Foreign companies from the auxiliary automotive industry, which operate in the Czech Republic, Slovakia and Hungary, are increasingly seeing Vojvodina as a good destination for starting a new business, or relocating the existing production capacities in order to address labour shortage in these countries.

In the period from 2016 to date, a total of 113 foreign companies invested 355 million euro in Vojvodina and employed about 18,200 workers. Out of these 113 companies that carried out investment activities (increase in the number of employees or re-investments), 29 are new companies operating in the Autonomous Province of Vojvodina (APV). So far, they have employed 1,600 workers and invested around 80 million euro in total. The Vojvodina Development Agency (VDA) has worked on some of the most ambitious projects of this kind, such as investments by Continental Automotive in Novi Sad, Kostel Automotive in Bačko Gradište, La Linea Verde in Ruma, and others. This is one of the reasons why we are talking to Nikola Žeželj, VDA’s director, about the province’s investments and the Agency’s further plans.

What is it that sways investors towards choosing Vojvodina as an investment destination?

It is always a combination of several decisive factors. Companies, which are already operating in Vojvodina, and with which we have regular communication, say that Serbia’s greatest advantages are competitive operating costs, numerous financial and tax reliefs, workforce, as well as an access to the market comprising of one billion people owing to Serbia’s free trade agreements with the CEFTA countries , EFTA, Turkey, Belarus, Kazakhstan and Russia, a transitional trade agreement with the EU and a preferential agreement with the United States. An additional advantage of Vojvodina is that only one border separates it from the EU and that the province’s geographical location allows for Just-in-Time / Just-in-Sequence, which is particularly important for companies in the auxiliary automotive industry, a sector that is very strong in Vojvodina.

How are the regions in the province profiled in terms of the concentration of industrial capacities?

That’s a really complex question and the answer depends on many factors. Investors are are the ones who choose an investment location, and if most investors, coming from a particular sector, decide on a particular location, then there is a higher industrial concentration there. For example, in addition to a well-structured infrastructure, having quick access to main roads, and similar, investors sometimes require that the municipality, in which they are planning to invest, already has a long tradition in their particular industry and a trained workforce. Sometimes, it is important for them that the municipality has schools or colleges that produces trained workforce they can employ. So, Bačka County, for instance, is the most prominent in the ICT industry, primarily because of Novi Sad, which has strong technical faculties and educates a large number of ICT professionals. Another example is the town of Vršac. Although it has the population of only 40,000, Vršac has become the pharmaceutical hub of Serbia thanks to companies like Hemofarm, which has been operating there for nearly six decades, and Fresenius Medical Care. Most of the metal processing companies are located in Banat County, while Bačka boasts with the highest number of workers in the auxiliary automotive industry. Foreign companies from the auxiliary automotive industry, which operate in the Czech Republic, Slovakia and Hungary, are increasingly seeing Vojvodina as a good destination for starting a new business, or relocating the existing production capacities in order to address labour shortage in these countries.

What trends have you noticed in the FDI influx in Vojvodina and which sectors are the most popular with investors?

In terms of the leading sectors in Vojvodina, according to the statistical dana collated by the VDA, these are agribusiness, financial sector, construction industry, pharmaceutical industry and auxiliary automotive industry. In regards to conuntries, the largest investors come from Germany, the United States, France, Italy and Slovenia. As I have already mentioned, the trends show that Novi Sad is increasingly becoming a strong IT hub, while investments in agribusiness, as one of the leading sectors in Vojvodina, can’t be even called a trend, but rather a constant. The highest number of foreign companies are engaged in agribusiness, which is only logical given that Vojvodina is a traditionally agricultural region. Currently, we have 56 foreign agribusiness companies, which have invested nearly three billion euro. There is also a trend in Vojvodina becoming one of the major European centres of automotive industry, with the highest number of citizens of Vojvodina working in this sector, namely over 15,000 people work in 24 automotive companies. In addition to education, the reason for this is the close proximity of large car and car parts manufacturers.

What are Vojvodina’s trump cards in attracting hi-tech investments?

In order to attract that kind of investments, you need to have an appopriate overall environment that facilitates innovation and advanced hi-tech culture that carries itself well when faced with fast development of new technology. I can say that Vojvodina has that kind of environment. Our province is known for being a region with excellent universities and research & development centres. The University of Novi Sad has about 50,000 students and has a special curriculum tailored to the needs of investors and new trends in technology development. Business incubator and ICT cluster have already been established in Novi Sad, and as you can see for yourself, the construction of a science and technology park, located at the beginning of Fruskogorska Street, is progressing well. Soon, we will have an additional 30,000 square meters available, which will further establish this space and attract even more domestic and foreign IT companies.

How much does the Vojvodina Development Agency invest in promoting the region as an investment destination? What is your place in investment promotion?

VDA’s job is, among other things, to make Vojvodina visible to all potential foreign investors, but also to help domestic companies with becoming suppliers and market their products in other countries. In addition, VDA currently participates very seriously in organizing appearances of Vojvodina’s businesses at several major trade fairs, based on the “Agreement on Joint Appearance at International Trade Fairs”, signed in November 2017 by the Provincial Government, the Vojvodina Development Agency, the cities of Novi Sad , Pančevo, Sombor, Subotica, Zrenjanin, Sremska Mitrovica, Vršac, and Kikinda, as well as the Chamber of Commerce of Vojvodina. In October, we are going to present the Province’s potential in the investment and real estate sector at the EXPO REAL Fair in Munich. Under the mentioned Agreement, Vojvodinian businesses also participated in the Beijing Tourism Fair, and are preparing for the upcoming Fruit Logistica Fair in Berlin, the most important international trade fair for the fresh fruits and vegetables sector.

Which types of promotions do you consider the most attractive and most effective in attracting new FDI?

Our experience has taught us that it is always best when you can enter into direct communication with potential investors. Everything we do, all sorts ofpromotional and marketing activities, is aimed at appearing in person in front of investors and presenting the potentials of Vojvodina in vivo.

What can investors expect from the Vojvodina Development Agency when they decide to consider Vojvodina as a potential investment location? What information and services can you provide from the moment the investment idea is born to its realization?

There is a good and generally accepted term in English for this type of service – a one-stop-shop. VDA is a place that domestic and foreign companies can turn for all issues related to the investment process. Our job is to find investors, and send them a detailed report on the business climate, operating costs, incentives, tax, customs and labour procedures, available workforce, logistics, etc. We are here to direct them to available locations, connect them with potential local suppliers and companies interested in joint ventures, as well as representatives of local self-governments, provincial and state institutions, private property owners and local companies, etc.

How much does VDA invest in boosting its expert capacities and expertise in order to be able to meet all of the investor needs?

Employee training is something we see almost as a regular activity. We attend seminars and trainings on different topics – event management, presentation skills, negotiation, etc. It is extremely important that each member of the team is proactive and closely follows everything that is going on in their profession, plus to learn and to progress.The work we do is like a living organism – foreign and domestic investment advisors have to know and monitor regulatory changes, new subsidies and be informed about all the changes and tendencies that together make the business climate. Those who work on promotion and marketing must use all modern promotion tools to make Vojvodina as visible as possible. For instance, in our Sector for Strategic Research, Innovation and Development Economic Policy, there is a constant need for improving the professional know-how and monitoring new laws and regulations that pertain to planning and programming of Vojvodina’s development.

According to your assessments, how successful is this year going to be for Vojvodina in terms of attracting investments?

If we take into account what we have done so far, the activities we have carried out and what is ahead of us by the year end, we can confidently say that we are more than satisfied with the current year. This success is not measured merely by the number of new investments, but also by the number of re-investments, new jobs, etc. For example, the Austrian company Egston System Electronics started production of cable systems in Pančevo at the beginning of the year, while the German company ZF Friedrichshafen began building a factory that will produce propulsion systems for electric vehicles. In Zrenjanin, the Essex Company is finalizing a factory that will manufacture enamelled copper wires, and Novares, which also produces components for the automotive industry, will open a new plant in October.

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