Business

16 Aug 2019, 12:30 PM

STA, 15 August 2019 - Slovenia's construction industry is seeing growth for the third year now. Nevertheless, it has still not returned to the levels before the crisis, while some indicators suggest that the growth trend could be reversed in the near future, finds a report by the Statistics Office.

Construction is one of the sectors that was hit hardest by the crisis ten years ago. While most of other sectors, such as industry, commerce and services, have already exceeded pre-crisis turnover, construction still lags far behind.

"After a significant fall in both the turnover and the number of employees and enterprises after 2008, growth was detected again in all three indicators after 2013, especially in 2017 and 2018," reads the statisticians' report.

While the number of construction enterprises has already reached the pre-crisis figures, with 19,220 such enterprises in 2018, the turnover and the number of employees still fall considerably short.

At the expense of the small number of workers, labour productivity increased and amounted to EUR 24,925 in 2018, exceeding the pre-crisis levels.

Construction companies generated a turnover of almost EUR 6 billion in 2018, which is almost 30% less than in 2008 and 34% more than in 2013. Almost half of the turnover was generated by specialized construction activities, 30% through construction of buildings and 21% by civil engineering.

There were 67,600 people working in the sector last year, compared 89,900 people a decade ago. 70% of the workers were Slovenian citizens and 30% foreigners. Most of the foreign workers came from Bosnia and Herzegovina, followed by those from Kosovo, North Macedonia, and Croatia.

Among the 19,220 construction enterprises registered in 2018, micro-enterprises with up to 10 employees prevailed, representing more than 90%. Compared to 2008 there were more than a half fewer medium-sized and large enterprises, however, in this period the number of parent enterprises doubled, which means that smaller enterprises which are interconnected prevail.

Wages in the sector had been increasing until 2011, but fell somewhat between 2011 and 2015, and after 2015 increased again. Average gross monthly pay was EUR 1,290 last year, which is 12% less than in 2008 and 23% less than the national average, despite a 20% growth compared to 2017.

Data on the number of the building permits and the construction confidence indicator suggest an impending decline. The number of building permits issued declined over the past three years and the trend continues in 2019 - in the first half of this year 10% fewer building permits were issued compared to the same period in 2018.

Only the number of residential building permits is somewhat increasing, whereas the number of non-residential building permits issued is falling. Between 2016 and 2018 the surface area of buildings for which building permits were issued increased (8%), as did the number of the apartments in those buildings (by more than 19%).

In the first six months of this year the construction confidence indicator was below the average of the previous year. Expectations for contracts and jobs peaked at the beginning of 2018, but then began to fall. The only exception was the indicator assured work in hand which in the first six months of 2019 was constantly above the average of the previous year.

As limiting factors to doing business, construction companies report in particular the shortage of skilled workers, fierce competition and high labour costs.

15 Aug 2019, 11:30 AM

STA, 14 August 2019 - Foreign Minister Miro Cerar and his visiting Japanese counterpart Taro Kono called for a further deepening of economic cooperation between the two countries in Ljubljana on Wednesday. They also urged respect for the rule of law and for arbitration decisions, including with regard to the Adriatic and the South China Sea.

During what is the first visit by a Japanese foreign minister to Ljubljana, the pair also exchanged views on developments in Asia, in particular the tensions on the Korean Peninsula, the trade dispute between the US and China, while they also discussed the situation in the Western Balkans.

Cerar and Kono, who first met on the sidelines of this year's Munich Security Conference, agreed to strengthen bilateral relations and economic ties.

"Minister Kono and I agreed that possibilities to increase trade in goods expanded vastly with the entry into force of the economic partnership agreement between the EU and Japan, but also that all the opportunities for cooperation have not been used sufficiently yet," Cerar said today.

The ministers identified the Koper port as one of the opportunities for closer cooperation with Kono telling reporters that the Slovenian port was among the first after the Suez Canal with good access to Central Europe, which made it interesting for Japanese companies.

While no concrete projects were discussed, Kono suggested Slovenia enhanced promotion of its business environment in Japan. His press officer Jun Saito said they welcomed seminars planned for September to inform Japanese businesses about Slovenia.

He said that it took time for Japanese companies to take a decision on cooperation, but once they did they were very loyal and were looking for long-term cooperation.

Trade between the two countries has been fairly modest, with Slovenian exports amounting to EUR 119 million in 2018 and imports to EUR 86 million, which made Japan Slovenia's 32nd largest trade partner. Still, cooperation has intensified in recent years, which is also reflected in increasing Japanese investment in Slovenia.

Economic cooperation was also in focus of a working lunch at which the two foreign ministers were joined by Economy Ministry State Secretary Aleš Cantarutti.

New opportunities for cooperation are emerging in the field of smart networks, proton cancer therapy and electro mobility. Successful cooperation has moreover been established in the field of new physics between Slovenia's Jožef Stefan Institute and Japan's KEK.

On Tuesday, representatives of the Slovenian rehabilitation hospital URI - Soča and of Japan's Toyota Motor Corporation and Fujita Health University signed an agreement on cooperation in the development of medical therapy robots.

Cerar noted that Japan, with its economic and technological development, can serve as model to many countries. He is happy that the Japanese Yaskawa robotics company and Japanese multinational Sumitomo Rubber Industries launched investments in Slovenia when he served as prime minister between 2014 and 2018.

According to Kono, the Japanese companies doing business in Slovenia valued in particular its highly skilled workforce. "Many Japanese companies notice Slovenia because of its qualified labour force in information technology and high technologies."

Yaskawa opened its first European robot factory in the south-eastern town of Kočevje in April, and Cerar and Kono are scheduled to visit it today. Kono has also been received by President Pahor.

Meanwhile, the pair also discussed initiatives for deeper cooperation in the Western Balkans and Cerar thanked his counterpart for Japan's long-standing support for the Slovenian-run ITF demining fund.

Also discussed were the 2020 Tokyo Olympics, where the ambassador of the House of Slovenia will be Miro Cerar senior, the winner of a golden medal in gymnastics at the 1964 Olympics in Tokyo, the Foreign Ministry announced.

The athlete's son, Foreign Minister Cerar, also highlighted today the alley of 300 cherry trees outside the Ljubljana Biology Centre that were given to Slovenia as a present in 1999, which he said was a special symbol of friendship between the two countries.

Pahor's office reported that the Japanese foreign minister thanked the Slovenian president for his decision to attend the enthronement ceremony for Japanese Emperor Naruhito in the autumn.

The office also noted Pahor's working visit to Tokyo in 2013 in what was the first visit by a Slovenian head of state in Japan. On the occasion, he was received by the then Emperor Akihito.

According to the president's office, Pahor and Kono hailed the friendship between the two countries and good political, cultural, economic and scientific links between them. Pahor also welcomed Japanese investment in Slovenia, a country that he said made a suitable gateway to Europe for Japanese businesses.

The Japanese foreign minister is due in Croatia later today for talks on Croatia's stint at the presidency of the EU, and bilateral relations, including economic cooperation, the Japanese Foreign Ministry said, but could not say whether opportunities afforded by Croatian ports would be discussed as well.

14 Aug 2019, 14:42 PM

STA, 14 August 2019 - The value of construction works in Slovenia rose by 14.4% in the first six months of 2019 year-on-year, shows data released on Wednesday by the Statistics Office. Following a rise in May, the value of construction works decreased by 6.7% in June over the previous month.

In the first half of the year the value of works on buildings rose by 11.9%, whereas the value of works on engineering objects was up by 15.1% compared to the same period in 2018.

Compared to May, the value of works on buildings was down by 8.8% in June and of works on engineering objects by 6.4%.

The year-to-year comparison for June on the other hand shows a 5.4% overall increase for the industry. Standing out is a 9% increase for non-residential buildings, whereas the value of works on residential buildings decreased by 2.1% in June year-on-year.

More details on this data can be found here

14 Aug 2019, 13:00 PM

STA, 13 August 2019 - Japanese and Slovenian partners signed two agreements in Ljubljana on Tuesday that pave the way for cooperation in development and research of robotised rehabilitation devices.

Fujita Health University signed one of the accords with the University of Ljubljana and the other with the Ljubljana-based URI Soča Rehabilitation Institute, and Toyota Motor Corporation.

The signing was attended by Economy Ministry State Secretary Aleš Cantarutti, who praised it as a major paving stone for further cooperation between Slovenia and Japan in the field.

"Cooperation between Slovenia and Japan has seen tremendous progress in recent years," said Cantarutti, praising the agreements as an "excellent example of cooperation between science and research and business", and a new opportunity to upgrade medical rehabilitation robotics.

Bilateral cooperation was also praised by Japanese Ambassador to Slovenia Masaharu Yoshida, who noted that Fujita Health University was a leading institution in the field in Japan. The university operates Japan's largest university hospital, treating 1.83 million patients a year.

"The agreement signed today will allow us to find a common path in development of rehabilitation robots and, above all, to put them on the market," said Robert Cugelj, director general of URI Soča.

The institute's main goal is to get its expertise and technology into the real world, and sell it. "In this way we generate value added mainly for patients, both those from Slovenia and elsewhere," said Cugelj.

The head of the institute's research and development department, Zlatko Matjačić, presented two projects that formed the basis for cooperation.

One is a rehab robot to train patients how to maintain balance and movement coordination during walking, which is being developed by the Slovenian institute, and the other is a robot developed by Fujita Health University and Toyota.

These are two exoskeletal devices focusing on two different areas. "The Japanese have focused on the leg's function and support during walk, while we're focusing on the integrated function of balance and coordination," Matjačić said.

They would now like to combine their expertise, technology and experience into a now concept to help in the rehabilitation of patients after stroke.

Fujita Health University professor and president Eiichi Saitoh was happy that the university was linking with the world's leading rehabilitation institutions, expressing belief that expertise is expanded and enriched through such cooperation.

Keisuke Suga of Toyota's BR-Medicare hailed the new partnership, which said would help implement Toyota's vision of mobility for all. The department headed by Suga specializes in development and production of devices used in patient rehabilitation.

The Japanese delegation already met Health Ministry State Secretary Simona Repar Bornšek on Monday and will be received along with URI Soča officials by President Borut Pahor on Wednesday.

All our stories on Japan are here, while those on robotics are here

14 Aug 2019, 10:11 AM

STA, 13 August 2019 - Foreign direct investments (FDI) in Slovenia more than doubled in the first half of 2019 to reach EUR 614.4 million. The figure is considerably higher than the EUR 242 million recorded in the same period of 2018, according to central bank data. What is more, FDI nearly doubled between June 2018 and June 2019 year-on-year.

Banka Slovenije's monthly report for June shows that FDI reached EUR 1.4 billion between June 2018 and June 2019, which is almost double the EUR 721.1 million recorded between June 2017 and 2018.

Last year, FDI in total reached EUR 1.2 billion, with the central bank pointing out that several large takeovers had taken place during this period, including the one of insurer Adriatic Slovenica by Italian Generali group, of home appliances maker Gorenje by Chinese Hisense and of poultry producer Perutnina Ptuj by Ukrainian MHP.

Slovenia's FDI abroad, on the other hand, was far lower. In the first half of 2019, reached EUR 52.6 million, a significant drop over the EUR 159.9 million in the same period of last year.

Between June 2018 and June 2019 Slovenia's FDI reached EUR 117.8 million, down from EUR 130.3 million invested between June 2017 and June 2018. Last year, Slovenia's FDI reached a total of EUR 63.3 million.

13 Aug 2019, 09:32 AM

STA, 12 August 2019 - More than 60 real estate agencies asked the Constitutional Court on Monday to review a recently adopted bill that limits commission fees for leasing real estate and other costs which real estate agencies can charge their clients.

According to Boštjan Udovič from the Chamber of Commerce and Industry (GZS), the 66 agencies involved want the top court to review and stay provisions limiting service commissions.

They argue the bill encroaches on the right to engage in free enterprise and the right to property, meaning it also violates the European Convention on Human Rights as well as EU law.

"The legislator failed to demonstrate any public benefit that would justify such an intervention in the rights of the plaintiffs. The goals allegedly pursued are general and have to do with housing policy and not with property brokerage," Udovič told the STA.

The legislative changes, originally passed on 11 July and again a week later following a National Council veto, entered in to force on 10 August and protect tenants against paying commissions for services provided by a real estate agency which was hired by the landlord.

They also introduced cap on commissions that can be charged by apartment rental agencies; the capped amount corresponds to one monthly rent, but should not go lower than 150 euro.

09 Aug 2019, 10:46 AM

STA, 8 August 2019 - Demand for new workers in the April-to-June period was the strongest in construction, when the sector's job vacancy rate - showing how many vacancies were advertised by employers - reached 6.2%.

Around 3,800 vacancies were advertised in construction, which was followed by manufacturing (over 3,700) and commerce (over 2,500), latest Statistics Office data show.

Meanwhile, the overall job vacancy rate decreased by 0.2 of a percentage point to 2.3% over the previous quarter and by 0.3 points over the second quarter in 2018.

This means that the number of job vacancies dropped by around 1,400 to slightly more than 18,500 from the January-to-March period.

Demand for new labour force decreased the most in manufacturing and trade, by around 300 job vacancies in each of them (-0.4 points).

On the other hand, the number of occupied posts has continued to rise ever since the second quarter of 2014, the figures released on Thursday show.

Around 772,100 posts were occupied in the second quarter, 5,700 more than in the first one. 81.5% of all occupied posts were at companies with 10 or more workers.

The number of occupied posts increased the most in construction (+1,500) and trade (+1,000).

More details on this data can be found here, while all our stories on employment in Slovenia are here

08 Aug 2019, 15:30 PM

STA, 8 August 2019 - The Swedish furniture giant Ikea obtained on Thursday a building permit for the shop it plans to build in Ljubljana's BTC City shopping district, the company said in a press release. Construction works are expected to start soon.

Vladislav Lalić, regional property and expansion manager at Ikea South East Europe labelled this a great success.

He thanked the Ljubljana municipality and experts at the Ministry for Environment and Spatial Planning for their efforts to overcome "all obstacles that were in our way".

He said the construction would be conducted in several phases, but the store was expected to open about a year after the start of construction.

Related: IKEAn’t Get No Satisfaction: A Brief History of IKEA Coming to Ljubljana, Part 1

The company also selected CGP for building the store after repeating the call for applications. Given that two years have passed since the initial call for applications, in which Pomgrad was selected, Ikea wanted to "make sure our pick reflected the current market trends," the company told the STA.

The deal with CGP was closed last month.

Ikea filed for the building permit in March after Ljubljana city council unanimously decided at the end of February to change the municipal spatial plan to allow it to start building its store.

The councillors endorsed 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.

08 Aug 2019, 11:47 AM

STA, 7 August 2019 - The company managing construction of the new Divača-Koper rail track has annulled a public tender for the first of several bridges on the new track after weeks of very public controversy that has renewed concern about the mega project going off the rails financially.

 

"It has turned out that the cheapest bidder was not the best," Dušan Zorko, the head of 2TDK, told the press on Wednesday after the company determined the selected bidder had apparently forged its prior experience with the construction of such infrastructure.

A consortium led by Markomark Nival was initially selected to build a 170-metre bridge over Glinščica Valley. Its price, EUR 8 million, was significantly lower than rival bids by consortia led by Kolektor CGP (EUR 13.5 million) and Godina (EUR 14.3 million), but both have now been ruled as invalid because of excessive price.

Zorko said the tender would now be repeated as soon as possible. It will not be changed much, but 2TDK plans to impose a price cap. It also expects more builders to bid. "We had expected more offers, domestic and international. Unfortunately, there were only three."

The winning bid for the Glinščica bridge had originally been selected in mid-June, but it quickly became apparent things would not run smoothly.

One of the failed bidders reported noticing that an Excel spreadsheet form used to submit the bids had errors resulting in an incorrect final price, and then unofficial sources started questioning whether Markomark Nival, a little known builder, had in fact sufficient prior experience to build the bridge.

In general, Slovenian public tenders for construction projects tend to get bogged down in appeals and accusations that can significantly delay the start of construction works. The Karavanke tunnel expansion, for example, has been delayed by more than a year already as bidders fight it out among each other.

The popular perception is that the biggest construction industry players are adept at turning tenders in their favour, especially when they are up against foreign bidders.

In recent years two subsidiaries of industrial conglomerate Kolektor and the Murska Sobota builder Pomgrad in particular have been in the spotlight, having grown from mid-sized company into market leaders after the financial crisis bankrupted almost all major industry players.

Infrastructure Minister Alenka Bratušek, a staunch advocate of the EUR 1 billion-plus rail project, said today she supported the decision of 2TDK to annul the tender.

"I stand firmly behind their decision not to succumb to the construction lobby," she said, adding: "I will not permit old practices of siphoning [taxpayer] funds."

Referring to the bid headlined by Kolektor CPG, Bratušek said three of the largest Slovenian builders had joined forces for the bid, which is "an indication of the creation of a monopoly and the desire to overcharge for construction services."

"Despite attacks targeting me, I will not let builders rig the system and offer prices up to 40% higher in public tenders. If necessary, tenders will be repeated."

All out stories on infrastructure in Slovenia are here

07 Aug 2019, 16:45 PM

STA, 7 August 2019 - Slovenia's largest pharmacy chain, Lekarna Ljubljana, was the target of a ransomware attack on Monday, which temporarily incapacitated its information system and forced the chain to close for business.

After being closed throughout Tuesday due to the problem, the pharmacies reopened on Wednesday but they have so far been able to issue prescription drugs based on paper prescriptions only.

The city-owned chain said that the information system would be restored shortly, so the units are expected to be able to start issuing prescription medications normally later today both for those prescribed on paper and in electronic form.

No further details are available at this point, but Lekarna Ljubljana said that the incident had been reported to the law enforcement authorities.

The Ljubljana Police Department confirmed receiving notification about the system breach from Lekarna Ljubljana, saying they were still making enquiries.

According to information from the Health Ministry, the attack affected the pharmacy chain's local information system, which is not connected to the national e-Health system.

Tadej Hren from the national cybersecurity centre SI-CERT said that the investigation would pinpoint where exactly the breach occurred and what kind of data the hackers had been able to access.

Ransom crypto viruses encrypt all user data files they are able to access. This type of attacks have been common in Slovenia since 2012.

Hren said that in all the cases they dealt with the victims had been picked randomly as part of a wider hacking campaign. The ransom for a decryption key in such cases ranges from EUR 1,000 to EUR 2,000.

In the past year SI-CERT has also been detecting more sophisticated attacks on large companies or institutions, which involve spy viruses which detect the scope of the damage that can be caused before a cryptovirus encrypts everything the hackers can access.

Information available to SI-CERT indicates the attack on Lekarna Ljubljana was likely a more sophisticated one because it is not believed to have been part of a larger campaign.

Lekarna Ljubljana operates more than 50 pharmacies in the capital Ljubljana and other towns, including Grosuplje, Ivančna Gorica, Idrija, Logatec, Vrhnika, Borovnica and Velike Lašče.

Prescription drugs have been issued normally at 14 private pharmacies with concession operating in Ljubljana.

All our stories on hacking Slovenia are here

07 Aug 2019, 13:00 PM

STA, 7 August 2019 - The Slovenian subsidiary of the Italian banking group Unicredit posted EUR 16 million in consolidated profit in the first half of the year, a marginal increase of 0.3% on the same period a year ago, shows the annual report released by the parent bank.

Unicredit Banka Slovenija and Unicredit Leasing saw their operating profit increase by almost 6% to EUR 19 million in the same period. Operating revenue rose by 7.2% to EUR 42 million and net interest revenue was up 1.3% to EUR 23 million.

The bank formed EUR 5 million in net write-downs on loans, a decline of 7.4% compared with the first half of 2018.

Unicredit Group reported a net profit of EUR 2.16 billion for the first half of the year, up 1% year-on-year.

All out stories on banking in Slovenia can be found here

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