2016 RETROSPECTIVE – Investments in AGRICULTURE AND FOOD INDUSTRY which have caused the greatest interest among eKapija users

The investment team of eKapija has performed the analysis and formed the list of investments and investment ideas which caused the greatest interest among our users in 2016. The results are very interesting, some of them expected, though there are lots of surprises as well, which is why we've decided to share the information with you.

We present the most interesting projects in the AGRICULTURE AND FOOD INDUSTRY category.

It is noticeable that the list is dominated by the processing industry, as the top 15 list of investments includes companies producing and processing fruit, vegetables, fish and pasta, as well beekeepers who are planning to build a honey factory and farmers intending to export to China. Our readers also found the stories about new plantations in Gruza and Valjevo interesting, as well as those about modern orchards and vineyards in the areas of Topola and Oplenac, in which more and more investments are being made.

Two groups stand out among the foreign investors – the first one mostly consists of German and Austrian companies, whereas the other one contains investors from the Far East (China, Indonesia, Nepal...).

As an exception, this year's list features two spots with two investments each. What's specific about these investments is that investors from the same industries, in this case quite exotic activities for our area, appeared simultaneously in one or two relatively close locations in Serbia. In Smederevo, two companies decided to process fish, predominantly sea fish, whereas noodle factories are being raised in Ruma and Indjija.

It should also be noted that the German meat industry Tonnies has placed in the top of the list for the second year in a row. In 2015, they placed second, and in 2016, they were in the leading position. Nevertheless, neither one of the announced pig farm investments in Serbia has been realized so far, and there are no precise indications when this might happen either.

All this points to the conclusion that 2016 was rich in investments in agriculture and food industry, though there are lots of announcement which have remained precisely that, as the deadlines were either exceeded or extended indeterminately...

The top spot on our list is taken by the story about the arrival of the German giant Tonnies to Serbia and its plans for investments in pig farms in Vojvodina. Even though the Government of Serbia signed the Memorandum of Understanding with the German investor back in April 2015, the announced raising of the farms and breeding of up to 500,000 pigs a year hadn't been realized in early 2016. Allegedly, the plan includes the production in 20 locations in Serbia and investments worth EUR 420 million, and the first farms might be raised in Plandiste, Apatin, Secanj, Odzaci and Calma. In November 2016, the mayor of Zrenjanin said that he hoped that the first Tonnies farm would be raised in the city, along with an investment of EUR 22 million.

As part of its plans, the German company was also interested in purchasing the Matijevic meat industry, whose representatives were prepared to sell a part of the ownership at the time.

In the second spot are two investments in noodle factories. The Nepalese Cinnovation Group started building a facility in Ruma in August, which should be completed in February 2017 and where over 400 workers should be employed. The initial investment has been estimated at EUR 8.5 million.

At the same time, the Indonesian Indofood opened its factory in Indjija in early September. This investment is worth EUR 11 million and 100 workers will be employed in the first phase, with 500 employees planned after the completion of the investment. Indofood is one of the world leaders in the field of food products, and their Indomie is the largest and most famous noodle brand in the world.

The Austrian company Gierlinger Holding placed third on our list. In mid-April 2016, it restarted the production in the Mitros meat industry in Sremska Mitrovica, which went into bankruptcy following the unsuccessful privatization in 2009. Since the acquisition of Mitros in January 2015, the Austrian company had invested EUR 16 million in the reconstruction and repair of the facilities, which was followed by the installation of the meat production and processing technology. The factory opened in mid-April, along with the announcement that the products would be exported throughout Europe through the already established network.

The fourth spot belongs to Serbian beekeepers who have decided to build a joint honey factory. Among the five locations shortlisted, the Beekeeping Association of Serbia opted to raise the facility for purchasing and marketing honey in the municipality of Raca, which had offered the largest amount to aid its construction. The estimated contract value shows that around EUR 650,000 will be needed for the construction and equipping of the facility, and EUR 280,000 has been secured so far. The plan is for the factory to open in 2018.

Miroslav Nikolic of Gruza, the owner of one of the first modern orchards in Serbia with the most quality apple and nectarine varieties, is in the fifth place on our list. He also owns a company for designing, producing and installing metal elements for anti-hail nets. Nikolic export 400 tons of fruit from his farm a year and an additional 250 tons from his subcontractors from all over Serbia. They also export and install anti-hail nets, as he says, from Albania to Belarus.

Companies for production and processing of fish placed sixth. The business entity ServFood has been using the newly built hall in Smederevo since mid-January 2016 for processing and canning fish, crustaceans and molluscs. They have obliged by the agreement signed with the city administration to invest EUR 2 million in equipment and to employ and train at least 100 workers. Furthermore, PTC Germany was handed over the keys to the new 4,000 m2 hall in late February. They will process fish and employ 300 workers there. Prime Minister Aleksandar Vucic emphasized on the occasion that PTC Germany would export fish from Serbia.

The seventh spot belongs to the Chinese company Shenyang Xinhui from Shenyang, which signed a memorandum on the realization of the beef production and processing project with several companies from Valjevo. A long-term sale and export of meat and meat products to the People's Republic of China was secured, and the letter of intent was signed with the Chinese company by JP Agrorazvoj-Valjevske Doline, Stokoprom, Agronid, S.C.E.C. and Zemljoradnicka Zadruga Valjevo.

“The Serbian Tuscany” – Oplenacko Vinogorje and the wine region around Topola, where all parcels suitable for vineyards have already been bought or reserved, placed eighth. According to the EU classification, Sumadija, more precisely the Oplenac area, has 24% of land ideal for cultivating vine, which has also been recognized by the family of Novak Djokovic.

The local self-government of Topola has provided logistics support so that the area might have all the characteristics of developed wine regions. Construction of quality roads was the priority, and the first phase of the preparation of the agricultural and rural development strategy started in mid-January 2016. There's a possibility that Topola will be the first municipality in Serbia to get a certificate for the export of food.

Poljoprivredna Korporacija Beograd (PKB) is in the ninth spot. In March 2016, there were no bidders for the purchase of PKB at the starting price of around EUR 154 million. It is believed that one of the main reasons for this are PKB's estimated liabilities, which amount to EUR 60-70 million. Nevertheless, in mid-August, the Swiss investment fund Castor expressed interest in the privatization or strategic partnership with PKB. According to the media, they showed that they were serious by proposing in the letter of intent to present their five-year development strategy for the company to the workers and the state. They allegedly intend to invest close to EUR 600 million.

The top 10 list is rounded up by the announced acquisition of the Pozega-based company Budimka, which is currently in bankruptcy. During the visit of the Chinese president, Xi Jinping, to Serbia, an agreement was signed between the two states, according to which a company from the province of Hebei would become Budimka's owner. The state might write off a part of the claims, bridge the years of service and “sell” Budimka for free to the Chinese company, which has obliged to invest EUR 15 million and buy off around 1,000 subcontractors from Western Serbia, which will serve as the base of raw materials. Furthermore, a factory worth EUR 30 million will be founded in the province of Hebei, which will operate under the Budimka brand and produce juices, marmalades and jams from the goods imported from Serbia. Around 300 will be needed to put the capacities into operation.

Next on the list is DTD Ribarstvo from Backi Jarak, another fish and fish products distributor, which started producing hummus in mid-January 2016. The production capacity of the plant food facility is one ton of 250 g packages or 1.5 tons of 50 g packages a day. The demand for hummus is constantly growing, both in the local and the foreign markets, including EU.

There's also the announcement of the company Don Don that it will open the most modern toast bread factory in the region in Kragujevac in the first half of 2017, worth around EUR 10 million, as well as Swisslion Takovo, which has owned the Banat factory in Vrsac since mid-August 2016. As it was reported, this acquisitions aims to revitalize the Vrsac company and its products. Also on the list is Agrogrnja from Backi Petrovac, a finalist of the investment of the year award Aurea 2016, which officially opened the silo-port in Beocin in April 2016 and announced new investments, as well as the Italian La Linea Verde group, which started building a vegetable processing and packing factory in Dobrinci near Ruma on November 15, 2016. It will invest EUR 8 million in the factory in the first phase, and the completion of the works has been announced for May 2017.

Take a look at the complete list of investments in AGRICULTURE AND FOOD INDUSTRY and compare it to your thoughts, estimates and projections.

Also, have you seen the list of projects which you've found the most interesting in the INDUSTRY and REAL ESTATE categories?