airport, which
was also renamed into the Joze Pucnik Airport Ljubljana on the occasion
Prime Minister Janez Jansa opened on Monday, 9 July a new passenger terminal at the
Ljubljana Airport, which was also renamed into the Joze Pucnik Airport Ljubljana on the
occasion.
In his speech, Jansa touched on the important role that the airport and Pucnik played in the
process of gaining Slovenia's independence.
20
This airport could not have been Slovenia's central airport if it was not for the man whom it
was renamed after, Jansa said.
The prime minister also talked about development achievements of the airport in the last
couple of years, explaining that the new terminal was only the first step towards future
development.
The new terminal, the first phase of the overhaul of the airport, presents a big improvement
for Slovenia because it meets the Schengen criteria by enabling separation of passengers on
those coming from the EU and non-EU countries.
The EU evaluation committee inspected the airport a week ago but it has not issued a report
yet. However, Jansa and the airport management are convinced that the report will be positive
and that the airport will get the green light for introducing the Schengen regime in March next
year.
Zmago Skobir, the chairman of airport operator Aerodrom Ljubljana, told the press before the
opening that the new floor above the existing terminal meant more space for passengers and
upgraded the airport's capacity and quality of work.
He added that a new terminal, which is to be built by 2010, will present an even bigger
improvement for the airport and the passengers.
The EUR 17m investment will increase the surface area for passengers from 800 square
metres to 5,000 and aid the airport in its plans to become a leading facility in the region by
2015, Skobir added.
Once the terminal is completed, the airport will be able to send 850 passengers on their way in
an hour, twice the capacity it has today, he said and added that the airport's capacity will rise
to 2.5 million passengers a year.
Transport Minister Janez Bozic meanwhile assured that the state backs the airport's plans and
said the ministry is going to co-fund a railway link between the airport and Ljubljana as well
as upgrade a part of the main road.
Pucnik (1932-2003) was the leader of Demos when it emerged victorious at the first multiparty elections in the country, held in 1990. Demos would go on to form a government that
led Slovenia to its independence.
From 1989 he served as the head of the Slovenian Social Democratic Party (SDSS), the
predecessor to the current senior coalition Slovenian Democrats (SDS). In 1993 he handed the
leadership to Jansa. He retired from politics in 1997.
In the former Yugoslavia, Pucnik was a writer persecuted by the Communist authorities for
his dissenting opinions. He was also sentenced to nine years in prison in 1958 for propagating
anti-Communist ideas.
Steel Group AGM Decides to Keep Distributable Profit
Shareholders of steel group Slovenska industrija jekla (SIJ) voted to leave the entire
distributable profit (EUR 7.1m) untouched
Shareholders of steel group Slovenska industrija jekla (SIJ) voted on Tuesday, 10 July to
leave the entire distributable profit (EUR 7.1m) untouched. They also appointed Alexandr
Sivoronov a member of the SIJ's supervisory board. Sivoronov comes from Russian company
Koks, which has recently acquired 55.35% of SIJ.
Sivoronov replaces Vladimir Lomberg, who became a member of the management board in
mid-May. Sivoronov's term in office runs until 11 April 2011.
The steel group also agreed to pay the supervisors EUR 5,000 in rewards, while the chief
supervisor will get EUR 6,000, SIJ chief executive officer Tibor Simonka told STA.
Koks acquired the majority of the state's stake in SIJ in early March, paying EUR 190.73 per
share and putting the deal at EUR 105m. While the sale was welcomed by the SIJ
management and the state, small shareholders protested, saying that the price was too low.
21
Indeed, several small shareholders - the most prominent being Druzba pooblascenka Ravne, a
firm comprising over 5,000 workers of SIJ and holding just over 1% of the share capital decided not to sell. A total of some 2% of SIJ shareholders opted to keep their shares,
Simonka told STA.
Simonka told STA that the price should not be the sole criterion in opting for the sale.
According to him, the state - which has kept 25% + 1 share - also had other reasons to sell,
mainly investment.
While SIJ made almost no investments between 1991 and 2003, the group embarked on an
intensive investment cycle after that period, Simonka added. He believes that the price offered
by Koks was proper and good, taking into account SIJ's profitability that still lags behind that
of the best steelworks in Europe.
DARS Signs EUR 80.13m Deal for NE Motorway Section
The works have to be completed in 24 months
Motorway company DARS signed on Tuesday, 10 July an EUR 80.13m deal for the
construction of a 12.9-kilometre motorway section between Slivnica and Drazenci in NE
Slovenia. The works have to be completed in 24 months, DARS wrote in a press release.
The companies constructing the section - SCT Ljubljana, Primorje Ajdovscina, Gradis
skupina G Ljubljana, CPM Maribor, Vegrad Velenje and Strabag Austria - will construct
three motorway exits, ten flyovers and several other facilities, including a service area.
This is the last of three contracts for the section between Slivnica and Drazenci. DARS signed
the contracts for the other two sections last week.
Lek Board Expanded to Six Members
The change coincides with the arrival of Vojmir Urlep, who will take over as the chief
executive of the Sandoz subsidiary in August
Lek, the Ljubljana-based drug maker, will have a six-member management board as of
August in accordance with the decision of the supervisory board on Tuesday, 10 July to
appoint Markus Delfosse and Darija Brecevic, who will be responsible for technical
operations and human resources respectively.
The change coincides with the arrival of Vojmir Urlep, who will take over as the chief
executive of the Sandoz subsidiary in August, succeeding Janja Bratos, Lek said in a press
release.
Lek says it is one of the most important parts of Sandoz in the field of technical operations
(purchasing, manufacturing, and customer supply).
This part of Lek's operations has undergone a period of intense growth and investment, so the
function will now be represented in the management board, the press release reads.
Delfosse will supervise pharmaceutical operations for all finished dosage form (FDF) sites in
Slovenia, as well as technical operations for Poland and Romania.
Brecevic joined Lek in December as the head of the human resources team for technical
operations for Slovenia and Romania. Before coming to Lek, she worked as head of human
resources at the Johnson & Johnson representative office for medical accessories and
diagnostics.
In addition to the two new members, the Lek board will continue to include present members
Ksenija Butenko Cerne, who is responsible for legal conformity with relevant local and EU
legislation, Anette Weber, who is in charge of finance, and workers' director Marjan Novak.
Merkur Exec Says MBO Possible
Bine Kordez, the chief executive officer of hardware retail chain Merkur, has told the Finance
business daily that a management buyout is not excluded
22
Bine Kordez, the chief executive officer of hardware retail chain Merkur, has told the Finance
business daily that a management buyout is not excluded.
The Merfin company, owned by Merkur senior executives, will continue purchasing the
retailer's shares in the coming two weeks, Kordez said in an interview for Finance, published
on Wednesday, 11 July.
Kordez, the senior partner in Merfin, which has increased its stake in Merkur to 15.64% on
Tuesday, 10 July, added that the ownership of Merkur has been on his mind for one year.
However, circumstances caused the idea to ripen in the last six months, he added.
Indeed, Merfin intends to purchase a further 9% of the retailer, bringing its stake in the
company to just below the 25% threshold for which a takeover bid is mandatory. Merkur
executives meanwhile also own some 3.5% of Merkur.
The majority of the money to finance the managers' purchases came from loans with the
partners in Merfin taking out over EUR 1m each, guaranteed by their personal assets, Kordez
said.
While the purchase was not really cheap due to Merkur's recent rise on the Ljubljana Stock
Exchange, Kordez is convinced that the retailer can do better. "If we did not believe in that we
would not be doing it," he said.
The CEO's plans for Merkur see the company becoming a leading retailer in Slovenia,
Croatia, Bosnia-Herzegovina and Serbia by 2012, while after that the company could set its
sights on countries such as Romania, Bulgaria and Macedonia.
The share of Merkur added over 60% in 2007 alone, closing at EUR 368.3 on Tuesday, 10
July. Merkur posted a net profit of EUR 21.59m for 2006, up 44.3% year-on-year. Net sales
amounted to almost EUR 1bn, which is 27.5% more than in the year before.
Boat Builder Recuperates after Fire
The owners of boat builder Seaway, whose production facility was completely destroyed in a
fire in April, spoke to the press on 11 July, explaining that an investigation had pointed to
negligence as the reason for the fire and that the company was already building a new facility
The owners of boat builder Seaway, whose production facility was completely destroyed in a
fire in April, spoke to the press on Wednesday, 11 July, explaining that an investigation had
pointed to negligence as the reason for the fire and that the company was already building a
new facility.
Owners Japec and Jernej Jakopin said that the fire broke out because of negligence during
maintenance work on the roof. Kranj police meanwhile said that a criminal complaint against
the two people responsible would be filed.
According to brothers Jakopin, the fire caused EUR 10m in damage. While refusing to reveal
how much they got from insurance, they said they were satisfied with the amount as it enabled
the company to continue its work.
They also said that inspectors had not discovered any major violations of safety, dispelling
warnings that had been voiced by the inhabitants of Zgosa and Zapuze.
Government Changes Telekom Privatisation Programme
The government changed the plan for the privatisation of Telekom Slovenije, raising the stake
that will be sold to a strategic investor from 39% to 49% and removing the limitation that
companies in state ownership may not take part in the privatisation
The government on Thursday, 12 July changed the plan for the privatisation of Telekom
Slovenije, raising the stake that will be sold to a strategic investor from 39% to 49% and
removing the limitation that companies in state ownership may not take part in the
privatisation.
23
The state will sell 49.13% of Telekom along with the state-run funds KAD and SOD. It can
either sell 35.13% in the first phase and the remaining 14% later, or offload the entire stake at
once.
The state will keep a controlling stake of 25% plus one share, Economy Minister Andrej
Vizjak told the press.
Moreover, the government renamed the commitments that potential investors must meet to
goals.
Changing the wording will make the privatisation programme more in line with EU law, as
setting commitments could be considered as restriction on the free movement of capital,
Vizjak explained.
The goals remain unchanged: the creation of an ownership structure securing efficient longterm management, competitiveness and development, maximisation the proceeds and the
upgrade of services.
The best bidder will be selected based on these goals and the price. "Given comparable
conditions, precedence will be given to investors who offer a cross-shareholding," Vizjak
said, adding that an international call for bids would be published by the end of August.
Home Appliance Maker to Build EUR 7m Plant
Home appliance maker BSH Hisni aparati is to build a state-of-the-art coffee machine plant
worth EUR 7m
Home appliance maker BSH Hisni aparati is to build a state-of-the-art coffee machine plant
worth EUR 7m, director of the company Bostjan Gorjup told the press in Nazarje on
Thursday, 12 July.
According to Gorjup, the plant is to be built by next February, when the company intends to
launch its new line of hi-tech coffee machines. The annual output will be a million units,
while the project is to create 200 jobs, he added.
The foundation stone for the new plant in Nazarje was laid by Economy Minister Andrej
Vizjak and CEO of the Bosch and Siemens Home Appliances Group Kurt Ludwig Gutberlet.
Acting director of the Public Agency for Enterprise and Foreign Investment Peter Jesovnik
meanwhile told the press that the state had earmarked EUR 1.2m for the project. The project
was eligible for state investment aid because it was a high-tech investment which would
create new jobs and attract new suppliers.
BSH Hisni aparati, which is part of the Bosch and Siemens Home Appliances Group, last year
generated EUR 144m in revenues and EUR 14.5m in net profit. It had more than 600 workers.
Gorjup said the value added per employee in the company stands at EUR 60,000, while the
production of coffee machines was to boost revenues by 150%.
Telco Invests EUR 4.5m in Bosnian Internet Provider
The funds for the Bosnian company, located in the Republic of Srpska, will be used for the
construction of broadband internet infrastructure
Telco Telekom Slovenije decided to supply its Blic.net subsidiary from Banja Luka with EUR
4.5m of fresh capital. The funds for the Bosnian company, located in the Republic of Srpska,
will be used for the construction of broadband internet infrastructure, Telekom Slovenije said
on Friday, 13 July.
According to the Slovenian telco, the funds will be used to facilitate the construction of
broadband wireless internet access and IP telephony. The money will be channelled into
expanding the communication backbone in the Republic of Srpska, access network and
optical network as well as voice over IP equipment.
24
Serbian Company Enters Bidding for Istrabenz
Delta Holdings's bid has been confirmed for STA by the state-run KAD and SOD funds, which
are selling the 28.23% stake
One of Serbia's largest companies has entered bidding for the state-controlled stake in
Slovenian food-through-tourism conglomerate Istrabenz. Delta Holdings's bid has been
confirmed for STA by the state-run KAD and SOD funds, which are selling the 28.23% stake,
but no further details were given.
KAD and SOD told STA that they could not release any further information on the bid by
Delta Holding in order to protect their interests in the sale. The price offered by the Serbian
company thus remains a mystery.
Delta Holding joins Slovenian investment fund Infond Holding and retail group Tus in
bidding for the Istrabenz stake. Infond Holding offered EUR 80 per share, while Tus offered
EUR 81, valuing the stake at around EUR 120m.
Delta Holding has operations in retail, financial services, insurance and sports. It plans to
generate EUR 1.8bn in revenues this year, while it employs 18,000 workers.
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SLOVENIA IN BRIEF
Virant's Brussels Talks Focus on E-Government
Public Administration Minister Gregor Virant met Information Society Commissioner
Viviane Reding and Commissioner responsible for Administrative Affairs, Audit and AntiFraud Siim Kallas in Brussels on Monday, 9 July, discussing e-government, administration
reform and Slovenia's EU presidency.
MPs Amend Ownership Transformation of Insurance Companies Act
Lawmakers concluded their July session by passing in a 46:16 vote changes to the ownership
transformation of insurance companies' act, which keep the shares of insurer Zavarovalnica
Triglav in the hands of the state-run KAD fund, and with no votes against the financial
instruments act, needed due to compliance with EU directives.
Solvit EU Mediation System Gaining Popularity, Minister Says
Economy Minister Andrej Vizjak welcomed on Friday, 13 July the fact that the Solvit system
that allows mediation of issues filed by EU citizens and companies against public
administration bodies in the area of the internal market is being used by an increasing number
of people in Slovenia.
Minister Sees Step Forward in Regional Security Cooperation
Interior Minister Dragutin Mate believes the latest meeting of the Salzburg forum, a Central
European security initiative, has resulted in progress in security cooperation in the region.
Cooperation helps provide answers to challenges that may be too big for individual countries
to tackle, Mate told STA following the meeting in Innsbruck on Friday, 13 July.
Crafts Chamber Signs Deal on Employment Relationship Act
The recent deal on the amendments to the employment relationship act was signed on Friday,
13 July by the Chamber of Crafts Industries (OZS) and the OZS employers' association, the
Labour, Family and Social Affairs Ministry said. The deal was already signed by all but one
of the country's trade unions, the Employers' Association of Slovenia and the Chamber of
Commerce and Industry of Slovenia. The only social partner that has yet to sign the deal is the
KNSS Neodvisnost, the second largest trade union confederation.
Government Official Visits Slovenians in Bosnia-Herzegovina
State Secretary for Slovenians Abroad Zorko Pelikan wrapped up on Friday, 13 July his twoday visit to Slovenians living in Bosnia-Herzegovina, where he discussed current issues with
representatives of Slovenian organisations in Prijedor, Banja Luka and Sarajevo.
Defence Minister Discusses Kosovo with Portuguese Counterpart
Defence Minister Karl Erjavec held talks with his Portuguese counterpart Nuno Severiano
Teixeira on the margins of Bastille Day celebrations in Paris on Saturday, 14 July, with the
pair voicing the desire for a continuation of efforts to resolve the status of Kosovo and a
unified EU position on the issue.
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