Slovenia - Industry

Chief Slovene industries produce electrical equipment, electronics, trucks, chemicals, processed food, textiles, paper and paper products, and wood products. Ferrous metallurgy and rolling mill products, aluminum reduction and rolled products, and lead and zinc smelting are also developed. In the third quarter of 2000, industrial production grew by 6.2 percent, although there was a slowdown in the largely loss-making coal-mining sector and in power output. Net profits in manufacturing, however, have soared from SIT 2 billion in 1997 to SIT 28.7 billion in 1998, all due to an increase in production, as opposed to previous years in which job cuts had played the primary role in boosting productivity.

Foreign strategic investors are allowed under Slovene law to acquire stakes of up to 60 percent in the formerly government-owned entities being sold. The state fund retains 20 percent stakes, while the remaining 20 percent are sold in voucher privatization or used to pay wage arrears (unpaid and overdue wages) to workers. Several major foreign companies have recently acquired stakes in Slovene manufacturing firms. Tire manufacturer Goodyear (U.S.) invested US$120 million in a 60 percent stake in Sava tire unit and 75 percent in its engineered rubber division. The government plans to sell the entire steel industry by accepting bids for its 3 main steel producers, Store, Ravne, and Jesenice. Inexa (Sweden) has recently expressed an interest in Store. Renault (France), BASF, Hoechst and Siemens (Germany) are among the top foreign investors.

Slovene homes abound with consumer durables such as electrical household appliances, due in part to the strong position of the local manufacturer Gorenje. The company holds about a 40 percent market share in refrigerators, kitchen ranges, washing machines, and related items, and output rose by 9.8 percent in 1999. Its products are cheaper and compete well in terms of quality with popular Italian imports like Candy. In addition, the company has started moving into more expensive high-end household products that have captured part of the market once reserved for German and Austrian brands.

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