TMCnet News
Bosnia and Herzegovina Country Report August 2014 [IntelliNews - Country Reports](IntelliNews - Country Reports Via Acquire Media NewsEdge) EXECUTIVE SUMMARY This report covers the main macroeconomic releases from August 6 until September 5, 2014 as well as the financial and political events that took place in Bosnia during this period. Despite rising indirect tax revenues in the country since the start of the year, the Indirect Taxation Authority (UIO) has cut its net revenue estimate for 2014 - by 0.8% compared to the initial plan, to reflect the economic impact of the May floods. The distributive trade sector, which employs some 18% of all employed in the country, contracted by 0.2% y/y due to a drop in the wholesale trade turnover. In addition, the construction sector activities recorded an annual contraction with the value of contracts of Bosnian construction companies abroad shrinking 1.1% y/y because of less activity in Africa. The report also contains information about the reasons why Bosnia was not included in the 2014- 2015 Global Competitiveness Ranking of the World Economic Forum. On the corporate front, Tropic Group B.V. became the third largest retailer in the country and the largest in Bosnia's Serb Republic after taking over Delhaize Group local stores earlier this year. On a positive note, a Bosnian-Macedonian consortium of engineering firms will start the construction of the Banja Luka-Prnjavor motorway in the beginning of September. Key points: ? CPI remained on its downward trend for twelfth consecutive month in July, dropping 0.9% y/y mainly on a softer decrease in food costs. ? The working-day adjusted industrial production grew 4.0% y/y in July after stagnating the month before. ? The number of employees in Bosnia grew 1.2% y/y in June, while the average net monthly wage rose by a nominal 0.9% y/y to BAM 829. However, the jobless rate inched up to 43.8% at end-June. REAL SECTOR 1.Inflation Bosnia's producer prices tick down 0.2% y/y in July 2014 Bosnia's producer price index (PPI) on the domestic market ticked down 0.2% y/y in July 2014, recording the same annual drop as in June, the country's statistics said in a statement. In monthly terms, the PPI edged down by 0.1% from June when it moved at the same rate. Manufacturing producer prices recorded a zero growth last month, improving from a 0.1% drop in June mainly thanks to the rising prices of leather and wood products as well as a softer decline in food, paper products, coke and refined petroleum products and basic metals producer costs during the month. Prices in the mining and quarrying sector inched down 0.8% y/y in July, worsening from a 0.5% y/y decline a month ago, dragged down by falling coal and lignite and metal ores extraction charges. Utilities' prices declined by 0.5% y/y in July, recording the same annual drop since March 2014. In addition, producer prices in the water supply, sewerage and waste management sector fell by 0.5% y/y last month, reversing from a 0.4% y/y growth in June. Bosnia's total producer price index, including export sales, swung to a 1.6% annual growth in July from a 0.6% y/y decline in June. Bosnia's consumer deflation softens to 0.9% y/y in July 2014 Consumer prices in Bosnia declined for the twelfth month in a row in July albeit at a slower pace than a month earlier, mainly on a softer decrease in food and furnishing costs, data from the country's statistics office showed. The consumer prices index (CPI) fell 0.9% y/y in July, narrowing from a 1.4% y/y drop a month ago. In monthly terms, the CPI edged down by 0.3% in July, compared to a 0.2% m/m drop in the previous month. The 12-month average deflation ending July was 1.2%. Food and non-alcoholic beverages prices fell 2.5% y/y in July, softening from a 4.2% y/y decline in the previous month. The annual decline in furnishing prices also narrowed to 0.6% last month from 1.2% y/y in June. The annual decline in clothing and footwear costs, however, widened to 6.7% from 4.9% y/y in June. On the other hand, alcoholic beverages and tobacco prices increased 6.0% y/y in July, speeding up from a 5.4% annual growth in June. The annual growth in other services and goods' prices also quickened – 0.3% versus 0.2% in June. In January-July 2014, the average CPI went down 1.4%. According to the latest IMF forecast, Bosnia's CPI will swung to a 1.1% growth in 2014 from a 0.1% contraction in 2013. The IMF sees the annual inflation reaching 1.5% in 2015. 2. Industry and Trade Bosnia's industrial production increases 4.0% y/y in July 2014 Bosnia's working-day adjusted industrial production grew 4.0% y/y in July 2014 after stagnating the month before, as mining and manufacturing output expanded at a stronger rate, helping offset falling production in the utilities sector, the country's statistics office data showed. In monthly terms, the seasonally-adjusted industrial output increased by 3.2% in July, quickening from a 2.5% hike in June. The manufacturing output growth speeded up to 8.5% y/y in July from 0.6% y/y the month before.The reading was underpinned byrising production of wearing apparel, wood products, coke and refined petroleum products, chemicals, basic pharmaceutical products, rubber and plastic products, other non-metallic mineral products, fabricated metal products and motor vehicles, trailers and semi-trailers. All of the sub-groups swung to a growth in July. The mining and quarrying sector expanded by 9.6% y/y in July, quickening from a 3.9% y/y hike in June, thanks to recorded growth of both metal ores and coal and lignite production. On the other hand, utilitiessector's output declined for an eighth consecutive month in July, going down by 10.2% y/y and deepening from a 8.1% y/y contraction in June. In 2013, Bosnia's working-day adjusted production index grew 6.7%, after contracting 5.2% the year before, on the back of higher manufacturing and electricity output, which offset a decline in the mining and quarrying sector. Bosnia's distributive trade edges down 0.2% y/y in Q2 2014 Bosnia's working-day adjusted distributive trade decreased by 0.2% y/y in the second quarter of 2014, reversing a 5.4% annual growth in the first three months of the year, the country's statistics office said. In monthly terms, the seasonally-adjusted distributive trade turned to a 1.2% growth in Q2 from a 1.9% m/m drop in the previous quarter. Wholesale trade turnover in Bosnia dropped 2.9% y/y in April-June after recording a 4.0% annual hike in Q1. In addition, turnover of wholesale and retail trade of motor vehicles and motorcycles shrank by 4.9% y/y in Q2, swinging from a 0.5% y/y growth in January-March. Retail trade turnover climbed 5.3% y/y in the second quarter, easing from 8.5% in Q1. Within sub-groups, retail sale of automotive fuel in specialised stores registered the strongest annual expansion of 14.7%, while the steepest yearly drop of 34.1% was reported in sale, maintenance and repair of motorcycles and related parts and accessories. The distributive trade sector employs some 18% of all employed in Bosnia and holds a 12.2% share of the country's GDP, according to latest data from the statistics office. Bosnia's Federation retail sales growth quickens to 4.8% y/y in July 2014 Bosnia's Federation retail sales went up by 4.8% y/y in July 2014, speeding up from a 4.2% annual hike the month before, the entity's statistics office said in a statement on August 27. In monthly terms, July's retail sales climbed 10.3%, up from 2.6% m/m growth recorded in June. Breaking down the indicator into main activity shows that retail trade growth in non-specialised stores speeded up to 24.9% y/y in July from19.7% y/y the month before. July's retail sales of automotive fuels and lubricants also increased - by 20.1% y/y albeit ata slower pace compared to the 22.1% growth rate in June. However, trade of food, beverages and tobacco in specialised stores, remained in the red, going down by 53% y/y last month and deepening from a 39% annual drop in June. The Federation, which together with the Serb Republic, forms Bosnia. The entity accounts for around two thirds of Bosnia's total GDP. Bosnia's Serb Republic retail sales decline 9.7% y/y in July 2014 Bosnia's Serb Republic retail sales fell 9.7% y/y in July, improving from a 11.4% y/y contraction the month before, the entity's statistics office said. The downward trend thus sustained for the seventh consecutive month. In monthly terms, retail sales rose 10.5% last month following a 2.6% hike on the month in June. Compared to the 2013 average, July's retail trade turnover edged up 0.2%. All sub-groups recorded annual drop but in monthly terms all of them rose, excluding other retail trade out of stores. The narrower decline in July came as sales in non-specialised stores (down 13.7% y/y) and in specialised stores (down 0.8% y/y) fell at a weaker pace than in June. By contrast, retail trade of food, beverages and tobacco contracted 4.4% y/y in July, worsening from a 3.0% annual decline the month before. The annual decline in retail sales of automotive fuels and lubricants also worsened in July – 13.6% versus 10.2% in June. In addition, other retail trade out of stores turned to 10% annual drop in July from a 1.3% y/y hike in the previous month. It recorded 5.7% drop on the month. The Serb Republic together with the Muslim-Croat Federation makes up Bosnia. It accounts for a third of the country's GDP. Household final consumption contributes nearly 70% of the entity's GDP. Bosnia's investments in fixed assets increase 1.8% y/y in 2013 Bosnia's gross fixed capital formation (GFCF) in new fixed assets increased by 1.8% y/y to BAM 4.18bn (EUR 2.14bn) in 2013, easing from a 5.85% hike in 2012, the country's statistic office said in a statement. The growth was mainly supported by rising investments in the sectors of information and communication (up 30.9% to BAM 367mn), professional, scientific and technical activities (up 84.4% to BAM 561.6mn), public administration and defence (up 12.42% to BAM 515.2mn), wholesale and retail trade (up 6.1% to BAM 546.3mn) and agriculture (up 5.5% to BAM 58mn). The growth was partly offset by declining value of fixed investments in utilities (down 23.9% to BAM 391.9mn), health (down 54.1% to BAM 64.2mn), mining and quarrying (down 16.7% to BAM 267.6mn), manufacturing (down 5.5% to BAM 655mn) and financial and insurance activities (down 10.6% to BAM 93.2mn). Strong investment activity together with rising agriculture, manufacturing and utilities sectors' output helped the country's economy in swung to a 2.48% growth in 2013 from a 1.2% contraction in 2012. Works abroad of Bosnian construction firms drop 1.1% y/y to EUR 27.9mn in H1 2014 The value of contracts that construction companies from Bosnia carried out abroad dropped 1.1% y/y to BAM 54.5mn (EUR 27.9mn) in the first six months of the year, worsening from a 0.3% annual drop in January-March due to falling activity in Africa, the country's statistic office said in a statement. More than half of the completed projects abroad were in Europe (BAM 31.4mn, up 42.7% y/y) as construction firms from Bosnia were most active in Albania, Slovakia and Croatia. Africa followed with BAM 19.8mn worth of completed projects in H1, down 39.3% y/y. The construction works were mainly carried in Kenya, Libya and Ethiopia. Civil engineering accounted for 76.2% of the overall completed construction works abroad, while construction of buildings accounted for the remaining 23.8%. According to latest balance of payments data published by the central bank, the inflow from construction activities abroad stood at BAM 28.3mn in January-March, down 0.4% on the year. Bosnia's Federation construction activity increases 1.6% y/y in Q2 2014 The construction sector working-day adjusted production index in Bosnia's Federation rose 1.6% y/y in April-June, slowing from a 14.2% y/y growth in Q1 2014, the entity's statistics office said in statement. In seasonally adjusted terms, construction activity turned to a 7.0% q/q drop in Q2 after increasing 6.9% q/q in the previous quarter. Construction of buildings rose 2.6% y/y in Q2, braking from a 16.8% y/y hike in Q1. Civil engineering works also increased by 1.1% y/y last quarter following a 13.1% y/y growth in Q1. The construction sector accounted for 3.1% of Bosnia's Federation GDP in Q1 2014, which is lower compared to a 3.8% in 2013 as well as to 5.1% in 2008. The Federation together with the Serb Republic makes up Bosnia. It accounts for around two-thirds of Bosnia's total GDP. 4. Tourism Foreign tourist arrivals to Bosnia down 1.9% y/y in H1 2014 The number of foreign tourists visiting Bosnia shrank 1.9% y/y to 228,668 in the first six months of 2014, the statistics office said. The total number of tourist arrivals, including domestic tourists, declined 4.1% y/y to 373,249 with domestic arrivals falling 7.4% y/y to 144,581 over the period. Foreign tourists' overnight stays declined 1.5% y/y to 469,856 in H1 and accounted for a 62.5% share in overall overnight stays. The average stay was 2.1 nights, up from 2.0 nights a year ago. In June alone, foreign tourists' visits to Bosnia fell 1.3% y/y to 56,871, while overnight stays decreased 0.6% y/y to 110,908. In first six months of the year, Bosnia was mainly visited by Croatians (15.2% share in total), Serbs (11.7%) and Turks (9.7%). The number of foreign tourists visiting Bosnia grew 20.5% to 528,579 in 2013, quickening from a 11.9% increase the year before. According to data from the World Travel & Tourism Council (WTTC), the total contribution of Bosnia's travel and tourism sector to the country's GDP was BAM 2.5bn in 2013 (9.3% of GDP). It is projected to rise by 16% to BAM 2.9bn in 2014. 5. Labour Market Bosnia's number of employees rises 1.2% y/y in June 2014 The number of employees in Bosnia grew 1.2% y/y to 700,659 in June 2014, slowing from a 2.3% y/y increase the month before, the statistics office said. In monthly terms, the reading remained flat, recording zero growth in June, after a 0.2% m/m hike in May. The annual increase in June was mainly driven by rising employment in the manufacturing (up 4.7% y/y), agriculture (up 2.9%), accommodation and food services (up 2.6%), information and communication (up 1.9%), education (up 1.4%), health (up 0.6%) and transportation (up 0.4%), which account for 49.9% of total employment. On the other hand, falling employment in the wholesale and retail trade (down 2.6% y/y), construction (down 1.0%), mining and quarrying (down 0.7%), and public administration (down 0.2%) sectors dented the overall employment growth. In 2013, employment in Bosnia edged down 0.1%, improving slightly from a 0.5% contraction the year before. Bosnia's average net wage rises 0.9% y/y to EUR 424 in June 2014 The average net monthly wage in Bosnia grew a nominal 0.9% y/y to BAM 829 (EUR 423.9) in June 2014, reversing a 0.2% y/y drop a month before, the statistics office said in a statement. On a monthly basis, the net wages inched down 0.1% y/y in June, following a 0.2% y/y contraction in May. The office does not provide an annual comparison in real terms but on a monthly basis, the June's salaries swung to a 0.2% hike from a 0.2% m/m drop a month before. June's annual increase was mainly due to rising wages in information and communication (up 4.6%), utilities (4.3%), public administration (4.2%), agriculture, wholesale and retail trade, construction, education, health sectors. The latter accounted for a 56.4% share in total employment. The gross average monthly salary in the country rose 0.2% y/y to BAM 1,286 in June after going down 0.9% y/y the month before. In monthly terms, the gross earnings remained unchanged in June, following a 0.2% m/m drop in May. In H1, the average net monthly wage increased 0.7% y/y to BAM 829, while in Q2, net wages stood at BAM 830, up 0.5% y/y and 0.2% q/q. Bosnia's jobless rate edges up to 43.8% at end-June 2014 – employment agency Bosnia's jobless rate inched up to 43.8% at end-June 2014 from 43.5% a month earlier, the country's labour and employment agency said in a statement. The June's unemployment rate was lower compared to its level of 44.5% at end-2013 and 44.5% at end-2012. The agency also released jobless data for July 2014 showing that the number of registered unemployed people decreased by 0.8% y/y to 548,612, following a 0.5% annual drop in June. The decline came due to lower unemployment registrations in the three entities: The Muslim-Croat Federation, The Serb Republic and autonomous Brcko District. On a monthly basis, the number of unemployed people in Bosnia edged up by 0.6% in July, speeding up from a 0.1% m/m hike in June. The agency did not provide figures on the July's unemployment rate. FISCAL SECTOR, MONETARY POLICY Bosnia's indirect tax office cuts 2014 revenue projection by 0.8% to EUR 2.54bn Bosnia's Indirect Taxation Authority (UIO) has cut by 0.8% to BAM 4.97bn (EUR 2.54bn) its net revenue estimate for 2014 in the aftermath of the devastating mid-May floods, according to an analysis of the UIO's macroeconomic department, cited by news service Capital.ba. The downward correction is based on the revision of the projected VAT revenue linked to the worsening of the collection rate and the expected growth in VAT refunds in the coming period, the analysis says. It added that the May floods became the reason for the extraordinary revision of the projections of this year's revenue from indirect taxes. However, even after the lowered projections, this year's net indirect tax revenues will be 1.9% higher compared to 2013. In particular, the UIO sees VAT proceedings up 1.4% y/y to BAM 3.14bn in 2014 and plans 2.4% y/y higher revenues from excises of BAM 1.3bn. The biggest growth rate is expected in the payment of excises on beer (as an effect of payment of earlier debt). Revenues from the excises on oil and non-alcoholic beverages are also seen up, while the income from other excises (including on coffee and alcohol) is seen declining. The UIO already reported that the gross indirect tax revenue grew 3.39% y/y to BAM 3.45bn (EUR 1.8bn) in the first seven months of 2014. In net terms, the indirect tax income amounted to BAM 2.8bn in Jan-July as VAT refunds stood at BAM 650mn, up 13.8% y/y. Last year, Bosnia's gross indirect tax revenue edged up 0.2% to BAM 5.9bn after inching down 0.1% in 2012. In net terms, however, the 2013 indirect tax income shrank 2% to BAM 4.9bn in 2013 as tax refunds grew 12.9% to BAM 997mn, according to IntelliNews calculations. Indirect tax revenues in Bosnia, which include a broad-based VAT and excise taxes, are collected on a national level and then distributed by the UIO between the central-state institutions and the entities according to a rules-based mechanism. These revenues form the largest tax base in both the Federation and the Serb Republic and compose the bulk of the state-level revenues. Bosnia's Federation sells EUR 25.6mn of three-year T- notes Bosnia's Federation sold a three-year Treasury notes issue worth BAM 49.99mn (EUR 25.6mn) on Tuesday, September 2, in its first such debt auction so far this year, the finance ministry said in a statement. The average accepted yield was 4.208%, equivalent to 99.98% of par, while the bids totalled BAM 83.6mn or 167% of the amount on offer. The newly sold securities have a nominal value of BAM 1,000 and mature on September 3, 2017. So far in 2014, the Federation has also placed one issue of one-year T- bills and four issues of three-month T-bills raising nearly BAM 186.6mn, including the proceeds from the auctions of three-year T-notes. The finance ministry plans to sell BAM 160mn (EUR 82mn) of short- and long-term debt on the domestic market in the third quarter of 2014. The fourth-quarter debt auctions schedule will be published by September 15. Bosnia's Federation sells out EUR 10.2mn issue of six- month T-bills Bosnia's Federation sold out a six-month Treasury bills issue worth BAM 20mn (EUR 10.2mn) on Tuesday, August 19, in its fourth such debt auction so far this year, the finance ministry said. The yield was higher compared to the previous such auction held on May 6. The average accepted yieldincreased to 1.19% (equivalent to 99.4079% of par) from the previous 0.74%. The bids in the latest sale totalled BAM 26mn. The ministry said it sold 2,000 securities maturing on February 18, 2015. In the last such auction held on May 6, the ministry sold out the planned BAM 20mn as demand reached EUR 47.4mn, or 237.0% of the amount on offer. So far in 2014, the Federation has also placed one issue of one-year T- bills and four issues of three-month T-bills raising nearly BAM 160mn, including the proceeds from the auctions of six-month T-bills. The finance ministry plans to sell BAM 160mn (EUR 82mn) of short- and long-term debt on the domestic market in the third quarter of 2014. Bosnia's Federation fails to sell planned EUR 10.2mn issue of three-month T-bills Bosnia's Federation failed to sell the planned issue of BAM 20mn (EUR 10.2mn) of three-month T-bills at an auction on August 26 after the finance ministry declined all offers, the ministry said in a bourse statement. It had to be the fifth such debt auction since the beginning of the year. In the last such auction held on July 22, the ministry sold out the planned BAM 20mn as demand reached EUR 38.4mn, or 192% of the issued volume. The average yield stood at 0.59% (equivalent to 0.9985 of par). So far in 2014, the Federation has placed one issue of one-year T-bills, four issues of three-month T-bills and four issues of six-month T-bills raising nearly BAM 160mn. The finance ministry plans to sell BAM 160mn (EUR 82mn) of short- and long-term debt on the domestic market in the third quarter of 2014. Bosnia's Serb Republic sells EUR 7.6mn of six-month T- bills Bosnia's Serb Republic sold BAM 14.85mn (EUR 7.59mn) worth of six-month Treasury bills in an auction on the Banja Luka bourse on August 18, the finance ministry said in a bourse filing. The ministry offered 1,500 securities of BAM 10,000 in par value each, maturing on February 19, 2015. The issue was oversubscribed with demand equalling to BAM 39.65mn or 267% of the amount on offer. The securities were sold at an average discount price 99.0270 of par, or an average annual interest rate of 1.9491%. This was the Republic's seventh sale of short-term debt for the year. At the latest auction held on July 22, the ministry sold out a BAM 9.84mn issue of nine-month T-bills at an average discount price equal to 98.3753 of par, equivalent to an interest rate of 2.20%. The issue was oversubscribed with demand totalling BAM 19.9mn, or 199% of the amount on offer. FINANCIAL INTERMEDIATION Share of non-performing loans in Bosnia rises to 15.5% in Q2 2014 The share of non-performing loans in Bosnia rose to 15.5% of total credits in the second quarter of 2014 from 14.3% a year ago and 14.9% at end-March, central bank data showed. Bosnia's banking sector remains well capitalised with a capital adequacy ratio (CAR) of 17.3% at end-June, up from 17.2% a year earlier and well above the statutory minimum of 12.0%. The CAR remained unchanged compared to the previous quarter. The banking sector's liquidity slightly improved in annual terms as the ratio of liquid assets to total assets stood at 24.7% at end-June, up from 24.2% a year ago. In quarterly terms, the ratio stayed at the end-March level. The sector's profitability, measured by the return on average equity (ROAE), which indicates the banks' efficiency in using their capital, improved to 3.5% at end-June from 2.3% in Q1. In annual terms, however, it was by 0.7pps lower. The ratio of non-performing loans to total loans climbed over four times above its pre-crisis level of 3% at end-2008, weighing on credit supply and banking sector profitability. According to the latest forecast of the government's Directorate for Economic Planning (DEP), loan growth should speed up to around 4.5% y/y in 2014 from 2.8% in the previous year partly due to higher investments needed for reconstructions after the mid-May devastating floods that hit the country. The growth is forecast to further speed up to 5-6% hike in 2015-2017. EXTERNAL SECTOR Bosnia's trade gap widens 12% y/y to EUR 2.1bn in January-July 2014 Bosnia's foreign trade deficit expanded by 12.1% y/y to BAM 4.1bn (EUR 2.1bn) in the first seven months of 2014 as imports rose faster than exports, the country statistics office said. The January-July export coverage ratio declined to 55.% from 57.7% a year ago. Exports edged up 0.4% y/y to BAM 4.97bn in January-July. The manufacturing sales abroad went up 4.2% y/y to BAM 4.44bn over the period. The reading was lifted by rising exports of leather, wood, fabricated metal products, machinery and equipment and furniture sales abroad. This helped offset falling basic metals, food, paper and paper products, coke and refined petroleum output sales. Import grew by 5.4% y/y to BAM 9.04bn in the first seven months of the year supported by stronger domestic demand for textiles, leather, rubber and plastic products, fabricated metal products, machinery and equipment. In January-July, exports to the European Union, which remains Bosnia's main trade partner, declined 0.9% y/y to BAM 3.66bn (73.7% share in total exports), whereas imports from the union (60.6% share in total) increased 4.6% y/y to BAM 5.48bn over the period. Bosnia's foreign trade deficit contracted 8.2% y/y to BAM 6.8bn in 2013 after widening 1.3% the year before due to higher manufacturing and utilities exports. The trade gap will likely continue to widen in the next few months following the mid-May floods that hit the country. STRUCTURAL REFORMS, CORPORATE PLANS WEF excludes Bosnia from this year's globalcompetitiveness ranking over data quality concerns Bosnia was not included in the 2014-2015 Global Competitiveness Ranking of the World Economic Forum (WEF) over data quality concerns. The 2014 survey data collected in Bosnia deviate significantly from the historical trends and recent developments in the country do not seem to provide enough justification for the large swings observed, the report read. In the 2013-2014 Global Competitiveness Report, Bosnia was ranked at 87th position scoring 4.0 points on a scale of 1 to 7. The breakdown of the index components showed that Bosnia ranked best in terms of basic requirements – 81th place with a 4.4 score, while in terms of efficiency enhancers and in innovation and sophistication factors its ranked at 89th place with a score of 3.8 points and 3.4 points, respectively. Bosnia's power firm RiTE Gacko eyes EUR 26mn investments next year Bosnian coal mining and thermal power generation complex RiTE Gacko plans to allocate BAM 50mn (EUR 26mn) for investments in 2015, ekapija news portal reported citing the company's director Milinko Milidrag as saying after a meeting with representatives of the Serb Republic's government. The government approved RiTE Gacko's investment plans that include mine basin protection measures, the purchase of new equipment along with receiving concessions for coal mining in the next 25 years. RiTE Gacko is owned by state-controlled Elektroprivreda RS, one of the three power producers in the country. The other two are Elektroprivreda HZ HB, majority owned by the government of Bosnia's Federation, and Sarajevo-based Elektroprivreda BiH. Tropic Group B.V. takes over Delhaize stores in Bosnia Tropic Group B.V. officially completed the took over of the Belgium's Delhaize Group local stores on August 8, news service Capital.ba reported. As a result, the local retail chain MojMarket expanded with 39 stores in Bosnia. Tropic Group now has more than one thousand employees and becomes the third largest retailer in the country and the largest in Bosnia's Serb Republic. The stores Tempo and Maxi will be rebranded to Tropic and MojMarket till the end of September. In April, the Belgium retailer agreed to sell its stores in the country to Tropic Group. At the end of July, country's antitrust watchdog has approved the takeover of Delhaize Group local stores by Tropic Group. The sale of the Bosnian stores was just the latest move in Dalhaize's bigger divesture of its Southeast European assets. Bosnia to start building EUR 158mn Banja Luka-Prnjavor motorway in Sept 2014 The consortium of Bosnia's Integral Inzenjering and Macedonia's Granit should start the construction of the 36-km Banja Luka- Prnjavor motorway in the beginning of September, the head of motorway operator Autoputevi RS told news agency Srna on Aug 29. Dusan Topic said that the necessary procedures for ratifying the international credit agreement with the EIB (which finances the project) have been completed in the past months. In the meantime, the EIB has also made an advance payment to the contractor, meaning there are no further obstacles for the start of the construction. Banja Luka-Prnjavor will lie on the future 72-km motorway between Banja Luka and Doboj – in northern Bosnia, passing the territory of its smaller entity, the Serb Republic. The EIB is supporting the project via a EUR 200mn loan, evaluating the total investment needed in the construction at EUR 250mn. The consortium of Integral Inzenjering and Granit submitted the lowest bid of EUR 158mn for the design and construction of the Banja Luka- Prnjavor stretch in the spring of 2013. The Serb Republic already awarded in August 2012 a EUR 180mn contract to the same consortium for the construction the 36.6-km long Prnjavor-Doboj section, which is supported by a EUR 150mn EBRD loan. UAE's property developer Buroj plans investments in Bosnia UAE's property developer Buroj plans to invest in developing tourist and business complexes in Bosnia, CEO Ismail Ahmed Bin Sultan told news service eKapija.ba in an interview. The Dubai-based company is currently evaluating potential investment projects and looking for suitable locations. Buroj is one of the leading property development companies in the UAE. Besides the Emirates, it has implemented projects in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia as well as in Eastern Europe. Prevent Group's plant in Bosnia starts producing car seat covers for Opel German-based Prevent Group has started producing car seat covers for Opel automobiles at its plant in Bosnia, news service eKapija.ba reported. The company has already started supplying seat covers for the Opel Mokka model and will soon launch production for the Opel Corsa models. The deal helped the company employ 90 more people at the plant. In March the group announced it launched the production of car seat covers for Volkswagen Golf Sportsvan in its plants in Bosnia's eastern town of Gorazde. The factories also manufacture door handle parts for BMW and car seat covers for the popular Volkswagen Golf 7 vehicles, among others. Prevent Group has several plants in Bosnia, producing goods for the automobile industry, as well as factories for protective clothing and rubber glass, a leather producer and a yacht maker. The group is present in 15 countries on three continents and employs around 12,000 people, of which 5,000 are in Bosnia. In July, the Indirect Tax Administration (ITA) ranked automotive supplier Prevent BH, the local unit of the group, as Bosnia's biggest exporter so far in 2014. Balkan states plan to scrap roaming charges as of January 2015 Several Balkan states, among which Montenegro, have started an initiative aimed at scrapping roaming fees from the region's territory as of January 2015, the head of the Montenegrin telecommunications agency, Zoran Sekulic, was quoted as saying by Portalanalitika.me According to Sekulic, the free roaming could start as of the beginning of next year after some of the countries participants in the agreement amend their legislation. He sees the possible discontent of mobile operators as one of the likely obstacles for the move. The initiative also includes Serbia, Albania, Turkey, Bosnia and Macedonia. Their regulators aim to remove all roaming charges - on calls, sms and data transfer. The agreement of the six states on the initiative will be formally signed at the end of September during this year's edition of the Infofest in Montenegro's Budva. Earlier this week, Serb telecommunications minister Rasim Ljajic said that roaming fees in Serbia are up to five times higher than those in the EU. He explained that being an EU candidate, Serbia already tried earlier to join Brussels' directive on lowering roaming prices - but was told the directive covers exclusively the EU states. Under the Brussels' directive, roaming fees on the territory of the EU were reduced by 55% as of July 2014 and will be completely scrapped by the end of 2015. The initiative of the Balkan states aims to make them part of this trend. Bosnia's Federation govt approves renewable energy feed-in tariffs Bosnia's Federation government has approved a renewable energy feed-in tariffs paid to plants which use renewable energy sources as well as cogeneration plants, the government said in a statement following its meeting on August 13. The feed-in tariffs depend on the size as well as the type of plant and primary energy sources. The hydropower plants producers will receive from BAM 0.29 (EUR 0.15) to BAM 0.12 / kWh. The wind power plants producers will get more – between BAM 0.37 to BAM 0.15 / kWh. The tariffs for solar power plants are the lowest, ranging from BAM 0.02 to BAM 0.39 / kWh. Biomass power plants' tariffs are set between BAM 0.31 to BAM 0.23 / kWh. The cogeneration plants attract a tariff of BAM 0.15 / kWh. Regulatory commission for energy in the Federation of Bosnia and Herzegovina (FERK) adopted an ordinance which prescribes methodology of defining the energy feed-in tariffs from power plants producers as well as the criteria for the tariff's change. (c) 2014 Emerging Markets Direct Media Holdings LLC Provided by SyndiGate Media Inc. (Syndigate.info). |