Private Briefing May 2024
No. 134 | Year XII
On the eve of summer ‘24, Private Briefing comes with analyses of programs supporting the internationalization of local businesses and creation of businesses from innovative business ideas. We analyse support for the development and integration of enterprises into the global market through structural and financial improvements via SME HUB and USAID Catalyze calls. The support programs for innovations cover a spectrum from the best ideas within the Green Agenda, through the EBRD Star Venture, to innovations in agribusiness supported by EIT Food Hub and NALED.
EIT Food: Start of Agribusiness Innovations Support
// The European Institute of Innovation and Technology (EIT) fosters innovation by supporting entrepreneurs, innovators, and students across Europe to turn their best ideas into reality. EIT’s Innovation Communities create and find innovative solutions to major societal challenges, with one of the most important areas being the future of food, overseen by EIT Food. As the largest and most dynamic food innovation community in the world, EIT Food invests in projects, organizations, and individuals that share the goals of a healthy and sustainable food system. In Serbia, NALED has been selected to be the EIT Food Hub partner for the two-year period 2024-2025, and through support projects that began this spring and will continue through new calls, it enables users to access a network of leading European agricultural enterprises, start-ups, universities, and research organizations.
// The goal of the program is to enhance the capacity of beneficiaries through educational sessions and training, but also to enable them to develop ideas from concept to market so they can launch innovative products, ingredients, and solutions. In line with these goals, besides financial assistance, innovators can also receive mentoring support and connect with global companies that would purchase or enhance their projects. As an EIT Food Hub, NALED will, in cooperation with the Faculty of Agriculture in Novi Sad, carry out a series of activities to support the innovation ecosystem in the field of agriculture, uniting the scientific research sector and industry. One of the focuses will be the promotion of women’s entrepreneurship in agriculture and providing support to women entrepreneurs to improve their businesses.
// Within the program, several key calls have been launched so far, such as EIT Jumpstarter – a pre-accelerator program for innovators in the fields of healthcare, agribusiness, raw materials, energy, urban mobility, and manufacturing; Sales Booster – a program tailored for start-ups to explore and enter new agricultural and food markets across Europe; Team Up – a program that connects technology innovators with business partners to accelerate the commercialization of innovations; and Test Farms – a program for testing and validating agrotechnological products and services on farms. These calls are just the beginning, and NALED’s support will be available for eligible applicants in the upcoming phases of the program, providing them with the opportunity to take advantage of these initiatives to improve their innovations and businesses. This is particularly significant given that the structure of domestic agricultural and agribusiness exports is dominated by raw materials, accounting for about 70% of total exports. Innovations aimed at developing the sector, such as new processing, packaging, and technology, can improve it to produce higher value and more sought-after products that will find a place in European and other markets. This two-year support cycle gives additional importance to the EIT Food program, making it highly recommendable.
SME Hub: Grants for Business Transformation
// SME HUB, a support project for small and medium-sized enterprises (SMEs) resulting from the public-private partnership of the Swiss Agency for Development and Cooperation (SDC) and the Serbian company ICT Hub, has announced a call for the allocation of non-refundable funds for manufacturing companies from Serbia that are suppliers to multinational companies or those that want to strengthen their capacities to join the supply chains of international companies. Therefore, companies that want to become suppliers to multinational and large domestic companies, as well as those that already have that status but want to improve their internal capacities, are welcome. This project, in terms of its goal, scope, and support model, represents an important link in the Serbian economy and provides significant support to SMEs in Serbia for stabilizing, developing, and improving their business.
The program is aimed at SMEs – producers of private label products, components, semi-finished products, packaging, and similar products in industries such as FMCG, construction, automotive, wood and textile industries, plastics, and metal processing industries. SME HUB provides these users with grants up to 100.000 euros for business transformation. The eligible purposes for deploying support are broadly set, allowing domestic companies to improve their performance and transform their operations to meet the demands and standards of the global market and multinational companies.
Business transformation involves obtaining the necessary certificates, licenses, implementing ERP systems, professionalizing management, building organizational structures and management systems, company reorganization, financial management, cash flow management, human resources, sales, as well as occupational safety and ESG standards.
All manufacturing companies that have been in operation for at least three years, have at least 15
employees, generate 200 thousand euros in annual revenue, and have domestic ownership capital of at least 51 percent have the opportunity to be part of the project.
After the successful completion of the pilot cycle, a new call is open for all eligible companies to apply. Even if a company currently does not meet the conditions, it is retained in the applicant database with the option to join the project if conditions are met in the future.
// The spectrum of possible improvements is set wide enough to cover the technical aspects of production, through sales management and the establishment of customer relationship management systems, to strategic areas such as organization, corporate governance, financial management, controlling, and budgeting. At the same time, the program setup allows for consulting support simultaneously in multiple dimensions, holistically addressing a series of steps and phases of business development and improvement that, if financed with their own funds, could take years.
// SME HUB has a budget of over 7 million Swiss francs, with the aim of transforming a large number of local small and medium-sized enterprises over the next five years. The task of SME HUB is to connect multinational companies with adequate local suppliers and, through business analysis, with consultants, finance and coordinate business improvements, removing potential obstacles to strengthening cooperation with international customers and enabling the local company that has entered the project to become a supplier to a multinational company and thus enter the global market. This complex and well-conceived support enables a significant number of local companies to outgrow their current business frameworks through support that will strengthen their capacities, improve their competitiveness, and make them more attractive partners in the domestic and international markets, thereby significantly improving the company’s earning capacity and capitalization. Glenfield is, of course, very active in this program, especially in the areas of financial management and organization as well as in areas of sales strategy improvement and human resource management, and we are available for a free preliminary assessment of the eligibility of companies for participation in the program.
USAID CATALYZE: Comprehensive Support for Financing Sustainable MSMEs
// The CATALYZE program, organized by USAID and implemented in the Western Balkans region, is an eight-year major initiative designed to mobilize $2 billion in private capital for development goals, particularly in underserved social sectors and markets. Through a combination of financing and performance enhancement for MSMEs, CATALYZE collaborates with local and international businesses and investors to explore commercially sustainable opportunities and approaches for job creation, development of sustainable social services, supply chain optimization, and promotion of inclusive growth.
// In the Western Balkans, including Serbia, CATALYZE is active through the “Engines of Growth” (EoG) program. The goal of the EoG program is to support small and medium-sized enterprises (SMEs) in increasing resilience to external challenges, growth, and job creation by facilitating access to financial support. EoG engages specialized financial consultants (BASP) who help businesses raise capital through strategic planning and financial analysis, as well as a range of other tools and techniques that enhance their investment readiness and attractiveness to a broad spectrum of potential investors.
EoG is now in its fourth year, and compared to the initial phase focused on business sustainability in the post-COVID reality, the program now incorporates changes in the global business approach, such as the shift to “nearsourcing” and consolidation towards a multipolar model. These trends also impact local financing needs, so SMEs and entrepreneurs continue to focus on easier access to long-term funds for financing permanent assets, but there is an increasing need to strengthen their position as suppliers to international partners. To remain aligned with the real needs of local businesses, Engines of Growth identifies and engages financial consultants with expertise in strategic planning, financial analysis, and financial engineering, who help businesses mobilize capital. In the current phase, the focus is on providing support for business continuity and job preservation, while the secondary focus includes systemic improvements of internal resources and performance to ensure long-term sustainability and financing.
Specific activities conducted by BASPs selected under the EoG program include joint, continuous work with users, with the initial phase being the identification of their external financing needs and an initial analysis of financial and business processes. As a result of this initial phase, an assessment of the users’ real creditworthiness and attractiveness to financial intermediaries is expected, followed by the development of an investment plan. This includes the formulation and definition of a business strategy, as well as the development of a solid and convincing business plan, and the implementation of financial engineering activities, i.e., financial analysis focused on structuring business growth and development ideas and plans into
adequate financial plans that reflect future business movements and financing effects. After the initial analysis and performance adjustments, making investment decisions, financing plans, and support from consultants through the process of presenting the investment and financial plan to appropriate financial intermediaries, whether traditional institutions such as banks and leasing companies, or funds expecting equity participation, profit, or a combination of the two financing methods. Support also includes identifying the appropriate source of financing and assisting in identifying opportunities and preparing documentation and presentations to development institutions and funds to secure other possible available sources of financing.
// Glenfield, as one of the leading regional consulting companies, is registered as a BASP and has been providing support to businesses in Serbia through the EoG program from the very beginning. Our expertise includes securing traditional financing sources, as well as “blended” models that involve various capital funds and factoring. Additionally, we provide support in enhancing users’ investment readiness and bankability. We are available for an initial assessment of the situation and possibilities for realizing financial support with the assistance of the Catalyze program.
Innovation and Development: Assistance from Innovation to Market
// Innovations and new business ventures, as one of the drivers of the development of individual enterprises and the entire economy, are one of the strategic priorities at the state level. This fact is reflected in the increasing number of available support programs, which we regularly analyse in the Private Briefing.
One of the programs that specifically supports innovation within the “green” transition is the UNDP program in Serbia, implemented with the support of the EU, the governments of Sweden and Switzerland, in partnership with the Ministry of Environmental Protection and in collaboration with the EIB. This year’s call, part of the multi-year Challenge for Innovative Solutions for the Green Transition of the Serbian Economy, aims to support the implementation of innovative business solutions in all five areas of the Green Agenda for the Western Balkans. The challenge is open to public, private, and social enterprises, research institutions, NGOs, local governments, and protected area managers, individually or in consortium form. The best submitted proposals will receive mentoring and technical support for further development, while the most successful among them will be provided with co-financing.
On the other hand, the EBRD Star Venture program brings together a network of mentors and advisors to offer start-ups a wide range of tailored advisory services. The program’s goal is to identify high-potential start-ups and mobilize expertise from around the world to rapidly develop young companies. The program provides technical expertise, mentoring support, local advice, and expertise in strategic business development. Selected start-ups will join a group of dynamic venture teams in an intensive and tailored 18-month program. Participation in the program includes strategic innovation business diagnostic workshops, advisory projects, mentorship, connections with various stakeholders for regional and international expansion, support in fundraising, and investor pitching events.
// In practice, we have found that the gap between an idea and a coherent business plan is often a huge barrier to materializing a start-up or innovative idea, especially since the number of support programs for such initiatives is on the rise. Bridging the gap between an idea and its realization is possible by using a set of techniques that enable the innovator to think like an investor. A good idea is important, talent sometimes plays a role, but the key lies in financial engineering. The application of best practices and methodologies in developing an idea through market assessment, internal analysis, potential quantification, cash flow projection, ROI estimation, and exit strategy is the fundamental foundation and ticket for any conversation with professional investors. Glenfield consultants, with decades of experience in analysing innovative ideas and transforming them into quantitative models, are available through these calls to help innovators maximize their chances for financing and market success. Learn how with a special bonus package available to Private Briefing readers. Send your inquiry to office@glenfield.rs, subject “Innovation”.
| KEY ECONOMIC INDICATORS | May - 24 | |
|---|---|---|
| 1 | Annual inflation | 5.00% |
| 2 | Reference interest rate | 6.50% |
| 3 | Unemployment rate | 9.40% |
| 4 | Average net salary - RSD | 96,913 |
| 5 | Average pension - RSD | 45,731 |
| 6 | Exchange rate RSD/EUR | |
| On the last day of the month | 117.1117 | |
| Average exchange rate for the month | 117.1393 | |
| 7 | Exchange rate RSD/USD | |
| On the last day of the month | 109.3684 | |
| Average exchange rate for the month | 109.1679 | |
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