Agribusiness in Serbia

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Goran Radosavljevic
Agribusiness in Serbia Investment possibilities
Presentation by Goran Radosavljevic Serbian
Investment and Export Promotion Agency SIEPA OECD
Conference, Zurich, September 4th 2003
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Agriculture
1990
2001
International isolation

• 15 of the GDP
• 24 of the labor
• 13 of total export
• 10 of total import

• 26 of the GDP
• 17 of the labor
• 2.5 of total export
• 3.8 of total import

• Loss of markets
• Decrease in demand
• Obsolete technology
• Production declined

• Revitalization measures since 2000
• Creation of a stimulating business environment
• Harmonization with the WTO and EU rules
• Prices, foreign trade and tariff system
  liberalization
• Reduction of taxes on agricultural inputs
• Agricultural incentives - state subsidizing
• Raising the level of competition

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Agriculture

• Land
• 5,118,568 ha of agricultural land
• 4,255,203 ha of arable land (83)
• 85 private farms

• People
• Total number of agriculture population 1,305,426
  (17 out of total population)
• Number of economically active people
• 604,127 (46)

Serbia is the leading producer of raspberries
both in the region and worldwide.
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Trade
Top 5 exporting products in 2001
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Food production
Industry overview

• 9.83 o the total GDP
• 26 of the manufacturing industry in 2000
• Total revenue of agro industry in 2001 is 3 bill.
  EUR
• 1,839 enterprises

• 106,193 employees (8.12 of the total labor force
  in Serbia)
• Average monthly wage 134 EUR (2001)

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Food production
Fruit and Vegetable processing

• 32 large factories with the annual capacity of
  700 thousand tons

• Key Players
• FreshCo. market leader in fruit juices
  production, 12.5 mill. EBRD investment
• Knjaz Milos market leader in mineral water
  production
• Takovo leading company in food production

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Food production
Production of waters and soft drinks

• Serbia is endowed with high quality wells of
  mineral and spring water
• 15 annual increase of the consumption of soft
  drinks
• 3,959,000 USD of exports of mineral water and
  non-alcoholic drinks in 2001
• 5,889,000 USD of imports (mostly non-alcoholic
  drinks)

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Food production
Foreign trade

• Total export in 2001 was 271.3 mill. US
• 15.7 of total country export

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Timber Industry

• General Overview
• 1.3 share in the total GDP
• Raw base of 235 million cubic meters, (27 of the
  Serbian territory)
• 1,396 primary producers and 2,096 final
  processing companies (96 private)
• 30,755 employees

Sawn Softwood Coniferous forest9 of forest in
Serbia Production in 2001 47,000 cubic meters
(90 spruce and fir tree) 5 was exported to
Croatia, Macedonia, Germany and Greece
Sawn Hardwood 10th largest producer in
Europe Sawn beech wood is 5th top exporting
product in 2001 Annual production 357,000 cubic
meters 7th largest exporter in Europe in
2000 Export in 2002 150,000 cubic meters Italy
major export partner
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Timber Industry
Veneer Boards 85 poplar veneer boards (mostly
cc class) Italy major importer Export in
2001 12,964 cubic meters, 50 exported 79 of
export went to Italy
Chipboard Local market demand 120,000 cubic
meters Ivanjica is the only producer left
Plywood Production in 2002 13,400 cubic meters
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Business environment

• Tax regime
• The lowest tax rate in CEE 14
• Tax holidays, tax credits, exemptions

Customs Average customs rate for agriculture is
15,69

• Free Trade Agreements
• Free Trade Agreement with Russia
• SEE Free Trade Area
• Autonomous Tariff Preferences for EU

Favorable geographic position Serbia is
positioned at the intersection of pan European
corridors no. 10 and 8 (river Danube)
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Switzerland
Trade between Serbia and Switzerland in 2002 (in
000 Fr.)
Investment from Switzerland to Serbia in 2001 (in
000 EUR)

• ERG Geshäftsstelle fur die Exportrisikogarantie
• Risk cover may be obtained for the following
  transactions
• short-term (less than 23 months), medium and
  long-term exports (23 months or more),
• construction and engineering work and other
  services,
• licensing and know-how agreements,
• goods on consignment abroad or on exhibition at
  trade fairs,
• bid bonds, down payment guarantees and
  performance guarantees.
• The maximum cover for all risks is 95.

• Agreement on trade and economic co-operation
• Effective as of 1st June 2002
• Most-favored-nation treatment
• National treatment of goods

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Reasons to invest

• Excellent resource base for agricultural products
  given fertile soils, restricted use of chemical
  fertilisers and perfect climatic conditions
• Favourable brand image on account of Serbias
  ranking as one of the most significant raspberry
  producers in the world and the excellent
  reputation of beef and pork products
• Technologically advanced, well educated and
  highly cost competitive labour force average
  net monthly salary within the agribusiness sector
  in 2001 was 134
• Domestic market leverage with growing local
  demand, as consequence of improved economic
  conditions - and excellent market accessibility
  courtesy of extensive free trade agreements
  Serbia and Montenegro is the only country
  outside the CIS with a free trade agreement with
  the Russian Federation with its 150 million
  consumers. Moreover, from 2004, Serbia directly
  borders the European Union
• Lowest corporate tax rates in Central Europe
  enhance profitability

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Reasons to invest
6. Widespread commitment to international
quality accreditation 7. Well established
international partnerships have accelerated
management and technical expertise of Serbian
managers 8. Rapid improvements within the
agribusiness sector as a consequence of
privatisation and subsequent restructuring 9.
Compliance with the regulations of the World
Trade Organization and fulfilment of European
Union accession will create additional investment
opportunities within the sector with reforms
impacting on increasing food safety, quality,
choice and productivity and enabling the sector
to achieve higher levels of harmonization,
standardization and international
competitiveness 10. Sustained improvements to
investment climate and 11. Ability to
communicate in English language highest
proficiency in Central Europe by a wide margin.
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Thank you for your attention! Serbian Investment
and Export Promotion Agency Phone [phone]
040 Fax [phone] e-mail
office_at_siepa.sr.gov.yu Web www.siepa.sr.gov.yu