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Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
Investment opportunities in macedonia for manufacturing companies   vele samak
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Investment opportunities in macedonia for manufacturing companies vele samak

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Finland – Macedonia Business Seminar, Wednesday, June 6, 2012 …

Finland – Macedonia Business Seminar, Wednesday, June 6, 2012
The Business Seminar was organized on the occasion of the visit to Finland of H.E. Mr. Nikola Gruevski, Prime Minister, President of the Government of the Republic of Macedonia.
Presentation by Vele Samak

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  • 1. Republic of Macedonia Minister for foreign investmentsInvestment Opportunities in Macedonia forManufacturing CompaniesVele SamakMinister for Foreign InvestmentsVele.Samak@msi.gov.mk+389-2-3121-046
  • 2. Agenda • Introduction • Challenges • 3 reasons for Macedonia • Next steps6/7/2012 Vele Samak, Minister for Foreign Investments 2
  • 3. Introduction• Mission and MO: „Attract the largest manufacturing and service companies to invest in Macedonia by identifying business and investment opportunities and using deliberate speed to solve problems.”• Team – Vele Samak, Minister for Foreign Investments, Vele.Samak@msi.gov.mk – Ivana Nikolik, Analyst, Ivana.Nikolik@msi.gov.mk – Riste Mishe, Analyst, Riste.Mishe@msi.gov.mk – Lejla Mehmedovic, Analyst Lejla.Mehmedovic@msi.gov.mk – Andrea Tevdovski, Analyst Andrea.Tevdovski@msi.gov.mk – Katerina Stojanovska, Assistant & Chief of Staff Katerina.Stojanovska@msi.gov.mk6/7/2012 Vele Samak, Minister for Foreign Investments 3
  • 4. From Macedonia Manufacturers can profitably expand into new markets, improve supply chain and source new talent and innovation Potential for growth: Older populations will require new services and increased productivity Electronics and Software content in vehicles and applications will continue to grow Incomes in Eastern Europe are less than half of those in West Europe Infrastructure development still lagging in Emerging Europe Challenges: Economic uncertainty will require production flexibility and better supply chains Price pressures on suppliers will not abate with lower volume growth Electronics supply chain and component shortages will remain volatile Fragmented consumer markets will challenge marketing and service operations6/7/2012 Vele Samak, Minister for Foreign Investments 4
  • 5. Western and Northern Europe remains the most-productive but also most- most- most-expensive manufacturing location in the world Source: BLS, US Department of Labor, March 2011, Bloomberg BusinessWeek6/7/2012 Vele Samak, Minister for Foreign Investments 5
  • 6. Eastern Europe is a crowded space for many manufacturers Choose your next site wisely! EU Border EST as of 2007 HMC-Kia, Zilina (2006) HMC-Hyundai, Novosice (2008) LVA VW-Skoda, Mlada Boleslav VW, Poznan LTU GM, Zeran (Warsaw) Toyota/PSA, Kolin BLR GM, Gliwice PSA, Trnava (2006) POL VW-Skoda, Bratislava BRD Fiat, Tychy LIAZ, Velki Krtis Daewoo, Uzhgorod CZE VW-Audi, Györ, (Engines) SVK UKR ZAZ, Zaporozhje Opel/GM AUS HUN MDA AutoVAZ, Kherson Daimler, Kecshemet SLO ROM Suzuki, Estergom HRV Renault- Renault-Nissan, Pitesti SER Renault-N, Novo Mesto BIH Ford, Craiova BGR Ford, Ford, Otosan, Gölcük MKD VW, Sarajevo Toyota, Sakarya ALB FIAT, Zastava, Kragujevac Oyak-Renault , Beykoz GRC Fiat – Tofas, Bursa Source: Government research6/7/2012 Vele Samak, Minister for Foreign Investments 6
  • 7. Three reasons to choose Macedonia People and ingenuity Cost benefits Record of leadership6/7/2012 Vele Samak, Minister for Foreign Investments 7
  • 8. Young, Dynamic and Well-educated Workforce Well-42% of population under 30 – youngest country in Eastern Europe 6%High intellectual capital: – 98.9% of high school graduates enrolled in college in 2010 – 63,000 University students in 2009 2,9% – 27% in Engineering and Technical studies – Multiple technical schools in each city 1,1%Engineering graduates recognized a top global universities USA Germany Macedonia Percent of GDP spent on Education90% study English, 20%+ study German in schools6/7/2012 Vele Samak, Minister for Foreign Investments 8
  • 9. Macedonia provides companies with unrivalledforeign language skills Foreign languages learnt per pupil; ISCED level 2 Secondary education (average) Foreign Primary School Secondary School Languages Students Students Country 2006 English 91% 94% Macedonia 1.7 French 22% 32% EU (27 countries) 1.4 German 13% 21% Slovenia 1.3 Italian / 2% Bulgaria 1.3 Russian 1% 2% Croatia 1.2 Turkish / 1% Czech Republic 1.1Total No. of primary and secondary schools students 310,000 Slovakia 1.1Source: State Statistical Office, Macedonia (Education 2008/2009) Poland 1.1 Hungary 1.0 Turkey N/A Source: EurostatEnglish is mandatory for first-graders in MacedoniaTwo foreign languages are mandatory in high school: English, and either German, French, orRussianMacedonia maintains strong lead in the CEE region in terms of language skills and ability toserve both, German and French-speaking markets
  • 10. Solid Industrial Base of Component Manufacturers and Local Suppliers in Many Fields to Support Investors 40+ companies inPlastics injection, extrusion, blow Machining & Metal-works Metal- molding, rubber, cables and tool makers PCBs, electric motors, relays, powerElectronics substations, broadcasting and telecom equipment Long tradition in castings, forgings, stamping, welding, extruding, tube making,Mining & Commodities metallurgy Metal toolworks and production Copper, Lead, Zinc, Nickel and Iron Hot rolled, cold rolled coils & Mines, all in operation sheets, basic steel plates, Oil refinery, chemicals, cement, Automotive components and gypsum and minerals production and railway brakes Learnica excavation6/7/2012 Vele Samak, Minister for Foreign Investments 10
  • 11. Three reasons to choose Macedonia Cost benefits6/7/2012 Vele Samak, Minister for Foreign Investments 11
  • 12. Unbeatable Fiscal Benefits in Europe Corporate Income Tax Personal Income Tax 10% Flat Taxes among lowest in Europe Tax credit on reinvested profit Lowest payroll taxes (27% of gross wage) 34+ Double taxation avoidance treaties signed Real estate VAT taxes at 2% - 4% VAT at 18%, with 5% on specific items Source: PwC (Taxes at a glance 2011), National Investment Promotion Agencies12/7/11 Vele Samak, Minister for Foreign Investments 14
  • 13. Macedonia is as competitive as China in Manufacturing, offering savings of 20-50% from comparable countries for the same productivity 20- LEGEND:Average Monthly Gross Wages Average gross wage in €/month Annual wage growth % € 700 Poland 875 4.5% € 400 Czech Rep. € 250 961 2.1% Slovakia 797 3.5% Hungary Unskilled College Skilled 792 3.7%blue-collar entry-level engineering Romania 497 6.4% Turkey * 1159 11% Sustainable Labor Advantage in Macedonia: • Young Population Bulgaria ** 450 9.9% • Large unemployment ~ 30% • Easy labor mobility Macedonia Serbia • High degree of loyalty, lower retention 356 2% 507 13% costs: 4.4% don’t get paychecks on time • Captive labor market outside EU pressures over the next 5 years Source: State Statistical Offices, 2Q 2011 * Last statistical data from 2008 * *Estimate based on company information 6/7/2012 13 Vele Samak, Minister for Foreign Investments
  • 14. Excellent infrastructure, No trade barriers & Competitive transportation costs All of Europe in 2-3 days via HighwaysFTAs ensure no trade barrierswith EU, CEFTA, EFTA, Turkeyand UkraineAccess to 650 million customers North-South and East-West Highways 2 Brand New International AirportsLarge pool of logistic companiesprovide competitive costs anddelivery times 3 hours to port of Thessaloniki 35 days or less inbound container ships from China6/7/2012 Vele Samak, Minister for Foreign Investments 14
  • 15. Macedonia Offers Many Free Economic Zones for Production and Supplier NeedsAll Zones:Highway interchangeGov’t owned and managedInfrastructure readyElectricity, water, telecomGas (Skopje only)
  • 16. Why trust Macedonia?A record of leadership in turbulent times 6/7/2012 Vele Samak, Minister for Foreign Investments 16
  • 17. Macedonia at a glance – Emerging Economy with Strong Political Stability• Independent since 1991• Stable parliamentary democracy: – Minority representation in every government – Model country for ethnic integration• Population: 2.1 million• Current Government since July 2006, 2 re- elections with a dedication to economic growth, political stability, EU & NATO integration• Strategic Partnership with US, supported by many EU countries, Germany – largest trade partner• EU recommended start of Membership Negotiation in 2009, reiterated in 2010 and 2011• Standing NATO invitation, designated net security exporter in the region6/7/2012 Vele Samak, Minister for Foreign Investments 17
  • 18. Key Macedonian Economic Indicators – Economic & Financial Stability with High Potential 2007 2008 2009 2010 2011* PositiveGDP nominal (€ mil) 5,965 6,720 6,677 6,945* 7,345 Steady GDP GrowthReal GDP Growth (%) 6.1 5.0 -0.9 1.8 5.2 #2 in Europe in 2009!GDP per capita, € 2,919 3,283 3,253 3,350 3,565Inflation (%) 2.3 8.3 -0.8 1.6 3 Low InflationUnemployment (%) 35.8 33.8 32.2 32 30.8MKD / EUR 61.2 61.2 61.2 61.5 61.5 Decade-long StableMKD / USD 46.44 41 44.07 46.4 46.4 CurrencyImports (€ mil) 3653 4434 3472 3961 4,760 26% Debt/GDP, andExports (€ mil) 2472 2684 1921 2493 3,036 2.5% DeficitTrade Balance -1181 -1750 -1,551 -1468 -1,724 Opportunities forBB+ Positive Credit Outlook by FitchSource: Central Bank, Ministry of Finance, State Statistical Office Improvement* Estimated figures High unemployment Negative trade balance 6/7/2012 Vele Samak, Minister for Foreign Investments 18
  • 19. Why Macedonia – A Sustainable Investment Platform: Stable, Safe and Leading Reformer in SEE 22nd BEST COUNTRY FOR 35th BEST COUNTRY FOR BUSINESS IN THE WORLD BUSINESS IN THE WORLD World Bank’s Doing Business 2012 Report Forbes Magazine 3rd BEST REFORMER 5th IN THE EASE OF PAYING IN THE WORLD TAXES World Bank’s Doing Business 2010 Report PwC and World Bank Group Study Ease of Dealing with Trading Doing Starting a Getting Registering Getting Protecting Paying Enforcing Resolving Construction Across Business Business Electricity Property Credit Investors Taxes Contracts Insolvency Permits Borders Rank Germany 19 98 15 2 77 24 97 89 12 8 36 Macedonia 22 6 61 121 49 24 17 26 67 60 55 Estonia 24 44 89 48 13 40 65 51 3 29 72 Serbia 92 92 175 79 39 24 79 143 79 104 1136/7/2012 Vele Samak, Minister for Foreign Investments 19
  • 20. Why Macedonia – A Sustainable Investment Platform: Stability, Safety and Business-Friendliness Recognized by Many Foreign Companies Business-6/7/2012 Vele Samak, Minister for Foreign Investments 20
  • 21. Foreign Direct Investments, 2011-12 update 2011-US Company KEMET Russian biggest German wire & Indias Samvardhana German wire &Electronics Corporation pharmaceutical company harnessing automotive Motherson Group invests harnessing automotiveto invest 25mill USD in Prodis‘, part of Protek supplier Kromberg & €12M; starting with 140 supplier DräxlmaierTIRZ Skopje 1 for initial Group‘ is investing €5M, Schubert is investing ppl in TIRZ Skopje 1, Group is investingl€15-500 new jobs to produce employing 300 ppl in TIRZ €25M in Development for production of die- 30M in a Developmentstandard D.C. film Skopje 1 Zone in Bitola; to employ casting parts and exterior Zone in centralcapacitors up to 3000 ppl glass used in rearview Macedonia; to employ up mirrors for the to 4000 ppl automotive industry6pm Group based in Plant 1, TIRZ Skopje 1: Plant 2, TIRZ Stip: Upwards of €55M ; 300 Belgian private Bus &Malta, to invest €5M, $40M 150-500 Investment of €20M; employees; Currently Coach producer, Vanhiring minimum 50 ICT employees; 1400 ppl for construction doubling capacity with Hool NV, will invest up tospecialists to deliver Tele manufacturing instrument of cut & trim plant for another €60M. Exhaust €20M in TIRZ Skopje 2 cluster electronicsCare and Tele Health web car seats catalyst manufacturer and hire up to 400based healthcare supplying all OEM plants employees to producesolutions in Europe; Today, the busses and coaches for biggest exporter from the USA and EU markets 6/7/2012 Vele Samak, Minister for Foreign Investments Macedonia 21
  • 22. Why trust Macedonia? There’s always one more thing… 6/7/2012 Vele Samak, Minister for Foreign Investments 22
  • 23. Excellent Connectivity and Western CultureBrand New International airports - Skopjeand Ohrid, with $150M+ investment fromTAVMacedonia is a place of great hospitalitythat offers a mix of traditional andmodernLargest wine producer in the region5 International Schools with large mix ofex-pats.“Macedonia has a qualified workforce withexcellent English skills“ Nikolai Beckers, CEO, Makedonski Telekom AD "We are satisfied from the support provided by“Macedonian Government has created an the Macedonian Government, its institutions, theattractive tax package. On the other side they are Cabinet of Minister Samak and Bitolawilling to help investors in training their labor Municipality. The decision for investment inforce and they are very dedicated to remove all Macedonia represents an important step in ourthe administrative barriers. “ expansion as part of the strategy for international output“ Avram Stojcevski, Plant Manager, Johnson Controls Makedonija Martin Passern, Managing Director, Kromberg & Schubert6/7/2012 Vele Samak, Minister for Foreign Investments 23
  • 24. Next Steps in Macedonia• Develop business case and review needs with Macedonian team• Setup agenda for assessment of: – Greenfield site – HR recruitment, pre-qualification and training – Local suppliers and logistics providers – Incentives and other Government support – Other needs• Determine dates to visit Macedonia6/7/2012 Vele Samak, Minister for Foreign Investments 24
  • 25. Thank You Q&A6/7/2012 Vele Samak, Minister for Foreign Investments 25
  • 26. Macedonia is the most competitive labor cost country in Eastern Europe today! Social Contributions Country Corporate Tax Personal Income Tax VAT Total Macedonia 10% 10% 18% 27% Serbia 10% 12% 18% 37.2% Croatia 20% 15-45% 23% 37.2% Poland 19% 40% 22% 31.2 - 34.1% Ukraine 25% 15% 20% 39.8 - 49.7% Romania 16% 16% 19% 44.5 - 55.7% Slovakia 19% 19% 19% 48.6% Czech R. 24% 32% 19% 45% Hungary 16% 36+4% 20% 44% Turkey 20% 15% 18% 33.5% Source: CEE-CIS Tax Notes – Price Waterhouse Coopers Each 1 Euro in Gross Wages includes = • 27% cents in social charges, health insurance and pension benefits • 10 cents in personal income tax • 63 cents in net wages6/7/2012 Vele Samak, Minister for Foreign Investments 26
  • 27. Reduced payroll taxes and flexible labor laws enacted in 2008 provide 10% wage cost savings! Macedonia - Social Security Contribution in Gross Wages Year 2011 2012 Pension and disability insurance 18% 17.5% Health insurance 7.3% 7.3% Employment insurance 1.2% 1.2% Additional health insurance 0.5% 0.5% Total 27% 26.5% • Hiring and firing made flexible with ability to hire, retain and dismiss temporary and contract-based employees, in addition to permanent staff • For large layoffs or reduction-in-force, key regulations are: • Employer is obligated to provide 30-days notice, • Offer severance ranging from 1-month up to 6-months of most recent wage, depending on time of employment6/7/2012 Vele Samak, Minister for Foreign Investments 27
  • 28. Public Holidays and Vacation Allowances 11 Public Holidays: • 1st January – New Year’s Day • 7th January – Christmas of Orthodox Christians • 1st May – Labor Day • 24th May - Day of Macedonian educators Ss. Cyril and Methodius • 2nd August – Day of the Republic • 8th September – Independence Day • 11th October – Uprising Day • 23rd October – Day of Macedonian Revolutionary fight • 8th December – Day of St. Kliment of Ohrid • Second day of Easter • First day of Ramadan BajramVacation: Orthodox Christian Holiday: th• 20 – 26 working days depending on work experience • January 6 - Day of Christmas Eve and conditions, after 6 months • Easter’s Friday• 10 days minimum for part-time employeesSick-leave and Maternity: Weekends and holiday shifts are• 14 calendar days with doctor permission, medical allowed according Labor relations law and commission for longer absence Collective agreements, but under certain• 9 mos Maternity leave, paid by State Health Fund conditions. 6/7/2012 Vele Samak, Minister for Foreign Investments 28

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