Ljubljana, 14 October (STA) - While the stock of foreign direct investment fell in Europe last year, it rose in Slovenia, which the director of the Public Agency of the Republic of Slovenia for Entrepreneurship and Foreign Investments (JAPTI) Igor Plestenjak considers a success.
Plestenjak told an interview with the STA that JAPTI was also happy with investment inflow this year, as the agency has helped bring to Slovenia over EUR 50m in capital in the year so far as part of around a dozen projects.
"Initially we had planned to hold four openings of applications as part of the public call for promotion of foreign investment this year...but we used up all of the EUR 8m in funds after three openings, which is why we are now using some of the funds for next year."
Funding for next year has been boosted to EUR 14m as part of efforts to step up support to potential investors, who are seen as important to economic recovery and job creation.
The investments brought in this year are expected to create around 673 new jobs over the next three years, Plestenjak told the STA on the sidelines of the FDI Summit international development conference in Ljubljana.
Plestenjak believes that the strong interest in investing in Slovenia has been created with the help of the lead generation system used by the agency for the past three years.
"Under this system you hire agents to market Slovenia to emerging companies abroad. These are highly-qualified people who know how to promote Slovenia in the right way. Once interest is found, JAPTI gets involved by presenting various models for investing."
Plestenjak explained that JAPTI was targeting all company sizes, although large investments in excess of EUR 12m are in the domain of the Economy Ministry.
"We are particularly pleased by the shift in the structure of FDI. Only a third of the investment is now in manufacturing, with two-thirds in services and research and development.
"This means that foreigners recognise Slovenia as a potential base for development with the capacity to create value added."
While Slovenia has in the past been criticised for being reserved to FDI, Plestenjak thinks that the situation is not as bleak as some had made it out to be.
"There is a positive trend. But I'm not speaking about financial investments; I'm speaking about greenfield investments for which we are in charge."
He added that Slovenia initially chose a different transition model to other countries in the region, but that much has changed since 2007, when attracting FDI became one of the priorities and JAPTI was launched.
"The word has been getting around since 2007, when we began dealing intensively with attracting foreign direct investment, that Slovenia is a good country to invest in."
He says that foreigners who invest in Slovenia do not have anything bad to say about the country and the business environment.
"Neither do they regret having made their investment, and they are not unhappy with the information we provided them about the workforce, infrastructure and other factors."
On another note, Plestenjak is convinced that Slovenia still has a number of struggling domestic companies that should be sold. But he says this is a matter for state-run institutions, such as the Capital Assets Management Agency, to deal with.
Rejecting criticism that Slovenia has not been active enough in promoting itself as a destination for FDI, Plestenjak said that one limiting factor is funding.
"You have to keep in mind that an add in the Financial Times costs EUR 200,000, while JAPTI's budget for promotion is EUR 300,000 a year. And that's for all 21 sectors combined."
Promotion is therefore focused on individual investors who show interest in putting their capital in Slovenia. "Our job is to find the right opportunity for this investor."
Asked about a lack of mega investments in Slovenia in recent years, Plestenjak responded that several large projects were in the pipeline, without providing more details.
While these are mostly in the domain of the Economy Ministry, JAPTI has been working on some of the cases. "I know that additional funds are being sought so that investors can be granted what has been promised."
He said he would not like to give projections about whether Slovenia will be able to secure a mega investment this year, for one thing to avoid the competition finding out about which investors are wanting to enter Slovenia.
He also responded to suggestions that Slovenia's market of two million is too small for most greenfield investors by pointing out that Slovenia was part of the EU market.
"The EU has no borders, which means we're part of a market of almost half a billion. This means that companies investing in Europe can invest in Slovenia without any reservations."
"This is also the message we have been getting across in emerging markets, such as in Asia and the Arabian countries, because we believe that the port of Koper is an excellent entry point to Europe."
He pointed to the importance of establishing a specialised brand as an investment destination. "For example Vienna is in the eyes of Western business a place from where you can 'conquer' all eastern countries, including the Balkans.
"If we can achieve that Slovenia becomes an entry point to the Balkans, this would surely be a success and a good thing."
"But at the same time we should no limit Slovenia only to being a springboard for the Balkans. Slovenia has the potential of developing logistics projects for landlocked central European countries."
"This is our great potential - involving countries such as Hungary, Slovakia, the Czech Republic, Austria, as well as Bavaria, parts of Poland and Switzerland."
"This is a story for which we have not yet recognised in Slovenia that it is the right way forward.
"But don't get me wrong, the key here is not just in transport and in the port of Koper, but also in ensuring that the goods arriving for these countries are processed, prepared, put through customs and documented... Singapore is a good example of such development."