|SOUTH-EAST EUROPEAN INDUSTRIAL ÌARKET » South-East European INDUSTRIAL Ìarket - issue 3/2018, September
Metal Processing in Bosnia and Herzegovina and Serbia
The Serbian metal industry has a long tradition and is still currently one of the most important sectors of country’s economy. Nearly 5000 business companies are active in the Serbian metal processing sector, which represents 5,5% of the total number of Serbian companies.
Nearly 11% of the total number of the Serbian employees is engaged in this sector. The metallurgical and mining sectors comprise of a total number of 736 companies that engage nearly 25 000 employees, states a report published by the Regional Development Agency Eastern Serbia (RARIS).
Historically, the metal industry has been very export-oriented and opened to collaboration with foreign companies. Serbian metal processing workers are highly skilled and trained to meet with the European market standards, and at the same time labour cost is one of the lowest registered within the Serbian industry.
The metal processing industry is mainly located in the Lower Danube regions, namely Eastern Serbia, outlines the industry report done by RARIS. Manufacturing, especially processing of aluminum and copper, and the production of final products made of these metals are significant competitive advantages of Serbia.
The installed processing capacities significantly exceed the domestic raw material inputs. These facilities are used for processing of significant amounts of foreign raw materials.
In terms of export – as already mentioned the Serbian metal processing industry is very export-oriented. Its products are most exported to the markets of Austria, Germany, Italy, Bulgaria, Romania, Netherlands.
Additionally, the metal/mechanical sector also accounts for significant imports of Italian packaging machines and food processing lines. According to forecasts, this industry will continue to offer interesting opportunities for foreign investments and collaborations.
Iron and steel production within the metal processing industry is related to steelworks US Steel Serbia in Smederevo, which is an integrated factory with a technological process starting from raw materials (iron ore, coke and limestone) and finishing with hot rolled strip and/or cold rolled sheets, at one location.
Its annual production amounts to about 2 million of tons of final products (steel sheet and strip). Some of the production is covered by the production of crude iron in both blast furnaces and crude steel in converters, while the rest is from other factories.
As the heart of the country’s metal processing industry, Eastern Serbia is characterized by a dominance of capital-intensive capacities of mining, metal smelting, energy generating and industrial sectors: manufacturing and processing of copper ore, production of non-metals, electric power generation, coal production, and production of construction materials.
The backbone of the Eastern Serbia metal processing industry represents the exploitation and processing of mineral resources, states the market report by RARIS. Continuing to today, there are significant mineral resources and reserves in the region.
Some of the most important are considered to be the deposits of copper and gold, but there are deposits and numerous occurrences of ores of other metals, such as lead, zinc and others recorded. Confirmed geological ore reserves amount to 1,38 billion tonnes of ore containing approximately 5,1 million tons of copper, 202 tons of gold and 1477 tons of silver. Copper production for the next 50 years is confirmed based on existing resources with an average annual production of 26 million tons of ore.
Regarding foreign investment and industrial cooperation Serbia has a number of advantages, among which is the fact that investing in the country’s metal/mechanical industry means acquiring some very important economical benefits such as low labor costs (for medium skilled labour especially) and low transport costs thanks to the geographic proximity of Italy and Serbia.
Investing in Serbian production additionally allows an access to a fast growing local market with a strong and growing request for machineries, and provides the investor with further access to various other markets holding preferential trade agreements with Serbia. A lot of opportunities are available especially in the field of subcontracting agreements when it comes to industrial collaborations.
Factors such as the high credit cost, obsolete machineries and lack of western-style management and sales skills are some of the main reasons why local companies tend to welcome subcontracting agreements.
The companies that comprise the metal processing industry also share some common characteristics. These include, but are not limited to: Fairly large facilities, because they were constructed to meet the needs of the former Yugoslav republics and its export; An increased competitiveness achieved by improving the technical quality of products and reducing production costs or prices of final products, activities of marketing services in enterprises are required; Current utilization of the facilities is about 30% of available capacities, primarily due to lack of working capital for purchase of raw materials and spare parts for continuous production, as well as the reduced market share caused by weak investments in the country; For continuous production, financing for current production activities, and overhauling of existing machines in order to improve the operational readiness to the level of 80% capacity is to be provided.
Listed below are some of the biggest companies in the Serbian metal processing sector, as described by their respective official websites.
Almag is a producer of metal structures, process equipment and other products related to steel and other materials. It was founded in 2002 in Kladovo. Initially the company consisted of 10 workers with big ambitions, while today it employs over 150 employees, of which 30 work in administration and the rest are part of the production capacity.
Currently, Almag operates on 6000 square meters and 90% of its products are directed towards export. It is situated 270 km southeast of Belgrade, near the Danube River. The company is able to deliver products through the river, which reduces the transportations costs. Its average annual production is about 2500 t.
“So far we have successfully cooperated with major giants such as Siemens, SGS, VAM, and other large companies who need potential producers who must meet the quality and speed”, writes the company’s official website.
ATB FOD first started its operation as far back as 1903 when exploitation of copper ore started in Bor. Setting up smelting aggregates and first flotation and copper electrolysis facilities lead to forming of suitable maintenance departments and central workshops of the Bor mine.
Until 1970 FOD Bor had been involved in maintenance, production of spare parts and carrying out investment works.
Then, the basic concept of scope and development of FOD was set. In that period, FOD had developed and started producing process equipment for application in raw material processing, such as flotation machines, hydro cyclones, horizontal and vertical hydro mixture transportation pumps, variable speed fluid couplings, also mining equipment such as conveyers for piece materials and powder materials, vibro screens, pit wagons, and pneumatic and hydraulic drilling machines.
Dam-Mont is a Serbian manufacturer of machines and equipment for the power, mining and process industries. The company was founded on July 7th 1990 in Dvoriste near Despotovac. Its main activity is the manufacturing of machines and steel structures. The company has established itself in the production of equipment and machines for the energetic, mining and process industry.
In 1996 Dam-Mont began the production and delivery of different types of light and heavy steel structures mainly for the German market, which later became one of the main turnover generating activities. Within the period from 1996 to 2002, over 14 thousand tonnes of different types of steel structures were produced and delivered for the German market.
In 2004 the company successfully implemented three new product lines: Manufacturing of machines and maintenance services for the mining industry; Manufacturing of machine assemblies for the metallurgical industry; Manufacturing of agricultural transport trailers. In 2007 Dam-Mont acquired Lola, Belgrade, which consists of two main business units, foundry and manufacturing of process equipment and machinery.
Fabrika bakarnih cevi
FBC Majdanpek is a specialized manufacturer of copper tubes highly ranked throughout Europe. FBC Majdanpek was founded on January 1st 1979 and operated as an integral part of Copper Processing Industry Zajecar.
It has a modern production, specialized for the manufacture of installation copper tubes for water and gas in sanitary and heating applications, copper tubes for industrial and other purposes. The quality management system is certified by ISO 9001:2015 British Standards Institution.
“Our high-quality input materials, state-of-the-art equipment and the applied copper tube manufacturing technology (pressing, cold rolling, and extrusion) ensure the top quality of our products.
The production runs under strictly controlled conditions,” says the company.
FBC Majdanpek possesses several quality designations: KITEMARK (United Kingdom), NF (France) and DVGW (Germany), and manufactures copper tubes according to all EU, US and other national standards. Products manufactured by the industrial company are used in the following countries: United Kingdom, France, Canada, Sweden, Germany, Holland, Italy, Russia, Slovakia, Hungary, Slovenia, Croatia, Bosnia and Herzegovina, Serbia, Macedonia, Romania, Bulgaria, Greece, Turkey, Algeria, Egypt, Israel, Iran, and South Africa.
The company was founded in 1990 and has been constantly evolving to master the technology of copper processing and copper wire production. It has since become a leading manufacturer of copper wires of 8, 12, 16 and 20 mm in Serbia.
“Grand D engineering Pine strives to provide our partners and provide consumers with a quality product in a professional manner respecting the standards of quality and ecology. Our aim is that in the future we remain market leaders in the production of copper wire, metallic conductors, cables and profiles, improving sales by conquering new markets and strengthen relationships with partners,” states the company.
The production capacities of Grand Engineering Bor are 12 000 tons of copper wire, 5000 tons of flexible cables, 2500 tons of copper profiles and 5000 tons of cables. Its production facilities are located in Bor, in eastern Serbia, 245 km from Belgrade. There are 85 employees who constantly supervise their standard and safety at work.
Product quality is controlled from the entrance of the main raw material (copper cathodes) until shipment of finished products with constant investment in test equipment and the same level of confidence.
Rhine Danube – Kladovo
Rhine Danube – Kladovo is located on right bank of the Danube river, at an artificial lake created between two river dams - Iron Gate/Djerdap I and Iron Gate/Djerdap II. The company is majorly owned by the Dutch firm Gebr. de Jonge.
Its strategic position, advantages of river level control and full range of shipyard equipment enable uninterrupted and quick interventions both on inland and river/sea vessels. Ship lifting capacity of syncrolift-type slipway is all the way up to 3650 tons, and it can lift vessels up to 140m in length and 22m wide.
Some of the main activities of Shipyard Kladovo are shipbuilding, ship repairs, ship conversion (especially single skin river tankers to double skin vessels), overhauling of vessels as well as production of equipment and objects for both inland shipping and off-shore industries.
“Shipyard Kladovo offers extensive experience in shipbuilding as well as repair, conversion and overhaul services for various types of watercrafts. A full range of shipyard equipment and specialized workforce will swiftly and successfully complete even the most complex of tasks, while maintaining paramount quality of work”, says the company on its corporate website.
RTB Bor Group
Copper Mining - Smelting Complex Bor (RTB Bor) is the only producer of copper, gold and silver in Serbia. These metals are stock exchange-traded products and their quality meets requirements of the domestic and foreign markets, states the company. Further processing of the metals and copper concentrate is conducted in RTB Bor.
As the only Serbian producer of copper and precious metals, RTB is regarded as the most important link in the copper chain of Serbia and the company that is world famous for its high quality cathode copper.
“As the basis of industry and economy in the country, the copper business provides the country with several hundred millions of dollars a year, and RTB Bor, as a unique system, produces copper ore and with its operations promotes the development of the entire region.
Hence the copper plant with its potentials and abundant natural resources is a strategically important company for the development of the entire Serbian economy, and as a great potential for economic prosperity is also seen by surrounding states,” explains RTB Bor on its official website.
After decomposing of the holding company RTB Bor and privatization of its subsidiaries, the company has operated as a single system with four main production subsidiaries: Mining and Smelting Combine Bor; Copper Mines Bor; Copper Mine Majdanpek; Bor Copper Smelter Refinery.
TF Kable FKZ Zajecar
TF Kable Fabrika kablova Zajecar was founded in 1974. The factory was an integral part of the Holding Company - The Mining and Smelting Combine BOR Group. Since April 2008 the factory owner has been Tele-Fonika Kable Sp. from Poland.
The production capacity of the factory is about 20 000 tones of cables and conductors per year. The products meet the requirements of worldwide standards and norms such as: JUS, IEC, BS, VDE, HD, NFC, GOST, SS, SABS, BDS.
“Our products are exported in large number of countries worldwide. In 1995 TF Kable Fabrika kablova Zajecar implemented a Quality Management System in accordance with ISO 9002 standard and in 2006 implemented Environment Management System in accordance with ISO 14001:2004 standard.
Now our factory has a Quality Management System in accordance with standard ISO 9001:2015, Certificate Number DAS83378781/1/Q and Environment Management System in accordance with standard ISO 14001:2015, Certificate Number DAS93187253/1/E”, explained company representatives.
Bosnia and Herzegovina
The metal processing sector of Bosnia and Herzegovina, along with base metal production, has traditionally been the country’s strongest and most successful industry and export sector.
The development of the metal processing sector in BiH has been enabled by country’s natural endowment with mineral resources (such as coal, iron ore, bauxite, lead, zinc, copper) as well as human capital and, to some extent, technology resources and know-how from the pre-war period (prior to 1992).
The sector is fairly large and both includes ferrous and non-ferrous metal processing, chiefly in iron and steel, aluminum, lead, zinc and copper. There also exist technical capacities in sheet metal processing, welding, plasma cutting, bending, machining, aluminum extrusion, castings and forgings.
Metal processing sector accounts for almost one-fourth of total manufacturing in BiH and more than one third of exports. The sector consistently marks positive trade balance in most of its sub-segments. In addition, the sector has the potential for significantly increased sales, exports, and employment. The main export products are aluminum, steel and iron, as well as automotive industry components.
The BiH metal sector has had a production growth rate of over 10% for the past several years according to the Foreign Investment Promotion Agency of Bosnia and Herzegovina. According to the Centre for the Promotion of Imports from developing countries (part of the Netherlands Enterprise Agency), the BiH metal sector as a whole makes up around 32% of total country exports, which gives it a strong lead over other top export categories - mineral products (13%), chemical products (6%), and clothing (6,5%). The local market is not able to use all those products that are exported due to a lack of purchasing power.
The industry is one of the most important industrial sectors of the whole region because of its long tradition, developed advantages at the international market, abundance of production facilities and industrial zones, skilled labor force, available production capacities, rich mineral resources, increasing number of active and productive metal companies in the country.
Three key value chains in the BiH metal processing sector are the automotive value chain, the aluminum joinery value chain, and the construction elements value chain. BiH, as a part of former Yugoslavia, has a long tradition in manufacturing parts for automotive industry. Over many years and decades the companies of the automotive value chain have developed a strong technological base for the production of highly sophisticated automotive parts. Today more than 90% of their products are exported, primarily to EU markets.
The aluminum joinery value chain on the other hand is mostly concentrated around Mostar region, where Aluminij Mostar produces good quality primary aluminum at a good price. The BiH metal construction industry also experienced a significant increase of production in the last decade and the companies within this value chain were able to respond to many demanding projects in EU.
Presently, the metal sector in the country is characterized by a large number of small companies producing lower value-added products – an environment which provides great opportunities for foreign investors to integrate existing primary producers and start production of higher value-added products. There are additionally opportunities to use existing production facilities and capacities to increase production, underlines the country’s foreign investment agency. Privatization opportunities are also still available within the sector.
Metal processing industry of the country is mainly located in five regions: South - Mostar Region (Mostar, Siroki Brijeg, Citluk and Konjic), Central Bosnia - Zenica Region (Zenica, Novi Travnik, Zavidovici, Kakanj and Zepce), North-West - Banja Luka Region (around Banja Luka city, Prnjavor and Prijedor), North - Tesanj Region (Tesanj and Jelah), and North-East - Tuzla Region (Gracanica, Gradacac and Lukavac).
Out of the five regions, Mostar and Zenica are considered to be the most significant, with the Mostar region of the south part of the country known as the “Aluminum Valley”. This is namely because it is home to the company Aluminij Mostar, a large producer of primary aluminum with annual exports over EUR 150 million, over 130 000 tons of primary aluminum and aluminum products. There are also many small companies mainly focused on aluminum processing.
The Zenica region situated in central Bosnia is another large metal sector hub. Located there is ArcelorMittal, the largest iron and steel producer in the country with an annual export over EUR 220 million. Metal processing companies in this region use modern technologies and processes including welding, laser cutting, machine processing and metal sheet processing (CNC), iron, steel and aluminum castings in their production of various products.
Market forecasts predict that the metal processing sector in BiH will continue to be country’s most important industry and export sector in terms of total production and sales, export revenue, number of employed and its share of GDP. In addition, experts anticipate continuation of positive revenue and export growth trends, positive trade balance, and further penetration into EU and new markets.
Listed below are some of the most prominent players on the metal processing market in Bosnia and Herzegovina.
Aluminij d.d. Mostar
Aluminij d.d. Mostar is a solid stock company with around 900 employees and an annual export exceeding EUR 150 million. The company was established in 1977 by merging Alumina Factory and Bauxite Mines. Aluminum Factory also became an integral part of it after the regular aluminum production start in 1981.
Nowadays, it has an extensive network of business collaborations with some of the world’s most prestigious names in the aluminum industry.
In mid-2002, the company completed its first major project of the modernization of the Aluminij facilities. In this visionary initiative of the new technologies introduction and the production system upgrading, the company invested EUR 150 million, and since then Aluminij can equally compete with the world’s leading producers, despite the destructions caused by the war, states the company website.
Production had also been increased by 30 percent, while the expenses on consumption of electricity and raw materials were significantly reduced.
“The crucial importance of the constant smelter modernization is clearly demonstrated by the fact that before the War in Bosnia and Herzegovina there were approximately 3400 workers in Aluminij producing 92 000 tons of metal per year, while today 900 of employees produce 130 000 tons of primary aluminum and aluminum products.
The best results of the boldly implemented modernization projects within Aluminij reflected during 2009, 2010 and 2011, when Aluminij survived one of the world’s largest economic and financial crises,” say company representatives.
Arcerol Mittal Zenica
Arcelor Mittal Zenica is a leading steel and mining company, which produces hot rolled products (rebars, wire rod, mesh, lattice girders, and classic construction armature) mainly for the Balkan, EU and North African markets.
The company has an industrial presence in 18 countries and is recognized in all major global steel markets including automotive, construction, household appliances and packaging, with leading research and development and technology, sizeable captive supplies of raw materials, and outstanding distribution networks.
Its annual production capacity of steel is approximately 113 million tons of crude steel and 62,9 million tones of iron ore as of 2016. The company has 199 000 employees across 60 countries and has steelmaking operations in 20 countries on four continents, in both developing and developed steel markets.
“We have a diversified fleet of production facilities to make steel, both basic oxygen furnaces and electric arc furnaces. In a basic oxygen furnace, molten iron ore is the principal raw material and is mixed with varying quantities of steel scrap and alloys to produce different grades of steel. In an electric arc furnace, recycled steel scrap is melted directly into new steel. About 12% of our steel is made from recycled steel”, informs Arcelor Mittal.
Bekto Precisa was established in June 2005 and employs over 400 people with a tendency towards further development. It is a family company with decades of business experience in the production of highly sophisticated industrial tools for plastic and non-ferrous metals, as well as a combination of metal-plastic.
In sections to that, the company injects positions for auto-, electrical-, sports-, mechanical and other industries, all in accordance with the regulations of European standards and requirements of customers.
“Using the latest technology, we meet all the requirements of our customers. Superior equipment and qualified employees, guarantee the highest level of quality. It is recognized in our workshops and targeted investments. The company office building, production facilities and storage areas cover well over 50 000 sq. m,” states Bekto.
The company BNT-TMiH (Machine and Hydraulics factory) is located in central Bosnia & Herzegovina, Novi Travnik, 90 km away from Sarajevo. The company is engaged in manufacturing structural metal fabrications and parts, manufacturing lifting, handling and conveying devices, manufacturing machine tools, providing machining services, heat and surface treatment services and laboratory services (mechanical, chemical, metallographic testing and calibration of measuring instruments), as well as manufacturing arms, weapons and military equipment. Its production capacity is 500 000 production hours per year.
“Organization of factory is instituted in such a way to provide development, production and quality control of product on optimal way and pleasure of the buyer”, states BNT-TMiH.
The FAGUS Company was founded in 1991 in Maslovare, the municipality of Kotor Varos, Republic of Srpska, Bosnia and Herzegovina, by investment of a private capital of the two brothers Branislav and Miroslav Malijevic. At the time it was a plant for primary wood processing.
Today, FAGUS is the group consisting of seven independent companies. The FAGUShaus Company is the member of the FAGUS group continuing more then 70-year-old tradition which is the source of the experience for the production of windows and doors by use of natural materials. Windows and doors of the highest quality are produced in modern plants in Banja Luka employing the largest part of totally 350 employees of the FAGUS Group. High standards and high quality are largely due to innovative spirit and improvement orientation of the company.
FEAL has a long tradition in the processing of aluminum and specializes in designing aluminum systems. Its products are various types of aluminum structures used in construction and industry.
The products that the company markets are various types of aluminum structures used in construction and industry. The development is based solely on creating a dedicated team of experts that monitors global trends in design and offer a complete series for the production of aluminum.
“Bearing in mind the dynamic and demanding market that is constantly changing, we answered with the modern equipment of the plant for aluminum extrusion, electrostatic powder coating and anodizing anode, as well as machinery for the processing of aluminum profiles,” comments FEAL.
Metalna Industrija Prijedor
The company was founded in 1957 and since 2001 (following a privatization) it operates as a joint stock company under the name Metalna Industrija Prijedor.
The primary production is focused on manufacture of welded steel structures and components of carbon structural steel in the sectors mechanical engineering, shipbuilding, hydraulic engineering, civil engineering, mining and other economic areas.
With 7500 sq. m of specific-purpose production halls, the production is divided according to stages -from sand blasting and cutting to final painting in modern automated painting chambers. There are bridge cranes having capacities of up to 100 tons, which allow for the production of large size and heavy constructions. With around 130 employees the capacity depending on the structure of the product is up to 4000 tons of welded steel constructions and assemblies a year.
Mariborska livarna Maribor is a producer of die-casting tools, aluminum die-casting parts, machined parts and forged semi products out of copper alloys. It has around 550 employees and produces about 5632 tons of die casting parts as well as 630 tons of forgings annually.
“With the combining of knowledge about metals and tools in Mariborska livarna Maribor we successfully fulfill the expectations of our customers in the automotive and electrical industry, in the industry of white goods in many enterprises that need semi products made of copper and its compounds and also in the modern world more and more indispensable aluminum”, writes MLM on its website.
Åòèêåòè: Almag ATB FOD Dam-Mont Fabrika bakarnih cevi Grand´d inzenjering Rhine Danube – Kladovo RTB Bor Group TF Kable FKZ Zajecar Aluminij d.d. Mostar Arcerol Mittal Zenica Bekto Precisa BNT-TMiH FAGUS FEAL Metalna Industrija Prijedor MLM Alutec