INVESTMENT OPPORTUNITIES IN METAL WOOD TEXTILE LEATHER AND

INVESTMENT OPPORTUNITIES IN METAL, WOOD, TEXTILE, LEATHER AND FOOTWEAR SECTORS OF THE REPUBLIC OF SRPSKA

Dear prospective investors, This is a short presentation of a number of non-privatized companies operating in the field of metal industry, wood, textile, leather and footwear sectors of the Republic of Srpska. We hope that this presentation will arouse your interest. Ministry of Industry, Energy and Mining

METAL INDUSTRY

SECTOR IMPORTANCE § Metal sector is one of the most important sectors of processing industry in terms of number of business entities, number of employees, and generated export. § Most prominent fields of metal industry are as follows: o Base metal manufacturing, o Finished metal goods manufacturing, except machines and equipment, o Electrical equipment manufacturing, and o Machine and equipment repair and installation. § There are 453 business entities operating in metal industry, § This sector generates more than 24% of total production generated by processing industry, § Metal industry employs 11, 247 workers or 35. 9% of total workers employed in processing industry, § Metal industry generates 618, 067, 000 KM or 38. 6% of total export by processing industry.

WHY INVEST IN METAL INDUSTRY § Long manufacturing tradition, § Production capacities distributed throughout the territory of the Republic of Srpska, § Favorable geographic position which enables deliveries to reach any location in Europe within 24 hours, § Republic of Srpska has significant basic materials, raw materials and energy required for work, § Stimulative tax policy, § Restructured and stable financial system, § Quality and availability of highly skilled labor force, at competitive labor costs, § Free access to markets of Southeast Europe and EU, § Available capacities for putting into function, § Largest exporters of the Republic of Srpska operate in metal sector.

THEY HAVE ALREADY INVESTED § The sector has attracted promising regional and global companies, mainly through brownfield investments. § Present investors: ₋ Balkan Steel Int Est, Liechtenstein ₋ Alpos, Slovenia ₋ SCAI and PRO-Re N. A. , Italy ₋ Livar, Slovenia ₋ Alumil YU Industry, Serbia ₋ Iskra, Slovenia ₋ FKL, Serbia ₋ Net. QM, Austria ₋ PMP FIMSI S. P. A. , Italy ₋ Končar, Croatia ₋ Uscha Martin Black, India

FAMOS - Fabrika motora Sarajevo a. d. Istočno Sarajevo Founded: 1950 Number of workers: 230 Production range: engine and gear shift manufacturing and overhaul State-owned capital 52. 11%. Significant assets: § land area § building area 52, 705 m 2 18, 245 m 2 Production potentials: § engines 1, 500 pcs/year § gear shifts 1, 500 pcs/year § engine parts: crankshafts 10, 000 pcs/year, housings 5, 000 pcs/year, § cylinder heads 30, 000 pcs/year and cogwheels 30, 000 pcs/year Cooperation opportunities: § privatization, § technical business cooperation (investment in manufacturing equipment modernization and product development and market expansion).

NOVA TVORNICA PREČISTAČA a. d. Rogatica Founded: 2010 Number of workers: 19 Production range: manufacturing of purifiers and filters for air, fuel and oil, oil separators State-owned capital 100% Significant assets: § construction land area § building area 24, 141 m 2 13, 246 m 2 Production potentials: § purifiers: air 30, 000 pcs/year, fuel 5, 000 pcs/year, and oil 5, 000 pcs/year § Filters: air 150, 000 pcs/year, fuel 200, 000 pcs/year, and oil 150, 000 pcs/year Cooperation opportunities: § privatization, § possibility of sales of unused land (suitable for greenfield investment) § possibility of sales or lease of production halls (suitable for brownfield investment) § technical business cooperation (investment in manufacturing equipment modernization and product development and market expansion).

KOSMOS a. d. Banja Luka Founded: 1958 Number of workers: 255 Production range: performs the overhaul, modification and modernization of radar and rocket systems of all generations, electronic systems and professional equipment, overhaul and repair of electric machines and engines, distribution transformers and power engineering equipment. State-owned capital 100% Significant assets: § construction land area § building area 55, 866 m 2 41, 846 m 2 Production potentials: § Overhaul 154, 000 hrs. /year, production 118, 000 hrs. /year and services 60, 000 hrs. /year. Cooperation opportunities: § privatization, § possibility of sales of unused land (suitable for greenfield investment) § possibility of sales or lease of production halls (suitable for brownfield investment) § technical business cooperation (investment in manufacturing equipment modernization and product development and market expansion). § Web address: http: //www. kosmos. ba/Lat/Index. html

FMSN - Fabrika motora specijalne namjene a. d. Pale Founded: 1982 Number of workers: 107 Production range: the main activity is manufacturing/overhaul of multi-purpose diesel engines of power ranging from 574 k. W to 735 k. W (possibility of manufacturing higher power engine). State-owned capital 62. 34%. Significant assets: o construction land area 22, 430 m 2 o building area 15, 260 m 2 Production potentials: o manufacturing of T-72 and M-84 tank engines 150 pcs/year, o overhaul of T-72 and M-84 tank engines 100 pcs/year, and o thermal treatment, sandblasting, lacquering, and paint baking. Cooperation opportunities: o privatization, o technical business cooperation (investment in manufacturing equipment modernization and product development and market expansion). Web address: http: //www. fmsn. info/index_sr. html

ORAO a. d. Bijeljina Founded: 1944 Number of workers: 422 Production range: overhaul, manufacturing and laboratories in the field of aviation (overhaul of turbo jet engines, manufacturing of parts for turbo jet engines, calibration of measuring equipment). State-owned capital 81. 49%. Significant assets: o construction land area o building area 85, 930 m 2 13, 000 m 2 Production potentials: o total overhaul capacities 187, 000 QH/year (equivalent to 80 overhauls of VIPER series engine); o total manufacturing capacities 143, 000 QH/year; o services of laboratories, calibration and material testing. Cooperation opportunities: o privatization, o technical business cooperation (business partnership with global producers in the field of aviation industry) – has the following certificates: EN 9100: 2009 (BVC, Paris); ISO 9001: 2008 (BVC, Paris); Part 145 (BH DCA, Sarajevo); BAS EN ISO/17025: 2006 (BATA, Sarajevo) Web address: http: //orao. aero/

WOOD INDUSTRY

SECTOR IMPORTANCE § Wood industry has a special and strategic importance for the Republic of Srpska, § Main fields of wood industry are as follows: o Wood processing and wood product manufacturing and o Furniture manufacturing, § There are 515 business entities operating in wood industry § Wood industry generates more than 16% of total production generated by processing industry, § Wood industry employs 7, 858 workers or 19. 3% of total workers employed in processing industry, § Wood industry generates the largest surplus in foreign trade of processing industry (export import ratio is 446. 38% in the first 6 months of 2014), § More than 52% of wood industry production is placed at foreign markets, § Wood industry generates 336, 100, 000 KM or 21. 4% of total export by processing industry.

WHY INVEST IN WOOD SECTOR § Tradition in wood processing longer than 150 years, § Wood industry uses domestic natural resources as raw materials, § Raw material resources are renewable and available in most of the territory of the Republic of Srpska, § Wood industry is an environmentally acceptable activity, § Wood industry capacities are located in the wider area of the Republic of Srpska and present in almost all municipalities, § Favorable geographic location and low transport costs, § Competitive labor costs, § Stimulative tax policy, § Available capacities for putting in function shortly.

THEY HAVE ALREADY INVESTED § The sector has attracted promising regional companies, § Present investors: o Holand group, Netherlands o CORA Domenico & Figli SPA Italy o Cornelissen Holding d. d. B. V. Netherlands o Mondery S. A. , Luxemburg o Derofis A. G. Amriswil, Switzerland

NOVA ROMANIJA a. d. Sokolac Founded: 2008 Number of workers: 85 Production range: manufacturing of sawn timber, elements, wood strip flooring, wood wall cladding, and construction carpentry State-owned capital 94. 15%. Significant assets: o construction land area 145, 788 m 2 o building area 37, 169 m 2 Production potentials/installed capacities: o primary processing capacity (sawmills) 32, 000 m 3/year, o final wood processing capacity 2, 070 pcs of windows and 3, 300 pcs of doors annually. Cooperation opportunities: o privatization, o possibility of sales of unused land (suitable for greenfield investment) o possibility of sales or lease of production halls (suitable for brownfield investment) o technical business cooperation (investment in manufacturing equipment modernization and product development and market expansion).

DRVNA INDUSTRIJA VLASENICA a. d. Vlasenica Founded: 2008 Number of workers: 24 Production range: manufacturing of sawn timber, manufacturing of furniture (beds), manufacturing of parquet. State-owned capital 100%. Significant assets: o construction land area 31, 941 m 2 o building area 9, 433 m 2 Production potentials: o primary production capacity o bed production capacity o parquet production capacity o drying capacity 12, 000 m 3 annually, 24, 000 pcs annually, 48, 000 m 2 annually, 150 m 3 in one cycle. Cooperation opportunities: o privatization, o possibility of sales of unused land (suitable for greenfield investment) o possibility of sales or lease of production halls (suitable for brownfield investment) o technical business cooperation (investment in manufacturing start-up).

NOVA BORJA a. d. Teslić Founded: 2009 Number of workers: 75 Production range: manufacturing of sawn timber, veneer, solid wood furniture, parquet State-owned capital 100%. Significant assets: o construction land area 75, 975 m 2 o building area 27, 975 m 2 Production potentials/installed capacities: o sawmill capacity for log cutting 60, 000 m 3 /year, o parquet production capacity 150, 000 -180, 000 m 2, o veneer production capacity 6, 000 m 2 of freely cut veneer, Final production capacity: o chair 80, 000 pcs. o table 14, 000 pcs. Cooperation opportunities: o privatization, o possibility of sales or lease of veneer production halls (brownfield investment) o technical business cooperation (investment in manufacturing equipment modernization and product development and market expansion).

TEXTILE, LEATHER AND FOOTWEAR Key Sectors

SECTOR IMPORTANCE § Textile, leather and footwear industry has a special and strategic importance for the Republic of Srpska, § Main fields of textile, leather and footwear industry are as follows: o Textile production, o Clothes production, and o Leather and leather goods production. § There are 158 business entities operating in textile, leather and footwear industry, § This sector generates more than 6% of total production generated by processing industry, § Textile, leather and footwear industry employs 9, 363 workers or 23. 0% of total workers employed in processing industry, § Textile, leather and footwear industry generates 401, 288, 000 KM or 25. 5% of total export by processing industry.

WHY INVEST IN TEXTILE, LEATHER AND FOOTWEAR INDUSTRY § Long tradition of production, § Qualified and trained labor force in compliance with the needs of labor market, § Free access to markets of Southeast Europe and EU, § Lower labor costs than in adjacent countries, § Large unused existing capacities, § Production flexibility and possibility of fast delivery, § Stimulative tax policy, § Restructured and stable financial system, § Support to this sector through application of lower contribution base for employees, § Significant unused raw material resources of leather and wool in the Republic of Srpska.

THEY HAVE ALREADY INVESTED § The sector has attracted promising regional companies. § Present investors: o DIAMANT SRL Italy o Franzoni Filati S. p. A. Esine Italy o Relaxshoe srl Verona, Italy o Devic, Croatia

NOVI ELASTIK a. d. Vlasenica Founded: 2009 Number of workers: 17 Production range: main activity is production of sewing accessories used in other industries – textile, metal, footwear, graphic, military industry, of wide application in healthcare and construction industry. State-owned capital 100%. Significant assets: o construction land area 10, 354 m 2 o building area 745 m 2 Production potentials: suspenders, metal and plastic zippers, keychain ribbons, belts, weightlifting belts and elastics. Cooperation opportunities: o privatization, o possibility of sales of unused land (suitable for greenfield investment) o technical business cooperation (investment in manufacturing equipment modernization and product development and market expansion). o Web address: http: //www. novielastik. com/

THANK YOU FOR YOUR ATTENTION! We are available for all your questions. Ministry of Industry, Energy and Mining Phone + 387 51 339581 Telefax + 387 51 339651 e-mail: mier@mier. vladars. net http: // www. vladars. net/sr-SP-Cyrl/Vlada/Ministarstva/mper/Pages/Default. aspx http: // www. investsrpska. net