Kosovo’s building industry is an unusual success story. Whilst many European economies struggled after the financial crash, Kosovo is the continent’s only country where GDP has recorded continual growth for the last five years.
The growth has ushered in a period of expansion for Kosovo’s construction sector.
“All construction companies in Kosovo are operating at their maximum capacity,” said Oliver Curri. “There is a great demand for our products.”
Mr Curri’s business, Tulltorja Sh. P. K, produces bricks and specialist roofing tiles for suppliers across the country.
But whilst the building industry often serves as a useful barometer of economic growth, Kosovo remains a comparatively poor nation. A third of the population lives below the poverty line and estimates put the rate of unemployment at nearly 40%.
On top of this, competition in Mr Curri’s sector is particularly tough, in part because of the poor regulatory environment for many of the country’s imports and exports.
“Materials are often brought in illegally, ignored or unnoticed by the local authorities,” explained Mr Curri. “These products skip crucial duties and taxes”.
This is a sizable problem for law-abiding businesses. Whilst competitors often sell their products at similar prices, the saving on taxation means that their profits are much higher. These gains can then be reinvested, giving businesses a huge advantage.
Fortunately for the company, the EBRD’s Local Enterprise Facility (LEF) saw great potential in Tulltorja. They partnered with the business in 2008, the year that Kosovo declared its independence.
Through a €5 million stake, the EBRD team helped the company increase its product portfolio, also increasing output capacity by over 100 per cent through the construction of a new production line.
Kosovo: building stronger SMEs
The EBRD's Local Enterprise Facility is helping to increase opportunities for companies like Tulltorja Sh.p.k., a construction company which started in 2008.
On top of this, the EBRD’s input helped Tulltorja move away from the use of heavy-oil fuels, reducing pollution and saving the business around €500,000 a year.
Thanks to help from the EBRD, Tulltorja’s financial standards have now reached the levels commonly expected in Western Europe.
Not only has this allowed the company to become the first business of its kind in the country to be totally transparent with the tax authorities, it will help them explore new markets for expansion abroad.
“The presence of the EBRD has had an enormous impact on our company”, said Mr Curri. “We would probably have faced enormous financial difficulties without the EBRD’s participation”.
With the support of the Italian Government and other donors, LEF will now continue its work in Kosovo, funding investments alongside the new Enterprise Expansion Fund (ENEF).
ENEF is just one of four pillars of the Enterprise Development and Innovation Facility (EDIF), a new initiative launched by the Western Balkans Investment Framework (WBIF) to generate an additional €300 million for small businesses such as Tulltorja.
By entering this new programme, the EBRD has underscored its commitment to forging ever closer ties with the region and its partners in the European Union, the European Investment Bank and the European Investment Fund.