Serbian can industry continues rebuilding
Zlatko Conkaš reports from Novi Sad, Serbia
The metal packaging industry for food and beverages in Serbia is looking to boost its sustainability and circularity, having developed a solid production and market base since the disruption of the 1990 wars in former Yugoslavia. Then, in Serbia, international sanctions imposed over disapproval of the nationalist regime of former president Slobodan Milošević, along with the disintegration of Yugoslavia, left Serbia’s domestic packaging production almost paralysed. Only with economic stabilisation and the inflow of foreign investments in the early 2000s to the then-independent Serbia were the conditions created for long-term recovery and development.
The most significant breakthrough occurred in 2005, when Ball Packaging Europe invested more than EU€75 million in opening a factory in Zemun, west of the capital Belgrade. Later expansions raised total investments to over €140 million, and today the factory supplies not only the domestic but also the regional market with aluminium beverage cans for beer and soft drinks, employing around 300 people.
A planned construction of a fourth production line, projected to open by early 2026, would further strengthen Serbia’s position as a European aluminium can making centre. It would increase the capacity of the Zemun factory from the current 2.4 billion to 3.2 billion units per year – 2,000 cans per minute. This growth has partly been fuelled by increasing pressure to meet sustainability requirements in recycling and energy efficiency.
Nikola Cerović, Ball Packaging Europe’s Belgrade plant manager, told CanTech International that the plant would follow the Ball Climate Transition Plan released in 2023, designed to follows UN guidelines on decarbonisation through its Sustainable Development Goals (SDG). Speaking about Zemum, Cerović said: “Specifically, in terms of our operations, this means taking certain measures to reduce CO2 emissions by 55 per cent by 2030 and to achieve full decarbonisation and net zero CO2 emissions between 2040 and 2050.”
He continued: “Such a level of production carries great responsibility, which is why Ball takes a planned, responsible, proactive, and equal approach to circularity and sustainable business practices across all markets.”
Parallel with Ball’s growth, the Serbian aluminium and steel packaging market has also developed by other domestic metal packaging producers, such as the Al Pack Group, based in Subotica; Serbian firm FMP Konzorcijum, headquartered in Belgrade); and Galeb Metal Pack, based in Šabac. Ardagh Metal Packaging Serbia, based in Belgrade, imports aluminium packaging to Serbian food and beverage producers via a Belgrade office.
Indeed, data from the Chamber of Commerce and Industry of Serbia shows that Serbia produces more than 2.5 billion aluminium and steel cans annually, while domestic consumption does not exceed 1.8 billion. The rest is exported, primarily to the Balkans and central Europe, said Cerović.
India-based 6Wresearch predicts that the Serbian aluminium can market will grow rapidly from 2025 to 2029, projecting that annual year-on-year expansion will accelerate to 13% by 2028, following 11% this year, before easing to 12% in 2029, it said.
Economic analyst and associate of the Belgrade-based Institute for Market Research, Saša Đogović, told CanTech that the aluminium packaging market in Serbia has recorded stable growth in recent years, while producers are investing in new technologies to increase efficiency and reduce environmental impact. “In the context of global fluctuations in raw material prices, companies in Serbia must adapt their production processes in order to remain competitive, while also focusing on recycling and sustainable practices,” said Đogović.
He added that while sanctions on Russia (imposed over its invasion of Ukraine) and instability in metal markets worsened by that war and other ongoing military conflicts, affect the supply and price of raw materials, Serbian domestic producers are striving to diversify sources to minimise supply risk.
Prices were already rising because of the Covid-19 pandemic. Eurostat data stressed the price of aluminium in the EU rose by more than 60% from 2020 to 2022, while transport and energy costs doubled. This particularly affected producers from smaller markets such as Serbia, where raw material costs are a key component of total expenses. Serbia relies on imports as it produces negligible amounts of primary raw aluminium (less than 1,000 tonnes annually) and approximately 1.5 million tons of crude steel per year, primarily from the HBIS Serbia Iron & Steel LLC’s Smederevo steelworks, based on 2023 government data.
Despite this, “State incentives and relief measures for the development of recycling facilities can significantly contribute to the modernisation of the industry and the increase of capacities for metal packaging production in Serbia,” Đogović emphasised.
According to Đogović, growing demand for aluminium beverage cans, especially in the beer and soft drink segments, is opening new opportunities. “Through cooperation with local and regional companies, Serbia can become a significant exporter of metal packaging in Southeastern Europe, especially given its geostrategic position and transport corridors,” he said.
Bojan Stanić, assistant director, strategic analysis and data at the Chamber of Commerce and Industry of Serbia, told CanTech that the metal packaging industry in Serbia has recorded stable growth, but that producers are increasingly pressured by rising raw material costs, particularly aluminium and steel, caused by global geopolitical disruption. As a result, he welcomed how government incentives for recycling could significantly contribute to the competitiveness of domestic companies in the regional market.
Currently, around 45% of aluminium cans are recycled in Serbia said Stanić, which is below the EU average of 76%. However, the government has announced that it will provide new incentives for investments in recycling plants and will support the introduction of a deposit-return system by the year 2027.
According to the World Bank, Serbia could then raise its aluminium recycling rate to over 60% by the end of the decade, bringing it closer to European standards and reducing costs for exporters. European Commission projections estimate that every 10% increase in aluminium recycling can reduce energy consumption by up to 7% and cut greenhouse gas emissions by nearly 5%, said Stanić.
Stanić also welcomed new government incentives for the development of new production lines, such as reduced corporate tax rates, grants for capital investments, subsidies for employment of new workers and support for infrastructure development to companies opening new factories or production lines. These incentives are administered through the Serbian Investment and Export Promotion Agency (SIEPA) and include financial support for equipment, training and energy efficiency projects, he said.
“Serbia, thanks to its strategic geographic position, has an advantage in the distribution of food and beverage metal packaging across Southeastern Europe, which could attract additional investment,” noted Stanić.
He said within Serbia, demand for aluminium beverage cans continues to grow, while the food sector still predominantly relies on steel packaging, and producers are increasingly investing in innovation and sustainable practices to meet market demands. “If investments in recycling facilities and the implementation of incentive policies continue, domestic producers can significantly reduce dependence on raw material imports and increase export capacities.” He stressed the importance of developing cooperation between the industry, state agencies such as SIEPA, and research centres, such as Serbia’s Institute for Chemistry, Technology and Metallurgy. This collaboration will “improve production efficiency and reduce negative environmental impact,” he said.
One key issue for Serbia is ensuring its environmental performance is sufficiently robust to ensure its metal packaging exports do not attract charges under the incoming EU Carbon Border Adjustment Mechanism (CBAM). The head of the Environmental Protection Unit at Serbia’s National Alliance for Local Economic Development (NALED), Sanja Knežević Mitrović, told CanTech that Serbian industry must prepare for this risk, maybe by introducing a national carbon tax, which could generate revenues of €382 million by 2034, taking into account taxes collected from the aluminium, cement, iron, steel and fertiliser industries, which will come under CBAM regulation starting in 2026.
“To ensure the targeted use of these funds, it is necessary to establish a Green Fund into which eco-taxes will flow directly and from which further investments in environmental protection will be financed,” argued Knežević Mitrović.
She warned that exporters from Serbia, unless they reduce carbon dioxide emissions, could otherwise through the CBAM face increased costs in accessing the EU market: “The only solution to avoid this outcome is full alignment with European legislation, alongside the simultaneous introduction of both a national carbon tax and a local levy, in order to prevent imports from countries where such a system does not exist and to preserve the competitiveness of domestic industry,” she said.
For Serbia, these improvements would provide both environmental and economic benefits, supporting long-term competitiveness and helping domestic producers align with future EU accession requirements.
