Participating with an exhibition stand at the big industrial technology trade fair in Hannover, gave the company Inox Ajanovic access to new export markets in USA and in EU.
Photo: Inox Ajanovic
FIRMA is to help companies to grow
FIRMA is an acronym for The Fostering Interventions for Rapid Market Advancement. The project that is to contribute to economic development in Bosnia and Herzegovina focuses on three sectors: wood processing, tourism and product manufacturing. The country’s wood industry has been strong ever since the Yugoslavia time, however the industry is poor on processing its products. This is why one part of the FIRMA project activities is about improving design and quality of consumer products.
"One example is a furniture-producing company that received funds to give capacity building to its staff, design its products and expand its customer base. Today, this company exports its products to Sweden, and if you buy a wooden CD-stand at IKEA, it might be 'Made in Bosnia and Herzegovina'," says Pelle Persson, country director at Sida’s office in Sarajevo.
Improving the quality of their products and becoming better at marketing them can be an effective way to increase the company’s profits, especially in a country with a history of socialistic rule where marketing was an unknown notion. Other activities organised through the FIRMA project are training of staff to better suit the needs of companies, help companies develop their business plans and become more efficient, improve international networking and increase access to investment capital. When it comes to the tourism sector, it is about developing the great potential that exists in the country, especially within the eco- and adventure tourism.
"By collaborating with Croatia where tourism is far more developed, the tourism office in Mostar has been able to attract quite a number of tourist waves. Those who go on a one-week holiday to the Croatian coast can combine it with a one-day excursion with hiking or fishing in Bosnia's beautiful nature", says Pelle Persson.
The five-year FIRMA project in Bosnia and Herzegovina is supported by Sida and the American development agency USAID. Sida contributes with about one third of the total budget of SEK 140 million ($ 21 million). USAID procured partners that are currently implementing the project, and among the implementing partners are also 16 different regional organisations in Bosnia and Herzegovina that, apart from implementing activities, are also the target group of the project through their role of a growing business organisation. The organisations are also involved in financing the activities, just as the companies themselves pay for parts of the cost.
The project has a clear focus on achieving results and identifying indicators to measure them. All companies taking part in the project are to report about their results every month and the figures have been positive.
"We can see that the sales of the companies that take part in some of the project activities have increased by 23 per cent in the first two years, compared with the companies in the country who do not take part in the project. When it comes to increasing exports, these figures amount to 29 per cent, and access to employment is 14 per cent", denotes Pelle Persson.
Supporting development of companies is a way to get a country's economy to grow. FIRMA has deliberately chosen not to invest in other areas that could benefit the industry, such as institutional development that would reduce heavy bureaucracy, and harsh taxation of companies that is an obstacle (to economic development) today. That work is already conducted through many other projects. Although supporting industry in itself gives more short-term results than the reforms of social structures, knowledge and expertise that are built up in the country through the FIRMA project become long-term.
"We have shown the way in which companies can develop their production, introduce a quality-oriented approach and become competitive with EU companies. Many of the activities that we implemented were designed to help companies get on track, give them support to get started, but then they are to stand on their own feet", says Pelle Persson.
Read more about some of the companies that have developed as a result of the FIRMA project:
Facts FIRMA Project
The FIRMA Project began in 2009 and runs until 2014. Sida is funding 48 million of the total of 140 million SEK, the remainder is funded by USAID.
The project aims to contribute to higher economic growth, more job opportunities and increased household incomes in Bosnia and Herzegovina, and the activities focus on three sectors: wood processing, tourism and light manufacturing.
The work is carried out in collaboration with local partners, to build capacity and ensure efficiency, sustainability and perseverance. The partners consist of aid donors, chambers of commerce, business associations, and business consultants.
To date, approximately 300 activities have been carried out, including support to companies, networking and training. FIRMA handles 33 percent of the entire cost of the activities, the companies finance 22 percent and the rest is paid by the 16 actors involved as well as other donors.