Jovanka Jovanovic, CEO of Robert Bosch Srbija - Construction of factory in Pecinci to open door to company's new investments

(Jovanka Jovanovic)

Construction of a factory of windshield wiping systems for automobiles in Pecinci will bring numerous indirect benefits to Serbia in addition to 620 new jobs. If the implementation of this project ends in success, and I am almost absolutely sure it will, the company Bosch will have incomparably big reasons to continue to invest in Serbia, Robert Bosch Srbija CEO Jovanka Jovanovic says at the beginning of an interview for eKapija.

The factory, of which construction is due to commence in March 2012, will span 22,000 square meters, and it will employ 60 workers for a start. Trial production is expected to start in spring 2013.

- The plan is to expand to 40,000 square meters until 2019 - says Jovanka Jovanovic.

eKapija: Which level of production do you expect to achieve in Serbia and where do you plan to sell the windshield wiping systems produced in Pecinci?

- Everything that comes out of the new factory will be offered to the European market where our most significant buyers from the automotive industry are located.

I cannot currently specify the quantity of wiping systems that will be produced in Pecinci, but I am sure it will be quite big, and so will the revenue generated from the sales.

During the first year of the project implementation we will primarily focus on the construction of the factory and everything that accompanies it.

eKapija: Why have you decided to build a EUR 70 million factory in Serbia?

- Bosch spent over a year analyzing locations in the countries of eastern and central Europe and, with a continuous support of the Serbian government and SIEPA, it has chosen Serbia.

There were several decisive factors, the most important of which are the country's good position and infrastructure. Our buyers are situated in Europe, and Serbia is well-connected with the European markets.

While we were analyzing the Serbian market, we learned from the German Business Association that German companies operating in Serbia were satisfied, that they did not regret coming to Serbia, and that they were willing to invest in expanding their capacities. That information meant a lot to us. As many as 80 percent of German companies said they were ready to invest in Serbia again. That was definitely a very good sign for us. Also, there is another very important reason why we have chosen Pecinci, and that is the vicinity of two university centers - Belgrade and Novi Sad, which means the availability of qualified manpower. We have already talked with representatives of the universities we plan to cooperate with.

(signing of the agreement on the construction of a factory in Pecinci)

eKapija: Do you think there are some factors that may make Serbia a risky destination for investment?

- I don't think Serbia is a risky destination for investment at all. On the contrary, I believe it is an attractive country to invest in.

When it comes to exchange rate fluctuations, which is one of the negative factors that are usually mentioned, I haven't noticed that the exchange rate in Serbia is less stable than in surrounding countries. Also, I do not think that our country is too much in debt or that its debts are bigger than those of most countries in western Europe and members of the EU. Serbia's budget deficit amounts to about 4.25%, while the average budget deficit in the EU countries is 6%, and it even goes up to 12% in some countries. Therefore, as far as economic situation is concerned, I believe that we are even in a better position than some countries of the European Union.

eKapija: Do you believe that the implementation of this project will encourage other foreign companies to invest in our country?

- I am sure it will. The reason why I say that is because German companies are very careful. Before entering such big projects, they thoroughly analyze all investment opportunities. When Bosch decides to enter a market and that decision turns out to be good, meaning that the project is implemented according to the plan and that the requested result is achieved, then it is much easier to attract another division. We have such situation in Hungary, where we operate 5 factories and employ over 8,000 people, and in Romania, where three factories of ours are situated.

eKapija: Bosch is present in the Serbian market since 1997, and the company Robert Bosch was formed in Belgrade in 2006. Have you experienced some difficulties in your operations during all this time? How is your cooperation with government institutions in our country?

(future factory in Pecinci)

- We have neither experienced any difficulties nor faced any obstacles. To be honest, we had not had many reasons to contact government institutions until we started thinking about the location for our production facility, but I can say that every cooperation was very correct.

Ever since we started thinking about the construction of a production facility, about a year ago, we have very often been in contact with ministries and the Investment and Export Promotion Agency (SIEPA), and all of them have been very supportive, SIEPA in particular. Also, we've received a great support from President Tadic and Minister Ciric because this project is of exceptional importance for both Bosch and the Republic of Serbia.

eKapija: Your sales in the markets of Serbia and Montenegro grew by 18% in 2010. How was the business year 2011 for Robert Bosch Srbija?

- When it comes to the retailing segment, we expect to maintain a similar upward trend in overall revenues this year as well. I must say that business conditions are not easy, but that is because general economic conditions in Europe, including Serbia, are still affected by the crisis.

The Bosch group in Serbia, comprising Robert Boch doo, Bosh Siemens Aparati za Domacinstvo and Bosch Rextron's branch office, generated a EUR 22 million revenue in 2010, and we expect to increase our revenue in this business year.

eKapija: How do you cope with competition in Serbia?

- Healthy competition is good and necessary for the business, and it provides you with guidelines for future improvements. What makes Bosch better than other companies in the field is the fact that it is present on the local level as an enterprise, while most other companies do not even have an office in this market. We are in direct contact with buyers. Also, in addition to products, we offer many services, and our numerous training centers in Serbia are of great importance as well.

A key to success lies in an exceptional quality of products and services, direct support to buyers and highly motivated team of associates.

I must stress that, on the other hand, I notice a greater presence of cheaper products in the market, as a consequence of the crisis and reduced purchasing power, but I believe that quality and reliable products and services will become again the first choice of buyers.

M.S.