Chinese poultry meat producer to expand in Serbia

21-Jun-2018 - Last updated on 21-Jun-2018 at 09:34 GMT

The Chinese group is to purchase land with a total surface of 90,000 square metres

Chinese poultry meat producer Qingdao Rongxing Foods Co is planning to construct a logistics centre in Indjija, in northern Serbia, as part of the company’s plans to expand its foothold in European markets, according to senior local government officials.

The latest investment was announced by the authorities of the Serbian municipality. Under the plan, the Chinese group is to purchase land with a total surface of 90,000 square metres in Indjija’s north-eastern industrial zone.

Mayor of Indjija Vladimir Gak said the Chinese investment was considered an important project that would create numerous jobs and contribute to the economic development of the municipality.

“We will be able to accommodate major plants and logistics capacities … [within] the new industrial zone, which was developed in the past 10 months,” Gak said in a statement.

The Chinese investors, who recently visited the municipality as part of a delegation, were satisfied with the conditions within the zone, and were primarily interested in the country's food industry and infrastructure, according to the mayor.

Gak said that, due to its state of development, the industrial zone had the ambition to compete against not only its Serbian peers, but also against other zones in south-east Europe.

Construction work on the new facility is expected to begin by the end of this year. This said, the value of the planned project and the proposed number of jobs that are to be created in Indjija were not disclosed by the authorities.

Tax incentives for investment

Locating the planned logistics facility within one of Serbia’s industrial zones will allow the Chinese investors to enjoy preferential tax treatment for the project. Under Serbian law, imports into and exports from the country’s free and industrial zones are not subject to value-added tax (VAT), customs and clearance.

“If goods are produced within a zone [with the use of] a minimum of 50% of domestic components, they are considered to be of Serbian origin and are therefore eligible to be imported into Serbian territory or exported without customs, pursuant to free trade agreements,” according to data from the state-run Development Agency of Serbia (RAS).

This latest development marks another major investment by a foreign meat industry player in the country’s Vojvodina region. In 2015, German meat business Tönnies signed a memorandum of understanding with the Serbian Government and, the following year, inked an agreement under which it announced a €300 million investment plan in the country’s pig breeding and meat sectors. The group aims to develop pig farms in the north of the country.

Qingdao Rongxing supplies poultry meat to a number of international chains, including US fast food chain KFC, according to the statement.

Set up in April 2007, the Chinese meat business is based in Hong Kong.

Indjija is located about 45km from the country’s capital, Belgrade.