Business

26 Feb 2019, 12:40 PM

STA, 25 February 2019 - Finance Minister Andrej Bertoncelj told European Competition Commissioner Margrethe Vestager in Ljubljana on Monday that Slovenia remained committed to the privatisation of Abanka. The pair also disused a potential lifting of management restrictions for the NLB bank before the state sells another 10%.

 

After Slovenia recently sold 65% in the country's largest bank, it is also in the process of privatising Abanka, the country's third biggest bank, by July this year as part of commitments made during the 2013 bank system bailout.

While there have been individual political calls in Slovenia for renegotiating the Abanka commitment, including from Economy Minister Zdravko Počivalšek, Bertoncelj told the commissioner the sale is progressing in an independent fashion and according to the timeline.

The minister said Slovenia had not asked for a postponement or cancellation of the sale.

Commenting on the situation, Vestager said Slovenia's commitments needed to be perceived in a comprehensive fashion and by considering the reasons why Slovenian banks had found themselves in trouble.

She acknowledged Abanka had met most of its commitments and was in much better shape, but added that negative experience with state meddling in corporate management had been a key reason for including the bank on the commitments list.

As regards NLB, the majority of which was sold in an IPO last autumn, Bertoncelj said the sale procedure for another 10% minus one share was proceeding in line with plans.

While the timeline envisages a sale by the end of this year, there is speculation that it will occur in mid-2019.

Vestager confirmed that talks were under way about the possibility of lifting all the remaining restrictions in the management of NLB - leasing services, factoring, the closure of branch offices, and above all the sale of NLB Vita, the bank's insurance subsidiary.

Vestager, who praised the NLB sale so far and the clear signal about plans to proceed, expressed satisfaction that Slovenia was proactive in the talks about the restrictions, but she would not comment further.

Bertoncelj already mentioned a few days ago in Brussels the idea of securing the lifting before the full execution of the sale in exchange for the state freezing its voting rights for the unsold 10%. He said the intention was securing the bank's development.

The Finance Ministry said today that it was proposing lifting the restrictions that presented the biggest burden for NLB's operations and were thereby also hurting the new private owners.

Bertoncelj added that the talks were complex and would take a while, meaning it was not possible to say whether the agreement with the Commission or the sale would occur first.

Meanwhile, the pair also discussed the European Commission's past changes and future reevaluation of rules governing state aid.

Bertoncelj said Slovenia supported changes towards a modernised system of state aid, strived for a further simplification of procedures and greater harmonisations with other EU policies, for instance cohesion policy.

While Vestager welcomed Slovenia's support, Bertencelj noted that Slovenia, having a centralised system for state aid, had no major problems in the transition to the new rules that gave more oversight competences to member states.

He pointed out that Slovenia was one of only five member states without any open claims for the return of illegal state aid.

25 Feb 2019, 13:12 PM

STA, 25 February 2019 - As tourism in the capital is booming and the city is venturing into congress tourism, investors are looking for ways to meet the demands of the market. The latest such project is a new luxury hotel to be built very close to the city centre.

The construction of the hotel, which will be located near the headquarters of the public broadcaster RTV Slovenija in Kolodvorska Street, is expected to start before summer.

The investor, the company Clippus, has estimated the project at EUR 8m.

The approximate locaton of the new hotel

The Neuhaus Kolodvorska building with big glass windows and green terraces will feature 49 hotel rooms and seven luxury apartments.

The seven-storey building will also boast an outdoor pool, a protected parking lot and basement.

See images of the planned hotel, and learn more about it (in Slovene) here

Being close to the city centre, it will offer a view of Ljubljana Castle, a landmark of the capital, said Peter Cesar of the architectural studio Arhitektura 2211, which is designing the building together with the Kosi studio and other partners.

According to Cesar, this will be the first building in Ljubljana where owners or users of apartments will be able to use hotel services such as a 24-hour reception, security, cleaning and maintenance and a restaurant.

Buyers of the apartments will also be able to rent them out as part of the hotel.

The builder Kolektor Koling plans to finish the project at the end of 2020.

The hotel is to be run by Clippus, which has been founded by Iztok Lampič, who runs one of the biggest land surveying companies in Slovenia, Gekom, and Cesar.

The apartments have not been put up for sale yet.

23 Feb 2019, 11:16 AM

STA, 22 February 2019 - Port operator Luka Koper posted a group net profit of EUR 60m last year, an increase of 71% compared to the year before, as net revenue rose by 7% to EUR 226m on a record volume of transshipment.

Operating profit (EBIT) was up 90% to EUR 70m. Discounting one-off compensation payment of EUR 9.6m accounted for in 2017 revenue and provisions for legal liabilities of EUR 15.7m accounted for in 2017 expense, EBIT was up by 15% in real terms, the company announced via the Ljubljana Stock Exchange.

Without taking into consideration the compensation received and the provisions, net profit increased by 9% in real terms in 2018.

The port transshipped a record 24 million tonnes of cargo in 2018, up 3% from the year before. Container throughput was up by 8% to 988,000 TEUs and car throughput rose by 2% to 754,000 vehicles.

The port's cruise terminal recorded 101,415 passengers, a rise of 41% from 2017.

Capital expenditure decreased by 56% to EUR 16m, while the number of the group's employees increased by 12% to 1,242.

20 Feb 2019, 16:30 PM

STA, 19 February 2019 - Economists warn against selling Slovenian flagship wine producers to non-strategic buyers, which are usually not interested in long-term development but quick profit. They believe strategic buyers could be found at home.

 Marko Hočevar and Aleš Kuhar have spoken to the STA after Istrabenz recently put on sale its 50% stake in Adriafin, the firm which owns almost 78% of Vinakoper.

They believe that for Vinakoper, one of the leading wine companies in Slovenia, getting a non-strategic owner would be "bad news".

Vinakoper is the leading wine maker on the coast, in the south-west of the country, where it has some 590 hectares of vineyards.

Another well-known wine maker, Vinag, a storied Maribor winery that traces its history to the 19th century, was sold to a company whose plans for the winery are not clear just yesterday. The new owner, Metalka Commerce is part of a business empire of Marjan Pišljar, dealing mostly in real estate and stocks.

Hočevar says there have been several takeovers lately with negative consequences for the acquired Slovenian wine companies, as non-strategic owners, such as various funds, are usually interested only in making quick profit from the wine producers' real estate or in other yields.

"I don't think it'd be good for Vinakoper to be taken over by a fund or somebody who sees its advantage in buildings rather than in the long-term development."

Since there are several solid wine makers in Slovenia, he believes Goriška Brda, another wine company from the Primorska region, could take over Vinakoper.

Kuhar shares Hočevar's view about the dark side of non-strategic owners, but notes the business models of Klet Brda and Vinakoper are somewhat different.

"Nevertheless, they could find synergies. The key question is the price and if Klet Brda would be able to finance such a purchase. Otherwise I see no problems," he says.

Hočevar says winemaking is one of the more important domestic industries, noting it is important economically, while Slovenians "are also culturally attached to wine".

In the business year 2017/2018, Slovenia produced almost 626,000 hectolitres of wine, meaning it was 91% self-sufficient.

Kuhar believes winemaking has a major development potential. "Winemaking is one of the most development-oriented branches of agriculture."

However, he also points to the grey market, which is thriving as wine production for own use often ends up in bars and restaurants and the state tolerates this.

Being in receivership, Istrabenz had tried to sell Adriafin before, and Adriafin's other owner - port operator Luka Koper - has the pre-emptive right to buy the company.

The 2016 attempt produced several potential buyers, including a Koper utility, which offered some EUR 2.5m for it, while Pišljar's Metalka Commerce offered somewhat more.

This time, the deadline for binding bids expires on 1 March.

19 Feb 2019, 14:30 PM

STA, 18 February 2019 - The Ljubljana city council has unanimously endorsed a decision that allows furniture giant Ikea to start building its store in Ljubljana's shopping district BTC. The first Ikea shop in Slovenia could open next year.

The councillors endorsed at Monday's session the decision allowing Ikea to apply for an operating permit even though the required access road south of the planned shop has not been built yet.

The land needed to build the access road leading from Kajuhova Street was supposed to be acquired by the local authorities, but the acquisition has been marred by ownership complications.

The land is owned by company Protect GL, which is in receivership, and the municipality has failed to come to an agreement on the price with the official receiver.

In the summer of 2016, the municipality launched expropriation proceedings, which were suspended last autumn on the municipality's own initiative, as it wanted the proceedings to be carried out under the new legislation.

Ikea will now be able to soon launch the construction of the shop, which could open its doors in 2020. The 30,000 sq-metre shop has been estimated at EUR 80m and is expected to bring around 300 jobs.

19 Feb 2019, 13:00 PM

STA, 17 February 2019 - Seven Slovenian companies and two institutions are featured at the International Defence Exhibition (IDEX), a biennial arms and defence technology sales exhibition, which is opening in Abu Dhabi, United Arab Emirates, on Sunday.

The Slovenian defence industry is being showcased at what is the main defence and security exhibition and conference in the Middle East and North Africa under the sponsorship of the SPIRIT investment promotion agency.

The fair, which will run until 21 February, has been held biennially since 1993 to present the latest products in the field of arms and military technology for land forces, air forces, anti-aircraft warfare and naval forces.

In 2017, it saw 1,235 exhibitors from 172 countries, and featured 39 national pavilions. It was visited by more than 100,000 people from 142 countries, SPIRIT said.

The joint Slovenian exhibition area is featuring ammunition and soldier equipment maker Arex, armoured vehicle producer Armas, unmanned aerial vehicle maker C - Astral, measuring equipment producer Dat - Con, protective equipment maker Prevent & Deloza, weapon systems maker Valhalla Turrets and Timtec.

They will be joined by the Slovenian Defence Industry Cluster and the Defence Ministry.

IDEX is one of the twelve international fairs at which the agency provides support for selected Slovenian exhibitors this year.

19 Feb 2019, 12:00 PM

STA, 18 February 2019 - Thermana Laško, the company operating the spa resort in Laško in east central Slovenia, saw its revenue rise by 6% to EUR 22.6m last year, while profit increased by 42% to EUR 1.7m.

According to a press release from the company, the number of nights spent at the resort rose to 187,200 last year from a little below 180,000 the year before.

The nights spent by Slovenian guests were up by 3% and those by foreign visitors by 6%.

The resort's pools attracted more than 210,000 visitors and 27,000 wellness services were sold.

"The company has been complying with the terms set down in the financial restructuring plan by 2023, which it committed to after a successful compulsory settlement," the release reads.

In the 2014 settlement the shareholders lost everything and Thermana passed to the Bank Assets Management Company. The former shareholders are challenging the process.

Thermana, which employed around 480 people last year, is expected to complete this year the first phase of refurbishment of the Laško Spa into a modern health rehabilitation centre.

The company has also opened a EUR 35,000 "nursing oasis" for people in the final stages of dementia at the local retirement home.

19 Feb 2019, 10:25 AM

STA, 17 February 2019 - Innovation is the main engine of Novartis's growth and Slovenia will continue to play a crucial role in innovative technologies, chairman of Novartis-owned pharma company Lek, Zvone Bogdanovski, told the STA in an interview. He highlighted Lek's centre for the production of active substances for innovative medicines in Mengeš.

The pharmaceutical industry is undergoing many changes due to digitalisation and population ageing, and Novartis is responding with a new strategy that focusses on the core business, optimisation, investment in ground-breaking transformative therapies and increasing profitability, Bogdanovski said.

Novartis, which owns Lek, Novartis Pharma Services and Sandoz in Slovenia, is betting on innovation. The Swiss multinational has decided to focus on individualised therapies - cell and gene therapy, and the radionuclide therapy used in cancer treatment, which are costly but effective.

"That's the future, not just for Novartis, but for the entire pharmaceutical industry," the Lek CEO said, adding that the future was also in digitalisation underpinned by big-data analysis, artificial intelligence and biological simulations, which could gradually replace clinical studies.

Novartis's generics division, Sandoz, aims to become a leading producer of generic biological drugs, differentiated generic drugs, drugs with added value and a leader in digital therapeutics, Bogdanovski said.

Since competition in generics is tough, "we won't play where we're not competitive, it does not make sense to slowly wither away."

Bogdanovski believes specialised products with high added value produced on a lower scale are the future. "We're not running away from basic generics, we're only shifting our focus."

He gave a drug that was developed in Prevalje last year, a child-friendly, rapidly dissolving Amoksiklav pill, as an example of Sandoz's drug with high added value. "These are the things we'll be working on in the future," he said.

"The pressure on prices is a global fact, so we're increasing our efficiency and productivity in Slovenia as well."

Sandoz and Novartis appreciate the Slovenian know-how and experience. "So far, we've proved we can master certain ground-breaking technologies and contribute to further growth."

Bogdanovski pointed to the construction of the EUR 38m facility for the production of new biological drugs in Mengeš north of Ljubljana, which is to become operational in a year and a half. "This puts us on Novartis's map as a centre for biotechnology."

Ljubljana boasts one of Sandoz's leading development centres. "It's the largest and best equipped development centre that Sandoz has. The knowledge of the experts working there is exceptional. The centre creates more than 20 new molecules a year and launches them around the world. In recent years, we're talking about over a hundred of the most demanding new drugs."

In Prevalje, where Sandoz has a production facility for its flagship product Amoksiklav, a new factory has been built, but is currently on hold. The decision on the continuation of the project in Prevalje has not been made yet but everything should be clear in the coming months.

Last year, two famous brands of Lek's over-the-counter drugs, Persen and Neopersen, were sold to Alvogen, a US pharmaceutical company, but Bogdanovski could not speak of any other potential sales.

"Sandoz's focus is on biosimilars, crucial generic products with high added value, so on the areas we are good at, where we have a competitive edge and cover the key therapeutic areas."

Bogdanovski also said that the sale of Persen and Neopersen and the separation of the generics section in the US were not in preparation for the sale of Sandoz.

While he would not reveal last year's results of Novartis in Slovenia, Bogdanovski said that both revenue and profit were projected to have increased.

With more than 70 drugs in haematology, oncology, cardiology, immunology, dermatology, neurology, pulmonology and ophthalmology, Novartis held a 14.8% market share on the Slovenian pharmaceuticals market last year.

"We're second biggest provider of generic prescription drugs and we're the leader in over-the-counter drugs," Bogdanovski said.

Novartis employed 4,152 people in Slovenia last year, which is 370 more than in 2017. In the last seven years, the headcount increased by more than 2,000.

All our stories on the pharmaceutical industry in Slovenia can be found here

18 Feb 2019, 10:33 AM

STA, 15 February 2019 - Slovenian fish supplies, comprising the landed catch and fish farm output, were technically depleted on Friday, February 15. The country will have to rely on imported fish for the rest of the year, said the World Wildlife Fund Adria NGO.

 "Today is the day when we eat up the local fish in Slovenia," said the NGO, adding that the country exhausted its annual fish supply in a month and a half since Slovenia produces only 13% of the fish its residents consume.

Europe is the biggest world market regarding fish and seafood with more than half of the latter is imported. The European Fish Dependence Day is 9 July, while Slovenia celebrates it today.

An average Slovenian consumes 10.8 kilos of fish per year, which is quite a small amount compared to the EU's 22.7 kilos average. Portugal is the country with the highest fish consumption - 55.3 kilos per capita - followed by Spain, Lithuania, France, and Sweden.

The NGO called for the implementation of a sustainable approach in the global fishing industry, warning that fish stocks are severely depleted, in particular in the Mediterranean.

15 Feb 2019, 14:45 PM

STA, 15 February 2019 - The European Investment Bank (EIB) has placed the project to build a new railway line between the port of Koper and Divača among the projects it would finance with loans. The state-owned company managing the project said that the EIB would provide a EUR 250m loan.

Announcing the news, 2TDK said that it had submitted the application for a EUR 250m loan to the bank last May.

"Negotiations between the EIB and 2TDK followed between October and January, on whose basis the investment bank will make a final assessment of the project and expectedly send it for confirmation by the board of governors in April."

Infrastructure Minister Alenka Bratušek, whose ministry is responsible for the project, welcomed the news, saying that the bank had recognised the quality and importance of the project.

"I'm happy that the things are moving in the right direction," the ministry quoted Bratušek, who added that the lengthy negotiations with the EIB had obviously produced a positive result.

"The decision is not final yet, but the placement on the EIB list means that the bank too has recognised the quality and importance of this project, which I believed in and expected throughout," the minister added.

In addition to government funding, the investment plan for the project also envisages loans from international financial institutions and the state-owned SID export and development bank, EU grants and loans from commercial banks.

The plan values the project at EUR 968m at current prices, but together with a reserve for unexpected works and interest the total price tag will be EUR 1.2bn.

All our stories on railways in Slovenia can be found here

The railway will be only 27 kilometres long, but the huge cost is attributed to the high number of tunnels and bridges on the tricky karst terrain.

Good news for the project also came today from the National Review Commission, which rejected a request for the suspension of public contracting pending an audit of the public tender for the project dossier.

The audit and the suspension of the public tender process was demanded by the engineering company Geoportal at the end of last year.

The review commission is yet to decide Geoportal's request to annul the tender. 2TDK had already rejected the request before forwarding it to the National Review Commission.

The sole bid for the job, worth EUR 19.93m excluding VAT, was submitted by a consortium of companies consisting of Elea iC, SŽ-Projektivno Podjetje and IRGO Consulting.

15 Feb 2019, 10:30 AM

STA, 14 February 2019 - Magna Steyr has welcomed the deal reached on Wednesday that persuaded an NGO not to challenge the environment permit for its paint shop in Slovenia any further. However, the multinational said the agreement did not make it possible to launch production at Hoče as yet, so its part of the job would be done at its Austria location for the time being.

 

The Austrian-Canadian automotive group said that it was obligated to meet the commitments to supply cars to its business partners by the agreed deadlines. The company said it had expected to be able to launch production at its EUR 160m Hoče plant near Maribor this week.

"Since this is not possible at this time, we will carry out this part of production temporarily at our Graz factory by introducing extra shifts," the multinational said, expressing the hope that a final solution allowing the earliest possible launch of production at Hoče would be found as soon as possible.

The company undertook "organisational preparations" on Monday to move production to its main facility in Austria's Graz due to uncertainty surrounding the environmental permit for the Hoče plant.

The Environment Ministry rejected the sole appeal against the environmental permit submitted by the Regional Environmental Association of Environmentalists (ROVO) from Novo Mesto, in the south-east of the country.

The ROVO threatened to take its appeal to the Administrative Court but changed its mind after yesterday's meeting with government officials who promised that the government would amend the special law on Magna investment so as to allow for the plant to have been built in a water protection area.

However, Magna will still need to wait for a 30-day period within which appeals with the court are still possible to expire. The period has been running since last Thursday when the ministry rejected ROVO's appeal.

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