Despite the increase in (Foreign Direct Investment) FDI there still remains: an abundance of spare production halls and facilities, a vast amount of unused natural resources, and human capital which in turn is causing a huge gap between real potential and actual performance of the B&H economy. To decrease this gap and materialize on this huge potential, B&H economy needs to increase: capital investment, new technologies and its foreign consumer base.   Strategic partners and large international companies can help B&H and in turn benefit from this further materialization of unused sources by investing in the following sectors:

• TOURISM

• AGRICULTURE AND FOOD PROCESSING INDUSTRY

• ENERGY

• WOOD

• MINING AND METAL PROCESSING

• AUTOMOTIVE

• CONSTRUCTION INDUSTRY

TOURISM

B&H recognizes tourism development as one of its top priorities from an overall national-economic development policy.  A lot of effort has been put into place to create a favorable investment environment for potential investors.

Unspoiled nature and rich historical and cultural heritage are what modern tourists look for which one can easily find in Bosnia and Herzegovina.  In terms of active tourism visitors can enjoy some of the many outdoor activities such as: Skiing, rafting, biking, and hunting.  Furthermore, B&H also caters to lovers of culture who will be mesmerized by the diverse and complex history of Bosnia and Herzegovina dating as far back as to Roman to even prehistoric times.

Investment opportunities in the tourism sector include: upgrading existing resorts, modernization of existing facilities and programs, and adjustments to business models, management philosophy and marketing strategy. 

AGRICULTURE AND FOOD PROCESSING INDUSTRY

Bosnia and Herzegovina is very rich in natural resources: unpolluted and fertile uncultivated land (50% of agriculture land is uncultivated), and clean water, along with ideal climate conditions creates the perfect environment for agricultural production.  Furthermore, skilled low cost labor (much cheaper than EU laborers) with a long tradition in agriculture is abundantly available; there also exists a developed education system along with agronomic and veterinary support. In order for B&H to meet its potential in terms of processing, additional investment is needed in upgrading technology and establishing new factories to make use of the perfect soil and weather conditions.

Bosnia has many different soil qualities and types, accompanied with easily accessible water supply, allowing for a large variety of agricultural production and differing land use:

AGRICULTURE LAND USE OF B&H

FIELD CROPS	Northern parts of B&H and river valleys are suitable for: field crop production, cereals, industrial crops, vegetables, feed crops.
LIVESTOCK AND FORAGE PRODUCTION	B&H has favorable climate conditions and lots of grassland for raising and breeding stock for milk/dairy and meat production.
VEGETABLE GROWING	A variety of different vegetables and fruits can grow in B&H, even mountain grasslands can be made use of for producing high quality potatoes, cabbage, rye, barley, oats, and etc.
MEDICINAL AND AROMATIC HERBS	Favorable climate, geographic and soil conditions have contributed to the rich biodiversity of medicinal and aromatic plants.
FRUIT AND VINE-GROWING	There are currently around 14 million trees producing plum, pear, apple, berry and other fruit for juice production and export.    There is a lot of potential here as B&H is full of hilly-mountainous regions and river valleys that get a lot of sunlight which are perfect for fruit-growing.   Wine production takes place in:  Mostar, Čitluk, Stolac, Ljubuški,Trebinje and Capljina.
FISH FARMING	Great investment potential for family to industrial size fish farming production: B&H has an abundance of clear, unpolluted rivers and streams.
ORGANIC FOOD PRODUCTION	The Washington Urban Institute and Sarajevo Economic Institute study identified huge potential for the organic food sector in B&H.
FOOD PROCESSING INDUSTRY	There is a lot of investment potential here, as there is access to a cheap educated labor force and an abundance of natural resources.

 

ENERGY

The energy sector has a long tradition in B&H.  Bosnia is also a member of the Energy Community of SEE (Energy community of South East Europe) allowing it to extend its energy market.  There exists huge potential and opportunities for further development and investment. 

Bosnia and Herzegovina possesses significant and diverse energy recourses:  

• Coal (brown coal and lignite) is B&Hs main energy resource at about 6 billion tons.
• Bosnia has a vast amount of hydro energy but only about 35 %  of hydro energy is being utilized (6000 MW is in use). This presents a huge investment opportunity to materialize on, in terms of exporting.
• In terms of the bio-mass energy, conditions are extremely favorable; there are approximately 1.5 million m3 of forest/wood industry residues (all wood waste, sawdust, chips, and chipped technical wood), etc. 
• Geo-thermal and solar energy  have not been explored and exploited, however potenital exists. 
• Research for  oil and gas indicate that there exist deposits on a number of sites in B & H (reserves are estimated at about 50 million tons of oil)

 

WOOD SECTOR

B&H posseses both hard wood (60%) and soft wood (40%), and has a long tradition in terms of wood processing.

50% of the country is covered in forests and has ample supply to serve both the furniture and construction industry.   

Over 60% of B&Hs wood production is exported, and wood is becomming one of the country's top export products.  Bosnian Beech is famous world wide due to its high quality.  The largest export markets for B&H in terms of wood are to: Western Europe, USA, and Middle East, meaning that there still exists a huge export potential to other countries.  Investment in new companies or upgrading old infrastructure with an introduction of new technology will enable B&H to increase its wood exports and in turn this can prove to be a  profitable  business for potential investors.

Most attractive uses for this sector, which should be targeted by potential investors are:

• pulp and paper mills

• edge glued panels

• veneer / hardwood plywood

• parquet

• furniture (preferably solid wood)

• medium density fiberboard

• particleboard

• joinery

• biomass (briquette, pellets, heat generation) 

MINING AND METAL PROCESSING

In terms of overall exports this is the leading sector for B&H.  Along with possessing large deposits of coal, bauxite, iron, and limestone B&H also has a long tradition in mining: exploration, exploitation, metal and other mineral processing.

 

Metal Type	Amount	Location
	Around 650 million tons	Ljubija and Jablanica region
Bauxite	Around 120 million tons, with 30 million tons of accessible reserves.	Vlasenica, Jajce, Mostar, Čitluk, Posušje, Stolac, Tomislavgrad, Žitomislići, and Bosanska Krupa
Zinc and Lead	Around 56 million tons	Olovo, Vareš, and Srebrenice
Magnesite	Around 2 million tons	Kladanj
Manganese	Around 2.5 million tons	Bužim and Konjic
Chromium	200 000 tons	Vareš

 

Higher level of specialization is needed in this sector, as well as introduction of new technologies to increase production.  There is a great array of opportunities in this sector especially as there is supporting infrastructure, education system, research and development institutions and engineering companies, providing a strong base for powerful development.

TOP METAL COMPANIES IN BIH:

COMPANY	WEBSITE
ALUMINIJ d.d Mostar	www.aluminij.ba
ARCEROL MITTAL ZENICA,d.o.o.	www.arcelormittal.com
ARMEX ARMATURE doo Sarajevo
BEKTO-PRECISA doo, Goražde	www.precisa.ba
METALNA INDUSTRIJA PRIJEDOR	www.mip.rs.ba
BOSNAMONTAZA a.d. Prijedor Company	www.bosnamontaza.com
BNT-Tvornica Masina i Hidraulike, d.d. Novi Travnik	www.bnt-tmh.com.ba
Energoinvest - termo aparati TAT, Sarajevo	www.tat.ba
BIRA - Bihać	www.bira.com.ba
FEAL doo Široki Brijeg	www.feal.ba
Metalno d.d. Zenica	www.metalno .com
MLM Alutec Bugojno
MaxMara d.o.o. Banja Luka	www.maxmaradoo.com
Fagus Haus d.o.o. Banja Luka	www.fagushaus.biz
Termoklima d.o.o. Trn Laktaši	www.termoklimadoo.com

 

AUTOMOTIVE INDUSTRY

For decades, dating back to the 1950s, major automotive companies have relied on Bosnia’s skilled workforce to assemble cars for Western markets.  Despite the turbulence caused by the war, B&H companies remain prominent as suppliers of quality auto components; B&H produces cars for Volkswagen, also diesel engines licensed under Mercedes Benz are produced in B&H.

The spectrum of automobile parts produced and assembled here in B&H include: engines and gears and their parts, high-quality metal precision parts, drive shafts, brake parts and systems, clutches, steering parts and systems, pumps, filters, automotive electric parts (signals, relays, electronic switches), textile and leather products, plastic injection parts, aluminum wheels, car batteries, and various small parts such as springs, screws, hoses, and components of metal, rubber or plastic.

In B&H there are 15 large distributors, selling components for around 30 different vehicle brands and models.  However, ASA Auto and Hyundai are exclusive distributors for B&H.

B&H has many advantages in the automotive sector: availability of skilled labor in engineering and other technical areas, developed inhouse R&D, facilities for productions, competent reputation, a wide export base with established clients, and geographic location.  To increase the competitiveness among automative companies within B&H, the Automative cluster B&H was formed in 2004.

Investors looking for profitable businesses in B&H should consider B&Hs automotive industry.  Investing in upgrading capacity and technology will allow B&H companies to increase their specialization and scope in certain activities.  Raw materials will become available upon investing in technology chain bottlenecks, thereby filling in the missing links and consequntly expanding B&Hs trade abroad.

CONSTRUCTION

Much of the construction supply ranging from building material to roadways is readily availabe in B&H, and offers a great opportunity in terms of export development. 

Additional investment opportunities can be found in the civilengineering sector of B&H where projects focus on major road, rail and energy production development.  It should be noted that these are large scale construction projects needing deep investments.

In terms of residentialand/busniess centres, construction, there already exist top foriegn companies and ogranizations that are heavily investing in this sector such as: EBRD, World Bank, and Saudi & Kuwait Fund. 

This sector is on the priority list for B&H as it needs further development and investments in modernization of mechanization and equipments.  In terms of human capital:  there are plenty of qualified workers with experience; graduate engineers, architects and civil engineers which will be more than willing to help with such projects.