In 2023 and 2024, room has opened up to significantly improve economic cooperation with Germany and break existing records. The Chamber of Commerce & Industry of Serbia provides full support to companies in achieving these objectives
Despite falling international demand and the slowdown in economic activity globally, Germany has remained Serbia’s top foreign trade partner, while the mutual exchange of goods and services continued to grow in the first half of this year, though admittedly somewhat more slowly than over the preceding two years. The exchange of goods increased by 15.6% in the first six months, with the exchange of services up 17.9%, with the total value of mutual trade thus reaching almost 5.5 billion euros.
“That trend has continued in the second half of the year, and we will this year exceed 10 billion euros for the first time, thereby surpassing the record of 9.99 billion euros in the exchange of goods and services that we achieved last year,” says Marko Čadež, president of the Chamber of Commerce & Industry of Serbia. This year’s combined balance in the trade of goods and services could “leap” to as much as 11.5 billion euros, with the exchange of goods exceeding 9.5 billion euros and the exchange of services over two billion euros,” explains our interlocutor.
What are the prospects of Serbian exports to the German market continuing to increase under the current circumstances?
– Goods exports grew significantly faster than imports in the first six months of this year, contributing to the deficit in trade with Germany falling significantly. With growth of 24 per cent compared to the same period of last year, exports increased to 2.155 billion euros, while imports were up by nine per cent to 2.382 billion and the deficit fell by 50 per cent – down from 448 million euros in the first half of 2022 to 227 million euros in the first six months of this year. The coverage of imports by exports reached 90.5%, which is the highest percentage in the last ten years.
If the trend of growing sales from the first half of the year is maintained in the third and fourth quarters, Serbian exporters, who last year sold goods worth 3.785 billion euros to German partners, will end 2023 with the highest annual performance on the German market to date, totalling almost 4.7 billion euros, and the prospect of next year recording five billion euros in goods exports for the first time ever. Apart from sales increasing and the deficit reducing, the structure of Serbian goods exports has also been improving year on year, in favour of products with a higher degree of processing, a significant contribution to which is provided by high-tech investments from Germany that are increasingly arriving in Serbia.
This year’s combined balance in the trade of goods and services could “leap” to as much as 11.5 billion euros
Alongside the reducing deficit in the goods exchange, the surplus that Serbia has enjoyed in the trade in services with Germany for years has continued to grow – up by as much as 29 per cent in the first half of the year compared to the same period of last year.
The exchange of services with Germany reached a value of 954.6 million euros in the first half of this year. Compared to H1 2022, export revenue increased by 20 per cent – to total €603.6 – while imports from Germany increased by 14.3 per cent – up to €351 million. New opportunities for the growth of exports of IT products and services were also created with the noted participation of our gaming industry firms in the world’s largest gaming fair in Cologne in late August, which prompted great interest among publishers, investors, media companies and gamers.
According to statistics that you presented recently, approximately 11,500 domestic and foreign companies that do business in Serbia are engaged in trade with Germany – both exporting from Serbia to Germany and importing from Germany to Serbia. How successful are we when it comes to including local companies in the supply and value chains of German-based multinationals?
– In the new circumstances globally, nearshoring processes have created new opportunities for Serbia and the region to entice more investments and for our companies to be included in the supply chains of European companies that are relocating their operations closer to their home countries.
Over recent years, we’ve responded to hundreds of inquiries from international companies, mostly German, that recognise new suppliers among Serbian and Western Balkan companies and that turn to the Chamber of Commerce & Industry of Serbia for support in identifying partners, primarily from the automotive, metals and electrical engineering industries, but also from other sectors. We’ve also continued organising ‘supplier days’ events for individual German companies and training for local exporters, in cooperation with GIZ, the German Association for Supply Chain Management, Procurement and Logistics (BME e.V.) and German companies.
How much room exists to continue, through such activities, to expand the number of Serbian companies that are included in the supplier networks of German companies?
– There is ever more room for that. In addressing the increased interest in suppliers, the Chamber of Commerce & Industry of Serbia is introducing new forms of networking between local and foreign companies. Since last autumn – with the organising of the Inter- Connect Executive Summit and this spring’s InterConnect B2B Matchmaking Conference – we have launched a series of events aimed at establishing a unique regional platform for connecting domestic companies, particularly SMEs, with international corporations, the majority of which have so far been German, such as Thyssenkrupp Automotive, Zentis Group, Celonis, Mahle, DBW, Skylotec etc.
This year’s conference focused on concrete business discussions – addressing supply and demand, and connecting buyers and suppliers in four areas: metals processing, the manufacturing of equipment, machinery and tools, and the rubber and plastics industries, in which Serbia has special potential and products that are particularly interesting to international companies.
What does the implementing of Germany’s Supply Chain Due Diligence Act mean for the Serbian economy and to what extent will this law apply to our companies?
– We will know precisely how many domestic companies this law will apply to next spring, with the expiry of the deadline for the submission of the first reports requested by the German companies whose supply chains these Serbian companies are included in. Almost 3,000 companies currently export from Serbia to the German market, but they aren’t all suppliers of German companies that are subject to the provisions of the Supply Chain Due Diligence Act (LkSG), which obliges companies in Germany to conduct risk assessment analysis of their supplier companies in order to prove that they have respect for human rights across their entire supply chain and that they do not have a negative environmental impact.
Serbian exporters could end this year with the highest annual performance on the German market to date, totalling almost 4.7 billion euros
It is important to note that the domestic companies that are direct suppliers of German companies satisfied all standards of their buyers, including environmental and employee protection standards, prior to the contracting of work and entering the supply chains of German companies. What’s actually new is the inclusion of indirect suppliers in the risk assessment process, which transfers obligations further down the supply chain to the suppliers of direct suppliers.
This is an opportunity for the Serbian economy to increase its competitiveness on the European market and for us to prove that we can offer organised and responsible supply chains that are ready to respond not only to the obligations of German law, but also to other directives at the EU level that have already entered into force or have been announced. Applying and adhering to German law will be a kind of preparatory training for adhering to the EU’s increasingly stringent and demanding rules and regulations.
As a business association, how does the Chamber of Commerce & Industry of Serbia prepare its members to comply with standards relating to sustainability and responsible business?
– We adopted the Green Declaration, activated the CCIS Green Team and formed, in cooperation with GIZ, the Responsible Business Hub to support companies that export to Germany and other EU markets, particularly SMEs.
We have already offered business leaders multiple online tools that will help them – firstly to determine where they stand in relation to the requirements of responsible business, which relate to environmental protection and human rights as defined by international standards and the laws of the most important markets, and then to receive guidelines on how to improve their processes. We are available to assist in terms of interpreting regulations and organising bespoke training for exporting companies and their suppliers, in order to increase the stability of all links in the chain. We will organise workshops on risk analysis and risk management for companies from five industries: automotive, metals processing, textiles, food and wood processing.
The CCIS is introducing new forms of networking between local and foreign companies in sectors where Serbia has special potential
New opportunities for exports of IT products and services were created with the participation of our gaming firms in the gaming fair in Cologne
We’ve offered business leaders online tools to determine where they stand on the requirements of responsible business and guidelines for improvement