Metal processing industry in Serbia
Serbian metal industry comes from a long tradition and it is, still today, one of the most important sectors of Serbian economy with almost 100,000 workers accounting for 6% of national GDP. This comprises 3,600 companies out of which 43% are big size companies, 26% are medium size companies and 31% are small size ones. Metal processing products account for 20% of the Serbian exports and 34.2% of the Serbian imports. Traditionally this industry has always 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. On the other hand labour cost is one of the lowest registered within the Serbian industry.
Iron and steel production in Serbia is related solely to steelworks US Steel Serbia in Smederevo. It is an integrated factory with a technological process starting from raw materials (iron ore, coke and limestone) and finishing with hot rolled strip and/or cold rolled sheets, at one location. The annual production is close to 2 million of tons of final products (steel sheet and strip). Some of the production 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 evidenced by import/export activities between Italy and Serbia, Serbia largest imports from Italy are represented by mechanical and household appliances. The Serbian metal/mechanical sector also accounts for significant imports of Italian packaging machines and food processing lines. According to present forecasts, this industry will continue to offer interesting opportunities for foreign investments and collaborations. As already mentioned Serbian metal/mechanical workers are highly skilled and very familiar with European market requirements and Standards. On the other hand labour cost is one of the lowest registered within the Serbian industry.
As regards foreign investment and industrial cooperation, the following considerations apply: investing in Serbian metal/mechanical industry means acquiring some very important economical benefits such as low labor costs (especially medium skilled labour) and low transport costs due to the geographic proximity of Italy and Serbia. Investing in Serbian production will not only allow a company to access a fast growing local market with a strong and growing request for machineries but will also provide them a further access to the various other markets holding preferential trade agreements with Serbia. As regards industrial collaborations, a lot of opportunities are available especially in the field of subcontracting agreements. 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. In short, the Serbian metal/mechanical industry has very high expectations as regards the joint venture between FIAT and ZASTAVA agreements, which will allocate significant investments up to approximately 700 million Euros a year for the construction of a local production unit with a capacity of over 200,000 vehicles per year.
LATEST issue 4/2023