NORWAY 2014

SPECIAL EDITION

World Markets and Opportunities

NORWAY

2014

INTERVIEW H.E. NILS RAGNAR KAMSVAG, NORWEGIAN AMBASSADOR IN BELGRADE

Entrepreneurship in Everything There is no better sign of investors’ trust than when they reinvest in the same country. That is what Telenor and RAPP Zastava just did, investing a combined total of more than €46 million in Serbia this year. However, in order to attract more Norwegian businesses Serbia needs to improve the rule of law and trust in the court system. This is also one of the areas receiving substantial Norwegian assistance

T

he way Norway is helping Serbia very much resembles the Chinese saying “if you want to help a man don’t give him a fish, rather teach him how to catch one”. From Obrenovac, where entrepreneurs are receiving help from Norway in working out how to restore their businesses after the devastating floods, to local municipalities learning to work together like their Norwegian counterparts, there is one main lesson to be learned: entrepreneurship, self-reliance and innovation are the keys to success. When it comes to fishing, this can be directed from Norway, which taught itself how to become the world’s biggest salmon exporter after starting from scratch four decades ago.

A willingness to try to create something for yourself, to try to develop your own ideas, is very important

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• Your programme of support for SMEs from Obrenovac has just been launched. What does Norwegian flood relief assistance encompass and are you satisfied with the way this process is going?

- Business Club Obrenovac is a part of our project, the Business Innovation Programme, which endeavours to establish a mechanism for mitigating the effects of flood damage on small and medium-sized businesses by helping them in their capacity building and identifying where they can gain assistance to restore their operations. Many of them lost their production equipment and need economic assistance to re-launch operations. We will see also if we can find ways of providing direct support to them.

Norwegian flood relief assistance comes through several sources.

Through the embassy, we initially provided €500,000 to local projects like BIP’s project in Obrenovac, to projects helping local farmers to start up again, improving local flood control measures and helping people pump water from their homes.

We channelled about four million euros through the Office for European integration (SEIO), which will be managed by UNOPS, The United Nations Office for Project Services. The aim is to help rehabilitating public buildings - schools, nurseries, cultural institutions in a number of the municipalities hit by the flooding. The Serbian government is doing its best to make the procedure very transparent. At the same time, it is also important to repair damaged public buildings as quickly as possible. We are impatient by nature and want to see the project progressing.

• The floods briefly interrupted the reform process in Serbia, but the government recently passed a package of reform legislation and announced a programme of fiscal stabilisation.

How do you rate these measures?

- Much of the legislative initiatives the Prime Minister announced when he presented the government’s programme have been launched in time.

As with all legislation, however, final judgment will depend on implementation. The measures connected to

fiscal consolidation have been postponed several times. I think this indicates that it is difficult to find the right balance between measures to achieve necessary fiscal consolidation and measures to encourage growth. Moreover, preventing adverse social effects is also an important consideration. However, it’s important not to delay decisions further because the more the deficit grows, the longer it will take to turn around negative macroeconomic trends. Unfortunately, given the severity of the situation Serbia is facing, tough decisions are necessary to create brighter economic prospects for Serbia.

• Turning the trend around also means attracting new investment.

Telenor is the largest foreign investor in Serbia, but the list of Norwegian companies operating in Serbia is still very short. How can Serbia interest Norwegian investors?

- Telenor invested €40 million this year alone, while RAP Zastava is investing more than six million euros.

The fact that Norwegian companies already present in Serbia decide to make new, substantial investments here is a very strong vote of confidence in Serbia’s economic future.

Telenor’s investment is very important, because they’re introducing new technology for banking that opens a whole new avenue of possible technologic and economic development.

It also means stronger competition in the banking sector, which should be very beneficial for the customers. Furthermore, that platform could help reduce cash transactions, which could also increase transparency and help the government fight corruption, the grey economy and tax avoidance.

• But it must be said that, when Telenor came for the first time, everybody thought that it would serve as a good example for other Norwegian companies to follow and that didn’t happen. Why? - There may be several reasons for this: - Explaining factors may be both the general economic climate and

also the risks perceived in investing in a relatively small market, such as Serbia’s, which is not well-known in Norway. Perceptions of the status of rule of law in Serbia and the region in general also influence investors. I am not talking just as an ambassador, but also from my own experience in private business – a few years ago I was working in the management of Norway’s biggest industrial company.

For us, and we invested globally, it

Before Serbian people start to trust the courts we cannot say that judicial reform has been successful

was more important to have a court system we could trust than to receive tax breaks when we were deciding on where to invest. Having said that, developments over the last few years in Serbia – first and foremost in terms of progress in Serbia’s EU integration process – will help increase investor trust in the country’s regulatory framework and the rule of law. Thus, I trust that foreign investors, including Norwegian investors, will gradually find the Serbian market more attractive.

- The structure of our businesses is such that there are not so many production companies, for whom Serbia and the region will be the most natural place to locate a production plant. We are big in areas such as oil and gas, offshore equipment, metals and fishing.

- We have big energy companies that are following the Serbian market closely and are interested in investing here. Although they have not invested in Serbia yet, they have invested heavily in other countries in

the region. For instance, Statkraft, the biggest producer of sustainable energy in Europe, invested more than a billion euros in Albania, and more than a billion in Turkey.

- In addition, Norwegian investors are much more likely to invest in markets they know, such as Sweden and Denmark, precisely in the same way that it is much easier for companies from Slovenia and Croatia to invest in Serbia and vice versa, because they know the market well.

• The foreign trade exchange between Norway and Serbia is at a low level, though exports to Serbia continue to grow, albeit from a low base.

What are the key obstacles that stand in the way of better cooperation?

- Realistically, there is much greater opportunity for Serbia to export to Norway than the other way round. And I think there are encouraging developments. Serbian exports to Norway tripled last year, albeit from a low level (from €10 million to €30 million).

What was particularly encouraging was that the growth was in a wide spectrum of areas. We have small success stories, like honey exports, where Serbia advanced in two years from zero to capturing 30 per cent of the Norwegian market, partly because of our project to support producers and exporters in Serbia. There is also huge potential for Serbia in areas like the export of agricultural products, processed food, cars and furniture. We see that Serbian exporters are becoming more professional, focusing on knowing the Norwegian market better. That is probably one reason why Serbian exports are growing and why it is possible that this positive trend can be further strengthened.

• What are the areas in which Norway is supporting Serbia?

- Our focus areas are rule of law, administrative reform, security sector reform, energy and environment and economic development.

Regarding economic development, I like to mention our focus on furthering entrepreneurship. The will-

NORWAY | WORLD MARKETS AND OPPORTUNITIES | 5

ingness to try to create and develop something for yourself is very important. A strong spirit of entrepreneurship is crucial for successful countries in a world where markets and products are developing faster and faster and where competition is getting tougher. An effective and transparent government is a key factor for economic development, but the government doesn’t invent, doesn’t develop technologies and doesn’t shape the market.

• Norway provides continued assistance to Serbia in the reform of public administration, the judiciary, strengthening regulatory bodies and other areas. How satisfied are you with progress in these areas?

- I think our results are varied. In some areas we see good results, while in others it is harder to identify lasting results. Capacity building is particularly difficult to assess when it comes to lasting results. However, in this context I would mention our support for independent supervisory bodies, which I think has contributed to the very positive development we see for many of these bodies.

On Monday [8th September] we signed off on a project worth half a million euros for forensic training and equipment for the police in Belgrade. This is part of a project where Norway has spent more than three million euros to support the construction of forensic laboratories in Serbia and the training of experts, something which we think has enhanced Serbian capacities in this area substantially. A number of similar examples could be mentioned.

Let me also mention a couple of other projects: for a number of years our national mapping authority has been involved in helping Serbia with aerial photography to help make better maps, but first and foremost to make good cadastres. Reliable cadastres are important for economic development, since any uncertainty over ownership can represent a huge barrier preventing investment.

When it comes to the environ-

ment, let me mention one project with Norwegian company Emisoft, which established an Environmental Accounting and Reporting system. This system is part of Serbia’s Environmental Management Centre, which provides services to both private companies and public bodies. In particular, large companies will be able to have the system customised to their environmental reporting requirements, ensuring their compliance with regulations, transparency and traceability

Telenor’s investment is very important, because it opens a whole new avenue of possible technologic and economic development

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in their reporting. This is an important part of Serbia’s EU obligations in the environmental field.

• Are you satisfied with the results of reforms? It seems that there is no visible progress in judicial reform?

- When it comes to judicial reform I think the only real test on whether reforms are successful is whether the trust of the people in the courts is high. Polls show that the trust in the courts continues to be very low in Serbia, and as long as that is the case we cannot say that the reforms have succeeded. The lack of trust in the court system is also a challenge to furthering economic development.

Having said that, I think we have had success in projects supporting the modernisation of courts. This includes the refurbishment of buildings, increased and better use of ICT and training judges.

• You are very active in helping Serbian municipalities and civil society

to become factors to improve their local environment...

- Norway has a decentralised government and Serbia has a very centralised government, but we both have many of the same challenges. That is why we have tried to share experiences. One shared challenge is the large number of municipalities, some of which are very small. Small municipalities have challenges in delivering good, costeffective services in all areas. In Norway we have a very advanced system of cooperation between municipalities, which has facilitated the delivery of such services. Serbian mayors participating in the project seem to have found inspiration from some of the solutions found in Norwegian municipalities. The project also focused on solving problems by doing things smarter together, instead of focusing on gaining extra funding from Belgrade.

• How much does the cultural exchange contribute to strengthening relations between Norway and Serbia?

- Cultural exchange is the best way of increasing understanding and knowledge between countries and here we do have a number of interesting projects. The biggest project we are presently funding is the Tutti project, which is bringing Serbian musicians together with Norwegian artists and artists from other countries in the region and beyond. We are supporting the Great school of Ljubiša Rajić, which deals with high education, literary translation and social and cultural activism through a series of public talks, movies, lectures and presentations. We have supported the rejuvenation of Felix Romuliana, an important part of Serbian heritage. Later this month there will be a fashion show, Ethnopoeia, bringing Viking-inspired fashion by Norwegian-Serbian designers. Other recent projects have included support for an exhibition of anti-war caricatures to commemorate World War I. We also presently have well-known Norwegian painter Kenneth Blom participating in a group exhibition in Belgrade called “Transformation”. •

NORWAY: ECONOMY

Economic Bliss Norway's social and economic diversity and prosperity ranks it as a forerunner in economic freedom and classifies it as the second wealthiest country in the world

T

he key to Norway’s flourishing economy is its developed state and private sectors, as well an extensive social welfare system. Its mixed economy allows for freedom within markets with state regulation and ownership. Over the years this has enabled incredible economic growth resulting in the Norwegian public sector displaying one of the highest percentages of overall gross domestic profit.

Rich in natural resources such as minerals, forests and hydro-electric power, Norway offers a strong selection of export goods. Crude oil production plays a vital role in state income and, with petroleum as its key asset, it contributes to the largest portion of export yield and about 30% of government yield. It is also the world’s third-largest exporter of natural gas and fifth largest oil exporter. Norway’s oil exports constitute more than 20% of GDP and make up 50% of the country’s exports. Government-owned resources, such as petroleum, are under conjoined ownership. This means that the government has control over such resources through a combination of state ownership in major operators in the oil fields (with approximately 62% of ownership in Statoil in 2007) and the fully state-owned Petoro, which has a market value worth about twice that of Statoil, and the State’s Direct Final Interest.

The Government Pension Fund was established in 1995 by the Norwegian government for the senior population and to alleviate any possible economic friction. Also known as the sovereign wealth fund, it is primarily funded by oil revenues, as well as additional income from sales revenues, taxes, dividends and licensing fees.

Norway’s Government Pension Fund reached one of its prime successes in

It is estimated that the Government Pension Fund will reach US$800–900 billion by 2017, making it the largest capital fund in the world March 2011 when its controlled assets were valued at approximately US$570 billion. This meant that GDP per capita was a staggering US$114,000, which is about 140% of Norway’s current GDP. It is estimated that the Government Pension Fund will reach US$800–900 billion by 2017, making it the largest capital fund in the world.

Alongside the Abu Dhabi Investment Authority, it is now the world’s second largest state-owned sovereign wealth fund. The fund controls approximately 1.25% of all listed shares in Europe and more than 1% of all publicly traded shares worldwide. This straightforward investment scheme gained worldwide recognition for its ethical

principles, one of which included refusal of investment in companies that produced parts for nuclear weapons.

In an IPO in 2000 the government sold a third of state-owned oil company Statoil and a year later the main telecom supplier, Telenor, was listed on the Oslo Stock Exchange. The state also owns significant shares in Norway’s largest bank, DnB NOR, and the airline SAS. Norway has a very low unemployment rate and since its rapid economic growth in 2000 the unemployment rate was not greatly affected by the international financial crises (3.3% or 86,000 people in August 2011) that mainly impacted on the industrial sector. Norway’s hourly productivity levels and average hourly wages are among the highest in the world.

Oil, metal and fish are among the country’s most important commodities and Norway is also the world’s second largest exporter of fish (in value, after China) and the 6th largest arms exporter in the world. Approximately 98–99% of Norway’s electric power is generated by hydro-electric plants, more than any other country in the world.

With colossal sums of cash being invested in international markets, Norway continues to be a top economic power. Its economy continues to be a world leader in trade freedom, investment freedom and overall financial freedom, with entrepreneurship and innovation encouraged. ■

NORWAY | WORLD MARKETS AND OPPORTUNITIES | 7

INTERVIEW OVE FREDHEIM, TELENOR SERBIA CEO

Force Behind Progress On top of investing more than €20 million in network development this year, Telenor has placed €40 million in the first mobile centric bank and is ready to continue to push forward. As such, the company hopes that next year it will be able to start offering 4G network

W

hen the additional spectrum becomes available, the telecommunication companies will start to invest. This will create new jobs and help the Serbian economy restore its growth momentum, says Telenor Serbia CEO Ove Fredheim. “We at Telenor are more than ready to engage in talks with the government and the regulator to push that forward.”

momentum. This, of course, is an overall challenge for the Serbian economy as well.

• Are you satisfied with Telenor’s results in the previous year?

- It is fair to say that it is a somewhat mixed picture. We are growing in terms of our revenue market share, with healthy financial performance beneath that, but what we also see – and this is the same for all telecoms players in Serbia – is that the growth momentum in the industry has diminished; it has become a zero sum game. Under such circumstances, we at Telenor are discussing what we could do in order to fuel growth and restore

In Serbia, for the first time, we are offering that mobile centric fully-fledged bank value proposition and are proud to be an early bird in that business

• Considering that Serbia is in the process of fiscal consolidation, implying salary and pension cuts, how this will impact Telenor’s customers and the company’s revenues?

- If you look at the big picture, then it is obvious that the measures the

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government is considering implementing will, generally, create a challenging market situation. The series of cuts in the purchasing power of consumers in Serbia is also likely to have an impact on us. However, having said that, we are in a sector that is somewhat resilient to general erosion of purchasing power.

• Telenor has already moved in a new direction, the banking sector. What will the new bank bring to that sector in terms of banking services and IT solutions?

- Serbia is a connected society. Tablets and smartphones are widespread and around 40 per cent of users have smartphones. So, on the connectivity side, society is very advanced, but if you look at some of the services attached to that, they are much more old-fashioned, banking being one of them.

The level of online banking is low and, we also see the potential in the user friendliness of the online banking solutions.

Therefore, we saw one opportunity to engage there, under the assumption that the interface we have is a preferred user-interface when it comes to basic consumer transaction in banking.

We have the ambition to develop this new initiative and hope it will deliver a healthy financial performance

in times ahead. We also, however, want to challenge the other banks to join us on this road, if you like, by building similar type of mobile-centric banking solutions, so that consumers in general take their banking onto this interface.

• What are the services you are going to offer through Telenor banka?

- Our core value proposition is a current account consisting of multiple currencies with the debit card attached to it. That is the initial offering, but with the world class user interface getting onto your bank account. The initial contract with the client requires signature, but then, ever after, the customer should be able to manage his or her account and to do basic transactions online, establish payment of invoices from utility providers and do currencies exchange, make basic payments, on his own. This is the starting point and, of course, later down the road there will be more: we will offer a service account and there will be credit cards. We will also start with some smaller loans.

At this point we are concentrating on private individuals, consumers and, of course, later on we might move into, perhaps, small companies, but not into the business of funding their operations, rather related to their everyday transactions.

• Do you think that other operators are going to follow your lead?

- Financial services are a part of Telenor’s corporate strategy. What we have been doing so far has mostly originated out of Asia, and with a different flavour focused mostly on basic cash payments to rural areas. In Serbia, for the first time, we are offering that mobile centric fully-fledged bank value proposition and are proud to be an early bird in that business. During this year alone we’ll know whether other telecoms players are following. We have seen a couple of examples in other countries, Russia, Poland and the Czech Republic, and

you will see more and more mobile companies moving in this direction.

• This is the second time Telenor is investing in Serbia. Was it different this time,now that the company has good knowledge of the country and the market?

- This year we are investing in excess of 20 million euros in building the network. On top of that, we are putting 40 million euros behind our

to obtaining a greater spectrum and establishing the 4G network, which we have already had in Montenegro for more than a year. We are very much engaged in that. I think that’s important for Serbian society, because once the additional spectrum becomes available telecoms firms will start to invest and that is good for the economy and the creation of new jobs.

• In which areas do you see further development of Telenor’s operations in Serbia?

- Around 40 per cent of all our mobile customers have smartphones and we expect these numbers to double in a few years’ time with 60 to 80 per cent of consumers having smartphones in 2017. This will be how the six million people in Serbia connect on the internet, do their Facebook activities, banking and many other things. It is a very significant journey that involves us really getting the kind of data connectivity that is needed to pass through seamlessly.

We see mobile telecommunications as part of the solution for Serbian society to restore the economy’s growth momentum banking initiative. And this at least demonstrates our firm belief that, in the longer term, there are good business opportunities in Serbia. We are strong believers in Serbia.

• What’s in store next for the telecommunications sector in Serbia?

- As mobile connectivity is going from being voice-centric, to being data-centric, we need a greater spectrum. In this respect, in the short term we are talking about something called technology neutrality, which will then allow us to deliver 3G and UMTS communication protocols, on the 900 bandwidth spectrum. Serbia is lagging behind in that a little bit, but we expect it will become a reality in a couple of months’ time. In the longer term, we are looking forward

• What is Telenor’s contribution to the development of the telecommunications and IT sector?

- We are a good corporate citizen in every aspect of what we do. Mobile phones are embedded in the everyday life of every person and every company and thanks to companies like ours, there is a safe internet, with all kinds of filters, spam filters and similar, allowing safe surfing for kids and others.

In the longer run, advanced, modern telecommunications are a tool for Serbia to improve the economic situation. We have so many smart IT heads here in Serbia and having broadband activity at an affordable price would allow them to engage with the global internet community.

Building the necessary infrastructure is a part of that and, as I said, Serbia is lagging a little behind at present.

At Telenor we are more than ready to engage in talks with the government and the regulator in order to push that forward. ■

NORWAY | WORLD MARKETS AND OPPORTUNITIES | 9

Norway is one of the world's richest countries per capita. It has the world’s largest sovereign wealth fund, valued at $884 billion.

Norwegian society today is based on values such as democracy and freedom of expression and features a strong feeling of fairness and egalitarianism. Honesty, tolerance and care for others are also specific values that are highly appreciated in Norwegian society.

Since the first licences were issued for the extraction of oil and gas from the North Sea in 1964, about 42 billion barrels of oil had been produced by the end of 2013. It is estimated there could be up to 24 billion more in untapped reserves.

The Norwegian economy is a prosperous mixed economy, with a vibrant private sector, a large state sector, and an extensive social safety net.

From the 8th to the 11th centuriesw Vikings ravaged the coasts of northwest Europe and were ruled by local chieftains. Olaf II Haraldsson, who became the first effective king of all Norway in 1015, began converting Norwegians to Christianity.

Sled dogs were probably one of the first means of transport that were used in Norway in order to travel through snowy terrain. Finnmarkslopet is the longest sled dog race in Europe. Today there are more than 170 teams representing 130 countries.

Norwegians have one hot meal a day and it is dinner. Fish dominates Norwegian cuisine. Breakfast is an important meal that is rich and filled with cheese, fish products, eggs and jam.

The Sami represent the oldest culture in Norway and the their churches are the most important Norwegian contribution to European cultural heritage. Their culture has been developing in Northern Scandinavia since the arrival of the first people 11,000 years ago.

ECONOMIC COOPERATION

Great Room for Growth in all Sectors Norway is a highly developed country with strong industry and a growing service sector, which is characterised by openness to international economic trends, but also a large state share in key industries. It is among those at the very top of the list of countries ranked in terms of gross national income, and elsewhere in the world according to GDP per capita, behind Luxembourg

F

rom the year 2000 until today the bilateral assistance provided to our country by the Government of Norway has reached in excess of €250 million. To date some 650 cooperation agreements have been signed and numerous projects implemented. Serbia’s European Union integration process is in the primary focus of support from this country.

Norway is ranked 36th on the list of countries where Serbia’s export products were sold in 2013.

At the same time, Norway was 54th among the 204 countries where Serbian imports are sourced. Norwegian participation in total trade in 2013 amounted to 0.2 per cent of exports from Serbia and 0.09 per cent of total imports.

FOREIGN TRADE EXCHANGE • According to the statistics of the RS Customs Authority, goods exported from Serbia to Norway in 2013 had a value of $29.5 million, while imports were worth $20 million • Exports increased by 125% compared to 2012, while imports rose 21.2% • A surplus of $9.5 million was reSERBIA-NORWAY TRADE EXCHANGE,2005-2013, IN USD MILLIONS YEAR 2005 2006 2007 2008 2009 2010 2011 2012 2013

EXPORT 2.6 7.6 10.5 25.1 7.6 7.1 9.1 13.1 29.5

Source: RS Customs Authority

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IMPORT 11.4 19.3 17.2 25.2 12.3 15.1 19.9 16.5 20.0

TOTAL 14.0 26.9 27.7 50.3 19.9 22.2 29.0 29.6 49.5

BALANCE -8.8 -11.7 -6.7 -0.1 -4.7 -8.0 -10.8 -3.4 9.5

corded on the Serbian side, while the existing coverage of imports by exports was exceeded by 48.2 per cent in 2013 • Serbia mostly exported the following products: general food products; winches; parts and accessories for chassis, other related items; soy beans; honey, natural; toothed friction gearing; fuel, kerosene type; other ammunition and parts thereof; paper and cardboard, plastic-coated, other; blackberries and mulberries, frozen, sugar free – Source: RS Republic Institute for Statistics • Imports were dominated by salmon, fresh or chilled; unclassified goods; Polyethylene of a specific density less than 0.94; notepaper, mechanical fibre> 10%; stranded wire, cables, insulated aluminium; sanitary

SERBIA-NORWAY TRADE EXCHANGE, IN USD MILLIONS

STRUCTURE OF IMPORTS FROM NORWAY TO SERBIA IN 2013

35

29.5

30

Mineral fuel and lubricants 23.8

25.1 25.2

25 19.3

20 15

11.4

10

19.9

17.2 12.3

10.5

7.6

7.6

19.97

Chemical products 21.3

Food and livestock 23.8

16.5 13.1

15.1 9.1

7.1

5 0 -5 -10

2.6

9.5

-0.1 -6.7

-8.8

-15 2005

-11.7 2006

Export

2007

-3.4

-4.7 -8.0 2008

Import

ware, other; propane, liquid; chemical wood pulp, dissolving; other electrodiagnostic apparatus; mackerel, frozen - source RS Republic Institute for Statistics • Serbia’s largest domestic exporters to Norway in 2013 were: Sојаprotein Bečej, Rap Zastava Kragujevac, LBK livnica Kikinda, Agrotrejding Novi Sad, Medino Krnjevo, NIS Novi Sad, Prvi Partizan Užice, Tetrapak Belgrade, Mega frukt Belgrade, Agardi Subotica • The top ten importers during the same period were: Skvadra Belgrade, Hemofarm Vršac, Rap Zastava Kragujevac, Euromodul Nova Pazova, Energoprojekt oprema New Belgrade, Euro gas Subotica, CPS Belgrade, Agrimatko grup Dipkom Novi Sad, Metro Cash&Carry Belgrade, Milan Blagojević Lučani • During H1 2014...

INVESTMENT According to the statistics of the National Bank of Serbia, direct cash investments from Norway during the 2005–2013 period reached €1.3 billion. This amount is primarily related to the purchase of mobile operator Mobi 63 by Telenor in 2006. This remains the largest single investment in Serbia ever. For many years Norway has been ranked as the second largest investor in Serbia, just behind Austria.

In 2006 company RAPP Marine Group purchased the enterprise

2009

2010

Raw material, except fuel 4.5

-10.8 2011

2012

Products classified by materials 19.7

2013

Machinery and transportation equipments 22.5

Total

Zastava Mašine from Kragujevac. This company today operates under the name RAPP Zastava and represents an example of a successful privatisation in Serbia. With the purchase of Gruža company 21. Oktober, which was under reconstruction, RAPP Zastava expanded capacities with the intention of becoming the manufacturing cen-

ditional €3.5 million in the modernisation of production capacities in Serbia.

Norway is ranked first on the basis of the individual value of foreign investment in Serbia and second in terms of total FDI inflow in accordance with the origin of capital in the 2005 - 2011 period, just behind Austria.

tre for Norwegian conglomerate RAPP Marine Group in 2015.

By taking over company Agrana Pak from Zemun, Norway’s Elopak A.S. launched production of packaging for milk and milk products for the market of Southeast Europe in 2005. In the last two years Elopak has invested an ad-

TELENOR Norway’s largest investment in Serbia is related to the purchase of mobile operator Mobi 63 by Telenor.

In early August 2006 the Government of Serbia and Norwegian company Telenor signed a purchase agreement in which the Mobi 63 and a license

NORWAY | WORLD MARKETS AND OPPORTUNITIES | 13

Elopak Norway, with the establishing of Elopak Serbia, a company producing cartons for milk and milk products Elopak Serbia. In the last two years Elopak Norway has invested around €3.5 million in modernisation. The machine for printing cartons alone required an investment of €1.3 million. This machine has double the capacity of the existing

and Bosnia-Herzegovina, and is soon expected to begin exports to Croatia and Slovenia. The rest of the production is sold on the domestic market, in almost all dairies in Serbia. The company is also considering the production of packaging for juices that are normally produced in Elopak factories in other countries.

The packaging produced by

ELOPAK Another significant Norwegian investment is the investment of

equipment and Elopak Serbia can now print up to 400 million packaging units annually. The remaining investments are related to the replacement of old bottling plant equipment at three Imlek dairies.

Elopak Serbia exports about 35% of total production to Greece, Estonia, Bulgaria, Romania, Great Britain

Elopak is made according to high environmental standards, is recyclable and has minimal environmental impact. Ekopak, which currently employs 55 workers in Serbia, has been operating in the country for ten years and, since 2005, has been wholly under Norwegian ownership. ■

DIRECT NORWEGIAN INVESTMENT IN SERBIA 2005 -2013

FDI IN SERBIA,2005 –2011, IN EUR THOUSANDS

for the provision of services and mobile phones was handed to the Norwegian national company for a price of €1.513 billion. This is still the largest single foreign investment in Serbian history.

Telenor was the only bidder in the tender for the second fixed telephony operator in Serbia, for which it offered €1,050 million for the license, which was awarded following an official decision in February 2010.

RAPP ZASTAVA Companies RAPP Marine Group bought enterprise Zastava Mašine from Kragujevac in 2006. This company today operates under the name RAPP Zastava and represents an example of a successful privatisation in Serbia. RAPP Zastava manufactures parts for ships, machinery and oil platforms, which are produced entirely for export.

By purchasing part of 21. Oktobar, a company under reconstruction from Gruža, RAPP Zastava expanded its capabilities with the intention of becoming a major production centre for Norwegian conglomerate RAPP Marine Group by 2015. According to the management plan, in the future further investments will be realised in equipment and facilities at RAPP Zastava, with the aim of doubling the company’s production levels.

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total

Net investment in cash, EUR thousands 24 1,296,061 2,326 4,025 -526 1,567 953 3,451 3,535 1,311,416

Source: National Bank of Serbia Note: The NBS receives data on foreign direct investment (FDI) from commercial banks, which means that the data is based on foreign investments in money received by the country of payment, and not necessarily the country of investment.

Moreover, data on direct investment by Norway for 2006 does not include the purchase of licenses for Telenor in the amount of $410 million or for the purchase of the third license from Austria in the amount of $425 million.

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Rank 1 2 3 4 5 6 7 8 9 10 11

Country of origin Austria Norway Greece Luxemburg Germany Italy Netherlands Russia France Slovenia Switzerland

Net FDI in cash 2,292.565 1,305.430 1,286.725 1,152.542 1,059.939 846.765 838.132 534.969 467.062 445.837 355.744

Source: National Bank of Serbia Most significant representative offices and companies from Norway on the Serbian market: TELENOR - telecommunications, ELOPAK - environmentally friendly packaging for liquid food and drinks, NTE - energy, RAPP ZASTAVA - shipbuilding technology, TECHNOR ENERGY AS - Energy, STATKRAFT WESTERN BALKANS - Energy. *Extract from Profila Norveška - Ljiljana Miletic, independent advisor to OEOI Serbian Chamber of Commerce

CULTURE

Music Knows No Borders Tutti World Music Centre Serbia successfully executed their project “Music as a tool in removing borders” in 2013, with the goal of strengthening cultural and educational relations between Norway and Serbia

F

Jovan Pavlović, the founder of Tutti Serbia, has encouraged a great deal of change in cultural relations between Norway, the Balkans and Palestine. One of the most important projects thus far has been their recent project, “Music as a tool in removing borders.” The Tutti World Music Orchestra is an ensemble comprised of the most talented participants from the workshops held in the last two years. Through running workshops, Tutti Serbia constantly works towards a self-growing network where participants become “ambassadors” of the values upon which Tutti Serbia is based. All projects have received wide media attention in Serbia, and this year in Norway as well. This is of great importance in the promotion of our organization in both countries.

In November 2013, The Tutti World Music Orchestra visited Norway and in cooperation with the Norwegian band Bengal, organized a music seminar that was held in the city of Trondheim. They held four concerts in the cities in the areas of North and South Trøndelag.

The main activity of Tutti Serbia is organising international, multi-cultural and multi-ethnic musical workshops. From the time of its estab-

lishment until the end of 2012, Tutti Serbia achieved its first goal, namely to open a world music center in Serbia which is now known as “Serbia World Music Centre”. Participants in these workshops living in Serbia had the chance to cooperate with various professional musicians from various

The main activity of Tutti Serbia is organising international, multi-cultural and multi-ethnic music workshops cultural backgrounds. The main focus was to include participants from Norway, former Yugoslavian republics and the Balkans. The cultural and ethnic diversity of the participants as well as the process of their bonding through music workshops and concerts, make this project unique and therefore very attractive to musicians

from all around the world.

Tutti Serbia has established cooperation with many leading cultural institutions in Norway, such as Rikskonsertene, Førde festival, Music Conservatory in Trondheim, the Junior Soloists and Trondheim Soloists, Jazz Fest, “Musik og ungdom” and more than 30 cities and municipalities in Serbia. Direct cooperation with cultural institutions and artists from Norway and Serbia provides a basis for a productive, stable and long-term cooperation in which Tutti Serbia plays the role as an organiser and intermediary for cultural events.

Tutti Serbia strongly believes that constant participation in projects such as these contribute even further to the cultural and educational co-operation between Norway and Serbia and promote both countries worldwide in the best possible way. ■

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NORWEGIAN PROJECTS IN SERBIA

No Taboos for the Kings of Serbian Satire

The Zemun Church

Njuz.net enjoys the freedom to transform news into make-believe stories that offer an absurd and often fun interpretation of Serbian politics and society.

Njuz.net, which has received financial support from the Norwegian Embassy, does not seem to have any taboo topics. For more than three years now, the writers of Njuz.net, so-called Njuzovci, simply make stuff up out of thin air to please their audience, but also point to some important issues in the society as a whole.

It all started in October 2010 when a group of six thirty-somethings spontaneously came up with the idea to make Serbia’s version of the Onion.

Njuzovci were accused of protecting some while exposing others to satire.

The breakthrough for Njuz.net came two months after the official launch, with the now famous story of a Serb called Dragan Stević who supposedly killed a shark by jumping off a cliff in Egypt’s Sharm El Sheikh. The imaginary story, which is among the top five most read stories on the website, with several hundred-thousand hits, was inspired by shark attacks on tourists in Egypt.

In 2013 Njuz.net went on TV, launching a show called 24 minuta, which is broadcast on TV B92 every Sunday night. It is the Serbian version of the popular American political comedy and fake news TV show, The Daily Show with Jon Stewart.

Njuz.net now receives about 30,000 hits daily and has so far published two books, as well as appearing in the print edition of daily newspaper Danas and radio stations Novosti and Index, while 24 minuta is the most popular TV show on B92.

The Roman Catholic Parish of Zemun has a church in the centre of Zemun that was built in the period from 1785 to 1794. It is dedicated to the Assumption of the Blessed Virgin Mary and although it has been renovated several times it once again requires attention.

Its initial purpose was to serve the people who were quarantined upon arrival in Zemun. During the time of war in the region, in the 1990s, this church was targeted by various extremists and it was closed for use from 1991 to 2006. In that period it experienced deterioration. The goal is to restore the façade and roof, as well as the immediate surroundings of the church of St. Rocco. Since 2006, when it was partly reopened, the liturgy has been served every first Sunday of each month. When the refurbishment project is completed, Mass will be held every Sunday and various ecumenical encounters will also be organised.

Better Equipment and Training for Forensic Experts The National Criminal Centre of the Serbian Criminal Police in Belgrade will receive new, modern equipment necessary for forensic analysis. This is according to a project entitled “Strengthening of forensic capacities in the domain of micro traces and elemental analysis,” supported by the Embassy of Norway.

Project manager, Nataša Radosavljević Stevanović, said that the total value of the project stands at €695,467. Norway has provided €625,647, with the remainder to be funded by the Serbian Interior Ministry.

She explained that micro traces, or so-called “silent witnesses”, represent sensitive and almost invisible evidence that perpetrators are not aware of leaving behind. Jannicke Bain, Deputy Head of the Norwegian Embassy in Belgrade, said that Serbia and Norway have a common interest in fighting crime and that the implementation of this project would contribute to this goal. The project, which will last for the next two years, represents the continuation of the Interior Ministry’s cooperation with Norway in this field.

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Beekeepers Receive Training and Beehives Beehives were handed out to participants of the beekeeping training organised by the Executive Board of the Association of Beekeepers’ MLAVA Petrovac. The ceremony was organized in Elementary school “Mladost” in Petrovac and the event attracted the attention of local media; TV “Mlava” and “RUF” as well as Radio “Petrovac”. The activities were part of the Norwegian funded project “Save Her Majesty The Bee”, with the goal of raising the quantity and quality of honey production in the region of Petrovac na Mlavi. The project in Petrovac na Mlavi represented one of the most successful local initiatives in Serbia supported by the Norwegian Embassy.

It was part of the joint efforts of Norwegian companies such as the Business Innovation Programs (BIP), the Norwegian Honning Central and the Embassy itself to create jobs and income through honey production and exports.

Together with the start-up beekeepers, the local school of Agriculture has also received new beehives. All together 80 beehives were delivered to beekeepers in Pozarevac in June. The event took place at the school of Agriculture “Sonja Marinkovic. The beekeeper start-ups received mentoring from experienced beekeepers which enabled them to establish own individual honey production. Another joyous moment for beekeepers took place in June in Krnjevo when a group of 18 beekeepers from four municipalities of Banicevo also received beehives as a part of the project “Honey Production – Export Chance of Branicevski Region”.

In 2012, based solely on the strength of the reputation and network of contacts that the Norwegian company Business Innovation Programs (BIP) has in Norway and Serbia, an initial 120 tonnes of good quality honey were successfully exported from Serbia to Norway.

Sweet Dreams are Made of This Serbian honey is entering the Norwegian market, hoping to conquer 1/3 of it this year. This is partly the result of Embassy-supported projects for Serbian bee keepers to improve their skills and promote export. A new one-year project supporting honey production as an excellent export opportunity in the Branicevski district of Serbia, was officially opened on 13th December in Petrovac na Mlavi. A series of trainings was launched as a part of “Honey production - Export Chance of Branicevski Region” project in Petrovac. The agenda of the trainings was adapted to participants’ knowledge and experience. The next step of the project was to deliver bee-hives to 35 advanced beekeepers and 76 start-ups.

After the selection process was completed, the handing-out of beehives took place in April and May. This was followed with onfield visits and a mentoring process. These activities enchanced

not only honey production capacities of Branicevski Region, but also enabled beekeepers to maximise yield through implementation of advanced beekeeping techniques and systems.

The partners to the project were the municipalities of Pozarevac, Petrovac na Mlavi, Zagubica, Malo Crnice, Veliko Gradiste and Golubac; the Beekeepers Association “Mlava”; Medino; Honningsentralen (the leader in the Norwegian honey market) and the Civil Society Organization “Business Innovation Programs” (BIP).

The project was funded by the Norwegian Embassy in Belgrade and the municipalities involved, and aimed to increase production and export of honey from the Branicevski region through enhancing expertise and production capacities of existing producers, as well as support youth start-ups. Providing basis for economic development and entrepreneurship were amongst the key areas in Serbia that the Norwegian Embassy supports financially.

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Battle for Green Tara Mountain The Tara National Park, in cooperation with Faculty of Forestry and with financial support from the Royal Norwegian Embassy, successfully conducted an extensive campaign using a modern biotechnological method to control this pest for the first time and thereby saving 60,000 trees.

Droughts over the two past years have been unusually severe at the Tara National Park. Such conditions weakened trees, making them an easy target for bark beetle species. The park’s administration applied for support from the Royal Norwegian Embassy and received a grant of €64,290.

The project resulted in the saving of 60,000 trees. According to the Norwegian Embassy, it is crucial that Serbia allocates funds for future battles in a timely manner and applies appropriate monitoring in order to swiftly alert foresters and decision-makers of possible risks.

Norwegian Ambassador to Serbia, Nils Ragnar Kamsvåg, visited the closing event at the Tara National Park on 12th June, when the results were presented. In his speech he referred to the experience Norway had with bark beetle gradation in the 1970s and ‘80s, and the lessons learned.

Official Opening of Newly Reconstructed Felix Romuliana Ampitheatre The ancient roman site of Felix Romuliana was reconstructed in the period from 2010 to 2011 with the aim of reawakening the initial interpretation of the imperial palace to visitors from the original entrance. However, the grounds in front of the eastern gate were not taken care of and, thus, presented a problem.

In an effort to improve the aesthetics of the surroundings and attract more tourists, the main goal of the project was to restore the amphitheatre just outside the eastern gate of the imperial palace.

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The project was finalised with the help of the Royal Norwegian Embassy in Belgrade and its donation of €32,000. This has, thus, become the most significant project for the National Museum of Zaječar and has also assisted the Ministry of Culture and Information of the Republic of Serbia.

BIP has long experience in the organization and implementation of various business development and support programs, including business plan development trainings and consulting in various business areas, and it is also experienced in project implementation in line with the Norwegian Embassy’s rules and procedures. ■

Rural Tourism Strengthens Family Business in Serbia The Business Development Center Kragujevac, supported by the Norwegian Embassy in Belgrade is fostering the development of rural tourism in the central Serbian region of Sumadija through a project called “Fostering Rural Tourism for Sustainable Local Economic Development.” It has recognized many opportunities and now works on developing rural tourism in the form of small family businesses in rural areas around Kragujevac, Topola, Rača, Knić and Rekovac. Most of the tourists are families and couples from Serbia, but they have also had guests from Slovenia, Denmark, Belgium, Australia, Russia and Israel. As part of the project, families and individuals interested in starting rural tourism business were given training in the areas of tourism as business, entrepreneurship characteristics, marketing and business planning, as well as consulting services. Marija Stojadinović, Director of the Business Development Center Kragujevac, says that the capacity and competitiveness of the households has been improving ever since the project started in November 2013. “In late August, we organized a three-day study visit to Slovenia, where the household owners to learned from the best and connected with hosts in the EU.” A non-formal partner on the project is “Domaćini za seoski turizam,” an association of rural tourism households. In February, participating households from Šumadija presented themselves at the Belgrade International Tourism Fair, and (as all good news spreads fast) the project leaders have been invited to present the project at numerous media outlets.

Post-Flood Technical Assistance for SMEs in Obrenovac

The Obrenovac 2014 Business Club was formed as an initiative of 15 SMEs damaged by the floods. The main idea of the project is to contribute to the normalization and improvement of the business environment in Obrenovac after the severe flooding and to establish a mechanism for mitigating any direct flood damage to the SME sector in Obrenovac through SME assistance and capacity building.

The project, which kicked off in August 2014 (and will last through 31st May 2015), is being carried out by the Citizens Association, Business Innovation Programs (BIP) and its cooperating partner Poslovni Klub Obrenovac (Obrenovac Business Club).

The initial part of the proposed action is to assess the state of individual companies and develop plans for their recovery. The second part will focus on empowering local business associations and initiatives, as well as the municipality, to create projects and programmes to help the local economy cope with the consequences of the floods.

The third part of the project will provide its beneficiaries with administrative and legal assistance when applying for support within different relief programmes.

COMPANY REGISTER ALBATROSS MARINE Branko Zmukic, Director Vrsacka 67, 21000 Novi Sad Tel: +381 21 423875 Fax: +381 21 500101 albatrossmarine.ns@gmail. com www.albatross-marine.co.rs ATOM MG COMPANY DOO Darko Janković, Direktor Jurija Gagarina 227, lok 183 11070 Beograd Tel:+ 381 11 7176 951 Direktor Mob: 00 381 62 96 266 22

atom-mg.com BUSINESS INNOVATION PROGRAMS Bratislav Dobrić, SE Project co-ordinator Kneginje Zorke 11a 11000 Beograd Tel: + 381 63 615 516 bd@bips.no bd@bips.rs www.bips.rs CERAGON SERBIA Nenad Stojanovic, Director Dobropoljska 26-28, 11000 Beograd Tel: +381 11 3699530

Fax: +381 11 3657191 office.serbia@ceragon.com www.ceragon.com ELOPAK D.O.O. Ilija Đenić, Director Batajnicki drum 23, 11080 Zemun Tel: +381 11 71 60 142, 71 60 577 Fax: +381 11 610 83 49 info@elopak.rs www.elopak.rs FOSDALEN Simon Simonović, Director Kralja Petra 70/9 11000 Beograd Tel:+ 381 011 2183 708

Fax:+ 381 011 2183 708 simon.simonovic@fosdalen.rs office@fosdalen.rs www.fosdalen.no HYDRO DESIGN PRODUCTION DOO Sasa Draganovic, Direktor Gornje Sajlovo 63 21000 Novi Sad Tel: +381 64 385 96 17 Fax: +47 66 915 566 www.cormate.com NOVICOM Ivana Manojlović Maršala Birjuzova 3-5 11000 Beograd

Tel: + 381 11 3286 871 ivana.manojlovic@novicom. com www.novicom-nordic.ls.rs RAPP ZASTAVA A.D. Slobodan Milovanovic, Director Trg topolivaca 4, 34000 Kragujevac Tel: +381 34 331986 Fax: +381 34 337077 sm@rappzastava.com www.rappzastava.com www.rappmarine.com ROVEX INŽENJERING DOO Romeo Vulas, Direktor

Bulevar Mihajla Pupina 10z/ NP 26 11070 Beograd Tel: 381 11 311 52 08 Fax: + 381 11 213 68 40 marketing@rovex.co.rs www.rovex.rs STATKRAFT WESTERN BALKANS D.O.O Dragan Vignjević, Director Francuska 17/05, 2nd Floor 11000 Beograd Tel: + 381 11 3038 688 Fax: + 381 11 3038 686 dragan.vignjevic@statkraft. com

biserka.tmusic@statkraft.com www.statkraft.no TELENOR D.O.O. Ove Fredheim, Director Omladinskih brigada 90, 11070 Beograd Tel: + 381 063 9000 Fax: + 381 063 9001 servis@telenor.rs www.telenor.rs TELENOR BANKA AD Martin Navratil, Predsednik IO Omladinskih Brigada 90v 11070 Beograd Tel: +381 63/9005 officebanka@telenor.rs

www.telenorbanka.rs VNG DOO Zorana Brankovan, Direktor Bulevar Oslobođenja 60A/ 5/ 48 21000 Novi Sad www.vng-ns.com ŠKOLA NORVEŠKOG JEZIKA “SAGA” Zorica Nikolić Marković Kneginje Zorke 11a 11000 Beograd Tel: +381 11 24 31 589 Mob: +381 69 220 73 22 zoricanikolicmarkovic@ gmail.com

NORWAY | WORLD MARKETS AND OPPORTUNITIES | 19

Come and experience for yourself the quality of our services and our professionalism for we exist because of you.

Atom MG Company has existed successfully on the market of the Kingdom of Norway for five years, as evidenced by many projects built for our Norwegian partners.

We work according to the applicable TEC 10 law on construction and in our team we have everything necessary for the implementation of construction projects, such as an electro firm, plumbing, a team of highly skilled carpenters, plasterers, flooring specialists and ground preparation using the latest machines, as well as a team of engineers able to monitor works and ensure adherence to the high quality demanded in Norway.

We cooperate with many Norwegian companies and are in the process of registering a new company, D&B Bygg AS, which will consolidate all operational elements with the aim of ensuring even better quality.

Atom MG Company Norway Ltd. – D & B BYGG AS Jurija Gagarina 227, Belgrade, Serbia Tel: +381 11 71 76 951, +47 93942935

www.atom-mg.com