Slovenia Business Week no. 45, November 2nd, 2004
Table of Contents:
HEADLINES ............................................................................................................................. 3
European Commission Autumn Forecast: Slovenia's GDP at 4% in 2004 ............................ 3
Air France to Operate Daily Flights to Ljubljana .................................................................. 3
CCIS Endorses Development Strategy, but with Remarks .................................................... 4
INTERNATIONAL COOPERATION ...................................................................................... 5
President Says Slovenia Keen for Bulgaria to Join EU on Time ........................................... 5
Regional Forum Opens at Bled .............................................................................................. 6
Western Balkans Has Good Prospects for Growth ................................................................ 6
Bulgarian President Discusses OSCE with FM Vajgl and Jansa ........................................... 7
Drnovsek and Parvanov Call for Stable and Safe Western Balkans ...................................... 7
Slovenia's Embassy Officially NATO Contact Point in Austria ............................................ 8
EUROPEAN UNION ................................................................................................................. 9
EU Home Affairs Council Gives Border Control Agency Go-Ahead ................................... 9
Slovenia Signs European Constitution ................................................................................... 9
LEGISLATION ........................................................................................................................ 10
Stricter Regulations to Ensure Better Corporate Governance .............................................. 10
STATISTICS/FORECASTS .................................................................................................... 11
EU Inflation Forecast Higher than IMAD's Due to Oil Prices ............................................. 11
Inflation at 3.3 Percent ......................................................................................................... 11
Households with Children Better Equipped with IT ............................................................ 11
FINANCE................................................................................................................................. 13
Double Price Tags Promise to Be a Tough Nut ................................................................... 13
Gorenjska Banka in for a Record Year ................................................................................ 13
Austrian Insurer Opens Branch Office in Ljubljana ............................................................ 14
NLB Bids for Serbia's Continental Banka............................................................................ 14
Slovenians Turning to Saving in Mutual Funds and Shares ................................................ 15
Ljubljana Stock Exchange .................................................................................................... 15
Foreign Exchange ................................................................................................................. 16
BRANCH INFORMATION .................................................................................................... 17
Zrece and Lasko Declared Best Health Resorts ................................................................... 17
Organic Framers Call for Protection in Face of Spreading GMOs ...................................... 17
Government Adopts Spatial Planning Regulation ............................................................... 18
European Engineering Industry Upbeat about Growth in 2005 ........................................... 19
Footwear Industry with Mixed Results in Q3 ...................................................................... 19
COMPANIES ........................................................................................................................... 21
Radenska Study Proves Beneficial Effects of Mineral Water .............................................. 21
Pivovarna Lasko Back in the Race for Knjaz Milos ............................................................ 21
Sava's Profit in First Nine Months Better Than Expected ................................................... 22
Broadcaster and Telcos Sign EMR Code of Best Practice ................................................... 22
Luka Koper Opens Office in Belgrade ................................................................................. 22
Gorenje Optimistic Despite Multitude of Adverse Conditions ............................................ 23
Publisher Delo Sees Sales Soar, Profit Level ....................................................................... 24
SLOVENIA IN BRIEF ............................................................................................................ 25
Alojz Uran Appointed New Ljubljana Archbishop .............................................................. 25
Slovenian Travellers to US Must Have Machine Readable Passports ................................. 25
Mobitel to Take Legal Action over Mobikos ....................................................................... 25
Mobile Operator Vega Sues the State for EUR 174m ......................................................... 25
Bratislava and Ljubljana Mayors Discuss Cooperation ....................................................... 25
Interbrew Takes Case against Slovenia to World Bank ....................................................... 25
Government to Send Fresh Humanitarian Aid to Darfur ..................................................... 25
39th Borstnik Theatre Festival Awards ................................................................................ 25
Frankfurt after Frankfurt to Feature 10,000 Books .............................................................. 26
Two Slovenians in the EESC Presidency ............................................................................. 26
2
HEADLINES
European Commission Autumn Forecast: Slovenia's GDP at 4% in 2004
The forecast projects GDP growth to drop to 3.6 percent in 2005 and gain 0.2 percentage
points in 2006 so that GDP growth would reach 3.8 percent
The European Commission has forecast Slovenia's GDP growth to reach 4 percent this year in
its economic forecast released on Tuesday, 26 October. The forecast projects GDP growth to
drop to 3.6 percent in 2005 and gain 0.2 percentage points in 2006 so that GDP growth would
reach 3.8 percent.
The report, entitled "Economy in a Rebound", says that the Slovenian economy appears to
have caught a strong growth momentum this year after a short period of economic slowdown.
The growth momentum is supported by export expansion, prolonged investment surge,
significant stock-building and marked household consumption, according to the Commission.
"For 2005, the forecast projects GDP growth to stay steady at 3.6 percent as the economy
comes under a mild temporary strain of presently high commodity price levels, confirmed by
withering investors' confidence. It is especially domestic consumption that is likely to drive
the economy next year," the report says.
"Real wage increases are expected to be subdued, however, a gentle pick-up in employment
and a new personal income tax regime should spur household spending," according to the
Commission.
The Commission expects growth to start accelerating again in 2006, when the negative effects
of high oil prices are expected to gradually fade. "All components should contribute to GDP
growth, forecast at 3.8 percent, with domestic demand giving the main impetus."
The European Commission forecast says that inflation rate will stand at 3.9 percent this year
and will continue to decline.
"The government exercised prudence in regulating administered price increases and indirect
tax changes, as well as applied frequent adjustments of excise duties on oil to temper the
impact of world market price fluctuations," the Commission notes.
"Assuming anti-inflationary policies continue, while exchange rate stability now anchors
expectations, inflation is projected to stay on a steady trend decline," says the forecast, which
projects the inflation rate at 3.4 percent in 2005 and at 3.0 percent in 2006.
The general government deficit is to arrive at 2.3 percent of GDP in 2004. It is projected to
remain broadly stable, declining marginally to 2.2 percent of GDP next year and to 1.9
percent of GDP in 2006.
The Commission downgraded the growth forecast in the eurozone to 2 percent in 2005, which
was mainly a consequence of the prolongation of higher oil prices.
The EU is to see growth at 2.5 percent this year. Next year growth is expected to drop to 2.3
percent, while edging up to 2.4 percent in 2006.
Air France to Operate Daily Flights to Ljubljana
French airline Air France will launch a new route Paris-Ljubljana on 15 November
French airline Air France will launch a new route Paris-Ljubljana on 15 November, to operate
two flights daily during the weekdays and one flight daily during the weekends.
Presenting the new route, Etienne Rochou, general director of Air France Europe, told a news
conference on Wednesday, 27 October that the airline launched the new route to meet fresh
demand after Slovenia's EU entry.
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The new route will be suitable for business people as well as tourists; it will meet the
mounting demand of French tourists and will offer Slovenian passengers destinations served
by the airline alliance SkyTeam, said Rochou.
SkyTeam currently connects eight airlines, namely Aeroméxico, Air France, Alitalia,
Continental, CSA Czech Airlines, Delta Air Lines, KLM, Korean Air and Northwest, while
three new companies are expected to join in this autumn.
Air France Regional will serve the route Paris Charles de Gaulle - Ljubljana Brnik with
aircraft Embraer 145, which boast 50 seats. The return ticket, airport tax not included, is to
cost 119 euros.
Scheduled daily flights between Ljubljana and Paris are already being operated by the
Slovenian national airline Adria Airways. While Adria and Air France signed a contract on
operating joint flights in 1999, Adria has now withdrawn from the deal, stating that the deal
no longer makes sense.
CCIS Endorses Development Strategy, but with Remarks
The strategy was presented by Janez Sustersic, the director of the government Institute for
Macroeconomic Analyses and Development (IMAD), who stressed that the paper delivers
what Slovenia needs to become a successful economy: decisive and far-reaching measures in
weak areas
The management board of the Chamber of Commerce and Industry of Slovenia (CCIS) has
endorsed the government's strategy of Slovenia's development, but voiced several remarks
about guidelines and proposed policies in the individual industries.
The strategy was presented on Thursday, 28 October by Janez Sustersic, the director of the
government Institute for Macroeconomic Analyses and Development (IMAD), who stressed
that the paper delivers what Slovenia needs to become a successful economy: decisive and
far-reaching measures in weak areas.
According to Sustersic, the objectives set out in the strategy are comprehensive and
achievable. To implement them, Slovenia needs broad consensus in the effective use of
knowledge, welfare reform and efficient administration.
Sustersic also noted that the differences between the old and the new government regarding
economic development are not significant. There are different views only about privatisation,
the development of small companies, competition and the labour market.
The management board, which is made up of chief executives of major Slovenian companies,
noted a lack of policies on the development of individual industries, especially guidelines on
what to develop and where to sell the products.
They also criticised the tax system, saying that it is completely inappropriate since it does not
attract investment. Slovenia should look towards countries that have managed to attract a lot
of foreign investment such as Slovakia, Poland and the Netherlands.
4
INTERNATIONAL COOPERATION
President Says Slovenia Keen for Bulgaria to Join EU on Time
Slovenian President Janez Drnovsek met with his Bulgarian counterpart Georgy Parvanov
Slovenia is keen for Bulgaria to join the European Union within the foreseen timeframe,
President Janez Drnovsek said as he came out of a meeting with his Bulgarian counterpart
Georgy Parvanov on Tuesday, 26 October.
"I would not find it fair for Bulgaria to have to wait for another country or a group of
countries to enter the Union," Drnovsek said.
Parvanov voiced satisfaction over Slovenia's support, while Drnovsek said Slovenia could not
provide technical assistance to Bulgaria as the country had wrapped up its negotiations with
the EU. He added that the two nations had walked "a large part of the path towards the EU
together".
Another major topic that dominated the agenda was the Organisation for Security and
Cooperation in Europe (OSCE). The countries are currently members of OSCE troika with
Slovenia to follow Bulgaria at the helm of the organisation next year. According to Parvanov,
his country has made the fight against terrorism and arms trafficking the priority of its
chairmanship.
Talking about the issues that Bulgaria has been dealing with during its stint, and that will
remain on the agenda as Ljubljana takes over, Parvanov highlighted Kosovo, the TransDniester region, and Nagorni Kharabah between Armenia and Azerbaijan. These are problems
that cannot be tackled during a year-long presidency, but require a continued effort, he said.
Asked by a reporter which chapter was the most difficult in Bulgaria's progress towards the
EU, Parvanov said his country closed some of the chapters quite easily. He expects problems
in the next phase, though, as it will have to implement what has been agreed.
Among the areas that will involve a lot of work in the future, Parvanov quoted a reform of the
judicature. According to him, the country also faces other problems typical of the countries in
transition. He highlighted the issue of the Romany minority and the related unemployment
problem.
Drnovsek explained that Bulgaria was now interested in the political decision, i.e. the signing
of its accession treaty and the subsequent entry into the EU on 1 January 2007. It is important
for Bulgaria that there are no delays.
The chance of Croatia catching up with Bulgaria and Romania on the path towards the EU
and join in the same wave of enlargement is something unrealistic for the Slovenian president.
He nevertheless reiterated Slovenia's interest in further enlargement. Moreover, he said he
found it important for European reform efforts to remain at the core of policies of the
countries aspiring to EU membership.
The two presidents also touched on bilateral cooperation in economy and culture. Addressing
the press after the meeting, Parvanov suggested that trade could reach a record figure this
year. The same goes for Slovenian investment in Bulgaria, he said.
The potential for business cooperation has not been exhausted, the Bulgarian president said,
drawing attention to cooperation based on agreements already in place, such as tourism.
The countries' keen interest in the promotion of Slavic culture was also highlighted, as
Slovenia-based forum of Slavic cultures has been established recently. In that context
Parvanov underscored the need to highlight the significance of "Slavic vector in the European
civilisation".
Parvanov also drew attention to the cooperation between the universities in Ljubljana and
Sophia, pointing to a great potential in regional cooperation and ties among municipalities.
5
Regional Forum Opens at Bled
Regional Business Meeting Point opened at Bled on 27 October
The only way to achieve long-term stability and security of the Western Balkans and the
whole of Europe is to include all countries of SE Europe into the EU, European Minister
Milan M. Cvikl said at the Regional Business Meeting Point, which opened at Bled on
Wednesday, 27 October.
In addition to increasing integration within the Union, the EU must focus on further
expansion, according to Cvikl. Things that are really important for Europe sometimes get lost
among the many priorities of the enlarged EU, said the minister.
Cvikl said that Slovenia, which believes that SE Europe must be a priority, will make great
efforts for further enlargement to remain one of the key policies of the EU.
EU prospects helped Slovenia to reach a national consensus and carry out a number of
unpopular, but necessary, reforms which have brought greater stability to the Slovenian
economy and the society as a whole. They were also the basis of a swift transition of Slovenia
at all levels, according to Cvikl.
Clear EU prospects can also help the countries of SE Europe, which are now in transition, he
said. With its rich experience and its knowledge about the situation in Western Balkan
countries Slovenia can be of great help to them in their efforts to join the EU, said the
minister.
Cvikl's address opened the Regional Business Meeting Point, a conference discussing
business relations with the Western Balkans and the stability and security in the region.
Western Balkans Has Good Prospects for Growth
Analysts and businessmen were upbeat about the development potential of EU aspirants from
the Western Balkans as they debated the challenges of economic development in the region at
a round-table debate held as part of the 12th Regional Business Meeting Point (RBMP)
Analysts and businessmen were upbeat about the development potential of EU aspirants from
the Western Balkans as they debated the challenges of economic development in the region at
a round-table debate held as part of the 12th Regional Business Meeting Point (RBMP) on
Wednesday, 27 October.
Branimir Gvozdenovic, Montenegro's deputy prime minister, is convinced that there will
never again be political instability that could jeopardise or slow down economic growth in the
region.
The Vienna Institute for International Economic Studies is similarly optimistic about the
region's prospects in terms of political and economic risk. According to Vladimir Gligorov,
the region grew by 4 to 6 percent in the recent years, and forecasts for this year and next are
similarly encouraging.
Only Macedonia is critical, he said, and added that optimistic forecasts could only be
hampered by imbalances in the balance of payments: it is characteristic of the Western Balkan
countries that export volumes lag behind imports significantly.
One of the solutions is greater foreign investment. According to Gvozdenovic, Montenegro
has already cut red tape and improved the tax system in order to attract foreign investors.
Montenegro will also curb the 17-percent VAT rate, which Gvozdenovic acknowledged is not
to the liking of the International Monetary Fund. In any case, however, corporate tax will be
reduced from 20 to 9 percent.
Andreas Henzl of the business information provider Coface Intercredit, also sees growth
potential for the region. He expects growth to outpace Western Europe's significantly in the
coming years.
While Henzl stressed poor payment discipline as a major problem in the region, Slovenian
economist Mojmir Mrak pointed to corruption and crime.
6
Another shortcoming is the region's poor infrastructure. According to Gligorov, it is very
difficult even to get from Belgrade to the Montenegrin coast, or from Bulgaria to Romania.
Bulgarian President Discusses OSCE with FM Vajgl and Jansa
Slovenia's upcoming presidency of the Organisation for Security and Cooperation in Europe
(OSCE) reigned prominent as Bulgarian President Georgy Parvanov met as part of his
official visit with FM Ivo Vajgl and the likely new PM, Janez Jansa
Slovenia's upcoming presidency of the Organisation for Security and Cooperation in Europe
(OSCE) reigned prominent as Bulgarian President Georgy Parvanov met as part of his official
visit with FM Ivo Vajgl and the likely new PM, Janez Jansa.
Parvanov and Vajgl agreed, according to a Foreign Ministry press release, that the OSCE
must be an organisation that respects the interests of all members. All efforts for an overhaul
must therefore be taken seriously.
They talked about some key issues that Bulgaria has been dealing with as OSCE president this
year and which Slovenia will inherit next year, notably the situation in Kosovo, SerbiaMontenegro and Macedonia.
Bulgaria's efforts to join the EU were also discussed, with Vajgl stressing that the country's
role in SE Europe will grow significantly once it becomes an EU member. Slovenia will
therefore continue to make efforts to develop good bilateral relations, a press release on
Wednesday, 27 October reads.
Talking with the likely new PM, Parvanov expressed gratitude at Slovenia's support for
Bulgaria's EU bid. Jansa pledged that Bulgaria will continue to enjoy support under the new
government, according to a Slovenian Democrats (SDS) press release.
Drnovsek and Parvanov Call for Stable and Safe Western Balkans
Slovenian and Bulgarian presidents, Janez Drnovsek and Georgy Parvanov addressed the
12th Regional Business Meeting Point
Stability and security in Western Balkans are essential conditions for improving economic
relations, agreed Slovenian and Bulgarian presidents, Janez Drnovsek and Georgy Parvanov,
as they addressed the 12th Regional Business Meeting Point on Wednesday, 27 October.
"It is hard to imagine successful business without minimal political, security and other
stability conditions," Drnovsek told the participants. Parvanov added that free trade must be
ensured so that the region can grow.
"CEFTA had a positive role in the development of trade; these positive experiences should be
transferred to Southeast Europe," Parvanov said in reference to the Central European Free
Trade Agreement.
Assessing the situation in the region, Drnovsek underlined Croatia's "willingness to follow us
to the EU". He is certain that Croatia will join the Union, yet it is unrealistic to expect that it
will become a member alongside Bulgaria and Romania.
Parvanov also stressed that infrastructure in the region should be improved. "It is
unacceptable not to use the geo-strategic position of the region," he added. Parvanov also
thinks that the region's energy market should be linked up with the EU's.
The presidents' address was followed by a plenary session of the 12th Regional Business
Meeting Point, which also emphasised stability and security as the main conditions for
economic growth.
The conference was organised by published GV Revije and the business association Pharos. It
was attended by over 150 participants from Croatia, Hungary, Bulgaria, Romania, SerbiaMontenegro and Macedonia.
7
Slovenia's Embassy Officially NATO Contact Point in Austria
Contact point embassies act as coordinators for non-member countries that are part of the
Partnership for Peace programme
Slovenia's embassy in Vienna hosted a reception on Thursday, 28 October to celebrate its new
role as the NATO contact point embassy in Austria. Contact point embassies act as
coordinators for non-member countries that are part of the Partnership for Peace programme.
Addressing the diplomatic corps and invited guests, Ambassador Ernest Petric stressed that
Slovenia will make efforts to deepen cooperation between NATO and its partner Austria,
which will contribute to bilateral relations, according to a Foreign Ministry press release.
Guests attending the ceremony included Slovenia's Ambassador to NATO Matjaz Sinkovec,
Defence Ministry State Secretary Milan Jazbec, the former Austrian Defence Minister and
current MEP, Werner Fasslabend and others.
Slovenia took over as NATO contact point in Austria on 1 September. A contact point
embassy represents a bridge between NATO and the Partner country, as it coordinates
communication with the alliance and its activities.
Together with NATO representatives, it cooperates in organising conferences and debates
dealing with the alliance, as well as offers logistic support during visits of the organisation's
high representatives.
8
EUROPEAN UNION
EU Home Affairs Council Gives Border Control Agency Go-Ahead
The ministers have not yet agreed where the agency will be seated
The EU Justice and Home Affairs Council gave the green light to the EU border control
agency to be launched in May 2005. The ministers have not yet agreed where the agency will
be seated. Bidding for the seat are Slovenia, Poland, Hungary, Estonia and Malta.
The EU border control agency will organise and coordinate border control, provide technical
assistance and assistance in the training of border police. It will also work out risk analyses
and organise cooperation with third countries.
The council also passed an agreement in principle about the introduction of two biometric
elements into passports on Tuesday, 26 October. As a consequence, a digital photography and
a fingerprint are to be included in the document.
The ministers also discussed a framework agreement to strengthen the penal code for water
pollution by vessels. The fight against terrorism was another item on the agenda, STA was
told by Slovenia's EU Ambassador Ciril Stokelj.
Slovenia Signs European Constitution
The signing is an important event for the whole of the EU, as it is a new step in its
development and demonstrates the unity of the member states, the Foreign Ministry wrote in a
press release on the occasion
Outgoing Slovenian Prime Minister Anton Rop and Foreign Minister Ivo Vajgl signed the
European constitutional treaty in Rome on Friday, 29 October. The signing is an important
event for the whole of the EU, as it is a new step in its development and demonstrates the
unity of the member states, the Foreign Ministry wrote in a press release on the occasion.
The Foreign Ministry stated that the final solutions were the fruit of efforts to draft a uniform,
more transparent and streamlined legal basis that will enable the EU to function more
efficiently in future. Slovenia is pleased with the final solutions in the constitution, as it coshaped them, the ministry also said.
The Slovenian officials signed the document along with leaders of EU member states in a
move that opens the way for the ratification of the European constitutional treaty.
Speaking to the press before singing the document, PM Rop said that the signing opened a
new period in the debate about the constitutional treaty. While closing the debates about a
better, more efficient and democratic way of functioning of the EU, the signing opens debates
about upcoming referendums on the treaty, the PM said.
Rop expressed the hope that the treaty would be ratified by all EU member states. "We cannot
expect that such an important document will be adopted without problems," he said. "But I
believe that the constitution is so important, even historic, that in the end the EU will succeed
and that the countries, where the debates are most controversial, will manage to ratify it," Rop
said.
Slovenia has decided that the document will be ratified by parliament.
9
LEGISLATION
Stricter Regulations to Ensure Better Corporate Governance
Convinced that the "introductory period" of corporate governance is over, the Association of
Supervisory Board Members on 26 October unveiled new and much stricter criteria for
would-be supervisors
Convinced that the "introductory period" of corporate governance is over, the Association of
Supervisory Board Members on Tuesday, 26 October unveiled new and much stricter criteria
for would-be supervisors. The changes are expected to ensure greater independence,
accountability and professionalism.
The new criteria, which are to be finalised in mid-November, require personal integrity,
business ethics, at least higher education, good knowledge and, notably, the absence of any
kind of economic, personal or other close relations with the company or its management.
The association also proposes changes to the payment of supervisors; instead of receiving
rewards from the company's profit, supervisory board members would get an annual payment
of between 3,000 and 5,000 euros per year in small companies, 5,000 to 7,000 euros in midsized companies and 7,000 to 10,000 euros in large corporations. They would also be
reimbursed 100 euros per board session.
The most important novelty of the new (and unbinding) criteria is the clear definition of
required know-how, and precise provisions on independence. Special provisions deal with
disclosures of possible conflicts of interest.
Borut Bratina, a professor at the Maribor Faculty of Business and Economy, stressed another
change awaiting supervisors soon: the introduction of the "Societas Europea", the European
company governed by EU law and consisting of least two companies from different member
states.
This means, stressed Bratina, that legislation will have to provide for the existing two-tier
system as well as the single-tier system, better known as the "board system" characteristic of
the US.
We are thus entering a new period, when we will have to define the role of non-executive
board members, said Bratina. He believes that rules on supervisory board members should
also apply to non-executive board members.
According to Bratina, the new criteria complement the existing legislation and the EU code of
conduct for publicly listed companies, which Slovenia adopted just before it joined the EU on
1 May.
10
STATISTICS/FORECASTS
EU Inflation Forecast Higher than IMAD's Due to Oil Prices
The European Commission autumn forecast projects Slovenia's inflation rate to stand at 3.9
percent in 2004
The European Commission autumn forecast projects Slovenia's inflation rate to stand at 3.9
percent in 2004, which is slightly higher than the 3.5 percent that has recently been forecast
by the Slovenian Institute for Macroeconomic Analyses and Development (IMAD). The gap
was a result of different oil price movement anticipations, the IMAD director told STA after
the Commission's report was released.
The European Commission's calculations are based on the expectations that oil prices will
remain at around US$ 50 a barrel by the end of the year, and drop to US$ 40 next year,
according to Janez Sustersic of IMAD.
IMAD, on the other hand, based its calculations on the expectations that oil prices will be
around US$ 37 per barrel, Sustersic explained.
The Commission praised the government's prudence in regulating administered price
increases in its report released earlier in the day. Its forecast says that inflation is projected to
stay on a steady trend decline providing that the exchange rate remains stable.
"We have made similar assumptions, only we arrived at lower figures," Sustersic commented
on the report.
In its autumn forecast, IMAD corrected its inflation projection from 3.3 percent from the
spring forecast to 3.5 percent.
The government institute also upgraded its economic growth forecast, from 3.6 percent
forecast in spring to 4 percent. In 2005, GDP growth is to reach 3.8 percent and inflation is
projected at 3 percent, according to the IMAD autumn forecast.
The Commission's economic growth forecast for Slovenia in 2004, was meanwhile in line
with the IMAD forecast, as both institutions anticipate it at 4 percent of GDP.
Inflation at 3.3 Percent
The October price rise was mainly affected by seasonal prices and higher prices of oil
derivatives
After two months of deflation, consumer prices rose by 0.3 percent in October, putting the
annual inflation rate at 3.3 percent, the Statistics Office said on Friday, 29 October.
The cumulative consumer price index, the measure of inflation, for the first ten months of the
year amounted to 2.9 percent.
The October price rise was mainly affected by seasonal prices and higher prices of oil
derivatives.
Adding the most to the growth of the consumer price index were dearer clothes and footwear
(up 4%), as a result of the new autumn collections, housing (2.3%), catering and
accommodation (1.3%) and transport (0.3%). A considerable price rise was also noted in
higher education (5.8%).
Prices on the other hand fell in leisure and culture (2.5%), food and non-alcoholic beverage
(0.9 percent), health (0.4 percent) and alcoholic beverage and tobacco (0.2 percent).
October also saw lower prices of package holidays (14%), fruit (4.3%) and vegetables (1.9%).
Households with Children Better Equipped with IT
A survey of the national Statistics Office on the use of IT in Slovenian households indicates
that 87 percent of Slovenian households had at least one mobile phone in the first quarter of
11
this year, while the share of households with fixed-line phones was decreasing. 60 percent of
households owned a PC, 47 percent with an Internet access
A survey of the national Statistics Office on the use of IT in Slovenian households has shown
that the households best equipped with information-communication technology are those with
higher income and more children.
Presented at a press conference on Friday, 29 October, the survey indicates that 87 percent of
Slovenian households had at least one mobile phone in the first quarter of this year, while the
share of households with fixed-line phones was decreasing. 60 percent of households owned a
PC, 47 percent with an Internet access.
This kind of survey was conducted for the first time, said Andreja Kacic of the office's
department for the information society, and it focused on households of the population aged
from 16 to 74.
While both types of telephones are found in almost every household, the PC and Internet
access depend on the income. The questionnaire also proved that households with children are
better IT-equipped.
In terms of education, the Internet users are mostly highly educated people, of which 89.7
percent use the Internet. The number falls with the degree of education.
At the time of the survey, 43 percent of Slovenians used the Internet, more than half of those
being daily users.
The most common online activities were the use of e-mail and browsing for information.
Most people use the computer as well as the Internet at home and at work, while high school
and university students are the most frequent users at public places.
Online shopping is less frequent, since only 22 percent have at any time purchased anything
online, the items mostly being books, magazines, newspapers, clothes, sports equipment or
travels.
Kacic explained that the reasons for the infrequent use of online shopping are the consumers'
attachment to traditional shopping and the accessibility of ordinary stores. She is convinced,
though, that online shopping will become a daily habit.
As for the gap in the Internet use between men and women, 44.4 percent of men and 42
percent of women were using the Internet in the first quarter of 2004. This piece of
information, Kacic said, places Slovenia among those 15 old EU member states with the
smallest differences between the sexes.
12
FINANCE
Double Price Tags Promise to Be a Tough Nut
Slovenian retailers will have to start labelling prices in tolars as well as euros before the euro
is introduced, presumably in 2007
Slovenian retailers will have to start labelling prices in tolars as well as euros before the euro
is introduced, presumably in 2007. Yet retailers are uncertain when they should introduce
double price tags considering that the exchange rate is not completely fixed.
Attending a public debate on Tuesday, 26 October, Bank of Slovenia vice-governor Andrej
Rant told the Association for Trade at the Chamber of Commerce and Industry of Slovenia
that retailers must introduce double price tags, and urged the retailers to start with technical
preparations for double pricing.
Rant said that the exchange rate the retailers should apply is 239.64 tolars for a euro, the
central parity rate that was set when Slovenia entered the ERM II exchange rate mechanism
earlier this year.
Although Rant said the central bank would make efforts to preserve this rate, director of
retailer Spar, Igor Mervic, wondered whether the Bank of Slovenia can indeed guarantee that
the rate will be the same when Slovenia joins the euro area.
The central bank will definitely make efforts to preserve this rate when it exits ERM II and
enters the euro area, said Rant, adding that "the euro is a stable currency. Entry depends on
those macroeconomic policies that will continue to ensure exchange rate stability".
The Spar director stressed that the central bank must be certain about the exchange rate, or
else the retailers would incur great damage. "Consumers must be confident that the exchange
rate is stable. We cannot embark on double pricing unless the rate is pegged," he said.
Mervic believes that the price in euros must be more than just informative; the vice-governor
said it would initially be merely informative, in order to provide information to consumers. It
must be precise to two decimal points, stressed the Spar chief.
The retailers also urged the central bank to give a deadline for double prices, so they can
make the necessary preparations. "We need a date to draft action plans and prepare the
technical equipment. If 1 January 2007 is the ultimate deadline, they should tell us how much
in advance we must be ready," according to Stanislav Brodnjak, the chairman of the retailers'
association.
The major retailers said that they have the technological capabilities for double pricing.
Representatives of the big three (Mercator, Spar and Tus) and oil trader Petrol said they need
about six months to adjust to double price tags.
Gorenjska Banka in for a Record Year
Gorenjska banka generated a gross profit of SIT 10.5bn (EUR 43.8m) in the first nine months
of the year
Gorenjska banka generated a gross profit of SIT 10.5bn (EUR 43.8m) in the first nine months
of the year and increased its total assets by 12 percent to SIT 275bn (EUR 1.15bn). This year's
profit will be significantly higher than last year, according to chair Zlatko Kavcic.
Kavcic acknowledged that foreign banks are interested in Gorenjska banka, but it is unlikely
that anything would happen soon. "If anything happens, it will happen because of long-term
ambitions," he stressed.
According to Kavcic, the bank does not expect any major changes in the shareholder
structure. Our shareholders are long-term owners, he said.
13
The biggest shareholder is chemical and tourism company Sava, which holds a 36 percent
stake. Most of the bank's shares are in the hands of corporate investors such as hardware
retailer Merkur, insurer Zavarovalnica Triglav and national telco Telekom Slovenije.
Kavcic believes that the bank has ample scope for expansion; it is intent on remaining the
biggest bank in the Gorenjsko region, but it is reaching beyond the borders of Gorenjsko, in
particular with its investment activities.
Holding a 5.1 percent market share, Gorenjska banka is Slovenia's eighth largest bank in
terms of total assets and the second largest in terms of profit, Kavcic said.
The chief executive claims that performance indicators are above average: pre-tax return on
capital stood at 28.7 percent in the first nine months, return on assets is at 5.4 percent and
capital adequacy was at 23.6 percent.
Austrian Insurer Opens Branch Office in Ljubljana
Austrian insurer Wiener Staedtische opened its branch office in Ljubljana on 28 October
Austrian insurer Wiener Staedtische opened its branch office in Ljubljana on Thursday, 28
October. Initially, it will market retail life and property insurance, but plans to soon expand its
range of services to property insurance for small and medium-sized companies.
Wiener Staedtische hopes to collect EUR 1.3m in premiums in Slovenia next year, a figure it
intends to increase to EUR 4.3m in 2006 and EUR 7.7m in 2007. The projections were
presented at a press conference by Manfred Fuchsthaler, who will chair the Slovenian
subsidiary together with Tomo Mrdjen.
The branch office in the Masarykova Street (running along the main train station) in the centre
of Ljubljana will be the only office in Slovenia for now. The office was opened as part of the
strategy of expansion in central and eastern Europe.
According to Wiener Staedtische deputy chair Karl Fink, the insurer is apart from Austria also
present in Bulgaria, Germany, Italy, Croatia, Liechtenstein, Poland, Romania, Serbia,
Slovakia, the Czech Republic, Ukraine, Hungary, Belarus and now also Slovenia. The group
employs 16,000 people and is considered to be a leading insurance group in central and
eastern Europe.
Wiener Staedtische was founded in 1824, by associates such as princes, counts, barons,
industrialists, as well as church institutions such as monasteries and convents, according to
Fink. Today it is the leader among Austrian banks with a 13.1 percent share.
The insurance group, which started to expand beyond Austria in 1990, expects to collect EUR
4.3bn in premiums this year, up 15 percent compared with last year.
According to Mrdjen, Wiener Staedtische will offer the Slovenian market a broad spectre of
insurance products. Although it will only have an office in Ljubljana with five employees for
now, it will market its services across Slovenia through agents.
NLB Bids for Serbia's Continental Banka
The tender was published on 27 September
Slovenia's largest bank, the NLB, is one of the four bidders to submit offers for the purchase
of a majority stake in Novi Sad-based Continental banka. The tender was published on 27
September.
NLB's offer will be measured against those of two Greek banks, EFG Eurobank and Piraeous
Bank, as well as a subsidiary of the US industrial giant General Electric, GE Capital.
The Slovenian bank has been a strategic partner and shareholder of Continental banka since
2001.
Continental banka's total assets are worth EUR 108.8m. It has 71 branch offices in Serbia and
154,000 clients.
14
Slovenians Turning to Saving in Mutual Funds and Shares
According to the figures of the central bank, Slovenians held a total of SIT 2,228bn (EUR
9.29bn) on their saving accounts at the end of August, of which 59 percent were in tolars and
the rest in foreign currencies
The trust of Slovenians in the domestic banking system and domestic currency is stable, while
the share of saving deposits in euros is increasing steadily, a Bank of Slovenia vice-governor
told STA on the occasion of World Thrift Day on 31 October.
According to the figures of the central bank, Slovenians held a total of SIT 2,228bn (EUR
9.29bn) on their saving accounts at the end of August, of which 59 percent were in tolars and
the rest in foreign currencies.
The increased number of savings in euro has been prompted by Slovenia's recent entry into
the exchange rate mechanism ERM II and the euro zone entry, due in 2007, the central bank
vice-governor Samo Nucic commented for STA.
The Slovenians are said to be a nation that prefers to economise, rather than take loans. The
saving habits seem to be changing though, as the traditional bank accounts are being replaced
by pension insurances, mutual funds, shares and bonds.
In the future, the financial structure of the residents' savings is to be divided into thirds, one in
the banks, one in the mutual funds and one in other forms of investments, Nucic predicted.
According to him, people are deciding for the most profitable modes of saving, which
however, Nucic warned, are also more risky, which people should become aware of.
Responding to these new trends, the banks have started expanding their range of services.
Consequently, the central bank has introduced basic standards for the new services offered by
banks.
In another major trend witnessed by Slovenian banks, the saving periods are becoming shorter
and shorter, with citizens opting for other forms of long-term saving than banks accounts, the
central bank official told STA.
Ljubljana Stock Exchange
The SBI 20 benchmark index was posting gains throughout the week, to close at 4,822.53
points
After several rather calm weeks, the trading became livelier on the Ljubljana Stock Exchange
last week, as investors were stirred up by business results for the first three quarters of the
year.
The SBI 20 benchmark index was posting gains throughout the week, to close at 4,822.53
points on Friday, 29 October, up 23.36 points or 0.49 percent from the previous week.
All other major indices followed suit: the PIX investment fund index rose by 0.34 percent to
4,392.01 points, the IPT free market index jumped by 1.48 percent to 4,089.96 points and the
BIO bond index rose by 0.23 percent to 119.60 points.
The week's trading volume amounted to SIT 7.4bn (EUR 30.8m) in a total of 5,476 deals
struck. Block deals totalled SIT 4.5bn (EUR 18.7m), accounting for 60 percent of the
turnover.
The hottest share of the week was drug maker Krka, which turned over SIT 492.1m (EUR
2.05m). The share jumped by 2 percent over the week to stand at SIT 82,517 (EUR 344.1).
Also high in demand was port operator Luka Koper, which on 29 October reopened its office
in Belgrade, closed for more than a decade. Generating a turnover of SIT 338.1m (EUR
1.4m), the share remained flat at SIT 8,150 (EUR 33.9).
Other popular shares of the week were tyre maker Sava, grocer Mercator and hardware
retailer Merkur. The Merkur share jumped by as much as 4.6 percent to SIT 36,989 (EUR
154.2).
15
In the week's top news on the free market, Iskra Avtoelektrika, a manufacturer of electric
motors for the car industry, was floated on the market. The share climbed to SIT 12,100 (EUR
50.4) by the end of the trading week.
Foreign Exchange
Mean exchange rate of the Bank of Slovenia
Euro (EUR) - SIT 239.79 (-0.01)
U.S. dollar (USD) - SIT 188.00 (-1.83)
Swiss franc (CHF) - SIT 156.70 (+0.88)
British pound (GBP) - SIT 344.44 (-2.26)
16
BRANCH INFORMATION
Zrece and Lasko Declared Best Health Resorts
The awards were conferred at a ceremony in Lasko on 26 October by the Tourist Society of
Slovenia as part of their action dubbed "My Country - Beautiful and Hospitable"
Terme Zrece and Zdravilisce Lasko have won awards for Slovenia's best health resorts of
2003, the former among big and the latter among small-size resorts.
The awards were conferred at a ceremony in Lasko on Tuesday, 26 October by the Tourist
Society of Slovenia (TZS) as part of their action dubbed "My Country - Beautiful and
Hospitable".
Explaining its choice, the TZS highlights that Terme Zrece is a climatic health resort, situated
by the woods and in the vicinity of a lake and the ski resort Rogla.
Zrece profits from its convenient location and does not favour mass tourism, but pleasant
individual approach. Furthermore, it offers a range of culinary delights, including local
specialities.
Zdravilisce Lasko, declared best of the smaller health resorts, is celebrating its 150th
anniversary this year and has been especially focusing on spa tourism.
The environment in Lasko is well-preserved in spite of frequent mass events, such as the
popular Beer and Flowers festival. The spa also boasts modern equipment and professional
medical workers in its newly opened medical centre, the TZS justified its choice.
Organic Framers Call for Protection in Face of Spreading GMOs
A two-day symposium about organic farming and GMOs was held in Ljubljana
Genetically modified organisms (GMO) are the factor that will affect the future of organic
farming in Slovenia and elsewhere most profoundly. Organic farmers, who perceive GMOs as
something unacceptable, therefore demand an adequate legal protection. The call was made
by head of the Slovenian Organic Farmers' Association Boris Fras as he opened a two-day
symposium about organic farming and GMOs in Ljubljana on Thursday, 28 October.
"Organic farmers want protection. We would like to protect our farmers because we believe
the evolution processes in nature are bold enough in creating organisms we grow today so that
we need not interfere in their genetic structure," Fras said.
According to him, the spread of GMOs is the result of the desire for greater profits among big,
especially US corporations. The majority of consumers, as well as farmers do not want GMOs
as they are concerned about the safety of people and the environment, Fras said.
Slovenian organic farmers wish for protective legal mechanisms similar to those in the
Austrian province of Carinthia. "We wish the government to give us maximum protection,"
said Fras. He also called for making the Alps Adria region a GMO-free zone that would
become known for organic farming Europe-wide. He believes such a region would be very
successful in tourism.
The symposium has attracted some 120 participants from Slovenia, Austria, Italy and
elsewhere. They were also addressed by the head of the European Commission
Representation Office Erwan Fouere, who said that the reform of the common agriculture
policy would increase the importance of environmental aspects of farming.
This year, the European Commission has also passed an action plan for the development of
sustainable farming. According to Fouere, political programmes aimed at sustainable
development must go in the direction of meeting consumers' desire for safe and healthy food.
The Commission would therefore want consumers and farmers to have a genuine choice to
decide for or against GMOs. The introduction of a system of product traceability will make
17
this possible. Saying that, Fouere noted that specific regulations and measures for the
protection of organic farming were crafted at the level of states.
After the opening address, the symposium, organised by the Slovenian Organic Farmers'
Association and the Sustainable Development Institute, resumed its work by focusing on two
theme sections. One deals with biotic safety, coexistence and seed units, while in the
afternoon the participants will debate monitoring, labelling and impact of GMOs on the
environment and people's health.
The two-day symposium on organic farming concluded on Friday, 29 October that an analysis
of Slovenian agriculture land should be carried out in order to determine the so-called
ecologically sensitive areas where growing genetically modified organisms (GMO) should not
be permitted.
As Agriculture Minister Milan Pogacnik told the seminar, the government estimates that
measures enabling the coexistence of GMOs would be difficult to determine due to the
specificity of Slovenian farming areas.
The government therefore backed a proposal this year for the formation of GMO-free zones in
Slovenia. But according to Pogacnik, it is also necessary to draft a national legislative
framework for ensuring the coexistence of GMOs with conventional and organic farming.
The European Commission has stressed the key purpose of guidelines for the national
strategies in that field is the prevention of economic damage resulting from unintentional
mixing of GMOs with conventional and organic products.
Minister Pogacnik is convinced that the limit of coincidental presence of GMOs in the organic
and conventional seeds would have to be as low as possible for the benefit of Slovenia, who
in the long run aims towards more nature-friendly types of farming.
He also stressed that Slovenia has so far been careful in introducing GMOs into its agriculture
and is thus among the 10 new EU members that have not yet experimented with genetically
modified agricultural plants.
Government Adopts Spatial Planning Regulation
Slovenian government adopted a regulation on Slovenia's spatial order, a strategic spatial
planning document which sets out the fundamental regulations on the national, regional and
local level
The government on Thursday, 28 October adopted a regulation on Slovenia's spatial order, a
strategic spatial planning document which sets out the fundamental regulations on the
national, regional and local levels.
"This wraps up the comprehensive spatial planning reform," said Janez Kopac, the minister of
the environment, energy and spatial planning.
The regulation stipulates that municipalities must draft their own spatial development
strategies and spatial orders, which will define, for example, the look of facades and roofs.
The regulations will only apply to new buildings.
Kopac sees the document as a crucial framework for a uniform approach to the planning of
new neighbourhoods and housing developments, taking into account sustainable spatial
development.
The government also adopted the regulation on noise management, transposing the relevant
EU directive.
According to Kopac, member states will have to notify the European Commission by July
2005 about noise limit values, explaining their decisions and describing measures to achieve
the EU-set ceiling values.
The EU ordered member states to draw up noise reduction programmes for major airports,
roads and railroads by 2008, and for small localities by 2012.
18
European Engineering Industry Upbeat about Growth in 2005
Electronics and Electrical Engineering Association and the Metal Processing Association at
the Chamber of Commerce and Industry of Slovenia (CCIS) are full-fledged Orgalime
members from Slovenia
The European engineering industry is optimistic about growth this year and 2005, although
the market situation is not rosy, it was stressed at the annual assembly of Orgalime, the
European federation of national industry associations representing the European mechanical,
electrical, electronic and metal industries.
The association expects output to grow by 3.3 percent this year and 2.5 percent in 2005,
Orgalime chairman Paul van Roon told the press in Ljubljana, where the assembly took place.
Van Roon stressed that domestic demand is still weak, so growth is fuelled by solid exports.
Although the figures are upbeat, he noted that European companies still lag behind US and
Japanese corporations, which will see double-digit growth this year.
Orgalime is one of the oldest industry associations in Europe and one of the most powerful
lobbyists in Brussels. It unites 33 trade associations from 23 European countries representing
130,000 enterprises and 7.3 million employees.
Electronics and Electrical Engineering Association and the Metal Processing Association at
the Chamber of Commerce and Industry of Slovenia (CCIS) are full-fledged Orgalime
members from Slovenia.
Footwear Industry with Mixed Results in Q3
While Planika slid back into debt enforcement again, Peko has emerged out of the red after
an extensive restructuring process, and Alpina has consolidated its position as one of the
world's leading makers of ski boots after it moved production to low-cost countries
The Slovenian footwear industry has been battling crises and recessions for years, and the big
trio - Alpina, Planika and Peko - have had mixed results. While Planika slid back into debt
enforcement again, Peko has emerged out of the red after an extensive restructuring process,
and Alpina has consolidated its position as one of the world's leading makers of ski boots after
it moved production to low-cost countries.
Planika, based in the city of Kranj, was hit hard by adverse market conditions, but its
problems were further augmented by poor business decisions, past liabilities and excessive
investment into its own retail network.
It is unclear what state the state-owned company is currently in, yet unofficial figures suggest
it amassed a loss of SIT 1.2bn (EUR 5m) in the first months of the year, up against the 2003
end-year loss of less than 1 million euros.
This has prompted the supervisory board to oust chief executive Milan Banzelj last week. A
new, two-member, management has been appointed and tasked with financial restructuring.
Borut Kosir and Milivoj Samar have already sought debt enforcement at the Kranj District
Court.
The management is expected to urge the owners - the biggest one is the Slovenian Restitution
Fund (SOD) - for a capital injection at the assembly scheduled for 7 November. It also seems
certain that the current 785-strong workforce will be curbed.
The Trzic-based Peko is doing much better and posted a Q3 profit of SIT 55m (EUR 0.23m)
on revenues of SIT 3.1bn (EUR 12.9m). Peko chair Marta Gorjup Brejc says cost-cutting and
improved productivity are behind the solid results; in the Trzic facility, productivity is up 14
percent this year.
The Peko management does not anticipate any layoffs. The company currently employs 800
workers in Slovenia and 300 abroad, of which 477 work in its retail chain.
For Planika as well as Peko, Western Europe is the biggest export market, yet the two
companies have also invested heavily in the former Yugoslavia. Peko has a chain of 126
19
stores in Croatia, Bosnia-Herzegovina, and Serbia, where sales increased by 35 percent this
year.
The Peko chair sees the company's future in the expansion of its retail network and the
production of high-end footwear, as well as the strengthening of its own trademark.
The strong brand is perhaps the greatest asset of Alpina, which has grown to become one of
the world's largest makers of ski boots, in particular for cross-country skiing. The Ziri-based
company increased sales by 2 percent year-on-year in the first nine months, to SIT 8.2bn
(EUR 34.2m)
Profits are level at just under 1 million euros. After a harsh summer season made worse by
fierce competition, the end-year result will depend heavily on the winter season, Alpina chief
executive Andraz Kopac explained for STA.
Alpina made headlines this year as it closed down two production facilities and laid off 200
workers against widespread protest, shifting production to the low-cost Romania and BosniaHerzegovina. Alpina already employs 500 workers abroad.
This move was hard but necessary, said Kopac, as labour intensive industries do not have a
future in countries with high labour costs. In the near future, however, Alpina has no plans to
lay off in Slovenia, where it currently has 850 employees.
20
COMPANIES
Radenska Study Proves Beneficial Effects of Mineral Water
The R&D department at beverage produced Radenska has proved that drinking mineral water
has beneficial health effects
The R&D department at beverage produced Radenska has proved that drinking mineral water
has beneficial health effects. The ten-year study examined the health effects of the mineral
water Sicheldorfer - Josefquelle, which is pumped by Radenska in nearby Austria.
The findings are revealed in the doctorate of Majda Bagar, a researcher at Radenska, which
was presented on Wednesday, 27 October. Her research shows that drinking this particular
water helps those with iodine deficiency problems as well as people exposed to radiation.
Sicheldorfer - Josefquelle has three times the amount of iodine that typical mineral waters
have. It is easily absorbed and affects the overall health condition, according to the study.
An interesting finding is that drinking this water reduces the amount of radioactive iodine
accumulated in the thyroid gland to less than 10 percent. The recommended daily intake of
the Sicheldorfer - Josefquelle for an adult is 200 millilitres per day.
Pivovarna Lasko Back in the Race for Knjaz Milos
Although its first bid failed, it has made a renewed offer for the acquisition of a 30 percent
stake in Knjaz Milos
Brewer Pivovarna Lasko is back in the game to acquire a stake in Serbian mineral water
producer Knjaz Milos. Although its first bid failed, it has made a renewed offer for the
acquisition of a 30 percent stake in Knjaz Milos.
Lasko, which got a go-ahead from the Serbian securities market commission on Thursday, 28
October, refused to disclose the offered price, yet the Serbian press agency Beta reports that it
offered 18,000 dinars (EUR 239) per share, 25 euros more than in the first bid.
In line with Serbian law, the bidders can up their bid until 15 November. Lasko CEO Tone
Turnsek told STA that his company would give it their best to succeed with the offer.
In its first bid, Lasko offered 16,100 dinars (EUR 213.8) per share, yet FPP Balkan Limited,
the British investment fund, offered 22,000 dinars (EUR 228.4) per share and managed to
acquire 25 percent of Knjaz Milos from small shareholders.
The fund later on got the green light from the securities market commission to acquire an
additional 10 percent at a price of 22,000 dinars (EUR 292.2) per share.
The Serbian Agency for Privatisation later pooled the remaining shares (72 percent, including
the state's 42 percent stake) and decided to put them up for sale as a package. It wants at least
20,000 dinars (EUR 265.6) per share.
In addition to Lasko and FPP Balkan Limited, Knjaz Milos is also being eyed by Serbia's
most famous basketballer, Vlade Divac, and French food company Danone. The erstwhile
rivals formed a joint venture, Apurne.
Apurne published a takeover bid on 18 October, offering 17,500 dinars (EUR 232.4) per share
for a 50.1 percent stake. It is willing to pay an additional 2,500 dinars (EUR 33.2) within a
year if the company performs well.
Apurne's offer thereby opened the door for Lasko, as Serbian law determines that rival bids
can be filed until 1 November and upped until 15 November.
21
Sava's Profit in First Nine Months Better Than Expected
Sava, the Kranj-based group investing in the chemical and tourism industries, generated pretax profit of SIT 2.1bn (EUR 8.8m) in the first nine months of the year
Sava, the Kranj-based group investing in the chemical and tourism industries, generated pretax profit of SIT 2.1bn (EUR 8.8m) in the first nine months of the year, which is an almost 50
percent increase year-on-year and 4 percent above the target figures, according to the group's
press release.
The management expects positive growth trends to continue in the last quarter as well, so that
Sava's business plans are to be reached if not surpassed, Sava said.
Sava subsidiaries generated SIT 42.3bn (EUR 176.3m) of sales revenues in the first nine
months, a 7-percent increase year-on-year in real terms, according to a management report
presented to the supervisors on Thursday, 28 October.
The subsidiaries posted SIT 1.8bn (EUR 7.5m) of pre-tax profit, which is by SIT 146m (EUR
0.6) better than anticipated and SIT 990m (EUR 4.1m) more than in the same period last year.
Most of the profit was recorded in the rubber and tourism industries.
Broadcaster and Telcos Sign EMR Code of Best Practice
The code, drawn up at the initiative of the Information Society Ministry, was signed by
Mobitel chief exec Anton Majzelj, Simobil chairman Zoran Thaler, Vega chief Julien
Coustaury, RTV SLovenija director general Aleks Stakul and member of the Telekom board
Dusan Mitic
Representatives of mobile operators Mobitel, Simobil and Vega, the telco utility Telekom
Slovenije and national broadcaster RTV Slovenija signed on Friday, 29 October a code of best
practice on the management of sources of electromagnetic radiation (EMR).
The code is a supplement to existing legislation and includes recommendations for dialogue
with local communities and the public. It is binding in requesting that the operators take into
account the aesthetic aspect of EMR sources, especially near schools, kindergartens and
hospitals.
In addition, the signatories pledged to promote research in this field, taking into account the
research priorities of the World Health Organisation and the European Commission.
Moreover, they are expected to share with the interested parties the assessments and results of
measurements.
The code, drawn up at the initiative of the Information Society Ministry, was signed by
Mobitel chief exec Anton Majzelj, Simobil chairman Zoran Thaler, Vega chief Julien
Coustaury, RTV Slovenija director general Aleks Stakul and member of the Telekom board
Dusan Mitic.
The mobile operators especially created conflicting situations in the past as local communities
frequently opposed the locations they chose for base stations.
Luka Koper Opens Office in Belgrade
Until 1990 Serbia had a 15 percent share in the transhipment of Luka Koper
The manager of the only Slovenian port has opened its office in Belgrade in what marks Luka
Koper's symbolic return to this market after the renewal of political and business ties between
Slovenia and Serbia-Montenegro in the aftermath of the Balkan conflicts in the early 1990s.
Luka Koper had its representative office in Belgrade in the early 1960s, which operated
successfully until the break-up of the former Yugoslavia, when it was closed down.
The re-opening of the office was required by the renewal of political and economic
cooperation between Slovenia and Serbia-Montenegro, and the reform process in Serbia, Luka
Koper deputy general manager Vitomir Mavric said at the reception in Belgrade.
22
Until 1990 Serbia had a 15 percent share in the transhipment of Luka Koper, while the share
was down to 1 percent or 106,615 tonnes last year. The bulk of goods was shipped in
containers (60,000 tonnes), followed by general cargo. Only 3,400 cars and 1,970 tonnes of
bulk cargo came from Koper for Serbia last year.
Luka Koper management nevertheless believes Serbia's market is very interesting, regardless
of the Montenegrin port Bar, which it claims currently cannot compete with the Slovenian
port in terms of the reliability and quality of services.
The port of Koper operator also hopes to profit from a regular freight rail service recently
launched between Belgrade and Ljubljana. Under the contract signed between Slovenian
Railways and its Serb partner, the Sava Express freight train will operate between the Serb
and the Slovenian capital once, and later three times a week.
The reception on the opening of the Luka Koper office in Belgrade was attended by some 100
Serb business executives, as well as economic advisor to the Slovenian Embassy in Belgrade
Bojan Mikec and head of the Slovenian Chamber of Commerce and Industry office in
Belgrade Dmitar Polovina.
On the occasion, the Slovenian company outlined its development since Slovenia became
independent in 1991. The overall economic zone operated by Luka Koper stretches over an
area of more than 4.7 million square metres, with wharfs in the length 2,636 metres and
28,000 metres of rail tracks. The overall open storage area covers 820,000 square metres,
while the reservoirs have the capacity of 49,000 cubic metres of fuel and silos can store up to
81,000 tonnes of agricultural products.
Gorenje Optimistic Despite Multitude of Adverse Conditions
Gorenje plans to sell 165,000 appliances in Slovenia this year, taking a 60 percent market
share; worldwide, it expects to sell 3 million appliances this year
Household appliance maker Gorenje is optimistic about its sales for this year, although the
global markets are far from favourable in 2004. Gorenje hopes to outperform its major rivals.
Describing the difficult business environment this year, Gorenje CEO Franjo Bobinac told the
press on Friday, 29 October that competition got fiercer this year, the US dollar slipped, and
so sales are increasingly concentrated on Europe, while oil and raw material prices have
soared.
Gorenje as well as its competitors are therefore facing extensive problems and some of the
biggest rivals have issued profit warnings. Moreover, the markets have not recovered yet,
especially Germany.
Despite this, Gorenje is pleased and has beefed up market shares. Bobinac refused to disclose
the figures, saying that concrete numbers will be clear after the supervisory board session
scheduled for 19 November.
"I cannot provide an estimate about the end-year result as yet. I'm confident that it will be
better than for most of our rivals," he stressed.
Gorenje also unveiled a new line of washing and drying machines. According to Bobinac,
Gorenje might have overtaken the competition in several fields with the new products.
The appliances are equipped with sensors and thereby save energy, water and detergents. The
maximum load is six kilo of dry laundry, which is washed at up to 2,000 revolutions per
minute.
Bobinac noted that household appliances remain the company's core activity, as they generate
80 percent of the total sales. Since this is a mature market, cost-cutting and innovation are the
key to success, he said.
Gorenje plans to sell 165,000 appliances in Slovenia this year, taking a 60 percent market
share; worldwide, it expects to sell 3 million appliances this year.
The company exports 93 percent of the output and has a 4 percent market share in Europe.
23
Publisher Delo Sees Sales Soar, Profit Level
Delo, best known as the publisher of Slovenia's leading broadsheet, the daily Delo, posted
sales of SIT 10.2bn (EUR 42.5m) for the first nine months of the year, up 20.3 percent over
the same period last year
Delo, best known as the publisher of Slovenia's leading broadsheet, the daily Delo, posted
sales of SIT 10.2bn (EUR 42.5m) for the first nine months of the year, up 20.3 percent over
the same period last year.
Net profit increased only marginally to SIT 709m (EUR 3m), with net profit per share at SIT
1,062 (EUR 4.42), the company said in a news release.
According to Delo CEO Tomaz Perovic, the high revenue growth is mainly a result of new
projects, notably the publication of a series of novels on sale each week alongside the daily.
Delo closed level at SIT 28,989 (EUR 120.89) on the Ljubljana Stock Exchange on Friday, 29
October.
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SLOVENIA IN BRIEF
Alojz Uran Appointed New Ljubljana Archbishop
The Pope appointed Ljubljana Auxiliary Bishop Alojz Uran the new Ljubljana archbishop and
Slovenian metropolitan on Monday, 25 October. The 59-year-old Uran is the sixth Ljubljana
archbishop and Slovenia's fifth metropolitan, succeeding Franc Rode, who left for a top office
in the Vatican in April.
Slovenian Travellers to US Must Have Machine Readable Passports
Citizens of 27 mostly European countries who are part of the US visa waiver programme,
including Slovenia, will only be allowed to the US as of Tuesday, 26 October if they have
machine readable passports, the Department of Homeland Security has announced. The visa
waiver programme applies to those travelling on business or as tourists for up to 90 days.
Slovenians should have no major problems as the passports are equipped with machine
readable features.
Mobitel to Take Legal Action over Mobikos
Slovenian wireless operator Mobitel announced its plan on Tuesday, 26 October to take legal
action to protect its interests in Kosovo after the UN civil administration (UNMIK) annulled
the tender for Kosovo's second mobile phone company, won by a local consortium affiliated
with Mobitel.
Mobile Operator Vega Sues the State for EUR 174m
Vega, Slovenia's third largest mobile operator, has filed a EUR 174m damage lawsuit against
Slovenia, alleging that the state and its regulators have failed to enforce and protect
competition on the mobile telecommunications market.
Bratislava and Ljubljana Mayors Discuss Cooperation
Transport, housing and funding topped the agenda as the visiting Mayor of Bratislava Andrej
Durkovsky met his Ljubljana counterpart Danica Simsic on Tuesday, 26 October. Durkovsky
also met Foreign Minister Ivo Vajgl, discussing international cooperation.
Interbrew Takes Case against Slovenia to World Bank
The Belgium-based brewer Interbrew has started legal proceedings against Slovenia at the
World Bank's International Centre for Settlement of Investment Disputes (ICSID) over its
Pivovarna Union takeover bid, a paper Finance wrote on Wednesday, 27 October.
Government to Send Fresh Humanitarian Aid to Darfur
The government took a decision on Thursday, 28 October to send fresh humanitarian aid to
the Sudanese province of Darfur, with the funds of SIT 3m (USD 15,000) to be managed by
UNICEF.
39th Borstnik Theatre Festival Awards
"Remembrance of Things Past", a play written by Marcel Proust and adapted by Harold Pinter
and Di Trevis, was conferred the award for overall best theatre production of the 39th
Borstnik Festival. The play was directed by prominent Slovenian director Dusan Jovanovic
and produced by the Ljubljana National Theatre Drama, Slovenia's leading theatre company.
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Frankfurt after Frankfurt to Feature 10,000 Books
The 18th annual show of foreign literature "Frankfurt after Frankfurt" is to be held at the
Ljubljana arts and congress centre Cankarjev dom from 4 through 9 November. The book fair,
organised by Konzorcij, a leading bookstore in the Slovenian capital, is to feature some
10,000 publications that had been exhibited at the Frankfurt Book Fair in October.
Two Slovenians in the EESC Presidency
Two Slovenian representatives have been elected in the 37-member presidency of the
European Economic and Social Committee (EESC) for a two-year term in office. Director of
the Cooperatives Association Martin Nose and the executive secretary of the Association of
Free Trade Unions Metka Roksandic were elected at the EESC plenary session which
wrapped up on Thursday, 28 October, according to Cooperatives Association.
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