Slovenia Business Week no. 47, November 21, 2005
Table of Contents:
HEADLINES ............................................................................................................................. 3
Schefenacker Officially Launches Production in Slovenia .................................................... 3
PM Jansa Believes Now is the Right Time for Reforms ........................................................ 3
Government Establishes Reform Coordination Office .......................................................... 4
INTERNATIONAL COOPERATION ...................................................................................... 5
Vizjak Says Slovenia May Adopt Harder Line on Croatia's EU Bid ..................................... 5
Macedonian PM Pledged EU Support from Slovenia ............................................................ 5
Macedonia Invites Slovenian Investors .................................................................................. 6
Macedonian PM and Finance Minister Discuss Euro ............................................................ 7
National Council President Discusses Economic Cooperation in Austria ............................. 7
EUROPEAN UNION ................................................................................................................. 8
FM: Budget Framework Has 50-50 Chance to Be Adopted in 2005 ..................................... 8
Conference Says EU Must Embrace Globalisation ................................................................ 8
Economist Mrak Believes EU to Include Entire SE Europe by 2015 .................................... 8
Vizjak: Slovenia Might Raise NEK Decomissioning in Croatian EU Talks ......................... 9
LEGISLATION ........................................................................................................................ 10
New Business Register Act to Simplify Registration Procedures ........................................ 10
Social Partners Reach Deal on Collective Agreements Act ................................................. 10
Government Aligns Provisions on Carbon Trading with EU Directive ............................... 10
STATISTICS/FORECASTS .................................................................................................... 12
Wages Down 0.6% in September ......................................................................................... 12
Unemployment at 10% in September ................................................................................... 12
EU Keeps GDP and Inflation Forecast Unchanged for Slovenia ......................................... 12
FINANCE................................................................................................................................. 14
NKBM Sees 8% Rise in Gross Profit ................................................................................... 14
Pensions to Increase by 1.7% ............................................................................................... 14
Government Establishes Two More Privatisation Groups ................................................... 14
Finance Committee Concludes Debate on Tax Acts ............................................................ 15
NLB Takes Out EUR 360m Loan ........................................................................................ 15
KD Group Buys 20% Stake in Delo, Sells Mercator Stake ................................................. 16
Ljubljana Stock Exchange .................................................................................................... 16
Foreign Exchange ................................................................................................................. 17
REGIONAL INFORMATION ................................................................................................ 18
Mayors Have Mixed Feelings about Govt's Two Regions Proposal .................................... 18
BRANCH INFORMATION .................................................................................................... 20
Slovenian Broadcasting Will Go Digital in 2012................................................................. 20
Vets Happy With Anti-Bird Flu Measures ........................................................................... 20
Government Responds to EU Telecoms Warnings .............................................................. 20
Reactions to REACH Directive Mixed ................................................................................ 21
Government Amends Trade Act to Restrict Sunday Shopping............................................ 21
COMPANIES ........................................................................................................................... 23
Lower Sava Starts Producing First Kilowatts of Power ....................................................... 23
KD Group to Sell Remaining Stake in Mercator ................................................................. 23
Mercator Chairman Ousted by the Supervisory Board ........................................................ 24
Mercator Doubles Profit in First Nine Months .................................................................... 24
Rogaska Avoids Bankruptcy ................................................................................................ 25
Slovenian Ski Resorts Expect Good Season ........................................................................ 25
Volja Mobil Becomes First Mobile Virtual Network Operator ........................................... 26
Retailer Merkur Posts Upbeat Results ................................................................................. 26
Krka CEO Awarded by Business Daily ............................................................................... 26
Krka Chief Executive Confident the Share Will Continue to Grow .................................... 27
Hardware Retailer Merkur Opens First Store in Serbia ....................................................... 27
Companies in NE Slovenia Push for Arrival of Ryanair ..................................................... 28
Mercator Says 500 Jobs to Go Because of Sunday Shopping Law ..................................... 28
Lasko Says Jankovic Dismissal Legal and Legitimate ........................................................ 29
Report Suggests State's Presence in Companies Still Too Strong ....................................... 29
Merkur Plans to Increase Sales at Home and Abroad, CEO Says ....................................... 29
SLOVENIA IN BRIEF ............................................................................................................ 30
Bosnia-Herzegovina Gives Demining Fund US$ 2.2m ....................................................... 30
Slovenia to Seek Renewed Arbitration on LB Debt ............................................................ 30
Drnovsek and Solyom Call for Affirmative Action for Minorities ...................................... 31
Rupel Attends CoE Ministerial; Meets with Serbia-Montenegro FM ................................. 31
Government Sends Requested Info on Mercator Sale to the EU ......................................... 31
Survey: Government Backers, Opponents Almost Tied ...................................................... 31
Competition Watchdog Stresses Role of Regulator in Telecommunications ...................... 31
Avgust Cernigoj's Yet Unseen Prints on Display in Lipica ................................................. 31
2
HEADLINES
Schefenacker Officially Launches Production in Slovenia
SAPS, the Slovenian subsidiary of German auto-equipment maker Schefenacker a new factory
on the premises of the defunct textile company Tekstilna tovarna Prebold in the northeast,
which it purchased in March
SAPS, the Slovenian subsidiary of German auto-equipment maker Schefenacker, opened on
Tuesday, 15 November a new factory on the premises of the defunct textile company
Tekstilna tovarna Prebold in the northeast, which it purchased in March.
As SAPS director Robert Grah told the press, the investment is worth EUR 4.5m, and the
same amount was needed for the equipment required to upgrade the former textile factory,
which went bankrupt a year ago.
The number of employees in the new factory is to increase to 200 within a year, Grah said.
The 47 former textile factory workers, who are already employed in SAPS, have been trained
in Schefenacker's subsidiaries in Hungary and Germany.
According to Grah, Schefenacker group has decided to start production in Slovenia as
expenses in the country are reasonable. He also added that the production is Prebold, which in
fact started already on 1 September, is a profitable investment.
"After the company was forced to back out of plans to open the plant in Zagorje, it had to look
for another suitable location. Schefenacker did not give up on Slovenia, although it was
already considered looking for a location in Hungary," Grah explained.
He also announced the expansion of the company's production, the modernisation of the
factory, and the possibility of building the fifth production hall in the near future.
PM Jansa Believes Now is the Right Time for Reforms
PM Janez Jansa told the National Council that the Slovenian economy is doing relatively
well, however the time had come to give it more oxygen, thus allowing companies to start
breathing with full lungs
PM Janez Jansa told the National Council on Wednesday, 16 November that the Slovenian
economy is doing relatively well, however the time had come to give it more oxygen, thus
allowing companies to start breathing with full lungs.
Jansa added that Slovenia must develop new programmes and create jobs with a future.
Furthermore, it "has to do it now, and not wait for the favourable economic environment to
turn".
Jansa, speaking at a session where the councillors are to debate the government reforms,
named Germany as an example of a country which missed its opportunity to implement social
and economic reforms in time.
Moreover, Slovenia is not the only country that is discussing reforms, Jansa continued. Beside
20 other countries which are debating similar issues, the EU's Lisbon Strategy also discusses
possible answers to today's crucial EU problems, namely dwindling competitiveness and the
effects of globalisation.
"Sustainable growth cannot be achieved without economic growth", added Jansa, explaining
that reform-minded countries all consider steps that would "reduce the taxation of labour and
increase taxes on consumption and wealth".
At the session, Damijan presented the framework of the social and economic reforms and
stressed their urgency. He also pointed out the importance of tax reform, as labour is overly
taxed.
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He furthermore outlined the withdrawal of the state from the economy, and presented the
reforms to the educational and pension system including the changes to social transfers.
Councillors in general agreed with him, but criticised the proposed flat tax. President of the
employers interest group Jozko Cuk claimed that a flat tax would hurt several business
sectors.
Farmers' representative Peter Vrisk agreed, saying that the flat tax will cause a loss of income
to a significant part of Slovenia's population.
Culture and sports representative Tone Persak pointed out that flat tax would have a
detrimental effect on culture and sport, while trade unionist Dusan Semolic called flat tax a
"socially unacceptable approach".
Government Establishes Reform Coordination Office
The Office for the Coordination of the Implementation of Slovenia's Development Strategy is
expected to start operating as of 2006
The government decided on Thursday, 17 November to establish an office that will coordinate
the implementation of the planned structural reforms, to be headed by a minister without
portfolio.
The Office for the Coordination of the Implementation of Slovenia's Development Strategy is
expected to start operating as of 2006, according to government spokesperson Valentin
Hajdinjak.
Hajdinjak said after the cabinet session that the Office would coordinate the implementation
of the reforms by working closely with relevant ministries and government agencies.
The Office should have 15 employees in 2006 and 2007, with most of its members being
transferred from other ministries. It will not require any additional budgetary expenses, he
explained.
Hajdinjak said that "personnel issues have not yet been discussed", saying that the head of the
office has to be first approved by coalition parties, and then put forward by PM Janez Jansa.
One of the most often mentioned candidates for the post is the head of the government reform
committee Joze P. Damijan.
4
INTERNATIONAL COOPERATION
Vizjak Says Slovenia May Adopt Harder Line on Croatia's EU Bid
Economics Minister Andrej Vizjak has suggested that Slovenia may adopt a harder line to
Croatia's efforts to join the EU in response to the arbitration motion that Croatia filed against
Slovenia over undelivered electricity from the Nuclear Power Plant Krsko (NEK)
Economics Minister Andrej Vizjak has suggested that Slovenia may adopt a harder line to
Croatia's efforts to join the EU in response to the arbitration motion that Croatia filed against
Slovenia over undelivered electricity from the Nuclear Power Plant Krsko (NEK).
Speaking to the press on Monday, 14 November in Bostanj after the launch of the first turbine
at the Hydro Plant Bostanj, Vizjak said that Croatia's claims regarding NEK are completely
baseless.
The Slovenia side will put together its case, while one can expect a more firm response by
Slovenia, including in regards to its backing for Croatia's bid to join the EU in the coming
months, Vizjak said.
He added that Slovenia nevertheless intends to continue to be a partner of Croatia in its efforts
to meet EU membership criteria.
His comments are in response to an announcement that Croatia has referred the case in which
it seeks millions of euros in compensation from Slovenia for over a year of undelivered
electricity from NEK to the International Centre for Settlement of Investment Disputes
(ICSID) in Washington.
Croatian grid operator HEP filed for an arbitration procedure in early November at the ICSID
over electricity that it says Slovenia failed to deliver from the jointly-owned NEK after the
two countries signed an agreement on the plant in 2002.
Meanwhile, Vizjak pointed out that Croatia has still not met its obligations stemming from the
agreement as it has not established a NEK decommissioning fund.
He reiterated his view that the two countries should solve the issue in bilateral talks.
Explaining its decision to seek arbitration, the Croatian Economics Ministry claimed in a
press release on Monday, 14 November that the Slovenian "showed no interest in
compensating HEP for the damage incurred".
Croatia had sent two offers to Slovenia for the amicable settlement of the issue, but the first
offer was rejected and there was no reply for the second, the ministry said.
"Arbitration does not exclude the possibility for an agreement but only confirms HEP's intent
to obtain compensation," it added.
Macedonian PM Pledged EU Support from Slovenia
Macedonian PM Vlado Buckovski received assurances of Slovenia's firm support for
Macedonia's efforts to join the EU, as he held talks with senior Slovenian officials
Macedonian PM Vlado Buckovski received assurances of Slovenia's firm support for
Macedonia's efforts to join the EU, as he held talks with senior Slovenian officials on
Thursday, 17 November.
Prime Minister Janez Jansa said that Macedonia has made great headway over the recent
years, and can serve as a role model regarding the coexistence of various ethnic groups.
Jansa was adamant that Macedonia would be confirmed as EU candidate country at the EU
summit on 15 and 16 December, which would have a positive impact on the economy there.
Slovenia has helped Macedonia on its path towards the EU, and will continue to do so, Jansa
told a joint press conference in Ljubljana.
5
Buckovski thanked Slovenia for the support, saying that Slovenia was "Macedonia's best
friend in the EU. We will do everything to keep it that way."
Buckovski held talks earlier in the day with Parliament Speaker France Cukjati, who was
quoted by the National Assembly as saying that when talks in Europe touch on Macedonia,
"there is the general conviction that it is a country which can become a factor of stability in
the Balkans, so it deserves even more to become a member of Euro-Atlantic organisations."
Talks with Slovenian officials, including President Janez Drnovsek, also touched on Kosovo.
Buckovski is reported as having voiced support for President Janez Drnovsek's plan for the
province, which he labelled as containing the essential elements for a permanent and just
solution. Yet Buckovski also told the press later on that the status of Kosovo depends neither
on Slovenia nor Macedonia. Kosovo must remain in the same borders as it is now, he stressed.
Drnovsek meanwhile said that the Ohrid Agreement, which ended fighting in Macedonia, is a
good model for the broader region of how relations between ethnic groups can be
constructively resolved, the president's office said in a press release.
As part of Buckovski's visit, Economics Minister Andrej Vizjak and Macedonian Deputy PM
Minco Jordanov amended the agreement on economic cooperation.
PM Jansa believes that the amended document will facilitate bilateral economic cooperation.
He said that Slovenia has great economic interest in Macedonia, not only in trade but also
other forms of economic cooperation.
Macedonia Invites Slovenian Investors
A Slovenian-Macedonian business conference took place at the Chamber of Commerce and
Industry of Slovenia
Macedonian Prime Minister Vlado Buckovski encouraged Slovenian companies to invest in
Macedonia, which is currently undergoing structural reforms to cut red tape for foreign
investors, at a Slovenian-Macedonian business conference on Friday, 18 November.
"The first results of a wide range of reforms have already become visible: we have also
obtained positive evaluations from the International Monetary Fund (IMF) and the World
Bank," Buckovski said, adding that bilateral cooperation should be strengthened.
Economics Minister Andrej Vizjak and president of Chamber of Commerce and Industry of
Slovenia (CCIS) Jozko Cuk agreed that cooperation would be boosted by the amended
economic cooperation accord signed on Thursday, 17 November by Buckovski and Vizjak to
cut red tape.
Macedonia is one of the trade partners with the largest trade gap with Slovenia: Slovenia
exported EUR 81m worth of goods in Macedonia in the first seven months, and imported
EUR 17m.
Cuk explained Slovenia's export to Macedonia was falling slightly, also due to the expiry of
the free trade agreement between the countries after Slovenia's EU entry. However, imports
from Macedonia are rising, making the trade more balanced.
Slovenian investments to Macedonia have increased, reaching EUR 8m so far this year, Cuk
said. The central bank said that the value of all Slovenian investments to the country so far
amounted to EUR 90m.
"We are hoping for even more Slovenian investment next year and more contracts signed
between Slovenian and Macedonian partners," Cuk underscored.
Buckovski said he expected Slovenia to become the main investor in Macedonia. According
to him, energy and the restructuring of agriculture are the sectors that offer the best prospects.
Furthermore, Buckovski was pleased with the political relations between the countries, while
Vizjak reiterated Slovenia was prepared to offer all technical and expert help in EU
integration.
6
Macedonian PM and Finance Minister Discuss Euro
According to a press release from the Finance Ministry, Bajuk said that Macedonia considers
Slovenia a strategic partner in its efforts to join the EU
Finance Minister Andrej Bajuk said on Friday, 18 November that he discussed Slovenia's
plans to adopt the euro with visiting Macedonian Prime Minister Vlado Buckovski.
According to a press release from the Finance Ministry, Bajuk said that Macedonia considers
Slovenia a strategic partner in its efforts to join the EU.
Earlier in the day, Buckovski attended talks between representatives of Slovenian and
Macedonian companies at the Slovenian Chamber of Commerce and Industry.
Bajuk said that "no concrete agreements were reached at the talks as they are for the
companies themselves to make", however, the state "is obliged to create an environment for
such talks".
National Council President Discusses Economic Cooperation in Austria
Susnik said after the talks that Slovenian border regions and Carinthia could use their joint
business potential to enter other markets
President of the National Council Janez Susnik held talks on Friday, 18 November with
business people in the Austrian province of Carinthia, with the focus being on improving
economic cooperation between Slovenia and Austria.
Susnik said after the talks that Slovenian border regions and Carinthia could use their joint
business potential to enter other markets, with the Slovenian minority standing to benefit from
such cooperation. The Slovenian official met with both Austrian business officials and
Slovenian minority entrepreneurs.
Susnik, visiting Austria at the invitation of Peter Mitterer, president of the Austrian Federal
Council, also called on Austria to respect all minority rights as stated in the the Austrian State
Treaty as well as strive to solve other minority issues.
The Slovenian official and an accompanying delegation of businessmen also attended the
opening of a fair on family, health and national customs, which was launched in Carinthia's
capital Klagenfurt.
In the afternoon, Susnik met representatives of Slovenian business and political groups in the
region, before wrapping up his visit with talks with Austrian business people.
7
EUROPEAN UNION
FM: Budget Framework Has 50-50 Chance to Be Adopted in 2005
The EU's budget framework for the 2007-2013 period has a 50% chance to be adopted by the
end of 2005, Foreign Minister Dimitrij Rupel told the parliamentary foreign policy committee
The EU's budget framework for the 2007-2013 period has a 50% chance to be adopted by the
end of 2005, Foreign Minister Dimitrij Rupel told the parliamentary foreign policy committee
on Wednesday, 16 November.
According to Rupel, the British EU presidency will make some small adjustments to the failed
Luxembourg proposal.
However, Great Britain has so far not presented any definite proposals, fuelling fears that the
EU's budget will not be adopted at the December summit of EU leaders.
Rupel therefore believes that Austria, which will chair the EU in the first half of 2006, is
probably going to have to deal with this issue.
He added that the recent riots in France as well as political changes in Germany mean that
these countries currently cannot focus solely on the EU budget.
Conference Says EU Must Embrace Globalisation
The EU must embrace the opportunities offered by globalisation and face the challenges,
agreed speakers at a business conference, discussing the impact of globalisation
The EU must embrace the opportunities offered by globalisation and face the challenges,
agreed speakers at a business conference on Thursday, 17 November, discussing the impact of
globalisation.
European Commissioner for Science and Research Janez Potocnik said the creation of new
opportunities should be a priority rather than the protection of domestic economies, which is
the case now.
This is why Europe is lagging behind rivals from the Americas and Asia, said Potocnik, who
also criticised the EU for spending 45% of the common budget on agriculture and decried the
current state of mind in the Union.
European Trade Commissioner Peter Maldelson also provided his view of globalisation in a
recorded address, saying that the Union's trade policy is designed to benefit industry as well
as consumers.
Industry benefits from the efforts in the framework of world trade talks to open new markets
to European products, while consumers reap the benefits of increased competition on the
European market, which is opening to the EU's trade partners, he said.
Yet Mandelson was pessimistic about the outcome of the WTO summit in Hong Kong
regarding the liberalisation of world trade. WTO members will probably not reach agreement,
he said.
The debate came after President Janez Drnovsek criticised the shortcomings of globalisation
in his opening address in the morning.
The unfair distribution of globalisation benefits is leading to social and environmental
unbalances and preventing the planet from making headway as a whole, he stressed.
Economist Mrak Believes EU to Include Entire SE Europe by 2015
Mojmir Mrak of the Economics Faculty in Ljubljana believes that EU enlargement to
Southeast Europe will be completed in 2015, when Albania, Bosnia-Herzegovina and SerbiaMontenegro join the bloc
8
Mojmir Mrak of the Economics Faculty in Ljubljana believes that EU enlargement to
Southeast Europe will be completed in 2015, when Albania, Bosnia-Herzegovina and SerbiaMontenegro join the bloc.
Mrak, speaking at a business conference in Portoroz on Friday, 18 November, added that
Bulgaria and Romania look set to join the EU in 2007 or 2008, followed by Croatia in 2010
and Macedonia in 2013.
He pointed out that EU has allocated a lot less money for its push towards southeastern
Europe than it had for its 2004 expansion. This is because issues from the near past are
troubling the countries in the area.
He also outlined an alternative scenario, which was drafted by an international group
including EU Science and Research Commissioner Janez Potocnik of Slovenia.
The group concluded that EU strategy towards the countries in the area is inappropriate and
stressed the need for state-building if the countries are to be able to join the bloc.
Mrak also pointed to the high level of unemployment and budget deficits as the biggest
problems faced by the economies of these states.
He explained that the first wave of structural reforms, namely liberalisation of prices and
trade, has been successfully carried out in the region, however capacity building has not been
successful in all countries.
The three-day conference, organised by the Ljubljana Faculty of Economy and business daily
Finance concluded on Saturday, 19 November.
Vizjak: Slovenia Might Raise NEK Decomissioning in Croatian EU Talks
The two countries committed themselves to adopting decommissioning funds as part of a
bilateral agreement on the jointly-owned N-plant that they signed in late 2001
If Croatia does not establish a decommissioning fund for the Nuclear Power Plant Krsko
(NEK), Slovenia might open the issue during Croatia's EU accession talks, Economics
Minister Andrej Vizjak told the press on Friday, 18 November.
"Slovenia has repeatedly called on Croatia to establish the fund and if it does not fulfil its
latest promise, Slovenia will initiate in 2006 an arbitration procedure", as stated in the
bilateral agreement on the plant from 2001, he added.
Vizjak explained that his Croatian counterpart Branko Vukelic promised at their meeting in
Mokrice that Croatia would establish such a fund, but not before 2006.
Vizjak also said that Slovenia has so far allocated some SIT 30bn (125m) for decomissioning,
while Croatia, despite repeated assurances that it would do so, failed to establish the fund,
even though the bilateral agreement states it should have done so by spring 2004 at the latest.
Vizjak warned that should Croatia fail to allocate decomissioning means, Slovenia would
have to fund the procedure by itself. "That is why we will pursue a consistent implementation
of European principles by accession candidates," he added.
The two countries committed themselves to adopting decommissioning funds as part of a
bilateral agreement on the jointly-owned N-plant that they signed in late 2001.
9
LEGISLATION
New Business Register Act to Simplify Registration Procedures
The government has recently adopted a new business registry bill which, if passed in
parliament, will set up a special registry of sole proprietors within the business register,
which is expected to shorten registration procedures
The government has recently adopted a new business registry bill which, if passed in
parliament, will set up a special registry of sole proprietors within the business register, which
is expected to shorten registration procedures.
One of the centrepieces of the bill is the registration at one place - at the subsidiaries of the
Agency for Public Legal Records and Related Services, which has been the primary registrar
for sole proprietors since June.
Moreover, the bill is based on electronic data exchange, which means that paper documents
are being replaced by electronic documents, Andrijana Starina Kosem, the state secretary at
the Economics Ministry, told the press on Monday, 14 November.
The bill also introduces a register of digital certificates, which will make it easier to verify the
legal representatives of legal entities.
Social Partners Reach Deal on Collective Agreements Act
The last things that the social partners agreed were the hierarchy of collective agreements
and exemptions to the compliance with the standards guaranteed by the collective agreements
Social partners have managed to finalise the wording of the act on collective agreements after
ten years of negotiations. "This means that social dialogue exists in Slovenia," Labour
Minister Janez Drobnic said after a meeting on Tuesday, 15 November.
The last things that the social partners agreed were the hierarchy of collective agreements and
exemptions to the compliance with the standards guaranteed by the collective agreements.
Gregor Miklic of the Association of Free Trade Unions told STA that two more minor issues
remain open - sanctions for employers who fail to comply with collective agreements and the
expansion of validity of the collective agreements.
Minister Drobnic explained that sanctions for employers will be instituted, but they will only
be enforced when it is determined by a court, rather than by just one of the social partners,
that violations had taken place.
The second open issue refers to whether the collective agreements will also apply to small
businesses.
One of the most contentious issues in the last phase of talks was the participation of
employers' organisations with mandatory membership in the signing of collective agreements.
The social partners ultimately agreed that organisations with mandatory membership would
be allowed to act as parties to collective agreements in a transitional period of three years.
This would allow voluntary associations of employers to assume all obligations associated
with collective bargaining, the Labour Ministry explained.
If the Chamber of Commerce (CCIS) retains mandatory membership, it will only be allowed
to sign contracts for three more years. If it switches to voluntary membership, this provision is
immaterial, Drobnic noted.
Government Aligns Provisions on Carbon Trading with EU Directive
The government has amended the act on environmental protection to bring the provisions on
carbon trading in line with the amended EU directive on emission allowance trading
10
The government has amended the act on environmental protection to bring the provisions on
carbon trading in line with the amended EU directive on emission allowance trading.
Environment Minister Janez Podobnik explained after the session on Thursday, 17 November
that Directive 2004/101/EC links the emission trading system with the Kyoto Protocol.
The directive allows companies to carry out carbon reduction projects outside the EU that can
be accounted for in their individual emissions reduction targets.
According to Podobnik, this would enable Slovenia to meet its Kyoto targets faster.
11
STATISTICS/FORECASTS
Wages Down 0.6% in September
The average net salary for employed in companies and other organisations amounted to SIT
176,573 (EUR 737) in September
The average net salary for employed in companies and other organisations amounted to SIT
176,573 (EUR 737) in September, down 0.6% from August but up 7.7% year-on-year,
according to the National Statistical Office.
The average gross salary per employee decreased by a corresponding 0.6% to SIT 277,878
(EUR 1,159) in September, staying at 6.3% more than a year ago.
In real terms, the September gross salary dropped by 1.6% compared to August, while it
remained 3% higher than the gross salary in September 2004.
The first nine months of 2004 saw the employees receiving an average net salary of SIT
173,220 (EUR 723), which is 8.1% more than they got in the same period last year.
In the corresponding time period, the average gross salary went up 6.5% to SIT 271,878
(EUR 1,159) during the same period.
Unemployment at 10% in September
As many as 91,083 people were registered as unemployed, up 0.6% over August and up 0.4%
over September 2004
Slovenia's registered unemployment rate stood at 10% in September, the same as in August,
while the ILO standards-based unemployment rate was at 5.8% in the second quarter of 2005,
according to the latest data released by the Statistical Office.
As many as 91,083 people were registered as unemployed, up 0.6% over August and up 0.4%
over September 2004.
The Office's data also shows that the unemployment rate among women was 12.1%, down
0.1% over August, while it remained flat at 8.3% among men. The rate for the first nine
months averaged 10.1%.
Slovenia's labour force numbered 907,159 in September. As many as 816,076 among these
were registered as employed, an increase of 0.4% over August and 0.7% year-on-year.
Out of 816,076 people employed, 81,632 persons were self-employed in September, which
0.2% more than in August and 1.9% lower than in September 2004.
EU Keeps GDP and Inflation Forecast Unchanged for Slovenia
It projects Slovenian economy to expand by 3.8% this year despite the unfavourable
international environment, whereas end-year inflation is expected to hit 2.6%
The European Commission has kept its economic forecast for Slovenia almost unchanged: it
projects Slovenian economy to expand by 3.8% this year despite the unfavourable
international environment, whereas end-year inflation is expected to hit 2.6%.
The Commission report, released in Brussels on Thursday, 17 November, suggests GDP
growth will amount to 4% in 2006 and 4.2% in 2007. Meanwhile, inflation is set to edge
down to 2.5% in 2006 and 2007.
The report notes that after relatively weak activity in the first quarter, the economy boomed in
the second quarter, mainly due to effects in foreign trade linked to the substantial increase in
exports of cars to France and Austria. "This year, the economy will continue to be driven by
domestic demand while the external contribution turns positive."
For 2006 and 2007, the Commission expects investment expenditure to pick up as production
processes are adjusted in order to improve the competitiveness of industry, and investment
12
spending related to construction activity should also stay high, as evidenced by strong growth
in the number of construction permits issued.
Private spending, particularly the purchase of durable goods, is likely to remain buoyant.
Domestic demand should fuel the economy while foreign demand is also expected to
contribute positively to GDP growth against the projections of healthy export growth to
continue, the report says.
The Commission also sees export markets recovering as oil prices decrease, and believes
"expectations linked to the adoption of the euro will spur domestic consumption." "As imports
are set to rise steadily in step with strong private and investment spending, the negative
current account is likely to deteriorate further."
The report notes that alignment with the Eurostat rules has caused substantial upward revision
of the 2001 and 2003 deficit. "In 2005, however, the general government deficit is set to
decline to 1.7% of GDP as the shortfall of the new direct tax regime will be smaller than
expected."
"Given the uncertainties surrounding the future amendments to the tax legislation, the forecast
for 2006 projects the deficit to increase again against the decision to index pensions to wages
and the commitment of the new government to gradually abolish the payroll tax," the report
says.
The Commission's figures are roughly in line with the slightly more optimistic domestic
projections made by the government Institute for Macroeconomic Analysis and Development
(IMAD) and the Bank of Slovenia.
IMAD anticipates that growth for this year and the next is to stand at around 4%, while
inflation will be at around 2.5%. The central bank has projected inflation of 2.5% this year
and GDP growth at 4.1% in 2005 and 3.8% in the two years afterward.
13
FINANCE
NKBM Sees 8% Rise in Gross Profit
In the first nine months of this year, the state-owned Nova Kreditna banka Maribor (NKBM)
increased its total assets by 15.7% to SIT 697.80bn (EUR 2.91bn
Slovenia's second-largest bank has seen its gross profit for the first nine months rise by 8
percent to SIT 5.46bn (EUR 22.78m) over the same period last year.
In the first nine months of this year, the state-owned Nova Kreditna banka Maribor (NKBM)
increased its total assets by 15.7% to SIT 697.80bn (EUR 2.91bn).
The bank's press release on Tuesday, 15 November also states that its pretax return on capital
in this period rose to 17.20% from 14.78% at the end of 2004.
Pensions to Increase by 1.7%
This is the second pension increase this year after the 2.4% hike in March
The council of the Pension and Disability Insurance Institute (ZPIZ) decided on Wednesday,
16 November that pensions would increase by 1.7% effective on 1 October. This is the second
pension increase this year after the 2.4% hike in March.
The increase is in line with the latest amendments to the pension and disability insurance act,
which have been widely criticised by the opposition and foreign financial experts as
undermining the stability of the pension system.
The amendments stipulate that pensions will be adjusted to wages more consistently, in
November and February.
In November, pensions increase by the equivalent of the January-September wage increase as
compared to the average of the whole of previous year.
The change in January aligns pensions to average wage growth in the previous year as
compared to the year before.
This year the adjustment is somewhat different, as the increase also takes into account the
March raise.
According to calculations by the Labour and Social Affairs Ministry, pension spending will
be up by about SIT 2bn (EUR 8.3m) this year as a result of the increase, and SIT 8bn (EUR
33.4m) next year.
The pension hike was the first decision made by the ZPIZ council after its inauguration the
previous week.
Government Establishes Two More Privatisation Groups
The cabinet set up two privatisation working groups, one for the country's largest bank, Nova
Ljubljanska banka (NLB), and the other for the leading insurer, Zavarovalnica Triglav
The cabinet on Thursday, 17 November set up two privatisation working groups, one for the
country's largest bank, Nova Ljubljanska banka (NLB), and the other for the leading insurer,
Zavarovalnica Triglav, government spokesperson Valentin Hajdinjak told the press after the
government session.
Each working group has to come up with at least one scenario. The NLB working group was
tasked to draft a privatisation plan by 23 December, while the Triglav one should present its
conclusions by 31 January 2006.
The NLB team will be headed by Peter Jesovnik, the former head of the Department for
European Affairs at the Chamber of Commerce and Industry of Slovenia (CCIS), while Rajko
Pirnat of the Ljubljana Faculty of Law is to head the Triglav working group.
14
Meanwhile, Economics Minister Andrej Vizjak announced the government is likely to set up
a group of experts to study an arbitration motion that Croatia has filed against Slovenia over
undelivered electricity from the jointly-owned Nuclear Power Plant Krsko (NEK).
"I will propose a team of some 12 experts to prepare positions, as well as give advice and
proposals to the government," Vizjak told a press conference following the cabinet session.
Besides reiterating his stance that Croatian demands are completely baseless, Vizjak said that
he was "annoyed that the Croats did not notify us about the filing of the motion through
regular channels, but simply did something they announced six months ago".
He also finds it "illogical and formally disputable" that the Croats used their state-owned
national grid operator to file a motion against a state, rather than against the NEK itself.
Croatia referred the case in which it seeks nearly EUR 32m for over a year of undelivered
power from NEK to the International Centre for Settlement of Investment Disputes (ICSID) in
Washington on 11 November.
Finance Committee Concludes Debate on Tax Acts
The parliamentary finance committee gave the green light to amendments to five tax acts
The parliamentary finance committee gave the green light to amendments to five tax acts.
After a marathon debate on the income tax act on 16 November, the committee on Thursday,
17 November discussed the government-sponsored changes to the corporate income tax act,
the value added tax act, the payroll tax act and the tax procedure act.
Finance Minister Andrej Bajuk said the payroll tax would be phased out by 2009. According
to Bajuk, gradualness is necessary because due to its planned 2007 euro changeover Slovenia
cannot afford any rash financial measures.
The committee therefore rejected the amendments by opposition Liberal Democrats (LDS)
which called for the tax to be abolished by 2007, and by the Social Democrats (SD) which
envisaged its elimination by 2008.
However, Bajuk told committee members that the government is ready to abolish the tax
sooner if public finances remain in a good shape.
The amendments to the value added tax act will meanwhile allow companies with up to SIT
50m (EUR 0.20m) of annual revenues to pay VAT only after their invoice has been paid,
instead of, as is currently the case, when they issue the invoice.
The committee has devoted most of its attention to amendments to the corporate income tax
act, which envisage a 20% tax relief to encourage research and development. A 40% relief
could be legislated for less developed areas, pending EU approval.
Opposition committee members meanwhile stressed that changes are being adopted too
rapidly. Therefore, Social Democrats MPs left the session early on. The amended acts, which
will be debated at a plenary session of the parliament next week, are to enter into force on 1
January 2006.
NLB Takes Out EUR 360m Loan
Nova Ljubljanska banka (NLB), Slovenia's leading bank, signed a contract on a EUR 360m
loan with a consortium of twelve foreign bank
Nova Ljubljanska banka (NLB), Slovenia's leading bank, signed a contract on a EUR 360m
loan with a consortium of twelve foreign banks, the NLB said on Thursday, 17 November.
The bank added that the terms of the deal were even more favourable than its June EUR 540m
loan. The interest rate for the credit line, due in five years, is EURIBOR plus 0.16% annually.
The NLB is convinced that the most favourable terms ever negotiated for such a loan on the
international capital market show a high level of trust in the NLB.
The funds are to be used for financing the bank's general needs, mainly for financing
Slovenian companies, the NLB explained.
15
KD Group Buys 20% Stake in Delo, Sells Mercator Stake
Asset management firm KD Group has acquired just under 20% of Slovenia's leading
newspaper outlet Delo in exchange for a 4.16% stake in grocer Mercator
Asset management firm KD Group has acquired just under 20% of Slovenia's leading
newspaper outlet Delo in exchange for a 4.16% stake in grocer Mercator.
KD Group said on Friday, 18 November that it had acquired 19.99% (133,492 shares) in Delo
from financial company Infond Holding. In turn, it sold 4.16% (133,492 shares) in Mercator
to Infond.
In line with the swap contract between KD Group and Infond, the price of shares of both Delo
and Mercator involved in the deal was SIT 37,910 (EUR 158.22), making the swap worth SIT
5.06 (EUR 21.11m).
Interestingly, the price paid by KD Group for Delo is some 25% over the SIT 30,031 (EUR
125.34) Delo shares were worth on the Ljubljana Stock Exchange on 18 November, while the
contract price for Mercator is only a touch above 18 November's market price.
The deal marks KD Group's withdrawal from Mercator, after it sold 7.6% of Slovenia's largest
grocer the previous week.
It also confirms recent speculation that KD Group was eyeing a stake in Delo. Earlier last
week, KD Group chairman Matjaz Gantar said the company would be interested in acquiring
Delo if it could get a good deal.
"Delo is a good newspaper outlet, which can improve its yields. The profit at Delo could rise
by as much as three-fold," Gantar told the press on14 November.
He told the STA that the purchase of Delo represents a long-term investment for KD Group.
He also indicated that KD Group intends to seek permission from the Culture Ministry - in
line with Slovenia's strict media legislation - to increase its stake in Delo above 20%.
"Whether we increase our stake in Delo will depend on whether we get permission or not,"
Gantar said.
Meanwhile, Infond Holding, the single-largest owner of beverage group Pivovarna Lasko,
now holds 7.5% of Mercator together with the 3.33% stake it acquired from KD Group last
week.
The remaining 4.26% of Mercator sold last week by KD Group was snapped up by Lasko,
which holds 18% in Mercator.
Interestingly, Lasko is the biggest owner of Delo, holding 24.98% in the newspaper outlet.
Gantar said that KD Group was not in talks with Lasko on buying its stake in Delo at the
moment.
Ljubljana Stock Exchange
Mercator and Petrol send LJSE on roller coaster ride
Big news involving retailer Mercator and oil trader Petrol energised the Ljubljana Stock
Exchange (LJSE) last week, pushing prices of substantially. The SBI 20 benchmark index
closed 89.8 points (1.99%) higher at 4,610.22.
Mercator topped the headlines this week. After legendary chief executive Zoran Jankovic was
somewhat unexpectedly dismissed by the supervisors on 15 November, asset management
firm KD Group pulled out on Friday, 18 November in exchange for a stake in publisher Delo.
KD Group said on 18 November that it had acquired 19.99% (133,492 shares) in Delo from
financial company Infond Holding. In turn, it sold 4.16% (133,492 shares) in Mercator to
Infond, which is the majority owner of Pivovarna Lasko, one of the two major Mercator
shareholders.
KD Group chairman Matjaz Gantar said "Delo is a good newspaper outlet, which can improve
its yields. The profit at Delo could rise by as much as three-fold." He said that the purchase of
Delo represents a long-term investment for KD Group.
16
News about the share swap could not affect the Mercator or Delo price, as it was carried out
on Friday, 18 November just before the closing call. Yet the dismissal of Jankovic earlier this
week seems to have left investors cold, as Mercator closed only 1.12% lower on the week at
SIT 37,142 (EUR 155.03).
Mercator was also the most heavily trader share due to the swap. It accounted for nearly half
of the week's turnover, which stood at SIT 20.2bn (EUR 84.3m).
Drug maker Krka followed with deals worth SIT 2.83bn (EUR 11.8m). After a two-week
surge, investors started cashing in at a price of about SIT 108,000 (EUR 450), sending Krka to
104,210 (EUR 434.93) by the end of the week.
Oil trader Petrol meanwhile still basks in news that Russian oil giant Lukoil was interesting in
acquiring a stake. Petrol soared to SIT 68,573 (EUR 286.23) by 18 November, up 10.57% on
last week.
The PIX investment fund index was up 22.82 points to 4,138.86 on mixed trading in popular
investment funds, while the bond BIO index shed 0.03 points to 123.14.
Foreign Exchange
Mean exchange rate of the Bank of Slovenia
Euro (EUR) - SIT 239.57 (-0.02)
U.S. dollar (USD) - SIT 205.09 (+0.18)
Swiss franc (CHF) - SIT 154.85 (-0.90)
British pound (GBP) - SIT 351.17 (-5.20)
17
REGIONAL INFORMATION
Mayors Have Mixed Feelings about Govt's Two Regions Proposal
The government proposal to see Slovenia classified as two cohesion regions in the EU has
triggered disapproving responses from the municipalities in the western part of the country,
which would be classified as the more prosperous of the two regions
The government proposal to see Slovenia classified as two cohesion regions in the EU has
triggered disapproving responses from the municipalities in the western part of the country,
which would be classified as the more prosperous of the two regions. Eastern parts of the
country, however, are generally pleased with the proposed division.
The municipalities of the Gorenjsko (N) and Primorsko (W) regions (western cohesion
region) believe that this proposal, which is pending EU approval, would deprive them of EU
financial aid. Therefore they expect the government to provide the "missing" funds.
Most of the mayors from Primorsko favour a different division with central Slovenia as the
more developed part of the country, and its surrounding less developed parts as the other
cohesion region. Another solution would be three cohesion regions.
Bogo Filipic of the Gorenjsko Regional Development Agency told STA that they made great
efforts to prove their entitlement to a bigger chunk of funds. All they got were promises from
the government to compensate the lost funds from the state budget.
The agency has estimated that Gorenjsko could lose more than EUR 100m of EU
development funds in the 2007-2013 period. "The only thing we can do now is to negotiate
with the government and convince it to keep its promises," Filipic pointed out.
The Primorsko mayors, with the exception of two mayors, who believe anything would be
better than the current situation, are convinced the proposal would hinder the development of
their municipalities.
They are certain they would receive less development funds than they are entitled to,
especially for larger projects which the municipalities cannot carry out by themselves.
Also, according to Kanal ob Soci Mayor Miran Ipavec, the demographically endangered
municipalities of Idrija, Cerkno, Kanal ob Soci, and Vipava would lag behind even more in
the future.
Most of the Primorsko mayors are also afraid the government would not fulfill its promise to
help the less developed areas within the more developed cohesion region.
Views are different in the east of the country, where Maribor Mayor Boris Sovic backed the
government's decision, saying it was adopted at the right time, as Slovenia could otherwise
miss out on a lot more.
He believes that the entire Slovenia will benefit from the cabinet's proposal, regardless of
which region they would belong to, as in addition to domestic funds, the EU development
funds would also be at hand.
However, Ptuj Mayor Stefan Celan disagreed with Sovic: "If I were selfish, I would be
pleased with such a division", as the EUR 4.5bn (EUR 530m per year) the government hopes
to receive from the EU's 2007-2013 budget framework will mainly go to the eastern cohesion
region.
Celan also told STA that he thinks that politicians and state officials do not fully understand
the importance of regionalisation, which is necessary "as the state is not able to react with
sufficient speed to regional demands".
While developed countries therefore already transferred the authority for decision-making to
the regions, "our politicians still promote solutions that enable the state to retain strict and
centralised supervision over the distribution of funds".
18
He also warned that in the absence of proper regional authorities, the state will find if difficult
to "convince the European bureaucracy that the government will first put the money in its
pocket and then mercifully divide it among regions...it might not even succeed in acquiring
EU funds in the first place".
Celan pointed out that the municipal budgets in the eastern cohesion region total some EUR
500m per year. He is therefore sceptical of the ability of the municipalities to absorb the
additional EUR 530m per year.
19
BRANCH INFORMATION
Slovenian Broadcasting Will Go Digital in 2012
The shift represents a substantial financial problem for Slovenia, Simoniti said on the margins
of a meeting of EU culture ministers in Brussels
Culture Minister Vasko Simoniti has said that Slovenia would probably go from analogue to
digital broadcasting in 2012, the ultimate deadline set by the European commission.
The shift represents a substantial financial problem for Slovenia, Simoniti said on the margins
of a meeting of EU culture ministers in Brussels on Monday, 14 November.
"I hope we can speed up the transition if we get financial support from abroad," Simoniti said.
The first countries, for example Finland and Sweden, are expected to go digital next year.
Simoniti also suggested that Slovenia could focus more on inter-cultural dialogue when it
chairs the EU in 2008, as 2008 has been declared the year of inter-cultural dialogue.
Vets Happy With Anti-Bird Flu Measures
The veterinary council, an advisory body to the agriculture minister, has assessed that the
National Veterinary Administration (VURS) has so far done a good job at preparing the
country to respond to a possible outbreak of bird flu
The veterinary council, an advisory body to the agriculture minister, has assessed that the
National Veterinary Administration (VURS) has so far done a good job at preparing the
country to respond to a possible outbreak of bird flu.
The council on Tuesday, 15 November scrutinised the action plan for the event of an outbreak
and concluded that "Slovenia is well prepared for a possible outbreak of bird flu," council
chairman Peter Hostnik told the press.
Several bottlenecks were nevertheless discovered, for example the speed of diagnostics, as the
National Veterinary Institute still uses the classical method of isolating the virus in a chicken
embryo.
Hostnik said the council launched an initiative to allocate additional funding and upgrade to a
new, molecular method. That way, the results will be reliable and the time of diagnosis much
shorter, he said.
Government Responds to EU Telecoms Warnings
The government has responded to two warnings about the state of competition on the
domestic telecommunications market that the European Commissions sent in July, claiming
that the situation has been rectified
The government has responded to two warnings about the state of competition on the
domestic telecommunications market that the European Commissions sent in July, claiming
that the situation has been rectified.
The first warning referred to the country's delay in ensuring the portability of mobile and
fixed phone numbers between competing operators.
Quoting a range of technical difficulties, the government on Wednesday, 16 November
responded that the relevant regulation entered into force in August.
The head of the telco watchdog, APEK, meanwhile recently announced that mobile numbers
would be portable by the end of this year and fixed-line numbers in the first half of next year.
The second EU warning was labelled by the Commission as the "black hole problem", as
Slovenia cancelled a number of competition-boosting commitments operators had as it
implemented new telecommunications legislation.
20
The Commission issued the warning because of the cancellation of a number of "significant
market power" (SMP) designations in a time that new telecommunications legislation was
entering into force.
However, APEK recently explained that SMP designations in line with new legislation are
now being issued, with the majority already in place for fixed operators, while mobile
operators are currently in the midst of being scrutinised.
The government added in its reply to the Commission that a correct interpretation of the
relevant law (the electronic communications act) does not suggest that the obligations of
operators with significant market power ceased before the issue of designations according to
the new law.
The Economics Ministry explained for STA that the Commission was told that the relevant
operators continued to act like operators with significant market power despite the temporary
legal vacuum.
Reactions to REACH Directive Mixed
Janez Furlan, the secretary of the Chemical industry association at the Chamber of
Commerce and Industry of Slovenia (CCIS), told STA that the directive was realistic and
looks set to facilitate the registration of chemicals
Slovenian stakeholders provided mixed reactions to the EU directive on the registration and
authorisation of chemical substances (REACH), which was passed in first reading in the
European Parliament on Thursday, 17 November. Whereas industry is pleased, environmental
organisations believe it is too watered down.
Janez Furlan, the secretary of the Chemical industry association at the Chamber of Commerce
and Industry of Slovenia (CCIS), told STA that the directive was realistic and looks set to
facilitate the registration of chemicals.
According to him, the chemical industry was happier with the proposals of the parliament's
committees for competitiveness and industry, but the environment committee's compromise
"has its good and bad sides".
The registration process will also be cheaper, as one registration will suffice for one
substance, said Furlan, who was confident that the passage in parliament paves the way for a
compromise deal with the European Commission.
Government Amends Trade Act to Restrict Sunday Shopping
According to the amendments, only stores smaller than 200 sq. metres offering essential
products and located at filling stations, hospitals, hotels, airports, border crossings and
train/bus stations will be allowed to open without limitations on Sunday
The government has adopted the eagerly anticipated amendments to the trade act on the
opening hours of shops, which will restrict Sunday opening hours.
According to the amendments, only stores smaller than 200 sq. metres offering essential
products and located at filling stations, hospitals, hotels, airports, border crossings and
train/bus stations will be allowed to open without limitations on Sunday.
Shops offering essential food products but larger than 200 sq. metres will be allowed to open
ten Sundays a year, with all other shops closed on Sunday.
Economics Minister Andrej Vizjak said after the cabinet session on Thursday, 17 November
that the amendments consistently follow the decision of the 2003 referendum and the
recommendations of the Constitutional Court.
The Economics Ministry first circulated a proposal to allow all shops below 200 sq. metres to
open without restrictions. However, according to Vizjak, the coalition partners New Slovenia
(NSi) and People's Party (SLS) demanded that the referendum outcome be signed into law
consistently.
21
The solution confirmed in the referendum (limiting the surface area to 80 sq. metres) was
designated as arbitrary by the Constitutional Court, which ordered the legislator to set a
threshold based on a study.
The ministry therefore set out to analyse the situation and found that all exceptions allowed to
open Sundays fall in the 200 sq. metre limitation, Matjaz Logar of the Economics Ministry
said.
Vizjak was disappointed with the final solution, saying that the original amendments would
keep shops open at camping sites, marinas, spas and old city centres, which would boost
tourism development.
According to him, this would also be in line with the reasoning of the coalition parties (which
were in opposition when the referendum was held) that Sunday should be a day off dedicated
to family, as only 15% of shops would have been allowed to open.
"If we had opened the door to this type of enterprise, we would not have affected most of the
employees in retail. Yet after coordination with the (coalition) deputy groups, we have closed
this door even tighter," he said.
The solution has been welcomed by the trade unions, with Franci Lavrac, the head of the shop
workers trade union, saying that their goal of giving employees a day off has been achieved.
Retailers are not pleased. Stanislav Brodnjak, a board member at Mercator and the outgoing
chair of the association of retailers at the Chamber of Commerce and Industry of Slovenia
(CCIS), said these amendments have been adopted under pressure from oil retailer Petrol and
the trade unions.
As shops at petrol stations are among the exceptions, petrol stations will be "exclusive Sunday
shops," he said. Brodnjak also announced that the act would be challenged at the
Constitutional Court once again, and said the retailers would certainly have to lay off staff.
22
COMPANIES
Lower Sava Starts Producing First Kilowatts of Power
The trial run is considered as a landmark in the lower Sava hydro power project, currently
the biggest energy project in the country
The hydro power plant Bostanj on the Sava river started producing the first kilowatts of
electricity on Monday, 14 November. The trial run is considered as a landmark in the lower
Sava hydro power project, currently the biggest energy project in the country.
The Bostanj plant is to be fully operational in May 2006. Until then, the second and third
aggregates will be brought online and synchronised, according to power utility Holding
slovenske elektrarne (HSE), which runs the project.
The hydro plant at Bostanj is the first of five plants to be built on the Sava. The foundation is
laid for the next one in the chain, Blanca, which is to enter service in 2009.
The foundation stone was laid by Economics Minister Andrej Vizjak, Transport Minister
Janez Bozic and representatives of the HSE.
The lower Sava chain (Bostanj, Blanca, Krsko, Brezice, Mokrice) is expected to raise overall
electricity output power in Slovenia by 187 MW and eventually cover 6% of Slovenia's
electricity needs.
KD Group to Sell Remaining Stake in Mercator
KD Group chairman Matjaz Gantar said that the company is expected to sell the remaining
3.16% it holds in Mercator through its affiliate KD Holding in the near future
Asset management firm KD Group is set to sell the rest of its stake in grocer Mercator in the
future, company officials have told the press. The announcement comes after the company
offloaded 7.6% of Mercator the previous week .
According to Roman Androjna of KD Investments, the investment arm of KD Group, the
previous week's sale of about three-quarters of KD's stake in Mercator was part of the
company's investment strategy.
Androjna said that the sale "was one of the rare opportunities to reduce the share of Slovenian
shares in our mutual funds."
According to him, KD Investments secured a good price for Mercator shares. The stake was
sold for SIT 9.3bn (EUR 38.81m), at an average price of SIT 38,067 (UR 158.88) per share.
Meanwhile KD Group chairman Matjaz Gantar said that the company is expected to sell the
remaining 3.16% it holds in Mercator through its affiliate KD Holding in the near future.
According to Gantar, the investment policy at KD Holding is somewhat different to that of
KD Investments.
Androjna explained that the recent changes in ownership at Mercator influence KD
Investments' decision to sell its stake.
Following the withdrawal of the Pension Management Fund (KAD) and Restitution Fund
(SOD), the stake in Mercator was no longer a strategic investment for which one could expect
a takeover premium, Androjna said.
A part of the stake in Mercator sold by KD Investments was snapped up by beverages group
Pivovarna Lasko, which continues to increase its stake in the grocer.
Lasko bought 4.27% to raise its stake in Mercator to 18% together with the shares it bought
from SOD in August.
23
Mercator Chairman Ousted by the Supervisory Board
Jankovic said he expected the dismissal, which the supervisory board is legitimately entitled
to do
The supervisory board of retailer Mercator has dismissed long-time chairman Zoran Jankovic
in what is the culmination of controversial ownership changes at one of Slovenia's largest
companies.
Jankovic told the press after the maiden session of the new supervisory board on Tuesday, 15
November that the dismissal was not mutually agreed, but he decided to concede nevertheless.
"Mercator is my baby, and you cannot hurt your baby," he told the press.
Jankovic said he expected the dismissal, which the supervisory board is legitimately entitled
to do. Yet, he said the supervisors agreed with most of the management board proposals, so he
was unsure what the big differences were.
The dismissal vote was split 6:6 (with shareholder representatives voting for the dismissal and
representatives of employees against) but the vote of supervisory board chairman Robert Sega
was decisive.
Until a new chairman is appointed, presumably by the end of the year, the chief executive's
tasks will be carried out by board members Ales Cerin and Marjan Sedej.
Jankovic was reluctant to speculate about his successor. Yet, asked by the most frequently
cited name, Gorenje board member Ziga Debeljak, a former Mercator manager, Jankovic said
he was a good choice for new chairman.
The online edition of business daily Finance reported that the remaining board members
wanted to hand in their resignations when they heard about the dismissal. However, Jankovic
prevented the mass exodus, saying that Mercator cannot afford to lose the whole management
team.
Rumour about Jankovic's impending dismissals appeared soon after holding Istrabenz and
brewery Pivovarna Lasko bought major stakes in Mercator from two state-run funds in a
disputed deal that looks set be investigated by a parliamentary commission. It was said that
the new owners had requested that Jankovic be replaced.
Jankovic, who is considered as perhaps Slovenia's best manager, was at the helm of Mercator
from October 1997. Ha managed to turn what was one of several small and struggling
retailers into the country's leading retailer with a market share exceeding 40%.
Mercator Doubles Profit in First Nine Months
Slovenia's leading grocer group has reported a 116.2% rise in nine-month net profit, which
stood at SIT 9.65bn (EUR 40.28m)
Slovenia's leading grocer group has reported a 116.2% rise in nine-month net profit, which
stood at SIT 9.65bn (EUR 40.28m). Mercator Group increased net sales revenues by 8.6% in
the same period to SIT 297.8bn (EUR 1.24bn), which is 77.7% of the revenues planned for
2005.
Mercator Group, which includes the parent company and 18 subsidiaries in Slovenia, Croatia,
Bosnia-Herzegovina and Serbia-Montenegro, generated SIT 24.3bn (EUR 101.4m) of
earnings before interest, tax and amortisation in the observed period, a 31.2% increase yearon-year.
In 2004, the group's net sales revenues amounted to SIT 377bn (EUR 1.57bn) and net profit to
SIT 6.6bn (EUR 27.55m), while earnings before tax, interest and amortisation stood at little
less than SIT 26bn (EUR 108.52m), the company said on Wednesday, 16 November.
The parent company generated a SIT 205bn (EUR 855.66m) of net sales revenues in the first
three quarters, which is 26.6% more than in the same period in 2004, and represents 78.8% of
the revenues planned for 2005.
24
Net profit amounted to SIT 7.46bn (EUR 31.13m) in the same period, a 132% surge over the
year before, which is as much as 170.3% of the planned 2005 net profit.
Mercator management sees the first nine months as successful, for both the group and the
parent company have already exceeded some of the planned results for this year. They intend
to exceed plans in all key categories by the end of the year.
Rogaska Avoids Bankruptcy
Creditors of glassworks Steklarna Rogaska overwhelmingly backed a motion to seek
bankruptcy protection for the debt-ridden company, paving the way for restructuring that
would see the company emerge out of the red
Creditors of glassworks Steklarna Rogaska on Wednesday, 16 November overwhelmingly
backed a motion to seek bankruptcy protection for the debt-ridden company, paving the way
for restructuring that would see the company emerge out of the red.
In line with the restructuring plan, banks, which were the biggest creditors, converted SIT 2bn
(EUR 8.3m) of their claims into ownership shares. The remaining claims of Nova Ljubljanska
banka (NLB), Nova Kreditna banka Maribor (NKBM), Banka Celje and SKB will be paid up
later.
Tomaz Kos, the administrator, said the only danger in the restructuring plan was current
operations, which have to be positive. This means that the company must cut costs and boost
revenues, he stressed.
Rogaska chairman Bojan Bevc said that the company would cut operating costs, promote
sales and reduce the workforce. "The formula is simple and I believe we know it. We have a
real opportunity to make it work," he said.
Steklarna Rogaska filed for bankruptcy protection at the beginning of the year in a last-ditch
attempt to deal with an increasingly dire situation that had seen it run up huge debts with
banks.
At the time, the management estimated Steklarna Rogaska's debts at SIT 12.6bn (EUR
52.6m), including over SIT 9bn (EUR 37.5m) owed to banks.
The shareholders - mostly former and current workers - approved a plan for debt conversion
at the end of August, opening the door for bankruptcy protection.
Slovenian Ski Resorts Expect Good Season
Slovenian ski lift operators expect a good season this year, as they invested a lot of money
into three new ski lifts, artificial snow machines and numerous other projects
Slovenian ski lift operators expect a good season this year, as they invested a lot of money
into three new ski lifts, artificial snow machines and numerous other projects, head of the
national ski lift operators association Ales Ursic said on Wednesday, 16 November.
The biggest investments so far were made in the Kranjska Gora ski resort with a new fourseater ski lift and artificial snow machines worth some SIT 900m (EUR 3.75m).
An even bigger investment was made at Slovenia's highest ski resort, Kanin (W), which is to
get a four-seater, linking the slopes on the Slovenian side with the ones in Italy in a project
worth SIT 1.1bn (EUR 4.59m).
A new ski lift was also built at the Golte (N) ski resort. The new double-seater is worth SIT
240m (EUR 1m).
Other ski resorts mainly invested in housing and artificial snow facilities, with the Pohorje
(NE) ski resort investing SIT 1.1bn (EUR 4.59m) into housing facilities and an expansion of
its artificial snow system.
The one-day ticket prices are to increase substantially from last year. They will range from
SIT 4,400 (EUR 18.37) for the Kobla ski resort to 5,900 SIT (EUR 24.63) for Slovenia's most
expensive ski resort, Kranjska Gora.
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More than 1.4 million skiers hit the slopes in Slovenia in last season.
Volja Mobil Becomes First Mobile Virtual Network Operator
The operator will offer only services, no phones
Slovenia has gotten the first mobile virtual network operator, as Volja mobil launched prepaid services on Thursday, 17 November under the brand Izimobil.
Volja mobil is piggybacking on the network of Mobitel, the country's leading operator, which
has 99% coverage, according to the company's director Metka Marinsek.
The operator will offer only services, no phones. We will try to keep it simple, quality and
cost-efficient, Marinsek told the press.
Volja mobil is currently offering GSM speech telephony, CSD and GPRS data transfer, as
well as SMS and MMS messaging, call waiting and roaming services.
The carrier charges a flat fee of 29 tolars (EUR 0.12) per minute for calls to all mobile and
fixed networks.
Volja mobil has the same owners as Voljatel, the Internet service provider, but is apparently
not connected with the ISP.
Retailer Merkur Posts Upbeat Results
Hardware retailer Merkur posted SIT 112.5bn (EUR 469m) in unaudited revenues, while the
rest of the group added SIT 22.8bn (EUR 95m) in the first nine months of 2005, a 5% increase
in comparison with the same period last year
Hardware retailer Merkur posted SIT 112.5bn (EUR 469m) in unaudited revenues, while the
rest of the group added SIT 22.8bn (EUR 95m) in the first nine months of 2005, a 5%
increase in comparison with the same period last year.
The company's net profits rose 5% as well to SIT 1.85bn (EUR 7.72m). The entire group
meanwhile posted a net profit of SIT 2bn (EUR 8.34m), Merkur's supervisory board learned
at its session on Thursday, 17 November.
End-consumers bought over than 20% more in the same period, including a 16% rise in sales
in Merkur shops, while an increased number of shops in Croatia caused the sales there to
double, compared with the first nine months of 2004.
The supervisory board also agreed on a SIT 3bn (EUR 12.52m) capital increase, to be
financed by issuing 300,000 shares worth SIT 10,000 (EUR 41,74) each.
The board also approved a capital increase for Merkur's subsidiary in Serbia-Montenegro,
Merkur International Beograd, which is to try and reach a target 10% market share in the next
three years.
Tomorrow, Merkur is opening its biggest shop abroad. The EUR 10m investment in Belgrade
extends on almost 10,000 sq. metres.
Krka CEO Awarded by Business Daily
The daily Finance conferred the award to Joze Colaric, the chairman of the drug maker Krka,
at a two-day conference on globalisation in Portoroz
Joze Colaric, the chairman of the drug maker Krka, has received an award for outstanding
achievement in business which is given out by the country's leading financial newspaper.
Colaric's leadership and experience have enhanced the development of not only Krka, but the
entire local area and Slovenia as a whole, Finance said in justifying its decision to award him.
Colaric has worked for Krka since 1982, but has been at the helm only since 1 January 2005.
The daily believes that he played an important role in the change at the top of the company
when the long-time CEO Milos Kovac retired last year.
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"His serenity has convinced the shareholders, buyers and suppliers that Krka will continue to
do even better than before," according to Finance, which believes that the laureate is an
important role model for Slovenian managers.
Colaric can also be credited with the company's wise decision to enter markets in the south
and east of Europe, according to Finance, which conferred the award at a two-day conference
on globalisation in Portoroz on Thursday, 17 November.
The award is given to an individual or an organisation that has made a difference on the
Slovenian business scene, and has at the same time enhanced the prosperity of the entire
society.
The Krka CEO has joined the likes of the speaker of the first democratically elected
parliament France Bucar, Slovenia's Former President Milan Kucan, and Joze Stanic, the
former CEO of home appliances maker Gorenje, etc.
Krka Chief Executive Confident the Share Will Continue to Grow
Joze Colaric, the chief executive of drug maker Krka, believes Krka's shares will continue to
rise in the next five years, buoyed by good results and the impending listing on the London
Stock Exchange, which he believes should involve 15 per cent of all Krka shares
Joze Colaric, the chief executive of drug maker Krka, believes Krka's shares will continue to
rise in the next five years, buoyed by good results and the impending listing on the London
Stock Exchange, which he believes should involve 15 per cent of all Krka shares.
Listing Krka in London will bring the company closer to sources of financing, Colaric told the
business daily Finance on Friday, 18 November, adding that the liquidity of the company's
shares would thereby improve.
Colaric explained the recent surge in Krka's share price by pointing to a rise in the share of
holdings by foreigners, which has grown from 2.9 per cent to 5.6 per cent in two years.
"In the next few years, a lot of patents will expire, and we'll be able to market new, profitable
products. Also, our markets still have room for growth, since the use of drugs in Eastern
Europe isn't as widespread as in Western Europe," he said.
The company is also gearing up to enter the markets of South and Central America, Colaric
explained.
Hardware Retailer Merkur Opens First Store in Serbia
The EUR 10m investment in Belgrade extends on almost 10,000 sq. metres, offering the widest
range of hardware products in Serbia
Slovenia Hardware retailer Merkur opened it first retail outlet in Serbia, the company's
biggest store abroad on Friday, 18 November. The EUR 10m investment in Belgrade extends
on almost 10,000 sq. metres, offering the widest range of hardware products in Serbia.
Serbia is becoming an important market for Merkur, said the head of the company's Belgrade
subsidiary Merkur International Beograd, Zoran Cvijovic. The subsidiary, established four
years ago, is achieving good results, he added.
Entering the Serbian market, Merkur intends to cooperate with the Serbian producers and
include their products into its sales programme, Merkur CEO Bine Kordez said at the
opening. Moreover, the shop, which employs 70 people, will also work with local suppliers.
The new store in Belgrade is only the beginning of Merkur's expansion in Serbia. It also
intends to open an outlet in Novi Sad next year, and another one in Belgrade in 2007,
investing a total of EUR 50m in Serbia-Montenegro.
As the countries of former Yugoslavia are the most important market for Merkur, the
company would also like to increase the number of outlets in Croatia, Bosnia-Herzegovina
and Macedonia, thus reaching a 10% market share in the next three years.
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Merkur posted EUR 469m in sales, while the rest of the group added EUR 95m in the first
nine months of 2005, a 5% increase year-on-year. The company's net profits rose 5% as well
to EUR 7.72m. The entire group meanwhile posted a net profit of EUR 8.34m.
Companies in NE Slovenia Push for Arrival of Ryanair
Maribor is trying to get three Ryanair routes: daily flights to London Stansted and two flights
a week to Barcelona and Frankfurt each
Eight companies from northeastern Slovenia have funded an association with a view to bring
Irish budget carrier Ryanair, and possibly other airlines, to the Maribor airport as soon as
possible.
Maribor is trying to get three Ryanair routes: daily flights to London Stansted and two flights
a week to Barcelona and Frankfurt each.
The founders include tourist companies Terme 3000, Zdravilisce Radenci, Terme Maribor,
Terme Dobrna, Grand Hotel Sava, Terme Olimia, the Pohorje Sports Centre and Aerodrom
Maribor.
Head of the Maribor airport Silvo Ambroz said at the signing on Thursday, 17 November that
the first plane was to land there in the beginning of next year. However, he received a
response from the Transport Ministry, which hampers the plans.
Ambroz told STA that the Transport Ministry set conditions that could not be complied with.
"If the state does not take a different standpoint, I am afraid the project will fall through. We
explained the conditions under which the airport might survive, but the ministry failed to
consider them," he said.
Ambroz said he thinks after over three years of negotiations, the talks would have to evolve
on a higher level, because it was improper to have one single state secretary decide the fate of
an entire region's economic development.
The company Aerodrom Maribor, owned by Prevent, is still waiting to sign the contract
drafted a while ago that would regulate the Maribor airport's relations with the state as a
partial owner of the airport infrastructure.
Mercator Says 500 Jobs to Go Because of Sunday Shopping Law
Slovenia's largest grocer Mercator expects that its sales will drop between 4% and 8%
because of amendments to the trade act that will limit shop opening hours on Sundays
Slovenia's largest grocer Mercator expects that its sales will drop between 4% and 8%
because of amendments to the trade act that will limit shop opening hours on Sundays. The
company has warned that it will have to cut 500 jobs as a result.
According to the company, the closure of its shops on Sundays would cause a SIT 12bn (EUR
50m) to 24bn (EUR 100m) fall in the company's revenues and in turn, 500 layoffs.
The amendments, which will greatly restrict Sunday opening hours as of 2006, will also cause
a drop in revenues for the entire Slovenian food sector, Mercator warned in its press release.
The government on Thursday, 17 November adopted the proposed amendments to the trade
act in line with the outcome of a referendum held in 2003. Parliament must vote on the law
now.
Shops offering essential food products will be allowed to open ten Sundays a year, with all
other shops having to be closed on Sunday.
Only stores smaller than 200 sq. metres and located at filling stations, hospitals, hotels,
airports, border crossings and train/bus stations will be allowed to open without limitations on
Sunday.
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Lasko Says Jankovic Dismissal Legal and Legitimate
Pivovarna Lasko, which recently bought 18% of Mercator, said in a press release that the
move corresponded with the recent changes in Mercator's ownership structure
The management of beverage group Pivovarna Lasko said on Friday, 18 November that the
dismissal of Zoran Jankovic as the chairman of Slovenia's largest grocer Mercator was in
accordance with the law as well as "legitimate" given the recent changes in the ownership of
Mercator.
Pivovarna Lasko, which recently bought 18% of Mercator, said in a press release that the
move corresponded with the recent changes in Mercator's ownership structure.
Furthermore, Lasko's management stated that the supervisory board, which dismissed the
long-time Mercator boss on Tuesday, 15 November, answers to the company's shareholders
and not to its management.
Report Suggests State's Presence in Companies Still Too Strong
A report on corporate governance in companies listed on the Ljubljana Stock Exchange
(LJSE) has found that the role of the state in governance is still too strong, be it directly or
through the state-controlled Restitution Fund (SOD) or Pension Fund Management (KAD)
A report on corporate governance in companies listed on the Ljubljana Stock Exchange
(LJSE) has found that the role of the state in governance is still too strong, be it directly or
through the state-controlled Restitution Fund (SOD) or Pension Fund Management (KAD).
The state had an average share of 24% in the 28 companies quoted on the official market,
with the stake as high as 30% in 10 of the companies, the report says, quoting data for the end
of 2004.
The state's influence is even greater if the stakes of state-owned insurer Zavarovalnica triglav
and Nova Kreditna banka Maribor (NKBM) are taken into account: in the biggest listed
companies, their combined stakes ranged from 25% to 48% at the end of last year.
Given the dispersion of the remaining stakes, this means that the state has actual control and
the opportunity to influence the companies' business and strategic decisions, says the report,
published on the LJSE website.
The authors deem this an "inherently unhealthy relationship, which gives the people in power
direct control and opens the door to political manipulation in the majority of big Slovenian
companies."
"In addition to the fact that the state is a sub-optimal owner, this leads to intransparent crossownership under the patronage of politics...and general meddling of the state in corporate
affairs," the report says.
This leads the authors to the recommendation that the state should urgently withdraw from
company ownership. "The state should define which investments are strategic and turn these
into transparent, direct ownership shares," the report says, urging for the sell-off all other nonstrategic assets.
In the short term, KAD and SOD should reduce their combined stakes to 10%. When SOD is
eventually shut down, KAD should become a portfolio investor in domestic and foreign
securities, like foreign pension funds are.
As a portfolio investor, KAD should also tone down its activities and refrain from appointing
its representatives to supervisory boards, the report concludes.
The report has been drafted by economists Borut Bratina, Aleksandra Gregoric, Katarina Zajc
and Joze P. Damijan, currently the head of the government reform committee.
Merkur Plans to Increase Sales at Home and Abroad, CEO Says
According to Kordez, the company plans to pour some EUR 300m in the next five years into
opening new outlets and marketing
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Hardware retailer Merkur, one of Slovenia's largest companies plans to significantly increase
sales at home and on the markets of the former Yugoslavia, the company's CEO Bine Kordez
told STA.
According to Kordez, the company plans to pour some EUR 300m in the next five years into
opening new outlets and marketing. Such large-scale investment makes it necessary for
Merkur to seek fresh capital injections, both at home and abroad, Kordez said.
The company's supervisory board last week endorsed a management proposal to increase the
number of company shares by 25%, thereby providing SIT 10bn (EUR 41.74m) of fresh
capital.
Kordez hopes that the December's meeting of company shareholders will support the plan as
well. "We will first give the investment chance to the existing owners, however, we want for
new owners to chip in as well, as more owners is always a good idea for a stock company,"
Kordez said.
So far the company has held talks with Slovenian companies, while they are to meet potential
foreign investors in London in the next week. "We hope and expect to attract foreign
companies," Kordez explained.
He added that the ownership structure of Merkur is similar to the one that was until recently
present in Mercator, so he is naturally interested in the recent events that took place in
Slovenia's largest grocer.
"I think it was not a good idea to dismiss Jankovic [Mercator's former CEO], neither for
Mercator nor for Slovenia...the owners should first find somebody who is a better manager
than him and only then initiate the replacement", he believes.
Merkur has so far been successful in its endeavours on the markets in the former Yugoslavia.
Besides being firmly present in Croatia, it opened its first outlet in Serbia-Montenegro on
Friday, 18 November. Kordez said that the company intends to open six or seven more stores
in Serbia-Montenegro in the next years and aims for a 10% market share.
According to the recently posted nine-month results, the Merkur group made SIT 135.3bn
(EUR 564m) in unaudited revenues, a 5% increase in comparison with the same period last
year.
SLOVENIA IN BRIEF
Bosnia-Herzegovina Gives Demining Fund US$ 2.2m
The government of Bosnia-Herzegovina approved on Tuesday, 15 November a US$ 2.2m
donation for the International Trust Fund for Demining and Mine Victims Assistance (ITF)
for a demining and mine victims centre in Bosnia-Herzegovina. The agreement on the
donation was signed in Sarajevo by the Bosnian Civil Affairs Minister Safet Halilovic and the
director of the Slovenian-run fund Dorijan Marsic, the ITF said.
Slovenia to Seek Renewed Arbitration on LB Debt
Foreign Minister Dimitrij Rupel has told the parliamentary foreign policy committee that
Slovenia would seek renewed arbitration on the debt of the defunct bank Ljubljanska banka
(LB) to Croatian savers. Speaking in parliament on Wednesday, 16 November, Rupel said he
had proposed arbitration on this issue in a recent letter to Croatian FM Kolinda GrabarKitarovic. However, he also recalled how the two countries had agreed to seek advice on the
matter from the International Monetary Fund (IMF) in 1999, yet Croatia never submitted the
necessary documents.
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Drnovsek and Solyom Call for Affirmative Action for Minorities
Slovenian President Janez Drnovsek and his Hungarian counterpart Laszlo Solyom have
called for affirmative action in both countries to make sure that the Hungarian minority in
Slovenia and Slovenia's in Hungary survive and prosper. Speaking to the press after an
informal meeting on Wednesday, 16 November, the presidents also proposed the appointment
of a joint forum for minorities, featuring representatives from all walks of life.
Rupel Attends CoE Ministerial; Meets with Serbia-Montenegro FM
FM Dimitrij Rupel, the OSCE chairman-in-office, on Wednesday, 16 November took part in
the meeting of the Council of Europe's Committee of Ministers in Strasbourg. After the
meeting, he held talks with his counterpart from Serbia-Montenegro, Vuk Draskovic, the
Foreign Ministry has said.
Government Sends Requested Info on Mercator Sale to the EU
The government has sent information about the disputed sale of Mercator to the European
Commission, which requested information about the sale of stakes in the retailer by two staterun funds, the Economics Ministry confirmed on Wednesday, 16 November.
Survey: Government Backers, Opponents Almost Tied
The percentage of those opposing government policy climbed 3 percentage points in
November to 43% to inch closer to the number of those who support government policy,
which stood at 46% (unchanged compared to October), November's Politbarometer survey
shows. At the same time, the ruling Slovenian Democrats (SDS) lost two percentage points,
with their support dropping to 23%. The leading opposition Liberal Democrats (LDS),
meanwhile, gained one percentage point, improving their standing to 15%.
Competition Watchdog Stresses Role of Regulator in Telecommunications
The electronic communications sector needs a good regulator, head of the Competition
Protection Office Andrej Plahutnik told the participants of the third Days of European Law
conference in Kranjska Gora on Friday, 18 November. Plahutnik pointed out that limited
competition and an unbalanced market structure make the existence of the Agency for Post
and Electronic Communications, Slovenia's telecommunication watchdog, a must for the
country. At the same time, he warned against excessive regulation, which could stifle
competition.
Avgust Cernigoj's Yet Unseen Prints on Display in Lipica
The 20th anniversary of the death of Avgust Cernigoj (1898-1985), who is considered a
pioneer of Slovenian graphic arts, is to be marked with an exhibition of his prints. The show,
which opened on Thursday, 17 November in the village of Lipica, is to feature his works from
the 1970s that have not yet been publicly displayed.
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