DENMARK 2013

SPECIAL EDITION

World Markets and Opportunities

denmark 2013

As a result of its acclaimed ‘flexicurity’ model, Denmark has a modern, prosperous and developed mixed market economy (source: World Bank). Employers can hire and fire whenever they want, but between jobs, unemployment compensation is very high.

Over the centuries, dancing has formed a key part of celebrations in Denmark. Festive gatherings often took place in farmhouses where chain dances or rotational sequences gave everyone the opportunity to join in.

The Lego Group’s motto is “the best is never too good”. Small town Billund is home to the LEGO Group and the theme parks Legoland and Lalandia.

According to a survey of 156 countries in the 2013 World Happiness Report released by Columbia University, Denmark is the happiest country in the world.

The Kingdom of Denmark is a unitary constitutional monarchy organised in a parliamentary democracy with Margrethe II as Queen Regnant.

The flag of Denmark, Dannebrog, is the oldest state flag in the world still in use by an independent nation. It was adopted in 1219.

The Faroe Islands and Greenland are part of the Kingdom of Denmark. The Danish Constitution stipulates that the foreign and security interests for all parts of the Kingdom of Denmark are the responsibility of the Danish government.

From the 8th to the 10th century, the Danes were known as Vikings.

The Danish Vikings were most active in the British Isles and Western Europe.

They conquered and settled parts of England under King Sweyn Forkbeard in 1013, as well as Ireland and France, where they founded Normandy.

interview

Nick Hækkerup, Danish Minister for Trade and European Affairs

No Time to Rest For a country as export-reliant as Denmark, the European and global slowdown and resultant drop in demand was always likely to have a negative effect. However, Denmark is a resourceful, forward-thinking country with world-leading capabilities in green technology and a business-conscious approach, meaning it stands ready to capitalise as markets pick up once more

economy and what are the economy’s main features?

- We see the potential for renewed growth through sectors where Danish businesses have world-leading competencies. These include green technology and environmentally friendly energy. As the consequences of continued reliance upon fossil fuels become increasingly clear, there will be more demand for energy efficiency and renewable energy. Even though Denmark has yet again been rated

D

enmark’s Minister for Trade and European Affairs, Nick Hækkerup, was appointed to the position in August this year after a two-year spell as Defence Minister. Given the Danish economy’s dependence on its strong export sector, the 45-year-old member of Denmark’s Social Democrats, which has governed the country as part of a centre-left coalition since 2011, will be a key player in helping bring the country back to consistent economic growth following falling house prices, rising unemployment and a swing from budget surplus to deficit post-2007.

However, Denmark’s businessfriendly economic environment and strengths in important sectors such as green energy, technology and agriculture, as well as new EU Commission projections that suggest growth will pick up over the next two years, mean Hækkerup can expect to be a very busy man.

Danish investors are skilled at evaluating opportunities in foreign markets and will take risks if they perceive them to be reasonable in relation to the possible returns

• What are the Danish government’s current priorities regarding the World Markets and Opportunities | denmark

the most business-friendly country in Europe, we must not rest on our laurels. We have to continue to improve the business climate so we can continue to attract investment.

• Denmark relies on exports a great deal. Could you tell us something about the export tendencies of the Danish economy considering that purchasing power globally and in Europe has declined?

- We are indeed a very export-dependent economy and have obviously felt the drop in demand in the European and some of the emerging markets.

Our reaction is to rely increasingly on our comparative strengths in terms of advanced technological solutions in a number of sectors, such as clean technology, energy conservation, pharmaceuticals and information technology, but equally in new ways of developing our traditional goods, such as quality agricultural products and equipment, and global shipping.

• What is the sustainability of the Danish economic model based on, and how does it differ from other countries in Scandinavia?

- Our economic model is characterised by a large but effective public sector, which acts in partnership with private business and wage earners in a highly developed social contract.

The government, led by the Social Democrats, is carrying out reforms that are broadly supported by the right-wing opposition parties. Denmark has for decades followed a stable currency policy, with the DKK pegged to the euro. This is unlike in Sweden, which is also outside the eurozone. Although energy self-suffi-

• You assumed your new ministerial responsibilities in August this year. What plans do you have in this position?

- Uppermost in my mind is to create more jobs and increase prosperity at home through external trade and European cooperation. Only by demonstrating the mutual advantages of partnership with European and foreign commercial stakeholders can we ensure the necessary domestic support for our policies.

• What are your priorities in terms of a strategy for economic cooperation with West Balkan countries?

- I see substantial potential in developing our economic cooperation with this region, which is geographically close but until now distant in terms of a lack of political and economic stability. Although we do great amounts of trade and cooperation with markets far outside our immediate proximity, we should not forget to explore the emerging markets and growth prospects in our European neighbourhood, including certainly the Western Balkans.

• With its new reforms, the Serbian government has been trying to improve conditions for the arrival of new foreign direct investments (FDIs). Which economic sectors in Serbia are Danish investors especially interested in?

- Danish investors are quite skilled at evaluating opportunities in foreign markets and will take risks if they perceive them to be reasonable in relation to the possible returns on their engagement. If they realise that reforms are being implemented in Serbia, leading to a good business climate, I expect them to react quite positively. Danish business has strong brands within renewable energy solutions, agricultural machinery and animal farming, to take but three examples.

• How much do you know about the situation in Serbia and what information do you have about the business climate awaiting potential Danish investors here? What priorities do Danish investors have when deciding which country to invest in?

- I understand that your government realises that in order to get out of the crisis, there is an urgent need to

PHOTO: Tanjug / Dragan Stankovic

cient, Denmark has neither Norway’s rich hydrocarbon resources nor Sweden’s industrial manufacturing base.

Our economy is characterised by a large but effective public sector, which acts in partnership with business and wage earners in a highly developed social contract address the deficit and public debt through serious structural reform, not least to diminish waste in the state sector of the economy and introduce modern principles of economic governance. This is also high on the agenda of Serbia’s upcoming accession negotiations with the EU. Danish investors will be interested in the skilled and competitive workforce in Serbia and the market’s strategic location regionally in South Eastern Europe and in terms of its free trade with third countries. With EU membership visible at the end of the accession process, they will be attracted by more familiar and predictable ground rules and regulations.

• It is a well-known fact that Denmark has high standards in terms of importing goods, equipment and services. What should Serbian companies planning to export to Denmark know before starting negotiations with Danish partners?

- Serbian enterprises certainly have the potential for exporting their products to Denmark. At the moment we see an increase in Serbian companies acting as sub-suppliers for Danish companies. Due to their highly skilled labour and sense of quality, the Danish companies can find sub-suppliers among Serbian partners in rather advanced technological fields. The short geographic distance between our two markets, combined with a mutually flexible approach to business, makes it possible to find good suppliers in Serbia who can deliver faster than, for example, competitors from Asia. And as your country embarks on reforms, the number of Serbian entrepreneurs will grow, developing new products that will find their way to the Danish as well as to other markets.

• Denmark is considered a developed economy and a so-called welfare state. What kind of context does the welfare state have in today’s recession? Did the social status of Danish citizens change, and, if it did, in which way?

- We have managed to maintain the essential features of the welfare state throughout the crisis. Our population is strongly attached to the principle that society should be organised in a way that shows solidarity and secures the basic human needs of citizens – health, education, employment – regardless of their financial means. We have had to trim some of the subsidies and benefits, but without seriously undermining the social status of our citizens.

The welfare state is, however, not the reason for the crisis; quite the contrary. To me and the government, now is the time to strengthen our welfare state, not weaken it. ■

denmark | World Markets and Opportunities

interview

H.E. Mr. Michael Borg-Hansen, Danish Ambassador to Serbia

Time to Take Responsibility Denmark is a strong and supportive friend of Serbia. However, despite the important progress made along Serbia’s EU pathway, it will take more than just new legislation to make Serbia fit for integration. According to the new Danish ambassador to Serbia, the actual implementation of EU-ready reforms is the key to the country’s future

O

n 17 September this year, Serbian President Tomislav Nikolić received the credentials of Denmark’s newest ambassador to Serbia, Michael Borg-Hansen. Noting the links between the two nations, such as expertise in agriculture and a wellintegrated Serbian diaspora living in Denmark, Borg-Hansen expressed his deep commitment to improving bilateral relations and supporting Serbia’s EU accession process. Here, he speaks frankly but supportively about the tough road ahead and the role Serbia has to play in ensuring long-term stability in the region and creating an environment in which business can thrive.

• How would you rate the quality of bilateral relations between Serbia and Denmark?

Good and improving. There are excellent prospects for enlarging areas of bilateral cooperation as the Serbian government turns a page in the country’s annals away from regional conflicts and strife, and embarks on a course towards EU integration and socio-economic renewal. Importantly, this course is improving the image of Serbia in Denmark, since we were used to receiving mostly bad news from the western Balkans. We approve and encourage what we per-

ceive as a determination to assume responsibility and face realities, and are ready to support such a line.

We approve and encourage what we perceive as a determination to assume responsibility and face realities, and are ready to support such a line

World Markets and Opportunities | denmark

• What areas of the two countries’ political and economic relations could be improved further?

- The relatively intense recent exchange of official visits taking place on governmental and parliamentary levels testifies to an interest in developing political relations. The extent to which Serbia progresses in its accession negotiations with the EU will enable an overall enhancement of these relations bilaterally, including

in the commercial field, since Danish businesses will evaluate opportunities in the Serbian market more positively. We can already see this happening in relation to neighbouring Croatia since its accession.

• Denmark has been supportive of Serbia’s efforts to establish good relations in the region, especially with Priština. How do you view this process?

- Serbia has a crucial role to play in this respect. We welcome and are ready to support the courageous decisions that will have to be taken in order to bring these efforts to a constructive and lasting conclusion acceptable to all communities in Kosovo. Reconciliation with Croatia will also contribute to regional stabilisation and prosperity.

experience Denmark has had its own experiences of facing up to difficult facts about the loss of provinces in which ethnic balances changed over time.

Denmark has had its own experiences of facing up to difficult facts about the loss of provinces in which ethnic balances changed over time.

The kingdom’s eastern provinces were lost to Sweden in the 17th century, and the southern land border with Germany was only settled permanently in a plebiscite in 1920 after centuries of tensions, culminating in wars brought on by the emergence of modern nationalism in the 19th century. Our relations with our neighbours and national minorities today are exemplary. Although historical parallels can be stretched too far, this demonstrates that such problems are in fact possible to overcome.

• As a well-regulated country with a high level of social security, the rule of law and one of the lowest levels of corruption in the world, what do you think of the efforts of the Serbian government to improve in these areas? What are Denmark’s experiences in this respect?

- Serbia has a lot of work ahead in this area, and as we know, it entails in many ways a collective change of lifestyle and the establishment of a solid institutional basis, not least in the operation of an independent judiciary. It is one of the main conditions to achieve EU membership.

No one claims this will be easy, and it has taken us many generations to achieve it in Denmark. It began with broadly based elementary education of the rural population 200 years ago, consolidation of parliamentary democracy 100 years ago, social security legislation in the 1930s, regulation of labour market relations etc. What we have thus gradually brought about is a high level of trust, solidarity and consensus in society, in which corruption has become un-

business climate

implementation Decisions on legislation will not be enough – it is the actual implementation that will count. Serbia will have to establish its record in accordance with the existing criteria.

Serbia should not expect foreign investment to be the main driver of reforms and modernisation.

Investment will follow a credible effort to improve the business climate.

acceptable and is prosecuted in the courts. I would argue that in modern conditions, with instant communication, such a turnaround can be carried out much faster to the benefit of the entire population.

• Are you satisfied with the current level of economic cooperation between the two countries?

- I am encouraged by the tendencies mentioned earlier, but much more has to be done to reach a satisfac-

Serbia will have to establish its record in accordance with the existing criteria, with an emphasis on the rule of law and sound economic governance tory level in economic cooperation.

It is an important part of my work to help this happen. The two countries are of comparable size and have a lot to offer each other. Denmark excels in sectors such as renewable energy and green technology, IT and agribusiness.

We typically operate in advanced niches and by small- and mediumsized enterprises of the type Serbia will have to launch to leave large and inefficient state corporations behind.

• What do you think of the European integration process in Serbia so far?

- The right government priorities have been set and the necessary political support garnered in parliament and public opinion. A skilled negotiating team and cross-agency coordination structures have been set up. So far, so good. A lengthy negotiation process will soon follow, during which Serbia will have to deliver many results.

Decisions on legislation will not be enough – it is the actual implementation that will count. No favours or disfavours will be given. Serbia will have to establish its record in accordance with the existing criteria, with an emphasis on the rule of law and sound economic governance. You can count on help and support from Denmark and other member states along this demanding road.

• Have you received any feedback from Danish investors operating in Serbia? How satisfied are they with the current business climate here?

- Some larger Danish enterprises have recently successfully invested in production facilities in Serbia. They have partly based their decision on the skilled and competitively priced human resources available, as well as the opportunity to make use of Serbia’s free-trade areas (FTA) with third countries. They find the central and local investment promotion agencies to be helpful interlocutors.

Our investors would, however, be more positive in their assessment of business opportunities if they were certain that reforms leading to a better investment and business climate will in fact be implemented.

More fair and transparent rules and regulations, and their more predictable application in practice, would be welcome. Equally conducive to positive investment decisions would be a modernised labour legislation, fewer

denmark | World Markets and Opportunities

⇢

sonnel and English-language training through the Serbian Ministry of Defence; it cooperates with the Serbian Ministry of the Interior on civil-emergency preparedness and has helped the Serbian Air Force set up a search and rescue service and with materiel donations. These activities are funded to the amount of €1.6 million.

and less time-consuming procedures for company start-up and construction permits, as well as fewer parafiscal charges.

Serbia should not expect foreign investment to be the main driver of reforms and modernisation. Foreign investment will surely follow a determined and credible domestic effort to improve the business climate for the sake of Serbia’s own companies and development in the interest of its citizens’ wellbeing.

• LEDIB (Local Economic Development in the Balkans) is a Danish programme launched to support economic development in the region, with a focus on SMEs. What are LEDIB’s most important goals?

- LEDIB was a very successful programme that ran its course for five years before it ended at the beginning of this year. Through it, Denmark contributed €10 million in grants and expertise to small- and mediumsized enterprises in south-eastern Serbia. There is still a revolving credit facility with the participation of a number of banks, which helps provide affordable credit to a wide variety of beneficiaries in the region.

• Denmark and Serbia have quite developed defence cooperation. What would you single out about this cooperation?

- The goal of our longstanding (since 2000) cooperation with Serbia’s defence and security authorities and armed forces is to promote their engagement and interoperability within Euro-Atlantic cooperation structures.

We would like Serbia, with its solid military traditions, to play its full role in international peace support operations alongside us and our allies and partners. In addition, we would like to see Serbian defence act as an anchor of regional cooperation and stability, making the Western Balkans a contributor to – not a consumer of – European security.

Our cooperation takes several forms: Denmark supports the resettlement of redundant military per-

Our investors would be more positive in their assessment of business opportunities if they were certain that reforms leading to a better investment and business climate will in fact be implemented

World Markets and Opportunities | denmark

• Denmark is one of the donors to Serbia’s Multi-Donor Trust Fund for Justice Sector Support (MDTF-JSS).

Could you tell us more about this project?

- We support the MDTF-JSS to assist Serbia in undertaking comprehensive reforms of the justice sector. The justice sector is the backbone of the rule of law, which again is the foundation for creating an environment where investors feel safe to come, where citizens trust their government and not least where the EU sees the path towards European integration.

• One of the most important elements of cooperation between Denmark and Serbia is the Fruits & Berries project, which was devised to support south Serbia’s fruits and berries sector.

What has been done in this respect so far and what are the project’s aims?

- The Fruits & Berries programme is the flagship of the bilateral development cooperation between our two countries. In this programme we aim to create a basis for economic growth in five districts of south-western Serbia through assistance to the producers and farmers of fruits and berries.

This is done not only in terms of grants for equipment, planting material and so on, but also through capacity building, helping them to reach new markets and helping them to obtain more profits from the value chains, from producer to consumer.

The programme runs over a fouryear period, due to end in 2016. The Danish financial contributions, totalling approximately €5.4 million, are supplemented by national sources from the Ministry of Agriculture, Forestry and Water Management, as well as the private co-financing of revenue generating investments. Thereby local co-ownership of the project is assured.

• How much do our two countries cooperate in non-economic areas such as culture and education?

- Quite a lot, I am happy to note. But not necessarily on a government-togovernment level, which is how it should ideally be in the very important area of people-to-people contacts. There are many such links, both by virtue of the Serbian diaspora and through twinning arrangements between municipalities.

Danish jazz has been and is one of the mainstays of the Belgrade Jazz Festival. Danish productions have been featured successfully in Serbian film and dance Festivals. Danish TV serials, which currently enjoy international success commercially, help to brand Denmark in Serbia.

There are numerous connections between educational institutions, some of which we aren’t even aware of on the official level. Secondary schools and folk high schools pay frequent study visits to Serbia, as do university groups; for instance, from politicalscience and journalism faculties. ■

interview

Predrag Radošević, General Manager, Novo Nordisk Serbia

Focusing on Patient Needs As the market leader in diabetes treatments, Novo Nordisk has been investing a huge amount of effort in raising public awareness about the consequences of this disease

N

ovo Nordisk is the leading global company in diabetes care, with the most complete range of diabetes medication, including the latest medical products for insulin administration. The company’s HQ is in Copenhagen and today it supplies medication to almost every country in the world.

• Diabetes care is one of Novo Nordisk’s priority segments. What products do you have?

- Diabetes is the chronic non-communicable disease with the fastest growing number of patients in the last few years. Such a huge increase in the number of people with diabetes is the result of excessive calorie intake and insufficient physical activity. It is interesting to note that with only slight modifications in diet and physical activity, almost 60% of type2 diabetes is preventable.

As the leader in curing diabetes, Novo Nordisk has been investing a lot of effort in substantially raising public awareness about the consequences of this disease. Novo Nordisk supports a number of diabetes-prevention programmes all over the world. Once a person is diagnosed with diabetes, the most important goal of treatment is to prevent further complications

with adequate disease control, and in order to do that, there must be highquality medical treatment.

In its product range, Novo Nordisk has the latest medication for each stage of this disease, which progresses over time. Pills are used at the very beginning of treatment for type-2 diabetes, while in advanced stages of the disease other medication such as insulin analogues or human insulin, which is now less used, are administered. Type-1 diabetes, usually diagnosed in children and adolescents, is treated with insulin from the very onset of the disease. While focusing on patient needs, Novo Nordisk developed the first ever insulin pen for subcutaneous administration almost 30 years ago. The pen made diabetes patients more willing to accept very demanding therapy.

While focusing on patient needs, Novo Nordisk developed the first ever insulin pen for subcutaneous administration almost 30 years ago • Novo Nordisk is one of the leading global manufacturers of recombinant human growth hormone (HGH). The company is also engaged in researching this hormone. What is the goal of this research?

- Since the growth hormone is administered with subcutaneous injections, most often in children, it is very important to make administration simple and well-received by patients. In this domain as well, Novo Nordisk has developed pens for simple administration of growth hormone. Apart from that, we have a longer-acting formulation

of recombinant growth hormone in the early stages of clinical development in several countries, so our patients will not have to administer the hormone every night, but rather once a week.

• What other products from your portfolio would you like to single out?

- Definitely medication for treating patients with haemophilia. We have a product that is used for treatment of the most severe cases of this disease.

We have recently had several new haemophilia drugs registered in Europe and we are also conducting clinical research into longer-acting haemophilia medication, with the aim of reducing the number of administered injections while keeping the same effect.

• In Serbia, Novo Nordisk became an independent company in 2006 (before that you operated as a representative office). How much has the business environment changed since then?

- This year the company is celebrating 90 years of worldwide operations. We are very proud of the fact that, during this period, most of the insulin therapy innovations came from Novo Nordisk’s clinical development laboratories. In Serbia, the company has been operating for almost a quarter of a century. We started off as a representative office and later became an independent company. In the 1990s, our operations were reduced to the basic supply of medication. At the beginning of this century, the state authorities took responsibility for securing a sufficient supply of medicines and our operations became, more or less, similar to those of other countries in the region. ■

denmark | World Markets and Opportunities

The Danish Monarchy

The History of the Throne As part of Denmark’s constitutional monarchy, Queen Margrethe II’s main tasks are to represent the nation abroad and act as a figurehead at home. The line of monarchs that preceded her have all played a role in forging the modern nation state Denmark is today

D

enmark is a constitutional monarchy, which means its monarch cannot perform political acts independently. Although the monarch signs all Acts of Parliament, these only come into force when they have been countersigned by a cabinet minister. As head of state, the monarch participates in the formation of a new government. After consultation with representatives of the political parties, the party leader with the support of the largest number of seats in the Folketing (Danish Parliament) is invited to form a government. Once the government has been formed, the monarch formally appoints it. Additionally, the monarch is the formal Head of the Government and therefore presides over the State Council, where acts passed by the Folketing are signed into law. The Prime Minister and Minister of Foreign Affairs report regularly to the Queen to inform her of the latest political developments. The Queen also hosts official visits by foreign heads of state and pays state visits abroad. She receives all ambassadors from foreign countries, who must present their credentials before starting their work in Denmark. Her Majesty also formally appoints and dismisses civil servants.

The Queen’s main tasks are to represent Denmark abroad and to act as a figurehead at home. The Queen performs the latter task by accepting invitations to open exhibitions, attending anniversaries and more. Exhibition openings abroad in connection with export campaigns are also often attended by members of the

The monarchy was originally elective, but when absolutism was introduced in 1660-1661, it was replaced by inherited monarchy

World Markets and Opportunities | denmark

royal family. In addition, the Queen regularly gives audience, so that citizens with legitimate petitions can offer their personal thanks regarding civil service appointments and retirements, knighthood appointments and the receipt of public service medals.

The Danish monarchy can be traced back to Gorm the Old (reign: circa 936-958). The monarchy was originally elective, but when absolutism was introduced in 1660-1661, it was replaced by inherited monarchy.

The direct lines of the ancient Danish dynasty became extinct with the death of Christoffer III in 1448.

That same year, Duke Christian of Oldenburg was chosen to be the King of Denmark and took the name Christian I. He belonged to one of the side branches of the original dynasty and became the founder of the Royal Family of Oldenburg, which reigned until 1863 when the last sovereign of that line, Frederik VII, died childless.

In accordance with the Act of Succession of 1853, the throne passed to Frederik VII’s relative, Prince Christian of Glücksborg, who was a direct descendant of the Royal House. He acceded to the throne as Christian IX and became one of Denmark’s longest-reigning monarchs (1863-1906).

He was also the first monarch of the current House of Glücksborg. Christian IX eventually became known as the ‘father-in-law of Europe’. His

daughter, Princess Alexandra, married Edward VII of England.

Christian IX’s son, Frederik VIII, was 63 when he finally acceded to the throne in 1906. When he died in 1912, he was succeeded by his eldest son, Christian X, who reigned over Denmark throughout both World Wars.

He is remembered as the ‘Equestrian King’ due to his ride across the old border into Nordschleswig after its reunification with Denmark in 1920.

He became popular during the German occupation of Denmark between 1940 and 1945, when every day he mounted his big white horse and rode through the streets of Copenhagen.

Christian X died in 1947 and was succeeded by his son, Frederik IX, who had married Sweden’s Princess Ingrid in 1935. They had three daughters: Princesses Margrethe (born 1940), Benedikte (born 1944), and AnneMarie (born 1946). When Frederik IX died in 1972, his eldest daughter was proclaimed Her Majesty Queen Margrethe. She was born in 1940 but did not become heiress presumptive until 1953, when a constitutional amendment allowed women to inherit the throne (after it became clear that King Frederick was unlikely to have any male issue). In 1967, she married Henri de Laborde de Monpezat, with whom she has two sons: Crown Prince Frederik (born 1968) and Prince Joachim (born 1969). ■

interview

Jim Toft Nielsen, General Manager, Grundfos Serbia

Taking Our Own Medicine Grundfos, which has had a presence in Serbia for three years, is a global leader in advanced pump solutions and a trendsetter in water technology our customers’ energy consumption is one of the most important aspects in efforts to realise our ambition of never emitting more CO2 than we did in 2008, despite economic growth.

The new factory in Serbia is built in accordance with LEED Gold requirements, as a natural step in following the high commitments Grundfos has towards a sustainable footprint.

G

rundfos Manufacturing Serbia produces small and medium circulator pumps for use in heating and sanitary systems. First preparations for the start of production in Serbia were made in 2009 before the decision was finally taken in 2010 to start production first in Nova Pazova while an entirely new plant was constructed in Indjija. In December 2012 Grundfos officially moved to its new premises in Indjija, a factory of 26,000m², representing just the first phase of Grundfos’ plans in Serbia.

• Grundfos is driven by the belief that the future of energy lies in energysaving products, new forms of energy and sustainable production. How is the company committed to meeting these goals?

- At Grundfos we take our own medicine and commit to reducing our environmental footprint throughout our value chain in buildings, processes and activities, regardless of whether we’re operating on a production line or in an office. More than anything, taking our own medicine is about creating an environmental mindset, management commitment and involving employees. It’s also about having the right tools: when good environmental ideas and initiatives are generated by our employees, we turn them to a systematic and conceptualised approach, bringing these initiatives to a higher level.

Reducing energy consumption related to our activities and reducing

• Grundfos is one of the leading pump manufacturers in the world. Apart from high quality, energy saving is one of your production priorities.

How do you succeed in that?

Latest generation of Grundfos’ speed-controlled pumps installed at the Indjija factory

Reducing energy consumption related to our activities and reducing our customers’ energy consumption is one of the most important aspects

- After setting our ambitious goal, the improvement process has started and close monitoring of each production site has been established in order to ensure that the ambitions are reached. Every year the Future Now Award is given to the company that has implemented the most innovative and giving project.

• Which industrial branches use your products?

- A large portfolio of industries can be mentioned, but some of the largest areas are the machine industry, the automotive industry, food and beverages, and the marine industry.

• How important is Serbia and this part of the Balkans to the company’s global operations?

- It has been a very important part of the Grundfos Group’s globalisation strategy to establish production in Serbia and be closer to our customers in the South East Europe region.

• Grundfos has replaced its ‘mission and vision’ with the word ‘purpose’.

What is the company’s purpose?

- Grundfos is a global leader in advanced pump solutions and a trendsetter in water technology. We contribute to global sustainability by pioneering technologies that improve the quality of life for people and care for the planet.

To be a “global leader” means that we operate with excellence in all we do, improving Quality – Delivery – Costs and orchestrating a globally competitive production set-up. In order to produce and deliver “advanced pump solutions” for different sales channels, we interact with customers to understand their needs. “Trendsetter in water technology” and “pioneering technologies” means that we are safe, fast and able to produce new trendsetting products and apply new production technologies.

“Contribute to global sustainability” means that we in the entire supply chain put sustainability first by lowering our CO2 emissions and being a role model. We reduce water and energy consumption and continuously strive to re-use resources. “Improve quality of life for people and care for the planet” means that our solutions always balance human, social and environmental concerns. We strive to have a safe and good working environment with possibilities for our talents and people with special needs. ■

denmark | World Markets and Opportunities

interview

Søren Engelbrecht Hansen, Regional Coordinator Western Balkans, Trade Council of Denmark

Opening Doors to Trade Since the turn of the millennium, Denmark has focused heavily upon promoting trade with other nations, a philosophy embodied by the Danish Ministry of Foreign Affairs’ Trade Council, which operates worldwide. With companies such as Carlsberg leading the charge, expect Denmark’s presence in the Western Balkans to continue to grow

D

enmark is seen as the model of a modern democracy, balancing strong socialsecurity provisions with a global, free-trade market outlook. As such, the Scandinavian nation utilises state resources to foster strong bonds with the private sector, promoting trade abroad and economic stability at home. Søren Engelbrecht Hansen, Regional Coordinator in the Western Balkans for Eksportrådet, the Danish state’s Trade Council, discusses his organisation’s aims and the growth in Danish-Serbian trade relations.

• When was the Trade Council founded and what is its main purpose?

- The Trade Council was founded on 1 January, 2000. It is an integrated part of the Danish Ministry of Foreign Affairs and was created with the aim of having one common unit within the Danish state and government for all trade-related matters, including multilateral trade policy. The Trade Council consists of different business areas such as Invest in Denmark, a customer relations department, and trade departments in embassies around the world. Today, the Trade Council is represented globally in more than 80 countries, with a total of 115 missions assisting Danish business and industry.

The idea of this one-unit state export system was to be more efficient on the cost side and deliver a high quality level of service. In the embassies abroad we see a strong synergy effect, in that the commercial advisors work side by side with diplomats and ambassadors, who all take part in the trade work. Before 2000 we did not have the same efficient state body to implement trade and export policies

Today, the Trade Council is represented globally in more than 80 countries, with a total of 115 missions assisting Danish business and industry

World Markets and Opportunities | denmark

into efficient daily operations that would create more exports for Denmark and high value for our companies.

The main focus of the Trade Council then as now is to create more exports and ultimately more jobs in Denmark.

• The Trade Council’s operating procedures are very detailed. Could you elaborate on them?

- The Trade Council (TC) works according to very specific rules. The TC con-

sists of business counsellors at home and abroad who help Danish companies to create value in their businesses. TC advisors and counsellors work as business consultants who in many ways are similar to our colleagues in the private sector. We seek to help our exporters penetrate the markets, identify the right opportunities and open doors to decision makers.

As consultants in private sector companies, we invoice our clients. The fee is based on an hourly rate set by our Ministry of Finance. There are several reasons for invoicing –one is that the embassy budgets are financed partly by the TC’s income. The embassies have their own income targets, and in cases where they are not met, their budgets will be cut accordingly.

• Are you satisfied with the level of development in Danish-Serbian economic cooperation?

- Trade between Serbia and Denmark has been increasing in recent years and we expect this positive development to continue. Denmark believes strongly in free trade and we see our trade relations with Serbia as a good

example of the benefits of free trade.

Serbian exports to Denmark have increased and so have exports to Serbia from Denmark, so it’s a win-win situation. The total trade volume is still at a relatively low level, but as Serbia reforms its economy and our relations become deeper due to the EU integration process, more trade between our nations can be expected.

The positive development in trade relations is also due to the increase in a variety of sectors. For instance, Denmark exports machinery to the agro and energy sectors. Also, we see a large proportion of exports to Serbia within pharmaceutical products.

Serbian companies export various industrial products and we’ve seen an increase in the number of suppliers in Serbia for Danish companies.

ICT is another interesting area for further cooperation. The high technical skills here in Serbia within ICT are beneficial to many Danish companies.

We expect to see an increase in sales of services from Serbia to Denmark within ICT. It can either be from Serbian or Danish IT companies here reexporting IT services such as software.

• Which sectors in Serbia appeal to Danish investors?

- One of the largest Danish investors in Serbia is Carlsberg, which has invested approximately €170 million since the company took over the existing Serbian brewery in 2003. Grundfos opened its greenfield plant in 2013 and has invested approximately €50 million. More investors are expected to come, and among them are likely to be small- and medium-sized companies that need an alternative to the distant Asian markets.

Some of Denmark’s core competencies are within the energy and agricultural sectors. We produce and export lots of technology and knowhow for these two sectors. And as you know, the agro sector in Serbia has great potential. We hope and believe that our companies can take part in the development of this sector. The same goes for the energy sector, which is to be transformed greatly,

becoming more green and energyefficient. Danish investment will in future likely be focusing on the energy sector as well as the manufacturing sector. The IT sector will see an increase in investments. In FDI figures, it will not be substantial; such investments are typically smaller if measured in figures, but they create sustainable and well-paid jobs.

More investors are expected to come to Serbia, and among them are likely to be smalland medium-sized companies that need an alternative to the distant Asian markets • Which economic sectors carry the biggest potential for cooperation between our two countries?

- It’s hard to be precise or predict the future, of course, but the energy sector seems to be a key sector for future cooperation. The reason is the large and challenging tasks Serbia has in transforming this sector into a much greener and especially much more energy-efficient sector that is sustainable for future economic growth. Denmark has already been through such a transitional period that awaits Serbia in these regards. The entire EU aspect of harmonising legislation and sector regulation is a big task for any country.

• How specifically does the Trade Council facilitate cooperation between Danish and Serbian businesses?

- The Trade Council in Serbia is often approached by various companies

and business organisations with an interest in the market. The TC advises companies on business opportunities in the Serbian market and in particular sectors. It provides help on financing, exporting, subsidies or any specific challenges there could be in the market. With this information, the companies have an idea of the market sector and any opportunities.

• Since 2007, the Danish Trade Council offices in Serbia, Slovenia, Albania and Croatia have been operating in tandem. What effect did this have on the TC’s work overall?

- The countries you mention have many market similarities. We know our private companies often organise their sales efforts into regions, and the Trade Council has followed their examples. We believe and see that coordinating our work in the region when helping Danish companies brings benefits to our clients. For example, we often see that a company seeks assistance in one market and then in the neighbouring market. By coordinating and helping each other we learn more about the clients’ needs and end up creating more value for them. We have learned to think more in opportunities not only in our own market, but also in neighbouring markets within the region. That is a strength companies can benefit from.

• How important is it for countries in the region to have a joint economic outlook? Is the region sufficiently aware of the importance of such an association and how much the region’s politics affects the Council’s results?

- For the region it is less important that we have this regional division. It’s made for the Danish companies’ sake and for us to optimise resources and coordinate approaches to daily work.

As such, we do not make use of it in the local approach to various tasks; we try to have a flat organisational structure with as little hierarchy as possible, thereby creating a fast and individual approach to working tasks in the markets. ■

denmark | World Markets and Opportunities

Interview

Jelena Marjanović, Assistant Minister in the Ministry of Foreign and Internal Trade and Telecommunications

Denmark is Waiting With economic cooperation between Serbia and Denmark “balanced but moderate”, now is a good time for bolder Serbian companies to push their ambitions in a Nordic direction. Likewise, although Danish companies have a presence here, greater stability and reform is needed to encourage others to follow suit US$94.2 million, and we expect it to reach last year’s level (US$137.1 million) by the year’s end. It is worth mentioning that, over the past six years, trading between our two countries more than doubled.

Still, this did not improve the export-toimport ratio. Our exports to Denmark are almost five times lower than our imports from, both in 2005 and 2012.

S

erbian-Danish relations are exercised through bilateral consultations between line ministries, diplomatic channels and various project exchanges. Serbia and Denmark might not have formed mixed intergovernmental bodies, but even without these bodies, cooperation between the two countries is very good, says the Assistant Minister in the Ministry of Foreign and Internal Trade and Telecommunications, Jelena Marjanović: “Activities for opening up the Danish market to Serbian companies are focused mainly on collating relevant information and analysing the opportunities for our economy. Through the Economic Affairs Department of our embassy in Stockholm, which covers the entire Nordic region, we have had talks with the Association of the Fashion and Textile Industry, the Association for Furniture Dealers and the Association for Investment and Venture Capital Funds, followed by talks with the biggest Danish fresh-produce retail company, Total Produce Nordic AB, and the largest importers of fresh fruits and vegetables.”

• How would you rate the overall quality of economic cooperation between the two countries?

- Economic cooperation between the Republic of Serbia and Kingdom of Denmark is balanced but moderate. Trading is the first and foremost segment of any economic cooperation, followed by investments, tourism exchange, institutional cooperation etc. During the first eight months of this year, trading between Serbia and Denmark amounted to

We figure SerbianDanish economic cooperation could be bolstered further once Serbia begins its EU accession negotiations

World Markets and Opportunities | denmark

• Which economic branches have the best cooperation?

- The most important goods we export to Denmark are rubber footwear, heating system pumps, paper and cardboard, refrigerators, raspberries and metal furniture. In terms of imports, we mostly import machine parts, medication, pump parts, generators, medical enzymes and micro-organic cultures, and electricity from Denmark. The main stakeholders in this trade are private companies, while Serbian companies have the responsibility to invest more effort in order to export to Denmark.

Let me illustrate this with an example: there is great interest shown in IT cooperation, and there are several Danish companies in Serbia, which came only recently and have both Serbian and Danish IT experts engaged in producing software, applications, computer games etc. This wouldn’t have happened if it weren’t for the proactive approach of these companies’ owners and their efforts to win outsourcing projects amid very stiff competition.

• What economic branches have the unfulfilled potential for even better cooperation, and on what does the future of this potential depend?

- The branches that could have better

cooperation are agriculture, renewable energy resources, the pharmaceutical industry, the metal-processing industry and others. Aside from trade between the two countries, which will probably continue to grow, there is plenty of room for better cooperation in investing. Serbia is absolutely open to Danish investment.

• Which are the most important Danish investments in Serbia?

- We consider Grundfos an example of a successful FDI in Serbia, worth €50 million. This investment should be considered a role model since the investment funds have been spent on export-orientated production and the creation of 400 new jobs. Grundfos came to Serbia in 2009. The company first operated in a rented hall, but this year they built a new production hall in Indjija. However, Grundfos is not the biggest Danish investment in Serbia – this is Carlsberg, which in 2003 bought the Lav brewery in Čelarevo and invested for approx. €170 million.

• Are there any projects in the pipeline?

- It is not wise to talk about investments in advance, but we can reveal that representatives from Danish cable, connector and personalised electro-mechanical solutions company Mikkelsen Electronics came to Serbia recently. With a view to relocating their production here, they visited brownfield locations in Kruševac, Rekovac and Čačak, and are planning to see the Niš industrial zone too. If they are happy with what they see, it is only logical to expect them to start operating in Serbia.

Of course, we have been anticipating new projects. We figured that Serbi-

an-Danish economic cooperation could be bolstered further once Serbia begins its EU accession negotiations. Danish companies planning to come to Serbia are thinking about concrete business parameters, which can be realised, as well as about the overall image of the country. Serbia has been labelled a ‘transition country’, and this must be changed to ‘a country at the threshold of EU membership’.

trative procedures, combated corruption, enforced the rule of law and court efficiency, and increased transparency, among other things.

• What opportunities are out there for Serbian businesses to sell their products and services in Denmark, and what criteria do they need to satisfy in order to do that?

- Experts have branded the Danish market as very closed-up and de-

There is great interest in IT cooperation, with several Danish companies in Serbia employing both Serbian and Danish IT experts to produce software, applications and games • Have Danish investors had specific requirements in terms of operating in Serbia?

- Not wanting to risk and experiment is a common thread among Danish companies when it comes to ‘small, unknown markets’, which is how they view Serbia. On the other hand, Danish companies take overall competitiveness into account when making business decisions.

We cannot compete with bigger or fast-growing markets, but we do have certain advantages over other regional and European countries, such as free-trade agreements with the Russian Federation, Belarus and Kazakhstan. Also, we are located along Corridor X, and some companies consider this very important.

Additionally, foreign investors, including the Danish, would jump at the opportunity to invest in Serbia if only our business environment changed, if we expedited adminis-

manding, with very rigorous procedures and strict conditions for market players. This is a market that is saturated and has a transection of well-established and elaborate product and service distribution channels.

There have been very few Serbian companies trying to sell their products to Denmark, or participating in local fairs, or searching for distributors, representatives and market agents. Serbian businesspeople have told us the main reason they were apprehensive about targeting Denmark as an export market more was inadequate knowledge of the market, the language barrier, high product-quality demands, market costs and similar. Still, there are opportunities in certain sectors that should be used, and these sectors are textiles, furniture, food and IT. It seems to me that Denmark has been waiting for the most ambitious companies from Serbia. ■

corporate

lundbeCk

Specialists in Brain Diseases Danish pharmaceutical company Lundbeck develops treatments for the full spectrum of brain diseases.

The investment and research it makes today goes into making a better tomorrow for patients and their families

A

ccording to the World Health Organization (WHO), more than 700 million cases of brain disease are reported every year. These are serious and life-threatening diseases that affect both patients’ and their relatives’ quality of life. As these diseases also involve major socio-economic costs, it is imperative for general society that new and innovative pharmaceuticals are developed. Over the past 50 years, new pharmaceuticals have revolutionised treatment options, but there remains a large unmet need for new and innovative therapeutics.

Lundbeck is a global pharmaceutical company that is highly committed to improving the quality of life for people suffering from brain diseases. To this end, Lundbeck is engaged in the research,

Each year, Lundbeck ploughs around 20% of its revenue back into the research and development of new pharmaceuticals to improve treatment for millions of people suffering from brain diseases development, production, marketing and sale of pharmaceuticals across the world. The company’s products are targeted at diseases such as depression and anxiety, psychotic diseases, epilepsy, Huntington’s, Alzheimer’s and Parkinson’s.

Lundbeck is one of Denmark’s most research-intensive enterprises. We employ more than 1,200 highly trained specialists in our research and development units. Each year, Lundbeck ploughs around 20% of its revenue back into the research and development of new pharmaceuticals to improve treatment options for the millions of people around the world suffering from brain diseases.

Our mission is to improve the quality of life of people suffering from psychiatric and neurological disorders. We strive to ensure that all of our innovative drugs are available to physicians and patients in Serbia, and we believe that in this way we can contribute to the quality of life of those patients and their families. ■ denmark | World Markets and Opportunities

People and traditions

The Kingdom of Two Anthems Denmark’s strong welfare state and work-life balance has made its citizens among the happiest in the world. The country might have shrunk in size and influence since its time as an imperial power, but it is still a nation of considerable cultural influence on the world stage Over 98% of the country’s population speaks Danish. German is recognised as an official regional language in the Nordschleswig region bordering Germany, where it is spoken by 23,000 people – about 0.4% of Denmark’s population of 5.2 million. Greenlandic, an Inuit language, is spoken by 0.1% of the population.

Denmark is an egalitarian society. Interestingly, this is reflected in their language, which employs genderneutral words.

‘Der er et yndigt land’ (There is a lovely land) is Denmark’s civil national anthem. When first published in 1819, the anthem had 12 verses, but today it has been shortened significantly. Now when it is performed or sang, only the first verse is played in its entirety, followed by the last four lines of the last verse. Denmark’s other anthem ‘Kong

D

enmark is one of the world’s oldest monarchies, with a history that stretches back to the Viking Age around the year 1000. Danish society rests on the foundation of the Danish Constitution of 1849, and the political system has since been characterised by broad solutions to bridge any political divide.

Denmark is often cited as one of the world’s best countries to live in. Its strong welfare state ensures economic equality throughout society and the virtual non-existence of corruption, while surveys repeatedly show the Danes to be among the happiest people in the world.

So, what characterises the Danes as a people? Many non-Danes living in Denmark say that Danes are open and welcoming. Others call them reserved, especially during the long winter months. For many Danes, the word “hygge” is essential when describing something characteristically Danish. The word is best translated into English as ‘cosiness’ or ‘conviviality’ and reflects the sense of community and security that comes about when Danes spend quality time with the people they care about.

For many Danes, the word “hygge” is essential when describing something characteristically Danish

World Markets and Opportunities | denmark

Christian stod ved højen mast’ (King Christian stood by the lofty mast) has equal status but is used mainly for royal and military occasions, although it is also tradition to sing it immediately after midnight on New Year’s Eve. The song’s theme is the heroics of Danish sailors during the wars against Sweden in the 17th and 18th centuries. It is regarded as one of the oldest national anthems in the world.

Most Danes are modest about their individual accomplishments and are more concerned about the group

than their own needs. Maternity and paternity leave provisions are particularly generous in Denmark; men are more actively involved in parenting than in many countries, although the division of domestic chores is similar to other developed countries.

The word ‘Denmark’ originated in the Viking age and is carved on the famous Jelling Stone, which dates back to approximately 900 AD. Today, though, Denmark is very different from its past. Between the 13th and 17th centuries, Denmark was a superpower whose influence was as powerful as that of the largest European countries.

The current diminished size and influence of Denmark is the result of 400 years of forced relinquishments of land, surrenders and lost battles. For a small country, however, Denmark still punches above its weight in many different areas, including design, architecture, farming, green technology and pharmaceuticals.

Many these days think of furniture design and architecture when they think of Danish lifestyle and culture.

Yet Denmark is perhaps equally famous for food, films and sports. Copenhagen’s Noma, three-time winner of Restaurant magazine’s Best Restaurant in the World award, has introduced a whole new way of cooking known as New Nordic Cuisine. Filmmakers such as Lars von Trier and Susanne Bier have also won a multitude of international awards, and one of the world’s best female tennis players, Caroline Wozniacki, is Danish. ■ Source: denmark.dk

corporate

Carlsberg Srbija Inovations

For Better Beer and a Better World Research, development and innovation are core to the Carlsberg legacy, both globally and in Serbia. Carlsberg Srbija offers its consumers new experiences and ensures its brands remain relevant by maintaining customer loyalty and attracting new customers

C

arlsberg Srbija is an integral part of the Carlsberg Group, the world’s fourth largest beer producing company.

When it came to Serbia it became one of the biggest foreign investors in the Serbian economy, with investments exceeding €170 million. From 2006 onwards the company has maintained a firm second position on the Serbian market, driving its constant growth through innovation and listening to the needs of consumers.

Innovations at this company always begin with product innovation, rather than different ways of marketing the same old formulae. Improvements from 2012 have shown that the Serbian market is open to new products and that consumer’s react positively to them.

Through an innovation-driven approach, Carlsberg Srbija continues to strengthen its brand portfolio.

The ability to respond with agility to changing customer and consumer demands with the goal of providing its consumers with more choices and thus developing the beer market in Serbia is key to managing all the challenges and creating a company capable of meeting and rising above the distinct, constantly evolving needs of the beer industry.

The perfect summer refreshment with a pleasant taste, which is a mixture of beer and fruit juice that falls under the category of Radler, became very popular on the Serbian market.

Carlsberg Srbija is achieving great success with LAV Twist. It appeared on the market two years ago, initially as LAV Twist Lemon, but since then the company has introduced more flavours: Grapefruit, Orange and LAV Twist mix with Ginger and Peach, thus offering the widest Radler portfolio on the market. Since April 2013 LAV Twist has been available in disposable glass bottles of 0.25l and 0.4l, as well as in 4x0.4l multi-packs.

Another brand that caused a huge rumble on the market is Somersby -

Through an innovation-driven approach, Carlsberg Srbija continues to strengthen its brand portfolio officially the fastest growing brand on the world’s list of top ten ciders in 2012. Somersby is available on the Serbian market in three different flavours – following the introduction of Apple and Pear, the brewery also introduced Somersby Blackberry cider.

Beside innovations in beer production and technology, corporate social responsibility (CSR) has long since become something of a buzz word. At Carlsberg it is part of the heritage and legacy and today CSR makes excellent business sense.

From its inception Carlsberg Srbija

sought to grow and create value not only for the company, but also for the stakeholders and the communities in which the company operates.

This was formalised in a CSR strategy and was demonstrated through many projects.

Carlsberg Srbija is a proud sponsor of national and local football clubs. The company’s employees have an annual day dedicated to nature and its cleaning (Working day in nature). Furthermore, Carlsberg Srbija has also started the production and distribution of Super-compost at its brewery in Celarevo, which has significantly reduced the amount of waste disposed of at the landfill.

Super-compost is an organic soil enhancer created as a by-product of wastewater treatment. It is a material of decomposed aerobic-anaerobic treatment of waste water, i.e. sludge generated in the brewing process. Its high content of organic and mineral solids, coupled with optimum content of nitrogen, phosphorus and humic acids, make super-compost very suitable for processing and refining all types of soil, especially poor and degraded soils, where it can help repair the structure.

Carlsberg Group and Carlsberg Srbija make decisions that have a positive impact on business and the communities in which they operate and the company is always committed to conducting all of its operations in a socially and environmentally responsible way. ■

denmark | World Markets and Opportunities

Economic Cooperation between Serbia and Denmark

Reliable Partners with Long Tradition During the first seven months of 2013, the value of trade between Serbia and Denmark amounted to US$77.4 million, a 5% increase relative to the same period last year, when it stood at US$74 million. Serbian exports to Denmark have gone up by 28%, amounting to US$16 million, while imports remained at last year’s level of US$61.4 million

S

erbia and Denmark share a long tradition in economic branches such as agriculture, textiles and energy. According to data collated by the Serbian Chamber of Commerce covering the first seven months of this year, Denmark was ranked 34th in the list of countries Serbia exports to and 33rd on the list of the countries Serbia imported from.

Serbia and Denmark signed the Agreement on the Succession of Bilateral Contracts in July 2003, which encompasses agreements on economic, industrial and technical cooperation, road transportation, as well as four agreements to consolidate the debts of the former Socialist Federal Republic of Yugoslavia (SFRY), a metrology agreement, a conciliation, arbitration and court proceedings agreement, the Convention on Social Security with accompanying protocol and notes, and the Agreement on Mutual Transfer of Sentenced Persons for the Purpose of Serving Their Prison Sentences.

Serbia and Denmark also signed a bilateral agreement on the consolidation of SFRY debt with the Paris Club of Creditors in December 2002. The negotiations on harmonisation of the Double Taxation Agreement took place in Copenhagen in November 2001, and in April 2006 the two countries agreed

During the first seven months of 2013, the value of trade between Serbia and Denmark amounted to US$77.4 million, a 5% increase relative to the same period last year

World Markets and Opportunities | denmark

on and initialled the Double Taxation Agreement.

In late 2006, Serbian and Danish Governments signed a Memorandum of Understanding stipulating a grant for the Republic of Serbia be used on implementing a programme called Local Economic Development in the Balkans (LEDIB). In order to implement subcomponent 2.3 of the programme – on better access to affordable credit in the amount of DKK 15 million (around €2 million) – the Government of the Kingdom of Denmark, the Government of the Republic of Serbia and the National Bank of Serbia concluded a Finance Agreement on 24 October 24 2008 to enable favourable financing for SMEs and entrepreneurs in the Nišavski Region.

Given the National Bank of Serbia’s experience in managing credit lines for SMEs, and its capacity as an agent of the Serbian Government, the national bank has been entrusted with managing, administrating and supervising these funds.

The LEDIB funds will be available until the end of 2016, and the funds’ end-users – SMEs and entrepreneurs in the Nišavski Region – will be able to withdraw them via NLB Bank, in dinars, without the applicable foreign currency clause. By the end of 2010, a total of 30 SMEs and entrepreneurs had used LEDIB funds in the amount of RSD 26.9 million.

These funds for SMEs and entrepreneurs operating in the Nišavski Re-

gion are supposed to be used towards investments and working capital. Denmark has also expressed interest in commencing negotiations about new social security conventions.

During the first seven months of 2013, the value of trade between Serbia and Denmark amounted to US$77.4 million, a 5% increase relative to the same period last year, when it stood at US$74 million. Serbian exports to Denmark have gone up by 28%, amounting to US$16 million, while imports remained at last year’s level of US$61.4 million.

By July 2013, Serbia recorded a US$45.4 million deficit in trade with Denmark, which is 7% lower compared with the same period in 2012, when the deficit amounted to US$49 million.

The export-to-import ratio declined significantly between 2005 and 2007.

From 2009 to 2011, this ratio grew noticeably, only to decline again in 2011 and 2012. The export-to-import ratio recorded a significant jump in the period from 2012 to July 2013.

Serbia mostly exports footwear, nonferrous metals, clothing, furniture and furniture parts, and miscellaneous ready-made products to Denmark.

In the first seven months of 2013, the following Serbian companies exported the most to Denmark: Gorenje Valjevo, Grundfos Manufacturing Belgrade, Ergomade Niš, Tigar A.D. Pirot, Impol Seval Sevojno, Hemofarm A.D. Vršac, Tetra Pak Production Belgrade,

Leading SITC sectors exporting to Denmark

Leading SITC sectors importing from Denmark Operating machinery and devices Medical and pharmaceutical products

Footwear Nonferrous metals

12%

11% 30%

19%

Benetti Ada, Iris Mega Belgrade and Di Netzwerke Lebane.

Serbia mostly imports operative machinery and devices, medical and pharmaceutical products, organic chemical products, general purpose industrial machinery and miscellaneous ready-made products from Denmark.

In the first seven months of 2013, the following Serbian companies imported the most from Denmark: Grundfos Manufacturing Belgrade, Phoenix Pharma Belgrade, Sunoko Novi Sad, Magna Farmacija Belgrade, Tetra Pak

By July 2013, Serbia recorded a US$45.4 million deficit in trade with Denmark, 7% lower compared with the same period in 2012

5% 4% 30%

Furniture and furniture parts Miscellaneous finished products, not specified elsewhere Other

13% 14%

8%

Clothing

19%

Organic chemical products General industrial machinery

33%

Production Belgrade, Farmalogist Belgrade, MTC-SO Sombor, JYSK Belgrade, Resinex Fac Novi Sad and Vega Valjevo.

On 15 May 2009, the Serbian and Danish chambers of commerce signed a cooperation agreement in Copenhagen.

The Danish Chamber of Commerce is one of the biggest professional business organisations in Denmark, with more than 200 employees, offices in three capital cities and an EU office in Brussels. The Chamber represents 20,000 Danish companies and 100 commercial associations in service sectors such as

Miscellaneous finished products, not specified elsewhere Other

commerce, tourism, business services, IT, social services and transportation. The Chamber closely collaborates with various European organisations, including Eurochambers (European Association of Chambers of Commerce and Industry) and EuroCommerce (which represents retail, wholesale and international trade in Europe). The Chamber also manages the Secretariat of the International Chamber of Commerce (MTK) in Denmark and upholds the interests of its members. Membership of the Chamber of Commerce is not mandatory. ■

Synonymous with Quality Junckers is a Danish manufacturer that has been producing solid wood floors for the past 100 years.

Junckers is synonymous with quality due to the company’s use of special wood treatment methods and its dedication to providing good design and quality.

Junckers’ solid wood flooring is known for its recognisable Danish design. It resembles hardwood planks and can be used in a wide array of facilities, from commercial and residential to sports, particularly for squash courts.

www.junckers.dk Exclusive distributor for Serbia

| World 34denmark 6,Vojvode Stepe street Markets +381 11 309and 8234Opportunities www.musculus.rs

Economy of Denmark

Denmark Lives the American Dream The Danish government offsets high social spending with a modern market economy that makes the country a world leader in high-tech agriculture, pharmaceuticals, maritime shipping and renewable energy. Despite a slightly shaky few years post-crash, Denmark’s economy remains resilient and its people among the happiest in the world

O

n 30 September, Nick Hækkerup, Denmark’s Minister for Trade and European Affairs, spoke at The New School for Public Engagement about why, in his view, Denmark thrives with a combination of high taxes, generous social services and an efficient public sector. According to Bloomberg Businessweek’s Peter Coy, the audience was receptive: The New School, founded in 1919 in New York’s Greenwich Village, is a hotbed of New York liberalism. On the walls of the room where Hækkerup spoke were frescoes by José Clemente Orozco depicting historical figures such as Mahatma Gandhi and Vladimir Lenin. Hækkerup took exception to a New York Times story published last May with the online headline “Danes Rethink a Welfare State Ample to a Fault”. He said: “True, we are reforming. But the real story is quite different.” According to Hækkerup, Denmark’s ‘flexicurity’ employment policies encourage employers to hire workers by ensur-

ing that they won’t be penalised if they have to lay them off later. The cost of benefits such as healthcare is borne by the government, and Danes receive training that enhances their employability. “I believe that the American dream comes alive in Denmark,” he added. That’s not to suggest everything’s perfect in Copenhagen. Hækkerup noted that “there may be some truth” to the argument that Denmark isn’t as good at innovation

The Danish economy performs remarkably well in terms of regulatory efficiency, while open-market policies sustain flexibility, competitiveness and large flows of trade and investment

World Markets and Opportunities | denmark

as the US, but he said government procurement policies aim to promote new approaches to problem-solving.

This thoroughly modern market economy features a high-tech agricultural sector, state-of-the-art industry with world-leading firms in pharma-

ceuticals, maritime shipping and renewable energy, and a high dependence on foreign trade. Denmark is a member of the European Union, and Danish legislation and regulations conform to EU standards on almost all issues. Danes enjoy a high standard of living and the Danish economy is characterised by extensive government welfare measures and an equitable distribution of income. Denmark is a net exporter of food and energy, and enjoys a comfortable balanceof-payments surplus, although it depends on imports of raw materials for the manufacturing sector.

Within the EU, Denmark is among the strongest supporters of trade liberalisation. After a long consumptiondriven upswing, Denmark’s economy started to slow in 2007 with the end of a housing boom. Housing prices dropped markedly in 2008-09 and, following a short respite in 2010, have since continued to decline. The global financial crisis has exacerbated this cyclical slowdown through increased borrowing costs and lower export de-

mand, consumer confidence and investment. The global financial crises cut Denmark’s real GDP in 2008-09.

The economy experienced a modest recovery in 2010, with GDP growth of 1.3%, in part due to increased government spending. However, the country experienced a technical recession in late-2010 to early-2011.

Historically low levels of unem-

ployment rose sharply with the recession and, based on the national measure, remained at about 6% in 2010-12 – about two-thirds the EU average. An impending decline in the ratio of workers to retirees will be a major long-term issue. Denmark maintained a healthy budget surplus for many years up to 2008, but the budget balance swung into deficit in 2009. Despite the deficit, the new coalition government delivered a modest stimulus to the economy in 2012.

Nonetheless, Denmark’s fiscal position remains among the strongest in the EU, with public debt at about 45% of GDP in 2012. Despite previously meeting the criteria to join the European Economic and Monetary Union (EMU), so far Denmark has decided not to join, although the Danish krone does remain pegged to the euro. Denmark held the EU presidency during the first half of 2012, the priorities of which included promoting a responsible, dynamic, green and safe Europe, while working to steer Europe out of the eurozone economic crisis.

Denmark’s economic freedom score is 76.1, making its economy the

9th freest in the 2013 Index. Its overall score is essentially the same as last year, with modest improvements in the management of public spending and freedom from corruption counterbalanced by declines in labour and investment freedoms. Trailing Switzerland, Denmark is ranked 2nd out of 43 countries in the Europe region.

The Danish economy performs remarkably well in terms of regulatory efficiency, while open-market policies sustain flexibility, competitiveness and large flows of trade and investment. The transparent and efficient regulatory and legal environment encourages robust entrepreneurial activity. Banking regulations are sensible and lending practices have been relatively prudent. Inflationary pressures are under control. The judicial system provides strong protection for property rights and anti-corruption measures are firmly institutionalised.

Protections for property rights are enforced strongly, with an independent and fair judicial system institutionalised throughout the economy The European sovereign debt turmoil entails elevated risks for Denmark, particularly with regard to the soundness of the financial sector and long-term fiscal sustainability. Banking has been under increasing strain and public spending continues to be over half the size of the economy.

The overall tax regime needed to finance the large scope of government remains burdensome and complex, although institutional assets such as

high degrees of business efficiency and regulatory flexibility have counterbalanced some of the shortcomings of heavy social spending.

Protections for property rights are enforced strongly, with an independent and fair judicial system institutionalised throughout the economy.

Commercial and bankruptcy laws are applied consistently. Intellectual property rights are respected and enforcement is consistent with world standards. Effective anti-corruption measures discourage bribery of public officials and uphold the integrity of government.

The top income tax rate is 56% and the top corporate tax rate is 25%.

Other taxes include a value-added tax (VAT) and intrusive measures such as the world’s first tax on fatty foods. The overall tax burden equates to almost 50% of total domestic income. Government spending continues to be more than 55% of GDP. The government has attempted fiscal stimulus, running a small deficit, and public debt is just under 50% of GDP. The regulatory environment remains among the most efficient in the world. Minimum capital requirements for limited-liability companies have been reduced, and starting a business takes fewer procedures than the world averages. Relatively flexible hiring and dismissal regulations sustain an efficient labour market. Monetary stability remains well-established, and the government took small steps in 2012 to cut back on welfare state benefits and costs. ■ Sources: Bloomberg Businessweek, OECD, Index Mundi, Heritage.org

Danfoss d.o.o. Đorđa Stanojevića 14, 11070 Novi Beograd Tel: +381 11 209 8550; Fax: +381 11 209 8551 www.danfoss.rs

Danfoss puni 80 godina postojanja! denmark | World Markets and Opportunities

culture of denmark

Hamlet in the Land of Design Danish architecture has a long and fine history, with Danish design behind worldfamous buildings found right around the globe.

Modern design is part of the Danes’ national identity and daily life, with the country now a world leader in fashion and product design, complementing its ongoing influence in the worlds of film and literature

T

here are only 5.6 million Danish speakers in the world, yet Denmark has a rich literary heritage with prominent authors such as Hans Christian Andersen, Søren Kierkegaard, Karen Blixen (a.k.a.

Isak Dinesen). Today, Denmark is also a European centre of design and fashion.

Architecture Danish architecture has a long and fine history, with world famous buildings that can be found right around the globe, from the iconic Jørn Utzondesigned Sydney Opera House to Bjarke Ingels’ 8 House in Copenhagen, which was awarded Housing Building of the Year at the 2011 World Architecture Festival. During the 1990s, Danish architecture focused increasingly on neo-modernism and sustainability, a good example of which is Terminal 3 at Copenhagen Airport. Today, Danish architecture still values these beliefs. Up to half of Danish buildings’ energy consumption is ‘locked’ into their design according to collaborative

research between architects and engineers. The geometric shape of a building and its exposure to daylight are key parameters in reducing energy use.

Design

'Spanish Chair' by Børge Mogensen

Modern design is part of the Danes’ national identity and daily life. Many Danish products have become archetypes or icons of 20th-century design. Industrial design, furniture and aesthetic objects have always been among Denmark’s biggest exports. Famous Danish designers include Børge Mogensen, Finn Juhl, Hans Wegner, Arne Jacobsen, Poul Kjærholm, Poul Henningsen and Verner Panton, all of whom are known around the world for their design classics. Finn Juhl is

World Markets and Opportunities | denmark

regarded as the ‘father of Danish design’, finding international fame after designing the Trusteeship Council in the UN building.

Fashion The Danish fashion industry is booming like never before.

Successful designers, international fashion fairs and two annual fashion weeks have put Copenhagen and Denmark on the fashion map of Europe. Some even speak of Copenhagen as the fifth European fashion enclave. The Copenhagen Fashion Festival occurs biannually, offering the chance to see new collections from the country’s most talented designers. You’ll find Danish labels on high streets all over the world, many

Copenhagen Fashion Week 2013

of which belong to the Danish Fashion Institute (DAFI), a network organisation established by the Danish fashion industry in 2005. With more than 100 member companies, DAFI’s purpose is to facilitate initiatives beneficial to the Danish fashion industry that the companies are unable to implement alone. In 2008, DAFI helped to create a pan-Nordic fashion network, the Nordic Fashion Association, in collaboration with its sister-organisations in Sweden, Norway, Finland and Iceland. The Nordic Fashion Association runs the sustainability project NICE (Nordic Initiative, Clean and Ethical), which supports and motivates fashion companies to integrate environmentally sustainable and socially responsible practices into their design and business models. In December 2009, DAFI and the Nordic Fashion Association contributed to the United Nations Framework Convention on Climate Change (COP15). Gathering 650 fashion industry professionals, experts and NGOs from around the

world, the conference promoted the visions and highlighted the challenges of a sustainable fashion industry.

Film Danish cinema is experiencing a boom period of national progress and international rec-

‘Dancer In The Dark’ by Lars von Trier

ognition. This success originated in the 1970s on the back of intensified public efforts to support the industry, resulting in the 1972 Film Act and the establishment of the Danish Film Institute. Gabriel Axel’s film based on the Karen Blixen story ‘Babette’s Feast’ was awarded an Oscar in 1987. In 1988, Bille August also received the Best Foreign Language Film Oscar for ‘Pelle The Conqueror’, based on the novel

by Martin Andersen Nexø. In 1992, August went on to win the Palme d’Or at Cannes with the Ingmar Bergman biography ‘The Best Intentions’.

The most internationally renowned movement in Danish cinema, Dogme 95, was founded

in the 1990s by a group of directors including Lars von Trier, Thomas Vinterberg, Søren KraghJacobsen and Lone Scherfig, and contributed to the success of Danish film abroad. Vinterberg gained worldwide popularity with movies such as ‘The Celebration’ (a.k.a. ‘Festen’) (1998), ‘The Third Lie’ (2000), ‘It’s All About Love’ (2003), ‘When A Man Comes Home’ (2007), ‘Submarino’ (2010) and ‘The Hunt’ (2012).

It is Lars von Trier, however, who is the most prominent figure in Danish film. His first publicly released film was an experimental short called ‘The Orchid Gardener’ (1977) and his first feature film followed seven years later, ‘The Element Of Crime’ (1984). The many prizes, awards and nominations he has won include the Palme d’Or in 2000 for ‘Dancer In The Dark’, the Cannes Grand Prix for 1996’s ‘Breaking The Waves’ and the Prix du Jury for ‘Europa’ in 1991.

Literature The first known Danish literature consists of verses in a runic alphabet about kings and warriors, written on stone between the years 200 and 1100 AD. Following the introduction of Christianity to Denmark, the predominant language became Latin, and sometime around the year 1200, Denmark got its first major literary work, ‘Gesta

Danorum’ (The Deeds of the Danes) by Saxo Grammaticus.

The book was about the first Danish kings and also contained the story of Prince Amletus, better known as Hamlet, who later served as the model for Shakespeare’s famous play.

Hans Christian Andersen (1805-1875), whose stories had attracted much international attention by the 1840s, wrote a great variety of literature. But today he is known primarily for world-famous fairy tales such as ‘The Emperor’s New Clothes’, ‘The Ugly Duckling’ and ‘The Little Match Girl’.

Søren Kierkegaard

Denmark’s second great writer, and a contemporary of Andersen’s, was Søren Kierkegaard (1813-1855), who today is considered one of the 19th century’s greatest philosophers. Among his masterpieces are ‘Either/Or’, ‘Fear And Trembling’ and ‘The Concept Of Anxiety’. Kierkegaard is widely recognised as the father of the philosophical theory of existentialism, which the French writers Jean-Paul Sartre and Albert Ca-

mus in particular made famous after World War II. Music Denmark’s most famous composer is Carl Nielsen, who is best known outside Denmark for his six symphonies, but whose melodies for popular songs are cherished among Danes. The Royal Danish Ballet, meanwhile, specialises in the work of choreographer August Bournonville (1805–79), while Hans Abrahamsen, Per Nørgård and Poul Ruders are successful composers of contemporary classical music.

Danish interest in classical music is exemplified by the prestigious Copenhagen Opera House.

Strategically set on the city’s waterfront, it has presented operas and musicals to full houses since its opening in 2005.

Danes have also distinguished themselves in other forms of music, with world famous jazz musicians such as Svend Asmussen, Niels-Henning Ørsted Pedersen, Niels Lan Doky and Marilyn Mazur. The Copenhagen Jazz Festival has acquired an international reputation. Every summer since 1979, the festival has taken over Copenhagen, making the city home to one of Europe’s most important and high-quality international music events, which focuses on new departures in both Danish and international jazz. ■

denmark | World Markets and Opportunities