cooperation possibilities with economic structure of

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CHAMBER OF ECONOMY OF SARAJEVO CANTON

COOPERATION POSSIBILITIES WITH ECONOMIC STRUCTURE OF SARAJEVO CANTON

Sarajevo, February 2009

1. GEOGRAPHY AND DEMOGRAPHIC FACTS Sarajevo Canton is located in the central part Of Bosnia and Herzegovina. Total area: 1.277,3 m2 Population: 418.891 inhabitants (statistics dated 2007) Official languages: Bosnian, Croatian and Serbian Currency: Convertible Mark (KM) 1 Euro = 1,95583 KM Municipalities: Stari Grad, Centar, Novo Sarajevo, Novi Grad, Ilidža, Vogošća, Hadžići, Ilijaš and Trnovo The territory of Sarajevo Canton is characterized with north-south directed Road and railway connection with the world as well as air accessibility.

2. ECONOMIC STRUCTURE OF SARAJEVO CANTON - GENERAL INDICATORS a) Number of companies By the end of 2007 there were 5.190 companies actively carrying out its facilities in the territory of Sarajevo Canton:

State-owned companies Private companies Joint-ventures Cooperative companies

Percent 5,6% 90,7% 3,4% 0,6%

b) Company structure according to total income and profit gained in 2007.

State-owned companies Private companies Joint-ventures Cooperative companies

Participation to Total income (%) Profit gained (%) 40 54 45 32 14 14 1 0

c) Economic activity placing according to total income and profit gained Total income 1. Trade 2. Industry 3. Communications 4. Financial services 5. Construction industry

Profit gained 1. Communications 2. Trade 3. Industry 4. Construction industry 5. Financial services

Structure of Industrial production in Sarajevo Canton Cellulose and paper industry

0,2

Wooden production

0,4

Lether production

0,4

Textile production

0,8

Metal production

1,3

Production of electricity,gas and oil

12,2 19,4

Chemistry production

24,6

Tobacco production

29,6

Food production 0

5

10

15

20

25

30

35

d) Industry Industry is economic activity that incorporates the greatest number of employees and performs highest export rate. Food and beverage industry represents most important industrial sector since it contributes 30% of total industrial products. The biggest manufacturer is KLAS factory dealing with pasta, flour, cakes, biscuits, tea cakes, final and semifinal products and medicinal herbs based teas. AKOVA IMPEX with meat processes and meat and fruit cold-storage plant then SARAJEVSKA PIVARA dealing with beer and beverages and MILCO'S manufacturing milk and milk products. Manufacturing of tobacco products is taking place in FABRIKA DUHANA SARAJEVO is second important industrial sector concerning its 24, 6% participation in total industrial products. Textile and leather production participates by the industrial product with 10.5%. KRAS factory producing kids ready-made clothes, and FABRIKA OBUĆE I GALANTERIJE SARAJEVO dealing with leather fancy articles. Besides, there is significant increment related to number of small companies involved in this activity. Printing and publishing with 5, 5% of total industrial production mostly is located in several companies. Still, there is high range of small firms supplying variety of services within this activity. Wooden industry incorporates manufacturing of cutter timber and plates as well as final wooden products such as furniture, windows, doors etc. This activity is mostly accomplished within facilities belonging to BJELAŠNICA, ŠIPAD ENTERIJER, STANDARD, HAZARTON, DALAS and some small firms. Participation of 4, 3% in total industrial product is notably decreased comparing it with pre-war period. Problems are indicated through facility reconstruction but also occurred by losing previous markets. Manufacturing of vehicles with 2, 8% of total industrial product is rather insignificant by now. Car manufacturing in VW SARAJEVO started by the end of last year surely will represent the crucial encouragement to future industrial development and employment. Plants for bicycle manufacturing are located in UNIS LASTA factory.

Chemicals processing with BOSNALIJEK and FARMAVITA's pharmaceuticals facilities, SEMIKEM’s plants for diagnostic and cosmetic chemistry represents 19, 4% of total industrial product. BOSNALIJEK's newly opened drug plants will provide more important place for this industrial sector concerning its position within Sarajevo Canton economic structure. Metal processing industry represents 3% of total industrial product. Comparing with prewar period, production volume of this sector is rather minor mostly because of enormous war damages and partly, concerning the lost market. Sector includes manufacturing of metal constructions, containers, boilers (ENERGOINVEST) as well as wire and wire related products, air-conditioning and ventilation equipment, reservoirs and variety of chambers. Majority of metal processing capacities has taken place within big production systems that have being slowly revitalized after the war. Machinery and equipment production even being leading industrial branch in the country before the war, in this moment participates total industrial product only with 0, 05%. Successful revitalization of ENERGOINVEST's dominant highly-sophisticated production (high voltage breakers, switchers etc.) facilities, step by step will increase the participation of this industrial sector within economic structure. e) Construction industry participates the Canton's income with 8.3% it consisted of several big companies that have references for carrying out activities all over the world. HIDROGRADNJA, ŽGP, GP PUT, GP BOSNA are companies specialized for both civil engineering, high-rise buildings and projecting. Besides small companies such as BUTMIR, HOMING and others seem to be very prospective in the future.

Sarajevo and vicinity

f) Foreign trade

EXPORT-IMPORT of SARAJEVO CANTON in mil. Euro 2.187

2500 1.701

2000 1.490 1500

1.197

1.437 EXPORT

957 1000 500

567 109

IMPORT

678 133

188

266

280

330

371

424

0 2001 2002 2003 2004. 2005. 2006. 2007. 2008

FOREIGN TRADE of SARAJEVO CANTON in 2008.

Other Countries 9% Countries with Agreement of Free Trade 31%

EU Countries 60%

MAJOR TRADING PARTNERS, 2008 of SARAJEVO CANTON

Turkey Swisse Czech Hungary Serbia

Import

Italy

Export

Austria Slovenie Germany Croatia 0

200

400

600

800

1000

TOP 10 EXPORTED PRODUCT GROUPS IN 2008

Others 28% Footwear & Gaiters 3% Ores, Slag and Ash 3% Articles of Iron or Steel 5%

Nuclear Reactors, Boilers, Machinery 12%

Aluminium and Articles thereof 12% Wood and Articles of Wood 10%

Mineral Fuels, Mineral Oils and Inorganic Iron and Steel Products thereof Chemicals, 6% 9% Organic or Furniture, Inorganic Bedding, Compounds Mattresses, 6% Mattress Supports 6%

MAIN EXPORT PRODUCTS

MAIN IMPORT PRODUCTS



Electrical machinery and equipment



Machinery and equipment



Pharmaceutical and medical goods



Mineral products



Wood and wood products



Food products



Tobacco products



Basic metals



Food products



Chemical and pharmaceutical products

g) Employment In Sarajevo Canton there are 119.897 employed persons, and 71, 93 % of which are employed in industrial sector and 28, 07 % in non-industrial sectors (data November 2008.). Various manufacturing capacities involves greatest number of employees (22.157) followed by trade (14.370 employees) processes industry, communications (10.343 employees) and construction industry (8.674 employees) etc. h) Unemployment Total number of unemployed persons is 61.699 university graduates being 6, 9 %, 27, 2% are high school graduates and 29,5 % are qualified workers (statistics dated on November 2008.) i) Salary Average salary calculated for period January '08 / November '08 was 494, 9 euro -net.

3. POSSIBILITIES FOR BUSINESS COOPERATION a) Foreign Trade and Long-Term Production Cooperation • • • •

Regulated within Law on Foreign Trade Policy ("Official Gazette B&H" 7 / 98) Law on Tariff Policy in Bosnia-Herzegovina ("Official Gazette B&H" 21 / 98) Law on Custom Tariff in Bosnia-Herzegovina ("Official Gazette B&H" 1/ 98) Low VAT

b) Joint-venture Regulated within Law on the Policy of Direct Foreign Investments in Bosnia-Herzegovina ("Official Gazette B&H" 17 / 98) Forms of foreign investments: • Investment to already existing company • Establishing joint-venture • Establishing the new, independent company c) Starting Business Law on Enterprises ("Official Gazette F B&H" 2 / 95 and 8 / 96) as well as newly published Law on Business Companies equalizes foreign and domestic persons concerning the way of establishing company. Following forms of companies can be established: join-stock Company, Limited Liability Company, one person company, limited partnership company, stock limited partnership company and general partnership company. Law on Business Companies allows for establishing following company forms: 1. 2. 3. 4.

Unlimited liability company Limited partnership company Join stock company Limited liability company

d) Representative Offices of Foreign Persons Regulated by Decree on the Conditions for Establishing and Operation of Representative Offices of Foreign Persons in Bosnia and Herzegovina ("Official Gazette Federacy B&H" 7/95) e) Buying the Company in Privatization Process Regulated by Law on Enterprises Privatization ("Official Gazette Federacy B&H" 27/ 97) as well as Law on Changes and Additions to Law on Enterprises Privatization ("Official Gazette Federacy B&H" 8 / 99) ( www.apf.com.ba ) Mentioned legislation enables to all foreign and domestic persons to participate in privatization transactions as regulated.

4. FIELDS OF CO-OPERATION More important activities for the realization of the cooperation on the Sarajevo Canton area with foreign partners: a) Sector-industry:

• • • • • • •

Food and beverage industry Ready-made clothes Wood processing and wooden products Furniture manufacturing Manufacturing of vehicles Chemicals and pharmaceuticals Metal processing industry

b) ) Other sectors:

• • • • •

Construction industry and projecting Traffic and communications Banking, insurance and other financial services Environmet protection and sustainable development Tourism

5. PROJECTS By the Chamber of Economy of Sarajevo Canton are registered over 40 development projects of the companies. More information on the projects are available in the Catalogue of the projects as well on the Chamber's web site. The large development projects with an international character are also in preparation which can be realized only within wider regional projects, such as: Highway construction through B&H on the corridor V-c ( Bypass road around Sarajevo), Food industry Projects in water sector development, Hydro-energetic projects, Apartment construction 6. MOST IMPORTANT PROJECTS: • • • • • • • •

Food industry (“KLAS”,”BROJLER”,”SPRIND”,”TELOPTIC “,”MUJANOVIĆ”); Furniture manufacturing (“DOMAVIJA”,”KALEA”, “SABIX”,”BOSANKA””DALAS”) Chemicals and pharmaceuticals (“BOSNALIJEK”,”LIKVAL”,”FAVEDA”,”SEMIKEM” FARMAVITA) Ready-made clothes (“KANA”, “KRAS”); Metal processing industry (“ZRAK”,”LTH”,”IGT “E-TVORNICA DALEKOVODNIH STUBOVA”); Construction (“NEXE-GP PUT””ŽGP” “STANOGRADNJA”); Traffic and communications (“GRAS”, “CENTROTRANS”); Tourism (“BANJSKO-KLIMATSKI KOMPLEKS ILIDŽA”,KOMPLEKS-”BJELAŠNICAIGMAN”,”ARHEOLOŠKI PARK DEBELO BRDO” etc.

7. WHY INVEST IN SARAJEVO CANTON? The Canton Sarajevo is the biggest consumer centre in B&H for many products. In Canton Sarajevo there are many banks, agencies, international organizations, expert and scientific institutions which support the business development ; In Canton Sarajevo there is expert and market oriented manpower; In Canton Sarajevo there is already built infrastructure enabling fast organizing and business start up (sections of ex development carrier: («E», «Unis», «Famos», «Zrak», arranged space in certain municipalities for business start up, forming of free and entrepreneur zones etc). Strategic Determinations in Development of Canton Sarajevo: - Support for development of regional and international development projects; - Stimulation for investors and insurance of roles according to European and world practice; - Qualifying of administration for effective investors' services, - Establishing and development of partnership relations; - Privatization of companies and - Using of preferential treatment in B&H. All information on cooperation possibilities are also available in:

CHAMBER OF ECONOMY OF SARAJEVO CANTON La Benevolencije 8 71000 Sarajevo, Bosnia and Herzegovina Chamber of Economy of Sarajevo Canton on the Web http://www.pksa.com.ba

European Integration and Foreign Relation Department Manager Esad Ibišević, M.Sc.Ec. Tel: + 387 33 25 01 26 Fax: + 387 33 66 67 18 E-mail: [email protected] Co-ordinator Export Promotion Belma Jahović, B.Com.Sc.. Tel: + 387 33 25 01 41 Fax: + 387 33 66 67 18 E-mail: [email protected] Assistant Amira Višnjić, Ec. technician Tel: + 387 33 25 01 05 Fax: + 387 33 66 67 18 E-mail: [email protected]

CHAMBER OF ECONOMY OF SARAJEVO CANTON

Address: La Benevolencija 8 71000 Sarajevo Bosnia and Herzegovina Phone: + 387 33 250 100, 250 101 Fax: + 387 33 250 138, 250 137 www.pksa.com.ba E-mail: [email protected] Representative: Mr. Kemal Grebo, President

Chamber of Economy of Sarajevo Canton as a non-government and independent organization supports its members by stabilization process and in the EU Accession Process, by business development and by increasing of competitive capability in the country and abroad. Our services to its members (business information, expert advices presentations in the country and abroad, organized participation's in exhibitions, fairs etc.); organization of functional and permanent education in order to innovate knowledge of managing and expert persons in economy; mediation in solving disputes among its members, ensued due to the disregard of the business morale and good ethical standards; carrying out public jobs, including preparation for concluding collective agreements on salaries and other job conditions. Chamber’s activity is representation of its members' interests in the authorized state bodies, specially in preparing economic legislation, in passing measures and mechanisms of economic system and economic policy and in determining macro development policy; provision of various STAFF: Mr. Kemal Grebo, President of the Chamber, phone/fax: ++387 33 250 190, 250 138 e-mail: [email protected] Mr. Irfan Mehičić, Vice-president of the Chamber, phone/fax: ++387 33 250 193, 250 139 e-mail: [email protected] Ms. Munevera Pahor, Secretary General, phone/fax: ++387 33 250 196, 250 137 e-mail: [email protected] Ms. Mubera Kadrić, Manager, Economics and Economy Development Department phone/ fax: ++387 33 250 110, e-mail: [email protected] Mr. Esad Ibišević Manager, Foreign Relations Department phone/fax: ++387 33 250-126, 666 718 e-mail: [email protected] Ms. Rusmira Mandić, Manager, Education and IT Center phone/fax: ++387 33 250 106 e-mail: [email protected] Mr. Emir Trnka, chief of CEO Phone/fax ++387 33 250108, e-mail: [email protected]

CHAMBER OF ECONOMY OF SARAJEVO CANTON Address: La Benevolencija 8 71000 Sarajevo Bosna and Herzegovina Tel: + 387 33 250 100, 250 101 Fax: + 387 33 250 138, 250 137 www.pksa.com.ba E-mail: [email protected]