1. WP4 SWG1 Agro-food processing Presentation of region and cluster activities Marko Otašević Directorate for development of SMEs SDAM Montenegro PP9 Sofia, 25.11.2010

2. The analysis of agro-food processing cluster / sector in the region of PP9 Montenegro (WP3) Agricultural land accounts for 38% (518,067 ha) of the total territory of Montenegro The greatest share in the agricultural land resources consists of pastures and grassland (88%), which is used extensively Food production and agriculture have significantly role in the economic development of Montenegro (about 12% of GDP) National strategy for agriculture development is given together with tourism a leading role in development. Growth in agriculture is carried out at an average annual rate of 3% Specific methods and tehnologies of production : -production Njeguši’s ham (prosciutto) -production Njeguši’s, Kuči’s and Pljevlja’s cheese -production of Montenegrin honey -production and processing fish on Skadar Lake -production of mussels -production Durmitor’s and Piva’s natural cream -production of olive oil in Bar -production and processing of medicinal plants -production of wine Agriculture in Montenegro, as well as at the global level was the special challenges because of the negative effects of global financial and economic crisis In 2009, a decline of GDP was 5.7% but the agricultural sector recorded a real growth rate of 1.8%. It was more than a clear indicator of the vitality of this sector and significant untapped potential and once again confirm that the agriculture sector in such situations and taking on the role of an important economic and social shock absorbers Even tough the business environment in Montenegro has significantly improved over the past few years (especially after independence 2006.), the country is still behind the leading Western Balkan group (f.i. Croatia, Serbia and FYR of Macedonia), concerning the development of sophisticated business support systems (incubators, clusters, technology parks etc.). No clusters, technology parks, science or business park in operation yet. In Montenegro so far, only a detailed analysis of the meat processing sector has been carried out as a basis for developing a cluster program.

3. Cluster(s) / networks / companies as a potential partners in the ADC project Association of manufacturers of Njeguši’s specialties (about 10 companies and 30 individual manufacturers leading by “Niksentrade” Ltd.) – annual production about 500t, annual export about 250t. The Ministry of Agriculture, Forestry and Water management Old royal capital Cetinje GTZ (German tehnical support office in Montenegro) Directorate for development of SMEs Investment-development Fund (IDF) Association of Agricultural, Food and Tobacco industry (in behalf of The Chamber of Commerce) Economic activities be involved improving cooperation among these partners exploring existing individual manufacturers of meat products with the benefits of association in the cluster additional efforts towards establishing the first functional cluster in meat industry in Montenegro training and knowledge transfer for several cluster managers attempt to clusters in Montenegro, after its establishment linked to sectorial clusters within the Adriatic-Danubean region

4. Structure, meetings and outcomes of RFG Regarding to my recent joining the ADC project (prior month) and past the time limit (participation in a meeting in Budapest), the current efforts are directed toward the introduction of the Association of manufacturers of Njeguši’s specialties content and purpose of the ADC project. The first reactions were overwhelmingly positive and welcome Next steps regarding the assembly of other stakeholders (The Ministry of Agriculture, Forestry and Water management, old royal capital Cetinje, GTZ, IDF, Directorate for development of SMEs) to maintain the first meeting RFG Objective estimates are that RFG will form and a first meeting will take place by end of year in accordance with the recommendations and agreed in Budapest.

5. Expectations of cluster members, networks, companies (services to be provided within the project & needs for the organisation of the sectorial PEV) The first comments were related to the benefits that all stakeholders will have as members of the meat industry cluster in Montenegro It is noticeable and expressed weak and very low knowledge about relevant clusters from the environment and about the possibilities of cooperation this project allows Exchange of good practice between Montenegro and other Adriatic-Danubian countries in conducting the cluster policy with the aim to establish a knowledge-based society Most of the potential actors of the meat industry clusters as a major obstacle see problems of: -financial resources in 2010 and also in 2011 (weak implementation of production, reduced exports, budget restrictions etc.) and -the lack of usable experience in the field of cluster as a type of institutional support Upcoming comments and suggestions are expected after the formation of RFG and the first meeting at the multilateral national level

6. Experience of SMEDD in similar activities Strategy for Development of Small and Medium Enterprises 2007-2010 envisages the formation of clusters as an instrument of support to SMEs in the areas of dairy and meat industries and their links with tourism. We are currently working on a new strategic document for the period 2011-15 SMEDD with the support of GTZ, has initiated activities in the formation of clusters in the meat processing sector. In the realization of the project for support Association of manufacturers of Njeguši’s specialties through credit line "Fostering competitiveness" is supported by eight manufacturers of this product. Leader of the Association is a company "Niksentrade" Ltd. from Kotor. This is the first form of cluster formation in Montenegro. SMEDD in cooperation with GTZ and the Chamber of Commerce of Montenegro over the past year has organized four seminars on the topic cluster, concept, advantages and benefits provided by the association in the cluster for companies. A few credit lines to improve the competitiveness of domestic producers (including the sector of the meat industry) Support SMEDD will need for successful implementation of the sectorial PEV quality promotion of the project and its objectives among participants of RFG consent of all stakeholders the purpose of signing the transnational cluster agreement financial, organizational, personnel and technical preconditions for participation in the PEV

7. THANK YOU FOR YOUR ATTENTION! Marko Otašević Directorate for development of SMEs Novaka Miloševa 42, Podgorica, Montenegro +382 (0) 20 406 306, fax: +382 (0) 20 406 323 marko.otasevic@nasme.me www.nasme.me