DESPOTOVSKI FOR MIA: A BIG MACEDONIAN COMPANY WILL SOON INVEST IN THE ZONES
Over 430 million euros of new investments and over 2,000 new jobs in just one year – with these numbers we round off the best year so far since the existence of the technological-industrial development zones. Already in October, we exceeded the highest export limit of three billion euros, which was the previous highest result achieved in 2021, says the director of the Directorate for Technological Industrial Development Zones, Jovan Despotovski, in an interview for MIA.
Despotovski emphasizes that we are starting this year with a new investment from North America, which will be located in TIDZ Shtip and will bring close to 2,000 new jobs, and the start of production is planned for the end of 2023. The details of the American investment, he announces, will be announced in ten days, both by the company’s management and by the Government.
-And, of course, we don’t stop there. As I mentioned in the previous question, for a year we have been working on negotiations with an American-Taiwanese company, where neighboring Serbia and the People’s Republic of China are competing. I expect that in one to two months we will have good news and we will have the next largest investment in the existence of TIRZ, this time over 200 million euros and close to 4,000 new jobs, the director points out.
He also reveals that there are negotiations for the new high-tech zone Skopje 3.
Despotovski gives an assessment for the past year 2022, refers to the crisis, wages in the zones, the need for qualified staff,…
– I expect that the initial goal we set for ourselves, which is one billion euros of new investments in the zones by the end of the mandate in 2024, will be achieved this year, concludes Despotovski.
Director, with how many new foreign investments in the zones did we complete the year 2022 and with how many new employments?
Over 430 million euros of new investments and over 2,000 new jobs in just one year – with these numbers we round off the best year so far since the existence of the technological-industrial development zones. Already in October, we exceeded the highest export limit of three billion euros, which was the previous highest result achieved in 2021.
But what particularly pleases me is that over 3,500 new jobs have been created in the past two years alone, and from 2017 to today the number is +10,000. That is 160 percent more jobs than what was achieved in the period 2007-2016. These are 10,000 of our fellow citizens, families, neighbors, friends who were given the opportunity to achieve a decent living at home. Wages are growing and for the first time in 2021 they exceeded the average in the entire economy. This year, although the data should be summarized with the final accounts, I expect a growth in the net salary of at least 15 percent, and it is very likely that the growth is even higher.
And this is not only a success for TIDZ, the Government or for Jovan Despotovski, but it is something that should make us all happy. My policy is that people need concrete, visible results. Waving policies, promises, strategies and the like do not pay the bills at home, do not cover the costs of decent education and healthcare, nor do they put food on the table.
What are the biggest challenges facing foreign investors in this approach to crisis and what is the Directorate doing to overcome them?
The energy crisis is undoubtedly the biggest challenge facing companies, not only here, but globally. However, our analyzes show that the companies in the zones absorb well the impact of global events. So, for example, with 70 percent of them, we have registered increased imports compared to the same period last year, as well as an increase in the number of jobs. Despite that, we are working on measures that enabled companies to set up photovoltaic power plants and use the electricity for their own needs, and soon we will come up with a proposal on how to use the excess electricity in the system.
In addition, we developed a completely new methodology for granting state aid, where in the foreground is not only the interest of the investors, but also the return for the state, i.e. society, which further specifies the part related to state aid. We have introduced clear game rules and open cards. This is how we gain the trust of investors and this has been clearly demonstrated in the past two years. After all, 2022 will remain marked as the year in which we reached the largest agreement for foreign investment in TIDZ in general. With the German pharmaceutical company Gersheimer, we reached an agreement of over 130 million euros, and that only in one phase.
What is new in 2023 is a completely new concept of functioning of the Directorate by integrating other institutions in the state that should create a single entry point for state support for all medium and large companies, regardless of where the capital comes from and where they are located. Thus, the Agency for Foreign Investments will soon be integrated into the Directorate for Trade and Industry and a single entry point will be created for medium and large companies, foreign and domestic. A true National Investment Service. It will give us more room to play and provide better conditions and services for investments, not only foreign but also domestic. The goal is to replicate the successful concept of zones throughout the country.
What are the salaries in the zones and do companies pay with qualified staff?
Initial analyzes show an increase in wages of at least 15 percent for companies in the zones compared to last year, and that this year they will be above the national average. Higher wages was one of the first goals I set for myself, and for me personally, the biggest success is that we managed to impose higher wages for our fellow citizens to be a key segment in the investment plans of future foreign investors, thus definitely abandoning the concept of cheap labor.
The problem with staff that companies need is not only in our country. That is why I keep repeating that we must understand that as a small country we have limited resources, not in terms of finances or land, but in terms of people. That is why we must invest in the intellectual potential, especially of young people, and open opportunities for them to progress here. We are aware that we must work to keep them at home, because they will move this country forward. We have such smart young people here that we need to offer them the opportunity to capitalize on their intellectual potential by working in highly advanced technology companies.
That’s why we invest in training programs. Last year, we introduced a new measure with which the state covers up to 50 percent of the costs of companies for training or further education of appropriate staff, and this measure is already used by a good part of the existing and new companies with which we sign contracts.
What are the projections for 2023 in terms of investments?
We have significantly increased interest among investors, not only foreign but also domestic. Only at the moment in TIRZ we are in the stage of more advanced negotiations for investments over 500 million euros. Through the Law on Strategic Investments, we are working on the investment of Greek “Mithylineos” in the field of energy, which weighs over 200 million euros.
But what is even more significant is that we are increasingly opening up to domestic companies as well, because they have great investment potential. A large Macedonian company will soon invest in the zones, which I believe will surely encourage a series of investments from domestic companies. Amendments to the Law on Industrial and Green Zones have been in the governmental procedure since December, with which the number of companies using the zones, mostly domestic, will increase significantly. The goal is to make the model and support that until recently was the exclusive right/privilege of foreign companies fully available to domestic companies.
With all these activities, I expect that we will achieve the initial goal we set for ourselves, which is one billion euros of new investments in the zones by the end of the mandate in 2024, already this year.
What will be the first new foreign investment in 2023 and if you can tell us in which zone?
This year, 2023, we are starting with a new investment from North America, which will be located in TIRZ Shtip. We promised this to our fellow citizens from the Eastern region sometime in the middle of 2022, and at the end of December we successfully completed the negotiations. The new investment will bring close to 2,000 new jobs, and the start of production is already planned for the end of 2023.
In ten days, all the details of the investment itself will be announced in a joint announcement with the management of the company and the Government.
And, of course, we don’t stop there. As I mentioned in the previous question, for a year we have been working on negotiations with an American-Taiwanese company, where neighboring Serbia and the People’s Republic of China are competing. I expect that in one to two months we will have good news and we will have the next largest investment in the existence of TIRZ, this time over 200 million euros and close to 4,000 new jobs.
If with the German “Geresheimer”, the country is put on the list of serious investment destinations, with the new project I mentioned, this position is definitely confirmed and strengthened.
Are there any negotiations for the new high-tech zone Skopje 3?
Yes. Just a few months after the promotion of the high-tech zone concept, we received a letter of interest from a world-renowned Japanese electronics company. The challenge here is great, because this is a completely new concept not only for us, but also for the entire region. The goal is to bring companies that will focus exclusively on high technologies that bring high-paying jobs, especially for young people. Let’s provide them with European (global) conditions here at home so that they don’t have to look for them outside the borders.