Slovenia Times 144

The Slovenia Times, Slovenian magazine in English Language, volume 8, number 144, EUR 4,80

Culture: Cinema special October 2011

CONTENTS 3

October 2011 Business Partners

POLITICS 6

The Wikileaks effect

ECONOMY 10 Logistics’ companies still struggling with economic downturn 12 Rogaška crystal gets Trump backing 13 The right time to buy gold?

15

Innovation special: DoubleRecall

FDI 18 21

Interview: Dr Giulio Bonazzi, Aquafil China sees Slovenia as a springboard for expanding into Balkans 22 Slovenia’s role in the Balkans – regional focus 24 EU membership essential for the Western Balkans

27

DIPLOMATIC SOCIETY

Interview: H.E. Predrag Filipov, ambassador of the Republic of Serbia 29 Harsh criticism of Slovenia at AmCham’s monthly breakfast 30 Embassy diaries

100

Real Estate special 31 33 35

95 25

Construction sector’s latest troubles Apartments prices rise despite low demand Swiss franc strength causes problems for Slovenian home owners 36 Who are the property investors in Slovenia?

40 Commercial property market is in transition 42 Overview of regional property markets

75 5

44

95 75 100

Lifestyle news

CINEMA SPECIAL

0 25 5 0

45 46 49 50 51 52

The history of Slovene cinematography The phenomenon of Partisan film Cinema theatres in the 21th Century Interview: Miha Hočevar, director Column: Gorazd Trušnovec People: Demeter Bitenc, film actor

54

The Event Guide

SPORTS Slo times avgust 230x95 mm 11. junij 2009 10:43:56

59

Basketball after the Lithuania

60

Dine with Style: Smrekarjev hram

62

Every picture tells a story October 2011

PANORAMA

source: STA, Slovenian Press Agency

The Final Fall

Diplomacy

Photo: BOBO

4

The National Assembly voted out the cabinet led

by Borut Pahor in a 36-51 confidence vote on Tuesday, paving the way for a likely snap poll in Slovenia in the winter.

The outcome of the confidence vote had largely been expected as Pahor, who has been leading a minority government since June, struggled to find votes for a necessary cabinet overhaul following the departure of two of the four coalition partners.

In a showdown with his critics in parliament, who have repeatedly accused him of not being up to the task, Pahor made one last appeal against a fullblown “paralysing political crisis” in Slovenia in a time of mounting debt problems in the eurozone. But the majority opinion in the parliamentary benches was that the minority government was already paralysed and that Slovenia needs a strong government formed based on the outcome of fresh elections. Aside from the Democrats (SDS), People’s Party (SLS) and National Party (SNS), those voting against included all but one MP from the former coalition partners Zares and the Pensioner’s Party (DeSUS).

The votes in favour came from Pahor’s Social Democrats (SD) and the LibDems (LDS), the lone coalition partners, as well as three unaffiliated MPs. In a short address to the parliament following the vote, Pahor said he had served the country according to the best of his abilities and thanked his cabinet for the hard work in dealing with the difficult economic situation in the country.

The vote means that parliament can now appoint a new prime minister, although there is virtual unanimous agreement among parliamentary parties that a snap election must be held. This would

be called if a new prime minister-designate is not appointed within 30 days.

The opposition parties hailed the chance to go to the polls in the coming months, reiterating that it was time for a new government that could implement overdue reforms.

The vote of no confidence brings to an end a tumultuous three-year period for a government faced by the deepest recession in over 15 years and often crippling disputes within its own ranks and inability to find common ground with social partners in pushing through reforms.

Economists and business officials were quick to hail the prospects of an early election as a way of breaking the current stalemate and getting a government that would put reforms in place. The trade unions joined the call for a strong government that would also lend an ear to them in shaping reforms.

The prime minister and his ministers will serve as caretakers until a new government is appointed, which could mean for several months in the event of early elections, which cannot take place before late November or early December.

In this capacity, the cabinet is unable to propose new motions unless urgent, although jurists warned that this area was moot and open to various interpretations. Pahor, 47, is the third prime minister to be ousted in a no confidence vote since Slovenia’s independence.

He follows in the footsteps of Lojze Peterle, the leader of the first democratically-elected government in the country, who fell in 1992, and Janez Drnovšek, who lost a confidence vote while leading his second government in 2000.

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The Slovenia Times

Remember the Non-aligned?

Slovenian Foreign Minister Samuel Žbogar addressed a ministerial of the Non-Aligned Movement in Belgrade marking the organisation’s 50th anniversary and held a number of bilateral meetings and lobbying for Slovenia’s bid for non-permanent membership in the UN Security Council in 2012-2013. The Non-Aligned Movement has encouraged international politics to strive for a peaceful and just world order and has laid the foundations for partnership, mutual respect and solidarity, Žbogar said at a panel on the second day of the meeting. Like the movement, Slovenia believes in efficient multilateralism as a basis for addressing global challenges and supports principled, transparent and open foreign policy, Žbogar further said according to a press release from the Foreign Ministry. The opposition Democrats (SDS) responded to Žbogar’s lobbying at the ministerial, claiming that Slovenia should focus on following the interests and ambitious of its allies and otherwise related democratic and economically most developed countries. Lobbying in the Non-Aligned Movement, which is linked to Slovenia’s non-democratic past under former Yugoslavia, is thus an “unclear and probably misguided contribution to the strategy of the Slovenian foreign policy,” the SDS wrote.

Playing the wrong card? Foreign Minister Žbogar sympathizes with the non-aligned.

Editor-in-chief Jaka Terpinc editor@sloveniatimes.com

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Front page by Jaka Terpinc

UNDER THE PRESS Patria Affair

Trial of the Decade The trial of five defendants, including ex-PM Janez Janša, accused of being involved in bribery in relation to the biggest defence deal in Slovenia’s history, started at the Ljubljana Local Court. Despite the disclosures, the SDS continues to vehemently deny any involvement in the bribery scandal and maintains it was a fabrication designed to give the left-leaning parties victory in the last general election.

After a three sessions in the court, the trial got postponed until 3 October, as the Ljubljana Local Court needs to examine the request from the defence for the exclusion of evidence and of judge Barbara Klajnšek, who has already familiarised herself with the disputed evidence.The defence demands that the minutes of all interviews and house searches made by the Finnish police and all evidence obtained on this basis are excluded from the trial as they were carried out in violation of the provisions on the protection of human rights. Janša’s lawyer Franci Matoz also believes that the evidence was exported from Slovenia to Finland by then president of the Corruption Prevention Commission Drago Kos. Janez Janša has also appeared in court as a plaintiff in the case against Finnish journalist Magnus Berglund, presenting the damage that he suffered because of Berglund’s “Truth About Patria”. He said the bribery allegations have changed his life. He believes that the allegations about bribery in the EUR 278m defence deal with Patria also preoccupied the 2008 general election campaign and cost the SDS at least 10 percentage points in the election result. As parties are financed on the basis of their election result, the SDS suffered damages of EUR 4.5m, he added. Janša has been stressing that Berglund has failed to put forward any evidence to support his claims. Berglund’s defence says that their client has merely decided to protect his sources.

Border arbitration

Jernej the Man The National Assembly appointed Jernej Sekolec Slovenian arbiter at the tribunal to determine the border with Croatia. Support for Sekolec had been voiced by all deputy groups bar the opposition Democrats (SDS). The opposition People’s Party (SLS) said it did not oppose the candidate even though it had opposed the arbitration agreement. Sekolec, an international law expert with rich experience in arbitration, will be one of the five members of the arbitration tribunal. One member will be appointed by Croatia, and the other three, including the chair, will be picked by the two countries from a list of international law experts compiled by the European Commission.

Deminig

New Name and Mission The Slovenian-run International Trust Fund for Demining and Mine Victims Assistance changes its name to ITF - Enhancing Human Security, and broaden its mission from demining activities to general post-war humanitarian and charity efforts. From now on the fund will strive to mitigate the humanitarian and social-economic consequences of mines and other unexploded ordinance and limit the risks to human security by supporting reforms of the security sector and programmes of humanitarian disarmament, the Government Communication Office said in a press release. The Slovenian government set up the ITF in March 1998 to better organise and finance demining activities and provide help and rehabilitation to mine victims. Initially, the ITF operated in Bosnia-Herzegovina, but later it expanded to other countries of SE Europe and the world.The government also got acquainted in mid-July with a proposal to transform the ITF into an international organisation to facilitate its access to funds offered by international organisations, countries and particularly the EU.

In any case the share of public attention will focus on personal instead of real questions. The black scenario envisages an emotional campaign, a sports-cheering-like clash between two political leaders which would overshadow all conceptual questions. The risk we are running is that, similarly to previous elections, the next ones will turn out as if Slovenia was on Mars.

Philosopher Igor Pribac on the black scenario after the fall of Slovenian Government. (Delo)

Those who fear the elections will do anything to extend the split time. Just as in 1989 and 1990 they will use repression and propaganda. They will try to create additional space for a so-called saviour of the left but at the same time they will be crushing down the “spring” option – the SDS in particular – with all known and yet unknown means. Every day we will be hearing how new faces are needed and how the current opposition (SDS) is not an alternative.

Janez Janša analysing the state of conspiracy on the SDS website.

My cynicism is a platform of brutally demolished ideals. The erasure of teenage algorithm and belief in a fellow human, but most of all – powerlessness... the lack of satisfaction. It all happened on these travels. I wouldn’t say life has lost its meaning after all I have seen – it is humanity which has lost all its artificially-won respect. Humanity is overrated. That is my dogma.

War reporter Boštjan Videmšek on cynicism as a self-defence from reality. (Delo)

The data proves what we used to say in pub debates: that everyone is the same. The decision will be even more difficult.

Media expert Domen Savič commenting on whether data accessible through Supervisor and Wikileaks makes a voter’s choice any easier. (RTV Slovenia)

When in Yugoslavia, we loudly refused anything we were told from Belgrade.

Today we accept whatever Brussels says without even thinking about how it would influence our life. From servants who rebelled we have become servants who do nothing but wait for orders. We have taken a step backwards.

Matjaž Hanžek, former ombudsman and founder of a new political movement: For sustainable development on servility. (Mladina)

October 2011

5

6

A WORD FROM THE EDITOR

POLITICS

Black September

Wikileaks

Aside from the good weather that has been gracing us for almost two months now, there was not much reason for joy in Slovenia in September. The temperature outside may

By Maja Dragović have been warm, but the downward spiral of political and economic developments has left the atmosphere distinctly cool.

It was one piece of bad news after another. First Slovenia dropped to 57th place on the Global Competitiveness Index, losing 12 places. Then the International Monetary Fund downgraded its prediction for Slovenia’s gross domestic product (GDP) growth in 2011 from two percent to 1.9 percent. Slovenia’s Office for Macroeconomic Analysis and Development followed suit, changing its prediction from 2.2 percent to 1.5 percent.

The criticism of the way the government has been dealing with combating the crisis then ceased to come merely from the outside but also came from within, in the form of Joseph A. Mussomeli, the US ambassador to Slovenia. His harsh words indicated that he was allergic to the beloved phrase of Slovenian political elite “the national interest” and is unsure whether an appropriate translation for words cooperation and consensus exists in the Slovenian language. You might not like what he said, but he was only saying what critics of the now-outgoing government have been saying too – the unbiased critics of the government, that is, not the political scoring army that is mounting an imminent attack on the Slovenian electorate.

The final blow, in economic terms, came in the form of Moody’s decision to downgrade Slovenia’s government bond ratings to Aa3 from Aa2. The reason? Problems in the corporate and financial sector at a time of growing uncertainty regarding the government’s ability to curb growing debt.

That decision coincided with what was the biggest but least unexpected news of the month – the government has fought and lost its final fight, losing the confidence vote in parliament. This could be good news for Slovenia, as this government – for all its honest policies to better the lives of its citizens – has proven itself unable to do more but pander to the interests of the few. The new problem, however, lies in the government that will be elected in the coming vote. It is the same old faces that have graced Slovenian politics in the last two decades. And, what is more, the leaders of all political parties have a stain against their name in one way or another. Let’s look at the outgoing coalition partners first.

Katarina Kresal, the LDS leader, has been dogged by affairs from the moment she entered politics. And she was finally forced to resign as the minister of interior affairs over allegations of corruption in renting new offices for the Ministry of Interior from a family friend. Evidence of corruption in the case was also found in an investigation by the Corruption Prevention Commission.

Zares leader Gregor Golobič damaged his reputation right at the beginning of his mandate in the outgoing government, by not publicly declaring his share in Ultra company. Furthermore, he was viewed by many as the one who was at the forefront of hindering the work of the Pahor government.

Though not directly accused of corruption or wrongdoing, leader of the Social Democrats Borut Pahor has done enough damage to himself with too much exposure in the media. Extensive talking was not followed by much needed action – not for a lack of will, but mostly for a lack of authority.

Karl Erjavec, who has a serious following but who nobody takes particularly seriously, is perhaps the cleanest of the lot which doesn’t say much for Slovenian politics.

And the opposition?

SDS leader Janez Janša is still battling bribe accusations over the Patria affair, the latest of arms-related scandals he has allegedly been involved in since the nineties. And the leader of Slovenian National party, Zmago Jelinčič, who can gain enough votes to play a part in the new government, has also been exposed in questionable dealings of late.

Not much of a choice, one might observe. But choice nonetheless.

What most will hope is that consensus and cooperation will find its equivalent in the Slovenian language and play a major part in the politics in the next four years, regardless of who is elected to run the government. Slovenia’s economic troubles are deepening and it can’t afford to play party politics any longer. maja.dragovic@sloveniatimes.com

Nothing Shocking The recent batch of US diplomatic cables made available on Wikileaks revisited some of the most recent and significant Slovenian political affairs.

Despite some interesting statements, there were no major revelations.

By Jaka Terpinc

W

ikileaks is a phenomenon which needs no introduction. Its recent publication of classified US cables made some 800 documents created by Ljubljana Embassy staff visible to anyone. The US Embassy in Slovenia responded critically to the most recent release of “alleged US official cables”, saying it objects to and regrets the irresponsible, wholesale disclosure of confidential information. Nonetheless, the documents became hot material for both journalists and politicians, especially as they were made available during the traditionally quiet Summer months.

As it turned out there were few surprises found in the documents.

But in a time when any kind of reporting in Slovenia suffers a high degree of political contamination, or is perceived that way, most welcomed the chance to learn something resembling the truth.

Don’t play with Croatia

Among recent Slovenian affairs, a dispute with Croatia seems to have been a priority concern for the USA. The disagreement certainly did turn highly unpleasant when the ‘patriotic’ non-parliamentary Party of Slovene Nation requested Croatia was prevented from joining NATO, something that was due to happen in April 2009. “We cannot have the embarrassment of one Ally failing to ratify Croatia or of seating a new Ally in the middle of a Summit,” reads a message from Secretary of State Hillary Clinton in which she goes on to urge embassy staff to use all possible pressure to prevent the “embarrassment” from happening. This additionally explains the agony of Prime Minister Pahor, who got himself pinned down between the legal circumventing of the domestic nationalists and the international scandal that he needed to avoid.

The US has strongly supported resolving the Croatian border

deal. The cables reveal that Pahor addressed the US charge d’affaires to support his effort for arbitration and also reported the intention to soften the anti-arbitration opposition boss Janez Janša.

The media

The Slovenian media comes in for criticism in the cables. “They often fall short of journalistic standards of professionalism by blatantly mixing fact and opinion in their stories. The media also exhibit a strong left-of-center bias,” then US Ambassador to Slovenia Johnny Young said in 2004. While praising the open information environment, the media itself was considered difficult, “complex and often opaque, very critical of the US”, mentioning journalists’ almost “allergic reaction” to the administration of then US President George W. Bush. Criticism was also levelled at media ownership, “which is difficult to determine, as are exact political and economic pressures, which allegedly affect media reporting and result in some self-censorship”.

This alleged left-bias was also discussed by the US charge d’affaires and Dimitrij Rupel, Foreign Minister during the time of Janša’s government. In a cable report, Rupel expressed his belief in the media monopoly of the political left and admitted that “some people in the government [not himself or the Prime Minister] had made an effort to select a friendly editor of leading daily Delo and had succeeded in installing a general manager and editor-in-chief through two companies on the supervisory board.” Again, this statement was no surprise but is fodder for those who see the current scandalous situation around Delo as a legacy of the former government’s media intervention.

Patriot games

While the antagonists in the ongoing Patria scandal wage their

Photo: BOBO

POLITICS 7

media war on whether Janša’s SDS was a bribe-taker or a victim of conspiracy, the cables make the US’ understanding of the matter quite clear. The May 2007 cable has Ambassador Robertson quoting a “clandestine source” that “PM Janez Janša’s SDS received more than EUR 2.8m ‘under the table’ from Patria.” Moreover another cable

on a meeting with Janša reports that the politician’s “ignorance” about the details of the APCs tender “was a bit disingenuous, especially since we know that as Slovenia’s former defence minister he follows these issues”. The views of the ambassador, who adds in the same cable that “the entire Patria deal has smelled fishy from the

get-go”, were explained away by SDS. The party claimed the cable proved Janša successfully resisted lobbying related to the APCs deal and that he insisted on a transparent public tender: Sistemska tehnika, the Patria rival bider is partly owned by General Dynamics and the US ambassador seemed to be trying to lobby for the US company.

These are just the few of the most popular topics in the cables.

In addition, the media quoted comments on the failed business plans of the entertainer Harrah’s and another American investment plan for a tourist settlement under Krvavec, which failed due to involvement of local tax-suspicious companies.

In short, t he “revelat ion s” in the cables actually shocked no one. Slovenian Information Comissioner Nataša Pirc Musar commented that “our politicians are damn naïve if they think that Americans will not forward to its intelligence base all that they had been trusted at some unofficial talks.”

The cables might have confirmed some allegations, but it is not likely to influence a change of public opinion for domestic politics, nor the sentiments for the United States. “To date, we haven’t seen any reports to suggest that our previous reporting was done with bias or ill-intent,” the US Embassy has commented.

“On the contrary, such reports, if accurate, indicate that our embassy was accurately reflecting both local mood and information available at the time these cables were written.” Definitely not far from the truth.

October 2011

8

Economy

FACTS AND FIGURES

source: STA, Slovenian Press Agency

Parliament endorsed in a 45:10 vote in September the supplementary budget for 2011, which responds to an expected EUR 365m drop in revenues with an equal spending cut to preserve the budget deficit at 4.6 percent of GDP. The proposed budget, which envisages EUR 7.96bn in revenues and EUR 9.65bn in expenditure, was backed by the coalition SocDems and LibDems, as well as the former coalition Zares, the group of unaffiliated MPs and the minority MPs. Votes against came from the opposition People’s Party (SLS) and the former coalition Pensioners’ Party (DeSUS). The opposition Democrats (SDS) abstained, while the opposition National Party (SNS) obstructed the vote in protest over the SDS’s decision, claiming the SDS indirectly allowed the budget to be passed.

The opposition criticised the budget mainly because of major cuts to investments, which would however still be six percent higher than in 2010.

The Transport Ministry’s budget is slashed the most with a EUR 128.2m cut to EUR 537.1m.

The budgets of most other ministries have also

Photo: BOBO

MPs Back Supplementary Budget

SDS head Janez Janša

been cut, a notable exception being the Labour Ministry, which was provided with around EUR 150m in additional funds for unemployment benefits due to the higher-than-expected unemployment rate.

SDS head Janez Janša described the proposed budget as a desperate move by the government

following three years of failed financial policy, cutting funds for investments and social cohesion.

“Pass it yourself if you will. It will not make a difference, and some things will even get worse,” he said, announcing the SDS would abstain.

The supplementary budget was passed despite a 39:36 rejection of related changes to the austerity act. Reactions to the supplementary budget by economists and the Chamber of Commerce and Industry (GZS) focused on what they see as unreasonable cuts to investments and excessive funds for welfare.

Igor Masten of the Ljubljana Economics Faculty said the budget was guided by political and not economic considerations. “Investments have no voting rights, which makes them the easiest target for cuts,” he said in a reference to a possible snap election.

The GZS said that the EUR 200m cut to essential investments would also result in slower GDP growth. It was critical of the rejection of the changes to the austerity act, claiming that the entire burden of the crisis was being pushed onto the shoulders of the private sector.

GDP growth

Finance

Petrol Acquires Croatian Subsidiary

Slovenia’s Growth Forecast Downgraded

Lower Banks’ Profits

Energy company Petrol has agreed to acquire the remaining 49 percent of Croatian petrol retailer and wholesaler Euro-Petrol for an undisclosed sum. Petrol, which acquired a 51 percent stake in Euro-Petrol in February 2008, will purchase the outstanding stake from Jozo Kalem, the founder and chairman of EuroPetrol. Euro-Petrol operates 50 service stations in Croatia and posted a net profit of EUR 5.2m for 2010 on sales of EUR 271.7m. Croatia is Petrol’s biggest foreign market and the acquisition is in line with the company’s strategy until 2014.

The Slovenia Times

The International Monetary Fund (IMF) downgraded the prognosis for Slovenia’s economic growth for 2011 from two percent to 1.9 percent in its second World Economic Outlook report published last month. Meanwhile, it cut the growth forecast for the eurozone from two percent in its June forecast to 1.6 percent. The government think-tank IMAD also announced last month it expects the Slovenian economy to grow by 1.5 percent in 2011, down from 2.2 percent forecast in March. Exports remain the key engine of growth, while domestic factors continue slowing it down, IMAD suggests.

Greek crisis

State-owned companies

Equal Conditions

AUKN Demands Three-Year Business Plans

Slovenia demands equal conditions as Finland in the matter of security for fresh loans to Greece, Finance Minister Franc Križanič said in Wroclaw last month at the meeting of EU finance ministers. “We want the same treatment as Finland, and six other countries are explicitly demanding this,” Križanič said.

He deems it likely that the regime of security will be tied to a certain payment or renouncement of profits within the European Financial Stability Facility. “A reflection is needed whether this would pay or not.” The minister is confident that Greece will manage to repay the loans without major losses for the creditors, but that the maturity would be longer.

The Capital Asset Management Agency (AUKN) issued in September guidelines for state-owned companies under which they will be expected to draft a three-year business plan and send it to the agency before the end of the year.

The three-year plan is expected to be drafted by 1 December at the latest, approved by the supervisory board and sent to AUKN by 3 December. The plan for the first year is to be based on quarterly forecasts and will also serve as the basis for reports on quarterly results, a concept similar to that of public limited companies. The additional two-year plan is to be drafted in lesser detail and updated every following year.

Photo: BOBO

Energy

Slovenian banks generated a total of EUR 34.3m in net profit in the first seven months of the year, which is only half of what they made in the same period last year, according to the data from the central bank Banka Slovenije. Bad loan provisions and write-downs amounted to EUR 357.1m, which is 6.9 percent more than in the same period last year. The banks on the other hand finished 2010 in the red, generating EUR 98.1m in net loss because of higher provisions and write-downs, which amounted to a total of EUR 2.66bn at the end of June 2011. The number of companies that were late in paying their dues to the banks increased from 4,530 in December 2010 to 5,168 at the end of June. The share of defaulters grew from 18 percent to 20.1 percent.

9 Labour

Finance

Logistics

Slovenia Drops Places in Competitiveness

Unemployment Up Again

Another Capital Increase

Regular Route After Long Pause

Latest data from the Statistics Office shows that Slovenia’s registered unemployment rate rose in July after four months in decline to 11.5 percent, up 0.1 percentage point on June. The unemployment rate for men was 11 percent, which is as much as the month before, while the rate for women rose by 0.2 percentage points to 12.2 percent. The biggest monthly fall was recorded in the agriculture, forestry and fishing industries, where the number of employees slumped by 1,200, and in construction (by 1,100). Meanwhile, the finance and insurance industry saw the number of jobs increase by around 300.

The shareholders of NLB, Slovenia’s largest bank, will decide on a new capital hike on 27 October. The central bank has ordered the bank to improve its capital adequacy ratios by means of a capital injection. The bank suggested it needs EUR 400m in additional capital. Development and European Affairs Minister Mitja Gaspari criticised the bank for providing a relatively poor support to Slovenian businesses, adding that the NLB was on the list of 16 banks for which the European Banking Authority said that “still have a lot to do to normalise their operations”. NLB chairman Božo Jašovič meanwhile told the weekly Mladina that a EUR 400m capital increase would raise the bank’s Tier 1 capital ratio to 9 percent or higher. He, however, feels that injecting taxpayers’ money into the bank is not the best option, because this entails public scrutiny of the bank’s future decisions. The other scenario includes investments by the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC).

Slovenia’s second largest airport in Maribor will get a regular route after more than three years. The Golden Air airline confirmed last month that it would be operating a route to London’s Stansted via Vienna five times a week as of 6 October. Golden Air’s webpage shows that a return tickets will cost EUR 150. The airline, 90 percent of which is in foreign ownership, and 10 percent in the ownership of a Slovenian company Avio Fun, was established two years ago and has so far been specialising in business and charter flights.

According to free daily Žurnal24, Golden Air is planning to launch additional routes in the future, possibly also to India, which was announced recently by Aerodrom Maribor boss Marko Gros. Bergamo and Birmingham are moreover mentioned as possible destinations.

Slovenia has lost 12 spots to rank 57th among the 142 countries surveyed in the Global Competitiveness Report 20102011, released in September by the World Economic Forum. Switzerland tops the rankings. According to the report, Slovenia’s biggest problems are limited access to financing, inefficient government bureaucracy, restrictive labour regulations and tax rates and regulations. Slovenia ranks just below India and ahead of Mexico. Trailing Slovenia among EU countries are Latvia (64th), Slovakia (69th), Bulgaria (74th), Romania (77th) and Greece (90th).

Slovenia scored best in higher education and training (21st), and health and primary education (24th), while scoring lowest in labour market efficiency and financial market development (both 102nd).

Unemployment drops year-on-year 120000

Source: SURS

Global survey

105000

Slovenia registered one of the biggest drops in Global Competitivness rankings Current rank

Change from previous year

90000

Slovenia

57

-12

Jul 2010

Montenegro

60

-11

Slovak R.

69

-9

Romania

77

-10

Namibia

83

-9

El Salvador

91

-9

Egypt

94

-13

Gambia

99

-9

Jamaica

107

-12

Dominican R.

110

-9

Insurance

Photo: BOBO

Adriatic Slovenica Posts Profit

Adriatic Slovenica, Slovenia’s third largest insurer, posted a net profit of EUR 17.6m in the first half of 2011.

The insurer collected EUR 136.3m in gross premiums, up 2 percent yearon-year, and paid out EUR 95.1m in gross damages. Adriatic Slovenica said in a press release last month it reached its goals for the first half of the year. CEO Gabrijel Škof wrote that the company posted higher growth than its competition in the first quarter of the year and its sales exceeded those from the first quarter of 2010. The insurer posted positive results in both investment and insurance operations. According to the insurer, the only exception was health insurance due to the growing health care expenses.

Jul 2011

Finance

Trade

Moody’s Downgrades Bond Ratings

Slovenia’s Trade Gap Increases Slovenia’s exports amounted to EUR 1.69 billion in July, while imports stood at EUR 1.73 billion. Trade gap amounted to EUR 32.6m in July, compared to EUR 27.3m the month before, the Statistics Office said last month. The export-import ratio dropped to 98.1 percent in July from 98.5 percent in June. Exports were up 6.5 percent year-on-year, while imports increased by 3.4 percent. Exports to other EU members accounted for 71.9 percent of exports in July, amounting to EUR 1.22bn. Exports to third countries stood at EUR 476.7m. Imports from the EU amounted to EUR 1.34bn, accounting for 77.9 percent of the total figure. The country meanwhile imported EUR 382.2m from third countries. The trade gap amounted to EUR 715.4m, while the exportimport ratio stood at 94.4 percent between January and July.

Trade balance (in EUR ‘000 000) 0 -50 -100 -150 -200 Jun 2010

Jun 2011

Source: SURS

Source: World Economic Forum

Country

Moody’s Investors Service, a global rating agency, has downgraded Slovenia’s government bond ratings by one notch to Aa3 from Aa2 due to problems in the corporate and financial. Moody’s also placed the ratings on review for possible further downgrade, the rating agency announced last month. Among the reasons quoted is increasing risk that the government may be called upon to provide additional support to Slovenia’s banking system, and the weakening outlook for the medium-term economic growth. The latter is due to the deleveraging expected in the corporate sector, anticipated constraints on credit availability due to stress within the banking system, and expected deceleration of export growth as a result of the global economic slowdown.

Budget

State Aid Down Last Year A total of EUR 460.1m in state aid was paid out last year, which is EUR 144.6m or 24 percent less than in 2009 and 42 percent more than in 2008. Aid intended for small and medium-sized companies (SMEs) halved in 2010 compared to the year before, while more money went to training and environmental protection. State aid in culture and mining and quarrying was down by almost 30 percent, while regional aid and aid for restructuring of companies decreased by more than 10 percent, according to a three-year report confirmed by the government last month.

Law

Tax Havens Open to Public Scrutiny Last month, parliament adopted changes to the act on the prevention of money laundering and financing of terrorism, which make data on bank transactions to tax havens by companies and individuals accessible to the public. The changes, drafted by a group of MPs led by SLS president Radovan Žerjav, stipulate that the Office for Money Laundering Prevention needs to be notified of all transactions exceeding EUR 30,000 as well as when there is suspicion of money laundering or financing of terrorism.

According to the SLS, tax havens are used not only by companies, but also by rich individuals who want to optimise their tax situation or, in other words, possibly engage in tax evasion. The Chamber of Tax Consultants labelled the amendments a “double-edged sword”, arguing that oversight would not be improved by making the data publicly accessible.

October 2011

10 ECONOMY

Financial results

A Question of Logistics As the recession enters its third year, half-year financial results show that some of Slovenia’s major logistics companies are still struggling to come out of the red. Others, however, are strategically positioning themselves in preparation for better times ahead.

By Maja Dragović

L

et’s look at the less positive results first since, predictably, there is currently more bad news to cover than good. Despite growth in all key areas, logistics group Intereuropa posted a EUR 300,000 net loss in the first six months of 2011. Sales revenues were up, however, by 20 percent compared to the same period last year to EUR 109.6m. The group recorded a rise in all three key areas; in land transport by 21 percent, in intercontinental transport by 19 percent and in logistics solutions by 18 percent. It also surpassed its half-year plans by 14 percent in overall sales.

Not so smooth sailing

Although Luka Koper’s halfyear profit is on the right side of zero, it is lower compared to the

same period last year. The port operator generated EUR 71.7m in operating revenues in the first half of 2011, which is 15 percent more than in the same period last year.

Operating profit was up 74 percent year-on-year to EUR 13.2m, while net profit was down 37 percent to EUR 3.4m.

The operator of Slovenia’s sole seaport is however satisfied with the result. Luka Koper chief executive Gregor Veselko says that, excluding the write-off of the financial investment in logistics company Intereuropa, net profit stands at EUR 9.1m. And there are big plans ahead, too. The port plans to increase its cargo transshipment to 21.4 million tonnes by 2015, compared to 15.4 million tonnes in 2010. While the port is to keep handling different kinds of cargo, its strategic development will focus on cars and containers.

Veselko adds that Luka Koper aims to become the leading port system for global logistics solution in Central and Eastern Europe.

Switching tracks too often

No consistency: Slovenian railways have changed 11 chief executives in the last 10 years The Slovenia Times

The saga around Slovenian Railways, on whose efficiency Luka Koper largely depends, continues in much the same manner it has in the last few years. Bad results still haunt the troubled company. Half year figures show a net loss of EUR 5.6m, according to an earnings report from the company published in late August. For the first six months of this year, the

company transported eight million passengers – 4.5 percent less than planned.

The company’s debts and continuous bad financial results are being blamed on the government, which is responsible for the frequent changes in the management of Slovenian Railways.

Daily newspaper Žurnal24 has argued that the boss of the railways is much more likely to be axed for political reasons than for bad operating results. The paper suggests that when eleven people change place at the helm of a company in a decade with only one of them completing the term, something must obviously be wrong.

The criticism comes amid yet another change in the management of the company, with Ervin Pfeifer replacing Goran Brankovič who had been in charge for two years. Pfeifer, who is the twelfth manager the company has had since independence, has taken over at a time of change for the firm. Slovenian Railways has started functioning as a holding with three affiliated companies: infrastructure, passenger transport and cargo transport, to be joined by the existing subsidiaries. With such significant changes happening concurrently, it is anyone’s guess as to whether this will further impact the fortunes of the troubled state-owned company.

Flying low

National flag carrier, Adria Airways, has similarly been trying to

ECONOMY 11 climb out of the red but its financial worries persist. The carrier generated a net loss of EUR 63.07m in 2010, compared to a EUR 14m net loss the year before. Excluding the depreciation of the airline’s planes, last year’s net loss would stand at EUR 25m, according to the annual results published last month.

The debt-ridden firm is awaiting a capital injection, envisaging a conversion of EUR 38.4m of creditor banks’ claims into ownership stakes and a EUR 50m state bailout. But there is a stalemate: the government has made the state bailout conditional on the participation of creditor banks but the banks have not yet reached an agreement on the amount of claims to be converted. To convert the loans, the banks are demanding that the company renegotiate a collective bargaining agreement.

The airline says negotiations with the in-house trade unions are ongoing. But time is running out – the company needs a capital injection by the end of September (at the time this magazine was going to print), when creditors expect their loans to be repaid.

Winner: despite financial troubles faced by its main customer Adria Airways, Ljubljana airport has registered profit in the first six months of the year

made an operating profit of EUR 2.1m in the first half of the year, which is up 77.8 percent on the same period last year. Net profit rose by 53.3 percent to EUR 2.3m, an unaudited report shows. The relatively positive results came as

a result of growth in the foreign carriers segment and cargo as well as cost managing measures.

In a sector that has generated much media and political storm during the term of the now outgoing government, it is difficult to

predict how the future will map out. While some companies are looking ahead and making strategic plans, others seem to be stuck in one place with no clear solutions. It is time for Slovenia’s logistics firms to travel forward.

Firm on the ground

Ljubljana airport’s chief executive Zmago Skobir, who was recently endorsed for another fouryear term, is confident that Adria Airways will manage to obtain the necessary agreements to keep its planes in the air. The operator has big investment plans, including the construction of a second passenger terminal, a cargo apron and cargo terminal, but the management will wait to see what happens with Adria before embarking on those investments.

“We hope the bailout plan succeeds and if we also successfully complete tenders, we could start building the second terminal next year,” Skobir says, adding that the construction of a cargo apron is also slated to start in 2012, to be followed by a cargo terminal in the next phase.

However, a potential receivership at Adria would require certain short-term crisis management at the airport operator, Skobir warns: “We’d need roughly six to twelve months to restore 70 percent of the turnover, but then we’d be back to normal operations.”

“Adria’s biggest asset is the Balkans and the destinations Adria has been connecting via Ljubljana since independence and earlier.

We’d lose that, but we’d definitely substitute major destinations in the West. The fact is that we’d be in a tight spot for a year.”

Despite the financial troubles of its main customer, Ljubljana airport is registering extremely good financial results. The airport

Attentive cabin crew, gourmet cuisine, champagne in all classes, 5-star service on long-haul flights

making the sky the best place on earth.

www.air france.si October 2011

12 ECONOMY

Retail

The Trump Card Donald Trump is many things to many people. To some, he is a billionaire businessman. Others see him as a potential US president. Many simply know him as a TV star thanks to his role at the helm of popular show The Apprentice. Most know him as a man with a very peculiar haircut. For Slovenes though, this undeniably fascinating individual is becoming something else – a champion of their nation.

By Claire Read

Foto: Iztok Nikolić, IZIV Dizajn Studio

Winning ticket: Donald Trump at the launch of Rogaška crystal products in New York’s Macy’s

I

t is only natural for a country to be proud when one of its sons or daughters makes it on the world stage. The pride is even stronger, however, when the population of that entire nation is smaller than that of other countries’ capital cities. And so when Melanija Knavs started to grace the covers of magazines including Vogue, Vanity Fair and Harper’s Bazaar, her fellow Slovenes couldn’t help but feel pride – even if her adopted name of Melania Knauss might have hidden her status as a born and bred Slovene and graduate of the University of Ljubljana.

In 2005, her status on the world stage increased further when she married American businessman Donald Trump. It’s that connection which partly explains why,

last month, the tycoon was in famous New York department store Macy’s officially launching a range of crystal products manufactured in Slovenia.

Go west

It was the culmination of a plan set in motion a year before, when Rogaška Crystal and Trump Organisation signed a cooperation agreement. The basis? For Rogaška’s crystal products to be sold in the US under the Trump name, for a period of five years.

At the October 2010 media launch of the deal, the US businessman joked that since his Slovenian wife loved the company’s products he’d had little choice in the matter.

Of course Trump would not have made millions and then bil-

Almost 200 visitors already registered for »Der deutsche Ball« The Slovene-German Chamber of Commerce announces for the second year running the already well-known »Der deutsche Ball«, which will be held on Friday, 21 October in a prestigious Hotel Kempinski Palace in Portorož. The German dance is about connecting Slovene and German culture, creating new business acquaintances and enjoying the finest music and cuisine. More than 32 successful and renowned firms from both countries have already confirmed their attendance to this unique networking event, while our expectations are going far above 300 guests on 21 October. Don’t miss the opportunity to become part of the strong Slovenian-German Partnership and reserve your tickets today.

For more information and reservations take a look at www.dihk.si/derdeutscheball.

Tomšičeva 3, 1000 Ljubljana Tel.: +386 1 252 88 60 ahk@ahkslo.si, www.dihk.si

The Slovenia Times

lions if his decisions were based on sentimentality rather than on sound business. He knows only too well that he has joined together with a strong partner – at the same media launch he made clear that he had been impressed both by the quality of Rogaška’s products and by its people. And Cathy Hoffman, the head of Trump Organisation’s global licensing, emphasised that the Slovenian firm is the perfect partner because of its expertise and tradition of excellence.

Strong tradition

For the fact is the Rogaška is a well established player. It was founded in 1926 and has already been present on the US market for 50 years. Data shows that every fifth highest value crystal item sold in the United States actually comes from Rogaška and that means that the US market has already been accounting for 44 percent of the company’s total sales.

But as a certain other representative of Slovenia once found, joining up with Trump can increase profile and success yet further. “We have wanted to get into Macy’s and by teaming up with Trump were able to do that faster and in a larger scope,” explains Boštjan Leskovar, head of Rogaška USA. At the moment, the products are on sale at 20 of the largest Macy’s stores in the United States but the ultimate goal is to be on the shelves of at least 200.

A good start

Initial indications are that this is a realistic goal. Although the official launch of the range was last month, the products have actually been available since May and Leskovar characterises initial sales figures as a pleasant surprise. He says internet sales have been especially strong. And since the main products in the range are home and business gifts, Rogaška might now reasonably expect a strong upturn with the biggest gift giving season in the US rapidly approaching. Many more US homes are likely to have Rogaška products after Christmas.

For a short time it even looked as though Slovenian crystal might make it into arguably the most famous house in the world. With Donald Trump seriously considering a run for the 2012 Republican nomination for president, Slovenian journalists extracted a promise that he would also seriously consider decorating the White House with Rogaška products. A May announcement that he had decided not to run seems to have dashed the hope that Slovenian crystal might grace the Oval Office. For now Rogaška has to return to an only slightly more modest aim: for its products to be common across all other offices and homes in the United States. Trump might no longer be helping with the White House goal, but he’s certainly helping with that one.

ECONOMY 13

Commodities

The Gold Rush The price of gold has hit record highs in recent weeks, having altogether gained 22 percent of its value in Euros since the beginning of the year. However, it is not all plain sailing – the commodity has also seen a drop in its price by a whopping 11.92 percent in just 30 days. Such unpredictability makes it difficult to know whether it is the time to buy or to sell the precious metal.

By Maja Dragović Photo: Dreamstime

I

n the last month, the price of gold reached record highs at 1,873,70 US dollars per ounce. It also recorded a record drop within 30 days, to as low as 1,637,70 US dollars per ounce. The reason for this particular fall was the decision by the US government last month to stop printing new dollars.

Regardless, the price of the precious metal has been rising steadily over the last five years, from $400 US to over $1,600 US (the price recorded at the time this magazine was going to print). The reason for the rise is not merely higher demand from jewellers – there are other factors at play.

One of the most important is the actions of Western central banks,

which have started buying the commodity again in light of the volatility of the value of paper money. Suddenly, thanks to the

financial crisis, the metal is back to being a safer investment bet than any currency. Banks have therefore reversed their two dec-

ade habit of selling gold and starting buying once more, and it’s the continued on page 14

MANAGER'S DAILY PULSE brings you daily summaries of the most important news from the world of Slovenian economy, politics, business, as well as arts, sports, science and technology – in ENGLISH.

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www.kliping.si/en October 2011

14 ECONOMY continued from page 13

main explanation for the surge in price.

“The advantage of gold is that – unlike the bonds of individual states – it is not dependent on the economic policy of any country,” says Banka Slovenije, Slovenia’s central bank. “It is therefore accepted as a safe haven in uncertain capital conditions. In general, the uncertainty about the economic situation of the world’s major economies leads to an increased preference for safe investments such as gold and consequently leads to the increase of the gold price.”

Stocking up

It is a conclusion supported by the statistics. Since the crisis in 2008, a significant increase in gold reserves has been registered in many of the world’s major economies. According to data from the World Gold Council, from the end of the third quarter of 2008 to the end of the second quarter of 2011, the central banks of China, Russia, India and Mexico all increased gold reserves.

The reason cited was the diversification of foreign reserves and/ or support for the domestic production of gold.

Source: www.goldprice.org

Gold price drops amid growth expectations 1900

1800

1700

1600

1500 26 Sep 2011

1 Aug 2011

Over the same period, gold reserves at central banks from the Euro area have fallen slightly, by around 114 tonnes. In Slovenia, the gold holdings of the Banka Slovenije in the same period did not change – the quantity remains at approximately 3.2 tonnes.

To buy or to sell?

So where now for the price of gold? Is it possible that it will continue to rise? Could it reach $2,000 US dollars by the end of the year? And, if so, it is time to buy? On all fronts, Bojan Ivanc, senior research analyst at KD Ban-

ka, argues that the answer is “not necessarily”.

“Our stance is that gold is, from both the short-term and long-term perspective, a highly speculative investment,” he says. “We are aware of the numerous arguments that speak in favour of gold but remain on the other side of opinion polls.”

“The main argument against gold is that it does not provide a cash flow and is currently in favour because of recession concerns, sovereign crisis and the high environment of uncertainty.

The current price of gold is only an abrupt response to relatively

cheap equity. We reiterate our sell recommendation.”

Double-dip

Advisors from the Finance daily newspaper have a different view, arguing the expected double-dip recession is one of the reasons the time is right to buy gold.

“Considering that the start of the financial crisis, and the reasons that prompted the crisis, have not thus far been dealt with, it is therefore just a matter of time before the (anticipated) second round of crisis begins,” the paper says. “Hence, it would make sense to increase rather than decrease gold reserves.”

The paper adds that “the difference between now and 2008 is that at that time, in terms of public debts, governments still had some manouevering space and saved the banks by taking over their debts”.

“Today, there is no longer room for such manoeuvres”, the paper grimly concludes.

Although the worsening economic situation worldwide might suggest that the price of gold will keep going up, the impact that US’ decision to stop printing additional dollars had on the price of gold shows that it is not always a safe investment – it is a risky business indeed.

5 LET S LOVE N S KO - N E MŠK E G O S P O DARS K E Z B O R N I C E 5 JAH R E AH K S LOWE N I E N Im AuftrAg des

The Slovene-German Chamber of Commerce and Industry, under the auspices of the Embassy of the Federal Republic of Germany in Slovenia, announces the second dance of German economy.

5 LET S LOVE N S KO - N E MŠK E G O S P O DARS K E Z B O R N I C E 5 JAH R E AH K S LOWE N I E N

Friday 21.10.2011 / 19.30 ˇ H o t e l K e m p i n s K i pa l ac e p o r t o r o z

the Chamber will host a gala ball with the slogan “5 years of the german Chamber of Commerce and Industry”, where fine music and exquisite german cuisine will grant you a unique experience. Let yourself be allured by the scent of the sea and the charm of the prestigious Hotel Kempinski Palace Portoroæ. Create new business acquaintances and become a part of the strong slovenian-german partnership.

TickeTs:

e 49,-*

* Without reserved seat. the ticket price includes the german cuisine buffet

TickeTs:

e 90,-**

** With reserved seat. the ticket price includes the german cuisine buffet

companY taBle (6 persons): e companY taBle (8 persons): e

600,1.000,-

BOOkiNG TickeTs:

www.dihk.si/derdeutscheBall

derdeutscheball@ahkslo.si · 01 252 88 60

Highlights:

Sm Networking le German cuisine Disco

Helena Blagne

special awards

The Slovenia Times

INNOVATION SPECIAL 15

DoubleRecall

Off the Wall Many of those who teach English as a foreign language argue that learning new words is like meeting people: first you see them, next time you recognise them, and the third time around you are already friends with them.

It’s a kind of thinking which could equally be applied to DoubleRecall’s internet advertising strategy.

By Simon Demšar

S

o what have new words and internet advertising got in common? As Robert Farazin and his colleagues at DoubleRecall have found, the once revolutionary but now obsolete banners and pop-up advertisements generate an extremely poor response. Their solution: make people actually do something with the advert (the equivalent of encountering a new word for the first time). The ads they create require users to read the text and then type in a twoword highlighted message to open the door to web content otherwise closed to casual browsers.

The idea is still rather new and for now its use has been mainly limited to newspapers. These publications have often tried to generate revenue from by web content through paywalls. However, this has proved relatively inefficient as internet users have become spoilt and not willing to pay for information. The New York Times found that it lost 24 percent of its page views when it installed its metered pay wall and though it’s making more money through subscriptions, the whole effort appears to be revenue neutral. DoubleRecall’s solution is different: advertisers gain measurable attention, publishers generate revenue and readers get free access.

California dreaming

DoubleRecall was developed in Slovenia by Farazin and his team.

He says that in order to be a successful startup company, “something significant should happen

every single week.” Having attracted 70 per cent of Slovenian publishers in less than a year, the only way up for them was the US market. The firm become one of 40 companies – and one of only five European – accepted into Y Combinator, a funding firm based in San Francisco which has funded over 300 startups since 2005. The company attracted attention with a funny presentation involving a short role play demonstrating the problem of paywalls.

In the pursuit of excellence, DoubleRecall also moved their headquarters to Palo Alto in Silicon Valley in California. “The goal of our team is to be the best and innovative. Silicon Valley hosts the best from this area and now it is up to us to prove whether we are of the right breed or not. This was the reason to come here,” explains Farazin, adding that money has never been the principal motivator.

Moving quickly

His colleague Rok Krulec agrees that the move was important: “A company in Slovenia is not apt for rapid growth while in Silicon Valley an idea sprouts, enters the market and then the bubble has endless possibilities to grow.”

The team has already proved it can act quickly: “I read a story about Times’ advertising problems on a Friday and we started working on the following Monday,” Farazin recollects. The idea quickly took off and the firm went from one employee to eleven.

He appreciates that he will not attract big customers overnight: “We are starting with mediumsized publishers, where the decision process is much faster,” he says. Even so, they have lined up prestigious sponsors such as Mercedes and Ford, and Farazin points out that most companies involved with Y Combinator eventually gain success.

Intriguingly, Farazin says DoubleRecall is just one of his bright ideas. He had actually been kicking around another concept which he considered equally brilliant when DoubleRecall took off. It’s clear that he has no intention of stopping here: “The problem is that there are actually too many ideas,” he says. It’s a nice problem to have.

AmCham event – save the dates:

Professional Update Thursday, 6 October 2011, 1.00 p.m. at Kristalna palača, Ameriška ulica 8 Seminar “Business Continuity Plan” Guest speakers:

Mag. Maja Šušteršič, Head of Insurance Service Department, Petrol d.d. will introduce Business Continuity Plan and experience from Slovenija and abroad.

Thomas Schildbach, EMEA, Manager Business Continuity Bruselj, Goodyear Dunlop will share best practice and introduce Goodyear Dunlop Sava Tires case

October 2011

16 FOREIGN DIRECT INVESTMENT

FDI

NEWS IN BRIEF

source: STA, Slovenian Press Agency

Automotive industry

Car Lights Maker Celebrates 90th Anniversary Motor vehicles lights maker Hella Saturnus Slovenija last month marked its 90th anniversary in style with a ceremony addressed

by Slovenian President Danilo Türk, company managing director Christof Droste, and Franz Josef Klegraf from German owner Hella KGaA Hueck & Co. Saturnus started out in 1921 as a crafts shop manufacturing tin products. It wasn’t until 1948 that the firm moved into the area for which it is now known: the making of car lights.

Come the 1960s, it made its first exports to large European car makers (Renault, Simca, Citroen, Peugeot and Volkswagen). The firm was renamed Hella Saturnus in 1997 following a takeover by German company Hella, which became the sole owner of the Slovenian company in 2004.

Speaking at last month’s ceremony, company managing director Christof Droste attempted to sum up the history of the firm: “90 years of engineering passion and high-tech production,” he

said. “Venerable age and young curious mind so that their rich experience has focused on the discovery of new solutions. This is the shortest way to describe the past nine decades Saturnus.”

Pride Josef Klegraf, representing the company’s German owner, added that “Saturnus was an established brand and a synonym for quality, recognisable in the auto parts industry. By taking the old name and merging with Hella in 2008,

we linked tradition and global potential for the future. As a director of one of the global manufacturers of lighting equipment, I am very proud of this company”.

Danilo Türk agreed that there was reason for pride when reviewing the achievements of the company: “Hella Saturnus Slovenija is an example of successful integration of tradition, knowledge and innovation. It is also an example of successful foreign investment, based on equal partnership, enterprise autonomy and accountability,” the president said at the anniversary ceremony.

Ongoing achievements The event also offered the opportunity to reflect on more recent achievements. Here too there was cause for celebration. In the last business year (until the end of May), the company generated EUR 250m in turnover and a profit of over EUR 21m. Similar results are expected in the 2011/2012 financial year.

Home appliances

Automotive industry

Tools

New Business Premises

New Investment, New Jobs

Japanese Tool Maker Moving to Ljubljana

The Kranj-based tire manufacturer Goodyear Dunlop Sava Tires will invest EUR 6m in the production of retreaded truck and bus tires which is to be launched in April 2012. The company expects to open 70 new posts in the next five years to secure unimpeded production. The production should reach full capacity by 2016, meaning that the company would manufacture more than 100,000 retreaded tires per year, the company said in a press release.

Head of the production at the company, Andrew Harper, believes the investment is an important recognition from the corporation that it would continue investing in Slovenia. The company moreover promises to only use well-preserved and carefully inspected tires for retreading, adding that the process is the most environmentally friendly way of recycling used tires.

The Japanese power tools maker Makita is moving its head office for Eastern Europe from Vienna to Ljubljana. The company decided to move because it wanted to be closer to its clients and its goal markets, Makita regional CEO Minoru Tanaka told the press at the 44th Trade Fair MOS in Celje. Tanaka said that Makita has received quite a few job applications for the 30 posts the company would open in the beginning. He added that his company has not yet researched the Slovenian economic market, but “the past experience shows it is a good environment”.

Makita, which has been present on the Slovenian market since 1991, was established in 1915 and has since expanded to more than 150 countries to employ some 12,000 people around the globe. Makita generated EUR 2.4 billion in revenues in 2010.

In September, BSH Hišni aparati opened new business premises in Nazarje. The premises were added due to the company’s rapid growth, particularly in the manufacturing expansion program regarding coffee makers and strengthening of the development function. Granted by the Ministry of Economy, the investment has added 1800m2 of new business space, primarily built for construction, laboratory and attendant services. Building the new facilities has also created more than 50 new jobs, particularly in the field of development and related services, mainly in the Savinjska region, but some in the central region also. The new rooms are well equipped and designed to encourage engineers to innovate, as BSH Hišni aparati is among national leaders in innovation, since each year it has a new patent application, the company says.

Visit us at Expo Real real estate fair in Munich The Slovenia Times

Stand B2 410

Division for FDI Verovškova 60 1000 Ljubljana Slovenia tel.: +386 1 5891 870 fax: +386 1 5891 877 e-mail: fdi@japti.si www.investslovenia.org

13-14 October 2011

Ljubljana, Slovenia

EXECUTIVE-LEVEL CONFERENCE ON FOREIGN DIRECT INVESTMENT

ProgramME with speakers Venue: Grand Hotel Union, Ljubljana

DAY 1, THURSDAY, 13 OCTOBER 2011 12.00 – 13.00 Registration and welcome luncheon 13.00 - 13.10 Official opening of the conference Brane Krajnik, The Slovenia Times, CEO 13.10 – 13.20 Opening address Dr. Danilo Türk, President of the Republic of Slovenia 13.20 – 14.00 Introduction session Searching the path from stagnation - Investors & Management Perspectives on creating a Regional Hub Chair: Tine Kračun, Institute for Strategic Solutions Speakers: Žiga Debeljak, Mercator Group, Chairman of the Board Bojan Radun, Nectar, CEO* 14.30 – 15.30 Keynote speech Crucial elements of the state competitiveness. What it takes to become a regional hub – Hong Kong case study Chair: Maja Makovec Brenčič, Faculty of Economics, University of Ljubljana Speaker: Stephen Kai Wang, Director of the Hong Kong Economic and Trade Office 15.45 – 16.30 Panel discussion Using the potential of Slovenia as a regional hub for the CEE and SEE markets Chair: prof. Marko Jaklič, Faculty of Economics, University of Ljubljana Speakers: Matjaž Rakovec, Zavarovalnica Triglav, Chairman of the Board Rudolf Klötscher, BSH Hišni aparati, CEO Gregor Veselko, Port of Koper, Chairman of the Board Igor Plestenjak, JAPTI, Director 16.45 – 18.00 Panel discussion The right recipe for strategic high value added FDI: a blend of R&D, production, effective logistics, marketing & sales (establishment of competence centers)

DAY 2, FRIDAY, 14 OCTOBER 2011 9.30 - 10.45 Panel discussion On a hunt for development capital! How to establish effective platform for promotion and realisation of investments and development projects in increasingly volatile European and Global Economy?

Speakers: Ivan Crnjac, Agrokor Group, Executive Vice President for Strategy and Capital markets Levan Shalamberidze, IFC – International Finance Corporation, Senior Investment Officer Peter Groznik, Faculty of Economics, University of Ljubljana Franjo Bobinac, Gorenje, Chairman of the Board Marjan Hribar, Director Internationalisation Directorate, Ministry of The Economy 11.00 - 12.15 Panel discussion Findig successfull development concept of Slovenia in Global Economy - Urgent improvement in state competitiveness, quality of governance, clear definition of strategic companies/ sectors, credible strategy of state withdrawal from nonstrategic part of the economy, effective exploatation of geostrategic location and implementation of sustainable development strategies Speakers: Marko Voljč, KBC Group, CEO for Central and Eastern Europe and Russia prof. Dušan Mramor, Dean of the Faculty of Economics, University of Ljubljana Japec Jakopin, Seaway, CEO Iztok Lesjak, Technology Park Ljubljana, Director 12.30 - 13.30 Closing session Slovenia on the crucial crossroad - How to integrate professional economic principals and practical experience into daily state governance?

Pre-election discussion with the principal political creators of the economic policy over the next four years 13.30 Closing luncheon

Speakers: Thierry Villard, Goodyear Dunlop Sava Tires, Chairman of the Board Christof Droste, Hella Saturnus Slovenija, CEO Giulio Bonazzi, Aquafil-Gruppo Bonazzi, President & CEO Saša Bavec, Knauf Insulation, Chairman of the Board 19.30 - 22.00 FDI Summit & Ljubljana Forum RECEPTION: »FDI AWARD CEREMONY« Venue: Ljubljana Castle Award ceremony of the 6th annual campaign to present the best cases of foreign direct investments in Slovenia

Organised by

Premium Partners

Programme Partner

Institutional Partners

Organized by: City of Ljubljana , CeGD, JAPTI & The Slovenia Times Hosted by: Mayer of Ljubljana:Mr. Zoran Janković Official Agency of the Conference

*to be confirmed

Main Media Partner

Media Partner

18 FOREIGN DIRECT INVESTMENT

Interview: Dr Giulio Bonazzi, Aquafil

Product of the Future Earlier this year, Slovenian company Julon launched a high-tech investment project in Ljubljana. The company, owned by Italian synthetic fibres manufacturer Aquafil, has invested some EUR 17m into Econyl, a unique project which involves recycling of waste into the base material for the manufacture of fibres, foils and raw materials. According to president and chief executive Dr Giulio Bonazzi, it is work which means Slovenia is producing the product of the future.

Photo: Maja Kaplan

By Maja Dragović

We have a few people going around the world looking for post-consumer waste materials which are at the end of their life cycle, normally disposed at landfills or incinerated or even abandoned in the sea or on the beach. We ship this waste to our first location – Ajdovščina.

The Slovenia Times

Where was the actual procedure for Econyl developed?

Aquafil has always been very careful when it comes to the environment. In Trentino region, we have the strictest legislation in all Europe, stricter than in Germany, for example. We have always been obliged to be ecological and it has become part of our culture.

We also understood that this was making us more competitive, to try to develop infrastructure and technology that was as respectful as possible to the surrounding environment.

Ten years ago, in Slovakia we tried to produce the main raw material that is used in our production process – caprolactam. It is a monomer produced by oil and is the basis to produce the polyamide 6. It is the spun into yarn used for carpets and for fabric. This past experience was very useful in our Econyl plant. Another part of the technology came from the experiences of large chemical companies; giants of the industry which tried to develop such technology but failed. Part of the technology was actually developed internally,

by Aquafil staff – in cooperation with at least five different countries (Italy, Slovenia, Slovakia, the USA and Germany) and also with the help of several universities.

So, it was a long process that happened with cooperation and also by coincidence.

Can you explain the actual production process of Econyl?

We have a few people going around the world looking for postconsumer waste materials which are at the end of their life cycle, normally disposed at landfills or incinerated or even abandoned in the sea or on the beach. It is hard work taking into consideration that it is very difficult to source pure waste. By this I mean that usually final products are made of various substancies and not of polyamid 6 only. We ship this waste to our first location – Ajdovščina. There we have the first part of the preparation – the mechanical preparation. We prepare batches of waste.

Then they arrive in Ljubljana and we start a mechanical and chemical process, without any solvents or dangerous materials. This is pos-

sible thanks to the chemical characteristics of polyamide 6 – it can be brought back into the original monomer state. Then, we properly purify it.

You recycle carpets and fish nets. Is there anything else?

These two things are amongst the largest. Carpet yarn is one of our main businesses. We make our products more environmentally friendly. Not only do we have a product that is sustainable, but the product of our client is also becoming sustainable. The industry itself is becoming sustainable.

Carpets often compete with materials like wood, which are seemingly more sustainable because they come from renewable sources. We produce thousands different types of yarn, coming from the polymer. The polymer can be extruded and spun with a different thickness and colour. Ultimately, we have more than 20,000 different products. Theoretically, we can replicate all of them without any problem.

How recyclable is this material? Can you recycle it more times?

You can recycle it forever. That is part of the revolution. If you remelt plastic, like a bottle, there is

FOREIGN DIRECT INVESTMENT 19 degradation each time and you are not able to continue recycling the product forever. In our case, you can recycle it forever because we produce the polymer, which is like the virgin one. The real problem is to collect the waste.

Where is it easiest to obtain waste for your recycling business?

Scandinavia is a good geographical area because they are starting some programmes to force fish farms and fishermen to collect nets at the end of their life and not throw them away. The government is starting to introduce and even force this issue. Canada is another good area. We are cooperating with British Columbia, where there are a lot of fishermen.

The most common way to dispose of the nets is to leave them in the forest. We are now working with them to see if we can take them out and bring them here. For carpets, the USA is also interesting because in certain states it is already forbidden to dispose of certain carpets in landfill. So they are forced to bring them back to care or directly to the carpet producers that start the separation into different components. Europe is already behind. It is not as advanced as the USA. There is no legislation in Europe forcing people to collect these products, which is not good.

It would be good if they started forcing people to start collecting things like this.

The logistics of all this collecting must be very difficult?

Yes, it is extremely difficult, it is like a miracle. I was lucky enough to visit some of these centres in the USA and saw all these carpets in many different sizes. It is very impressive, competitive and helps create new jobs. We are working with the United Nations and we have been involved in a project

Superior part of the carpet flooring

regarding India. We are now verifying the possibility to involve local people in recovering waste in landfills, make there the first separation and prepare it for shipping to us. There are already some programmes like that in New Delhi and in Mumbai (for plastic bags).

We are trying to work with the Slovenian Ministry of the Environment and Spatial Planning to see if this is possible in the Mediterranean area – to free Mediterranean coasts from wild fish nets.

How cost effective is the production of Econyl?

That is an excellent question.

The recycling process, in order to be really sustainable, must be profitable. If you do not make money, you are not sustainable.

Sooner or later, you will shut it down. In terms of emissions and energy consumption this process is fully competitive with the process of producing the same raw material from non-renewable sources or from oil. To implement the sustainability of our Econyl plant we are planning to power it with renewable energy. In our Arco plant in Italy we produce around 90 percent of the energy internally. Also, the energy we purchase for all other Italian plants is completely from renewable sources – hydroelectric power. It costs us more, but it is a matter of philosophy. Our dream is to have solar energy or wind energy in Slovenia. The future is to try to go into renewable sources of energy.

Why do you think that this is the technology of the future?

To get out of this crisis, the world is going to have to change. A good example is construction. In the past, who would have built houses like they do today? You have to consider consumption of energy, possibly even production of energy, natural ventilation, etc. When you buy a car, you consider buying one that consumes less energy.

Nowadays people are also buying hybrid or electrical cars. It is the same with us. We have to innovate and bring into the market something that is more respectful to the environment, possibly in a closed loop – not taking anything from the earth and not leaving anything in the earth at the end of the cycle.

That is why we believe that this is the future. If you see a product in the shops which is of the same quality and costs about the same, except that it is recycled, I am sure you would buy the recycled one.

Raw materials are becoming so rare that it is not good to drill for oil, it is better to recycle.

Econyl is currently produced only in Slovenia. Do you have plans to introduce it elsewhere?

Our dream is to have another plant in the USA. From a logistical standpoint, the USA is the ideal location, but it was possible to realise this project here because we had the space and the infrastructure, otherwise the EUR 20m investment would have had to be more than doubled.

What are your future plans in Slovenia?

We have about 2,000 people working for Aquafil – in Italy, Slovenia, Croatia, Belgium, Germany, Thailand, the USA and Turkey. Apart from Turkey and Belgium, there are production facilities in all these countries. In Berlin, we have 25 engineers who are developing plans to produce different types of polymers.

In terms of the number of employees, Slovenia, together with Italy, is our most important country. Italy is first, Slovenia is second and Croatia is third. In Croatia, the activities are controlled from Slovenia. If you put Slovenian and Croatian activities together, they are larger than in Italy – Slovenia and Croatia together have more than 900 employees, while in Italy we have 850. It is essential for us to be successful here and keep investing in modern technology, quality and so forth. With Econyl, this was the centre where we invested most of the money. We did not invest only in Econyl, but also in improving and enlarging the rest of the production. We are still investing and we think we will increase the number of employees in this country. We hope the business environment will remain positive for us.

International maneouver: fishnets for recycling come from all over the world

The recycling process, in order to be really sustainable, must be profitable. If you do not make money, you are not sustainable. Sooner or later, you will shut it down. In terms of emissions and energy consumption this process is fully competitive with the process of producing the same raw material from non-renewable sources or from oil.

October 2011

20 FDI - REGIONAL FOCUS

Home appliances

BSH Hišni aparti in Adriatic East Region BSH Hišni aparati is part of BSH Group, which is the largest manufacturer of home appliances in Europe and one of the leading companies in its industry in the world. Group unites over 70 companies in over 46 countries and employs close to 43,000 people. BSH Group is present in Slovenia since 1993, when it took over in Nazarje production of small household motor powered appliances. Successful operation has enabled today’s development and production program of BSH Hišni aparati encompasses other appliances for preparing food and drinks and the BSH Group competence center for development of small motor driven appliances and automatic coffee machines.

Value for money

BSH Hišni aparati are responsible for Adriatic-East region which includes Slovenia, Croatia, Serbia, Kosovo, Montenegro, Macedonia, Bosnia and Herzegovina, Albania and Bulgaria. Company brands portfolio are Bosch, Siemens and Gaggenau. The company has established three subsidiaries: the first one in Croatia being in operations since 2007; the second one in Serbia being in operations since October 2008; and the third one in Bulgaria in operations since March 2011. The number of employees has already exceeded 1,100. In 2010 generated revenues was EUR 271,1m which was 12 percent more than in 2009.

Good trend is continuing also in year 2011. Results show the company is 26 percent above previous year. Considering these figures, estimation of marketing based on ‘value for money’ principle and the sales growth strategy being implemented in the entire Adriatic-East region is successful. Also, The Slovenia Times

in all markets the company increased its market share. Despite the continuing global economic recession business activities are in expansion as well as investment in the entire region which come up to EUR 13,6m. Most of them are investments into production, R&D and recruitment of new employees (particularly in the field of development, technology, sales and some other expertise). One of the most important investments is starting a new range of Bosch fully automatic coffee machines, stick mixer and hand mixer. With this the company will concentrate on the three pillars: ”fully automatic coffee machines” , “Tassimo” and “ motorical appliances” such as kitchen machines or stick mixer for example. The company produced over 6,5 million appliances in 2010, which represents almost 1 million more appliances than in 2009. For the year 2011, plans are even higher, not so much in terms of quantitative increase in production as of par-

ticular, focusing on devices with higher added value.

Sustainable development

Long-term business strategy is focused to expand sales and marketing on the principle of sustainable development. In the following years BSH Hišni aparati will launch several new products in the segment of small motor appliances and also extend and strengthen its competence in the segment of coffee and hot beverage appliances. This will greatly strengthen the company’s position within the BSH Group and on the market and make it the only development and production centre in Europe for both product groups at the same time – for small motor-driven food-preparation appliances as well as for fully automatic coffee machines. On this basis, the share of products, younger than three years, in their production range will increase from the current 45 percent to 60

percent. Also the total production quantity will grow, and the structure of production assortment will change in favour of more sophisticated and higher value-added products. This all goes hand in hand with providing greater opportunities for employment of technical experts (due to very intensive employment in the period from 2007 to 2010, the number of employees increased by nearly 450, of which more than 80 were technical experts) , but also improving the prospects for cooperation with different R & D institutions. “BSH Hišni aparati, are willing and prepared to take an active role in establishing some kind of ‘dual-system’ education, offering and combining valuable practical knowledge and expertise with theoretical knowledge from institutions and so help to further improve the level of technical education and quality of workforce in the region,” stated Rudolf Klötscher, CEO of BSH Hišni aparati.

FDI - REGIONAL FOCUS 21

International relations

Partnership from Afar On a recent visit to Slovenia, China’s deputy foreign minister Fu Ying said her country is seeking to upgrade ties with the South East European nation through business cooperation, including in infrastructure development and energy. Ying is also optimistic that Slovenia could be used a springboard for Chinese investments in the wider Balkan region.

By Maja Dragović and STA

“

There isn’t a country in the world that has build as much infrastructure in the last 30 years as China has,” Fu Ying was quoted as saying by the Slovenian newswire. “We have the most modern technology in infrastructure building and this is what is most needed in the Balkans.”

“The question for [China] is how to transfer the good political relationship into concrete business ties,” Fu said on the sidelines of the Bled Strategic Forum, adding that this would be the priority area for the Chinese embassy in Ljubljana.

Many opportunities

Partnership is key

Ying participated in a roundtable discussion at the forum that tackled the issues of what is to be expected in the future in terms of shifting world powers and the economic crisis. She said that conferences such as the one in Bled are an opportunity for Chinese businesses to learn about the ways of investment in the West and for domestic business officials to get acquainted with Chinese investors.

Ying explained that China’s guiding principle in international relations is partnership, emphasising that her country does not believe the current trends represent a power shift from West to East but a diffusion of power.

“We see the world is in a period of diffusion – you see the capital, technologies, the market is diffusing from the centre to the wider area,” she said, highlighting the growing role of the BRIC and African countries in international relations and trade.

As part of this, Ying sees a need to “reform the [economic model] which was built after World War II, which accommodated only one billion people. We need to accommodate more now.”

But she stressed this must be done by peaceful means. “We don’t believe in a shift through a form of revolution or war or conflict... The reforms that are necessary will have to take place through negotiations and dialogue,” she said, highlighting the G20 as an important forum in this direction.

A strong West

Moreover, she added that such a process cannot succeed without a strong West. “For negotiated dialogue changes, we need to have strong partners. The weaknesses in the older developed countries are not going to benefit the newly emerging countries at all.”

“That’s why we are part of the effort to promote economic recovery in those countries,” Yu continued. “We provide charter bonds, we invest, we promote trade. It is important that these countries come out of the difficulties as soon as possible in order to join this trend of peaceful development.”

Lessons to learn

She said that the current financial predicament of the West is also an important learning exercise for China as it progresses

down the road of development.

“We want to learn the lessons from these countries, because most of the countries in trouble are post-industrial countries. The problems they confront might occur in China one day. So we need to see how they come out of it and how they address the problems.”

Chinese government is also keen to help Slovenians learn lessons about its own country. A November trip to the country has been organised by the Chinese Confucius institute in Ljubljana in cooperation with the Shanghai Institute of Foreign Trade.

Those participating in the trip will have a chance to visit the cities of Shanghai, Nantong and Suzhou. The excursion is designed primarily for company owners, directors and employees of small and medium-sized Slovenian companies that are already operating internationally or are thinking about expanding their business. Those who decide to take part in the trip will most certainly make valuable contacts as well as learn about doing business in the Chinese market and with Chinese partners.

Many of the world’s countries are ahead of Slovenia in exploiting the opportunities presented

by China. But if Fu Ying’s recent visit is anything to go by, there is a dedication in both countries to strengthening what could be a very fruitful relationship.

Foto: Nebojša Tejić/STA

According to Ying, this has topped the agenda of her two visits to Slovenia this year. On both, she was accompanied by strong business delegations. Talks explored possible cooperation in the development of roads and ports.

The deputy foreign minister believes that Slovenia could act as a springboard for Chinese investments in the Western Balkans, as well as being a partner to Chinese companies in joint ventures in the region. “Slovenia has extensive regional outreach and is competitive in auto parts manufacturing, chemical and pharmaceutical industries,” she argued.

The delegation accompanying Fu to the Bled Strategic Forum included representatives of energy, machinery, telecommunications

and financial sectors. “This shows the great interest of the Chinese business community in Slovenia and the region,” said Fu. As part of her discussions at the Bled Strategic Forum, the Chinese official highlighted that “Europe as a whole needs to learn how to accept investment from developing countries” such as China, which are only now beginning to invest abroad.

The panel discussion titled The Power of the Future included the participation of the Slovenian minister for foreign affairs Samuel Žbogar, Russian minister of telecommunications and mass communications Igor Olegovič, Chinese deputy minister of foreign affairs Fu Ying, and the Egyptian investment banker, activist and writer Mahmoud Salem. The discussion was moderated by renowned BBC news presenter, Nick Gowing October 2011

22 FDI - REGIONAL FOCUS

Investments in Western Balkans

An Important Role The economic crisis affected Slovenia more than any other country in the Western Balkans. Even so this is a country which has played, and is playing, a crucial role in the economic wellbeing of the region.

By Matej Rogelj

Slovenian investments in the Balkans have mainly focused on the pharmaceutical, automotive and appliances’ sectors

W

hen the economic crisis hit in 2009, none of the countries of the Western Balkans suffered as grave a decline in economic growth as did Slovenia. The country has lagged behind on other economic measures too – notably the “open to investment” criteria where its performance is worse than every other nation in the region.

Not all bad

At first glance Slovenia’s performance looks uninspiring when compared to the rest of the reason.

But in many important respects the country deserves a pat on the back. In the Balkan constellation, the Slovenian economy has played a part which can for the most part be assessed as mutually beneficial and constructive. Notably, many Slovenian companies first “went

The Slovenia Times

international” on the regional Balkan markets thus guaranteeing their continued existence and in some instances gaining the necessary experience to approach other markets. Slovenian investment in Serbia can well be described as strategic; a significant number of Slovenian companies are already taking advantage of the duty-free export to the Russian Federation, with which Serbia has signed a free-trade agreement.

Opportunities lost

Clearly, a picture like this is bound to obscure some inconsistencies. The headline figures show that the news is not all good and so too does a closer look at some specific areas of the economy. For instance, exports have centred on more or less the same Slovenian flagship products for decades.

Medicines, automobiles, home appliances. Despite good connections and apparent advantages compared to other countries, many contacts have been lost or insufficiently utilised. Another problem is that Slovenian firms tend to compete among themselves on all markets and often get stuck with small deals. What is also lacking is financial support and clear access to international development funds through which infrastructure, communal and development projects could be supported.

Significant problems and lost opportunities have in some cases led to the dissolution of business values. Such is the case in the Slovenian construction sector, which has lost its reputation along with a series of deals.

Looking forward

So what does Slovenia need to do to improve what it offers itself and the region? The simple answer is to set up a more encouraging environment for economic success. The complicated part is doing it.

The Western Balkans – an overview

Croatia, Slovenia’s biggest trade partner in the region, is so close to EU membership that it has already started to publicly support the joining of Serbia and Bosnia and Herzegovina (BiH). It has the best developed economy in the Balkans, although the growth is largely a consequence of the increase in total and public investment based

23

2006

2007

2008

2009

2010

Croatia

565

592

602

594

527

Serbia

314

344

370

368

343

Bosnia and Herzegovina

214

246

264

260

237

Macedonia

92

106

119

121

120

Montenegro

42

52

49

50

54

2

7

10

16

17

Albania

on the lending boom. The negative corollary and long-term risk lies in significant foreign debt.

Along with Albania, Kosovo holds the status of the poorest country in Europe. It has a predominantly agricultural economy and an excessive informal sector.

Economic growth is mostly based on the private sector and trade.

Despite a highly rated business environment and open economy, Macedonia still fights a low living standard, unemployment and negligible economic growth.

Montenegro, much like Kosovo, enjoys the privileges of the Euro.

It has an open trade regime and a relatively efficient legal framework for business and investment.

Serbia, Slovenia’s biggest investment destination in the region, is pestered by a relatively high inflation rate and a drop of its currency Dinar by a third in relation

Source: Banka Slovenije

Number of Slovenian companies with direct investment in the region

By Jani Zupan, MBA, Profil d.o.o.

to Euro since 2008. On the bright side, this contributed to 26 percent export growth in 2010. A huge problem is the nation’s unbelievable brain-drain. Allegedly, half a million young qualified experts have left the country.

With a combination of rapid growth, low labour cost and low tax rates, Albania presents itself as the new China. Yet it is still one of the poorest European countries, with the fewest investments in the region.

Bosnia and Herzegovina (BiH) remains an internally divided market and hence the lowest assessed market in the Balkans with respect to economic freedom. It is in the club of European countries with soaring unemployment (estimated 43.1 percent in 2010).

Matej Rogelj is the deputy director at the Chamber of Commerce – Centre for Competitivness

Slovenia’s exports to the countries in the regions (in EUR ‘000) Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

135090

147902

107394

106386

120412

Bosnia and Herzegovina

44891

48240

41893

53399

53691

Serbia

53368

58745

46934

50721

51224

FYR Macedonia

12816

14575

13087

11754

12298

Montenegro

11837

13909

8109

7894

8954

Kosovo

6394

8027

7399

8667

7787

Albania

2642

3194

4088

3428

Croatia

2960 Source: SURS

Slovenia’s imports from the countries in the region (in EUR ‘000) Croatia

Profil d.o.o.

Parmova 53, 1000 Ljubljana, Slovenia Phone: +386 01 280 54 00 Fax: +386 01 280 54 09 E-mail: profil@profil-group.com www.profil-group.com

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

69035

73981

53030

60536

75147

Serbia

29478

37420

23771

31810

39202

Bosnia and Herzegovina

24998

31628

20437

28383

33067

FYR Macedonia

6339

4709

2093

2831

3565

Montenegro

703

4120

534

1151

545

Kosovo

392

101

259

324

494

Albania

64

40

9

87

48 Source: SURS

Recruiting Paradox in SE Europe Following the global economic downturn in 2009, the companies in the region fought the battle of survival in 2010, reviving slowly in 2011 and again facing new possible black scenarios in 2012 as IMF is warning the world economy is entering “a dangerous new phase”.

Increasing unemployment rates in the region that followed recent changes have not created the talent surplus many would have predicted. On the contrary, recent analyses show that more than 60 percent of top executives predict talent shortages. In addition, retirement of baby boomers and senior leaders creates concerns for pipeline of experienced and well prepared leaders for emerging market challenges. Region of SE Europe has been, moreover, continuously experiencing “brain drain” since talents have been migrating to the “west”. Market feedback also provides additional concerns about employee retention in the coming years.

Strategic questions for the majority of companies capture issues such as improving company’s performance, managing and cutting costs, retaining and gaining new customers, developing new product and services etc. In following the strategic issues, companies throughout the region should focus on some important management priorities such as performance management, developing and recruiting of emerging leaders and talent potentials, focus on experienced hires, perform talent assessments, work on succession planning, develop and implement retention plans and conduct appropriate workforce planning.

Despite all the analyses, signs of priority focusing, market feedback and even awareness of top executives of what should be done, companies still show fear of market ambiguity in the future. Therefore strategic issues are observed and followed mainly from financial perspective, controlling cost issues and optimizing organization performance and efficiency, while talent challenges are left behind.

We follow market development in the region and as HR specialists and executive recruiters continuously receive real time feedback from the market and therefore we cannot escape the feeling of paradox since recruiting and talent management activities have been very rare, sometimes even frozen, while all indicators and management reports show that fight for the talent should be one of the primary strategic focuses.

As time is running out very fast and predictions of possible “new dangerous phase” have been published, we would suggest organizations to move from anxiety to action and work on higher confidence in talent management. We are all aware of holdback issues but focus should be in the future with a mindset of clear understanding of economic cycles. The ones that will plan and invest in talent will easier face recession and be better prepared for expansion period. For any possible dilemma regarding talent planning do not hesitate to contact us.

PROFIL is an independent human resources management consultancy, established as a limited company with private capital in 1989. It was the first consulting company in Slovenia and in SE Europe to provide executive search and selection services.

They operate in Slovenia, Croatia, Serbia, Bosnia and Herzegovina (BiH), Macedonia, Albania, Kosovo and Montenegro.

The logo says it all: Three smiling faces, representing happy Client, happy Appointee and happy Consultant.

October 2011

24 FDI - REGIONAL FOCUS

European Union accession

EU Future Key for Western Balkans At last month’s Bled Forum one of the main discussions was the importance of integrating the Western Balkans into the European Union. The essential message? That giving the region a future in the EU is a crucial part of promoting progress in its constituent countries.

Key for progress: Serbia’s foreign minister Vuk Jeremić warns that a halt in accession process after Croatia joins the EU could cause regression

D

ebating under the title What Is Next for the Balkans? Responsibility, Power to Progress, Perspectives, panellists at the eighth annual Bled forum stressed that implementing necessary reform in the region will be much easier with the support of European partners.

Serbian Foreign Minister Vuk Jeremić highlighted that the Western Balkans had long been subject to triangular geopolitics with pressure from the east, west and south-east. He argues this is a trend which the current generation has a chance to break via European integration.

“It would be a tremendous failure if this generation fails to make use of this historic opportunity,” he said, adding that such a failure would be the responsibility of the EU as well as of the region itself.

No middle ground

Both Jeremić and his Montenegrin counterpart Milan Roćen said their countries are working hard to meet the criteria required to gain a date to start accession negotiations with the EU. Both also argued they were worthy of this step.

The Slovenia Times

The Serbian minister warned that a halt in the accession process after Croatia joins the EU could cause regression. “A stoppage is an illusion,” he said, adding that the history of the Balkans shows that matters in the region either progress or regress. Without momentum he believes regression is inevitable – a “move back into very dangerous territory,” Jeremić warned.

tries will be in the EU, but when,” he argued.

He did add that there is a domestic responsibility to push along the process: “In Serbia and Montenegro, there is a strong sense of purpose and urgency. We wish this would appear in BosniaHerzegovina as well.”

Inzko argued that the region must be aware that working together pays dividends, giving it much greater leverage abroad. “If the region works together – we’re talking about 55m people – the potential is huge.”

Touching on open controversies in the Western Balkans, Jeremić stressed that Serbia was “ready to work with partners in the region and abroad to resolve the issue of Kosovo in a mutually acceptable way”.

Vice President of the European Bank for Reconstruction and Development (EBRD) Jan Fischer was also at the panel and suggested that cooperation in the areas of transport and infrastructure offered the potential for bringing the region closer together.

Gains for everyone

Commenting on the importance of the integration of Western Bal-

kans into the EU, portfolio manager at KD Skladi Sašo Šmigić, says: “There is evidence that central Eastern European markets and particularly South Eastern European markets are not yet integrated in global portfolios since their expected returns reflect higher standalone risk excluding their lower covariance with global portfolios.”

He adds that integration will have a huge positive impact on the region: “Convergence toward the EU will attract foreign capital flows into the region as markets become more liberalised and countries complete the privatisation process.”

“This will have a positive impact on the cost of capital, increasing the economic activity and potentially further increasing the trend growth rates of the economy.” Šmigić concludes that “moving toward integration with the EU will force SEE countries to speed up the structural reforms necessary to satisfy EU requirements which would further lower the cost of capital and contribute positively to economic growth.”

Foto: Nebojša Tejić/STA

Foto: Nebojša Tejić/STA

By Maja Dragović

Friends in high places

Roćen expressed confidence that Montenegro would have an easier time in the accession negotiations than Croatia and Slovenia before it, because it will be able to rely on those countries’ experiences: “Slovenia and Croatia did not have such close friends to rely on as they went through this process as we have in them,” he said.

High Representative in Bosnia and Herzegovina Valentin Inzko showed optimism and pointed out that, in spite of some difficulties, the countries of the region have never been closer to EU membership than they are now. “It is not a question of whether these coun-

The panel discussing the future of the Balkans was moderated by The Economist journalist Tim Judah and included panelists from across the region: Vuk Jeremić, Serbian minister for foreign affairs; Milan Roće, Montenegrin minister for foreign affairs and European integration; high representative for Bosnia and Herzegovina Valentin Inzko; vice president for policy implementation at the European Bank for Reconstruction and Development Jan Fischer; ambassador Jiro Kodera who is the managing director of the Office for European Affairs in the Japanese ministry of foreign affairs; advisor to the European External Action Service, Robert Cooper; and professor at the Faculty of Social Sciences, University of Ljubljana Aleš Debeljak

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Narrow Strategic Region Broad Strategic Region

The oldest management company in Slovenia As the oldest management company in Slovenia (member of KD Group - one of the largest financial groups in Slovenia), KD Skladi (KD Funds) has been actively managing equity and fixed interest securities throughout Central and South Eastern Europe for many years. The firm, established in 1994 and headquartered in Ljubljana, is an innovator in the Slovenian market, managing the oldest Slovenian mutual fund KD Galileo, flexible structure (established in 1992), creating the first Slovenian fund of funds and money market fund. KD Funds has a strong reputation in the management of mutual funds and regional CEE/SEE portfolios for well-informed investors, winning the Lipper award for KD Galileo and numerous other awards for management of portfolios (Best Slovenian portfolio manager in 2010). In the European survey by Reader’s Digest magazine KD Funds for the fourth consecutive

time has been chosen Slovenian Trusted Brand in the category Investment companies and management funds.

Broad range of 18 mutual funds (global, regional, or sector focused) KD Funds manages a broad range of 18 open-end mutual funds (predominately equity) and well informed investor portfolios with different investment policies that are global, regional, or sector focused (eg. energy, healthcare, financial etc). The core focus of the KD Funds investment team is the South Eastern European and Central Eastern European markets. KD Funds is one of the few managers which invests in the region, is based in the region with investment professionals located across the core markets.

You can participate in the high-growth markets of South-Eastern Europe through KD Balkans (KD Balkan) Equity Subfund which invests in companies from Slovenia, Austria, Croatia, Bosnia and Herzegovina, Serbia, Macedonia, Romania, Bulgaria, Greece and Turkey, without sectoral limitations.

KD Skladi, družba za upravljanje, d.o.o. / KD Funds – Management Company LLC Celovška cesta 206, 1000 Ljubljana, Slovenia, T: +386 (0)1 582 67 80 kd-skladi@kd-group.si, www.kd-skladi.si

Invest for a reason KD Funds – Management Company LLC (KD Skladi, družba za upravljanje, d. o. o.), Celovška cesta 206, Ljubljana, Slovenia, manages the KD Umbrella Fund and its subfunds KD Galileo, Flexible Asset Structure; KD Rastko, Equity; KD Bond; KD MM, Money Market; KD First Selection, Fund of Equity Funds; KD Balkans, Equity; KD New Markets, Equity; KD North America, Equity; KD Raw Materials and Energy, Equity; KD Technology, Equity; KD New Energy, Equity; KD Vitality, Equity; KD India – China, Equity; KD EM Infrastructure and Construction, Equity; KD Financials, Equity; KD Latin America, Equity; and KD Eastern Europe, Equity, as well as the KD Equity Income Mutual Fund (KD Delniški dohodkovni). The investor is entitled to request a free copy of the simplified prospectus, the prospectus including the fund rules and the latest published audited annual and semi-annual reports. These and other documents as well as data and information referring to the funds are available to investors free of charge during business hours at the Management Company’s headquarters and subscription offices, and in e-format on the website www.kd-skladi.si, along with a list of subscription offices.

Business Conference

Slovenia-SErbia A sporting spectacle as an opportunity to boost the economic collaboration 11. October 2011, Maribor, Slovenia

Programme 13.00 Registration and welcoming refreshments 14.00 Opening of the conference & an overview of the collaboration between the two countries On 11th October 2011, Maribor will host the final game of the qualifiers for the next European Football Championship, between Slovenia and Serbia.

Both countries are traditionally good partners in the field of economy, but there are still plenty of opportunities to upgrade the existing business connection and make new investments.

On the day of football spectacle, our business magazine “The Slovenia Times� will host a BUSINESS CONFERENCE between Slovenia and Serbia in Maribor.

The conference is conceived as a top network event. The guest list will include diplomats, business partners, managers of companies from both countries who are already working together and also managers interested in new projects.

15.00 Networking break 15.30 A panel discussion on the experiences of Serbian and Slovenian investors 16.20 Networking break 16.40 A panel discussion about crucial market obstacles and business opportunities for encouraging cooperation between the two countries 17.30 Concusion of the conference 17.45 Late luncheon networking reception for the participants of the conference 19.45 Organised departure for the football match at the stadium (VIP seats)

Organizor

contact Marko Stijepić Marketing Manager, The Slovenia Times T: +386 1 520 50 85 marketing@sloveniatimes.com

Communication Partner

DIPLOMATIC SOCIETY 27

Interview: H.E. Dr Predrag Filipov, ambassador of the Republic of Serbia

Close Ties Relations between Slovenia and Serbia are more positive than they have been at any time since the breakup of the former Yugoslavia. According to ambassador of the Republic of Serbia to Slovenia Dr Predrag Filipov it is a development which is massively beneficial for both nations.

How would you assess current economic relations between Serbia and Slovenia?

Despite the difficulties caused by the global and local economic crisis, economic cooperation between Slovenia and Serbia is constantly improving on both the macro and micro levels. As a direct result, overall trade balance in 2010 (around EUR 900 million) increased significantly compared to 2009 and approached the precrisis level of 2008 to nearly EUR 1 billion. Here I can say with a great pleasure that Serbian exports to Slovenia grew by almost 25 percent, although the trade deficit is still on our side. Even though the majority of our exports to Slovenia can be attributed to Slovenian direct investments in Serbia, important steps in this area are being taken by our export industry. In the first six months of this year, foreign trade between our countries has improved by 17 percent compared to the previous year and we expect this trend to continue.

Furthermore, extensive efforts are constantly being made by the leaders and institutions of both countries to improve administrative procedures and strengthen the platform for more efficient development of economic cooperation. Serbia and Slovenia have so far concluded 17 bilateral agreements in this area, the most important being the Agreement on Economic Cooperation, the Agreement on Promotion and Protection of Investments, and the Agreement on Avoidance of Double Taxation. We should not forget the collaboration of local governments of our countries. Some 42

Photo: Maja Kaplan

By Maja Dragović

Serbian cities and municipalities have signed agreements with about 37 Slovene. This provides for exchange of knowledge and experience by local governments, formation of joint projects at the EU level, and can encourage economic exchange at the local level.

How important is Slovenia’s support in Serbia’s negotiations with the European Union?

Slovenia has shown substantial support to Serbia in the process of European integration. This assist-

Serbia’s economic indicators improve in 2011 Metric

2010

2011 (forecast)

GDP Growth

1.50%

2.50%

Industrial Production

-0.50%

5.00%

Unemployment

20.00%

19.50%

Inflation

10.30%

7.50%

Public Deficit

-4.80%

-4.00%

ance is manifested in the political support to the region, including my country, that Slovenia provides within the EU institutions.

There is also direct cooperation of almost all competent authorities responsible for the technical part of the job, such as fulfilment of the Copenhagen Criteria, harmonisation of legislation and implementation of comprehensive reform processes. I would also highlight the fact that mutual consultations, on the content and execution of this support, are held at every given opportunity during regular and frequent meetings of Serbian and Slovenian highest state officials. In addition, within the domain of the agreement on development cooperation that our two countries have, it is important to emphasise development assistance. Out of EUR 9.5m available in bilateral aid for the Western Balcontinued on page 28

Even though the majority of our exports to Slovenia can be attributed to Slovenian direct investments in Serbia, important steps in this area are being taken by our export industry. In the first six months of this year, foreign trade between our countries has improved by 17 percent compared to the previous year and we expect this trend to continue October 2011

FDI in Serbia by sector (in EUR million) Food and Beverage, Agriculture

2,642.6

Financial

2,400.0

Telecommunications

2,172.0

Retail

1,853.2

Oil and Gas

1,427.0

Real Estate

1,016.0

Tobacco

847.0

Automotive Industry

760.0

Pharmaceutical

752.5

Construction

711.1

Metallurgy and Metalworking

399.1

Insurance and Pension

313.0

Tourism

300.4

Wood and Furniture

256.2

Others

879.1

of local and foreign products are already competing. It is also important for building knowledge of the development paths of the local economy, which should provide our companies a better insight and thus a more detailed and thorough entry strategy. continued from page 27

kans in 2010, Slovenia allocated eight percent of funds to Serbia.

A good signal: the recent purchase of Fructal

by Nectar shows that it is indeed possible for Serbian companies to invest in Slovenia

Some ambassadors in Ljubljana are quite critical of the business environment in Slovenia. What is your opinion?

I would agree with the general view that entry into the Slovenian market is not an easy task. It is important to mention that particular business circles in Serbia have observed the existence of certain obstacles on different political levels in Slovenia. Aside from operational difficulties, high cost of land and labour could be mentioned, together with the lack of information on business and legal environment in Slovenia that has so far been available to our companies.

The last is of significant importance for taking into account the scope and demands of the Slovene market in which a vast number

Serbian Nectar recently acquired Slovenian Fructal. How important is this business deal and what sort of message does it send to Serbian companies?

The merger of the two companies and their brands has the potential to grow into a regional giant that can compete with other similar products at the European level. In addition to the message that Serbian companies can be a good and reliable business partner to Slovenia, and therefore are welcome as investors, this acquisition in some way defies the myth that it is impossible to invest in Slovenia, and heralds a “rosy” and more positive perspective on future business cooperation. We do expect that these recent events will pave the way for more such positive ventures.

Are Serbian companies interested in investing in Slovenia?

Trade growth between the two Photo: BOBO

Great relations: Flipov emphasizes that relations between Serbia and Slovenia are excellent both politically and in economic terms

The Slovenia Times

Based on SIEPA research 2011

Photo: BOBO

28 DIPLOMATIC SOCIETY

countries, including an increase in Serbian exports, speaks to the rising interest of Serbian companies in cooperation with Slovenia.

Successful business stories like ComTrade (Hermes Softlab) and more recently, Nectar, show that Serbian investments in Slovenia are welcome. I am also pleased to state the optimistic conclusion that there are no major political aspects that hinder the entry of Serbian investors in Slovenia. We therefore anticipate increasing interest in investing in Slovenia from our companies. This will depend solely on their assessments and strategic plans, as well as on the economic and financial situation in both countries.

There is a lot of discussion about even greater cooperation both between the two countries and the region. Where, in your opinion, are the opportunities for such cooperation?

There are a number of opportunities for further cooperation in the sphere of the utilisation of Free Trade Agreements that Serbia has with Russia, Belarus, Kazakhstan, and other countries. In this regard, through production in Serbia, Slovenian companies can enter those markets. Slovenia, on the other hand, can be an additional gateway for the placement of Serbian products in the EU but also in North African markets through its port of Koper.

In addition to the conventional sectors of the economy, there is the strong possibility for cooperation in energy, transport infrastructure, as well as in logistics. The last is a very important industry since the most important traffic corridors cross in our region.

Opportunities for greater cooperation also exist in agriculture, “green” economy, and information technology, where both countries have highly educated and skilled labour.

DIPLOMATIC SOCIETY 29

AmCham monthly breakfast

Undiplomatic Diplomacy After a summer lull, the US ambassador to Slovenia Joseph A. Mussomeli decided it was time to deliver some strong and urgent messages to Slovenian politicians and decision makers. Yet the panel that followed the ambassador’s opening statement showed there are differing views on where the problems lie and how they should be solved.

By Maja Dragović

W

hen he arrived in the country ten months ago, Mussomeli said he was very optimistic about the future prospects of Slovenia. Almost a year later, he seems to be feeling much less positive.

“One year later, in the face of this protracted and complex worldwide economic crises, we are all realising that we are not going to get through these difficult times simply by conducting business as usual – a little tweak here and there is not going to fix it,” the ambassador told last month’s meeting of the American Chamber of Commerce. “At the risk of sounding undiplomatic, it has been impossible to maintain optimism when there has been no progress in opening and reforming the Slovenian economy, or improving bilateral economic relations.”

Frustration

The ambassador’s frustration with current developments in Slovenia were obvious in every sentence he uttered; all of them emphasising concerns that the media and unbiased critics of the government have been voicing for a while now. Commenting on Slovenia’s slip by 12 places on the World Economic Forum’s Global Competitiveness Index, he said the country “is discovering that maintaining the status quo and standing still in this global econo-

my means falling further and further behind”.

The ambassador also said he was frustrated to see US companies investigate Slovenia for potential investment, only to become discouraged and go elsewhere.

“Despite plenty of lip service and nice-sounding public statements – and impressive analysis by many domestic economists – this country is not yet genuinely committed to opening up its economy to foreign investment,” he concluded with regret.

Which way to go?

The subsequent round table debate on the future of global trade and industries – and on the future of Slovenia – seemed to echo the ambassador’s sentiments. Panelists Dr Gonzalo Caprirolo, Dr Žiga Turk, Dr Dušan Mramor and Dr Peter Groznik all agreed that both Europe and Slovenia must start tackling problems immediately and with determination.

However, their ideas on how the problems should be tackled differed. Dr Groznik, for example, supports consensus government that will put aside party politics and work towards getting Slovenia out of the woods. Dr Mramor stressed that Slovenia should ideally have a professional government from both political poles.

Dr Turk, perhaps unsurprisingly considering he is a member of the Slovenian Democratic Party, advo-

No time to waste: panelists (from left) Dr Gonzalo Caprirolo, Dr Dušan Mramor, Dr Žiga Turk and Dr Peter Groznik all agreed that both Europe and Slovenia must start tackling problems immediately and with determination

Tell it like it is: Mussomeli was not mincing his words when criticising Slovenia’s political elite

cated early elections arguing that new political leadership is necessary as the current one has lost its political capital. This prompted some reaction from the audience, with Johannes Douma, the Dutch ambassador, making a point that early elections will only delay decision-making and that Slovenia is losing time.

These were far from the only differences. While Dr Turk argued for big economic packages that would intice investors, Dr Groznik expressed opposition to such plans saying that they have been shown not to work. Instead, he urged small measures that do not involve a lot of work and huge changes, such as employing more people in the judiciary to speed up the process of justice as well as the time it takes to do basic things such as setting up a company.

Europe at fault too

Criticism was not only focused on Slovenia. Dr Groznik pointed out the authorities of European countries are extremely inefficient: “They act as if things will settle for themselves, they await the end of the crisis.” He called for authorities to recognise the reality and start working, not just talking. Dr Caprirolo stated the crisis of trust should be overcome before any kind of fiscal consolidation can follow.

Now that early elections seem inevitable, the future government’s top task will be addressing these mounting problems in an efficient manner. In all likelihood a party that was in opposition will win the elections but many will wonder whether it is as good at solving problems as it was criticising the (in)action of the outgoing government.

October 2011

30 DIPLOMATIC SOCIETY

EMBASSY DIARIES British embassy

Sailing

The Winning Team

Izola Hosts Regatta of Diplomats

Before the World Rowing Championship began in Bled at the end of August, members of the Great Britain team were guests of honour at a welcome reception hosted by the British Ambassador to Slovenia Andrew Page in the Grand Hotel Toplice. The team won 14 medals altogether, seven of them gold, more than any other team at the competition. The rowers received massive support from the stands with spectators including not only the ambassador but also the UK Minister for Sport and Olympics Hugh Robertson, the British Olympic Association Chairman Lord Moynihan, and the World and Olympic rowing Champion Sir Steve Redgrave. During the Bled championship the British embassy’s London 2012 – Be a part of it photo exhibition was also on display. It reminded all the athletes what they are competing for – to be a part of the London 2012 Olympics.

Italian embassy

US embassy

New Ambassador

Commemorating a Legend

The new Italian ambassador to Slovenia, Rosselle Franchini Sherifis, handed a copy of her credentials to State Secretary at Foreign Ministry Dragoljuba Benčina last month. According to the Foreign Ministry, the officials exchanged views on bilateral cooperation between Slovenia and Italy in different fields, drew attention to recent meetings of high state officials of both countries, and stressed the importance of both national minorities, giving special attention to cooperation at the regional level and within the European Union. Franchini Sherifis, who replaced Alessandro Pietromachi, previously held diplomatic posts at Italian embassies in Belgrade, Athens, and the EU mission to Brussels. Since 2008 she has headed the tourism department at the Italian prime minister’s office.

Iranian embassy

FM Inaugurates Embassy Iranian Foreign Minister Ali Akbar Salehi visited Slovenia in July. As part of the visit, the minister inaugurated the premises of his country’s embassy in the Ljubljana district of Bežigrad. Iran opened its embassy in Ljubljana in October of last year, with Mohammed Rahim Agheipur heading it as the first residential ambassador to the country. Salehi is the second Iranian foreign minister to visit Slovenia, after his predecessor Manouchehr Mottaki paid a visit in 2007.

Spanish embassy

Something for the Youngsters The Spanish embassy organised a play for the little ones at Mini Teatr in Ljubljana at the end of August. The children enjoyed KRAFT spectacle, which is a new production of the theatre group Bamablina from Valencia.

This modern theatrical animation consists of playing with paper and includes elements of pantomime, puppetry and live percussion music. The original inspiration was the “need for fun and playful spectacle that would answer the crucial question of our love for things and people.”

The Slovenia Times

The US embassy in Ljubljana organised a concert in Križanke in September as part of celebrations for Bob Dylan’s seventieth birthday.

The concert follows the release of a CD where different Slovenian artists perform Dylan’s classics.

The project also aims to encourage volunteerism among the young in Slovenia. Slovenian national television will soon air a documentary about the project that will see musicians performing Dylan’s songs, while at the same time showing the work of Slovenian volunteers on the ground. The documentary is directed by the award winning filmmakers Maja Weiss and Peter Braatz. The embassy plans to distribute the film to Slovenian schools.

Representatives from 46 countries gathered in Izola in lovely summer weather last month for the ninth annual regatta of diplomats.

Honorary patron of the event, Foreign Minister Samuel Žbogar, pointed to the uniting role of the event that brings together athletes, diplomats, politicians and business executives for a day. Žbogar hoped guests would enjoy the day ahead of what he said would be a “difficult autumn” for Slovenia and Europe and international relations in general. Austrian Ambassador Erwin Kubesch, who is a member of the organising committee, also highlighted the bonding role of what he called another “wonderful” regatta.

Embassy of the Kingdom of Netherlands

Musical spectacle The Dutch embassy last month organised two concerts by symphonic student orchestra GSO Mira from Groningen. One concert was in Portorož, and one in Ljubljana.

The programme included Overture “Oberone” by Carl Maria von Weber; Franz Lizst’s First Piano Concerto in E flat major, op. 88; and Robert Schumann’s Symphony number 4 in d minor, op.120. The orchestra consists of enthusiastic students with a passion for music from all higher educational institutions in Groningen. It was founded in 1964 and has played an important role in the cultural life of Groningen ever since. Since February 2010 it has been under the artistic direction of Peter Stam.

31

Photo: Dreamstime

REAL ESTATE SPECIAL

A House of Cards Slovenian construction companies are renowned in South East Europe for constructing firm viaducts, bridges and buildings. But over the course of just one year the sector itself has fallen like a house of cards. Of the three leading construction companies in the country, one has gone bankrupt (Vegrad), one into receivership (SCT) and the third (Primorje) has recently been given a six month loan moratorium by the banks.

By Mark Koghee

P

rimorje may be the only construction giant that is still trading but business isn’t going well, despite a EUR 7.6m net profit in 2010. At the end of last year the liabilities of the Primorje Group amounted to over EUR 300m. Last month turned out to be a crucial one for the builder from the small town of Ajdovščina. To save itself the firm was forced to layoff 400 employees at the begin-

ning of September. The bank accounts of the company were frozen soon after and on September 15 the banks NLB, Abanka, Banka Koper and NKBM decided to give Primorje an extra six months to pay off its debts.

Primorje has acquired construction projects in other countries of the former Yugoslavia and the company needs guarantees from the banks to secure the deals. It

has also obtained several projects that fellow builder Slovenija Ceste Tehnike (SCT) lost because of its bad financial position. SCT went into receivership last June while, in its heyday, the Ljubljana-based construction company was one of the biggest in the region and viewed as the flagship of the Slovenian construction sector.

SCT hung on longer than fellow construction giant Vegrad

which fell in October 2010, quickly followed by smaller firms Konstruktor and Gradbeno Podjetje Grosuplje (GPG). The latter left the construction of a residential complex with 400 apartments unfinished in the west of Ljubljana.

The six storey high building is surrounded by scaffolding while investor Housing Fund of the Republic of Slovenia searches for a new builder. Meanwhile workers October 2011

Photo: BOBO

32 REAL ESTATE SPECIAL

Economy professor Rasto Ovin of Maribor University blames the current troubles of the construction sector on the political decisions to act in the national interest and have the motorways built by Slovenian companies

from other companies are now building the infrastructure at the site.

In a nutshell

The project in Ljubljana seems to capture the situation of the Slovenian construction sector in a nutshell. There is a standstill and

yet there is some work going on.

Economy professor Rasto Ovin of Maribor University describes the situation of the construction sector, not surprisingly, as “bad”. But he adds that “small companies, which were not contaminated with business with big companies, seem to flourish as do some international builders like Strabag from Austria.”

Ovin expects that new big construction companies will arise in Slovenia. “There is considerable technology which at the end of the day will get another owner,” he argues. “The gap will be for sure filled by some companies who will be confident at the right time and also by some foreign service providers.” The professor predicts that “the big fall will be compensated by above average growth”.

The construction sector has seen the number of projects decrease since the economic crisis started in 2009 and many have argued this is the problem for the sector.

In 2010 the number of apartments under construction dropped by 19 percent compared to 2009. And to make things worse for the Slovenian builders, due to the completion of the motorway network in Slovenia a well of government projects has dried up.

Ovin, however, believes that the

root of the problem lies elsewhere.

He blames the political decisions to act in the national interest and have the motorways built by Slovenian companies. “The growth of the companies was often based on unfair competitions and on incapable agencies who should control their works and financial requirements. They lost any judgement on immobility prices and general economic developments, what at the end left them insolvent.”

“Opportunities”

On the investor side there is still interest in new construction projects. The development branch KD Kvart of the KD Group is working on its Sumi project in Ljubljana which contains housing and commercial spaces, reports Staša Milušič, the public relations consultant of KD Banka.

“Despite the obvious crisis in the Slovenian construction sector and the unstable economic outlook we feel that there are opportunities for the well prepared projects,” she says.

Right now the developer is completing the financial structure of the project. One of the next steps would be to find a builder for the project. But will there be a Slovenian construction company left to take on the job?

Komenda Business Zone The Komenda Business Zone is one of the largest and greenest business zones in Slovenia and even in Central Europe. The dynamic business centre stretching on 93 hectares is primarily intended for trade, production and distribution enterprises, but also research and technological companies and other industries. The concept and structure of the zone enables big companies to centralise their business in one location, which can rarely be found in Slovenia. However, Komenda Business Zone is also inviting smaller and medium-scale businesses, tradesmen and businessmen.

The Zone’s strategic location near the Slovenian capital Ljubljana has been recognised as one of the most promising in the country, according to the EU study carried out within the Phare programme in 2002. The strategic planning and development has been underway since, amounting today to a decade-long history. The Komenda Business Zone now operates with great success and fulfils its strategic objectives, despite some contradictory and unfounded insinuations. There you will find a number of Slovenian and foreign companies, such as Lidl, Starman, Eko Produkt and others, while among the most recent buyers are Jungheinrich, Reni and Taptom.

Information for property buyers

Foto: Aleš Nanut

Last remaining properties with public utilities on sale in Komenda Business Zone

Prices

The construction in the period 2005-2011

The construction was carried out in two phases after the spatial plan was accepted in 2005. The first phase comprised the construction on 18 hectares and all the properties were immediately sold. The second phase yielded another 60 hectares and was initiated upon adoption of the local plan in 2009, which enabled the construction of the advanced public utilities.

PC Komenda d.o.o., Glavarjeva cesta 61/a, 1218 Komenda, Slovenija T: +386 (0)1 83 43 328, F: +386 (0)1 83 43 339, info@pc-komenda.si, www.pc-komenda.si The Slovenia Times

As of May 2011, the Business Zone has fully operational electric and water supplies, gas piping and telecommunications wiring, sewage system, road infrastructure and street lighting. In terms of public utilities Komenda Business Zone is one of the best developed in Slovenia.

Today, there are only a few properties left on the market at competitive prices. The prices for a property with public utilities differ depending on the location. You can buy 1m2 for between EUR 115 to EUR 120, excluding 20 percent VAT, but the price can be somewhat lower when bigger properties are in question. The investor may start with the construction of a business unit within a month after filing the necessary documentation with the administrative unit.

Prospective investors are given full support and advice with choosing the location. For more information visit www.pc-komenda.si or call +386 (1) 83 43 328.

REAL ESTATE SPECIAL 33

Property market

High Prices Despite Low Demand The construction of new apartments is down significantly yet property prices keep going up. It is not an increase which reflects a greater demand for properties but instead reluctance on the part of sellers to drop their prices.

By Maja Dragović

T

he prices of flats in Slovenia remain relatively high, especially when it comes to new apartments. Even the Ljubljana Housing Fund has been forced to increase its offer on properties seized by banks as collateral when a number of developers failed to meet their financial obligations.

After an initial bid of EUR 1,850 per square metre for two-bed apartments failed to attract any sellers – primarily banks – the fund has now raised its offer to EUR 2,450. This is just one small reflection of the current state of the market.

Prices of new housing in Slovenia edged 0.5 percent higher in the second quarter of 2011, the third consecutive increase despite a lower number of transactions. Compared to the same quarter in 2010, prices were 9.9 percent higher and 11 percent higher than the same period in 2009. Prices of existing flats in Slovenia also increased – by 4.2 percent in the second quarter of 2011 compared to the preceding quarter. The average price per square metre stood at EUR 1,800 in the second quarter of 2011, compared to EUR 1,727 in the preceding quarter.

On the up

The Surveying and Mapping Authority attributes the rise in the average price to an increased share of flat transactions in pricier areas. The increase was most notable in Ljubljana where 30 percent of all flats were sold. Prices for flats remain highest in the coastal region, with an average cost of EUR 2,561 per square metre in the second quarter. Prices in Ljubljana come in second. The average cost of a flat has not changed this year, standing at EUR 2,524 in the second quarter.

In the meantime, house prices in Slovenia went up about five percent in the second quarter of 2011 compared to the previous quarter.

The average price for a house was EUR 290,242 in Ljubljana and EUR 251,794 in the coastal region.

Stalled: the building of new apartments has dropped significantly compared to previous years

Settled market

“The average prices and the number of transactions in the four largest Slovenian cities, where more than half of the flats in Slovenia are sold, are a good indicator of a calm real estate market in Slovenia this year,” the Surveying and Mapping Authority argues.

Despite increases in the latest quarter, the prices of flats have settled according to the Authority – they are now about 10 percent lower than before the crisis. However, although prices may not be near the pre-crisis level, they are still on the increase. This despite the fact the number of flats sold went down by more than 50 percent compared to pre-crisis times.

The worst is yet to come

Alexander Picker – chairman of the Slovenian subsidiary of the Austrian Hypo Group Alpe Adria bank, which is strongly present on the Slovenian real estate market – does not see a quick solution. He

believes the stagnation is largely a psychological one with buyers waiting for prices to fall and sellers expecting them to increase.

“All players have gotten in too deep,” Picker says in an interview with STA. “The banks lent too much and the builders and developers took on excessive debts, all based on the conviction that the level of prices attained could be kept or that they would even grow.”

Bubble bubble toil and trouble

The problem is a classic example of a real estate bubble, Picker argues – something which has happened before and which he believes is likely to happen again. He predicts it will take a while for the market to recover and suspects banks cannot do much to alleviate the crunch on the real estate market.

Bojan Ivanc, CFA, senior research analyst at KD Banka, be-

lieves things will still get worse before they get better.

“With regards to the current real estate crisis in Slovenia we can imply that worse is yet to come as the real estate market prices are downward sticky,” Ivanc says. “The current banking crisis which boosted interest rates on short term deposits only aggravates the situation.”

“The collateral of many impaired loans are real estate and that is likely to put some pressure on real estate prices for the following couple of years. A tail risk event [a sudden fall in prices due to forced sales from banks] cannot be excluded although we think that the state might intervene with an establishment of a real estate trust to create a cushion.”

Though sellers will certainly be happy to see an upward trend in real estate prices, it appears this is not the best way to get the market moving again.

October 2011

34 REAL ESTATE SPECIAL

Expert opinion

Going with the Times In the beginning of 2011, I received the official decision from the land registry in charge, which was processing my submission since 2006 only to have the Ministry of Justice now notifying me, through the media, that the time window for decisions will only be 15 days, as of end December this year. This is making me wary, not least because the Supreme Court in its Annual Report 2010 states that the average time for such decisions is 2.2 months.

Start - Remote electronic access to real estate data

The basic principles and the amount of required documentation remain unchanged, but number of eligible submitters is limited, while the e-service calls for electronic legal documents, type documents, e-signatures, e-delivery and centralised storage.

Surely, the system has bugs. One journal is still publishing a series on user experiences, most of which were far from positive. The most criticised, however, was the land registry’s decreased transparency, increased administration and irrational procedures, while in some cases errors in data transfer occurred.

The Slovenia Times

The days of queuing at the courts and at surveying and mapping authorities to get information about Slovenian real estate are long gone. Now, when someone needs in formation when purchasing real estate, securing loans or making valuations, or simply wants to know if the neighbour owns the house she lives in, this can easily be done free of charge while sitting in front of a computer.

Remote electronic access to the Slovenian Surveying and Mapping Authority provides easy access to public information on real estate kept in its registers (land, building and public infrastructure cadastres, a real estate register and a register of spatial units).

GURS also operates records of the Slovenian real estate market where information on the legal transactions for the sale and lease of real estate are kept. All the registers can be accessed at http://eprostor.gov.si/.

European funds helped also Slovenian municipalities to build upon the electronic access to their spatial data. Nowadays the data, still mostly for informative purposes, can be obtained online; some municipalities use the Spatial information municipalities system (www.geoprostor.net/PisoPortal/Default.aspx) while others have their own web sites (e.g.

Ljubljana at https://urbanizem. ljubljana.si/UrbinfoWeb/profile. aspx?id=Urbinfo2@Ljubljana).

From 2004 check of land registry data is available on web. The link to electronic land registry excerpts is https://evlozisce.sodisce.si/evlozisce/javni_izpisi/list.html.

The newest thing – electronic land registry

As of May this year, the land registry is available online, fullon. The basic principles and the amount of required documentation remain unchanged, but number of eligible submitters is limited, while the e-service calls for electronic legal documents, type documents, e-signatures, edelivery and centralised storage.

The prices of certain legal services have decreased, whereas the notary costs increased due to their key role in the procedures. Except in the rare cases of filing records in court, the notary has to be involved in the registry procedure, even if the notary has not filed the submission. In such cases the applicant has to submit to a notary the underlying documents (which must include a legal basis for the registration with notarised land registry permission) and the notary converts the documents to electronic form and submits them to the court.

Surely, the system has bugs.

One journal is still publishing a series on user experiences, most of which were far from positive.

The most criticised, however, was the land registry’s decreased transparency, increased administration and irrational procedures, while in some cases errors in data transfer occurred.

Conclusion

Despite the numerous criticisms, nobody claims the system is bad, particularly as some problems are being solved. Nevertheless, the relevant authorities should learn something from dealing with the issues the users have reported. If anything, the ensuing digitisation of judicial procedures (first the expected digitisation of executive procedures) should only be introduced when the e-application functions fully and flawlessly.

Ana Filipov is a lawyer at Schönherr corporate law firm and an expert on real estate market

REAL ESTATE SPECIAL 35

Housing loans

Cheap Loans Become a Burden One out of five Slovenians with a housing loan is facing rocketing repayment costs now that the crisis in the Eurozone has shot the value of the Swiss franc sky high. Years of warnings from Slovenia’s Central Bank may have helped some avoid the problem. But for others what was once a dream loan has turned into a nightmare.

By Mark Koghee

T

Photo: Dreamstime

aking out loans in Swiss francs has long been popular in Eastern Europe. The low interest rates made them an especially popular choice when financing real estate purchases.

Twenty percent of all mortgages in Slovenia are in Swiss francs and in recent years Slovenians have even started using the currency to buy cars.

But what was once a guarantee of low interest rates has turned into anything but. When the crisis in the Eurozone started this year the value of the Swiss franc rocketed. The currency gained almost 25 percent against the euro. Borrowers that took loans in the Swiss currency have seen a similar rise in their repayments.

Early warning

Slovenians are not alone in their suffering. Loans in Swiss francs are widespread throughout East and Southeast Europe – sixty percent of home loans in Hungary are in the currency – and several municipalities in the south of France, like the town of Saint Tropez, also chose loans pegged to the franc.

In fact, in some respect Slovenians may be better off than those in other areas who chose to go Swiss.

The reason? Early and repeated warnings of the problems ahead.

The Central Bank of Slovenia first raised concerns in a report in early 2005. Because lending in Swiss francs remained popular, it stepped up efforts in July 2006, sending out a warning letter to all banks in the country. The letter instructed banks to inform their clients of the risks of borrowing in a foreign currency.

A long battle

At the end of 2006 a fifth of all housing loans in Slovenia were in Swiss francs or pegged to the currency. According to the Central Bank, the loans then became a non-negligible credit risk for banks. Despite further warnings the popularity of the loans didn’t

cease. In May 2008 the Central Bank reported that the share of housing loans in Swiss francs exceeded 30 percent and was still increasing. This was termed an “undesirable risk”.

With extra warnings, a brochure on borrowing in foreign currencies, and considerable media attention on the issue, the Central Bank continued to fight the popularity of loans in Swiss francs.

It seems the warnings eventually worked. In 2009 the amount of loans in Swiss currency stood at EUR 1,891m, last year saw al-

ready a small drop to EUR 1,868m, and in February of this year the amount decreased further to EUR 1,747m.

Now some institutions, like KD Banka, simply don’t offer any loans in or pegged to the Swiss franc. For those who are already in the Swiss trap, banks say they are willing to help find solutions.

Options include a deferral of payments, extended repayment periods, changing the currency of the loans back to euros, or a loan moratorium.

Mortgages in Slovenia in Euros and Swiss francs Balance at the end of the period (in EUR ‘000 000)

Balance at the end of the period (in CHF ‘000 000)

July to September 2010

1.095,0

1.454,9

October to december 2010

1.128,6

1.411,2

January to March 2011

1.052,9

1.369,3

April to June 2011

1.109,0

1.338,6 Source: Banka Slovenije

Taking matters in their own hands

The Swiss are trying to seek solutions to the issue too since their strong currency is not only harming foreign borrowers but also the domestic economy. Export and tourism are suffering because Swiss products and services have become significantly more expensive for foreigners. Last month the country’s central bank issued an unusually strongly worded statement expressing a dedication to decreasing the value of the Swiss currency. It said that the “current massive overvaluation” of the currency posed “an acute threat” to the country’s economy: “The Swiss National Bank (SNB) is therefore aiming for a substantial and sustained weakening of the Swiss franc. With immediate effect, it will no longer tolerate a EUR/CHF (Swiss franc) exchange rate below the minimum rate of CHF1.20. The SNB will enforce this minimum rate with the utmost determination and is prepared to buy foreign currency in unlimited quantities.”

Borrowers will be hoping these measures have an impact.

October 2011

36 REAL ESTATE SPECIAL

Investors

Foreign Policy Foreign buyers have played an increasingly important role in Slovenian real estate. From which land those buyers hail, though, has changed regularly and dramatically in recent years.

By Claire Read

W

hen Justin Young from Slovenia Estates casts his mind back to July 2006, he suddenly sounds a lot like someone remembering a carefree summer of childhood.

“It was a very straightforward time,” Young says simply. “We were dealing with ever-increasing numbers of British buyers happy to squeeze as much equity as possible from their UK home to fund their dream of owning a holiday home in the little gem that is Slovenia. Austrian and Italian enquiries were common too, and Russian investors seemed to have just discovered that Slovenia had a coast, and a pretty nice one at that!”

“We agencies knew our market, we enjoyed our jobs, and we sold – and pretty easily too,” recalls Young.

Challenges

If July 2006 was carefree childhood, July 2009 surely represented the sudden, occasionally painful challenge that is entering adulthood. “The landscape at that point was very, very different,” remembers Young.

“We had gone through a year or more where the market was not a market – it was a desert,” he says.

“British buyers had disappeared because they were desperately trying to pay their mortgages in the UK. The last thing they were thinking of was buying another property in a foreign land. Austrian and Italian buyers quickly realised they could snap up the same holiday home for half the price in their own countries. And although we still had some interThe Slovenia Times

often looking for something they can renovate. And with Dutch and Belgian buyers we often get requests for land alongside the house.”

Group three comes from much further afield. “Americans have begun to wake up to the delights that Slovenia has to offer,” says Young. “With lower property prices, many are drawn to Bled and Bohinj. We have had clients relocate here for retirement which always says a lot of the quality of life somewhere.”

Renovation project: property above, close to the Slovenian coast, is on the market for EUR 3m, after being revamped by a Russian investor

est from Russian buyers, it became less and less.”

Between heaven and hell

The good news for those who rely on foreign buyers of Slovenian real estate is that the situation has now settled somewhere between the glory days of 2006 and the dark days of 2009. Summer 2011 may not have been carefree childhood but nor was it crippled by the challenges of adulthood.

Perhaps instead it can be characterised as adolescence – not carefree, but not without a job to get through five days a week.

“The market is a market again now,” confirms Young. “We have a series of compact, easy-to-predict groups of investors who know what they want and are willing to pay for it. There is some ebb and flow but on the whole it’s pretty secure.”

The British are back

Group one: the British. Buyers from the UK are certainly

not back in their pre-2008 levels, says Young, but they are returning, keen to land a dream home in somewhere like Gorenjska. Most express interest in three bedroom two bathroom character houses with some land and a sea view – a demand which is relatively easy to meet thanks to a good supply of such properties. The majority don’t want to spend more than EUR 200,000 and those with a lower price limit will tend to head east to Prekmurje.

Austria... and America

Buyers from Austria and Italy now fall into the second group, a “Rest of Europe” category. “They have been joined by some newcomers,” explains Young. “Those from Belgium, Holland, France, Switzerland and Finland have all been our clients in the past 18 months. Their budgets tend to be the same as the British buyers but they don’t go East. Most tend to favour older properties,

The Russian misconception

The final group is the one which Young says sellers most want to hear about – those from Russia.

But he immediately seeks to correct what he says is a common misconception about buyers from this land: “They don’t all come with EUR 3m in their back pocket, looking for the biggest, brightest place in town!”

Instead, Young says his experience is that Russian buyers are very astute and know exactly what they want and what price they should be paying. Yes, some have spent EUR 2m but the average is around EUR 400,000.

There are some other groups which are starting to emerge. Enquires have been reported from Israel, South Africa and the Middle East. But for now one gets the impression that Young and his colleagues are perfectly content with the four solid, reliable groups that have developed. It’s a long way from July 2006 but, thankfully, it’s an equally long way from July 2009.

Situla a superior

living experience

A peaceful oasis in the vibrant city introduces a trendy urban living style to the capital.

Dressed in glass and metal that gives an impression of old bronze, Situla, a new addition to the Ljubljana skyline, is offering a one of a kind urban living experience.

This unique architecture spliced with topnotch materials and innovative technology at the crossroads of Ljubljana’s Vilharjeva cesta and Šmartinska cesta comprises 226 luxury apartments, 6,000 m2 of office space and 28 shops. It guarantees the highest standard of living in the city centre, offering exquisite views of the city and its surroundings.

The trend of migration to the suburbs is surely jeopardised by complexes such as Situla.

Those who live in the city are accustomed to a certain level of comfort: to live in a city is to live in the centre of happening, to have everything within reach, to have the opportunity to succeed, to meet interesting people and have endless fun or devote to serious study. Situla’s innovative concept enhances the urban experience by eliminating negative aspects of living in the capital. If you are a true lover of the city pulse and comfort but you hate pollution and are disturbed by the noise and grey facades, then Situla is just the place you.

Photo: Matjaž Volkar, Franc Vrtačnik

The inconvenience caused by the noise in the city is neutralised by high-quality glass panoramic walls and fully automated air conditioning featuring humidity control functions, which is a novelty in Slovenian

homes. All apartments have low-temperature underfloor heating and additional fan convectors which can adjust instantly to a sudden change in the weather. This means opening windows is unnecessary, unless you wish to slide open the panoramic wall and extend the apartment into the spacious balcony and a “Japanese garden.”

The latter gives amazing unrestricted views across the city centre, the surrounding hills and mountains and the city hiving on the streets and rails below.

The Situla is there for you to cater for any service in question. The designers strived to give the resident / user an all-around daily service, including a smaller delicatessen, numerous shops and business areas, a bank, a wellnessfitness oasis, a restaurant, cafe and not least a car wash for exquisite car care. The complex also has a 24/7 concierge providing professional reception and security services.

The offices are functionally cosy, featuring highquality modern design yielding an exceptional work environment at maximum personalisation.

The complex is linked to high-end electronic and optical networks which facilitate interruptionfree work process and use of modern communications and electronic devices.

Giving you the highest standard, Situla will without doubt set a new trend in Slovenia. Great interest and first signed contracts in the very first months come as no surprise. The apartment prices range between 3,142 EUR/m2 and 3,878

www.situla.eu

EUR/m2 inclusive of VAT. The price for 1 m2 includes a pantry but no parking space. The office prices are between 2,000 EUR/m2 and 2,400 EUR/m2 exclusive of VAT, while business areas are priced between 2,430 EUR/m2 and 3,400 EUR/m2 exclusive of VAT. Now, what do you get for your money?

Voluminous spaces, exquisite wooden floors and elevators, ‘smart’ electric wiring hooked to a slim touch screen with which you can manipulate devices and settings also via the internet, video intercom, efficient sun protection with electrically operated sliding aluminium panels, quality fixtures made of composite materials, intuitive logistics enabling optimal and safe communication between apartments, offices, shops and garages.

The materials have been selected from the best suppliers in Europe: German facade and machines, Dutch ceramics and Swiss wiring, Finish wooden floors and elevators, French and Italian electrical wiring, etc. The services, some materials and the know-how are Slovenian!

Situla, as you can see, is meant for all aficionados of city life and for those who expect a high standard of living culture. The diversity of apartments and offices gives you the opportunity to find what best suits your needs.

To be better able to imagine the advantages that the Situla has to offer, two sample apartments will be open for visitors In October 2011, and ready to move into by September 2012.

38 REAL ESTATE SPECIAL

Property leasing

Joining Forces Immorent and Erste Group’s real estate business have joined into one group, changing its name to Erste Group Immorent. The subsidiary in Ljubljana also changed its name into Erste Group Immorent Ljubljana. In addition to the new name, the company brings together a full spectrum of services in one place. The main novelties for customers are possibilities for additional short-term project financing and conventional credit financing for real estate projects, especially when leasing, for various reasons, is not possible. With 40 years experience, the group has completed over 10,000 projects and manages a total balance sheet value of over EUR 13 billion. Despite the crisis, the group is sticking to the same policy it had before 2008, says its country head Boris Tuma.

They are fundamentally both similar products of financing.

With leasing, the property rights remain with the leasing company .

With a loan, the amount is insured with a mortgage. With leasing, the leasing company is somewhat more insured because it has the property rights. They can, therefore, offer better conditions to the clients. Otherwise, the products are very similar. They both go through the same procedures.

What about the interest rate?

Is that smaller with leasing?

It isn’t usually. The interest rates are more or less the same with our organisation. That was also the point of our merger: why the leasing and loaning segments were joined under one banner.

What do the investors prefer – leasing or loans?

I see no real differences. Most people prefer loans because they know the system better. But we do not see any great differences – that some would only want leasing and some only loans. It is difficult enough to get a long-term financing source, so the people are not really sensitive about the type of financing.

Boris Tuma, country head of Erste Group Immorent Ljubljana

Our studies have shown that the biggest amount of office spaces is still in the centre and we sensed a lack of modern facilities for hire in the strict business centre of Ljubljana.

The Slovenia Times

Why have you decided to form a unified organisation?

The project is quite old. We had been discussing it for four or five years, but the real merger happened on 1 January 2011. First and foremost, we were thinking about our clients. If they wanted leasing, they came to us and if they wanted a loan, they went to the bank. It could be very confusing for our clients, so we decided to join leasing and loans and our clients could get all the services in one place. This was our main objective when forming the unified organisation.

What is the difference between leasing and loans?

Erste Group Immorent deals exclusively with leasing for companies. How popular is financing real estate with leasing?

People do not really care if it is leasing or loans, as long as it is a long-term source of financing.

There were many projects with short-term financing which did not go through and many of those investors are now taking an interest in this long-term source. As I said, there’s no preference towards either leasing or loans. Banks tend to prefer leasing because they are more insured with the property rights than with a mortgage.

Can you tell me something about your current project Severna Vrata Ljubljane (the Northern City Gates of Ljubljana) or as you have named it City Tower Ljubljana?

Besides leasing, we also have our own projects and we are currently working on three. One of our main projects is the City Tower Ljubljana. This project is very close to the city centre, next to the railway and bus stations.

It will contain about 15,000m2 of rentable office space. Its most special feature is the location: it is in the centre of Ljubljana, near the railway station. The skyscraper will have 23 above ground floors and five underground floors with parking spaces. All areas are intended to be leased. The ground floor and first floor will also have a public programme with cafeteria, bank, restaurant and some shops.

The project was designed by the renowned architect, professor Boris Podrecca and his associate Sandi Pirš, who won the public tender for the best architectural solution. We applied for a building permit at the start of the year and we hope to have it shortly, so we can start building in the next few months, with the building process taking two years.

Why have you decided to build the City Tower Ljubljana in the centre of Ljubljana?

Our studies have shown that the biggest amount of office spaces is still in the centre and we sensed a lack of modern facilities for hire in the strict business centre of Ljubljana. We see this as a big opportunity for us to market the project and find enough people who will lease the spaces. After all the biggest pro of the building is modern offer within prime location.

How hard is it to find good projects?

It is certainly very difficult because there is not much construction work being done in Slovenia. It is very difficult to get a client who does not already have too many debts. This is the main problem. However, it also means that all our projects, which are approved and manage to overcome these obstacles, will go through.

REAL ESTATE SPECIAL 39 are still doing well in comparison to offices, which are 20 per cent empty. Shopping centres at good locations are still successful, so it is possible that more of them will be built in the future, especially in smaller towns, where there aren’t any. I think there is definitely still room for shopping centres, but not to the same degree as before.

Great location: EGI’s City Tower Ljubljana project will take two years to complete

What were your most complicated and most interesting projects in Slovenia?

Shopping centres were especially popular in the last few years and we financed a big part of shopping projects in Slovenia.

Our biggest project was Europark in Maribor, which was also the first project we financed. Later we financed its two extensions. The total investment value was somewhere in the vicinity of EUR 100m.

Recently, leasing to municipalities has become widely spread – a sort of public-private partnership.

which have now come to a halt.

But this year has been better in this regard. We have already sealed a few contracts and have a few other interesting things pending. I think that 2011 has been better than 2009 and 2010.

Do you think it is financially viable to invest more in shopping centres in Slovenia?

I remember people saying five years ago that there were too many shopping centres in Slovenia already. Shopping centres

Shopping centres were especially popular in the last few years and we financed a big part of shopping projects in Slovenia.

Where do you see the possibilities of growth in the real estate market?

I see possibilities not so much in mass production, but on a smaller scale. In the past, apartment buildings, shopping centres and offices were built in large quantities.

There is still possibility of growth, but it has to be done more prudently. There will always be good locations for, say, shopping centres and office buildings, or apartments. I think the trend will go towards quality and less towards quantity. There will always be a need for real estate, but we will have to think about the investments more.

What are your plans for Slovenia in the future?

Even though Slovenia is not one of the biggest markets compared to other CEE countries, we think that it is very well situated with profound market fundamentals, legal security and a stable political situation. With regards to our leasing activities we will continue to form public-private partnerships, develop our own projects and offer reliable services to our existing and potential partners.

Our policy is the same as it was before the crisis, there have been no great changes. We were very conservative in the past years, which proved to be a right decision, so all our clients pay regularly.

How has EGI coped with the crisis?

Our policy is the same as it was before the crisis, there have been no great changes. We were very conservative in the past years, which proved to be a right decision, so all our clients pay regularly. We took no special measures for the crisis, but there are fewer projects in the last few years and fewer opportunities for financing.

We do not have as much new business, which is understandable.

There has thus far been no need for any other crisis measures.

How has the crisis influenced the leasing market in real estate?

The number of transactions with leasing has decreased dramatically in the last few years. It is questionable whether new projects that are being financed are actually new, or if they are existing projects that have been revamped. Leasing has definitely been affected by the crisis. This was especially evident in construction work and investments, which are practically nonexistent. Leasing companies used to help construction companies,

Being the first: Europark in Maribor is EGI’s biggest project thus far October 2011

40 REAL ESTATE SPECIAL

Commercial property

Office Activity With most headlines focusing on the domestic real estate market, the challenges of commercial property in the aftermath of the economic downturn have gone largely unnoticed. Yet talk to anyone working in this area and it quickly becomes clear that this too is a market in serious transition.

By Claire Read

O

Photo: BOBO

n May 15 2009, the foundation stone for a major new Ljubljana building was laid. The plans – to build a 20-floor high office building which would be Slovenia’s highest – would always have been ambitious. But they seemed even more so given that at the time building work started on Crystal Palace (Kristalna Palača), the world’s real estate market was in a devastating slump.

Last month, the owners of the building held its official opening party. The news was good: 65 percent of the offices were occupied when Crystal Palace opened its

doors. That didn’t tell the full story, though. According to the chief financial officer of building owners BTC, the company had gone out and found each and every tenant. Not one had approached BTC.

Changing times

It’s a story which sums up the commercial real estate market in late 2011. Just like those selling and renting domestic property, those who deal in commercial real estate have had to confront nervous tenants. Those like BTC who have been willing to grapple with that situation have succeeded. But those who haven’t have been left unsatisfied.

“Last month we had a landlord refuse an offer of EUR 15 per square metre in a poor building in the city centre,” says Jacqueline Stuart, director of Slovenia Invest, the country’s only commercial property advisors. “It’s frustrating because we know we will have to go through several months of this before the landlord appreciates that you can’t fight the market. It is what it is.”

Low rents, new clients

Crystal Palace The Slovenia Times

And what it is at the moment is a market which bears little relation to that of just a few years ago. In late August, Stuart was approached by a company looking to renegotiate their office lease. It was signed three years ago at EUR 18.2 per square metre. Today the same space would go for just EUR 12 per square metre. Another of Stuart’s clients, a rapidly expanding aviation company, recently moved to a larger office space in a brand new building. Yet thanks to the charged market, there will be no increase in the amount the firm pays in rent.

Those two clients could be regarded as traditional occupiers of commercial property space.

But according to Stuart, another change in the market has been the dramatic increase in enquiries from doctors, dentists, fitness companies, complementary therapists and the like. She says her firm recently signed a lease with a pilates studio for a B Class of-

fice building in the suburbs. Such deals are now far from unusual.

Buy?!

What is unusual, however, is an enquiry Stuart received in late August. “We heard from someone who wanted to buy offices,” she remarks with an air of disbelief.

“That was the first such enquiry in nine months. Companies are increasingly realising that money tied up in office space can be better utilised to develop their businesses. Nearly all office transactions now are rentals.” Also surprising was an enquiry from a bank looking for 4,000 square metres of office space. This is huge by Ljubljana standards: the average office space in the city is just 250 square metres.

For some, adapting to the unique characteristics of the Slovenian market is another challenge.

Stuart relates the story of a recent visit from partners at the Budapest office of Cushman & Wakefield, the renowned commercial real estate brokers and consultants. The team were viewing an out of town development which the owner wants to sell and had valued at a six percent yield based on similar transactions in Vienna.

Institutional investors in Slovenia, however, would expect 10 percent since the market is viewed as highly illiquid.

Room for improvement

In this and other respects, Slovenia still lags behind when it comes to commercial real estate. At Cushman & Wakefield’s London headquarters, situated in an AAA location in the heart of London, senior executives hot desk. This means they occupy very little space. Stuart says that in Slovenia, on the other hand, workers have an average of 12m2 each. She argues this is an area with the potential for real improvement and cost savings.

In other respects, though, Stuart is just fine with the market as it is.

“Towards the end of September, I added up all the enquiries we had received since the end of the holidays on 31 August. We’d had 44. This is the kind of market we like,” she smiles.

Investment opportunity

AMUSEMENT PARK ABOUT THE PROJECT The SiPark project is realising a modern concept for an amusement park. Degraded land is going to be used to create a place with added value and participants in the project will be offered unique opportunities – both financially and in terms of fun.

INVESTORS We are searching for a buyer of the whole project or a strategic/capital partner.

part of the land will remain unchanged so the desert will also be an attraction for visitors. The entire area will put great emphasis on the protection of nature.

SiPark is a starting point for the promotion of nature and natural resources, which are in the area’s vicinity. Here begins the Natura 2000 area and Krakovski gozd (forest). This area is also known for bird nesting grounds of the rare and protected bird species Čebelar (beekeeper). The area is known for its vineyards and wine product, especially the famous Cviček wine that is unique to the Posavje and Dolenjska regions.

LOCATION

The desert

SiPark is located along the major European transport corridor, corridor X. It is one hour’s drive from Ljubljana and half hour’s drive from Zagreb.

SiPark is spread over 30 hectares of landscape and is divided into several segments: a real estate project; a tourism project; a commercial project; an entertainment project; an eco awareness project; a wellness project; a culture project; an education project; a sports and recreation project; and a high technology project.

On the surface there will be a lot of green areas and camping facilities. Thirty or more houses will be on site and will not simply offer sleeping facilities – they will represent European and other countries, offering a unique way to depict a country’s appearance as well as its cuisine, tourism and trade. Additional facilities within the project will include syllabus trails, a spa, a hotel and an amusement park designed for recreation and adrenaline rush with an emphasis on a specific Slovenian literature topic. Meanwhile

Department of Wood Science and Technology, Turistica in Koper, Faculty of Sciences and Engineering/Department of Geology, Eco Schools etc.

ECOLOGY & SCIENCE The ecology element is seen as the main part of the project. Everything in SiPark is based on ecofriendly technology, including ecological approach and innovations.

Culture in the SiPark is a bond of the whole project.

All segments are interwoven through the rich cultural heritage of Slovenian literature. The main mascots are chicken Kati and rooster Pepi. Slovenian stories will be told with a new, modern approach.

The company’s mission is to promote science involving innovations in real estate as part of the project itself.

The point is to offer customers a haven of fun as well as all forms of relaxation in one place.

PARTNERS & FUTURE PARTNERS Centre for Entrepreneurship and Tourism Krško, Municipality of Krško, AMZS, Local Community Krško, Tourist Association of Raka, Philosophical Faculty/Department of Library Science, Biotechnical faculty/Department of Botany, Biotechnical faculty/

FUTURE In 2012 the opening of the first part of the project (the desert) is planned. In 2012 it is planned to invite one or more investors to join the project. Plans are to have the whole SiPark fully operational within the next five years. Subsequently, SiPark’s business model is going to be replicated abroad.

SiPark, Slovenian Park of Tourism Ltd, CKŽ 7, 8270 Krško Telephone: +386 (0)41 422 459 info@sipark.si, www.sipark.si

42 REAL ESTATE SPECIAL

Regional overview: Serbia

Government Helps in Lowering Prices In Serbia, all segments of the real estate market suffered in 2010, each in their own manner. Now each is seeing different forms of stabilisation and growth, with a number of factors influencing such developments.

By Mateja Novak

A

fter witnessing decline, the prices of residential properties in Serbia are expected to stabilise in the second half of 2011.

According to Colliers International, at present a discrepancy in prices among similar projects in similar locations still exists but expects this to change: “Colliers expects greater transparency and sophistication on the market to emerge in future so prices are more closely correlated to location, size and the quality of a given project.”

A drop in prices across all areas of Serbia’s real estate market is currently evident. In luxury locations where apartments were priced at EUR 5,000 per square metre, prices are now around EUR 3,000 per square meter. The fall is partially explained by the gov-

ernment’s decision to subsidise mortgages for new apartments as well as by the apartments that the government itself is constructing in a few locations across Belgrade.

Prices of government constructed apartments are set by law to help the construction industry in times of crisis – they range from EUR 1,250 per square metres up to EUR 1, 290 per square metre, including VAT. Although the construction is of low quality, it is generating huge interest amongst the local population, forcing other investors to also lower their prices and make most of the subsidised mortgages offered to buyers.

Commercial expansion

The commercial market is also picking up. Despite a construction slowdown in the Belgrade office market during 2010, the total

Average prices for residential properties in Belgrade municipalities (in EUR per sqm,Vat included) Municipality

Price

Voždovac

1,500 – 1,700

Vračar

2,300 – 2,500

Zvezdara

1,650 – 1,850

Zemun

1,200 – 1,400

New Belgrade

1,900 – 2,200

Palilula

1,700 – 1,900

Stari Grad

3,000 – 3,300

Čukarica

2,000 – 2,300

Savski Venac

2,300 – 2,700 Source: Colliers International

stock of office space has increased by 76,100 square metres, totalling 658,419 square metres at the end of 2010. With prices falling, interest in increasing.

“Numerous companies started their search for new business premises in 2010, encouraged by somewhat lower rental levels”, Colliers International states.

Regional overview: Croatia

The Positive Impact of EU Accession Slowly but surely, and with a slight lag behind other European markets, 2011 has brought initial signs of an uptick for the Croatian real estate market. It seems that the new rules of the game as dictated by the economic crisis are now being taken on board. The country suffered less damage during the global economic downturn than many of its neighbours and so its recovery may be less pronounced. Even so, property prices have overall fallen by further 2.6 percent compared to last year.

By Mateja Novak

T

he key news in Croatia in recent times has been the decision by the European Union to close negotiations on accession. The country is now sched-

Average prices in Croatia (in EUR per sqm) Aug-10

Aug-11

Apartments in Zagreb

1,832

1,775

Houses in Zagreb and its suburbs

1,194

1,167

Apartments on the coast

1,963

1,824

Houses on the coast

1,554

1,554 Source: www.centarnekretnina.net

The Slovenia Times

uled to join the EU on July 1 2013.

Membership is expected to have a number of positive effects on both the economy as a whole and the construction/real estate sector in particular.

The opportunities that present themselves in the real estate market are numerous. Pre-accession funding from the EU for infrastructure development should become available in the coming months (infrastructure is expected to be a key sector for investment). Significant development in tourism (which accounts for 20 percent of gross domestic product) is expected. Croatia’s business en-

vironment has gained already exponentially from carrying out reforms required by the EU(for example, the country has jumped five spots on Transparency International’s Corruption Perceptions Index since 2004, from 67th to 62nd out of 178 countries). And there are clear signs that rents are rising (or at least, falling less than they otherwise would) for prime retail and office properties.

Nonetheless, the commercial real estate sector in Croatia essentially remains in a stable rather than an exciting phase. That said, there is more opportunity than risk for developers and investors.

REAL ESTATE SPECIAL 43

Cautious outlook

Although there have been some positive developments in 2011, Serbia’s real estate advisors remain cautious.

“The last year has proven to be challenging for all of us,” says Maja Sahbaz, general manager at Colliers International Serbia. “Although the messages we receive from banks, investors as well as the government are encouraging, 2011 will continue to be a year of caution but a slow and definite recovery.

“As a result of all this change, the one thing we can say is that the market is a lot more sophisticated than it was two to three years ago. Some difficult lessons were learned, and among them the most important one would be that the market has shifted towards tenants and buyers.”

The City of Zagreb at the moment offers a fairly decent supply of quality office space at base rates around EUR 12-16 per square metre per month, with negotiable rent holidays and landlords willing to share fit-out costs, according to PriceWaterhouseCoopers (PwC) in Croatia. The firm predicts that demand for such space will continue to grow to the detriment of the more widely available old-style offices. As for the retail sector, PwC reports that “the confidence of professional foreign investors in top quality properties has recently been confirmed by the investment of TriGranit together with Heitman into the Arena Centar.”

It appears that the fut ure growth of the Croatian real estate market will largely depend on the recovery of the post-crisis economy, with the country’s forthcoming EU accession almost certain to have a positive impact.

Regional overview: Montenegro

Tourism Factor The fate of the property market in Montenegro strongly correlates with that of the tourism industry. Worryingly, though, while the number of visitors to the country continues to increase the real estate market still lags behind.

By Mateja Novak

A

ccording to data from its statistical office, Montenegro was visited by 647,450 tourists in the first seven months in 2011, which is 8.8 percent more than in the same period last year.

“The season began late, but arrivals in July and August were unusually good, so we can be satisfied with the results so far,” Montenegro’s Tourism Minister Predrag Nenezić told Reuters.

The upturn is very important progress for such a small economy where almost 27 percent of the GDP comes directly or indirectly from tourism.

Photo: Dreamstime

“These tenants came from a range of business sectors including finance and insurance, engineering, architecture and construction, IT, media and publishing, and retailing. Among the companies seeking space were Findomestic Bank, KBC Securities, Meridian Balkans, SunGard, Reuters, Benetton, and others.”

Local and foreign government institutions and embassies were also active players in the market, Colliers International adds.

Luxury remains

The tourism boom Montenegro began to enjoy in 2008 is closely connected to the number of investors that flooded the country and scooped up coastal properties, fuelling a building frenzy.

However, many ambitious tourism projects have since stalled.

During the golden pre-crisis years, apartments in Montenegro were sold for as much as EUR 5,000 per square metre, with land fetching between EUR 350 to EUR 600 per square meter. This year, prices as well as the number of transactions are down 30 percent compared to that period.

Despite falling prices, sales are still slow and there are currently some 10,000 apartments of different sizes which remain unsold even though they are very competitively priced. Most are in Budva (about 4,500 dwellings).

Interest in the development of luxurious properties is not completely waning, however. In Ulcinj an Egyptian-Swiss consortium plans to build an exclusive tourist resort. Preparations for a preliminary design for the island of Sveti Marko are also under way, where a Russian company plans to build tourist resort with luxury apartments next year. The proposal includes a hotel with a capacity of 60 luxury rooms and suites, restaurants and support facilities, 100 luxurious bungalows, support services, business and commercial premises and facilities, and fitness spa.

Knock on effect: locals hope that the increasing numbers of tourists will help push the real estate market

Business is slow

When it comes to business premises, Montenegro is suffering the same torments as other countries in the region. Due to the global economic crisis, many commercial developments did not evolve as planned so most foreign investors withdrew from the sector, returning to their home country and leaving property empty. Real estate agencies say that office space was more easily sold in 1999 when the country was bombed by NATO than it is today.

In order to get the real estate market back to the desired level, experts argue it will be necessary to simplify the procedure of obtaining usage permits. At a recent

forum organised by the American Chamber of Commerce in Montenegro, participants argued that the Montenegrin government, state institutions and municipalities must continue to enhance their own capacity to work with investors. It was suggested that the country should consider introducing incentives to continue to attract substantial investment in the area of real estate.

The development of the property market in Montenegro will continue to be vital for attracting investments and thus will affect the growth of the economy, the AmCham forum concluded.

Locals will hope the high tourist numbers will speed up the return of foreign investors.

October 2011

44

Cars

Philanthropy

news The Mustangs are Coming!

Wellness

Following the idea of crowd funding, a Slovene enthusiast has decided to renew and import 49 vintage Ford Mustangs (1964-69).

The business model lets anyone invest, with an initial 100 EUR buying at least a share and making the investor part of a potentially growing business. The share is also an entry fee also for those who intend to buy a Mustang. The project, 49Mustang.com, is among the first of its kind in Slovenia.

Turkish Airlift

A Slovenian non-governmental humanitarian organisation has launched a new project to help the inhabitants of a slum village in Uganda. Slovene Philanthropy – Association for Promotion of Voluntary Work will be helping women and children to help themselves, focusing on improving living conditions and so making it easier to deal with poverty, AIDS, teenage pregnancy and single motherhood. The Sunny Skies project is being strongly supported

by Turkish Airlines, which will provide the transport to Uganda.

Along the three crafts route

Wine

As a part of their »Green for events« programme, the Sava Hoteli Bled company has developed a range of teambuilding programmes with sustainable components. One of the programmes, called “Along the three crafts route”, takes participants into the small village of Gorje in the vicinity of Bled, where they get acquainted with village life and try local delicacies. The programme includes a visit to a 300-year old estate with fruit drying and schnapps distilling huts, which have been maintained since the times of Maria Theresa, and a stop at a castle mill and cellar dating back to Roman times.

And the Wine-ners are…

Wine lovers were once again intrigued at the beginning of September as the Salon of Decanter Award Winners were announced. And there was one big victory for Slovenia.

Five years ago, Belvin Wine School initiated an event dedicated to state-of-the art winemaking. The first Salon of Decanter Awards was a small gathering of just thirteen winemakers but was the seed from which an important event has grown. And just as the event has grown, so too has the success of Slovenian winemakers in the eyes of Decanter magazine, the undisputed judge of wine standards.

On the first Wednesday of September the magazine announces its international trophies. A few days later, the Salon forwards the message to curious Slovene wine lovers. This year the list featured around 100 wines, a quarter of them from abroad. All can now be declared a Decanter medal winner.

According to wine expert and Decanter judge Robert Gorjak, this year’s event was a bit smaller due to the early start of grape-picking season. The same is true for the number of Decanter medals among Slovenian wines, despite more samples having been sent for evaluation. 2010 was among the most difficult wine harvest years in the last two decades. Even so there was one great success.

Beside a number of regional Decanter awards, this year for first time Slovenia won an international trophy: Dveri Pax Šipon 2009.

In general positive trends can be observed in building up authentic Slovene regional varieties such as Pinela, Zelen or Šipon. As for general trends in wine styles, Gorjak finds that the most prestigious wines have calmed down and became more subtle and fine in their taste.

The Slovenia Times

CULTURE 45

CINEMA SPECIAL

The Spirit of Goldenhorn 80 years have passed since Slovenes have been able to see their first feature film - The Realm of the Goldenhorn. After all these years, the body of work produced by the Slovenian film industry consists of more than 200 feature films.

By Uroš Lebar

F

or decades it was a subset of the much larger Yugoslavian cinema industry, so it can only be regarded as being totally autonomous from the eighties onwards. Instead of a history of the different genres and opuses, it might make more sense to discuss individual films that placed Slovenian cinematography in a diachronous and fragmented cultural context between the cultural and commercial film. For about forty years, it has been based on continuous tensions between socialist ideology and modern European culture on one hand and a dissident-like attitude towards the repressive political system and aesthetic uniformity on the other.

It could be said that Slovenian film production has often been in the shadows of literature and theatre production, which were seen as the traditional cornerstones of national identity. Therefore it is not surprising that there are many

films based on literary works and that their aesthetics have been under the strong influence of the theatre.

climb Slovenia’s highest mountain Triglav, which plays an important role in national mythology.

The Early Years

Nationalist themes also prevailed in the first movies after the Second World War, when films had strong revolutionary and propaganda characteristics. During the socialist period, which lasted for next forty years – until the decay of Yugoslavia, movie production was almost entirely subsidized by the state and for a long time also controlled and regulated by it.

This was also reflected in the selection of topics, most noticeably in the early years after the war, when movies were entirely dedicated to the national liberation struggle during the Second World War. The first movie of that period, which was also the first feature film with sound; On Our Own

At the beginning of thirties, towards the end of the silent film era, there wasn’t a cinematographic network in Slovenia. Therefore, the movies of that period all came about through the initiative of private individuals. Short documentaries, which usually followed the pattern of Lumiere’s silent film, were the vogue. The same could also be said for the first full-length movies of that time called In the Realm of the Goldenhorn) by Janko Ravnik and The Slopes of Triglav by Ferdo Delak, both produced in 1931. Those movies were documentary dramas and focused more on the photography than on the narrative structure or camera movements. They both centre on a group of climbers about to

Reflections of War

Land in 1948 established the “partisan film” as a sub-genre of the war film.

The director of the film, France Štiglic, was the most prolific producer of feature films in Slovenia.

His most famous works that were centred on war themes are Trieste, Don’t Cry, Peter and Dolina miru The Valley of Peace, for which a black American John Kitzmiller won the best actor award at the Cannes film festival.

Different thematic approaches were taken towards partisan films. The socialist realistic aesthetic was not felt as much in Slovenian films as it was in other socialist states. There were no black or white portrayals or epic spectacles in Slovenian films.

Right from the beginning, it tried to escape from naïve idealizations and demagogic simplifications of the national liberation fight to continued on page 46 October 2011

46 CULTURE Later the intimate experiences of individuals were often used to criticize the war and the revolution, which is probably most clearly seen in the movie Farewell Until the Next War, which was made in the early eighties.

Comedy, literature and a Brave Young Boy

The Valley of Peace continued from page 45

more specific themes such as the destiny of concentration camp internees, dissidents and Jews.

The role of the collective struggle was soon replaced by individual destinies, propaganda was replaced by more existential themes.

One such film from the early sixties is Action, in which the po-

litical liberation action is more about existential quandary, full of doubt, weakness and the melancholy of the individuals rather than the homogenous collective thing. The movie The Ballad of the Trumpet and the Cloud takes the viewer even further – the main character lives in the cleft between the real and virtual world of his hallucinations.

During the fifties, Slovenian films developed the main characteristics that defined them during the decades that followed.

Besides the war and post-war dramas that still prevailed, there were also comedies and movies based on works of literature. Children’s movies and bourgeois dramas were also relatively frequent genres.

Even though it was still the era of the classical partisan film, it soon became clear that audiences were demanding films with more contemporary themes.

The first youth comedy Vesna, a pleasant story of three youngsters falling in love, also became the first real hit movie. It brought more peo-

ple to the cinema that any Slovenian film had done before (approx.

100,000) and its Czech director, František Čap, also produced the sequel, Don’t Whisper.

Then the time has come to translate the national literature classics into the film language. The reasons, apart from the country’s rich cultural tradition, was also the lack of original scripts and the aping of a worldwide trend.

Another reason for taking stories from Slovenian books was as a way out from beneath the political dictates of the time into the critical position towards uniformity and idealistic comprehension, something that already existed in recognized literature. Parvenus is a good example of that and was the first movie made that was based upon a literary work. While it focuses on Slovenia’s bourgeoisie at the beginning of the 20th century, it had strong indirect implications for the time in which it was made - the fifties.

Some of these films accurately followed the original story: Blossoms in Autumn, Idealist and the

Partisan film

The Air Trembles as if the Sky is on Fire The partisan movie is known to be the only authentic film sub-genre of the former Yugoslavia, serving not only an entertainment purpose but also a key role in the maintenance of the country’s ideology.

By Jaka Terpinc

T

he story of the World War II “national liberation” struggle was a firm ideological basis for a country known as the Socialist Federative Republic of Yugoslavia – a state where Slovenes spent 45 years of their history, a history which is also the one of filmmaking. A rich history indeed but there’s one type of

film inevitably linked to the faith in a federal country: the partisan movie.

The eternal battle of Partisan versus German comes in many genres and flavours, from existential drama to adrenaline action.

The most notable however were the historical spectacles, the most famous of them the Oscar nomi-

nated Battle of Neretva. In a way, partisan films always reflected global trends: the massive, spectacular Neretva by director Veljko Bulajić corresponds to the era of Hollywood WWII epics and biblical spectacles. It all made sense – in a country where traditional religion was denied a state forming role, the partisan myth made it to the screen with a similar ideological mission.

Brynner, Welles... and Picasso

The Battle of Neretva: Courage and sacrifice The Slovenia Times

As a 2009 documentary by Igor Stoimenov reveals, the shooting of Neretva was no less epic than the battle itself. It featured thousands of extras, multi-million budgets, tons of military hardware (blown up) and, on top of all that, a bridge over Neretva built next to the original one just to take it down again. Imagine shooting Lord of the Rings without CGI and you’ve

understood the process this film involved. The cast united the domestic elite with international stars like Yul Brynner, Orson Welles and Russian Sergei Bondarchuk. The film poster motif was created by none other than Pablo Picasso, who reportedly took on the job almost pro-bono, demanding only a crate of good wine as payment.

With President Tito a film buff and Yugoslavia sufficiently open to the west, Hollywood stars were always welcome. In Sutjeska, a sequel to Battle of Neretva, Tito himself was one of the main characters.

The only one who could fill his shoes was superstar – and troublesome alcoholic – Richard Burton.

From epics to westerns

The epic period ended with the nineteen-seventies as the partisan

CULTURE 47 Literary works also had a strong influence on children’s films. From about a dozen produced, six were based upon works of literature.

The three movies based upon the alpine tales by Josip Vandot undoubtedly deserve special mention. The legendary movies – Kekec, Good Luck Kekec and Kekčeve ukane Kekec’s Tricks – had a huge following and have been screened on all five continents. In contrast to most screen adaptations, this film created huge interest in the books and after the premiere of Kekec more books about the brave boy were published than ever before.

Flying in the Face of Authority

Vesna: Young and in love... in 1953

Tenth Brother, which are all works based on three of Slovenia’s most recognized classics (in this case Ivan Tavčar, Ivan Cankar and Josip Jurčič).

However, most of the players and directors interpreted literary works more liberally. Probably the most unconventional screen adap-

film got a new inspiration in the form of spaghetti westerns. The idea of collective sacrifice was abandoned and the focus placed firmly on just one action hero.

Said hero was typically played

by Velimir Bata Živojinović. In 1972’s Walter Defends Sarajevo

by Hajrudin Krvavac, Živojinović shoot 186 Germans himself. Walter went down in history not just for the body count but also as the most viewed foreign film ever – in China.

Ultimately, the partisan film is reflected in dozens of titles, some of which have grown into cult movies and others which have been more or less forgotten.

They definitely reflect the times in which they were made. A closer look at Krvavac’s last big film, 1979’s Partisan Squadron, loosely based on the story of actual first air force unit, reveals a pretty clear similarity to Star Wars.

TV too

Television in Yugoslavia might have been a decade behind the

tation of a classic Slovenian novel is the movie On the Hill of Desire.

The director Vojko Duletič applied specific aesthetic forms such as replacing the words with silent images, freezing and holding images, repeating gestures and actions, etc. and thus gave the film a distinctive authorial note.

west in certain aspects but the overwhelming partisan topic took on a major role there as well.

Written-off Heroes, a 13 episode series focusing on young Belgrade underground fighters taking on the Nazis, was an instant hit in 1974. Its popularity was such was that the show soon returned for another series. Serbian national TV has since aired nine reruns. The most recent was earlier this year and still drew enviable ratings.

It seems then that the partisan film has long outlived its era and underpinning ideology. The people have distanced themselves from these myths long ago, and the propagandist element has became a matter of irony. Yet these films and series keep being successfully aired on the networks and sold on DVD. Whether this is due to nostalgia or real artistic value it is too early to tell but it obviously still feels good to watch Partisans and Germans chasing each other through the forests of what used to be called Yugoslavia.

Directors Boštjan Hladnik and then Matjaž Klopčič, introduced modernism to the Slovenian film industry in the sixties. They not only brought a more authorial approach to their films but also connected them with contemporary European genres. Hladnik’s tragic expressionist drama, Dance in the Rain, was the herald of this new period. After that he made The Castle of Sand in this newwave manner. Five years later he surprised audiences with an artistic pop comedy about the sexual revolution called The Shout of the Sun. His films were often censored due to their freethinking, immorality and promiscuity. Masquerade is probably the most notable example of this and the movie was banned for a long time. Klopčič, the other modernist, asserted himself with refined aesthetics and art in the movies On the Run) and On Wings of Paper.

With the sixties came a wave of films that were focused on social criticism. While the movie The Feast expressed this through the nostalgia of the wartime that had passed away, The Minute for Murder showed it through the obscenity of post-war power. The

The story of a best friend for the generations to come: Sreča na Vrvici. Directly translated as Happiness on the leash; international title Hang on, Doggy!

criticism became more obvious in the movies Don’t Come Back the Same Way and Toughs from the Castle, where despair defined the individuals.

Pulling down the taboos of the socio-political reality continued into the seventies with the arrival of the Serbian director Živojin Pavlović, who brought the socalled ‘black wave’ to Slovenian film. The most notable film of this era, which also won the best film award at the Pula film festival, was Red Spikes, which clearly showed the ideological primitivism of forced collectivization and its brutal and cruel consequences.

From Popularity to Crisis

The seventies were a period in which the filming of literary works became widespread. These were mainly adaptations of the classics from Slovenian literature.

There were, however, two noteworthy exceptions, one based on a children’s book and another on a contemporary novel. Hang On, Doggy, a children’s comedy about the restrictions of life in urban continued on page 48

Walter takes no prisoners.

The new wave: Dance in the Rain October 2011

48 CULTURE continued from page 47

surroundings, was very popular.

Real Pests, a farcical comedy set in a suburban environment, was released at around the same time and went on to become one of biggest hits.

The next decade brought very few hits to the cinema, with some notable exceptions like the grotesque fantasy-comedy about the struggle for the power called Butnskala (Bumpstone) made by Franci Slak. While in this movie the terror of totalitarianism was still allegorical, it became much more concrete in the movie The Felons. It was set in the early fifties, as the former Yugoslavia turned its back on the Soviets causing the “informbiro” crisis, and it demonstrates the absurdity and paranoia generated by the crisis - in this instance by the Soviet informers and sympathisers.

The adaptation of people to the changing social and political circumstances in fifties was the focus of many other movies in the eighties including Red Boogie by Karpo Godina.

Slak and Godina became recognized for their unconventional film expression. Godina, with an ironically nostalgic narrative about an avant-garde movement, called The Raft of Medusa, which

Red boogie: The motherland doesn’t rebuild itself on jazz.

some critics consider to be one of Yugoslavia’s best movies and Slak with a drama centred on juvenile forlornness The Time of the Crisis.

The main character in this films personalizes the crisis that actually confronted Slovenian film production in the eighties and clearly shows its alienation from the audience.

Shortly before Slovenia’s independence its main production company, Viba film, was closed down. In its thirty years of existence it produced more than ninety films. However, there were still some small-scale producers who had been operating since the sev-

enties and many more who started in the eighties. Then along came the last film made in the socialist era, Grandma Goes South. It was also the sole hit from the early nineties and drew huge crowds to the cinema.

Contemporary Film

The alienation of Slovenian film continued until the middle of the nineties and it seemed that audiences had totally forgotten about domestic movies. Then Outsider was released in 1996 and the nostalgic drama about life’s conflicts set around the punk subculture of the eighties became the biggest hit for twenty years. It won two international awards – the Bronze Palm in Valencia and the best male actor in Cairo – as well as the Audience Award in Portorož and influenced many subsequent movies. It presented the traumatic and tragic story in a very light, attractive and dynamic way, something that seemed to be missing in previous films and that became characteristic of other hit movies afterwards – Stereotip (Stereotype) and Porno film.

There have been many films made on very low budgets in the past decade, the most notable amongst them are two award-win-

ning movies with specific black and white aesthetics; Idle Running and Bread and Milk. The latter, made by Jan Cvitkovič, which outlines the problematic psychological situation confronting a family living on the bottom rung of the social ladder, developed a very high profile. It won the Golden Lion award at the Venice film festival; the most prestigious prize ever won by a Slovenian film.

Low-budget movies arrived along with digital technology.

The most successful of them, The Last Supper, portrayed two marginalized lunatics unable to adjust to society. Marginal and social themes are otherwise well represented in contemporary Slovenian films, especially recently. Two examples are this year’s melancholic drama about resigned lives, The Suburb as well as the popular Cheese and Jam, which highlights the ambivalence shown towards ex-Yugoslavian citizens. Its director and leading man, Branko Ðurić, also had a role in another international hit, No Man’s Land, which was a part-Slovenian production. Amongst many other awards, it won an Oscar for the best foreign film in 2002 and the award for best screenplay at the Cannes festival.

A popular title from 2008 Rooster’s Breakfast was a huge success for many reasons - at least two have a name. It’s Severina, the notorious Croatian pop star, who made an appearance there and Feri Lainšček, a best-selling author with a couple of films owing to his books. Moreover, one of them called Shanghai is currently being shot in East Slovenia. Roosters’ Breakfast topped the box office for two years, until a Going Our Way hit the theatres last year to become the most viewed Slovenian film ever. This adolescent comedy sets the story back to where Slovenian film legends are born: to the iconic Alpine world – the realm of Kekec and Goldenhorn.

Bosnian Academy award winner No man’s land - as close to the Oscar as we got.

The Slovenia Times

CULTURE 49

Cinema theatres

A New Wave for Cinemas From single screens Cinemas to multiplex centers located outside the city, cinema life in Ljubljana has gone through a complete metamorphosis in the last decades. With the re-opening of Kino Komuna, it seems that tendency has changed its path again.

By Marion Foucart

I

n 1907, Ljubljana’s first permanent cinema, Kinematograf Edison, opened its doors to customers and was quickly followed by another cinema named Elektro - radiograf Ideal, that will later become named Kino Komuna. After the World War II, when film industry started to flourish, Ljubljana’s cinema story is attached to year 1947 in which Ljubljanski Kinematografi (Ljubljana Cinematographic Company) was founded.

Newly established company has since overtaken the responsibility of regulating distribution and screening of the films in the capital. It was a humble start with just three cinema halls. None of those three initial halls does exist today. The company had a wide range of interests; from showing artistic movies to propaganda trailers and films showed on the glass screen. Slowly, a number of new theatres were included in its network such as: Union, Vič, Šiška, Mojca, Triglav, Mini Union, Kompas… Until 1976, company had in its portfolio eleven cinema halls, scattered around different parts of the city.

newly opened shopping mall complex BTC. This is where consequently, in the spring of 2001, company opened Kolosej, the first multiplex cinema in Slovenia. After its opening, Ljubljanski Kinematografi narrowed its focus over to only one of the two basic tasks of the company - distribution of films - Kolosej became primarily an exhibition company.

There are probably more reasons why Ljubljana found itself suddenly without cinemas in the centre of the city. One of the reasons is surely the ownership nexus relating to different buildings hosting cinema halls. Cinemagoers sadly remember the day when one of the most historical movie houses, the Union, was torn down to accommodate the new Union Hotel Ballroom. But the other part of the story is maybe connected with the fact that Ljubljanski Kinematografi became the official distributer for one of the US major

From the centre into the suburbs

In the nineties, the ownership structure, like in many other Slovenian’s companies, changed from a state owned to privately held ownership rights. But what was even more important is that the change of the ownership model resulted in the closing of the city’s centre hall and migration of the city life from the city centre into its suburbs, or more closely the

Kino Dvor, where the art film has taken shelter.

companies, Warner Bros, which dictates very strict commercial strategy. This surely increased its interests for opening multiplex cinema centres in the outskirts of Ljubljana.

A new wave of cinema demand

Ljubljana centre in the end was left with cinema hall Kinoteka, which focused on film collection of world cinema, Kinodvor, which specialised in art cinema, and Kino Vič, which was some kind of compromise between mainstream and art movies. At the moment, Ljubljanski Kinematografi, owning Kino Vič through Kolosej, decided to close it and reopen Kino Komuna, an institution that certainly had the longest cinematographic history in Ljubljana. According to Urška Umar, PR for Kolosej, the programming will be a “mix between mainstream Hollywood productions and un-

derground movies in order to satisfy the demand of city’s center viewers”. It seems that there is a new wave of cinema demand that is appearing on horizon. So the question is how the company will deal with the new challenges in demand for cinema.

For example, Kinodvor, a place where a more demanding cinema production is presented to the viewers, where the profit is not the primary goal, we can see that the main challenge of any film distributor is to attract cinema public at the different levels. As pointed out by Aliki Kalagasidu, responsible for public relations at Kinodvor, cinema has to be a “meeting point, gallery and bookshop” – all in one. “All those complement contents assure that our customers are turning back to us constantly “.

Seeing a good movie in a nice community setting seems to be the recipe adopted by the film industry to fight growth of Internet piracy, illegal downloads and other home cinemas. To be able to sustain their box office numbers, theatres have to provide services that can’t be found at the privacy of one’s home - online. Kolosej is already experimenting with this approach by offering cinematic 3D viewing. But does 3D really increase the value added of a movie? The answer is probably to be found in the reopening of cinema hall Komuna, showing us that the future of film might not be with Avatar-esque blockbusters, but with more modestly budgeted genre movies that have a built-in audience and a safer return.

October 2011

50 CULTURE

Interview: Miha Hočevar

Going His Way When Going Our Way hit Slovenian cinemas last year it quickly became the highest grossing domestic film of all time. Writer and director Miha Hočevar says he is proud of the movie’s popularity, dedicated to his own way of making films, and not too worried about what the critics think.

What is the outlook for this film abroad? Might it be shown at international festivals? Be distributed abroad?

The global promotion is under the jurisdiction of the National Film Centre. But generally the distribution philosophy in each country means that, beside Hollywood blockbusters, the country’s own domestic films go into its cinemas. In the same manner it is unlikely that a good foreign youth film would be seen in Slovenian cinemas – the Danes are famous for exceptional youth films but you can occasionally only see them, during the daytime on public TV. That’s why I don’t see some huge international fluidity for my film.

Did the success of Going Our Way come as a surprise?

A small surprise. During the process of creation, you get a feeling whether you are going to make it or not. In this case, everyone involved already felt we were dealing with a hit film when we were in pre-production.

A commercially successful Slovenian film is far from common. Many directors do quality stuff, but the financial burden overwhelms cultural considerations. Do producers like you more because of your record of commercial success?

My producer hopefully does. He has a good feeling for both artistic and commercial components, and has proven that a couple of times before with Idle Running and Porno Film. The commercial equation is simple: ticket price multiplied by the visitors. With some 200,000 viewers it is clear we are not talking big bucks, but we have managed to crawl past breakeven point and hope to earn some extra money in the future thanks to DVD sales and TV rights. The fact remains that the costs of making The Slovenia Times

a Slovenian film are insignificant compared to those involved in making a Hollywood feature.

How do other directors see your success? Does anyone mention commercialisation?

No because [the success] is not about some inexpensive, underrated thing but a quality youth film. Everyone is happy for me – the feedback has been entirely positive. Perhaps someone envies me but that is a normal, healthy thing.

Are there any recent Slovenian movies which you think have been unfairly neglected by audiences?

I think a film like Circus Fantasticus deserved a bigger audience, even though it is a very atypical film – very visual and silent. It’s too bad that its distribution was limited to the network of art cinemas, where you cannot harvest big audience numbers. Generally I consider Slovenian films successful. In 20 years of independence we have produced a number of films that can compete with the top Hollywood blockbusters in terms of Slovenian viewers.

Many argue that the leading role of Jurij Zrnec, Slovenia’s most popular comedian, played a big part in the success of Going Our Way. Do you think the film would have been as successful without him?

We have many good actors, comedians as well, but he is outstanding and unique. I wrote the script with him in mind. We agreed to work together on this project in the very early stages.

He could of course be replaced by someone else. I’m aware that the number of people who have seen the film owes much to him, but not to him only – the kids became very popular too.

The film might have been a massive hit with its audience but it didn’t become a critics’ darling… Does that bother you?

The critics aren’t darlings of mine neither so, no, I’m not bothered by that. We have grown these attitudes long ago but it does still hurt a little, mostly because the reviews can be sloppy and miss the essence. The critics were actually wrong – some predicted a commercial flop!

Actors in your films are mostly young amateurs. Your debut Jebiga also had an interesting cast: no known actors, the actors sort of play themselves. Is there a difference between working with amateurs and working with professionals?

A professional is better prepared and knows the difficulty of entire process. She or he has experience and a certain craftiness which can help build a role. A professional needs fewer instructions. He or she is used to repetition and can get better through it, while an amateur slowly loses energy and you need to get the best out him or her as quickly as possible.

Some claim that the Ljubljana Film, Theatre and TV Academy may not be the best training for film actors, who find it hard to switch between the stage and the camera…

I think it’s a rather incompetent statement. It’s a case specific phenomenon – there are stage actors who have made exceptional performances on film and manage both media and then there are some exceptional stage performers who never make it to the big screen. This is a problem of a director as well. They all might initially be a bit stiff and until they fully embrace the ways of a camera close up: the logic of less is more. Some do it with more feeling, others with less. Script is

CULTURE 51 also a factor – if I do a theatrical text, which sounds theatrical, the effect on film would be just like that.

Youth film appears to be your speciality. What is it that appeals about this area and how do your explain your success in it?

There’s not much thinking about who the target audience is.

I simply make it the way I like it, and apparently I don’t underestimate the young viewer, so the film turns out to be comprehensible for them and doesn’t reflect my age of 48. There must be something about my sincerity and humour.

Actually these films appeal to the older generation as well.

Slovene film classics are almost exclusively youth films: Kekec, Vesna, Hang on Doggy…

Is it all about timeless topics or is there another element?

If you like something in your childhood, it will follow you for the rest of your life. And many memories are linked to the cinema. First you go with your parents, then all of a sudden the time comes to go with friends instead, then with a girlfriend, then you are taking your child or grandchild to watch a film. The young audience is actually a pretty wide one, it is not so specialised. They are not interesting in viewing a particular filmmaker’s obsession or a problem. In general they are grateful for a relaxed, humorous film.

Take the black and white classic Kekec – archaic as it seems it still attracts new viewers.

Perhaps there’s the language factor. Most of the production we see daily is in English. Progress has been made with synchronising animated features, but still...

The characters in Kekec seem domestic, so is the landscape. There’s also that special momentum with the iconic alpine scenery, the landmarks that are actually national symbols.

Time for a remake of Kekec?

Filmmakers are considering these ideas, but I see no point in going back in time. I did that in a way by isolating people from the urban environment, sending them to the nature via the scouts but retaining modern gadgets. I don’t know why we should go back a century to revive some shepherd traditions.

What comes next?

Soon after the premiere we an nounced a sequel to Going Our Way. It is a promise to our audience. Hopefully the project gets confirmed by the Film Centre soon so we can begin auditions.

Column

Time for the Next Generation of Filmmakers Slovenian filmmaking has come a long way in the twenty years since independence. Yet there’s still much further to go, argues film critic and essayist Gorazd Trušnovec.

T

he history of Slovenian film did not begin with the country’s independence. As a national cinematography, Slovenia already existed even when the nation itself was part of Yugoslavia.

In fact, the year of independence brought with it a great shock to the film industry – the bankruptcy of Viba film, which had operated as sort of a national studio or production service during the socialist years. Frankly, its days had long looked numbered.

During the nineteen eighties films came out only sporadically and those that they did arrive were greeted with a lukewarm reception from critics and audiences alike.

Nonetheless, when Viba’s bitter end finally came an uncertain situation became even more so. It took three years of persistence from those working in the industry for a national film fund to be established which, by providing budget sponsored funds, finally institutionalised support for cinematography. It was a move which put the responsibility for the realisation of film projects firmly on the shoulders of independent producers. Independent, yet dependent on the fund which backed 78 projects from its establishment up until 2010.

That’s a figure which becomes even more powerful when put into context. Over the sixty years which separate the release of Slovenia’s first feature (In the Realm of Goldhorn, 1931) and the launch of its first feature as an independent country (Grandma Goes South, 1991), 122 features were made. Yet in the twenty years since independence, 83 films have reached the screen – nearly half of them directorial debuts.

The nineties introduced a young generation of creators, all of whom have systematically implemented the elements which Grandma Goes South proved to be important. It’s a relatively straightforward recipe for success, according to one of the most influential Slovenian film producers. “Slovenes don’t ask much from their films – only some story, a bit of emotion and a handful of laughs,” argues Marcel Štefančič Jr. “If a film ignores these basic demands, they don’t come.”

For the twentieth anniversary of independence, the magazine I edit asked critics to name their favourite Slovenian films made post-1991. Strikingly, the top five consisted of three debuts: Bread and Milk (2001, Jan Cvitkovič), V leru (1998, Janez Burger) and Ekspres, ekspres (1997, Igor Šterk). All have followed the formula for a successful Slovenian film: all managed to combine positive critical feedback with large audiences and also bagged a number of international awards. In the case of Bread and Milk, its director took home the Golden Lion of the Future at Venice. All are in the list of the sixteen Slovenian films which have received an international release.

Nevertheless, two decades after Slovenia gained independence, its film industry remains trapped between two main obstacles. First: while there is now state funding for cinematography, it is limited.

Second: Slovenes just aren’t going to the cinema as

much as they once did. And, when they do, it often isn’t to see Slovenian movies.

The biggest ever domestic box office smash, Going Our Way (2010, Miha Hočevar) is a notable exception. It drew 205,000 Slovenes to the cinema (one in ten of the population) and was beaten only in the popularity stakes by Hollywood juggernaut Avatar.

The others in the top three by viewers are Cheese and Jam (Branko Đurić, 2003) and Rooster’s Breakfast (Marko Naberšnik, 2007).

It is surely no coincidence that both Hočevar’s and Naberšnik’s films starred established television stars. The recognition helped drived success.

But this highlights another problem with the industry: this is a nation without established modern film stars. And with just five features being made a year, only a very limited number of actors are getting the chance to become experienced in acting for the big screen.

It seems as if our filmmakers would be ashamed of thrillers, horror stories, comedies or war films.

None of this, however, justifies the chronic shortage of Slovenian filmmakers willing to take on a non-traditional genre. They also steer clear of animation, and of films aimed at children. And contemporary Slovenian cinematography has avoided confronting the more daring and radical issues of social transition. This is partially conditioned by production situations, where a costume drama – for instance – would represent a huge logistical effort.

Just as the country itself stands as a crossroads, so too does Slovenian film. The “revival” generation is now entering middle age and has in any case already demonstrated its reach. We now eagerly await a new generation; one which has known nothing but an independent Slovenia and one which might just be willing to create a fresh wave of Slovenian cinematography.

Gorazd Trušnovec is a film critic and essayist whose work has been published extensively in national magazines. For the last two years he has served as editor-inchief of film and television magazine Ekran.

October 2011

52 PEOPLE

Demeter Bitenc, film actor

Never Say No to Film Demeter Bitenc is an actor with over 200 film titles on his resume. His life story is not only the tale of the many roles he has performed but also the story of cinematography from the Second World War onwards. Even at the age of 89 this is a man who never fails to impress.

By Jaka Terpinc

W

ith its miniature size and resulting miniature film production, Slovenia could never afford itself true film actors. Generally speaking, it was all about theatre actors who were occasionally hired by filmmakers. However there’s one important honourable exception – a man who has built an enviable international career as a film actor.

Demeter Bitenc, born in 1922, divided his youth between Ljubljana and Planica, where his parents moved to run a tourist business.

From an early age he developed a passion for sports – specifically tennis, skiing and climbing.

Back then, participation in winter sports was limited to the elite.

After Planica gained world fame with constantly improving world records in ski jumps, more and more of the nobility went there to relax. In this environment young Demeter came across many opportunities to develop both his social and his language skills.

Among others exciting opportunities, he had the chance to offer ski lessons to Serbian Prince Peter Karadjordjevic. He recalls that The Slovenia Times

his mother went to great efforts to make her son look decent among these members of high society and the result was that he quickly developed a sense for fashion and style, reflected in a sort of flamboyance that remains his personal trademark.

He developed his other passion at a very early age too. Never one for remembering movie titles, Bitenc can’t now recall the name of the first film he saw. But a few scenes from a silent Tolstoi’s Hadji Murat made an unforgettable impression on him while Pat & Patachon were responsible for a good laugh.

When he returned to Ljubljana as a high school student in the nineteen-thirties, film moved from passion into obsession. Kino Ideal (today’s Komuna) or Kino Moste with their double bill deals were his territory. “In the 3rd grade year I saw 130 films, and as a consequence failed a year at school,” he remembers with a chuckle.

Little wonder that he soon developed an ambition to devote himself to acting. He took lessons from Slavko Jan, a legendary theatre director, to be ready to

make his first stage appearance in Ibsen’s Vikings of Helgeland at Ljubljana’s Drama theatre. The year was 1943. He went on to play some 80 roles in the theatre, most of them in the period before he met the film camera. That fateful moment came with the 1958 wartime classic Good Old Piano.

As he would many times again, Bitenc played a SS officer.

But the real turning point for his career came in 1960, when a German producer hired him for a small appearance for a film. Then an actor designated for a much more visible role in the same production dropped out two days prior to shooting and Bitenc was asked to replace him. The successful performance resulted in a contract for another three films for the same producer. Essentially, he had been discovered and things began to open up with incoming offers by filmmakers from Italy to the United States. Despite the tense postwar situation, the political situation didn’t impose many limits on him: “Yes there were procedures involved in obtaining passports or visas. But outside I had no problems caused by being Slovene. Over here, yes, a few, but they were more or less related to the envy of other actors.

As a colleague of mine admitted [the problem was that] I was making money – the others weren’t.”

Indeed Bitenc has spared himself the hard life of many Slovene actors, firstly because he overcame the small production scale of his

home country and secondly because he managed to get into the freelance business: “A few of my colleagues attempted the same, only to safely return to regular theatre employment after a while,” he remembers.

Burt in spaghetti western Starblack

Rabaneck in The Saracens

Camera sees everything

Bitenc has returned to the stage a few times since 1960, as “excursions out of curiosity to explore the relationship between theatre and film”. He sees acting like athletics: “You cannot make a sprinter run a marathon well and vice versa. In theatre you are actually cheating the public, while in film you cannot. You cannot lie to a camera. It sees everything… As such it is a strange thing. It’s an adventure. It’s a snobbism. It’s an industry. Or even a Mafia.”

Yet there’s another important element Bitenc says is specific to film: contrary to theatre it is international, cosmopolitan. Speculating on film as an art or craft, he doesn’t want to end up in philosophical debates: “I have always seen it as an occupation. Everyone decides on his own one, and so did I. Film allowed me a better life. So I take every role simply as a job that needs to be done. If you do it better than just a job – it becomes great. If less than that – you fail.

But regardless of whether a film is good or bad it’s up to you to do make the best of your role. Nothing should be below you if you working in film.” He particularly admires the late French actor Jean

PEOPLE 53 Gabin: “He was always different at the end of the film from the beginning and yet he did nothing.

He simply was.”

Bitenc has never hidden his excitement at the freedom he earned through film acting. “In theatre you are always manipulated by the management,” he claims. “My colleagues ended up a little embittered, with unrealised ambition.

In theatre you wait and wait for a role you think is meant for you, while in film you avoid this uncertainty and wait for the offer.”

The Golden Years

Asked which to name the best period in his career, he quickly points to the nineteen-sixties.

“Films took longer to shoot, actors had a few days of between shootings, leaving time for relationships to develop,” he remembers. “You had ten days of shooting, but you lived in Rome for two months. After that period television rushed in and took over Bproduction. It was an uncertain time. The Winds of War was the most expensive television project to date costing 192 million dollars.

At that period, there was no time anymore. For six months ahead everything was scheduled by the hour. Time shrunk by a half.” The Winds of War indeed was the biggest project involving Bitenc playing the German Ambassador to Lisbon.

During the ’golden age’ he appeared in many co-production features filmed all over the world.

He was nothing if not versatile.

The knowledge of languages he built up during childhood paid off, leaving him able to speak Serbo-Croatian, German, English, Italian and French. “Americans were asking for English with German accent. I also had a few lines in Chinese, playing an 18th century Jesuit officer in a German TV series. The extras in that series were Chinese students and we had fun learning to say it properly.” He always quick to learn any additional skills he needed

The historic role from WWII: General Von Weichs

to get roles: “An Italian producer asked me if I could ride and my answer was – ‘When do we start shooting?’ I had three months to learn and I did not hesitate to contact my stunt friends to teach me. As a consequence I became a fan of riding and this contributed greatly to my future engagement in westerns. You should never say no to a film.”

The German

For 45 of his roles he had to put on a German World War II uniform. That means that for many Slovenes, Bitenc will always be a Nazi officer. It was a character he had the opportunity to meet in person a couple of times when a young actor in occupied Ljubljana. At that time he probably had no idea he was destined to have a “brilliant career” in the German Army – he jokes he started as Obersturmbannführer and was quickly promoted to General. As well as fictional army officers, he has played many real people from history including the infamous General von Kleist. “When you put on a German military uniform it automatically gives you a certain strictness. At first Germans were portrayed as black and white. Later on the human character entered these roles,” he says about the evolution of these parts.

It is clear he has paid attention to every detail of them.

The exciting life story of Demeter Bitenc certainly covers many periods and changes in the film industry. His typical role as antagonist extended his lifespan on film he thinks. “The antagonist always changes and you don’t get bored with him, while the protagonist – especially if a lover – lives up to a certain age, and then falls out.” He had the chance to work and make friends with many great names, from Michael York, Richard Chamberlain, Peter Finch, Stewart Granger or Christopher Plummer, to Yugoslav legends such as director Veljko Bulajić and actor Bata Živojinović.

Among the Czech fans of Winnetou in May 2011. Bitenc played Dick Stone in the 1963 adaptation of Karl May’s Classic.

As for the state of the industry today, he regrets that stunning visuals are stealing attention from the actors and blames it on American sci-fi and fantasy movies. “These films are so dumb, but visually so great they just make you watch them. Before, film was more static. More demanding. In the past, a crash or explosion had a short shot of an actual mess, the rest was the reactions of characters. Today it is the opposite – it is pyrotechnics all over.” Regardless, he remains a film buff. The most recent films he recommends are Terrence Mallick’s Tree of Life and How I Ended This Summer, a recent masterpiece of Russian cinematography, which he greatly respects.

Defying Age

Having performed in so many roles, from the notorious German officers to Spanish Generals or British Commandos, asking about his favourite part becomes rather trivial. “It’s like you have 11 kids in family – you cannot neglect anyone,” he responds. “Yet now I’m beginning to realise there was not a single year without a role. From 43 up until two years ago I didn’t spend a year without some ap-

pearance in theatre or in film.”

His career might have slowed down in recent years but the same can’t be said for his personal life.

He is a dear guest of social events and widely admired by the media for his vitality at the age of 89. In good mood, charming, well dressed, with a glass of whiskey and a cigar, but most of all an excellent interlocutor. You cannot help but wonder how he maintains such a condition. Bitenc attributes it to his constant sporting activities, which even today involve trekking, cross-country skiing and cycling trips of up to 20 kilometres a day. He also mentions spending time with his much younger lady-friend: “Women are very important here and have always played an important role in my live. It is also important to keep mentally fit. I used to regularly follow fine arts exhibitions, although I may now be losing track of it with this new kind of installation art.” Occasionally, he still makes an appearance in front of a camera. “If you ask me which is my favourite role I’d say my latest – because it suggests I’m still in the industry. I never wanted to accept the fact that any film could be my last one.”

The fictional WWII: Allied Commando Corporal Bell in Operation Cross Eagles October 2011

54 EVENTS Psychedelic

Dead Man Wed 5 Oct, 10pm, Gromka, Ljubljana, EUR 8 Dead Man is a psychedelic rock band from Örebro, Sweden, formed in 2003. The band’s sound is highly influenced by 60’s and 70’s psychedelic rock/folk rock as well as other musical genres. The band was started by Kristoffer Sjödahl and Johan Rydholm. As the two jammed together a lot, they then asked Marcus Allard to join and later bass player Joakim Dimberg joined to complete the band. The band has gone through several lineup changes, but vocalist Kristoffer Sjödahl remains the only founding member left, with his distinct vocal, often compared to Shannon Honn (Blind Melon) and Chris Cornell (Soundgarden). The opening act will be The Chuhapuhas from Slovenia.

Dance

Not.All.Ways Wed 5 Oct–Thu 6 Oct, 8pm, Cankarjev dom, Ljubljana, EUR 9–12 Not.All.Ways is a dance duet performance which deals with the

Jazz

misunderstandings and errors in translation. It offers an unorthodox insight into the world of dancing and choreography, which is bound to attract people looking for something out of the ordinary in the world of dance. The realisation of this project has been funded with support from the European Commission.

Film

Jonas Hellborg & Ginger Baker Group Mon 10 Oct, 8.30pm, Narodni dom, Maribor, EUR 18–22

The Robber

attempt to escape the largest deployment of police officers in Austria’s post-war history.

Wed 5 Oct–Sun 9 Oct, 8.30pm, Cankarjev dom, Ljubljana, EUR 4.20–4.90

Alternative

The Robber is an adaptation of the eponymous novel, based on a true story. Leading a double life, the protagonist’s doppelganger is an endorphin addict pursuing the quest for total freedom. Johann Rettenberger has just returned from prison. He is a marathon runner but also a professional bank robber. He lives an official life with his girlfriend in Vienna and robs banks repeatedly throughout Austria. He is driven to stay in motion and motivated by the adrenaline effect of the robberies on his athletic body. When the authorities finally locate him, he uses his marathon skills in an

Moveknowledgement Thu 6 Oct, 9pm, Cvetličarna, Ljubljana, EUR 9–11 Moveknowledgement is a five man band from Slovenia that plays a unique fusion of hiphop, dub, rock, and electro. While focusing very hard on playing powerful live concerts they also like to experiment with sound and enjoy coming up with strange visual concepts. The band received the Slovenian Bumerang Award for the Best Live Act in 2002.

Lead vocalist N’Toko became the National Freestyle Champion of Slovenia in 2002 and 2003 and in the meantime they have toured all over Slovenia, Croatia, Bosnia and Serbia.

Jonas Hellborg and Ginger Baker played together for the first time 1985 on the now legendary Public image Ltd. recording “Album”.

Several Tours and Albums ensued.

As a rare opportunity, Ginger Baker has agreed to do this tour. Taking his unique fusion of drumming styles as the rhythmical backbone in forming groups like The Cream, Blind Faith and Airforce, he elevated the art of drumming in popular music. The Jonas Hellborg Group featuring Ginger Baker is founded on Baker’s Afrocentric

approach to rhythm, pinned down by master percussionist Abas Dodoo and made complete by one of the most spectacular guitar players on the planet, Regi Wooten and bass player Jonas Hellborg.

Rock

The Melvins Tue 11 Oct, 8pm, Cvetličarna, Ljubljana, EUR 19–24

Experimental Concert of South Indian Classical Music

SIKKIL/vocal GURUCHARAN Dr. JYOTSNA SRIKANTH/violin CHIDAMBARAM NARAYANAN/mridangam

22nd Oct 2011 at 8pm

City Museum of Ljubljana Tickets available from 3 rd Oct 2011 at City Museum of Ljubljana, Gosposka 15: 16€ in presale, 20€ on the day of the concert More information: info@gopuram.org, +386 41 335 166

www.gopuram.org

institut for vedic culture Ljubljana, Slovenia

The Slovenia Times

www.sikkilgurucharan.com

Embassy of India Ljubljana partner of the event

main sponsor

media partner

Atari Teenage Riot Fri 7 Oct, 9pm, Kino Šiška, Ljubljana, EUR 18–23 Nowadays, words like innovator are used too often. When it comes to Alec Empire, however, one finds it difficult to say anything else.

Undoubtedly years ahead of times, this extremely committed artist has been making his controversial music for more than 20 years, be it in the Atari Teenage Riot or in his solo career, yet it still sounds like nothing on earth. The pioneers of digital hardcore, Atari Teenage Riot, headed by Alec Empire, present their excellent new record “Is This Hyperreal?” which was released officially 20 June 2011, as well as their absolute stage form guarantee a full-blood concert experience.

The Melvins are an American band that formed in Montesano, Washington in 1982. In the early days of their career their dark, heavy, oppressively slow sound made them innovators of genres like sludge, grunge, and doom metal. Melvins’ music is influenced by Flipper, Black Flag’s My War-era hardcore punk and Black Sabbath-style heavy metal, but their idiosyncratic approach, bizarre sense of humour, and experimentation make neat categorization difficult. Singer/ guitarist Buzz Osborne (aka “King Buzzo”) and drummer Dale Crover are constant members while several bass guitarists have cycled through the group.

Experimental

Iva Bittová duo Tue 11 Oct, 7pm, Cankarjev dom, Ljubljana, EUR 11–14

Month of Design 2011 13. 10.–13. 11.

Ljubljana

Design expo 13.–14. 10.

Ljubljana Exhibition and Convention Centre (Slovenijales)

pRogRAmme: -----------------------------------13. 10.

10.00–17.00: Design expo 10.00–16.00: 180° stage 19.30: official opening with design award ceremony and the eat & Drink Design event 14. 10.

10.00–17.00: Design expo 10.00–16.00: international design conference 19.30: flower & fashion Design and the 4 divas concert ------------------------------------

180 º sTAge & inTeRnATionAL Design ConfeRenCe

17. 10.–13. 11.

Design in THe CiTY different venues in the city center of Ljubljana

13.–14. 10.

Admittance fees apply

Main sponsors

Media sponsors

Partners

Organizer

Zavod Big Dunajska cesta 22, 1000 Ljubljana, Slovenia T: +386 1 431 2222, F: +386 1 431 3174 info@zavodbig.si

www.monthofdesign.com

56 EVENTS Rachmaninow or Arvo Pärt have had a great impact on her music.

Slovenia Times Recommends

Billy Cobham Band Billy Cobham was first catapulted to jazz skies due to his collaboration with Miles Davis in late 1960s and 1970s (including the ground-breaking Bitches Brew), and later due to his commitment in Mahavishnu Orchestra, which was founded by John McLaughlin and acted as a founder of jazz-rock fusion.

In his prolific career, Cobham recorded over a hundred albums, both solo (including the legendary albums Total Eclipse and Spectrum) and as a collaborative musician in projects and groups of some of the most prominent authors (including: Eumir Deodato, Santana/McLaughlin, Marc Almond, Gil Evans, Randy Weston, Ray Barretto...).

His trademark style of play – quick, explosive and massive drumming – has marked international stages, festivals, symphonic orchestras, big bands, Broadway, TV and radio shows. From his early beginnings, he has also been active as workshop tutor, college teacher and symposia supervisor, transferring his master knowledge and experience to younger generations. On his current tour, Billy

Cobham presents his repertoire comprising an overview of his diverse creative periods as well as his new album “Palindrome”, which was released last year, presenting Billy’s return to the future based on refreshed sound and music collaborators.

Iva Bittová is one of the most renowned musicians to hail from the Czech Republic and has received acclaim in many countries in the world. The performance of the Iva Bittová duo is a part of the international cultural project dedicated to the promotion of Czech music – Czech Dreams 2011. It will feature Iva Bittová on vocals and violin and Vladimír Václavek on guitar.

Percossa Wed 12 Oct, 8pm, Tivoli sports hall, Ljubljana, EUR 29–49 Not just unrivalled drumming, but humour and acrobatics as well.

Having started out as punks in the streets, they have evolved into an unmatched theatre sensation: Percossa. After 10 years of blood, sweat and tears, world tours and international successes, these ‘Rebels of Rhythm’ treat their audiences to the mother of all shows. No compromises, no breather, no mercy, but an unstoppable rollercoaster of hard hits, piercing humour and acrobatic stunts, all bundled up with such theatricality it’s uncanny. Percussion is not the goal of these guys; it is a means to spur the imagination.

Pop

Leeloojamais Thu 13 Oct, 9pm, Kino Šiška, Ljubljana, EUR 13–17 The Slovenia Times

Foam Festival Sat 15 Oct, 9pm, Ljubljana Exhibition and Convention Centre, Ljubljana, EUR 29

Thu, 6 Oct 2011 at 9pm; Kino Šiška, EUR 18-20

Percussion

Electronic

LeeLooJamais first started making their mark with the release of their debut, Pod Vplivom in 2001. The pop rock formula they were playing under soon became much too restrictive for the members who were studying music all around the world. Their expanded sound came to life on their sophomore release Nextasy in 2004, adding R&B, soul and hip hop to the mix. This vibrant sound helped establish the band as one of the best live acts in Slovenia and brought them the title - The album of the year. With a strong stage presence and enticing music, LeeLooJamais are also a first rate live act.

Classical

Turquoise Thu 13 Oct, 7.30pm, Cankarjev dom, Ljubljana, EUR 6–19

Classical music in films and film scores from Harry Potter, Godfather, Titanic, Ice Age, Lord of the Rings, James Bond and others. The first part of the concert will consist of classical music compositions, written by Dukas, Tchaikovsky, Massenet, Wagner and others, which have been used in films. The second part of the concert will consist of compositions written specifically for films by such masters as John Williams, Hans Zimmer, Howard Shore and others.

Experimental

Soap&Skin with Ensemble Fri 14 Oct, 9pm, Kino Šiška, Ljubljana, EUR 13–15

Foam Festival is a spectacle with electronic music, foam, special effects, fire, dancing and a laser show. It will feature two renowned artists – David Morales and Avicii.

As a Grammy award winning DJ, producer and co-owner of Def Mix Productions; David Morales is setting trends. David hails from the street of Brooklyn, which influences his unique style behind the DJ booth as well as the studio.

It’s that style that brings guts and accessibility to his music. Tim Bergling, known professionally as Avicii, Tim Berg and Tom Hangs, is a Swedish DJ and record producer.

His single “Bromance” has charted in the top 20 on the national single charts of Belgium, the Netherlands, and his native Sweden.

Jazz

Nuška Drašček Sat 15 Oct, 8pm, Hotel Mons, Ljubljana, EUR 24 Nuška Drašček has proven herself to be quite a versatile singer, excelling at different styles, including jazz, chanson, pop and many other genres. One of the biggest rising stars of the Slovenian scene will demonstrate her talent and stage charisma at one of the most desired settings for a jazz performance in Ljubljana. At the Mons hotel, she will be joined by the Big Band of the Slovenian Radio and Television, conducted by Tadej Tomšič.

Experimental

Moon Duo Sun 16 Oct, 9pm, Menza pri koritu, Ljubljana Soap&Skin is an experimental musical project of Austrian artist Anja Plaschg. She has been playing piano since she was six. At the age of 14 she began violin studies and developed an interest in electronic music. She attended the Graz Polytechnic for Graphic Design, and in Vienna she studied art at the Academy of Fine Arts in the master class of Daniel Richter. Musicians like Xiu Xiu, Cat Power, Björk, Nico, Aphex Twin and composers like Sergej

San Francisco’s Moon Duo was formed in 2009 by Sanae Yamada

EVENTS 57 and Erik Johnson (Wooden Shjips).

Inspired initially by the legendary duo of John Coltrane and Rashied Ali, Moon Duo counts such variant groups as Silver Apples, Royal Trux, Moolah, Suicide, and Cluster as touchstones. Utilizing primarily guitar, keyboards, percussion and vocals, the duo plays space against form to create a primordial and disorienting sonic stew.

Dance

Shen Wei Dance Arts Sun 16 Oct at 6pm, and Mon 17 Oct at 7.30pm, Cankarjev dom, Ljubljana, EUR 14–28

Metal

Exhumed Tue 18 Oct, 8pm, Gala Hala, Ljubljana, EUR 20–24 Formed in 1991, when the band’s sole remaining founding member Matt Harvey was at the tender age of 15, Exhumed spent much of the ensuing decade hacking its way through numerous line-ups, demos, split CDs, and Eps. The band finally recorded their debut album, the genre-(re)defining and critic-repulsing “Gore Metal” in 1998. Known as one of the most intense live bands around, they will be joined on stage by fellow Americans Cephalic Carnage and Slovenian grind champions Dickless Tracy.

Experimental

This time, the New York-based choreographer and painter is returning with Re-I, II, III, his most resounding and, according to many dance connoisseurs, visually most arresting show. The choreographer created each show in response to his journeys in Tibet, Cambodia and China, which he experienced as the first “homecoming” after the politically motivated move to New York. The trilogy summarizes Wei’s impressions of the spirituality and visuality of three Asian countries; which he complements with the western dance and performing traditions. The ultimate value of Shen Wei’s theatre poetics is the blending of eastern and western concepts, their merging and overlaying, from which they emerge as one.

Exhibition

for the eyes and the ears also for music lovers without a particular fondness for metal.

Classical

The Sound of Southern India Sat. 22 Oct, 7 PM, City Museum Ljubljana, 16-20 EUR Young and upcoming vocal artiste from Chennai (India) Sikkil Gurucharan is about to showcase a glimpse of one of India’s two mainstream classical systems, Carnatic music, originating from south India. This will be the first of a kind event in Slovenia.

Folk

Dure-mere

Terrafolk and Simbolični orkester

Tue 18 Oct, 10.30pm, Menza pri koritu, Ljubljana, EUR 7–10

Sat 22 Oct, 7.30pm, Cankarjev dom, Ljubljana, EUR 16–28

Dure-mere let out its first cry on the night of May 16th 2005.

Abandoned at birth by its parents, the child brings itself up alone, from basements to venues and from bars to squats. Three-headed, it feeds on bandoneón, drums, strings and nameless contraptions. Sometimes it screams. As a teenager it is (un) skilfully labelled rock, noise, tango, experimental, jazz, grunge... but like any good orphan Dure-mere disowns all those adoptive parents.

Last year, the trio put out its first album Sangre, which has been very well received.

Terrafolk is known for its playful blend of world music and original compositions, written by classically trained violinist, Bojan CV, and composer of progressive rock, Mystica. Playing original music or

adaptations, the band disregards all musical constraints, and unrestrainedly delves into highly contagious musical hedonism.

Their performances are a delicious combination of southern temperament and northern orderliness, the progressive and the ancient, joy and melancholy.

For this occasion they have partnered with the Simbolični orkester (Symbolic Orchestra). The band will play a programme of original music.

Blues

Elliott Sharp’s Electric Willie Tue 25 Oct, 8.30pm, Cankarjev dom, Ljubljana, EUR 11–14 A central figure in the avant-garde and experimental music scene

Metal

Heidenfest Wed 19 Oct, 6.15pm, Cvetličarna, Ljubljana, EUR 23–28

Independent Biennale Mon 17 Oct, 8pm, Kino Šiška, Ljubljana, no admission Independent biennale is more than just a periodical event. It not only researches different fields of contemporary illustration and its usage, but also directly supports and promotes authors and co-creates visual culture in Slovenia. The Biennale supports the total independent production of its authors. This is realized in completely uncensored artwork created for the authors’ personal usage but specifically and exclusively for Independent Biennale events.

Heidenfest is a traveling metal circus of Pagan warriors. Most of the bands hail from Scandinavia, playing mostly folk metal with influences from Pagan metal as well. The biggest names of this mini festival are undoubtedly Finntroll, Turisas and Alestorm, while Arkona Trollfest and Skálmöld are slowly but surely gathering a legion of followers as well. The live performances will surely be a feast October 2011

58 EVENTS in New York City since the late 1970s, Elliott Sharp has released over eighty-five recordings ranging from blues, jazz, and orchestral music to noise, no wave rock, and techno music. He pioneered the use of a lap top computer in live performances. He is an inveterate performer, playing mainly guitar, saxophone and bass clarinet.

He comes to us on this occasion playing tribute to one of America’s blues greats – Willie Dixon.

World music

Cheikh Lô Thu 27 Oct, 9pm, Narodni dom, Maribor, EUR 12–16

Thu 27 Oct, 9pm, Jamski dvorec mansion, Postojna, EUR 14

Philips fashion week At the end of October Slovenia will finally get its very own Slovenian fashion week. The fashion event, named Philips fashion week, will host 16 Slovenian fashion designers, who will show off their talent and creations on the catwalk and convince the attendants that Slovenia boasts some world class designers. Philips fashion week is a one of a kind event not to be missed by fashion enthusiasts.

Blues

Smokin’ Joe Kubek & Bnois King

Fashion Tue 25 and Wed 26 Oct, Kino Šiška, Ljubljana

N’Dour offered to produce Lô’s debut album, Ne La Thiass.

Cheikh N’Digel Lô is a Senegalese musician. Lô began playing drums and singing at an early age. He joined Orchestre Volta Jazz, an ensemble which played Cuban and Congolese pop songs as well as traditional Burkinabé music.

By 1985 Lô was playing guitar with numerous Côte d’Ivoire and French musicians, which lead him to record material in Paris in 1987. After his band dissolved, Lô remained in Paris as a session musician, whilst developing his own sound. In 1995 Youssou

Kubek is one of those people who was born to play the guitar.

Kubek has the technique and the chops to burn up any stage and has been doing so for the past 27 years. A guitar prodigy at the age of 14, the Texas born guitar slinger frequented the Dallas bar scene during the 1970’s and early 80’s playing with Stevie Ray Vaughan and people like the three Kings, B. B., Albert and Freddie. In 1989, Kubek met guitarist/vocalist

Bnois King, who plays a more jazz influenced style and is a very soulful vocalist. More than anything else, Smokin’ Joe Kubek and Bnois King exist to perform live.

Jazz

Jean Louis Thu 27 Oct, 10.30pm, Menza pri koritu, Ljubljana, EUR 7–10 Jean Louis was founded in 2005 in Paris by two students of the jazz department of the Conservatoire National de Paris, drummer Francesco Pastacaldi and trumpet player Aymeric Avice. They teamed up with double bass player Joachim Florent and so Jean Louis was born. Their style is best described as jazz rock, with long instrumental workouts. Some of their diverse influences include Zu, Marc Ducret, Meshuggah, Melvins, Varese, Stravinsky, Zakir, Hussein, Fela Kuti, Miles Davis and Fred Frith. In 2009, Jean Louis released their debut Jean Luis.

Experimental

Us3 Thu 27 Oct, 9pm, Kino Šiška, Ljubljana, EUR 18–20 Us3 is the brainchild of Londonbased producer Geoff Wilkinson.

Formed in 1992, alongside The Slovenia Times

production partner Mel Simpson, Us3 rose from the ashes of 2 previous incarnations. The worldwide success of Us3 took everyone by surprise, and proved a point to Geoff. After several world tours with the Us3 band, Mel left for pastures new, and in 1996 Geoff set about making the follow-up. After taking a break from touring in 2008, Us3 are back in 2009 with a new album “stop. think. run” featuring 2 new American rappers, 23 year old Sene and 20 year old Brook Yung.

Metal

Neckbreaker’s Ball Wed 2 Nov, 7pm, Cvetličarna, Ljubljana, EUR 23–29 Neckbreaker’s Ball Tour is a metal feast, which includes some of the biggest names in metal, like Dark Tranquility from Sweden, Eluveitie from Switzerland, Death Angel from the USA, Varg from Germany, Mercenary from Denmark and Omnium Gatherum from Finland.

The night will be full of diverse musical offerings, from melodic death metal, thrash metal, heavy metal, Pagan metal and folk metal.

Folk

Brina, Warsaw Village Band Thu 3 Nov, 8.30pm, Kino Šiška, Ljubljana, EUR 16–19 After a five-year break, Brina, led

by Brina Vogelnik on vocals, return with their third album. “Slečena koža” is a continuation of “Pasje legende”, a rare Slovenian album released on a Slovenian label that made it to the top of specialised European charts. Thanks to the late DJ Charlie Gillett, their track Poljanska balada was played north and south of the equator, which resulted in Brina touring Spain (including performances at Womex and Expo), Mexico, Canada and the USA. Years have passed and brought a breath of fresh air to the sound of the band, which was shaped by Chris Eckman. Brina will share the stage with the Polish ethno folk band Warsaw Village Band.

SPORTS 59

Basketball

A Harsh Reality?

It is easy to say that the national basketball team’s performances at European or World Championships are by far the most emotional sporting events in Slovenia. And it is just ridiculous that the story has been the same again and again, for twenty years now: mixed feelings before the tournament, mostly struggling during it, and losing critical matches by a point or two in the dying moments.

By Simon Demšar

A

Photo:BOBO

fter tournaments, players and especially coaches are at the receiving end of harsh criticism. With the development of Internet forums, things have become even more difficult for those who read the criticism and take it to their hearts.

This was clearly seen during this year’s European championship in Lithuania, where Slovenia was struggling against traditionally non-basketball nations such as Bulgaria, Georgia, Belgium and Ukraine. Poor performances, despite wins, triggered an avalanche of negativity which clearly affected the players’ morale. The only winner from the situation was a guy called »Sosed«, whose secretly recorded comments during the match against Bulgaria received more than 150,000 hits on YouTube.

Fighting the underdogs

The preliminary round ended with four wins and a defeat against Russia with a buzzer beater. In the second round Slovenia played Greece, Macedonia and Finland. After losing against Greece and Macedonia, they won their place in the quarter finals with another hard-fought win against another »underdog«, Finland. The opponent in the quarter final was the eventual champions, Spain. The first quarter was unexpectedly good and Slovenia was leading by seven points but eventually lost 86-64. However, there was still a goal to reach – securing a spot in the Olympic qualifying tournament. In order to do

that, Slovenia should have beaten Lithuania but the team ultimately lost 80-77 in the dying moments.

They finished the tournament with a win anyway, beating Serbia for seventh place overall.

Seventh place in Europe doesn’t look that bad to an outsider. What hurt most was the performance.

While the defence was one of the best in the tournament, scoring points proved to be almost mission impossible. (Former) stars, such as Jaka Lakovič and Matjaž Smodiš are obviously past their prime, NBA star Goran Dragič failed to impress, and Erazem Lorbek was unable to repeat his

Olimpija to quench basketball thirst Basketball mania is set to return to Slovenia in late October, when Union Olimpija begins its Euroleague season. The team will play in group D against Barcelona, Siena, Unics Kazan (Russia), Polish champions Prokom and a qualifier. The team’s first match will be on October 20, against Barcelona. Last year’s Euroleague was a story of success for Olimpija, which reached the second round.

Fans rewarded the team with massive attendance and most games were sold out. There’s not much longer to wait for the regional NLB league either. Games begin on November 8, with Maccabi, one of the most successful teams in recent years, joining the competition. Other strong teams include Partizan Belgrade, Krka Novo mesto and the best Croatian team, Cibona and Cedevita.

performance of two years’ ago.

Two bright exceptions were Mirza Begić and Zoran Dragić.

Coach Božidar Maljković (left) will be the one who pays the bill in the end. He came with great expectations but didn’t make an impression.

New expectations

Coach Božidar Maljković will be the one who pays the bill in the end. He came with great expectations but didn’t make an impression. His contract is for three years (ending after the next Eurobasket which takes place in Slovenia in 2013). With most of the key players into or approaching their 30s, their participation in the national team is questionable. There is still the reserve of those who didn’t take part this time around for various reasons (Goran Dragić [my reading of the previous paragraph is that Dragič took part but wasn’t any good, whereas this seems to imply he didn’t take part at all], Saša Vujačić, Gašper Vidmar, Primož Brezec and Boštjan Nachbar) but on the other hand, there are few prospects on the horizon, at least not any that could fill the shoes of former stars. With basketball growing throughout Europe, it may become increasingly difficult to remain competitive. After a while seventh place may no longer be seen as a disappointment.

Sports

Ljubljana Marathon Sun 23 Oct, 10.30am, Streets of Ljubljana, no admission The Ljubljana Marathon is a mammoth celebration of running participated by nearly 18,000 runners from 35 countries. The Ljubljana Marathon is getting more popular every year and the number of participants is on the increase.

Also this year, competitors will be running a classical marathon (42 km), a half marathon (21 km) or various shorter recreational races.

All the races will be held within the wider city centre area.

October 2011

60

Dine

wit h St yle Smrekarjev hram Nazorjeva 2, Ljubljana T: +386 (0)1 308 19 07 smrekarjev.hram@gh-union.si www.gh-union.si Open Every day from noon till 11 p.m.

Price range daily three-course menu (incl. a glass of wine) - 20 EUR Food type Slovene with a twist

The Grand Smrekarjev Hram

Reservations recommended

After a nice long summer rest, Smrekarjev Hram has once again opened its doors. The Slovenia Times’ culinary expert Jade Van Baren was delighted to help welcome it back by sampling its exciting new menu.

When I ask Miro Rismondo what he does during the Summer, when the Hotel Grand Union’s flagship restaurant closes to make way for the outdoor hotel terrace, the head chef’s eyes sparkle and a contagious grin spreads over his face. “We make things,” he says simply. I am intrigued but soon discover exactly what he and his team have been making – their own jams, pickled vegetables and other delicacies which all now feature in the restaurant’s new menu.

To understand Chef Miro’s food, you must first understand the man behind the white coat. Proud of his heritage and his country, he sticks close to his roots, focusing on locally produced food and suppliers with old school techniques. Miro’s food is Slovenian but with a twist. It’s refined, it’s delicate and it is intelligent. The dishes and flavours are very well thought out and tested.

Miro has something that many chefs don’t have, the support of a four star hotel to help fund his creative culinary achievements.

The Autumn menu that he and his talented young team of chefs have created has something special for everyone.

Picnic with a Bear

Our first course was a trio of marinated sea bass – lightly smoked batonnet of fish tossed with orange; bass tartar with julienne of granny smith apples and finished with Buga lemon olive; and marinated bass with fennel and lemon. The sea bass was nicely presented in a trio of different cooking styles: smoked, raw and pickled. All were delicious but the shaved fennel was a favourite.

The chef also suggested that I try the bear starter. After I was assured that there are plenty of wild bear in Slovenia, I happily partook of this accomplished dish. Miro begins by lightly smoking the marinated bear loin and then submerges it to rest in olive oil. The meat is thinly sliced and served with Karst “Caveman” cheese and a cornel of luscious creamy bear pate and then finished with a tuiles of pancetta and topped with pickled cranberries. The result? Delicious. The loin was moist and delicate and half way between a carpaccio and prosciutto. The whole dish came together beautifully and it was with extreme reluctance that I agreed to share it with my dinner guest.

Luckily the next dish quickly arrived: red beetroot soup with trout eggs and goat cheese foam, served in a cognac glass.

The goat cheese foam was perfect; so subtle with the beetroot soup, the ratio was perfect. The trout eggs were equally as interesting.

My next course was a trio of beef. It was a refreshing change to have such variety in this dish. The first was marinated and braised tongue of beef served with young

last was braised beef tail confit breaded and then deep fried. I was delighted to see tongue because when it is prepared properly its absolutely gorgeous. I love the velvety texture and the delicate, subtle flavours of this cut. The braised tail of beef had a bold and rich taste to it and the contrast in textures between the crunchy layer of breadcrumbs and the runny rich compote that lay waiting inside was scrumptious.

A Sci-fi spectacle

cheese and horseradish; next to that was beef marrow served in what at first looked like the bone, but what turned out to be a hollowed out roasted potato; and the

And then to the theatrics of our dessert.

The waiter arrived with a sphere of chocolate with additional projecting shards of chocolate, all dusted in gold. It definitely had a galaxy feel about it. I then watched as he poured hot chocolate sauce on top of this galaxy and watched as the ball melted to reveal cherry compote, whipped vanilla marscapone and yet another layered chocolate ball. I knew I had to give it one more push to see what lay beneath yet another galaxy. I was not disappointed; inside was a fresh and zingy cherry sorbet. The perfect ending to a perfect meal.

And what of the ambiance? Well, the restaurant décor is fashionably nouveau. It is not a large room and provides you with an intimate dining experience – there are even private dining rooms which would be just perfect for a couple celebrating an anniversary, for instance. There is also good news for the lunch crowd. The restaurant has introduced a pri fix lunch menu – three courses with wine for EUR 20 per person. It is a great deal.

Our waiter was faultless, catering to our every need. He made some lovely suggestions on wines and was very helpful with the menu. He was there when you needed him and disappeared into the background when you didn’t – very much a professional who took great pride in his work.

It often seems that, as Summer comes to an end, there is little to celebrate. But I’ve found one thing: the reopening of the divine Smrekarjev Hram Restaurant.

Top choice

In Issue 132

Cafe Central

Grand Hotel Portorož ***** Obala 33, Portorož Tel: +386 (0) 5 692 1050 info@lifeclass.net, www.lifeclass.net Open: Every day, 8am – 9pm In Issue 133

Promenada Gourmet Restaurant Cesta svobode 15, Bled Tel: +386 (0)4 579 18 39 restavracija.promenada@hotelibled.com www.sava-hotels-resorts.com Open: Tuesday to Sunday: 12pm–10pm In Issue 134

Bled Castle Restaurant Grajska cesta 6, 4260 Bled Tel: +386 (0)4 579 44 24 restaurant@vgs-bled.si www.hotelastoria-bled.com/castle restaurant Open: Every day, 10am –10pm In Issue 136/137

City Restaurant - BTC CITY Ljubljana Poslovna stolpnica, 13th floor, Šmartinska 140, Ljubljana Tel: +386 (0)1 585 19 97 www.btc-city.com Restaurant open: Mon-Fri, 11am – 4pm Bar open: Mon-Fri, 7.30am – 6pm

In Issue 138 JB logo 4/15/08 4:32 PM Page 1 C

M

Y

CM

MY

CY CMY

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JB Restaurant

Miklošičeva 17, Ljubljana Tel: +386 (0)1 430 70 70 restavracija.jb@siol.net, www.jb-slo.com Open: Mon-Sun, 11am – 11pm Sat, 5pm – 11pm In Issue 139

Otočec Castle Restaurant

Grajska cesta 2, Otočec Tel: + 386 (0)7 384 89 00 booking.grad-otocec@terme-krka.si www.castle-otocec.com Open: Every day until midnight

Composite

In Issue 140

Kavarna Restavracija Nebotičnik

Štefanova 1, Ljubljana T: 0590 70 396 info@neboticnik.si, www.neboticnik.si Open: Sun to Wed: 9am – 1am, Thu to Sat: 9am – 3 am (Restaurant operates until 10pm, Sun closed) Bon Appétit Miklošičeva 28 1000 Ljubljana T: +386 (0)1 430 80 80 www.bonappetit.si Open: Monday to Friday: 12pm-3pm; 7pm-10pm Saturday and Sunday: by reservation)

In Issue 141

In Issue 143

Smrekarjev hram Nazorjeva 2, Ljubljana T: +386 (0)1 308 19 07 smrekarjev.hram@gh-union.si www.gh-union.si Open: Every day from noon till 11 p.m.

In Issue 144

Flash mob: School kids in performance “I breathe the dance”

by Kazina dance school

A championship in sheep trimming in Semič.

EVERY PICTURE TELLS A STORY

Introduction of a new exhibit in Pivka Army Museum: A Yugoslav submarine P-913 donated by Montenegrin goverment

Porsche Slovenia’s Promotional Event with former skiing ace Bojan Križaj with a racing modification of Škofa Fabia S2000

Marko Vozelj, the public vote winner of Slovenian song contest. (Mediaspeed)

British indie rockers The Wombats performing at Itak Džafest in Križanke summer theatre.

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Kempinski Palace Portorož

Obala 45 6320 Portorož, Slovenia T +386 5 692 7070 E reservations.portoroz@kempinski.com www.kempinski.com/portoroz

The Night of the Roses Come and celebrate one unforgettable New Year’s Eve dedicated to the Rose - the true symbol of Portoroz. The fabulous and the only 5 Star Superior Hotel Kempinski Palace offers two tempting options: New Year's Eve package includes: Two nights accommodation in Superior double room park view Gala Buffet dinner and party with live music in our magnificent Ballroom Crystal Hall or 5 course Gala Menu dinner with live music and surprises in the glamorous Restaurant Sophia Spectacular firework show New Year's party with Midnight Buffet Daily lavish breakfast buffet until 12 am Free entrance to the Rose Spa (indoor swimming pool and sauna area) Free use of WiFi Package with celebration in Crystal Hall starting from € 635 for single use and € 987 for double use in Superior double room park view including VAT or package with celebration in Restaurant Sophia starting from € 657 for single use and € 1.031 for double use in Superior double room park view including VAT. City tax of 1,01 € per person per day is not included.

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Christmas dinner a la chef starting from 39 € per person

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Offer is valid upon request and availability till 29th of December 2011.

Celebrate your Christmas party and receive a very special offer including: Your complimentary „pool party“ (entrance to indoor pool, sauna area and one soft drink per person) OR Complimentary welcome reception For dinners booked for more than 20 persons, every 20th dinner for free Special room rate for overnights special discount on spa treatments available upon request.

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13-14 October 2011

Ljubljana, Slovenia

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