Kosova Airlines Seeking Partners to Achieve Ambitious Growth Plans

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KOSOVO Agriculture & Food Industry The Lie of the Land: The Government Is Overseeing the Commercialisation of the Country’s Farms Agriculture has always played a prominent role in Kosovo’s economy. With more than half a million hectares of cultivable land and 60% of the population living in rural areas, the country is well set up for further investment in this crucial sector. With the ongoing privatisation process, Kosovo’s larger farms, under the stewardship of the Kosovo Trust Agency, present particularly good opportunities for investment. The government has laid out a detailed strategy to further stimulate agricultural development in the country. After assessing the topographical and climate conditions in the country, the Ministry of Agriculture, Forestry and Rural Development will be targeting high value crops such as fruit and vegetables. The government is also keen to make the transition from a largely subsistence base to a commercial base with the development of the land market to increase the size of farms. Moreover, the ministry hopes to develop knowledge transfer that will raise the productivity of the land. In parallel with these practical measures, the country will be looking to bring its legal and regulatory framework in line with the highest EU standards. With over 250,000 hectares of meadow and grassland, Kosovo is well placed to expand its agricultural base. Currently, grains such as wheat and maize account for the largest share of the sector in terms of land use. However, the government is keen to re-align the focus to fruit and vegetables which presently account for just over 38,000 hectares of arable land. Kosovo’s viticulture industry is well established. The public sector has a wine processing capacity of 112 million litres while the private sector processes approximately 30,000 litres. The government is also looking to revitalise its livestock production industry so that the country can become increasingly self-sufficient in meat and dairy production. For all segments of the agricultural sector, the government has provided incentives to bring further investment to the country. Most agricultural inputs and capital goods are tariff free which is supported by VAT exemption for a wide range of agricultural inputs. The government hopes that this will increase production dramatically allowing the country to become a significant agricultural exporter. This is no pipe dream. Kosovo has a series of competitive advantages in the agricultural field including high yields and cheap labour. With local production currently only covering 30% of domestic demand, the potential for growth is sizable. The stimulation of the sector should allow the government to both bring down its reliance on imports as well as create a liberal environment to become a major agricultural exporter to the EU. 48
KOSOVO Agriculture & Food Industry Peja Brewery Market-Leading Local Brewery Expanding Regionally Peja Brewery has carved out a 70% share of the local beer market thanks to its high quality beers made with cutting edge techniques. As Sebastjan Gergeta, acting General Manager, explains, the brewery was founded in 1971 and acquired in 2006 by leading Slovenian Pivovarna Laško Group and local Kosovar investors, mainly Dukagjini Group’s owner Ekrem Lluka. “After the €11 million privatisation tender, we invested around €12-13 million in upgrading the brewery’s facilities, equipment, technologies and marketing. Now we are a very well known brewery with a very well known brand. Any new product we introduce will most likely be a success,” he says. Thanks to its upgrades, the brewery has increased the shelf life of its beer from three weeks to six months. It has been reinvesting revenues but hopes to make a profit next year and anticipates an average 10% growth over the coming five years. Peja aims to expand to markets beyond Kosovo, since it has not yet reached full production capacity and believes that the Kosovar market will not be able to keep up with the brewery’s growth. Peja already has agreements with distributors in Montenegro, Serbia and Macedonia but its main focus next year will be Albania, where it aims to boost sales by 5% to 6%. “We are welcome everywhere and present in every market in the region,” Sebastjan Gergeta says proudly. Signficant investment potential Peja Brewery offers very attractive investment potential. “European portfolio investors, including smaller investors, and funding organisations are very welcome. We are a very transparent company and we would repay the faith that any European institution has in us,” Sebastjan Gergeta says. He adds that new investments will go toward expanding the brewery’s product lines and continuing to upgrade its technologies. Around €15 million over the next five years will be needed to bring the brewery fully up to EU standards. Peja would also like to partner with distributors, suppliers and consultants in Western Europe. The brewery’s successful partnership with Slovenia’s top breweries, Pivovarna Laško and Pivovarna Union, gives it an edge. “We have the necessary know-how, financing and guarantees, as well as people who know the business. Our 70% market share, which we aim to boost to 80%, gives us a virtual monopoly in Kosovo and we Sebastjan Gergeta, acting General Manager have basically taken over the distribution system,” Sebastjan Gergeta explains. He adds, “Investors interested in Kosovo should work with a strong local partner.” Peja Brewery 30000 Peje, Kosovo Tel.: +381 39 432 661 Fax: +381 39 433 989 49
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