Devastating floods have caused widespread logistics and transportation disruptions in northern and central Slovenia, hitting the automotive industry hard. Thousands of companies have been forced to halt production operations across large parts of northern Slovenia since August 5 due to extreme flooding.
The Slovenia Business Development Agency indicates that in 2022, 20 percent of total Slovenian exports were attributed to automotive components, with most of these exports going to Germany (33%), France (14%), and Italy (7%). In 2022, the country’s automotive exports totaled €4.1 billion ($4.5 billion). Slovenia is similarly a leader in metal processing and machinery, specializing in highly niche products including thermoplastic injection molding tools for the automotive sector. The Koroška industrial area, one of the areas with disproportionate levels of flood damage, is home to numerous technology companies and metal and machining companies largely serving the automotive industry. TAB Mežica is one such company in the Koroška industrial area that produces lead and lithium-ion batteries for the automotive industry. It estimates damages into the tens of millions and production stoppages that could last upwards of 10 weeks.
Other prominent manufacturers supplying the automotive space that have sustained heavy damages include KLS Ljubno, a leading manufacturer of starter ring gears, signal rings and mass rings for engine flywheels. The company’s site in Ljubno is unlikely to restart production for months while responding to at least €30 million ($33 million) in damages.
Apart from the automotive sector, sectors dependent on general machinery and metal processing from Slovenia could experience heightened disruptions. The country is a global leader in industrial knives, premium grade super hardened and resistant steels, and logging winches, with its largest export markets for metal products in Germany (24%), Italy (12%) and Austria (10%).
Everstream predicts that supply chain disruptions will likely persist across Slovenia in the short to medium term due to widespread infrastructure damage. Although recovery efforts are ongoing in the region, authorities have not provided an estimated timeline for when production activities in the area can fully resume. Disruptions are likely to be felt in procurement, production, and the delivery of goods and services.
