Business News

Luka Koper Keen to Make Headway, But Obstacles Remain (interview)

Koper, 13 April (STA) - Luka Koper, the operator of Slovenia's sole seaport, has ambitious development plans but its CEO Gregor Veselko has told the STA that there are many stumbling blocks along the way.

"We hope to realise our development guidelines. But we are stumbling at the issue of the national zoning plan and other development incentives," Veselko said.

Luka Koper has been pushing to build a third pier, but its plans have been hampered by opposition from locals and the state's failure to adopt a zoning plan.

"If we want to remain competitive we have to keep up with the other [northern Adriatic] ports. We know that the ports in Trieste, Venice and Rijeka are developing. We are developing as well, but there are many stumbling blocks."

Veselko says that Koper is the most competitive port in the northern Adriatic. "We have good infrastructure, we are capable of providing multiple services for competitive prices and our personnel is good."

The CEO also said that a strategic partner for the port would be welcome, provided they brought fresh capital and new business processes, but he hinted that the current ownership structure might not be too conducive to such plans.

"The Port of Koper is the only port in Slovenia...I agree that the state should have majority ownership, but the remaining 49% is open... Whether such a strategic partner has a stake of 49%, 10% or 3% is, however, open to debate."

He said he has held talks with many potential investors since he took the helm of Luka Koper a year ago, but he would not mention any names. "I can confirm that there is interest by a variety of companies."

Luka Koper saw sales drop 15% year-on-year in 2009 and transshipment by volume was down by a fifth. But Veselko points out that the company managed to weather the crisis on solid shape owing to the fact that it is a multi-purpose port.

"When the car segment declined, we offset it with transshipment of frozen fruit, vegetables, wood and liquid cargo."

More importantly, during the crisis the port expanded its foothold on markets where overall cargo volumes declined, for example Hungary and Austria, two key markets for Luka Koper.

During the crisis Luka Koper also increased its debt burden to EUR 280m by the end of 2009. Veselko says the company just has to live with that, but the bigger issue is how to secure sufficient revenue to service the liabilities.

He said non-core businesses would be offloaded and all energy focused on the core business. "Data for the first three months of the year show that we are on track."

The company said Tuesday transshipment of containers rose by nearly a third in the first three months of the year to 111,984 units.

Just this week Luka Koper got a EUR 30m 15-year loan from the state-owned SID development bank. The money will be used for expansion of the container terminal.

The project involves the extension of the pier to accommodate four giant post-panamax container cranes that are used to load and unload containers from ships too big to pass through the Panama canal.

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