Business

29 May 2019, 10:36 AM

STA, 28 May 2019 - Slovenia remains level in the latest World Competitiveness Rankings, retaining 37th place among 63 countries after climbing six places last year. While it made gains in business efficiency, government efficiency and development of infrastructure, it fell behind in economic efficiency.

Slovenia slipped four places in economic efficiency to rank 33rd, while gaining seven spots in business efficiency (40th), one spot in infrastructure (27th) and three spots in government efficiency (39th).

"Slovenia's overall ranking is solid," said Sanja Uršič of the Institute of Economic Research, which partners with the Swiss-based International Institute for Management Development (IMD) in compiling the index.

But as researcher Peter Stanovnik pointed out, several challenges remain, among them an insufficient scope of investments, tax restructuring and health reform. He also pointed to innovation, staffing and productivity as areas that need to be tackled.

On the other hand, Slovenia performs well in measures such as exports, price competitiveness and education.

Stanovnik said investments had improved, but not enough. "Investments are essential for gains in productivity, which is still 20% behind the European average."

The government efficiency indicator improved due to progress in public finances and legislation governing business, while fiscal policy and the social framework held it back.

The improvement of business efficiency was driven be higher productivity, better management practices and values. The situation on the labour market deteriorated. "This is probably due to changes of the minimum wage act, which employers feel will not achieve their intended purpose," said Mateja Denovšek of the Ljubljana Faculty of Economics.

Gains in infrastructure are the result of higher marks for technological infrastructure and education.

"The overall estimate of Slovenia's attraction is based on a well trained workforce, high education levels and reliable infrastructure," according to Drnovšek.

Singapore tops the IMD rankings, followed by Hong Kong and the US. Statistical indicators account for two-thirds of the grades and survey-based indicators provide one-third of the final estimate; in Slovenia 100 managers responded to the survey.

The full rankings can be seen here

28 May 2019, 13:24 PM

STA, 27 May 2019 - Impol, a leading Slovenian aluminium producer, has recently entered a deal to supply German car producer BMW with aluminium rods for the bodyworks of new electric and plug-in hybrid vehicles.

 

The deal, worth EUR 40 million, will make the Slovenska Bistrica-based group BMW's direct supplier for at least five years, the Slovenian company has told the STA.

To meet the demand, Impol will build a new production facility spanning 3,000 square metres in Slovenska Bistrica.

The company is now seeking to obtain a building permit and plans to launch construction work in the second half of the year.

The investment is estimated at almost EUR 6.5 million, of which almost EUR 4 million will be spent on new equipment.

Production is meanwhile expected to be launched at the end of 2020 or at the beginning of 2021.

Impol will be the only supplier of aluminium rods for BMW's new electric SUV which is expected to hit the market in 2021.

The company will have to employ several dozen new workers (in production, logistics and quality control) and is hoping to further expand the cooperation with BMW.

Earlier this month, it launched a new production line for the automotive industry at its Croatian location in Šibenik.

Impol makes a wide range of aluminium products, from rods and tubes to sheets, slugs, strips and cast aluminium. Its products are used in the automotive, construction, food&beverage and energy industries.

Last year the group, which sells its products to 50 different countries, generated EUR 728 million in sales abroad, of which EUR 614 million in EU countries.

Its most important market is Germany, accounting for almost a third of its sales abroad. The company plans a 9% rise in sales revenue generated abroad for 2019.

22 May 2019, 11:48 AM

STA, 21 May 2019 - The favourable economic situation in Slovenia reflected in the domestic capital market last year, with total market capitalisation of the financial instruments listed on the Ljubljana Stock Exchange (LJSE) increasing by more than 12% compared to 2017, according to a report by the Securities Market Agency (ATVP).

 

The ATVP noted in the report, published on Tuesday, that total market capitalisation of the financial instruments listed on the LJSE stood at EUR 33.37 billion at the end of the year.

The bulk of this were bonds (EUR 27.02 billion), while total market capitalisation of all shares combined was EUR 6.35 billion.

The report adds that the volume of transactions had meanwhile dropped by 2.91% to EUR 337.32 million. The value of the SBI TOP blue chip index was also down somewhat, by 0.18% to 805.06 points.

The number of securities listed in Ljubljana continued to drop last year, also due to takeovers, whose number was unusually high in 2018, with the agency recording a total of 15 successful and completed acquisitions.

The number of securities on the LJSE stood at 41 at the end of the year, including two new ones - shares of the NLB bank and bonds of power producer Gen-I.

Related: Slovenian Blue Chips – the most liquid stocks on the market

Seven shares and one bond were delisted from the LJSE last year, including the stock of the household appliances maker Gorenje, which was acquired last spring by China's Hisense, which bought out small shareholders in the autumn.

Issuers are withdrawing from the market, for example after ownership consolidation, while new ones rarely decide to enter the Slovenian capital market, the ATVP commented in the report.

In order to raise awareness of Slovenian issuers about the importance of the capital market, the agency said it had implemented last year a pilot programme of support for listing of small and medium-sized enterprises.

Last year, investors could pick among 100 mutual funds in Slovenia, which were managed by six asset management firms, one fewer than in 2017, as the consolidation of the market in this field continued, the agency said.

Their combined assets amounted to EUR 2.48 billion at the end of last year, EUR 187 million less than at the end of 2017. The ATVP attributes this largely to the negative trends at international stock exchanges at the end of 2018.

The agency noted regretfully that the share of securities of domestic issuers in the portfolios of mutual funds had continued to drop last year.

Follow the business news in Slovenia here

22 May 2019, 11:46 AM

STA, 21 May 219 - The Organisation for Economic Co-operation and Development (OECD) has downgraded its forecast for Slovenia's gross domestic product (GDP) growth for this year by 0.2 percentage points to 3.4%, while upgrading the 2020 forecast by 0.4 points to 3.1%.

In the forecast published on Tuesday, the OECD said that Slovenia's economic growth remained strong, being powered by the solid domestic consumption.

Domestic consumption is supported by the improving situation on the labour market, growth of wages in real terms and a high consumer confidence rate.

The EU structural funds, the companies' needs for additional production capacities and favourable financing conditions are maintaining a strong investment growth, while exports are slowing down due to lower demand.

The OECD expects that private consumption will increase this year by 3% (3.1% in 2020), state investments by 2.2% (1.9% in 2020), companies' investments in fixed assets by 8% (7.2% in 2020), exports by 5.8% (7% in 2020) and imports by 5.2% (5.9% in 2020).

Employment continues to grow, with hiring of foreign workforce also being on the increase, the OECD said, adding that the shortage of workforce was nevertheless the highest in the last ten years.

The Paris-based organisation noted that Slovenia's fiscal policy for this year was expansive, while that for 2020 was neutral, adding that Slovenia should make its fiscal policy stricter to keep inflation pressure in check and ensure fiscal sustainability.

Measures such as restricting early retirement and facilitating privatisation would contribute to mobilising labour resources which are not fully utilised at the moment, and make labour force available to fast-growing industries, the OECD added.

It said it expected economic growth in Slovenia to slow down in 2019-2020, adding that the higher domestic demand and growth of investments would be covered with higher imports.

Given the weaker demand from abroad and higher labour costs, the growth of exports will slow down, while the employment rate will drop below the natural rate, which is expected to facilitate wage growth and increase inflation.

Slovenia's economic growth could be higher than projected if households save less and increase consumption, or lower than projected if companies fail to increase their production capacities to the expected level.

This could result in a drop in their competitiveness and lower exports, the OECD said, adding that economic growth in Slovenia could also be negatively affected by a possible strong real estate market correction.

21 May 2019, 14:20 PM

STA, 19 May 2019 - The Ljubljana fairgrounds (aka theGospodarsko Razstavišče), which annually hosts around 20 fairs, has been boosting its congress-hosting business lately, with the share of its revenue gained from this activity increasing from 25% in 2010 to 44% last year. Its operator believes that the venue will continue to grow and record another successful year in 2019.

Presenting the figures for the STA, Iztok Bricl, the director of Gospodarsko Razstavišče, stressed that the fairgrounds operator's total revenue was up by 10% last year, with the goal being to grow at an annual rate of 5%.

The company generated EUR 6.5 million in net revenue in 2018, while net profit was up by 35% to EUR 400,000 million. Last year it hosted more than 260 fairs, exhibitions, concerts and other events, which were visited by a total of 400,000 people.

Bricl noted that the venue north of the city centre had hosted 12 international congresses last year, featuring a total of 11,000 delegates. "Fairs organised by us were also successful and very well visited."

The construction fair Dom, the largest fair in Ljubljana in terms of the exhibition area and the number of exhibitors, attracted 57,200 visitors alone, he said, adding that this year was also expected to be successful.

Gospodarsko Razstavišče also invests in congress halls, equipment and staff. "Since I took over in 2010, we have invested almost five million euros of our own funds in infrastructure, technical equipment and lighting."

Construction of a new hall, measuring 2,630 sq metres and standing 24 metres tall, is expected to start in 2022. "The ground floor will feature the largest multi-purpose hall in Slovenia, which will host fairs and congresses."

Above the hall, which will be able to accommodate up to 4,000 guests, will be another, smaller hall, intended for receptions. It will notably feature a green terrace, added Bricl.

The new hall, which will host large international congresses as the fairgrounds operator is recording an increasing demand for such events, will cost between 6 and 8 million euros.

While constantly investing in infrastructure and updating and expanding the list of its services, the company also attends international fairs in a bid to promote Slovenia and Ljubljana as a new congress destination, Bricl said.

Three years ago, Gospodarsko Razstavišče got connected with the Turkish Dekon Group, the third largest professional conference organiser (PCO) in Europe, which organises 60 major events with more than 10,000 participants every year.

The two have established the joint company Dekon.SI, the first international PCO in Slovenia. "Next year it will bring to the Ljubljana fairgrounds two international congresses with between 1,200 and 1,800 participants from all over the world."

Since 2013, Gospodarsko Razstavišče has also been hosting major exhibitions, which are visited by up to 70,000 people. The latest exhibition, Body Worlds Vital, was visited by more than 55,000 people in three months.

Established on the initiative of Slovenian businesses and the chamber of commerce as a professional organisation hosting fairs and exhibitions, the company recently marked its 65th anniversary.

According to Bricl, the history of Gospodarsko Razstavišče is very colourful and rich, "as if you are watching an interesting documentary reflecting a certain era, starting with the post-war times in the spirit of the building of the socialist Yugoslavia."

It was followed by planned economy, the opening up in the 1960s and 1970s, and connecting with the Alps-Adriatic region and wider, development of the market economy, influence of the global economic trends and the related recession and economic growth.

Before the Tivoli Hall was opened in 1965, the venue also hosted many international sport competitions. The national broadcaster opened its first studio there in 1956, while the legendary jazz musician Luis Armstrong had a concert there in 1959.

There were plans in the past to move the fairgrounds to the outskirts of the capital, but they are no longer viable. "We will certainly stay in the centre of the city, at the location which was designated for fairs 65 years ago."

Bricl explained that, as the volume of activities connected to the immediate vicinity of hotels is increasing, it would be impossible to further develop the congress-hosting business at a location outside the city centre.

He sees the next ten years of the Ljubljana fairgrounds within the context of the planned development of the wider area, which include two skyscrapers, one large office building and renovation of several existing buildings.

"That part of Ljubljana will be a modern urban business centre a 10-minute walk from the old city core with the Castle Hill, Ljubljanica, Triple Bridge, restaurants and shops," Bricl concluded.

You can learn more about the Gospodarsko Razstavišče here

17 May 2019, 12:30 PM

STA, 15 May 2019 - The National Council, the upper chamber of parliament, is spearheading a new attempt to help several thousand people who took out mortgages in Swiss francs and ran into trouble when the Swiss central bank stopped protecting the value of the currency in 2015.

 It adopted on Wednesday a bill that would make it obligatory for banks to convert all Swiss franc loans to euro at the exchange rate valid at the time the loan agreement was signed.

The new loan agreement would bear interest applicable to euro loans at the time of the original loan agreement, and borrowers would be entitled to get back any excess payments they have already made.

The bill would apply to all Swiss franc loans made between 28 June 2004 and 31 December 2010, including those that have already been fully paid up.

The legislation, which will now have to be examined by the lower chamber of parliament, is substantively the same as a bill proposed by Franc Association, a group lobbying for Swiss franc borrowers, in December 2017.

That bill automatically expired when the new parliament was inaugurated in 2018, with franc borrowers counting on the new parliament being more susceptible to their proposal and enlisting the National Council to help get the legislation into parliamentary procedure.

The new government indicated in late-2018 it was willing to tackle the issue, with the caveat that it would try to seek a different solution than the one proposed by franc borrowers.

The original bill had been strongly criticised by banks, which want the issue resolved on a case-by-case basis rather than with a sweeping systemic law.

It has also come under fire from the European Central Bank, which expressed serious concerns about its retroactive character and effects on the banking sector.

Slovenian courts have so far delivered mixed verdicts in claims brought by borrowers, substantively revolving around whether consumers had the necessary information about risks when they took out loans.

But the Supreme Court appeared to have set a general course for future lower-court rulings with two verdicts in late-2018 that respectively determined that consumer protection rules at that time were more lax, and that banks had sufficiently explained the risks.

At least one case has already made it to the Constitutional Court, which is yet to deliver its verdict.

17 May 2019, 11:28 AM

STA, 15 May 2019 - The board of directors of the European Investment Bank (EIB) approved a EUR 250 million loan for the construction of a second rail track between rail hub Divača and Koper port on Wednesday, the EIB confirmed for the STA.

This approval is considered a significant step to finalising the financial plan for the project estimated at just under EUR 1.2 billion.

To approve the financing, the EIB insisted on a state guarantee for the loan which will be taken out by 2TDK, a company incorporated with the purpose of building and managing the new track.

Infrastructure Minister Alenka Bratušek has previously said that the state guarantee should not be a problem as a relevant bill is as good as ready. It needs to take effect before the loan contract is signed, expectedly by the end of the year.

She told the press after the EIB approved the loan that such a decision was expected, considering that the European Commission already okayed a loan from the EIB.

2TDK CEO Dušan Zorko, who was also confident that the loan would be approved, said that the EIB recognised the importance of this project for the entire region.

The next step will be to negotiate the contract for the loan, said Zorko. Bratušek added that there was no hurry to sign the contract.

"We were in a hurry with the loan so that we could finalise the financial plan for the project and so as not to endanger the EUR 190 million from the EU," the minister said.

"With the EUR 109 million in grants provided by the European Commission, the project can now start," European Commissioner for Transport Violeta Bulc said in a written statement.

The board of EIB directors was expected to discuss the loan to Slovenia in early April, but postponed the decision due to long debates about Brexit, the EIB said over a month ago.

17 May 2019, 09:20 AM

STA, 15 May 2019 - Trade unions have announced they will fight with all available means what they believe are concealed attempts to change the law on minimum wage on demands from employers, as suggested by statements by government officials and debates held by employer representatives. The Labour Ministry denied that changes were in the works.

 

Speaking at a press conference in Ljubljana on Wednesday, representatives of the trade union confederations ZSSS and Pergam said that they were ready to push for a referendum on the minimum wage law if it was changed.

Slovenian’s minimum wage is currently  €886 a month

ZSSS president Lidija Jerkič said that there was an increasing number of signs lately that employer organisations wanted to prevent the provisions eliminating all bonuses from the minimum wage from entering into force in January 2020, as scheduled.

Jerkič said that this was suggested by the statements by PM Marjan Šarec that an agreement should perhaps be found on minimum wage law changes, as well as by Economy Minister Zdravko Počivalšek about employers warning him about the consequence of the exclusion of all bonuses from the minimum wage.

She also pointed to the recent round table debate of the Chamber of Commerce and Industry discussing the "domino effect of the minimum wage law" and certain statements by representatives of employees.

"If this is intended for testing the will of trade unions, let me reiterate clearly that we will not allow unilateral attempts at changing the legislation," Jerkič said.

If the law gets changed without the consent of trade unions, they will use all available means, including referendum, she said, adding that talks about a postponement of the exclusion of bonuses was out of the question.

Find out the average pay for various jobs in Slovenia here

The minority government's partner in the opposition, the Left, also sided with the trade unions and said it would help collect the needed signatures to have a referendum called.

Luka Mesec, the leader of the Left, said that profits were growing in "leaps and bounds", going from EUR 169 million in 2013 to EUR 4.2 billion last year.

Aljoša Čeč, the secretary general of Pergam, also said that employers were undermining social dialogue by trying to change the minimum wage legislation.

ZSSS vice-president Ladi Rožič said that, given the announcements that the Slovenian economy as a whole made EUR 4.2 million in net profit last year, claiming that the minimum wage would destroy the economic model was "unwise and unproductive".

The Labour, Family, Social Affairs and Equal Opportunities Ministry responded by saying that it detected no anomalies or derogations that would require a change in legislation.

It added that the minimum wage must be high enough to allow a decent living without the aid of social transfers.

All out stories on the minimum wage in Slovenia are here

15 May 2019, 14:23 PM

STA, 15 May 2019 - The group around the insurance company Zavarovalnica Triglav posted a pre-tax profit of EUR 29.9 million in the first quarter of 2019, up 8% year-on-year, while also recording the same growth rate in consolidated gross premiums, which amounted to EUR 317 million, shows the unaudited quarterly report released on Wednesday.

The report says that the group's premium growth on most of its markets exceeded the growth of the markets as a whole.

In Slovenia, where the group collects 76% of consolidated premiums, the average premium growth stood at 6% (compared to the market growth of 5%) and 10% in the markets outside Slovenia.

In terms of individual insurance segments, premium growth was recorded in all non-life insurance classes, the company said.

In the life and pension insurance segments, premium declined by 2% compared with the same period last year, while health insurance premium increased by 20%.

Gross claims paid by the group totalled EUR 166 million, down by 3% compared to the first quarter of 2018, while net claims incurred were at the expected level, up by 6% compared to last year.

At the end of the first quarter, the group's financial investments totalled EUR 3.2 billion.

Commenting on the results, chairman Andrej Slapar said the company was pleased with the performance, adding that it "pursues the set strategy to become a modern, innovative and dynamic insurance and financial group".

15 May 2019, 09:00 AM

STA, 13 May 2019 - Small and medium-sized companies in Slovenia as well as those providing for up to 3,000 full-time jobs will be able to apply for EUR 100 million in funds offered by the Slovenian Equity Growth Investment Programme (SEGIP). The new scheme is to help attract private investors from abroad.

The European Investment Fund (EIF), and Slovenia's SID export and development bank each contributed EUR 50 million to the programme.

According to SID CEO Sibil Svilan, the initiative for the SEGIP had come from SID after the crisis revealed a major deficiency in private equities in Slovenia.

In November 2017, a deal to set up the EUR 100-million programme was signed with the EIF, with the European Fund for Strategic Investments (EFSI) providing for guarantees.

The goal of the programme is to provide equity financing to the small, medium-sized and mid-cap companies as well as attract foreign private investors and strengthen local capabilities by supporting the up-and-coming managers of Slovenia-based entities whose investments are focussed on Slovenia.

Gabriele Todesca of the EIF said at today's presentation that alternative finance still represented a small share among all financial sources available to local small and medium-sized companies, which slowed down the economic growth.

"The EIF is happy to contribute to the tackling of this issue through the SEGIP," he said.

The EIF has chosen KF Finance and KD Skladi to manage the private capital funds.

Tone Pekolj of the KF Finance funds noted that the first generation of Slovenian entrepreneurs were now passing their companies on to the next generation, and were willing to open the door to other investors.

Meanwhile, KD Skladi CEO Luka Podlogar stressed that small and medium-sized companies were the engine of the Slovenian economy and that because of the lack of private capital funds many of them failed to realise their potential.

According to the SID bank, the SEGIP is not intended for start-ups or companies in trouble. It will support investments aimed at strengthening or expanding companies in Slovenia, which also entails hiring and job creation.

13 May 2019, 14:30 PM

STA, 13 May 2019 - Employers have been pointing to their difficulties in finding qualified new employees for quite some time, but the situation has only been worsening to the point when it looks more dire than it was in 2008, before the economic crisis. Employers' organisations thus urge the authorities to take action by promoting economic migrations.

 

Employers have been hiring foreigners to alleviate the shortage, but the manpower pool of the former Yugoslav republics is depleting as well.

The organisations thus expect the government to speed up measures to tackle the issue and come up with a strategy for promoting economic migrations.

According to the Employment Service's data, in the past six months, almost 50% of employers were faced with the shortage, with the share standing at 70% among large companies.

The deficiency is most pronounced in the restaurant business (69%), construction (62%), social and health care (62%) and manufacturing (56%).

"Employers often encounter problems when trying to recruit employees for jobs which are paid less, physically demanding and/or come with demanding working schedules. There's also the issue of finding candidates for technical jobs requiring specific skills which are difficult to be obtained quickly by not (yet) trained and inexperienced people," said the service.

Increasing systemic discrepancies are present in the labour market, according to the service, with the number of available jobs growing, and the number of jobless decreasing.

As a result, the share of the unemployed with primary education or without it is increasing, same as the share of jobless people who are limited in finding employment and require active support.

On the other hand, the share of the unemployed disabled people is decreasing more slowly than the share of all unemployed people.

Employers are thus trying to fill in the gaps by adopting measures such as overtime or temporary increased workload, recruiting through temping agencies, encouraging the young to find jobs more quickly, discussing post-retirement work with older employees and attracting foreign employees, the executive director of the Chamber of Commerce and Industry (GZS) Samo Hribar Milič has told the STA.

The Slovenian Employers' Association (ZDS) secretary general Jože Smole also said that recruiting foreign employees was one of the key ways to tackle this issue.

According to the Employment Service, the number of work permits increased from 14,811 in 2015 to 18,049 in 2018. The numbers do not include single residence-work permits, with 1,180 of them being issued in 2015 and a significantly higher number of them in 2018 - 20,889.

In the first four months of this year, 9,693 foreigners obtained permits to reside and work in Slovenia. But getting such permits does not automatically denote receiving a work permit at the administrative unit in charge.

The majority of foreign recruits are from the former Yugoslav republics. Slovenia issued 16,596 work permits to citizens of Bosnia-Herzegovina last year, 1,281 to citizens of Croatia, and 140 to citizens of Serbia.

The share of single residence-work permits was highest in case of migrant workers from Serbia, Kosovo, North Macedonia and Russia.

Employers criticise the length of procedures for hiring employees from third countries. Moreover, they have been waiting a year for the ratification of the treaty on employing Serbian citizens in Slovenia.

The protocol for implementing the treaty was signed in November last year, but the ratification has not taken place yet. However, employers caution that the manpower pool in the former Yugoslavia is being drained as well.

Hribar Milič thus called for ratification of treaties which would enable employing citizens of countries such as Ukraine and Belarus. He also urged the authorities to follow Germany's example and establish offices in charge of employing third-country nationals, for example in Sarajevo, Kiev or Skopje.

"The state already promised that, but has still not delivered on it," he pointed out.

The newspaper Delo recently reported that around a third of the foreigners getting work permits in Slovenia used that opportunity as a stepping stone for migrating to another EU country.

Commenting on this, Hribar Milič said that GZS member companies had been pointing that out, having invested in foreign recruitment only to be faced with recruits moving on to other EU countries.

He denied accusations of Slovenia importing workforce to the EU at dumping prices as Slovenian labour costs are lower, which makes workers from Slovenia cheaper. He said the accusations were based on individual cases, which should be sanctioned by law.

Smole said that given the amount of labour costs in Slovenia one could not speak about dumping.

He expects the government to step up action mitigating the manpower drain, reduce red tape and come up with an operational strategy for economic migrations.

On the other hand, the GZS is pleased about its collaboration with the Employment Service since the latter is developing personalised training and further courses for the unemployed in cooperation with the organisation. However, Hribar Milič concluded that there was room for improvement in that respect as well.

All our stories about employment in Slovenia are here

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