The Serbian public was disconcerted by the news of the collapse of the Mitros Company, the former giant in the meat industry from Sremska Mitrovica, now owned by the Austrian holding company Gierlinger.
The Austrians are shutting down production and will lay off all the workers, after receiving 5.8 million euros in subsidies from the Serbian government and the Austrians investing only EUR 800,000.
This is not an isolated case, because there had been quite a few foreign factories, pompously opened by the President of Serbia Aleksandar Vučić personally, that have shut down production and left the country. Teklas, Aptiv, InoBat and Leoni are just a handful of foreign companies that are still operational, out of approximately 260 factories that were officially opened by the president.
Over EUR 400 million for Rio Tinto’s partner
Recently, a Slovakian company Inobat has decided to open a gigafactory, named Lion, in the Serbian town of Ćuprija with the Serbian government agreeing to pay out over EUR 400 million in subsidies to the company. The notorious Rio Tinto is one of Inobat’s investors. One of the investors in InoBat is Rio Tinto, which has been developing a lithium mining and processing project in the country. Following mass protests throughout Serbia and other forms of public pressure, the government decided to halt it. However, there are indications that the project could be revived, so the deal with InoBat makes it even more likely.
Vučić’s “saves” workers from Vranje
In the southern Serbian town of Vranje, the Serbian President officially opened a Teklas factory, which is supposed to take 1,200 workers that were laid off by the Italian footwear producer Geox which shut its production in Serbia and left the country. Early last year, Teklas received 10.7 million euros of state aid from the Serbian Ministry of Economy, so that, in addition to the plant in Vladičin Han, the company would open another one in Vranje, set in the production hall that the Italians abandoned.
The Turkish factory undertook to employ 500 full-time workers by 2028, as well as to pay each new worker 20 percent over the minimum wage, although last year the workers said that they were earning just 36,000 dinars a month, which was 1,000 dinars, i.e. about three percent, over the then minimum wage.
Fainting for EUR 25.5 million
The British auto parts factory in Leskovac, Aptiv, received EUR 25.5 million in state subsidies in Serbia. There were numerous reports that the factory pushed its workers, mostly women, to the brink, demanding that they work 12-hour shifts. Many workers went on sick leave with the same health problems which are now called „The Aptiv Syndrome“. Last year, on one Saturday, Aptiv workers refused to work overtime and were promptly fired. The factory is still operational.
Does EUR 10,000 include adult diapers?
Workers at the South Korean automotive cable manufacturing company Yura are working in disastrous conditions, which peaked during the coronavirus pandemic, when they were forced to come to work at full capacity despite all the epidemiological measures advising them not to. However, an even bigger shock came when the workers said that they wear diapers when working because they are not allowed to have toilet breaks. Furthermore, they claimed that they did not have days off and that they suffered mental and physical abuse, because the production supervisors beat them with metal sticks and passed sexual advances to female workers. Perhaps the most shocking thing is that Yura received 65 million euros in state subsidies, i.e. 10,000 for each of its 6,500 employees.
A wheelchair for 30 million euros
In February of last year, a worker at the Leoni factory in Leskovac was injured at work and died four days later. Only a few months later, in May, the worker fainted after a verbal conflict with the plant manager. The workers also testified that the shifts lasted over 10 hours and that at one time, wheelchairs were positioned next to production lines in case someone fainted again. Toilet breaks are minimal, while the ambulance is a frequent „guest“ at the factory. Leoni opened four plants in Serbia with President Vučić claiming that the company refused to take state subsidies. Nevertheless, Leoni had previously signed three incentive contracts with the Ministry of Economy with a total value of around 30 million euros.
Germany’s HAIX gets EUR 2.6 million
In late August of this year, the German footwear factory Haix Oprema in Vranje was granted 2.6 million euros in state subsidies. According to the contract signed with the Ministry of Economy, the state will cover a quarter of the total costs that the company will have stemming from hiring 651 employees, while the company will invest 2.8 million. The media reported about this factory in May of this year, when a worker suffered severe injuries to both hands, after which she was sent for emergency surgery.
14 million „sweet“ euros
In October 2021, the Swiss company Barry Callebaut opened a chocolate factory in Novi Sad, and the opening was also attended by Vučić. This company received 14.2 million euros from the state, in the form of subsidies and free land. Those 14.2 million include 12 million as subsidies for 100 employees, which is EUR 120,000 per employee, as well as 20,900 square metres of land, worth 2.19 million euros. In return, Barry Callebaut promised to invest at least 45 million euros in production by the end of this year. Also, by the year-end, the factory must employ the 100 workers for whom it received subsidies.
As if 14 million euros were not enough, the Novi Sad government invested about 342 million dinars in the construction of the infrastructure for the factory. According to the Novi Sad investigative website VOICE, this company was sued for child slavery in the United States, i.e. employing children to work on their cocoa plantations without any financial compensation.
Economist and foreign investment expert Dr. Milan Kovačević says that the problem is that almost anyone who knocks on the president’s door can get subsidies. “We have to start doing things differently. The state has to consult economy experts when granting subsidies“, says Dr. Kovačević.
Dr. Kovačević also says that, although there are a lot of foreign factories in our country, they won’t stay in the country forever. Factories, especially food and textile ones, will leave Serbia because, as Dr. Kovačević says, they are like migratory birds. They will move their factories to other countries providing they can get more in subsidies or land there. “Those factories have mobile machines which can be moved from place to place when they are promised better conditions,” he adds.
(Nova, 29.09.2023)