Business

18 Feb 2020, 12:11 PM

STA, 18 February 2020 - With the acquisition of the logistics company Intereuropa finalised, the national postal operator Pošta Slovenije plans to further expand on the markets of the Southeast Europe and make EUR 195 million in investments in the next six years.

The company said on Tuesday, after its strategic development programme through 2025 was recently confirmed by Slovenian Sovereign Holding, that EUR 457 million in revenue was expected to be generated as early as this year.

The new strategy takes into consideration the steep growth of global e-commerce, technological progress, changed habits and expectations of users and liberalisation of postal service market, which puts an emphasis on modern technologies, digitalisation, automation and e-commerce.

Boris Novak, the chairman of the state-owned company, said that Pošta Slovenije would focus its logistics and parcel services on the markets of the Southeast Europe, which was expected to result in further growth of the entire group.

One of the key points of the development programme, which is expected to secure balanced growth and profitability over the next six years, is further expansion in Southeast Europe, which was made possible with last year's acquisition of Intereuropa.

The plan envisages a total of EUR 195 million in investments until 2025 in Pošta Slovenije and Intereuropa, which employ a combined 8,000 people. The bulk of funds will go for automation and digitalisation in postal logistic centres and in transport, as well as for expanding capacities.

"We will also invest a lot in energy efficiency and sustainable development, both in terms of the car fleet and energy efficiency of the network and buildings," added assistant director Vesna Kos Tomažič.

The company will continue to optimise the postal network, and expects that its network at the end of 2025 will feature a combination of its own postal offices, franchise offices, self-service parcel terminals and other solutions.

Pošta Slovenije wants to become a leading provider of parcel distribution services in Slovenia, and it plans to generate more than half of its revenue with logistics and parcel services as early as this year.

16 Feb 2020, 10:06 AM

Ex-Yu Aviation reports that events surrounding last year’s collapse of Adria Airways are now under investigation by the Slovenian police, who are looking into suspected abuse of office and fraud. Adria was last owned by a Luxembourg based German fund, 4K Invest, which liquidated a number of affiliated companies after the carrier’s collapse, making investigations of the circumstances more complicated. What’s more, 4K itself has closed its website and cut off its phone lines, as well as disappearing from business registries in a number of companies

The whole story is worth a read, and although no specific allegations are being made yet by the police, there are enough odd facts and suspect actions to raise questions as to whether 4K was ever sincere in its wish to run Adria Airways, and why the Slovenian government did not choose to find a strategic partner within the aviation industry.

All our stories on Adria Airways are here

14 Feb 2020, 12:29 PM

STA, 13 February 2020 - Bia Separations, a world leader in the development of purification processes for biologics, in particular for gene therapy, is launching a EUR 6 million investment into expansion of its production facilities in Ajdovščina in March. Major investments are also planned in the US and Canada.

The facilities in Ajdovščina will be five times bigger after the EUR 6 million investment, which will be funded entirely from the company's surplus.

"We will introduce second-generation production lines and the possibility of making products of larger volume. We are creating about 100 new jobs," said CEO Aleš Štrancar about the plans for Ajdovščina.

Construction work is to be completed at the beginning of next year.

The company also plans to build production facilities in its most important market, North America, where Bia Separations has been recording high demand.

The construction of the facility, which will be three- to four-times bigger than the new, expanded facility in Ajdovščina, is expected to start in 2022 and conclude by the end of 2023.

According to Štrancar, the company generates 80% of revenue in North America. "Buyers expect our production of the key products they use in their production of medicines and vaccines to be as close to them as possible and not depend on the extremely unpredictable business environment and the increasingly uncertain transport routes," he said.

The management presented the plans for expansion into North America in detail to US Ambassador to Slovenia Lynda C. Blanchard on Wednesday.

The ambassador invited the company to get in touch with US institutions and offered the Embassy's help in the strengthening and expanding of its presence on the US market.

Last year, Bia Separations completed court-mandated debt-restructuring early and its revenue doubled to EUR 12 million. The plan for this year is EUR 25 million in revenue.

You can learn more about the company on its website

13 Feb 2020, 13:01 PM

STA, 13 February 2020 - The European Commission has kept Slovenia's economic forecast unchanged at 2.7% for 2020 and 2021, more than double the eurozone average. In its winter 2020 forecast released on Thursday, it said consumption and investment are expected to continue growing while net exports are set to "weigh on growth over the forecast horizon".

Net exports are expected to have a positive impact, but their contribution to headline growth will be slightly lower due to lower export demand growth and robust import growth.

Private consumption is expected to remain strong in the next two years provided the employment rate remains high and wages keep on rising.

Investment growth is also forecast to continue apace, albeit at a slightly lower rate than in 2019 due to weaker economic confidence.

The Commission has also said that housing investment is expected to start growing due to recent increases in house prices. Moreover, commercial real estate and public investments are projected to continue increasing as well.

Meanwhile, higher wages will drive up inflation, in particular in the services segment. "Overall, consumer price inflation is forecast at 1.9% in 2020 and 2% in 2021", up from 1.7% in the second half of 2019.

13 Feb 2020, 11:02 AM

STA, 12 February 2020 - The European Commission has issued a letter of formal notice to Slovenia and seven other member states for failing to transpose the 5th anti-money laundering directive. Anti-money laundering rules are "instrumental in the fight against money laundering and terrorism financing," the Commission said on Wednesday.

It added that recent money laundering scandals had revealed the need for stricter rules at EU level and that legislative gaps in one member state had an impact on the EU as a whole.

EU member states were obligated to transpose the directive by 10 January, however, Slovenia, as well as Cyprus, Hungary, the Netherlands, Portugal, Romania, Slovakia and Spain, failed to do so.

Unless the countries fail to provide a satisfactory response to the Commission within 2 months, the Commission will send them reasoned opinions, after which they get another two months to act or else face the European Court of Justice.

In December, Slovenia's National Assembly passed changes to the act on anti-money laundering and terrorism financing, transposing into Slovenian legislation the 4th anti-money laundering directive adopted by the Commission in 2016.

The Finance Ministry meanwhile said that it had stepped up efforts to draft the needed legislation after receiving the formal notice. The ministry expects the draft changes to be filed in government procedure shortly.

12 Feb 2020, 14:25 PM

STA, 12 February 2020 - Slovenian companies wondering about the future relationship with their UK partners after Brexit were assured at an event held by the British Slovenian Chamber of Commerce and the British Embassy on Wednesday that Britons wanted to preserve the close business ties.

The UK exited the EU at the beginning of the month after 47 years of membership. The terms of trade will remain unchanged until the transition period expires at the end of the year, while talks on new relations are to start soon, UK Ambassador to Slovenia Sophie Honey told the event.

"We would like for us to continue to grow together," she said, noting the countries' close cooperation in many fields, from construction to banking and advanced technologies, with the volume of business between the two countries increasing by more than 10% over the past three years.

Honey believes that an agreement on the future relationship between the UK and the EU is feasible by the end of the transition period. The UK is keen to reach a free trade agreement similar to the one between the EU and Canada.

Tim Abraham, deputy director at the UK Department of Business, Energy and Industrial Strategy, said that now was the opportunity to prepare for the changed terms and conditions setting in as the UK exits the single market and customs union at the end of 2020.

Abraham, who would like for the close business ties to be preserved, noted that many of the businesses present at the event today already do business with countries outside the EU, saying that doing business with the UK on new terms would not be much different than that.

Zoran Stančič, the head of the European Commission's office in Slovenia, assured business representatives present that procedures would be run transparently and that businesses would get all the necessary information.

"However, the path ahead won't be easy, eleven months is little time," he said, adding that the European Commission had high ambitions for the future relationship with the UK. He said that the transition period could be extended by a year or two if the talks did not develop the way both sides wanted.

Tjaša Redek, a professor from the Ljubljana Faculty of Economics, presented an analysis which showed that Brexit would have only limited impact on Slovenia, with the negative impact on GDP growth projected at up to 0.03% in a decade.

Data for 2018 show that Slovenian companies exported EUR 577 million in goods and services to the UK, importing EUR 441 million.

The analysis also showed that Slovenian companies do not expect substantial negative consequences of Brexit, but they are preparing for the changes nonetheless and many are eyeing new markets.

All our stories on Brexit and Slovenia are here

11 Feb 2020, 09:20 AM

STA, 10 February 2020 - Slovenia's industrial output increased by 3% last year, the sixth consecutive year of growth. The output in December was 1% higher than in the same month a year ago but 1.8% lower than in November.

Fresh data from the Statistics Office show an annual growth in the value of industrial production, stocks and turnover in industry.

The 3% growth rate in industrial output last year is a slowdown compared to the 5% growth rate recorded in 2018 and a six-year high rate of 8.4% in 2017.

industrial output slovenia 2020.JPG

The growth was driven by a 3.4% growth in manufacturing, while the electricity, gas, steam and air conditioning supply sector and mining and quarrying contracted by 0.8% and 3.6%, respectively.

Industrial turnover increased by 2.3%, owing to a 3.1% growth in the foreign market and a 1% growth in the domestic market. Sales revenue rose across all main industrial groupings, the most in consumer goods industries, at 4.5%.

In December, industrial turnover was 1.8% lower than in November and 1.5% higher than in December 2018.

The value of stocks rose by 4.1% last year. In December their value fell by 0.5% compared to the month before but rose by 2.9% year-on-year.

More on the data can be found here

07 Feb 2020, 09:49 AM

STA, 6 February 2020 - The outgoing government on Thursday approved Slovenian Sovereign Holding's (SSH) asset management plan for 2020, which also contains a long-awaited plan to consolidate, manage and restructure state-owned tourism companies.

The tourism consolidation plan has been months in the making, but the government did not provide any details about it after today's session.

Similarly, Economy Minister Zdravko Počivalšek, the initiator of the changes, did not reveal any details when leaving the session, saying only that the plan had been discussed.

His ministry told the STA earlier this week that the tourism consolidation plan pursued goals from the 2017-2021 strategy on sustainable tourism growth.

The strategy governs the consolidation of state-owned tourism companies in terms of ownership and management under the roof of a special state holding.

The state's tourism assets would be consolidated within a holding which would stem from a special company the bad bank has set up after seizing Istrabenz Turizem shares.

Transfer of the shares of tourism companies Istrabenz Turizem and Thermana is pending, awaiting government approval of the tourism consolidation plan.

The new holding is also expected to feature the state's stakes in Sava Turizem (including Hoteli Bernardin), Hit Alpinea, Terme Olimia, Adria Ankaran and Unitur.

Počivalšek believes the consolidation should help the companies improve their performance and increase value, which would be a good basis for a "well thought-out" privatisation.

The newspaper Delo reported that the goal was to increase the value of the companies by EUR 400 million in eight years.

To buy the remaining stakes the state does not yet hold in these companies, for instance the York fund's over 40% stake in Sava or Unitur, the business daily Finance said EUR 40-60 million could be needed.

Delo said that investments of the tourism companies pooled by the new holding, some of which are still quite indebted, are planned to over EUR 200 million.

The European Bank for Reconstruction and Development (EBRD) is reportedly interested in recapitalising the holding, which would give more leverage for investment.

In today's press release, SSH said the consolidation and restructuring of the state's tourism portfolio would be carried out in several stages.

The key goals will be increasing the portfolio's value and improving its profitability as well as further development of the tourist industry in line with the strategy.

It also said the state's tourism portfolio represented a significant part of the Slovenian industry, so its consolidation would have a positive impact on the entire industry.

Meanwhile, SSH's annual asset management plan, which specifies management of individual sectors and of specific investments, sets the target return on equity for 2020 at 5.9%.

This is 0.3 of a percentage point less than in 2019, but SSH boss Gabrijel Škof has recently said this is due to lower anticipated economic growth, one-off events in 2019 and regulatory requirements.

The custodian of state assets plans dividends at EUR 142.4 million, of which EUR 102.9 million would go directly to the state and EUR 39.5 million to SSH.

Last year's dividends amounted to EUR 250.4 million as a result of the sale of banks NLB and Abanka, while no major sales of state assets are planned for this year.

In the release SSH said that following the privatisation of the two banks, the share of financial companies in its portfolio had significantly dropped as had the share of important and portfolio investments, whereas the holding continues to manage many strategic investments, the return on equity of which is usually lower.

The annual asset management plan consists of a general public part and a special part which details each individual asset, SSH explained.

It said that the government had also adopted criteria to assess the performance of companies with a state stake.

Leaving the government session, Infrastructure Minister Alenka Bratušek told the press her proposal to put quality services before profit in companies carrying out public service, such as the national railway and postal companies, had not been included in the SSH's annual plan.

06 Feb 2020, 08:54 AM

STA, 5 February 2020 - Banks have been complaining for years about negative interest rates, which have been eroding their earnings. In some countries they have therefore started charging fees for household sight deposits. In Slovenia, this is unlikely to happen, at least for the vast majority of deposits, shows a central bank analysis.

A survey of commercial banks conducted by the Slovenian central bank shows that at least sight deposits up to EUR 100,000 should be safe from any such measures.

Just one in ten banks involved in the survey said they were considering negative interest and two in ten said they were considering deposit fees, shows the survey presented on Tuesday.

And even if some banks decide to start charging for deposits, the central bank is bullish about the impact this would have on the banking sector.

That is because banks elsewhere in Europe which have already introduced deposit fees have not seen significant outflows of cash, according to vice-governor Primož Dolenc.

And the measure would only affect a small proportion of savers: only 1% of deposits are in excess of EUR 100,000.

What is more, bank clients are slow to react to changed interest rates since real rates are already negative. This implies that some would even accept deposit fees, according to Dolenc.

And even if banks started charging negative interest, most said they would change their policies, meaning they would try to entice clients to convert sight deposits into term deposits.

Bank clients also have few other ways to invest their deposits with the same degree of risk. "Alternative investments would have to be similar to deposits - with high liquidity and low risk," but they do not currently exist, said Dolenc.

This is also why the central bank is not concerned about the impact negative interest might have on bank capital adequacy and liquidity.

"Banks would respond actively, liquidity of the banking sector is reasonably high and access to alternative sources of financing is good at the moment," Dolenc said.

The central bank does not plan on issuing any recommendations to commercial banks regarding negative interest. "Interest rate policy is in the domain of banks," according to Dolenc.

06 Feb 2020, 08:51 AM

STA, 5 February 2020 - Slovenian executives are quite pessimistic about the prospects for global economic growth this year as more than half think growth will slow down, shows a survey conducted by PricewaterhouseCoopers (PwC).

 "The sentiment of this year's survey of Slovenian directors is best summarised with the word uncertainty," head of legal services at PWC Slovenia, Sanja Savič, told the press on Wednesday.

Last year 47% of directors thought that global growth will deteriorate over the next 12 months, this year 53% think so.

The Slovenian figures are very much aligned with global trends. In last year's PwC survey just 29% of directors were pessimistic, this year the share rose to 53%, in what is the biggest jump in pessimism since 2012.

Savič said uncertainty was present across all segments of the economy and is the consequence of "tensions in international trade, political turmoil, increasing protectionism, coronavirus, terrorism, cyberattacks and increased regulation".

The factors most commonly highlighted by Slovenian directors as having an impact on growth of their companies include uncertain economic growth (78%) and higher taxes (76%). Technological change (67%) and availability of skilled staff (60%) also rank high.

Savič pointed out that Slovenian directors do not perceive cyberattacks as a major threat, as they ranked last among perceived threats (49% mentioned them). Globally, however, the share is much higher, 73%.

Slovenian directors plan to employ a variety of strategies to counter the growing uncertainty, foremost among them organic growth, which is the choice of 69% of Slovenian respondents.

"Interestingly, 50% of Slovenian directors said they would forge new strategic partnerships this year. What this means remains to be seen," Savič said.

Several directors were on hand for the presentation and highlighted the business environment as the overarching problem.

"We don't need much, all we need is a stable and predictable business environment," said Dejan Turk, the director of mobile operator A1 Slovenija.

Likewise, Sašo Berger of IT company S&T said high taxes were not a problem, the business environment was.

This is the second time Slovenia was included in the PwC survey, which has been conducted for over two decades. A total of 45 directors took part in Slovenia and almost 1,600 globally.

06 Feb 2020, 08:45 AM

STA, 5 February 2020 - Addressing the press on Wednesday amid continuing speculation about the plans of Novartis, representatives of the Swiss multinational's Slovenian subsidiary Lek said Novartis would continue a reform in Slovenia that included the transformation of production locations and more focus on innovative drugs along with generics.

"The changes that we feel the most are Novartis's ongoing portfolio changes. In this context I see Lek in Slovenia integrated to a greater extent in the innovative segment," Lek head Robert Ljoljo said.

"This does not mean that we're leaving generic products entirely ... but we'll definitely see a transformation of production locations and an additional increase in the number of innovative drugs produced," he added.

Lek started producing 10 innovative drugs last year, making for a total of 26. The development of generic pharmaceuticals is also continuing, with registration applications filed last year for 21, the development and research executive Uroš Urleb explained.

Novartis plans to continue with investment. Last year it expanded the development centre in Ljubljana and set up an automatised analysis lab, while this spring it expects to wrap up an investment into the development of biological medicinal products in Mengeš.

Commenting on the change of plans in Prevalje, where Lek built a new hall to then announce it was actually phasing out the production of antibiotics there, Lek management board member Raul Intriago Lombeida repeated this location would be part of Novartis's future global centre for technical operations.

As regards a potential sale of the newly built hall, Ljoljo said that talks with TAB, the Mežica-based maker of starter batteries for cars and industrial batteries, were still ongoing.

Meanwhile, Intriago Lombeida did not wish to comment directly on the visit of potential Chinese investors at the production unit for active ingredients in Mengeš. He said such visits by agency representatives, suppliers etc. were an everyday affair.

Lek's results in 2019 were also not discussed concretely, with Ljoljo announcing they would be presented in the annual report, presumably in August. He did say the trends were in line with those for Novartis, which increased net sales by 9% while seeing a decrease net profit by 7% to EUR 11.7 bn.

New Total Croatia Info Site

total-croatia-montenegro.jpg

Editorial

Photo of the Week

Photo galleries and videos

This websie uses cookies. By continuing to browse the site you are agreeing to our use of cookies.