Slovenia Business Week no. 50, December 12, 2005
Table of Contents:
HEADLINES ............................................................................................................................. 3
D&B Upbeat about Slovenian Economy ............................................................................... 3
PM Pleased with Slovenia's Overall Condition...................................................................... 3
Krka, Gorenje Among Top 700 R&D Companies in Europe ................................................ 4
INTERNATIONAL COOPERATION ...................................................................................... 5
Russia Important Market for Slovenian Companies, CCIS Panel Says ................................. 5
Upgraded Slovenia-Croatia Railroad Border Crossing Opens ............................................... 5
OSCE Ministerial Ends without Ministerial Declaration ....................................................... 6
New Sudanese Ambassador Presents Credentials to Drnovsek ............................................. 7
Croatian FM Receives Slovenian Ambassador's Credentials ................................................ 7
Ambassador Zbogar Accredited also to Mexico .................................................................... 7
Slovenia Would Like to See WTO Talks Completed in 2006 ............................................... 8
EUROPEAN UNION ................................................................................................................. 9
Cukjati Discusses EU Presidency in London ......................................................................... 9
Borg and Lukacic Discuss Slovenian Fishing ........................................................................ 9
Commission Drafting New Fishing Rules for Croatia and Slovenia ..................................... 9
Jansa: Slovenia for Granting Macedonia Candidate Status ................................................. 10
Jansa Labels British EU Spending Plan Proposal Acceptable ............................................. 10
EU Affairs Committee Confirms REACH Proposal ............................................................ 11
Slovenia Supports Joint EU Stockpile of Antiviral Drugs ................................................... 12
Slovenia Hands Out EUR 250m in State Aid in 2004 ......................................................... 12
LEGISLATION ........................................................................................................................ 13
SD Wants Worker Shareholding in One-Tier Management System .................................... 13
Government Confirms Guidelines for Talks on New Social Agreement ............................. 13
Government Decrees Quotas for Disabled Workers at Companies ..................................... 13
Income Tax Act Amendments Passed Once Again ............................................................. 14
STATISTICS/FORECASTS .................................................................................................... 15
Foreign Debt at EUR 18.33bn in September........................................................................ 15
Employment Service Optimistic .......................................................................................... 15
Factory-Gate Prices Up 0.1% from October ........................................................................ 15
GDP up 3.7% in Q3.............................................................................................................. 16
Industrial Output Up 2.8% Y/Y in October ......................................................................... 16
October Trade Gap Lower than in September...................................................................... 16
FINANCE................................................................................................................................. 18
Government Appoints New State Secretary at Prime Minister's Office .............................. 18
Government Updates 2005-2008 Convergence Programme ................................................ 18
Block Deals Dominate November Trading on LJSE ........................................................... 18
Finance Minister Says 2006 Budget Bill Is Good ................................................................ 19
NLB Supervisors Back Purchase of West East Bank........................................................... 19
Ljubljana Stock Exchange .................................................................................................... 20
Foreign Exchange ................................................................................................................. 20
BRANCH INFORMATION .................................................................................................... 21
Podobnik Calls for Speedy Action on Climate Change ....................................................... 21
New ICT Test Centre Opens in Bled ................................................................................... 21
COMPANIES ........................................................................................................................... 22
Pfizer Lawsuit against Krka Rejected .................................................................................. 22
Mobilkom Tops Up Stake in Simobil .................................................................................. 22
Engrotus Boosts Sales by 25% ............................................................................................. 22
Zito's Restructuring Proves Successful, CEO Says .............................................................. 23
Discount Chain Hofer to Invest EUR 100m in Slovenia in 2005 ........................................ 23
Slovenian Pipe Maker Moving Production to Bosnia .......................................................... 24
Droga Kolinska Lays Foundation Stone for Pate Factory in Sarajevo ................................ 24
Emona Obala Group Expects to End 2006 in the Black ...................................................... 24
SLOVENIA IN BRIEF ............................................................................................................ 25
Drnovsek and Lavrov Discuss OSCE, SE Europe and Bilateral Ties .................................. 25
Jansa and Drnovsek Discuss Balkans with EU Commissioner ............................................ 25
Drnovsek Discusses Potential Contacts with South Korean FM ......................................... 25
FM Rupel Holds Bilateral Talks on the Margins of the OSCE ............................................ 25
Erjavec Meets Colleagues from Macedonia, Albania in US ................................................ 25
Jansa Nominates Damijan Reform Minister without Portfolio ............................................ 25
Rupel Meets Kazakh, Kyrgyz and Georgian Counterparts .................................................. 25
Defence Minister Meets US Defence Secretary Rumsfeld .................................................. 25
Government Confirms Bill Awarding Rights of Asbestos Victims ..................................... 26
2
HEADLINES
D&B Upbeat about Slovenian Economy
Dun&Bradstreet's (D&B) December report keeps Slovenia firmly at the top in the region,
with the country's ratings still bearing a growth sign
Dun&Bradstreet's (D&B) December report keeps Slovenia firmly at the top in the region,
with the country's ratings still bearing a growth sign.
The report points to Slovenia's relatively good score on Transparency International's
Corruption Perceptions Index. The score reflects the relatively good business environment in
the country, the report says.
D&B goes on to say that the Slovenian government adopted the Reform Programme for the
Implementation of the Lisbon Strategy in Slovenia in November after asking for an extension
so that the document could be brought in line with the reform proposals drafted by the
government reform committee.
Reviewing the reform proposals, the rating firm says that the streamlining of the tax code is
among the most important measures being proposed by the reform team. Apart from flat tax,
D&B points to the gradual phasing out of payroll tax as a key measure for greater economic
efficiency.
According to the report, concerns that the "removal of the payroll tax would fuel wage
inflation are probably overdone, as competitive market pressures force firms to keep costs
low".
PM Pleased with Slovenia's Overall Condition
Inflation rate meet the euro changeover criteria, economic growth will reach 4% by the end
of the year and Slovenia's international position is better than ever, Prime Minister Janez
Jansa assessed Slovenia's state of affairs after his first year in office
Inflation rate meet the euro changeover criteria, economic growth will reach 4% by the end of
the year and Slovenia's international position is better than ever, Prime Minister Janez Jansa
assessed Slovenia's state of affairs after his first year in office.
Jansa told the press on Friday, 9 December that the government and the central bank managed
to keep inflation below predicted levels, despite a growth in oil prices. Slovenia was thus able
to "meet the final Maastricht criteria for the euro changeover", he said.
He added that the country's economy will grow by 4% in 2005, which is a "good result in
comparison with similarly developed EU countries".
Slovenia was also successful in chairing the OSCE and has moreover established the
necessary infrastructure in preparations for its stint as the EU chair in the first half of 2008.
The country's most important achievement on the domestic scene in 2005 was passing
Slovenia's Development Strategy. "This document allowed us to successfully draft the
framework of the economic and social reforms to boost the country's economy," Jansa added.
The government also improved the system of phasing the EU funds with the country rising
from the last to third place among the EU's newcomers in drawing the money. Jansa said that
Slovenia will "almost surely" be a net receiver by the end of 2005.
The PM also stressed that for "the first time in Slovenia's independence" the number of civil
servants will drop by the end of this year, but mentioned no figures.
He was pleased with the number of bills drafted by the government and the measures it has
taken. He especially stressed the new companies bill, the doubling of development funds for
the business sector, tax relief for R&D and corrections of the tax legislation.
3
The government has also simplified a large number of administrative procedures for the
citizens as well as reduced the prices of such procedures, and taken many measures to
improve the educational system.
Krka, Gorenje Among Top 700 R&D Companies in Europe
Drug maker Krka and home appliance group Gorenje are among the top-700 European
companies in terms of funds spent on research and development in 2005
Drug maker Krka and home appliance group Gorenje are among the top-700 European
companies in terms of funds spent on research and development in 2005.
Krka, which spent EUR 35m in 2005 for R&D, is ranked 242nd in Europe. Meanwhile,
Gorenje is 685th, spending EUR 5m for research and development.
According to the European Commission, the top 700 European spenders on R&D invested a
combined EUR 102bn for the purpose.
This is well short of the top 700 global spenders on R&D, which invested EUR 212bn.
The data is reason for concern, European Commissioner for Science and Research, Slovenia's
Janez Potocnik, said on Friday, 9 December in Brussels.
According to him, growth in R&D spending among the top 700 investors in Europe stood at a
mere 0.7%; global growth was nearly 7%.
Moreover, Potocnik stressed that EU spending on R&D slipped from 1.92% to 1.9% of GDP
in 2005. Europe therefore still trails well behind Japan (3.15% of GDP) and the US (2.59%) in
this field.
4
INTERNATIONAL COOPERATION
Russia Important Market for Slovenian Companies, CCIS Panel Says
Russia's exports and its market are expanding, which is a great opportunity for Slovenia's
small and medium businesses
Russia's exports and its market are expanding, which is a great opportunity for Slovenia's
small and medium businesses. However, they are still not using it as much as they could, Esad
Ajeti of the Slovenian Embassy in Moscow told a Chamber of Commerce and Industry's
(CCIS) panel on Tuesday, 6 December.
Russia is an important market for Slovenian companies, for they generated a total of US$
520m in 2004 there, the representative for trade affairs at the embassy told the panel, which
focused on bringing Slovenia's businesses closer to the Russian market.
The advantages of trade between Slovenia and Russia are kindred mentality and good political
relations. Opportunities lie in the market, such as large long-term sales, cheap labour force,
and Russia's stable economic growth, Ajeti said.
However, there are ever more top-level Western companies there, thus, the smaller businesses
need to find a market niche. Ajeti sees opportunities in construction, the automotive industry,
chemistry, pharmacy, telecommunications, tourism, banking, transport and real estate.
Slovenia's large companies have used these opportunities well, with drug maker Krka the
leading exporter to Russia. It is followed by telecommunications company Iskratel, chemical
groups Helios and Belinka, and home appliance maker Gorenje.
Ajeti also gave the participants advice on how to start and successfully conduct a business in
Russia. He stressed the importance of personal contact as well as the knowledge of Russian
culture and language.
Upgraded Slovenia-Croatia Railroad Border Crossing Opens
Public Administration Minister Gregor Virant said upon its inauguration that the crossing
fully complies with strict EU Schengen standards on border security
An upgraded railroad border crossing between Slovenia and Croatia in Dobova (SE) opened
on Tuesday, 6 December, after three years of construction.
Public Administration Minister Gregor Virant said upon its inauguration that the crossing
fully complies with strict EU Schengen standards on border security.
He added that the SIT 5bn (EUR 20.86m) project was mainly funded from the Phare
programme, with the works being completed in due time.
Local community interests were also taken into account while constructing the new facility,
Virant said. The facility houses police, customs and railroad personnel.
Transport Minister Janez Bozic meanwhile said that the border crossing represents an
important point in the existing international transport corridors.
The minister also expressed a wish that Croatia's EU entry would make the border crossing
redundant in the near future.
Slovenia now has a total of six Schengen-compliant border crossings: the Ljubljana
International Airport, the port of Koper, the road border crossings at Jelsane, Gruskovje and
Obrezje and the Dobova railroad crossing.
After joining the EU in May 2004, imports of goods from non-EU countries can only be
carried out at these border crossings, which accommodate all necessary services, including
relevant inspection teams.
5
OSCE Ministerial Ends without Ministerial Declaration
Instead, OSCE chair Dimitrij Rupel just circulated the chairman's statement, which is not
politically binding
The OSCE ministerial council did not adopt a ministerial declaration on Tuesday, 6
December. Instead, OSCE chair Dimitrij Rupel just circulated the chairman's statement,
which is not politically binding.
The ministerial did however adopt the road-map for a reform of the organisation, which was
the subject of intense debates at the Ljubljana ministerial.
Rupel said in his closing speech it was unfortunate that after six years the organisation was
still debating the 1999 Istanbul commitments on Russia's pullout of troops from Moldova.
At a press conference following the ministerial, he said the absence of a declaration is a result
of consensus-based decision-making in the OSCE, as there was a "super-qualified majority"
in favour of the declaration, but no consensus.
However, he pointed out that this year progress has been made in many countries in terms of
"leaders genuinely working to find ways to increase human security."
Rupel praised progress in Ukraine and Kyrgyzstan and said there were good results in
Nagorno-Karabakh and Kosovo, but he was critical of the "back-pedalling on reform" in
Uzbekistan. "We should work with our Uzbek partners to narrow the divide which currently
stands between us."
Rupel also voiced regret that declarations on Kosovo and Moldova had not been adopted. He
said there were discords over whether the OSCE should intervene in the process at all.
In the end, he said, the Kosovo statement was eventually so watered-down "nobody really felt
passionate about it any more."
Despite the absence of a ministerial declaration, Russian Foreign Minister Sergey Lavrov
meanwhile said he was pleased that the ministerial embarked on a reform process.
Russia has been the loudest backer of reforms as it believes the OSCE has got off track in its
operations. In its views, reforms would strengthen the organisation and make it more
transparent.
Speaking at a press conference after the ministerial, Lavrov labelled the debate on the
Moldova pullout that brought down the ministerial declaration an "artificial issue".
According to him, Russia has made it clear that it is prepared to commit to a pullout of its
troops from Moldova. He added that this was subject to the conclusion of negotiations on the
withdrawal between Russia and Moldova that were suspended in 2003.
Meanwhile, US Ambassador at the OSCE Julie Finley said that it was key that the ministerial
declaration state regret about the lack of progress in the withdrawal of Russian troops from
Moldova. She regretted that it was impossible to reach consensus on a ministerial declaration
with such wording.
The Slovenian chairmanship thus only circulated the chairman's statement, which roughly
sums up the proposed content of the declaration but is not politically binding.
The statement says the OSCE must "continue to adapt in order to meet evolving security
challenges and to strengthen the organisation's functioning," whereby the ministers
acknowledge the positive contribution of the high-level consultations in that regard.
Moreover, the statement says the OSCE's comprehensive approach to security across its
politico-military, economic and environmental, and human dimensions, is as relevant as ever.
The ministers also voice the conviction that "the OSCE's institution- and capacity-building
expertise is important in assisting participating countries to effectively uphold the rule of law,
including in combating transnational organised crime and trafficking in human beings, drugs
and arms."
The statement reiterates the ministers' determination to better utilise the potential of the OSCE
in the economic and environmental dimension of security.
6
At the same time, it reaffirms that respect for human rights and fundamental freedoms,
democracy and the rule of law is the essential element of the OSCE's comprehensive concept
of security.
New Sudanese Ambassador Presents Credentials to Drnovsek
The Sudanese ambassador told President Drnovsek that Sudan sees Slovenia as an important
partner within the EU
The new Sudanese Ambassador to Slovenia Elamin Galal Eldin, who is based in Vienna,
presented his credentials to President Janez Drnovsek in Ljubljana on Friday, 9 December, the
president's office said in a press release.
The Sudanese ambassador told Drnovsek that Sudan sees Slovenia as an important partner
within the EU. He hopes that the EU will continue to participate in solving the severe
economic and social problems in Sudan.
Drnovsek was interested in how the problems are tackled in the Sudanese region of Darfur.
He also expressed Slovenia's readiness to cooperate with the international community in its
bid to bring stability to the country.
The president moreover expressed a wish for the bilateral relations between the two countries
to develop further, the press release also reads.
Croatian FM Receives Slovenian Ambassador's Credentials
The new Slovenian Ambassador to Croatia Milan Orozen Adamic presented his credentials to
Croatian Foreign Minister Kolinda Grabar-Kitarovic
The new Slovenian Ambassador to Croatia Milan Orozen Adamic presented his credentials to
Croatian Foreign Minister Kolinda Grabar-Kitarovic on Friday, 9 December in Zagreb, the
Croatian Foreign Ministry said today.
According to the ministry, Orozen Adamic and Grabar-Kitarovic stressed friendly relations
between the two countries during the ambassador's introductory visit.
They added that open issues between the two countries should be solved through dialogue and
in the spirit of good-neighbourly relations.
Grabar-Kitarovic also thanked the ambassador for Slovenian support for Croatia's efforts in
EU accession. She believes that successful bilateral cooperation will continue in the future.
Ambassador Zbogar Accredited also to Mexico
Since Slovenia covers Mexico from the Embassy in Washington, the country is considering
opening at least an honorary consulate in Mexico
Slovenian Ambassador to the US Samuel Zbogar presented his letters of credence to Mexican
President Vicente Fox in Mexico City on Friday, 9 December, thus officially assuming the
post of ambassador to Mexico.
Zbogar, who is based in Washington, told the STA that he had extended to Fox an invitation
of Slovenian President Janez Drnovsek to visit Slovenia. The visit could take place in May,
when the Austrian capital of Vienna hosts an EU-Latin America summit.
Zbogar moreover told Fox that, with Mexico having a free trade agreement with the US and
the EU, an increasing number of Slovenian companies are interested in doing business with
Mexican businesses.
Since Slovenia covers Mexico from the Embassy in Washington, the country is considering
opening at least an honorary consulate in Mexico. This Latin American country, on the other
hand, covers Slovenia from its Embassy in Vienna.
Zbogar also took this opportunity to outline to Fox Slovenia's OSCE presidency in 2005 and
the country's integration into the EU and NATO.
7
The Mexican president, meanwhile, invited Slovenian officials to attend a world summit on
water management which is to take place in Mexico in March.
Slovenia Would Like to See WTO Talks Completed in 2006
Slovenia would like to see WTO talks successfully completed by the end of 2006, Mojca
Jazbinsek Volk of the Economics Ministry told STA prior to a Hong Kong WTO ministerial
Slovenia would like to see WTO talks successfully completed by the end of 2006, Mojca
Jazbinsek Volk of the Economics Ministry told STA prior to a Hong Kong WTO ministerial
which begins on 13 December.
From Slovenia's point of view, "industrial products and services are two of the most important
issues to be debated in Hong Kong", said Jazbinsek Volk.
However, she regretted a lack of initiatives from other negotiating partners which would
secure progress in these two areas.
The acting head of the directorate for foreign economic relations said Slovenia expects to
benefit most from the opening up of the Brazilian, Chinese and Indian markets.
Jazbinsek Volk added that while EU members managed to harmonise their positions on the
latest EU proposal on agriculture, the offer of Trade Commissioner Peter Mandelson is
incomplete, as it brings no solution to the liberalisation of sensitive products.
According to Jazbinsek Volk, Slovenia is one of those EU members which advocate different
treatment of developing countries. The reason for such a stance is the very big differences in
development in this group of countries.
8
EUROPEAN UNION
Cukjati Discusses EU Presidency in London
According to Cukjati, the aim of his visit was to get acquainted with problems the UK has
faced during its EU presidency ahead of Slovenia's term, coming up in 2008
Speaker France Cukjati on Tuesday, 6 December met his British counterpart Michael Martin
as part of his two-day official visit to London.
According to Cukjati, the aim of his visit was to get acquainted with problems the UK has
faced during its EU presidency ahead of Slovenia's term, coming up in 2008.
Slovenia's delegation was especially interested in how the British parliament chooses the
topics for EU-related discussions, Cukjati told STA. He said that some things are new for
Slovenia, however, they cannot be directly copied to the Slovenian parliament.
Martin stated that as an observer, he perceives the UK EU presidency as an extremely
difficult task for the government, which has to seek unity within the EU and simultaneously
defend the interests of its own country, Cukjati's delegation said in a press release.
Cukjati underscored that Slovenia is interested in the EU becoming economically more
powerful, and to include former communist countries, such as Romania and Bulgaria.
During his two-day visit, Cukjati also met the leader of the House of Lords, Valerie Ann
Amos, and representatives of the British parliament's group for Slovenia.
Borg and Lukacic Discuss Slovenian Fishing
Agriculture Minister Marija Lukacic received EU Commissioner for Fisheries and Maritime
Affairs Joe Borg for talks focusing on new EU fisheries regulations and major challenges
facing the Slovenian fishing industry
Agriculture Minister Marija Lukacic received on Thursday, 8 December in Ljubljana EU
Commissioner for Fisheries and Maritime Affairs Joe Borg for talks focusing on new EU
fisheries regulations and major challenges facing the Slovenian fishing industry.
The pair also exchanged views on the implementation of the common European fisheries
policy and the adoption of a new regulation on fishing in the Mediterranean, the press release
by the European Commission's Representation Office in Slovenia said.
"As a maritime country, Slovenia is interested in forming a common fisheries policy in the
Mediterranean," Lukacic said.
Borg, who pointed to the need of ensuring a stable fishing situation in the Mediterranean, got
acquainted with the challenges Slovenian fishermen are facing.
Slovenia is hoping to draw EUR 19m from the European Fisheries Fund address between
2007 and 2013. According to Lukacic, the money is to be invested in the renewal of the
obsolete Slovenian fishing fleet and in the costs connected with the implementation of the
common policy.
Commission Drafting New Fishing Rules for Croatia and Slovenia
European Commissioner for Fisheries and Maritime Affairs Joe Borg discussed the
implementation of EU fisheries policy and the Slovenia-Croatia agreement on border
transport and cooperation (SOPS) with Slovenian officials
European Commissioner for Fisheries and Maritime Affairs Joe Borg discussed the
implementation of EU fisheries policy and the Slovenia-Croatia agreement on border
transport and cooperation (SOPS) with Slovenian officials on Thursday, 8 December.
9
He said that the European Commission is drafting implementation rules for the part of the
SOPS which refers to fisheries. "We are still discussing the details, however, both Croatia and
Slovenia are ready for dialogue," he told a press conference in the coastal town of Izola.
With these rules, Brussels could help improve relations between Croatian and Slovenian
fishermen, who were involved in numerous incidents, especially in summer months, due to
the unresolved issue of the maritime border between the two countries.
According to Slovenian Agriculture Minister Marija Lukacic, Borg agreed with her that an
independent fund for fishing policy is needed in order to make the fishing industry more
competitive. Slovenia expects to receive EUR 19m within the common fisheries policy, she
told the press.
They moreover agreed that the Slovenian fishing fleet must be modernised, with Borg
promising to help. Lukacic suggests that new, more environment-friendly engines should be
provided when it is not possible to repair the vessels.
Borg also met representatives of Slovenian fishermen for talks on how the European
Commission could help in fish farming, the development of the industry and marketing. The
commissioner pointed to the need of motivating more young people for fishing.
Loredano Glavic, one of the representatives told STA after meeting Borg that the
commissioner reassured them that most of their problems should be solved during the EU's
next budgetary period.
According to the Slovenian Ministry of Agriculture, Food and Forestry, there are around 400
Slovenians working in the fishing sector.
Jansa: Slovenia for Granting Macedonia Candidate Status
PM Janez Jansa called on his British counterpart Tony Blair to press for Macedonia getting
the status of EU candidate at the EU summit which is to take place on 15 and 16 December
PM Janez Jansa on Thursday, 8 December called on his British counterpart Tony Blair to
press for Macedonia getting the status of EU candidate at the EU summit which is to take
place on 15 and 16 December.
Jansa urged Blair, whose country is currently chairing the EU, to give the status to the
southernmost country of the former Yugoslavia, in line with the recent recommendation of the
European Commission.
This topic is currently not on the summit's agenda, however granting such a status "would
send a positive signal to the entire region", Jansa told the press after meeting Blair in London.
"Macedonia is best placed among the Balkan states that do not have this status yet," Jansa
said.
"To give it such a status would boost the endeavours of those who try to uphold European
standards. It would also send a positive signal to Bosnia-Herzegovina and SerbiaMontenegro," Jansa added.
The prime minister furthermore stressed that European prospects are the only positive
alternative for the Balkan countries.
Jansa Labels British EU Spending Plan Proposal Acceptable
The British proposal for the 2007-2013 EU spending plan is an acceptable compromise if
changes to some of most important segments, such as CAP and development, are made, PM
Janez Jansa told the press in London after meeting British PM Tony Blair
The British proposal for the 2007-2013 EU spending plan is an acceptable compromise if
changes to some of most important segments, such as CAP and development, are made, PM
Janez Jansa told the press in London on Thursday, 8 December after meeting British PM
Tony Blair.
10
Provided the proposal does not change significantly, Slovenia's net position is close to its net
position from the budget proposal which Luxembourg presented at the June summit, Jansa
said, adding that this position is relatively favourable.
The new compromise envisages less money for the development of rural areas, yet, the
amount of cohesion money will stay almost the same, Jansa said. Thus, with a proper
combination of both, we will be able to carry out the planned programmes if the budget is
adopted in December, he added.
Slovenia's PM pointed out that although the new compromise cuts cohesion funds for the new
EU members by EUR 14bn, it extends the fund phasing period from two to three years. It
moreover enables the newcomers to use the aid for housing, which is a novelty, he added.
The pair shared a view that no better proposal would be drafted, not even in the next six
months. Thus, it is better to reach an agreement as soon as possible, and then focus on other
important topics, Jansa is convinced.
However, Jansa admitted that he is somewhat disappointed with the current budget proposal
because it does not follow certain strategies which the EU has already adopted, especially the
Lisbon Strategy.
According to preliminary calculations based on the British proposal, Slovenia would receive a
net sum of 0.88% of GNP. This is 0.01% up over the previous proposal presented by
Luxembourg at the June EU summit which would give it 0.87% of GNP.
Slovenia set itself a goal in June to receive in the next EU budgetary period double the
amount it is getting in the 2004-2006 period, which on average amounts to 0.36% of GNP.
Britain's proposal slashes spending from June's Luxembourg proposal from 1.06% to 1.03%
of GNP, that is from EUR 871bn to EUR 846.7bn. The biggest cut (9% or EUR 14bn) was
made in cohesion funds for the bloc's ten new member states.
EU Affairs Committee Confirms REACH Proposal
Slovenia supports the proposal, as the British presidency made big progress in improving the
directive, which now offers greater health protection and at the same time promotes
competitiveness
The parliamentary EU affairs committee confirmed on Friday, 9 December an EU draft
directive on the registration and authorisation of chemical substances (REACH).
Slovenia supports the proposal, as the British presidency made big progress in improving the
directive, which now offers greater health protection and at the same time promotes
competitiveness, committee's chair Anton Kokalj said.
Kokalj, speaking to the press after the committee's session, added that the new REACH
proposal takes into account Slovenian and Maltese proposal on reducing the number of
chemicals that need to be registered, which "will reduce expenses of Slovenian companies".
In the end of November, the committee called on the government to invoke a "parliamentary
restraint" motion at an EU Competitiveness Council session because it wanted to discuss
REACH and not just confirm the government positions.
With today's endorsement, the government has the green light at the next session of the EU
Competitiveness Council, which will debate REACH on Tuesday.
The committee also discussed preparations for the next EU summit, which is to take place on
15 and 16 December in Brussels. The summit's agenda will be topped by the EU spending
plan for 2007-2013, as proposed by the British EU presidency.
The committee was given the calculations on the consequences of the proposal for Slovenia
today, however decided to postpone debate until 14 December, when the government is to
draft its positions.
The committee will then discuss them together with the finance committee, Kokalj said.
11
Slovenia Supports Joint EU Stockpile of Antiviral Drugs
Slovenia is in favour of establishing a joint stockpile of antiviral drugs in the EU, Health
Minister Andrej Brucan said at the fringes of a meeting of EU health ministers in Brussels
Slovenia is in favour of establishing a joint stockpile of antiviral drugs in the EU, Health
Minister Andrej Brucan said at the fringes of a meeting of EU health ministers in Brussels on
Friday, 9 December.
"Every member state should have its own stockpile in addition to the joint stock of
medication," Brucan told the press.
The idea, proposed by France, was unanimously accepted. However, no dates have been set
for its implementation, Brucan added.
Currently Slovenia has a sufficient amount of anti-flu drugs. The country has concluded a
contract on stockpiling Tamiflu with Swiss drug maker Roche.
According to Brucan, the country will order enough Tamiflu for a quarter of its population, in
line with World Health Organisation recommendations.
He added that the first shipment of the medication will arrive in Slovenia in March 2006.
Slovenia will be among the first EU countries to receive the drug.
Measures to combat a potential outbreak of bird flu were only a part of the ministers' agenda,
as they also reached a deal on a new directive on pediatric health, which is to ensure better
health care for children.
Slovenia Hands Out EUR 250m in State Aid in 2004
Slovenia granted a total of EUR 250m in state aid in 2004, which represents 0.96% of its
GDP
Slovenia granted a total of EUR 250m in state aid in 2004, which represents 0.96% of its
GDP, the European Commission said on Friday, 9 December in Brussels.
The country therefore granted more aid than was handed out on average (0.6%) in the EU as a
whole.
Slovenia allocated the most money for the manufacturing sector (46%), closely followed by
agriculture (45%), with 6% going to coal mining.
However, the data is incomplete, as potential state aid for railways was not included in the
report. Since the sector is not liberalised, aid for the sector is treated as compensation for
public services.
While some member states have reduced the overall level of state aid, the Lisbon Strategy
objectives of reducing assistance are far from being met, the Commission said.
12
LEGISLATION
SD Wants Worker Shareholding in One-Tier Management System
The opposition Social Democrats (SD) have filed an amendment that would introduce worker
shareholding also under the one-tier management system
The opposition Social Democrats (SD) have filed an amendment that would introduce worker
shareholding also under the one-tier management system, SD lawmaker Dusan Kumer told
the press in Ljubljana on Monday, 5 December.
The amendment to the act on worker shareholding would harmonise the law with the one-tier
management system as proposed under a new companies bill, but only in the section of the
bill on worker representation in company management bodies.
"The debate on the companies bill so far has shown that one-tier management system could
seriously curb the constitutional rights of workers regarding worker shareholding," Kumer
said.
The new companies bill envisages the possibility to opt for a one-tier management system
with no supervisory board, with the management board consisting of executive and nonexecutive members.
Therefore the Social Democrats called for executive and non-executive members to be clearly
defined in the bill, with workers representing one third of non-executive members.
If such a division does not get enough support the SD further "proposes that in case of a single
management board, one third of its members should represent the employees", Kumer
explained.
According to Kumer, a decision to include workers in the management board is arbitrary and
is decided by the company itself. The party on the other hand would like to see this issue
regulated by legislation, Kumer stressed.
Government Confirms Guidelines for Talks on New Social Agreement
Once the social partners have submitted remarks and recommendations, the Labour Ministry
will produce the necessary documents so that talks can start as soon as possible
The government has confirmed guidelines for negotiations on the 2006-2009 social
agreement. Once the social partners have submitted remarks and recommendations, the
Labour Ministry will produce the necessary documents so that talks can start as soon as
possible, Labour Minister Janez Drobnic told the press on Wednesday, 7 December.
The government had produced guidelines in March. But since it also started preparations for
the implementation of economic and social reforms at the time, the guidelines were put on
hold as social partners wanted to wait for the reform blueprint, Drobnic said.
According to him, the original guidelines have been supplemented with provisions on
economic measures, the flexibility of the labour market, taxes and public finances. The
document also deals with the introduction of a flat tax.
Government Decrees Quotas for Disabled Workers at Companies
All companies or individuals, as well as public sector entities, which employ over 20 workers
must comply with the quotas, except for foreign diplomatic representations
The government has adopted a decree which determines minimum quotas of disabled
employees that companies must employ. The lowest quota (2%) has been set for the public
sector and non-commercial activities, while the highest (6%) for industry.
The quotas have been set based on the actual figures on disabled employees for 30 June, the
government said after its session.
13
The decree, which has been unanimously approved by the social partners, determines that
companies can either employ disabled persons or contract work to sheltered workshops.
All companies or individuals, as well as public sector entities, which employ over 20 workers
must comply with the quotas, except for foreign diplomatic representations.
Income Tax Act Amendments Passed Once Again
The National Council vetoed the amendments on a number of counts, most notably because
they were passed in emergency procedure and due to the favourable tax treatment of the
recipients of denationalisation bonds
The parliament passed the changes to the income tax act on Thursday, 8 December after they
were vetoed by the upper chamber of parliament at the end of November.
The amendments, which needed an absolute majority (46 votes) after the veto, were backed in
a 50:29 vote as the National Assembly met for an extraordinary session.
The National Council vetoed the amendments on a number of counts, most notably because
they were passed in emergency procedure and due to the favourable tax treatment of the
recipients of denationalisation bonds.
Finance Minister Andrej Bajuk, however, called the veto groundless, stressing the changes
merely dealt with the inconsistencies of the 2004 income tax act. He claimed the changes
should make Slovenia more interesting for foreign investors.
14
STATISTICS/FORECASTS
Foreign Debt at EUR 18.33bn in September
Slovenia's foreign exchange reserves amounted to EUR 8.45bn at the end of September
Slovenia's foreign exchange reserves amounted to EUR 8.45bn at the end of September,
falling EUR 9.88bn short of the overall foreign debt. This amounted to EUR 18.33bn,
according to the latest issue of the Bank of Slovenia Bulletin.
The bulk of foreign exchange reserves in September belonged to the central bank (EUR
6.72bn), while the rest were the reserves of commercial banks.
Most of the overall foreign debt was long-term debt (EUR 13.54bn). Short-term debt
amounted to EUR 3.51bn and liabilities to affiliated enterprises to EUR 1.28bn, the central
bank says.
While private debt totalled EUR 14.62bn, public and publicly-guaranteed debts amounted to
EUR 3.71bn.
Employment Service Optimistic
According to their data, registered unemployment in the first nine months of this year was
1.7% under last-year's and the participation rate went up by 0.7%
Presenting its past year performance at news conference in Ljubljana, on Tuesday, 6
December, National Employment Service director Anka Rode said the service was making
good progress, as the participation rate is up and the market situation favourable. However,
the service notes the level of unemployment among persons with higher education is
increasing.
According to their data, registered unemployment in the first nine months of this year was
1.7% under last-year's and the participation rate went up by 0.7%.
As many as 78,835 persons were made redundant in this period, a 0.3% drop against lastyear's figures. What is striking, however, is a more than 100% rise in workers losing job due
to their company's insolvency.
Recent years have brought dramatic changes in the unemployment structure. The shares of the
long-term unemployed, the unemployed aged over 50 and the unemployed with lower
education have decreased.
On the other hand, the shares of jobless women, first-time job seekers and persons under 26,
especially those with higher education, notably in the field of humanities, have increased.
Rode said the Employment Service especially wanted to highlight this fact.
Labour Minister Janez Drobnic has already responded to this worrying finding, saying the
young will have to be encouraged to go into occupations in great demand, also by curbing
enrollment at certain faculties.
Factory-Gate Prices Up 0.1% from October
Since the beginning of the year, prices have risen 1.4%, according to the data released by
Slovenia's Statistical Office
Factory-gate prices, while rising 0.1% from October, were up 1.8% year-on-year in
November. Since the beginning of the year, prices have risen 1.4%, according to the data
released by Slovenia's Statistical Office.
The most substantial year-on-year price increase was recorded in manufacturing, where prices
were up 2.2%. Prices in mining rose by 1.4% on a yearly basis, water supply is 0.2% more
expensive y-on-y, while forestry prices remained flat.
15
The mining sector meanwhile recorded the largest monthly price hike (0.9%), manufacturing
activities cost 0.1% more in November, while forestry prices remained flat and electricity and
water supply prices dropped 0.1% in comparison with October.
Apart from a rise of 0.3% in capital goods prices, the prices of intermediate goods (energy
products and raw materials) and consumer goods remained unchanged on a monthly basis.
The monthly rise of capital goods now puts the yearly price growth of intermediate, consumer
and capital goods at 1.8%.
GDP up 3.7% in Q3
Gross domestic product increased by 3.7% in real terms in the third quarter of the year over
the same period in 2004
Gross domestic product increased by 3.7% in real terms in the third quarter of the year over
the same period in 2004, Slovenia's Statistical Office said in its preliminary report released on
Friday, 9 December.
Seasonally and working days adjusted GDP went up 0.7% over the second quarter and 4.2%
over the same quarter last year.
GDP measured at current prices amounted to SIT 1,654.6bn (EUR 6.9bn) or 3.4% more than
in the third quarter of 2004.
In the first nine months of 2005 GDP increased in volume terms by 4% compared to the same
period in 2004.
Import prices of oil meanwhile contributed heavily to a higher rise of overall import prices
over the rise of export prices.
Domestic expenditure increased by 1.3% in Q3 compared to the same period in 2004, with
final consumption rising at a 3.3% rate.
Gross capital formation continued to drop, while the growth in gross fixed capital formation
remained slow in Q3 of 2005 (a 1.6% growth compared to the same period in 2004).
Contribution of the external trade balance to the GDP volume growth remained positive with
2.4 percentage points. Exports grew somewhat slower in Q3 in comparison with the first half
of 2005.
After growing very slowly in the Q2 of 2005, imports recorded a 3.1 percentage points rise in
Q3, with their growth totalling 4.6%.
Industrial Output Up 2.8% Y/Y in October
Slovenia's industrial output fell 1.2% in October over September, but rose 2.8% year-on-year,
according to the latest report by the National Statistical Office
Slovenia's industrial output fell 1.2% in October over September, but rose 2.8% year-on-year,
according to the latest report by the National Statistical Office.
Meanwhile in the first ten months of 2005 Slovenian companies produced 2.4% more in
comparison with the same period last year.
While output in mining soared 31.6% year-on-year, manufacturing recorded a much more
modest 2.6% rise in comparison with last year.
However, volumes in electricity, gas and water supply dropped by 3% on last year, the
statistics show.
October Trade Gap Lower than in September
Slovenia's exports amounted to EUR 1.26bn in October
Slovenia's exports amounted to EUR 1.26bn in October, a 5.1% rise year-on-year, while
imports totalled EUR 1.34bn, up 3.2% over October 2004. Trade gap stood at EUR 78.1m,
putting the export-import coverage at 94.2%, according to the National Statistical Office.
16
The preliminary data show that in the first ten months of 2005 Slovenia's exports increased by
11.3% to EUR 11.76bn, and imports by 10% to EUR 12.64bn.
In the January-to-October period trade deficit reached EUR 878.1m, and the export-import
coverage stood at 93.1%.
17
FINANCE
Government Appoints New State Secretary at Prime Minister's Office
The tax expert Andrej Sircelj is to take over his new post as of 1 January 2006
The government appointed on Wednesday, 7 December Andrej Sircelj as the new state
secretary at the prime minister's office in charge of taxes. The tax expert is to take over his
new post as of 1 January 2006.
According to Finance Minister Andrej Bajuk, Sircelj will be stationed at the Finance Ministry.
He was an active member of a tax task force responsible for drafting amendments to the tax
legislation, headed by Marko Kranjec.
On the basis of the group's proposals, the Finance Ministry has drawn up changes to the tax
laws, which the parliament adopted in November.
Bajuk hopes the new reinforcement will enable a quicker implementation of the changes,
which the Slovenian tax system needs.
"Our first task is to modernise the tax administration and the entire tax system, bring it to the
21st century and achieve our goals together with Finance Ministry State Secretary Ziga Lavric
and the ministry's expert services," Bajuk also said.
Government Updates 2005-2008 Convergence Programme
Finance Minister Bajuk said Slovenia is within reach of the euro
The government has updated the 2005-2008 convergence programme, which will be sent to
the European Commission and the EU Council. The report shows a positive picture regarding
compliance with the criteria for the adoption of the euro, Finance Minister Andrej Bajuk said
after the government session on Wednesday, 7 December.
Bajuk said Slovenia is within reach of the euro. The only criterion that still "causes doubts" is
inflation, although the EMU convergence price index (12-month average harmonised index of
consumer prices) has come very close in November at 2.5%, Bajuk said.
Compared to the convergence programme submitted to the EU in January, the updated
convergence programme slightly upgrades GDP growth forecasts for this year and next.
At the same time, the projected public finances deficit has been changed: the figures have
been revised from 2.1% of GDP for this year and 1.8% for 2006, to 1.7% for both years.
Moreover, while the programme projected a general government debt of 30.7% of GDP for
2005, the figure has been revised to 29%, Bajuk said, adding that this was the result of the
supplementary budget for 2005 and debt restructuring.
According to Bajuk, the only open question is the long-term stability of the public finances,
considering the low birth rates and an ageing population.
This is a big challenge for our country that we will have to tackle so that future generations
will not have to shoulder too great a burden, he said.
Block Deals Dominate November Trading on LJSE
Block deals dominated trading on the Ljubljana Stock Exchange in November, generating as
much as SIT 52.3bn (EUR 218.3m) in turnover, a record for the year
Block deals dominated trading on the Ljubljana Stock Exchange in November, generating as
much as SIT 52.3bn (EUR 218.3m) in turnover, a record for the year. Meanwhile, regular
action remained lethargic, with SIT 14.1bn (EUR 58.9m) in turnover. The SBI 20 benchmark
index gained 2.5% on the month.
18
According to the LJSE monthly statistical report, the SBI 20 was down 4.4% on the year in
November. Monthly volumes were 21.6% below last November's value and 15.4% short of
last year's monthly average.
Unlike the SBI 20, the other major indices, the PIX investment fund index and the BIO bond
index, lost ground, falling 2% and 0.1%, respectively.
Drug maker Krka was the busiest share on the official market, with deals worth SIT 3.5bn
(EUR 14.6m), followed by oil trader Petrol with SIT 2.2bn (EUR 9.2m) and retailer Mercator
with 1.2bn (EUR 5m).
The total market capitalisation of all securities traded on the Ljubljana Stock Exchange in
September amounted to SIT 1,612.3bn (EUR 6.73bn).
Finance Minister Says 2006 Budget Bill Is Good
Finance Minister Andrej Bajuk labelled a 2006 budget bill good, while a 2007 bill still
remains to be finalised, as he presented both documents at an extraordinary session of the
parliament
Finance Minister Andrej Bajuk labelled a 2006 budget bill good, while a 2007 bill still
remains to be finalised, as he presented both documents at an extraordinary session of the
parliament on Thursday, 8 December.
The 2006 budget bill is good and truly development-oriented, while many things are still
unknown in the 2007 proposal, mainly because the EU budget has not yet been adopted,
Bajuk said.
Once the EU spending plan is adopted, the government plans to change the 2007 bill
accordingly. Moreover, the amended 2007 bill would also take into account the planned social
and economic reforms, he explained.
According to Bajuk, the budget priorities for 2006 include technological development,
scientific programmes, improving the country's competitive ability, state roads, health care,
environmental issues and regional development.
The 2007 bill, however, only includes the facts that are already known. "I promise today that
as early as 2006 we will draft all the necessary changes for the 2007 budget," Bajuk pledged.
He added that this is the reason for which the government has not yet proposed a rise in the
VAT rate, which will be decided before the 2007 budget starts to be implemented, reforms
and planned revenues permitting.
"We are talking about two key budgets, as Slovenia is getting ready for the euro changeover,"
Bajuk stressed.
The budget bills, however, already include the effect of the phasing out of the payroll tax,
Bajuk said.
Budget revenues for 2006 are projected at SIT 1,756.4bn (EUR 7.33bn). With expenditures at
SIT 1,857.9bn (EUR 7.76bn), the projected deficit is at 1.4% of GDP.
The deficit is to shrink to 1.2% of GDP in 2007 on revenues of SIT 1,861.1bn (EUR 7.77bn)
and expenditures of SIT 1,954.2bn (EUR 8.16bn).
NLB Supervisors Back Purchase of West East Bank
The Sofia-based bank specialises in financing trade deals between Bulgarian and Slovenian
companies as well as between companies on the other markets where NLB is present
The supervisory board of Slovenia's leading bank, NLB, backed on Thursday, 8 December a
plan to purchase a 97% stake in West East Bank as part of the NLB Group's expansion in SE
Europe.
The Sofia-based bank specialises in financing trade deals between Bulgarian and Slovenian
companies as well as between companies on the other markets where NLB is present.
19
The Slovenian bank will purchase the stake from Slovenia's Maksima and Dutch company
Activa Holdings, according to a press release from NLB.
Ljubljana Stock Exchange
The dullness of the previous week continued on the Ljubljana Stock Exchange (LJSE), with
the blue chip SBI 20 index shedding 1.08 points (-0.02%), closing at 4.626,91 points on mixed
trading
The dullness of the previous week continued on the Ljubljana Stock Exchange (LJSE), with
the blue chip SBI 20 index shedding 1.08 points (-0.02%), closing at 4.626,91 points on
mixed trading.
The most heavily traded share this week was drug maker Krka, with SIT 945m (EUR 3.94m),
including block deals. Krka grew 1.24%, closing the week at SIT 105,307 (EUR 439.53).
Trading in Krka was influenced by the Ljubljana District Court's decision to reject US pharma
giant Pfizer's lawsuit against the Slovenian drug maker over the drug Atoris.
Pfizer filed the lawsuit against Krka in April 2002, demanding the suppression of the use and
production of Atoris and the removal of the product from stores, Krka said on Tuesday, 6
December.
The court said that Krka had got the sales license in line with the legislation and dismissed the
lawsuit as unfounded.
Volume-wise, retailer Mercator came a strong second with SIT 734m (EUR 3m), edging
0.70% higher and closing the week at SIT 37,520 (EUR 156.59).
Brisk trading with Mercator was fuelled by the announcement that the likely future Mercator
CEO had already chosen his management board team.
Ziga Debeljak has chosen the management team from top Mercator executives. If confirmed
by the supervisory board on 13 December, they will take over on 1 January.
The total volumes traded on the LJSE amounted to SIT 6.27bn (EUR 26.16m), with SIT
3.79bn (EUR 15.81m) in block deals.
Bonds enjoyed solid volumes too. Block deals included, the 29th issue of the Republic of
Slovenia bonds turned over SIT 1.2bn (EUR 5m) as the most heavily traded bond of the week.
The PIX investment fund index meanwhile dropped 18.17 points to 3,950.08, with the BIO
bond index following suit, edging down 0.18 points to 123.15.
Foreign Exchange
Mean exchange rate of the Bank of Slovenia
Euro (EUR) - SIT 239.59 (+0.02)
U.S. dollar (USD) - SIT 203.63 (-1.77)
Swiss franc (CHF) - SIT 155.65 (+0.51)
British pound (GBP) - SIT 355.31 (+1.52)
20
BRANCH INFORMATION
Podobnik Calls for Speedy Action on Climate Change
Speaking at the UN climate change conference in Montreal, Slovenian Environment Minister
Janez Podobnik pointed to a growing incidence of extreme weather phenomena and called for
prompt agreement on collective measures to tackle global warming
Speaking at the UN climate change conference in Montreal, Slovenian Environment Minister
Janez Podobnik pointed to a growing incidence of extreme weather phenomena and called for
prompt agreement on collective measures to tackle global warming.
Podobnik said on Wednesday, 7 December there was concern over record precipitation and
flooding in Slovenia this summer and also pointed to other parts of the world, notably New
Orleans, which was devastated by hurricane Katrina.
He acknowledged that humankind can adopt to the changing climate to an extent, stressing the
need to help poorer countries in this regard. He went on to explain that adapting to changes
and the mitigation of consequences should be viewed as parallel processes.
Podobnik also emphasised that a longterm resolution to the problem has to be sought and
found soon. "We live in a time of great challenges. The decisions we take today will shape
our tomorrow. We will be judged by our children and grandchildren on the basis of the world
they inherit from us," he concluded.
Ministers are debating a draft proposal on how to combat climate change at the three-day
meeting, which is a culmination of a two-week conference involving 180 nations.
Despite fierce international pressure at the conference, the fist after the Kyoto Protocol
entered into force, the US signalled that it would continue to pursue its own way on global
warming, citing its investments in alternative energy and bilateral efforts to deal with the
phenomenon.
New ICT Test Centre Opens in Bled
The first such centre outside ENTSI's headquarters in France will test compatibility of new
products by various information and communication technology (ICT) manufacturers
The European Institute for Telecommunication Standards (ETSI) opened a testing centre for
new technologies on Friday, 9 December in Bled.
The first such centre outside ENTSI's headquarters in France will test compatibility of new
products by various information and communication technology (ICT) manufacturers.
The centre, run by the newly established non-profit Sintesio foundation, will greatly facilitate
the development of next generation of networking technologies, Economics Minister Andrej
Vizjak said at the centre's opening.
Andrej Polenec, head of telecommunications equipment manufacturer Iskratel, one of the
partners in the project, stressed the importance of testing.
According to Polenec the fast pace of technological innovation in the ICT sector only makes
new technologies marketable if they are compatible among themselves.
The facility, which will test equipment from all over the world, will therefore enable faster
commercialisation of such technologies, Polenec believes.
Vizjak and Polenec also agreed that the centre is of paramount importance for Slovenia as it
presents the country as a hot spot for testing.
The EUR 100,000 facility, co-founded by the ETSI, the Slovenian Metrology Institute and
Iskratel, will employ three or four experts, with functional tests conducted by experts from
different countries. The centre will begin with major tests in January.
21
COMPANIES
Pfizer Lawsuit against Krka Rejected
The Court agreed and said that Krka got the sales license in line with the legislation and
dismissed the lawsuit as unfounded
The Ljubljana District Court has rejected US pharma giant Pfizer's lawsuit against the
Slovenian drug maker Krka over the drug Atoris, Krka said on Tuesday, 6 December.
Pfizer accused Krka of unfair competition regarding the sales of the cholesterol lowering
medication.
Pfizer filed the lawsuit against Krka in April 2002, demanding the suppression of the use and
production of Atoris and the removal of the product from stores, Krka said.
Pfizer also claimed that Krka had unlawfully acquired the sales license for the drug, while
Krka responded by saying that Pfizer had failed to prove the claims.
The Court agreed and said that Krka got the sales license in line with the legislation and
dismissed the lawsuit as unfounded. However, the decision is not yet final.
Mobilkom Tops Up Stake in Simobil
Austrian mobile operator Mobilkom has bought 17.2% of Slovenia's second-biggest mobile
operator, Simobil, to up its stake to over 92%
Austrian mobile operator Mobilkom has bought 17.2% of Slovenia's second-biggest mobile
operator, Simobil, to up its stake to over 92%. The company bought the stake from four
Slovenian companies in a deal worth nearly EUR 40m.
Mobilkom bought 8.24% from holding company Istrabenz, 5.48% from logistics company
Intereuropa, 2.34% from bank Probanka and 1.12% from telecommunications company UPC
Telemach.
Given that the company was ahead of the contractual date in buying out the stake, it was
given a 5.5% discount on the shares, paying a total of EUR 39.58, Mobilkom said.
The company also announced it would purchase the remaining shares - owned by electronics
company Iskra (5.46%) and investment company Medaljon (2.35%) - by May of next year.
Mobilkom first became an owner of Simobil in 2001; by the end of 2001 it had 75% plus one
share. In 2002, it signed a deal to buy out the rest of the shares by July 2007.
Commenting on the latest deal, chairman of the Mobilkom group Boris Nemsic said, "We
have succeeded in turning around Simobil, which is operating better than ever. By increasing
our stake, we are fulfilling our promise and increasing its integration into the Mobilkom
Austria group".
Engrotus Boosts Sales by 25%
This year's profit is to amount to SIT 3.9bn (EUR 16.28m), up from SIT 2.6bn (EUR 10.85m)
in 2004
Engrotus, the third-largest retailer in Slovenia, will see its sales total SIT 108.5bn (EUR
452.9m) for the year, up 25% over the year before. This year's profit is to amount to SIT
3.9bn (EUR 16.28m), up from SIT 2.6bn (EUR 10.85m) in 2004.
Engrotus's director Aleksander Svetelsek told the press on Wednesday, 7 December that he
was pleased with the results. He was especially happy that the company started to build a
large shopping centre in Slovenia's second-largest city Maribor.
The Celje-based group, which has more than a 20% market share in Slovenia, earmarked
about SIT 18bn (EUR 75.13m) for investment this year. In 2006, it intends to allocate SIT
23bn (EUR 96m) for 42 new facilities and an additional SIT 10bn (EUR 41.74m) for
investment in Serbia-Montenegro and Macedonia.
22
Engrotus is to open a new cash&carry centre in Celje in January 2006. Meanwhile, another
shopping centre in Lasko is to be opened in autumn of 2006.
Asked what Engrotus will do in case a 20% flat tax rate is introduced, Svetelsek said no
grocer can cover such a rate by themselves; the company will have to increase prices by
around 11.5%.
Zito's Restructuring Proves Successful, CEO Says
Slovenia's biggest bread and pasta maker has seen an improvement in the third quarter of
2005, which it closed with a net profit of SIT 9.7m (EUR 40,490), covering the loss from the
first six months
Slovenia's biggest bread and pasta maker has seen an improvement in the third quarter of
2005, which it closed with a net profit of SIT 9.7m (EUR 40,490), covering the loss from the
first six months, Zito CEO Iztok Bricl told the press in Ljubljana on Thursday, 8 December.
According to Bricl, the company has launched a reorganisation of its business this year, and it
has been a successful one. "The restructuring will lead to a profit by the end of this year," he
was optimistic.
However, the company will conclude 2005 with a lower turnover than last year, when it made
a profit of SIT 338.2m (EUR 1.41m). Bricl pointed to fierce market competition as the main
reason for the loss.
Zito's sales revenues were SIT 9.4bn (EUR 39.23m) in the first nine months of 2005, which is
12% more than planned. However, the company still made an operating loss of SIT 114.1m
(EUR 476,200). In the same period in 2004, it made an operating profit of SIT 239.3m (EUR
998,800).
Zito has ambitious plans for 2006, Bricl stressed, saying that they intend to make a profit of
SIT 818m (EUR 3.41m).
Zito plans an increase in sales revenues, especially on foreign markets (by 28%), in the
countries of former Yugoslavia as well as in Western Europe, added Bricl, who took over as
Zito CEO in May.
Their goal is to strengthen the bread making sector and increase the sale of confectioneries.
With the help of a new investment, they will be able to enhance production of frozen food by
100%.
The company expects more cooperation from new traders and grocers in Slovenia in the
future. According to Bricl, talks with Austria's grocer Hofer, which has recently opened it first
store in Slovenia, have not yet concluded.
Discount Chain Hofer to Invest EUR 100m in Slovenia in 2005
Hofer opened its first outlet in Slovenia on 7 December
Hofer Slovenija, the Slovenian arm of the Aldi Sued discount chain group, plans to invest
pver EUR 100m in Slovenia by the end of 2005, a quarter of all direct foreign investments in
the country this year, the company said on Thursday, 8 December.
Hofer Slovenija added that investments in Slovenia will reach EUR 300m over the next few
years. The company also plans to employ 3,000 people in the long run.
While some 500 employees already work for Hofer, their number will treble by the end of
next year, predicts the company, which opened its first outlet in Slovenia on Wednesday, 7
December.
Hofer Slovenija plans to reach half of its revenues through sales of domestic products, with
the company's mid-term plans anticipating annual sales to the amount of EUR 100m.
Hofer plans to open ten more shops in Slovenia in the coming days, and will expand its
network in the future to cover the entire country.
23
The Aldi Sued group already has shops in Germany, Austria, the UK, Ireland, the US and
Australia, and plans to launch its operations in Switzerland soon.
Slovenian Pipe Maker Moving Production to Bosnia
Alpos, a producer of steel pipes, has opened a new production facility in Prnjavor
Alpos, a producer of steel pipes, has opened a new production facility in Prnjavor, BosniaHerzegovina. A part of the production from its central production facility in Slovenia's Sentjur
will be relocated to the new location, the company said on Friday, 9 December.
The 3,800 sq. metre facility, worth EUR 5.3m, will allow the company to double its output of
cut steel strips and welded steel pipes, the company said, adding that all such production has
now been moved from Sentjur to the new location.
The facility is part of the UNIS steel pipe factory that Alpos bought a year ago and then set
out to renovate.
The new facility will open new jobs in Prnjavor in the Republic of Srpska, as up to 50 new
jobs are to be created in addition to the 65 existing ones.
After it makes all the payments to the government of the Republic of Srpska, Alpos is to
become a 90% owner of UNIS.
Alpos generated SIT 28bn (EUR 117m) in revenues in the first nine months of the year,
making a net profit of SIT 200m (EUR 834,000). The company expects to increase revenues
by 16% next year as it expands production to other locations in the former Yugoslavia.
Droga Kolinska Lays Foundation Stone for Pate Factory in Sarajevo
According to Ferko, the Argeta factory is to be completed by September 2006, with
production expected to be launched as of 2007
Slovenia's largest food company is preparing to open a pate production company in Bosnia's
capital. The foundation stone for the EUR 20m Droga Kolinska plant was laid on Friday, 9
December in Sarajevo by the company's chairman Robert Ferko.
According to Ferko, the Argeta factory is to be completed by September 2006, with
production expected to be launched as of 2007.
Ferko pointed out the factory in Sarajevo was a part of Droga Kolinska's strategy to expand
production in southeastern Europe.
The new factory will employ up to 220 workers. It is expected to produce 4,500 tons of
Argeta pate annually, which is to be sold in Bosnia and Herzegovina, Turkey, the Middle and
Far East.
Emona Obala Group Expects to End 2006 in the Black
The supervisory board of wholesaler and retailer Emona Obala confirmed on 8 December the
strategic business plan for the group for the 2006-2010 period
The supervisory board of wholesaler and retailer Emona Obala confirmed on 8 December the
strategic business plan for the group for the 2006-2010 period, which sees Emona Obala out
of the red as early as next year.
Emona Obala presented the plan on Friday, 9 December. It expects to generate SIT 12.2bn
(EUR 50.92m) in net revenues next year, thereby breaking even.
The group's wholesale division expects SIT 5.9bn (EUR 24.62m) in revenues, which it will
achieve mainly by trying to take over trademarks from smaller distributors.
Its retail division meanwhile plans to expand its line, opening two new round-the-clock shops
in the country. It will also establish a subsidiary in Macedonia.
For 2010 the group predicts SIT 19bn (EUR 79.30m) in revenues and a 7% return on equity.
"The plans and business goals for 2006 are ambitious, but attainable...We have no other
option", said Emona Obala CEO Ales Skraba.
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SLOVENIA IN BRIEF
Drnovsek and Lavrov Discuss OSCE, SE Europe and Bilateral Ties
Russian FM Sergey Lavrov, who was in Slovenia for the 13th OSCE Ministerial Council, was
received on Sunday, 4 December by Slovenian President Janez Drnovsek, the president's
office said in a press release. On the eve of the ministerial, Lavrov also met Slovenia's FM
Dimitrij Rupel, the incumbent OSCE chairman, and was received by PM Janez Jansa, as part
of his working visit to Slovenia.
Jansa and Drnovsek Discuss Balkans with EU Commissioner
Slovenian PM Janez Jansa and President Janez Drnovsek met on Monday, 5 December in
Ljubljana European External Relations Commissioner Benita Ferrero-Waldner, with the
situation in the Western Balkans toping the agenda of both meetings.
Drnovsek Discusses Potential Contacts with South Korean FM
President Janez Drnovsek on Monday, 5 December received South Korean Foreign and Trade
Minister Ban Ki-Moon. The pair shared a view that there was great potential to develop
bilateral relations in business, politics and other areas, Drnovsek's office said in a press
release.
FM Rupel Holds Bilateral Talks on the Margins of the OSCE
Foreign Minister Dimitrij Rupel, the OSCE chairman, held a number of bilateral talks on the
margins of the OSCE ministerial on Monday, 5 December, including with foreign ministers of
Uzbekistan, Ukraine, Azerbaijan, Armenia and Macedonia.
Erjavec Meets Colleagues from Macedonia, Albania in US
Slovenian Defence Minister Karl Erjavec met his Albanian and Macedonian counterparts as
well as Senator from Iowa Tom Harkin (D) on the margins of a regional ministerial in
Washington on Monday, 5 December.
Jansa Nominates Damijan Reform Minister without Portfolio
PM Janez Jansa nominated economist Joze P. Damijan (38) minister without portfolio in
charge of structural reforms, and sent the nomination to parliament for approval on Tuesday,
6 December.
Rupel Meets Kazakh, Kyrgyz and Georgian Counterparts
Slovenian FM Dimitrij Rupel, the incumbent OSCE chairman, held bilateral meetings with
his Kazakh, Kyrgyz and Georgian counterparts on the sidelines of the proceedings at the
OSCE ministerial in Ljubljana on Tuesday, 6 December. Topical OSCE issues dominated the
exchanges.
Defence Minister Meets US Defence Secretary Rumsfeld
Defence Minister Karl Erjavec met US Secretary of Defence Donald Rumsfeld on the margins
of the Southeastern European Defence Ministerial (SEDM) in Washington on Tuesday, 6
December. The pair discussed the reform of the Slovenian Armed Forces.
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Government Confirms Bill Awarding Rights of Asbestos Victims
A bill awarding rights to individuals exposed to asbestos at work was adopted by the
government, making people who have worked at companies which manufactured or stored
asbestos eligible for compensation. Once it is signed into law, the bill will replace the 1996
act on the prohibition of production and trade in asbestos products.
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