Business

23 Apr 2019, 14:03 PM

STA, 20 April 2019 -Impol, Slovenia's largest maker of aluminium products, has obtained a certificate proving its compliance with the international quality standard for the aerospace industry. This will allow the company to make forays into new markets.

 

As part of the process, the Zagreb subsidiary of the certification body DQS checked Impol's compliance with all points of the EN 9100 standard, except product development, which is conducted in cooperation with the client.

Special attention was dedicated to the management of measuring equipment used for the products designated for the aircraft industry.

The Slovenska Bistrica-based company said the certificate created new opportunities for its foray into the demanding market of top-quality products, and upgraded the company's profile.

As a certificate holder the company is now recognised in the Oasis information system, where potential clients have access to all the information about Impol's certified production programme.

All aerospace industry manufacturers and their suppliers need to comply with the EN 9100 quality management standard, and testify compliance by means of a certificate issued by authorised certifier.

Some of Impol's products had been intended for the aerospace industry before, but the clients had not yet set such high demands.

With its newly incorporated company Impol FinAl, Impol Group said that it had sufficient potential and capacities to launch new high value added products in the aerospace industry market.

One of the biggest Slovenian exporters, Impol increased its exports by 16% last year to EUR 728m. It generated 94% of its sales revenue abroad.

Exports to EU markets amounted to EUR 614m, and exports to other European markets to EUR 50m, with the EUR 64m worth of products sold to other continents. Germany accounts for almost a third of the sales.

Impol expects sales abroad to increase by a further 9% to EUR 795m.

23 Apr 2019, 07:29 AM

STA, 23 April 2019 - Economy Minister Zdravko Počivalšek will start a multi-day visit to China on Tuesday designed to strengthen economic relations between the two countries as well as Slovenia's role in the Belt and Road Initiative.

Počivalšek will present the government's action plans for potential investors and the situation in Slovenian business. Tourism cooperation will also be on the agenda.

The minister will visit the headquarters of the Chinese appliance and electronics manufacturer Hisense, the owner of the Slovenian white goods maker Gorenje.

He will meet with representatives of the local authorities in the province Liaoning Shenyang, where the Slovenian automotive supplier TPV would like to launch a production facility.

Počivalšek will attend the second Belt and Road Initiative Forum, addressing participants at the silk road innovation conference.

China is Slovenia's leading trading partner in Asia, listed as 13th among the country's top trading partners, ahead of Russia and the US, said the Economy Ministry, adding that Slovenia is particularly supportive of hi-tech projects.

More than 12,500 Chinese companies exported to Slovenia last year, while almost 500 Slovenian companies traded with China. Bilateral trade in goods increased by almost 12% year-on-year, amounting to EUR 1.3bn.

The scope of Slovenia's investment in China is on the rise as well, currently estimated at EUR 45m, as over 30 Slovenian companies have affiliates in China.

In Slovenia, there are roughly 110 companies in 100% Chinese ownership and 23 companies with mixed Chinese ownership, according to Economy Ministry data.

All our stories on Slovenia and China are here

21 Apr 2019, 18:22 PM

April 21, 2019

Večer reports that last Wednesday the UK’s Ambassador to Slovenia, HMA Sophie Honey, joined a discussion at the British-Slovenian Chamber of Commerce in Maribor, where the possibilities of economic cooperation between the two countries during the Brexit uncertainty and after were discussed.

Iztok Kračun, the director of the Institute for Strategic Solutions said that it is a very difficult task for many small and medium-sized enterprises to get to the volume of business which is required to be profitable in the UK, however, he sees the opportunity for niche market products with high added value, which is thus what Slovenian economy should be based in the future.

Panvita CEO Toni Balažič agreed that niche products were the right answer to the export question, and added that companies should remember the a large immigrant community from the former Yugoslavia in the UK, who are already familiar with Slovenian products. He then mentioned how Panvita’s čevapčiči are popular among the Brits. Ambassador Sophie Honey seconded him by saying that her children also love čevapčiči, and are already worried about where they’ll get them on their return back home.

20 Apr 2019, 10:30 AM

STA, 19 April 2019 - Tourism contributed EUR 5.7bn or 12.3% to the Slovenian gross domestic product (GDP) in 2018, according to a report by the World Travel and Tourism Council (WTTC). The sector employed 110,700 people or 12.8% of total employment.

The annual contribution of tourism to the Slovenian GDP increased by 6% compared to 2017, the Slovenian Tourist Board said.

Related: 2018 Saw 8% Rise in Tourists, 10% in Nights, Strongest Growth from Abroad

In Europe, tourism contributed 9.7% to the GDP last year, an increase of 3.1 percentage points over 2017. Some 36.7 million people or 9.7% of all working Europeans were employed in the sector.

On a global scale, the tourism and travel sector directly and indirectly contributed EUR 7.825bn or 10.4% to the global GDP. The sector employed some 319 million people.

This year, tourism's contribution to the global GDP is set to increase by an additional 3.6%. The WTTC estimates that the total number of people employed in the sector globally will increase by 2.9%.

All our stories on travel and tourism in Slovenia are here

19 Apr 2019, 16:20 PM

STA, 17 April 2019 - Slovenians prefer to save in bank deposits, however mutual funds have seen an increase in assets and savers. At the end of 2018 Slovenian households had 1.7 billion euros invested in mutual funds, said Karmen Rejc, director of the Slovenian Investment Fund Association.

The average European invests 10% or 5,800 euros of their assets in mutual funds, whereas in Slovenia that figure is lower, namely 6% or 900 euros, Rejc said at a news conference leading up to Friday's World Mutual Fund Day.

Matjaž Lorenčič, president of the Slovenian Investment Fund Association and Infond Investment Funds chairman, said that out of the over 20 billion euros in last year's bank deposits, between 250 and 300 million euros were lost due to inflation.

Slovenian asset managers manage approximately 2.7 billion euros in 100 mutual funds. Adding the assets in alternative funds and those managed based on contracts for the sound management of operational risk, this figure amounts to approximately 3.7 billion euros. The number of investors in mutual funds is approximately 450,000.

Slovenian mutual funds are managed by six companies. Last year they recorded an inflow of approximately 540 million euros, an outflow of 550 million euros. This year, cash flow is positive, according to Lorenčič.

There are 96 foreign mutual funds operating in Slovenia. These manage 211 million euros in assets.

18 Apr 2019, 12:50 PM

STA, 17 April 2019- Slovenia still has a way to go before becoming truly attractive to best talent, a debate organised by AmCham heard on Wednesday. The speakers, among them Labour Minister Ksenija Klampfer, shared the view that capable workforce thrived on demanding and interesting challenges.

 

Nana Šumrada Slavnič, the head of legal services at Ekipa 2, a branch of Outfit 7 that created the Talking Tom game, believes Slovenia has a good education system but it fails to deliver variety to those who want more than what is offered as part of the curricula.

Moreover, companies should focus on public exposure of their best talent. "People are good at their jobs when they feel valued," Šumrada Slavnič told the event hosted by the Ljubljana Faculty of Economics.

The minister in charge of labour, family, social affairs and equal opportunities, Klampfer, believes that life-work balance remained a blind spot for many Slovenian employers.

Often, people leave their jobs because of poor relations at the company, she said, adding the only way to address this issue was to improve communication at the workplace.

Professor Robert Kaše of the Economics Faculty believes that talent need challenges. A study of the faculty showed that talents believed they were using only about 66% of their potential at work. He also stressed the importance of either formal or informal recognition of the talent's status within the company.

Ksenija Špiler of BB Consulting believes it is key for talents to find their own challenges and not for them to wait to be presented by challenges with the superiors.

Touching on brain drain, the minister said this was a normal phenomenon. It is good for people to go abroad, gain new experience and return back home. Slovenia can achieve that they will indeed return through effective housing policies and welfare system.

Matic Vošnjak of Competo, a human resources consultancy, said that 47% of people who venture abroad return back home. However, they often have problems with finding new opportunities for themselves once they return because companies frequently do not know how to use their potential.

All our stories about AmCham Slovenia are here

17 Apr 2019, 16:38 PM

STA, 16 April 2019 - The National Assembly voted down the Democratic Party (SDS)-sponsored amendment designed to cut the personal income tax on Tuesday, thus paving the way for the adoption of the government proposal to abolish tax on the annual holiday allowance up to average monthly pay.

In its third such proposal since 2017, the opposition party sought to reduce tax rates for all income brackets by two percentage points, raise brackets by EUR 2,000 upwards, and increase the general tax credit from EUR to 3,300 to EUR 4,000, as well see to its adjustment with inflation.

The party argued that labour taxation in Slovenia was among the EU's highest, which made Slovenian businesses less competitive and less productive because they could not spend enough money on research and development. The high taxation was also blamed for the brain drain.

The party calculated that the amendment would result in a loss of revenue from income tax of EUR 387m, which would be offset through higher receipts from VAT as a result of an increase in consumption.

The Finance Ministry estimated the loss of revenue at EUR 383m and the increase in VAT revenue at EUR 19m. The government and coalition MPs argued that the loss of revenue would thus be excessive.

The only other parties to back the SDS proposal were the fellow opposition New Slovenia (NSi) and National Party (SNS).

Now that the SDS amendment is off the table, the National Assembly will be able to move on to the government-sponsored amendment which increase the threshold at which the holiday allowance is exempt from taxes and contribution from 70% to 100% of average pay.

The parliament is expected to pass this proposal at a session due on 25 April.

The current session wrapped up today after only two days of proceedings, including Monday's questions time.

All our stories on tax in Slovenia are here

17 Apr 2019, 14:25 PM

STA, 17 April 2019 - Abanka, the country's third largest bank, posted EUR 66.7m in net profit last year, up 56.6% over 2017, according to the audited annual report released on Wednesday.

The report says that the optimisation of operations of Abanka continued in 2018, reflecting in a reduction of operating costs, which were down by 2.4% or EUR 1.8m compared to the year before.

Net interest revenue amounted to EUR 60.6m, down from EUR 71.9m in 2017, while net non-interest revenue was up to EUR 64.4m from EUR 46.8m. Impairments and provisions amounted to EUR 22m, up from EUR 8.2m in 2017.

Abanka's total assets amounted to EUR 3.73bn at the end of last year, up from EUR 3.66bn at the end of 2017.

The Abanka group's net profit was up by 57% to EUR 65.6m, while net interest revenue was down by almost 17% to EUR 61.1m.

The bank continued to lower the share of non-performing loans, which dropped by 5.6 percentage points at the group level to 4.6% through the sale of non-performing claims.

Abanka noted that the operating results, the sound capital position, a high level of liquidity and a significant reduction in non-performing loans also resulted in an improved credit rating by Moody's to investment grade in 2018.

The bank has been in 100% state ownership since it was bailed out with taxpayer money in 2013. The government must privatise Abanka to meet the commitments it made in exchange for the EU clearance of the state aid.

According to unofficial reports, three binding bids for the bank were submitted in the second half of March.

The media have mentioned the US private equity fund Apollo, Hungarian bank OTP, Serbia's AIK Banka, Austrian Erste Group, as well as US private equity funds Blackstone and Advent International as potential buyers.

While the pricing of the offers remains a secret, analysts estimated late last year the bank was worth EUR 340-460m based on the book value.

16 Apr 2019, 12:25 PM

STA, 16 April 219 - HSE, the state-owned power utility which owns the Šoštanj coal-fired power station (TEŠ), is looking for a new energy source for TEŠ, according to HSE chairman Stojan Nikolić. He believes burning biomass or waste would be economically viable.

"We know that we have to overhaul the plans for the operations of the Premogovnik Velenje mine and TEŠ. It's been clear for a while that TEŠ will not be able to operate until 2054, as originally planned, both for economic and technical reasons," Nikolić said in an interview with the STA.

But he could not say when the coal-fired power station will be wound down, because it is not clear yet how long the extraction of coal from the Velenje mine, the only source of coal for TEŠ, will be possible.

"My estimate is that until 2040. But we need to set the framework for a fair transition to other activities for the entire coal mining region.

"If we manage to agree on this in the next two or three years, which I'm hoping for, then I think we can still be competitive in the next 15 or 20 years with the production of electricity from coal," he said.

The main challenge faced by HSE as the biggest coal-fired producer of electricity in the country is decarbonisation.

The construction of TEŠ 6, the cutting-edge generator with minimal emissions, was part of efforts to reduce CO2 emissions, Nikolić said.

But TEŠ is still unable to cover the costs of the investment, which are being partly covered by HSE. Admitting that TEŠ was struggling, Nikolić said that the management of HSE and TEŠ were looking for possible solutions. Given that the viable coal reserves at the Velenje mine are running out, importing coal is one of the options.

However, given the current market prices of coal and CO2 coupons, importing coal would not be economically viable and the situation will only get worse in the future.

This would be an option only if a supplier was found that would offer coal at the same price as the Velenje mine, which is EUR 2.75 per gigajoule, or 50 cents more at the most, Nikolić said. "That is, if we get all the necessary permits."

The Environment Agency already said importing coal would require no additional permits, but the environment permit would still need to be changed if any other energy source is to be used at TEŠ.

"Burning biomass would probably be economically viable and definitely also burning processed waste, as now we are paying a lot of money to export waste to Austria and Italy."

Burning imported coal is seen as the last resort, but if this would make it difficult for TEŠ to obtain an environmental permit for biomass and waste burning, then the idea to import coal would be abandoned.

Slovenia will have to solve the problem of waste treatment soon, and TEŠ as well as the cement plant in Anhovo are appropriate facilities to burn waste, Nikolić said.

The other area HSE is focussing on is renewable energy sources but the options here are limited. The Drava river can take no more power plants, while recently a political decision was made not to build any on the Mura, he said.

HSE is currently cooperating with GEN Energija in building a chain of hydro power plants on the lower Sava river and has a concession for the plants on the middle Sava.

But Nikolić said they often faced resistance from environmental groups. Any new facility can be controversial, which is why measures must be taken to minimize the environmental impact and take measures to offset its effects, he believes.

The alternative is to import electricity from the countries which still burn coal, such as Poland, Bosnia-Herzegovina and Kosovo. But this means more green house gas emissions. "What will we do with the intact Mura if temperatures rise for a couple of degrees and there will be no life in it?"

By 2040, two biggest power plants, TEŠ and the Krško Nuclear Power Plant (NEK), generating more than half of electricity in the country, will probably be wound down. "They will not be able to be replaced with just hydro power plants," Nikolić stressed.

16 Apr 2019, 11:15 AM

STA, 15 April 2019 - EU member states gave the final stamp of approval on Monday to the directive on copyright in the single digital market. Nineteen states voted yes, six were against, with three, including Slovenia, abstaining.

 

EU members have two years to transpose the new rules, which were adopted despite the criticism of facilitating censorship on the internet, into national law, whereupon the directive will enter into force.

The Slovenian Permanent Representation at the EU explained Slovenia had abstained because it believed the final compromise did not sufficiently reflect the interests of the majority of Slovenian stakeholders.

The German news agency dpa reported that if another country, for instance Germany, had voted no or abstained today, the new directive would have fallen through.

According to the French press agency AFP, voting against were Italy, Finland, Sweden, Luxembourg, the Netherlands and Poland, whereas the other two countries abstaining were Estonia and Belgium.

When the European Parliament voted on the directive on 26 February, the majority of Slovenia's MEPs rejected it, mostly arguing it undermined internet freedom. Only three of Slovenia's eight MEPs backed it.

However, Slovenian creatives welcomed the Parliament's yes vote, with its fiercest opponents, among then the opposition Left and the non-parliamentary Pirate Party, labelling it a "catastrophe" and a "dark day for the internet".

The directive is part of the EU's reform of copyright law designed to adjust it to the digital age. In today's press release, the EU Council said it provided an adequate degree of protection of authors and artists, at the same time bringing new opportunities to access and share copyrighted works around the EU.

The directive was put forward by the European Commission in September 2016, but it took two years of talks and adjustments for the European Parliament, the EU Council and the Commission to arrive at a compromise last February.

13 Apr 2019, 17:57 PM

STA, 13 April 2019 - The downturn in Germany's economy has not yet had a significant effect on Slovenia's economy, although automotive suppliers exporting to Germany have started to see a slight drop in orders.

 

Gertrud Rantzen, the president of the Slovenian-German Chamber of Commerce, has told the STA in Bled this week that there are several reasons for the slowing of Germany's economy, among them uncertainty caused by Brexit and the intention of the US to raise tariffs on imports.

She said that the signs of slowing are most evident in manufacturing industry, as this sector sees a decline in investment funds in times of uncertainty.

Rantzen does not believe that Germany faces a crisis as severe as the one decade ago, but she does not exclude the possibility. She believes much will depend on Brexit and the relations between Europe and the US.

The automotive industry, which has started to feel the effects of the downturn, is well prepared for such fluctuations in economic trends, said Rantzen.

She believes that most countries are following economic indices closely and are well-prepared, so it is not likely that crisis as severe would repeat.

Marko Gorjup, the boss of the Novo Mesto-based TPV group, an automotive supplier, told the STA at the sidelines of an exporters' conference in Brdo pri Kranju this week that there had been a slight decrease in orders in autumn.

The decrease is "nothing drastic" and the company is optimistic that the situation will stabilise in the second half of the year, he said.

The economic slowdown has not yet been felt in construction, Igor Kastelic, the director of Rem Trebnje, a module building maker, told the STA at the conference.

"In the first quarter, our revenue was about 15% higher than last year, with Germany accounting for the majority of our sales," said Kastelic, implying that the company was barely keeping up with orders.

Moreover, Marko Lukić, the boss of Lumar, a maker of prefabricated houses, said in mid-March at an event hosted by PwC and KD Skladi that the company's production lines were booked for the next year and a half.

He noted however that the construction sector would be the last to feel a potential economic crisis due to its long investment cycles.

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