Business

17 Jan 2020, 14:20 PM

STA, 16 January 2020 - Slovenia remains an attractive destination for Austrian investors, shows this year's survey of the representation of the Austrian economy in Slovenia, Advantage Austria Ljubljana, but its director Peter Hasslacher notes that the main problems have persisted for years, and that it is high time for "concrete measures and reforms".

The survey, carried out in cooperation with the Ljubljana Faculty of Economics at the end of last year, shows that 75% of Austrian entrepreneurs in Slovenia believe that the country will also be attractive for new investments this year.

"The result is good, but it is average in comparison with their assessment from a year ago. In 2018, this was the opinion of 91% of the respondents, a record-high number," Hasslacher told the press in Ljubljana on Thursday.

He added that Slovenia was attractive for Austrian investments due to its geographical position, in particular the maritime port of Koper, skilled workforce, access to south-east European markets and safety.

But according to Hasslacher, the annual survey shows that the sentiment of Austrian companies in Slovenia has deteriorated somewhat and that they are growing pessimistic.

On the one hand, Austrian companies in Slovenia are very satisfied with the quality, level of education and motivation of workforce, with access to public contracts and the tax system in the broadest sense.

"Tax burden on companies, public administration, inflexible labour legislation, default on payment and low availability of workforce meanwhile remain the critical points of the investment environment," he added.

For this reason, Hasslacher believes the Slovenian government should take measures as soon as possible and facilitate permit issuing procedures, reduce administrative barriers and enable more openness and transparency.

It should also reduce the tax burden, especially when it comes to rewarding performance, provide greater flexibility of the labour market and invest more effort in preventing corruption, he added.

The shortage of skilled workforce is an increasing problem which was detected by 63% of the respondents, up 16 percentage points compared to 2018. Around 64% of the respondents said they were looking for workers with secondary education.

Advantage Austria Ljubljana sees a solution in dual vocational education, in a combination of theoretical education and practical training or traineeship in companies.

With around EUR 3.6 billion in investments, Austria is the largest foreign investor in Slovenia, with around 1,000 Austrian subsidiaries in Slovenia employing some 20,000 people.

17 Jan 2020, 11:40 AM

STA, 16 January 2020 - Hooray Studios [formerly Hurra Studios], a Ljubljana-based start-up that specialises in personalised children's books, is growing rapidly after expanding to foreign markets. Sales revenue more than doubled in 2019 to EUR 27 million, said the company, which has sold over a million books since its inception in 2013.

Starting out in Slovenia, the company first branched into Italy and Germany, but now it also has subsidiaries in the United States and United Kingdom, where it sells its products under the Hooray Heroes brand.

Its portfolio contains a variety of personalised children's books in which young children as well as their siblings and parents appear as protagonists.

"By expanding our concept of personalised books for children to books for the wider family, a plethora of new opportunities have opened up that we had not even detected before," Hooray Studios marketing director Mic Malenšek said.

The surge in demand required beefing up the IT system to manage orders. The company also forged partnerships with print houses in the US, France and UK and now has the capacity to print up to 100,000 books per day, according to general manager and co-founder Rado Daradan.

The company now has 140 staff and contracts additional workers during peak season. In 2020 they plan to roll out more than ten new projects, not just books but also complementary merchandise.

Related: Hurra Studios Personalised Children’s Books Wins Slovenian Start-up of the Year Award

16 Jan 2020, 10:11 AM

STA, 15 January 2020 - NLB Skladi, the asset managing arm of Slovenia's largest banking group, NLB, attained a market share in excess of 34% in 2019, the largest among all Slovenian mutual funds, managing more than a billion euro in mutual funds.

Slovenian mutual fund managers saw assets under their watch rise by more than 20% last year to EUR 3.01 billion. The bulk of the growth was generated through an increase in the value of investment, with net payments into the funds amounting to EUR 83.6 million, NLB Skladi said on Wednesday.

Related: More Slovenians Invest in Mutual Funds, But Less Than European Average

Foreign providers managed EUR 221 million in assets as of the end of October, paying out EUR 1.7 million net. Receipts to the European Undertakings for the Collective Investment in Transferable Securities by the end of October totalled EUR 284 billion.

"It wasn't a record year but it was a very good year in Europe nonetheless," Kruno Abramovič, the CEO of NLB Skladi, told reporters in Ljubljana.

After a fall in 2018, NLB Skladi did not record an increase in payments until June or July 2019. "It took six months for investors to stop being jittery," said Abramovič, adding that a similar trend was observed in Europe, although it took only about three months there.

Board member Blaž Bračič said that NLB Skladi's market share in gross payments into mutual funds was 47.1%, and the market share in gross receipts 104.8%. "The rivals had outflows and we had inflows," he said.

Marko Bombač, chief analyst with NLB Skladi, noted that at the end of 2018, the manager had projected a 11% return on global shares for 2019, which was considered an upbeat projection. In fact global stock markets posted a growth of almost 30%, while euro corporate bonds posted a 6.3% growth.

"The obvious question after such a growth is whether time has come for profit-taking and a bit more conservative structure of investments in the portfolio," Bombač said, adding that NLB Skladi believed there was still plenty of room for growth in 2020.

Projections for bond investments this year are low, which tips the scales in favour of investment in stocks. "We expect a solid stock year, a bit under average," said Bombač. The mid scenario is for a growth of 7% for advanced and emerging markets, 9% for Western Balkan markets and 10% for Slovenia.

NLB Skladi favours Europe over the US, its projections for the US being on a par with those for developing markets, where countries are lagging with reforms. Key to the profitability of US shares will be the profitability of technological shares.

The manager is optimistic about European banking shares, has raised weightings of cyclic sectors such as raw materials and manufacturing and car industry, and has kept slightly above-average exposure to the software and services sectors.

A major topic of the year will be the US presidential elections with NLB Skladi projecting a narrow victory for Donald Trump, but also the possibility of a new US-China escalation. A global recession is not expected to hit until 2022, but it is expected to be deeper as it would be in 2021.

15 Jan 2020, 13:35 PM

With Adria Airways assets due to be auctioned next week, at 11:00 on Thursday 23 January, Ex-Yu Aviation reports that a group of unnamed Russian investors are interested in purchasing the collapsed airline’s Air Operators Certificate (AOC) and reviving the name to run services within Europe, using Sukhoi Superjet 100 aircraft. As reported earlier on TSN, the starting price for Adria’s assets, which include various training manuals in addition to the AOC, has been set at €45,000. However, a new owner would need to take on a number of obligations that remain after the carrier’s bankruptcy.

The airline’s previous owner, the Luxembourg-based German fund 4k Invest, purchased Adria from the Slovenian government in 2016 for €100,000. Since Adria’s collapse in 2019 an investigation into the role of 4K Invest and possible mismanagement has been launched, although the fund’s decision to liquidate its assets is complicating this.

While the closure of the national carrier lead to a 60% fall in Slovenia’s international seat capacity, a number of airlines have stepped in to fill the more profitable gaps in the schedule, while the Slovenian government is said to be in talks with regard to subsidising some other routes.

14 Jan 2020, 11:57 AM

STA, 13 January 2020 - Power utility group GEN generated over EUR 2.2 billion in revenue and EUR 48 million a net profit last year. The parent company in the group, GEN Energija, generated EUR 207 million in revenue and EUR 26 million in net profit.

 The group, which exceeded plans by 25%, had a good business year, and invested EUR 100 million, GEN Energija CEO Martin Novšak told the press in Krško on Monday.

GEN Energija has five subsidiaries, including Slovenia's only N-plant NEK, which is jointly owned with Croatia, and two chains of hydro power plants on the Sava.

NEK worked at full speed throughout the year and in a stable manner, exceeding the plans to produce 5,532 gigaWatt hours of electricity.

The state-owned group met all the expectations of state-assets custodian SSH, and finished as the second largest group in Slovenia in terms of revenue, according to Novšak.

This year GEN plans to generate around EUR 2.4 billion in revenue and EUR 54 million in net profit, and invest EUR 150 million, said GEN Energija director Danijel Levičar.

The group will continue planning the project of construction of a second nuclear reactor, on which the government has however not taken any final decision yet.

GEN deems the project "economically viable and justified from the aspect of the environment and climate".

NEK will continue with upgrades, including with a new high-pressure turbine which will enable it to raise output by 80 gigaWatt hours a year.

The nuclear power station moreover expects to obtain a building permit for a dry cask storage facility for spent nuclear fuel this year.

GEN's power station Termoelektrarna Brestanica plans to complete gas turbine unit seven in the second half of the year.

The group also plans to strengthen its GEN-I trading segment, foremost by purchasing power producer Elektro Primorska's electricity trader E3.

The group's vision is to become an international leader in reliable, safe, competitive and low-carbon energy supply, according to Levičar.

Through its marketing and sales companies, the group is present in more than 20 countries in Central and Eastern Europe. The parent company has 60 employees, whereas the number of employees at group level is around 1,400.

Related - Invest in Slovenia: Meet the Companies in the Benchmark Investment Index, the SBI TOP

13 Jan 2020, 12:55 PM

STA, 13 January 2020 - The newspaper Večer argues in Monday's lead commentary that the state should help Slovenia's ailing ski-lift operators to invest into modernising their facilities and allow them to operate year round.

Given climate change and the projections that snow is not to be expected below ever higher altitudes, the paper agrees that millions' worth of investment into ski slopes at altitudes below 1,500 seems like throwing money out of the window.

"However, despite understanding climate change, the state should not just give up on ski resorts and leave them up to weather conditions and market rules."

The paper says that in that case most ski resorts would go bust, which would impact negatively on tourism, economy and jobs.

It cites a study commissioned by the Economy Ministry, which shows that one euro spent on a ski pass in Slovenia generates an extra four euro at the destination.

This is why it believes the question of why the state should bail out ski-lift operators should also take into consideration the multiplier effect, including the overall tax take.

It also says that ski resorts should expand their offerings year round.

"If the state transforms ski lifts into public infrastructure and allows new investment through subsidies, and if alpine centres focus on year-round tourism, we will be still skiing in Slovenia in 2100. It will only be three months, but mainly on account of visitors in the other nine," concludes the paper under the headline Skiing in 2100.

13 Jan 2020, 10:05 AM

STA, 11 January 2020 - Deržič, a family-run business from the east of the country specialising in fire doors and solar trackers, has made it to almost all continents over the past 25 years. It is now launching a major investment drive.

Speaking to reporters earlier this week, the company owner Rudi Deržič announced an investment of EUR 1.5 million into an expansion of its production facilities.

Their chief products are fire doors, soundproof doors, flood doors and recently sliding glass radiation protection doors, all made to order, and all product of Deržič's own know-how and development.

Based in Veliki Obrež near Dobova, the company has also developed dual-axis solar trackers for solar panels, erecting the largest solar power plant in the country at its location.

The plant, comprising 90 such trackers, supplies 850,000 kilowatt hours of power into the grid on average annually.

According to Deržič, the trackers make it possible to increase the efficiency of solar plants by almost 50% and provide adaptability to all weather conditions, in particular strong wind.

Employing 25 people, the company posits an average of EUR 2 million in annual revenue, roughly 10% of which is reinvested. Steady growth is expected to continue.

Almost a third of the output is exported with a 20% growth projected in foreign markets this year.

The headcount is also expected to increase gradually, with plans to hire in particular engineers.

As a side activity, the company also runs an energy self-sufficient farm on a remedied local landfill, breeding a small herd of cattle.

The company also manufactures metal door frames and other types of doors. It will supply doors for Hotel Brdo at the Brdo estate as part of renovation.

You can learn about the company here

12 Jan 2020, 11:45 AM

STA, 10 January 2020 - Medical experts in the western Goriška region and the Medical Chamber of Slovenia have urged decision-makers to properly address the local environmental issues, pointing at pollution effects on people's health in the area. They also expressed concern over efforts to expand incineration capacities at a local cement factory.

The region's doctors and dentists have sent their appeal to a number of relevant institutions and decision-makers, most notably to the Environment Ministry and Environment Agency.

The medical chamber endorsed the petition at its Thursday's session. So far, it has been signed by more than 140 doctors and dentists from the region as well as a number of their colleagues from other parts of the country, altogether more than 160 experts.

"The area has been marked by several decades of asbestos-cement production, moreover, in the recent years, the local cement factory or co-incineration plant has been producing an increasingly larger share of energy by incinerating waste, including toxic waste," said the signatories.

The Salonit Anhovo cement factory endeavours to get the go-ahead to incinerate more waste. The factory is the largest such facility in Slovenia, incinerating more than 100,000 tonnes of waste per year.

In December, the local branch of the opposition party Left held a public debate on these developments which included experts and environmental civil initiatives.

The debate heard warnings about detrimental effects of such an activity on general health and requests for the area to be declared degraded land and restored.

The Environmental Agency is currently examining the factory's request for expanding its incineration capacities by almost 25%.

Meanwhile, the medical experts have warned about exercising caution in technology implementation and capacity expansion due to potential long-term effects and interactions among pollutants.

They have urged decision-makers to employ the precautionary principle, prevent any further exposure to pollutants and set the same limit values for all citizens regardless of where they work or live.

11 Jan 2020, 10:54 AM

STA, 11 January 2020 - Slovenia has launched SiChain, a blockchain infrastructure platform, to become the first EU country to have a pilot blockchain infrastructure system in place at state level. SiChain technology aims to facilitate blockchain technology use for companies and state agencies, and could be used for document verification as well.

The pilot project, which was launched in December last year, is designed to test blockchain applications by the state, companies, local communities and research agencies.

It is run by the Economy Ministry in cooperation with the EU Commission, with the project's infrastructure being devised by blockchain firm HashNet and telecoms provider Telemach.

The deployment timeline depends on EU Commission-approved pilot projects. As soon as they are given the go-ahead, development of prototype models will start, Telemach has told the STA.

Theoretically, there are three development phases spread across this year. Initially, transaction testing and capacity measurements are to be carried out, followed by a second phase developing more complex applications and expanding the network to the state and international levels.

The third phase is expected to create links between networks and public use.

In general aim is to implement transactions and smart contracts using hashnet technology, a distributed data block technology that is considered energy and time efficient.

SiChain could potentially be used to verify marriage certificates and other documents, standardise student ID cards, for electricity market transactions, and inter-governmental contracts within the EU.

The EU Commission has earmarked EUR 10 million for the project's pilot stage, but the actual figure depends on the proposed and approved project, according to Telemach.

"The total amount which the EU will allocate for the development and implementation of blockchain technology in the next five years, is estimated at EUR 300 million," said the telco.

European Blockchain Services Infrastructure (EBSI) is one of the key European Blockchain Partnership projects, developed by the EU Commission in cooperation with member states and blockchain experts.

All our blockchain in Slovenia stories are here

10 Jan 2020, 09:39 AM

STA, 9 January 2020 - Luka Koper, the operator of Slovenia's only seaport, generated EUR 224.5 million in net sales revenue last year, a 1% uptick compared to the previous year, preliminary data show. Meanwhile, ship-to-ship transshipment dropped by 5% over 2018 to 22.8 million tonnes, the group announced on the website of the Ljubljana Stock Exchange on Thursday.

Container transshipment stayed level over 2018, while liquid cargo transshipment increased by 12%. On the other hand, bulk cargo transshipment decreased by 17%, vehicle transshipment by 4% and general cargo transshipment by 16%.

Related - Invest in Slovenia: Meet the Companies in the Benchmark Investment Index, the SBI TOP

 Luka Koper said that liquid cargo transshipment was record-high in 2019, mainly due to favourable trends in fuel transport and sufficient terminal capacities.

The second half of 2019 was marked by economic cooling, which affected Luka Koper's operations as well, most notably in goods transshipment. Apart from manufacturing slowdown, the situation was made more precarious by trade wars and political conflicts overseas.

All our stories about Luka Koper are here

 

09 Jan 2020, 15:20 PM

STA, 8 January 2020 - Slovenia's Financial Administration (FURS) collected EUR 17.6 billion in taxes in 2019, which is by EUR 954 million or 5.7% more than in 2018, its early figures show.

The trend has been present ever since FURS was set up with the merger of the national tax and customs administrations in 2014. Since then its tax collection rose by 29%.

Last year all public budgets - the national budget as well as the municipal, pension and health budgets - posted rises in revenue, with excise duties being one of few major taxes the collection of which dropped (-1.1%).

Social security contributions collected - which provide for pension, disability and health insurance and are largely paid directly to the public pension and health funds, but some also to the national budget - increased by 7.2% to over EUR 7 billion.

FURS also collected by 9.4% more taxes on income and profit; a significant rise of 5.9% was recorded in personal income tax, while corporate tax collected rose by 17%.

The VAT take increased by 2.8%.

FURS pointed out in a press release that last year's 5.7% rise in taxes it collected was higher than Slovenia's GDP growth, which reached 2.7% in the first three quarters of the year.

The national revenue service also said that more than 95% of all taxes had been paid voluntarily last year.

It noted another positive trend of a falling tax debt ever since FURS was established. Last year, it dropped by 3.1% to some EUR 1.2 billion, and by 18% since 2014.

All our stories on taxes in Slovenia are here

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