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Foreign investors became interested in the agricultural domain of the Balkans
Foreign investors became interested in the agricultural domain of emerging economies in the Balkans, drawn by the reduced price of land and work in the region, but encouraged by the calming down of the effects of world crisis, according to a Reuters analysis. Foreign companies invested in Serbia and other Balkan states outside the EU, in milk industry, meat processing, crops and others. The region attracts new investors as well, as the world crisis is calming down.
« We have contract, especially, with investors in the Golf region who need diversity to ensure their food safety. Several groups in the Middle East think seriously to the 3.2 million ha land Serbia can offer” the Serbian vicepremier Bozidar Djelic said. Some analysts consider the Balkan region has become more attractive, after the financial crisis for food producers and investment funds. For example, the London company for assets management Agrotrust was interested in acquiring land in Serbia since 2004 but during that period they could not draw financial investors. The company will try again, next year, to gather 250 million euro to buy and manage agricultural land in Serbia, Poland and Romania.
« The market is still hesitating, and investors wait that somebody breaks the ice » Djelic said.
Serbia has enormous agricultural potential, presenting the advantage it is very close to the EU, Placide Mchoud said, as former investment banker who in 2008 invested in a Serbian factory for canning olives and pickles and this year has expanded a greenhouse farm. « The idea is that we feed the European market from here » he mentioned.
Some Balkan states hope to transform the technological limit of farms into an advantage, by the production of organic produce. « Bosnia has a big potential of agricultural development, as the conditions are for reduced rate of cultivation after the war so that the soil is best for organic agriculture. However, such potential cannot be put to use too much” Zoran Puljic, general manager of the Mozaik foundation said.
At the same time, Albania hopes to increase exports on some shares such as organic fruits and vegetables or olive oil.Some private equity funds have been investing in meat industry in the Balkans for several years. For example, British Ashmore Special Situations Fund 3 acquired majority share in Carnex, one of the biggest in the domain in Serbia. At the same time, Salford Capital Partners owns several Balkan food companies, which they want to sell in the next two years to Danone, Nestle or PepsiCo.
Even so, investment in the Balkans bring several unpleasant surprises, such as the case of two Canadian investors who in 2005 bought or 5.9 million euro the Serbian company BDAgro when it was privatised. Later, they saw they inherited debts of 5.4 million euro as compared to 3 million euro as included in the documents. Investors face bureaucratic problems, uncertain legislation, corruption and other difficulties specific for post-communist tradings.