MUNICIPALITY OF KOTOR-VAROS
ADMINISTRATIVE SERVICE
-Department of Economy and Social Services-

18.10.2009.
Kotor-Varos
POTENTIALS OF MUNICIPALITY KOTOR-VAROS

-THE MAIN INFORMATION ON THE MUNICIPALITY-

The municipality of Kotor-Varos is placed in the central part of Bosnia and Herzegovina, more precisely, in the southwest part of region of Banja Luka. Mainly hilly-mountainous territory of the municipality is surrounded by the mountains Uzlomac, Borja, Vlasic and Cemernica. The municipality is dominated by the river Vrbanja and its tributaries whose water power potential is huge.
The most important part of the road network is the highway M-4 which connects the regions of Doboj and Banja Luka. The regional road Kotor-Varos – Knezevo is of great importance and it significantly shortens the distance between the Federation of Bosnia and Herzegovina (more precisely, Travnik and farther on towards Sarajevo) and Repubic of Srpska.
The municipality of Kotor-Varos occupies the territory of 560 km2, 56.72% of which is covered with woods, 38% is agricultural land, rivers and streams make 0.65%, and 4.6% of the entire territory is a built-up area and other unfertile areas.
The last census in Bosnia and Herzegovina was made in 1991 and according to it 36 670 people lived on the territory of municipality of Kotor-Varos. It is estimated that 27500 people live there today.

-THE PRE-WAR INDUSTRY OF THE MUNICIPALITY OF KOTOR-VAROS-

Until 1992 the existing economic structure of the municipality of Kotor-Varos was dominated by the industry which alongside agriculture and forestry provided 84% of the municipal revenues. The main industrial branches, which were the key factors in economic development of the municipality, are: leather manufacturing, machine industry (manufacture of machine tools and devices for mechanization) and timber and wood industry (manufacture of sawn timber and finished wood products).
Company “Proleks” had the key role in the development of the municipality when it comes to leather-manufactoring industry. The company had 1097 employees and it manufactured leather, leather shoes and other leather products, the biggest part of which was intended for export (Switzerland and Italy – 78% of the goods). It also manufactured Sellotape and it was the only factory of that kind in Bosnia and Herzegovina.
Ltd ”Jelsingrad” was very important for economic development in the field of machine industry. Various eccentric presses and lines for can packaging were manufactured there and exported to Russia and Belgium. The company had 233 employees.
The joint-stock companies “Prerada drveta” and “Drvoprerada” Siprage were the upholders of the development of timber and wood industry. The companies manufactured all kinds of sawn timber, wooden flooring, parquet and briquette. Most products were exported to Italy.

-THE INDUSTRY TODAY-

The situation in the industrial sector of economy has deteriorated a great deal in the post-war period. The slow process of privatization (the transition to trade system of doing business in the joint-stock companies “Proleks”, “Jelšingrad”, as well as in the joint-stock companies for wood and timber manufacturing “Prerada drveta” and “Drvoprerada” Šiprage) has lead to unemployment of 1600 workers whose work status was said to be “on hold”.
With the arrival of the Italian investors, Ltd “Sportek”, the situation in leather-manufacturing industry has greatly improved. This factory manufactures sports shoes and has 1.024 employees, so that currently it has the key role in the industrial development of the municipality of Kotor-Varos. One of the greatest companies in the field of machine industry is Ltd “Mechanical constructions” which has 40 employees, and in the field of food industry Ltd “Jezerka” is the most important company. Ltd “Fagus” stands out in the field of timber and wood industry. This company has 260 workers and is leading company in this field of industry which has greatly developed in the post-war period since Kotor –Varos is very rich in wood as natural potential and the fact that today there are twelve companies in Kotor-Varos which are dealing with wood processing is in favour of this statement.
The problem of development in food industry is tightly related to numerous difficulties in the development of agriculture. Fragmentation of agricultural plots has influenced variable expenses in a way of increasing them, whereas, on the other hand, the extensive way of manufacturing leads to the shortage of raw materials for the development of food industry. The lack of market for sale of agricultural products is also a big problem and the old-fashioned mechanisation makes the products non-competitive.
In the timber and wood industry the main problem is the lack of finished products. Companies which are the part of this field of industry are mainly focused on cutting the trunks, and only few of them make the finished products, mainly joinery.
Based upon what has already been said, the conclusion can be made that the development of municipality of Kotor-Varos, along with the traditionally developed leather-manufacturing and wood and timber industry, should rest on the development of agriculture in order to ensure the raw materials for the development of food industry. Healthy environment, like there is in Kotor-Varos, is very suitable for integral ecological and healthy production of food and medicinal herbs, particularly on the hilly part of the municipal territory where the soil, water and air pollution is minimal. If we have in mind that organic production has a growing tendency in the world, it is clear that these conditions represent significant comparative advantage.

-RESOURCES-

The resources which are available in this municipality, and which can be relied on in future, are above all woodland, water (rivers and natural streams of drinking water), as well as tourism which would be based on the two above mentioned resources.
The economic development of municipality of Kotor-Varos should, taking the exceptional natural potentials into consideration, revolve around ecologically clean environment, highland and country tourism, production of water and healthy food, as well as traditionally developed leather-manufacturing and wood and timber industry.
In future, the following resources will have the most important part in the economic development of the municipality:
1. woodland – the possibility of making the finished wood products (opening a factory where furniture will be produced) which has not existed so far because the raw materials are exported and sold as such;
2. water
Water-power potential of river Vrbanja (tributary of river Vrbas) for which 13 concessions were given by the government for the construction of small hydro-electric power plants. So far only one of them has been constructed.
Put greater emphasis on cleaning the river bed and put forward its quality as ecologically clean and fish-stocked river
Put emphasis on tributaries of river Vrbanja as unpolluted sources which can be used for production of drinking water, and as potentials for fishing tourism, “fly fishing” and other jewels of nature ( Vilenjska Vrela, Bobas, Skakavac waterfall etc.)
3. agriculture, soil and mineral resources – 38% of the territory is agricultural land, 56.72% is woodlands, 0.65% is water, 4.6% of the entire territory is built-up area and other unfertile areas. The territory belongs to highland relief type. The height of the southwest part of the municipal territory is 220m above sea level, whereas the height of the southeast part is 1739m. The difference in height between the two parts of the territory causes different types of agricultural production, and this terrain and climate are especially suitable for cattle-breeding, growing of fruit and medicinal herbs.

4. tourism – the territory of the municipality of Kotor-Varos offers excellent conditions for the development of tourism, above all mountain and country-tourism
Mountaineering – the sport which is becoming more and more popular, not only as a sport but also as a kind of tourism, particularly in Scandinavian countries. It is also called a “medicine for heart”
Air spa – a potential which can be relied on as a way of recreation and sport, the opening of new recreational centers and health centers ( the slopes of mountain Vlasic are very suitable for this)
Hiking – it is becoming more and more popular in developed and wealthy countries
Paragliding – this sport has more fans than ever. Hills and plateaus surrounding Kotor-Varos are ideal for it, ex. Borci or Vagani.
Fishing and hunting – there are all the prerequisites needed and with the eventual investments this could become very important branch of economy and tourism.

5. sport – this is a very significant potential of the municipality considering a large number of sports clubs and successes which were made in both team and individual sports.
There are numerous sports fields: sports center, football stadium “Mladost”, as well as the other smaller terrains for different sports (indoor football, handball, tennis, volleyball etc.). Considering the above mentioned sports infrastructure as well as healthy environment and clean air, the municipality of Kotor­-Varos is very suitable for the preparation of athletes. There are several sports clubs in Kotor-Varos, and the largest are: football club “Mladost”, handball club “Kotor-Varos”, basketball club “Mladost”, judo club “Mladost”, karate club “Ipon” and kick-boxing club “Panter”. Possible corporation between sports clubs in Kotor-Varos and sports clubs in Bosnia and Herzegovina and abroad (for example athlete exchange programmes and other ways of sport corporation) would promote the sport in our municipality and welcome the potential users of sport terrains from abroad.

-FORESTS-

Forests and woodlands occupy 31.762 acres of the territory of Kotor-Varos, 23.760 acres of which are owned by government and 8.002 acres are private property. Places which are 500m or more above the sea level, such as for example mountains Uzlomac, Borja and Vlasic are covered by woods. We can be very pleased with the variety of flora and fauna that can be found in the woodland on the territory of the municipality. The altitude range of the territory of the municipality of Kotor-Varos is from 270m up to 1402, and that is the reason why all the constituent parts that characterize the continental woodland can be found there.
Many grasslands and fields are turned into agricultural fields as a consequence of wartime and economic migrations of the population. There is a significant difference in the growth of trees on these areas. It is assumed that the growth will be better in future.
This area is characterized by the wide variety of different types of forests, such as oak, oak-beech, beech, fir-spruce or only spruce forests.
There are 23.760 acres of forests owned by the government. 18.000 of these are forests with very high trees, 2000 acres are forest cultures, 1000 acres are barren landscapes and 2760 acres of the territory are covered with recently planted trees.
The consequence of such a huge territory covered with woods is a wide variety of species which form a biodiversity seldom found in the world. There are 6000 medicinal herbs that grow in Europe and all 6000 of them can be found in Bosnia and Herzegovina. There are 5500 medicinal herbs growing on the territory of the municipality of Kotor-Varos.
The production and exploitation of timber has a prominent role in the way woods have been used so far. Not enough attention was paid to the other ways of wood exploitation.
Collecting the so-called subsidiary wood products (such as medicinal herbs, mushrooms, snails etc.) is unorganized. This activity should become more important in future, since it is attractive as a sort of tourism and economy and, with that purpose, new associations specialized for this kind of economy are being formed these days.
The area for hunting is separated into three parts and there are three hunter associations in charge of them. There is a wide variety of game on this area. There is also a significant population of big game, for example bears, wolves and wild boars.

-THE MUNICIPAL AREA FOR CONSTRUCTION OWNED BY THE MUNICIPALITY-

On the territory of Kotor-Varos there are 102.039m2 of municipal land for construction owned by the municipality.
There are several different locations and classes (from 2nd to 5th class) of this land. The most suitable for construction and biggest of these are: Arabasnica – 12.245m2 (next to “Jelsingrad”, the former factory for production of machines and devices); Ripiste – 14.370m2 (placed in the part of town called Bregovi); Kukavice – 17.235m2 (next to factory “Proleks”); Bara – 19.948m2 (next to ltd “Sportek”) and Barenjci – 26.248m2 (Donji Varos).
Traffic infrastructure is ensured for all of these locations, as well as electric power and water supplies, apart from “Barenjci”, although a new road is going to be built which will connect this plot with the rest of the territory.

-MINERAL RESOURCES ON THE TERRITORY OF THE MUNICIPALITY OF KOTOR-VAROS-

The mineral resources which can be found on the municipal territory are coal, manganese, limestone, architectonic ornamental limestone etc. Maslovare (the village on the municipal territory) is famous for coal deposits and there are also manganese, gravel, broken stone, clay and quartz deposits on the mountains Uzlomac and Borja. There are the indications of other mineral resources as well. Researches that were done during the construction of hydro-electric power plant have shown the existence methane which can be used as an alternative source of energy.
After the World War II, the coal deposits in Maslovare were exploited (in the period between 1916 until 1940, and another time 1947-1950). Manganese and clay deposits (used for brick production) were exploited from the mountains Uzlomac and Borja (from 1960 until 1970). These areas are extremely suitable for further researches and exploitation from which the entire municipality of Kotor-Varos and even the whole region would benefit. The regional planning of Republic of Srpska includes the information about the deposits of coal and manganese dioxide as well as other mineral resources on the territory of the municipality. Government of Republic of Srpska gave the concession for researches and exploitation of coal from the deposits “Maslovare” and “Hrvacani” to the company “Eco Green Energy” from Kotor-Varos. The privilege to research and exploit the mineral resources was granted for the purpose of supplying “Energana” in Kotor-Varos with power and for the purpose of selling it to the third party

.
-AGRICLTURE-

The climate in the municipality of Kotor-Varos is temperate, the summers are hot and the winters are cold. The average precipitation is 1176mm/m2 and is equally disposed during the period of plants growth.
Agricultural land occupies the territory of 21.562 acres or 215, 62 km2 which is 38% of the entire territory of the municipality. The quality of the soil differs a lot, namely there is soil which has very good productive characteristics, suitable for organized production, and on the other side there is soil of very low quality. There are very favourable prerequisites for the following forms of production: fruit-growing (plumes, apples, pears, berries), cattle-breeding (production of milk; sheep-breeding), cultivation of soil (maize, wheat, oats), medicinal herbs (collecting and directly producing them), honey production (there are 2000 organizations dealing with it on the municipal territory). The mountainous-hilly part of the municipality is rich in rivers and streams which is ideal for constructing fish ponds. The mountainous part of the territory (slopes of mountain Vlasic and villages Vagani, Vrbanjci, Zabrdje) is almost deserted because of depopulation. However, the territory is rich in pastures with grass of good quality which is very cheap feed for cattle and sheep.
The surface of the territory owned by the municipality is 100 acres.

-TOURISM AND SPORT-

Some forms of the tourist offer which could be provided by the municipality have already been stated in the previous part of the text. There is already certain infrastructure, premises and organizations for some of the aforesaid suggestions, such as mountaineering and sport. The association of mountaineers “Mehanizam” has been active for several years now in Kotor-Varos. It means that certain prerequisites for this part of tourist offer already exist, and we can include it in the presentation of the municipal potentials.
The project of organization of the tourist area around the waterfall Skakavac on river Duboka is currently implemented. When we say organization of the tourist area, we have in mind activities like making the paths for tourists, putting up safety fences and signposts, cleaning the river beds and other activities which would help to make the area more attractive to tourists. When all the activities are brought to end, we expect even greater interest of tourists for this area.
The situation is similar when it comes to sport. Sports clubs existing in Kotor-Varos make significant results (handball and football clubs in particular) and have their own premises and qualified staff. This is also a way of using accommodation and catering services which the town has to offer. Namely, the up-to-date hotel “St. Petar” has the capacity of 36 rooms four of which are suites, 20 double rooms and 12 rooms with double beds which is, of course, very important in case of athlete-exchange programme or their preparations for competitions. Naturally, the town would also be involved in this project, together with the foreign investments, therefore this would this would provide the option for mutual engagement.
Hunting and fishing, alongside the sports fishing and fly fishing which are becoming more and more popular, could also be included in the tourist offer. Very attractive locations for these activities are rivers Bobas, Cvrcka, natural beauties such as the waterfall Skakavac, Vilina vrela etc.
Constructing the ethno-village can also be very interesting and profitable form of tourism since its popularity is growing worldwide.
The idea of creating the town souvenir should be put forward in near future; something that would be a recognizable mascot of the town and which could be used as a present to our business associates or simply as a souvenir.

-THE STRUCTURE OF UNEMPLOYED PEOPLE-

In September 2009, 2890 people were registered as unemployed on the territory of the municipality of Kotor-Varos. The following chart contains the information on the number of unemployed workers according to their qualifications:

Chart: the number of unemployed workers

QUALIFICATION THE NUMBER OF PEOPLE THE UNEMPLOYMENT PERCENTAGE
low-qualified worker 1159 40%
half-qualified worker 40 1,3%
qualified worker 1161 40,2%
worker with secondary school degree 448 15,5%
highly qualified worker 7 0,2%
worker with college degree 17 0,6%
worker with university degree 23 0,8%
workers without formal education 34 1,2%
TOTAL 2890 100

The most numerous professions registered in Kotor-Varos are:
Shoe-maker: 167
Leather-worker: 115
Mechanic: 105
Bricklayer: 91
Economist: 69
Machinist: 66
Textile worker: 48
Merchant: 35
Forester: 16
Medical worker: 12

Other professions might as well be found on this list: catering workers, hairstylists, electricians, carpenters, workers in civil engineering etc. There are 23 persons with university degree who are unemployed currently.
According to the official information there are 3948 people who are currently employed.

The companies which employ the largest number of workers are:
Ltd “Sportek” – 965 employees
Ltd “Fagus” – 260 employees
Ltd “Dermal” – 150 employees
Ltd “Mehanicke konstrukcije” – 40 employees

The above stated structure of unemployed people shows that we have skilled labour which is an important prerequisite future investments in the economy.