Welcome to a regularly updated portal into all things economic about The Slovak Republic.

Here you will find web-links and excerpts from Financial analysts and useful information about the current financial situation.

This information is presented without liability and for information purposes only and does not reflect an opinion from your yourslovakia.com

02.04.2007 SITA

ECONOMY

Companies in the automotive industry in Slovakia reported a turnover of SKK 443 billion last year, which is up 34 percent y/y. This accounts for nearly 30 percent of the aggregate turnover of the entire industrial sector in Slovakia. Automotive Industry Association (ZAP) president Jozef Uhrik reported that 295,390 cars were produced in Slovakia last year, which is up 32 percent from 2005. "While Volkswagen produced the most cars, PSA Peugeot Citroen also took off quite well," added Mr. Uhrik. The association's president reported that automotive industry companies will produce around 500,000 cars this year and their production should increase to 800,000 cars annually by 2010. Investments into the automotive industry last year achieved a record-breaking SKK 61 billion, which is up 52.5 percent y/y. During the upcoming two years interesting figures are expected as far as investment is concerned, due chiefly to subcontractors," added Mr. Uhrik. Last year Volkswagen, Kia and Peugeot Citroen employed 66,875 people in Slovakia, while they had 57,376 people on their payrolls in 2005. The association assumes that as many as 100,000 people will be working in the automotive industry in Slovakia by 2010.

INVESTMENT

After Austrian ropeway manufacturer Doppelmayr announced its plan to build a new plant in eastern Slovakia, another ski lift group announced the intention to launch business operations in this country. According to information from Vladimir Stefunka from Techmont Snow that represents Pomagalski in Slovakia, Czech Republic, and Ukraine, the Leitner Group includes the companies Leitner, Pomagalski, and Prinoth is planning to build a production plant here. He said that four localities in Slovakia are considered at present. "A production plant for ropeway structures should be built. A service center is also under consideration," he said. The Leitner Group intends to begin building its new production facility this year and it should be ready to begin production next year. The company plans to invest a number of millions euro

New investors from Japan, Spain, Germany and France are coming to the industrial park in Nitra. Approximately 4,000 job vacancies will be created. Several investments are connected with arrival of the company Sony. Them Japanese concern Ryoka that is one of the biggest Sony’s sub - supplier, will start its test operation in summer. The German company Muhlbauer will employ 200 to 300 people thereof one half will comprise of research and development employees.

23.3.2007 SITA

INVESTMENT

The German company Fritz wants to build up a new factory for car components production in Presov. The company initially intended to launch the production two years ago, but it did not because of lack of appropriate investors at that time. The investment for more than SKK 200 million will create approximately 400 job vacancies, while the total volume of the investment could be influenced by the amount of the state support. The investor is interested to locate the factory on the 26 hectares area of the industrial park IPZ Zaborske, where it will produce car components for the Spanish company Seat.

The town of Galanta will get SKK 219 million from European Union (EU) structural funds for an industrial park. Galanta Mayor Alexander Mezes and the director general of the Slovak Investment and Trade Development Agency (SARIO), Peter Hajas, signed an agreement on the provision of a non-returnable financial contribution on Thursday. SARIO spokesperson Jana Murinova informed that the money will be used to refund 95 percent of the total sum of costs that Galanta already spent on the construction. The remaining 5 percent will come from the town, which is SKK 11.5 million.

22.3.2007 SITA

Answer to speculations about timing and amount of central parity change arrived faster than expected. The Slovak crown will be in exchange rate mechanism for at least one year. There are several theories. One theory expects that the new parity will last and that the final exchange rate will be stated close to market one in one year. This rate is expected at about SKK 32 up SKK 32.50 a euro. The second theory expects that one more change in parity is awaiting the Slovak crown, which will also change the conversion rate.

Construction boom, which has gradually spread across from Bratislava, supports the growth of construction insurance, especially when the buildings are under construction. These policies are completely different from standard real estate insurance. They address contractor’s liability, investors insurance against delayed completion of construction or against the freeze of the basement. Many big projects also lead to a substantial growth in the volume of construction-assembling insurance, which grew 40 percent last year.

20.3.2007 SITA

Europe Changed one Criterion for Joining the Eurozone for Slovakia
The European Central Bank announced that at the request of Slovakia European structures have agreed to move to a stronger level the central parity of the Slovak crown, which is important for adoption of the euro. The central parity was moved from 38.455 SKK/EUR to 35.4424 SKK/EUR, which is an appreciation by 8.5 percent. The Slovak crown will be allowed to fluctuate +/-15 percent from the central parity in the ERM II European exchange rate mechanism, which is a waiting room for the euro. The new limit values for the Slovak currency now are 40.759 SKK/EUR and 30.126 SKK/EUR.

19.3.2007 SITA

Slovakia will probably introduce euro at the beginning of 2009. Transfer to euro is a complicated process, which also requires the readiness of Slovak entrepreneurs. Neglected preparation may increase costs for euro introduction to a company. According to the National Bank of Slovakia (NBS), preparation may last in some firms up to as much as two to three years.

SLOVAK CROWN
The European Central Bank announced that at the request of Slovakia European structures have agreed to move to a stronger level the central parity of the Slovak crown, which is important for adoption of the euro. The central parity was moved from 38.455 SKK/EUR to 35.4424 SKK/EUR, which is an appreciation by 8.5 percent. The Slovak crown will be allowed to fluctuate +/-15 percent from the central parity in the ERM II European exchange rate mechanism, which is a waiting room for the euro. The new limit values for the Slovak currency now are 40.759 SKK/EUR and 30.126 SKK/EUR. The Slovak currency has been constantly strengthening in the recent past and moved 12 percent from the original central parity.

INVESTMENT
The government is preparing a new law on investments, which should more significantly support investors in regions with high unemployment rates, said Economy Minister Lubomir Jahnatek. The law was conceived on the following principle: in regions where the unemployment rate is 50 % higher than the Slovak average, investors will be eligible to draw on state support for projects of SKK 100 million and upwards; in regions where the unemployment rate is 25 % higher than the average, state support will go to projects of SKK 200 million and more; in regions with the average unemployment rate, state support will start at SKK 400 million.

TRANSPORT
Letisko Kosice-Airport Kosice serviced 43,060 passengers in two months of this year, which is up by 20 percent y/y. In international transport, the airport provided services to 21,902 passengers. The remaining 21,158 passengers traveled on domestic flights. The airport reported 42,068 passengers on regular flights to Bratislava, Prague and Vienna, while 922 passengers used irregular flights. The volume of cargo transported in the January - February period increased by 15 percent to 30 tons, airport executive director Marta Horvathova told.

18.3.2007 SITA

ECONOMY
Total hourly labor costs in Slovakia rose at an annual rate of 8.5 percent in the fourth quarter of 2006. According to figures released by Eurostat, the Statistical Office of the European Communities, the most significant labor cost growth in Slovakia was posted in industry, which went up 8.9 percent, services 8.5 percent and the construction sector 5.5 percent. Eurostat figures further show indirect costs, which include employers' contributions to social and healthinsurance funds, and employees' personal income tax grew as much as 7.9 percent, while direct wage costs on net wages rose 8.8 percent.

INVESTMENT
Economy Minister Lubomir Jahnatek talked on Thursday in Levoca with the town's mayor Miroslav Vilkovsky and the mayor of Spissky Hrhov Vladimir Ledecky about the state aid for future industrial parks. „This field belongs to the territory where the state can provide the highest support for new investors and for new jobs' creation,“ Mr. Jahnatek stated after the talks. The minister thinks that the main problem of that region is the transport connection to main European routes. A highway in that locality should be built in two years.

Representatives of the Korean cable manufacturer Sewon and the southern Slovak town of Rimavska Sobota signed a contract on Thursday concerning the rental of a part of former army barracks where the company wants to produce cables. Jana Murinova, from the Slovak Investment and Trade Development Agency, said that the contract will enable Sewon to launch trial production. "Sewon wants first to start a trial of bunched cable production in order to test the quality of the workforce," she explained. The company wants to invest SKK 118 million in Rimavska Sobota by 2009. It is still waiting, however, for the authorities' decision regarding its request for state assistance.

The company Euro Energy based in Liptovsky Hradok, which is owned by Russian firm MGP Holding, will invest more than 9 billion SKK in silicon processing in the town Jelsava. The investment should be launched in few months. The company needs only some permissions, an evaluation of the impacts on environment and an approval of supplements to the town planning scheme. The investor has already employed first 30 employees and is preparing premises of the former barracks where new technologies will be installed. The company plans to employ 150 people this year and double this number in one year. The Russian investor paid almost 10 million SKK for two thirds of the object from after waiting a long time for the transfer of former barracks. The company wants to produce bare silicon in the factory, mainly microelectronics, solar technology and car industry. The manufacture will use Russian and local raw materials.

REAL ESTATE
The developer group CIAS plans to build branches in Slovakia, Ukraine and the United Arab Emirates. CIAS opened branches in Bulgaria and Romania last year. The company's management plans to gradually expand its representation in further countries also, reported CIAS media representative Krystof Hilsky. Ceska Inzenyrska is the group's owner.

13.3.2007 Slovak Spectacular

INVESTMENT

Samsung investment official
The Slovak Republic signed an investment memorandum with Samsung Electronic LCD in Bratislava on March 13.
Prime Minister Robert Fico announced at a news conference held after the signing that the South Korean firm would invest €320 million (about Sk11 billion) in the new plant, which will produce LCD flat panels in Voderady near Trnava.
The investment will create 1,200 direct jobs.
Economy Minister Ľubomír Jahnátek said that the government would support this investment with a package of incentives amounting to 21.9 percent of the total investment, which is about Sk2.2 billion. The government will thus provide approximately Sk2 million per job created. In addition, the government allocated Sk1.6 billion from its budget for necessary infrastructure, which falls under regional assistance.
The South Korean investor is to launch production of LCD modules next March, and the plant should be running at full capacity by 2012. Samsung will produce ten million LCD modules annually at the new plant and its turnover should be about Sk80 billion.
The South Korean investor pledged in the memorandum that the average wage in the new plant would be Sk25,500.
Samsung already has a plant in Slovakia, in the western town of Galanta, which is the company's biggest plant for the production of TV sets with LCD monitors in Europe. It invested €131.4 million in Slovakia between 2002 and 2006 and has employed more than 3,000 people.