Slovenia Business Week no. 47, October 15th, 2004
Table of Contents:
HEADLINES ............................................................................................................................. 3
SDS Leader Jansa Receives Mandate to Form Government .................................................. 3
Strong Business Delegation Visiting China ........................................................................... 3
Entrepreneurs Pleased with Major Improvements in Ten Years ............................................ 4
INTERNATIONAL COOPERATION ...................................................................................... 5
Speaker Cukjati Receives Croatian Ambassador ................................................................... 5
CEI Summit to Discuss the Initiative's Role in Europe ......................................................... 5
Finance Experts Examine Slovenia's Budget Planning .......................................................... 5
EUROPEAN UNION ................................................................................................................. 7
EU Needs Translators, Recruitment Campaign to Be Launched ........................................... 7
Commission Says Careful Preparations Key to Successful Euro Adoption .......................... 7
Slovenia Sticks to Its Bid for EU Border Agency .................................................................. 8
Stokelj Says Slovenia Willing to Preside over EU in 2008 ................................................... 8
Slovenia Outlines National Employment Programme in Brussels ....................................... 10
Slovenia Rushes to Compensate for Shortage of Translators .............................................. 10
LEGISLATION ........................................................................................................................ 12
Government Amends Companies Act to Introduce International Accounting Standards ... 12
STATISTICS/FORECASTS .................................................................................................... 13
Statistics Days Focuses on Globalisation ............................................................................. 13
Factory-Gate Prices Up 0.3% in October ............................................................................. 13
Slovenia's 2003 Unemployment at 6.7%, According to Eurostat ........................................ 13
September Export-Import Ratio at 95.6% ............................................................................ 14
Business Sentiment Strong, Except in Construction ............................................................ 14
FINANCE................................................................................................................................. 15
Trade Unions Call on Employers to Pay Christmas Bonus ................................................. 15
Petrol Cheaper as of 9 November ........................................................................................ 15
Bank of Slovenia Enters STEP2........................................................................................... 15
Banka Koper Exceeds Half-Year Plans ............................................................................... 16
Austrian Regional Bank Opens Branch Office in Ljubljana ................................................ 16
Abanka Sees Profit Soar by 27% but Falls Short of Forecasts ............................................ 17
NLB Streamlines IT Infrastructure....................................................................................... 17
Slovenia Must Tighten Belt as Euro Grows Stronger .......................................................... 17
Banks Brace for Euro and Basel 2 ....................................................................................... 18
Ljubljana Stock Exchange .................................................................................................... 19
Foreign Exchange ................................................................................................................. 19
REGIONAL INFORMATION ................................................................................................ 20
Trbovlje Closing Down Mines and Looking for New Opportunities .................................. 20
BRANCH INFORMATION .................................................................................................... 21
Peugeot 307 CC Would Be Ladies' Choice .......................................................................... 21
Outsourcing Prospects Compound Fears of Further Layoffs ............................................... 21
Chamber of Trade Expects Better Conditions for Small Business ...................................... 22
Slovenia Becomes Top Holiday Destination for Britons ..................................................... 23
COMPANIES ........................................................................................................................... 24
Autocommerce First Ferrari and Maserati Car Dealer in Slovenia ...................................... 24
Droga and Kolinska Promise Huge Synergy Effects of Their Merger................................. 24
Istrabenz to Take Over Kolinska in Major Deal .................................................................. 25
Profit Down for Mercator in First Nine Months .................................................................. 25
Zavarovalnica Triglav CEO Wants to Keep State as Major Owner .................................... 26
Mobitel to Cut Prices of Calls to Other Networks in December .......................................... 27
Kolinska Bid to Spur Consolidation of Food Industry ......................................................... 27
Zito Posts Lackluster Sales but Solid Profit ......................................................................... 28
Hit Acquires 85% of Hotel Chain Kompas hoteli ................................................................ 28
Clothes Maker Mura to Post EUR 417,000 of Loss This Year ............................................ 29
Aerodrom Ljubljana Beats Profit Target .............................................................................. 29
50 Years of the Port of Koper Enclosed in a Book .............................................................. 30
Planika Management Seeks Bankruptcy Protection ............................................................. 30
Terme Catez Gearing Up for Biggest Slovenian Investment in Serbia ................................ 31
Intereuropa Reports Net Profit of EUR 11.7M .................................................................... 31
Autocommerce Acquires Adria Mobil ................................................................................. 31
Tax Regulations Prompt Mercator Management to Offload Shares .................................... 32
SLOVENIA IN BRIEF ............................................................................................................ 33
Slovenia Wants OSCE to Pay More Attention to Demographic Issues ............................... 33
Anton Turk Becomes Slovenia's Representative at NATO ACO ........................................ 33
Bohinc Says EU Should Strengthen Its Integration Policy Ambitions ................................ 33
Small Businesses Sign Wage Annex to Collective Agreement ........................................... 33
Prospective EU Presidency to Be Discussed by Parliament ................................................ 33
Cebulj Takes Over as Constitutional Court President .......................................................... 33
Transport Conference Seeks to Connect Theory and Practice ............................................. 33
Head of Office for Slovenians Abroad Visits Croatia.......................................................... 34
Debt-Ridden Textile Company to File for Bankruptcy ........................................................ 34
Slovenia Plans to Enter Schengen Group by 2007 ............................................................... 34
Slovenia, Macedonia Army Officials Discuss Forms of Cooperation ................................. 34
2
HEADLINES
SDS Leader Jansa Receives Mandate to Form Government
Jansa must form government in 15 days
Janez Jansa, the leader of the centre-right Slovenian Democrats (SDS), has been given the
mandate by parliament to form a new government. He won the nomination with 57 votes for
and 27 against. "The real work is only just beginning," he told the press.
Jansa expects that the government will be elected by the end of November, after the coalition
agreement is signed. Talks about the content of the coalition agreement "have come quite far",
he noted on Tuesday, 9 November.
The Jansa-led government would be Slovenia's eighth since the first multi-party elections
were held in 1990; it would be the first since the country joined the EU earlier this year.
After he was elected prime minister-designate, Janez Jansa now has up to two weeks to form a
new government. The parliament will take a vote on the new ministerial lineup as a whole
after each candidate undergoes a hearing in the relevant parliamentary body.
Jansa must present to the speaker of parliament a list of cabinet members along with an
explanation for their nomination within 15 days, according to the parliament's standing orders.
The ministerial candidates then undergo hearings in relevant parliamentary bodies, whose
chairs must submit an evaluation of the candidates to the parliament speaker and the prime
minister-designate within 48 hours of the hearing.
The prime minister-designate can replace a candidate up to three days after the hearing.
The parliament then takes a vote on the cabinet lineup as a whole. If the government is
appointed, the ministers are sworn in.
On the same day, state secretaries must offer their resignation to the new ministers. As the
new ministers are sworn in, a provision of the state administration act will come into force
whereby each ministry will only have one state secretary.
The law was passed by parliament in 2002 as part of a reform of the state administration. It
was designed to gradually separate "political offices", such as ministers and state secretaries,
from those held by professional civil servants.
If the list of ministerial candidates submitted by the prime minister-designate is found to be
incomplete and if the prime minister-designate fails to amend it within the set deadline, the
parliament can take a vote only on the ministers whose nomination has been complete if they
account for more than two thirds of the cabinet.
In that case, the prime-minister designate has to nominate the rest of the cabinet members
within ten days after the government is appointed.
Strong Business Delegation Visiting China
Some 50 business officials, mainly coming from small and medium-size companies, are
visiting Shanghai, Xiamen and Hong Kong during their stay in China
Representatives of almost 40 Slovenian companies began a one-week visit to China on
Wednesday, 10 November in what is the biggest Slovenian business delegation to this Asian
country so far.
Some 50 business officials, mainly coming from small and medium-size companies, will visit
Shanghai, Xiamen and Hong Kong during their stay in China. The delegation is led by Jozko
Cuk, the president of the Chamber of Commerce and Industry of Slovenia (CCIS).
The CCIS wrote in its press release that Slovenian companies are increasingly interested in
trading with China, which is reflected in the mounting bilateral trade and increasing number
of branch offices opening.
3
Currently, Slovenian companies have three joint ventures in China, one co-owned by supplier
of starter motors and generators Avtoelektrika and two by producer of commutators Kolektor.
One company, Sinoslo Technology, is in 100-percent Slovenian ownership, while 12
companies (Genshipping Pacific line, Hammax Trading, Iskraemeco, Kovinoplastika Loz,
Lek, Marka, Prevent, Engrotus, Zlati Mandarin, Zivex, Riko, Etol) hold their branch offices in
China.
The trade between Slovenia and China amounted to US$ 360.3m last year, rising from US$
246.9m in 2002. Totalling US$ 330.2m, Slovenia's imports accounted for most of the 2003
figure. Slovenia's trade with Hong Kong stood at US$ 23.9m last year.
Entrepreneurs Pleased with Major Improvements in Ten Years
The Slovenian Association of Entrepreneurs at the Chamber of Commerce and Industry of
Slovenia celebrates its 10th anniversary
As the Slovenian Association of Entrepreneurs at the Chamber of Commerce and Industry of
Slovenia celebrates its 10th anniversary, its president Marta Turk told a ceremony on
Wednesday, 10 November that the situation of small-sized companies has improved
considerably over the past decade.
Ten years ago, small companies had hardly any access to financial sources and loans were
expensive. In recent years though, banks changed their attitude towards entrepreneurs and the
government set up the Small Business Development Fund, according to Turk.
In other encouraging trends highlighted by Turk, rare small companies were using e-mail six
years ago, while practically all companies are using it now and have their own website, many
of them in English.
Moreover, according to Turk, small companies have started to enter foreign markets, are
joining international clusters and are looking for joint ventures on foreign markets.
While the Slovenian Chamber of Commerce and Industry numbered 28,000 member
companies in 1994, the figure stands at 50,000 this year.
As to the future goals of the association, Turk said that the association needs a representative
in Brussels, who would be tasked with lobbying and providing information to entrepreneurs.
Also attending the ceremony, Erwan Fouere, head of the European Commission
representation office in Slovenia, highlighted that entrepreneurs should make more profit of
the country's geographical position, which represents a passage to Southeastern Europe.
He also advised the entrepreneurs to create new jobs in the parts of the country with a high
unemployment rate, and called on the government to cut the red tape in the small business
legislation.
4
INTERNATIONAL COOPERATION
Speaker Cukjati Receives Croatian Ambassador
The pair called for dialogue and solutions that are acceptable to both countries
Parliament Speaker France Cukjati held talks with Croatian Ambassador to Slovenia Mario
Nobilo on Thursday, 11 November. The pair called for dialogue and solutions that are
acceptable to both countries.
Open issues need to be resolved, yet not under pressure from the public but rather within
expert groups, Cukjati and Nobilo agreed according to a National Assembly press release.
Nobilo told Cukjati that Slovenia is very important for Croatia. It is a link with European
institutions and the events in the EU, as well as a mediator of experience in EU accession, he
stressed.
CEI Summit to Discuss the Initiative's Role in Europe
The annual summit of the Central European Initiative (CEI), scheduled for 25 November, will
focus on the initiative's role in the enlarged EU and new cooperation prospects
The annual summit of the Central European Initiative (CEI), scheduled for 25 November, will
focus on the initiative's role in the enlarged EU and new cooperation prospects, the CEI
executive secretariat said on Thursday, 11 November.
The summit t will be accompanied by a meeting of the 7th Economic Forum and a conference
of the Youth Forum, the CEI director general Harald Kreid said in a news release.
The Economic Forum, a platform for business exchange, is expected to feature over 600
mostly businessmen and financiers. A round-table debate will be organised about boosting
economic growth through industrial policy.
Meanwhile, the concurrent Youth Forum will focus on youth mobility and gaining work
experience through voluntary work.
The CEI associates a total of 17 countries, namely Albania, Austria, Belarus, BosniaHerzegovina, Bulgaria, the Czech Republic, Croatia, Italy, Hungary, Macedonia, Moldova,
Poland, Romania, Slovakia, Slovenia, Serbia-Montenegro and Ukraine. Slovenia, which this
year presides over the CEI, has been a full member since 1992.
As the current CEI president, Slovenia has been making efforts to direct the initiative's
attention to those CEI members that have been left outside the EU after the last round of
enlargement.
Finance Experts Examine Slovenia's Budget Planning
Slovenia's budget planning was presented to budget experts from Central, Eastern and
Southeastern Europe at a conference organised by the Organisation for Economic
Cooperation and Development (OECD)
Slovenia's budget planning was presented to budget experts from Central, Eastern and
Southeastern Europe at a conference organised by the Organisation for Economic Cooperation
and Development (OECD).
In what was the first meeting of its kind, the budget was presented by OECD experts on
Wednesday, 10 November, while representatives of the Slovenian Finance Ministry provided
more detailed explanations on Thursday, 11 November, Finance Minister Dusan Mramor told
STA.
According to Mramor, the participants were particularly interested in the mechanism of twoyear budget planning and the information system needed for that. The responses to Slovenian
budget planning were very favourable and many questions were asked, he stressed.
5
Minister Mramor also met with his Dutch counterpart Gerrit Zalm, seeking Dutch support in
Slovenia's efforts to join the OECD.
6
EUROPEAN UNION
EU Needs Translators, Recruitment Campaign to Be Launched
Lithuanian, Latvian, Maltese and Slovenian languages presents the biggest challenge
The European Commission has, the European Voice reports, failed to hire enough translators
after the EU has recently expanded by ten countries and the number of official languages has
increased from 11 to 20. Only 189 translators have so far been recruited from the ten new
members, which is well under the required 455.
Karl-Johan Lonnroth, director general for the Commission's translation services, told the latest
edition of the weekly that the Lithuanian, Latvian, Maltese and Slovenian languages presented
the biggest challenge. So far, there are only between 13 to 18 translators for each of these
languages, when the target figure is 50 to 55.
However, the Commission has been more successful in recruiting translators from the other
five new EU official languages, for which there are about 130 translators. But this figure still
falls short of the number of translators for the EU's original 11 official languages for which
there are 90 to 150 translators per language.
To cope with the problem, the Commission is planning to mount a large-scale recruitment
campaign, particularly in Lithuania, Latvia, Slovenia and Malta to recruit the target number of
translators by 1 January, the European Voice reports.
"We will be sending out teams of recruiters to these countries and will also ask member states
and universities to help us find suitable candidates," Lonnroth told the weekly.
Translators of the European Commission, who are based in Brussels and Luxembourg, will
translate an estimated 1.6 million pages of text this year.
Commission Says Careful Preparations Key to Successful Euro Adoption
The European Commission issued its first report on the state of practical preparations for the
euro in the new member states
The European Commission issued its first report on the state of practical preparations for the
euro in the new member states on Wednesday, 10 November. The report highlights that
careful and timely practical preparations are of key importance for a smooth and successful
introduction of the common European currency.
The Commission has advised the ten new members a swift transition from the national to the
European currency, and a short period of dual circulation during which banknotes and coins
denominated in both euro and national currency have legal tender status.
Most of the new member states, which wish to adopt the euro between 2007 and 2010, have
already decided on a swift transition, which is termed a "big bang" approach.
Slovenia, too, prefers the big bang approach, as it plans to enter the eurozone and at the same
time introduce euro banknotes and coins on 1 January 2007. It also opted for a short period of
dual circulation, which is to last only two weeks, the Commission says in the report.
The competition for the design on the reverse side of euro coins has already been launched in
Slovenia, the Commission observes.
The report also notes that Slovenia, along with Estonia and Lithuania on 28 June entered the
Exchange Rate Mechanism II (ERM II), a two-year grooming phase for the euro. As a
consequence the three countries are closest to introducing the euro.
The Commission does not assess practical preparations in the new member states in the
report, but rather gives advice on the base of experience from the 2002 changeover.
The Commission favours the big bang approach and proposes measures to be taken to avoid
any impact on prices. The proposal comes after results of a Eurobarometer, polling 10,000
7
citizens of ten new member states in September, show that the citizens' awareness of this issue
is already high. The risk of abuse and cheating on prices during the changeover is a key
concern for 71 percent of the respondents, the report highlights.
Future changeovers are expected to be more smooth than that in 2002, also because citizens in
the new member states are already familiar with euro banknotes and coins. The Slovenians
have taken the lead according to the latest Eurobarometer, since as many as 95 percent have
already seen euro banknotes and 81 percent have already used them.
The European Commission will continue to monitor practical preparations for the introduction
of the euro in new member states and issue reports about the state of preparations at least once
a year.
Slovenia Sticks to Its Bid for EU Border Agency
The border agency will be the first EU institution of the kind that will be seated in a new
member state
Slovenia sticks to its bid for the seat of the EU external border agency. This is what Slovenia's
Ambassador to the EU Ciril Stokelj said at a meeting with Dutch EU presidency officials in
Brussels on Thursday, 11 November.
"Slovenia insists on the candidacy; speaking in favour of that are strategic and geopolitical
situation of the country, the vicinity of the external EU border and the processes of potential
further enlargement," Stokelj told the press after the meeting.
The ambassador stressed that Slovenia can offer adequate premises for the agency's seat,
saying that the same goes for information infrastructure.
The issue was discussed at an informal bilateral consultation with the Dutch presidency held
to discuss the EU Council presidencies after 2007.
The Dutch presidency would like to see a final decision on the agency's seat made by the end
of the year, likely at the December EU summit in Brussels.
The agency for the management of the EU external border is to be launched in May 2005.
Competing for its seat are Slovenia, Poland, Hungary, Estonia and Malta.
Interior Minister Rado Bohinc told STA on Wednesday, 10 November, that Slovenia's bid
was supported by several member states.
The border agency will be the first EU institution of the kind that will be seated in a new
member state. The agency will coordinate border control activities and is to help improve the
control at external EU borders.
Stokelj Says Slovenia Willing to Preside over EU in 2008
Under the proposal, Slovenia is to join Germany and Portugal as the presiding EU members
in 2007, when 18-month team presidencies will replace the current rotating six-month
chairmanships of the EU Council
Slovenia has accepted the proposal of the current Dutch EU presidency to be part of the first
troika to preside over the EU in 2008. Slovenia's Ambassador to the EU Ciril Stokelj made the
announcement on Thursday, 11 November, following an informal bilateral consultation with
the Dutch presidency.
Under the proposal, Slovenia is to join Germany and Portugal as the presiding EU members in
2007, when 18-month team presidencies will replace the current rotating six-month
chairmanships of the EU Council. The country would be the last of the three to preside over
the EU, in the first six months of 2008.
"Following Foreign Minister Ivo Vajgl's instructions, I gave the presidency the very clear
answer that we do accept the proposal. In line with the decision by the collegiate body of the
speaker of parliament on 10 November, the final and formal decision will be adopted by
parliament, most likely towards the end of next week," Stokelj said.
8
The collegiate body, which comprises the speaker and the heads of parliamentary factions,
opted in favour of the proposal Wednesday, 10 November. However, the National Assembly
must take a formal decision, Stokelj said. According to him, the proposal is backed by both
the outgoing government of Anton Rop and also the incoming Prime Minister Janez Jansa.
Ambassador Stokelj said he also told the Dutch presidency that Slovenia felt honoured to be
chosen as a member of the first troika. This is a great acknowledgment for Slovenia, as it
means the EU considers the newcomer fit to take up the challenge of presidency after just a
few years, Stokelj said.
"The country is aware of the huge responsibility and substantial financial challenge that this
entails, as well as the need for thoroughly prepared staff," Stokelj said. As proof that Slovenia
is up to the task, he pointed to the country's experiences as a non-permanent member of the
United Nations Security Council, as the current president of the Central European Initiative
and as the 2005 chair of the Organisation for Security and Cooperation in Europe.
Slovenia was the last among the EU member states to hold informal consultations on the topic
of the troikas with the Dutch presidency. According to Stokelj, the presidency will officially
draw up a proposed list of troikas to preside over the EU from 2007 until 2020 next week. By
2020, all of the EU member states, including Bulgaria and Romania (due to join the EU in
2007), will have had a turn at the head of the EU.
Stokelj does not expect any changes to be made to the current draft of the proposed list as
regards Slovenia, though he would not rule out the possibility of changes affecting other
countries. Some member states expressed certain wishes in the consultations which might be
taken into account in the final draft.
The final proposed list could be reviewed as early as next week by the EU's Permanent
Representatives Committee (COREPER). A final decision will be taken on the basis of that
committee's recommendation. According to the Dutch presidency's plan, this could happen as
early as December, during the EU summit.
The troikas are part of changes to the presidency of the Council that will be introduced in
2007, according to the EU constitution. The system of the six-month rotating presidency will
be phased out, a new post of EU Council president will be established and a three-member
joint presidency will be introduced for all but the foreign affairs council, which will be headed
by the EU foreign minister.
The constitution itself does not describe the joint presidency in detail, but a supplementary
declaration stipulates that each troika will be in charge of the Council for an 18-month period.
The composition of each troika will be determined on the principle of equal rotation, taking
into account the diversity and geographical balance of the EU.
Each member of the troika will have six months to preside over the all configurations of the
Council, with the exception of that for foreign affairs. The other two troika members will
provide assistance to the third. However, the troikas do have the option of "alternative
solutions," since the supplementary declaration's guidelines are not binding.
In fact, Slovenia would rather the troika members to divide up the various configurations of
the Council and take charge of them for the full 18 months. However, it seems that Germany
and Portugal prefer the solution envisaged in the supplementary declaration, i.e., one half-year
presidency over all configurations of the Council.
According to the Dutch presidency's current draft proposal, the troika of Germany, Portugal
and Slovenia is to be followed by: France, the Czech Republic and Sweden (2008-2009);
Spain, Estonia and Belgium (2010-2011); Poland, Denmark and Cyprus (2011-2012); Ireland,
Latvia and Greece (2013-2014); Italy, Slovakia and Luxembourg (2014-2015); the
Netherlands, Malta and Hungary (2016-2017); the UK, Lithuania and Bulgaria (2017-2018);
and Austria, Romania and Finland (2019-2020).
9
The Dutch presidency has also envisaged the possibility that the constitution will not be
ratified in all of the EU member states, and therefore will not enter into force on 1 November
2006 as expected. In that case, the countries would probably continue to rotate the presidency
in the current manner using the same sequencing of countries as in the troika scheme,
diplomatic sources say.
Slovenia Outlines National Employment Programme in Brussels
Each member of the EU must present its national programme for the following year to
Brussels until 1 October
Slovenia successfully presented its national action programme of employment for 2004 to the
relevant committee of the Council of the EU in Brussels on Wednesday, 10 November. The
officials established the country had achieved many goals of the European employment
strategy, according to the Ministry of Labour, Family and Social Affairs.
Among the achievements, they placed special emphasis on the above average employment of
women and the low unemployment in Slovenia, the ministry stated in a press release.
The programme was accepted as a good foundation for the implementation of policies in the
following year, and also for drawing funds from the European Social Fund, the ministry said.
The European employment strategy is an important part of the Lisbon strategy, according to
which the Union is to become the most competitive economy in the world, based on
knowledge, until 2010. In order to achieve this, the EU would have to substantially increase
the level of employment.
Each member of the EU must present its national programme for the following year to
Brussels until 1 October. The programme serves as the basis for the implementation of
policies of the European employment strategy in each member state.
Slovenia Rushes to Compensate for Shortage of Translators
The European Commission has recently warned that it failed to recruit a sufficient number of
translators for four new official languages, including Slovenian, which could cause serious
delays in the translation of new legislation
The European Commission has recently warned that it failed to recruit a sufficient number of
translators for four new official languages, including Slovenian, which could cause serious
delays in the translation of new legislation. Part of the gap will be filled by freelancers, but the
government also intents to help out: government employees with experience in translating and
editing will be sent to Brussels.
Lithuanian, Latvian, Maltese and Slovenian are said to present the biggest challenge. So far,
only between 13 to 18 translators have managed to pass the rigorous tests for each of these
languages, when the target figure is 50 to 55. All in all, only 189 translators have so far been
recruited from the ten new members, which is well under the target figure of 455.
The Government Office for European Affairs (SVEZ) has stepped in to help: experienced
officials, so far working as government translators or lawyer-linguists, will be sent to help out
as part of what is called the "national experts scheme". SVEZ told STA that the formal
conditions have been met and the names of the candidates will be sent to Brussels by 15
November.
The candidates will first have to pass tests drawn up by SVEZ, while the final selection will
be made by the Commission's Directorate General for Translation, which will select ten
experts that will be assigned to their new posts in early 2005. They will sign one-year
contracts with the option of extension to up to four years.
SVEZ acknowledges that the departure of ten experts will create a gap at home, but insists
that this is crucial for the country. They are convinced the new translators will improve the
10
quality of translations in a period when translating services of the ten EU newcomers are only
starting to take shape.
The European Commission will also join the effort: it is planning to mount a large-scale
recruitment campaign, particularly in Lithuania, Latvia, Slovenia and Malta, to recruit the
target number of translators by 1 January, the European Voice has reported. This year alone,
European Commission translators are expected to translate 1.6 million pages of documents.
11
LEGISLATION
Government Amends Companies Act to Introduce International Accounting Standards
According to Dusan Psenicnik, a counsel at the Economics Ministry, the amendments must be
enacted quickly so that international accounting standards can enter into force in 2005
The government has confirmed draft amendments to the companies’ act, which will
implement international accounting standards in Slovenia and provide the legal framework for
the supranational type of incorporation, the EU-designed Societas Europaea.
According to Dusan Psenicnik, a counsel at the Economics Ministry, the amendments must be
enacted quickly so that international accounting standards can enter into force in 2005.
The proposed amendments include new regulations on valuation, especially of fair value.
There are also provisions lifting the thresholds for the separation of small, medium and large
companies for accounting purposes.
The introduction of international accounting standards means that listed companies will be
obliged to compile consolidated annual reports, Psenicnik explained. While this will be
optional for non-listed companies, banks and insurance companies will have to comply as of
2007.
With the amendments governing the Societas Europaea type of incorporation, Slovenia will
become only the 7th European country to transpose the appropriate EU regulation in national
legislation.
The Societas Europaea is designed so it can do business EU-wide without having to open
subsidiaries. It can be established by at least two companies from at least two different EU
members.
The confirmed amendments also include provisions that create a legislative framework for
what is termed "one-stop-shop", designed to shorten administrative procedures for registering
a company.
According to Psenicnik, this is a first step towards the creation of a more entrepreneurfriendly legislative environment that will make it easier to register companies.
12
STATISTICS/FORECASTS
Statistics Days Focuses on Globalisation
The conference was organised by the Slovenian Statistics Association and the Statistics Office
and was attended by 200 participants from 13 countries
Globalisation was in the focus of this year’s Statistics Days, a three-day event that opened in
Radenci on Monday, 8 November. The conference, organised by the Slovenian Statistics
Association and the Statistics Office, was attended by 200 participants from 13 countries.
Current statistical systems are based on monitoring the developments within countries, while
much of the economic activity is going on at the global level, said Genovefa Ruzic, the deputy
director general of Slovenia's Statistics Office, at the outset of the event.
Multinationals also play an important role in globalisation, as they influence rapid growth of
the exchange of goods and services and affect labour and capital markets, while being the
driving force of research and development and the transfer of technology, according to Ruzic.
She added that it was a special challenge for statistics to monitor the relations among
companies of multinationals.
Another issue examined at the conference will be the increasing specialisation of services and
their combination with material goods, which obscures the clear line between products and
services, Ruzic said.
Among other things on the programme of the opening day was a lecture by Marjan Svetlicic
of the Faculty of Social Sciences about modern trends and challenges of globalisation. Dennis
Trewin of the Australian Bureau of Statistics, on the other hand, spoke about measuring
services.
Factory-Gate Prices Up 0.3% in October
Compared to September, prices edged up by 0.3 percent, while they increased by 4.4 percent
since the beginning of the year
Factory-gate prices rose by 5.1 percent year-on-year in October. Compared to September,
prices edged up by 0.3 percent, while they increased by 4.4 percent since the beginning of the
year, according to data released by the Statistics Office.
The year-on-year increase may be attributed to the 6.3 percent price rise in electricity supply
and the 5.1 percent price increase in manufacturing. Meanwhile, prices in mining and
quarrying were up 3.2 percent and those in forestry by 0.2 percent.
The prices of intermediate goods rose by 0.5 percent and those of consumer goods edged up
0.1 percent, while capital goods were cheaper by 0.2 percent in the period between October
2003 and October 2004.
Slovenia's 2003 Unemployment at 6.7%, According to Eurostat
Slovenia's unemployment rate in 2003 stood at 6.7 percent as compared to an average of 9.1
percent in the 25 EU members
Slovenia's unemployment rate in 2003 stood at 6.7 percent as compared to an average of 9.1
percent in the 25 EU members, according to Eurostat, the EU's statistical office, which
analysed data for 254 European regions.
Across Europe, the unemployment rate ranged from 2 percent in the Italian region of Bolzano
to 31.8 percent in the French overseas territory Reunion, Eurostat reported on Tuesday, 9
November.
13
A total of 53 regions had jobless rates of under 4.5 percent, mostly in the Netherlands,
Austria, Great Britain and Italy. On the other hand, 25 regions (10 from Poland, 5 from
Germany, 4 from France and 3 in Italy) had unemployment rates higher then 18.2 percent.
September Export-Import Ratio at 95.6%
Slovenia exported EUR 1.17bn worth of goods in September, while imports stood at EUR
1.22bn
Slovenia exported EUR 1.17bn worth of goods in September, up 9.9 percent year-on-year,
while imports stood at EUR 1.22bn, up 12.6 percent. The preliminary data released by the
national Statistics Office also show that the trade gap was at EUR 53.3m, which means that
exports covered 95.6 percent of the imports.
Exports to the EU 25 totalled EUR 996.3m, while EUR 403.4m worth of goods were exported
to non-EU countries. Imports from the EU amounted to EUR 996.3m, while imports from
other countries stood at EUR 225.5m in September.
In the first nine months of the year, exports were up 10.2 percent to EUR 9.21bn, while
imports rose by 11.6 percent to EUR 10.05bn. The trade gap was at EUR 838.8m, with the
export-import ratio at 91.7 percent.
Business Sentiment Strong, Except in Construction
The seasonally adjusted value of the sentiment indicator rose by 2 percentage points in
October compared to the month before
The seasonally adjusted value of the sentiment indicator rose by 2 percentage points in
October compared to the month before, according to the Statistical Office. It was up 8 points
year-on-year and 7 points above last year's average. Construction companies are far less
upbeat, however: the sentiment indicator in the industry plummeted by 7 points.
The seasonally adjusted value of the confidence indicator in manufacturing was the same as in
September 2004. Compared to October 2003, it was up by 8 percentage points and 9 points
above the 2003 average.
The indicator was boosted by lower inventories of end-products, but production expectations
as well as orders dropped, so the effects cancelled each other out. The expectations for the
coming three months are not favourable, the statisticians note.
In retail, the seasonally adjusted confidence indicator rose by 2 percentage points compared to
September 2004. Compared to October 2003 the indicator was down 2 percentage points but
was still 2 points above last year's average.
The confidence indicator in construction was down 7 points, yet is still nine points higher than
in October last year. Expected employment was the greatest single contributor to the drop and
expectations for the last quarter are not upbeat.
Meanwhile, the consumer confidence indicator soared by 11 points compared to the previous
month. The outstanding increase was mainly due to more optimistic estimations of the general
economic situation in Slovenia over the next 12 months. The consumer confidence indicator
is now 11 percentage points higher than the long-term average.
14
FINANCE
Trade Unions Call on Employers to Pay Christmas Bonus
If the Christmas bonus is paid, the wages will rise by 2.5 percent on average
The Association of Free Trade Unions (ZSSS) called on the employers on Monday, 8
November to pay out the Christmas bonus in November and December in line with a
collective agreement that envisages the bonus for workers if a company has reported a
successful performance.
While 20 percent of workers received the bonus last year, this year the share as well as the
sum paid out should be increased given a bigger production, the ZSSS executive secretary
highlighted at a news conference.
If the Christmas bonus is paid, the wages will rise by 2.5 percent on average, which is still in
line with the social agreement stipulating that the growth of wages should lag behind the
productivity growth by 1 percentage points, according to Brane Misic.
According to the ZSSS figures for 2003, the average Christmas bonus - the calculations
include workers who did not receive any - amounted to SIT 12,978 (EUR 54) in November
and SIT 15,773 (EUR 66) in December, received by 10 percent and 10.6 percent of workers
respectively.
The industries were most of the bonuses were paid out included transport, logistics, financial
and pharmaceutical sectors.
Petrol Cheaper as of 9 November
Prices of petrol are adjusted by the government every fortnight according to the prices of
derivatives for delivery at Mediterranean ports and the exchange rate of the US dollar
All oil derivatives are about 2 tolars (0.01 euros) cheaper as of Tuesday, 9 November due to
lower prices of oil on the world markets and the increasingly cheaper US dollar.
Regular petrol costs SIT 206.60 (EUR 0.86) per litre, premium SIT 211.10 (EUR 0.88) and
diesel SIT 204 (EUR 0.85). Heating oil is available for SIT 125.8 (EUR 0.52) per litre.
Petrol would be even cheaper had the government not lifted the excise duties from the lowest
levels permitted by the EU. Excise duties went up by 4.02 tolars (EUR 0.02) for petrol and
SIT 4.85 (EUR 0.02) for diesel.
Prices of petrol are adjusted by the government every fortnight according to the prices of
derivatives for delivery at Mediterranean ports and the exchange rate of the US dollar.
Bank of Slovenia Enters STEP2
The bank thus complied with the recommendations of the European Central Bank that all
banks in EU member states be included in STEP2 by the end of the year
The Bank of Slovenia became a member of the payment system STEP 2, a pan-European
scheme for processing retail payments on Monday, 8 November.
The bank thus complied with the recommendations of the European Central Bank that all
banks in EU member states be included in STEP2 by the end of the year, according to the
bank's press release.
The central bank offered indirect participation in the system to other Slovenian banks; ten
banks opted for the proposal, while four will be included in the system through other banks.
The Slovenian government will also have access to the system via the central bank.
Promising to save costs and time, the STEP 2 system covers cross-border payments
amounting to less than EUR 12,500.
15
Banka Koper Exceeds Half-Year Plans
Banka Koper has reported to have generated SIT 3.4bn (EUR 14.18m) in pre-tax profit in the
first half of the year
Banka Koper has reported to have generated SIT 3.4bn (EUR 14.18m) in pre-tax profit in the
first half of the year, whereby it exceeded the projections and topped the 2003 half-year figure
by SIT 18m (EUR 75,066).
Half-year revenues were at SIT 21.6bn (EUR 90m), while assets increased by 8 percent to SIT
330.9bn (EUR 1.38bn) in the period, the Koper-based bank says in a report posted on the web
pages of the Ljubljana Stock Exchange.
The bank says the profit topped the planned figure due to unexpected positive effects of
portfolio management and somewhat lower costs, which the bank attributes to the seasonal
impact.
Interest revenues accounted for the bulk of the revenues, 40 percent or SIT 8.6bn (EUR
35.87m). Financial transactions amounted to SIT 5.4bn (EUR 22.52m) or 25 percent of the
overall revenues, while EUR 2.4bn (EUR 10m) or 11 percent was generated in commissions.
The increase in assets is attributed to an increase in deposits by the non-banking sector and
liabilities to the banking sector. These were up by SIT 15.6bn (EUR 65m) and 6.4bn (EUR
26.69m), respectively. The bank invested heavily into loans to the non-banking sector (up by
SIT 12.6bn/EUR 52.55M) and loans to banks (up SIT 11.8bn/EUR 49.21m).
Austrian Regional Bank Opens Branch Office in Ljubljana
Bank fuer Kaernten und Steiermark (BKS Bank) will seek to control some two percent of
Slovenia's banking market
An Austrian regional bank opened its first subsidiary abroad in Ljubljana on Wednesday, 10
November. Bank fuer Kaernten und Steiermark (BKS Bank) will seek to control some two
percent of Slovenia's banking market, which is roughly the market share it has in Austria.
According to Herta Stockbauer, a member of the BKS Bank management board, the office in
Ljubljana will initially offer consumer and corporate loans, while later the bank wants to
expand its services to saving schemes, asset management and payments.
BKS is a regional bank that was founded in 1922 by industrialists in the Austrian province of
Carinthia. It is a universal bank dealing in retail and corporate banking. The major
shareholders are banks Oberbank and Bank fuer Tirol und Voralerberg, which together hold a
37 percent stake in it.
The three banks form 3 Banken Gruppe, the group that controls all of Austria and the
neighbouring countries and with the total assets of EUR 21bn ranks 7th among Austrian
banks. "Regardless of the mutual ownership, the banks operate independently on the market,"
said Heimo Penker, another board member.
BKS Bank's assets totalled EUR 4.2bn at the end of last year. The office in Ljubljana is 55th
branch office, according to Stockbauer. In Austria, the bank concentrates on the provinces of
Carinthia, Styria, Vienna and Burgenland.
Through its representative offices and leasing companies, the bank is also present in Italy,
Croatia and Slovenia. It currently generates only 1 to 2% of revenues abroad, but plans to
increase the share to 5%. BKS Bank has been present on the Slovenian market since 1998
trough BKS Leasing.
The Ljubljana subsidiary will initially offer loans, while in 2006 it plans to offer asset
management and investment funds. Other services will be introduced later. If operations are
according to the plans, the bank could open offices elsewhere in Slovenia, for example in
Maribor. The planned turnover on the Slovenian market in the first year is EUR 30m, bank
officials said.
16
Penker agreed with the claim that the bank's arrival on the Slovenian market is rather late,
given the number of Austrian banks here. He said though, that their attitude would be
different. "Our main focus will always remain on Austria, but as a service company we have
to account for the demands of our clients," he said.
Slovenia is a very important economic partner of Austria, with some 800 Austrian companies
present directly on the Slovenian market. Many of these are the clients of banks in the 3
Banken Gruppe, Penker explained.
Austria is the leading foreign direct investor in Slovenia.
Abanka Sees Profit Soar by 27% but Falls Short of Forecasts
Abanka posted a profit of SIT 3.1bn (EUR 12.9m) for the first nine months of the year
Abanka posted a profit of SIT 3.1bn (EUR 12.9m) for the first nine months of the year, up 27
percent year-on-year. Total assets increased by 16.8 percent to SIT 484.7bn (EUR 2.02bn),
the bank reported on Wednesday, 10 November.
The profit and total assets growth fell short of expectations, but Abanka nevertheless managed
to strengthen its position as the third largest bank in Slovenia, with a market share of 8.9
percent.
The best performing segment was loans to non-banking customers, which were up 28.4
percent over the same period last year thanks to high demand for corporate loans. Loans to
other banks also increased, by 11.1 percent, the bank said.
Total liabilities were SIT 34.2bn (EUR 142.6m) or 73.9 percent bigger than at the end of
September 2003, mostly due to a syndicated loan worth EUR 75m that the bank drew in
September.
NLB Streamlines IT Infrastructure
Hermes Plus will be the bank's strategic partner in corporate banking, SRC.SI in retail
banking, Halcom Informatika in the field of payment systems and IBM Slovenija will be in
charge of technology
Nova Ljubljanska banka (NLB) has chosen four Slovenian providers of information
technology solutions as strategic IT partners, curbing the number of IT providers from 40.
Hermes Plus will be the bank's strategic partner in corporate banking, SRC.SI in retail
banking, Halcom Informatika in the field of payment systems and IBM Slovenija will be in
charge of technology, NLB told the press on Friday, 12 November.
According to Marjan Kramar, the bank's chairman, the NLB group associates 45 corporate
entities in 145 countries; without appropriate IT, it cannot conduct business successfully, let
alone develop.
Kramar stressed that NLB, Slovenia's largest bank, places great importance on cooperation
with local companies, adding that the strategic partnerships have not been forged for a limited
time, nor does the arrangement close the door to other possible strategic partners.
Slovenia Must Tighten Belt as Euro Grows Stronger
The euro traded at record levels against the US dollar in mid-week, at 1.3005 dollars per
euro
The euro traded at record levels against the US dollar in mid-week, at 1.3005 dollars per euro,
fuelled by high budget and trade deficits in the US. Although this has beneficial effects on
Europe's inflation considering the high oil prices, it jeopardises economic growth. Slovenian
economists are warning that domestic expenditure (wages and natural monopoly services)
must therefore be curbed to below productivity growth levels.
The need for austerity was stressed by France Krizanic, the head of the Economic Institute at
the Ljubljana Faculty of Law. "The commitments of social partners are very important and if
17
they persevere the period will not be stressful," he told STA. Indeed, judging by interest rates
for dollar and euro deposits, this period is drawing to an end, he noted.
A strong euro means lower expenses for Slovenia, especially in the imports of energy that are
accounted in dollars. This may be beneficial from the vantage point of inflation, but the
economy is tied to the euro which makes Slovenia less competitive on the global markets,
Krizanic noted.
Slovenia's most important trade partners (these include in particular Germany, France and
Italy) and export destinations have similar problems, which weighs down on economic
growth. "The strong euro is the main reason why economic growth in Europe is slower than in
the rest of the world," he stressed.
Economist Davor Savin notes that Slovenia shares Europe's fate and does not have to be
afraid of a loss of competitive edge since the tolar is pegged to the euro. The weak dollar
makes the EU's exports more expensive, yet the eurozone mainly export technology products
to the US where consumers are not shunning them yet despite higher prices, he said.
That the dollar might get even weaker, was recently stressed by international finance expert
Mojmir Mrak, a professor at the Ljubljana Faculty of Economics. Foreign exchange analyst
for the bank NLB, Bojan Plibersek, even said that the US deficit will push the euro up to 1.45
dollars.
The overpriced euro and high oil prices have prompted the European Commission to
downgrade its GDP growth forecast for the rest of the year and the first quarter of 2005. This
has already led to calls for intervention on foreign-exchange markets to bring the euro down
to sustainable levels, yet analysts have already pointed out that this is unlikely to happen.
Banks Brace for Euro and Basel 2
Slovenian banks are in for an extraordinary array of new challenges in the short term, most
notably the introduction of the euro and the Basel 2 capital adequacy criteria
Slovenian banks are in for an extraordinary array of new challenges in the short term, most
notably the introduction of the euro and the Basel 2 capital adequacy criteria, bankers said
upon a conclusion of a two-day conference on Saturday, 13 November.
Over 80 top bankers that attended the annual meeting agreed that the first experiences in ERM
II, the grooming phase for the euro, are encouraging, according to Dusan Hocevar, the chair
of the Bankers' Association.
Slovenia already meets two euro criteria and is well on track to fulfil the others (interest rates,
inflation and exchange rate). There is no fear that these conditions would not be met when the
time comes, he stressed.
Hocevar noted that banks have already started preparing for the euro, but there are still
numerous technical and procedural issues that have to be addressed. In addition, they will
have to adjust to the Basel 2 capital adequacy standards and speed up the introduction of
international accounting standards.
These challenges are further compounded by the effects of the tax reform, most notably the
taxation of interest on deposits, which has already been implemented, and the taxation of
inter-banking interest. The banks oppose the latter, fearing that it might impair their
competitiveness, he said.
The participants, who met behind tightly sealed doors, also debated the ownership structure of
the banking sector, establishing that almost half the banking sector is in the hands of
foreigners in one way or another.
Franjo Stiblar, the dean of the Ljubljana Faculty of Law and an expert on political economy,
said that if Slovenia is to pursue its strategy and keep a certain level of economic
independence, "like even the least developed of the "old" EU members do", it needs its own
banking and financial pillars.
18
"We will not have macro-policies available any more; our only chance is in this area," he said.
"There is no reason why at least some of the pillars would not remain in domestic ownership
or why we should not at least keep the final say," according to Stiblar.
If Slovenia fails to do that, it will be yet another of the growing number of "provincial
countries" in the enlarged EU, he stressed.
Ljubljana Stock Exchange
The blue chip SBI 20 index added 1.56 percent (75.37 points) to close just short of an all-time
high, at 4,913.67
Buoyed by a strong performance of drug maker Krka and the prospective takeover of food
company Kolinska with its resulting influx of capital, the Ljubljana Stock Exchange was in
bullish mood last week. The blue chip SBI 20 index added 1.56 percent (75.37 points) to close
just short of an all-time high, at 4,913.67.
The investment fund PIX added 1.05 percent (46,55 points) to 4,459.62, the free market IPT
index was up 111.66 points (2.74 percent) to 4,191.51, while the bond BIO index closed at
120 points, up 0.31 percent.
Trading was spurted by holding company Istrabenz, so far focusing on tourism and energy but
now likely to enter the food market. Istrabenz said it would issue a takeover bid for food
company Kolinska worth a total of SIT 20.6bn (EUR 85.9m).
Investors at first responded cautiously but Istrabenz went on to add 3.81 percent over last
week, to close at SIT 9,395 (EUR 39.18). Its takeover target, Kolinska, added 2.6 percent and
remained just below the announced takeover price, at SIT 6,498 (EUR 27.10).
While Istrabenz electrified trading with a concrete takeover prospect, drug maker Krka
continued apace despite an absence of good news but probably in anticipation of good Q3
results. Krka added a whopping 5.1 percent to close at an all-time high of SIT 86,468 (EUR
360.61).
Retailer Mercator was also heavily traded, but posted lackluster Q3 results and lost some
ground, closing at SIT 42,649 (EUR 177.87), down 0.47 percent. Mercator promises to reign
prominent in the coming weeks as the board of managers said they would offload their shares
due to new tax legislation, so about 2 percent of the entire issue will be put up for sale.
White goods maker Gorenje is yet to publish Q3 results, but it had indicated that it would
meet the Q3 profit target. Gorenje added 1.6 percent last week to SIT 6,577 (EUR 27.43).
Petrol trader Petrol was up 2.2 percent to SIT 64,854 (EUR 270.47).
The free market was predictably dominated by trading in investment fund Triglav Steber 1,
which saw deals worth SIT 569m (EUR 2.37m), Zvon Ena Holding with a turnover of SIT
382m (EUR 1.6m) and investment fund KD ID.
Brokers wrapped up 9,223 deals last week, worth a total of SIT 7.1bn (EUR 29.61m), almost
three times as much as the week before. Block transactions accounted for 37 percent of the
week's turnover.
Foreign Exchange
Mean exchange rate of the Bank of Slovenia
Euro (EUR) - SIT 239.78 (-0.01)
U.S. dollar (USD) - SIT 185.65 (-0.56)
Swiss franc (CHF) - SIT 157.66 (+1.09)
British pound (GBP) - SIT 342.45 (-0.98)
19
REGIONAL INFORMATION
Trbovlje Closing Down Mines and Looking for New Opportunities
The first mine began operating in Trbovlje back in 1804
A ceremony was held on Wednesday, 10 November to mark 200 years of the mining industry
in Trbovlje, with the officials stressing in their speeches that this town in central Slovenia
must now gear up for new lines of business as its mines are closing down.
President Janez Drnovsek, who originally comes from this mining region, said in his address
that this is a crucial time for the town, since its mining industry has to be replaced by other
industries that would create jobs for younger generations.
While looking for new opportunities and building new infrastructure, Trbovlje should make
the best use of the state and EU funds, Drnovsek also highlighted.
Ales Berger, director of the mine Rudnik Trbovlje-Hrastnik, was hopeful in his speech that
the planned construction of an industrial and business zone will attract new companies to
Trbovlje.
Both Drnovsek and Berger pointed to the huge impact the Trbovlje mining industry has had
for centuries on the development of the Slovenian economy and the life in the Trbovlje
region. He stressed that mining was not merely a line of business here but a way of life.
The first mine began operating in Trbovlje back in 1804, while the industry started to flourish
after 1849, when a railway connecting Vienna and Trieste was finished.
20
BRANCH INFORMATION
Peugeot 307 CC Would Be Ladies' Choice
The other finalists are Audi A3, Citroen C2, Jaguar x-type 2.0 D, Lancia Ypsilon, Land Rover
Freelander TD4, Peugeot 407, Renault Megane Coupe Cabriolet, Saab 93, Seat Altea, Smart
Four Four, Toyota Corrola Verso, Volkswagen Golf and Volvo S40
Peugeot 307 CC, a definite women's favourite, has won the title of No. 1 "seductive hot rod"
in a survey conducted by the magazine publishing house Delo Revije. Currently the hottest
ride, was selected by exclusively women's votes.
In November, famous Slovenian ladies had their say in the selection of 14 finalists from a
previously offered selection of 25 car models, launched between July 2003 and June 2004,
that were proposed by the car export companies.
"The hottest lady killer" was then determined by almost 15,000 female voters, who could
support their favourite in magazine polls, by mobile and fixed phone lines, radio or internet.
The reason why the only voting condition was the voters' sex is that the car exporters included
the cars which they felt should be aimed (also) at women drivers.
Alenka Nedelko, a PR officer at company Peugeot Slovenija, commented on the title of
"seductive hot rod": "Given the high technology and its safety, the French trademark Peugeot
is known for its ability to subtly lend an ear to the desire for symmetry, attractive shapes and
elegance. Women seem to have an especially developed sense of those features."
Delo Revije said in a press release on Wednesday, 10 November that the ultimate selection of
"seductive hot rod 2004/2005" is due for spring 2005. The other finalists are Audi A3, Citroen
C2, Jaguar x-type 2.0 D, Lancia Ypsilon, Land Rover Freelander TD4, Peugeot 407, Renault
Megane Coupe Cabriolet, Saab 93, Seat Altea, Smart Four Four, Toyota Corrola Verso,
Volkswagen Golf and Volvo S40.
Outsourcing Prospects Compound Fears of Further Layoffs
Slovenia is not immune to fears that jobs will be outsourced to cheaper markets, which is
expected to happen across Europe
Slovenia is not immune to fears that jobs will be outsourced to cheaper markets, which is
expected to happen across Europe. What is even more pressing than in Western Europe,
however, is the fact that the industrial sector has not completed the comprehensive
restructuring begun in the transition to a market economy, so it will find it even harder to
withstand the huge pressure from cheaper Asian rivals.
The Slovenian industry will not be able to avoid outsourcing production; indeed, this is
already happening, says France Krizanic, the director of the Economic Institute at the
Ljubljana Faculty of Law. Footwear maker Alpina has already moved production to Romania
and China and most other companies have been forced to at least start considering such a
move, he noted.
"We have an advantage in that we are an EU member and that some producers from
elsewhere in the world are forced to move production to Europe: Slovenia is one of the
possible destinations," Krizanic told STA, adding that Slovenia might be able to attract a
major investor from the US or Japan.
Employers have a gloomier outlook of the situation. Samo Hribar Milic, the president of the
Employers' Association, says that the global uncompetitiveness characteristic of the EU is
even more emphasised in Slovenia, so massive layoffs may be expected. "We have not been
ambitious enough in our restructuring efforts in the past ten years," he stressed.
21
The labour-intensive industries such as textiles, leather and wood processing will be hit
hardest: they typically have a poorly educated workforce and outdated equipment. Already,
these industries are shedding workers at a very fast rate.
According to the Statistical Office, the textile and leather industries alone have shed 7,600
employees in less than four years, the total number down to 31,000. This compares to a
workforce of 76,000 at the beginning of the 90s for an industry that keeps making headlines
with serial bankruptcies and layoffs.
Despite the obvious dangers in certain industries, the Employment Service believes that there
are no reasons for excessive pessimism. According to director Joze Glazer, the number of
employees in certain industries will continue to fall, yet other segments (retail, automotive,
metal, construction) have been hiring at a fast pace.
Glazer believes that the number of jobless will drop to 85,500 this year from the current
91,300. He also noted the non-fulfilled forecasts that EU entry would cost 40,000 people their
jobs. It is true, however, that a slump in Europe, in particular in Germany, is quickly felt in
Slovenia.
Unfinished restructuring may be the main reason for the poor competitiveness, but Miro
Sotlar, the vice-president of the Chamber of Commerce and industry of Slovenia, also blames
the unflexible labour market. Productivity relies primarily on labour market flexibility, he
claims, particularly in labour-intensive industries.
The trade unions naturally do not share this view. According to Dusan Semolic, the head of
the largest union, the Association of Free Trade Unions of Slovenia (ZSSS), the situation on
global markets and EU entry are often used as excuses to cover up poor business decisions of
managers that fail to respond properly or quickly enough to global changes.
To guarantee that there will not be many layoffs or a lot of outsourcing, and that foreign
investments will create new jobs and preserve the existing ones, is the creation of an
environment friendly to capital owners and workers, Semolic is convinced. Such an
environment must have a well educated workforce and managers, as well as social dialogue
and social peace.
Chamber of Trade Expects Better Conditions for Small Business
Small companies record the highest growth in Slovenia and play a key role in reaching the
country's economic goals
Small companies record the highest growth in Slovenia and play a key role in reaching the
country's economic goals, Miroslav Klun, president of the Chamber of Trade, said in an
interview for STA ahead of the chamber celebrating its 35th anniversary on Tuesday, 16
November.
The chamber is convinced that the small business sector could create from 60,000 to 70,000
new jobs in a relatively short period of time and help achieve the Lisbon agenda goals, but
only if the government secures favourable conditions for the sector.
According to the chamber's figures, micro and small-size companies currently account for
98.4 percent of all Slovenian companies. They employ 37.5 percent of the workforce and
create 38.8 percent of revenues, 51 percent of net profits and 52.2 percent of net losses.
Slovenia's average small business has three employees, including the owner, while the EU
average stands at 7 or 8. "If we manage to raise the number of employees from 3 to 4, this
would create 50,000 new jobs," Klun highlighted.
However, the sector's growth is hindered by the red tape, inflexible labour legislation,
deficient tax policy, high operating costs and notably the indiscipline in the payment practice,
the chamber's head pointed out.
All these obstacles have caused a falling trend in the number of small businesses, decreasing
by 2.4 percent in 2003 over the previous year, according to the chamber's figures.
22
While the outgoing government of the Liberal Democrats (LDS) has made a lot of promises to
reduce the red tape, little has been done, said Klun. He expressed hope that the new
government of centre-right Slovenian Democrats (SDS) would do more to boost the sector.
Commenting on which lines of the small business have good prospects for the future, Klun
was convinced that the entire sector could work well, while there is especially a lot of
potential in the tourism industry.
Slovenia Becomes Top Holiday Destination for Britons
With the arrival of the no-frills carrier Easyjet on the Ljubljana airport, Slovenia has become
one of the favourite European destinations for the British tourists this year
With the arrival of the no-frills carrier Easyjet on the Ljubljana airport, Slovenia has become
one of the favourite European destinations for the British tourists this year, the airline has
suggested.
According to the Easyjet office in Ljubljana, these growing numbers have also been prompted
by the fact that Slovenian has been voted a top holiday destination in the surveys carried out
by the Guardian and the Observer.
Easyjet has been reporting a 90-percent flight occupancy on its route Ljubljana-London, with
7,700 passengers transported on a monthly average. Similar occupancy rate is expected on the
route Ljubljana-Berlin, to be launched by Easyjet on 25 November.
Figures of the Slovenian Statistics Office show that as many as 65,000 British tourists visited
Slovenia over the past nine months, which is almost a 50-percent increase over the same
period last year. Britons already place fifth on the list of foreign tourists in Slovenia.
23
COMPANIES
Autocommerce First Ferrari and Maserati Car Dealer in Slovenia
Autocommerce, a group of 22 companies dealing in vehicles, retail, tourism, finance and IT,
will become an authorised car dealer and service agent for Ferrari and Maserati for Slovenia
and Croatia
Autocommerce, a group of 22 companies dealing in vehicles, retail, tourism, finance and IT,
will become an authorised car dealer and service agent for Ferrari and Maserati for Slovenia
and Croatia. Its managing director also expects his company to be on the stock market by the
summer 2005.
Herman Rigelnik said in an interview on Monday, 8 November that he expects three or four
Ferraris to be sold on the two-million Slovenian market annually a year after the company
opens a show room in Ljubljana on 19 November.
But "I believe we have particularly great prospects with Maserati, notably with one of its
models which will cost around 100,000 euros. We could sell 20 to 30 a year," Rigelnik told a
business weekly. He added the company had been after the contract with Ferrari and Maserati
since 1995.
As for Autocommerce entering the exchange market next year, Rigelnik said the company is
under pressure of its main vehicle suppliers to remain a non-public joint stock company
without any shocks on the bourse.
They would be the happiest if the owners of Autocommerce were natural persons as close to
Autocommerce as possible, with the state-run funds pulling out of the company in order to
eliminate political meddling, Rigelnik told Gospodarski vestnik.
In what is good news for Autocommerce and its car suppliers, the state-run Pension
Management Fund (KAD) sold its 15.86 percent stake in Autocommerce to holding company
Infond Holding.
Autocommerce will top its plans for 2004 in all areas; the group's revenues in the January-toSeptember period were around SIT 85bn (EUR 354m), a profit totalled SIT 1.5bn (EUR
6.2m), and return on equity stood at 10 percent.
While one of the group's companies will post a loss this year, all are expected to be profitable
in 2005. AC-Intercar, the company representing Mercedes and considered Autocommerce's
flagship, expects to post sales revenues of some SIT 25bn (EUR 104m) this year, a record in
its history.
Autocommerce was founded in 1952 as the only authorised Mercedes-Benz dealer for the
entire Yugoslavia. Rigelnik became its managing director after terminating his office as
speaker of parliament in November 1994.
Droga and Kolinska Promise Huge Synergy Effects of Their Merger
A merger between food producers Droga and Kolinska could result in a synergy effects
amounting between SIT 15 (EUR 62.5m) and 18bn (EUR 75m)
A merger between food producers Droga and Kolinska could result in a synergy effects
amounting between SIT 15 (EUR 62.5m) and 18bn (EUR 75m), the two companies presented
their study in a joint press release on Monday, 8 November.
The positive synergy effects are to be prompted by a more efficient distribution network of
the two companies and consequently higher sales figures, the study suggests.
The study was carried out by a special team appointed by the management of Droga and
Kolinska in September, in order to be taken into account by the two companies' owners when
deciding whether to approve the merger.
24
The supervisory boards of the two producers are scheduled to examine the study and take a
stance on the merger by the end of November.
The two companies decided on the merger in spring, after Kolinska came into a 20-percent
stake of Droga.
The other major shareholder of Droga, owning 12.14 percent, is energy and tourism company
Istrabenz, which also boasts a 5.58-percent share in Kolinska.
The biggest owners of Kolinska are the state-run funds KAD and SOD (owning 11.63 percent
and 10.59 percent respectively), investment company Maksima (10.18 percent) and insurer
Zavarovalnica Triglav (6.9 percent).
Istrabenz to Take Over Kolinska in Major Deal
The company is to offer SIT 6,500 (EUR 27.11) a share in a deal worth SIT 20.6bn (EUR
85.91m)
Energy and tourism company Istrabenz has said it will bid to acquire Kolinska, the Ljubljanabased food industry, in what promises to be one of the biggest mergers in Slovenia ever. The
company is to offer SIT 6,500 (EUR 27.11) a share in a deal worth SIT 20.6bn (EUR
85.91m).
Such a decision was endorsed on Tuesday, 9 November by the supervisory board of the
Istrabenz holding company, Istrabenz says in a press release posted on the web pages of the
Ljubljana Stock Exchange.
It says the management of the company has already notified Kolinska, the Security Market
Agency and the Competition Protection Office on the planned move.
Istrabenz already holds a 9.73 percent stake in Kolinska, while it also owns a six-percent stake
in Droga, another food company, which has been planning a merger with Kolinska.
Istrabenz has recently offloaded its 50-percent stake in oil retailer OMV Istrabenz for EUR
95m and pulled out of the oil business. For the past year it has been investing heavily into
tourism in particular.
The Kolinska share closed up 1.34 percent on 9 November to SIT 6,333 (EUR 26.41).
Istrabenz issued the notice after the stock market closed.
The Istrabenz management believes that the takeover intent "is not in disagreement with the
interests of Kolinska", and that it could even benefit from it.
The company expects the takeover to facilitate the implementation of the planned
development goals and projects and make it possible to follow a strategy that will secure
Kolinska a successful growth and development.
Apart from Istrabenz, the biggest owners of Kolinska are the state-run funds KAD and SOD
(owning 11.55 percent and 10.59 percent, respectively), investment company Maksima (10.18
percent) and insurer Zavarovalnica Triglav (6.9 percent).
Kolinska has been working on a merger with Izola-based Droga since last spring. The
companies have already drawn up a study that shows the merger could result in synergy
effects amounting between SIT 15 (EUR 62.5m) and 18bn (EUR 75m).
The supervisory boards of both companies are expected to examine the study and take a
stance on the merger by the end of November.
Profit Down for Mercator in First Nine Months
The parent company of Slovenia's leading grocer Mercator has posted SIT 6bn (EUR 25m) in
profit in the first nine months
The parent company of Slovenia's leading grocer Mercator has posted SIT 6bn (EUR 25m) in
profit in the first nine months, a 4.3 percent drop year-on-year. Lower profit is mainly a
consequence of unexpected developments and the costs of the celebrations of the company's
55th anniversary, the company said.
25
Net sales revenues jumped by 41.7 percent to SIT 162bn (EUR 676m). In the first nine
months of the year the Mercator parent company posted 77.6 percent of the profit set out in
the 2004 plan and generated 77.8 percent of the planned revenues.
Higher revenues were posted on the back of new shopping centres in Slovenia, and transfers
of retail unit Mercator - Degro and retail stores of Zivila Kranj to the parent company, as well
as revenues posted by the Mercator hardware chain, the company said in a press release on the
web pages of the Ljubljana Stock Exchange.
The Mercator group posted SIT 274.2bn (EUR 1.1bn) in net sales revenues between January
and September, which is up 17.1 percent year-on-year. So far, the group posted 75.6 percent
of the planned sales revenues figures. As much as 95.8 percent of sales revenues in the first
nine months of the year came from retail.
The group's net profit was down 16.9 percent to SIT 18.5bn (EUR 77m), which is 55.2
percent of the anticipated profit for 2004, Mercator said.
Zavarovalnica Triglav CEO Wants to Keep State as Major Owner
The new development strategy of the leading Slovenian insurance company Zavarovalnica
Triglav has been drafted on the presumption that it will remain independent, i.e., that it will
not be privatised in a way that will mean selling it to a foreign strategic partner
The new development strategy of the leading Slovenian insurance company Zavarovalnica
Triglav has been drafted on the presumption that it will remain independent, i.e., that it will
not be privatised in a way that will mean selling it to a foreign strategic partner. This is what
CEO Joze Lenic told Dnevnik on Wednesday, 10 November.
"Of course, the state must agree with that, as it is our biggest owner. Therefore, I would like
to discuss the matter with the new government as soon as possible to present the
management's arguments," Lenic said in an interview for the paper.
He said it would be good in the long run if the state were to keep a significant share in
Zavarovalnica Triglav through the state-run Pension Management Fund and the Restitution
Fund, which now control 85 percent of the insurer.
The new strategy, passed four months ago, outlines the insurance company's development
until 2007.
"Our objective is to become the leading insurance and financial group in the region, i.e., in the
rest of the former Yugoslavia as well as in Romania and Bulgaria," Lenic explained.
The insurer also plans to play a more active role in the mutual funds market. The insurer now
manages the mutual fund Triglav Steber 1 through the Triglav Investment Company. After
restructuring, Triglav Steber 1 will soon become the leading mutual fund in Slovenia,
according to Lenic.
Another objective is to strengthen cooperation with banks. "Currently we are preparing for
even closer cooperation with Abanka," said Lenic, adding that the company is also interested
in cooperation with Gorenjska banka, Banka Celje and others.
Zavarovalnica Triglav is a major and strategic owner of Abanka, Slovenia's third-largest bank.
The insurer has failed to get approval from the Bank of Slovenia to increase its stake in
Abanka, but Lenic told Dnevnik that this does not mean that Zavarovanica Triglav will not be
able to increase its share in future.
"The Bank of Slovenia has only set certain conditions, one of them being that we must discuss
potential stake increase with the other Abanka owners," Lenic explained.
The management of Zavarovalnica Triglav was authorised at the last shareholders' assembly
to increase the share capital by up to 45 percent with only the consent of the supervisory
board, Dnevnik wrote.
26
Asked about when the fresh injection of capital will take place, Lenic said it depends on
business growth and planned takeovers. He said that a takeover of another insurer could come
about in a few months or in a year or two.
Mobitel to Cut Prices of Calls to Other Networks in December
Mobitel subscribers will pay a uniform price of SIT 39 (EUR 0.16) per minute for calls into
other networks 24 hours a day seven days a week as of 1 December
Mobitel, the leading Slovenian mobile services provider, has announced it will cut the prices
of day-time calls into other networks in December. The company denies that the move has
anything to do with Western Wireless International accusing Mobitel of unlawfully high
prices for calls to other networks.
Mobitel subscribers will pay a uniform price of SIT 39 (EUR 0.16) per minute for calls into
other networks 24 hours a day seven days a week as of 1 December.
So far, subscribers had to pay up to SIT 50 (EUR 0.21) for calls into other networks between
7 AM and 6 PM. However, the prices of night calls into other networks have been lower so
far and will increase with the introduction of a uniform price.
The company said in a press release that the uniform price was meant to make the pricing
system more transparent, particularly because of "false and distorted information" about the
prices of Mobitel services.
The new price will only be valid for subscribers, while the prices for other users of Mobitel
services will remain the same, according to the press release.
Mobitel said the prices of Mobitel services remained below the EU average and that the
monthly subscription was the only fixed amount that subscribers have to pay.
The move comes after the US company Western Wireless International, the owner of
Slovenia's third mobile telephony operator Vega, accused Mobitel of unlawfully high prices
for calls to other networks, saying this deterred users from changing operators.
Mobitel CEO Anton Majzelj told the daily Dnevnik that the price cut had not been made
because of Vega but because the company was adjusting to the situation on the European
market.
Vega in late October 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.
"I did not understand Vega why it entered such a highly developed mobile market, and I do
not understand what it wants to achieve with the suit," Majzelj told the daily Dnevnik on
Wednesday, 10 November.
"We have not broken any laws or directives, but we have won on the market. We can prove
that we have a natural monopoly, because this is a market of only two million people and
there is no place for a third operator. We are better in all economic categories," said Majzelj,
adding that competition fight was not only about prices but also about the offer of services.
According to Dnevnik, Mobitel has almost 70 percent of mobile telephony subscribers in
Slovenia.
Mobitel meanwhile said in the press release that there are currently a total of 1,476,499 users
of Mobitel networks. A total of 700,012 of them are regular subscribers of the digital network
Mobitel GSM, 647,827 are users of the pre-paid system Mobi, 40,762 are subscribers of the
Mobitel NMT analogue network and 87,898 are subscribers of service provider Debitel.
Kolinska Bid to Spur Consolidation of Food Industry
Considering that Istrabenz is a major shareholder of Kolinska and Droga, the Kolinska
management expects the takeover will be friendly and spur the merger with Droga
27
The intention of Istrabenz to acquire food company Kolinska is yet another step in the
company's active participation in the consolidation of the food-processing industry. "This step
will not restrict the process but rather spur it," Istrabenz CEO Igor Bavcar told STA on
Wednesday, 10 November.
The announcement of Istrabenz that it would seek to acquire Kolinska came as a surprise and
triggered speculations about whether the financial holding would go on to purchase also food
company Droga, which has been in merger talks with Kolinska.
The possible takeover of Kolinska as an intermediate step is not a deviation from the outlined
merger strategy, Bavcar stressed for STA. Istrabenz has significant stakes in both companies.
According to Bavcar, Istrabenz has often voiced the opinion that Kolinska is a good company
which could make even better use of its potential through the merger. "The reason for the
takeover is simple: we believe in Kolinska," he said.
Istrabenz is offering SIT 6,500 (EUR 27.11) per share in a deal worth SIT 20.6bn (EUR
85.91m). The management of the company has already notified Kolinska, the Security Market
Agency and the Competition Protection Office on the planned move.
The head of the Competition Protection Office, Andrej Plahutnik, told Radio Slovenija that
Droga and Kolinska are companies that have complementary production programmes. From
this point of view, the Kolinska takeover does not seem disputable, he said.
The Kolinska management was tight-lipped about the takeover attempt, saying it would
express its position within 10 days. Considering that Istrabenz is a major shareholder of
Kolinska and Droga, the management expects the takeover will be friendly and spur the
merger with Droga.
Zito Posts Lackluster Sales but Solid Profit
Bread and pasta maker Zito posted sales of SIT 7.89bn (EUR 32.9m) for the first nine months
of the year
Bread and pasta maker Zito posted sales of SIT 7.89bn (EUR 32.9m) for the first nine months
of the year, down 14 percent from last year and 2 percent short of the target. Net profit topped
SIT 242.6m (EUR 1m), eight times more than last year but far below expectations.
Yet it is impossible to compare sales directly year-on-year, as sales channels in the group
have been overhauled thoroughly, the Ljubljana-based company said in a press release on
Wednesday, 10 November.
While net profit was solid, operating profit soared year-on-year, to SIT 239.3m (EUR 1m).
This is 50 percent more than expected and up from a deep red in September 2003.
The company also noted that it has undertaken extensive cost-cutting measures: the costs of
material, goods and services were trimmed by 19.2 percent and labour costs by 12.5 percent.
Traded on the official market, Zito remained level on 10 November at SIT 39,374 (EUR
164.21). The share has had a lackluster year, adding less than 17 percent from the beginning
of the year. The blue chip SBI 20 index added 24 percent.
The all-round streamlining efforts are the work of a new team of managers, who were brought
in to rescue the firm in September 2003 after the old management was dismissed due to poor
results.
Zito is Slovenia's largest producer of flour, bread, pasta and sweets. It employs about 2,000
workers in 61 production facilities around Slovenia and in Croatia.
Hit Acquires 85% of Hotel Chain Kompas hoteli
Gaming chain Hit bought fresh 15.32 percent of the hotel chain Kompas hoteli
Gaming chain Hit bought fresh 15.32 percent of the hotel chain Kompas hoteli, rising its total
share in this Kranjska gora-based company to 85.52 percent, Kompas hoteli said on Thursday,
11 November.
28
Slovenia's leading gaming chain published a takeover bid for Kompas hoteli on 15 October,
offering SIT 15,793 (EUR 66) per share. It did not state in which case the bid, which ran out
on 11 November, would be considered successful.
The company promised in the bid not to cut jobs in Kompas hoteli and pledged to secure a
long-term development for Kranjska gora that would make this Alpine ski resort more
competitive with domestic and foreign rivals.
The management of Kompas hoteli does not oppose Hit's takeover attempt, estimating that it
is not contrary to the company's strategic goals. The two companies have though not signed
any takeover agreement.
Clothes Maker Mura to Post EUR 417,000 of Loss This Year
The leading Slovenian clothes manufacturer Mura posted SIT 12bn (EUR 50m) of sales
revenues in the first nine months of the year, which is a 3-percent rise year-on-year
The leading Slovenian clothes manufacturer Mura posted SIT 12bn (EUR 50m) of sales
revenues in the first nine months of the year, which is a 3-percent rise year-on-year. The
figure is encouraging as the company has seen revenues dropping in the last five years. Still,
Mura will not be able to close the business year without losses, Mura CEO Borut Meh told the
daily Vecer.
The loss, anticipated at SIT 100m (EUR 417,000), will largely be a consequence of the
introduction of a fixed allowance to wages and the rise of the minimum wage, Meh told the
paper. The average gross wage in Mura was SIT 145,549 (EUR 607) in September, below the
Slovenian average of SIT 267,000 (EUR 1,113).
Garment completion contracts still account for 64 percent of Mura's revenues. Since such
contracts cannot guarantee successful operations in the long run, the company would like to
increase the sale of its own brands, Meh said.
Mura is now gearing up to establish an independent company that would deal with the design
and sale of its own line. The new company is to be launched on 1 January and is to employ 70
people.
Moreover, the company plans to boost its sales network on the markets of eastern and central
Europe. At least 30 more shops are to open until 2006, Meh explained.
Mura's retail network now includes 48 shops in Slovenia, Croatia, Serbia-Montenegro,
Hungary, Ukraine, Macedonia, Russia and Poland.
A leading European clothes manufacturer, Mura had as many as 6,500 people on its payroll in
1990s. Last year, when Meh took over as the CEO, the number of employees stood at 5,520,
and the figure dropped to 4,672 at the end of October. Meh told Vecer that the company was
taking a soft approach towards cutting the workforce.
Aerodrom Ljubljana Beats Profit Target
Aerodrom Ljubljana, the operator of the Ljubljana airport, increased revenues by 13 percent
in the first nine months of the year, to SIT 4.2bn (EUR 17.5m)
Aerodrom Ljubljana, the operator of the Ljubljana airport, increased revenues by 13 percent
in the first nine months of the year, to SIT 4.2bn (EUR 17.5m). Net profit was up 7 percent
year-on-year to SIT 1.5bn (EUR 6.3m).
The high profit is a result of a greater number of charter flights, the addition of new scheduled
flights and good ticket sales, the company said in a news release on Thursday, 11 November.
The total number of flights increased by 12 percent to 27,030, while passenger numbers were
up 11 percent to 812,397, mostly as a result of the arrival of budget carrier Easyjet.
Eaysjet started operating scheduled flights between London and Ljubljana on 28 April. In the
five months to the end of September, it carried 39,289 passengers.
29
Aerodrom Ljubljana's main source of revenues are airport taxes (45 percent) followed by
ground supply services (26 percent) and commercial services (25 percent).
50 Years of the Port of Koper Enclosed in a Book
A book on the company managing the port of Koper, Luka Koper, has been published in the
run-up to the 50th anniversary of the only Slovenian commercial port
A book on the company managing the port of Koper, Luka Koper, has been published in the
run-up to the 50th anniversary of the only Slovenian commercial port.
The book "Luka Koper/Port of Koper" came out in Slovenian and English. The first chapter
focuses on the historical background, the second deals with the development of the company
Luka Koper, while the third introduces the services of the port.
The editor and co-author Livij Jakomin, speaking at the book's launch on Wednesday, 10
November, listed the troubles Luka Koper had to face since its beginnings 50 years ago, in
spite of the important role it has played in the development of the region.
According to Jakomin, the founding of Luka Koper was strongly opposed by the association
of Yugoslav ports that resented competition. He noted however, that the issues of concession,
state ownership and infrastructure still remain to be resolved today.
Jakomin explained that he got the idea for the Slovenian-English monograph on the port of
Koper a year and a half ago, when Slovenia was intensively getting ready to enter the EU. A
further encouragement was the anniversary.
The book was printed in 1,000 copies and designed for business gifts.
Planika Management Seeks Bankruptcy Protection
The Planika group, which includes an affiliated company in Croatia, one in BosniaHerzegovina, two in Serbia-Montenegro, and one in Russia and the Czech Republic,
generated SIT 7.7bn (EUR 32.1m) of revenues last year
The management of ailing footwear maker Planika has asked the Kranj District Court to
launch bankruptcy proceedings. The move comes after the court rejected on Tuesday, 9
November the company's request for debt enforcement.
The Planika management said on Thursday, 11 November that it sought bankruptcy protection
because the company would not survive until its appeal to the court decision on debt
enforcement is resolved.
The court rejected Planika's debt enforcement request because the deadlines for the payment
of liabilities from a 1999 bankruptcy procedure have not expired yet.
Planika owes the state, the suppliers and employees over five billion tolars (over 20 million
euros). The enforcement of these liabilities would ruin the company so the management
resorted to bankruptcy.
The management says that the difficult financial situation emerged due to liabilities related to
the participation of the state, the company's largest owner through the Restitution Fund
(SOD), and excessive investment into Planika's own retail network.
The Kranj-based company, whose shoe-making tradition goes back to 1951, has been making
significant efforts to streamline its production and cut the workforce. It generated SIT 6.6bn
(EUR 27.52m) in sales revenues in 2003, a drop of 20 percent over the previous year.
Operating losses amounted to SIT 16m (EUR 67,000), while the end figures showed a net loss
of SIT 200m (EUR 830,000), a result of the SIT 900m (EUR 3.7m) loss from 2002.
The Planika group, which includes an affiliated company in Croatia, one in BosniaHerzegovina, two in Serbia-Montenegro, and one in Russia and the Czech Republic,
generated SIT 7.7bn (EUR 32.1m) of revenues last year.
30
Terme Catez Gearing Up for Biggest Slovenian Investment in Serbia
Terme Catez, the leading Slovenian spa, is planning to build a EUR 45m tourist complex in
Serbia
Terme Catez, the leading Slovenian spa, is planning to build a EUR 45m tourist complex in
Serbia in what will be the biggest Slovenian direct investment in this former Yugoslav
republic, Slovenian business paper Finance wrote on Friday, 12 November.
The spa is to be built in the city of Indzija north of Belgrade. The deal is to be signed by the
end of November, while construction works are to be launched in the summer, Finance said.
Terme Catez has meanwhile said in a press release that it is "studying a possibility to invest in
tourist complexes in Serbia, but no decision has been made so far about concrete locations".
The complex, including several pools, will be built on 30 hectares of land, according to
Finance, which says the company will make use of a local thermal water spring. Within the
next five years, two four-star hotels, a congress hall and a golf course are to be added as well.
The spa centre is to be built by a newly founded Serbian company in which Terme Catez
holds a 90 percent stake, the paper writes.
Another company planning fresh investments in Serbia is the leading Slovenian retailer
Mercator, which is to open shopping centres in Indzija, Cacak and Kragujevac. A further one
is planned in Montenegro's Podgorica, according to the business daily.
Intereuropa Reports Net Profit of EUR 11.7M
The net return on equity topped 10 percent, which the company said was almost 20 percent
above the target figure
Logistics company Intereuropa has reported to have generated a net profit of SIT 2.8bn (EUR
11.7m) in the first nine months of the year. The net return on equity topped 10 percent, which
the company said was almost 20 percent above the target figure.
The business results were reviewed by the Intereuropa supervisory board on Wednesday, 10
November. According to a press release circulated after the meeting, the board established the
company successfully adapted its operations to the new conditions following Slovenia's entry
to the EU.
The supervisory board also found the performance of affiliated companies to be good in the
first nine months of the year.
Reviewing the amended development strategy for the 2004-2006 period, the supervisors
established that the management had set itself bold development goals targeted at increasing
the company's value.
The amended strategy confirms the Intereuropa group's plan to remain a leading logistics
company in the southeastern Europe and to seek to rank as a medium-sized provider of such
services in Europe, according to the press release.
Autocommerce Acquires Adria Mobil
Adria Mobil generated almost SIT 35.4bn (EUR 147.6m) in net sales revenues last year
Autocommerce, a group of companies dealing in vehicles, retail, tourism, finance and IT, has
acquired a majority stake in Adria Mobil, the Novo mesto-based camper and caravan
manufacturer. The details of the deal will be presented by both CEOs at a press conference
scheduled for Monday, 15 November, Adria Mobil said on Friday, 12 November.
Business paper Finance reported that some 270 employees of the Novo mesto company,
owning a combined 13.24 percent share in the company, accepted the takeover bid of
Autocommerce on Wednesday, 10 November.
Observers say it is very likely that the bid has also been accepted by the majority owners, who
hold 86.76 percent of Adria Mobil. These are 50 employees, mostly executives, who are said
to be under contract with Autocommerce.
31
Autocommerce is a group of 25 companies, six of them located abroad. The major
shareholders are holding company Infond Holding, Koper port manager Luka Koper,
authorised investment companies and banks. The company was founded in 1952 as the only
authorised Mercedes-Benz dealer for the entire Yugoslavia.
A few days ago Autocommerce said its annual net profit would be up 11 percent over the SIT
1.3bn (EUR 5.42m) posted last year. The group's revenues in the January-to-September period
stood at around SIT 85bn (EUR 354m), profit totalled SIT 1.5bn (EUR 6.2m), while the
return on equity was at 10 percent.
Adria Mobil generated almost SIT 35.4bn (EUR 147.6m) in net sales revenues last year, up
26 percent over 2002, while it increased profit by 39 percent to SIT 1.9bn (EUR 8m). In the
first half of the year, it posted SIT 1.7bn (EUR 7m) in profit. The value added per employee is
close to SIT 5m (EUR 21,000), while the company also boasts a 38.9 percent return on
capital.
Adria Mobil put out the first caravan in 1965 and exported it to Sweden. At the end of last
year, the company employed 600 people.
Tax Regulations Prompt Mercator Management to Offload Shares
The amended income tax act, entering into force on 1 January, stipulates that those who own
stakes worth more than SIT 60m (EUR 250,000) in a single company will be liable for capital
gains tax regardless of when they purchased the shares
All management board members of retailer Mercator will sell their Mercator shares by the end
of the year. "The decision is not a sign of distrust in Mercator but purely a result of the
changed provisions of the income tax act," CEO Zoran Jankovic said in a press release on
Friday, 12 November.
The amended income tax act, entering into force on 1 January, stipulates that those who own
stakes worth more than SIT 60m (EUR 250,000) in a single company will be liable for capital
gains tax regardless of when they purchased the shares. Others are exempt from tax after three
years.
The five-member board of directors owns a combined total of 68,034 shares, which represents
2.12 percent of the entire share issue. Zoran Jankovic owns 47,014 shares, Jadranka Dakic
and Ales Cerin 6,000 each, Marjan Sedaj 5,950 and Stanislav Brodnjak 3,070.
Mercator closed at SIT 42,649 (EUR 177.87) on the Ljubljana Stock Exchange on 12
November, which means that Jankovic's stake is worth in excess of two billion tolars (EUR
8.3m).
Jankovic is convinced that the new tax regulation is controversial. "We bought Mercator
shares because we believed and still believe in Mercator's success and thereby showed our
allegiance," he explained.
According to Jankovic, the new tax provision presented them with a difficult choice.
Although several options were possible, the directors opted for the sale. "I am convinced that
the share sale will not affect Mercator's business operations," he stressed.
The management of drug maker Krka decided to do the same after the tax changes were
announced.
32
SLOVENIA IN BRIEF
Slovenia Wants OSCE to Pay More Attention to Demographic Issues
A seminar "Demographic Prospects in the OSCE Area: Economic and Security Implications"
was held on in Trieste on 8 and 9 November as part of preparations for the 13th Economic
Forum entitled "Demographic Trends, Migrations and Minority Integration: Providing
Security and Sustainable Development in the OSCE Area", due in May. Two more seminars
will be organised in preparation for the Economic Forum.
Anton Turk Becomes Slovenia's Representative at NATO ACO
Brigadier Anton Turk, the incumbent deputy chief-of-staff of Slovenian Armed Forces, has
become the first national military representative at the Mons-based Allied Command
Operations (ACO), one of NATO's two main military commands. Turk assumed office on
Tuesday, 9 November, according to the Defence Ministry.
Bohinc Says EU Should Strengthen Its Integration Policy Ambitions
Interior Minister Rado Bohinc believes that the EU should strengthen its ambitions in
integration policy. Speaking on the margin of a Dutch-presidency sponsored ministerial
integration conference on Wednesday, 10 November, Bohinc backed the plan to draw up
proposals of common guidelines for national strategies. The debate at the three-day
conference has been evolving around the document that lists the common principles of the
EU's migration and integration policies.
Small Businesses Sign Wage Annex to Collective Agreement
Social partners in the small business sector signed on Wednesday, 10 November an annex to
the collective bargaining agreement and pledged to start negotiations on a new collective
agreement. The annex was signed by the Chamber of Trade, the Association of Small
Business Employers and the Trade Union of Small Businesses. The social partners also urged
the Chamber of Commerce and Industry (CCIS) to join them in the creation of a uniform
collective agreement for all social partners in the small business sector.
Prospective EU Presidency to Be Discussed by Parliament
The decision whether Slovenia will accept the proposal of the Dutch EU presidency and
become a member of the EU presiding troika in 2007 will be made by the parliament at an
extraordinary session, Parliament Speaker France Cukjati said after a meeting of the
parliament's collegiate body on Wednesday, 10 November.
Cebulj Takes Over as Constitutional Court President
Administrative law professor Janez Cebulj officially took over as president of the
Constitutional Court on Thursday, 11 November. Cebulj, so far vice-president of the Court,
succeeded Dragica Wedam Lukic, who completed her three-year term in office. Together with
Cebulj, international law professor Mirjam Marjeta Skrk assumed the office of vice-president.
They were both elected on 6 September.
Transport Conference Seeks to Connect Theory and Practice
The 8th international conference on transport science, ICTS 2004, began in Nova Gorica on
Thursday, 11 November, with some 120 participants from 10 countries examining transport
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logistics in theory and practice. The two-day event was organised by the Slovenian Scientific
Society and the Faculty of Maritime Studies and Transport.
Head of Office for Slovenians Abroad Visits Croatia
The director of the government Office for Slovenians Abroad, Jadranka Sturm Kocjan, on
Thursday, 11 November concluded a three-day tour of Slovenian minority organisations in
Croatia to get acquainted with their problems and explore opportunities for improvements.
Debt-Ridden Textile Company to File for Bankruptcy
The management of Tekstilna tovarna Prebold has decided to file for bankruptcy amids lack
of orders and after the debt-ridden textile company was unable to pay out minimum wages to
its workers. The company, which used to employ 1,860 workers at its height, now only has
213 people on the payroll. It posted over SIT 400m (EUR 1.7m) in losses last year.
Slovenia Plans to Enter Schengen Group by 2007
Slovenian Interior Minister Rado Bohnic said Slovenia expects to enter the Schengen group
by 2007, as he met on Friday, 12 November with his counterparts from Austria, the Czech
Republic, Hungary, Poland and Slovakia, countries that make up the Salzburg Forum.
Slovenia, Macedonia Army Officials Discuss Forms of Cooperation
Macedonia can count on Slovenia's support in its NATO bid, Chief-of-Staff of Slovenian
Armed Forces, Ladislav Lipic, assured on Friday, 12 November his Macedonian counterpart
Gjorgji Bojadziev, who paid a visit to Slovenia, and also held talks with Defence Minister
Anton Grizold.
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