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Business Briefs

Cabinet advances sale of VÚB and SLSP
Electro-tech industry in the black for 1999
Slovak Rail lost 55 million Sk from Hungarian strike
VW Slovakia plans to produce 150,000 cars in 2000
EIB to put more cash into Slovak private sector
Core inflation hits 6.7% in January

Cabinet advances sale of VÚB and SLSP

The cabinet has told bank privatisation advisor J.P. Morgan that an 84.5% stake in state bank Všeobecná Úverová Banka (VÚB) is to be offered to potential investors. In the case of state bank Slovenská Sporiteľňa (SLSP), the advisor will decide between two alternatives. According to the first scenario, the state would sell the entire 87.2% stake it holds, while the second alternative proposes the sale of an 63.8% stake with the option for a further 23.3%. Finance Minister Brigita Schmögnerová provided this information to journalists following the cabinet's regular session on February 16.
The cabinet also decided that during the second phase of restructuring VÚB and SLSP it would transfer, in line with the World Bank's recommendations, 35 billion Slovak crowns of classified loans into the Slovenská Konsolidačná agency and the Konsolidačná Banka hospital bank. After the first phase of loan carve outs in December (72.3 billion crowns was transferred from VÚB, SLSP and state bank IRB to Konsolidačná Banka and the agency), the share of classified loans in VÚB's portfolio decreased to 32%; after the second phase it should decrease to 20%. In SLSP this share decreased to 38% in the first phase, and should also sink to 20% in the second round, which should be finished by late April.


Electro-tech industry in the black for 1999

According to preliminary results, the net earnings of electro-technical companies in Slovakia totaled 1.6 million crowns in 1999, compared to 1998 losses of 210.3 million crowns.
In 1999, Slovak companies in the electro-technical industry registered sales of 42.5 billion crowns, from which exports accounted for 23.9 billion crowns, up 33.7% compared with the previous year. The industry employed 40,377 people in 1999 compared with 38,370 people at the end of 1998, and the average monthly wage increased 10.4%. Capital investments increased 4.5% to total 3.2 billion crowns.
The largest electro-technical companies in Slovakia are Siemens Automotive in eastern Slovakia's Michalovce, Alcatel Slovakia, in Liptovský Mikuláš, EZ Elektrosyst0my of Bratislava, Sony Slovakia in Trnava, and Kablo in Bratislava.


Slovak Rail lost 55 million Sk from Hungarian strike

Slovak Rail (ŽSR) suffered a 55 million crown loss from canceled transport contracts between Slovakia and Hungary during the strike held by Hungarian rail (MAV) in February. ŽSR calculated the loss from a comparison of transport volumes during the same period in 1999, when 5,100 boxcars transporting 190,000 metric tons of freight were shipped between Slovakia and Hungary. The losses from canceled transport cannot be claimed from MAV, ŽSR spokesperson Miloš Čikovský said on February 15.
Other losses due to the delayed boxcars heading from Slovakia to Hungary will be calculated at the end of the month, while losses from passenger transport will be totaled after figuring out annual transportation output. "We assume that a sizable portion of our cargo freight customers moved to road transport during the strike, and there is a great concern that part of them will not return," Čikovský said.
Hungarian rail unions said on February 13 that they were calling off a two week national strike as of 5:00 p.m. after reaching agreement on most issues with state rail company MAV.


VW Slovakia plans to produce 150,000 cars in 2000

Volkswagen Slovakia, based in Bratislava, plans to manufacture 150,000 cars this year, and a new development project will introduce a new off-road vehicle, the Volkswagen Colorado. When production starts on the new model, the assembly plant in Bratislava will be the only one in the VW Group producing three models (Polo, Golf/Bora and Colorado).
The company also plans to construct an industrial park north-west of Bratislava, near the village of Lozorno and 10 kilometers from the VW plant in Bratislava. Presently, VW is acquiring land for construction of the 35 hectare industrial park, which is expected to employ from 700 to 1,000 people.
Yet another VW project in Slovakia, Auto Martin, is expected to start producing components for cars in April.


EIB to put more cash into Slovak private sector

Finance Minister Brigita Schmögnerová and European Investment Bank (EIB) director Wolfgang Roth met to dissect further possibilities for the EIB's involvement in Slovakia for 2000 and 2001. Schmögnerová's spokesman, Peter Švec, said on February 14 that the EIB wants to continue its traditional projects covering transport, energy and water management and also wishes to focus on investments into the private sector. Through Slovak commercial banks, the EIB hopes to support projects exceeding 20 million crowns destined for small and medium-size businesses.
Generally, the EIB provides loans with a 15 to 20 year maturity to the public sector with a possibility of installment default for three to five years. The EIB loans for the private sector carry a 10 year maturity and also include the chance of repayment default. Since 1993, the EIB has provided the Slovak public corporate sector with loans amounting to almost one billion euros, of which 0.6 billion euros have been withdrawn.


Core inflation hits 6.7% in January

In January 2000, Slovakia's core inflation was 6.7% compared to January 1999, while net inflation was 8.6%, according to figures released by Slovak Statistics Office on February 14. According to its monetary program, the the National Bank of Slovakia (NBS) expects core inflation of between 4.5 and 5.8% by the end of the year 2000.
In 1999, core inflation was at its highest in September (at 7.3% year-on-year), while the minimum was posted in May (at 4.7% year-on-year). Net inflation reached its maximum last year in September (10.2%), and the minimum in January (6.2%).


Compiled by Keith Miller from SITA

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