Slovenia Business Wek no. 22, May 30 2005 Table of Contents:
Slovenia Business Wek no. 22, May 30 th 2005
Table of Contents:
Economics Ministry for Voluntary CCIS Membership .............................................. 3
Slovenia a Safe Investment Destination, Bajuk Says at EBRD Forum ...................... 4
Bajuk Urges EBRD to Boost Cooperation with Transition Countries ....................... 5
Slovenian and Croatian MPs to Hold Joint Session over Open Issues ....................... 6
Rupel Welcomes New Challenges for Diplomacy ..................................................... 6
Trade Between Austria and Slovenia on the Increase, Panel Says ............................. 7
Hong Kong Trade Officials Present Business Opportunities ..................................... 8
Government Confirms Schengen Facility Programme ............................................... 9
PM Jansa: French Referendum Failure No Disaster for Europe ................................ 9
Government Moves to Protect Contracting Authorities ........................................... 11
Government to Make Public Information Even More Accessible ........................... 11
Consumer Demand Weakens, Government Demands Stagnates ............................. 13
Raiffeisen Krekova Banka Still Looking for Chairman ........................................... 15
Gaspari Says Inflation Goals to be Met by April 2006 ............................................ 16
Prices in Tolars and Euros Mandatory as of March 2006 ........................................ 17
Kranjec: Complicated Tax Procedures Affect Competitive Ability ......................... 17
Coalition Puts Finishing Touches on Supplementary Budget .................................. 18
Traders: Double Prices in March 2006 Only if Rate Is Fixed .................................. 18
Newspaper Outlet Delo Reports Slump in Q1 Profit ............................................... 27
Dividends for Merkur Shareholders, Bonus for the Management ............................ 27
IT and Telecommunications Fair Opens in Ljubljana .............................................. 30
FM Hopes EU to Start Entry Talks with Croatia in June ......................................... 31
OSCE Chair Calls for Better Integration of Legal Immigrants ................................ 31
Foreign Ministry State Secretary Attended CEI Meeting ........................................ 31
HEADLINES
Economics Ministry for Voluntary CCIS Membership
Meanwhile, CCIS president Jozko Cuk said the administrative board does not agree with Vizjak's vision
Economics Minister Andrej Vizjak has reiterated that his ministry is in favour of voluntary membership of the Chamber of Commerce and Industry of Slovenia (CCIS) as he addressed the administrative board of the chamber. Vizjak told the press on
Wednesday, 25 May in Ljubljana that the CCIS and the ministry agreed on the need for businesses to associate in a bid to raise competitiveness.
"However, the ministry is of the opinion that the association should be based on a common interest rather than coercion," he told the press after addressing the CCIS administrative board behind closed doors.
Vizjak also announced that the government would draft legislation that will make
CCIS membership voluntary in the coming month or so. The bill should be passed in parliament before the year is out, he added.
Abolishing obligatory membership would not only promote competitiveness but would also ease the load off of businesses, he said. "Obligatory membership is a kind of a tax," he added.
The minister also said the chamber is run mainly by large corporations which claim they do not need a chamber and that it serves the needs of smaller companies. "I think we should be truthful about who actually needs a chamber with mandatory membership," he added.
Vizjak also revealed that an independent survey would be carried out among companies to gauge support for the government-proposed changes. "We don't want to put forward solutions that will not have the support of businesses," he said.
He also said voluntary CCIS membership would benefit industrial relations. "I don't think its fair that unions, which have voluntary membership, have to negotiate with an organisation with mandatory membership and subsequently more clout."
Meanwhile, CCIS president Jozko Cuk said the administrative board does not agree with Vizjak's vision. "The members of the administrative board expressed backing for the strategy and vision that had been prepared by the management of the CCIS," he stressed.
Elan Gaining Share on Global Market, Head Says
According to head of Elan Ski Matjaz Sarabon, the company now controls 7% of the world market and is looking to increase its share to around 10% by 2009
Contrary to popular opinion, Slovenian ski maker Elan is making inroads in the global ski equipment market, head of Elan Ski Matjaz Sarabon told the daily Delo on
Monday, 23 May. According to him, the company now controls 7% of the world market and is looking to increase its share to around 10% by 2009. This means that
Elan would become one of the five leading winter sports brands in the world by then,
Sarabon said in an interview published in Delo.
Sarabon said that currently every seventh pair of skis sold in the world is produced by
Elan at its plant in Begunje.
Moreover, Elan currently accounts for 13% of global research and development in skis, as it performs R&D and produces skis for other ski manufacturers as well. In this respect, Elan is the 3rd or 4th biggest in the world, he added.
In the medium-term, Elan Ski hopes to produce 600,000 pairs of skis annually at its plant in Begunje. The company hopes to increase the production of own-brand skis, while the share of skis made for other companies would drop to around 35%, he said.
Sarabon also told Delo he was not overly concerned by the faltering interest in skiing.
According to him, Elan could take advantage of confusion on the market that could arise as a result of takeovers or mergers among other companies.
"We have decided what our target customers are for this very reason," he said, adding that Elan was working on all-around winter sports solutions, not just on skis.
Moreover, Sarabon said that a foreign takeover of Elan could help the company begin concentrating more on the market rather than on local quarrels that have dogged the company since Slovenia's independence.
According to him, the downsizing of the ski market will mean the end for small producers, who are likely to be acquired by the big players. However, he does not think that Elan will be acquired by a foreign rival.
Supervisors Endorse Slovenica-Adriatic Merger
The supervisory boards of insurance companies Slovenica and Adriatic endorsed the proposed merger that will create the second largest insurance group in the country with annual insurance premiums in excess of SIT 44bn (EUR 183.6m)
The supervisory boards of insurance companies Slovenica and Adriatic on Tuesday,
24 May endorsed the proposed merger that will create the second largest insurance group in the country with annual insurance premiums in excess of SIT 44bn (EUR
183.6m). Pending approval in June by the shareholders of both companies, the new company, Adriatic Slovenica, will be incorporated in the second half of the year and based in Koper, the chief of the Slovenica supervisory board, Matjaz Gantar, told the press.
"The united insurance company has ambitious plans on the domestic market, where it intends to increase its market share, while it also plans a more aggressive approach to foreign markets," according to Janez Bojc, the top supervisor at Adriatic.
The two companies anticipate synergies of SIT 2.5bn (EUR 10.4m) through costcutting, reduction in operating assets and increase in volumes. It is expected that the merger will create 164 redundant employees, but only 10 are to be permanently laid off until 2009.
"We are convinced that the merger makes economic sense and that we will have plenty of good results in the future," said Anton Koncnik, the chief executive of
Slovenica. "The merger means even better-quality services for our customers."
The majority shareholder of the merged company will be KD Holding (a part of the
KD Group) which owns almost 100% of Slovenica already. Slovenica in turn holds a
51% stake in Adriatic. KD Holding will own 64% of Adriatic Slovenica. The swap ratio is 0.38 Slovenica shares for one Adriatic share.
KD Group had tried to sell both insurance companies in 2003. Although three companies carried out due diligence, only one made an offer. Yet since the bid was not in line with the expectations of the owner, the sale was aborted.
INTERNATIONAL COOPERATION
Slovenia a Safe Investment Destination, Bajuk Says at EBRD Forum
Finance Minister Andrej Bajuk has underscored that Slovenia is a low-risk destination for foreign investment as he presented the country at a business forum
held as part of the European Bank for Reconstruction and Development's (EBRD) annual meeting in Belgrade
Finance Minister Andrej Bajuk has underscored that Slovenia is a low-risk destination for foreign investment as he presented the country at a business forum held as part of the European Bank for Reconstruction and Development's (EBRD) annual meeting in
Belgrade on Sunday, 22 May. According to Bajuk, Slovenia enjoys wide economic and political stability. Moreover, the new Slovenian government has made it its priority to create an equal playing field for domestic and foreign investors.
The government is also hoping to downsize the public administration, while the country's main economic priority is to join the euro in 2007. As part of efforts to join the eurozone, Slovenia will have to continue bringing down inflation, he said.
Moreover, Bajuk claimed the government would not block privatisation of the banking sector, although it will work to keep a stake in strategically-important banks.
Speaking for STA on the margins of the EBRD meeting, Bajuk said the aim of the forum was for countries to present their economy and the possibilities for foreign investors.
According to him, Slovenia has not had much success in attracting foreign investors.
The current government is therefore working on making Slovenia successful in this respect, he added.
Bajuk also took part in a meeting of finance ministers and prime ministers from the region hosted by Serbian Finance Minister Mladjan Dinkic.
Bajuk Urges EBRD to Boost Cooperation with Transition Countries
Finance Minister Andrej Bajuk has said one of the priorities of the European Bank for
Reconstruction and Development (EBRD) should be to cooperate with the new entrants to the EU with a view to more effective use of structural and cohesion funds
Finance Minister Andrej Bajuk has said one of the priorities of the European Bank for
Reconstruction and Development (EBRD) should be to cooperate with the new entrants to the EU with a view to more effective use of structural and cohesion funds.
The bank should also be more active in transition countries, Bajuk said in his address to the annual EBRD meeting in Belgrade on Monday, 23 May. According to him, the bank's share in the countries that are about to conclude transition dropped from 39% to 35% in 2004.
"We believe this is certainly a reduction that has been backed by the market, while the policy of the EBRD should continue to follow such trends," Bajuk said at the session of the EBRD board of governors on the last day of the annual meeting.
Bajuk also said that Slovenia expected further activity from the EBRD, in particular in the domains in need of further structural reforms.
Volumes and the number of projects in transition countries increased last year. We believe that our efforts in these countries can boost the fight for democratic principles,
Bajuk said.
"Pluralism and democracy are essential in transition processes, while one should point out that while some countries have taken these steps, others have unfortunately not done this yet," Bajuk said.
According to the finance minister, this year's EBRD meeting showed the bank's commitment to its further activity in the Southeastern Europe.
"Prior to the Belgrade meeting, we had some regional seminars to discuss ways to boost business and investment in the region, something that should contribute to better regional ties. Cross-border trade and investment among the countries should
also contribute to creating an atmosphere that would bring about the desired stability in the region."
Bajuk believes that the EBRD should get engaged in this process and should increase its presence in the region. The need for reforms in these countries requires more operations and investment than in 2004, Bajuk stressed
Slovenian and Croatian MPs to Hold Joint Session over Open Issues
Slovenia and Croatia plan to shortly establish cooperation at the level of parliamentary bodies
Slovenia and Croatia plan to shortly establish cooperation at the level of parliamentary bodies. Speakers of both parliaments announced in Zagreb on Monday,
23 May that committees on foreign policy and European affairs from both parliaments would meet for a joint session before summer recess to debate problems in bilateral relations. Speaking after a meeting with his Croatian counterpart, Speaker of
Parliament France Cukjati said the talks were also intended as preparations for the regional parliamentary summit to be held in Slovenia's Bled in June.
The meeting of speakers of parliaments from Slovenia, Austria, the Czech Republic,
Hungary, Poland and Slovakia is also expected to be attended by their counterparts from countries aspiring to join the EU, among them Croatia.
National parliaments in the EU cooperate in order to debate their positions in relation to the governments and the EU. At Croatia's initiative, such cooperation will also be set up between Ljubljana and Zagreb, Cukjati said. He was hopeful that cooperation between parliamentary bodies would help the countries to resolve bilateral issues.
According to him, open issues between the two countries must not be an obstacle in
Croatia's progress towards the EU. He said some of the issues, such as the border issue, must be tackled soon, given that the Schengen regime would be introduced on the border between the two countries in two years' time.
"We expressed the view that it is not good to deal with these issues under the pressure of Croatia's progress towards the EU, but we can tackle this as experienced and good friends in bilateral talks," Cukjati said.
Speaker of the Croatian Parliament Vladimir Seks said the meeting was aimed at establishing "excellent political, economic, cultural and other ties between Croatia and Slovenia".
According to him, the two countries boast well-developed political relations at the level of heads of state and government, ministers and other bodies, moreover, a joint session of both governments is planned.
He said that the heads of parliamentary committees in charge of foreign policy and
European affairs would get in touch in an attempt to organise a joint session which is to address open issues between the two countries.
Seks also expects that the Bled conference will provide an opportunity to debate many topics of common interest, as well as other issues concerning Bosnia-Herzegovina,
Serbia-Montenegro, Kosovo, Macedonia and other countries.
This was the first working meeting between the Slovenian and Croatian speakers after the then Speaker of the Croatian Parliament Zlatko Tomcic visited Slovenia in 2001.
Rupel Welcomes New Challenges for Diplomacy
The Slovenian government set 22 May, the day when Slovenia became a UN member in 1992, to be the Diplomacy Day
Slovenian diplomacy is not afraid to face new challenges, FM Dimitrij Rupel's said in a message on Diplomacy Day. Rupel underlined that Slovenia's EU and NATO
membership, the most important international projects, have proven the maturity and professionalism of Slovenian diplomats. Slovenian diplomacy has gained a lot of experience and indispensable self-confidence as well as optimism, Rupel said according to a Foreign Ministry press release.
EU and NATO membership have secured Slovenia a place among the most developed western democracies. In both organisations, the country has already fully assumed its responsibilities and begun to take part in the decision making, Rupel added.
The responsibilities of Slovenian diplomacy have expanded even more with Slovenian
OSCE chairmanship. According to Rupel, this has brought recognition in the broader geographic area.
Rupel also talked about the preparations of the Slovenian diplomats for EU presidency, acknowledging a substantial advantage they have gained because of the preparations for the OSCE chairmanship.
"Successful preparations are the key to successful presidency. And by successfully presiding the EU, Slovenia as a new member will finally strengthen its place and role in the European family," the minister said.
Among other important issues, Rupel mentioned relations with neighbouring countries, the EU's new budget framework and the EU prospects of the Western
Balkans.
The Slovenian government set 22 May, the day when Slovenia became a UN member in 1992, to be the Diplomacy Day.
Rupel and Draskovic Discuss Kosovo Status
Bilateral relations were also on the agenda, as well as the succession to the former
Yugoslavia
The future status of Kosovo dominated informal talks on Sunday, 29 May between
Slovenian Foreign Minister Dimitrij Rupel and his Serbia-Montenegro counterpart
Vuk Draskovic, with Rupel saying that "there is readiness for compromise by Serbia-
Montenegro." "There is some maneuvering space between Serbian and Kosovar positions. I believe there is readiness for compromise by Serbia-Montenegro," Rupel.
Bilateral relations were also on the agenda, as well as the succession to the former
Yugoslavia. "We talked about the need to prompt all sides towards a resolution of issues related to the balance sheet of the National Bank of Yugoslavia," Rupel was quoted as saying.
Trade Between Austria and Slovenia on the Increase, Panel Says
Slovenian exports of goods and services to Austria amounted to EUR 930m last year, while imports stood at EUR 1.6bn
Slovenian exports of goods and services to Austria amounted to EUR 930m last year, while imports stood at EUR 1.6bn. An official of the Chamber of Commerce and
Industry of Slovenia (CCIS) presented the figures at a debate on business partnership between Slovenia and Austria in Celje on Monday, 23 May. According to Katarina
Drobnic of CCIS, the biggest chunk of the imports was composed of machinery parts, electric products, cars and furniture, while imports included power and leather goods.
Top exporters were manufacturing company Varista and machinery maker Palfinger, while the biggest importers were manufacturer of car-seat covers Prevent, aluminium producer Talum and home appliances manufacturer Gorenje, Drobnic told the round table organised by the Zlatorog business club.
Slovenia ranks 15th among Austria's foreign trade partners, while Austria is the leading foreign investor in Slovenia with 700 investments totalling EUR 1.2bn.
Slovenian investments in Austria meanwhile amount to mere EUR 64.7m.
Assessing bilateral business cooperation, Drobnic said that Slovenian companies notably encounter problems when it comes to the free flow of services in the building sector and acquiring working permits at the Austrian local administration offices.
Slovenian companies still boast a lot of business opportunities in the electronics and timber sector, furniture industry and computer software business, Drobnic also estimated.
Trade consultant at the Austrian Embassy in Ljubljana, Georg Krauchenberg, said that
Austrian exports to Slovenia have been on the increase in recent years, amounting to
EUR 2bn in 2004. Imports from Slovenia meanwhile stood at EUR 1.2bn.
Austrian companies account for 23% of foreign investment in Slovenia. As to the drawbacks that the companies face, Krauchenberg highlighted lengthy administration procedures and high labour costs.
Hong Kong Trade Officials Present Business Opportunities
Hong Kong trade representatives presented the advantages of doing business with
Hong Kong to Slovenian business people at a conference organised by the Slovenian
Chamber of Commerce and Industry
Hong Kong trade representatives presented the advantages of doing business with
Hong Kong to Slovenian business people at a conference organised by the Slovenian
Chamber of Commerce and Industry on Tuesday, 24 May. According to Carrie Lam, director general of the London-based Hong Kong Office for Economy and Trade,
Hong Kong can help foreign investors in their bid to enter the Chinese market given its geographical position, knowhow and its special cooperation agreement with China.
Hong Kong is moreover an attractive destination for foreign investors due to its open and competitive economy, adequate legislation, well-developed financial, communication and transport sectors, and simple tax system, the trade official highlighted.
Participants of the conference agreed there was still a lot of potential for business cooperation between Slovenia and Hong Kong.
The bilateral trade amounted to US$ 52m in 2004, an increase of 27.4% over the previous year. Slovenian exports to Hong Kong amounted to US$ 13.16m, while imports stood at US$ 9.88m, according to the figures of the CCIS.
EUROPEAN UNION
Government Confirms Schengen Facility Programme
The indicative programme comprises eight objectives, among them investments in police stations, technical equipment and vehicles, training, and investments in border crossings
The government on Thursday, 26 May confirmed the proposed indicative programme for the Schengen Facility for the 2004-2006 period, which envisages funds of EUR
119.83m. Slovenia must submit the programme to the European Commission by 31
May. The indicative programme comprises eight objectives, among them investments in police stations, technical equipment and vehicles, training, and investments in border crossings.
The ministers were also briefed on the phasing of funds and the first supervisory report on the carrying out of this temporary programme of grants for newcomers on the EU's external border.
The supervisory report, compiled by a team chaired by Marcel Koprol, the head of the
Government Office for European Affairs (SVEZ), determined major delays between the planned and realised projects.
The supervisors therefore issued several recommendations, calling for better compliance with European Commission instructions and the inclusion of those projects that can be completed.
The Schengen Facility is an aid programme for seven EU newcomers worth EUR
900m. It is designed to strengthen control on the EU's external border.
PM Jansa: French Referendum Failure No Disaster for Europe
Europe must take the message of the French referendum on the constitution seriously, yet this is no reason for a general uncertainty on the European political or business scene
Europe must take the message of the French referendum on the constitution seriously, yet this is no reason for a general uncertainty on the European political or business scene. This is how Slovenian PM Janez Jansa reacted to the French 'no' to the
European constitution on Sunday, 29 May.
The failure of the French referendum is no disaster for Europe, said Jansa in a press release. While European integration had witnessed problems before, Europe was not only able to deal with them, but they also made it stronger, more experienced and integrated, he stressed.
The referendum outcome has shown, according to Jansa, a gap between political elites that would like to see the constitution implemented and French citizens. The gap should be taken very seriously, as a challenge. Moreover the doubts and fears of EU citizens should be addressed, he added.
The French 'no' should not dissuade the EU from other priorities, stressed Jansa, and listed a consensus on the new financial perspective, the attainment of Lisbon Strategy goals and Europe's key foreign policy and security challenges. He believes the
European Council would have to adopt an unambiguous statement to that effect.
The prime minister also urged for the process of constitution ratification to continue in the member states which have not yet ratified the treaty. He believes "a good-bye to the set ambitions would not send out the right signal at this moment".
If it turns out there is no chance to implement the constitution, Jansa believes an alternative scenario should be worked out to enable the EU a further successful development even without the constitution.
What matters most, according to Jansa, is Europe's political contents and its long-term orientation, he said. Here he mentioned European integration as a process which needs to be continued for Europe to open the door to all those candidates that meet membership criteria.
LEGISLATION
Government Moves to Protect Contracting Authorities
The government has drafted amendments to the act on audit of public procurement procedures in order to improve the legal remedies of public contracting authorities
The government has drafted amendments to the act on audit of public procurement procedures in order to improve the legal remedies of public contracting authorities.
Past practice has shown that the legislation does not provide for equal legal remedies for contracting authorities and bidders, Finance Minister Andrej Bajuk told the press on Thursday, 26 May.
According to the proposal, a claimant requesting an audit must prove an interest in being awarded a public contract as well as a reasonable degree of likelihood that it could have incurred damages due to the irregularities alleged in the request.
The complaint itself will not be enough, as the potential bidder will have to prove the likelihood of damage, Bajuk explained.
Under the current system, the contracting authority must freeze the procedure when an audit request is filed. The amendments would allow the chair of the National Audit
Commission to decide not to stop the procedure.
One crucial aspect of the amendments, according to Bajuk, is that the National Audit
Commission has been appointed the body in charge of handing out fines.
The current law prescribes penalties and fines but does not name a specific body in charge of supervision and implementation, the finance minister said.
Government to Make Public Information Even More Accessible
The government debated draft changes to the act on the access to public information designed to make the work of the public sector even more transparent
The government on Thursday, 26 May debated draft changes to the act on the access to public information designed to make the work of the public sector even more transparent. According to Public Administration Minister Gregor Virant, the changes are to allow public access to some information related to the use of public finances and performance of public offices that has so far been confidential.
The government only debated the amendments, while it will adopt them and refer them to parliament for passage in an emergency procedure at a correspondence session next week, Virant told the press after the government session.
According to him, the amended law is to state exceptions to the principle of free access not as absolute but as relative. It would state that the exceptions set forth in the law are not used when the information concerns the use of public money or the performance of office in the public sector.
Another important change quoted by Virant is that in the case of exceptions, a piece of information can be disclosed to the public when the right of the public to learn about the information is stronger then the public interest to keep it secret. This will not be applied in case of highly classified information.
By introducing this test of public interest, Slovenia will join those countries that have gone farthest in making the public sector transparent, such as the United States, the
UK and Australia, Virant said.
According to him, the Ministry of Finance has made some comments regarding the issue of confidential information related to taxes, so this still needs to be dealt with either in the law on access to public information or the one dealing with tax service.
A further reason for amending the law is to bring it in line with a new EU directive that allows countries to charge for the use of public information that has already been made accessible. This is to be applied when such information is used for commercial purposes, according to Virant.
The third set of amendments is designed to facilitate access to public information. As part of these changes, a central register of public information is to be made available at the e-administration online gateway.
STATISTICS/FORECASTS
Consumer Demand Weakens, Government Demands Stagnates
Full data for aggregate demand is not available yet
Consumer demand has slackened off while government demand has actually stagnated in the first months of 2005, according to Economic Trends. The report notes, however, that full data for aggregate demand is not available yet. According to the May report of the Economic Institute at the Faculty of Law, foreign trade was buoyed in March in particular by trade with the "rest of the world", where imports and exports saw a much bigger increase than trade with the EU.
Preliminary data suggests that exports were at EUR 1.23bn in March, with imports at
EUR 1.1bn. Whereas 67.7% of the country's exports were destined for the EU, this is still much less than the 70.4% in the first quarter overall. Imports from the EU stayed roughly equal than in the previous months.
The report suggests the shift in exports was prompted by stagnation in the EU, while the seeming "shifting" of imports was caused by high oil prices. Prospects for the summer indicate meagre trade growth.
Industrial production remains on par with last year's. Indeed, with a growth of 1.37% in March, it slowed down more slowly than it did in February.
The report also notes that job figures rose in March, while the levelling number of registered unemployed suggests that the upbeat trend will continue.
Foreign Debt at EUR 15.85BN in February
Slovenia's foreign exchange reserves totalled EUR 7.57bn at the end of February, falling EUR 8.28bn short of the overall foreign debt
Slovenia's foreign exchange reserves totalled EUR 7.57bn at the end of February, falling EUR 8.28bn short of the overall foreign debt. This amounted to EUR 15.85bn, according to the latest issue of the Bank of Slovenia Bulletin. The bulk of foreign exchange reserves in February belonged to the central bank (EUR 6.54bn), while the rest were the reserves of commercial banks.
Most of the overall foreign debt was in long-term debt (EUR 11.89bn). Short-term debt amounted to EUR 2.92bn and liabilities to affiliated enterprises to EUR 1.04bn.
While private debts totalled EUR 11.96bn, public and publicly-guaranteed debts amounted to EUR 3.89bn.
Business Sentiment Unchanged
The seasonally adjusted value of the business sentiment index was on a par with
April's and last year's average, while it was 2 percentage points lower compared to
May 2004
Business sentiment remained flat for a third month in a row in May. The seasonally adjusted value of the business sentiment index was on a par with April's and last year's average, while it was 2 percentage points lower compared to May 2004, according to the National Statistics Office. Confidence in manufacturing, retail confidence index and consumer confidence remained at the April level too.
Nevertheless, the sentiment index in manufacturing was 6 percentage points lower compared to May 2004 and 3 percentage points below last year's average.
On the other hand, consumer confidence index is currently 4 percentage points higher than the long-term average and at the level of last year's average.
Moreover, in retail, the index was up 1 percentage point in a year-on-year comparison, and 2 percentage point up over last year's average.
FINANCE
Raiffeisen Krekova Banka Still Looking for Chairman
Raiffeisen Krekova banka, a small Austrian-owned bank, increased its total assets by
25.7% in 2004 to SIT 159.5bn (EUR 665.7m), which puts its market share measured by assets at 2.8%
Raiffeisen Krekova banka, a small Austrian-owned bank, increased its total assets by
25.7% in 2004 to SIT 159.5bn (EUR 665.7m), which puts its market share measured by assets at 2.8%. This places the bank among the fastest growing banks in the country, the bank said after the general meeting on Monday, 23 May. The bank's provisional chief executive Klemens Nowotny told the press that there is no news about a new chairman, after Ales Zajdela left the bank at the end of March. "There are still three candidates shortlisted and our task is to pick the best one," Nowotny said, adding that there was no hurry.
Nowotny also touched on the bank's prospective participation in the privatisation of
Nova Kreditna banka Maribor, the country's No. 2 bank, which is to be partially privatised through a stock market floatation.
"We are not excluding this option, but only if we had at least some influence after the purchase. We shall not do this at any cost, but rather focus on the bank's organic growth," Nowotny explained.
The general meeting also confirmed a decision of a SIT 3.6bn (EUR 15m) capital increase with the non-public issuing of 56,928 ordinary shares. The current shareholders will have the exclusive preemptive right to participate in the supply of fresh capital.
Double Pricing to Cost over EUR 33m
The project of double pricing in the run-up to the euro changeover is to cost traders in excess of SIT 8bn (EUR 33m), according to an analysis made by the government
Institute for Macroeconomic Analyses and Development (IMAD) and the Finance
Ministry
The project of double pricing in the run-up to the euro changeover is to cost traders in excess of SIT 8bn (EUR 33m), according to an analysis made by the government
Institute for Macroeconomic Analyses and Development (IMAD) and the Finance
Ministry. In debates so far, the question of when to introduce price tags in euros and tolars has been one of the most heated issues. The analysis, which the government is expected to examine shortly, recommends that double prices be introduced when the tolar-euro rate is cemented.
The costs of double pricing will be roughly the same as in other eurozone members, at about 0.55% of GDP in 2003, or SIT 5.8bn (EUR 24.2m). The project will be somewhat more expensive for small and mid-sized enterprises, the analysis suggests.
However, should the central parity rate change before the exchange rate is fixed, the costs would rise to SIT 7.1bn (EUR 29.6m). Companies are likely to incur additional expenses of about SIT 1.2bn (EUR 5m) due to the state of Slovenian retail and wholesale.
Flat Tax Proponents Defend Their Proposal
A group of economists who have recently proposed a 20% across-the-board flat tax rate insists that the new rate would reduce labour costs, improve the country's competitive ability and cut red tape
A group of economists who have recently proposed a 20% across-the-board flat tax rate insists that the new rate would reduce labour costs, improve the country's competitive ability and cut red tape. The authors of the feasibility study which served as the basis for the proposal of the Strategic Council for Economic Development, Joze
P. Damijan and Saso Polanec, said on Monday, 23 May that the flat tax is sustainable in social and budgetary terms.
It will not hurt any income group as net wages will remain as they are, according to
Damijan. All taxpayers would get a tax break corresponding to 110% of minimum living expenses, while relief for family members would be transformed to a credit system of relief.
Addressing the Macroeconomic Forum, which unites mainly young liberal economists, Damijan said the tax proposal would reduce labour costs substantially.
The reduction would be as much as 32% for the most educated employees, he said, adding that Slovenia can no longer afford the taxation of labour that is in place now.
The study shows that the state stands to lose around SIT 200bn (EUR 834m) in income tax and payroll tax as a consequences of the lower tax rate. However, some of this can be made up with greater tax revenues from VAT, while the state will also save on taxes it has to pay for public sector employees.
Damijan also reiterated that the tax reform would have to be carried out alongside the reform of social transfers. Moreover, further analyses must be made to include employment, tax breaks for investment and know-how. Damijan also said that while this proposal deals only with personal income tax, an analysis on corporate income tax is in the making.
Gaspari Says Inflation Goals to be Met by April 2006
Speaking at the annual conference on finance and the stock market in the seaside resort of Portoroz, Bank of Slovenia Governor Mitja Gaspari reiterated that high inflation remains the biggest obstacle to adopting the euro in Slovenia
Slovenia's central bank governor has said Slovenia should meet the inflation targets for the euro by April next year. Speaking at the annual conference on finance and the stock market in the seaside resort of Portoroz on Thursday, 26 May, Bank of Slovenia
Governor Mitja Gaspari reiterated that high inflation remains the biggest obstacle to adopting the euro in Slovenia.
According to him, Slovenia is to bring down its inflation to around 2.5% by the end of this year. The rate is to continue dropping at the beginning of the next year, with the target being met by April 2006, according to him.
In order to meet the Maastricht inflation criterion, Slovenia's inflation cannot exceed the average inflation rate of the three eurozone members with the lowest inflation by more than 1.5 percentage points.
Gaspari also said he was more concerned by the prospects that the falling inflationary trend would turn around in 2007.
Moreover, Gaspari said prices of oil and other raw materials pose the biggest threat to inflationary trends in the future. A US$5 rise in the price of a barrel of oil would add
0.4 percentage points to Slovenian inflation, he said.
Slovenia must therefore work hard on local factors of inflation in order to give itself more room to deal with unexpected global factors over which it has no influence, he added.
Apart from administered prices, the government must keep a close eye on wages, he added.
He warned, however, that the introduction of a flat tax rate - as proposed by some economists advising the government - could fuel inflation.
The rise in value added tax for food from 8.5% to 20% would impact negatively on
Slovenian competitiveness as this would raise inflation. This has been demonstrated well in Slovakia, he said.
Gaspari also said that the current mean euro-tolar exchange rate of 239.64 had proven correct, as the bank has not had to intervene on the market.
He also said that in May or June of next year, the European Central Bank is to compile reports on the state of countries waiting to adopt the euro. The Bank of
Slovenia would set the final exchange rate after the report comes out, he added.
Prices in Tolars and Euros Mandatory as of March 2006
The government decided that prices will have to be stated in tolars and euros as of 1
March 2006, which puts an end to months of debates about the time frame for double pricing in the run-up to the euro changeover expected on 1 January 2007
The government decided on Thursday, 26 May that prices will have to be stated in tolars and euros as of 1 March 2006, which puts an end to months of debates about the time frame for double pricing in the run-up to the euro changeover expected on 1
January 2007. "The government has made this decision based on the experience of other countries and in the firm belief that we are on track to completing this project successfully and efficiently," Finance Minister Andrej Bajuk told the press.
The introduction of informative double pricing will allow people to get used to new prices. It will also prevent retailers from rounding prices up once the new currency is introduced, which happened in certain other countries, he explained.
The date has been set based on a cost analysis carried out by the government Institute for Macroeconomic Analysis and Development (IMAD) and the Economics Ministry.
The analysis suggests the costs will amount to about 0.55% of GDP in 2003, or SIT
5.8bn (EUR 24.2m).
According to the analysis, the figure would rise to SIT 7.1bn (EUR 29.6m) should the central parity rate change before the exchange rate is fixed.
Bajuk said that there is a risk involved, but the government has assessed it is relatively small. There are no signs of any forthcoming major exchange rate shift; the inflation rate is dropping and the Bank of Slovenia is pursuing a restrictive exchange rate policy, he added.
According to the government decision, price labels will have to include tolars and euros until ten months after the euro becomes the national currency.
Kranjec: Complicated Tax Procedures Affect Competitive Ability
Marko Kranjec, the head of a task force appointed by the government to amend tax legislation, highlighted the dilemmas of the new tax system as he delivered an opening address at a three-day meeting of tax advisers at the Terme Catez spa resort
Marko Kranjec, the head of a task force appointed by the government to amend tax legislation, has said that while Slovenia's current tax system is not the key problem in the country's poor competitive ability, complicated tax procedures are an important aspect of competitiveness. Kranjec highlighted the dilemmas of the new tax system as
he delivered an opening address at a three-day meeting of tax advisers at the Terme
Catez spa resort on Thursday, 26 May.
According to him, the state is very inefficient when it comes to the money collected in taxes, so the only way to reduce taxes is to make tax collection more efficient.
The most problematic aspects of the new tax legislation as quoted by Kranjec are income tax, farmers' taxation and taxation of interest groups, such as athletes, students, artists.
Kranjec believes Slovenia has different tax rates due to globalisation. It is capital's mobility which requires different taxation. He said that Slovenia would do best to have taxation that is similar to that abroad.
The economist dismissed farmers' grievances about high taxes as unjustified. He said that farming was undervalued today so the concept of cadastral income would have to be changed.
Kranjec also said that taxation of farmers must become an independent project.
According to him, small producers should pay lump sum taxes, while bigger farmers should pay according to the volume of production.
As part of the 12th annual Days of Tax Advisors, a round-table debate discussed flat tax rate. According to Darko Koncan of the Society of Tax Advisors, flat tax rate reminds of a model of financial schemes where only those on top can count on success.
Milan M. Cvikl, a former state secretary and the Finance Ministry and today an MP of the opposition Liberal Democrats (LDS), meanwhile criticised the flat tax as a government manoeuvre designed to deceive. He also claimed that the concept was unknown in the EU with the exception of Slovakia.
Coalition Puts Finishing Touches on Supplementary Budget
Ministers and MPs of the four coalition parties met to "micro-align" the proposed
2005 supplementary budget
Ministers and MPs of the four coalition parties met on Thursday, 26 May to "microalign" the proposed 2005 supplementary budget. Everybody is aware that this is only a supplementary budget and a lot of the money has already been spent; there is little maneuvering space, PM Janez Jansa told the press. The supplementary budget, adopted by the government on 12 May, sets the budget deficit at SIT 91.9bn (EUR
383.49m) or 1.4% of GDP. The original 2005 budget, passed by parliament in
December 2003, anticipated budget deficit of SIT 112bn (EUR 467.37m) or 1.7% of
GDP.
Revenues will amount to SIT 1683.045bn (EUR 7.023bn), or SIT 63.9bn (EUR
266.65m) more than in the original budget, while budget expenditures are to increase by SIT 41.7bn (EUR 174.01m) to SIT 1774.985bn (EUR 7.407bn).
According to Jansa, the supplementary budget could be added many more development opportunities had there not been the need to provide an additional SIT
70bn (EUR 292m) for liabilities that had been known when the budget was passed in
2003 or appeared later, Jansa said.
Traders: Double Prices in March 2006 Only if Rate Is Fixed
Slovenian retailers and wholesalers agree with the government's proposal for mandatory double pricing as of March 2006, but only if the tolar-euro exchange rate is cemented by then
Slovenian retailers and wholesalers agree with the government's proposal for mandatory double pricing as of March 2006, but only if the tolar-euro exchange rate
is cemented by then, according to Stanislav Brodnjak, the head of the association for trade at the Chamber of Commerce and Industry of Slovenia (CCIS). Peter Puhan, the director general of the internal market directorate at the Economics Ministry, said that the ministry had actually proposed that double prices be mandatory as of October
2006, a date that had been agreed with the traders.
However, the government did not accept the Economics Ministry's proposal and instead opted for 1 March, exactly ten months before the euro is set to become the national currency, Puhan explained.
According to Brodnjak, it is not so important when exactly double pricing becomes mandatory. What is important, however, is that the exchange rate be fixed.
Puhan acknowledged that the rate is unlikely to be cemented by 1 March. "The government cannot confirm that... but it is likely," he explained.
The central parity rate was set at SIT 239.64 tolars per euro when Slovenia entered the
ERM II exchange rate mechanism. Until eurozone admission, the rate may not fluctuate more than 15% in either direction.
However, the traders refuse to accept this rate, because it is changing on a daily basis.
"The rate must be fixed. Any other considerations are political and render any debate meaningless, for it seems that professional opinion does not count for anything,"
Brodnjak said.
He said the experts have been highlighting the need to cut costs, a goal that the traders share. Any change in exchange rate would increase these costs, Brodnjak thought.
The association of trade also looked into the recent decision of the Constitutional
Court, which upheld the results of the referendum on the opening hours of shops that will in effect close most shops on Sundays.
"It will become evident in time whether we have done a favour to our neighbours and whether outlets in neighbouring countries will see a new niche market in that,"
Brodnjak explained.
He said the association is by no means happy with the decision, but it will participate in the resolution of the final open issues that still need to be tackled.
Ljubljana Stock Exchange
The SBI 20 benchmark index remained virtually unchanged last week at 4,631.51 points in one of the slowest trading weeks in recent history
The SBI 20 benchmark index remained virtually unchanged last week at 4,631.51 points in one of the slowest trading weeks in recent history. The mixed trading on the
Ljubljana Stock Exchange last week was compounded with a lack of investor interest.
Regular trading amounted for only SIT 1.7bn (EUR 7.1m) in volumes.
Analysts say the current rut is a result of investor worries and a massive drop in the money flowing into mutual funds.
Big name shares traded mixed last week. Among the most active, drug maker Krka gained 0.3% to SIT 78,158 (EUR 326.16). Meanwhile, brewer Pivovarna Lasko fell
0.07% to SIT 7,390 (EUR 30.84).
One of the best performers last week was retailer Mercator, which added 0.78% to
SIT 36,738 (EUR 153.31) as it rebounded after taking a battering a week earlier.
Bonds generated the bulk of the volumes last week. Topping the action were 57th and
58th issue treasury bonds. The BIO bond index finished the week 0.04% lower at
121.84 points.
There was some strong selling last week with popular investment funds. Infond ID topped the list of losing shares, tumbling 2.68% to SIT 2,538 (EUR 10.59). The PIX investment fund index fell 2.6% to 4,311.62 points.
Foreign Exchange
Mean exchange rate of the Bank of Slovenia
Euro (EUR) - SIT 239.61 (+0.01)
U.S. dollar (USD) - SIT 191.14 (+1.42)
Swiss franc (CHF) - SIT 154.85 (-0.06)
British pound (GBP) - SIT 348.52 (-0.04)
REGIONAL INFORMATION
Lipica to Host World Cup Dressage Meet
The meet, which is taking place as Lipica celebrates its 425th anniversary, will culminate on 2 and 3 June, with the prestigious Grand Prix competition
Lipica, the home to the world-famous Lipizzaner horses, will once again be the site of a World Cup Dressage meet as some of the world's best riders are to go head to head from 2 through 5 June. The organisers said on Wednesday, 25 May that they expected a total of 48 competitors from 16 countries to take part in the five days of competition. A total of 10 Slovenian competitors are expected to be taking part.
The meet, which is taking place as Lipica celebrates its 425th anniversary, will culminate on 2 and 3 June, with the prestigious Grand Prix competition.
According to the organisers, a total of 26 competitors from the world rankings will be taking part in the meet, making for top-flight competition.
BRANCH INFORMATION
Innovations Ample, But Few Hit Market
It takes an average 8.7 years for an innovation to develop from an idea to an actual product on the market in Slovenia, while it takes 3.1 years for innovation in services, which is much more than in the United States or Japan
It takes an average 8.7 years for an innovation to develop from an idea to an actual product on the market in Slovenia, while it takes 3.1 years for innovation in services, which is much more than in the United States or Japan. This is one of the findings of a survey on Slovenian innovators. The survey, carried out by the Independent Network for Entrepreneurship and Innovation, (Spim), also shows that Slovenian innovators have between three and five ideas that they do not have the financial means or support to develop for.
Due to unfavourable conditions and abolishment of support programmes, more than
60% of innovations that had begun to develop in Slovenia were transferred abroad in
2002.
Over the past eight years, the failure to realise their innovation and accumulated debts caused the failure of 46 Slovenian innovators, 146 small companies, 19 independent entrepreneurs, while four innovators committed suicide.
The results of the survey also show that Slovenian courts do not protect inventors or innovators: in the past five years, they violated patent law or even the Constitution to the detriment of Slovenian innovators in 27 cases. Half of the incompetent rulings were to the advantage of foreigners.
The survey moreover suggests that guarantees and loans offered by the state are unfavourable for innovators, while its consulting services do not give enough useful professional advice and assistance. Public invitations to tender are not based on clear conditions, and are tailored to state-run institutes and universities, the survey says.
The Slovenian innovator who successfully realised an innovation is on average 46 years old, married, has two children and has worked for 29 years.
He or she has invested 66% of his or her funds (or money borrowed from friends and family), between 0 and 8% grants and between 0 and 34% of local funds, got 9% of funds for assistance in consultations and used 38% of foreign assistance. He or she also used between 0 and 6% of bank loans and between 0 and 18% of state aids for promotion.
The survey was conducted among 300 Slovenian inventors, innovators and copyright holders among private researchers, sole proprietors and independent entrepreneurs, micro and small companies with up to 20 employees.
Foresters Point to Poor Timber Exploitation
Slovenian foresters highlighted that Slovenia still needed to do a great deal in order to upgrade its exploitation of timber
Slovenian foresters highlighted that Slovenia still needed to do a great deal in order to upgrade its exploitation of timber, as they held a news conference at the launch of
Forest Week on Tuesday, 24 May. Representatives of the Slovenian Forestry Institute, the Agency for Forests and the Foresters' Association claimed that Slovenia might be
"a country of forests" but is certainly not "a country of timber".
Their figures suggest that 3 million cubic metres of wood was cut last year, which represented merely 70% of the wood that was actually good for cutting. This unused
potential is notably a problem in privately-owned forests, which account for twothirds of Slovenian forests.
The country's forest area amounted to 1.2 million hectares last year, an increase of
6,000 hectares year-on-year, to account for 57.4% of Slovenia's total surface area.
According to Jost Jansa of the Agency for Forests, some SIT 700m (EUR 2.92m) are to be earmarked for investments into forest this year, of which SIT 476m (EUR
1.98m) is to come from the state budget and SIT 219m (EUR 0.91m) from EU funds.
Car Cluster Urges Greater Focus on Innovation
The Slovenian automotive industry, which employs 23,000 people, must focus on innovation in order to prosper, agreed speakers at the third annual consultation of the Slovenian automotive cluster
The Slovenian automotive industry, which employs 23,000 people, must focus on innovation in order to prosper, agreed speakers at the third annual consultation of the
Slovenian automotive cluster on Tuesday, 24 May. Andrej Vizjak, the economics minister, expects the industry to develop in Europe although production is being moved to Asia. However, if Slovenia is to use its potential, it has to focus on innovation.
Indeed, the companies in the cluster should focus on innovation in the more demanding projects. He said their development-oriented activities would be supported by the state.
The cluster claims that focus on innovation is already evident, for example in the creation of a polycentric technological centre, which includes nine companies and three research institutions. The main problem is in sales: marketing is often unfocused and not aggressive enough.
The event, dedicated to development trends in the automotive industry, saw attendance by 170 businessmen, managers and researchers from Slovenia, Croatia,
Germany, Serbia-Montenegro and Norway.
The automotive cluster was set up three years ago and comprises 54 companies.
Bill Transposes EU Directive on Drivers' Hours
Representatives of hauliers attending a panel discussing EU and Slovenian regulations related to drivers' hours have highlighted that the bill adopted by the government was in collision with the employment legislation
The cabinet has adopted a bill dealing with working time and mandatory rest period for lorry drivers and instruments measuring driving time which transposes the relevant European directives. Yet representatives of hauliers attending a panel discussing EU and Slovenian regulations related to drivers' hours have highlighted that the bill adopted by the government was in collision with the employment legislation.
The bill extensively deals with trip recorders or tachographs. It stipulates that tachograph servicing outlets are monitored by the National Transport Inspectorate, which also controls the issuing of memory cards, while the issuers will be selected in a public tender.
The Transport Inspectorate and the Labour Inspectorate are in charge of controlling hauliers, while the police checks on them on the road as part of its responsibility to ensure road safety.
The bill also deals with tachograph servicing centres as each EU member must ensure that such instruments are installed and serviced only by centres approved by the body in charge in the member state.
The panel on drivers' hours that was organised by the Chamber of Commerce and
Industry of Slovenia (CCIS) and the Chamber of Trade (OZS) in Ljubljana however highlighted that the bill was not in line with the employment act.
The EU directive allows working time of up to 48 hours a week (or up to 60 hours if the four-month average does not exceed 48 hours a week), while the employment act stipulates 40-hour working week or up to 56 hours in case of irregular hours, yet only up to six months.
According to the secretary of the CCIS Transport Association Robert Sever, CCIS and OZS representatives brought the government's attention to the issue already during negotiations, urging it to wait with the proposal until the clash in legislation has been addressed. They now expect their objections to be taken into consideration in parliamentary debate.
COMPANIES
Intereuropa Beats Q1 Expectations
Logistics company Intereuropa beat expectations for the first quarter of the year with net profit at SIT 1.015bn (EUR 4.24m)
Logistics company Intereuropa beat expectations for the first quarter of the year with net profit at SIT 1.015bn (EUR 4.24m). This is less than last year but 20% above forecasts, the company said after the session of the supervisory board on Tuesday, 24
May. The supervisors also decided to propose dividend payouts of SIT 240 (one euro) per share, which brings the total handout to SIT 1.9bn (EUR 7.9m). The proposal will be put up for vote at the 15 July annual general meeting.
Simobil Boosts Q1 Revenues
Slovenian number two mobile operator Simobil generated revenues of EUR 21.6m in the first quarter of 2005, which is a rise of 12.5% compared to the same period last year
Slovenian number two mobile operator Simobil generated revenues of EUR 21.6m in the first quarter of 2005, which is a rise of 12.5% compared to the same period last year, the company said on Wednesday, 25 May. The earnings before interest, taxes, depreciation, and amortization (EBITDA) amounted to EUR 6.8m in the first three months of the year, rising from EUR 4.2m reported in the first quarter of 2004.
The operator said it boasted 364,500 users in the first quarter, which is an increase of
2,800 users year-on-year.
Group Mobilkom Austria, which is Simobil's majority owner, generated revenues of
EUR 526.8m and EBITDA of EUR 216.9 in the first three months of the year.
Petrol's Net Profit up 35% in Q1
Fuel retailer Petrol generated SIT 84bn (EUR 350.59m) in net sales revenue in the first quarter of this year according to unaudited figures
Fuel retailer Petrol generated SIT 84bn (EUR 350.59m) in net sales revenue in the first quarter of this year according to unaudited figures. This result tops last year's by
23% in the same period. Operating profit soared 54% year-on-year, amounting to SIT
1.3bn (EUR 5.43m), while net profit went up 35% to SIT 1.1bn (EUR 4.59m), Petrol said in a press release on Wednesday, 25 May.
The company sold 467,000 tonnes of oil and gas products in Q1, which is 6% more than planned and 10% more than in the same period of 2004.
Sales revenues from other commercial goods, which amounted to SIT 9.3bn (EUR
38.82m) in the first three months of this year, exceeded plans by 9% and were 12% higher than last year's.
Brewer Union Posts Loss in Q1
Brewer Pivovarna Union generated around SIT 3bn (EUR 12.52m) in net sales revenues in the first quarter of the year
Brewer Pivovarna Union generated around SIT 3bn (EUR 12.52m) in net sales revenues in the first quarter of the year, which is down 2.1% year-on-year and represents 18.5% of the planned revenues for 2005. The brewer's net loss in the first three months stood at SIT 20.9m (EUR 87,229), which is SIT 72.1m (EUR 300,921)
better compared to the same period last year, the company said in a press release
Wednesday, 25 May.
Pivovarna Union, owned almost fully by fellow brewer Pivovarna Lasko, generated an operating loss of SIT 23.5m (EUR 98,081), which is an improvement of SIT 84.8m
(EUR 353,927) compared to last year. Union plans to make a profit of SIT 700m
(EUR 2.92m) for the whole of this year.
In Q1, Union sold 246,494 hectolitres of drinks on the Slovenian and foreign markets, which is 0.2% less than in the 2004 period, 2% under the planned volume for Q1 of
2005 and 18.2% of the planned sales for the year.
Due to the seasonal demand for beer and non-alcoholic beverages and the fact that the first quarter is characteristically off-season, the brewer usually generates loss in this period, this year being no exception, Union said.
After the takeover by Lasko, the Union Group plans to focus on synergies of beverage producers in order to obtain an efficient production and solid sales figures, the company said.
Union added that restructuring is to continue at fruit beverage arm Fructal. The short term aim is to achieve the business plan for 2005 and avoid a loss, while in the long run Fructal aims to strengthen its position on the market.
Zagozen New GM of HSE
The supervisory board of Holding Slovenske elektrarne (HSE), a group of power companies, chose Joze Zagozen of the ruling Slovenian Democrats (SDS) as the best candidate for the post of general manager
The supervisory board of Holding Slovenske elektrarne (HSE), a group of power companies, chose Joze Zagozen of the ruling Slovenian Democrats (SDS) as the best candidate for the post of general manager. Zagozen, who served as economics minister in the Andrej Bajuk government in 2000, will assume his 4-year term on 1
July, head of the board Djordje Zebeljan told the STA on Wednesday, 25 May.
The other candidate for the post was Franko Nemac, director of the Energy
Restructuring Agency. Both candidates presented their visions of the HSE development to the supervisors, but Zagozen's vision met the expectations of the board to a greater extent, Zebeljan said.
Zagozen's predecessor Drago Fabijan tendered his resignation on 24 March, around three months before his contract was to run out, but gave no reason for the move.
Fabijan headed the HSE since it was established in September 2001 with the merger of four state-owned power producers - Dravske elektrarne, Savske elektrarne, Soske elektrarne and Termoelektrarna Brestanica - and the Velenje coal mine.
The HSE supervisory board put out a call for applications for a new general manager on 29 April, and the applications had to be handed in until 13 May.
Food Company Zito's Quarterly Profit Drops
In the first three months of this year, food company Zito made a net profit of SIT 15m
(EUR 63,000) compared to SIT 91.8m (EUR 380,000) the same period last year
In the first three months of this year, food company Zito made a net profit of SIT 15m
(EUR 63,000) compared to SIT 91.8m (EUR 380,000) the same period last year. Net sales revenues were SIT 2.87bn (EUR 11.27m) in this time, which is 4.7% more than planned and 8.7% more than in the same period last year.
According to the company, net sales revenues should not be compared directly to
2004 results or 2005 plans due to the restructuring of sales in the company, Zito said in a press release on Wednesday, 25 May.
Net sales revenues were higher than planned due to the transfer of flour repro sales from Zito Intes group to the parent company on 1 March this year.
Zito, the leading maker of bread, pasta and flour in Slovenia, sold 2% less products in the first three months of this year, compared to the same period in 2004.
Newspaper Outlet Delo Reports Slump in Q1 Profit
Slovenia's leading newspaper outlet Delo reported a 22.6% fall in quarterly net profit to SIT 112.8m (EUR 470,000)
Slovenia's leading newspaper outlet Delo reported a 22.6% fall in quarterly net profit to SIT 112.8m (EUR 470,000). The company blamed the earnings slump on higher labour costs as a result of the new income tax legislation and a fall in advertising earnings. In a press release published in the daily Delo on Thursday, 26 May, the company said advertising revenues fell 5% in the first quarter owing to fewer advertisements by the main advertisers.
Nevertheless, total revenues increased 4.8% to SIT 3.2bn (EUR 13.35m). According to Delo spokesperson Bogi Pretnar, this is about 6% short of plans.
Revenues from sales of newspapers, books and DVDs rose by 14% to SIT 1.8bn
(EUR 7.51m) compared to the first quarter of last year, Delo added.
Dividends for Merkur Shareholders, Bonus for the Management
The shareholders of hardware retailer Merkur confirmed the management board's proposal for the division of distributable profit, which amounts to SIT 10.15bn (EUR
42.4m)
The shareholders of hardware retailer Merkur confirmed the management board's proposal for the division of distributable profit, which amounts to SIT 10.15bn (EUR
42.4m), at a general meeting on Thursday, 26 May. Shareholders will receive dividends of SIT 600 (EUR 2.5) per share, while members of the management and supervisory boards will get bonuses totalling SIT 56m (EUR 233,000).
The proposal for a capital increase was withdrawn from the agenda. Chairman Bine
Kordez told a press conference that the management board garnered insufficient support for a proposed capital injection of SIT 4bn (EUR 16.7m).
Kordez explained that this capital increase was proposed in order to simplify the procedure, not to "double-cross some shareholder in the proportionate increase of their share".
Kordez said he is convinced the shareholders would support individual projects and investors they will start looking for, because they are crucial for the achievement of the high goals according to which Merkur would make EUR 300m in new investments in five years.
The proposal for the payment of performance bonuses was opposed by the Pension
Fund Management (KAD) and the Restitution Fund (SOD), but was accepted with
52% of all votes.
The date 10 August was set for the payment of dividends, while the shareholders agreed that the rest of the distributable profit, worth SIT 9.4bn (EUR 40.6m), remain untouched until next year.
Istrabenz Gets New Supervisory Board
The shareholders of energy, tourism and food group Istrabenz named a new supervisory board, effective as of 30 May
The shareholders of energy, tourism and food group Istrabenz on Friday, 27 May named a new supervisory board, effective as of 30 May, and handed out SIT 673m
(EUR 2.8m) to shareholders in the form of dividends at SIT 130 (EUR 0.54) per share. The supervisory board comprises former Istrabenz CEO Janko Kosmina, head of the Pension Fund Management (KAD) Tomaz Toplak, Restitution Fund (SOD) management board member Bozo Predalic, Pivovarna Lasko chief executive Tone
Turnsek, chief supervisor of insurer Zavarovalnica Triglav Damjan Mihevc and Bojan
Korsika.
Mihevc was appointed at the counter-proposal of Zavarovalnica Triglav and thus squeezed out Milan Knezevic, the chair of the supervisory board of food company
Kolinska before it merged with Droga this year. Employees will be represented by
Sanja Bajec, Klavdija Ule and Klavdija Primozic.
The general meeting moreover decided to overhaul the payment system for supervisory board members. Instead of being awarded performance bonuses at the end of the year, they will get a fixed salary of SIT 2.61m (EUR 10,900) per year plus meeting fees, with the chairman receiving double the sum.
Engrotus Boosts Sales by 35%
Net profit was at EUR 11.2m, 16.6% more than the year before
Engrotus, the third-largest retailer in the country, boosted revenues by 35% last year to EUR 374.2m. Net profit was at EUR 11.2m, 16.6% more than the year before, director Aleksander Svetelsek told the press on Friday, 27 May. The Tus group, which includes the retailing business as well as restaurants, cinemas and gas stations, generated total revenues of EUR 439.5m, up 50% year-on-year. Net profit soared by
67% to EUR 16.3m.
According to Svetelsek, the company held 18.3% of the retail market last year. This compares to only 5% four years ago. He said the company's vision is to become "the most successful European retailer".
The company last year acquired three retail chains (Vele, Preskrba and Izbira Lasko) and spend EUR 64.6m for investment. Svetelsek said this figure makes Tus the largest domestic investor in the country.
Investments are to top EUR 70m this year. "When we have reached a 25% market share in 2007, the investment cycle will stop in Slovenia. We will only refurbish older stores here, but we will expand...to Serbia and Macedonia." The first store there is to open in 2006.
According to him, the company has no further plans for Croatia (it has one supermarket in the coastal city of Rijeka). The retail market is "inhumane" there and all foreign retailers are making a loss, he said.
The main objective for this year is to streamline costs and business processes and the flow of information. This will improve efficiency and increase returns, Svetelsek is convinced.
In the next months and a half, Tus, which currently boasts 65,000 sq. metres of store space, plans to open five new supermarkets. In the coming months it also plans to up the number of gas stations from 4 to 25 or 30.
Tus is a privately owned non-listed limited liability company based in Celje.
Steel Group Boss Calls for Gradual Privatisation
The chairman of the Slovenian Steel Group has called for a gradual and two-pronged privatisation of the group
The chairman of the Slovenian Steel Group has called for a gradual and two-pronged privatisation of the group. In an interview published in the daily Delo on Saturday, 28
May, Tibor Simonka said that the quick sale of the group would not be the right
decision. Our operations over the last two years have made us believe that were are headed in the right direction and that our investment plans are not that much different from those of potential strategic investors, Simonka said.
"This is why I believe that a quick sale to the first buyer that comes along is not a good solution," Simonka said. According to him, the privatisation should be based on acquiring strategic owners, while the state should keep a controlling stake for the time being.
The right strategic partners would allow the companies in the group to realise their development projects. "These strategic partners of the subsidiaries in the group would in most cases not become majority owners, instead they should be specialised in the industry so that synergies could be achieved."
Simonka said he had recently raised the issue of privatisation with Economics
Minister Andrej Vizjak, who has not issued an official opinion on the proposed model.
Moreover, Simonka said the restructuring of the Slovenian Steel Group has been an obvious success. "Financially speaking we're doing well...although the restructuring is not over yet."
The main goal in the future is to boost competitiveness, Simonka told Delo. We have made progress "in this respect, as our operations have become much more high-tech", he said.
The group reported sales revenues of SIT 91.4bn (EUR 381.3m) in 2004, an increase of 30% over the previous year, while the profit amounted to SIT 2.59bn (EUR
10.8m). It generated exports of EUR 267m last year, to rank Slovenia's sixth biggest exporter.
FAIRS, CONGRESSES
IT and Telecommunications Fair Opens in Ljubljana
The event combined three so far separate IT and telecommunications fairs: the
Electronics Fair, Infos and Teleinfos
A range of modern technologies and services were featured at the Hevreka fair, which opened at the Ljubljana fair grounds on Wednesday, 25 May. The event, running until
Saturday, 28 May, combined three so far separate IT and telecommunications fairs.
Hevreka replaces the Electronics Fair, Infos and Teleinfos (which specialised in individual segments of technology) with a view to improving cooperation between science and the corporate sector and motivate young talent.
SLOVENIA IN BRIEF
FM Hopes EU to Start Entry Talks with Croatia in June
Foreign Minister Dimitrij Rupel has expressed hope that the EU will take a decision to launch entry talks with Croatia next month. "I hope this is possible. There are indications this would be possible," Rupel said in Brussels on Monday, 23 May, adding that "something could go wrong still". "As I understand the majority of those who cooperate with a task force appointed by the EU to assess Croatia's cooperation with the International Crime Tribunal for the former Yugoslavia, admitted that things are changing, that cooperation with The Hague is more intensive," Rupel said on the sidelines of the meeting of EU foreign ministers.
OSCE Chair Calls for Better Integration of Legal Immigrants
Foreign Minister Dimitrij Rupel, the OSCE chairman, urged OSCE members to improve the position of legal immigrants and ensure they have an opportunity to become fully integrated into host societies. Current immigration policies and regulations often failed to correspond to today's realities, he said at the opening of the
13th OSCE Economic Forum, which started in Prague on Monday, 23 May. The event was organised by the Slovenian chairmanship and the Office of the Coordinator of
OSCE Economic and Environmental Activities.
FM Rupel Meets Czech Counterpart
Foreign Minister Dimitrij Rupel met his Czech opposite number Cyril Svoboda on the margins of the 13th OSCE Economic Forum in Prague on Tuesday, 24 May for talks that focused on bilateral relations and EU-related issues. According to a Foreign
Ministry press release, the pair discussed in particular the ratification process of the
EU constitution. Rupel, who is also the OSCE chairman, moreover briefed Svoboda on Slovenia's role in the security organisation as well as the situation in Kyrgyzstan and Uzbekistan.
Foreign Ministry State Secretary Attended CEI Meeting
Foreign Ministry State Secretary Bozo Cerar addressed foreign ministers of the
Central European Initiative (CEI) at their annual two-day meeting in the Slovakian town of Tatranska Lomnica on Friday, 27 May. The situation in CEI countries and its cooperation with the EU topped the agenda. Cerar stressed the importance of strengthening mutual political dialogue, a quick implementation of reforms, and adjusting to the European democratic standards for the stabilisation and progress of eastern and southeastern European countries.
Ljubljana Hosting NATO PA Session
Members of the NATO Parliamentary Assembly, associate delegations and guests - around 700 people from 47 countries - are visiting Ljubljana as a NATO PA session began on Friday, 27 May. At a press conference, the NATO PA president Pierre
Lellouche outlined the main topics to be discussed, ranging from the future of NATO to the Uzbekistan crisis. Other topics on the agenda include the situation in Iraq, new
NATO partnerships, terrorism and weapons of mass destruction, security relations between NATO and the EU, and the situation in the Middle East and Central Asia, said Lelluche.
FM Rupel: Little Prospect for European Constitution
This constitutional treaty has no big prospects, Slovenian FM Dimitrij Rupel said on
Sunday, 29 May as he commented on the first unofficial results of a referendum in which the majority of French voters said 'no' to the European constitution.
