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The Government of the Republic of Serbia

In the service of citizens

Strengthening of SMEs through TAM project

Belgrade, 22 March 2005

Serbian Assistant Minister of Economy for Small and Medium-Sized Enterprises Petar Pavlovic said today that from the beginning of its mandate the Serbian government has secured 1,200 loans for small and medium-sized enterprises (SMEs), with a total value of 9.6 billion dinars.

That allowed for the creation of approximately 15,000 jobs, Pavlovic said at a press conference and added that the same amount of funds will be secured in 2005. However for the first time, loans will be extended to owners of small businesses as well.

The Serbian Development Fund will also begin approving loans to those who were laid-off, but want to set up their own private enterprise. A total of 600 million dinars will be set-aside for these purposes.

Pavlovic stressed that the government will focus on providing aid in SMEs development and on creating measures that will encourage and help entrepreneurs to become more competitive and expand their field of activity.

He thanked the representatives of the European Agency for Reconstruction (EAR) and the European Bank for Reconstruction and Development (EBRD) for supporting the SMEs development in Serbia, among other things, through the TurnAround Management programme (TAM).

Director of the TurnAround Management (TAM) programme Charlotte Salford said that since it’s formation in 1993, the TAM programme of the EBRD has helped to realise nearly 1,200 projects in 28 countries

Salford pointed out that the programme was introduced to Serbia in 2001 and that to date, 36 projects have been initiated.

The TAM programme works with private companies that employ between 50 and 2,000 workers and provides them with advisory services concerning changes to and improvement of management.

Salford explained that the TAM programme in Serbia is supported with the financial assistance of the European Union, through the European Agency for Reconstruction, and that its budget totals €1.5 million. The TAM programme is working with 25 companies in Serbia and is expected to complete its activities by early 2006.

The programmes that were started in 25 different companies on January 1 this year were crafted with the aim of helping them in economic transition, the creation of jobs, export promotion and the improvement of competitiveness on the EU market, Salford pointed out.

A successful example of the implementation of the TAM programme is the Interdrvo company from Kragujevac, which specialises in wood processing, and has been included in the TAM programme in September 2004.

According to Salford, the TAM programme helped Interdrvo improve organisational structure, develop sales and marketing strategies, improve the production process and establish international contacts.

As a direct result of these activities, an agreement was signed between Interdrvo and the Swedish company Ikea for the delivery of 12,000 square metres of oak hardboards.

Head of the EAR office in Belgrade Adriano Martins said that although the privatisation process was launched a long time ago, the Serbian economy is still burdened by problems of large formerly socially-owned companies.

The TAM programme aims to accelerate the development of one of the most prosperous sectors in Serbia, the SMEs sector, so that it can be a driving force behind economic growth and employment, Martins explained.

In this programme financed by the EU, selected enterprises in Serbia will be forced to seriously analyse their challenges and opportunities, thus better securing long-term progress and employment.

Martins said that the development of entrepreneurship in Serbia has been one of the crucial components in the EAR’s activities over the past four years.

He explained that there is a long list of projects relative to entrepreneurship in Serbia, noting that the programme for small and medium-sized enterprises is among priority programmes. He explained that the financial support is to be disbursed through loans, whereas non-financial support includes development of the strategies and policies of those enterprises.

The EAR has supported the Serbian government in the development of small and mediums sized enterprises since 2003 and will continue to do so in the future. Martins said that the EAR is currently engaged in the development of a national innovations strategy, which will form the strategic part of developing the Serbian economy and also be a mainstay of its competitiveness in Europe.

He recalled that important projects have been implemented with a view of promoting exports and foreign investment, which is of utmost importance considering the country’s high trade deficit and long-term goal of developing a sustainable private sector.

The EAR has also assisted the privatisation process in large socially owned companies through the Privatisation Agency, he said, and added that EAR has participated in the privatisations of 13 large Serbian companies.

Martins expressed gratitude to the Ministry of Economy for its role in this project and wished luck to any companies planning to join the TAM programme, noting that their success will be success for the Serbian economy.

The press conference was also attended by General Manager of Interdrvo from Kragujevac Dragan Stojnic and General Manager of Vojvodina-sped from Novi Sad Dragan Stankov.