MLAĐAN DINKIMLAĐAN DINKIĆĆDeputy Prime MinisterDeputy Prime Minister

Minister for Economy and Regional DevelopmentMinister for Economy and Regional Development

New Manufacturing Hubs and Supply Chains in Serbia

Official Name: Republic of Serbia

Area: 88,361 km2

Population: 9.5 million

Official Language: Serbian

State Form: Democratic Republic

Capital: Belgrade (1.6 million)

Currency: Serbian Dinar (RSD)

Public Debt Public Debt in % of GDPin % of GDP

In 2009 exports slumped by 19,7% to 6 bil. EUR (18,9% of GDP). In the 1st Q 2010 exports rose by 14,9% to 1,47 bil. EUR

Blue line – existing motorways

Red Line – planned motorways

A major part of the Corridor X highway already built, but some sections missing:

towards FYR Macedonia and Greece

towards Bulgaria

towards Hungary

Belgrade bypass

International tenders to be completed in the coming months

1. BELGRADE – SOUTH ADRIATIC HIGHWAY (E-763)2. POJATE – PRELJINA (E-761)-MOTORWAY3. PARAĆIN – ZAJEČAR (M-5)-MOTORWAY4. KRAGUJEVAC SOUTH BYPASS5. SVILAJNAC BRIDGE6. SMEDEREVO RAILROAD7. ŠABAC –RUMA MOTORWAY8. NIŠ – PROKUPLJE MOTORWAY9. BELGRADE BRIDGES

◦ OBRENOVAC BRIDGE

◦ ZEMUN – BORČA BRIDGE

◦ PANČEVO BRIDGE

◦ VINČANSKI MOST

10. BELGRADE - VRŠAC11. BELGRADE - POŽAREVAC

National Roads StrategyNational Roads Strategy

1

2

34

5

7

8

9

100

110

EUCEFTA

Free trade agreementsEFTARussia BelarusTurkey

EUEUCEFTA CountriesCEFTA CountriesFree Trade AgreementsFree Trade AgreementsInitiative to start negotiationsInitiative to start negotiations

Source: The PricewaterhouseCoopers

Source: The PricewaterhouseCoopers

Free Zones in Serbia

Fiscal benefits (exemptions from any tax burden for FDI, VAT, company profit tax, property tax, income tax, etc.) Free of customs duties for goods, equipment, raw material and construction material Financial benefits (free cash flow) Efficient administration, (one stop shop) Simple and fast customs procedures Local subsides for using the infrastructure (low price and service costs) Liberal law on paper Providing a set of services to users under preferential terms (transportation, loading, reloading, freight forwarding services, insurance and banking services)

Automotive Industry – Our Tradition

1939

1954

1965

1971

1988

2005

First production in Kragujevac – 1939

35 FDI Projects since year 2000

Totally more then 1 billion EUR of FDI

Sector of Strategic Importance to Serbia

The Solution – Reviving Automotive Industry in Serbia

Joint Venture between Fiat Group Automobile and the Republic of Serbia Government

Total investment at around 700 million EUR

Starting from 2011, FAS will set-up the production of at least 200,000 units per year

The new factory should export 1.5 billion EUR/year of cars

Up to 85% of new model components will be produced in Serbia

2,400 jobs will be created by Fiat, while 10,000 more by suppliers and sub-suppliers

We expect knowledge transfer to our workers

105050503001,000Minimum Number of New Jobs

€0.25 mn€0.5 mn€0.5 mn€1 mn€50 mn€200 mnMinimum Investment Amount

€2,000-10,000per job created

€2,000-5,000per job created

€5,000-10,000per job created

€4,000-10,000 per job created

Up to 20% of the total investment

Up to 25% of the total investment

Grant Amount

Projects Realized in Any Region

Projects Realized in

Other Regions

Projects in Automotive,

Electronics, IT Industries Realized in Regions of

Special State Interest

Projects Realized in Devastated Regions and Regions of

Special State Interest

Labor-Intensive Projects

Capital and Labor-

Intensive Projects

Export-Related Services

ManufacturingManufacturing and

Export-Related Services

Standard-Scale ProjectsLarge-Scale Projects

Eligible Projects

Financial Grants

Cash grants for Greenfield & Brownfield investment provided by the Government

New Package of Investment Incentives

Special Incentives for Automotive Suppliers

In the municipalities of special interestfor regional development:

Niš

Zaječar

Kraljevo

Novi Pazar

Min. investment: 0.5 million EUR

Minimum new of jobs: 50

5,000 to 10,000 EUR/new job created

Incentives for investing in Underdeveloped Regions

In the municipalities that are considered most underdeveloped in Serbia

Min. investment: 0.5 million EUR

Min. creation of jobs: 50

5,000 to 10,000 EUR/new job created

Incentives for Large-Scale

Investment Projects

In all municipalities in Serbia

For projects with investment value of over 50 million EUR and creating 300 new jobs the Government will provide up to 20% of total investment

For projects with investment value of over 200 million EUR and creating 1,000 new jobs the Government will provide up to 25% of total investment

Foreign Investors in Automotive Industry

Leading Foreign Investors in the Automotive Industry

Company Country of Origin Investment Type EUR

million

Fiat Italy Joint Venture 700

Cimos Slovenia Privatization 100

Michelin France Joint Venture 44

Brikel Bulgaria Privatization 37

CGS Tires Czech Privatization 22

Albon Great Britain Greenfield 18

Leoni Germany Brownfield 15

Dräxlmaier Germany Greenfield 10

Yura Corporation South Korea Privatization 8

Lohr France Brownfield 7

Streit Group France Brownfield 7

Tesnila Slovenia Greenfield 6

Grammer Germany Brownfield 4

Bauerhin Germany Greenfield 2

THANK YOU!

Government of the Republic of SerbiaOffice of the Deputy Prime Minister for Economic Development

e-mail: kabinet@merr.gov.rs