Serbia: A new investment frontier

| June 23, 2015 | 0 Comments
Belgrade, seen above, is home to the Canada-Serbia Economic Council. Canadians have already invested $1 billion in Serbia, a sum that will be matched by another $1 billion set through the bilateral Strategic Economic Cooperation Agreement. (Photo: National Tourism Organization of Serbia)

Belgrade, seen above, is home to the Canada-Serbia Economic Council. Canadians have already invested $1 billion in Serbia, a sum that will be matched by another $1 billion set through the bilateral Strategic Economic Cooperation Agreement. (Photo: National Tourism Organization of Serbia)

Last September, then-foreign minister John Baird’s four-day visit to Serbia was a great opportunity for constructive talks with Serbian leaders. Representatives of the two countries signed a foreign investment protection agreement, the only one Canada signed with a European country in 2014. It’s a strong political message for investors and a sign of the commitment to operating in a secure business environment on the part of the two governments.
In 2013, a similar message of friendship between top officials was confirmed by the visit of Senate Speaker Noël Kinsella to Serbia and the establishment of a Canada-Serbia Parliamentary Friendship Group.
In 2012, Serbian Prime Minister Aleksandar Vucic signed a bilateral strategic economic co-operation agreement with Canadian Commercial Corporation, which gave $1 billion toward strengthening bilateral economic relations.
Here’s a hint for potential investors: If your company is in hydro, Serbia is your place. But it’s not only about hydro. Opportunities also exist in mining and prospecting, agriculture, pharmaceuticals and motor vehicle parts manufacturing.
For sectors of Canadian excellence, Serbians will logically choose Canadian-based companies. Well known for their business integrity, Canadians are praised in Serbia as reliable economic partners and stakeholders.
In almost 60 Canadian companies and enterprises already present in Serbia and gathered around the newly established Belgrade-based Canada-Serbia Economic Council, there is a figurative bouquet of success stories. From heavyweights and well-known names (SNC Lavalin has a copper smelter site revitalization project worth $250 million), to privatizations by Molson-Coors (of Apatin Brewery, Serbia’s largest) and Valeant (a Serbian-based pharmaceuticals production site), to Magna’s greenfield investment (as a part supplier for Ford, Renault and Smart), the investment landscape is busy.
In the mining sector, 80 percent of all prospecting licences (gold, copper, lead, lithium) issued on an annual basis in Serbia go to Canadian companies. In agriculture, the opportunities presented in organic food production (Serbia is responsible for 30 percent of the world’s raspberry production), as well as livestock (the biggest pig farm in Serbia has North America’s Duroc livestock), are highly profitable.
So what is the next big thing? The information technology sector? Telecommunications? Or Bombardier’s interest for growing Air Serbia’s fleet? Etihad Airways of Abu Dhabi is in the process of seeking more than two weekly direct flights from Belgrade to Toronto. That would be a game-changer, boosting the open-door investment policy promoted by the Serbian government.
We’ve also seen success in tourism: Belgrade is a popular destination: the Danube River is great for sightseeing, the EXIT musical festival in Novi Sad draws many, as does the Brass festival in Guča. It’s no surprise, then, that Lonely Planet sets Serbia within the world’s Top-10 best-value destinations for 2015.
We are also proud of our successes in exporting cars to Canada. Long-time partners FIAT and Zastava car factories are producing a 500L model, that, under a FIAT-Chrysler deal, became “domestic” both in Serbia and Canada (and Italy, of course). That gave a real boost to a trade exchange that was, however, modest at $111 million. Clearly, there’s more opportunity waiting to be seized.
Altogether, in the last decade, more than $1 billion worth of Canadian investment and capital has been put to work in Serbia. Everybody knows that after the first billion, things will get easier.
Not to make rating agencies feel forgotten, here are some statistics about Serbia. In Ernst and Young’s European Attractiveness Survey 2014, Serbia was one of Europe’s favourite investment locations in Central and Eastern Europe. In 2013, new jobs increased by 18 percent, the fifth-largest growth in Europe, while 63 new investment projects made Serbia the second-most-attractive location in Central and Eastern Europe, after Poland. Serbia — it’s the next big thing.
See you there.

Mihailo Papazoglu is the ambassador of Serbia. Reach him at (613) 233-6280 or diplomat@serbianembassy.ca.

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Mihailo Papazoglu is the ambassador of Serbia. Reach him at (613) 233-6280 or diplomat@serbianembassy.ca.

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