������� ����������� ������� ������ ������� �������������� ������� ������ �������� The Western Balkans: ������� ������� ������ ����������� ������� ������� �������� Europe’s Next High-Value Location for Manufacturers ������� ����� ���������� ������ ����������� ��� ���������� �������� ��� ������� ��������� ������ r Now is a strategic time to invest in the Western Balkans r A new study of current investors analyzes operating costs and conditions r The European Investor Outreach Program (EIOP) helps investors consider their options and plan site visits ����������������� ���������������� As the EU expands, the focus is on the Western Balkans ������������������������� As the last frontier amid a rapidly integrating continent, the Western Balkans has emerged as Europe’s next high-growth destination for foreign direct investment (FDI). ���������������� ���� ����������������������� The region, now directly adjacent to the EU’s expanding border, has attracted the focus ���������������� of the leadership of the European Commission. It is expected that countries of the Western Balkans will enjoy membership in the EU within five to ten years. As has been demonstrated in the economic booms of recently acceded EU member countries, the period leading up to full EU integration is a strategic time for forward-looking investors to maximize their opportunity. An insiders’ perspective from current investors A recent benchmarking and competitiveness study* conducted by the Multilateral Investment Guarantee Agency (MIGA) of the World Bank Group substantiates the Western Balkans’ opportunity for manufacturers on a country-by-country basis. Based on personal interviews with 76 existing investors in Albania, Bosnia and Herzegovina, Croatia, Macedonia, Serbia and Montenegro, the study reveals emerging, yet evident strengths in the sample sectors among an industrial base of local and foreign investors. The Western Balkans as a production platform The study’s analysis of critical location factors highlights key advantages for “Greenfield” manufacturers considering investments in the Western Balkans, including: r The highly competitive overall cost structure. In a comparison of the largest operating costs, i.e., labor, land and utilities, countries in the Western Balkans rank well ahead of new EU member countries such as the Czech Republic and Hungary. (See index comparison on reverse side.) r Labor availability, cost and quality. The workforce is well educated and experi- enced in production processes; current investors cite local technical expertise and the strong work ethic as competitive advantages. r Strategic location and proximity. Uniquely situated with Adriatic port access and adjacent to both Western and Central European major country markets, the region is well positioned for serving the EU, Russia and beyond. r Local availability of raw materials and supply network. Inputs increasingly can be locally sourced in key sectors, and an existing supply network is based in the region’s longstanding history as a production center. r Improving fiscal and incentive regimes. The governments of the region are com- mitted to the attraction of FDI, as evidenced on several fronts, including progress on regulatory, fiscal and tax reforms and investor incentives. O Operating Cost Index The Western Balkans’ growing base of manufacturers The Western Balkans is already host to many global and regional companies making Serbia 37 leading products in their sectors. In the two surveyed sectors, a sampling of current Bosnia and Herzegovina 75 foreign investors includes: Macedonia 43 Croatia 68 Company Origin Location Product/Activity Slovak Republic 64 AUTOMOTIVE Czech Republic 98 Daido Motor Japan Montenegro ball bearings VW Sarajevo Germany Bosnia and Herzegovina vehicle assembly, spare parts Hungary 100 Prevent Sarajevo Slovenia Bosnia and Herzegovina leather interiors (Includes labor, property and St. Jean Industries France Croatia aluminum casts utilities of automotive components Le Belier France Serbia and Montenegro aluminum casts plant) Iskra Avtoelektrika Slovenia Bosnia and Herzegovina electronic parts In the study’s comparison of Plastal Sweden Serbia and Montenegro plastic parts costs in the automotive sector, ThyssenKrupp Belisce Germany Croatia vehicle tires overall operating costs in the MZT Hepos Italy Macedonia brake equipment Western Balkans were deter- Ruen Intl. Technologies Luxembourg Macedonia clutches, gears, metal parts mined to be as low as 40% of cost levels in the Czech Republic Dura Auto. Systems USA Bosnia and Herzegovina control systems and Hungary. FOOD AND BEVERAGE Flour Mills Loulis Greece Albania flour and wheat processing Coca-Cola USA S/M, B/H, Croatia soft drink bottling Delta Ice Cream Greece Serbia ice cream Bramburi Austria Croatia potato packing facility Citrus D.O.O. Slovenia Bosnia and Herzegovina meat processing Chipita Intl. Greece Serbia and Montenegro snacks and croissants Aprider Israel Albania greenhouse agriculture Zito Luks-Skopje Greece Macedonia baked goods Ideal Sipka Bulgaria Macedonia cheese Van Drunen Farms USA Serbia and Montenegro organic fruits and vegetables Contact For more information: EIOP – your partner in the Western Balkans The European Investor Outreach Program (EIOP), an independent, pan-regional program Dermot Coffey based in Vienna, offers customized services to help investors consider their options in Vienna Facility Manager the Western Balkans. All services are provided at no cost to investors, including: t. + 43 (1) 535 53 82-2115 f. + 43 (1) 535 53 82-5115 r Information and research on business conditions in the region [email protected] r Coordination of site visits r Cooperation with the region’s investment promotion agencies European Investor r Investment facilitation Outreach Program r Access to an extensive network of key contacts World Bank Group r Assistance with risk mitigation, such as MIGA’s political risk tools Multilateral Investment r Assistance in the sourcing of finance Guarantee Agency (MIGA) Strauchgasse 3 * The study’s findings include: data on general business conditions from “desktop” sources; local information collected in the field through desk and telephone research; data collected during A -1014 Vienna personal interviews at companies in the region; and an analysis of each country’s strengths, Austria weaknesses, opportunities and threats (SWOT) for FDI in the subject sectors. www.eiop.org .