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south-east european

INDUSTRIAL MARKET

12

SEE INDUSTRY

SERBIA

The Serbian metal industry has a long tradition and is

still currently one of the most important sectors of coun-

try’s economy. Nearly 5000 business companies are

active in the Serbian metal processing sector, which

represents 5,5% of the total number of Serbian compa-

nies. Nearly 11% of the total number of the Serbian

employees is engaged in this sector. The metallurgical

and mining sectors comprise of a total number of 736

companies that engage nearly 25 000 employees,

states a report published by the Regional Development

Agency Eastern Serbia (RARIS). Historically, the met-

al industry has been very export-oriented and opened

to collaboration with foreign companies. Serbian metal

processing workers are highly skilled and trained to

meet with the European market standards, and at the

same time labour cost is one of the lowest registered

within the Serbian industry.

The metal processing industry is mainly located in

the Lower Danube regions, namely Eastern Serbia,

outlines the industry report done by RARIS. Manufac-

turing, especially processing of aluminum and copper,

and the production of final products made of these met-

als are significant competitive advantages of Serbia.

The installed processing capacities significantly exceed

the domestic raw material inputs. These facilities are

used for processing of significant amounts of foreign

raw materials.

In terms of export – as already mentioned the Serbi-

an metal processing industry is very export-oriented.

Its products are most exported to the markets of Aus-

tria, Germany, Italy, Bulgaria, Romania, Netherlands.

Additionally, the metal/mechanical sector also ac-

counts for significant imports of Italian packaging ma-

chines and food processing lines. According to fore-

casts, this industry will continue to offer interesting op-

portunities for foreign investments and collaborations.

Iron and steel production within the metal processing

industry is related to steelworks US Steel Serbia in

Smederevo, which is an integrated factory with a tech-

nological process starting from raw materials (iron ore,

coke and limestone) and finishing with hot rolled strip

and/or cold rolled sheets, at one location. Its annual

production amounts to about 2 million of tons of final

Metal Processing in Bosnia and Herzegovina

and Serbia

products (steel sheet and strip). Some of the produc-

tion is covered by the production of crude iron in both

blast furnaces and crude steel in converters, while the

rest is from other factories.

As the heart of the country’s metal processing indus-

try, Eastern Serbia is characterized by a dominance of

capital-intensive capacities of mining, metal smelting,

energy generating and industrial sectors: manufactur-

ing and processing of copper ore, production of non-

metals, electric power generation, coal production, and

production of construction materials.

The backbone of the Eastern Serbia metal processing

industry represents the exploitation and processing of

mineral resources, states the market report by RARIS.

Continuing to today, there are significant mineral re-

sources and reserves in the region. Some of the most

important are considered to be the deposits of copper

and gold, but there are deposits and numerous occur-

rences of ores of other metals, such as lead, zinc and

others recorded. Confirmed geological ore reserves

amount to 1,38 billion tonnes of ore containing approxi-

mately 5,1 million tons of copper, 202 tons of gold and

1477 tons of silver. Copper production for the next 50

years is confirmed based on existing resources with an

average annual production of 26 million tons of ore.

Regarding foreign investment and industrial cooper-

ation Serbia has a number of advantages, among

which is the fact that investing in the country’s metal/

mechanical industry means acquiring some very im-

portant economical benefits such as low labor costs

(for medium skilled labour especially) and low trans-

port costs thanks to the geographic proximity of Italy

and Serbia. Investing in Serbian production additional-

ly allows an access to a fast growing local market with

a strong and growing request for machineries, and pro-

vides the investor with further access to various other

markets holding preferential trade agreements with

Serbia. A lot of opportunities are available especially in

the field of subcontracting agreements when it comes

to industrial collaborations. Factors such as the high

credit cost, obsolete machineries and lack of western-

style management and sales skills are some of the

main reasons why local companies tend to welcome

subcontracting agreements.

The companies that comprise the metal processing

industry also share some common characteristics.

These include, but are not limited to: Fairly large facili-

ties, because they were constructed to meet the needs

of the former Yugoslav republics and its export; An in-

creased competitiveness achieved by improving the

technical quality of products and reducing production

costs or prices of final products, activities of marketing

services in enterprises are required; Current utilization

of the facilities is about 30% of available capacities,

primarily due to lack of working capital for purchase of

raw materials and spare parts for continuous produc-

tion, as well as the reduced market share caused by

weak investments in the country; For continuous pro-

duction, financing for current production activities, and

overhauling of existing machines in order to improve

the operational readiness to the level of 80% capacity

is to be provided.

Listed below are some of the biggest companies in

the Serbian metal processing sector, as described by

their respective official websites.

Source: Dreamstime

Source: Dreamstime