Slovenia Business Week no. 29, July 18, 2005
Table of Contents:
HEADLINES ............................................................................................................................. 3
S&P Keeps Slovenia's Credit Rating Firm ............................................................................. 3
Hidria to Launch Construction of Industrial Park in Serbia................................................... 3
D&B: Slovenia Firmly at Top Place in the Region ................................................................ 4
INTERNATIONAL COOPERATION ...................................................................................... 5
Slovenia Wants to Boost Ties with Russia's Sverdlovsk Region ........................................... 5
First Cambodia Ambassador Accredited to Slovenia ............................................................ 5
Drnovsek Receives Credentials from Jordanian Ambassador ............................................... 6
Rupel Meets Governor of Russian Sverdlovsk Region .......................................................... 6
Slovenia and Sverdlovsk Region Sign Protocol on Cooperation ........................................... 7
EUROPEAN UNION ................................................................................................................. 8
Regional Partnership Urges UK to Resume Budget Talks ASAP ......................................... 8
Slovenia Backs the EU Budget Proposal for 2006 ................................................................. 8
LEGISLATION ........................................................................................................................ 10
Parliament Adopts Amendments to Pension Act ................................................................. 10
STATISTICS/FORECASTS .................................................................................................... 11
Salaries Slightly up in May .................................................................................................. 11
Slovenia's Population Remains below Two Million ............................................................ 11
FINANCE................................................................................................................................. 12
NLB to Issue EUR 130m in Subordinate Bonds .................................................................. 12
NKBM Takes Out EUR 240M Syndicated Loan ................................................................. 12
LJSE Turnover Drops 30% in First Six Months .................................................................. 12
Government Adopts Bill on Double Pricing ........................................................................ 13
All Set for Transition to International Accounting Standards .............................................. 14
Gorenjska Banka Increases Profit in First Half of 2005 ...................................................... 14
Triglav Management Get Bonus and Discharge .................................................................. 14
Ljubljana Stock Exchange .................................................................................................... 15
Foreign Exchange ................................................................................................................. 15
BRANCH INFORMATION .................................................................................................... 16
Private Telecoms Share Their Grievances with EU Officials .............................................. 16
Dairy Welcomes Cooperatives' Decision on Joint Milk Sales ............................................. 16
Government Proposes Formation of New Small Business Promotion Agency ................... 17
Seaside Resorts Happy with Tourist Season So Far ............................................................ 17
Conference Highlights Advantages of Technology Platforms ............................................. 18
COMPANIES ........................................................................................................................... 20
Luka Koper General Manager Resigns ................................................................................ 20
Mobitel Gets New Supervisory Board ................................................................................. 20
Marija Markes Elected New Director of Triglav National Park .......................................... 21
Avto-Phone Becomes Majority Owner of Kompas MTS .................................................... 21
Pivka Poultry Industry Happy with Half-Year Performance ............................................... 21
Acroni Boasts Record Sales This Year ................................................................................ 22
Government Changes DARS Articles of Association.......................................................... 22
Drug Maker Lek Boosts Half-Year Sales............................................................................. 23
Intereuropa Management Board Reduced to Three Members ............................................. 23
Economics Minister Visits Revoz to Examine New Investments ........................................ 24
Simobil Plans to Strengthen Its Market Position, Nemsic Tells STA .................................. 24
SLOVENIA IN BRIEF ............................................................................................................ 26
Bajuk Urges UK to Secure EU Budget Deal ........................................................................ 26
EU Education Ministers Discuss Uniform Vocational Education ....................................... 26
Finance Ministry Not Pleased with Tax Reform Proposal ................................................... 26
Minister Mate for Greater Role of EU Anti-Terrorism Coordinator.................................... 26
Petrol Manager Jancic Resigns ............................................................................................ 26
Damijan Named Head of New Government Reform Committee ........................................ 26
New International Border Crossing to Open with Croatia ................................................... 26
RTV Slovenija Bill Confirmed, Opposition Announces Referendum ................................. 27
Amendments to Local Election and Self-Government Act Passed ...................................... 27
2
HEADLINES
S&P Keeps Slovenia's Credit Rating Firm
Standards & Poor's, the credit rating firm, has kept the credit risk rating for Slovenia for
long-term exposure at AA for domestic currency and AA- for foreign currency
Standards & Poor's, the credit rating firm, has kept the credit risk rating for Slovenia for longterm exposure at AA for domestic currency and AA- for foreign currency. Short-term
exposure in domestic as well as foreign currency was kept at A-1+, with both types of risk
assessed as having a stable outlook, the Economics Ministry has said.
Slovenia's rating is constrained by the relatively low per capita GDP, which is to top US$
18,863 this year and is less than half of the average of countries rated with AA, the agency
has said.
Moreover, the country's progress to a higher grade is being hampered by slow privatisation
and low level of foreign direct investment, S&P is quoted as saying.
According to S&P, the assessment reflects the judgement that the potential benefits of
eurozone entry are balanced with an increased need for conservative fiscal policies in the
eurozone.
The assessment is further underpinned with a well-diversified economy and stable political
institutions.
S&P expects that the general government deficit will reach 1.8% of GDP this year and remain
level over the medium term.
Although the rating firm expects that Slovenia will meet the criteria for eurozone entry, it
notes that curbing inflation remains a challenge.
To achieve the monetary objectives, cooperation between the central bank and the
government must be improved.
This is crucial in the light of the government's commitments to raise pensions, which could
add 1% of GDP to public spending by 2010, S&P notes.
Hidria to Launch Construction of Industrial Park in Serbia
The manufacturing conglomerate Hidria plans to build a technological and industrial park in
Serbia to manufacture air-conditioning, heating and cooling systems as well as aluminium
alloy products for the automotive industry
The manufacturing conglomerate Hidria plans to build a technological and industrial park in
Serbia to manufacture air-conditioning, heating and cooling systems as well as aluminium
alloy products for the automotive industry.
According to a press release from Hidria, the park, which is to extend over an area of four to
five hectares, is to give jobs to a total of 260 people within five years, while 160 of these will
be employed right after the facility has been completed.
The Spodnja Idrija-based corporation is to invest some 15 million euros in the construction of
the park and high-tech production there.
Hidria already has a subsidiary in Serbia - a sales and distribution company Hidria Beograd.
The new, 11,500-square-metre production hall will also be located in Belgrade or its vicinity.
The new plant in Serbia will be Hidria's third production facility abroad apart from the one
manufacturing motorcycles in Epe, Netherlands, and a hand electric tools production in Quito,
Ecuador.
Serbia is one of the company's fastest expanding markets. Hidria plans to export Serbia-made
products to Russia, the broader SE European region and EU countries.
3
Hidria consists of over 30 companies in Slovenia and abroad. Five major ones are located in
Slovenia: AET, which produces parts for the automotive industry; hand power tools
manufacturer Hidria Perles; air-conditioning manufacturer IMP Klima, motorcycle producer
Tomos and Rotomatika, which manufactures aluminium components, special electric motors,
fans, rotors and rotor motors.
Hidria's sales and distribution network is wide-spread from the US, Ecuador, Columbia, Peru,
Australia, Hong Kong to the UK, Portugal, Netherlands, Poland, Germany, Switzerland,
Croatia, Serbia and Bosnia-Herzegovina, according to the company's web site.
D&B: Slovenia Firmly at Top Place in the Region
The July report of the international rating firm Dun&Bradstreet (D&B) keeps Slovenia firmly
at the top place in the region, with the country's ratings still upward
The July report of the international rating firm Dun&Bradstreet (D&B) keeps Slovenia firmly
at the top place in the region, with the country's ratings still upward.
The report's macroeconomic forecasts remain unchanged over the past month, with the
exception of international reserves.
The D&B establishes that international reserves stood at EUR 6.2bn at the end of May,
amounting to the value of imports in 4.8 months and dropping slightly over June, when they
totalled the volume of imports in 5.2 months.
4
INTERNATIONAL COOPERATION
Slovenia Wants to Boost Ties with Russia's Sverdlovsk Region
The region, located between Europe and Asia, is one of the richest in Russia with natural
resources
A delegation from Sverdlovsk, one of the leading and economically most developed Russian
regions, visited Slovenia as the two sides are looking for ways to boost cooperation.
The region, located between Europe and Asia, is one of the richest in Russia with natural
resources, the region's governor Eduard Rossel told a business conference organised by the
Chamber of Commerce and Industry of Slovenia in Ljubljana on Tuesday, 12 July.
According to the official, the region is also an important transport cross-roads. It is one of the
oldest mining and industrial centres in Russia. It has abundant resources of raw materials and
minerals, such as bauxite, iron ore, copper, asbestos and nickel.
Rossel told Slovenian business officials at the conference that the region's leading industry
was metallurgy and that more than 30% of all industry was export-oriented. According to the
2002 data he quoted, Sverdlovsk generated more than US$ 4bn in foreign trade, up 8.1% from
2001.
There are three Slovenian joint ventures operating in the region. Rossel highlighted the
example of IskraUralTel, the manufacturer of digital telephone exchanges set up by Slovenian
telecommunications company Iskratel.
IskraUralTel is based in Yekaterinburg, just like Iskraural, the company set up by the Kranjbased electricity meters and measuring equipment manufacturer Iskraemeco. The joint
venture IsetAdria, set up by metal and plastic products manufacturer Kovinoplastika Loz and
WGM is meanwhile based in Kamensk-Uralsk.
According to Russian data, there are five more Slovenian-Russian joint ventures operating in
the region. Nevertheless, Rossel says that the potential for trade and investment cooperation
has not been exhausted yet.
The data quoted by the head of the Slovenian Chamber of Commerce and Industry of
Slovenia, Jozko Cuk, shows that more than 100 Slovenian companies cooperate with Russia,
while more than 400 companies have indirect business ties with this country.
According to Cuk, Russia is Slovenia's major trade and investment partner. The country's new
strategy anticipates expansion of ties to Russia's other major industrial regions apart from
Moscow. Sverdlovsk has a special place among these, which is why a big Slovenian business
delegation visited the region last year.
The overall trade in goods and services between Slovenia and Russia topped one billion US
dollars last year. While Slovenia exported US$ 520m worth of goods, imports totalled US$
392m.
The main export products are medicines, electric appliances, fixed telephony, coatings and
flooring, the leading exporters being pharmaceutical companies Krka and Lek, Iskratel, home
appliance manufacturer Gorenje, chemical companies Helios and Henkel, plus vinyl flooring
manufacturer Juteks.
Oil, gas, aluminium and iron alloys represent the bulk of Slovenian imports from Russia.
First Cambodia Ambassador Accredited to Slovenia
The newly-appointed Cambodian Ambassador to Slovenia Keo Puth Reasmey, who will be
based in Berlin, presented his credentials to President Janez Drnovsek
5
The newly-appointed Cambodian Ambassador to Slovenia Keo Puth Reasmey, who will be
based in Berlin, presented his credentials to President Janez Drnovsek in Ljubljana on
Tuesday, 12 July.
Drnovsek took this opportunity to express satisfaction that Cambodia accredited an
ambassador to Slovenia, which he sees as an opportunity to expand cooperation between the
two countries, his office said.
Ambassador Reasmey, who briefed Drnovsek on the situation in Cambodia and the region,
stressed the importance of cooperation with the EU and expressed his country's interest in
intensifying ties with Slovenia.
Drnovsek Receives Credentials from Jordanian Ambassador
President Janez Drnovsek received credentials from Jordanian Ambassador to Slovenia
Shehab El-Din Madi, who is based in Vienna, Austria
President Janez Drnovsek on Tuesday, 12 July received credentials from Jordanian
Ambassador to Slovenia Shehab El-Din Madi, who is based in Vienna, Austria, the president's
office said in a press release.
The president labelled the relations between Jordan and Slovenia as good. However, the
ambassador and president agreed the cooperation could be strengthened, especially in the
economy.
They also discussed the situation in the Middle East. President Drnovsek expressed his hopes
that the peace processes in the region would be successful, the press release also reads.
Rupel Meets Governor of Russian Sverdlovsk Region
FM Dimitrij Rupel received the governor of Sverdlovsk Eduard Rossel, who was on an official
visit to Slovenia, to discuss the potential for boosting cooperation
FM Dimitrij Rupel received on Thursday, 14 July the governor of Sverdlovsk Eduard Rossel,
who was on an official visit to Slovenia, to discuss the potential for boosting cooperation, the
ministry said in a press release.
"Slovenian-Russian relations have been very dynamic these days, and I'm happy to see I can
continue the dialogue after my yesterday visit to Moscow with the governor of one of the
most important industrial regions in Russia," Rupel said as he acquainted Rossel with his
meeting with Russian FM Sergey Lavrov.
Rossel meanwhile outlined business opportunities for cooperation, which he had earlier last
week discussed with representatives of Slovenian companies. "Business cooperation between
Slovenian companies and the companies of our region has intensified in the past three years,"
he noted.
He believes that the food-processing industry, the wood-processing industry, engineering,
construction and R&D investment are the most obvious areas where business could be
upgraded.
Rupel meanwhile told his guest that Slovenian businessmen who accompany him on his trips
as the OSCE chairman "consider Sverdlovsk one of the most promising Russian regions for
restoring economic cooperation".
He moreover noted that trade between Slovenia and Russia is reaching towards the set goal of
US$ 1bn a year.
"We wish for balanced development and expanded cooperation in all areas. We therefore
think intensifying cultural contacts is especially important, also on interregional level," the
minister added.
Rupel also took this opportunity to discuss with the governor the Ljubljana-based Forum of
Slavic Cultures, an initiative with which Slovenia wants to boost cultural exchange among
Slavic countries, the ministry added in a press release.
6
Slovenia and Sverdlovsk Region Sign Protocol on Cooperation
The protocol is to be followed later this year by a memorandum as a formal framework for
cooperation
Slovenia and the Russian region of Sverdlovsk on Thursday, 14 July signed a protocol which
defines the key areas of cooperation that are to be upgraded.
The protocol is to be followed later this year by a memorandum as a formal framework for
cooperation, Economics Minister Andrej Vizjak said after talks with Sverdlovsk Governor
Eduard Rossel.
According to Vizjak, the visit of the delegation from Sverdlovsk will contribute to better
business cooperation, in particular in the food, telecommunications, construction and
household appliances industries.
Considering the soaring trade (which is expected to double this year from last year's US$
21.9m), Slovenia will also consider setting up a trade office in the region, Vizjak said.
According to Rossel, the delegation visited Slovenia looking for new opportunities, including
joint ventures. They met several Slovenian companies and already signed some agreements.
For example, a EUR 13m contract was signed with insulation manufacturer Termo for the
construction of a production facility in Sverdlovsk.
Moreover, talks were held with the household appliance maker Gorenje, which said it would
send a delegation to the region to examine the feasibility of building a plant there.
7
EUROPEAN UNION
Regional Partnership Urges UK to Resume Budget Talks ASAP
Regional Partnership prime ministers called on the British EU presidency to resume talks on
the EU's next financial perspective as soon as possible and on the basis of the latest
Luxembourg compromise
Regional Partnership prime ministers called on the British EU presidency to resume talks on
the EU's next financial perspective as soon as possible and on the basis of the latest
Luxembourg compromise, as they meet in Budapest on Wednesday, 13 July.
The heads of governments of the Visegrad Group plus Slovenia and Austria consider the
Luxembourg compromise a good basis on which the budget could be reformed and
modernised, Slovenian PM Janez Jansa told STA after meeting his counterparts.
Moreover, the leaders of Slovenia, Austria, Hungary, Poland, Slovakia and the Czech
Republic shared a view that an agreement on the Union's next budget should be reached as
soon as possible, Jansa added.
According to him, this is not important only for newcomers to prepare for the phasing of EU
funds, but also for net contributors, whose interest is certainly for the less developed parts of
the EU to develop as quickly as possible.
Jansa moreover said that the recent Hungarian proposal about a transitional, three-year budget
"is not topical yet". He maintains that efforts should be made first for a final agreement on the
entire seven-year budget period to be reached.
EU enlargement was another topic of the Budapest informal meeting, with the six prime
ministers sharing a view that accession talks with Croatia should begin as soon as possible.
Moreover, Western Balkan countries should have a European prospect.
A European prospect is "the only true positive prospect" for these countries, said Jansa, who
is convinced that its absence could take these countries decades back, into the time of wars.
Jansa also announced Slovenia's plan to help Hungary, the incumbent Visegrad Group
presiding country, organise a conference on the Western Balkans, which is scheduled to take
place in October.
The PMs voiced concern about what impact a decision to begin accession talks with Turkey
might have on the European public opinion in the aftermath of a double rejection of the
European constitution and the terrorist attacks in London, Jansa told STA.
Slovenia Backs the EU Budget Proposal for 2006
Slovenia backed the UK presidency proposal for the EU 2006 budget in the first reading
Slovenia backed the UK presidency proposal for the EU 2006 budget in the first reading on
Friday, 15 July, head of the Slovenian permanent mission to the EU Ciril Stokelj said after
attending a meeting of EU finance ministers in Brussels.
According to Stokelj, Slovenia voiced support for the proposal for three reasons. Firstly, the
proposal takes into account the agreements with the newcomers made during the accession
negotiations in Copenhagen.
Secondly, the budget draft envisages new jobs in EU institutions that are priority for Slovenia,
namely translators, interpreters, and lawyer -linguists.
Thirdly, the budget's volume and structure enable for implementation of all EU policies,
according to Stokelj.
He added though that Slovenia is not completely satisfied with the proposal since it would
like to see lower cuts in funds for the Western Balkans and bigger funds for new jobs in EU
institutions.
8
The draft budget came under heavy criticism of the European Commission and the European
Parliament, unhappy with the initially envisaged funds being lowered by EUR 1.14bn to EUR
111.4bn.
9
LEGISLATION
Parliament Adopts Amendments to Pension Act
The changed act foresees more consistent synchronisation of pension and wage growth
The parliament passed on Friday, 15 July the amendments to the act on pension and disability
insurance with 62 votes for and none against. The changed act foresees more consistent
synchronisation of pension and wage growth.
In line with the amendments, pensions would be adjusted to wage growth twice a year. In
November, they would increase by the equivalent of the January-September wage increase as
compared to the average of the whole of previous year. The change in February would align
pensions to average wage growth in the previous year as compared to the year before.
The amended act also sets up a circle of claimants, and regulates payment and synchronisation
of the annual bonus. The bonus may gradually increase until it reaches 75% of the annual
holiday allowance of employees in the public sector.
The amendments also abolish the financial census for obtaining the right to a part of the
widower's pension in addition to one's own retirement and disability pension. The total
amount though cannot exceed the highest basic retirement pension for men for 40 years of
work.
With the changed act, the Pension and Disability Insurance Institute (ZPIZ) will have only
one governing body, a 27-member board with representatives of the founder (government),
trade unions, employers and pensioners.
The government is to appoint ten members, six will be named by trade unions, four by
employers' associations, five by pensioners' associations, while the organisation of working
disabled persons and the ZPIZ employees are to name one member each.
The board is to replace the former ZPIZ assembly and management board. The government
currently has three representatives in the 13-member management board and seven in the 30member assembly.
10
STATISTICS/FORECASTS
Salaries Slightly up in May
Employees in Slovenia earned an average takehome pay of SIT 175,066 (EUR 730.72) in May
Employees in Slovenia earned an average takehome pay of SIT 175,066 (EUR 730.72) in
May. This is 1.1% more than what they earned in April and by 8.5% more than what they
received in May 2004, according to the Statistics Office.
The average gross monthly salary meanwhile amounted to SIT 275,861 (EUR 1,151.43), up
1.5% over the month before and up 7.3% year-on-year.
In real terms, gross salaries increased by an average 1.2% compared to April and by 5%
compared to May 2004.
In the first five months of the year, employees got an average of SIT 173,091 (EUR 722.47)
net a month, up 7.1% over the same period last year. The average gross salary meanwhile
increased by 5.9% to SIT 272,102 (EUR 1,135.74).
Slovenia's Population Remains below Two Million
Slovenia's population grew by 0.06% to 1,997,590 last year
Slovenia's population grew by 0.06% to 1,997,590 last year, while it expanded by 0.5% over
the last five years, according to the national Statistics Office. The main reason for growth is
immigration.
The population expanded by 0.1% in the first three quarters of 2004, but shrunk by 0.06% in
the last quarter, mainly on account of a drop in the number of foreigners temporarily residing
in the country (by 1,365 persons).
Slovenia's estimated population at this moment is 1,998,566, a number that the office has
calculated on the basis of suppositions on births, deaths and immigration for July 2005.
People in Slovenia were aged an average 40.3 years at the end of last year with the population
aging by one year annually over the past three years.
At the end of 2004, there were 42 elderly per 100 inhabitants fit for work. This is 6% down
compared to the situation 20 years ago.
While the number of foreigners permanently residing in Slovenia increased by 230.3% over
the past five years, the number of those with temporary residency status dropped by 37.9%.
The changes are mainly the result of the foreigners act which sets continuous eight-year
residence in the country as a condition to acquire a permanent residency permit.
Thanks to regular naturalisation of immigrants, the number of Slovenian citizens increased by
0.4% over the past five years, the Statistics Office calculations show.
11
FINANCE
NLB to Issue EUR 130m in Subordinate Bonds
Nova Ljubljanska banka, Slovenia's largest bank, signed a contract on the sale of EUR 130m
in subordinate bonds to a closed circle of investors, more precisely KBC Bank
Nova Ljubljanska banka, Slovenia's largest bank, on Monday, 11 July signed a contract on the
sale of EUR 130m in subordinate bonds to a closed circle of investors, more precisely KBC
Bank.
This is the first issue of this instrument by a Slovenian bank, which will improve NLB's
capital adequacy ratio, the bank said in a press release.
The bonds will be issued on 15 July and floated on the Luxembourg stock exchange. The
issue has been organised by KBC Bank, which is also drafting the stock market prospectus.
The bonds will not have a pre-determined maturity date, but they have a built-in recall option
after 10 years and every six months from then.
In the first ten years bond owners will get annual interest of six-month EURIBOR plus 1.68%,
with the margin rising to 2.68% after the expiry of the ten-year period.
The issuer has the right to withhold the payment of interest in certain cases.
NKBM Takes Out EUR 240M Syndicated Loan
Slovenia's second largest bank signed a EUR 240m syndicated loan contract with a group of
26 foreign banks in what is the largest loan the NKBM has ever taken out abroad
Slovenia's second largest bank signed on Tuesday, 12 July a EUR 240m syndicated loan
contract with a group of 26 foreign banks in what is the largest loan the NKBM has ever taken
out abroad.
Drawing it in one go, the bank intends to use the loan for credits to its clients. The rest would
go to improve the bank's structure of financial sources and to pay off some old loans, the
Maribor-based bank said in a press release.
The NKBM had first intended to get a loan of EUR 100m only, but its organisers (Bank
Austria Creditanstalt, DZ Bank and WestLB) managed to come up with a sum of nearly EUR
300m.
The bank then changed its mind, deciding to go for a bigger loan chiefly due to the favourable
terms and a rising demand for foreign currency loans at home.
The syndicated loan, which was approved by the bank supervisory in June, is repayable in
five years.
LJSE Turnover Drops 30% in First Six Months
The benchmark SBI 20 index shed 10.4% in the first six months of the year
The value of deals on the Ljubljana Stock Exchange (LSSE) in the first half of this year,
excluding block deals, amounted to SIT 70bn (EUR 292.2m), down 30.4% from the same
period last year. Accordingly, all major indices suffered significant losses.
The benchmark SBI 20 index shed 10.4% in the first six months of the year. January was the
only month in the black for the SBI 20, while June was the worst, as the index lost 5%,
according to the semi-annual statistical report of the LJSE.
Similarly, the investment fund PIX index lost 7.9%, with January the most upbeat month. The
bond BIO index sustained milder losses, as it was down only 0.2% in June compared to the
beginning of the year.
12
The busiest share in the first half of the year was pharma company Krka, with deals worth SIT
10.2bn (EUR 42.6m). Retailer Mercator saw deals worth SIT 5.1bn (EUR 21.3m) and oil
trader Petrol SIT 4.4bn (EUR 18.4m).
Among debt securities, the 2nd issue of the Restitution Fund (SOD) bonds saw deals worth
SIT 6.4bn (EUR 26.7m).
Only one share remained in the black in the first half of the year, namely retailer Kompas
MTS (+10.1%), which was subject to a takeover bid by mobile phone retailer Avto-Phone and
has since been removed from the SBI 20 index.
The biggest losers were bread and pasta maker Zito (-18.7%), tourism and food group
Istrabenz (-17.7%), household appliance maker Gorenje (-16.8%), retailer Mercator (-16.3%)
and logistics company Intereuropa (-15.6%).
The market capitalisation of all securities on the stock exchange was SIT 3,025bn (EUR
12.63m) on 30 June, down 0.8% over 1 January. Market capitalisation of bonds increased by
24%, largely as a result of new listings, while that of shares plummeted by 12.7%.
Government Adopts Bill on Double Pricing
The government confirmed the bill on double pricing, which stipulates that price tags in tolars
and euros will become mandatory on 1 March 2006 and remain in place until six months after
the euro changeover planned for 1 January 2007
The government on Thursday, 14 July confirmed the bill on double pricing, which stipulates
that price tags in tolars and euros will become mandatory on 1 March 2006 and remain in
place until six months after the euro changeover planned for 1 January 2007.
Double price tags are designed to ease the transition to the common European currency for the
consumers. The desired result, the government says, is also to build up people's trust in the
currency, and keep in check price hikes that could raise inflation.
In the period between March 2006 and the actual changeover on 1 January 2007, the central
parity rate, currently at SIT 239.64 to the euro, will be used for the calculation.
After the arrival of the euro coins and notes, the actual changeover rate as determined by the
EU Council will be used for the calculation.
Companies will have to have double prices on all products, but there will be some exceptions
for companies selling their goods in a specific way, or if double price tags would be
technically unfeasible.
According to the bill, filling stations, vending machines, book sales, gaming, as well as the
sale of meat, fish, groceries and bread may be exempt from the mandatory provisions under
certain provisions.
Moreover, the Economics Ministry may adopt an implementing regulation to determine
exemptions if it turns out that double pricing would represent an unacceptable technical or
commercial burden. In this case, other measures may be prescribed to achieve the purpose of
the law.
The bill as it stands means that the government did not concede to the retailers and
wholesalers, who insisted that double pricing should be made mandatory only after the
exchange rate is fixed for good.
Yet this will presumably not happen before the country's mandatory two-year membership of
the ERM II exchange rate mechanism runs out on 28 June 2006.
The companies have been warning that they would incur large additional costs if the exchange
rate changes, that is if the current central parity rate end up not being the actual changeover
rate.
13
All Set for Transition to International Accounting Standards
The board of governors of the Bank of Slovenia has adopted a set of amendments to
implementing regulations on the reporting of banks and savings banks in line with
international accounting standards
The board of governors of the Bank of Slovenia has adopted a set of amendments to
implementing regulations on the reporting of banks and savings banks in line with
international accounting standards.
The central bank has thereby finished adopting implementing regulations governing the
transition to international accounting standards on January 2006, the bank said in a press
release on Thursday, 14 July.
Gorenjska Banka Increases Profit in First Half of 2005
The Kranj-based bank increased its total assets by 7% to SIT 299bn (EUR 1.2bn) in the
January-to-June period over the same period last year, and now holds a 4.8% market share
The supervisory board of Gorenjska banka discussed on Thursday, 14 July the bank's results
in the January-to-June period when its gross profit amounted to SIT 8.9bn (EUR 37.2m), up
from SIT 6.3bn (EUR 26.3m) in the same period in 2004, the bank said.
Happy with the bank's performance, the supervisory board said the main reasons for good
business results were dynamic investing and the state's early exercise of securities in June, the
bank's press release reads.
The Kranj-based bank increased its total assets by 7% to SIT 299bn (EUR 1.2bn) in the
January-to-June period over the same period last year, and now holds a 4.8% market share.
The supervisory board also backed a supplementary business plan for 2005 which anticipates
a rise in total assets as well as profit.
The changed plan is in line with the expectations of the management; at the bank's AGM in
May, chair of the management board Zlatko Kavcic announced better results than in 2004,
even if last year's figures were above the expectations already.
Slovenia's eighth largest bank in terms of total assets and the second largest in terms of profit,
according to its website, posted profit after tax of SIT 9.5bn (EUR 39.6m) in 2004, up 11
percent year-on-year.
Triglav Management Get Bonus and Discharge
The shareholders of Slovenia's largest insurer have conferred a discharge to the management
and supervisory board for 2004
The shareholders of Slovenia's largest insurer have conferred a discharge to the management
and supervisory board for 2004. They also endorsed the proposed distribution of profit,
rewarding the former management with a total of between SIT 50m and 60m (EUR 0.21m
and 0.25m) in bonuses.
The decisions passed by the shareholders of Zavarovalnica Triglav were presented to the press
on Wednesday, 13 July after a meeting by the head of the supervisory board, Damjan Mihevc,
who declined to reveal what bonus individual members of the management would get.
The ratio is confidential, Mihevc said and added that it depended on service contracts and the
stint of each board member. Last year, the insurer was headed by a line-up chaired by Joze
Lenic. Other members were Darko Medved, Andrej Kocic, Igor Kusar and Vladimir Miso
Ceplak as representative of the employees.
After Lenic stepped down in March, the supervisors named Kocic the new chairman in early
June. At the same time, the number of managers was reduced to three. Kocic voiced
satisfaction with the general meeting, saying it represented a good start.
14
New board members will have lower salaries under new services contracts, which are to be
signed shortly. According to Mihevc, Kocic will get by 10% less what Lenic got. Salaries of
other board members will also be cut by 10%.
Triglav's distributable profit at the end of 2004 amounted to SIT 9.8bn (EUR 40.90m). The
shareholders declared SIT 40 (EUR 0.17) dividend per share or a total of SIT 221.8m (EUR
0.93m). The dividend remains level for the third year in a row.
The shareholders also rewarded a total of SIT 13.1m (EUR 0.05m) in bonuses to supervisors
and the mentioned EUR 0.21m to 0.25m to the management, while they did not distribute the
rest of the distributable profit.
The meeting also reviewed the operations report for 2004, when the insurer generated SIT
2.7bn (EUR 11.27m) in profit. It named PriceWaterhausCoopers the auditor for 2005.
Ljubljana Stock Exchange
The SBI benchmark index started the week with two falls in a row that the subsequent gains
could not make up for. It closed 11.88 points or 0.27% down to 4,444.93 points
Bearish mood returned on the Ljubljana Stock Exchange last week after more cheerful tones a
week before. The SBI benchmark index started the week with two falls in a row that the
subsequent gains could not make up for. It closed 11.88 points or 0.27% down to 4,444.93
points.
This negative trend did not rub off on the PIX investment fund index as it gained 21.58 points
or 0.52% on the week to close at 4,197.12 points. The BIO bond index was almost flat at
121.70 points, down 0.04 points or 0.03% over the previous week.
The week's volume of SIT 7.9bn (EUR 32.97m) was on a par with that generated a week
before. The bulk of the turnover or SIT 5.9bn (EUR 24.63m) was done in bloc deals.
The official market saw most action with the share of the pharma Krka, which gained 0.62%
to SIT 78,103 (EUR 326), with a turnover worth SIT 304.5m (EUR 1.27m).
Retailer Mercator was close behind, generating SIT 176.9m (EUR 0.74m) in turnover, but
gaining slightly more, i.e. 3.13% to SIT 35,469 (EUR 148.05).
On the losing side, oil retailer Petrol edged down 2.07% to SIT 61,999 (EUR 258.78) with a
turnover of SIT 145.8m (EUR 0.61m), while port operator Luka Koper lost 1.04% to SIT
7,200 (EUR 30.05), generating SIT 102.9m (EUR 0.43m) in turnover.
Action on the bond market was lively as well. The most popular securities were the 57th issue
treasury bond (SIT 1.42bn/EUR 5.93m) and the 9th issue Abanka Vipa bond (SIT
1.15bn/EUR 4.80m).
On the free market, the share of the company Hidrotehnik generated SIT 211m (EUR 0.88m)
in turnover, followed by the shares of investment funds NFD 1 (SIT 104.2m/EUR 0.43m),
Maksima ID (SIT 72.3m/EUR 0.30m) and Zvon Ena Holding (SIT 65.3m/EUR 0.27m).
Foreign Exchange
Mean exchange rate of the Bank of Slovenia
Euro (EUR) - SIT 239.58 (-0.01)
U.S. dollar (USD) - SIT 198.17 (-3.00)
Swiss franc (CHF) - SIT 153.60 (-0.72)
British pound (GBP) - SIT 348.69 (-0.11)
15
BRANCH INFORMATION
Private Telecoms Share Their Grievances with EU Officials
The visit by EU officials came less than a week after the European Commission warned
Slovenia, along with ten other countries, that it was not fully implementing the Union's
regulations on telecommunications
Small, privately-owned electronic communications providers have told visiting EU
telecommunications officials that the situation on the Slovenian market has not improved and
that the country is on the verge of violating several EU directives.
Representatives of the companies, associated in the Forum of Alternative Electronic
Communications Carriers (APECS), met a delegation of the EU Information Society and
Media Directorate General, who visited Slovenia on 11 and 12 July.
In a press release issued after the meeting, APECS said its representatives had urged the EU
officials to act. They also informed EU officials that the situation on the market of electronic
communications had not changed since the EU's negative 10th report in 2004.
Moreover, they said that this situation enabled the state-run Telekom Slovenije group to
further consolidate its monopolist market position. APECS therefore urged decisive action to
be taken to give consumers the option to choose.
The visit by EU officials came less than a week after the European Commission warned
Slovenia, along with ten other countries, that it was not fully implementing the Union's
regulations on telecommunications.
In particular, the Commission said, Slovenia must ensure the transferability of phone numbers
and keep in place competition protection measures regarding operators with significant
market power.
Dairy Welcomes Cooperatives' Decision on Joint Milk Sales
According to the national statistical office, 650.4 million tonnes of cow milk was produced
last years, of which dairies purchased 503.3 million tonnes, which is about 1% more than in
2003
Cooperatives that make part of Mlekodel and which supply milk to Slovenia's largest dairy
Ljubljanske mlekarne, agreed on joint milk sales. Ljubljanske mlekarne have welcomed the
decision, as it could solve certain problems, the dairy told STA on Tuesday, 12 July.
The cooperation agreement, proposed by the Association of Cooperatives, was signed on 4
July by the majority of 35 members of Mlekodel, which sell around 140 million litres of milk
per year, the association said in a press release.
The head of the association Peter Vrisk said after the agreement was signed that the
Association of Cooperatives is happy with the decision. "This move is a big step toward
organised cooperation between the cooperatives on the dairy market at home and abroad," he
added.
The decision was also welcomed by Ljubljanske mlekarne. The company believes it will
prevent individual cooperatives from changing their minds about selling milk in the usual
way, which has caused problems in the past, the dairy's representatives also said.
Slovenia's biggest dairy, which purchases about 60% of all milk produced in Slovenia, added
that they cannot comment on the agreement because they are not acquainted with the details.
"We found out about the contents of the contract from the media," the company said.
The dairy, which annually purchases around 300 million litres of milk, also said that it is still
not known whether Mlekodel will sign the contract as seller or as agent for the cooperatives.
16
According to the national statistical office, 650.4 million tonnes of cow milk was produced
last years, of which dairies purchased 503.3 million tonnes, which is about 1% more than in
2003.
Government Proposes Formation of New Small Business Promotion Agency
The government has adopted amendments to the act on the support environment for small
businesses, with a view to merge three existing services into a new agency for the support of
small business
The government has adopted amendments to the act on the support environment for small
businesses, with a view to merge three existing services into a new agency for the support of
small business. The relevant articles of association are to be drawn up in the coming days,
Economics Minister Andrej Vizjak told the press on Thursday, 14 July.
The new agency, due to be launched in autumn, will pool the resources and tasks of the Small
Business Development Centre (PCMG), the Trade and Investment Promotion Agency (TIPO)
and the Enterprise Fund.
"We have managed to take a big step forward towards greater efficiency, streamlining and
upgrading of the existing institutional environment in support of small businesses," Vizjak
thought.
The original proposal also included the Slovenian Tourism Board, but the idea was dropped.
Moreover, the new agency was supposed to be called the agency for competitiveness, but
following complaint the ministry decided to wait with the new name.
All implementing activities associated with support for business will thus be transferred onto
the new agency, said Vizjak, noting that no assignments would be dropped. Instead, the
existing work will be more efficiently coordinated and upgraded.
The Chamber of Commerce and Industry of Slovenia (CCIS) has already expressed
disagreement with the ministry's proposal, saying it was drafted without prior consultation
with the social partners.
Moreover, in addition to abolishing certain institutions, the proposal also combines public
agencies with financial funds, which is unacceptable according to the CCIS.
Furthermore, the decision-making would be focused on government representatives
exclusively, disregarding the representatives of consumers and businessmen.
Responding to the criticism, Vizjak said that the ministry is in charge of the institutional
environment and it did not want the subjective views of particular institutions to affect the
solution.
We have therefore decided to include in the decision-making the policy-makers, not
institutions which implement the policies, Vizjak said.
Seaside Resorts Happy with Tourist Season So Far
Despite the bad weather, there has not been any major change in the number of overnight
stays at the peak of the tourist season in either of the three seaside municipalities year-onyear
Despite the bad weather, there has not been any major change in the number of overnight
stays at the peak of the tourist season in either of the three seaside municipalities year-onyear, tourist information centres at the seaside have told STA.
Hotels in Piran and Portoroz reported around 114,000 overnight stays in June, mostly by
foreign tourists (75.8%). Data shows that 77% of hotels were booked, up 2% over the same
period last year, Patricija Grzinic of the Portoroz Tourism Association said.
However, compared to last June, camp sites report a drop in the number of guests, which can
only be a consequence of bad weather, Petra Tripar of the association added.
17
In Koper, around 35% of camping facilities were occupied, up 4% over last year. Overnight
stays in hotels, mostly by German, Austrian, Italian and Dutch tourists, increased by 8%,
Bojan Oblak of the Tourist Information Centre Ankaran told STA.
Compared to last year, establishments offering accommodation in Izola report a 1.5% fall in
the number of overnights with the number of foreign visitors dropping by 11% over June
2004, Maksim Vergan of the Tourist Information Centre Izola told STA.
Nevertheless, the figures are similar to previous years, when the number of overnight stays
increased in the summer months. Vergan therefore expects this trend to continue this year as
well.
Conference Highlights Advantages of Technology Platforms
European Commissioner for Science and Research Janez Potocnik has urged Slovenian
companies to pool their efforts towards technological development at the national level in a
bid to improve their competitive ability
European Commissioner for Science and Research Janez Potocnik has urged Slovenian
companies to pool their efforts towards technological development at the national level in a
bid to improve their competitive ability.
Potocnik was addressing a conference on technology platforms on Friday, 15 July, the first in
a series of events sponsored by the Chamber of Commerce and Industry of Slovenia (CCIS) in
implementing a project of technology platform strategy development.
According to Potocnik, such platforms are a good form of technological partnership. He
believes that it is essential for companies to get organised at the national level, seek
integration in European platforms and in this way respond to challenges they face.
The idea of technology platforms has been initiated by the European Commission and
industry. The aim is to bring together companies, research institutions, the financial world and
the regulatory authorities at the European level to define a common research agenda which
should mobilise a critical mass of - national and European - public and private resources.
The conference in Ljubljana brought together representative of Slovenian companies that are
involved in the process of technological linking in one way or another. In Slovenia,
companies cooperate in this way in the construction industry and manufacturing, sustainable
development and new materials.
Potocnik believes that Slovenia has good chances to find its position in Europe. Referring to
the large scope of European projects and limited funds, the commissioner advised Slovenian
companies to target areas where they are most competitive.
There are 25 technology platforms operating at the European level, most of them in the first of
three phases of development. According to Potocnik, the objective is for the platforms to
generate the general development of Europe.
He said the important thing was long-term commitment by the industry as well as all EU
member states, that is cooperation by companies and the state. Partnerships between public
and private sectors are the most important answer to technological development.
Corporate officials attending the conference meanwhile highlighted the need to engage
financial organisations in these efforts as well. Potocnik explained that talks were under way
with the European Investment Bank on the possibility to secure loans for projects that banks
find too risky to engage in themselves.
Mateja Mesl, a deputy chair of the CCIS, meanwhile noted that technology platforms
provided a forum for debate and decision-making on challenges of strategical development.
These platforms are an excellent opportunity for the Slovenian economy, research and
politics, she said.
Slovenia lags behind the EU in terms of technological development, just like the EU lags
behind the United States. According to Janez Bester of the Ljubljana Faculty of Electrical
18
Engineering, there are 6% of high-tech companies in Slovenia, 16% in Europe and 23% in the
US.
19
COMPANIES
Luka Koper General Manager Resigns
Korelic said he wishes to give the new supervisory board the opportunity to appoint a new
management
Bruno Korelic, the general manager of port operator Luka Koper, handed in his resignation on
Monday, 11 July, the company said in a press release. Korelic said he wishes to give the new
supervisory board the opportunity to appoint a new management.
"The resignation does not mean, however, that I take any responsibility for the current
situation, as I was not given a chance to influence the events," Korelic said.
Korelic, the company's chief executive since 1996, believes that the current management has
done a good job, but "the principle of accountability calls for my withdrawal."
He said his decision to resign comes after he established that the uncertainty of the staff about
Luka Koper's management could influence the company's performance.
According to him, the withdrawal will prevent tensions between the Transport Ministry and
the company, and "enable the kind of development and business that will guarantee high
returns for the owners, and long-term social security for employees."
Transport Minister Janez Bozic said the move was Korelic's personal decision. "Nobody from
the ministry forced him to resign," he said in a statement for STA.
Korelic's resignation comes as no surprise: he said in June that he would step down if the
government, which owns 51% of Luka Koper, will seek to expand the management board to
four members.
The relevant changes to the company's articles of association are to be confirmed at the
company's next shareholders' meeting, due to take place on 28 July.
At the shareholders' meeting on 7 July, the shareholders replaced five supervisory board
members representing shareholders.
The new supervisors are state secretaries at the transport and environment ministries, Peter
Verlic and Marko Starman, construction inspector Bojan Zadel, Marko Valentincic and Metod
Mezko.
Luka Koper boosted sales by 21% in the first six months of the year, to SIT 9.9bn (EUR
41.3m), with pre-tax profit at SIT 2.6bn (EUR 10.9m), up 18% year-on-year.
Mobitel Gets New Supervisory Board
Mobile operator Mobitel got a new supervisory board as the supervisory board of its parent
company, Telekom Slovenije, endorsed the proposal of the Mobitel management to name
Libor Voncina, Ziga Turk and Miro Rozman as the new supervisors
Mobile operator Mobitel got a new supervisory board on Monday, 11 July, as the supervisory
board of its parent company, Telekom Slovenije, endorsed the proposal of the Mobitel
management to name Libor Voncina, Ziga Turk and Miro Rozman as the new supervisors.
Libor Voncina is the chief executive of Telekom Slovenije, Ziga Turk is a member of the
Telekom supervisory board and Miro Rozman is the telecom’s chairman of the supervisory
board, according to a press release.
The three will join on the board Ana Metelko and Miro Zupancic, who are the representatives
of the employees. The Telekom supervisors moreover proposed that the Mobitel supervisory
board be expanded to seven members.
20
Marija Markes Elected New Director of Triglav National Park
The only Slovenian national park, Triglav National Park is located in the Julian Alps and
contains the country's highest peak Mount Triglav (2864m)
The council of the Triglav National Park on Monday, 11 July elected Marija Markes its new
director. She stills needs a stamp of approval from the government. Markes is an employee of
the park and worked as state secretary at the Agriculture Ministry during the previous
government term. She is due to succeed Janez Bizjak, who was in charge of the park for 13
years and whose term expired in May.
Outlining her plans, Markes said that she would make efforts for improving the park's
cooperation with experts, NGOs and local community. She also noted that the park's future
programme should be based on protecting nature.
Highlighting other priorities, Markes said that the new act on the park should be drafted. But
given that the existing legislation offers enough room for maneuver, we should exploit this in
the short run, Markes insisted.
As to the question of the park's funding, Markes said that the most important thing is to have
good ideas and programmes. "Once the objectives are clearly defined, getting money for them
is never such a problem", she was convinced.
Markes was backed by 10 votes in the 18-member council. Two other candidates bidding for
the post were Marjeta Kersic Svete and Martin Solar, also an employee of the park.
The only Slovenian national park, Triglav National Park is located in the Julian Alps and
contains the country's highest peak Mount Triglav (2864m). It covers 4% of Slovenia's
territory. Its great wealth in terms of biodiversity comes as a combination of Mediterranean
and alpine influences.
Avto-Phone Becomes Majority Owner of Kompas MTS
Company selling mobile phones Avto-Phone has acquired a 34.76% stake in Kompas MTS,
thus increasing its stake in the company running a chain of shops to 85.41%
Company selling mobile phones Avto-Phone has acquired a 34.76% stake in Kompas MTS,
thus increasing its stake in the company running a chain of shops to 85.41%, Avto-Phone said
in the daily Dnevnik on Tuesday, 12 July
To realise its ambition of expanding mobile phone sales, Avto-Phone published a public
takeover bid for Kompas MTS on 8 June, offering SIT 1,500 (EUR 6,26) per share in cash.
The company, however, did not specify how many shares it would like to acquire for the
takeover bid, which closed on 6 July, to succeed. The bid was not opposed by Kompas MTS.
On the contrary, the Kompas MTS supervisory board and the company's chairman Robert
Lavric reached agreement on Lavric's resignation. At the same time, Avto-Phone chairman of
the board Aleksander Jereb was appointed to run Kompas MTS for a five-year term.
Pivka Poultry Industry Happy with Half-Year Performance
"The financial results are much better than those in the first six months of last year and better
than expected," Janez Rebec told STA after the press conference
Pivka perutninarstvo claims its performance in the first six months was successful, although
the chairman of the poultry company refused to give any figures at a press conference in at
Kal near Pivka on Tuesday, 12 July.
"The financial results are much better than those in the first six months of last year and better
than expected," Janez Rebec told STA after the press conference.
"Exports are on the increase and we expect them to top last year's by 20% by the end of the
year. Moreover, we expect to wrap up the year in the black after last year's loss."
21
Rebec refused to quote any half-year figures, saying they must be reviewed by the company's
supervisory board first. He did say though that the planned profit of SIT 17m (EUR 71,000)
was expected to be exceeded by the end of the year.
Half-year sales results are on a par with last year's, albeit slightly better in Slovenia and
slightly lower in terms of exports. The overall results may be attributed to lower raw material
prices and marketing solutions, according to Rebec.
While Pivka generates the bulk of sales revenues at home, exports are on the increase too.
Rebec explained that the company has recently been notified that it had been licensed to
export to the Russian federation.
"This big market is an excellent opportunity for us. We intend to increase sales, mainly on
account of canned products," the chairman said.
Pivka generates 80% of exports on the markets of the former Yugoslavia, while it wants to
further boost its position there. With that view in mind, it opened an office in Belgrade in
early May. Its aim is to generate EUR 500,000 in sales revenues by the end of the year.
Pivka perutninarstvo has also been granted a Halal certificate which allows it to sell its
products on Muslim markets. According to Rebec, volumes are being gradually raised and the
company is trying to expand the range of licensed products.
The company also intends to target the markets of EU countries, such as Italy, Austria and
Germany, the chairman said.
Speaking about a planned takeover by Jata Emona, whose main line of business is fodder
production, Rebec said Jata Emona carried out due diligence at Pivka in March and made a
takeover bid in mid-June.
Since the companies are compatible, the takeover could result in synergy effects worth SIT
200m (EUR 0.83m) a year, Rebec explained.
The company generated sales of SIT 5.5bn (EUR 22.94) last year, up 11% over 2003. Despite
the jump in sales, the company posted a loss of SIT 377m (EUR 1.57m) last year.
Acroni Boasts Record Sales This Year
Steel mill Acroni posted sales of SIT 27bn (EUR 154.4m) for the first six months of the year,
up 26% over the same period last year
Steel mill Acroni posted sales of SIT 27bn (EUR 154.4m) for the first six months of the year,
up 26% over the same period last year. Net profit doubled to SIT 1.65bn (EUR 6.9m), which,
according to director Vasilij Preseren, proves the correctness of the company's decision to
specialise in high value-added products.
Speaking to the press on Tuesday, 12 July, Preseren said that the sales are a result of extensive
investments and innovations, worth over EUR 75m last year. Value added is the future of the
steel mill, as competition with companies from the East is impossible.
The company's strategy until 2010 envisages investments of EUR 80m in the development of
own technology, which should allow Acroni to become Europe's second largest manufacturer
of thick stainless steel in Europe, and the region's largest maker of electrical steels.
Acroni, which is a part of the state-owned Slovenian Steel Group, exports two-thirds of its
products, which places it 12th among top Slovenian exporters. It is the third largest European
producer of thick stainless steel.
Government Changes DARS Articles of Association
The government has changed the articles of association of the Motorway Company (DARS),
so that the management board will no longer be appointed by the supervisory board but
directly by the government
22
The government has changed the articles of association of the Motorway Company (DARS),
so that the management board will no longer be appointed by the supervisory board but
directly by the government.
The new articles of association, which were adopted at the correspondence session on
Tuesday, 12 July, bring the document in line with the new act on the DARS.
According to the Transport Ministry, the DARS act is a special act and may regulate
nominations in a different way than the companies’ act, which says that the management is
appointed by the supervisory board.
Yet the supervisory board will retain the power to nominate or propose the dismissal of
management board members.
DARS is a state-owned non-listed joint-stock company which manages the construction and
maintenance of Slovenia's motorways.
Drug Maker Lek Boosts Half-Year Sales
Drug maker Lek generated sales of US$ 352.1m in the first half of the year, a rise of 8% over
the same period last year
Drug maker Lek generated sales of US$ 352.1m in the first half of the year, a rise of 8% over
the same period last year, the Ljubljana-based company said on Thursday, 14 July.
The company, owned by Swiss Novartis, reported half-year sales of US$ 247.6m in the
markets of Central, Eastern and SE Europe and the former Soviet market, which is an increase
of 13% year-on-year.
These markets accounted for 58.5% of the drug maker's total sales.
The sales growth was particularly notable on the markets of Russia and Poland, which
alongside Slovenia rank among the company's traditional markets.
Sales in Western Europe, the United States and other oversees countries accounted for 29.6%
of the total figure, while those on the Slovenian market amounted to 11.9%.
The company's management said in a press release that it is pleased with its balanced market
structure.
Lek is a member of Sandoz Group, the generics division of Novartis. It employs nearly 4,200
workers in different regions of the world, and posted sales of US$ 746.5m in 2004.
Intereuropa Management Board Reduced to Three Members
The shareholders also decided to earmark SIT 1.9bn (EUR 7.93m) out of the total
accumulated profit of SIT 12bn (EUR 50m) for dividends, while the rest is to remain
undistributed
Shareholders of the Koper-based logistics company Intereuropa decided at an AGM on
Friday, 15 July to lower the number of management board members from current five to
three.
The AGM did not back a proposal of the company's biggest shareholder, port operator Luka
Koper, which suggested that the management board would be reduced to only one member in
order to make it more efficient.
The majority of shareholders, 75% of them were present at the session, argued that running
the parent company plus 15 subsidiaries in ten countries would be too much for just one board
member.
Intereuropa chairman Joze Kranjc told STA that he expects the changed articles of association
to come into effect at the end of September, with the new board due to be elected at the end of
the year.
The shareholders also decided to earmark SIT 1.9bn (EUR 7.93m) out of the total
accumulated profit of SIT 12bn (EUR 50m) for dividends, while the rest is to remain
undistributed. Dividends are to amount to SIT 240 (EUR 1) gross per share.
23
Economics Minister Visits Revoz to Examine New Investments
The government is prepared to offer funds for the project according to a contract signed in
July 2004
Economics Minister Andrej Vizjak visited the Novo mesto-based car maker Revoz on Friday,
15 July, to examine investments into the production of a new vehicle. The government is
prepared to offer funds for the project according to a contract signed in July 2004.
Meanwhile, Revoz has already finished the first part of larger investments, so the minister
launched two new production lines, Revoz said in a press release.
The investments into a new line of heavy presses amount to EUR 17m. With the new line,
Revoz will be able to increase local integration and diminish the costs of logistics, according
to the press release.
The investments into the line of pre-treatment of surface and cataphoresis amounted to EUR
26m. The line has provided for a warranty of 12-year anti-corrosion, lead-free cataphoresis
and increase in the capacity of 42 vehicles per hour.
The preparations for each line took a year and a half. The main contractor for the first one was
Brasil-based company Schuler, with cooperation from the local companies Spina, Begrad and
Mostovna.
The contractor for the second line that is to improve Revoz's environment protection standards
was the France-based company Durr Systems. Slovenian companies MTD, Himomontaza,
Trimo, Malkom and MKI also cooperated.
According to head of Revoz management Marcel Brouiller, the company is planning 75 more
engineering sites in the factory area to place it among the best factories in the Renault
industrial system.
Simobil Plans to Strengthen Its Market Position, Nemsic Tells STA
STA interview with Boris Nemsic
Simobil, No. 2 mobile carrier in Slovenia, intends to consolidate its position on the Slovenian
market, and is optimistic about achieving this key goal, the CEO of Mobilkom Austria,
Simobil's majority owner, has told STA.
Simobil intends to increase its market share and the number of customers as well as remain a
price leader in Slovenia, Boris Nemsic explained what he meant by the consolidation of
market position.
Simobil's data shows that the company, which has been in majority ownership of Mobilkom
Austria since 2001, has a 23.3% market share in Slovenia and around 363,000 customers.
While Simobil used to complain about the poor liberalisation of the Slovenian
telecommunications market, things have changed for the better over the past few months,
according to Nemsic.
The agency for electronic communications has begun making efforts for liberalisation. "I'm
very optimistic this process continues so that the Slovenian market is not only 'de iure' but
also 'de facto' liberalised," he told STA in Sofia as Mobilkom took over Bulgaria's Mobiltel
earlier last week.
Complaining about the old regulator, from which Simobil had no support, Nemsic said it was
absurd to treat Simobil as an operator with a significant market share while it is "four times
smaller" than Mobitel, the subsidiary of the state-owned Telekom Slovenije.
The group Mobilkom Austria has consisted of five members since 12 July: besides the parent
company and Simobil, it also includes Croatia's Vipnet, Liechtenstein's Mobilkom and
Bulgaria's leading operator Mobiltel.
"Mobiltel is a big step in our expansion; we've obtained more than 3m users and 2,300
employees. We want to become the largest mobile services operator in SE Europe," Nemsic
outlined his company's ambition for STA.
24
Plans for southeast-ward expansion also include the purchase of mobile operators Eronet in
Bosnia and Mobtel in Serbia. "We think we're in a good position," Nemsic commented on the
current talks with relevant authorities.
The chairman of the management board of Mobilkom Austria also told STA that Mobilkom
was interested in Telekoma of the Republic Srpska, which is expected to be privatised.
25
SLOVENIA IN BRIEF
Bajuk Urges UK to Secure EU Budget Deal
Finance Minister Andrej Bajuk has urged the British EU presidency to secure agreement on
the Union's 2007-2013 budget framework by the end of the year. "This is strategically
important for Slovenia," Bajuk said at the sidelines of a meeting of EU finance ministers on
Tuesday, 12 July.
EU Education Ministers Discuss Uniform Vocational Education
Education Minister Milan Zver joined EU education ministers at the two-day informal
meeting, which started on Tuesday, 12 July.
Finance Ministry Not Pleased with Tax Reform Proposal
The tax reform proposal drafted by the government-appointed task force led by Marko
Kranjec is "relatively incomplete" and could be labelled only as reform guidelines, Finance
Ministry State Secretary Bogomir Spiletic told the public broadcaster on Tuesday, 12 July.
Minister Mate for Greater Role of EU Anti-Terrorism Coordinator
Interior Minister Dragutin Mate called for a bigger role of EU anti-terrorism coordinator as he
attended an extraordinary meeting of EU justice and home ministers in Brussels on
Wednesday, 13 July.
Petrol Manager Jancic Resigns
Vladimir Jancic, the member of oil retailer Petrol management responsible for finance and
energy, has submitted his resignation which will be effective as of 30 September. The news
was posted by Petrol on the Ljubljana Stock Exchange website, but the company gave no
reason for Jancic's move. His term would have otherwise run out at the end of March 2008.
Damijan Named Head of New Government Reform Committee
The government has named economist Joze P. Damijan to head a new working group in
charge of drawing up guidelines for structural reforms. The reforms would implement the
objectives of the development strategy that the government adopted in June. Damijan told the
press after the government session on Thursday, 14 July that the "committee for reform" as
the working group is called, would have ten sub-committees in charge of topics such as
competitiveness, efficient use of EU funds, liberalisation, public finances, tax reform, labour
market reform, health reform and pension reform.
New International Border Crossing to Open with Croatia
A new border crossing on the Slovenian-Croatian border, the Podgorje/Jelovica crossing will
open to international traffic on 18 July under the draft decree passed by the government on
Thursday, 14 July, the Government PR and Media Office said. The Podgorje border crossing
was initially declared open to road passenger traffic between Slovenia and Croatia. Later, the
foreign ministries of both countries agreed to change it into a border crossing catering to
international passenger traffic.
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RTV Slovenija Bill Confirmed, Opposition Announces Referendum
Parliament has confirmed the controversial act on public broadcaster RTV Slovenija, which
had been vetoed by the National Council. However, the act will not come into force as the
opposition has already filed a request for a referendum.
Amendments to Local Election and Self-Government Act Passed
Parliament confirmed on Friday, 15 July the amendments to local self-government and local
elections acts. The local election act was passed with 45 votes for and 10 against, while the
local self-government act was backed in a vote 44:11.
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