Serbia is a key country for Turkey for the transportation of Turkish products to EU as well as bilateral economic relations. Turkish firm which have focused on easy access opportunity to EU recently are keeping on investing for Belgrade, the capital of Serbia.
Pursuant to the Free Trade Agreement signed between Serbia and Turkey in 2010, mutual imports of industrial products have been carried out without customs since 2015. According to the data of the Ministry of Economy, trade volume between Serbia and Turkey became 1,1 billion dollars by increasing 30% in a record level in 2017 when compared to the previous year. Considering the trade potential between two countries, important opportunities are shining out for the firms of our country in Serbian market.
With the appeal of the country after the incentives given by Serbian government, 10 firms from textile sector has already invested 100 million dollars for Serbia. At the same time, high educated labor and low minimum wage of Serbia contribute this appeal. In addition to the available investments, firms are targeting to increase their capacities in the future with new investment plans.
Incentive System Increases Demand
At the statement given by Tanju Bilgiç; Ambassador of Belgrade, Turkish firms are stated to employ 10 thousand Serbian people in Belgrade. Bilgiç says one thousand people will be employed with a new factory to be opened soon.
Hikmet Tanrıverdi, the President of İstanbul Textile and Apparels Exporters’ Association (İHKİB), states incentive system and low minimum wage are effective for the increasing interest of Turkish firms for Serbia. Tanrıverdi says “Besides the popular medium size and large- scale firms at textile sector in Serbia, Turkish firms take parts from automotive sector. Serbia has 2 kind incentives it applies for investors.”
Tanrıverdi who reports businessmen in Serbia where employment incentives are so attractive, are taking back more than 30% of the investment as cash after the investment is completed, he remarks that due to the taxes on imported raw material, costs are high in Turkey.
Serbia Investment Of Turkish Textile Suppliers
Ready- to- wear investments in Serbia are going on with store openings. LC Waikiki and Tudors are just two of these. In recent years, store numbers of Turkish firms are increasing as much as the investments.
After Jeanci Tesktil which is one of the first Turkish investors in Serbia, firms such as Aster Tekstil and Tibet Moda became the other names which invested for the country. Jeanci firm which took the investment decision in 2010, employs above one thousand people today. And Aster Tekstil signed under 10 million Euro valued investment in Nis. Tibet Moda, one another of Turkish firms, which invested in Serbia has about one thousand personnel at the factory in Cuprija.
Taypa, one of the firms of Tay Group, took the action for new textile investment that it plans to make in Serbia. Within the scope of Memorandum of Understanding signed by Goran Knezevic who is the Minister of Economy and Mesut Toprak; the Chairman of the Board of Tay Group in Belgrade, Serbia in 10 October 2017, 35 million euro valued investment is planned to be carried out in next 5 years for ready-to-wear and outfit factory to build in Kraljevo.
About The Serbia’s Economy
Serbia economy mainly grounds on foreign capital supported manufacture sector and export. Serbia is defined as one of the countries having growth potential. According to the country report issued by Republic of Turkey, The Ministry of Economy, GDP which increased 2,8% in 2016, carried out as 41,7 billion dollars with 1,9% increase in 2017. Fixed investments increased 5,3%, industry production increased 3,9% but agriculture production decreased 10%. Special consumption expenses are expected to increase 3,3% in 2018- 2020. Among the most important subjects of Serbia, there are high unemployment rate and creating of new business fields, inflation, high public costs, and increasingly growing public borrowings, increasing public and special external debts, drawing of new foreign investments.
And among the attractive factors of Serbian economy, there are country’s strategic location, having relative cheap and qualified labor, Free Trade Agreements made with EU, Russia, Turkey and CEFTA countries and pretty generous stimulus packages applied for foreign investments.
