Business

01 Feb 2019, 16:20 PM

STA, 1 February 2019 - Gorenje, the Velenje-based household appliances group which was taken over by China's Hisense last year, is cutting 325 temporary-basis jobs, according to information from the in-house trade union.

Gorenje confirmed that fixed-term contracts of 190 workers had elapsed, but the head of the in-house trade union Žan Zeba insisted that 325 jobs were being slashed, including agency workers.

Speaking with the STA, the head of the in-house trade union Žan Zeba said the news came as a negative surprise after the company's plans about expansion of production and extra hiring.

Zeba said the Gorenje management had promised the workers who are now being laid off full time jobs. He also said that it would be hard to meet the output goals given the current labour dynamics.

"After the very good test results of our new generation appliances we definitely expect production to increase and the capacities to be filled; we will welcome all new investments once they happen."

Zeba also hopes that the employees' wishes be taken into consideration in the company's reorganisation.

He said the management was planning to launch a new dishwasher production line in mid-year, but the trade union did not have any information about it.

Production of build-in freezers and fridges is to be moved to the subsidiary in Valjevo in Serbia in the coming months.

Denis Oštir, director of corporate communication at Gorenje, told the STA that the mentioned workers were on temporary job contracts. "These contracts have now run out."

"Gorenje denies in the strongest terms the information that we will lay off 325 workers. We will not give notice to a single worker employed on fixed or non-fixed terms," Oštir said.

After receiving official information from the staffing department, Oštir also denied that employment contracts of 325 workers had run out, saying the correct figure was 190 workers.

He added though that it "is true that the fixed-term contracts of a number of workers have elapsed at this time. This is a matter of seasonal change, which is common in a company's operations".

Oštir said the company was adapting to the clients' demands and seasonal trends in demand. At the end of 2018, demand for labour force in production was bigger because the company created stocks because of the move to Valjevo.

Asked about the plans for a new TV plant announced by the Chinese owners, Oštir said the project was in the phase of acquiring the necessary documents.

The plant is to be built by the existing warehouse in Velenje and is to create 300 to 400 jobs.

Gorenje is currently being transformed from a joint stock company into a limited responsibility company. The company delisted from the Ljubljana Stock Exchange last year.

01 Feb 2019, 12:50 PM

STA, 31 January 2019 - About 40% of employers in Slovenia have a problem finding qualified work force, according to a survey conducted by temping group ManpowerGroup. The figure is, however, 5% lower than the average of the survey conducted in 43 countries.

 

Compared to a similar survey conducted in 2017, the share of companies that have a tough job finding skilled work force has increased by 40%.

The needs of employers are changing and they are often looking for work force with very specific know-how, skills and experience, Nebojša Biškup, the head of ManpowerGroup Slovenia and Croatia said on Thursday.

Related: Foreigners now hold 10% of jobs in Slovenia

 Modern jobs do not always demand a university degree, but they do depend on continuous development of skills because even the most traditional work places will require modern technology skills, Biškup added.

The survey included more than 39,000 employers from six industries, finding that more than half of them have started investing in educational platforms and the development of tools to train the right work force. A survey in 2014 showed that only 20% of employers made such investments.

All our stories about employment in Slovenia are here

31 Jan 2019, 10:20 AM

STA, 30 January 2019 - The past year has been again excellent for business, so it's time for long-term measures to raise net wages, the Managers' Association of Slovenia (Združenja Manager) boss Aleksander Zalaznik said as he addressed the association's annual get-together in Ljubljana on Wednesday.

https://www.zdruzenje-manager.si/en/home/

Taking a look at 2018, Zalaznik said exports reached 86% of Slovenia's GDP, and praised the fact that 75% of jobs were created by new and fast-growing companies, which was above EU average, as especially encouraging.

Still, signs of a slowdown in Slovenia's main trade partners could be noticed in recent months, and Brexit is another unknown, he said, adding competitiveness and productivity remained Slovenia's challenges, while demographics should also not be neglected.

Nevertheless, an important next step is raising net wages to contain brain drain and facilitate further economic development. So the association proposes a five-year agreement to gradually raise gross wages and reduce taxation.

Related: Find Out the Average Pay for Various Jobs in Slovenia

"A social agreement that we all want a competitive business environment is crucial here," said Zalaznik, who is convinced Slovenia is able to make this leap. "The moment is right, let's take it."

His view about higher wages but also a higher added value was echoed by Zdravko Počivalšek, the minister of economic development and technology.

He said the Council for Competitive and Stable Business Environment, the ministry's advisory body, had proposed the government and businesses draft a long-term plan for wage growth.

"Higher wages and a higher added value must be the goal of all of us, and they are also our responsibility," the minister stressed.

The managers were also addressed by Prime Minister Marjan Šarec, who outlined via video conference government plans to improve the business environment in 2019.

Related: Outfit7 Founders Still the Richest Slovenians

He said the government would draft a proposal on tax restructuring and overhaul the regulatory framework.

The event was attended by President Borut Pahor, who thanked the association for its contribution to Slovenia becoming a better society since gaining independence.

The Managers' Association, which traditionally holds its get-together at the start of a new business year, also gave out its annual awards.

The lifetime achievement award for 2018 went to Bogomir Strašek, the founder, majority owner and director of automotive supplier KLS Ljubno.

Igor Verstovšek, the co-owner of hi-tech company Cosylab, became Young Manager of 2018.

The Artemide award for breaking the glass ceiling to assume top posts in companies was bestowed on GZS director general Sonja Šmuc and Agitavit Solutions director Anka Brus.

30 Jan 2019, 12:39 PM

STA, 30 January 2019 - The Slovenian pharmaceutical company Lek, a subsidiary of the Swiss giant Novartis, has announced that it had a very successful 2018 compared to the set objectives, while failing to reveal concrete business results. It did say that it employed an additional 370 people last year to increase the workforce to 4,085.

Lek, which is headquartered in Ljubljana, said in a press release on Wednesday that it was expanding the range of production of healing agents for innovative pharmaceuticals.

Last year, the company launched at the Mengeš location the production of three healing agents for innovative pharmaceuticals, which will enter the market in the coming years.

At other locations in Slovenia, Lek launched the final phases of production of innovative biopharmaceuticals, the press release says.

In Mengeš, located some 10 km north of Ljubljana, the company is building a EUR 38m facility for the production of biological agents, which "will boost the role of the location as a key Novartis centre for biotechnology".

Since 2003, Novartis has invested more than EUR 2.3bn in Slovenia, with more than half intended for development, and the rest to modernisation and expansion of the production facilities.

Lek also announced that it employed an additional 370 people last year, with the number of employees standing at 4,085 at the end of 2018, while "continuing to optimise and adjust the production network in Slovenia."

"By increasing the market share to 30.1% in 2018, Lek has solidified its position as the second largest provider of generic drugs in Slovenia and strengthened its position of the market leader in the non-prescription drug segment," the release reads, the full text of which can be read here.

24 Jan 2019, 14:30 PM

January 24, 2018

The Ministry of Justice (Ministrstvo za pravosodje) is considering opening the Slovenian penal system to private investors. This is evident from the Ministry's recent call for bids to carry out a preliminary procedure and legally test the public-private partnership in building one and renovating another of Slovenian prisons.

Slovenia has already been punished at the European Court of Human Rights due to overcrowding and poor living conditions in its prisons, and is hence addressing the issue by solving two of its most pressing issues. The first is related to the male prison currently located at Povšetova street in Ljubljana, which is planned to be closed and the prisoners moved to Dobrunje, although this facility is yet to be built. The second is related to the female prison in Ig, which is in need of renovation and enlargement.

It seems that in order to address a lack of funding, the Ministry is now looking into the possibility of developing both projects to cooperation with private investors.

23 Jan 2019, 10:20 AM

STA, 22 January 2019 - The Civil Aviation Agency has found that the Slovenian carrier Adria Airways is able to secure long-term solvency, which means that it will keep its operating licence.

The agency has found that the planned and implemented measures presented by Adria show that the carrier is able to settle all of its liabilities in the long term and meet all the legal requirement, demands and criteria for keeping the operative licence, according to a press release from Adria.

The agency reportedly also confirmed in several different procedures that Adria met the required technical demands for ensuring adequate air safety.

Adria CEO Holger Kowarsch said he had expected no other decision given that Adria had been meeting all the demands for the operating licence all along.

"I regret that so many false and misleading reports were published about the state and operations of our company in recent months, and at the same time I look forward to being able to continue to implement our strategic plan undisturbed ..." he said.

Adria plans to additionally optimise its network of flights and add new flights while preserving all of its key connections to the main European hubs, Kowarsch announced.

After a thorough inspection last summer, the Civil Aviation Agency established that Adria Airways was no longer capable of settling its liabilities, so it ordered the German turnaround fund 4K Invest, which acquired the former flag carrier three years ago, to recapitalise the company in order to secure long-term financial sustainability.

The German fund injected EUR 4m in Adria Airways at the end of 2018, while announcing that an additional EUR 10m capital hike was in the pipeline for the first quarter of 2019.

Adria had until the end of last year to submit documentation assuring that it can secure long-term solvency.

The carrier posted a net loss of EUR 5.4m in 2017 after finishing in the black the year before due to the sale of its brand. The negative result was attributed to rising fuel prices as well as to the termination of cooperation with two European carriers.

The company announced in October it would not manage to get out of the red in 2018 either, mostly due to high fuel prices.

22 Jan 2019, 14:20 PM

STA, 22 January 2019 - Brewer Pivovarna Laško Union has won a damages suit against its former CEO Boško Šrot, with the latter being ordered to pay EUR 51m to its former employer, the news portal Siol reports.

The brewer's corporate affairs director, Tanja Subotić Levanič, could neither confirm nor deny the information when asked to comment by the STA.

According to Siol, the brewer has already applied for enforcement against Šrot and his family business Atka-Prima with the Celje District Court in a bid to seize his assets.

The beverage group, which was taken over by Heineken in 2015, brought a EUR 13.3m damages claim against Šrot in 2011 arguing damages incurred through the financing of his management buyout.

The Celje District Court found that Šrot was responsible for his actions early in 2016 after which Šrot unsuccessfully appealed with the Supreme Court.

He is currently serving a prison sentence of almost six years for abuse of power in the leveraged management buyout of the beverage group between 2008 and 2009.

Damages suits against Šrot have also been brought by the beverage group's subsidiaries that have since been sold, that is mineral water company Radenska, fruit drinks maker Fructal and newspaper publisher Delo.

Siol says that the companies would probably never get the damages awarded because the Šrot family has protected most of its assets from seizure, while seized assets would not even cover court costs.

22 Jan 2019, 10:25 AM

STA, 21 January 2019 - Fraport Slovenija, the operator of the Ljubljana Jože Pučnik Airport, has decided to cancel talks with the selected bidders for the construction of a new terminal and repeat the tender. The decision comes after the National Review Commission introduced a new practice in the tender for the construction of the second Karavanke tunnel tube.

According to the decision, published on the e-Naročanje public procurement portal on Monday, it follows from the decision of the review commission in the Karavanke tunnel case that bids cannot be amended following the deadline for applications.

The new practice was introduced after the deadline for bids for the construction of the new terminal at the airport passed and could not be factored in in Fraport's call for applications.

The company has established that the call's documents were unclear in terms of the new practice, which is why it has decided to reject all bids and repeat the tender after the expiry of the eight-day period for potential requests for legal recourse.

Under the new tender, Fraport will negotiate with all applicants whose bids will meet the tender criteria and not only the best three, to increase competition. The company will only negotiate the price and not the substance of the contract, because this will ensure the best possible transparency.

The company received six applications in the first tender. A solo bid was submitted by Austrian Strabag, while joint bids were filed by Slovenia's GIC Gradnje and Elcom, Croatian GP Krk and Slovenian CBE, Slovenian Kolektor Koling and CGP, Slovenia's Pomgrad and Gorenjska Gradbena Družba, and Slovenia's VG5 and Remont.

It is unclear for how long the repeated tender will delay the construction, which, according to Zmago Skobir, the head of Fraport Slovenija, was set to begin this year.

He said at the end of last year, when Fraport decided to enter talks with three bidders, that he expected talks to be concluded by the end of spring and the construction to be completed by the end of 2020.

Fraport later said that the decision to repeat the tender would likely delay the start of the construction by two to three months, whereas insisting with the cancelled tender could cause significantly longer delays.

The terminal, valued at around EUR 20m, was scheduled to open before the summer season in 2021, just before Slovenia is to take over the EU presidency. This is still the goal, said Fraport.

At 10,000 m2, the terminal will house departures and security check facilities, which are currently cramped in a space that cannot be expanded. Additional retail and restaurant facilities are planned as well.

17 Jan 2019, 13:21 PM

STA, 17 January 2019 - Slovenia will promote its growing brewery industry at the International Green Week (IGW) in Berlin, one of the biggest agricultural and food exhibitions in the world. Kicking off on Thursday, the 84th IGW will feature more than 1,700 exhibitors and will be accompanied by an agriculture ministerial attended by Slovenia's Aleksandra Pivec.

Wikimedia Aleksandra Pivec  STA CC-by-4.0 1024px-Aleksandra_Pivec-za_splet.jpg

Aleksandra Pivec. Wikimedia: STA, CC-by-4.0

Slovenia's stall will feature micro breweries Vizir, Tektonik, Hopsbrew, Adam Ravbar, Maister, Ressel, Green Gold, Reservoir Gogs, Barut Brewing, Frizi Beer, Castra and Človeška Ribica, as well as the country's biggest brewery, the Heineken-owned Pivovarna Laško Union.

The stall will also feature hop-growing companies and associations from Slovenia, as well as three start-up companies: plant pot maker Urban Planty, aromatic salt maker Barba Sol and chili pepper grower Gorki Chili.

Gorki chili - slovenian hot sauce (6).jpg

Photo: JL Flanner

Read our story on Gorki Chili here

Pivec will attend the opening on Thursday and will stay in Berlin until Sunday. On Friday, she will hold bilateral meetings, among others with Jose Graziano da Silva, the head of the UN Food and Agriculture Organisation (FAO).

On Saturday, she will attend the agriculture ministerial hosted by German Food and Agriculture Minister Julia Klöckner. The high-level meeting will focus on digitalisation in agriculture. The ministerial will also discuss young farmers, small farms and family farms, which are priorities of the FAO.

Pivec will wrap up her trip by meeting Slovenians living in Berlin on Sunday.

Watch three men try too many Slovenian craft beers here

17 Jan 2019, 11:50 AM

STA, 16 January 2019 - Migration flows are becoming increasingly important for the Slovenian economy, the central bank says in its monthly bulletin. Banka Slovenije notes a workforce shortage for occupations requiring intermediate qualifications, meaning that employers have started to hire foreign citizens.

 

"With Slovenians moving away, the hiring of foreigners has preserved a positive net migration since 2015."

Related: Foreigners now hold 10% of the jobs in Slovenia

"However, on average the structure of the foreign worker population in terms of education and vocation is poorer than that of domestic workers."

Unless Slovenia starts producing higher value added and introduces direct measures to prevent brain drain, the country's productivity growth could become too low to keep up with the most developed countries, and the effects of an ageing population all the more pronounced, Banka Slovenije said.

Brain drain is lost potential for the state that has invested into the education of highly-trained work force now leaving the country, it added.

Related: 1 in 8 residents of Slovenia is now a resident

The central bank believes brain drain happens for a number of reasons, among them a relatively low value added of a large part of the economy.

Also touching on exports, the bulletin says that the international environment is becoming less advantageous for Slovenia's exporters, as growth in the EU as well as globally has been slowing down.

Although the estimate of economic growth for Slovenia's trade partners is somewhat lower than in 2018, the outlook still indicates "solid conditions" for the exporting companies.

15 Jan 2019, 15:00 PM

STA, 12 January 2019 - The economic and financial crisis in Slovenia, which started in 2009, brought a significant growth of unemployment, with the number of the unemployed more than doubling to almost 130,000 at the beginning of 2014. The situation on the labour market has been improving lately, with shortage of certain staff actually becoming a problem.

The number of registered unemployed persons was up steeply in 2009 and peaked at the beginning of 2014 at almost 130,000, which was around double of that before the crisis.

It was in 2014 when the number finally started to decline, with the improvement on the labour market accelerating in 2016 and 2017 and continuing in 2018, with the number standing at 78,534 at the end of the year.

Projections for the coming years speak about an additional improvement, with the number of registered unemployed expected to drop to the pre-crisis level by 2021 barring major negative shocks.

Staff shortages are now a growing issue, along with unemployment among those aged 55+

There is a large number of structurally and long-term unemployed people in Slovenia and hard-to-employ people, whose activation requires additional active employment policy measures.

Given the circumstances, a large number of companies have already started reporting shortages of adequately trained staff, which is becoming a limiting factor in the implementation of their strategies.

The number of the active working population is also growing again, and the employment rate exceeded the pre-crisis level in 2017. The total number continued to increase in 2018 to reach 1.022 million in the third quarter, a 23-year record.

Although the total employment rate is somewhat higher than the EU average, Slovenia fares much worse when it comes to the employment rate in the 55-64 age category despite an improvement in recent years.

In 2017, it stood at 43% or 14 percentage points below the EU average. Slovenia is meanwhile recording better progress in the under-25 category, but its rate is still at roughly half of the EU average.

         Employment  Registered        Survey

         rate (%)    unemployment (%)  unemployment (%)

2008        73.0         6.7               4.4

2009        71.9         9.1               5.9

2010        70.3        10.7               7.2

2011        68.4        11.8               8.2

2012        68.3        12.0               8.9

2013        67.2        13.1              10.1

2014        67.7        13.1               9.7

2015        69.1        12.3               9.0

2016        70.1        11.2               8.0

2017        73.4         9.5               6.6

* The figures are annual averages

Source: Statistics Office, Employment Service

Pay in Slovenia after the crisis

Growth of wages slowed down in the crisis years and came to a stop in 2012 and 2013. Wages started to grow again noticeably only in 2017 and 2018, when the growth of gross wages exceeded 3%, with the trend expected to continue and grow even stronger in the coming years. Domestic and foreign macroeconomic analysts are stressing that the growth of wages will not significantly exceed the growth of productivity and undermine the competitiveness of the economy.

Data for the period as of 2008 also show that the growth of wages was higher in the private than in the public sector. While in the public sector the crisis was fought with lay-offs, there were no dismissals in the public sector, with the number of employees even increasing in certain activities. Civil servants did contribute their share by accepting austerity measures, which are only now being gradually abolished.

Related: Economic crisis that produced a "lost decade" in Slovenia

In the years after 2013, contributing significantly to the real purchasing power was a low inflation, which was noticeable again only in 2017 and last year, when it reached 1.4% according to preliminary estimates.

What also marked the crisis years was a raise of the minimum wage of more than 20% in 2010, which enraged the employers, who blamed the rise in the unemployment rate in the coming years on this measure. Trade unions were meanwhile noting that the minimum wage was still below the minimum costs of living and that all bonuses were calculated into it.

In the recent years, the minimum wage has been increasing more gradually, standing at EUR 843 gross last year. This year it will increase to EUR 886 and in 2020 to EUR 940 gross under the latest legislative changes, which also regulate the elimination of bonuses from the minimum wage as of 1 January 2020.

      Inflation (%)  Average net wage*      Average gross wage*

                     in EUR   growth in %   in EUR  growth in %

2008     2.1         899.8       7.8        1,391.4       8.2

2009     1.8         930.0       3.3        1,439.0       3.4

2010     1.9         966.6       3.9        1,494.9       3.9

2011     2.0         987.4       2.1        1,524.6       2.0

2012     2.7         991.4       0.4        1,525.5       0.0

2013     0.7         997.0       0.6        1,523.2       0.0

2014     0.2       1,005.4       0.8        1,540.2       1.1

2015    -0.5       1,013.2       0.8        1,555.9       1.0

2016     0.5       1,030.2       1.7        1,584.7       1.8

2017     1.7       1,062.0       3.1        1,627.0       2.7

* Annual average

Source: Statistics Office

Added value and productivity

In addition to the demographic trends, one of the key challenges for long-term development and economic competitiveness of Slovenia are growth in productivity and added value in the economy, to which growth of wages and well-being are tied. In this segment, the economic crisis brought stagnation and even a slight decline, while in comparison with the EU average, productivity in the Slovenian economy in 2018 was still lower than in the pre-crisis 2008.

Gross added value per employee was up in the 2008-2017 period, but is still well below the EU and eurozone averages, at 63% of the EU average and 57% of the eurozone average.

Related: Banks were at the center of the financial crisis in Slovenia

Increasing productivity and added value is a challenge both for the economy and economic policy. Businesses have set an ambitious goal of reaching EUR 60,000 in added value per employee, EUR 50bn in exports and an EUR 2,300 average wage by 2025, which is why they except measures from the state ranging from the tax police to the immigration policy.

Among the necessary measures both in the economy and institutions, they have pointed to measures for growth of investments in new production capacities and new technologies and digitalisation, a growth in investments in research and development, which as a share of GDP dropped from 2.6% in 2013 to 1.93% in 2017.

Labour productivity, % of EU average

       Per employee   Per hour worked

2008       83.5           83.8

2009       79.9           79.0

2010       79.4           78.2

2011       80.6           80.3

2012       80.0           79.8

2013       80.3           78.9

2014       81.2           78.9

2015       80.5           77.9

2016       80.5           79.7

2017       81.0           81.5

Source: Statistics Office

Gross value added, in EUR

      Per employee  EU average    Eurozone average

2008     34,759        55,079          61,492

2009     33,694        52,917          60,581

2010     34,107        55,506          62,638

2011     35,594        56,951          64,164

2012     34,854        58,247          64,834

2013     35,643        58,850          65,863

2014     36,893        60,247          66,991

2015     37,758        62,818          68,678

2016     39,091        62,418          69,398

2017     40,136        63,276          70,861

Source: Eurostat

All out stories on the Slovenian economy can be found here

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