Why are companies relocating production to Bosnia and Herzegovina?

By: Moja Dolenjska

An increasing number of companies are reducing production in Slovenia and relocating it to Bosnia and Herzegovina (BiH). Among the most notable examples recently are the Primorska-based company Mahle and Alpina from Žiri. Additionally, Unior is closing its plant in Stari Trg in the Poljane Valley. According to recent information, Iskra is also transferring part of its production from Semič to BiH.

Last year, Iskra began building a factory worth 15 million euros in Laktaši, BiH, which will employ around 500 people. In one of the plants, approximately 100 people are already employed. The company is relocating its production of capacitor filters (EOM), and the move is expected to be completed by mid-2025.

At the Iskra plant in Semič, which at its peak employed up to 1,800 people, there are currently around 270 workers. Between 70 and 80 employees are expected to retire this year and next. Iskra reports that the Semič plant will focus on the development and production of energy capacitors.

• The gross cost per employee in BiH is 1,200 euros, compared to over 2,000 euros in Slovenia.
• The price of land in Slovenia is 150 euros per square meter or more, whereas in BiH, in a fully equipped industrial zone, it is as low as 3 euros per square meter.
• In BiH, building permits are issued in six days, while in Slovenia, the process takes about six months.
• Construction costs are cheaper in BiH.
• The corporate income tax in BiH is 10%, while in Slovenia, it is 22% (before the current government, it was 19%).

There are many reasons for this trend, and they are understandable. Taxes and contributions in Slovenia are steadily increasing, with new ones expected next year.

Laktaši is a small town near Banja Luka. Several companies are relocating their production to this area or its vicinity. Among them is the Šempeter-based company Mahle, which set up its starter motor production in the town of Aleksandrovac in the municipality of Laktaši. In the new factory, worth 20 million euros, they plan to employ 700 people.