Slovenia Business Week no. 13, March 29th, 2005
Table of Contents:
HEADLINES ............................................................................................................................. 3
Prevent Global Entering High-Tech Market .......................................................................... 3
Mercator Launches Fifth Croatia Mall ................................................................................... 3
Viator&Vektor Logistics Company Penetrating Serbian Market .......................................... 4
INTERNATIONAL COOPERATION ...................................................................................... 5
IMF Praises Slovenia's Achievements, Highlights Risks....................................................... 5
PM Notes Croatia's "Unusual" Situation ................................................................................ 6
Slovenia Opens Consulate in Edinburgh ................................................................................ 6
Drnovsek and Mesic Discuss Bilateral Issues ........................................................................ 6
Businessmen and Diplomats Note Many Problems in Trade ................................................. 7
EUROPEAN UNION ................................................................................................................. 8
Jansa: Amended Lisbon Strategy Means No Extra Work for Slovenia ................................. 8
Bajuk Hopeful Agreement on Stability Pact Paves Way to Budget Deal .............................. 8
PM Says Slovenia Could Change its Classification at NUTS 2 Level .................................. 9
Jansa Pleased with Summit's Decision to Send EU Mission to Croatia................................. 9
Jansa: Overhauled Lisbon Agenda Increases Commitment of Member States ................... 10
EU Enlargement Tops Rupel-Asselborn Talks .................................................................... 10
Transport Minister Disputes EU Figure on Motorway Cost ................................................ 11
LEGISLATION ........................................................................................................................ 13
New Legislation Gives More Emphasis on Environment .................................................... 13
STATISTICS/FORECASTS .................................................................................................... 14
Slovenia Successful but Too Slow, Says IMAD Report ...................................................... 14
Slovenia Sees Increase in Internet Users.............................................................................. 15
Report Warns of High Wage Growth ................................................................................... 15
Sentiment Indicator Level in March ..................................................................................... 15
FINANCE................................................................................................................................. 17
Government Will Not Interfere with Banks' Business, Says PM ......................................... 17
Stock Exchange Phases Out Free Market Index .................................................................. 17
Central Bank Will Adjust to Stability Pact Changes ............................................................ 17
Tomaz Toplak at the Helm of Provisional KAD Management ............................................ 18
Bank Austria Creditanstalt Wants to Control 10% of Slovenia Market .............................. 18
Member of the Government's Tax Reform Team on Tax Code ........................................... 19
Banka Koper to Sell Capital Shares ..................................................................................... 19
Companies Want More Flexibility in Wage System ............................................................ 20
Ljubljana Stock Exchange .................................................................................................... 20
Foreign Exchange ................................................................................................................. 21
BRANCH INFORMATION .................................................................................................... 22
Consumers Have Say in Environmental Protection, Conference Told ................................ 22
EUR 7m of Unforeseen Transfer of Expenses at Agriculture Ministry ............................... 22
Fresh Water Resources in Slovenia Fairly Well Preserved .................................................. 23
Slovenia Looking to Learn About Waste Management from Austria ................................. 23
Experts Call for Protection of Water Sources ...................................................................... 24
MPs Pass Policy to Improve Nation's Diet........................................................................... 25
Environment Agency Finds Only High Ridges Suitable for Wind Power ........................... 25
Slovenian-Made Tokaj Renamed to Tocaj ........................................................................... 25
COMPANIES ........................................................................................................................... 27
Krka Seeking Investors in Western Europe ......................................................................... 27
Incoming Lek Chairman Gets Supervisory Board Backing ................................................. 27
Istrabenz Boosts Y/Y Earnings, Falls Short of Targets ....................................................... 27
Sava Increases Stake in Pivovarna Lasko ............................................................................ 28
Simobil Reports 2004 Net Loss, But Posts First Operating Profit ....................................... 28
Schefenacker Buys Property from Bankrupt Textile Company ........................................... 29
Novartis CEO Says Lek Well-Positioned in Central Europe, Russia .................................. 29
Kovintrade Reports Jump in Revenues ................................................................................ 30
Store Steel Mill Increases Output by 20% ........................................................................... 30
Belinka Beats Forecast with Second Year of Robust Growth.............................................. 30
Flavourings Maker Etol Sees 32% Rise in Profit ................................................................. 31
Helios Sales Surge 30 Percent .............................................................................................. 31
Companies Call for More Efficient Business Diplomacy at a Panel ................................... 31
SLOVENIA IN BRIEF ............................................................................................................ 33
Slovenia Presiding over CEEPUS This Year ....................................................................... 33
Puksic Meets with Minority Party in Italy ........................................................................... 33
Jansa Holds Brief Meeting with Berlusconi ......................................................................... 33
Rupel Pleased with Annan's UN Reform Proposal .............................................................. 33
GM of State-Owned Power Producer Steps Down .............................................................. 33
European University One Step Closer ................................................................................. 33
Military Attaches Conclude Regular Consultations ............................................................. 33
Clocks Turned Forward to Summertime .............................................................................. 34
UNMIK Rejects Court Verdict on Mobitel .......................................................................... 34
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HEADLINES
Prevent Global Entering High-Tech Market
The Slovenj Gradec-based company Prevent Global has decided to launch a new production
of optical memory cards in Slovenia
The Slovenj Gradec-based company Prevent Global has decided to launch a new production
of optical memory cards in Slovenia despite great interest of its foreign partners to win the
deal. Test production is expected to start in December.
Investment will amount to between EUR 40 and 50m at the initial stage, CEO Joze Kozmus
told the press on Wednesday, 23 March, adding that the investment would return in seven
years at the latest.
The company is deliberating four to five possible locations for the new production facility.
Refusing to disclose them, Kozmus said that the chosen location would be known in three
months.
The new plant, the second of the kind in the world, will employ a workforce of 100, according
to Kozmus. It will produce 10 million optical memory cards and post revenues of EUR 40m.
He said the production could be upgraded in a relatively short period to raise the output to 30
million memory cards.
The production will be based on a licence agreement between Laser Card and Global
Investment Group signed in 2004.
Prevent, a leading European manufacturer of car-seat covers, will enter high-technology
market with the new production. "Sewing car-seat covers does not guarantee stable future in
the long term, which is why searching new market niches is a must," Kozmus said on
Wednesday, 23 March. Memory cards will be sold on the European, Asian and African
markets.
Marjan Spegel of the Jozef Stefan Institute of science and research said at the press
conference held by Prevent Global that the investment into expertise and technology needed
for the production of laser cards in Slovenia would strengthen Slovenia's position as a hightech producer. It will also boost the development of expertise, technology, systems and
solutions based on smart cards at home, Spegel said.
Mercator Launches Fifth Croatia Mall
The EUR 25m centre in the town of Zadar, in northern Dalmatia, is the latest addition to an
ever-growing chain of Mercator shopping centres in Croatia
Slovenia's largest grocer, Mercator, has opened its fifth shopping centre in Croatia as it
continues its push to capture ten percent of the country's grocery market.
The EUR 25m centre in the town of Zadar, in northern Dalmatia, is the latest addition to an
ever-growing chain of Mercator shopping centres in Croatia.
Apart from the five already completed, works are set to begin on at least five new locations in
the near future, Mercator chairman Zoran Jankovic told the press as he opened the new centre.
Mercator is set to build its next mall in the northern Croatian port town of Rijeka, he revealed.
Jankovic added that he was not scared of the fierce competition on the Croatian market and
rejected claims that Mercator was the most expensive of all the big chains operating in the
country.
The centre in Zadar stretches across an area of 12,500 sq. metres, a quarter of which is taken
up by Mercator's shop, while other stores, including sporting goods chain Intersport, occupy
the rest of the space.
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More than half of the goods sold in Mercator's shop will be local, while 15 percent will come
from Slovenia, Jankovic said.
Meanwhile, the head of Mercator operations in Croatia Stanislav Brodnjak said the company
has opted to build two roads in Zadar in return for an exemption to municipal tax. The roads
will cost more than the municipal tax, he added.
The new centre will create 230 new jobs, including 130 in Mercator's shop. This will raise the
total number of workers employed by Mercator Croatia to 1,640.
Slovenia's largest grocer first entered the Croatian market in 2000. Since then it has opened 84
outlets around the country.
Viator&Vektor Logistics Company Penetrating Serbian Market
In March it acquired a second local company by taking over the Kragujevac-based shipping
company Zastava Sped
Viator&Vektor, a Slovenian haulage and forwarding company, is making efforts to penetrate
the Serbian market. In March it acquired a second local company by taking over the
Kragujevac-based shipping company Zastava Sped.
CEO Zdenko Pavcek told STA that Viator&Vektor would continue to pursue the strategy of
forming a network of companies dealing with logistics services in SE Europe, as well as
Western Europe.
The company, which has offices at all border crossings of Serbia-Montenegro, has the
ambition to become a leading firm offering comprehensive logistics services in SE Europe.
Viator&Vektor also sees opportunities in cooperation with companies from SerbiaMontenegro in servicing and in the maintenance of military freight vehicles and in the
production of buses, which is the main activity of its Maribor subsidiary Tovarna vozil
Maribor.
The company, which is familiar with the experience of Serbia-Montenegro companies in
military industry, also believes it could produce light armoured vehicles Valuk for the Serbian
market, Pavcek told STA.
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INTERNATIONAL COOPERATION
IMF Praises Slovenia's Achievements, Highlights Risks
The goal of the almost two-week mission was to get acquainted with key development policies,
the implementation of the planned structural reforms and any changes since their last visit
here
Slovenia's achievements in 2004 were better than the International Monetary Fund (IMF) had
forecast, yet the country still needs to curb inflation and tackle the budget deficit, an IMF
delegation said after completing a two-week routine mission to Slovenia on Monday, 21
March.
The country recorded robust economic growth, entered the ERM II exchange rate mechanism
and is well prepared for the introduction of the euro planned in 2007, IMF mission head
Biswajit Banerjee told the press.
"Things are going well, the prospects look good but the situation is not without risk. One has
to be aware of these risks and ready to respond quickly. One has to have a balanced approach
of policy mix, which depends on how close you are to the end of the period of euro adoption,"
Banerjee assessed.
The IMF recommends that Slovenia keep a close eye on inflation movements and act quickly
if there are any deviations from the set path. Last year, inflation slowed down quicker than the
IMF thought it would, despite high oil and production prices: the central bank's prediction that
inflation will be curbed to 2.5 percent by the end of the year is thus feasible, he said.
Yet there are also some risks in reducing inflation further, to the level stipulated by the
Maastricht criteria, according to Banerjee: the reference inflation rate rests on inflation in the
three most successful eurozone countries, and there is a risk of higher consumer prices if
factory-gate prices rise faster.
Banerjee said that wage growth should be commensurate to productivity, or else inflation will
receive a boost. In the trade sector productivity grew faster than wages and social partners
should make efforts to pursue this policy, he added.
Fiscal policy is also crucial in efforts to rein in inflation. Banerjee said that budget
expenditures should retain savings measures built into the 2005 budget, while pressure for
further spending should be resisted. The structure of expenditure should not affect the budget
flexibility, he said.
Finance Minister Andrej Bajuk, who attended the press conference, said that the government
is drafting the supplementary budget for this year with a view to reducing the deficit by up to
SIT 20bn (EUR 62.6m).
Banerjee is meanwhile reserved about changes to the methodology for calculating pensions,
as pensions would skyrocket. The IMF thus estimates that changing the indexation of
pensions is questionable from the vantage point of fiscal stability.
Bajuk explained that the government would tackle this issue in the second half of the year as
part of preparations for the 2006 and 2007 budgets. Possible changes to the calculations will
certainly not exceed frameworks stipulated in the budget, Bajuk stressed.
Last year's GDP growth, at 4.6%, beat IMF forecasts. The IMF's forecast for this year is 4
percent and for 2006 3.8 percent. According to Banerjee, these figures are based on the
presumption that demand from abroad will dwindle and the fact that the number of working
days will be lower than last year.
Banerjee is reserved about the possibility that Slovenia would introduce a flat tax rate like
Slovakia did. "This option must be studied very carefully," he said, adding that such a change
5
entails many other changes. He said Slovenia should wait, as the period leading up to euro
adoption is not appropriate for such experiments.
The press conference marked the end of the IMF delegation's visit, which started on 9 March.
The mission visited the Bank of Slovenia, the Finance Ministry and other government
institutions as well as trade unions, the Chamber of Commerce and Industry and the Statistics
Office.
The goal of the almost two-week mission was to get acquainted with key development
policies, the implementation of the planned structural reforms and any changes since their last
visit here.
PM Notes Croatia's "Unusual" Situation
Heads of government from the ranks of the European People's Party (EPP) will propose at
the EU summit that the Union's leaders carry out informal talks about Croatia, PM Janez
Jansa said after the EPP meeting
Heads of government from the ranks of the European People's Party (EPP) will propose at the
EU summit that the Union's leaders carry out informal talks about Croatia, PM Janez Jansa
said after the EPP meeting on Tuesday, 22 March. He labelled Croatia's situation after the
postponement of accession talks as "unusual".
"We took the almost unanimous decision to propose that the European Council address the
situation as part of the informal debate," Jansa said. He added that subsequent steps are "in the
air", which has a detrimental effect on Croatia and the entire region.
Although EU leaders will not take any decisions regarding Croatia, Jansa expects that they
will give instructions to the foreign ministers (who on 16 March took the decision to postpone
the start of accession talks) to "better define" the criteria of full cooperation with The Hague.
"The European Council concluded in June last year that Croatia cooperates fully with The
Hague, but the decision has now been made at a lower level, which is unusual," Jansa
explained.
Croatian PM Ivo Sanader also attended the EPP meeting. He said he was pleased with the
debate on Croatia, as a large part of the participating prime ministers voiced support for
Croatia's ambitions.
Slovenia Opens Consulate in Edinburgh
The consulate is expected to boost economic and culture cooperation between Scotland and
Slovenia, and raise awareness about Slovenia in this part of Great Britain
Slovenian Ambassador to Great Britain Iztok Mirosic and Honorary Consul Ana Wersun on
Wednesday, 23 March inaugurated a consulate in Edinburgh, the first Slovenian consular
mission in Scotland.
The consulate is expected to boost economic and culture cooperation between Scotland and
Slovenia, and raise awareness about Slovenia in this part of Great Britain, the Slovenian
embassy in London said in a press release.
Mirosic also visited Glasgow, where he met with representatives of the Scottish chamber of
commerce to discuss ways of promoting economic cooperation.
Drnovsek and Mesic Discuss Bilateral Issues
Slovenia would like to see a stable Croatia within the EU so the bilateral trade will improve
even further
Slovenia would like to see a stable Croatia within the EU so the bilateral trade will improve
even further. This is what the Slovenian President Janez Drnovsek and his Croatian
counterpart Stipe Mesic told the press as they met for an informal meeting at Bizeljsko on
Thursday, 24 March.
6
The two presidents met after the EU last week postponed accession talks with Croatia, which
is why special attention was paid to the subject at the talks, the pair said.
Mesic thanked Drnovsek for Slovenia's support for Croatia's EU entry, which he believes will
benefit both countries, particularly in economy.
Drnovsek said that the informal meeting was aimed at tackling open bilateral issues. Here,
Slovenia is very much interested in Croatia starting EU accession talks, he said.
Mesic invited Drnovsek to visit Croatia for a continuation of talks on bilateral issues.
Also discussed was a planned meeting of the two presidents and Italian President Carlo
Azeglio Ciampi to discuss the resolution of open questions from the end of WWII. Drnovsek
and Mesic said that preparations were underway for the meeting, however, they stressed the
need for the appropriate political atmosphere.
Businessmen and Diplomats Note Many Problems in Trade
Businessmen gathered in the business club Zlatorog have stressed they encounter many
difficulties in trying to do business in countries of the former Yugoslavia, ranging from
unclear ownership structures to intellectual property protection
Businessmen gathered in the business club Zlatorog have stressed they encounter many
difficulties in trying to do business in countries of the former Yugoslavia, ranging from
unclear ownership structures to intellectual property protection. They vented their grievances
in a debate on Thursday, 24 March, attended by ambassadors from Croatia, Macedonia and
Serbia-Montenegro, who in turn pointed to problems on the other side.
Chairman of flavour maker Etol thus emphasised the poor liquidity of the companies there,
and transition circumstanced that aggravate business operations.
Henrik Dvorsak, the director of heating-system manufacturer Weishaupt, pointed out that his
company would not have been able to register a subsidiary in Zagreb in 1993 had it not
received assistance from the Slovenian Ambassador.
SIP Sempeter, a maker of machinery for agriculture, will have to pull out of Serbia after two
years because they are unable to get suppliers that could ensure appropriate quality, according
to director Andrej Korosec.
The ambassadors, meanwhile, pointed to problems that companies from their countries have
in Slovenia. Croatia's Mario Nobilo thus noted that his embassy, too, often helps Croatian
businesses here to ensure that they have the same conditions that domestic enterprises have.
Macedonian Ambassador Iljaz Sabriu additionally highlighted the imbalance in trade with
Slovenia. He said it could be mitigated if Slovenia increased investments in Macedonia.
Ranko Milovic, the ambassador of Serbia-Montenegro, stressed that his country's agriculture
expanded by 19.5 percent last year, but companies still find it difficult to penetrate the EU
market.
"We expect Slovenia to help in a breakthrough to this market, and in exchange offer
Slovenian companies...to enter the market of the Russian Federation with the help of a free
trade agreement," he noted.
Milovic also stressed that Slovenian companies could be more active in the privatisation of
Serbia-Montenegro companies.
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EUROPEAN UNION
Jansa: Amended Lisbon Strategy Means No Extra Work for Slovenia
Prime Minister Janez Jansa estimated that the amended Lisbon Strategy does not mean any
additional work for Slovenia since key reforms envisaged in the strategy are already featured
in the government programme for its current four-year term
Prime Minister Janez Jansa estimated on Monday, 21 March that the amended Lisbon
Strategy does not mean any additional work for Slovenia since key reforms envisaged in the
strategy are already featured in the government programme for its current four-year term.
Jansa made the assessment on the sidelines of a panel gathering his ministers, the director of
the Institute for Macroeconomic Analysis and Development (IMAD), a member of the
government Strategic Council for Economic Development, a member of the European
Parliament and European Commissioner Janez Potocnik.
The prime minister said he was pleased that the Lisbon Strategy has become more realistic in
terms of its goals. He was also satisfied that, in addition to economic efficiency, the strategy
talks about the quality of life and sustainable development.
According to Jansa, the strategy tackles a number of issues that Slovenia is currently facing,
such as excessive regulation of the entrepreneurship sector or cooperation between research
projects funded by the state on one side and those by the private sector on the other.
What is crucial, according to Jansa, is that the strategy envisages concrete mechanisms for
measuring the progress of EU member states in implementing its goals.
Jansa said that the government has not taken a decision yet on who to appoint as a national
coordinator for implementing the strategy. He said the job might be given to a new minister
without portfolio in charge of development or to the ministers for economics affairs and
regional development.
The round table was organised ahead of the summit in Brussels.
Bajuk Hopeful Agreement on Stability Pact Paves Way to Budget Deal
According to Bajuk, the agreement on Stability Pact reform opens the doors to a speedy
solution for the 2007-2013 financial perspective, the EU's budget framework
Finance Minister Andrej Bajuk has voiced hope that an agreement on the reform of the
Stability and Growth Pact achieved at the EU summit in Brussels on Tuesday, 22 March
paves the way to a deal on the next EU budget framework before June.
According to Bajuk, the agreement on Stability Pact reform opens the doors to a speedy
solution for the 2007-2013 financial perspective, the EU's budget framework.
"As a result an agreement on the financial perspective could be achieved during
Luxembourg's presidency (which lasts until June)," Bajuk said.
The Slovenian finance minister reiterated that Slovenia would like to see a deal on the next
budget framework during Luxembourg's presidency, since this would guarantee it remains
entitled to Objective 1 development funds.
Speaking about the Stability Pact reform, Bajuk stressed that implementation is crucial from
now on, and that the reform must be supplemented with the Lisbon Strategy overhaul.
"Without a solid basis and strong growth, all other efforts will be in vain," he said.
The finance minister said he supported, in principle, the directive on the liberalisation of the
services market, the most disputed part of the Lisbon Agenda. "Slovenia supports the
directive but a lot of negotiation will be necessary".
According to him, a lot can be achieved with amendments to the directive: "The wrapping can
stay the same while the contents change".
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PM Says Slovenia Could Change its Classification at NUTS 2 Level
Slovenia has secured itself an option to change its classification at the level of NUTS 2, which
serves as a basis for drawing funds from EU structural funds
Slovenia has secured itself an option to change its classification at the level of NUTS 2, which
serves as a basis for drawing funds from EU structural funds, Prime Minister Janez Jansa has
said.
The European Commission in a special statement voiced its readiness to change the country's
regional classification at any appropriate moment if necessary, Jansa said on the sidelines of
the EU summit in Brussels on Wednesday, 23 March.
"In Slovenia's case, this means that it could enforce a different regional classification before 1
January 2007, if the country makes such a request, and thus continue with negotiations for
division into regions under terms of NUTS directive," Jansa said. According to him, the
Commission made a commitment to draft changes on time.
The Commission issued the statement at the session of the committee of deputy permanent
representatives (Coreper 1), which confirmed amendments to the NUTS directive prompted
by last year's enlargement.
The agreement reached by this body must be formally endorsed by the Council of the EU,
which is expect to give its clearance without debate at one of its future sessions.
NUTS level 2 areas in the Nomenclature of Territorial Units for Statistics are important under
Objective 1 of the EU's regional policy, which is to promote the development and structural
adjustment of regions whose development is lagging behind.
Of these geographical areas, only those with a per capita GDP lower than 75% of the
Community average are eligible under Objective 1. Slovenia is considered as a single region
at NUTS 2 level, but the country has been making efforts to change this.
Jansa Pleased with Summit's Decision to Send EU Mission to Croatia
According to a special declaration passed by the EU summit, the Croatia mission is to
comprise representatives of the Luxembourg and the upcoming two EU presidencies, the
European Commission and EU's High Foreign Policy Representative Javier Solana
Prime Minister Janez Jansa has welcomed the decision of the EU summit to send a special
mission to Croatia to assess its cooperation with the Hague war crimes tribunal. "It is a good
decision, we have backed it, moreover we co-shaped it," Jansa said in Brussels on
Wednesday, 23 March.
"It is a fact that there are certain differences about this cooperation between the arguments
presented by the candidate country in the past months and the Hague prosecution," Jansa said.
"We have two sides and a mechanism had to be drafted that will weigh and in a way make a
proposal whether Croatia meets the condition of cooperation with The Hague to start the
talks," the PM said.
In the worst case scenario, the question would be left in the air and that would worsen the
stability not only of the candidate country but the region as a whole, the PM said.
"We are pleased with this move, also because a similar situation could repeat in the coming
years with a different candidate form the Balkans," said Jansa, reiterating that EU enlargement
to the region was in Slovenia's strategic interest.
"If we now finalise the mechanisms that can prevent potential delays in future, so much the
better for the region and the entire EU," said Jansa.
According to a special declaration passed by the EU summit, the Croatia mission is to
comprise representatives of the Luxembourg and the upcoming two EU presidencies, the
European Commission and EU's High Foreign Policy Representative Javier Solana.
The mission is to draft a report by May, according to Jansa. It will be used by the EU to pass a
decision on whether Croatia fully cooperates with The Hague.
9
The summit decided to send a mission to Croatia after the EU foreign ministers on 16 March
shelved Croatia accession talks over insufficient cooperation with the war crimes tribunal.
Jansa: Overhauled Lisbon Agenda Increases Commitment of Member States
PM Janez Jansa welcomed the reform of the Lisbon Agenda approved by the EU summit
PM Janez Jansa welcomed the reform of the Lisbon Agenda approved by the EU summit on
Wednesday, 23 March. He said the reformed economic plans were based on more realistic
grounds than they were five years ago when the agenda was first passed. Moreover, the
monitoring of implementation has become a part of the Strategy, which increases the
commitment of the member states.
"The EU today extended the life expectancy of the Lisbon Strategy, while abandoning the
goals set exaggeratedly high at the outset," Jansa said. "The Strategy has been brought down
to realistic ground...We have cast aside illusions from 2000 based on then economic
prosperity," the PM said.
Jansa stressed the monitoring of the Strategy's implementation. "This is no longer a general
document - every country must draft a three-year action plan whose implementation will be
monitored annually," Jansa stressed.
Liberalisation of the services market in the EU will be a key pillar of the relaunched Lisbon
Agenda, according to Jansa, who said that this would determine whether the EU will indeed
become one of the world's most competitive economies.
No member state questioned the liberalisation, he said, adding that the debate evolved around
the adequacy of the current draft directive. He said that the assessment prevailed in the end
that the draft directive be changed rather than abandoned altogether.
The PM also welcomed the reform of the Stability and Growth Pact, which was approved by
the European Council on Tuesday, 22 March. "It is very important that the reform was passed
without sacrificing the main part of the Pact, which is of key importance for stable economic
development of the EU in the coming years," the PM said.
EU Enlargement Tops Rupel-Asselborn Talks
The Luxembourg EU presidency will do all it can to create a positive starting position for
Croatia, Luxembourg Foreign Minister Jean Asselborn told the press after meeting his
Slovenian counterpart Dimitrij Rupel
The Luxembourg EU presidency will do all it can to create a positive starting position for
Croatia, Luxembourg Foreign Minister Jean Asselborn told the press after meeting his
Slovenian counterpart Dimitrij Rupel on Thursday, 24 March.
Asselborn pointed out that the EU agreed on the formation of a special mission to look into
Croatia's cooperation with the war crimes tribunal in The Hague.
He stressed that the doors of the EU are open to Croatia, however, the country must meet the
criteria of full cooperation with The Hague.
Asked who would decide whether Croatia indeed cooperates fully with the international
criminal tribunal, Asselborn said that it is clear that the decision would be taken by the EU
Council for General Affairs and External Relations.
Two things are important, according to him: the wish of the people from all 25 EU members
that the doors stay open for Croatia, and the necessity for Croatia to try harder to cooperate
fully with The Hague.
If this condition is met, we will arrive at a solution during Luxembourg's EU presidency, he
said.
Rupel and Asselborn also talked in general about EU enlargement, with Rupel noting that
Luxembourg's views is "somewhat more conservative".
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"Our friends from Luxembourg have pointed out that EU enlargement is not something that
should be taken lightly; the (membership) criteria are there for a reason," Rupel noted.
Asselborn noted that Romania and Bulgaria will have to work hard, but he is confident that
they will join the Union on 1 January 2007.
Turkey, he said, has made significant progress in legislative reform, but the country will also
have to improve human rights standards.
The pair also dedicated a lot of attention to the 2007-2013 budget framework, with Asselborn
saying that Luxembourg wishes negotiations would be wrapped up during its presidency.
He said it was crucial that all 25 member states realise that Britain's budget rebate is still a
problem that needs to be solved. Cohesion means solidarity and the Luxembourg presidency
will do all it can to prevent cohesion from becoming merely an abstract term.
Asselborn also had the message "don't worry" for Slovenia's EU presidency in the first half of
2008. We will be on hand with experience, he said, noting how it is said that small countries
do a better presidency job than big ones.
Rupel and Asselborn also discussed the meeting of the EU and OSCE troikas, as Slovenia
chairs the OSCE this year.
According to Asselborn, the meeting was very useful, as it provided an insight into how
countries lying between the EU and Russia resolve problems together and in a peaceful
manner.
Asselborn also met with President Janez Drnovsek and Speaker of Parliament France Cukjati.
Asselborn briefed Drnovsek on the decisions taken by EU leaders at the summit held earlier
this week. The pair also examined the prospects of SE European countries for joining the EU
as well as the ongoing talks on the next EU budget framework.
Transport Minister Disputes EU Figure on Motorway Cost
A kilometre of four-lane motorway in Slovenia costs on average EUR 9.2m and not EUR
12.5m, Transport Minister Janez Bozic said in a letter to the Directorate General for
Transport and Energy, disputing the EU's recent report which claimed that motorway
construction in Slovenia was among the most expensive in the EU
A kilometre of four-lane motorway in Slovenia costs on average EUR 9.2m and not EUR
12.5m, Transport Minister Janez Bozic said in a letter to the Directorate General for Transport
and Energy, disputing the EU's recent report which claimed that motorway construction in
Slovenia was among the most expensive in the EU.
The EU published a report in November saying that Slovenian motorways cost around EUR
12.5m per kilometre to build. This would place Slovenia alongside Hungary and Slovakia
among countries with the highest motorway construction costs per kilometre in the EU.
Since this is false information that was received negatively in Slovenia, the directorate should
publish an amended report listing the correct figure, Bozic said on Friday, 25 March in a letter
addressed to the directorate's Director General Francois Lamoureux.
Bozic also wondered how come that the higher figure appeared in the report, as the ministry
sent the company Planco Consulting the information listing EUR 9.2m, which the company
confirmed.
The European Commission had stressed in December that the report was an independent
technical survey it had commissioned. The Commission said then that it would not respond to
comments, as the survey reflects the view of the company that made it.
Soon after the report was released, the Motorway Company, DARS, provided their
assessment that a kilometre of road costs on average EUR 7.7m.
According to DARS, a kilometre of dual two-lane motorway costs EUR 10.3m, a kilometre of
dual two-lane express road EUR 7.3m, and a kilometre of an additional lane on each side of
the existing one-lane road EUR 2.1m.
11
Asked why the ministry needed four months to respond to the study, the ministry told STA
that they were examining the issue to establish with evidence the actual figure.
12
LEGISLATION
New Legislation Gives More Emphasis on Environment
The new environmental protection act has introduced environmental licences and emission
trading, strengthened the position of the public and established environmental guidelines as
the legal framework for intervention in the environment
The new environmental protection act has introduced environmental licences and emission
trading, strengthened the position of the public and established environmental guidelines as
the legal framework for intervention in the environment.
The main highlights of the new legislation on environmental protection were outlined at the
outset of a panel in Ljubljana on Wednesday, 23 March by the head of the Institute of Public
Administration, Senko Plicanic.
The law, in effect since May 2004, introduced environmental licences as licences for
pollution. Under the former law of 1993, companies only needed to acquire licences or
concessions to use water, mineral resources, etc., Plicanic explained.
The public has for the first time been legally granted the right to take part as a party in a
procedure, in particular when it comes to the issuance of actual documents, such as abovementioned environmental licences. Yet this right only affects people living in the area where a
certain plant will operate, according to Plicanic.
The official considers environmental guidelines to be of strategic importance for giving the
principles of environmental protection more weight. They will have to be taken into
consideration in all acts related to the environment.
Greenhouse gas emission trading is one of the three market-based "flexible mechanisms"
aimed at meeting Kyoto targets. According to Plicanic, the "lively" trade is to contribute to
reducing greenhouse gas emissions.
The other two mechanisms, joint implementation and the clean development mechanism, are
to be included in the law by November this year with the transposition of the relevant EU
directive.
Addressing the panel, Minister of the Environment and Spatial Planning Janez Podobnik
quoted a report of the Institute for Macroeconomic Analysis and Development which
indicates that the concept of balanced economic, social and environmental development is not
fully implemented.
The environment has been negatively affected by economic development, mainly due to high
energy consumption, high-emission industries, intensive agriculture and non-sustainable
policies in some sectors, Podobnik said.
The panel, organised by the Institute of Public Administration and the Ministry of the
Environment and Spatial Planning, attracted some 170 experts, corporate representatives, state
and local officials, and NGOs.
13
STATISTICS/FORECASTS
Slovenia Successful but Too Slow, Says IMAD Report
The 2005 Development Report, the annual assessment of the implementation of the 2001
Strategy of Economic Development, suggests that Slovenia has high economic and social
stability, yet these are accompanied by developmental and structural weaknesses in various
fields
Slovenia has been successful in pursuing balanced economic, social and environmental
development. It is also catching up with the most developed EU countries, yet progress in
many areas is slower than in some other EU newcomers, according to a report by the
government Institute for Macroeconomic Analyses and Development (IMAD) which the
government confirmed on Thursday, 24 March.
The 2005 Development Report, the annual assessment of the implementation of the 2001
Strategy of Economic Development, suggests that Slovenia has high economic and social
stability, yet these are accompanied by developmental and structural weaknesses in various
fields, IMAD director Janez Sustersic told the press.
The report notes that real GDP growth was robust, which benefited the labour market.
Moreover, coordinated macroeconomic policies of the government and the Bank of Slovenia
(in particular stabilising the exchange rate upon ERM II entry) slowed down the growth in
consumer prices.
Social development results are favourable in many areas and Slovenia is approaching the most
developed European countries in several fields. Although environmental development is
slower and long-lasting, certain positive changes are already evident, the report states.
Structural changes are slow, largely due to poor implementation of transition and structural
reforms. The report pinpoints delays in the financial sector and competitiveness.
The share of agriculture and industry has been falling too slow as compared to services, so the
gap between economic structures in the EU and Slovenia is widening.
The report criticises slow restructuring in manufacturing, which it blames on inappropriate
development of human resources, R&D, innovation and similar development-boosting
factors.
Analyzing competitiveness, the report warns that the current labour costs can be sustained
only with products with higher value-added. However, restructuring is too slow for this.
The financial system, too, is poorly developed: banks are not playing a comprehensive role in
economic development, and the share of their total assets in GDP is not even one third the
level it is in the EU, according to report editor Ana Murn.
Slovenia also lags behind in the insurance sector, although the gap is somewhat smaller. The
report says that in order to make the financial sector more effective, a stable ownership
structure must be put in place.
Equally, only modest progress was made last year in the liberalisation and privatisation of
infrastructure. The report notes that the European Commission in particular criticised slow
liberalisation in power and gas distribution in all newcomers.
IMAD added a new chapter to the report this year - how the European Commission is
monitoring Slovenia's development and to what extent Slovenia is meeting Lisbon Strategy
objectives.
The report concludes that Slovenia is successful in the share of employed women; access to
the Internet; transfer of European directives; and share of renewable energy sources.
14
However, with the current pace of development, Slovenia will fail to meet the objectives in
employment of older persons, R&D spending and raising the retirement age, IMAD has
found.
Slovenia Sees Increase in Internet Users
Slovenia boasts a share of Internet users that is higher than in most of the old EU member
states
Slovenia boasts a share of Internet users that is higher than in most of the old EU member
states. According to a Eurobarometer survey, more than 25% of people use the Internet in all
newcomers. In Slovenia, the share stands at 41.7%, while Estonia leads the pack with 44%.
Before the enlargement, in 2003, the Internet was used by 43.5% of the EU's population, a
share that dropped to 41.4% after the ten new members joined the Union in May 2004,
according to a press release issued by Noviforum, the company behind Slovenia's most
popular search engine, Najdi.si.
Positive trends for Slovenia are confirmed by the Eurostat 2004 survey, in particular when it
comes to the use of the World Wide Web as a source of information. Slovenia ranks 4th
among EU countries with 80% share in the use of the Internet as a source of information.
Similar results were found in a survey carried out by Najdi.si, which showed that more than
74% of the users of this search engine used the Internet as a source of information about
products or services currently arousing their interest, while nearly 50% of the users compared
prices of rival providers on the web.
A further confirmation of the growing trend was the Najdi.si statistics from previous Monday.
On that day, over one million queries were recorded, a 33% increase over the same period last
year, and a 70% rise over 2003.
As the most popular search engine Najdi.si is expected to near the magic threshold of 80% of
Internet users, something that is seen in almost no other country. Currently, some 750,000
Slovenians use Najdi.si, according to Noviforum.
Report Warns of High Wage Growth
According to the Economic Trends report, rising wages in Slovenia threaten the
competitiveness of Slovenia's trade sector, while endangering price stability in the non-trade
sector
Rising labour costs in Slovenian threaten the competitiveness of the economy, an economic
report published by the Economic Institute at the Ljubljana Faculty of Law warns.
According to the Economic Trends report, rising wages in Slovenia threaten the
competitiveness of Slovenia's trade sector, while endangering price stability in the non-trade
sector.
The report notes that wage growth exceeded nominal economic growth through the whole of
last year. In January, the annual growth of wages stood at 8 percent, whereas Slovenia's
economy grew 4.6 percent last year.
The trend means that Slovenia came out at the very top of the EU in terms of the growth in
labour costs, the report says, warning that Slovenia's industry could be hard hit as a result.
Sentiment Indicator Level in March
The sentiment indicator stayed put in March compared to the previous month and last year's
average
The sentiment indicator stayed put in March compared to the previous month and last year's
average. The seasonally adjusted value of the business sentiment index was also flat in the
year-on-year comparison, according to the National Statistics Office.
15
Business confidence in manufacturing remained level compared with February, but was 1
percentage point down year-on-year and compared to last year's average.
In retail, the index was 1 percentage point down over the month before and 3 percentage
points down over March 2004 and last year's average.
The consumer confidence index also dropped by 2 percentage points over the previous month,
and was down 1 percentage point compared to the long-term average.
The Statistics Office calculates the indices based on polls about business prospects for
manufacturing and retail sectors and a survey among consumers.
16
FINANCE
Government Will Not Interfere with Banks' Business, Says PM
The government has partially replaced the supervisory board of NKBM, but the board took no
decisions that could affect the bank's business or ratings, Jansa said in the parliamentary
Q&A session
The government has not interfered with any bank's business decisions, nor does it intend to,
according to PM Janez Jansa. The government has partially replaced the supervisory board of
NKBM, but the board took no decisions that could affect the bank's business or ratings, Jansa
said in the parliamentary Q&A session on Monday, 21 March.
According to Jansa, who was replying to a question posed by Saso Pece of the opposition
National Party (SNS), the government will go about privatising NKBM (Slovenia's second
largest bank) in line with the coalition agreement and in a transparent manner.
He said it was in the interest of the state to have well-standing banks and the economy as a
whole. "We want to build a banking system that will serve the interests of economic
development, local communities and Slovenia as a whole," he explained.
Jansa said one of the criteria for bank privatisation (the privatisation concept is to be finalised
this year) would be non-discrimination, which means that shares will be sold to those who can
offer the most to Slovenian taxpayers.
"As for certain specific interests that we have concerning the role of the banking system in
economic and social development, we will protect these interests by preserving certain
controlling stakes in this bank and, possibly, in others," he said.
Stock Exchange Phases Out Free Market Index
The management of the Ljubljana Stock Exchange has decided to phase out certain indices,
including the free market IPT index, in line with new strategic guidelines
The management of the Ljubljana Stock Exchange has decided to phase out certain indices,
including the free market IPT index, in line with new strategic guidelines. The stock market
also accepted the decision of Tehnounion to delist from the free market, the LJSE reported on
Monday, 21 March.
As of 1 April, IPT index will no longer be calculated. The same fate befell the industry
indices HRP (food and beverages), KEM (chemical industry), TRG (retail and wholesale),
transport (TRS) and the non-weighed index SBI 20NT.
Justifying its decision to eliminate these indices, the LJSE said in the press release that indices
can reflect the market situation only if they include heavily traded securities.
Additionally, the bourse introduced new liquidity criteria, and started taking into account
"quality criteria" such as investors' interest and use in index-tied funds.
Meanwhile, Tehnounion decided to delist after financial group Arkada Holding increased its
stake to 98.55% in January. Trading in Tehnounion, an exporter of consumer goods and
household appliances, has been suspended since 16 March when the shareholders took the
decision to withdraw from the market.
Central Bank Will Adjust to Stability Pact Changes
Bank of Slovenia Governor Mitja Gaspari was reluctant to comment on the reform of the EU's
stability and growth pact, which the EU finance ministers confirmed on 20 March
Bank of Slovenia Governor Mitja Gaspari was reluctant to comment on the reform of the EU's
stability and growth pact, which the EU finance ministers confirmed on 20 March. "It is not
the central bank's task to assess and comment this; it will adjust to the new circumstances
17
appropriately, but always with the emphasis that stability is its foremost concern," Gaspari
said on Monday, 21 March.
Speaking to the press as an International Monetary Fund (IMF) delegation wrapped up a twoweek mission to Slovenia, Gaspari instead offered the position of the European Central Bank:
that the best solution would have been not to change any provisions of the pact at all, although
it is welcome that the reform deal rejected a special list of circumstances that allow individual
countries to "violate" the pact's provisions.
Meanwhile, Finance Minister Andrej Bajuk noted that "it all depends on how all mechanisms
are implemented in practice". He told the press that "the worst solution would have been to
create a pact that cannot be complied with".
He reiterated his often voiced position that Slovenia can live with the pact as it has been so
far, but that "better economic logic" should be introduced in the enactment of certain criteria.
"It is crucial that reference figures have not changed," he said, and welcomed the preventive
measures in this field.
Dusan Mramor, Bajuk's predecessor, told the STA that the reformed pact has put arbitrary
decisions by a commission in place of a certain form of automatism. "Such a change may
make more economic sense, as automatism has proved too rigid in particular cases. However,
it also entails certain risks," Mramor said.
According to him, only interpretation and consistency in enforcement will determine whether
the pact continues to play the coordinating role of ensuring fiscal discipline. What is more, the
changes bring about greater and subtler possibilities for unequal treatment of member states,
which could be negative for Slovenia as well as the whole of EU.
Tomaz Toplak at the Helm of Provisional KAD Management
Toplak will occupy the post until a new management board is appointed, or no more than one
year
Lawyer Tomaz Toplak was named on Monday, 21 March provisional chairman of the stateowned Pension Fund Management (KAD), replacing Borut Jamnik, who stepped down in
February. Toplak will occupy the post until a new management board is appointed, or no
more than one year.
Mateja Bozic was named board member, while the assembly also extended the term of Helena
Bester, KAD said in a press release.
Toplak, 40, had been director of the Bank of Slovenia legal department for five years. He has
also been chairman of the shadow economics cabinet of the coalition Slovenian Democrats
(SDS).
Jamnik stepped down in February and returned to his previous employer, casino company
HIT. He explained that he decided to resign in order to put an end to uncertainties regarding
the fund that manages state-owned assets in over 200 companies.
The fund generated operating revenues of SIT 29.5bn (EUR 123m) in 2004, while pre-tax
profit amounted to SIT 18.5bn (EUR 77.1m).
Bank Austria Creditanstalt Wants to Control 10% of Slovenia Market
The Slovenian subsidiary of Bank Austria Creditanstalt increased its total assets by 30% to
SIT 300bn (EUR 1.25bn) last year, increasing its market share by 0.8 percentage point to
5.4%
The Slovenian subsidiary of Bank Austria Creditanstalt increased its total assets by 30% to
SIT 300bn (EUR 1.25bn) last year, increasing its market share by 0.8 percentage point to
5.4%. The bank's chairman France Arhar also told the press on Tuesday, 22 March that pretax profit was up 14% to SIT 2.977bn (EUR 12.42m).
18
According to Arhar, positive trends continue this year: the bank's total assets rose by 10% in
January and February alone. The chairman added that the mid-term target for Bank Austria
Creditanstalt is to become a leading bank in Slovenia with a 10% market share.
The bank is very satisfied with the 2004 operating results. It was one of the most successful
Slovenian banks in terms of growth in assets, contributing 11.6% to the overall increase in the
assets of all Slovenian banks (SIT 600bn/EUR 2.5bn).
Arhar said even better results were anticipated for this year. Profit is expected to increase by
about 20%.
Quoting reasons for high growth in the past year, Arhar highlighted a surge in loans and
consumer spending. While the bank saw a 56% increase in credits to companies, consumer
loans were up by 36%.
While savings deposits in Slovenian banks rose by an average 7% last year, Bank Austria
Creditanstalt Slovenija posted an increase of 13%. Moreover, companies' deposits surged by
52%.
Nevertheless, the bank did not have sufficient resources, so it decided for the first time to hire
a syndicated loan of EUR 70m abroad. This February, the bank increased its share capital by
SIT 8bn (EUR 33.37m), securing itself a firm basis for further growth, Arhar said.
Last year, the bank opened four new offices in Slovenia, while a further one is planned to be
opened in Nova Gorica this year, so that the bank will have offices in all of Slovenia's
regional centres.
Arhar also confirmed the bank's interest in acquiring a share in Nova Kreditna banka Maribor,
Slovenia's second largest bank, and said they expected the state to make further steps in the
bank's privatisation.
Member of the Government's Tax Reform Team on Tax Code
Tax legislation that entered into force this year will probably be changed towards radical
simplification of procedures and with a view to boosting competitiveness
Tax legislation that entered into force this year will probably be changed towards radical
simplification of procedures and with a view to boosting competitiveness, according to Andrej
Sircelj, a member of the government's tax reform team.
Speaking at the assembly of the Employers Association on Wednesday, 23 March, Sircelj said
that provisions which in effect constitute double taxation will be crossed out of the corporate
income tax act. There will also be changes in provisions on amortisation and transfer of loss,
he said.
He noted that the new corporate income tax act has expanded the tax base, so more profit is in
effect taxed. However, the legislator failed to take into account that companies can move
within the EU's internal market, where there are different tax bases.
Sircelj also stressed that the reformed corporate income tax act is unlikely to have a social
component: more significant tax breaks will be put in place in areas with higher value-added.
Noting that not all the tax changes can be attributed to the 1 May 2004 EU entry, he said the
personal income tax act and corporate income tax act do include EU directives, however there
is no regulation in the Union that says tax legislation must be uniform in all member states.
Moreover, there is an increasing trend in the EU of lower tax rates and greater simplification,
as well as higher tax breaks. EU members are thereby competing amongst themselves as
capital is moving to places with a better business environment, he explained.
Banka Koper to Sell Capital Shares
The Banka Koper bank plans to sell capital shares in five successful companies in the coastal
region
19
The Banka Koper bank plans to sell capital shares in five successful companies in the coastal
region, which will increase the bank's capital revenues by several billion tolars, Delo wrote on
Thursday, 24 March.
The CEO Vojko Cok that the bank would sell its shares in the insurer company Adriatic,
automotive parts manufacturer Cimos and furniture hardware manufacturing Lama. Talks are
also underway about the sale of shipping company Splosna plovba Portoroz, he told Delo.
Asked about consolidation, Cok said that the circumstances in Slovenia did not allow many
mergers. Apart from the efforts to form a second financial group, the activity has been
concentrated on alternative financial services, said the CEO of the bank, which is in majority
ownership of SanPaolo IMI and controls 6% of the Slovenian market.
The bank, which last year increased its total assets by 9% to SIT 333.3bn (EUR 1.4bn), is
looking for new sources and services as the beneficial effects of high interests margins are
gradually decreasing, Cok also said.
Companies Want More Flexibility in Wage System
In a recent survey of the Employers' Association, 93 percent of the companies said the system
has to be changed as it is inflexible and the tax wedge is too big
Slovenian companies are displeased with the wage system. In a recent survey of the
Employers' Association, 93 percent of the companies said the system has to be changed as it is
inflexible and the tax wedge is too big.
What the companies dislike most is inappropriate base wages, which they feel do not reflect
the actual value of the work, Slava Pirs of the Employers' Association told the press on
Friday, 25 March.
They also disagree with the mandatory relative ratios between the different tariff classes, and
the fact that they cannot reduce wages below the minimum wage stipulated in the collective
agreement if they are running a loss.
The employers feel, according to Pirs, that the wage system should provide for performance
bonuses as well as penalties, whereby the companies should be allowed to penalise workers to
the extent that they would get less than the minimum wage.
Moreover, about 84 percent are convinced that they should be allowed discretion in eligibility
for minimum wage, while 80 percent would like the minimum wage linked to labour costs.
The large majority, over 80 percent, said that the tax wedge is too big.
Problems related to the existing wage system have prompted certain sectors to address the
shortcomings in the sector collective agreements.
However, new solutions often bring new problems as the provisions of these collective
agreements are often in disharmony with other legislation, Pirs said.
The Employers' Association says the wage model will have to be overhauled to ensure, among
other things, that the overall volume of wages does not increase and that gross wages grow
slower than productivity
Ljubljana Stock Exchange
Bearish mood continued on LJSE
Major Slovenian stocks hit five-month lows last week before recovering some of their losses
on Friday, 25 March. In the end, the SBI 20 benchmark index ended the week down 1.4
percent at 4,780.35 points.
Analysts believe the recovery could stretch out into the first half of this week, after the long
weekend, when investors are more likely to be willing to take firm positions.
Volumes were moderate last week, with a total of SIT 9.2bn (EUR 38.37m) worth of stocks
changing hands. However, almost two-thirds of that was in block deals.
20
Brewer Pivovarna Lasko was the most active share on the official market owing to a large
block deal worth SIT 2bn (EUR 8.34m) on Tuesday, 22 March. The share was one of the few
blue chips to register gains last week, as it picked up 0.4 percent to SIT 7,354 (EUR 30.67).
Bread and pasta company Zito was the hardest hit by the selling last week, plunging as much
as 7 percent to SIT 32,168 (EUR 134.17). Ilirika analyst Marko Garbajs says the sell-off has
been prompted by a lack of trust in the Zito management.
Moreover, logistics company Intereuropa tumbled 5 percent to SIT 6,752 (EUR 28.16) in
what was an overdue knee-jerk reaction to the announcement of last year's poor results.
Among the most actively traded big name blue chips, drug maker Krka lost 2 percent to SIT
78,746 (EUR 328.45).
The other major indices also finished the week lower: the PIX investment fund index slipped
2.12 percent to 4,342.72, the IPT free market index dropped 1.55 percent to 4,092.88 and the
BIO bond index was off 0.3 percent at 122.23.
Foreign Exchange
Mean exchange rate of the Bank of Slovenia
Euro (EUR) - SIT 239.72 (0.00)
U.S. dollar (USD) - SIT 184.71 (+4.62)
Swiss franc (CHF) - SIT 154.29 (-0.40)
British pound (GBP) - SIT 345.37 (+0.24)
21
BRANCH INFORMATION
Consumers Have Say in Environmental Protection, Conference Told
Growing demand for environmentally-friendly products and services has fuelled a boom in
companies in the environmental protection business
Growing demand for environmentally-friendly products and services has fuelled a boom in
companies in the environmental protection business, president of the Chamber of Commerce
and Industry of Slovenia (CCIS) Jozko Cuk has told an international conference on Monday,
21 March.
Addressing a conference on the environment and economy in Ljubljana, Cuk said
environmental protection was an emerging business opportunity as well as a crucial answer to
the world's dwindling supplies of finite energy resources.
He stressed that solutions to the world's burning environmental issues call for the
development of new technology.
Environmental protection in the EU is business worth 110 billion euros, Cuk stressed, adding
that it could be the engine of future job creation and economic growth.
Meanwhile, Swedish Ambassador to Slovenia John Hagard told the conference - organised by
the Slovenian ecological cluster and the CCIS - that environmental protection requires the
participation of the whole society, including companies, the government, institutions and
individuals.
According to him, Sweden has invested heavily into environmental protection and this has
paid dividends.
While saying that good progress had been made, he added that the work was not over. We
cannot overlook the fact that industrial and agricultural pollution still pose a grave threat to
the environment, Hagard said.
Zheng Huaxing, vice-chairman of the Shanghai Environmental Protection Industry
Association, said in his address that the Chinese government had made environmental
protection one of its policy priorities.
China, he said, is facing great problems in the field of environmental protection, foremost
because of the large volumes of waste water, large energy needs and the associated airpollution.
As a result, companies dealing in environmental protection have registered rapid growth and
have begun to develop their own technologies.
Zheng said China believes that it could work with Europe on environmental issues,
particularly in waste water management, recycling and the use of environmentally-friendly
construction materials.
EUR 7m of Unforeseen Transfer of Expenses at Agriculture Ministry
While SIT 1.49bn (EUR 6.2m) are direct payments for land, SIT 218m (EUR 0.9m) refer to
preventive health care of animals
There are SIT 1.71bn (EUR 7.1m) of unforeseen transfers of expenses from 2004 in this year's
budget of the Ministry of Agriculture, Forestry and Food, Minister Marija Lukacic told the
press on Tuesday, 22 March. While SIT 1.49bn (EUR 6.2m) are direct payments for land, SIT
218m (EUR 0.9m) refer to preventive health care of animals, she explained.
Moreover, Lukacic highlighted SIT 30.7bn (EUR 128m) of foreseen transfers from the 2004
budget. These are delays in payments due to a different definition of a budgetary year in the
EU.
22
Lukacic also addressed the lack of regulations that should have been adopted by the ministry.
She particularly pointed to regulations pertaining to agricultural land and some secondary
legislation that have not been drafted ever since the act on agricultural land was passed in
1996. The ministry's agenda now includes the adoption of 130 acts and items of secondary
legislation.
Another area insufficiently dealt with by the ministry in the past is the backlog of appeals. A
total of 5,467 appeals were pending in December, when Lukacic took over. The minister said
that about 2,500 would be solved in the coming six months.
The ministry acts as the body solving appeals against decisions of the Agricultural Markets
and Rural Development Agency, the Veterinary Administration, the Inspectorate of
Agriculture, Forestry and Food, the Chamber of Forestry and Agriculture, the Forestry
Institute and administrative units.
The minister also addressed the introduction of graphic control for agricultural parcels
payments in 2005. She said the ministry had established a computerised graphical land parcel
identification system, required as of 1 January for the drawing of European funds for land
payments.
Fresh Water Resources in Slovenia Fairly Well Preserved
Underground water presents as much as 95% of resources of drinking water in Slovenia
Underground water presents as much as 95% of resources of drinking water in Slovenia,
which are fairly well preserved compared to the situation in other European countries, the
National Environmental Agency highlighted on Tuesday, 22 March, World Water Day.
There is poor awareness in Slovenia that the whole territory of Slovenia is in fact a water
collection area, which means that everything that is being dumped eventually ends up in
underground water, Marjeta Krajnc of the agency told the press.
She said that about 60 percent of ground water comes from alluvial aquifers, while the rest
comes from karst and fissured aquifers.
Fresh water supply mainly depends on shallow alluvial aquifers, Kranjc explained,
highlighting that these aquifers were completely unprotected, vulnerable to pollution from
intensive industrial and agricultural activities on the land's surface, transport infrastructure
and dumpsites.
Even more vulnerable are karst and fissured aquifers, which have lower purifying capacity
since waters flow more swiftly there. "Fortunately, these aquifers are well protected by
forests," said Kranjc.
She said some sources of fresh water do not require any additional purification of water,
which is a great advantage of Slovenia, according to Kranjc.
As for pollution of ground water, Kranjc said that the levels of nitrates and pesticide antrazine
often exceed the allowed levels. However, she noted that a drop had been noted in the
concentration of atrazine.
Kranjc announced that the agency would upgrade the network of groundwater quality
measuring stations. She said that phytoplankton would be used in assessing the condition of
waters in future.
Kranjc said that the EU water directive, passed by Slovenia upon EU accession, calls for a
good condition of all underground, surface and coastal waters to be provided by 2015.
The main theme of this year's World Water Day is "Water for Life", stressing the importance
of water as a source of life.
Slovenia Looking to Learn About Waste Management from Austria
Slovenia expects to launch its fist incineration plant in 2009, in line with its EU commitments
Slovenia is looking to gain experience in waste management from neighbouring Austria as it
23
seeks to implement its strategy on waste management, a Slovenian official has said at a
conference.
According to Bernarda Podlipnik of the Slovenian Environment Ministry, Slovenia wants to
learn from Austria how to best implement its waste management strategy.
Speaking at a waste management conference organised by the Environment Ministry as part
of a Slovenia-Austria Interreg project, Podlipnik said Slovenia's approach to the problem of
waste management was similar to Austria's.
Meanwhile, a local government official from the Austrian province of Carinthia said that it
was important the two countries produce good projects in the field of waste management for
the 2007-2013 EU budget period.
According to Jozef Martinz, who is responsible for EU affairs in the Carinthian government,
the EU promotes cross-border cooperation. Moreover, he stressed that environmental
cooperation represents an important contribution to the achievement of EU economic goals.
Podlipnik said Slovenia was also examining Austria's model of waste incineration plants as it
prepares to build such facilities.
Slovenia expects to launch its fist incineration plant in 2009, in line with its EU commitments.
For now, there has been no decision about how these plants are to operate, she said.
Experts Call for Protection of Water Sources
Slovenia's water resources exceed the EU average by about one third, but the awareness
about the potential of this resource is poor
Water is the natural element most heavily subjected to the forces of climate change. Slovenia's
water resources exceed the EU average by about one third, but the awareness about the
potential of this resource is poor. Moreover, water preservation should be included in
development programmes, according to Environment Ministry State Secretary Marko
Starman.
Speaking at an Environment Ministry-sponsored conference marking World Water Day,
Starman noted that protection of resources and environmental issues are mainly being
resolved with a view to making environment protection lucrative.
Head of the Environment Directorate at the Ministry of the Environment, Radovan Tavzes,
added that one of the main tasks of not only Slovenia but also the EU, is to include the price
of water protection in the "real" price of water.
The price of water does not include external expenses: it should, however, include costs for
adjustments to climate change for those sources that we are not using yet, which will be
affected due to climate change, Tavzes said.
He wants transparent and comparable water prices across the EU, so that the price, which is
typically subject to market trends, "includes all expenses a country has in ensuring the quality
of water".
Expenses for maintaining clean water standards should be shouldered by those who use
drinking water and those who pollute it, Tavzes said.
Tavzes is not too upbeat about water supply in Slovenia: most aquifers and subterranean
water are located on intensive farming areas and many are thus at risk of pesticide pollution.
Klemen Bergant of the Nova Gorica Polytechnic presented several climate change scenarios,
whereby global temperature could rise from 1.4 to 5.8 degrees Celsius globally, and between
1.8 and 7.7 degrees in Slovenia.
He noted the possibility of major changes in percipitation: Europe is expected to see more rain
or snowfall in winter and spring and less in the summer. Yet the Mediterranean area,
including Slovenia, would have less rainfall than now in all seasons.
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MPs Pass Policy to Improve Nation's Diet
The MPs agreed that Slovenia urgently needs the resolution, which promotes healthy eating,
regular exercise and healthy lifestyles to fight unhealthy habits
With 71 votes in favour and none against, the parliament passed a government-drafted
resolution on nutrition policy until 2010. The MPs agreed that Slovenia urgently needs the
resolution, which promotes healthy eating, regular exercise and healthy lifestyles to fight
unhealthy habits.
According to key health indices associated with nutrition (life expectancy, education and
social-economic situation), Slovenia places among developed EU countries.
Unhealthy eating habits are particularly common among the socially deprived and in the
countryside, particularly in eastern Slovenia.
Research has shown that only half of Slovenians have normal blood pressure, a third normal
cholesterol levels and only a third normal weight.
Presenting key objectives of the resolution, Health Minister Andrej Brucan highlighted the
need to provide safe food on the Slovenian market. Moreover, the resolution will encourage
safe food production and promote knowledge about healthy diet.
The nutrition policy aims at increasing the consumption of vegetables (by at least 30%),
dietary fibre, calcium and vitamin C, while reducing the total fat intake by 20%.
Another goal is to reduce the consumption of alcohol and the number of overweight and obese
people.
Environment Agency Finds Only High Ridges Suitable for Wind Power
Only the highest mountain ridges and plateaus are appropriate for wind turbines, while solar
power could be harnessed in the west and east of the country
Only the highest mountain ridges and plateaus are appropriate for wind turbines, while solar
power could be harnessed in the west and east of the country, according to a survey of the
Agency for the Environment presented on World Meteorology Day on Wednesday, 23 March.
Three areas stand out for wind speeds, according to Gregor Gregoric of the Environment
Agency: southwest Slovenia, in particular the coast, the northeast and the mountainous parts
of the country. However, he stressed, the flatlands have small potential compared to the
mountains.
There are plenty of areas in the country with wind average speeds of two metres per second,
yet the threshold for feasibility is four metres per second, which only few areas have.
Despite the numerous hills that create shadows, the potential for harnessing solar power is
considerable, the survey has shown. Many people use small solar panels, but more could be
installed at isolated locations where other energy sources are scarce.
The survey, entitled Wind and Solar Potential in Slovenia, was carried out by the
Environment Agency and the Department of Meteorology at the Ljubljana Faculty of
Mathematics and Physics.
Slovenian-Made Tokaj Renamed to Tocaj
Winemakers from the western region of Primorsko were forced to rename the popular wine
after Hungary protected the geographical origin in the EU
After months of debating, winemakers from the western region of Primorsko have decided to
rename the wine that has so far been known as tokaj into tocaj (c with a circumflex). They
were forced to rename the popular wine after Hungary protected the geographical origin in the
EU.
The official name of the grape sort is now "sauvignon vert" and "sauvignonnase", but the
winemakers thought it was not a marketable brand so they opted for a simpler name.
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Ales Kristancic, the esteemed winemaker and director of the Brda consortium of winemakers,
said the new name was selected to preserve the easy-to-recognise sound of the old name.
He also noted the label design that will be used - the cross in the t is extended to incorporate
the circumflex over the c, so most foreigners will never notice the difference.
According to Kristancic the grape covers about 200 hectares of vineyards in the Goriska Brda
region, which comes out to 1.4 million litres of tocaj.
26
COMPANIES
Krka Seeking Investors in Western Europe
Company representatives will hold introduction talks with investment fund managers and
other potential investors in West European financial centres in April
The pharmaceutical company Krka has launched a campaign to seek investors in Western
Europe. Company representatives will hold introduction talks with investment fund managers
and other potential investors in West European financial centres in April, a press release said.
Krka will be looking for investors in Great Britain, the Netherlands, Germany, Switzerland
and Austria, the business daily Finance wrote on Tuesday, 22 March. CEO Joze Colaric and
CFO Brane Kastelec will be on a tour, inviting western investors to buy Krka shares, the daily
wrote.
Potential investors addressed by Krka will be funds with dispersed ownership investing in
pharmaceutical industry, particularly the generic industry. Such investors now have a 3.2%
stake in Krka. The company would like the figure to rise over 10%, Finance was told by
Colaric.
"This will of course not be possible overnight," Colaric told Finance, adding that this would
not be the only road show this year. Similar tours will follow every six months. Krka already
held a similar campaign inviting foreign investors three years ago.
Incoming Lek Chairman Gets Supervisory Board Backing
Dragonja, who was one of the engineers of Lek's acquisition by Novartis, had been picked to
become the general manager of Novartis's generic division in Russia as of 1 May
The supervisory board of drug maker Lek installed Janja Bratos the new chairman as outgoing
chairman Metod Dragonja gets ready to assume his new job in Russia.
The appointment of Bratos, who has held senior positions at Lek for years, had been expected
after it was announced that Dragonja was moving to Russia.
Dragonja, who was one of the engineers of Lek's acquisition by Novartis, had been picked to
become the general manager of Novartis's generic division in Russia as of 1 May.
The new Lek chairman assumes the post at a time of organisational restructuring at Lek,
which is incorporating its operations into the Sandoz group, the generic arm of Novartis.
"I'm pleased that I have been given this responsibility...this development demonstrates that
Sandoz recognises and appreciates the knowledge, experience and business achievements of
Lek's employees," Bratos said in a press release.
She added that her appointment "assures continuity in leadership at Lek". Dragonja had
previously run Lek for 15 years, whereas Bratos has been a member of the Lek management
board since 1999.
Istrabenz Boosts Y/Y Earnings, Falls Short of Targets
Energy and tourism conglomerate Istrabenz posted a net profit of SIT 6.8bn (EUR 28.4m) for
2004
Energy and tourism conglomerate Istrabenz posted a net profit of SIT 6.8bn (EUR 28.4m) for
2004, which is up 186% over the year before but still 25 percent short of the targets. Revenues
amounted to SIT 14.2bn (EUR 59.1m), up 113% over 2003, according to board member Aldo
Gabrijel.
Istrabenz posted an operating loss of SIT 1.5bn (EUR 6.3m), however this is due to expenses
related to the management of its portfolio: the results are stated in the balance sheet under
financial activities, where the net profit was SIT 10.2bn (EUR 42.55m).
27
The most important event for the company in 2004 was the acquisition of 93.5% of food
company Kolinska. The Istrabenz management expects that the forthcoming shareholder
meetings of Kolinska and Droga will confirm the merger.
Meanwhile, Istrabenz chairman Igor Bavcar rejected rumours that Droga Kolinska might join
forces with Croatia's Podravka. However, he does not exclude this option altogether.
Managing investments and enterprises will remain Istrabenz's core business, Bavcar said, and
the company plans operating revenues of SIT 125bn (EUR 521.4m) for next year.
Bavcar also stressed that the shift from oil (Istrabenz had a 50% stake in oil trader OMV
Istrabenz, which it offloaded last year) to hotels has paid off, as profit is now on par with the
figure posted by the company when it was still exclusively in the oil business.
In 2005 Istrabenz will focus on its four key segments: energy, tourism, food and investments.
Over half of all planned investments will be targetted at the food sector.
Several major projects are also planned in tourism: the refurbishment of Palace Hotel in
Portoroz, and the completion of renovation at Hotel Adriatic in Croatia's Opatija and Hotel
Jama in Postojna.
According to audited and consolidated financial statements, shares of Istrabenz gained 18%
last year. Return on assets was at 21.5%.
Sava Increases Stake in Pivovarna Lasko
The tourism and energy group Sava purchased 2.86% of Pivovarna Lasko shares
The tourism and energy group Sava purchased 2.86% of Pivovarna Lasko shares on Tuesday,
22 March, raising its stake in the brewer to 4.7%. Sava said that deal was in line with its
strategy of profitable financial investments.
Stock market analysts do not rule out that lively trading in Pivovarna Lasko will continue in
the following days, the daily Delo wrote on Wednesday, 23 March. Analysts believe that the
brewer is making efforts to get more influence on its operations.
The state-run Pension Fund Management and the Restitution Fund control some 14% of the
brewer. The state also has some influence on the operations of Lasko through Infond funds,
managed by the state-owned Nova Kreditna banka Maribor, Delo writes.
There has been lively trading in Lasko shares in the past few days as well, with the brewer's
new owners including poultry producer Perutnina Ptuj, which is known in business circles as
a major Pivovarna Lasko ally. Another major owner of the brewer is Bank Austria
Creditanstalt with a 3.8% stake, according to Delo.
Simobil Reports 2004 Net Loss, But Posts First Operating Profit
Simobil, the country's second biggest mobile operator, generated revenues of little less than
SIT 21bn (EUR 87.6m) in 2004, which is an increase of 10 percent over the previous year
Simobil, the country's second biggest mobile operator, generated revenues of little less than
SIT 21bn (EUR 87.6m) in 2004, which is an increase of 10 percent over the previous year, but
still posted a net loss of SIT 1.2bn (EUR 5m).
Earnings before interest, depreciation, tax and amortisation rose by 59 percent to SIT 4.9bn
(EUR 20.4m), while for the first time, the operator reported an operating profit of SIT 23.1m
(EUR 96,400), Zoran Thaler, chairman of the board, told a news conference on Tuesday, 22
March.
He explained that although the company managed to reduce net losses by as much as 76
percent last year, it still does not anticipate to generate net profits as early as this year.
Thaler was though satisfied with the last year's performance and was optimistic about the
current year, expecting that exterior conditions affecting the company's operations would turn
for the better.
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According to Thaler, Simobil is satisfied with the new policy announced by officials who
have recently assumed top positions in government agencies in charge of the
telecommunications market.
The operator, which is part of the Austrian group Mobilkom Austria, increased the number of
its users by 0.5 percent last year to 363,283, to control a 23.6-percent market share.
Asked to comment on the case of Vega - the country's third largest wireless operator, which
has filed an anti-trust damages claim against the state - Thaler said that Simobil has been
following the case closely. He added that it had received no proposal to acquire Vega.
As regards to third-generation mobile phone technology, Thaler said that the operator might
examine the investment once the Slovenian telecommunications market begins to function
properly.
Schefenacker Buys Property from Bankrupt Textile Company
Its Slovenian subsidiary, SAPS, purchased a part of the bankrupt textile company Tekstilna
tovarna Prebold for SIT 364m (EUR 1.52m)
German auto-equipment maker Schefenacker has finally found a new location after the
company was forced to back out of plans to open the plant in Zagorje. Its Slovenian
subsidiary, SAPS, on Wednesday, 23 March purchased a part of the bankrupt textile company
Tekstilna tovarna Prebold for SIT 364m (EUR 1.52m).
SAPS also signed a statement of agreement with the terms and conditions of the purchase,
which means that it must launch production in the acquired facilities and employ at least 60
percent of thaw workers who used to work there.
The company's representative, Robert Grah, has expressed the wish that refurbishment of the
production hall start as soon as possible. He is willing to invest about EUR 5m, the STA was
told by the textile maker's administrator Branko Djordjevic.
The new owner will initially employ 100 workers and plans to add another 400 to its payroll
later on. The production lines for car parts are to start rolling at the end of May.
Schefenacker had already received state aid of EUR 1.1m in support of its plans for a plant
that would produce car lighting equipment in Zagorje, central Slovenia, but the plans there
failed due to disagreements with neighbours of the intended production facility.
The new jobs will be welcome in Prebold as the textile company was the only big employer in
this small eastern Slovenian town.
Novartis CEO Says Lek Well-Positioned in Central Europe, Russia
According to Daniel Vasella, the decision to put Lek's former chairman Metod Dragonja in
charge of Sandoz operations in Russia will put a new mark to the weight of this market
The CEO of the Swiss pharmaceutical giant, Novartis, has said that Ljubljana-based Lek, a
subsidiary of Novartis' generic group Sandoz, is well-positioned on the markets of Eastern
Europe and Russia, which afford enormous growth potential.
According to Daniel Vasella, the decision to put Lek's former chairman Metod Dragonja in
charge of Sandoz operations in Russia will put a new mark to the weight of this market.
Dragonja has many ambitions, but he will be able to assess the situation on the market only
after certain time, on the basis of which we will establish how to go on, Vasella said in an
interview with Slovenian reporters on Thursday, 24 March.
Vasella, who was in Ljubljana to participate in a panel on corporate management, believes
Slovenia as a country is extremely well-positioned in the markets of Eastern Europe and
Russia. This, as well as China and India are identified by Novartis as three very large
potential markets with substantial growth opportunity.
"In pharmaceuticals for example, in China we grew about 50 percent last year and had an
average growth beyond 25 percent compounded annual growth in the last five years,"
29
Novartis CEO said. He admitted that the company still does not occupy all the regions of the
country, which also goes for Russia.
According to its CEO, Novartis currently does not have new takeover appetites as it is
currently in the process of buying German Hexal and US Eon Labs. The company's main
target is to remain competitive, efficient and prompt in all its operations.
Asked by a journalist how long Lek would retain its present name, Vasella said the only
guarantee was success: "if somebody is successful, nobody would take away investments."
"Last year Lek invested about 68 million US dollars in research and development, almost
everything in Slovenia, and invested 110 million US dollars among other things in a
biopharmaceutical plant here in Slovenia."
"Investments have been all-time high. So I think any concerns people have had when we
acquired Lek that this would disappear were just unreasonable fears," Vasella said.
Lek's business strategy will not change because of the change at the helm of the company Dragonja was replaced by management board member Janja Bratos. There will be some
organisational changes due to the acquisition of Hexal, Vasella said.
Kovintrade Reports Jump in Revenues
Kovintrade, the Celje-based metal products wholesaler, had reported a 63 percent jump in
sales revenues, which amounted to SIT 30bn (EUR 125m) last year
Kovintrade, the Celje-based metal products wholesaler, had reported a 63 percent jump in
sales revenues, which amounted to SIT 30bn (EUR 125m) last year. The group doubled its
profit in 2004 to SIT 762m (EUR 3.2m).
The group, which is made up of ten companies, generated around 40 percent of its sales
revenues on foreign markets. It prides itself on the network it has in eastern Europe, including
in the former Soviet republics.
Kovintrade's new additions last year were new branch offices in Hungary, the Czech
Republic, Romania and Serbia-Montenegro.
Store Steel Mill Increases Output by 20%
The steel mill Store Steel generated sales of SIT 15.5bn (EUR 64.7m) last year and posted a
profit of SIT 355m (EUR 1.5m)
The steel mill Store Steel generated sales of SIT 15.5bn (EUR 64.7m) last year and posted a
profit of SIT 355m (EUR 1.5m). Output increased by one fifth to 118,600 tonnes, the
company said on Thursday, 24 March.
The company is upbeat about this year too: output until the end of March is projected at
33,000 tonnes, up 10 percent year-on-year.
Reviewing the financial statements for 2004, the supervisory board concluded on Wednesday,
23 March, that the company made good use of the favourable market conditions and
reinforced its position.
While Store Steel earmarked EUR 5m for investment last year, total investments in 2005 are
expected to top EUR 9m.
Belinka Beats Forecast with Second Year of Robust Growth
Chemicals group Belinka has beaten forecasts by 21 percent with a net profit of SIT 1.05bn
(EUR 4.4m) for 2004
Chemicals group Belinka has beaten forecasts by 21 percent with a net profit of SIT 1.05bn
(EUR 4.4m) for 2004, up 13 percent year-on-year. The Ljubljana-based group said it upped
sales by 13 percent last year to SIT 10.4bn (EUR 43.38m).
The figures for 2004 follow double-digit growth in revenues and profit in 2003.
30
The company said sales abroad were up 18 percent, so exports accounted for 72 percent of the
revenues, up 4 percentage points over the year before.
Belinka Perkemija, a subsidiary making peroxide compounds, reported a 27-percent increase
in this segment. The glue wing, Kemostik, saw sales soar by 42 percent.
Considering the performance, the management and supervisory boards have proposed that the
shareholders be awarded dividends of SIT 150 (EUR 0.63) gross per share, up 7.1 percent
over the year before.
Flavourings Maker Etol Sees 32% Rise in Profit
Flavourings maker Etol last year generated sales revenues of SIT 7.7bn (EUR 32.12)
Flavourings maker Etol last year generated sales revenues of SIT 7.7bn (EUR 32.12), a rise of
12.3 percent on 2003. The group's profit surged 32.2 percent to SIT 958.8m (EUR 4m),
according to a press release from Etol.
The group said the rise in profit was a result of more favourable market conditions and the
consequent growth in sales.
The Celje-based parent company in the Etol group generated 73.4 percent of all revenues.
The group said it was looking to bolster the operations of its subsidiaries and planned to open
more office branches on foreign markets. Moreover, it also hopes to strengthen the Etol brand
name in the future.
Helios Sales Surge 30 Percent
The forecast-beating sales helped up the group's operating profit by 22 percent to SIT 3.18bn
(EUR 13.26m)
Chemical group Helios has reported a 30 percent rise in sales revenues for 2003, which
amounted to SIT 40.36bn (EUR 168.3m). The forecast-beating sales helped up the group's
operating profit by 22 percent to SIT 3.18bn (EUR 13.26m).
Helios said in a press release on Friday, 25 March, that it managed to meet all operating
targets despite seeing the price of essential raw materials sky-rocket as a result of dearer crude
oil.
The group sold 92,802 tonnes of products, a rise of 29 percent on 2003. Paints and varnishes
made up for the bulk of the group's sales.
The group made a net profit of SIT 3.46bn (EUR 14.43m) last year, an 8 percent increase on
the year before. The sluggish growth in this department is also a result of new accounting
standards, the group said.
Helios, which acquired paints producer Color in 2004, expects to see its sales rise by 20
percent volume-wise this year.
Companies Call for More Efficient Business Diplomacy at a Panel
The state should organise business diplomacy in a more efficient way and strengthen it in
terms of personnel, while companies should on the other hand clearly express their needs and
expectations
The state should organise business diplomacy in a more efficient way and strengthen it in
terms of personnel, while companies should on the other hand clearly express their needs and
expectations. These were the conclusions of a debate held last week on how business
diplomacy can encourage economic growth.
Business diplomacy does not offer enough to small and mid-sized companies, the CEO of
flavourings maker Etol Ivan Ferme said. He said people should be recruited that would lend
an ear to the economy and create the conditions in which there would be more readiness to
offer assistance, he said.
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Franjo Bobinac, the CEO of home appliance maker Gorenje, said that the state should set up
strong business diplomacy in areas where it sees its economic interests. He also highlighted
the need for cooperation of business diplomacy with key business players, such as the
Chamber of Commerce and Industry of Slovenia (CCIS).
"Business diplomacy can open doors, it can gather and forward information," said Jozef
Kunic, the head of the Slovenian Association for International Relations. He said that the
image that a deal has state backing is often very important as well.
He highlighted that businesses should not wait for a diplomatic initiative but should come
forward with their wishes and expectations.
One of the key problems faced by the Slovenian business diplomacy is a lack of qualified
staff and funds, said Joze Drofenik, Foreign Ministry state undersecretary in charge of
reforming business diplomacy.
He, too, stressed that all major players, such as CCIS, the Economics and Foreign Ministries,
should join forces in promoting and defending Slovenian business interests.
Perhaps it would make sense to close some diplomatic offices and move them to countries
where Slovenia has biggest economic interests, Drofenik also suggested at a panel debate held
on Wednesday, 23 March.
32
SLOVENIA IN BRIEF
Slovenia Presiding over CEEPUS This Year
Slovenia has assumed the presidency of the Central European Exchange Programme for
University Studies (CEEPUS) at the 10th anniversary of this network. According to Minister
of Higher Education, Science and Technology Jure Zupan, the priority of Slovenia's
presidency will be CEEPUS II with an emphasis on joint degrees.
Puksic Meets with Minority Party in Italy
Franc Puksic, the head of the Government Office for Slovenians Abroad, pledged the
government's support for the minority in Italy as he met on Tuesday, 22 March with
representatives of the minority's only political party in Italy, the Slovenian Community (SSK).
Jansa Holds Brief Meeting with Berlusconi
Prime Minister Janez Jansa had a brief informal conversation with Italian PM Silvio
Berlusconi on the sidelines of the EU summit in Brussels on Tuesday, 22 March, STA was
told by the Slovenian delegation at the event. Topping the agenda were minority issues, while
the pair made no conclusions, STA was told.
Rupel Pleased with Annan's UN Reform Proposal
Foreign Minister Dimitrij Rupel has assessed as positive the proposal for the reform of the
United Nations that UN Secretary General Kofi Annan presented earlier this week. The
proposal was also debated and endorsed by EU foreign ministers, Rupel said in Brussels on
Wednesday, 23 March.
GM of State-Owned Power Producer Steps Down
Drago Fabijan, the general manager of state-owned power giant Holding Slovenske elektrarne
(HSE), tendered his resignation on Wednesday, 23 March. The supervisory board of HSE,
which is Slovenia's largest power producer, has already accepted the resignation. HSE is in
charge of the construction of six hydro plants on the lower Sava river in southeastern
Slovenia, the biggest energy project in Slovenia at the moment.
European University One Step Closer
An Italian and a Slovenian higher education establishment have signed a memorandum of
understanding in what is another step towards the creation of a European University in the
Slovenian-Italian border region. The agreement was signed on Thursday, 24 March by Branko
Tomazic of the Higher Education and Research Centre of the University of Primorsko, and
Nicolo Fornasir of the University Consortium from Italy's Gorizia.
Military Attaches Conclude Regular Consultations
A regular, week-long meeting of Slovenian military attaches stationed abroad concluded on
Friday, 25 March with a briefing of Defence Minister Karl Erjavec about the ministry's main
tasks for this year. The ministry, according to Erjavec, plans to continue professionalization of
the Slovenian army, strengthen its activities in NATO and the EU, increase the country's
cooperation in international peace-keeping missions and pursue efforts for stabilising the
Western Balkan, among other objectives.
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Clocks Turned Forward to Summertime
Slovenia is running on Daylight Savings Time (DST), as clocks were set ahead one hour at
2:00 AM on Sunday, 27 March, in line with European directives. The return to standard
Central European Time (CET) will take place on the last Sunday of October. The original
purpose of the shift to summertime was to make better use of daylight, but the DST also helps
save energy.
UNMIK Rejects Court Verdict on Mobitel
The United Nations administration in Kosovo (UNMIK) once again hindered the attempts of
Slovenia's largest wireless provider, Mobitel, to begin constructing the province's second
wireless network. UNMIK ordered the Telecommunications Regulatory Authority (TRA) to
disregard a court ruling demanding that it grant Mobitel frequencies for its network.
According to UNMIK, a local Pristina court had no legal basis to rule in the case since the UN
administrator in Kosovo issued an executive decision to annul the tender process which saw
Mobitel selected for the license together with its local partner Mobikos.
34