Ljubljana related

19 Oct 2020, 10:15 AM

STA, 15 October 2020 - Home appliances maker Hisense Gorenje has officially announced it will start producing TV sets at one of its former facilities in Velenje in January next year. The Chinese-owned company announced that the Hisense Europe Electronic TV factory will involve around 400 jobs in the first stage, 330 of which will be for production workers.

Hisense Gorenje wrote on Thursday that jobs will first be offered to workers from existing production facilities in Gorenje, meaning they will be offered redeployment. The vacated jobs will be replaced with new hirings, the company said.

Part of the staff will also be sought in other Hisense Europe companies, while external candidates will get a chance as well. The workers at the TV factory, which is to produce Hisense TV sets for the European market, will start with training on 15 December.

The factory is being set up in Gorenje's former HZPA production facility. Investment in the equipment is estimated at EUR 7 million.

The planned annual output at four production lines in the first stage is two million sets a year. Capacities and output are then expected to grow in line with market demands to almost four million sets a year by 2023.

Hisense Gorenje is convinced that the new factory will not only contribute to reducing unemployment in the region but will also boost innovation, expand production activities, sustainable development and increase competitiveness and internationalisation.

"Creating a larger number of new jobs in the Savinja-Šalek region has additional weight in the light of the restructuring of this coal-mining region. Additional development potential for the region is harboured by the possibility of setting up a local supply network, which is particularly important for the small business sector," Hisense Gorenje wrote.

The first announcement of a TV factory in Velenje were made in 2018 when Hisense took over Gorenje. Initially a brand new factory was announced worth several dozen million euros and archaeological excavation was under way on a 3.5-hectare location.

Meanwhile, the news was welcomed by the SKEI metal industry union in Gorenje, whose head Žan Zeba said the union "above all expects that all standards and rules valid in our environment will be respected, that Hisense will prove it could also be a socially responsible company". He also mentioned the need for a suitable wage as "the best possible advertisement.

Zeba is, however, concerned about the chance of the new hirings at Gorenje, meant to replace the redeployed workers, being for a fixed term, which would raise what is presently believed to be a 20% share of fixed term contracts at the company.

Meanwhile, Gorenje told the STA the company presently had substantially more orders than in the same period last year and that its capacities were filled until the end of the year.

Gorenje added that strict protective measures at the company had been preventing a spread of Sars-CoV-2, but the epidemiological situation in the country nonetheless presented a substantial risk as regards the fulfilling of the orders. Workers have been asked to behave responsibly outside the company as well.

09 Sep 2020, 11:57 AM

STA, 8 September 2020 - Gorenje Group generated a net loss of EUR 55.2 million last year, down from 2018's EUR 111.2 million. One-off events excluded, the group's loss amounted to EUR 37.3 million. Revenue meanwhile rose by 4% to EUR 1.23 billion, shows the group's annual report published on the website of the AJPES agency.

Profit before tax, depreciation and amortisation (EBITDA) dropped by 4.4% to EUR 28.3 million, while operating loss rose from 28.2 million in 2018 to EUR 44.6 million.

The group said the loss was largely a result of poor performance in the first quarter of 2019, when the volume of sales was rather low.

Following a number of measures to avert the trend, business improved, with a pronounced upward trend recorded in the second half of the year, which was however not enough to offset the early poor start.

The group generated almost 57% of revenue in eastern Europe, about a third in western Europe and the rest around the globe.

The group's home appliances unit increased its revenue by 6.6% to EUR 1.15 billion, posting the biggest rise (+11%) in east European markets.

It had an average 10,661 employees last year, or 437 fewer than in 2018, mostly because of sale of four non-core companies.

The parent company Gorenje meanwhile generated EUR 836.6 million in sales revenue, up 2.1% from 2018, posting a net loss of 59.6 million, down from EUR 126.8 million.

The group continued integration into China's Hisense Group last year, transforming from a publicly listed company into a limited company.

To improve efficiency, reorganisation of business processes at the level of the entire Gorenje group was launched after the group was bought by Hisense in 2018.

Gorenje announced a new investment cycle for this year to develop new products and modernise production in a bid to offer new and competitive products.

This should bring about growth in sales and revenue, so Gorenje Group expects to finish 2020 with a profit.

19 Aug 2020, 11:49 AM

STA, 18 August 2020 - Slovenian home appliance manufacturer Gorenje is hiring some 600 temporary workers to cope with a record number of orders. Orders until the end of the year are by more than 30% higher for each month than last year, while a 15-20% increase is also expected for early 2021, the company told the STA on Tuesday.

Since 10 August, Gorenje has already hired 240 workers on a fixed-term contract, and is looking for another 350, to be employed by 1 September.

Some of the new workers will be hired until the end of October, but the majority until the end of the year, said the company, which is part of the Chinese group Hisense.

"While a rise in orders is typical of this time of year due to the seasonal nature of production, we have an absolute record number of orders for this period now."

When the coronavirus pandemic hit this spring, Gorenje's new owners were planning massive layoffs.

Orders for August to October then rose significantly and June was the first profitable month this year.

The changed situation prompted the Hisense Gorenje management to resort to soft methods to improve efficiency in production at Gorenje.

Due to the pandemic, Gorenje has introduced a number of measures to boost sales, cut costs and increase production efficiency.

15 Jul 2020, 09:49 AM

STA, 14 July 2020 - Home appliances maker Hisense Gorenje will not lay off production workers as initially planned. The company will instead employ soft methods to reduce the workforce, since orders have grown in recent weeks and June was the first profitable month this year.

The latest previous plan was to lay off roughly 300 workers in the production unit Gorenje in the town of Velenje, the group having already let go of 46 employees at the back-office unit Hisense Gorenje Europe in June.

Initially, as many as 830 people were to be laid off in Slovenia.

"Due to the altered operating circumstances, the management of Hisense Gorenje has decided to employ soft methods to improve work efficiency at the production company Gorenje," reads a statement issued on Tuesday.

The increased orders are "good news for the company and its employees" and a result of measures taken to improve operations and adjust to the consequences of the coronavirus pandemic, which has included changing business models, accelerating online sales and cutting costs.

These measures will continue given the unprecedented uncertainty and instability on the market, the company said, confident that the positive trends will continue in the months to come.

The in-house trade union expressed satisfaction today that the management decided to follow its recommendations. Its head Žan Zeba expressed hope that the company would now focus on goals it had set for itself and start showing results "that will benefit all stakeholders".

23 Apr 2020, 12:08 PM

STA, 22 April 2020 - The Chinese-owned group Hisense Europe is planning to close 2,200 jobs by the end of the year as a result of the coronavirus pandemic, including as many as 1,000 in Slovenia, TV Slovenija reported, citing a trade unionist.

According to the report, the management of household appliances maker Hisense Gorenje set its plans at a meeting featuring Chao Liu, one of the executive directors, production manager Tomaž Korošec, staffing officials and representatives of the works council, trade union and the employees' representative on the board Drago Bahun.

The management presented data on the situation resulting from the pandemic. Production in Velenje has not yet returned to full capacity after being completely suspended for three weeks.

The head of the in-house trade union Žan Zeba told the public broadcaster that Hisense was to make 1,000 people redundant in Slovenia, including 700 at the production facility in Velenje and 300 in the Ljubljana-headquartered company Hisense Europe.

Zeba said the staff were shocked by the extent of planned layoffs, noting that the company had received state aid "probably also in order not to make redundancies".

The first meeting with employees on layoffs are to be held after May day holidays.

Gorenje is to set out detailed plans about job cutbacks on Thursday.

20 Apr 2020, 14:10 PM

STA, 20 April 2020 - Revoz, the Slovenian subsidiary of the French car maker Renault, continues to top the Delo list of Slovenia's largest exporters, followed by pharmaceutical companies Lek and Krka, and the household appliances maker Gorenje, the only four companies whose exports exceeded a billion euro in 2019.

Revoz recorded exports of EUR 1.77 billion, followed by Lek with EUR 1.48 billion and Krka with EUR 1.4 billion. Gorenje was at EUR 1.12 billion, shows a list published by Delo on Monday.

The top ten is rounded off by aluminium producer Impol, steel group SIJ, industrial conglomerate Kolektor, home appliances maker BSH Hišni Aparati, foundry LTH Castings and aluminium producer Talum.

Overall merchandise exports totalled EUR 33.5 billion in 2019 and trade continued to grow through February, but the coronavirus pandemic has probably already led to a sharp contraction.

Delo says the major exporters are now preoccupied with mitigating the damage, as supply chains have been interrupted and entire industries ground to a halt.

"We definitely don't expect a repeat of the results from previous years, but the survival of the company should not be jeopardised," Jani Jurkošek, the general manager of SIJ, told Delo.

Srečko Stefanič, the boss of chemical company Melamin, said that "we cannot count on a reversal of the trend ... before autumn, while the recovery and the return to what had already achieved may take a year or two."

Delo's annual list includes 110 companies that have reported their results. While the top ten are broadly unchanged, some major companies do not yet have audited results for 2019 and have therefore not been included on the list.

14 Apr 2020, 10:21 AM

STA, 14 April 2020 - Companies which have suspended their production due to the coronavirus epidemic are gradually restarting operations and joining those that have only partly shut down or have not closed shop at all. As of Tuesday, a number of major businesses will be active again.

Household appliances maker Gorenje, owned by China's Hisense, temporarily shut down its operations on 23 March. The company's plant producing washers and dryers started its operations last Friday and other production lines in Velenje are expected to restart today.

Adria Mobil, which shut down on 18 March, saw its support services and management resume their work last week. Assembly lines will start running again on Tuesday, with the company introducing flexible working hours to prevent crowding.

Elan, another company that suspended production in mid-March, is sending more than half of its workforce back to work and adopting similar measures of reorganizing shifts to ensure that as few people as possible are working in the same place.

Revoz, the Renault-owned car assembly plant, had considered reopening as well but then extended the shutdown by another week. Restarting operations on 20 April is still questionable though and depends on a number of factors, including the resumption of public transport services, component supply and the developments in France and Spain, a Revoz unionist said on Thursday.

Despite restrictions imposed to stem or at least slow down the spread of Covid-19, it has been business as usual for many major companies, such as food and infrastructure businesses, as well as drug makers Lek and Krka, steel maker Sij, electric motor manufacturer Domel, tool maker Unior and aluminium producer Impol.

Some companies have merely reduced the scope of their operations, including aluminium producer Talum, glassworks Steklarna Rogaška, shoe maker Alpina and Hidria, which mostly manufactures hi-tech products for the car industry.

Another major company, household appliances maker BHS Hišni Aparati, plans to increase production to full capacity this week after it decided to restart three assembly lines in early April.

There has not been a single coronavirus hotspot in any of the companies that have continued to operate through the epidemic. This is one of the reasons why the government is planning to gradually ease restrictions in certain services this week.

All our stories on coronavirus are here

25 Feb 2020, 12:15 PM

STA, 24 February 2020 - The novel coronavirus COVID-19 outbreak has so far had no profound effect on Slovenia's economy, but problems have arisen in certain areas. Economy Minister Zdravko Počivalšek said on Monday that the government was deliberating mitigation measures, such as subsidies to compensate for shorter working time.

The minister pointed out though that any measures to protect public health must not interrupt the flow of goods because the country's exports depended on that.

After meeting several CEOs whose companies have been feeling the consequences of the outbreak, Počivalšek said that the ministry had been keeping track of the situation and its effect on the economy since the start.

He said the situation in Slovenia had been under control so far, but since the country had no influence on future global developments, it needed to be ready to deal with potential challenges.

Despite no major effects being determined so far, the ministry has decided to act in prevention and consider a future strategy in cooperation with economy representatives. Počivalšek intends to present potential measures at the government session on Thursday.

Problems have so far been detected mainly in tourism and logistics while a drop in sales and orders has been recorded in manufacturing, which could lead to a slowdown in production. The government is considering introducing subsidies for those waiting for work to help the affected companies and avoid lay-offs.

Slovenia introduced this measure a decade ago during the economic crisis and Počivalšek said he hoped it would not need to be introduced again.

Closing the borders would be the country's last resort, he stressed.

Slovenia's tourism has been worst hit by the outbreak of the coronavirus - mostly due to travel cancellations of Asian tourists. The situation could be exacerbated by the virus spreading to neighbouring countries.

Last year, 160,00 Chinese tourists visited Slovenia, while Italy is a key market, with 600,000 guests visiting Slovenia a year.

The Slovenian Tourist Board will step up its promotion efforts in nearby countries and it is also hoping to get EU funds for this purpose.

Meanwhile, the Chinese-owned household appliances maker Gorenje said that the situation was under control, but there was some disruption in supplies in China.

Port operator Luka Koper expects to feel the effects of coronavirus in the next two weeks, with its transshipment from or to China accounting for 30% of its total transshipment.

All our stories on cornonavirus and Slovenia are here

23 Jan 2020, 11:08 AM

STA, 22 January 2020 - The household appliances maker Gorenje, owned by the Chinese conglomerate Hisense, will streamline its production by reducing the number employees in support services in production by 176 in different ways by mid-April, the management said on Wednesday. Gorenje decided for the move "because of poor business results".

The measure will affect some 720 warehouse employees, dispatchers, technologists, planners, quality control, production management and similar positions, including those that have been moved from Velenje to Ljubljana as of this year.

The share of indirect production workers at Gorenje currently stands at 29.2% and is thus 8.6 points higher than in a comparable company within the group, Hisense Refrigerator.

The Gorenje management thinks this will help boost the efficiency of production, improve the use of resources and cut labour costs.

The company also plans to modernise its technological processes, increase automation, introduce IT solutions, and optimise the work process.

The management said it would conduct all procedures related to this in line with the law and in talks with the trade union. "The procedure is expected to last until mid-April."

Several workers have already been transferred to similarly paid jobs in direct production, while some will retire, the management said.

Meanwhile, the in-house trade union expressed concern, with its president Žan Zeba telling the STA that they expected the total number of dismissals to be rather high.

The total number of workers will go down also because work contracts will not be extended for nearly 240 people at the end of January, said Zeba, adding that the union was informed about this today.

"When you add up the numbers, it gets quite worrying. They are far from forecasts about production increase," he said, also expressing worry that Gorenje would start outsourcing some of the services that are now provided within the company.

In the next phase of optimisation, the group plans to reorganise the business processes in the newly founded Hisense Gorenje Europe in Ljubljana, which has employed 880 indirect production workers as of 1 January.

Last December, the Gorenje Group estimated its last year's loss at EUR 40 million. The goal for this year is EUR 30 million in profit.

All our stories on Gorenje are here

22 Dec 2019, 09:28 AM

The covers and editorials from leading weeklies of the Left and Right for the work-week ending Friday, 20 December

Mladina: Chinese-owned Gorenje seen as threat by Germany

STA, 20 December - The left-wing weekly Mladina is concerned about whether the Slovenian government is aware of the geostrategic interests involved in Gorenje becoming a Chinese company, predicting that Germany will make an all-out effort to prevent Hisense from making a foray into the European market through Slovenia.

In the latest editorial, headlined Angela Merkel Watching Gorenje, editor-in-chief Grega Repovž writes that Hisense has been unsuccessfully trying to get into the German market for almost two decades as all its attempts have been blocked by Germany and its industry, in particular the Bosch - Siemens group.

He says that this complicates the situation for the Slovenian household appliance company, because the moment it was acquired by Hisense, Gorenje became the company that the European industry and countries, in particular Germany, will do everything to stop in its expansion efforts.

"This is a big game that is not necessarily bad. Wise countries, especially small ones play at several sides, cooperate with various global superpowers thus establishing its power internationally.

"The German government does not feel any true sympathy for Slovenia, we are part of its interest but not its friends. To them, Hisense Slovenija is in fact a more important player than Slovenia," writes Repovž.

He goes on to say that China cares equally little about Slovenia, except when its geostrategic interests are concerned, wondering whether the Chinese government is extorting Slovenia over Gorenje into adopting Huawei's 5G technology, which he infers from Chinese Foreign Minister Wang Yi's visit.

He wonders whether the Slovenian government and intelligence services think ahead far enough, including how Slovenia's position in the eyes of the German government has changed and what will the consequences be for Gorenje.

"It is intriguing that Slovenia is getting involved in these big geostrategic games, but the fundamental question is whether it is fit to play. We are a country without long-term alliances, we do not have an ally of our own like the Croatians, who have Germany, or the Serbs France (and Russia)."

Repovž also notes the geostrategic interests related to retailer Mercator, where it says Slovenia has become vulnerable against Russia, which controls Mercator.

Or Ljubljana airport, where Lufthansa, one of the shareholders of the German operator of the airport, has now taken over most of the air traffic to and from Slovenia. "There was no coincidence in Adria Airways's collapse, only a clear business plan on the part of the competition."

Reporter: Poor governance at state-owned companies

STA, 16 December 2019 - The right-wing weekly Reporter writes about corporate governance at Slovenian state-owned companies in the latest editorial, finding that the executives affiliated with former President Milan Kučan are on their way out.

"Members of Kučan's table on the front page of the latest issue of Reporter (...) are the part of the deep state that is on its way out, their businesses are being taken by a new guard, rift apart into several networks that fight each other ruthlessly for control of the (para)state sector," writes editor-in-chief Silvester Šurla.

He writes that, 20 years ago, three close "adjutants of Kučan ruled" in the energy company Petrol, which "has always been and will continue to be a political company, as long as the state has a major say there. A big sack of money that many of the chosen ones feed from (...)

"Two months ago Petrol saw a showdown between 'red' networks, the losing side being the Borut Jamnik clan, an important member of which was Tomaž Berločnik, who rose to the post [of Petrol CEO] eight years ago with the help of politics and will now likely leave the same way."

Šurla offers Petrol as well as retailer Mercator and household appliances maker Gorenje as examples of how deep in the doldrums Slovenian corporate governance at state-owned companies is.

He says that Mercator and Gorenje were driven to such a poor state by domestic owners and managers that they are now being salvaged by foreigners.

"These days it is priceless to hear and watch how representatives of Russian Sberbank and Chinese Hisense are trying to drive home to the Slovenian public that socialism is over."

Šurla goes on to say that a person from China, the cradle of Communism, had to come to Velenje to spell it out that socialism is over once and for all, that there will be no future for Gorenje without a profit.

Under the headline Thin Red Line, the editor concludes that Mercator and Gorenje are "paying the toll of the notorious 'national interest'. Other 'flagship' state-owned companies are bound to face a similar fate in the future. Once they have turned into a heap of rust and politics is forced to sell them."

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