Exporting to Serbia
Demand for UK goods
Goods made up over 65% of all UK exports to Serbia in the year up until June 2019 (ONS, 2019). Top goods by value exported from the UK to Serbia were medicinal and pharmaceutical products, specialised machinery, electrical goods, consumer manufactures and scientific instruments (ONS, 2019).
Improving economic conditions
The import market in Serbia has seen healthy growth over the last 5 years, and this growth is projected to continue (IMF, 2019). GDP per capita is also rising, with a GDP growth of 4% predicted by the end of 2020 (IMF, 2019).
The EU and aid funded business
Serbia is in accession negotiations with the EU. The Stabilisation and Association Agreement is currently enabling free trade between Serbia and the EU over a transitional period. This is a precursor for the eventual elimination of duties and non-tariff restrictions on accession. Serbia will have received €1.539 billion in financial assistance from the EU by the end of 2020 (European Commission).
Opportunities for exporters
Serbia’s economy is dominated by a large and growing services sector (61% of GDP), but the industrial sector (31%) and agriculture (8%) are significant. UK exports to Serbia amounted to £307 million in 2019 (ONS, 2020), with close to 100 UK firms active and many more represented through agents and distributors.
Prominent sector with vast potential
Around 60 international investors have invested over 1.7 billion euros in the sector. A strategic location, free trade agreements, EU negotiations and government incentives for hiring and investment have also increased the sector’s attractiveness. UK goods, services and expertise are welcomed in this thriving environment for trade and investment.
Long-term development of electric vehicles and supplies
Serbia has large deposits of lithium-borate which is used in a vast array of products, most notably, batteries for hybrid and electric cars. If developed, Serbia could supply 10% of the global demand for lithium. UK companies have the expertise that will enable them to make full use of the opportunities in this field.
The biggest opportunities for UK business lie in potential renewable energy sources. At the moment, renewable energy supply in the country is limited to hydropower plants providing electricity and non-commercial use of biomass and geothermal energy. Other sources with high potential in Serbia are biomass (wood and agricultural), wind energy and solar energy.
Demand for UK skills
Serbia is facing challenges, with a need for UK expertise in legal, financial, due diligence and technical issues that will help it make the best use of renewable energy. There is a strong need for new solutions and strategies – especially in digital technology.
Opportunities for new stakeholders
The majority of Serbian energy infrastructure is state-owned and operated by public enterprises. To be able to develop its energy sector and increase the share of renewable energy, as agreed under the Energy Community Treaty, Serbia will have to open its market to new stakeholders.
Significant EU funding
Serbia has a high inflow of overseas development assistance, including the EU’s 210 million euros per annum Instrument for Pre-Accession Assistance (IPA). This assistance funds infrastructure projects which benefit from the input of UK companies.
Serbia’s energy infrastructure includes power generation, transmission and rehabilitation energy from waste, renewable energy, energy efficiency projects. Many such opportunities may be pursued through public-private partnership (PPP) arrangements.
Strong mineral potential
There is renewed interest in Serbia’s mineral potential, following recent discoveries of new mineral deposits. These include the high-grade copper-gold mineralization and the presence of substantial lithium-borate deposits. Lithium and borates are significant for a vast array of products, such as batteries for hybrid and electric cars, ceramics, fertilizers and detergents.
Generation modernisation and increased efficiency
UK businesses have the opportunity to do business through supply of equipment, consultancy services and financing of projects. Expertise is required in all stages of the mining lifecycle.
Grocery retailing in Serbia, in particular discounters, recorded the highest growth of all retail areas in 2019. With only a few key players in the market, possibilities for UK retailers are large.
Demand for UK brands
The most popular form of representation for UK brands operating in the Serbian market is by franchising. Possibilities are growing due to development of retail sector and Serbian buyers’ interest in UK brands. Body Shop is a successful example of a new player on the market accepted for its global popularity.