Prerequisites are needed to further attract investment – an available and skilled workforce, a stable and predictable monetary and financial policy, including flexible and stimulating regulation related to taxes and contributions on wages, says Clemens Sachs, CEO of Leoni Serbia for the latest edition of “Investing in Serbia 2000-2020”.
The company has been operating in Serbia for 10 years. What are your experiences as an investor?
From the very beginning, from 2009, when we opened our first factory in Prokuplje, until now, with the fourth factory in Kraljevo, our experience has been very positive. One of the main reasons for the decision to invest in Serbia was that there was an available and qualified workforce here, with an exceptional work ethic which was not the case everywhere.
Also, what meant to us from the very beginning was the support we had from the Government of the Republic of Serbia. Having all that in mind, we decided to expand our business, by opening new factories, first in Doljevac, then in Nis and now in Kraljevo.
The total value of our previous investments in Serbia is over 142 million euros. What is different now in relation to the beginning of our business here, is that the situation on the labor market has changed tremendously, bearing in mind, above all, going abroad due to the work of a large number of people, which will certainly have an impact on our business.
What are the advantages of doing business in Serbia, and what part of the business environment could be improved?
There are a lot of advantages. I mentioned the most important, and that is a qualified and accessible workforce with an open mindset, exceptional work ethic, with excellent knowledge of English. These are all things that attract investors. There is also state support.
When it comes to room for improvement, there is, especially in the area of policies and regulations related to the area of taxes and contributions on salaries of employees, which should be more flexible, including increasing the non-taxable part of salaries and reducing the rate of taxes and contributions on salaries. All this would encourage companies to continue to invest more and employ more people, offering more earnings as well.
Given the emigration of the mostly able-bodied population, do you have problems finding staff?
I can say that we as a company also feel the effects of the trend of labor migration from Serbia to the countries of the European Union and that this is one of the great challenges we face, and I believe other companies in our environment.
Do you cooperate with domestic suppliers? Are local SMEs able to engage in international supply chains?
We have cooperation with more than 500 domestic suppliers in the field of procurement of non-productive materials and services. We are proud that our business here has influenced the opening and growth of a large number of small and medium enterprises, especially in areas where we have factories. If we talk about whether these domestic companies are ready to get involved in international supply chains, I think it is feasible, given that they have the capacity, resources, people, “know how” and it is in some way part of our business strategy .
Where do you see room for improvement in attracting investment?
The current situation with migration and outflow of labor is something that can affect further foreign investments, and in this regard, it is necessary to create an environment and preconditions for people to stay and not leave the country.
This means that the preconditions I have already mentioned are necessary for further investment attraction: an available and skilled workforce, a stable and predictable monetary and financial policy, including flexible and stimulating regulation related to taxes and contributions to wages.
Also, there are many regions in Serbia where foreign investors would come and invest, but it is necessary to have a good traffic infrastructure, especially the highway.
What is the company’s relationship with local governments?
From the moment we arrived in Serbia, we have good cooperation with each of the local governments where we opened factories, starting with Prokuplje, Doljevac, Nis and now Kraljevo.
The local administration was our sincere partner to start and do our job as soon as possible and without obstacles. But there is still a lot to be done and realized, especially I mean the conditions that were guaranteed to us when we decided to invest in those local governments.
For example, we currently have great difficulties regarding the availability of public transport in Kraljevo and partly in Nis, and we expect much greater support and engagement of local governments. In this regard, we are talking to representatives of both cities in order to find a solution that is in everyone’s interest, Nova Ekonomija reports.
