USAID Kosovo Private Enterprise Program (KPEP) Year 3 First Quarter Report

The program is divided into four components: Increased Competitiveness of Key Sectors, Business Support Services, Business Enabling Environment, and Workforce Development. In the first quarter of 2011, KPEP made significant progress in several sectors. The Livestock sector established a raw milk sampling scheme, which is expected to benefit farmers in the second quarter. The sector also received grant support from the EU to upgrade facilities, which will improve efficiencies and output. The poultry sector saw a significant increase in local sales of fresh broilers, with one client able to more than double his production and slaughter capacity. The forest and wood industry activities are proceeding well, with notable success in the forest sector. The National Forest Standards were submitted to the Forest Standards certification Body on September 16, and received solid buy-in from all stakeholders at regional trainings. The wood processing sector continued to support the industry through the industry manufacturing association, AWPK, and exports of furniture increased, particularly to Albania. The construction materials sector saw good strategic progress, with the identification of three industries with growth potential: clay bricks and blocks, galvanized metal fabrication, and clay roof tiles. Exhaustive client visits were made to understand their needs, and where appropriate, grant support was initiated. The road construction sector finalized the targets for upgrading workforce skills by selecting the KEK training center to host the heavy operators training center and the welder's certification courses. The tourism sector intensified its work, raising the demand for and increasing the quality of tourism offers in Kosovo. Initial indications are that this work is being well received internationally, with more than four times the inbound tourism in Q1 than the whole of last year. A combination of internal improvements and high-level exposure in international target markets through tourism fairs and familiarization trips is paying off. The recycling sector is consolidating its position by working with a major regional player in the plastics recycling industry. Seven new centers have been opened up for more effective and efficient plastics collection and processing. Additionally, a grant has been made to a large tissue paper manufacturer to improve processing of locally available paper and to replace imports of semi-processed product. The ICT sector has focused strategically on interventions with the greatest potential for job creation. An investigative visit to India highlighted the potential of Kosovo as an opportunity for firms looking to bring business process outsourcing closer to their European business partners. At least one Indian investor is seriously looking to invest in Kosovo as a result. The industry skills gap analysis continues to look at opportunities to focus workforce development activities in this high-potential sector. Cross-cutting support is being generated by the Business Enabling Environment, Business Support Services, and Workforce Development components. BEE has driven the collaboration efforts between KPEP and the new KBEEP project, resulting in the development of well-conceived and articulate position papers that have been circulated at ministerial level. BSS has continued to provide support to association strengthening, with the development of specific strategic plans for KPEP-supported associations. WFD continues to work with the internship process, with particularly good results in industry placements in the financial sector. KPEP was also asked to initiate a "cash for work" program in Northern Kosovo, which was successfully launched on December 6th. The program involves cleaning the banks of the Ibar River in four municipalities and has seen the employment of all 172 employees enthusiastically engaged in the work. This represents the start of Phase I of the activity. KPEP responded to the request to investigate small business support opportunities in the north by placing two full-time staff in North Mitrovica. Response has been overwhelming, with more than 40 business support opportunities being identified by the end of the quarter.