Serbia / Lebanon

US companies Pepsico, Molson Coors, Coca-Cola, Austrian Rauch, Swiss Nestlé, Denmark’s Carlsberg, UAE’s Al Rawafed, United Kingdom’s Salford and Ashmore, and many others have chosen Serbia as their preferable investment destination.

Fruit production is one of the key subsectors. With fruit export of €57.6 per capita, Serbia was ranked 13th globally in 2014. In 2015, export of fruit amounted to €526.1 million. In 2015, Serbia was the largest provider of frozen fruit to the French and Belgian markets and the second largest to the German market.

With around 79,000 tons produced, Serbia accounted for more than 21% of the global production of raspberries in 2015 and was the largest global exporter of raspberries with export revenues amounting to US$270 million. Around 80-85% of raspberry production is being exported mainly frozen and in bulk. There is also huge potential in production of final products such as frozen fruit in smaller retail packages, spreads, jams, toppings, ingredients for the ice cream industry, fruit cubes for yoghurt production, etc.

Serbian raspberries

Apples are also an important export. Serbia exports more than US$100 million of apples annually especially to the Russian Federation, to which it was the largest exporter of apples in 2015. Massive apple orchards are expanding all across Serbia especially in Vojvodina, with premium melioration systems, trendy varieties, and modern anti-hail nets.

Climate is also favorable for vegetable production, and Serbia is the main exporter of vegetables to southeastern Europe. Pepper (paprika) is exported in different forms—shredded, cooked, roasted or dried and used for the production of aromatic spices.

In terms of production, potatoes are the most important vegetable followed by cabbage, melons, and watermelons. The production of green peas and sweet corn is constantly on the rise due to increased global consumption of frozen, ready-to-eat meals.

Livestock farming and meat processing in Serbia also have a long tradition and a strong position in the CEFTA market. The most popular meat products are fresh or smoked pork and beef as well as poultry. Serbian pâté, dry sausages of different types, hotdogs, and smoked meats are widely spread through retail chains in the Western Balkans.

The Serbian dairy industry exports various products internationally—from kajmak, a creamy dairy spread originally made in Serbia, to yoghurt, paprika in sour cream, and white, soft, and hard cheeses. Fresh and pasteurized milk is used mainly for the local market or exported regionally. However, Serbian export companies are eyeing new markets, primarily Russia and Turkey for the signed FTAs.

Traditional Serbian white cheese and kaymak

Serbia also has a great potential for producing and placing organic products thanks to the number of small land properties—two to four hectares—and excellent climate and soil conditions. Possibilities for organic food production are endless and underexploited. Organic farming is increasing every year—from 5,800 hectares in 2010 to 15,000 hectares in 2016.

Serbian organic farming is often focused on export. Traditionally, this includes mostly fruits requiring a low degree of processing such as frozen raspberries, blackberries, sour cherries, blueberries, and strawberries but also fresh apples, concentrated fruit juices, dried fruits, medicinal herbs, mushrooms, and different varieties of fruit purées.

Organic farming in Serbia

To corroborate these claims, the report uses a chart in which Serbia is listed as a mature market with respectable market volumes. This market is expected to grow and become visible in the foreseeable future, and there is the potential for Serbian companies to be vendors for regional customers or a nearshoring market for regional IT companies.

Serbia is becoming a respectable offshore destination for software development, and that is reflected in ICT export performance— the total revenue from computer and information services exports excluding hardware. The total revenue of the software export sector alone was €239 million, while the rest was generated by local branches of Microsoft, IBM, HP etc. (€50 million) and the large Serbian system integrator (€20 million). The share of software exports in Serbia’s GDP is trending up.

On the global market, IT companies from Serbia (SME and big ones alike) are involved in different outsourcing roles: programming, testing software, and designing websites. The main markets for outsourced industry are the EU followed by the US. Outsourcing companies have established a trend of making their own products with a high export value on the foreign markets.

Other OEMs (original equipment manufacturing) found different advantages to producing automotive systems and parts in Serbia using the country’s effectiveness, logistic position, and government support for investments in the industry. Very soon, brands such as Bosch, Michelin, Continental, Magna, Johnson Electric, Delphi, Lear, Hutchinson, and many more that built factories triggered the influx of much-needed capital and know-how into an industry with a long tradition.

At the same time, Serbian capital oriented itself to the more-flexible SME sector while Serbian forgers, toolmakers, and plastic and rubber producers found they had a new market right at their doorstep. Besides vehicles produced by FIAT, the Serbian automotive sector shows a diversified portfolio of component producers. Whether it’s passenger cars, tires, turbocharger housings, wiring harnesses, electric motors, bearings, seat covers, various plastic, rubber, or metal parts and a variety of other components, the automotive industry in Serbia is growing relentlessly year by year taking the country into a new industrial age.

Beside passenger cars, commercial buses and trucks are being produced in Serbia. Ikarbus is the largest producer of city, intercity, and tourist buses and medical vehicles. The majority of Ikarbus vehicles are sold on the domestic market, while the rest are exported mostly to Russia.

Contemporary Ikarbus bus models are produced under the Mercedes license using Mercedes components and its quality standards. The Zastava truck factory operates in cooperation with FIAT (the state still owns a majority stake in the company) and produces trucks up to 8 tons. Larger trucks from 10 to 32 tons and other heavy vehicles are produced by the FAP Company in Priboj, western Serbia.

Serbia also has a potential to become the preferred country for foreign investments in the wood and furniture sector. Over the past decade, the Serbian wood industry was one of the most attractive sectors for foreign investors. French Tarkett, Italian Ditre and Gruppo Fantoni, Austrian Kronospan, and many others have built factories in Serbia to supply local, EU, and the ever-growing Russian market with which Serbia has a free-trade treaty that greatly boosted furniture exports.

Serbian wood industry

The wood processing and furniture industry in Serbia comprised around 2,200 companies employing close to 23,000 in 2014. More than 90% of these enterprises are privately owned and located mainly in central Serbia. The majority of these companies engage in timber production, while the rest are engaged in furniture production.

The sector’s share in Serbia’s GDP was 1.4%, while the wood processing industry’s contribution to total exports amounted to 5.7%, with an ongoing positive growth trend over the last few years.

The timber and furniture industry was the second most important sector in the country and had a trade surplus of over €152 million in 2014. A half of exported products comes from the furniture industry, and the other half comprises sawn timber and other wood products.

Proven experience in maintaining customer relations and meeting customer requirements in line with international standards contribute to a steady increase in this sector’s export volume. Exports of the textile sector were worth close to US$1.2 billion in 2014, up 8% from 2013. Textile production and the garment industry accounted for 72% of the sector’s export revenue, US$853 million, which represented a 7% increase. The textile and clothing industry experienced a remarkable growth of exports from US$228 million in 2001 to more than US$853 million in 2014, an increase of over 374% in 13 years.

Serbia’s textile and clothing manufacturing industry has a significant production capacity especially in the production of heavy and light garments for all ages, knitted garments, sportswear, jeans, children’s clothing, baby equipment, work clothes and uniforms, underwear, socks, home textiles, and carpets.

The major export markets for textile products (socks/hosiery, yarns, and other fabrics) are Italy, the Russian Federation, and Germany, which absorb 45% of the exported value. For garment products, Italy and Germany are the biggest export markets (almost 20% of the exported value). Traditionally, Serbian companies provide quality CM and CMT (cut, make, and trim) services mainly for well-known brands such as Dolce & Gabbana, Patrizia Pepe, Gucci, Hugo Boss, Valentino, Tommy Hilfiger, and many more. However, a great number of Serbian companies are increasingly interested in extending their services in OEM (original equipment manufacturing) and ODM (original design manufacturing), which includes purchasing raw materials for the customers and design of the collections for their target groups.

The tourism industry is mainly focused on the mountains and spas of the country, as well as the historical cities of Belgrade and, to a lesser degree, Novi Sad, which are the preferred choices of foreign tourists.

The most popular mountain resorts are Kopaonik, Stara Planina and Zlatibor. There are many spas in Serbia, the largest of which are Vrnjačka Banja, Soko Banja, and Banja Koviljača.

Đavolja varoš – Devil’s Town

City-break and conference tourism is developed in Belgrade and Novi Sad. Other touristic products that Serbia offers are natural wonders like Đavolja varoš (Devil’s Town), Christian pilgrimage to the many Orthodox monasteries across the country and river cruises along the Danube. There are several internationally popular annual music festivals, such as EXIT (with 25–30,000 foreign visitors coming from 60 different countries) and the Guča trumpet festival.

Useful links:

• Serbia.com
• National Tourism Organization of Serbia
• Exit Festival
• Kopaonik
• Zlatibor
• Spas