MONTENEGRO
Dirk Niebel German Minister of Economic Cooperation and Development ■ Vladimir Kavarić Montenegrin Economy Minister ■ Branimir Gvozdenović Montenegrin Tourism and Sustainable Development Minister ■ H.E. Mr. Pius Fischer Ambassador of Germany to Montenegro ■ Velimir Mijušković President of the Montenegrin Chamber of Commerce ■ Duško Knežević President of Atlas Group ■ Rüdiger Schulz CEO of crnogorski Telekom and President of Montenegrin Foreign Investors Council (MFIC) ■ Michael Schmidt Director of the Delegation of the German Economy in Serbia
German & Montenegrin Economic Cooperation
Challenging Business Opportunity FDI Foreign Direct Investment
www.cordmagazine.com
August 2013
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Germany and montenegro: Challenging Business Opportunity
Germany and montenegro: Challenging Business Opportunity
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contents 8
omment: Great C Potential for Medium-Sized Businesses
Dynamic
Emil Frey Group to become General Distributor for Daimler in Serbia and Montenegro
Jovana Gligorijević, Editor
Michael Schmidt, Director of the Delegation of the German Economy in Serbi
German & Montenegrin Economic Cooperation
Challenging Business Opportunity 2013
EDITOR Jovana Gligorijević, j.gligorijevic@aim.rs dESIGN Branislav Ninković
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ruitful F Development Cooperation
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reat G Challenges Lie Ahead of Us
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Branimir Gvozdenović, Montenegrin Tourism and Sustainable Development Minister
Dirk Niebel, German Minister of Economic Cooperation and Development
conomic E Advantages of a Small Country
Duško Knežević, President of Atlas Group
PHOTOS Zoran Petrović TRANSLATORS Snežana Bjelotomić lecture Christen Bradley Farmer, c.farmer@aim.rs PROJECT MANAGERS Biljana Dević, b.devic@aim.rs Svetlana Okanović, s.okanovic@aim.rs Sandra Bandović, s.bandovic@aim.rs Irena Lalić, i.lalic@asim.rs EXECUTIVE DIRECTOR Ruža Ristanović, r.ristanovic@aim.rs GENERAL MANAGER Ivan Novčić, i.novcic@cma.rs
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ynamicProgress D Towards the EU
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esponsible R Investment
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Rüdiger Schulz, CEO of crnogorski Telekom and President of Montenegrin Foreign Investors Council (MFIC)
Vladimir Kavarić, Montenegrin Economy Minister
artners P Worthy of Attention
Velimir Mijušković, President of the Montenegrin Chamber of Commerce 40
Great Potential Economic Cooperation between Montenegro and Germany
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H.E. Mr. Pius Fischer, Ambassador of Germany to Montenegro 21
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onstructive C and Supportive
aimler to D restructure business in Serbia and Montenegro
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Bilateral economic cooperation, By Milan Vuckovic
reating the C Future
Snežana Ivanović, CEO of Siemens Montenegro
ontenegro: M Small but
onstantly C Advancing Cooperation
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Where God Showers Gifts Tourism in Montenegro
FINANCIAL DIRECTOR Ana Besedić, a.besedic@aim.rs EDITORIAL MANAGER Tanja Banković, t.bankovic@aim.rs office manager Nataša Nešić, n.nesic@aim.rs PRINTING Rotografika d.o.o. Segedinski put 72, Subotica German & Montenegrin Economic Cooperation Challenging Business Opportunity published by: alliance international media
Makenzijeva 67, 11000 Belgrade, Serbia Phone: +(381 11) 2450 508 Fascimile: +(381 11) 2450 122 E-mail: office@aim.rs www.allianceinternationalmedia.com ISSN no: 1451-7833 All rights reserved alliance international media 2013
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Montenegro was ruled by its Bishops until 1696, and then by the House of Petrović-Njegoť until 1918. From 1918, it was a part of Yugoslavia. On the basis of an independence referendum held on 21 May 2006, Montenegro declared independence on 3 June of that year.
Montenegro has privatized its large aluminum complex - the dominant industry - as well as most of its financial sector, and has begun to attract foreign direct investment in the tourism sector
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Germany and montenegro: Challenging Business Opportunity
The Constitution of Montenegro describes the state as a "civic, democratic, ecological state of social justice, based on the reign of Law." Montenegro is an independent and sovereign republic that proclaimed its new constitution on 22 October 2007.
The Montenegrin Adriatic coast is 295 km long, with 72 km of beaches, and with many well-preserved ancient old towns. National Geographic Traveler (edited once in decade) features Montenegro among the "50 Places of a Lifetime"
The European Council (EC) granted candidate country status to Montenegro at the December 2010 session. Montenegro began negotiations to join the EC in June, 2012.
Brandy “Loza� is the best ambassador of Montenegrin vineyards. Strenght of this brandy is 50 degrees. It is best to drink with prshuta, smoked meat and cheeseOnly 6000 up to 8000 liters per year are produced!
The first literary works written in the region are ten centuries old, and the first Montenegrin book was printed five hundred years ago. The first state-owned printing press was located in Cetinje in 1494, where the first South Slavic book, Oktoih, was printed the same year Germany and montenegro: Challenging Business Opportunity
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comment
Great Potential for
Medium-Sized Businesses The Montenegrin market could be especially interesting for German medium-sized companies. The first German-Montenegrin Business Forum, which took place last year, clearly set the most important directions of the economic cooperation: energy, transport and utility infrastructure and services.
Jovana Gligorijević Editor
T
hanks to its economic might and development,
public enterprises Vodovod and Kanalizacija that operate
Germany was in a position to help all of Europe and
under Vodakom.
“extinguish hotspots” in economies engulfed by the
This overview of the most important German invest-
global economic downturn. Therefore, it was only natural
ments clearly shows a good incentive for further economic
for Germany to become the main partner and anchor for
cooperation which ought to develop in four segments – ener-
all EU-hopefuls – the countries that are waiting to become
gy and energy efficiency, infrastructural development, tour-
members. If we look at the former Yugoslav republics,
ism and finance. The Montenegrin market could be especial-
which are anticipating becoming EU members, Montenegro
ly interesting for German medium-sized companies following
is definitely the closest to that goal. If we consider the posi-
the accession negotiations with the EU which could provide
tions of both countries, Germany is not unexpectedly an im-
fresh incentives for reform. The first German-Montenegrin
portant partner to Montenegro, particularly in bilateral co-
Business Forum, which took place last year, clearly set the
operation and assistance. In the period between 2000 and
most important directions of the economic cooperation: en-
2009, the German development aid, allocated for the im-
ergy, transport and utility infrastructure and services. The
plementation of structural reforms, reconstruction of infra-
German Chamber of Foreign Trade has announced that it
structure, economic development (primarily of SMEs) and
would assist Montenegrin companies in breaking into the
tourism, amounted to €250 million, making Germany the
German market via the Chamber's regional structures.
third biggest bilateral donor to Montenegro. In terms of the economic cooperation, both countries have the good will to develop it, but this potential is still not being fully utilized. In the past ten years, German investors invested a total of €179.2 million in Montenegro. The most im-
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In terms of the economic cooperation, both countries have the good will to develop it, but this potential is still not being fully utilized
portant German investment was Deutsche Telekom’s ac-
We should also mention the clear determination of the
quiring Telekom Montenegro via the Hungarian compa-
Montenegrin authorities to join the European Union. These
ny Matáv. The global electronics leader Siemens AG has
efforts haven't gone unnoticed, and this has been validat-
opened a branch in Montenegro, thus increasing its mar-
ed in the European Commission's report on Montenegro's
ket share in Montenegro. Another German company,
readiness to join the EU. The report states that the coun-
WTE from Essen and Budva municipality concluded the
try's continuous progress in implementing reforms in key
Agreement on the construction of a waste water treat-
areas qualify Montenegro for negotiations. The roles of the
ment facility on the Budva Riviera worth €58 million in
national parliament and judiciary have been increased while
2009. This will be the biggest environmental project ev-
policies on anti-corruption, human rights and the protection
er implemented on the Montenegrin coast. Also, Sachsen
of national minorities have been reinforced. The authorities
Wasser GmbH has been officially operating in Tivat since
have continued with the constitutional and public adminis-
September 2009 after having being chosen through a ten-
tration reforms, so, now Montenegro plays a constructive
der to develop the capacities of Vodakom and the local
role in the region, as it fulfils its international obligations. ■
Germany and montenegro: Challenging Business Opportunity
auction see auction south east europe Belgrade Office
Makenzijeva 67, 11000 Belgrade, Serbia Tel: +381 11 2450 508; Fax: +381 11 2450 122 office@auction-see.com
Podgorica Office
Bul. Sv. Petra Cetinjskog 1A, 81000 Podgorica Tel. +382 20 246 166; Fax. +382 20 246 167 Mobile: +382-69-246-999 office@auction-see.com
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Germany and montenegro: Challenging Business Opportunity
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interview
Dirk Niebel, German Minister of Economic Cooperation and Development
Fruitful Development Cooperation The ties between Montenegro and Germany are reflected in many different areas, this includes very fruitful development cooperation
exclusive
D
uring the fourteen years that Germany and Montenegro have been working together on development issues many joint successes have been achieved, and the portfolio of ongoing projects continues to be impressive. Germany is still Montenegro's second biggest donor, coming after the EU but before the US and Turkey. ■ Mr. Niebel, you will be coming on an official visit to Montenegro in August. What are the priorities of your visit's agenda? - The agenda for my visit to Montenegro is, on the one hand, to find out how the current projects are progressing, and, on the other, I am also keen to learn more about the progress that has been made with regard to the process of moving closer to the EU.
obviously paid off that we Germans led the way in 1999 – immediately after Yugoslavia broke apart – and got involved in building up the country, particularly its infrastructure. Just think, for example, of how the water supply and sanitation system has been rebuilt all along the Adriatic coast or how the hydropower stations at Piva and Perucia have been restored to working order. Together these two plants provide for about three quarters of Montenegro's energy needs. However, successful cooperation always needs a reliable and
Until about 2016 we will continue to be actively engaged in projects in Montenegro. Our ongoing and planned projects add up to a total of over €300 million
■ In the last ten years, Germany has invested over €250 million in Montenegro through various channels. Are you satisfied with the efficiency of these investments? - For our side – by which I mean, development cooperation – I can answer that question with a clear “yes”. I think that it has
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committed partner – and Montenegro has shown itself to be a fitting partner right from the start. It also helped that both Montenegro's politics and its economy are clearly pro-European – that has made a lot of things easier. I think that, through our cooperation, we have been able to make a not insignificant contribution towards stabilising both Montenegro and the region as a whole. That in turn has been the basis
Germany and montenegro: Challenging Business Opportunity
Partners
EU
Environment
Successful cooperation always needs a reliable and committed partner – and Montenegro has shown itself to be a fitting partner right from the start
Through our early involvement in Montenegro right from the start, we have shown that we want Montenegro to be part of the European family
The more stable the overall environment is, the more attractive the location becomes for foreign companies – including German ones
for Montenegro's success in moving closer to the EU. And Germany has also benefited from this cooperation – it has opened and is still opening doors for many German businesses. And although Montenegro still has a good way to go, I think the country can be very proud of what has been achieved so far! ■ Following Croatia joining the EU, Montenegro is now the number one candidate among West Balkan countries in terms of opening of the accession negotiations. From your perspective, what are the priorities that Montenegro needs to adhere to in order to expedite its accession to the EU? - Here we are talking about precisely that part of the journey which still lies ahead for Montenegro: It is not just by chance that the priorities of the accession negotiations are basic rights and justice, and fighting organised crime and corruption. In our view Montenegro's flanks are still open in that regard and there is still a great deal of work to be done. However, if Montenegro is serious about wanting to become a member of the EU, then it will have to meet EU-defined standards with regard to the rule of law, establish stable democratic and free-market structures, observe wide-ranging human rights and minority rights, and bring its legislation and government administration into line with EU standards. I see huge challenges still ahead that Montenegro needs to be aware of. Nevertheless, we will do everything we can to help Montenegro realise its ambitions to become an EU member and I am convinced that Montenegro will address these problems with the same determination that we have come to know from our past years of cooperation.
ue to be actively engaged in projects in Montenegro. Our ongoing and planned projects add up to a total of over €300 million. And it will still be possible for us to offer Montenegro support beyond 2016, on a case-by-case basis, within the framework of regional programmes. We have already done that in the case of regional projects in the field of energy efficiency and water supply. We are not planning to just drop everything, we will continue to be present in Montenegro.
Thanks to its location on the Adriatic and its largely unspoilt countryside, Montenegro therefore has excellent potential for developing tourism as the mainstay of its economy. I could imagine that, sooner or later, many more German tourists will discover your beautiful country for themselves
■ In the last two years, Germany and Montenegro have noticeably increased their contacts. What have been the results of the contacts between the two countries so far? - One result, if you take me personally, is that, although this is admittedly my first time in Montenegro, I am on my third visit to this region since taking office as development minister. The whole south-eastern region of Europe is very important to us. We are convinced that we must do everything we can to promote the integration of this region – so that, in the best case scenario, instead of just being next to one another, the individual countries will start working with one another. That is the best strategy for reconciliation and lasting peace – and I am sure that the countries of south-eastern Europe share that same interest. For Montenegro in particular, we want, for the future, to stop being development cooperation partners. That is not meant in a negative way, quite the opposite! Montenegro has made good progress, so that we have decided to withdraw to an extensive degree, but not yet completely. Until about 2016 we will contin-
■ How has Germany helped, and will help, Montenegro on its way to the EU membership? - I think that, through our early involvement in Montenegro right from the start, we have shown that we want Montenegro to be part of the European family. That has been a reciprocal process: Montenegro also indicated its intentions early on, embarking on a course that led towards the EU – and we have supported that course, not only politically. Our cooperation has helped to stabilise Montenegro and advance the country's development. The goal is now within reach: a good year ago the European Union began accession negotiations with Montenegro. However, our basic way of doing things is also that we do not break off projects in the middle – all our committed projects will be carried out properly right to the end as agreed. That is another aspect of a partnership based on trust, such as we have with Montenegro.
Germany and montenegro: Challenging Business Opportunity
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■ Which economy segments have the biggest potential for more trading between the two countries? - You don't need to be an economist or an analyst, all you need is two good eyes to see what potential and what riches your country has to offer. Some of the region’s finest sandy beaches are in Montenegro, with the bathing season lasting from May to November and with spectacular nature parks offering diverse opportunities for sports and nature tourism. Thanks to its location on the Adriatic and its largely unspoilt countryside, Montenegro therefore has excellent potential for developing tourism as the mainstay of its economy. I could imagine that, sooner or later, many more German tourists will discover your beautiful country for themselves. However, I do see areas where some catching-up is needed: if this potential is to be fully harnessed, further improvements will need to be made in the infrastructure, especially in coastal areas, to bring it up to international standards. An uninterrupted electricity supply and modern water and sanitation systems are certainly a must. It is also true for other areas of the economy that, the more stable the overall environment is, the more attractive the location becomes for foreign companies – including German ones!
my Ministry supports. They are all multipliers and will gradually help enhance the links between our two countries so that, in addition to the political relationships, economic and also personal relationships are built up. I also know that Montenegrins are very interested in Germany, both the country and its people. I would be pleased and supportive if, in return, the people in Germany were to develop an even greater interest in Montenegro. ■ Montenegro is certainly one of the most attractive tourist destinations in the region, with a huge untapped tourist potential. To what extent is Germany going to support this important economic segment in Montenegro? - Within the framework of our cooperation we have already made a start in many areas – for example, our experts have provided tailored advice to support the development of “hike and bike” tourist activities in the mountains. We were also involved in the further development of the government's tourism master plan, which is a kind of blueprint for the whole tourism industry. During my visit I will also be going to Lake Skadar. Here we have begun a transboundary project to protect the biodiversity of a unique natural landscape on the border between the two neighbouring countries. This project is not only creating jobs – it is also developing the hinterland for tourism, far away from the areas typically visited by people interested in beach and bathing holidays. With regard to the coastal region, I would like to repeat that, without improvements in the infrastructure, it will be hard to attract more tourists.
I would like to repeat that, without improvements in the infrastructure, it will be hard to attract more tourists
■ Several dozen German companies have been operating in Montenegro with Montenegro expecting FDIs to be made in the production sector. Do you think that that is a realistic expectation considering the Montenegrin economic potential that is on offer to direct investors, and do you think that Montenegro is ‘visible’ enough to the German economy and German businesses? - I am pleased to have a group of business people with me as part of the delegation on my visit. You can believe me when I say that my fellow travelers have a genuine interest in Montenegro. However, your question does of course touch on an aspect that we do need to address: we need to make Montenegro and the region as a whole with all its possibilities more well known. Montenegro is an interesting location for international businesses by reason of its position on some important transit routes. The representatives of companies and business associations accompanying me on my visit will certainly use this opportunity to make valuable contacts and to network. I will also be meeting with the young graduates from the Scholarship Programme of German Industry, which
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■ During your earlier visits to the West Balkans, you have underlined regional stability on many occasions as being important for economic growth in this region. What is your view of today’s business climate for investors willing to invest in Montenegro and the region? - I think that Montenegro – like its neighbours – is a very suitable location for major trading chains or suppliers of car parts, for example. The economic environment and the geographic location are good. Montenegro is one of the countries in the region that is on the right track. Particularly when it comes to stability, the country has made great progress. That is also reflected in the World Bank's Doing Business Report: here Montenegro has
Germany and montenegro: Challenging Business Opportunity
moved up 6 places compared with the previous year from 57th to 51st place out of a total of 185 countries. ■ Which economic segments do you think have a potential for cooperation between the West Balkan countries on projects that could involve German investors too? - All in all – as we have talked about already – tourism is a sector with great potential. Sustainable, gentle tourism in particular is an area that is gaining in popularity, in Germany and elsewhere. I see good opportunities here for cooperation, including cooperation with German businesses and investors. I could imagine that the tourist sector can offer opportunities – particularly in Montenegro – to spur urgently needed structural
Montenegro is an interesting location for international businesses by reason of its position on some important transit routes. The representatives of companies and business associations accompanying me on my visit will certainly use this opportunity to make valuable contacts and to network.
change. Montenegro is not the only country facing such challenges. Many parts of Germany have either already made the difficult and painful journey away from heavy industry towards a more service-based economy, or they are in the middle of this transition. Sharing and exchanging experience in this area could certainly prove fruitful. All in all, I am convinced that it will be small and medium-sized enterprises in particular that have the greatest influence on the job situation and on further economic development both in Montenegro and throughout the whole region. I think Montenegro would be well advised to continue on this path. I am eager to see what other impressions I will have to take home with me from my visit to Montenegro. ■
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interview
Vladimir Kavarić, Montenegrin Economy Minister
Dynamic Progress Towards the EU
Foto DARKO JOVANOVIC
The global crisis has disrupted Montenegro's economic progress. However, the Montenegrin government has recognized the protection of investments and the development of a competitive business environment as strategic priorities.
R
elations between the Federal Republic of Germany and Montenegro are mainly characterized by German support for economic reforms in the framework of the European and Euro-Atlantic integrations of Montenegro. German development aid has been used towards the implementation of structural reforms, rehabilitation and advancement of financial sector, construction of infrastructure, and the development of the economy (SMEs) and tourism. Germany is the fourth largest bilateral donor in Montenegro. “The financial assistance for Montenegro is mainly realized via the Ger-
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for the project. The German Reconstruction and Development Bank (KfW) has been operating in Montenegro since 2001 and has been a partner to the Montenegrin government in funding and implementing a number of projects, particularly in utility infrastructure, energy and banking sectors.” man International Cooperation Society (GIZ) and German development bank KfW,” says Montenegrin Economy Minister Vladimir Kavarić, and adds: “Through the GIZ, the German government has launched a project called Advisory Services to Energy Efficiency (ASE). In the meantime, the German Federal Ministry for Economic Cooperation and Development has provided additional funding
Each step closer to the EU translates into improving living standards and living conditions in our country, as well as creating more stable conditions for further development
Germany and montenegro: Challenging Business Opportunity
■ In which economic sectors do these two countries share common interests? How can you further bolster the economic cooperation with Germany? - With support from the GIZ, the Embassy of the Federal Republic of Germany in Montenegro and the Delegation of German Economy in Montenegro and Serbia (AHK), the Montenegrin Chamber of Commerce and the German Committee on Eastern European Economic Relations (OA) held a Montenegrin-German Business Forum in Budva in May 2012. Over 200 business people from both countries participated in the Forum.
development
investors
NATO
In the last few years, Montenegro has been focusing on having an open market and fostering the private sector as the driving force behind economic growth and development
We expect investors to provide their support in sustainable utilization of our coal reserves and hydro-potential, particularly in new clean energy resources.
Considering the collective security concept in NATO, Montenegro would become a safer and more secure place for foreign investments.
The main conclusion of this event was that energy, energy efficiency, utility infrastructure and tourism were the priority segments in the economic cooperation between the two countries. ■ Regarding foreign investments, are you happy with what Montenegro has been offering to investors in terms of quality of the business environment, that is to say, reducing the red tape, corruption and increasing predictability for doing business? - In the last few years, Montenegro has been focusing on having an open market and fostering the private sector as the driving force behind economic growth and development. The measures that we have been implementing are geared toward reducing tax rates and customs duties, proportional taxation, the free flow of goods and capital (there are no restrictions on capital transactions), and the free repatriation of profit. We also have the euro as the national currency, and foreigners are given the same treatment as nationals. Considering that we are a small and open economy, we are very susceptible to global economic changes. As a result, the global crisis has disrupted Montenegro's economic progress, and reduced the overall foreign aggregate demand in the country. Consequently, all the deficiencies of our economic system have been revealed. In order to overcome these shortcomings, the Montenegrin government has recognized the protection of investments and the development of a competitive business environment as strategic priorities. Bolstering
business environment has been widely recognized as an effective tool for further improvement of free market institution. ■ Montenegro is on its way to becoming an EU member. In that context, what are the priorities of the Montenegrin
tiveness, we need to continue developing our business environment and implement structural and regulatory reforms. An advanced and stable business environment is the key priority and the key prerequisite for economic growth. Apart from implementing structural reform policies and improving our investment and business environment, we have been continuously working on development programmes too. These programmes are devised for SMEs, for attracting fresh capital and creating conditions for realization of new investments. Our aim is to use all economic resources efficiently and increase the competitiveness of our economy. ■ Out of all foreign investments made in Montenegro, how many of them are German and which
Considering that we are a small and open economy, we are very susceptible to global economic changes. As a result, the global crisis has disrupted Montenegro's economic progress, and reduced the overall foreign aggregate demand in the country government when it comes to investors, and how advantageous is to invest in Montenegro compared to other regional countries? - Montenegro has been progressing dynamically toward EU membership. Each step closer to the EU translates into improving living standards and living conditions in our country, as well as creating more stable conditions for further development. At the same time, this progress will result in higher employment and improving other aspects that are crucial for bettering the lives of our population. In order to improve our long-term competi-
economic segments have received German investments? - In 2012, direct investments from the Federal Republic of Germany amounted to €14.6 million, while, in 2011, they stood at €8.1 million. The most important German investment in Montenegro is Deutsche Telekom acquiring Montenegro Telekom via Hungarian Matáv. The global electronics conglomerate Siemens AG has opened a branch in Montenegro. Another German company WTE Wassertechnik from Essen and the Budva municipality have concluded an Agreement on Construction of a Waste Water Treatment Fa-
Germany and montenegro: Challenging Business Opportunity
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cility on the Budva Riviera worth €58 million. Also, Sachsen Wasser GmbH has been officially operating in Tivat as a consultant in developing capacities of Vodakom and local public enterprises. ■ The Montenegrin government has been doing a lot on advancing the energy sector. What has been done so far and what are the future plans in this respect? - In terms of the energy sector, Montenegro is known for its positive reforms, advancing business environment and investments. Our legislative framework, namely our energy and energy efficiency legislation, as well as our regulatory framework, predictability and reliability of the entire business environment, are the main strategic directions of our energy sector. I would like to remind you that Montenegro is a member of the Energy Community and therefore shares the same goals with the Energy Community, namely increasing the safety of energy supplies, attracting investments in construction of new energy production and transmission facilities, better utilization of renewable energy resources, advancing energy efficiency, bolstering market competition and improving environmental situation. Considering that EU regulation provides a legal framework for the Energy Community Treaty, Montenegro, as a member of the Energy Community, must harmonize its legislation with EU energy and environmental protection directives. The implementation of obligations stemming from the Energy Community Treaty is hugely important not only for the success of our energy reforms, but also for the overall European integration process and economic development of our country. In line with our commitments, Montenegro has been implementing energy sector reforms in legislative and regulatory aspects, in addition to institutional and organizational aspects.
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■ How large is the investment capacity of these projects, and where do you expect foreign investors to step in? - The investment capacity of these energy projects has been estimated
Considering that EU regulation provides a legal framework for the Energy Community Treaty, Montenegro, as a member of the Energy Community, must harmonize its legislation with EU energy and environmental protection directives at close to €2 billion, not counting oil and gas whose financial ‘weight’ will be known once we launch an oil and gas research tender, now in its final stage. We have already been notified of the interest shown by globally renowned energy companies. We have 20 companies expressing their interest (for participating in the tender) with five of these companies being among the top ten global energy companies. We expect investors to provide their support in the sustainable utilization of our coal reserves and hydro-potential, particularly in new clean energy resources. Through joint efforts, we will create a valuable export product and, apart from creating overall energy supply stability in the country thanks to a transmission infrastructure which we have been implementing together with Italy, we shall have a valuable valorisation on the European market.
Germany and montenegro: Challenging Business Opportunity
■ How much does the progress in the Euro-Atlantic integration process affect international economic cooperation, particularly in view of investments? - If Montenegro were a NATO member, this would just validate its reputation as a stable and safe (risk-free) investment destination which, in turn, would bring the country many economic benefits that would contribute to increasing and sustaining its dynamic economic development. The countries that have joined NATO have recorded higher investments due to heightened interest by investors for investing in progressive and politically stable economies. All NATO members belong to a group of the most prosperous countries in the last 60 years. The experiences of these countries show that, considering the collective security concept in NATO, Montenegro would become a safer and more secure place for foreign investments. Also, we should mention the long-term economic benefits that would lead to a higher credit rating, investment stability, higher aggregate demand, higher GDP and general development of Montenegrin economy. ■ Unbalanced regional development is certainly one of the weak spots of Montenegrin economy. Do you have strategies and plans for improving the current situation? - Yes, we do have strategies and plans whose goal is to reduce regional development differences. Essentially, there is the Regional Development Strategy for Montenegro 2010-2014 and an action plan for the Strategy’s implementation, apart from strategic plans at the local level. Spatial plans are also very important for achieving more balanced regional development, as are national sector strategies, especially those that apply to development of SMEs, energy (the
energy strategy covering the period until 2030 is currently being drafted), agriculture and tourism. The government has also started to work on drafting the 2014-2020 Regional Development Strategy. ■ As the Montenegrin Economy Minister, are you satisfied with the amount of foreign investments made in Montenegro? - In 2012, the net FDI influx in Montenegro was €461.6 million which is 18.6% growth compared to 2011. The gross FDI influx was €633.7 million, a 28% hike compared to 2011. The higher FDI influx is a result of higher investments in companies and banks (34.9%), in real estate (22.7%) and of settling of intercompany debts (22.5%). Immediately after declaring its independence, Montenegro was the number one country in terms of FDI influx in the region. Of course, recent global events have negatively affected FDI flows, but the implementation of strategic projects like building a motorway and the second unit in the Pljevlja thermal power plant will certainly substantially contribute to a higher FDI in Montenegro even during this time of cautious investing.
The efforts that the Montenegrin government has been investing in the last few years, especially since the onset of the global economic downturn, were geared toward helping the biggest Montenegrin exporter to recover ■ The biggest Montenegrin exporter – the Podgorica Aluminium Plant (KAP) – has been struggling for some time now. Is there an end to the troubles in the KAP, and what has the government been doing in this respect? - The efforts that the Montenegrin government has been investing in the last few years, especially since the onset of the global economic downturn which has been very hard on the aluminium industry, were geared toward helping the biggest Montenegrin exporter to recover. However, these efforts were not sufficient and, on top of all existing problems with the company’s management, especially when it comes to the problem with power supply and various political problems, we were unfortunately unable to reach a unified stand about the solution for the company’s problems. All of this has lead to KAP’s now being bankrupt and having to deal with the risks that come with bankruptcy. Unlike KAP, the Nikšić Ironworks (Željezara Nikišić) is a good example of a company that, although undergoing bankruptcy procedures, has managed to attract interest from a renowned investor. We think that this company now has a realistic chance of becoming successful. Although the situation in the Aluminium Plant is very different compared to other such companies, we still hope for a good outcome, namely for the bankruptcy to lead to the company’s recovery instead of extinction. ■ Germany and montenegro: Challenging Business Opportunity
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interview
H.E. Mr. Pius Fischer, Ambassador of Germany to Montenegro
Constructive and Supportive The rule of law is the single most important condition for German business to invest in Montenegro. It will contribute to more business activities of German companies in Montenegro, the potential of which is surely not sufficiently exploited today.
a democratically consolidated and economically healthy country.”
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he German government has long supported and continues to support the development of Montenegro in many senses. Germany has sponsored and funded many improvement projects, contributed know-how and expertise, and lends its help to bolstering public institutions and their proper administration. All in all, cooperation between the two countries – as described by H.E. Mr. Pius Fischer, Ambassador of Germany to Montenegro – has been characterized as excellent. In this ex-
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Germany is a key partner of Montenegro on its path towards the European Union. If necessary, we might be critical, but always in a constructive and supportive manner clusive interview, Mr. Fischer talks about some of the most prominent areas of this cooperation and points out some of the potential which lies ahead. “We might be critical,” the ambassador notes, “but always in a constructive and supportive manner. Germany wants to see Montenegro in the European Union – as
Germany and montenegro: Challenging Business Opportunity
■ The region of the Western Balkans underwent significant turbulence over the past 20 years, and we hope this will end with entrance of these countries in the EU. How do you see this process when it comes to Montenegro? - Montenegro stands out in the Western Balkans as a multi-ethnical and multi-religious country with considerably internal stability and good neighbourly relations with all of its five neighbours. It is leading by example and thus contributes significantly to regional stability. Measured by its per capita income it ranks third after Slovenia and Croatia amongst the successor republics of the former Yugoslavia. Following the reforms in 2011 and 2012, the EU has decided to open membership negotiations in June 2012. The chal-
Cooperation
Condition
Economy
Both our political dialogue and the practical cooperation between Germany and Montenegro are substantial
The rule of law is the single most important condition for German business to invest in Montenegro
Besides tourism, the energy sector is the most promising area for economic development in Montenegro
lenges now are to maintain the reform momentum and to strengthen the rule of law in Montenegro sustainably. This includes a drive to fight corruption and organized crime effectively. There is no doubt that the pace of Montenegro’s accession to the EU will first and foremost depend on the progress achieved in these crucial areas. ■ How would you rate the overall bilateral cooperation of the two countries? - Our bilateral relations are excellent and have gained momentum. Both our political dialogue and the practical cooperation between Germany and Montenegro are substantial. The increasing frequency of high ranking bilateral visits that have been recently taken place amply illustrates this fact. Both Deputy Prime Minister and Foreign Minister Luksic and Deputy Prime Minister and Minister of Justice Markovic have already visited Berlin this year, meeting with their respective counterparts and, inter alia, members of the German Bundestag. Now the German Minister for Economic Cooperation and Development, Dirk Niebel, is paying a visit to Montenegro, underlining our commitment to Montenegro. Germany is a key partner of Montenegro on its path towards the European Union. If necessary, we might be critical, but always in a constructive and supportive manner. Germany wants to see Montenegro in the European Union – as a democratically consolidated and economically healthy country. ■ What are the key sectors in which cooperation between Germany and Montenegro is dominant? - Development cooperation focuses on some of the key areas for the economic development of Montenegro:
energy, waste water management and tourism. The German Development Bank KfW, for example, finances the sewage systems around the Bay of Kotor and the construction of several waste water treatment plants between Herceg Novi and Ulcinj. In
ruption prevention and the reform of the penitentiary system, the German government will second a renowned judicial advisor to the Minstry of Justice in order to help comprehensively implement the judicial reform agenda in the years to come.
Following the opening of the membership negotiations in June 2012, too little progress has been made on the substance of chapters 23 and 24
■ How does this affect the business environment? - The rule of law is the single most important condition for German business to invest in Montenegro. It will contribute to more business activities of German companies in Montenegro, the potential of which is surely not sufficiently exploited today. At a German-Montenegrin Business forum organised in May last year, some 200 Germany companies have shown an increasing interest in Montenegro, provided that a favourable investment environment will take root here.
the energy sector, the German KfW provides low interest loans for the modernisation of Montenegro’s aging power plants and the transmission lines necessary for the interconnectivity of the power grid of Montenegro. KfW also facilitates the energy-efficient rehabilitation of some 30 schools in Montenegro, whereas the GIZ has contributed significantly to develop tourism in the Montenegrin hinterland (hiking and biking). In support of the EU accession process, Germany makes also substantial contributions to Montenegro’s efforts to strengthen the rule of law. In addition to two German-led EU Twinning projects in the area of cor-
■ Germany supports Montenegro also in respect to establishment of democratic, free and transparent market and economic structures. How do you rate the progress in this segment of cooperation? - Transparent procurement procedures and a reliable legal framework are important issues regularly
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country clearly has the potential of becoming a regional energy hub and even a net exporter of energy if it takes the necessary decisions. If Montenegro further exploits the potential for renewable energies, if it resolutely cuts energy subsidies for unprofitable companies and if it improves the connectivity of energy transmission networks within the region, the energy sector can be a true driver for economic development in Montenegro. The TransAdriatic pipeline (TAP) offers another perspective for Montenegro to serve as and profit from its position a potential transit country for energy.
raised by German companies. The tax climate is generally favourable to foreign investment in Montenegro, but retroactive taxation in the telecommunications sector has raised doubts in the past, to give you one example. Administrative procedures, for example for construction permits or public tenders, are sometimes not entirely transparent or too cumbersome, and can be further improved. All in all, I am confident because I see the commitment on the side of the Prime Minister and the government to improve the overall business environment, which is especially needed if Montenegro wants to attract more investors from the EU member states. ■ Like with its neighbours, the core of the accession negotiations of the EU and Montenegro are in chapters 23 and 24: the rule of law, judiciary sector, human rights and the fight against corruption and organized crime. What do you think of the progress in these sectors? - Following the opening of the membership negotiations in June 2012, too little progress has been made on the substance of chapters 23 and 24. This might be partially due to the fact that Montenegro was going through a double election year – with parliamentary elections in October and the presidentials in April. A period of political campaigning is rarely conducive to difficult political decisions. However, we are now encouraged by attempts to rectify certain deficiencies in the electoral process and investigate the “Snimak” affair. It still has to be seen what will happen with some court verdicts that have been quashed by the appeals court. These were verdicts which had been previously presented as successes in the fight against corruption and organized crime. I can see that Montenegro has now redoubled its efforts to make progress in the areas of chapters 23 and 24. An agreement on the constitutional reforms, needed to strengthen the independence of the judiciary, is within reach and would be a major step
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An agreement on the constitutional reforms, needed to strengthen the independence of the judiciary, is within reach and would be a major step ahead. ahead. Both the ruling parties and the opposition parties involved in finding a compromise here deserve our recognition. Furthermore the chief negotiator for EU accession has submitted substantial actions plans on chapters 23 and 24 with very concrete objectives and clear benchmarks. These steps lead the way in the right direction. ■ In May this year, a contract was signed concerning the loan between the German Bank for Development (KfW) and the Montenegrin Electric Transfer System (CGES) with a value of €25 million for the construction of a transmission line between Montenegro and Italy. How important is this project for the development of Montenegro and of the region? - Besides tourism, the energy sector is the most promising area for economic development in Montenegro. This
Germany and montenegro: Challenging Business Opportunity
■ The German government is supporting different projects of infrastructural and security importance in Montenegro, such as ammunition storage and the like. What are the criteria based on which the German government is making such donations? - When considering the funding of a concrete project, three conditions must be met. First, the project must serve the aims and objectives of German foreign policy, for instance those of the Stability Pact for South East Europe. Second, the project should yield a tangible result within a reasonable time span and, third, efficient and financially sound management by the Montenegrin partners is required. The rehabilitation of the ammunition storage in Brezovik, which you have just mentioned, fulfils all these requirements, and it is therefore a small but significant success story of our cooperation. ■ When it comes to cultural and educational exchange, what is the level of development? - In the field of education we particularly support the promotion of German language courses at higher secondary schools and the foreign language department of the University in Niksic. German is the mother tongue of approximately 100 million Europeans, it is without doubt one of the most important languages in the EU. ■
Corporate
Emil Frey Group to become General Distributor for Daimler in Serbia and Montenegro
Daimler to restructure business in Serbia and Montenegro Daimler AG and Emil Frey Group, one of Europe’s leading groups in the automotive business signed General Distributor Agreements for Serbia and Montenegro. These agreements will become effective upon approval of the restructuring of Daimler's operations in Serbia by the relevant authorities.
I
n Serbia, Daimler has been selling and servicing Mercedes-Benz passenger cars, vans, trucks and busses together with smart, Fuso and Setra since 1996. Serbia and Montenegro are the only markets in the region where wholesale functions for Daimler vehicles are handled by a Daimler subsidiary, however, the restructuring will have the Emil Frey Group step in and take over these functions. By winning Emil Frey Group as a partner in these markets Daimler consequently pursues its business strategy and successfully implements its anticipated set-up. At the signing ceremony Mr. Peter Alexander Trettin, President and CEO Daimler for Central and Eastern Europe, Africa and Asia, said: “Today marks the beginning of a new chapter for Mercedes-Benz business in Serbia and Montenegro: The Emil Frey Group as one of the leading groups in the automotive business in Europe will become a part of our distribution network. We are very glad that we could win such a professional and experienced partner to further advance our business in these markets. We elaborated this new setup very diligently,
Mr. Peter Alexander Trettin, President and CEO Daimler for Central and Eastern Europe, Africa and Asia (left), Mr. RolfJuergen Seyerle, CEO Mercedes-Benz Srbija i Crna Gora and Mr. Walter Frey, the President and Chairman of the Emil Frey Group
In order to ensure continuity of Daimler’s commitment to this market Mr. Rolf-Juergen Seyerle, current CEO, will remain in his position
striving to optimize the business structure on both wholesale and retail level. Our clear objectives thereby have always been: to anticipate and meet our customers’ needs to the maximum extent and to efficiently exploit available market potentials. We are convinced that the new setup with Emil Frey Group as a partner is a further step forward in the development of this market. Together, we will improve the leading position of our brands in Serbia and Montenegro.” According to Mr. Walter Frey, the President and Chairman of the Emil Frey Group: “Our company has recognized the potential of the automotive business in Serbia and Montenegro. Managing business for Daimler in these markets is a great opportunity for the Emil Frey Group and we are very proud to enter into a long-term partnership with Daimler. We will tap the full potential of the premium market to maintain the position of Mercedes-Benz as the brand of the first choice and to strengthen the sales and service activities in these countries in order to maximize the performance of Mercedes-Benz.” This restructuring will not affect business operations in the country, the most important automobile market in the region. The current distribution structures will remain as they are, so that continuity in contact
with all Mercedes-Benz clients will be ensured. The same applies for vehicle prices. The company will carry on training of its own staff as well as personnel of the authorized MercedesBenz dealer network using state-ofthe-art teaching tools, equipment and methodology in the most advanced training center in the region. As the General Distributor, the Emil Frey Group has a customer-oriented and market-driven approach and a first class customer and dealer care. In order to ensure continuity of Daimler’s commitment to this market Mr. Rolf-Juergen Seyerle, current CEO, will remain in his position. The Emil Frey Group is a family-owned Swiss company, founded in 1924 by the mechanic Emil Frey, with headquarters in Zurich, Switzerland. The company is mainly focussed on the automotive business (car wholesale, car retail, car finance, and car and part logistics) and operates in Switzerland, France, Germany, Hungary, Czech Republic and Poland. The Emil Frey Group also owns various import companies, numerous retail outlets and finance companies in these countries. ■ Further information from Daimler is available at: www.media.daimler.com www.daimler.com
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interview
Branimir Gvozdenović, Montenegrin Tourism and Sustainable Development Minister
Great Challenges Lie Ahead of Us
By Uroš Andijašević
The tourism projects are worth around €3 billion so it comes as no surprise that the WTTC has ranked Montenegro as having the biggest total contribution in travel and tourism to GDP in the next ten years.
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uring the recent meeting of the Montenegrin Tourism and Sustainable Development Minister Branimir Gvozdevnoić and Executive Director of the Netherlands Constituency in the World Bank Frank Heemskerk, the two officials concluded that Montenegro's priorities are having tourism of the highest quality and forming tourism links between the country's north and south. In order for these priorities to be implemented, several other measures need to be applied – modernizing infrastructure, conforming to high environmental standards, legalizing illegally built facilities and providing adequate waste treatment. All of the aforementioned measures come under the jurisdiction of the Ministry of Tourism and Sustainable
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Development. We are talking to Minister Gvozdenović about the way in which these measures are going to be implementing and the challenges that lie ahead. ■ How do you plan to implement these priorities? - We have prepared an Action Plan for Tourist Season Preparation – the Tourism Reform Agenda. The challenge that we have to face is to devise a set of measures that would facilitate the construction of new tourist accommodation and improving the quality of existing facilities. Increasing hotel capacity is one of the key prerequisites for extending the tourist season and, this year alone, 11 new hotels with over 630 beds have been opened. We have also started to harmonize our legislation with
Germany and montenegro: Challenging Business Opportunity
the best practice cases in the world. We have also recently adopted the Law on Amendments and Supplements to the Law on Spatial Planning which will expedite the implementation of investment projects. We expect large-scale investment projects to become a major driving force behind Montenegro’s tourism development. One of these is a €500-million project in Kumbor with one of the biggest and most reputable travel agencies, One & Only, expected to arrive here. Also, there is the Porto Montenegro project which entails opening a new hotel called the Regent by 2014. Aman Resorts, also one of the biggest global travel agencies, has completed its investment on the St. Stefan Island. On May 18, the foundation was laid for construction of tourist facilities in Luštica Bay, which is one of the biggest projects in the whole Mediterranean area. The works are progressing nicely, and I am confident that, in the following period, progress will be even more pronounced. The tourism projects are worth around €3 billion so it comes as no surprise that the WTTC has ranked Montenegro as having the biggest total contribution in travel and tourism to GDP in the next ten years.
Agenda
German tourists
Strategic market
On my meeting with Mr. Niebel we expect to discuss cooperation on implementing tourism and infrastructure development projects
According to indicators, the number of German tourists who visited Montenegro this year has grown by 30%.
Germany, as the biggest outgoing tourist market, is one of the most important strategic markets for Montenegro.
■ In what segments does the Ministry collaborate with the World Bank? - The Spatial Planning Management Sector (LAMP) and the Housing Development Sector have been cooperating with the World Bank on preparing the Project on Development of the Software for Recording and Categorizing Informal Settlements. After the project is implemented, we are going to have a database that will contain spatial information and information on informal settlements, their owners and the process of legalizing these facilities. Together with the World Bank, the Environmental Sector and the Utility Sector have been implementing a priority project called ‘Industrial
tional hazardous waste landfill project. Realizing this project is one of the major prerequisites for Montenegro joining the EU. ■ Does creating tourism links between the country’s north and south areas entail achieving a more balanced regional development in Montenegro and what needs to be done in that respect? - In order to have more balanced social and economic development in the country and create the prerequisites for increasing competitiveness of all areas, we have adopted the Regional Development Strategy and the Law on Regional Development. Primarily, more balanced regional development is achieved by developing infrastructural facilities, advancing the local economic development, facilitating public-private partnerships, aiding SME development and adopting and implementing spatial planning documents. With the construction of the Risan-Žabljak road we have made a big leap forward in connecting the north and south areas in Montenegro and thus have fulfilled a key precondition for a better touristic valorisation of these areas. Our ministry’s goal is to create a tourist offer that will combine the uniqueness of diversity of the coastal and the northern part of our country. Of course, we must not forget the hinterland of the coastal region, since some coastal municipalities are already developing rural tourism in the coastal hinterland of the main tourist centres.
The challenge that we have to face is to devise a set of measures that would facilitate the construction of new tourist accommodation and improving the quality of existing facilities Waste Management and Cleaning’ in five environmental hotspots in Montenegro which are also industrial waste dumpsites. The project will nominate a location that would be best suited for construction of a national hazardous waste landfill. The project’s preliminary phase (worth US $1 million) is nearly completed. The World Bank’s Board of Directors is expected to make a decision soon as to whether to loan US $60 million to the Montenegrin government which would be spent on the further implementation of the five environmental hotspots and na-
■ How much have German investors been investing in tourism and sustainable development? - In June 2013, HTP Budvanska Rivijera and PEMI BAU AG GmBH, Berlin signed a contract stipulating PEMI BAU’s acquiring the Rivijera Hotel in Petrovac. At a later stage, PEMI BAU Germany and montenegro: Challenging Business Opportunity
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GmbH Berlin transferred the acquisition rights to Euromix Tours Company from Budva. This company has begun constructing a luxury 30,000 square metre hotel called the Rivijera Crystal, worth close to €32.5 million. Cooperation with Air Berlin began in 2011 when the Montengrin government adopted the Proposal for Introduction of Charter Flights of Air Berlin and the draft contact. In 2013, the contract on continuation of the cooperation with Air Berlin was signed. From November 15 to 17, 2012, Montenegro was the host of the most important and the biggest gathering of German tourism businesses – the annual conference of the German Travel Association (DRV – Deutscher ReiseVerband). The conference has significantly improved the image of Montenegro, as well as promoted the Montenegrin tourist offer on the German market. However, its promotional benefits extend even further. According to indicators, the number of German tourists who visited Montenegro this year has grown by 30%. Montenegrin authorities have been successfully cooperating with the GIZ on defining strategic tourism development guidelines in Montenegro, analyzing the Montenegrin market and its potential, advancing human resources, developing climbing and cycling tourism and creating links between agriculture and tourism.
market, is one of the most important strategic markets for Montenegro. I was very glad to see that the partners of our travel agents who cover the German market have reported on increase in number of German tourists in Montenegro in the first half of this year.
water supply through detecting and repairing locations where significant water loss had been detected. Also, KfW has provided a loan for construction of 110 km of sewage lines, while the construction of a waste water treatment facility in Herceg Novi has begun. Early next year, we expect the construction of two more such facilities to start – one in Bar and one that will cover the area of the municipalities of Kotor and Tivat.
The Spatial Planning Management Sector (LAMP) and the Housing Development Sector have been cooperating with the World Bank on preparing the Project on Development of the Software for Recording and Categorizing Informal Settlements
■ Is there any room for improvement in the cooperation between German and Montenegrin sustainable development and tourism sectors? - The Ministry of Sustainable Development and Tourism has been successfully collaborating with the German Society for International Cooperation on implementing a number of projects – from setting up tourism development guidelines and drafting the Tourism Master Plan and several strategically important documents to implementing a number of smaller, but equally important, initiatives pertaining to developing and marketing our tourist offer, with an emphasis on national parks and the northern part of Montenegro. Germany, as the biggest outgoing tourist
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■ In terms of waste water management projects, it seems that German assistance is of crucial importance. Could you elaborate on these projects? - Several water supply and waste water management projects have been implemented in coastal municipalities thanks to German assistance for Montenegro realized via the KfW Bank (Kreditanstalt für Wiederaufbau). So far, this financial assistance has been realized in four stages including a €10 million donation. KfW has also provided a €68 million loan. This money was used to improve the
Germany and montenegro: Challenging Business Opportunity
■ What has the Ministry of Sustainable Development and Tourism been doing to attract more investments? - The Ministry of Sustainable Development and Tourism has a group of very complex jurisdictions, but, basically, the ministry logically integrates reliance on the space as a limited and nonrenewable state resource. This endeavour to treat the development policy in a complex and homogenous manner is the main motive behind functional centralization of only seemingly diversified activities under the roof of one ministry, including tourism as one of the most important economic segments in Montenegro. We should underline that, in the current atmosphere of limited economic resources, the ministry has implemented a new format of promotional communications with its surroundings. This format combines the promotion of the Montenegrin tourism offer with the promotion of the country’s investment environment and potential. As it turns out, such an integrated approach to promotion is only appropriate and economically prudent.
■ Montenegro has undertaken to resolve the problem with illegally built settlements in accordance with the Vienna Declaration on Informal Settlements in South East Europe. What progress has the country made in dealing with this problem and what have been the biggest challenges so far? - One of the priorities that the Montenegrin government has, on its way to full-fledged membership in the EU, concerns improving the work done by the public administration which also entails setting up a land registry
through legalizing informal settlements. This legalization is one of the most important projects for the Montenegrin government and is of crucial significance for the further development of the real estate market in Montenegro. The efforts that the Montenegrin government is going to make in legalizing informal settlements will depend on the date of the beginning of the legalization process. The parliamentary procedure for adopting the draft law has entered its final stage and we expect the implementation of this complex and socially very sensitive project to commence soon. I can confidently say that the biggest challenge that we are facing now is motivating the builders of informal settlements to start regularizing their facilities while being mindful of the current economic reality. Apart from being instructed so
Several water supply and waste water management projects have been implemented in coastal municipalities thanks to German assistance for Montenegro realized via the KfW Bank by the law, illegal builders need to be informed of and be able to enjoy the benefits of this process. The results of the regularization process have to be visible through improving living conditions in the specific area, improving the utility infrastructure, and constructing required facilities. Also, we are currently negotiating with KfW about the Energy Efficiency Project in Legalization which entails providing illegal builders with an opportunity to conform to energy efficiency standards during the legalization process. ■ What are the biggest challenges that Montenegro has been facing in implementing the EU’s environmental agenda?
- Chapter 27, which covers environmental policies, is one of the biggest chapters since it entails close to 700 pieces of regulation (or one third of the Acquis Communautaire) which are supposed to become an integral part of the Montenegrin legislation. The good thing is that most of this regulation (close to 60%) has already been incorporated into our legislation, while we are working hard on incorporating the remaining 40%. It is worth mentioning that almost all EU directives have been incorporated into the Montenegrin legislation. In terms of environment, apart from the legislative aspect, we will have to face both implementation and financial challenges. Applying relevant regulation and constructing the required environmental infrastructure are of critical importance for the success of the entire process. ■ In early March, you met with the German Economic Cooperation and Development Minister Mr. Dirk Niebel. On the occasion, you both said that you were satisfied with the implementation of tourism, energy and sustainable development projects. Mr. Niebel is coming to Montenegro again in early August. Are you going to meet again and, if you are, what will be the meeting agenda? - We have been successfully cooperating with Germany on implementing tourism, energy and utility infrastructure development projects. Considering the readiness and the receptiveness of both sides in terms of advancing existing cooperation, the agenda of my meeting with Mr. Niebel will be discussing the continuation of the cooperation on implementing tourism and infrastructure development projects, namely cooperation with German travel agencies and airline companies, as well as promoting Montenegro in Germany as a unique travel destination. We are also going to discuss the construction of utility infrastructure (building waste water collection and treatment facilities in smaller coastal towns, the management of sewage sludge, providing expert assistance to the ministry in those segments and others), supporting the European integration process in the Montenegrin environmental sector, cooperating on facilitating foreign investments and implementing future investments by German investors in Montenegro. ■ Germany and montenegro: Challenging Business Opportunity
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interview
Rüdiger Schulz, CEO of crnogorski Telekom and President of Montenegrin Foreign Investors Council (MFIC)
Responsible Investment "The Montenegrin government knows how important foreign investments are. The ministries concerned are all involved in a lot activities aiming on improvement of the investment climate in Montenegro, and we can see quite some progress," said Rüdiger Schulz, CEO of Crnogorski Telekom and President of Montenegrin Foreign Investors Council (MFIC)
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here are still a lot of obstacles, and there is often a long way between the announcement of a minister and the result as change of law or directive. In companies, we call it the “blockade of middle management,” said Mr. Schulz. "You can see something like this also quite often in the government. All in all, cooperation between German companies and the government is driven by a constructive exchange of opinions with the mutual aim of solving issues and helping each other. Every good business means also well paid tax," said Rüdiger Schulz
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■ The problems that foreign investors in the region are most frequently facing are concerning bureaucracy, legislation and cor-
Cooperation between German companies and the government is driven by a constructive exchange of opinions with the mutual aim of solving issues and helping each other. Every good business means also well paid tax ruption. How much has the Montenegrin government done when it comes to improving the business climate for foreign investors? - The response to this question demands certain introductory notes.
Germany and montenegro: Challenging Business Opportunity
Namely, as you may know, in October 2012 I was appointed President of the Montenegrin Foreign Investors’ Council (MFIC), an association of the leading foreign investors in the country, established in 2009 as a non-governmental and non-profit organization aimed at improving the investment climate and supporting business developments in Montenegro, stimulating direct foreign investments and promoting interests of the international business community in Montenegro. The Council's key document is the White Book, an annual publication informing the general public and all stakeholders about the Montenegrin business environment and obstacles experienced by foreign investors in Montenegro, and, more importantly, it provides recommendations for removing the barriers identified, aimed at increasing the attractiveness and competitiveness of the Montenegrin economy.
Communication
Technology
Energy
It is important that we work on communications to all citizens, because sometimes there is still a lack of public understanding how important foreign investments for Montenegro are
The availability of state of the art telecommunication technology is one of the main decision criteria with regard to selection of locations for new businesses
All companies in the Deutsche Telekom Group are working on gradually reducing the energy consumption involved in their business processes.
We have pointed out quite a few areas in which the improvements have been achieved through the efforts invested by the state and municipalities. For example, in the area of tourism, our members reported that certain issues referred to in the previous White Book have been resolved: e.g. the business environment in tourism has been stable when it comes to the ad-hoc introduction of new taxes and that the work of inspections was mainly positive (although improvement is still necessary) and the total smoking ban was revoked after eight months in force, while the compromise solution introduced afterwards has been
assessed as satisfactory. Also in the other areas of the trade/retail area we can see that many of the issues underlined in last year’s White Book (such as unnecessarily complicated and long import procedures, import-
The Council's key document is the White Book. It provides recommendations for removing the barriers identified, aimed at increasing the attractiveness and competitiveness of the Montenegrin economy ers being charged for all the mandatory procedures and analyses, procedures for issuing sanitary permits for importing goods, protection of
local retail chains in comparison to those owned by foreign investors and many other such) are no longer problematic. â– Where do you see room for further improvement of business conditions in Montenegro? - In the new edition of the White Book, our members identified the Labour Market and Employment, Property Development, Taxation, Corporate Governance and Rule of Law as focus areas for improvements, and most of the recommendations referred to in the White Book go precisely to them. On top of this, I think it is also important that
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promote an information culture in Montenegro. A total of 150 schools have participated in this project, and the memorandum of agreement with the Montenegrin Ministry of Education and Science has been renewed. Crnogorski Telekom also offers a special discount for disadvantaged people. Over 300 customers made use of the discount so far.
we work on communications to all citizens, because I think sometimes there is still a lack of public understanding how important foreign investments for Montenegro are and that companies with foreign ownership have to make a reasonable profit, and only by this they can offer to Montenegrins interesting and well-paid jobs, good education and intellectual development. ■ To what extent can Crnogorski Telekom and other foreign investors help improve the overall business climate in Montenegro? - First, of course, every company has to contribute itself. Crnogorski Telekom, as leading telecommunication provider stands for state of the art, reliable, affordable telecommunication infrastructure which is available practically everywhere where business takes place in Montenegro. The availability of state of the art telecommunication technology is one of the main decision criteria with regard to selection of locations for new businesses. And very importantly, CT stands for transparent and reliable corporate governance, shown by following the highest standards of compliance rigorously. As part of the investor community, as MFIC we appointed a council representative in the Working Group for preparing for negotiations on accession of Montenegro to the European Union for Chapter 4: Freedom of Movement of Capital and expressing willingness to contribute to other processes going on in parallel in all other working groups. ■ Crnogorski Telekom is paying a great deal of attention to the development of an IT society. What steps are you taking in this respect? - In general, infrastructure is the key resource for providing all communication and IT services. CT is successfully implementing new access networks through projects Fibre to the home (FTTH) and new highspeed mobile technology HSPA+/
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Our members identified the Labour Market and Employment, Property Development, Taxation, Corporate Governance and Rule of Law as focus areas for improvements LTE in order to provide higher access speeds and further expansion of fixed and mobile broadband services which results in internet penetration growth. All IP platform consolidation, the next generation of IT systems, smart access devices and constant education of customers will provide further development of IT society as base for advanced electronic services. CT as leading telecommunication provider in Montenegro sees itself as main contributor in the development of our IT society and also recognizes its relevance within society. As one example Crnogorski Telekom, is making free ADSL internet access possible for elementary and high schools in Montenegro. The aim here is to enhance computer literacy, increase the level of knowledge and internet usage, raise the general level of awareness of the importance of the Internet, and
Germany and montenegro: Challenging Business Opportunity
■ Your company is applying different measures that refer to the lowering of energy consumption, and different forms of CSR activities. What are your priorities in this segment of doing business? - All companies in the Deutsche Telekom Group are working on gradually reducing the energy consumption involved in their business processes. We all strive to use energy-efficient information and telecommunications technology and optimize our operational processes and network infrastructure. We are implementing a range of measures to save energy and make our operations more energyefficient. Through the years, we have demonstrated that we care for the society we operate in by being involved in all areas that are of importance for Montenegrin society. Besides striving to offer the most advanced telecommunication services to our customers, we wish to actively contribute to the development of the community in which we do business and of which we are an integral part. By acknowledging the principles of sustainability, and considering the social, ecological, and economic consequences of our activities, corporate social responsibility has been part of our corporate culture for many years. This is why corporate giving (donations and sponsorships) is one of the most visible aspects of our corporate responsibility. Our strategic activities are recognized by the public and the state. We are very proud that earlier this year, in April, the Montenegrin Chamber of Economy awarded Crnogorski Telekom with the Annual Award for Social Responsibility in 2012. ■
interview
Snežana Ivanović, CEO of Siemens Montenegro
Creating the Future Through implementing the company’s mission – namely applying the latest and comprehensive technology solutions that facilitate elevating the overall standard to a higher level – Siemens in Montenegro has been present in the Country's industry, energy, infrastructure and cities and healthcare.
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iemens has been implementing projects in Montenegro for decades. By opening a representative office in 2000, the company has validated the importance of this dynamic market. In 2005, the representative office became a limited liability company Siemens d.o.o. Podgorica. Snežana Ivanović, CEO of Siemens Montenegro, has spoken to us about the company’s operation. ■ Could you give us an overview of the development of Siemens in Montenegro from the company’s arrival in 2000 until today? - Through implementing the company’s mission – namely applying the latest and the most technology solutions that facilitate elevating the overall standard to a higher level – Siemens in Montenegro has been present in the country’s industry, energy, infrastructure and cities, and healthcare. ■ Could you describe for us the activities of Siemens Montenegro in the energy sector? - The most important projects that Siemens has been implemented in Montenegro in the past few years are modernizing the control equipment in the Pljevlja thermal power plant, constructing a highvoltage 110/10 kV substation, Podgorica 5, and the Ribarevine 400/110/35 kV substation. We have also delivered and installed protection equipment in the
A company which has been creating the future with its innovative technology and solutions, as Siemens has been doing for the past 165 years, is obliged to contribute towards the common good of the society
Montenegrin power system, including the switching equipment. We are currently building a 110/35 kV substation in Kotor, with the first 110 kV gas insulated system in Montenegro.
latest innovative solutions. Nine mediumvoltage power distribution substations in Montenegro use Siemens equipment, which is over a half of the new substations in the primary electricity distribution grid.
■ The company is also delivering products and services for Montenegrin cities, infrastructure and electricity distribution network. What are the major projects in these segments? - Comprehensive solutions for luxury hotels and business premises range from delivering a substation to the latest security and communications systems which are excellent references for the company’s participation in large-scale projects in Montenegro. Siemens has been the only supplier of equipment to a luxury hotel, the Splendid Hotel in Budva, which had the required expertise to meet the set deadlines and ensure a level of integration that would facilitate smooth operations. We have installed a complete hotel management system, including a room-automation system for ultimate climate comfort, access control systems, and service and reception management systems. Following the implementation of a complex project which entailed installing the Siemens One Solution, the company is about to complete work on the Atlas Capital Centre, the most luxurious business, commercial and residential facility in Montenegro. Siemens has been involved in developing the Montenegrin electricity distribution network for a number of years through its
■ Siemens Montenegro has been realizing large-scale healthcare projects in Montenegro since 2007. Could you tell us something about these projects? - Siemens delivered its first RS CT Sensation scanner in Montenegro in 2007. After that, we implemented two more major projects – the installation of oncology equipment in the Oncology and RadioTherapy Clinic in 2008 and diagnostic equipment in 2009. Following this, Siemens became a strategic partner to the Montenegrin healthcare system. ■ Is Siemens Montenegro viewed as a socially responsible company? - A company which has been creating the future with its innovative technology and solutions, as Siemens has been doing for the past 165 years, is obliged to contribute towards the common good of the society of which it is an integral part. We were sponsor of the International Conference of Electrical Engineering Students, as well as of the Iskra philanthropy award. We have also been successfully cooperating with Red Cross of Montenegro by getting involved in useful projects and campaigns which facilitate the revival and development of values like solidarity and humanity. ■
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interview
Michael Schmidt, Director of the Delegation of the German Economy in Serbia
Montenegro: Small but Dynamic The direct and indirect presence of German companies in Montenegro is continually growing, as international financial institutions (WB, EBRD, EIB) and the German development bank KfW increase their commitments in Montenegro.
■ You have been at the head of DSW for years already, and this has been one of the most dynamic organizations that gathered foreign investors in Montenegro, as well as in Serbia, during this period. From that perspective, how do you see the development of the business environment in Montenegro over the past years? - As a relatively young state, and thanks to the long common history with neighbouring countries, and especially Serbia, Montenegro is an increasingly interesting part of the economic space of the Western Balkans. With an attractive coastline and interesting hin-
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terland, Montenegro offers opportunities for German companies in the area of tourism and real estate development. German investors are notoriously shy to invest in major projects in new and rather uncertain markets such as Montenegro. It is important to note, however, that German equipment, building materials, and know-how are widely used in projects that are conducted by investors from other countries, such as the Porto Montenegro or the Lustica project. As all countries in Southeast Europe, Montenegro’s economic transition has
German companies based in the region, mostly in Serbia, but also in countries such as Croatia, Hungary or Austria, closely follow market opportunities in Montenegro not been completed yet. This also relates to the improvement of the transport, energy and municipal infrastructure. German companies, of which some are present in Montenegro, can offer interesting technological solutions, products and know-how in all of these areas. The direct and indirect presence of German companies in Montenegro is continually grow-
Germany and montenegro: Challenging Business Opportunity
ing, as international financial institutions (WB, EBRD, EIB) and the German development bank KfW increase their commitments in Montenegro. ■ A significant part of the DSW’s membership in Serbia has businesses in Montenegro and in other regional countries. How much is the consolidation of markets with similar market conditions, similar language and business environment favourable for current and future German investors? - German companies based in the region, mostly in Serbia, but also in countries such as Croatia, Hungary or Austria, closely follow market opportunities in Montenegro. The most significant German investment was done by German Telecom through their Hungarian subsidiary Magyar Telekom. Due to the relatively small size of the Montenegrin market, few companies and also our organisation – the Association of German Chambers of Commerce and Industry (DIHK) – do not have offices or even headquarters in Montenegro. It is therefore even more important for Montene-
gro to promote itself a stable, well-regulated and growing market within the economic region of Southeast Europe. All countries in the region aspire to become members of the EU, and the process of EU integration and regional ar-
tively few production companies in Montenegro. At this stage, it is important that local companies, especially SMEs, develop in Montenegro and open up new export markets in the region, Europe and the world. Cooperation with Ger-
As all countries in Southeast Europe, Montenegro’s economic transition has not been completed yet rangements such as CEFTA or the Energy Community are ideal mechanisms to regulate and harmonise the conditions for doing business here. Small countries such as Montenegro should spearhead these developments, as they are to benefit most from uniform, transparent legal conditions and good neighbourly relations. ■In which business sectors in Montenegro are German investors most interested, and what do they demand when it comes to business conditions? - I already mentioned that German Telekom is active in Montenegro. Other compa-
man companies in the form of joint investments, know-how transfer and marketing activities abroad could be particularly fruitful. As official representatives for important trade fairs such as Cologne and Munich in Montenegro, we actively promote and support visitors and exhibitors from Montenegro to find such partners on trade shows in Germany. It is encouraging to see that bilateral trade between our countries is slowly recovering after the deep slump in in 2009 and 2010. Exports to Germany in the first four months of 2013 have increased by 50% compared to the same period
It is important for Montenegro to promote itself a stable, well-regulated and growing market within the economic region of Southeast Europe nies focus on infrastructure projects, for example in the energy sector, the construction of waste-water plants, municipal infrastructure. More recently, there has also been more interest in projects to promote renewable energies, most notably in wind parks. Here implementation is still relatively slow, as an effective and transparent legal and administrative framework has not been fully established yet. Unfortunately there are rela-
last year. It is important to develop further this export potential through joint projects. New initiatives, such as the opening of a Montenegrin consulate in Munich to promote German-Montenegrin bilateral economic relations or the active participation of the municipality of Ulcinj in the most important European trade show for investments, and real estate in Munich in October, are steps in the right direction. â– Germany and montenegro: Challenging Business Opportunity
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interview
Duško Knežević, President of Atlas Group
Economic Advantages of a Small Country Conforming to the EU regulation and its implementation, prior to formally joining the Union, is also one of the ways to attract investments from Asia, Russia and the Middle East. ■ What is your view of the economic climate in Montenegro and how can it be further improved? - Undoubtedly, there is a real strategy in place with priorities like creating a better quality investment environment and investing in infrastructure, energy and tourism. The main challenge for this strategy is raising the operability of the system, namely the institutions and the state apparatus, as well as improving human resources. The economic environment can be improved if we find the right balance between fiscal conservatism and a socially progressive policy. Montenegro's advantage lies in the fact that the country is a small system that can be amended easier, changed faster and adapted whenever the need arises.
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tlas Group employs close to 1,200 people in Montenegro alone, which makes this company one of the biggest employers and tax payers in the country. Additionally, the company has founded the first privately-owned university in an effort to raise the quality of the Montenegrin educational system. It has also opened the first water plant in Kolašin as its contribution to the development of the northern part of Montenegro. “These are just some of our initiatives. We also give Atlas scholarships to 160 of the best university students in Montenegro,” says President of Atlas Group, Dr Duško Knežević. “Also, there is the Summit of 100 Business Leaders of the South East Europe which we organize annually together with the Montenegrin government in Montenegro. We are also partners with the Clinton Foundation and we had Bill Clinton attending the Balkan Networking Conference. Some of the investors that we have brought here are Capital Investment from the UAE, Mace and Turner International from the US, and Future Capital Partners from the UK.”
■ In what economic branches has Atlas Group been active? - At the moment, Atlas Group is comprised of close to forty financial, banking, real estate, investment, manufacturing, tourism, healthcare, media and educational companies, while our Atlas Foundation is engaged in humanitarian and socially responsible work. The Group operates in Montenegro, Serbia, Russia and Cyprus.
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I have been often underlining that Montenegro, as a small economic system, has to have a comparative advantage over other investment destinations. Reducing red tape, shortening the length of the permit issuing procedures, and creating an efficient legal and economic framework which is going to reassure investors, are just some of the
Montenegro's advantage lies in the fact that the country is a small system that can be amended easier, changed faster and adapted whenever the need arises prerequisites for faster development. Conforming to EU regulation and its implementation, prior to formally joining the Union, is also one of the ways to attract investments from Asia, Russia and the Middle East. ■ What are the most important investments and projects you are currently working on? - We have been implementing the Atlas Capital Centre project, which is financially and in terms of design one of the biggest investments in the West Balkans, together with the Al Nahyan royal family from Abu Dhabi. This is absolutely one of the most significant investment projects that Atlas Group has ever realized. We have other large-scale real estate projects pending like the spacious Expo Centre which we have been working on together with Future Capital Partners from the UK, as well as luxury tourist facilities Mogren Garden, Mogren Hill, Kamenovo and Meljine Bolnica which are going to be built.
Germany and montenegro: Challenging Business Opportunity
Environment
Investment
The economic environment can be improved if we find the right balance between fiscal conservatism and a socially progressive policy
Together with the Al Nahyan royal family from Abu Dhabi, we have been implementing the Atlas Capital Centre project, which is one of the biggest investments in the West Balkans
Apart from substantial investments in the real estate segment, the financial arm of Atlas Group has been developing rapidly too. We are currently involved in the process of further integrating the Montenegro Stock Exchange with regional and European stock exchanges, as well as increasing our presence on the Russian market thanks to ever-improving results of Atlas Bank in Moscow.
■ What sets this facility apart from other similar facilities? - Primarily, its dimensions – it spans across 100,000 square metres. It has business and commercial premises, apartments, a hotel, parking garages etc. Most of the technical solutions applied in its construction have been devised at the HQs of the biggest European companies (like Siemens, STO, Schuco, Philips, Intra, Clivet) exclusively for Atlas Capi-
As founder of the first privately-owned university in Montenegro, Atlas Group is going to continue investing in education primarily with the view of bridging the gap between labour market demands and the professions produced by our educational system, and, further on, bolstering informal and lifelong learning which will help our citizens in becoming more competitive in the European and global economy alike. ■ Companies Atlas Invest and Atlas Centre currently occupy an important place in your agenda. Why is that so? - Owing to its quality, highly professional staff and implemented projects, Atlas Invest has already become prominent in the relevant business segments both in Montenegro and among foreign investors. The company’s advantage over other Montenegrin engineering companies lies in its exceptional staff, financial stability, and an extensive network of foreign consultants covering almost all areas of the business. In terms of its advantage over foreign companies, Atlas Invest has a much deeper knowledge of the local conditions and markets and competitive prices. We are currently talking to several global companies which are engaged in generating energy from the sun, wind and similar resources and I am confident that we are going to do a lot in this area in the near future. One of our partners, with whom we have been writing a feasibility study - Qsolar Ltd. from the Netherlands - is one of those companies which closely specializes in developing solar energy industry and has made substantial investments in the solar industry mostly in the Benelux countries and Germany. ■ Could you tell us more about the Atlas Capital Centre project? - Atlas Capital Centre is the symbol of standing up to the global economic downturn in Montenegro and the first joint venture of Atlas Group and the companies from the United Arab Emirates. This is the biggest and, technically, best real estate facility in Southeast Europe. Its location, the quality of construction, the reputation of its developers/investors, and the contemporary architectural lines have lead to some of the biggest names in the business and diplomacy wanting to take up premises in the Centre, while its residential area is utterly luxurious and comfortable, without lagging behind its European counterparts and is able to satisfy even the most demanding of clients.
Atlas Capital Centre is the symbol of standing up to the global economic downturn in Montenegro tal Centre. An outstanding energy system and insulation provide unparallel energy efficiency, never seen before in this type of facility. Interior furbishing is supplied by the top manufacturers; there are terraces that can span across 20 square metres, advanced security solutions, and the fastest Internet connection with almost unlimited optical cable bandwidth. All of this provides maximum comfort at minimal cost. ■ Is German Embassy going to take up premises at Atlas Capital Centre? How did that come about? - Atlas Capital Centre is envisaged as a diplomatic and business centre, and has been designed and implemented to fully meet the needs of such clients in a contemporary, design effective and efficient and technologically advanced manner. The United Arab Emirates Embassy has already taken up quite a lot of the exclusive premises here. We are currently negotiating with other embassies today, and our negotiations with the German Embassy are nearly completed. Considering that the biggest German companies (Siemens, Schucco Lindner, Aco, Geberit, Hansgrohe) were material suppliers or contractors on the project, it is only natural that the German Embassy and German companies trust us and have expressed interest in occupying the premises at Atlas Capital Centre. ■
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interview
Velimir Mijušković, President of the Montenegrin Chamber of Commerce
Partners Worthy of Attention By converging the interests of the Montenegrin economy, the Montenegrin Chamber of Commerce serves as a bridge between the government, the embassies and international organizations. Our cooperation and bilateral relations with the German Chamber of Commerce are very good.
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Although the Montenegrin and German economies are incomparable in size, I am confident that we can have better economic cooperation, showing that Montenegro and its products and services are worthy of the attention of German businesses and consumers,” says President of the Montenegrin Chamber of Commerce Velimir Mijušković at the beginning of this interview. He then adds: “I think that our country needs to focus more on winning the trust of German tourists, as well as encourage German companies to come to Montenegro by setting up joint ventures through various forms of cooperation.” ■ How would you rate the overall economic cooperation between Germany and Montenegro, and what kind of projections and projects are you planning for this cooperation to develop further? - Over the last few years, trade between the two countries has been far
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There is plenty of room for cooperation in the Montenegrin renewable energy segment
below realistic possibilities and, going forward, we should use the existing opportunities to increase it. Let me remind you that following the disintegration of the former Yugoslavia, the Montenegrin tourist offer was highly valued by German tourists. They were very welcome here while cooperation with large German travel agencies has been exceptional. Some of these connections are being reactivated thanks to Montenegrin companies and our National Tourist Board that participate in tourism fairs, particularly in the Berlin Tourism Exchange. They have been also working on winning back the trust of German tourists, and this is something that needs to be stepped up. I believe that the last year’s conference of German travel agencies in Montenegro will have positively affected the Montenegrin tourism in the current season. I also think that there is plenty of room for cooperation in the Montenegrin renewable energy segment. This is an area where Germany is far
Germany and montenegro: Challenging Business Opportunity
ahead of other developed European countries, both in know-how and project implementation. The fact that Montenegro has normatively regulated this segment certainly helps us, the Chamber, to promote this potential, as it also helps potential investors to decide to invest in this area. Apart from that, metal processing SMEs in Montenegro could be developed with the help of German companies to mutual satisfaction. I believe that a stimulating business environment, quality workforce and other advantages will sway many foreign partners towards cooperating with Montenegro in the future. ■ How much did Germany invest in Montenegro, value wise, and what place does Germany take on the list of foreign investors in Montenegro? - Over the last ten years, German investors have invested €179.2 million. Deutsche Telekom acquired Montenegro Telekom via Hungarian Ma-
táv. The global electronics conglomerate Siemens AG opened a branch in Montenegro, thus increasing its presence here, just as did another German company – Messer. In 2009, German WTE from Essen and the Budva municipality concluded an Agreement on Construction of a Waste Water Treatment Facility on the Budva Riviera worth €58 million, the biggest environmental project implemented on the Montenegrin coast. The waste water treatment facility is supposed to become operational in mid-July next year. As of September 2009, Sachsen Wasser GmbH has been officially operating in Tivat. The company won at a tender and subsequently became a consultant in developing capacities of Vodakom and the local public water supply and sewage enterprises which are operate under Vodakom. In terms of the ranking, Germany takes 11th place among the largest foreign investors in Montenegro. ■ What are the most important German investments in Montenegro and why? - The largest German investment so far is Deutsche Telekom’s acquiring Montenegro Telekom. This investment is important for our country in many ways – it has updated and expanded the offer of telecommunications services and has brought a new dimension to consumer relations. In a year when the Montenegrin Chamber of Commerce is celebrating its 85th anniversary, we have decided to give Telekom the Social Responsibility Award as a testament to the fact that the company’s management is very dedicated to caring about the local community, as well as contributing to its development (schools, hospitals, sports). ■ Which segment of cooperation between Germany and Montenegro is the most developed? - The priority segments of the cooperation between our two countries are energy and energy efficiency, utility infrastructure and tourism.
Labour flexibility is very important for attracting foreign investors
In 2012, we had 32,648 tourists from Germany who spent 184,984 days in our country. To compare, in 1987, close to 145,000 German tourists visited Montenegro so having as many German tourists as possible coming here should be our priority. According to available information, the next season’s bookings of the German travel agency Rewe Group have
relations with the German Chamber of Commerce are very good. Together we participate in the activities of the Association of European Chambers of Commerce – EUROCHAMBERS. We have been organizing business meetings in cooperation with the local German chambers of commerce, which are members of an extensive DIHK system. The communication
gone up by 30%. Two other German travel agencies – Olimar and Berge und Meer – have included Montenegro in their offer. The outbound German tourist market is one of the most important in the world, with 60 million foreign trips annually. Cooperation with German airline Air Berlin started in 2011. The company offers charter flights and this has brought some really good results. In 2013, the airliner signed a Contract on Continuation of Cooperation adding Munich to the list of outbound flights, on top of Berlin, Hamburg, Dusseldorf and Hannover.
between businessmen and finding business partners thanks to good cooperation between the respective chambers of commerce contribute to advancing and developing economic cooperation. Also, owing to the support we get from the DIHK, we have been able to implement a number of projects which are of great help to the Balkan chambers of commerce and economies. Among other things, we have organized visits to German fairs. For two consecutive years, we have been facilitating visits to the famous Green Week in Berlin, an exhibition vehicle for the food industry, agriculture, forestry and horticulture. Over 100,000 companies participated in the fair, providing a great opportunity to talk to exhibitors and make business deals. The cooperation between the Montenegrin Chamber of Commerce and the German Committee on Eastern European Economic Relations (OA) offers great possibilities. The Committee’s members of these two organizations can obtain updated informa-
■ In which way do the Montenegrin and German chambers of commerce serve as a link between the business people from the two countries? - By converging the interests of the Montenegrin economy, the Montenegrin Chamber of Commerce serves as a bridge between the government, the embassies and international organizations. Our cooperation and bilateral
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tion about Montenegro, as well as participate in business gatherings like last year’s conference in Montenegro with over 200 Montenegrin and German businessmen participating. Via our two organizations, our companies are given a chance to participate in conferences in Germany. ■ Which economy segments have been drawing in most interest from German investors? - The German Reconstruction and Development Bank (KfW) has been active in Montenegro since 2001 and has been a partner to Montenegrin government in funding and implementing a number of projects, with an emphasis on utility infrastructure, energy and banking projects. KfW has provided a donation for drafting the Master Plan for Water Supply in municipalities on the Montenegrin coast and the Cetinje municipality. We have created the conditions for cooperation in the framework of the water supply and wastewater disposal on the Montenegrin coast project, as well as cooperation on a number of energy and energy efficiency projects. These include the rehabilitation and modernization of HPP Piva, the filter replacement project in the Pljevlja Thermal Power Plant, the expansion of substation Ribarevine and Podgorica, and drafting studies on the environmental impact of hydro power plants on the Morača River. Implementation of the Strategic Assessment of the Environmental Impact of the Draft Energy Development Strategy of Montenegro by 2030 is pending. A loan contract was signed with KfW stipulating laying 150-km long highvoltage 400 KW cable between Tivat and Pljevlje, as well as the construction of a substation in Lastva Grbaljska and the overhaul of a Pljevlje substation. Also, in cooperation with KfW, Montenegro has been implementing an energy efficiency programme for public buildings covering the period from 2011 to 2014. Stuttgart-based consultancy Fichtner GmbH & Co. KG has been hired to work on the project.
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There is a great potential for cooperation with Germany, but we should make an effort to generate positive effects The deadline for project implementation is June 2014. During the project, a total of 30 educational facilities will be reconstructed to become energy efficient. Another project is being implemented in cooperation with the German International Cooperation Society (GIZ) called Advisory Services to Energy Efficiency (ASE). There are also a number of other pending projects. ■ What do German investors expect from a business environment, and how has Montenegro accommodated these expectations? - Montenegro is very dedicated to advancing its business environment, and we have garnered notable results in that respect. Foreign companies that operate in Montenegro participate in the work of the Montenegrin Chamber of Commerce, in line with their business activity. They can give suggestions and proposals that will be considered in drafting various laws. These foreign companies say that if we want to attract more foreign investors to Montenegro, we have to set up, in their words, “a nice playground.” Foreign investors also say that labour
Germany and montenegro: Challenging Business Opportunity
flexibility is very important for attracting foreign investors. Our labour market is still very complex, with many obstacles to implementing business projects. Also, the issue of ownership is another problem in their eyes. They say that they get frustrated not knowing whether a building or another investment or theirs is actually owned by them and, in such situation, it is very difficult to draft a sustainable profitability analysis. In terms of taxation, corporate taxes in Montenegro are relatively low and this is something with which foreign investors are happy. They also want to have a more predictable business environment. ■ What are the most important trade treaties between the two countries? - In March 2011, our two countries exchanged notes which facilitated the continuation of the 31 bilateral treaties concluded between Yugoslavia and Germany, including the Economic Cooperation Treaty (signed in 1956) and the Investment Protection and Facilitation Treaty (from 1989). In 2004, the Serbia and Montenegro Council of Ministers and the Government of the Federal Republic of Germany signed the Technical Cooperation and Assistance in Agreement which is still valid. ■ To what extent have the Montenegrin business been able to operate on the German market? - Among other things, being present on the German market means being a reliable partner in a demanding economy. Overhauling German ships in the Bijela Shipyard is one such example. Germany is the biggest business partner for this shipyard. Over the last five years, the shipyard has overhauled 78 German ships which have a very respectable position in the maritime world. The overhaul projects were worth €20 million. There is a great potential for cooperation, but we should make an effort to generate positive effects. ■
corporate
Balkan Lift
Reliable for Ups and Downs The main activity of the company includes design, manufacture, import, delivery, installation, modernization, utilization, certification, launching and maintenance of elevators, escalators and moving walks for every vertical and horizontal transport system
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n 1989, named after Mihajlo Pupin, a private company was launched, and in April 1992, its rapid growth paved the way for the establishment of Balkan Lift. The main activity of the company includes design, manufacture, import, delivery, installation, modernization, utilization, certification, launching and maintenance of elevators, escalators and moving walks for every vertical and horizontal transport system. BLC's primary markets include Serbia, Montenegro and the Republic of Srpska. For almost 19 years, BLC has been working efficiently and developing, due to close cooperation with the Schindler Group, the largest supplier of escalators and the second largest manufacturer of elevators worldwide. It is also due to their high quality equipment that is made in European factories, and a high level of HR quality: engineers, economists and fitters. Today the company works on a project, montage
and service basis, which is fully equipped and trained to perform installations, servicing and modernization of equipment for vertical, inclined and horizontal transport in a wide variety of possible buildings. We have a very good and solid working relationship with the Belgrade University, Faculty of Mechanical Engineering and the Institute of Chemistry and Technology. Balkan Lift employees are trained to assist investors in selecting optimal solutions, which are always justified from an economic and technical point of view and in line with legislation. They are also trained to solve any problem easily, without pressure from investors, with confidence and teamwork, to enable investors to obtain a completed facility as soon as possible, with as little cost and with superior quality for users. ■
Balkan Lift Apart from main company, Balkan Lift in Belgrade, Balkan Lift Podgorica was established in Montenegro. Here are the projects in Montenegro of which the company is very proud. TRADEUNIQUE BUDVA Assembly of six new electric machineroomless with frequency regulated gearless drives. Type Schindler 3300 and 5400. Year of installation: 2010. ATLAS CAPITAL CENTER PODGORICA Assembly of 23 new electric machineroomless with frequency regulated gearless drives. Type Schindler 5400. Assembly of two new escalators. Type Schindler 9300 CU. Year of installation: 2011. POLICE DEPARTMENT AND PUBLIC ADMINISTRATION OF MONTENEGRO BUILDING, DUP NOVI GRAD 1 AND 2, PODGORICA Assembly of four new electric machineroomless with frequency regulated gearless drive. Type Schindler 5400 and 3300. Year of installation: 2009. DELTA CITY MONTENEGRO Assembly nine new electric machineroomless with frequency regulated gearless drives, in the Delta City Montenegro business centre. Type Schindler 5400 m Q=1000;1275;1600 kg. Assembly of four frequency regulated moving walks. Type Schindler 9300AE, Capacity 9000 persons/h, Hd=5980 mm, inclination angle α=30°, width1000 mm. Year of installation: 2008. NLB Bank, Podgorica Installation of one new electric machineroomless with frequency regulated gearless drive. Q = 800 kg V = 1m/s. Type Schindler 5400. Year of installation: 2004. Besides the above companies and finished jobs, in period from April 1989 to this day, we have made projects, assembled or generally overhauled several hundred lifts.
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As Versatile as the World of Construction Owing to the experience and the know-how of over 900 engineers at PERI, residential, industrial and business facilities, skyscrapers, towers, bridges and tunnels are being constructed all over the world. PERI's engineers have been using their know-how, based on the best available solutions, to support construction companies in implementation of their projects.
F
or over 40 years, PERI has been known as a reliable partner in producing and applying formwork and scaffolding systems. This familyowned company was founded by Mr. Artur SchwĂśrer in 1969, in the town of WeiĂ&#x;enhorn, where the company has its headquarters and its main development and production facility. Today, PERI is one of the 50 most successful companies in Bavaria. The company's name is derived from the Greek preposition 'peri' meaning 'around'. Since 1974, PERI has been expanding strategically to new countries and markets. Apart from having 20 branch offices in Germany, and 52 daughter companies, the company also has 110 efficient logistics sites with over 6,500 employees which cover construction sites in more than 95 countries worldwide thus ensuring market efficiency and
proximity to clients. Following PERI's arrival in Serbia in 2003, the company also brought new formwork and scaffolding standards. PERI's innovative solutions have been drawing in a substantial number of clients from the construction industry. Intelligently devised Product in best quality
PERI provides project-specific formwork and scaffolding solutions for all construction facilities and all sorts of concrete works. We develop new products for applications with which we see potential for rationalization with real future. In this way, efficient system equipment with convincing and practical details is developed which maintain a strong position in the market over many years. The high quality of the PERI system guarantees a worthwhile investment. It is the basis for long product life cycles with high utilization. The equipment is made of steel, wood and aluminium and is constantly subjected to a strict quality control. It also complies with the all needed approvals and certificates issued by authorized institutions. Engineering services tailored to client's needs
PERI's success is not only derived from its immense innovative strength in product development, but also from early internationalization and achievements and com-
Bridge on the Danube River at Beska
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Germany and montenegro: Challenging Business Opportunity
Avala Tower
Dimitrovgrad Bypass
Commercial Complex PERI Oplate d.o.o.
petence of our employees. Owing to the experience and the know-how of over 900 engineers at PERI, residential, industrial and business facilities, skyscrapers, towers, bridges and tunnels are being constructed all over the world. PERI's engineers have been using their know-how, based on the best available solutions, to support construction companies in implementation of their projects. Economic performance
PERI also rents out and sells formwork and scaffolding. Especially the combination of both models allows cost-effective project completion. Formwork and scaffolding solutions from a single source are one of the key benefits for our clients. Our experts and supervisors provide assistance to construction site person-
nel with the view of the most efficient utilization of PERI equipment. In so doing, they always keep a careful eye on the costs as well as safety for construction site personnel. On-site assistance
PERI carries out planning and delivery of required construction materials – from small-sized plywood cut-to-size through to complex formwork units. Our clients can benefit from fast availability and on-schedule delivery regardless of the ordered quantity, including the delivery of elements of unusual component geometries. All of this ensures clear and transparent cost projection without having to resort to expensive on-site improvisations due to unavailability of adequate equipment or material. The result of this is a significant improvement in work performance. ulfilling special requirements regarding F visible concrete surfaces
Architectural concrete has become a very popular design element. We offer practical solutions for the construction of facilities with highly demanding visible concrete surfaces which are optimally adjusted to architectural re-
Stepa Stepanović Settlement
quirements. PERI's experience is as versatile as the international world of construction. For buildings with complex shapes, for challenging bridge and tunnel structures, for the implementation of the highest architectural concrete requirements as well as for ambitious scaffolding task – we promise to provide you with the fullest possible support and the best solutions also in the future. ■ PERI oplate d.o.o. Oplate Skele Inženjering Formwork Scaffolding Engineering Zmaja Ognjenog Vuka 2 22310 Šimanovci Srbija | Serbia Tel.: +381 (0)22 40 82 00 Fax : +381 (0)22 40 82 50 office@peri.rs www.peri.rs
Residential building, Belgrade
Germany and montenegro: Challenging Business Opportunity
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Economic Cooperation between Montenegro and Germany
Great Potential
In the period between 2002 and 2012, Germany invested a total of €179.3 million in Montenegro. Most of the investments – €40 million– were made in 2007. In the last four years, the volume of trade between Montenegro and the Federal Republic of Germany has been around 6% of the total foreign trade of Montenegro. In 2012, the value of trade between Montenegro and Germany stood at €130 million, which is a 0.1% drop relative to 2011. The total export to was worth €14.4 million, or 3.9% of total Montenegrin exports, while the total import amounted to €115.6 million which was 6.3% of total Montenegrin imports, a 4.3% increase compared to 2011. In 2011, Montenegro and Germany’s trade exchange was worth €131.3 million which is 9.2% more than in 2010. The same year, exports amounted to €20.5 million which is 4.5% of total Montenegrin exports for that year, while Montenegro imported €110.8 million worth of goods from Germany, a 6.1%
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In 2012, the value of trade between Montenegro and Germany stood at €130 million
share of total imports in that period. The import to export ratio was 18.5%, and the trade deficit stood at €90.3 million. In 2010, the value of trade between Montenegro and Germany was €120.2 million. Montenegrin exports to Germany amounted to €3.1 million, or a 19.2% hike in com-
Germany and montenegro: Challenging Business Opportunity
parison with 2009. Imports from Germany grew by 5.4% to €117.1 million – a 7.1% share of total Montenegrin imports in 2010. The deficit stood at €114 million while import to export ratio was only 2.6%. In 2009, the value of trading between Germany and Montenegro amounted to €113.7 million which
is 5.9% of the total foreign trade of Montenegro. In the same period, Montenegrin exports to Germany were worth €2.6 million, while the value of imports was €111.1 million. The deficit stood at €108.5 million. In 2012, Montenegro mostly exported to following goods to Germany: iron and steel (€6.9 million), natural or cultured pearls, precious or semi-precious stones (€2 million),
German FDIs in the period from 2002 to 2012 - in mil. of euros
Year
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total
Investment value 20.9
5.5
7.8
5.1
26.9 40.0 21.5 17.7 11.2
8.1
14.6 179.3 Source: CBCG
Trade exchange between Montenegro and Germany between 2009 and 2012 - in mil. of euros
Item
2009
%
2010
%
2011
%
2012
%
Total foreign trading of Montenegro 1,931.2
100
1,987.7
100
2,277.6
100
2,187.4
100
Total trading with Germany
113.7
5.9
120.2
6.0
131.3
5.8
130.0
5.9
Export to Germany
2.6
0.9
3.1
0.9
20.5
4.5
14.4
3.9
Import from Germany
111.1
6.7
117.1
7.1
110.8
6.1
115.6
6.3
Deficit / Surplus
-108.5
-114.0
-90.3
- 101.2 Source: MONSTAT
The list of products imported from Germany in 2012 per value Custom Tariff no.
and copper and copper products (€1.4 million). In the same year, Montenegro mostly imported to following from Germany: vehicles, parts and accessories (€40.8 million), machinery and mechanical appliances (€13.4 million), and meat and meat offal (€10 million). Direct
In the period between 2002 and 2012, Germany invested a total of €179.3 million in Montenegro. Most of the investments – €40 million – were made in 2007. ■
Amount in €
87
Vehicles other than trains or trams, and parts and accessories thereof
40.818.991
84
Boilers, machinery and mechanical appliances and parts thereof
13.395.345
02
Meat and meat offal Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television recording and reproduction of sound and images, parts and accessories thereof Milk and milk products, bird and poultry eggs, natural honey, edible products of animal origin, not specified or included elsewhere Pharmaceutical products
9.971.768
4.394.265
38
Plastic and plastic products Optical, photographic, cinematographic, measuring, control, precision, medical or surgical instruments and apparatus; their parts and accessories Miscellaneous chemical products
19
Cereal, flour, starch or milk based products; baked goods
1.832.773
85
In 2012, Montenegro mostly exported to following goods to Germany: iron and steel, natural or cultured pearls, precious or semi-precious stones, and copper and copper products
Item
04 30 39 90
8.281.126 6.964.198 5.274.211 2.505.759 2.003.244
Source: MONSTAT
The list of product groups exported to Germany in 2012 per value Custom Tariff no.
Item
Amount in €
72
Iron and steel
6.909.889
71
Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and products thereof; imitation jewelery; coins
2.000.122
74
Copper and copper products
1.397.023
87
Vehicles other than trains or trams, and parts and accessories thereof
893.598
22
Beverages, alcoholic beverages and vinegar
854.173
44
Wood and wood-based products; charcoal
829.225
08
Edible fruit and nuts; citrus fruit peel, melons
419.515
84
Boilers, machinery and mechanical appliances and parts thereof
248.631
07
Edible vegetables, roots and tubers
121.683
85
Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television recording and reproduction of sound and images, parts and accessories thereof
114.118
Source: MONSTAT
Germany and montenegro: Challenging Business Opportunity
| 41
comment
Bilateral economic cooperation
Constantly Advancing Cooperation
By Milan Vuckovic
Apart from the fact that large German companies have been operating in Montenegro for quite some time now, this smallest Balkan country is hoping for German investors who are willing to invest in its production capacities. There are those who are interested.
T
he political and bilateral economic relations between Montenegro and the Federal Republic of Germany have been constantly improving for the last several years. Considering the upcoming official visit of the Federal Economic Cooperation and Development Minister Mr. Dirk Niebel and the German business delegation to Montenegro on August 7 and 8, as well as future projects to be implemented by German business organizations by the year’s end, the cooperation between the two countries is really picking up pace. Apart from business people, who will be arriving to Montenegro in August, a number of German businessmen from the whole West Balkan region will be coming to Podgorica too. After this, Podgorica will play host to more meetings between the business people from the two countries that are due to take place in September, October and November this year. Last year, on May 30, the first large-scale German-Montenegrin Economic Forum took place on the Adriatic coast, in the Montenegrin tourist resort of Pržno. Over 200 businessmen attended, as did 40 representatives of notable German companies. The Forum was endorsed by many respectable German business institutions like the Federal Ministry of Economics and
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Technology, the German Committee on Eastern European Economic Relations (Ost-Ausschuss der Deutschen Wirtschaft) and the Delegation of the German Economy in Serbia which also covers Montenegro. On the Montenegrin side, the gathering was supported by the Montenegrin government, while the Montenegrin Chamber of Commerce generously provided assistance in organizing the Forum. The Forum was officially opened by former Montenegrin Prime Minister Igor Lukšić, the State Secretary in the Federal Ministry of Economics and Technology, Mr. Stephan Kapferer, Director General of the German Committee on Eastern European Economic Relations Professor Dr Rainer Lindner, and the Head of the Delegation of the German Economy in Serbia Mr. Michael Schmidt. The main focus of the Forum was on economic segments that carry the biggest potential in terms of economic cooperation between the two countries, namely: energy and energy efficiency, infrastructure development (including utility infrastructure), tourism and finances. This was the first ever visit by an extensive and important German economic delegation to Montenegro. Apart from this visit, the associates of the Delegation of the German Economy in Serbia have been frequenting Montenegro too in an effort to encourage as many German companies as possible to come to this small, but dynamic market. The popular website of the Delegation, which operates under the German Chamber of Foreign Trade (AHK), contains a lot of information about Montenegro, both in the German and Serbian languages. Through Bonn-based Senior Expert Service (SES), for which we – the Delegation of the German Economy in Serbia – serve as the representative for regional countries, many SMEs and Montenegrin institutions have used the services of German experts who stayed in Montenegro for months in order to provide concrete consultancy services. Although the representatives of the Delegation of the German Economy in Serbia already spent some time in Montenegro at the beginning of this year, their next visits will take place in September, October and November. The reason for their stay, among other things, is two regional projects which are also going to be implemented in Montenegro. In cooperation with the German Federal Ministry for Economics and Technology and German company em&s GmbH, the Delegation of the German Economy in Serbia is going to imple-
Germany and montenegro: Challenging Business Opportunity
ment these projects in October and November. The first project pertains to transport and logistics and entails holding conferences for transport and logistics professionals from Germany. The conferences will be held in Podgorica, Belgrade and Skopje. The conference participants will visit the sites of the implementation of prestigious projects in Montenegro, Serbia and Macedonia, as well as cooperation exchange. They will also be able to talk to the transport and logistics professionals from the three countries. The second project is a water supply project that will be realized in Serbia, Montenegro and Albania. In late November, Podgorica will host a conference with representatives of many water supply companies, institutions and experts from Montenegro, Germany and the region participating. Also, B2B meetings between Montenegrin and German companies will take place at the same time. Although quite a few big German companies like Stada, Mercedes Benz, Deutsche Telekom, Würth, DHL, Dekra, Porsche, Trenkwalder, Siemens, Berlin Chemie, Messer Group, ThyssenKrupp Elevators and others have been operating in Montenegro for some time, Montenegro is still hoping for German investors willing to invest in the country’s production capacities. Although the competition among investment candidates in the region is stiff, Montenegro definitely has production opportunities that could be interesting to serious German investors. One such investor is the German company HGL which has recently expressed interest in acquiring Podgorica-based KAP (the Podgorica Aluminium Plant) which has been struggling financially (the company’s total debt equals 10% of Montenegro’s GDP). This renowned aluminium producer used to be the driving force behind the Montenegrin economy, and it is absolutely vital for it to
Podgorica will play host to more meetings between the business people from the two countries that are due to take place in September, October and November this year recover. Prestigious investments like these could substantially improve the current perception of the attractiveness of this market among potential foreign direct investors. Aside from these, there is more potential for bigger and better trade and cooperation. For instance, the Delegation of German Companies from Serbia has found out that a number of Montenegrin companies have been indirectly, rather than directly, exporting their products to Germany, namely via their partners/mediators from neighbouring countries. These are mostly semi-finished products which their partners/mediators additionally process and subsequently export themselves to Germany. There are also the so-called ‘second plan’ investment opportunities in Montenegro like, for instance, investments in healthcare capacities (an initiative has already been launched to open small contemporary health resorts for foreigners), spas, health treatments and agriculture. Montenegrins living in Germany could also get more involved in investment processes, which has not been the case so far. There are definitely more interesting business ideas out there. However, you can expand your business creativity only when you see and experience Montenegro and its population for yourself. So, don’t hesitate. Pack your bags and go. Preferably today! ■ (The author is an associate of the Delegation of the German Economy in Serbia)
Interview
Nikola Vasiljević, Country Manager for Montenegro at Gebrüder Weiss
Reliable Shipments Gebrüder Weiss became operational in Montenegro in 2011. Thanks to the flexibility and advantages of the global GW network, as well as our continuous development, we can guarantee that we will be a reliable partner vices to our clients,” says Nikola Vasiljević, Country Manager for Montenegro at Gebrüder Weiss.
G
ebrüder Weiss is the oldest transport and logistics company in Austria. The company has been family-run since its foundation. It operates in 29 countries, from 162 locations and has a total of 5,250 employ-
Considering that the Montenegrin market is mainly import orientated, we see a great potential and a need to provide sustainable high quality transport and logistics ees in Europe, Asia and the US. “This worldwide network is supplemented with many strategic partners and related companies. Together, we offer a whole range of transport and logistics ser-
■ What services does the company provide in Montenegro? - Gebrüder Weiss became operational in Montenegro in 2011. Although, locally speaking, we are still a young company, thanks to the flexibility and advantages of the global GW network, as well as our continuous development, we can guarantee that we will be a reliable partner and collaborator, equipped to deal with every single challenge in modern transport. In Montenegro, Gebrüder Weiss renders the following services: road transport, storage services, maritime container transport, air transport, customs services, national distribution and additional goods insurance during transport. ■ How much development potential does the Montenegrin market have for your company? - Considering that the Montenegrin market is mainly import orientated, we see a great potential and a need to provide sustainable high quality transport and logistics services to our local, regional and global clients regardless of what is the point of shipment – the region, the EU or anywhere else in the world – and regardless of the mode of transport – by truck, airplane, ship, directly or via the GW system transport. ■
Germany and montenegro: Challenging Business Opportunity
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Tourism in Montenegro
Where God Showers Gifts
Boka
Apart from the exciting and soothing nature, rugged and awe-inspiring at the same time, Montenegro has many other must-see destinations
T
here is an old Montenegrin legend which says that God's bag of gifts, containing gifts of nature, tore right above Montenegro, which is the reason that this small country has so many of nature’s attractions – mountains, lakes, forests, pastures, bays, coves, hidden beaches, and, of course, the Adriatic Sea. White and gray limestone desert landscapes, also known as the "sea of stone," hang over the sea coast. In the middle region lie the fertile Zeta and Belopavlićka plains, as well as a bird sanctuary at Lake Skadar. Look further and you will see the over 2,000-metre high mountain ranges with glorious summits, forests, spacious pastures, over forty lakes, clean and mighty rivers, and deep and
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mysterious canyons. Montenegro has five nature parks. The Durmitor Mountain and the Tara River Canyon are natural world heritage sites. The latter is also one of the biosphere reserves, while Lake Skadar has been inscribed into the Ramsar List of the Wetlands of International Importance. Apart from the exciting and soothing nature, rugged and awe-inspiring at the same time, Montenegro has many other must-see destinations. ausoleum on the M Mount Lovćen
Eminent poet and philosopher Petar II Petrović, known as Njegoš, chose this beautiful location to raise a chapel at the top of Jezerski Vrh (1,660 m altitude). Following Njegoš’s pass-
Mausoleum on the Mount Lovćen
ing, Prince Danilo and chosen Montenegrin dignitaries put Njegoš’s body to rest in the place that is known as ‘the kingdom of thunder’. Thunder was not the only occurrence that disturbed Njegoš’s final resting place. Jezerski Vrh was first occupied by the Turks and later by the Austrians which destroyed the chap-
Germany and montenegro: Challenging Business Opportunity
el in 1916. A new chapel was built in 1925 when the idea to build the monumental mausoleum, designed by sculptor Ivan Meštrović, was born. Biljarda
Biljarda is a building where the spiritual and secular leader, poet and philosopher Njegoš wrote his
most important work. This is his former residence, built in 1838, and designed by Jakov Ozereckovski. It was named after the billiard table which Njegoš had brought from Vienna. At the time, it was the first and only billiard table in Montenegro. The museum material is
tional Park. The river is 156 km long, and its source is in northern mountain range. It flows from south to north and converges with the Piva to form the Drina River, one of the longest and the water-richest rivers in the Balkans. The mighty Tara is
enchanting. It looks as if the mountains have cracked and let the sea in. This is the southernmost fjord in Europe. High mountains envelop the long coastline, protecting it from the harsh northern climate. This is why Boka is an oasis of Mediterranean
Biljarda
still not organized into collections and most of the exhibited pieces belong to other museums that operate under the National Museum in Cetinje. Njegoš’s personal items, manuscripts, books, an extensive collection of books, money and weapons are permanently exhibited here, as are original manuscripts and the fountain pen he used. The Ostrog Monastery
The Monastery of Ostrog is placed against an almost vertical background, high up in the large rock of Ostroška Greda, at 900 metres in altitude, in a cave used as a hermitage by monk and the Metropolitan Bishop of Zahumlje and Herzegovina Vasilije Jovanović in the second half of the seventeenth century. The Monastery is the most famous Christian pilgrimage in Montenegro, visited by pilgrims of all faiths from around the world. The Tara River Canyon
The Tara River, known as ‘the teardrop of Europe’, partly runs through the Durmitor Na-
tificial island in front of Perast. Up until the mid-15th century, there was a small chapel in the church’s place. Every year, on July 22, people on decorated boats bring rocks and throw them around the island. The church houses a museum col-
The Ostrog Monastery
quite slow in certain segments, and the places where you can walk across it are few and far between. Near Bistrica, the Tara riverbed is so narrow that, back in the day, you could jump over it if the need arose. Ada Bojana
The Ada Bojana river island is located at the very end of Velika Plaža (The Great Beach), with the River Bojana running between the island and the beach. Ada is the most beautiful at sunset, when the amazing play of colours make the sea, the sand and the sky merge into a single image. This is a true paradise for windsurfing, sailing, water skiing, horseback riding on the beach, and favourite destination for naturists. Ada Bojana Island has both subtropical and Mediterranean vegetation, with one-of-akind plant and animal species.
vegetation: agave, palm, mimosa, oleander, kiwi, pomegranate, and medicinal herbs grow here. While the mountain peaks around Boka are covered in snow, roses, camelias and mimosas grow in the foothills. The bay is naturally divided into four smaller bays - Herceg Novi, Risan, Kotor and Tivat. Beautiful coastal towns, which are historical and artistic treasures, line the seaside like pearls.
lection of great works of art by Italian painters. The church is also decorated with 68 paintings of Tripo Kokolja (16611713), a famous Baroque painter from Perast. Kokolja’s work spans a whole decade, while his most important work was a commission from the Archbishop of Bar, Andrija Zmajević. St. Stefan
Gospa od Škrpjela
Gospa od Škrpjela (Our Lady of Škrpjel) is a Baroque church built in 1630 on an ar-
The St. Stefan Island is rightly called the most beautiful site on the Montenegrin coast. Unusual in appearance, the island
Boka – ‘The Bride of the Adriatic’
Whether you approach it by sea or mainland, Boka is equally
The Tara River Canyon
Germany and montenegro: Challenging Business Opportunity
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tress”) is located at the very north of Herceg Novi and is a segment in the town’s complex fortification system. For the most part, the tower was built on limestone 85 metres above the sea and, because of its size and position, it dominates the town landscape. Blue Cave
Ada Bojana
is surrounded by high stone walls. This used to be a fishermen village. Today, St. Stefan is a globally renowned hotel and town rolled into one that will never leave you indifferent. This unique island has 118 villas built in medieval style which are interconnected by narrow cobble paved streets, while the Mediterranean vegetation gives the island special charm. St. Stefan is over six centuries old and, in the beginning, it was the fortress of the Paštrović family who are native to this area. The island used to fend off many conquerors throughout history. You can still see old cannons on its stone walls. Budva – The Old Town
Budva (the Roman name Butua) is one of the oldest settlements on the Adriatic Sea coast. A legend recounts that the town was founded by Cadmus, the son of the Phoenician King Agenor,
who was exiled out of Thebes by Zeus, and Cadmus’ wife Harmonia. The Old Town of Budva is of typically medieval appearance, and makes a unique architectural and urban unit. The town is home to the biggest and most valuable necropolis in the Adriatic. Budva was built on a peninsula that used to be an island and was subsequently linked to the mainland by a sandbar. The town is surrounded by thick stone walls built in the 15th century which were modified several times, particularly after the earthquake in 1667. Budva – The Red Commune
The Memorial House is a part of the Museum of the Revolution and contains archival materials (documents, photographs, letters and printed materials) from the time of formation of the first Communist municipality in Croatia, in 1920. The Memorial House has a gallery
St. Stefan
named after Marko Gregović. It exhibits the classical artwork (paintings, sculptures, etchings), as well as new artistic media (installations, performances, video art). The Memorial House building is built in a traditional early 20th century Mediterranean style. Kanli-Kula
Turkish fortress called KanliKula (in Turkish – “bloody for-
Gospa od Škrpjela
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The Blue Cave (Plava Špilja) is one of the most attractive caves on the Luštica peninsula, located between the Zlatna Luka
Germany and montenegro: Challenging Business Opportunity
Cove and the Mokra Gora Cape. It is 5.7 km from Herceg Novi. The cave is of unusually blue colour due to sunrays reflecting off the sea surface on clear days. The cave has two entrances – the one that is very wide, but low-pitched, while the other is very narrow, but high. The Cave is appealing both to scuba divers and swimmers. It is also an excellent destination for a safari photo tour, under and on the
The Old Town of Budva
Corporate
Porto Montenegro
First Ever Mercedes Benz Designed Motor Boat Blue Cave
water. You can reach the Blue Cave by a boat. The Monument to the Heros of the Battle of Mojkovac
The monument is situated on a stone elevation, on the right bank of the River Tara, near the bridge, in honour of the 50th anniversary of the Mojkovac Battle. The monument was unveiled on October 30, 1966, and it bears the following inscription: “They have become immortal because they died for freedom and brotherhood – 1915-1916.” This grandiose monument was made by sculptor Drago Đurović and architect Mirko Đukić. The monument is also depicted on the municipality of Mojkova’s official coat of arms. The Old (Emperor’s) Mosque
The Emperor’s Mosque, built in 1471, lies at the centre of Plav, on the elevated plateau of
the former Grad, surrounded by stone walls. This is the first ever mosque built in Montenegro and its construction was funded by Sultan Abdul Hamid. Because of its original architecture, woodengravings, arabesques, stone and wooden architectural ornaments, galleries, soferluk (the entrance part) and slender minarets, the Mosque is a protected monument of culture. Gornja Lastva
Gornja Lastva is situated in the hinterland of Tivat, at an altitude of about 300 meters, on the slopes of the Vrmac Hill. This is a rural area, away from the coast, which sits in the silence of olive groves and has a beautiful view of the Bay of Tivat. The town dates back to the fourteenth century and is one of the few surviving rural areas that still attract many tourists and visitors. This little town with its Mediterranean atmosphere is wonderfully appealing and welcoming. ■
Gornja Lastva
On 27th July 2013, The Silver Arrows of the Sea had its world-wide premiere at Porto Montenegro, its home port
Mark Harrison, Principal of MRM (left), Ron Gibbs, Chairman of Silver Arrows Marine and Mladen Miranovic, President of the Board of Porto Montenegro
T
his will be the first ever Mercedes Benz designed Motor Boat, which will be officially launched at the Monaco Yacht Show this September. In addition to the boat launch, Mercedes Benz launched their new S-Class Mercedes Car series. Mercedes Benz Style is an exclusive brand including Eurocopters, Furniture and Watches, and officials from Daimler Benz
dition the Silver Arrows team announced that MRM was its official partner. Mark Harrison commented “After working on the Porto Montenegro project for the last 8 years, it is a great pleasure to add the Silver Arrows of the Sea, and Mercedes Benz Style to our project, and with the Regent Hotel opening next year, and a much expanded marina, and the arrival of the
Porto Montenegro was chosen as the home port becomes of its newly acquired status as the exclusive yachting destination in the Mediterranean were present to celebrate this historic event together with numerous guests from around the world. Porto Montenegro was chosen as the home port becomes of its newly acquired status as the exclusive yachting destination in the Mediterranean. In ad-
world’s largest pleasure boat fleet, the Golden Fleet, Porto Montenegro has firmly positioned itself as the yachting destination in the Mediterain. Our company, MRM is proud to be a member of the overall team,” said Harrison principal of MRM. ■
Germany and montenegro: Challenging Business Opportunity
| 47
German culture
A culture Older Than a Nation From its roots, culture in Germany has been shaped by major intellectual and popular currents in Europe, both religious and secular. Historically Germany has been called Das Land der Dichter und Denker (the country of poets and thinkers)
G
erman culture began long before the rise of Germany as a nation-state and spanned the entire German-speaking world. From its roots, culture in Germany has been shaped by major intellectual and popular currents in Europe, both religious and secular. Historically Germany has been called Das Land der Dichter und Denker (the country of poets and thinkers). The federated states are in charge of the cultural institutions. There are 240 subsidised theatres, hundreds of symphonic orchestras, thousands of museums, and more than 25,000 libraries spread in Germany. These cultural opportunities are enjoyed by many: there are over 91 million German museum visits every year; annually, 20 million go to theatres and operas; 3.6 million per year listen to the symphonic orchestras. The UNESCO inscribed 33 properties in Germany on the World Heritage List. Language
German is the official and predominant spoken language in Germany. It is
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Nine Germans have won the Nobel Prize in literature: Mommsen, Von Heyse, Hauptmann, Mann, Nelly Sachs, Hesse, Böll, Grass, and Herta Müller
one of 23 official languages in the European Union, and one of the three working languages of the European Commission, along with English and French. Recognised native minority languages in Germany are Danish, Sorbian, and Frisian. They are officially protected by the ECRML. The most used immigrant languages are Turkish, Kurdish, Polish, the Balkan languages, and Russian. Standard German is a West Germanic language and is closely related to and classified alongside English, Dutch, and the Frisian languages. To a lesser extent, it is also related to the East (extinct) and North Germanic languages. Most German vocabulary is derived from the Germanic branch of the IndoEuropean language family. Significant minorities of words are derived from Latin and Greek, with a smaller amount from French and most recently English (known as Denglisch). German is written using the Latin alphabet. In addition to the 26 standard letters, German has three vowels with Umlaut, namely ä, ö, and ü, as well as the Eszett or scharfes S (sharp s) which is written "ß".
Germany and montenegro: Challenging Business Opportunity
German dialects are distinguished from varieties of standard German. German dialects are traditional local varieties and are traced back to the different German tribes. Many of them are not easily understandable to a speaker of standard German, since they often differ in lexicon, phonology, and syntax. Around the world, German has approximately 100 million native speakers and also about 80 million non-native speakers. German is the main language of about 90 million people (18 %) in the EU. 67 % of German citizens claim to be able to communicate in at least one foreign language, 27 % in at least two languages other than their own. Literature
German literature can be traced back to the Middle Ages, with the most notable authors of the period being Walther von der Vogelweide and Wolfram von Eschenbach. The Nibelungenlied, whose author remains unknown, is also an important work of the epoch, as is the Thidrekssaga. The fairy tales collections collected
knowledge and faith, reason and emotion, and scientific, ethical, and artistic ways of seeing the world. German philosophers have helped shape western philosophy from as early as the Middle Ages (Albertus Magnus). Later, Leibniz (17th century) and most importantly Kant played central roles in the history of philosophy. Kantianism inspired the work of Schopenhauer and Nietzsche as well as German idealism defended by Fichte and Hegel. Marx and Engels developed communist theory in the second half of the 19th century while Heidegger and Gadamer pursued the tradition of GerJohann Wolfgang von Goethe man philosophy in the 20th century. A number of German intellectuals were and published by Jacob and Wilhelm also influential in sociology, most noGrimm in the 19th century became tably Adorno, Habermas, Horkheimer, famous throughout the world. Luhmann, Simmel, Tönnies, and WeTheologian Luther, who transber. The University of Berlin founded lated the Bible into German, is widely in 1810 by linguist and philosopher credited for having set the basis for the Wilhelm von Humboldt served as an modern "High German" language. influential model for a number of modAmong the most admired German ern western universities. poets and authors are Lessing, GoeIn the 21st century Germany has the, Schiller, Kleist, Hoffmann, Brecht, been an important country for the Heine and Schmidt. Nine Germans development of contemporary anahave won the Nobel Prize in literature: lytic philosophy in continental Europe, Theodor Mommsen, Paul von Heyse, along with France, Austria, SwitzerGerhart Hauptmann, Thomas Mann, land and the Scandinavian countries. Nelly Sachs, Hermann Hesse, Heinrich Böll, Günter Grass, and Herta Müller. Philosophy
The rise of the modern natural sciences and the related decline of religion raised a series of questions, which recur throughout German philosophy, concerning the relationships between
In the 21st century Germany has been an important country for the development of contemporary analytic philosophy in continental Europe
Grönemeyer, Scorpions, Blind Guardian, Rammstein, Nena, Xavier Naidoo, Dieter Bohlen, Tokio Hotel and Modern Talking have enjoyed international fame. German musicians and, particularly, the pioneering bands Tangerine Dream and Kraftwerk have also contributed to the development of electronic music.[9] Germany hosts many large rock music festivals annually. The Rock am Ring festival is the largest music festival in Germany, and among the largest in the world. German artists also make up a large percentage of Industrial music acts, which is called Neue Deutsche Härte. Germany hosts some of the largest Goth scenes and festivals in the entire world, with events like
Music
In the field of music, Germany claims some of the most renowned classical composers of the world including Bach, Mozart and Beethoven, who marked the transition between the Classical and Romantic eras in Western classical music. Other composers of the Austro-German tradition who achieved international fame include Brahms, Wagner, Haydn, Schubert, Händel, Schumann, Liszt, Mendelssohn Bartholdy, Johann Strauss II, Bruckner, Mahler, Telemann, Richard Strauss, Schoenberg, Orff, and most recently, Henze, Lachenmann, and Stockhausen. As of 2006, Germany is the fifth largest music market in the world,[8] has exerted a strong influence on techno and rock music, and pioneered Wilhelm Richard Wagner trance music. Artists such as Herbert
Immanuel Kant
Wave-Gotik-Treffen and M'era Luna Festival easily attracting up to 30,000 people. In addition, the country hosts Wacken Open Air, the biggest heavy metal open air festival in the world. Since about 1970, Germany has once again had a thriving popular culture, now increasingly being led by its new-old capital Berlin, and a self-confident music and art scene. Germany is also very well known for its many renowned opera houses, such as Semperoper, Komische Oper Berlin and Staatstheater am Gärtnerplatz. Richard Wagner has built the Bayreuth Festspielhaus. One of the most famous composers in the film business is German Hans Zimmer. ■
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German Business Etiquette
Formal, Detail-Oriented and Direct Knowing a few rules of etiquette can greatly ease the process of making business contacts in Germany
W
hen making a first contact via email, be sure to follow international standards for netiquette by structuring your message well and keeping it short. If you are calling your German business partner, please do him/her the favor of identifying your company and yourself by name when you first greet him/her. Relationships & Communications • Germans do not need a personal relationship in order to do business. • They will be interested in your academic credentials and the amount of time your company has been in business. • Germans display great deference to people in authority, so it is imperative that they understand your level rela-
tive to their own. • Germans do not have an open-door policy. People often work with their office door closed. Knock and wait to be invited in before entering. • German communication is formal. • Following the established protocol is critical to building and maintaining business relationships. • As a group, Germans are suspicious of hyperbole, promises that sound too good to be true, or displays of emotion. • Germans will be direct to the point of bluntness. • Expect a great deal of written communication, both to back up decisions and to maintain a record of decisions and discussions. usiness Meeting EtiB quette • Appointments are mandatory and should be made 1 to 2 weeks in advance.
• Letters should be addressed to the top person in the functional area, including the person's name as well as their proper business title. • If you write to schedule an appointment, the letter should be written in German. • Punctuality is taken extremely seriously. If you expect to be delayed, telephone immediately and offer an explanation. It is extremely rude to cancel a meeting at the last minute and it could jeopardize your business relationship. • Meetings are generally formal. • Initial meetings are used to get to know each other. They allow your German colleagues to determine if you are trustworthy. • Meetings adhere to strict agendas, including starting and ending times. • Maintain direct eye contact while speaking. •A lthough English may be spoken, it is a good idea to hire an interpreter so as to avoid any misunderstandings. • At the end of a meeting, some Germans signal their approval by rapping their knuckles on the tabletop. • There is a strict protocol to follow when entering a room: • The eldest or highest ranking person enters the room first. • Men enter before women, if their age and status are roughly equivalent. Business Negotiation • Do not sit until invited and told where to sit. There is a rigid protocol to be followed.
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Germany and montenegro: Challenging Business Opportunity
• Meetings adhere to strict agendas, including starting and ending times. • Treat the process with the formality that it deserves. • Germany is heavily regulated and extremely bureaucratic. • Germans prefer to get down to business and only engage in the briefest of small talk. They will be interested in your credentials. • Make sure your printed material is available in both English and German. • Contracts are strictly followed. • You must be patient and not appear ruffled by the strict adherence to protocol. Germans are detailoriented and want to understand every innuendo before coming to an agreement. •B usiness is hierarchical. Decisionmaking is held at the top of the company. • F inal decisions are translated into rigorous, comprehensive action steps that you can expect will be carried out to the letter. • Avoid confrontational behavior or high- pressure tactics. It can be counterproductive. • Once a decision is made, it will not be changed. Dress Etiquette • Business dress is understated, formal and conservative. • Men should wear dark colored, conservative business suits. • Women should wear either business suits or conservative dresses. • Do not wear ostentatious jewellery or accessories. ■
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Germany and montenegro: Challenging Business Opportunity