Slovenia Business Week no. 12, March 21st, 2005
Table of Contents:
HEADLINES ............................................................................................................................. 3
Slovenian Economy Grows at 4.6% in 2004.......................................................................... 3
Four Medals Go to Slovenian Wines in Burgundy ................................................................ 3
Director of Biotech Company Named Entrepreneur of the Year ........................................... 3
INTERNATIONAL COOPERATION ...................................................................................... 5
Cukjati Upbeat about Serbia-Montenegro's EU Prospects ..................................................... 5
Parliament Wants Closer Ties with Counterparts in Western Balkans .................................. 5
Cerar and Zhang Favour Strengthened Slovenia-China Cooperation .................................... 6
Bajuk: Relations with Latin America Require Courage ......................................................... 6
Uzbekistan Interested in Slovenia's Experience ..................................................................... 7
Speaker Cukjati Voices Support for Montenegrin EU Aspirations ....................................... 7
Uzbekistan Stresses Taxes and Cheap Labour as Incentives for FDI .................................... 8
Cukjati Receives Deputy Irish PM ......................................................................................... 8
Uzbek President and PM Jansa Call for Stronger Business Cooperation .............................. 9
Rupel Pledges Support for Serbia's European Aspirations .................................................... 9
Slovenia and Carinthia Looking to Boost Agriculture Cooperation .................................... 10
Business Ties Discussed as Tadic Ends Slovenia Visit ....................................................... 10
Slovenia Opens Its Third Consulate in Argentina ................................................................ 11
EUROPEAN UNION ............................................................................................................... 12
Slovenia Pleased with Formation of EU Fisheries Agency ................................................. 12
Government to Finance EU Resource Centre From Now On .............................................. 12
Government Creates 35 Working Groups for EU Legislation ............................................. 13
Slovenia Hero of R&D ......................................................................................................... 13
Potocnik Says Knowledge and Innovation Key in EU's Development ................................ 13
Slovenia Successful in Transposing EU Directives ............................................................. 14
LEGISLATION ........................................................................................................................ 15
Patent Protection Crucial for Economic Growth .................................................................. 15
STATISTICS/FORECASTS .................................................................................................... 16
Average Salary Up 7% Annually ......................................................................................... 16
Pensions to Go Up by 2.4% ................................................................................................. 16
January Unemployment at 10.4% ........................................................................................ 16
FINANCE................................................................................................................................. 17
Diesel Price Shoots Up Despite Lower Excise Duties ......................................................... 17
NLB to Acquire Macedonian Postal Bank ........................................................................... 17
State Must Gradually Withdraw from the Economy, Panel Says ........................................ 17
Veselinovic Gets Go-Ahead for Regional Bank Post .......................................................... 18
PM Says Government Will Try to Reduce Budget Deficit .................................................. 19
NKBM Shareholders Appoint New Supervisory Board ...................................................... 19
Ljubljana Stock Exchange .................................................................................................... 20
Foreign Exchange ................................................................................................................. 20
REGIONAL INFORMATION ................................................................................................ 21
Regional Development Projects Awarded Budget Funds .................................................... 21
BRANCH INFORMATION .................................................................................................... 22
Conference Stresses IT as Motor of Growth ........................................................................ 22
Slovenian Tourism Fails to Meet Development Opportunities ............................................ 22
Hypermarkets Taking Over in Slovenia ............................................................................... 23
Slovenia Hosts International Public Procurement Conference ............................................ 24
COMPANIES ........................................................................................................................... 25
Footwear Maker Sees Revenues Increase, Profit Drop ........................................................ 25
Engrotus Beats Forecasts, Increases Market Share .............................................................. 25
Big Plans to Revamp Mineral Water Company Voda Juliana ............................................. 25
Juteks Beats 2004 Targets .................................................................................................... 26
Mobitel Scores Court Victory in Kosovo ............................................................................. 26
Pivka Gets Halal Certificate for its Poultry Products ........................................................... 27
Perutnina Ptuj Acquires Agrokombinat Maribor ................................................................. 27
Tekstina Avoids Red Figures ............................................................................................... 28
Telekom Sees Operating Profits Explode ............................................................................ 28
SLOVENIA IN BRIEF ............................................................................................................ 29
People Satisfied with First 100 Days of Jansa Government ................................................ 29
Jansa: EU Decision Not Good, But Not Tragic for Croatia ................................................. 29
EU Warns Slovenia about Delay in Biofuel Directive ......................................................... 29
Slovenia and Great Britain Share Bologna Process Experience .......................................... 29
Gorisek Stays at the Helm of Insurance Supervision Agency ............................................. 29
IMF Officials Briefed on Changes in Public Administration .............................................. 29
Stud Farm Lipica Needs Major Government Money Injection ............................................ 30
Ikea Cancels Deal with Tomos............................................................................................. 30
2
HEADLINES
Slovenian Economy Grows at 4.6% in 2004
Surging exports and a jump in domestic consumption are behind the fastest growth of GDP in
Slovenia since 1999, as the economy expanded by 4.6 percent last year
Surging exports and a jump in domestic consumption are behind the fastest growth of GDP in
Slovenia since 1999, as the economy expanded by 4.6 percent last year, the National Statistics
Office said on Tuesday, 15 March.
Stronger-than-expected growth in the last quarter of 2004, which stood at 4.3 percent, capped
off a strong year of growth for the Slovenian economy.
The robust growth represents a rebound from a lackluster 2003, when GDP expanded by only
2.5 percent, the lowest rate since independence in 1991.
According to preliminary data from the office, the slowest growth was registered in the first
quarter, when the economy grew at 4.1 percent.
The pace picked up to 4.9 percent in the second and 5 percent in the third quarter before
dropping to 4.3 percent in the last quarter.
Figures show that an improvement in the balance of trade meant the trade detracted only 0.2
percentage points from growth, 2 percentage points better than in 2003.
Exports grew by 12.6 percents and imports by 12.4 percent last year, the data shows.
Although the contribution of government spending fell by 1 percentage point, this was offset
by stronger private consumption. Domestic spending was up 4.7 percent on the year.
Moreover, the fact that 2004 had five working days more than 2003 added 0.5 percentage
points to growth, the office said.
At current exchange rates, GDP amounted to EUR 25.919bn or EUR 12,977 per capita.
Four Medals Go to Slovenian Wines in Burgundy
Slovenian winemakers won one gold, one silver and two bronze medals at the 12th
international wine competition Chardonnay du monde 2005
Slovenian winemakers won one gold, one silver and two bronze medals at the 12th
international wine competition Chardonnay du monde 2005. The selection was made among
1090 chardonnay wines from 37 countries, said the Goriska brda wine cellar in a press
release.
At the four-day event, which ended on Sunday, 13 March, the Goriska brda Wine Cellar was
conferred a gold medal for its chardonnay bagueri 2003. Bronze medals went to Agroind
Vipava 1894 for its chardonnay lanthieri 2001, and to the Simsic cellar for its chardonnay
reserve 2002.
A silver medal was conferred on Matjaz Ramsak for his chardonnay maribor 2003, the only
wine from the Northeast Slovenia to win an award, the rest being from the southwest.
At the wine tastings, which were held throughout the event following strict international
standards imposed by the International Organisation of Vine and Wine, medals were
conferred on 323 of the wines tasted.
The organisers granted 64 gold medals, 189 silver and 70 bronze ones, while a special medal
called the Gold Medal of Excellence was not given out this year.
Director of Biotech Company Named Entrepreneur of the Year
Ales Stancar, the co-founder and director of biotech company BIA Separations, has been
named Entrepreneur of the Year by the business magazine Podjetnik
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Ales Stancar, the co-founder and director of biotech company BIA Separations, has been
named Entrepreneur of the Year by the business magazine Podjetnik. Stancar received the
prestigious award for his "vision and strategy which brings together hi-tech research and
entrepreneurship", the award jury said.
Founded in 1998 by a group of scientists and venture capital investors, BIA Separations
employs 33 experts and manufactures monolithic columns for biomolecule purification.
The company has been granted five patents in the US in the past five years. According to
Podjetnik, this is more than all Slovenian universities and institutes combined.
At the Biotech Forum in Barcelona in November, investors named BIA Separations as one of
the three most desired companies for venture capital investment.
Four entrepreneurs were shortlisted the award alongside Stancar, namely Matija and Andraz
Koren of Koren Sports for their adrenaline parks; Lorena Leonardos of Potencial for the air
ionisers she invents and markets; and Miro Crv of electronics company Smarteh.
4
INTERNATIONAL COOPERATION
Cukjati Upbeat about Serbia-Montenegro's EU Prospects
Parliament Speaker France Cukjati met his counterpart Zoran Sami
Slovenia is convinced that Serbia-Montenegro will join the EU sooner or later, Parliament
Speaker France Cukjati said after talks with his counterpart Zoran Sami. The delegation has
offered the Serbia-Montenegro parliament assistance and cooperation in efforts to join the
EU, Cukjati stressed on Monday, 14 March.
According to Cukjati, who told the press that he and Sami discussed a number of problems
that Serbia-Montenegro is facing, the country's problems are in a way Slovenia's problems as
well.
"We live in the same region; we share not only a large portion of history but also a great
future," Cukjati said.
Sami told the press that talks focused on Serbia-Montenegro's efforts to join the EU, a path
that Slovenia has already walked. He noted that the situation in the restless provinces of
Kosovo and Metohija also came up during the talks.
The meeting with Sami was the first part of Cukjati's two-day visit to Serbia-Montenegro.
Parliament Wants Closer Ties with Counterparts in Western Balkans
Slovenia's parliament would like to establish closer ties with all legislatures in the countries
of the former Yugoslavia, one of the reasons being to seek information, plans and proposals
on how to deal with the problems faced by the Balkans
Slovenia's parliament would like to establish closer ties with all legislatures in the countries of
the former Yugoslavia, one of the reasons being to seek information, plans and proposals on
how to deal with the problems faced by the Balkans. Speaker France Cukjati said this after
meeting his Serbian counterpart in Belgrade on Tuesday, 15 March.
According to Cukjati, his opposite number, Predrag Markovic, voiced readiness for such
cooperation. The Serbian speaker added that the relations between his country and Slovenia
were developing well.
Slovenia would like the Serbian parliament to join the group of parliaments with close ties
with the National Assembly, Cukjati said. This group includes parliaments of EU members, in
particular those from Poland, the Czech Republic, Slovakia, Hungary and Austria.
The Slovenian speaker also told the press in Belgrade that he arrived in Serbia at a time when
this country was witnessing new, big opportunities. His Serbian counterpart meanwhile
highlighted the fact that Cukjati had chosen Serbia-Montenegro for his first trip abroad after
the October general election in Slovenia.
According to Markovic, the two delegations also discussed the 4th regional meeting of
speakers of parliament, to be held at the Slovenian lakeside resort of Bled in June, to which
representatives from the Western Balkans will also be invited.
The two sides also "exchanged good news" on "the few problems remaining between the two
countries", Markovic said. Slovenia has made it one of its priorities to sign a social
agreement, something that would enable individuals to exercise their property rights, as well
as encourage business.
Markovic said the Serbian parliament would provide the legislative basis to boost business
ties with Slovenia, given that "Slovenian investments, growth in bilateral trade and lower
trade gap on the part of Serbia are something that both parliaments support".
Cukjati also met Belgrade Bishop and Metropolitan Stanislav Hocevar and Serbia's President
Boris Tadic. According to a press release from Tadic's office, the pair touched on the Kosovo
5
issue, agreeing that talks on the province's future status could only start after ethnic Serbs
there enjoy security according to European standards.
Cukjati and Tadic also discussed ways to boost economic cooperation between their countries,
stressing the need for political stability. Tadic also highlighted the need for two-way
investment.
Cerar and Zhang Favour Strengthened Slovenia-China Cooperation
Foreign Ministry State Secretary Bozo Cerar and Chinese Deputy Foreign Minister Zhang
Yesui held a regular political consultation as part of Zhang's visit to Ljubljana
Foreign Ministry State Secretary Bozo Cerar and Chinese Deputy Foreign Minister Zhang
Yesui on Monday, 14 March held a regular political consultation as part of Zhang's visit to
Ljubljana. They deemed the relations between Slovenia and China very good and diverse, and
spoke in favour of their further strengthening, according to a press release.
Cerar and Zhang also agreed there are multiple possibilities to further develop bilateral
cooperation in economy, culture and science.
The Slovenian side confirmed during the talks that it supports the one China policy and
welcomed the progress China made in the last years, the Foreign Ministry wrote on their
Internet site.
The politicians exchanged views on the conditions in Southeastern Europe and Asia,
especially the Korean peninsula. Cerar also briefed the Chinese guest about the activities of
the OSCE Chairman-in-Office, Slovenian Foreign Minister Dimitrij Rupel.
According to the ministry, the extent of political cooperation is increasing and the relations
have gained a new dimension with Slovenia's entering the EU and NATO, the press release
said.
As an EU member state, Slovenia is making efforts to establish a constructive and efficient
dialogue with China on all issues that dominate China's dialogue with the EU, the ministry
said.
Bajuk: Relations with Latin America Require Courage
A seminar on political and economic processes in Latin America was organised by the
Slovenian Association of International Relations and the Centre for Latin America
Finance Minister Andrej Bajuk has suggested that Slovenia should open up to Latin America,
a region that he thinks provides a number of opportunities. Bajuk, who spent most of his life
in Argentina, was addressing a seminar on political and economic processes in Latin America
on Tuesday, 15 March.
"Accelerating relations between Slovenia and Latin America takes courage, given that the
slump in the value of the dollar doesn't promote export," said Bajuk.
"On the other hand, there has traditionally not been a lot of interest in either the troubles of
Latin America, or the opportunities it provides," added Bajuk, who has worked for the Parisbased Inter-American Development Bank (IDB), where he was in charge of the promotion of
relations between Latin America and Europe.
According to Bajuk, Slovenia should consider what Latin America has to offer and put aside
the weak dollar. He believes globalisation will remain a strong factor, therefore Slovenia
should be more open towards Latin America.
The finance minister also stressed that the country should take advantage of the opportunities
provided by membership in the international organisations, such as the International Monetary
Fund (IMF) and the World Bank (WB).
Slovenia qualifies as a donor of resources in all organisations except the European Bank for
Reconstruction and Development (ERBD) and the European Investment Bank (EIB). As such,
it has to learn how to seize numerous opportunities, says Bajuk.
6
EU Ambassador to Slovenia Erwan Fouere, who also addressed the seminar, organised by the
Slovenian Association of International Relations and the Centre for Latin America, explained
the relations of the largest economic group in Latin America, Mercosur, and the other states of
Latin America, with the EU.
Uzbekistan Interested in Slovenia's Experience
President Islam Karimov met his Slovenian host and counterpart Janez Drnovsek at Brdo pri
Kranju
Uzbekistan is keen to learn about Slovenia's experiences in the development of freedom,
democracy and market economy. The task of Uzbekistan is to build a civil society and the rule
of law, President Islam Karimov told the press after meeting his Slovenian host and
counterpart Janez Drnovsek at Brdo pri Kranju on Wednesday, 16 March.
The pair called for a boost in the relations between their countries. According to Drnovsek, he
and Karimov discussed various aspects of bilateral relations as well as reviewed international
issues given Uzbekistan's important geo-strategical position.
Although the countries have not had many ties they hope to develop them also in view of
Slovenia's role in the OSCE, the European Union and NATO, Drnovsek said. He voiced
satisfaction at the fact that the two countries signed three agreements.
Transport Minister Janez Bozic and Uzbek Foreign Minister Elyor Ganiyev signed an
agreement on international road transport of passengers and goods. The chambers of
commerce meanwhile signed an agreement on cooperation, while the Uzbek National Bank
for Foreign Economic Activity signed a memorandum of understanding with NLB, Slovenia's
largest bank.
Noting that further agreement should be signed, Drnovsek stressed Uzbekistan's great
potential such as natural resources and cheap labour. Some have already seized this
opportunity, but "we can get to know each other better" in the longer term, he said.
Karimov, too, stressed that there are "excellent opportunities" for the development of business
ties. He suggested that Slovenian companies should set up subsidiaries, and expressed the
willingness to grant Slovenia a special investment status.
The Uzbek president further stressed that his visit is a milestone that can provide a fresh
impetuous for the development of bilateral cooperation. He said Uzbekis know Slovenia's
path and its achievements; these experiences are interesting for the entire post-Soviet region.
Asked by the journalists about the state of human rights in Uzbekistan (the country has been
subject to harsh criticism by human rights organisations), Karimov stressed that his country's
goal is to develop democratic values and that human rights are an absolute value.
Such violations occur everywhere, he said, adding that any major human rights violation in
Uzbekistan is subject to in-depth review by the Ombudsman, which the country has had for a
decade.
Karimov also said that his country is "realistic and pragmatic" about the possibility of a
"colour revolution" like the ones in Georgia or Ukraine. We are aware of which factors to
avoid in order to preclude such a revolution, he said, adding that he himself would welcome a
revolution if the leader forgot about his responsibility towards the people.
Speaker Cukjati Voices Support for Montenegrin EU Aspirations
The main objective of the parliamentary visit to Serbia and Montenegro was to gather
information ahead of the regional meeting of parliament speakers, to take place in Bled in
June
Slovenia will back Montenegro in its efforts to join the European Union, Parliament Speaker
France Cukjati said on Wednesday, 16 March after holding talks with senior Montenegrin
officials.
7
Speaking to the press alongside his Montenegrin counterpart Ranko Krivokapic, Cukjati said
that Slovenia does not wish to assess relations between Serbia and Montenegro, but instead
respects their right to self-determination.
"Every country should decide for itself how it will join the EU," he said, adding that it is
unnecessary to insist on a "package treatment" of EU aspirants, for those who meet
membership criteria first would be in an unequal position.
Krivokapic, meanwhile, stressed that "Slovenia is Montenegro's first strategic partner in the
near West". It is one of the biggest foreign investors in Montenegro and its experience in EU
accession is especially valuable, he said.
Wrapping up his three-day tour of Serbia and Montenegro, Cukjati also held talks with
Montenegrin president and prime minister, Filip Vujanovic and Milo Djukanovic.
The main objective of the parliamentary visit to Serbia and Montenegro was to gather
information ahead of the regional meeting of parliament speakers, to take place in Bled in
June. Slovenia will host top parliament officials from Austria, the Czech Republic, Hungary,
Poland and Slovakia, who will be joined by their counterparts from the Western Balkans to
examine open issues towards reinforcing peace and stability in the region before the Western
Balkans countries start joining the EU.
Uzbekistan Stresses Taxes and Cheap Labour as Incentives for FDI
Uzbekistan sees Slovenia as a bridge to the European Union, while Slovenia could consider
Uzbekistan as a road to southern Russia, western China and Afghanistan
Favourable tax legislation, highly qualified and relatively cheap labour, stable economic
development, rich natural resources and a big, well-developed market are the key incentives
for foreign investment in Uzbekistan, according to head of the Uzbek Chamber of Commerce
Alisher Shaikhov.
"We are very interested in cooperation with Slovenian companies, in particular in treatment of
raw materials, electronics, pharmacy and tourism," said Shaikhov, who addressed
businessmen from both countries as part of President Islam Karimov's visit to Slovenia.
According to Shaikhov, Uzbekistan also sees Slovenia as a bridge to the European Union,
while Slovenia could consider Uzbekistan as a road to southern Russia, western China and
Afghanistan.
"Slovenia and Uzbekistan are actually very similar: they have both been criticised for slow
economic reforms and saw similar macroeconomic indicators last year," he said.
Uzbekistan has developed a legislative framework that facilitates and supports the
development of entrepreneurship whilst also offering many opportunities for foreign
investors, Shaikhov added.
Businesses also signed three agreements. The Slovenian Export Corporation signed a deal
with the Uzbek insurer Uzbekinvest, which is designed to improve the safety of Slovenian
investment in Uzbekistan.
The Uzbek tourist company Uzbektourism, meanwhile, signed business agreements with
Slovenia's leading tour operator Kompas and Renee&Co, a company specialising in tourism
and retail.
Slovenia-Uzbekistan trade is currently still lacklustre, and totalled only EUR 9m in 2003, with
exports at EUR 3.5m and imports at EUR 5.5m. Drug makers Krka and Lek, and electronics
company Iskra account for nearly 90 percent of Slovenia's exports, while cotton represents
almost 90 percent of the imports.
Cukjati Receives Deputy Irish PM
Deputy Irish PM Mary Harney praised Slovenia's swift development in all areas
8
Speaker of Parliament France Cukjati received Deputy Irish PM Mary Harney and Irish
Ambassador to Slovenia Gary Ansbro on Thursday, 17 March. Harney praised Slovenia's
swift development in all areas, the parliament said.
Harney said that an increasing number of Irish companies were interested in investing in
Slovenia. Ireland would also like to see closer ties between the two countries in tourism, the
parliament said in a press release.
Cukjati was pleased with Ireland's interest in Slovenia, according to the press release.
The parliament speaker briefed the Irish guests on the current situation in Serbia and
Montenegro.
Uzbek President and PM Jansa Call for Stronger Business Cooperation
Jansa and Karimov agreed that Slovenia and Uzbekistan have great potential for boosting
business cooperation, which is to be facilitated, among other means, with several new
bilateral agreements that are currently drafted
Uzbek President Islam Karimov met Prime Minister Janez Jansa and Foreign Minister
Dimitrij Rupel, as he concluded his three-day visit to Slovenia on Thursday, 17 March. Ways
of boosting business cooperation topped the agenda.
Jansa and Karimov agreed that Slovenia and Uzbekistan have great potential for boosting
business cooperation, which is to be facilitated, among other means, with several new
bilateral agreements that are currently drafted.
According to a press release by the prime minister's office, Slovenia is interested in bilateral
cooperation with Uzbekistan due to its geopolitical position and important role in Central
Asia.
OSCE activities meanwhile dominated the talks between Karimov and Foreign Minister
Rupel, the OSCE chairman-in-office, as Slovenia presides over the organisation this year. The
pair discussed the OSCE's role in ensuring stability and security in Central Asia and across the
world. According to the Foreign Ministry's press release, Karimov voiced support for
Slovenia's efforts to reform the organisation.
Karimov said he was in favour of introducing a presidency term of several years instead of the
existing one. He also praised Slovenia's work as the presiding country so far, according to the
ministry.
Rupel briefed Karimov about the meeting of EU foreign ministers, and about the Union's
neighbourhood policy, while Karimov outlined activities for improving cooperation within the
Commonwealth of Independent States.
Karimov and Rupel already met in mid February, when the Slovenian foreign minister was
visiting Kazakhstan and Uzbekistan in his capacity as the OSCE chairman.
Rupel Pledges Support for Serbia's European Aspirations
According to Rupel, who met visiting Serbian President Boris Tadic on 18 March, Slovenia
will offer Serbia all the assistance it can give it in order to help it achieve its goals
Foreign Minister Dimitrij Rupel, the OSCE chairman-in-office, has stressed that Slovenia
supports Serbia's European aspirations. According to Rupel, who met visiting Serbian
President Boris Tadic on Friday, 18 March, Slovenia will offer Serbia all the assistance it can
give it in order to help it achieve its goals.
Tadic told the press that Serbia's top aims were membership of the EU and NATO's
Partnership for Peace programme. These are, primarily, security goals, however, in the long
term they will become crucial for economic stability and development, Tadic said.
The Serbian president stressed the importance placed by Serbia on Slovenia's current stint as
OSCE president, as well as Slovenia's membership of the EU.
9
Meanwhile, Rupel said that stability in Serbia-Montenegro and Kosovo was in the interest of
Slovenia and the whole of the region. The OSCE, Rupel said, would promote activities that
would provide stability and prosperity to the Western Balkans.
In Tadic's opinion, Kosovo is the main sticking point. Although saying that the pre-1999
situation of classic autonomy was no longer possible in Kosovo, he stressed that full
independence was unacceptable for Serbia.
Kosovar independence would impact negatively on the stability of the province and the whole
region, while it would also hurt security and stability in Serbia, Tadic said.
Tadic also got assurances for assistance from the Slovenian Prime Minister Janez Jansa,
whom he met earlier in the day.
Jansa and Tadic agreed that giving countries of the Western Balkans the prospect of taking
part in European integration was a suitable framework for finding solutions to questions about
the future of Serbia-Montenegro and Kosovo.
Slovenia and Carinthia Looking to Boost Agriculture Cooperation
Slovenian Agriculture Minister Marija Lukacic and Councillor of the Austrian province of
Carinthia responsible for agriculture Josef Martinz underscored a mutual interest in boosting
cooperation in agriculture
Slovenian Agriculture Minister Marija Lukacic and Councillor of the Austrian province of
Carinthia responsible for agriculture Josef Martinz underscored a mutual interest in boosting
cooperation in agriculture as they met on Friday, 18 March.
During her visit to Klagenfurt, Lukacic said Slovenia stands to learn a great deal in agriculture
from Carinthia.
According to Lukacic, Carinthia's experience in the production of environmentally-friendly
fuels and the marketing of agriculture products could prove useful for Slovenia.
Moreover, she also said Slovenia could gain crucial experience in phasing EU structural funds
from Carinthia.
While Lukacic and Martinz agreed that cooperation between Slovenia and Carinthia was
good, the Slovenian official said the role of the standing commission on rural cooperation
could be strengthened.
Martinz underscored the importance of cooperation between Slovenia and Carinthia in
forestry and regional development. He said he supported stronger agricultural cooperation,
especially in efforts to promote common interests in the European Union.
Lukacic was accompanied on her one-day visit to Carinthia by the head of the Government
Office for Slovenians Abroad Franc Puksic. Puksic used the occasion to highlight the role of
the Slovenian minority in Carinthia.
According to him, Carinthia can establish an excellent basis for cooperation between Slovenia
and Austria in the European Union. The Slovenian minority in Carinthia can aid these efforts,
he added.
Business Ties Discussed as Tadic Ends Slovenia Visit
Trade between Slovenia and Serbia-Montenegro amounted to US$ 610m in the first eleven
months of last year, an increase of over 43 percent on 2003
Business ties were high on the agenda as Serbian President Boris Tadic paid a visit to
Slovenia on Friday, 18 March. Tadic met Slovenian Economics Minister Andrej Vizjak to
discuss possibilities for boosting investment. Meanwhile, the heads of the chambers of
commerce from the two countries spoke of joint efforts to break on to third markets.
According to a press release from the Economics Ministry, Vizjak and Tadic agreed there was
room for improvement of business ties despite the quick growth in trade and investment in
recent years.
10
The pair pointed to investment in technological development and cooperation in
manufacturing as fields in which the two countries could base their future economic
cooperation.
Moreover, Vizjak and Tadic spoke about the possibility for companies from the two countries
to join forces in penetrating third markets, such as Russia.
This issue was also raised in talks between the president of the Slovenian Chamber of
Commerce and Industry Jozko Cuk and his Serbian counterpart Slobodan Milosavljevic.
Milosavljevic stressed that Slovenian companies should pay more attention to the possibility
of teaming up with Serbian companies in a bid to break on to third markets.
The pair said they were pleased with the investment activity between the countries, especially
the extensive flow of Slovenian capital to Serbia.
Cuk and Milosavljevic also look at the CCIS's experience in EU integration. Milosavljevic
said he was especially interested in cooperation between the state and the economy in getting
ready for the EU.
Trade between Slovenia and Serbia-Montenegro amounted to US$ 610m in the first eleven
months of last year, an increase of over 43 percent on 2003. Moreover, there was a notable
surge in Slovenian investment in Serbia-Montenegro last year.
Slovenia Opens Its Third Consulate in Argentina
The consulate in Mendoza, the capital of the province of the same name will be headed by
honorary consul Joze Smon
Slovenia has opened its third consulate in Argentina, a country with a sizable Slovenian expat
community. The consulate in Mendoza, the capital of the province of the same name, was
inaugurated on Friday, 18 March. It will be headed by honorary consul Joze Smon.
The other two Slovenian consulates are situated in Moreno, in the province of Buenos Aires,
and in Brioche, in Patagonia. Slovenia also has its embassy in Buenos Aires.
The Mendosa province along the border with Chile is home to some 400 Slovenian families,
according to the Slovenian embassy. The province has a population two million.
In his address to the inauguration ceremony, Slovenia's Ambassador Bojan Grobovsek said
the opening of a consulate in Mendoza was also in recognition of the Slovenians there for
what they did for the promotion of relations between Slovenia and Argentina, the embassy
said in a press release.
11
EUROPEAN UNION
Slovenia Pleased with Formation of EU Fisheries Agency
The Vigo, Spain-based Community Fisheries Control Agency, whose main task is common
inspections and coordination of national inspections and fisheries programmes, will increase
oversight in this field
EU agriculture ministers clinched a deal Monday, 14 March on the creation of an EU fisheries
agency which is designed to improve oversight of fishing and prevent the further depletion of
fish stocks. Agriculture Ministry State Secretary Franci But, who represented Slovenia,
welcomed the move and said the agency would "bring more order into fisheries".
According to But, Food and Agriculture Organisation (FAO) data indicates that as much as
one third of all fishing takes place outside formal safeguard mechanisms, which further
endangers the already meagre fish stocks. Some species in the Mediterranean are nearing
extinction, he added.
The Vigo, Spain-based Community Fisheries Control Agency, whose main task is common
inspections and coordination of national inspections and fisheries programmes, will increase
oversight in this field, he was convinced.
The agriculture ministers also debated a new countryside development fund, whose inception
is planned for 2007 to coincide with the beginning of the next EU budget period. As
negotiations on the 2007-2013 budget are still underway, so talks on the design of the new
fund are also far from over.
The EU has not had a designated fund for rural development so far and money for this
purpose has come from funds for agriculture and regional policy. The new fund will have
three main objectives: improving farm and forestry competitiveness, supporting environment
and land management, and improving the quality of life.
According to But, talks will focus on the distribution of money for these three objectives.
Slovenia is an advocate of a flexible approach whereby countries would have greater say in
the use of the money.
Some EUR 13.7bn is to be allocated for rural development between 2007 and 2013. Franci
But was reluctant to say how much money Slovenia is counting on, he only noted that efforts
will be made towards the best possible outcome.
Government to Finance EU Resource Centre From Now On
The government has provided funds to Center Evropa as the management of the former
resource centre of the European Commission in Slovenia is turned over to a private entity
The government has provided funds to Center Evropa as the management of the former
resource centre of the European Commission in Slovenia is turned over to a private entity.
The centre, which offers EU education and runs public-awareness campaigns about the bloc,
had previously been funded by the European Commission, which used it as its resource centre
in Slovenia, but that was stopped at the end of last year.
The Slovenian government in turn took the decision to take on part of the financial burden
because it believes the lack of such a centre in Slovenia would impact negatively on the
public's awareness about the EU.
The Government PR and Media office will provide SIT 30m (EUR 125,000) to the centre in
2005 for promotional and educational activity from the money earmarked for the
government's EU public awareness efforts, the office said.
The funds were awarded in public bidding through a call to tenders that was published in
January. The company 3S, a PR agency, was chosen as the best bidder and put in charge of
running operations at the centre.
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Government Creates 35 Working Groups for EU Legislation
According to a government press release, the new composition was necessary due to certain
organisational changes and the associated staff changes
The government has formed 35 working groups that will be in charge of drafting positions
that will aid the authorities in the adoption of legislative proposals and other acts in the EU.
The new working groups will continue the work of similar groups set up by the previous
government in May 2003, the government said on Thursday, 17 March.
According to a government press release, the new composition was necessary due to certain
organisational changes (certain jurisdictions have been reshuffled among individual
ministries) and the associated staff changes.
The individual working groups are headed by the ministries or government agencies in charge
of the respective matter, but they include other ministries and departments whose work is
related.
The working groups roughly correspond to the EU's organisational structure and thus include,
among others, external relations and institutional affairs; security and defence; structural and
regional policy; budget; and free movement of persons.
Slovenia Hero of R&D
The "Lisbon scorecard", compiled by London-based think-tank Centre for Economic Reform
(CER), ranks the 25 member states, plus Romania and Bulgaria in terms of progress made
towards the Lisbon goals
Slovenia has been ranked among the best rated EU member states in research and
development and the information society, according to a report on the implementation of the
Lisbon Strategy.
The "Lisbon scorecard", compiled by London-based think-tank Centre for Economic Reform
(CER), ranks the 25 member states, plus Romania and Bulgaria in terms of progress made
towards the Lisbon goals.
While Slovenia placed among the "heroes" in terms of R&D along with Sweden and Finland,
and got best rates in information society together with Denmark and Estonia, the country also
found itself together with Portugal among the "villains" when it comes to climate change.
According to the survey, Sweden is the best EU member state in terms of implementation of
the EU's economic reform agenda, while Italy is the villain.
Potocnik Says Knowledge and Innovation Key in EU's Development
The instrument of that development will be the seventh framework programme for research,
which has not yet been confirmed by the European Commission
Knowledge and innovation play a key role in the ongoing development of the EU, European
Commissioner for Science and Research Janez Potocnik said at a press briefing on Friday, 18
March. The instrument of that development will be the seventh framework programme for
research, which has not yet been confirmed by the European Commission, added Potocnik.
According to him, the EU should provide competitiveness and increased productivity,
especially in reference to small and medium-sized companies (SME), which represent the
future of Europe due to their flexibility. Research funds should be increased and the
conditions for achieving the Lisbon goals should be provided, said the commissioner.
Europe currently allocates EUR 5bn for research, a sum which should be doubled according
to Potocnik. He believes that there is a need to restructure the European budget, which will be
a difficult task. The main points of interest should be ideas and human resources.
Potocnik also announced more rational legislation that will provide more accessible ways to
acquire research funds. While Potocnik expects feedback from the SMEs, he also said Europe
should recognise their importance in its programmes.
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"It is important to take action on every level, national as well as regional, and thus encourage
research. The driving force of regional development is innovative clusters that connect SMEs
to universities and research institutions," said Potocnik.
The seventh framework programme is to introduce new regions of knowledge to strengthen
the capability of the regions to invest in research. Potocnik promised administrative
improvements in the sense of integrating SMEs into other European initiatives and
developmental infrastructure.
Potocnik said that the EU should encourage regional mobility, attract researchers from nonmember states to come to the EU and return after a while. "Brain drain is in nobody's
interest," said Potocnik.
Minister for Higher Education, Science and Technology Jure Zupan pointed out at the
briefing that Slovenia allocated 1.5 percent of the GDP for research, a figure that should be
doubled. He said 1 percent should come from the state and the rest from companies.
Zupan thinks the government should provide more research funds and use them for the
development of SMEs, which represent an important subcontractor in multinational chains,
especially in chemistry, plastic materials and toolmaking.
While Slovenia successfully integrated into the fifth framework programme, it was less
successful in carrying out its projects, said Zupan. He added that the seventh programme
should carry on with the successful special measures for the SMEs, although he thinks some
improvements could be made, especially regarding the number of applications, which is too
high.
Slovenia Successful in Transposing EU Directives
The country has notified Brussels that it has transposed 2,539 out of a total of 2,572
directives for which the deadline for transposition has already expired
Slovenia has been successful in transposing EU directives to its national legislation, a table
released by the European Commission has shown.
The country has notified Brussels that it has transposed 2,539 out of a total of 2,572 directives
for which the deadline for transposition has already expired.
This makes Slovenia 98.72 percent successful and places it 8th among the 25 member states.
The average for the 25 is 98.12 percent (2,510 out of 2,559 directives).
The country most successful in adopting EU directives is Lithuania, having included 99.5% of
directives into its legislation. Italy trails the list with 96.31%.
The European Commission compiles the table every second month on the basis of data
provided by the member states. The Commission also checks the contents of national
regulations and the way they are implemented. The latest table was released in early March.
14
LEGISLATION
Patent Protection Crucial for Economic Growth
In Slovenia, intellectual property rights are protected with the copyright act, the act on
industrial property and the act on protection of topographies of integrated circuits
Appropriate intellectual property protection is essential for economic development, experts
agreed at a seminar on patent protection on Tuesday, 15 March. For foreign investors it is
crucial how these rights are protected: if protection is not good, they will go elsewhere,
Michal Svanter of the World Intellectual Property Organisation (WIPO) said.
In Slovenia, intellectual property rights are protected with the copyright act, the act on
industrial property and the act on protection of topographies of integrated circuits, according
to director of the Slovenian Intellectual Property Office Biserka Strel.
About 300 national patents are registered each year. Their number has been growing steadily
but even more have come from other European countries. "We are members of the European
Patent Organisation so everyone can designate Slovenia as a country where they want to have
patent protection," said Strel.
The seminar, which wrapped up on Wednesday, 16 March, was organised by the EU's
Technical Assistance and Information Exchange Unit in association with the Slovenian
Intellectual Property Office and WIPO. It was being attended by experts from different fields.
Strel noted that the event has been designed to inform all relevant actors in Slovenia about
what awaits them next year when the European directive on intellectual property rights has to
be implemented.
15
STATISTICS/FORECASTS
Average Salary Up 7% Annually
Slovenians earned SIT 173,117 (EUR 722.13) net on average in January
Slovenians earned SIT 173,117 (EUR 722.13) net on average in January, which is 6.5 less
than in December 2004 and 7 percent more than in the same month of 2004, according to the
Statistics Office.
The average gross salary amounted to SIT 272,845 (EUR 1,138) in November, down 6.5
percent over the month before and up 6.5 percent year-on-year.
In real terms, gross salaries decreased by 5.8 percent at the monthly level and increased 4.2
percent year-on year.
Pensions to Go Up by 2.4%
After the rise, the lowest pension base will amount to SIT 102,748 (EUR 428.59) and the
highest to SIT 410,994 (EUR 1,714.39)
March pensions will increase by 2.4 percent as a result of an adjustment to the increase in
salaries. The decision was taken on Wednesday, 16 March by the Pension and Disability
Insurance Institute (ZPIZ).
The ZPIZ established that the average gross monthly salary paid out in January was 2.6
percent above the average paid out last year, while the lowest pension base increased by 0.6
percent over the same period.
After the rise, the lowest pension base will amount to SIT 102,748 (EUR 428.59) and the
highest to SIT 410,994 (EUR 1,714.39).
Pensions went up already in February. Most of them increased by 0.7%, while pensions of
those who retired after 1 January 2004 rose by 1.3 percent.
January Unemployment at 10.4%
The figure represents a rise of 0.3 percentage point over December 2004
10.4 percent of Slovenia's working population were out of job in January, according to the
latest data on registered unemployment rate released by the national Statistics Office on
Wednesday, 16 March. The figure represents a rise of 0.3 percentage point over December
2004.
As many as 93,353 people were registered as unemployed in January, up 2.9% over
December 2004 and down 5.7% over January 2004. The unemployment rate among men
stood at 9%, while it reached 12% among women.
As of 1 January, the Statistics Office uses a different source of data for employed persons, i.e.
the statistical registry of working population, rather than a monthly survey on salaries of
employees in companies and organisations.
Due to changed methodology, the working population increased by an average 25,000 in
2004. The registered unemployment rate was therefore lower by about 0.3% throughout last
year, while the new calculation for December puts unemployment at 10.1% (instead of
10.4%).
The Labour Force Survey unemployment, based on the International Labour Organisation
standards, stood at 6.4% in the last quarter of 2004, the latest available data.
16
FINANCE
Diesel Price Shoots Up Despite Lower Excise Duties
The price of diesel soared to a new record of SIT 211.50 (EUR 0.88)
The price of diesel soared on Tuesday, 15 March to a new record of SIT 211.50 (EUR 0.88)
despite the curb in excise duties that the government enacted on 14 March to mitigate the
price increase.
While diesel is thus be SIT 8.7 (EUR 0.04) dearer, heating oil went up by SIT 5.5 (EUR 0.02)
to SIT 127.10 (EUR 0.53).
The price of regular and premium fuel remained unchanged at SIT 206.2 (EUR 0.86) and SIT
210.6 (EUR 0.88), respectively, due to lower excise duties.
This is the first time since the pricing model was introduced in 2001 that the price of diesel
exceeds that of premium petrol.
According to a government regulation, the petrol retailers adjust prices every fortnight based
on the dollar exchange rate and the price of oil derivatives.
Analysts of Petrol, the leading petrol retailer, have calculated that regular petrol on the
Mediterranean exchanges was 5.64 percent more expensive in the past 14-day period than in
the two weeks before that.
Diesel was up 15.09 percent on average and heating oil 12.30 percent.
Meanwhile, the US dollar lost 1.20 percent compared to the tolar in the same period.
Since 1 January, the retail price of diesel has soared by 8.13 percent and heating oil by 7.53
percent. Regular petrol is up 4.83 percent over the beginning of the year.
NLB to Acquire Macedonian Postal Bank
NLB confirmed that it had reached agreement on the purchase of 66.6% share in the
Macedonian bank with its two biggest shareholders
Slovenia's leading bank, Nova Ljubljanska banka (NLB) is to acquire Postenska banka, the
Skopje-based postal bank. NLB confirmed on Tuesday, 15 March that it had reached
agreement on the purchase of 66.6% share in the Macedonian bank with its two biggest
shareholders.
According to Macedonian press reports, private shareholders of Postenska banka decided to
sell its shares to the Slovenian bank on Monday, 14 March, following two months of talks.
They signed a letter of intent with NLB.
According to Utrinski vesnik, the Slovenian bank presented the best offer. The deal will be
completed within ten days after NLB receives an answer to its request for the acquisition of
the stake held in the bank by the state.
On Monday, 14 March, Macedonian PM Vlado Buckovski said the government would debate
the issue at one of its future sessions. He said he was notified on the sale by NLB chairman
Marjan Kramar.
The Macedonian state owns a 33% stake plus a gold share in Postenska banka. If it decides to
sell it out, NLB would become a sole owner of Postenska banka.
NLB already holds a majority stake in another Macedonian bank, Tutunska banka. Its officials
say one of the bank's strategical goals is to acquire important market shares in the markets of
SE Europe. They intend to achieve this through growth and takeovers.
State Must Gradually Withdraw from the Economy, Panel Says
The state must withdraw from the economy, however the withdrawal must continue to be
gradual, there should be no sell-out
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The state must withdraw from the economy, however the withdrawal must continue to be
gradual, there should be no sell-out. The state-run Restitution Fund and the Pension Fund
Management, the owners of considerable shares in leading Slovenian companies, play a key
role here. This was highlighted at an annual stock market forum on Tuesday, 15 March.
Topping the agenda was the privatisation of the Nova Kreditna banka Maribor bank (NKBM).
Matej Lahovnik, former economics minister, said there was no need to sell the bank, as
Slovenia does not face a considerable budget deficit. He said NKBM and the insurance group
Zavarovalnica Triglav would not be sold in the next five years.
The CEO of the Abanka Vipa bank, Aljosa Tomaz said that after the sale of NKBM less than
20 percent of the banking sector would remain in Slovenian hands, which he finds bad. The
country's competitive power can be increased with financial independence, he said, adding
that no west European country's banking market is dominated by foreign banks.
Finance Minister Andrej Bajuk said on the sidelines of the forum that the privatisation of
NKBM was being planned. He did not rule out the possibility that there will be a replacement
of the bank's management before that. He added that there had been no talks with any foreign
bank on the privatisation of NKBM.
The minister said that the operation of Slovenian banks resembled too much that of closed
clubs. Bajuk also said that banks should support the development of Slovenian
entrepreneurship.
The state is making efforts for the shares of as many state-owned companies as possible to be
listed on the official stock market as soon as possible, the finance minister also said.
However, there is no sense in demanding from these companies to be listed on the stock
exchange, according to Bajuk. "The state must create the atmosphere to make stock exchange
listing interesting. That is why we will further develop and modernise the capital market, as
well as strengthen the role of the Securities Market Agency," said Bajuk.
He said that better conditions must be created in Slovenia, pointed the need for improved
security and higher yields in order to prevent Slovenian investors from "fleeing" to the south.
The 11th stock market forum opened with a debate on the transformation of investment funds
into mutual funds. The participants said that a forceful transformation through legislation was
not good. There is enough room for investment funds, which manage SIT 292bn (EUR 1.2bn)
of assets and have a market capitalisation of SIT 242bn (EUR 1bn), it was said.
Stane Valant, manager of the investment fund NFD, said the transformation would be the
death of the stock market, as trading in investment funds accounts for 15 percent of the daily
turnover on the stock market.
Moreover, investment funds have most of its funds, almost SIT 160bn (EUR 667m), invested
in stock market securities. A withdrawal of investment funds from the stock market would
lower the turnover of blue chip capitalisation, the panel said.
Veselinovic Gets Go-Ahead for Regional Bank Post
The Bank of Slovenia approved Veselinovic's request for a license to head Dezelna banka
Slovenije
Drasko Veselinovic, the former chairman of the Ljubljana Stock Exchange, has been cleared
by the central bank to become chairman at a small Slovenian regional bank.
The Bank of Slovenia approved Veselinovic's request for a license to head Dezelna banka
Slovenije.
Veselinovic, who was named for the post by the supervisory board of Dezelna banka in
February, will thus be able to begin serving his five-year term in April, as planned.
The board appointed Veselinovic to replace Milan Knezevic, who stepped down at his own
request.
18
Dezelna banka Slovenije emerged from a merger between a cooperative bank and a group of
savings banks at the beginning of 2004.
According to the central bank data of 30 June 2004, the bank had a 1.3 percent share on the
Slovenian market with total assets of SIT 67.12bn (EUR 280m).
It ranked 16th among 19 Slovenian commercial banks.
The head of the supervisory board Martin Nose is confident that, with his long-term
experience, Veselinovic will help the bank achieve its goals, such as becoming one of the ten
most successful Slovenian banks.
Veselinovic resigned as the chairman of the Ljubljana Stock Exchange in the summer of
2004, after 15 years in office, over a Securities Market Agency probe against the stock market
management.
PM Says Government Will Try to Reduce Budget Deficit
Prime Minister Janez Jansa has said one of the government's priorities over the next few
weeks will be to draw up amendments to the 2005 budget act, whereby it will try to bring
down the anticipated deficit
Prime Minister Janez Jansa has said one of the government's priorities over the next few
weeks will be to draw up amendments to the 2005 budget act, whereby it will try to bring
down the anticipated deficit.
"Our plan is to look for internal reserves and to economise, and, if possible, to reduce the
budget deficit below the level envisaged in the 2005 budget," Jansa said in a statement for the
national radio on Thursday, 17 March.
The PM admitted that "not all things could have been anticipated" given that the 2005 budget
act was passed as early as 2003. Nevertheless, he added that the plans "were too unrealistic,
which causes additional problems to almost all ministries".
Government departments are in a difficult situation, having to cope with amended legislation
coupled with a shortage of funds, Jansa told Radio Slovenija on the margin of the award
ceremony for Entrepreneur of the Year.
"At the time of preparations for the introduction of the euro, the only solution apart from hope
for high economic growth is to seek internal reserves and thrift," the PM said. According to
him, reserves are hidden in personnel policy.
"Our target is to reduce by one percent annually the number of employees in the civilian part
of the administration, which is not subject to Schengen or NATO commitments."
Translated into salaries, the reduction would enable the government to save some SIT 3bn
(EUR 12.5m), Jansa told Radio Slovenija. He promised that the quality of work would not
suffer as a result. Moreover, he said massive lay-offs were not anticipated.
NKBM Shareholders Appoint New Supervisory Board
In line with the government proposal, the NKBM general meeting appointed the following
supervisors for a four-year term in office: Finance Ministry State Secretary Bogomir Spiletic,
former government advisor Matjaz Kozelj, member of the government's strategic council for
the economy Anton Jurgetz and former manager of paper producer Paloma Stanislav Lesjak
The shareholders of Slovenia's second largest bank, Nova Kreditna banka Maribor (NKBM),
have endorsed new members of the bank's supervisory board as proposed by the government
on 17 March, according to a press release issued by NKBM.
In line with the government proposal, the NKBM general meeting appointed the following
supervisors for a four-year term in office on Friday, 18 March: Finance Ministry State
Secretary Bogomir Spiletic, former government advisor Matjaz Kozelj, member of the
government's strategic council for the economy Anton Jurgetz and former manager of paper
producer Paloma Stanislav Lesjak.
19
The other members are economics professor Tanja Markovic-Hribernik, former general
manager of the Post of Slovenia Marija Ribic, former chief exec of bank Krekova banka
Anton Guzej and risk management expert Daniel Blejc.
Representatives of NKBM owners - the state and the state-run Capital Management Fund
(KAD) and Restitution Fund (SOD) - dismissed eight members of the former supervisory
board headed by the Finance Ministry acting director for financial system, Sibil Svilan.
One of the former supervisors, Herman Rigelnik, tendered in his resignation earlier.
The only old supervisory board member to stay on for another term is Janez Erjavec, the
director of trade-fair company Pomurski sejem. He has been proposed as the representative of
the opposition.
The management of NKBM called the general assembly after the government decided earlier
in March the bank needs new supervisors to ensure appropriate management and oversight.
Ljubljana Stock Exchange
The bear made a comeback to the Ljubljana Stock Exchange over the past week
The bear made a comeback to the Ljubljana Stock Exchange over the past week as three of
the major indices hit multi-month lows. The big name blue chips were hit by a sell-off that
dragged the SBI 20 benchmark index down 104.83 points (2.16 percent) to 4,847.39, the
lowest it has been since the beginning of December.
The bulk of the SIT 8.5bn (EUR 35.45m) in volumes was generated in block deals. The
turnover was on the low side for most of the week.
Analysts believe the Slovenian market has fallen victim to burnout. According to Marko
Grbajs of Ilirika brokerage, Slovenian investors are looking to invest elsewhere believing that
Slovenian shares are overpriced.
Drug maker Krka led all blue chips in terms of losses last week. The share, which was the
most actively traded, lost 3.66 percent to hit a five-month low of SIT 80,115 (EUR 334.16).
Slovenia's top retailer Mercator fell below the all-important SIT 40,000-mark. The share
finished trading at SIT 39,960 (EUR 166.67).
Petrol retailer Petrol was another big name blue chip to be hit by the selling, tumbling 3.1
percent to SIT 65,972 (EUR 275.17).
The sell-off was even more intense with popular investment funds. Hit by Zlata Moneta 1's
plunge (-3.39% to SIT 142.91/EUR 0.60), the PIX investment fund index fell 153.44 points
(3.46 percent) to 4,434.58.
The IPT free market dropped 48.57 points (1.17 percent) to 4,156.49 points. The BIO bond
index, meanwhile, edged 0.02 points (0.02 percent) higher to 122.60.
Foreign Exchange
Mean exchange rate of the Bank of Slovenia
Euro (EUR) - SIT 239.72 (-0.01)
U.S. dollar (USD) - SIT 180.09 (+1.33)
Swiss franc (CHF) - SIT 154.69 (+0.08)
British pound (GBP) - SIT 345.12 (+1.96)
20
REGIONAL INFORMATION
Regional Development Projects Awarded Budget Funds
The government has confirmed 75 regional development projects that will be awarded budget
funding
The government has confirmed 75 regional development projects that will be awarded budget
funding. Their total value is SIT 5.9bn (EUR 24.6m), whereby the government co-fund them
with SIT 1.9bn (EUR 7.3m) this year and SIT 189m (EUR 0.8m) next year, Regional
Development Minister Ivan Zagar told the press on Thursday, 17 March.
The projects have been confirmed in line with criteria such as the number of people, size and
development risk index of the region where they will be implemented. "Most money will go
into high-risk regions," Zagar said.
The objective of regional incentives is to help municipalities and regions with regional
development infrastructure, in particular zoning and investment documentation. The money is
intended to boost economic growth and job creation.
The largest share of the money (SIT 542m/EUR 2.3m) has been awarded to projects in
Podravje, NE Slovenia, while programmes in Dolenjsko, in the south of the country, will get
SIT 350m (EUR 1.5m).
The poorest region in Slovenia, Pomurje, will get SIT 335m (EUR 1.4m) for ten projects that
were confirmed.
21
BRANCH INFORMATION
Conference Stresses IT as Motor of Growth
The IT and communications technology sector is crucial for the development of a competitive
economy
The IT and communications technology sector is crucial for the development of a competitive
economy, according to Economics Minister Andrej Vizjak. As much as half of all
productivity gains come from the sector, and Slovenia as well as the EU have a great
opportunity in this field, Vizjak told an IT conference on Tuesday, 15 March.
Vizjak said that his ministry would boost competitiveness in the electronic communications
market and develop broadband access. "We realise that infrastructure and applications are
essential components in raising the competitiveness and productivity of the economy," he
explained.
Andreja Jaklic of the Faculty of Social Sciences noted that the extent to which IT and
communications technologies contribute to growth depends on the industry, costs and
absorption capabilities. OECD data shows they can contribute 2 to 8 basis points, she said.
Since differences between individual countries are large indeed (transition countries lag far
behind the US or Australia), greater emphasis must be laid on research into the effectiveness
of the technologies and their effect on productivity growth must.
Jaklic presented one such survey which examined the effect of the technologies on
productivity in Slovenia. She said the results indicate that the effect on productivity gains is
indisputable regardless of the industry or the size of the company. However, the effect in
services shows a bit later than in manufacturing.
In addition, she explained, surveys indicate that productivity gains are bigger at exportoriented companies, in particular those that have subsidiaries in multiple markets and
production at several locations.
Yet Jaklic was quick to point out that merely investing in IT does not solve underlying
problems or lead to better productivity automatically. There are several factors involved such
as planning, concurrent organisational changes, the selection of suppliers and motivation, she
added.
The conference, organised by the Institute for Information Safety, was designed to improve
communication between management boards and IT departments by promoting the use of
modern technology.
Slovenian Tourism Fails to Meet Development Opportunities
Tourism, which employs 6.4 percent of Slovenian labour force, last year generated 4 percent
of GDP and EUR 1.3bn of foreign exchange inflow
The government has not been serious in implementing the 2002-2006 tourism strategy which
is why Slovenian tourism failed to use its development opportunities in the 2002-2004 period.
This is what economist Bogomir Kovac told a panel on Tuesday, 15 March. Marjan Hribar of
the Economics Ministry rejected these claims, saying Slovenian tourism grew faster than the
economy.
Kovac said that the strategy had no clear guidelines in the 2002-2004 period and that
responsibilities had not been clearly distributed either. According to him, the growth of
revenues and the number of night stays were lower than planned, while the rise in the number
of foreign visitors and foreign exchange inflow exceeded the plans.
He said the investment policy had been the most successful policy in tourism. It was based on
the co-funding of projects from the European Fund for Regional Development. Also
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successful were the marketing policy of the Slovenian Tourism Board and the development of
the information infrastructure.
According to Kovac, as much as 72 percent of strategic measures and projects had not been
implemented. Moreover, he said only a third of them are being partly or fully implemented.
Rudi Rumbak, the secretary of the association of Slovenian natural spas, highlighted that spas
did not receive enough attention given that they are one of three prime products of the
Slovenian tourism. They record 30 percent of all night stays in Slovenia and generate EUR
130m gross income.
He said spa tourism received SIT 16.3bn (EUR 68m) of money from European structural
funds for the 2004-2006 period for ten projects. This is 70 percent of all funds approved for
the co-funding of tourism facilities.
Milan Kriselj, in charge of countryside tourism at the Slovenian Tourism Association, said
that the strategy lacked enough elements to provide tourism development of the countryside.
He said the conditions had to be provided to improve the quality of people's lives, diminish
regional differences, preserve natural environment and cultural heritage.
Gaming, another main product of the Slovenian tourism, generated SIT 70bn (EUR 292m) in
revenues and over SIT 20bn (EUR 83,4m) in direct taxes from the gaming industry and
licences.
These latter funds are allocated for the encouragement of tourism growth by law. Dusan Luin
of the Nova Gorica-based casino chain Hit said these funds had not been actually invested in
the encouragement of the tourism development.
Tourism, which employs 6.4 percent of Slovenian labour force, last year generated 4 percent
of GDP and EUR 1.3bn of foreign exchange inflow. The foreign exchange inflow is to raise
to EUR 1.6bn by 2006 and the number of night stays is anticipated to grow from 7.2 million
in 2002 to 9 million.
Hypermarkets Taking Over in Slovenia
According to the survey "Shopper Trends" by market research firm ACNielsen, Slovenia
boasts the highest number of hypermarkets and supermarkets per capita in Central and
Eastern Europe, namely 177 per 1 million residents
A regional market survey suggests that Slovenians rank among most modern consumers in
Central and Eastern Europe, as they like to shop most in hypermarkets and supermarkets.
According to the survey "Shopper Trends" by market research firm ACNielsen, Slovenia
boasts the highest number of hypermarkets and supermarkets per capita in Central and Eastern
Europe, namely 177 per 1 million residents.
The survey presented to the press on Wednesday, 16 March, moreover suggests that sales in
these shops are bound to increase further, which will be at the expense of small, traditional
shops.
Currently, 36 percent of Slovenians still shop in traditional stores, which is a high share
compared to other countries of Central and Eastern Europe.
When choosing where to go, Slovenian consumers, above all, like to "find fast what they
need", while they also wish "to find it all at one place" and "access" there easily.
As is the case with other countries, retailers planning to open shops in Slovenia pay most
attention to the location of their shops in order to meet consumer demand for "practicality".
Slovenia is yet to see, on the other hand, an increase in outlets. Two top European discount
chains Lidl and Hofer have announced their arrival, while Italian Eurospin is already opening
outlet stores together with Slovenian retailer Tus.
The survey, which involved 1,200 Slovenian respondents and was carried out in October
2004, also maintains that Slovenian consumers are not generally loyal to brands, especially
when it comes to food products.
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However, they are extremely loyal to their favourite brand of beer: as much as 36 percent
would go to look for their beer to another shop or would wait for stocks coming in, a share
even higher than with the Czechs, the world's number 1 beer drinking nation.
Slovenia Hosts International Public Procurement Conference
EU spends 16% of GDP on public procurement
The EU spends some 1,500 billion euros for public procurement, which is more than 16% of
the Union's GDP, according to Bertrand Carsin, head of public procurement policy at the
European Commission Internal Market Directorate General. Carsin was addressing a press
conference on the margin of a two-day European conference on public procurement, which
brought together 80 officials from 38 countries in Ljubljana on Thursday, 17 March.
According to him, the importance of public contracting is not expected to lessen, given the
rapid development of infrastructure, especially in the new EU members.
The European Parliament last year passed new directives on this field, so that all EU member
states must bring their legislation in line with them by 1 January 2006.
The conference, sponsored by the European network of EU member states, acceding countries
and other European countries, plays an important part in the exchange of views and
experiences in public contracting.
All countries face difficulties in implementing new directives, and there are also certain
problems concerning the implementation of the existing legislation.
Slovenia, which has a single public procurement law, will have to adopt new legislation to
include the latest European directives. As a result, there will be two laws dealing with this
issue, according to the head of the conference's organisational committee Igor Soltes.
Since European directives only state goals that need to be achieved, but not the way to
achieve them, countries decide themselves what model to use. The Ljubljana conference is
therefore aimed at comparing different instruments among countries.
According to Soltes, the question is how individual methods - such as electronic auctions,
public procurement centralisation, framework agreements - affect public contracting in terms
of effective use of public funds.
The UK, for example, has saved 18% of the funds through e-auctions. The conference also
listened to the Italian presentation of comparison of public procurement across EU members.
Officials from Denmark outlined their model of transposition of European directives in their
national legislation, while their German peers spoke about a reform in the public procurement
system.
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COMPANIES
Footwear Maker Sees Revenues Increase, Profit Drop
Footwear maker Alpina generated revenues of SIT 11.9bn (EUR 49.64m) in 2004
Footwear maker Alpina generated revenues of SIT 11.9bn (EUR 49.64m) in 2004, up 7
percent over the year before. The group's net profit stood at SIT 206m (EUR 859,000), a fall
of 7 percent.
Alpina, which specialises in sports footwear, including ski and cross-country boots, saw its
sales grow by 6.5 percent at home and 7 percent on foreign markets.
Exports made up for 70 percent of all sales, Alpina said in a press release.
The fall in the profit is a result of new accounting methods in calculating the profits of its
subsidiaries. Had the same method been used as last year, Alpina would have reported a profit
of SIT 305m (EUR 1.27m).
Alpina continues to be the standout Slovenian performer in an industry that has been hard hit
by globalisation.
According to the group, the solid results in 2004 are a good basis for success in the future.
Alpina hopes its newly-opened production plant in China will help it keep up with the
competition.
Engrotus Beats Forecasts, Increases Market Share
Retail group Engrotus saw its sales surge 37 percent to SIT 89.6bn (EUR 373.72) in 2004
Retail group Engrotus saw its sales surge 37 percent to SIT 89.6bn (EUR 373.72) in 2004.
The group, Slovenia's third-largest grocer, said its market share in Slovenia stood at 18
percent.
The non-listed company reported a profit of SIT 2.6bn (EUR 10.84m), an increase of 14.5
percent over the year before.
According to Engrotus general manager Aleksander Svetelsek, the group beat forecasts for
last year. He stressed that the company had managed to increase its market share in Slovenia
from 5 percent to 18 percent over the last five years, while it expects to have control of a
quarter of the market by 2007.
Engrotus' rise is based on quality products, Svetelsek said, adding that the company has also
focused on the development of own-brand products. These now account for 22 percent of all
sales.
According to him, the group will concentrate on complementing its retail operations with a
better offer of entertainment and leisure activities, such as cinemas and bowling alleys.
Asked about how it intends to respond to the growing presence of discount retailers in
Slovenia, Svetelsek said the group would offer special discounts in order to be competitive
even against discount shops.
Svetelsek also revealed the company intends to expand to foreign markets in the next four
years.
The company anticipates sales to grow by 18 percent this year. Moreover, it plans to employ
an additional 130 workers.
Big Plans to Revamp Mineral Water Company Voda Juliana
Efforts are being made to change the bankruptcy proceedings into bankruptcy protection,
which would open the way for Voda Julijana to start selling mineral water to Russia
New owners of the mineral water producer Voda Julijana have unveiled ambitious plans to
revamp the ailing company, facing bankruptcy proceedings. Efforts are being made to change
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the bankruptcy proceedings into bankruptcy protection, which would open the way for Voda
Julijana to start selling mineral water to Russia.
Companies Roga and Gemag-center, the owners of Voda Julijana, have signed a contract with
the Victoriya - Galaba holding on annual sales of 13.5m litres of mineral water valued at EUR
4m. The holding operates in Russia, Uzbekistan and Bulgaria.
Moreover, talks are underway on other deals abroad on the sale of the high-quality mineral
water.
A financial reorganisation plan will be presented to the Kranj district court this month, and the
court will decide whether to give the green light to the change of the bankruptcy proceeding
into bankruptcy protection, Nevena Tea Gorjup of Gemag Center and Marjan Krajnc of Roge
told the press on Tuesday, 15 March.
All creditors of Voda Julijana have been called upon to convert their claims into ownership
shares if the bankruptcy protection plans receive a go-ahead. If the plan succeeds, the first
shipment of Julijana water could be sent to Russia as early as April.
Marjan Krajnc of the company Roge is also the manager of Studentski servis Maribor, a
student job agency that bought out several creditors in January which forced the bankruptcy
court to halt the sale until a new board of creditors is named.
Juliana got into trouble in June 2002 when its biggest creditor, savings bank HKS Sicura,
went into bankruptcy, which forced the company to pay up its loans. Although it was making
a profit, it could not pay up the loans and was forced into bankruptcy. A total of 178 creditors
demand SIT 3.4bn (EUR 14.2m). The trustee in bankruptcy admitted a total of SIT 2.7bn
(EUR 11.3m) in claims and threw out the rest.
Juteks Beats 2004 Targets
Vinyl floorings maker Juteks generated operating revenues of SIT 9.36bn (EUR 39m) in 2004
Vinyl floorings maker Juteks generated operating revenues of SIT 9.36bn (EUR 39m) in
2004, an increase of 9.3 percent over the year before. The net profit amounted to SIT 1bn
(EUR 4.17m), the company said on Wednesday, 16 March.
The supervisory board examined the results on Tuesday, 15 March and concluded that the
company operated successfully in 2004 as it surpassed business targets.
The Zalec-based producer expanded the production of floorings in terms of square metres by
8.4 percent year-on-year, while it also increased the production of top-end products by 3.6
percent, according to the company.
Next year, the company plans to increase its sales by 8.5 percent.
Mobitel Scores Court Victory in Kosovo
Slovenia's leading mobile carrier Mobitel on 16 March scored an important court victory in
Kosovo as a Pristina court ruled that the Kosovo Telecommunication Regulatory Authority
(TRA) must grant it frequencies for its planned network in the province
Slovenia's leading mobile carrier Mobitel on Wednesday, 16 March scored an important court
victory in Kosovo as a Pristina court ruled that the Kosovo Telecommunication Regulatory
Authority (TRA) must grant it frequencies for its planned network in the province.
The court ruled that the TRA must grant Mobitel the frequencies within 15 days. The move
has been welcomed by Mobitel, which hopes Kosovo authorities will respect the ruling.
The ruling is final as both sides waived their right to an appeal, Mobitel said in a press
release.
The company said it was looking forward to launching the construction of the network
together with its local partner Mobikos as soon as possible.
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The TRA selected the Mobitel and Mobikos consortium as the winner of bidding for the
second mobile phone license in the province in June, but the Kosovo government requested an
opinion on the matter from the United Nations administration in the province (UNMIK).
Citing "serious flaws" in the process, supposedly established by an independent audit,
UNMIK urged the authorities to annul the tender.
However, the TRA said the selection process was carried out correctly and decided in midOctober to grant the license to Mobitel and Mobikos. This prompted UNMIK to annul the
tender.
Mobitel responded to UNMIK's announcement on 26 October by launching legal action to
protect its interests. Mobitel argued that UNMIK did not have the authority to annul the
tender.
Mobitel has already paid for the license: in December, it deposited seven million euros on a
special account which the Kosovo government will be able to access once Mobitel is given
the frequencies for its network.
Apart from Mobitel's local partner, five other companies entered bids for the second mobile
services license in Kosovo, among them Swedish Tele 2, the consortium IPKO, linked to the
US Western Wireless International, Albacell (Norwegian Telenor and Siemens), and Kostel
(Orange Group).
Mobitel's most serious rival for the licence was US company Western Wireless International.
Local media reports have suggested that the US company relied on respected US lobby
groups to pressure UNMIK and the Kosovo government into invalidating the bidding.
Pivka Gets Halal Certificate for its Poultry Products
Poultry company Pivka perutninarstvo has been granted a Halal certificate for its products,
the first step in efforts to boost sales on Muslim markets
Poultry company Pivka perutninarstvo has been granted a Halal certificate for its products, the
first step in efforts to boost sales on Muslim markets.
The company, which has a 25 percent market share in Slovenia, hopes to overcome its recent
struggles by raising sales on traditional Muslim markets, where poultry is in high demand.
According to Alekander Debevec, the chairman of Pivka, the company launched efforts to
obtain the certificate because of a surge in demand for Halal products.
In a bid to secure the certificate, the company established a special working group. The group
was assisted in its efforts by Mufti Osman Djogic, the highest Muslim official in Slovenia.
The company had to make minor adjustments to its production line in order to fulfil the strict
criteria of the Halal Certification Authority Europe, Pivka said.
The company generated sales of SIT 5.5bn (EUR 22.94) last year, which is 11 percent more
than in 2003.
In spite of the jump in sales, the company posted a loss of SIT 377m (EUR 1.57m) last year.
It blamed surging prices of raw materials and falling sales prices for the loss.
Perutnina Ptuj Acquires Agrokombinat Maribor
Perutnina Ptuj, the largest poultry company in Slovenia, has increased its stake in
Agrokombinat Maribor to 84.42 percent
Perutnina Ptuj, the largest poultry company in Slovenia, has increased its stake in
Agrokombinat Maribor to 84.42 percent, according to a notice published in the daily Vecer on
Friday, 18 March.
Perutnina Ptuj acquired 82.91 percent of Agrokombinat shares in a takeover bid that expired
on Tuesday, 15 March. Before publishing the bid, Perutnina owned 1.5 percent of the
takeover target.
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The poultry company offered SIT 1,000 (EUR 4.17) per share in cash, or some SIT 414m
(EUR 1.73m) for the total of 413,977 shares it acquired. The company said that the bid was
successful.
As a result of the acquisition, Perutnina Ptuj will add about 1,500 hectares of farmland to its
portfolio.
The Agrokombinat management did not oppose the bid and considered it in line with the
company's interests. The consolidation of food and agriculture industry will ensure successful
growth and development, the company said as the bid was published.
The main business of Agrokombinat Maribor is the production of field crops on 1,500
hectares of arable land in long-term lease from the state. It also owns a fodder packaging
facility.
The company posted revenues of SIT 1bn (EUR 4.2m) in 2004, according to preliminary data,
with profits at SIT 20m (EUR 83,000).
Perutnina Ptuj concluded 2004 with a profit of SIT 350m (EUR 1.4m) on sales of EUR
145.3m.
Tekstina Avoids Red Figures
Textiles producer Tekstina reported revenues of SIT 3.6bn (EUR 15m) in 2004
Textiles producer Tekstina reported revenues of SIT 3.6bn (EUR 15m) in 2004, up 7 percent
year-on-year, while profits amounted to SIT 4.8m (EUR 20,000), down 20 percent, the
Ajdovscina-based company said on Friday, 18 March.
The company said in a press release that the results were lower than expected due to higher
costs of production and material, dropping number of orders and fierce competition.
The company, which employs 300 people, would have actually reported losses if it had not
sold some of its real estate, according to the press release.
Despite poorer results, Tekstina is one of few Slovenian textile companies to have avoided red
figures last year.
Telekom Sees Operating Profits Explode
Generating SIT 157bn (EUR 655m) in operating revenues last year, a 14 percent increase on
2003, Telekom Slovenije, which has a monopoly on the Slovenian market, saw its operating
profits soar 45 percent to SIT 14.9bn (EUR 62m)
Slovenia's state-owned telecommunications group saw its operating profits explode last year.
Generating SIT 157bn (EUR 655m) in operating revenues last year, a 14 percent increase on
2003, Telekom Slovenije, which has a monopoly on the Slovenian market, saw its operating
profits soar 45 percent to SIT 14.9bn (EUR 62m).
Reviewing last year's results, the supervisory board of Telekom Slovenije concluded that all
key goals had been surpassed.
The parent company, which operates fixed line services, generated SIT 88.7bn (EUR 370) in
operating revenues and SIT 8.5bn (EUR 35.5m) in net profit, which represents a jump of 11
percent and 32 percent respectively, the company said.
Apart from the fixed line company, the group also includes Mobitel, Slovenia's leading
wireless carrier, and Siol, the country's top Internet provider.
Moreover, the company said that the management and supervisory board endorsed a plan to
list Telekom's shares on the stock market.
The supervisory board also decided to convene a general assembly for 26 April in line with a
government request. In its capacity as the biggest shareholder of Telekom, the government
intends to replace the supervisory board.
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SLOVENIA IN BRIEF
People Satisfied with First 100 Days of Jansa Government
An overwhelming majority of Slovenians are happy with the work of the Janez Jansa centreright government during its first 100 days in office. According to a poll commissioned by the
public broadcaster, 71% of those questioned are satisfied or very satisfied with the
government. The latest survey, whose results were released by TV Slovenija on 13 March,
shows that 60% of those questioned are satisfied with the work of the Jansa government,
while 11% are very satisfied.
Jansa: EU Decision Not Good, But Not Tragic for Croatia
Prime Minister Janez Jansa believes the EU foreign ministers' decision not to clear the launch
of accession talks with Croatia is not good for Croatia, but neither is it tragic. The Slovenian
government regrets that the EU foreign ministers failed to approve the launch of talks with
Croatia, Jansa stressed. However, Jansa said Slovenia welcomed the adoption of a negotiating
framework, since this was an important and positive development that overshadowed the
decision not to approve the start of talks.
EU Warns Slovenia about Delay in Biofuel Directive
The European Commission has issued a formal warning to Slovenia, notifying it that it has
not provided a report on the transposition of the directive on biofuels until the December 2004
deadline. Slovenia also failed to report on the target share of biofuels, which it should have
done until 1 July 2004, the Commission said on Wednesday, 16 March. Slovenia is one of 19
EU members that received the warning. A total of 9 member states also failed to report on the
target shares for biofuels.
Slovenia and Great Britain Share Bologna Process Experience
The Bologna process and higher education were the subjects of a debate attended by
Slovenian and British education experts in Ljubljana on Wednesday, 16 March aimed at
exchanging experience. The debate, organised by the Ministry of Higher Education, the
British Council and the Centre for Mobility and European Education & Training Programmes,
touched on experience in testing the quality of higher education, the introduction of a system
of credits and common diplomas.
Gorisek Stays at the Helm of Insurance Supervision Agency
The government on Thursday, 17 March extended the term of director of the Agency for
Insurance Supervision. At the helm of the agency since 2000, Jurij Gorisek has been
appointed for another five years. The director is named by the government at the proposal of
the finance minister. In addition to Gorisek, the agency's consultant Julijana Bizjak Mlakar
was running for the post.
IMF Officials Briefed on Changes in Public Administration
Public Administration Minister Gregor Virant on Thursday, 17 March met a regular annual
mission of the International Monetary Fund for talks dominated by public administration
salaries and employees. According to a press release from the Public Administration Ministry,
IMF officials inquired about public sector wage reform, the number of employees in the
sector and cost-cutting measures.
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Stud Farm Lipica Needs Major Government Money Injection
The stud farm Lipica, famous for its Lipizzaner horses, needs an urgent government money
injection of SIT 100m (EUR 0.41m) otherwise it will not be able to pay its employees at the
end of the month, a group of experts appointed by the government to advise the troubled farm
said on Friday, 18 March.
Ikea Cancels Deal with Tomos
Swedish furniture giant Ikea has cancelled its deal with Koper-based company Tomos on the
supply of steel furniture parts. The move is expected to result in job cuts at Tomos. According
to Tomos, Ikea has chosen to cancel the deal in spite of good cooperation. The Swedish
company has decided to import components from Eastern Europe and China, where labour
costs are lower, it added.
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