The abolition of the tax by the Government of Kosovo for building blocks for clay, produced in Serbia, will reduce the amount of production of this product by local companies, say owners of several companies producing construction materials. According to them, with the repeal of this measure, blocks originating from Serbia will enter the Kosovo market cheaper, by about 10 percent of the price.
The Government of Kosovo has repealed a decision of 2016, for anti-dumping protection measures of 0.02 cents for standard blocks 19x19x25 imported from the state of Serbia.
Dumping means the import of goods into Kosovo, at a lower export price than the comparable price for a similar product intended for consumption under normal market conditions in the exporting country.
The abolition of this measure for local producers of construction materials, in addition to reducing the amount of production, will interrupt new investments, says Ilir Dula, deputy director of the company “Rizam Holding” in Prizren.
Rizam Holding currently produces 12 million units a year and employs 75 people.
“It has a negative impact because we are being harmed, as Serbia has subsidies from its own state and has the opportunity to produce for the Kosovo market. With these measures we are protected. Now with the removal, it destroys the investments we have made ourselves, not to mention new investments. It is normal that the number of blocks will be reduced because the trader who has material warehouses, is supplied with lower prices and people buy them at a cheaper price, the manufacturer is not interested “, said Dula.
The price of a wholesale building block is about 22 cents, depending on the manufacturing company, while the retail price is up to 25 cents.
In addition to reducing the amount of production of building blocks, there is also a risk of reducing the number of workers, says Ejup Maloku, owner of the company “Apollonia”.
“They force us for these, because Serbian companies prevent us from selling. At the moment they are not sold, the warehouses are filled and we have to reduce the production. “When the product is not sold, it affects workers and wages,” Maloku told Radio Free Europe.
Even the president of the Association of Manufacturers of Construction Materials from Argjila, Mustafë Borovci, at the same time owner of the company “Brickos” in Gjilan, says that with the repeal of this measure, local producers; puts them in fierce competition with Serbian producers, who, according to him, are subsidized in various forms by their state. Borovci says that during the five years that this measure has been in force, the financial situation of this industry has significantly improved.
According to Borovci, there are eight companies operating in Kosovo for the production of building blocks with about 1,200 employees.
“The Serbian bloc will be cheaper by 0.02 cents in the Kosovo market. This will reflect a lot, because to understand the value of 0.02 cents is about 10 percent of the value of a block. With the fact that a part of the Kosovo market is given to a neighboring country and some of the local block manufacturers are endangered, I think this is a sufficient indicator of the importance of the measure remaining in force. “I do not know why the industry of a neighboring country should be maintained and the industry of Kosovo should be endangered”, he said.
Meanwhile, Boban Markovic, director of the blocking company ‘Mladost’ from Leskovac, says that when the tax of 2 cents was imposed, years ago, it significantly reduced the sales volume of their products in Kosovo. The 100 percent tax then stopped their export to Kosovo, so this company was forced to look for some new markets to replace the Kosovo market.
“With the abolition of the 100 percent tax, the 2 cent tax remained and continued to have a discouraging effect on the sale of our products last year. At the moment, tax abolition means a lot, but we can not know the exact effect. “We will know the effect next year, when we will make contracts and plan bigger goods for this market, as there are no more administrative barriers to exports,” Markovic told Radio Free Europe.
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