Bosnia and Herzegovina

Automation & RoboticsIndustrySouth-East European INDUSTRIAL Мarket - issue 3/2016

The total area of Bosnia and Herzegovina (BiH) is covered with approximately half forest and half agricultural land (of which about half pasture, half arable land). Part of the arable land remains uncultivated (approximately 44%). On the cultivated land, mostly wheat and maize and other cereals (together 56%) are harvested, whilst vegetables represent about 13% of harvested area, and potatoes are 7%. The production mostly takes place in small-scale farms, with relatively low productivity.

The MIMS Group is one of the largest privately owned companies in BiH, employing over 5000 people. It has a variety of company members such as Merkur (retail), Klas and Sprind (mill and bakery), Sarajevo and Tuzla Breweries. Further, larger companies from the region are also quite dominant on the market, such as Agrokor (Croatia), Mercator (Slovenia), and Danube Food Groups (DFG).

According to the "World Agricultural Production" report conducted by the United States Department of Agriculture, in 2014/2015 Bosnia and Herzegovina has yielded 2,70 metric tons per hectare for oats, in 2015/2016 - 2,73 metric tons per hectare for oats (preliminary results) and the projections for 2016/2017 are 2,73 metric tons per hectare for oats. The country has produced 0,03 million metric tons of oats in 2014/2015, and the same amount is expected for the 2015/2016 period.

In comparison, Bosnia and Herzegovina has yielded 2,25 metric tons per hectare for rye in 2014/2015, and the preliminary results for 2015/2016 show an increase of 2,67. The prognosis for 2016/2017 is 3,00 metric tons per hectare. The rye production is projected at 12,50 per cent higher in 2016 compared to last year’s yields.

Meat processing and production
Due to the high share of grasslands in total agricultural land, livestock production is important for BiH. Halved during the war, livestock have been gradually renewing. The years 2000-2008 are characterised by constant increases in production of almost all livestock products (milk production +37%, meat production +16.3%). However, BiH is still a net importer of meat.

BiH has a tradition in lamb meat and baby beef production as well as in processing of meat (in particular dried and smoked meat). There are more than 30 meat processing companies in BiH, but most are small-scale. The annual capacity of the 11 largest companies is approximately 60,000 MT, but only around 50-55% is utilised.

Market leaders in the meat processing and production industry are: Akova Impex, Sarajevo; Lijanovic, Siroki Brijeg; and Menprom, Tuzla. All have HACCP and ISO certification, and Akova Group also has a Halal certificate and Menprom an ISO 22000-2005 certificate. Other companies on the market are smaller (e.g. Brajlovic, Stanic, Bro jler, La Vita, Brovis, etc.). One of the market leaders in egg production is Posavina koka.

Milk processing and production
There are about 100 dairies in BiH, with a total capacity of ~2 mln litres/day. Only about one third of that capacity is used. Approximately 45 dairies exceed capacity of 1,000 litres/day and 10 exceed capacity of 100,000 litres/day. The dairies produce mainly high-volume, fast-turnover, low margin products like fluid milk and only a few dairies produce value-added products like aged cheese. As a result, most value-added milk products are imported from neighbouring countries or the EU.

Market leaders in the milk processing and production industry are the Kozarska Dubica dairy Mlijekoprodukt, Meggle Eastern Europe GmbH, Sarajevo Dairy, Banja Luka Dairy and Tuzla Dairy. The companies have HACCP and ISO, and some also Halal certificates.

Bakeries, flour mills and edible oil production
Market leaders in the flour mills/bakeries industry are Klas and Sprind, both belonging to MIMS Group. Further, there are a number of small and medium sized companies. BIMAL, Brcko, is BiH’s sole edible oil producing company that has crushing, refining and bottling capacities.

Sugar factories and sugar production
From 1996 until recently, sugar beets have not been produced in the country. However, it seems that sugar beet production has been restarted in Bijeljina. BiH still has some unused customs-free quota for export to EU. Studen in cooperation with Agrana, Austria, have built a sugar refinery in Brcko, BIH: Studen-Agrana Rafinerija Secera, but it is only refining sugar based on imported semiprocessed products. The sugar plant of Fabrika secera in Bijeljina has a daily processing capacity of 4,000 tons sugar beet and production of 500 tons sugar.

Fruits and Vegetable processing and production
BiH’s production of vegetables is in total ~490,000 tons on 32-38,000 ha. Its potatoes production is ~414,000 tons, and the production of fruits - 252,000 tons (plums: ~156,000 tons, apples: ~71,000 tons, pears: ~25,000 tons).

Industrial processing of fruit in BiH involves mainly drying and production of fruit juices (or concentrates) and jams. However, there are frequent fruit shortages for some fruit varieties. About one third of fruit juices are imported, as local production cannot meet the local demand.

There are approximately 20 fruit and vegetable processors in BiH. The two largest companies, Vitaminka, Banja Luka and Vegafruit (MIMS Group) export part of their production. Other companies are small to medium-sized (Mladegs PAK, Vegic commerce, Fruktona, Sava, Berry Dreams, Bajric).

Beer, mineral water, soft drinks
Local production of beer in BiH covers about 65% of the domestic market. The majority of beer imports come from Serbia and Croatia. The market leaders are Sarajevo Brewery (owned by MIMS Group), Banja Luka Brewery and Tuzla Brewery (owned by MIMS Group). Others are the Bihac Brewery and Grude Brewery. The five local breweries cover an estimated 64% of the domestic market, the rest of beer being imported.

350 million litres of soft drinks are sold per year in BiH, of which about half are bottled water. Still and functional bottled water are fast growing categories. Market leader for soft drinks is Coca Cola HBC B-H. Sarajevski Kiseljak (Agrokor) is a market leader for bottled water, followed by Vitinka. Other companies producing bottled water are Sarajevo Brewery, Ilidzanski Dijamant, Oase, Planinski Biser and Leda. Despite having good resources of water, BiH is still a net importer, with imports mainly coming from Croatia (e.g. Jamnica) and from Slovenia.

Wine and grape production
Wine production in BiH amounts to about 25 mln litres in 2009. BiH is a net importer of wine, with wine from FYR Macedonia and from Montenegro often being cheaper than the local wine. BiH exports wine mainly through the wineries Herzegovina Vino & Citluk and Podrum Andrija. Other smaller wineries are for example Podrum Ostojic, Vukoje, Tvrdos, Stolac Winerey, and Doanovici Winery.

Confectionary and snacks
Until 2008 there was strong growth in sales of confectionary and snacks. Since the global financial crisis, consumers look again more for basic food stuff and products at discount prices. Companies from the region (in particular from Slovenia, Croatia, and Serbia) are dominant in the market.

VISPAK, Visoko, is a local company producing coffee, chocolate, snacks, etc. Furthermore, Vitaminka a.d., Banja Luka, also produces confectionary and snacks (in addition to processing fruits and vegetables). Other companies producing chocolates, ice cream and/or snacks are for example Lasta, Barpeh, Emmesse, and Eurovip.

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