Breathing New Life Into Southwest Serbia’s Economic Landscape
How entrepreneurs are taking the place of big processing factories
Serbia is a small country. You can cross our entire nation in less than a day. Yet, when I drove recently from Belgrade into the southwest region, the capital city felt like a world away.
This part of Serbia was once an industrial zone, with socialist textile and wood processing factories forming the backbone of the economy. During the 1990s, when economic and political transition swept through Eastern Europe, big processing factories became outdated and unprofitable. People lost their jobs.
Today, unemployment remains high, especially among young, first-time job seekers, but a shift is underway. As big processing factories are fading into the background, more and more local entrepreneurs are taking their place.
Entrepreneurship is a risky business, no matter where you live in the world. But it is an especially big leap for business owners who remember the factory life. The good news is that the Development Agency of Serbia has teamed up with USAID to help these entrepreneurs reshape their futures — and the local economy.
The two development agencies are helping private sector firms in 12 municipalities throughout southwest Serbia to succeed in the 21st century. The project helps entrepreneurs develop business plans, adjust to market demands, and improve their operations. And USAID is helping them gain access to grant funding — most business owners will tell you that the number one obstacle to successfully starting a new business is sufficient capital.
During my trip, I traveled to three municipalities participating in this program — Priboj, Prijepolje and Nova Varos — to visit new business owners in the area.
My first stop was at NOVATEX, a protective clothing producer located in Nova Varos. Nadezda Kolasinac started this business in 2006 and, after 10 years, was struggling to grow her operations. USAID’s local partner, the regional development agency Zlatibor-Uzice, helped her company develop new products and expand to web-based commerce using online selling software.
“Sales went up 50 percent once we created a website and set up the online store. Had we known that it would work so well, we would have done it long ago. It was an eye-opener,” Nadezda told me. Her company currently employs nine workers, but she hopes to add more as business grows.
Entrepreneurship is a risky business, no matter where you live in the world. But it is an especially big leap for business owners who remember the factory life.
I also visited Branko Mandic, the owner of MB, a 20-employee food processing company in Nova Varos. His business, which he founded in 2002, produces more than 15 types of dough, and exports regionally to markets in Serbia, Bosnia and Herzegovina, Montenegro and Australia.
“The USAID project helped my company create new products and attain international food safety certification, which is required to export and expand into new markets. Thanks to this assistance, MB now supplies the local supermarket chain DIS, the biggest chain in the region. We are continuing to create new products and are exploring how to further modernize our IT infrastructure to stay competitive,” says Branko.
Down the road from Nova Varos sits Prijepolje, a town once home to the national textile industry. Ivan Ljujic is the head of Prijepolje’s textile association, founded in 2012 with USAID assistance. The association includes textile companies, the regional development assistance agency, the municipality of Prijepolje, and the textile vocational school.
Ivan told me how local businesses have to fight for their place in markets abroad — most of them export to neighboring countries, but also to Germany — and how important training is for the future workforce as older workers are nearing retirement.
Last year, USAID helped companies within the association to meet European Union standards for export, participate in international trade fairs, and adopt business practices in line with international standards.
“The association, which includes 11 companies that employ between 800 and 1,000 workers, produces a variety of textile products that are now in compliance with the EU quality standards. I am proud to say this is the reason why we do not encounter issues any longer with exporting our goods to the EU countries,” says Ivan.
My last stop was at Zumbas, a small textile company located in Priboj that produces protective gear and hunting clothing. Zumreta Bajrovic, the company’s owner, admits that, not long ago, she was uncertain about the future of her business.
“The first USAID grant helped me buy modern sewing machines. With these machines, we became competitive in the local textile market and attracted new customers. I was also successful in the second round of grants, and the equipment I got helped me expand my business,” says Zumreta. Today, with two full-time employees, Zumreta is helping to breathe new life into an industry that has defined her community for generations.
The drive through southwest Serbia is a reminder of how much untapped potential exists here. I have been moved by how these business owners have unlocked the entrepreneurial spirit in the region. USAID provided needed resources, but these resourceful men, women and youth have done the rest themselves.
Read more about USAID’s work in Serbia.
About the Author
Ana Zapletic is an administrative assistant with USAID’s mission in Serbia. Follow her work @USAIDSerbia.
