Toennies might cancel its investment in Serbia

The final decision on whether the German pork producer Toennies will invest in should be made in March, according to information from the source close to the company’s top management. According to the source, the company is close to abandoning its investment all together – says the VOICE Research and Analysis Centre (VOICE).

Toennies and the Government of Serbia signed the Memorandum of Understanding in April 2015, whereas. Back then, Aleksandar Vucic, who was the prime minister, confirmed that the company’s plan was to breed three million pigs annually, while Toennies announced that it would open five pig farms during the initial stage which would be located in Pancevo, Vrsac, Zitiste, Zrenjanin and Kikinda (all in Vojvodinian county of Banat).

In 2016, the company’s owner Clemens Toennies visited Serbia and met with Aleksandar Vucic, who was already presidential candidate at that point. On the occasion, the German businessman said that his team “is working on drafting projects for 10 farms in Serbia”, and added that he “has come to Serbia not to push out Serbian farmers, but to boost the production and export of pork”. Toennies also announced a 300-million-EUR investment in the next five years.

Despite pompous announcements, no contract was signed in June or at a later date. In late 2016, Agriculture Minister, Branislav Nedimovic reassured that the cooperation with Toennies was developing fine, and the first pig farms would be built in Banat County.

However, in November 2018, the company requested the postponement of the announced investment, with the decision to come to Serbia by the end of March 2019 at the latest.

According to VOICE, the German company has not yet leased any of state-owned agricultural land, although, the agreement was for Toennies to occupy about 5,000 hectares in two Vojvodinian towns, Zrenjanin and Kikinda. Plus, the company undertook to cultivate the land in the area of Sečanj.

On the basis of planned investments, Toennis was granted the lease of 2,420 hectares in the municipality of Zrenjanin, 2,544 hectares near Kikinda, and the undisclosed land in Sečanj. However, until now, the German meat giant has not paid a penny for this land.

The main reason, as informal sources say, for Toennies possibly withdrawing its investment in Serbia is the slowness and flippancy that the local administration has demonstrated in preparing the field for the construction of farms. Plus, there was an outbreak of the African swine flu, which made the German company doubly cautious.

The aforementioned land was supposed to be rented out to Toennies in the autumn of 2017 (Zrenjanin) and in 2018 (Kikinda).

(Nova Ekonomija, 12.02.2019)

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