Serbian plum conquers Moscow - Russians interested in goods distribution center project in Blace valued at about EUR 3.5 million

Serbian producers are not sufficiently exploiting a duty free export agreement with Russia, both economists and politicians agree. In order to strengthen domestic export to this large and demanding market, it is necessary to join forces and merge. Among other things, our country has agricultural products which are extremely interesting to Russians, but there is still a problem – quantity. It is necessary to build centers where fruits would be collected and then exported in an organized way.

The Blace municipality presented this idea in October at a large investment conference in Moscow. In the Russian capital, where there is a large interest in the purchase of fruits from Serbia, they presented the goods-distribution center project for three municipalities within the Toplice region.

Blace is a municipality which, in comparison to its surface area, has the biggest number of plum trees in Serbia. Up to 60 thousand tons of that fruit which mostly ends up in brandy, is collected here. Still, if the distribution center project is implemented, the region will be capable of placing more than thousand ton of dry fruit.

The goods-distribution center for Prokuplje, Blace and Kursumlija is included in the Blace Spatial Plan. The project calls for the construction of an industrial zone on an area of 12 hectares in the Pretezane location with a complex of business and industrial facilities, totaling EUR 3.5 million.

Milivoje Ralic, the assistant mayor of the Blace municipality, says to eKapija that they have good impressions from the Moscow conference, but that they are expecting specific results.

- There were companies who found the center interesting, mostly transporters i.e. distributors. Apart from that, we got a promise from the representatives of one of their chambers of commerce that they will deliver our project to Russian businessmen – our collocutor says.

- Apart from that, while we were in Moscow, a potential investor called and asked to send him material, which we did. We will see his reactions – Ralic adds.

The goods-distribution center will actually be business-agri-industrial zone. It will function as a terminal market for regional cities, but it will have facilities for processing and preparation of products for other locations.

The center would comprise storage facilities (warehouse, cold storage) and administrative building of the market with internal traffic arteries and green areas.

According to preliminary estimates, it is necessary to set aside EUR 1.737 million for the development of essential infrastructure (access roads, water supply system, sewerage system, electricity, etc). The scope of investment for industrial facilities will depend on potential investors’ needs. The preliminary estimation totals EUR 1,877 mil.

For the municipality, Milivoje Ralic explains that the construction of the center would mean an organized purchase of fruit, in significant quantities, as well as transport, storage and distribution.

- It would be the most efficient probably if we could get one investor but we do not leave out the options that a couple of them appear who would invest mutually – our collocutor says.

The Blace municipality did a study, i.e. investment profile translated into Russian and soon the Serbian Chamber of Commerce should provide support and the translation to the English.

The plan documentation development is now due. The program of the European partnership with municipalities (EU PROGRES) funded the spatial-program study because so far there have not been sufficient elements for business plan.

- We are very grateful for that and we expect to cooperate in the future – the Assistant Mayor of the Blace municipality says.

Capacity

Apart from famous Blace plum, other fruit would be stored here as well -apples, pears, cherries, strawberries, plums and quince.

It is estimated that storage capacities of 3000 tons will be sufficient and fully-exploited within the first five years of exploitation.

- We suggested fresh fruit to be exported from here but in Moscow we found out that they are primarily interested in dry plums, i.e. that dry products are much more interested to them – assistant municipal mayor explains.

According to development concept of Goods-distribution center, the construction is planned in two stages.

The first stage comprises construction of only basic facilities as well as minimal investment in infrastructure construction to the scope which satisfies the needs of the construction of main warehouse-cold storage. In line with that, land would be provided only to the necessary area for the start of works. The initial investment amount would this way be reduced to the most minimal amount for the conditions provided and the period of investment repay would decrease.

The rest of the land would be provided in the second stage, the remaining infrastructure would be built so that investment terms would be provided. After that, other facilities would gradually be built: additional warehouse and/or processing capacities (in line with the investors’ interest), business and additional premises…

The essence of the goods-distribution center is purchase of fresh fruit and vegetable during the whole season and then selection, packing, storage and product sales at the market. Income would be generated through the following sources: service fruit and vegetable storage, sorting services, packing and placement.

Fruit growing area

The Toplice region is above the republic average when it comes to the area under orchards areas and the yield of some crops, especially plum and cherry.

Out of the total agricultural land area in the Blace municipality, some 6000 ha is under fruit areas, 5000 of which is plum (yield of 10-12.000 kg per hectare – even 14% of total production n Serbia), some 500 of which of cherry (with yield of some 8000 kg per hectare) and some 300 hectares under apples.

Possible state participation

- State grants for greenfield and brownfield projects

- Grants of the National Employment Bureau

- Infrastructure development co-financing for Blace Goods Distribution Center

- Republic and municipal incentives

M.S.