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

Kosovo is a relatively small country with an area of about 1,1 million ha, of which around 53% is considered to be agricultural land. Approximately 87% of the agricultural land is in private hands, the remainder is administered by the Kosovo Privatisation Agency (KPA). Irrigation systems are a constraint to agricultural production, and Kosovo has limited water resources.

Cereal and fodder crops account for the largest share of arable land in Kosovo, followed by vegetables. Cattle production including milk production is mostly taking place on very small-scale farms. The farms are usually small (around 3,2 ha) and mostly have semi-subsistence production, with a very significant share of on-farm consumption and informal trade.

Market integration is low. Agro-processing firms used to be part of Agro-Kombinats, which were mostly privatized. Kosovo has a tradition in wine production, but most of the plantations are relatively old now.

Kosovo is a strong net importer of agrifood products. Most of the agrifood trade is with the neighbouring countries Serbia, Macedonia and Albania. The main agrifood import products are: tobacco, beverages, meat, cereals, dairy produce, eggs and honey. Most of the companies in the food sector in Kosovo are still relatively small, with the exception of the larger retail & wholesale company Elkos Group, ETC, the company Abi, and the brewery Peja.

With the government support to the agriculture sector, domestic production increased by 26% in the years 2013 and 2014, which has directly contributed to the replacement of the import and improved trade balance. The agricultural land cultivated with different crops has also increased, and with this increased the yields of these crops.

Meanwhile, through investment grants the government of Kosovo has created about 15,000 new jobs in 2009-2013 and has supported about 10,000 existing jobs. The supporting budget for farmers for 2015 was EUR 43 million, where 20 million were planned in grants and 23 million in subsidies.

Meat processing and production
Raw material and final products of the meat processing and production industry are to a large extent imported. Local production of livestock is mainly on a very small-scale. There is a considerable amount of on-farm consumption and informal trade. Traditionally, Kosovo was an important exporter of lamb meat.

Kosovo has around 12 meat processing companies that together process approximately 3,000 tons of locally produced meat annually. There are about 6 relatively large meat processors, supplying around 15-20% of Kosovo’s domestic market. Almost 100% of the packaging material needs are imported.

The government is elaborating a strategy on how to improve the food safety standard in dairy and meat processing plants. One can expect that some establishments will be closed, and others need to invest to meet the required standards.

A major meat processor in Kosovo is Koral, Prishtina. A chicken meat and egg producer is KonSoni, Gjilan. Alaska and Valvis from the towns of Prishtina and Prizren have the biggest slaughtering facility in Kosovo, using mostly imported livestock.

Milk processing and production
The demand for milk in Kosovo is estimated at ~320-340,000 tons. Local milk production is estimated at ~240-260,000 tons (number of milk cows estimated at ~140,000). Milk is mostly consumed directly on the farm or sold as raw milk, sour cream or white cheese on local markets. Only about 10-15% of the milk is supplied to dairies (an estimate of about 34,000 tons).

Imports amount to ~82,000 tons per year (milk products in milk equivalent liters), amounting to EUR 25-30 million annually. Import products are mainly UHT milk, yogurt, butter, white cheese, and yellow cheese. About 80% of the imports come from the EU, mainly from Hungary, Slovenia and Germany.

Kosovo has ~26 processing units, of which only 18 are licensed. Of those, about 5-6 diaries may be called ’commercial’ (with 5000-40,000 liters intake per day). The dairies mainly produce liquid milk, yogurt, white cheese. The dairy processing industry in Kosovo is currently in the process of implementing and integrating quality management systems.

Devolli Company in Peja began in 2003 with the production of Vita UHT milk. Vita milk is a cooperation between Devolli and Tetra Pak. In addition to producing UHT milk, Devolli also packages coffee and different juices. Abi Dairy (linked to Abi supermarkets) processes about 20,000 liters of raw milk. Another growing dairy is Bylmeti.

Bakeries, flour mills and edible oil production
Cereals (wheat, maize, barley) are the main cultures that cover the major part (70%) of the cultivable land (arable land and gardens) in Kosovo. One of the biggest feed mills is M&Sillosi in Xerxe, Rahovec, which was privatized several years ago. Bakeries in Kosovo are mainly small.

Fruits and vegetable processing and production
Kosovo has vegetable production on 25,000-28,000 ha (mainly in the regions Dukagjin and Anamorava), of which about 200 ha are greenhouse areas. Vegetable production is estimated at ~200,000 tons of potatoes, ~65,000 tons cabbage, ~100,000 tons of green peppers, ~55,000 tons tomatoes. However, statistical data on overall fruit and vegetable production in Kosovo are not always reliable, and often differ from source to source.

There is a demand for high quality local produce from the supermarkets. The current bottlenecks are missing post harvest handling capacities (cold storage, grading, and packaging) and modern processing capacities.

Pestova is a leading potato producer and processor in Kosovo and one of Kosovo’s few exporters. The company was founded in 1991, was severely damaged during the Kosovo conflict in 1999, and resumed its activities in 2000. The company started primarily with the production of potatoes and later invested into the production of crisps and potato frozen products.

Abi & Elif 19, also known by its brand name Progress, is a processor of fruit and vegetable products, i.e. marmalade, jams and jellies, ketchup, peppers, cucumbers, green bean and other products. Abi & Elif 19 is among the most significant food processors of fruit and vegetables in Kosovo. Other smaller processors are MOEA, Dona, Tango, Frutti (juice production based on concentrates).

Beer, mineral water and soft drinks
There is one main brewery in Kosovo, the Peja Brewery, which is in Slovenian ownership. Peja brewery is also distributing soft drinks. Bonus Bonita, Lipijan, is the key producer and distributor of mineral water.

Wine and grape production
In 1980s, Kosovo winemakers produced 50 million liters of wine a year, of which up to 40 mln litres were exported. However, about 50% of the vineyards were destroyed in the 1990s. Now, there are about 5,000 ha vineyards. Production is taking place mainly in the south and west of Kosovo.

There were four formerly state-owned wineries with the following capacities, of which three are now privatized. One of the privatized wineries is Stone Castle ("New Cellar") in Rahovec. Stone Castle produces about 10 million liters and exports more than 90% of that amount. Another private winery is Haxhijaha ("Old Cellar").