BROD MUNICIPALITY

INVESTMENT BRIEF

BROD MUNICIPALITY ¦ INVESTMENT BRIEF2

BROD MUNICIPALITY

Brod Municipality in Republika Srpska (RS)/ Bosnia and Herzegovina (BiH)

Bosnia and Herzegovina in Europe

RepublikaSrpska

RepublikaSrpska

FederacijaBosne i Hercegovine

Location Bosnia and Herzegovina, Republika Srpska

Population 17,943

Territory 228 km2

2017 budget 9.780.000 KM / 5.000.000 €

Mayor Mr. Ilija Jovičić

Address Svetog Save 17, 74450 Brod

Telephone/Fax Tel: + 387 53 610 116, Fax: + 387 53 610 116

E-mail portparol@opstina-brod.net, nacelnik@opstina-brod.net

Web www.opstina-brod.net

Climate Temperate continental

Time zone Central European Time

Average altitude 95 m

BROD MUNICIPALITY ¦ INVESTMENT BRIEF 3

The geographic position and accessibility of transport infrastructure make Brod Municipality an excellent location for establishing and growing a business. Brod lies at the very border with the Republic of Croatia and EU, with around 500 million of potential consumers. The Brod international border crossing is a Category II customs terminal which is transited by approximately 100,000 trucks every year.

Brod Municipality offers greenfield and brownfield zones for investment, situated around 3 km from the border crossing, with lease prices of land as low as 1 KM/m2 in the greenfield zones, depending on the number of jobs created by an investor, and qualified work force in metal processing, locksmiths and welders trained in TIG, MIG and REL procedures and holding the certificates from the TÜV certification company.

Brod lies around 30 km from the regional Vc highway that will connect the Port of Ploče (Croatia/EU) through Sarajevo and Doboj with the highway E70 Ljubljana (Slovenia) – Zagreb (Croatia) – Belgrade (Serbia).

The Brod border crossing is 8 km away from the highway E70 that links with the far north of Europe (Scandinavia), Western Europe (the Netherlands), east (Turkey) and south (Italy and Spain), with no costs for transportation within BiH of goods manufactured in Brod, as Brod is on the very border with EU.

Brod is located 4 km from the railway station in Slavonski Brod (Croatia/EU), which enables transport of raw materials and final products by train to any part of Europe and lowers transportation costs. Transport of goods to the Slavonski Brod railway station is possible only by land.

In October – April period, when the Sava River is navigable, the waterways permit shipping to Belgrade (Serbia) and further down the Danube to the Black Sea. The Bosphorus and Dardanelles Straits effectively permit further shipping of the goods to any part of the world without reloading. Brod is 45 km away from the port in Šamac and 107 km away from the port in Brčko (BiH). The closest airports are Banja Luka – 100 km and cargo airports in Zagreb (Croatia) 190 km, Belgrade (Serbia) 210 km and Sarajevo 220 km.

BROD MUNICIPALITY – A LOCATIONWITH EXCELLENT TRADE LOGISTICS

TRANSPORT INFRASTRUCTURE/ LOGISTICS LINKS

Links of Brod Municipality with the far east and west of Europe by land via highway E70

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BROD MUNICIPALITY – DISTANCE TO MAJOR CENTERS km Driving time by car

BANJA LUKA (Bosnia and Herzegovina) 110 km 1 h 44 min

ZAGREB (Croatia) 192 km 1 h 52 min

SARAJEVO (Bosnia and Herzegovina) 216 km 3 h 01 min

BELGRADE (Serbia) 220 km 2 h 08 min

LJUBLJANA (Slovenia) 330 km 3 h 04 min

BUDAPEST (Hungary) 360 km 3 h 31 min

TRIESTE (Italy) 424 km 4 h 01 min

VIENNA (Austria) 562 km 5 h 16 min

SOPHIA (Bulgaria) 608 km 6 h 28 min

MUNICH (Germany) 737 km 6 h 57 min

ROME (Italy) 1,085 km 10 h 00 min

ISTANBUL (Turkey) 1,188 km 12 h 28 min

• BiH Ministry of Foreign www.mvp.gov.ba• BiH Ministry of Foreign Trade and Economic Relations www.mvteo.gov.ba• BiH Economic Planning Directorate www.dei.gov.ba• Republika Srpska Government www.investsrpska.net

INFORMATION ON BOSNIA AND HERZEGOVINA’S BENEFITSIN INTERNATIONAL TRADE

SECTORS FOR INVESTMENTS

Metal industry Brod Municipality has a long tradition in manufacturing of metal products. The major producers were companies ‘Metal-Emajl’ – manufacture of metal products for bathrooms (baths, wash basins, and lavatory cisterns), ‘Metal’ Brod – manufacture of metal frames for construction industry and ‘Adapter’ – manufacture of extension devices for agricultural machinery.

In Brod Municipality, educated, trained and experienced work force in the metal sector is available to investors. Out of the total of 1.898 unemployed on the list of Brod’s Employment Bureau, 226 are in metalworking (135 locksmiths, 19 welders, 11 lathe operators, 38 car mechanics and 23 mechanical engineering technicians). The welding school in Brod trains welders in TIG, MIG and REL techniques, while a TÜV certification company in the neighboring Slavonski Brod conducts testing and provides certificates to trained welders.

Links

The subsector for locksmith’s and welding work holds the greatest investment potential in the metal sector.

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AgricultureAround 2.100 hectares of land are available to investors in agriculture sector in Brod. The soil quality is quite favorable for investment in crop farming and fruit growing (plums, apples and pears). 2017 agricultural output in Brod Municipality included:

• 1.595 heads of cattle• 7.000 pigs• 305 ha of wheat• 2.900 ha of corn• 10.000 apple trees• 10.000 pear trees• 100,000 plum trees

Due to a growing trend in livestock farming (cattle and pigs), the surface area in cultivation increases by about 50 ha every year, indicating a mild expansion in agriculture.

In 2017, 302 farms were registered in Brod Municipality. In 2017, farmers were allocated 815 ha of arable land, with the allocation of remaining land continuing in 2018. Corn and wheat are the leading crops. Brod Municipality and the RS Government provide incentives to farms in the form of funds, agricultural machinery and livestock for raising and breeding.

BROD MUNICIPALITY ¦ INVESTMENT BRIEF6

UTILITY COSTS FOR BUSINESS USERS IN BROD MUNICIPALITY

HUMAN RESOURCES

• Electricity 0.038 EUR/kWh• Water 1.05 EUR/m3

• Sewage 0.307 EUR/m3 of water consumed• Heating 1.31 EUR/m2

EMPLOYED PERSONS 3.025 (62.74%)

UNEMPLOYED PERSONS 1.898 (37.26%)

AVERAGE GROSS WAGE IN BROD MUNICIPALITY 1,412.00 KM

EDUCATIONAL INSTITUTIONS

‚Nikola Tesla‘ Secondary School – educates students for the economics,

chemistry, electronics and metal sector profiles, and on general program curricula

Closest university and technology ceters are in Banja Luka (120 km away):1. Banja Luka University (http://unibl.org/).2. Banja Luka Innovation Center (ICBL) (http://www.icbl.ba/) established to support the entrepreneurship and

SME development

The listed prices do not include VAT.

INVESTMENT LOCATIONS OFFERED BY BROD MUNICIPALITY

The Assembly of Brod Municipality adopted the decision on establishing and business zones for investments.

At present, three locations ( zones) are available for investments, on land 100% owned by Brod Municipality, with surface area 3 ha, 4 ha and 6 ha. The infrastructure should be developed in the zones - a contract between the municipality and investors could define the mode of investment in a zone and development of utility infrastructure for construction of manufacturing and/or service plants. All the zones are located in the town area, not more than 3 km from the border crossing.

Business Zone – the ‘Metal Emajl’ Co. (which used to manufacture bathtubs, shower cabins, toilet cisterns and bathroom equipment), privately owned, with the total surface area of 36,012 m2, of which 9,852 m2 of manufacturing plants and office space.

The contact point for both and business zones:

Municipal Departmentfor Socio-Economic DevelopmentContact person: Mr. Boro GrabovacPhone: +387 53 611 972Email: grabovacb@opstina-brod.net

Commercial and Social DepartmentContact person: Mr. Slobodan Pejčić Phone: +387 53 610 918Email: privreda@opstina-brod.net

BROD MUNICIPALITY ¦ INVESTMENT BRIEF 7

SUPPORT TO INVESTORS PROVIDED BY BROD MUNICIPALITY

AVAILABILITY OF GENERAL SERVICES

The administration in Brod Municipality is swift and efficient, we will issue all documents an investor may need within 7 days after a request is submitted.

Brod Municipality offers land lease prices as low as 1 KM/m2 in the greenfield zones, depending on the number of created jobs.

Brod Municipality provides financial incentives to employers of up to 5,000 KM per a job.

The costs of fees and charges in Brod Municipality are among the lowests in Republika Srpska.

Municipal fee for construction permit: • 50 KM for buildings worth up to 50,000 KM • 100 KM for buildings worth up to 100,000 KM• 0.1% of the value for buldings worth over 100,000 KM, to a maximum of 1,000 KM

Municipal charge for environmental permit is 150 KM. The charge for issuing the usage permit:• 50 KM for buildings with the surface area up to 400 m2

• 100 KM for buildings over 400 m2

Preparations are under way for the implementation of the Brod Municipality Water Supply and Sewerage Network Reconstruction Project, worth around 9.5 million KM, which will improve local business environment and enhance the quality of life in the municipality.

There are eight commercial banks and two microcredit organizations operating in Brod Municipality, and a number of insurance companies, several book-keeping agencies, notary office, legal offices, and several shipping agencies. The contact information for these agencies and bureaus are available at Brod Municipality through the investor contact points.

The following information is also available to investors:

• Electronic registers with detailed listing of permits and licences that investors need in Republika Srpska and Bosnia and Herzegovina are available on the following links:

• Republika Srpska Governmenthttp://www.regodobrenja.net/index.php?jezik=1

• BiH Ministry of Foreign Trade and Economic Relations http://rap.mvteo.gov.ba/egfVwOdlukaJedinice.aspx

• Listsoffiscalandnon-fiscal investment incentiveson the levelofRSandBiHareavailableon thefollowing links:

• Republika Srpska Government/Invest Srpskahttp://www.investsrpska.net/index.aspx?PageID=436&menuID=215&langid=1

• BiH Ministry of Foreign Trade and Economic Relationshttp://www.mvteo.gov.ba/izvjestaji_publikacije/izvjestaji/default.aspx?id=6175&langTag=en-US

INVESTORS IN BROD MUNICIPALITY

There are 454 companies currently operating in the Brod Municipality. The most important among them are:

• „Zarubežneft“, oil industry, investment from Russia – An oil refinery processing 1,000,000 tons of oil per year and employing 969 workers.

• SCAI Adapter, investment from Italy – The company produces metal shims for car industry, mostly for Fiat, Lancia and Alfa romeo. The company employs 149 and records an annual turnover of 10 million KM.

• ST Komerc, a company manufacturing aluminium and PVC joinery, employing 17 workers and recording an annual turnover of around 800,000 KM. The company exports around 90% of its products, mainly to Germany.

• Brod Promet, a company for wholesale trade in alcoholic and non-alcoholic beverages, with over 8 million KM in annual turnover and 12 employees.

DID YOU KNOW ...• the Brod Railway Station was built in 1896, the train left Brod on 15th July 1987... The Brod Railway

Station was the busiest railway crossing in BiH until the end of the World War II... The station was built in a pseudo-Moorish style, the architect found the model for the building in Afghanistan...

• the petroleum lamp in BiH was used in Brod in 1860, owing to Slavonski Brod merchants...

• the oil managed to procure a Ford automobile in 1923 and that was the motor vehicle in Brod

• the airshow was held in Brod in 1912, just 9 years after the of airplane in the world...

CONTACT FOR INVESTOR SUPPORT IN BROD MUNICIPALITY

Municipal Department for Socio-Economic DevelopmentContact person: Mr. Boro GrabovacPhone: +387 53 611 972Email: grabovacb@opstina-brod.net

Commercial and Social DepartmentContact person: Mr. Slobodan Pejčić Phone: +387 53 610 918Email: privreda@opstina-brod.net