Heading towards the EU accession process, Serbia received the instrument for the pre-accession assistance in the policy area “Agriculture and Rural Development” IPARD. IPARD grants will directly benefit Serbian farmers, businesses and rural communities with the objective of building up a more competitive farming and food sector; enabling the application of food safety standards and providing a better quality of life in rural areas.
The importance of agriculture in Serbia
Agriculture is one of the main sectors of the Serbian economy and actively plays an important part in forming the gross domestic product with 20%. In terms of cultivation, the most popular form of agriculture is cereal crop production, including wheat, corn and sunflowers.
Structure of agricultural production:
- crops and vegetable (58%),
- livestock production (30%),
- fruit growing (10%), and
- vineyard (2%).
Agriculture is also a significant export-sector from Serbia. Statistics show that the amount of exported agricultural goods was around 20 percent of all exports in 2016, the majority going to EU members: 64 per cent of all agricultural exports go to the EU market.
Fusion of agriculture and IT sector: the first digital farm in Serbia
Against the backdrop of the traditional agri-food production, the future of the agriculture still lies in the implementation of a large number of technological solutions such as automated machines which will help in finding new or more optimized solutions in agriculture. The synergic development of the two most promising sectors of Serbia, IT and agriculture, can lead to the development of sustainable agriculture as the most important segment of the domestic industry.
In March 2018, the first ever digital farm in Serbia was opened as a unique place where cutting-edge technology, combined with agricultural machinery, is applied in a real-life environment, i.e. in a field. The digital farm is designed by the BioSense Institute from Novi Sad.
Opportunities for Swiss companies
In July 2018, the first ten contracts for the procurement of mechanization with the proceeds from the EU IPARD funds were handed over to Serbian agri-food producers. Serbian producers can also purchase mechanization and equipment from Switzerland (Swiss suppliers) amounting to 100 000 EUR per supplier.
Opportunities also lie in investments in the processing of fruits, vegetables and grapes, mainly through modernizing the equipment for the drying, deep freezing, cutting, stewing, heat treatment and conservation, storage, packaging, etc.
Organic production should also be mentioned as a potential for development in the agrifood sector. Finally, the potential of the food industry lies in the production of safe, high quality food, which is highly sought after on foreign markets.
Best practices: Swiss companies operating in the agri-food sector
Nestlé Adriatic was founded in 2003 in Zagreb, covering the markets of Croatia, Serbia, Bosnia and Herzegovina, Macedonia, Montenegro and Kosovo, while Nestlé Adriatic S LLC is based in Belgrade was founded in 2005, with joining of Slovenia in 2011. Nestlé Adriatic offers over 700 different products and over 30 world famous brands such as Nescafé, Thomy, Maggi, Nesquik, KitKat, Smarties, Lion, Purina and Nestlé cereals.
Since 2011, when the factory in Surčin, Serbia, was opened, the company invested more than 12.5 million euros in plant and equipment, as well as in product development. The company exclusively cooperates with local suppliers that have implemented certifications such as ISO 22000, HACCP and GMP.
Today, the factory in Serbia serves around 22 million people from the Adriatic region with high quality products, as well as exports to the 23 countries with plans for further expansion of exports. Over 30% percent of all raw materials for culinary products produced in Surcin factory are coming from Serbian producers. Among locally sourced materials are oil, sugar as well as vegetables: peppers, carrots, celery, parsnip, spinach, parsley, dill.
The factory is following Nestlé efforts to create healthier and more delicious products with renovating 80 percent of the culinary range and by committing, that by 2020 all MAGGI and C products will have the reduced amount of salt, sugar and saturated fatty acids, no artificial colors and will have an increased amount of whole cereals, vegetables, legumes and seeds.
Koelemann Food products
Koelemann Food products, based in Svilajnac, Serbia, is mainly involved in packing gherkins and olives in various packaging. The company is solely active in private labels and is also organizing the sourcing of raw material through its network of farmers and cooperatives in Serbia.
In April 2017, a water factory started operating in Kosjeric, Serbia, as a greenfield investment of the Swiss company Aquawell. The SAINT JOHN'S water boasts a remarkable balance of minerals, allowing the human body to absorb all the substances and make optimum use of them. According to Mr. Jovanovic, CEO of Aquawell production, the company operates in line with ISO and HACCP standards and has implemented the working codex from Switzerland.
Would you like to know more about your opportunities in the agri-food sector in Serbia? Get in touch with our Senior Consultant Central Eastern Europe, Katalin Dreher-Hajnal, and receive more detailed information about doing business in Serbia.