Novartis announced on Monday it had aborted the expansion of production in Prevalje, citing lower demand for generics, and the need to introduce a new technology.

To co-finance its additional factory for broad-spectrum antibiotics in Slovenia, Lek received EUR 1.5 million in incentive in 2017.

The ministry now withdraws from the contract under which Lek would receive a total of EUR 7 million, which the company announced would return with interest.

Issuing a press release on Tuesday, the ministry said it was making efforts to attract as many quality, sustainable, hi-tech projects as possible, but understood that in taking their business decisions, companies had to adjust to current market trends.

Economy Minister Zdravko Počivalšek, speaking to the STA on the sidelines of the Bled Strategic Forum, regretted Novartis's decision today.

However, he said Lek had built a major industrial facility in Prevalje and a serious investor was interested in it.

Novartis said yesterday it did not yet know what it would do with the facility, whereas Počivalšek could not reveal more details so early on.

Unofficial information circulating has suggested that TAB, a local maker of starter batteries for cars and industrial batteries, was interested in buying it.

At a recent news conference, TAB director Bogomir Auprih neither denied nor confirmed the speculation.

State Secretary Aleš Cantarutti, meanwhile, said the Swiss multinational realised there were already new technologies available to manufacture the medicine, whereas the know-how in Slovenia in this respect was limited.

He assumes Novartis will move production to a country where there is more know-how about how to manufacture the drug in the most effective manner.

"This shows that Slovenia cannot afford to rely on its past achievements, but must constantly work on all sectors making great efforts to remain competitive."

The ministry said that 14 companies had received state incentives for 16 investments in 2009-2018 under the law on encouraging FDI.

One of them, clothes maker Aha Mura, which received EUR 5.8 million in 2011 to open 920 jobs, has recently gone bankrupt, and another has partly returned the incentive after it failed to fully complete the investment.