Fragile production - In red for three years in a row

Serbia is known for its quality leather and various products, including jackets, coats, bags, and shoes. Today, on the domestic market, the production of leather items is mostly done by small producers and craftsmen, reports Biznis.rs.

Artisan Miladin Milojević says he makes leather clothes by hand and uses traditional leather processing and sewing techniques passed down through the generations.

"Many smaller producers and artisans have a developed leather processing industry, and domestic producers often use local leather as raw material, known for its durability and quality," explains Milojević.

Apart from traditional production methods, several larger manufacturers in Serbia use modern technologies and machines for leather clothing production. These companies often export their products abroad, primarily to the markets of the European Union.

Recently, more attention has been paid to sustainability and ecological standards in leather production, including the drop in using harmful chemicals and improved working conditions in the industry.

"Depending on the quality, color, type of leather, the price per square meter is from 18 to 20 euros. However, although the price is affordable, there is a lot of competition with importers, especially goods from Asia, which are cheaper. This is one of the biggest problems domestic producers must face," says Milojević.

The total number of registered companies in the production of leather clothing is 52, but the financial results show that the entire sector is threatened.

The total profit has been in the red for the last three years, and in 2023 it amounted to -6,355,000 dinars.

However, Napredak AGP from Čačak has been operating stably for years. Profit-wise, they have the top spot on the credit list rating, according to CompanyWall. In 2023, as the financial reports show, this company achieved a business result of 3,819,000 dinars. It is also the best result for the last three years because in 2021 the profit of Napredak was 1,944,000 dinars and in 2022 - 1,730,000 dinars.

The Kodžić Family company from Belgrade with two companies is in second and third place on the same list of the biggest winners in the leather clothing industry. In second place is Kodžić & Co with a profit of 3,062,000 dinars according to the EBITDA parameter, whose operations are also stable according to financial data. The 2021 result was 2,505,000 dinars, and at the end of 2022, the profit was slightly higher than 2,782,000 dinars.

"Back in 1920, the first Kodžić craft shop was established in Belgrade. Since then, the family business has been passed on to new generations taking responsibility for the company, with more than 100 employees, with significant awards for cooperation with big names and institutions. Following trends and constant changes in the fashion industry, we are constantly innovating our leather jackets and other leather products. The company offers men's and women's leather jackets, leather pants, leather dresses, and other fashion accessories the hallmark of the Kodžić collection are pilot leather jackets, made according to the strictest military standards, from the highest quality leather", they state in their presentation from the company Kodžić & Co.

In third place is a daughter company called Kodžić Fashion, which has been operating since 2014 at the same address as Kodžić & Co in Kneza Miloša Street in Belgrade. The profit of 1,699,000 dinars, almost the same for the last three years, brought this company to third place, according to CompanyWall analysis.

In fourth place on the list according to profit was a company founded just last year in Valjevo called Jalize. The company, which is 100% owned by Aleksandar Milovanović, made a profit of 637,000 dinars in the previous year - their first year of operation.