A crane is pictured next to containers lined up at the port of Koper, Slovenia January 14, 2014 [Reuters/Srdjan Zivulovic]

As supply chain disruptions caused by the Covid-19 pandemic, war in Ukraine and lockdowns in China hit Western European markets, Balkan companies hope to benefit from their proximity and low costs labor.

Some companies attending a Sarajevo business forum devoted to “near-shoring” – partnerships closer to home rather than in markets thousands of miles away – said on Thursday that interest from their European partners had increased over the past year.

German company GS-TMT, located in the central city of Travnik in Bosnia, is opening a new factory to meet increased demand for mechanical parts and e-bikes from buyers in Germany and Austria.

Growth for the company, which employs 462 workers, fell 16% in 2020 during the coronavirus pandemic, but increased 32% last year and is expected to rise another 42% in 2022, with revenues estimated at more than 60 million Bosnian marks ($32.4 million), CEO Snjezana Kopruner told Reuters.

“One of the reasons for the increase in our income is that we resumed production of some of the goods that had been produced in China,” Kopruner said.

A recent survey of German employers showed that they view the Western Balkan countries, including Albania, Bosnia, Kosovo, Montenegro, North Macedonia and Serbia, as desirable investment destinations in because of low labor costs and taxes and the geographical position, Sophia Kluge from Germany-Serb told the chamber of commerce.

“The Western Balkans as a European region are as close as possible,” Kluge said.

She said German employers, while citing infrastructure, governance and political instability as challenges, also highlighted so-called “cultural closeness” and their positive experience with workers in the region.

“It was this gut feeling that was decisive for some in choosing the region for their investment,” she said.

Ekrem Turajlic, director of Bosnia’s largest pharmaceutical company, Bosnalijek, which exports mainly to Russia, the Middle East and the Balkans, was also optimistic about expanding a network of European buyers.

“We are seeing significantly more interest from European customers to look to suppliers closer than Asia,” Turajlic said.

Martin Grabe of Germany Trade & Invest said the Western Balkan countries were generally seen as stable, but they had to make a clear choice about which path they would take and whether they would work towards integration into the European Union . [Reuters]