Serbia is looking to increase the role of domestically owned medium-sized manufacturers in export-oriented industrial development, with investment in local production capacity identified as a priority at the MEPS 2026 conference in Belgrade.
The issue comes as the country’s merchandise exports continue to expand, raising questions about the extent to which increased foreign sales generate value within the domestic economy and create opportunities for Serbian-owned businesses.
According to the Statistical Office, goods exports increased by 8.9% to EUR 26.89 billion in January-September, while imports grew by 4.9%. However, the figures do not establish whether export growth resulted from higher production by domestic suppliers, increased output from multinational manufacturers or changes in the composition of exported goods.
Medium-Sized Manufacturers in Industrial Supply Chains
Domestically owned medium-sized companies could strengthen the connection between major industrial investors and smaller businesses by expanding their capacity to supply international manufacturers.
Their scale can support investment in certified production processes, engineering, quality assurance and delivery infrastructure, while allowing them to serve multiple customers. Establishing regular export relationships, however, requires access to working capital, modern equipment, qualified employees and documented production performance.
Participation in international supply chains also involves meeting demanding technical and operational requirements. Buyers in the automotive, electrical, metal-processing and industrial-equipment sectors frequently require product traceability, precise manufacturing tolerances, reliable delivery schedules and strict cost management.
Companies must complete qualification procedures and demonstrate compliance with buyer requirements before receiving substantial purchase orders. Financing arrangements that do not account for the time and resources needed to meet these standards may fail to support supplier development, even when borrowing conditions are attractive.
Industrial Production and Investment Requirements
Serbia’s industrial performance provides additional context for the proposed focus on domestic manufacturers. Industrial production increased by 3.2% year on year in September, while manufacturing output grew by 5.1%. Cumulative industrial production during the first nine months was only 0.5% higher than in the corresponding period a year earlier, indicating uneven performance across the sector.
These figures underline the importance of assessing individual companies and their production capabilities when evaluating opportunities for industrial expansion and export development.
Linking Financing with Domestic Supplier Development
A more integrated approach to industrial policy would connect financing opportunities with purchase agreements, supplier-development initiatives, technological modernisation and export promotion.
Banks could incorporate contracted demand and prospective supply-chain relationships into their lending assessments rather than relying primarily on collateral. At the same time, larger manufacturers could receive incentives to expand sourcing from qualified domestic suppliers.
Such an approach would address the financing and operational requirements of medium-sized companies seeking to move from occasional subcontracting towards regular participation in international production networks.
The effectiveness of this strategy could be assessed through indicators including domestic value added, the number of Serbian suppliers qualifying for international contracts, productivity per employee and sustained export revenues generated from customers outside Serbia.
