The seat of the company managing state-owned forests will be in the Kočevsko in the south east, the government announced today after examining all the initiatives coming from various parts of the country.

According to Agriculture, Food and Forestry Minister Dejan Židan, the government decided for Kočevsko due to high unemployment there and long tradition in forestry.

"If state-owned forests cover the area of almost 240,000 hectares, 38,000 hectares of those are in the Kočevje municipality alone and 70,000 in Kočevsko," Židan said.

The government thus also made a step towards policentric development of Slovenia, according to him.

Kočevsko is also home to Snežnik, the forestry and logging enterprise in which the state holds a 70% share, which will be folded into the state forestry company as a non-cash contribution. The state will also provide a cash investment in the amount of EUR 20m in the incorporation.

Snežnik boss Rupnik, who had been put forward by Židan, was the only candidate for acting head of the new corporation.

Rupnik, a forest engineer, took over at Snežnik in 2010, when the company operated at a loss topping EUR 240,000. Only two years later, the company was back in the black. Last year its profit stood at EUR 958,000.

"This is the reason why the government entrusted this important task - the setting up of an important state-owned company - to Rupnik," Židan said, noting that Economy Minister Zdravko Počivalšek had also interviewed Rupnik.

In the coming days, Rupnik will register the new company, after which the government will appoint a commission that will be in charge of the selection of the company's supervisors. "Once they are appointed, I expect the proceedings for selecting the management to begin."

The goal is for the new company to take over all state forests on 1 July. These are now managed by the Farmland and Forest Fund.

About one fifth of all forests in Slovenia are state-owned and their management is based on concessions from 1996, which were conferred without a public call for applications for a period of 20 years. Since most of them expire at the end of June, the Agriculture Ministry had to find a new concept for managing of state forests.

The main task of the new company, set up under an act passed in early February, will be to manage state-owned forests and acquire new forest area. The company will also manage centres for collection or processing of wood and create conditions for the development of the forest-wood chain.

One of the goals of the bill is to make forest management more profitable, create green jobs, increase the area of state-owned forests in the long run and increase transparency in awarding contracts for forest work and sale of wood.