INTERVIEW - Serbia targets 2013 FDI of over 2.0 bln euro, energy, automotive industry in focus

The automotive industry, where several big deals are expected to be wrapped up over the next three months, and energy are the sectors most likely to attract the bulk of investments over the near term, Bojan Jankovic, deputy director of the Serbia Investment and Export Promotion Agency (SIEPA), told SeeNews on the sidelines of the Southeast Europe Business Forum in Istanbul last week.

SeeNews was media partner of the November 22-23 event organised by the Bulgaria Economic Forum.

"This year, we haven’t had any significant privatisation, merger, or acquisition to boost the [total FDI] value. So, I expect 1.0 billion [euro] this year," Jankovic said.

In 2011, FDI in Serbia more than doubled to 1.83 billion euro from 860.1 million euro in 2010, preliminary central bank data released earlier this year indicated. The wholesale and retail sector attracted the bulk of FDI inflow over the review period at 883.3 million euro, followed by the manufacturing industry with 441 million euro, the central bank data showed.

According to Jankovic, if blockbuster deals - like the 2011 takeover by Belgium's Delhaize of local retailer Delta Maxi Group, are taken out of the equation, FDI volume has been more or less steady over the past few years.

Delhaize Group acquired 100% of Delta Maxi Group for 932.5 million euro.

"Basically, [..] when all things are considered,[..] regular investment activity, like this year, is around 1.0 billion euro. And that is not enough for Serbia. What we need to do is create an environment where every year we will have an additional larger acquisition, investment or takeover."

In his view, to achieve this goal, Serbia should take steps to reassure heavyweight investors of its stability.

"High-value investments have a rationale behind them that is different from that of manufacturing projects or any other projects, for that matter. Big-spending investors are extremely cautious and very risk-averse. Sometimes this risk is just a perception and sometimes it is real, and sometimes it is a mixed bag," Jankovic said.

"In Serbia I would say it is mixed - I would say there are some real problems but there are also a lot of misconceptions about what Serbia is and how stable and secure it is. [..] So we need to do whatever it takes to assure this type of investors that this is a market where they will be prosperous."

One sector likely to stay on investors' radar is the automotive industry which, Jankovic pointed out, has been a very strong FDI performer across the years.

"There are a couple of big projects from the automotive sector that we are expecting, a couple of really cash-intensive projects [..] that we hope in the next three months we will be able to wrap up," he said, declining to name names.

The official singled out Serbia's electronics, logistics, services and telecommunication sectors as other likely areas of investor interest. "But my pick would be, first of all, as I said, [..] definitely energy."

($=0.7699 euro)