Norfish is a successful example of cooperation between a local Bosnian company and a foreign investor. Could you give us some background information about your company?
Norfish is a newly established company. It is 1 ½ year old, to be accurate. The company was established in June 2000 as a result of a joint venture investment project between the 'Norwegian Balkan Invest' and the Bosnian state owned company "Ribogojiliste Blagaj".
Ribogojiliste Blagaj, was established in 1951, and was specialized in the production of some varieties of trout that are typical to this area. The company was developing well and started soon to produce fish for a wider market. For a start, the company was part of holding companies in former Yugoslavia. The story of cooperation started in 1999 when the management of Ribogojiliste Blagaj met the Norwegian embassy in Sarajevo with the aim to find Norwegian investors interested in investing in their company.
Why did the company decide to meet the Norwegian Embassy in particular?
Norway is one of the leading nations producing fish, especially trout and salmon. The Norwegian technology and know-how represent a great value for the company. The Commercial Department at the Norwegian Embassy found, after conducting some research, the company Norwegian Balkan Invest. Today, 70% of the company belongs to the foreign investor, 28.2% is still state-owned and 1.8% was privatized before the war. The privatization in former Yugoslavia was initiated by the Prime Minister who was in charge at that time with the aim to give the shares of companies to workers and, after that, to attract foreign investments. Unfortunately this process started just before the war and that is why only 1.8% of the company was privatized. In the following months, the part of the capital that is still state-owned in the company should be privatized.
Are the remaining 28% to be privatized on the national or international level?
Actually, the Norwegian company will buy that part from the state and they have already expressed their interest in doing so. The state is favourable since the majority of the company is already into Norwegian hands and that now the company is less interesting for other investors.
What was the interest for the Norwegian Balkan Invest to come and purchase Ribogojiliste Blagaj?
For the Norwegian Balkan Invest together with the Norwegian state investment fund (NORFUND), who are actually our Norwegian partners, the main interest in Ribogojiliste Blagaj was to get closer to the East European market and the Far East markets too, including of course the European Union. Beside that, there are in Bosnia excellent natural resources for fish farming and the Bosnian legislation is quite liberal towards foreign investors willing to do business in the country.
Geographically, Bosnia and Herzegovina is closer to those markets than Norway. The Norwegian Balkan Invest chose BiH because we have a central position in the Balkan area, and one can have fast and easy access to other markets.
I can tell you that before the Norwegians entered this company the production at the annual level was approximately 70-80 tons a year. After June 2000, there was a big increase in production, and in 2001 we produced 600 tons. That actually shows the potential of this company and we are still using only about 50% of our potential. With the new equipment we can produce a maximum of 1200 tons, but Norfish has the potential to expand up to 2000 tons in the future.
Is the increase of production your main concern for the future?
Yes, and for Norfish the priorities are also to develop this industry here in Bosnia and Herzegovina. This also means the establishment and cooperation with small companies and the use of the Norwegian model in this industry. In Norway, the companies in this business work and produce together, so that it is easier to export, because they have bigger quantities, reduced costs and are obviously more competitive.
How do you intend to finance your development?
It is important to make our investments work, and to reach the level of 1,200 tones this year or beginning of next year. In the future, we will try to partly invest our own means and partly to get financial support from Norway or from Bosnia. Maybe it will be in the first phase more from Norwegian funds, and then from Bosnian ones, since the Norwegian state and the government are trying to help Norwegian companies in doing business in the so called "developing countries". I think when we will have successfully finished the fist phase, there will be an opportunity to get financing from Bosnia too.
What is presently your turnover, and what are your financial expectations?
This year, we expect to have a turnover of about 3.5 million KM. Today, we have 73 employees, 35 directly involved in production and in fish farming, 15 in the restaurant and 23 in the factory plus we have 5 in administration. This factory is new and modern, build up according to strict Norwegian/EU standards, and for now on, we can talk only about the plans for further expansion of our factory, to increase the production. If we manage to establish cooperation with smaller fish farms, then it could be possible to increase production even more because we can help them to expand their production as well. We are always thinking positively in the sense that if Norfish is developing, then other companies will have the possibility to do the same. We are planning to export to foreign markets, and we are trying to establish some good links.
| To export into Europe, you need to reach a certain level of quality. Are you already up to western standards or are there still improvements to be done and what markets do you want to reach?
It is very important to mention that for fish farming and fish production here, we have a regional responsibility to adopt all the Norwegian technology in the company. When we say technology in the company, we mean everything from the fish eggs to the final product. All this is strictly controlled and under the supervision of the Norwegian partners. Our quality still needs improvement, but the reason for that is that in fish farming it takes time in processing and you can't get results overnight. It may take up to one or two years. If you look at the fact that we only exist for 1.5 years, we are very satisfied with the quality level we have reached. Indeed, what we propose matches the market needs. In the European Union, we have already established contacts with companies from Germany. Our policy is, to invite customers to come and see our production. We are aware of the fact that we are in Bosnia and Herzegovina, and despite the Norwegian ownership and technology, we have to make an extra effort in presenting the company. So far, we have had a very positive response, and we have had concrete agreements. Unfortunately, there is a problem for all agricultural food production in B&H - the veterinary certificate. The EU does not accept our veterinary certificates since B&H has only certificates on the level of entities. There are two places where you can get one - in the Federation and in Republika Srpska. The EU standards require the certificate to be on state level and that is our main problem. It is not a question of quality any more.
Did you talk to public institutions about this problem and do they know about it?
Everybody in the country is aware of this problem. We are trying to get help through the Norwegian Embassy in Sarajevo. All the international organizations and all the government institutions in B&H are aware of this issue, but unfortunately, they are doing very little. Last year, the government established some veterinary offices at the state level under the supervision of the Council of Ministers. The idea was that this veterinary office should be issuing state veterinary certificates, but the entities refused to lose their authority to do that.
What is the status of the competition, and what are your competitive advantages?
We think that our main competitors are in the meat industry. When I was talking about our plans to expand the factory, I meant all those small companies that exist in B&H and I think that they should cooperate with us. In a way, they are our competitors, but we don't see them in that way, rather like our partners. Real competitors are in the meat industry since people here eat meat a lot. If they start eating less meat, they'll eat more fish.
How do you promote the image of your company?
Before this factory started, one could only buy live fish in Bosnia. You could not export live fish, since it is very difficult, almost impossible. Now that the factory is here, we are finishing the promotional material that will serve to educate people in B&H on how to eat fish. I'm talking about trout fish. In Bosnia, people know just about very few ways to prepare that kind of fish and the whole knowledge about fish is very limited, especially about the fish produced in our factory. We will try to give information on what to look for, how to check if the fish is fresh, and so on. In this way, we are actually helping other fish companies too. Of course, our promotion materials will contain our company's logo, but promoting fish is our primary goal.
Do you intend to develop special products that people would associate with Norfish?
Today we have cutlets and filets that are produced by Norfish, and we are the first company in B&H that is producing them. B&H imports some types of salmon that one can find only in shopping centres in Sarajevo, but most filets and cutlets are represented by Norfish. We are using our restaurant, partly to promote the small trout and new product. All our products has the name with prefix "Norfish", to stress with quality from our company
Is the restaurant a significant part of your company or is it, as you said, to test customers?
This restaurant has a very long tradition but this is our secondary business. Our primary one is fish production. If we find partners interested in developing it, we might do a chain of restaurants, but not for now.
What final message would you address to our readers?
If I take the experience of Norfish, the current owners are 2300 km away from Bosnia, and as I said earlier, there is not good and correct information about Bosnia and Herzegovina. However, these persons still managed to find a way. From this point of view, I do not see any reason why someone else should not try. But of course, it is important to understand the situation in B&H and estimate it realistically. If you look at the economy before the war, one can see that the ex-Yugoslavia was one of the most developed countries in the Balkans, including Eastern Europe too. In 1990, according to statistics, we were among the first of all eastern European countries. It is true that we have had a war here, which is very negative, but if you look at it from another point of view, there is something positive - we have an opportunity to start from the beginning and to build everything according to the Western European concept. We have the people, the knowledge and that is the most important. Our main problem is the lack of capital. It is very important to have a very liberal legislation on foreign investments. It provides even better conditions for foreigners than for Bosnians. So, there are here many opportunities.
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