Summary of economic news released on Thursday, March 1
Jahnatek Expects Car Production in Slovakia to Double in 3 Years
On Thursday, Slovakia's Economy Minister Lubomir Jahnatek met with chairman of the Italian association of industry Confindustria Luca di Montezemolo. At the meeting the Slovak minister said he expects that in three years the production of carmakers in Slovakia will almost double. Volkswagen, PSA Peugeot Citroen and Kia Motors will produce about 500,000 cars this year. Mr. Jahnatek underscored that Slovakia will become a country with the highest car production per inhabitant in the world.
Average Loan Interest Rate in Slovakia Dropped in January
In January, interest rates on loans provided by commercial banks in Slovakia were cheaper from December of last year. According to the National Bank of Slovakia (NBS) figures, they posted a drop of 0.07 percentage points m/m to 6.92 percent on average. Interest rates on loans for non-financial companies reached 6 percent on average in the first month of this year, which is 0.16 percentage points less than in December. The average interest rate on household loans remained unchanged from December at 8.24 percent.
Sewon ECS Slovakia Recruits Staff for its Plant in Rimavska Sobota
At a presentation of Korean car component producer Sewon ECS Slovakia in Rimavska Sobota where their plant is being built, company's personnel-administrative manager Patrik Puchon said that the initial salary of their employees should be around SKK 9,700. The salary, however will depend on the offered bonuses, language skills, as well as active approach of employees. Company's director Seung Kil Park confirmed that salaries in the company will be competitive with other branches. They have interest in people with basic education and the ratio between female and male workers should be 70:30. The company set no age limit for its future employees.
Elektrovod will Cooperate with Electricity Transmission Firm SEPS
Energy services company Elektrovod Holding, a.s. Bratislava signed a contract with the national electricity transmission network operator Slovenska Elektrizacna Prenosova Sustava (SEPS) concerning providing of emergency services for cases of large breakdowns and blackouts. Elektrovod Holding will assist SEPS in cases of service interruptions at 220 kV and 400 kV transmission lines. SEPS spokesman Igor Gallo explained that SEPS does not have its own project design, assembly, and technical capacities. That is why Elektrovod Holding will be in charge of removing serious line breakdowns and service interruptions immediately to prevent that such incidents threaten operations and security of electrical energy transmission. The companies signed the corresponding agreement in February of this year.
Construction Permit for Sverepec-Vrtizer Highway by End of this Year
Construction permits for the whole highway stretch Sverepec -- Vrtizer should be issued by the end of the year. The National Highway Company (NDS) has a permit for the second highway stretch from the center of Povazska Bystrica to Vrtizer. A tender to select a contractor will soon be announced for this part of the highway. NDS spokesman Marcel Janosik informed that the company has one out of seven necessary construction permits. Proprietary rights to land under the planned highway stretch between Sverepec and the center of Povazska Bystrica have not been settled yet. NDS can announce a tender also for the first highway stretch after acquiring necessary construction permits.
Dell Opens European Business Center Headquarters in Bratislava
World's No. 1 seller of computer systems, the US company Dell, has opened a new headquarters of the European Business Center in Bratislava. Dell Vice president for Europe, the Middle East, and Africa (EMEA) Paul Bell said in his address that the center is the first Dell center integrating several activities such as finances, marketing, human resources, technical logistics, sale and others. Currently, Dell employs 1,500 people in Bratislava with plans to increase that to 2,100. The Bratislava center is the third biggest center in the EMEA region.
Yazaki Wiring Technologies will Build a New Plant in Michalovce
The company Yazaki Wiring Technologies Slovakia, s.r.o. Michalovce, a Slovak subsidiary of the world's largest manufacturer of wire harnesses has announced a tender in February for a general contractor of a new Yazaki production plant in Michalovce. Bidders are expected to have experience in industrial construction projects with an area of more than 10,000 square meters from the last three years. Another requirement is at least SKK 200 million turnover in industrial construction over a calendar year and also a written confirmation is required that no bankruptcy or liquidation petition was submitted against the company. Another requirement is a financial guarantee. The deadline for registration in the tender is March 2.
State Budget Deficit was SKK 8.53 Bln. at the End of February
The state budget of the Slovak Republic ended the second month of this year with a deficit of SKK 8.53 billion. Thus, its performance deteriorated SKK 14.877 billion compared to February 2006, when the state budget closed the first two months with a surplus of SKK 6.347 billion. "It is because this year's revenues are lower by SKK 4.393 billion and expenditures rose SKK 10.484 billion compared to the previous year," Finance Ministry comments on the results.
CAC Leasing Slovakia Earns Taxed Profit of SKK 22.5 Mln. in H1 2006
CAC Leasing Slovakia, a.s., involved in provision of financial and operative leasing, closed the first half of last year with a taxed profit of SKK 22.5 million. The H1 net interest income amounted to SKK 184.1 million, while after an adjustment to account for credit risk it was SKK 161.4 million. Net non-leasing interest income in the monitored period reached SKK 29.1 million. These figures were reduced by a SKK 16.6 million loss from fees and commissions. Operating costs were SKK 128.5 million and the midyear operating profit of CAC Leasing Slovakia thus amounted to SKK 32.3 million, according to data disclosed by the leasing company.
MONEY MARKET: Banks Accumulate Surplus Funds in Reserve Accounts
The interbank market opened this month with flat trading in a quiet mood. OTP Banka Slovensko dealer Juraj Mitosinka said that banks were mainly focusing on accumulation of funds in their minimum reserve accounts because of the liquidity surplus, which pressed down the shortest deposit prices. Thus, they deposited SKK 39.918 billion in their reserve accounts in the National bank of Slovakia (NBS) meeting the minimum requirement set for March at SKK 22.333 billion on a cumulative basis to 178.74 percent. According to Mr. Mitosinka, a similar scenario could persist over the next few days. Next week's NBS repo tender should change the liquidity situation on the market.
CME Posts USD 73.42 Mln. Net Revenues through Markiza TV in 2006
US media company Central European Media Enterprises (CME) reported net revenues of USD 73.42 million (about SKK 1.914 billion) in Slovakia last year. This is an increase of 14.2 percent compared with 2005. CME made earnings before interest, tax, depreciation and amortization (EBITDA) in Slovakia via TV Markiza at USD 20.805 million, which is 20.7 percent more than a year ago, according to data disclosed by CME.
STOCK MARKET: SAX Index Slightly Weakens on Thursday
The Bratislava Stock Exchange (BCPB) slightly reduced its gains from Wednesday. Decreasing share prices of Bratislava-based crude-oil refiner Slovnaft weakened Slovakia's official SAX share index by 0.12 percent or 0.48 points to 417.08 points. Turnover on the Bratislava Stock Exchange (BCPB) went up from SKK 88.848 million on Wednesday to SKK 693.627 million on Thursday with SKK 786,700 in share trading.
Employers Disagree with the Draft Labor Code Revision
The Slovak Association of Employers (AZZZ) disagrees with the draft amendment to the Labor Code. AZZZ fears the amendment will have a negative impact on tradesmen in Slovakia, since the revision changes the definition of a dependent work. Moreover, the revision will increase payroll costs and will harm flexibility of the labor market. AZZZ misses analyses and impact studies, which could show that the proposed changes would have sense. The Construction Ministry along with the National Association of Employees (RUZ) and the Slovak Construction Business Association (ZSPS) warn about a negative impact of some proposed measures in real life. "Our partners think that the revision will make life for small and medium-sized businesses and tradesmen harder, since they might be by negatively influenced by a new definition of dependent work," said spokesman for the Construction Ministry Miroslav Batovsky.
FOREX MARKET: Slovak Currency Registers Slight Gains
The Slovak currency only moderately improved towards the euro during quiet trading on Thursday. ING's Martin Matejka stated that the crown initially strengthened from the opening 34.46 SKK/EUR to 34.34 SKK/EUR; however, it later reduced these gains, and, before the close of trading, the crown's exchange rate stood at SKK 34.43/34.45 SKK/EUR. According to Mr. Matejka, the crown's further development will depend mainly on the development of regional currencies, above all on the Polish zloty and the Hungarian forint.
A New Tram Line to Petrzalka should be Part of a Railway Project
The Bratislava City Council approved the wording of the memorandum on cooperation in the construction of a railway and tram line in Bratislava on Thursday. In line with the memorandum, the City of Bratislava, the Transport Ministry and railway company Zeleznice SR (ZSR) should jointly build the railway track within the Trans-European Network TEN -- T 17 project, which will interconnect Paris, Strasbourg, Stuttgart, Vienna and Bratislava and the track for Bratislava's carrying public transport system, that is a tram line from Petrzalka to Safarikovo Namestie square. Bratislava Mayor Andrej Durkovsky informed journalists following the City Council meeting on Thursday.