Kolektor Etra has expanded its transformer manufacturing operation in Serbia with a €21.5 million investment, increasing production capacity at its Barajevo facility as demand for grid equipment rises across Europe. The Slovenian company inaugurated new production facilities near Belgrade on September 24. The expansion increases installed capacity at the Serbian operation to approximately 140 transformers per year, compared with around 70 units produced in 2025.
- European transformer demand drives capacity expansion
- €1.3 billion order book keeps production capacity committed
- Barajevo serves European export markets
- Data centres add to electricity equipment requirements
- Investment shifts toward higher-value manufacturing
- Permitting speed supports the Serbian expansion
- Third investment phase planned for Barajevo
Kolektor is preparing another expansion that could raise annual output above 200 transformers by 2028. Separately, the company has set a target of sustaining production at about 150 units annually by 2030 as its workforce and manufacturing capabilities grow. The Serbian business currently employs approximately 175 people, with staffing expected to increase to around 230. Serbia provided approximately €2.4 million in incentives for the investment.
European transformer demand drives capacity expansion
The investment comes as transformer availability becomes increasingly important to European electricity infrastructure. Utilities are upgrading ageing networks while new wind and solar capacity requires additional grid connections. Electrification across industry and transport is creating further demand, while expanding data-centre capacity is increasing requirements for reliable and high-capacity electricity connections.
Kolektor estimates that the European market for power transformers is currently worth approximately €7 billion and could grow to €13 billion to €15 billion over the next decade. The Serbian factory gives the country a role in this market through manufacturing equipment needed for transmission, distribution, industrial facilities and new electricity generation projects.
€1.3 billion order book keeps production capacity committed
Kolektor Etra currently has an order book exceeding €1.3 billion, with production capacity effectively committed for 2026 and 2027. The company is also accepting orders for deliveries extending to 2030. Existing orders correspond to approximately three years of production, reflecting the tight supply conditions affecting the European transformer market. Increasing manufacturing capacity requires specialised equipment and technical expertise. Transformer production involves engineering, winding, drying, testing and heavy lifting, while manufacturers also need qualified personnel and must complete customer certification procedures.
The newly opened Barajevo production hall covers approximately 3,100 square metres. It contains two drying ovens for windings and active transformer components as well as a 70-tonne industrial crane. The Serbian plant produces power transformers with ratings of up to 40 MVA and 145 kV.
Barajevo serves European export markets
The Serbian operation is primarily export focused, with Sweden, Britain, Germany, Denmark and Austria among its principal markets. Kolektor also supplies customers in the Netherlands, Norway and France and has entered the Swiss market. The business generated more than €24 million in revenue and approximately €4 million in EBITDA during 2025, with most of its production sold to customers in northern and western Europe.
Kolektor expects further expansion to support substantial revenue growth, with the Serbian operation potentially reaching €100 million in annual revenue once additional production capacity is established. The scale-up represents a major change from the operation acquired by Kolektor in 2018. At that time, the factory produced only around three or four transformers annually. Output subsequently reached approximately 70 units in 2025, while the latest investment raises available capacity to about 140 units. The next expansion phase is expected to include a new winding department and could push annual production beyond 200 units.
Data centres add to electricity equipment requirements
Transformer demand is being driven by several infrastructure investment cycles at the same time. The expansion of data centres is adding another source of demand alongside renewable energy and broader electrification. Artificial-intelligence computing requires large and reliable electricity supplies, leading new data-centre campuses to require substations, transformers, backup systems and high-voltage grid connections. European utilities are simultaneously reinforcing networks to accommodate wind and solar generation, electric vehicles, heat pumps and industrial electrification.
Serbia is also attracting proposals involving data centres, renewable generation and battery storage, while EMS and Elektrodistribucija Srbije face requirements for further investment in transmission and distribution infrastructure. This creates potential demand for locally manufactured transformer equipment from both the domestic Serbian market and the wider European market.
Investment shifts toward higher-value manufacturing
The Barajevo expansion also reflects a manufacturing model based on engineering and higher value added rather than primarily low-cost labour. According to company management, Kolektor Etra Beograd expects value added to approach €60,000 per employee, approximately four times the level recorded when the business was acquired eight years earlier. The Serbian operation has received technology, engineering expertise and production processes from the wider Kolektor group, supporting its integration into a specialised European electrical-equipment supply chain.
The approach is significant as Serbia faces rising wages and tighter labour availability. Industrial investment increasingly depends on productivity, engineering capabilities, automation and integration with specialised supply chains. Transformers require technically demanding manufacturing processes and have become increasingly constrained by limited production capacity.
Permitting speed supports the Serbian expansion
Kolektor has also identified the speed of project execution as an advantage of its Serbian operation. Company management said the latest expansion moved through construction permitting, environmental procedures and other administrative requirements in approximately six months. The company contrasted that process with a planned expansion in Slovenia, where a substantially larger factory project has encountered permitting delays lasting several years. For a manufacturer operating with an order book above available production capacity, the ability to bring additional factory space online quickly has direct commercial significance. The Serbian support for the project therefore extends beyond the €2.4 million financial incentive, with the permitting process enabling the company to add capacity within a relatively short timeframe.
Third investment phase planned for Barajevo
Kolektor is already preparing a further investment phase at the Serbian site. The planned third phase includes construction of a new winding department, with completion targeted in approximately two years. Documentation is being prepared, and the company expects to secure the required permits before construction begins. The additional facility could substantially increase output and expand the Barajevo plant’s role within Kolektor’s European production network. The development comes as European demand for transformers and other electricity infrastructure continues to grow alongside investment in renewable generation, grid reinforcement and electrification.
Beyond transformers, European infrastructure investment is creating requirements for switchgear, cables, substations, protection systems and other electrical equipment. Serbia’s existing electrical-engineering base and proximity to European markets provide a manufacturing platform for this wider supply chain. The €21.5 million Barajevo expansion therefore increases Serbia’s production capacity for equipment used across European electricity infrastructure while Kolektor continues to build out the site in response to its long-term order pipeline.
