Page 103 - SE Outlook Regions 2022

3.8.3 Industry

North Macedonia's industrial output declined for the fourth consecutive
month in October 2021 by an annual 6.5%, narrowing from the 8%
decrease in the previous month.

Industrial production fell from July to October 2021 after four months of
growth. The biggest annual increase in industrial output this year was in
April, when it jumped 46.1%, due to the low base effect.

Despite this, companies operating in North Macedonia’s free economic
zones achieved record high exports in 2021 of about €3bn, which is
15% more compared to 2020, and 6.5% more than in pre-pandemic
2019, the head of the directorate of the free economic zones. The
biggest of the zones is Bunardzik, close to Skopje, where one of the
major exporters in the country, UK chemicals company Johnson
Matthey, is located.

South Korean car parts manufacturer Almac together with US-based
automotive supplier Dura Automotive Systems will invest €30mn in a
production capacity in the free industrial zone near Skopje. The start of
production is planned for the coming year.

Also in the automotive sector, German automotive company Fritz
Draexlmaier said it is issuing a €350mn ESG-linked Schuldschein to
back investments in North Macedonia as well as Romania and
Moldova. The financing will go towards e-mobility linked investments in
the three countries. In North Macedonia, the company has been
operating a factory in Kavadarci since 2012.

Meanwhile, local battery maker Tab-Mak is planning a new investment
cycle worth €30mn to increase production of starter batteries. 97% of
Tab-Mak's production is sold on foreign markets.

3.8.4 Energy & power

North Macedonia’s government on December 1 approved the decision
to extend the state of crisis in the energy sector by six months until
June 9, 2022.

The country initially declared a state of crisis in the energy sector for a
period of 30 days on November 9 to stabilise the situation in the
electricity market amid soaring prices on international markets. The only
measure arising from this decision is to inject funds into the state-run
energy companies, MEPSO and ESM, it was said at the time. No
restrictive measures were planned.

The extension of the state of crisis in the energy sector aims to ensure
continuity in the implementation of measures and activities to overcome
the situation with electricity supply.

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