A Renewed Serbian Military Industry Ripe for Foreign Investment

7 02 2011

Source: Radio Televizija Srbije
Translated from Serbian by Balkan Monitor

Serbia’s military industry factories have managed to restore production and return their products to the international market, despite the damage suffered due to sanctions and NATO bombing. Although new jobs are expected to continue to increase due to exports, additional investment is necessary to modernize and increase production safety.

Serbian producers and arms exporters, who last year recorded a significant increase in production and exports, are gearing up for Serbia’s bi-annual arms fair “Partner 2011” (Website: http://www.armamentfairbelgrade.com/), which in June 2011 will bring to Belgrade over 100 exhibitors.

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Despite the NATO bombing of Serbia in 1999 and sanctions making it illegal for Serbia to export its arms, Serbian military factories have since resumed production and returned their products to the international market. Given the green light from the United States Serbia’s arms industry currently exports 90 percent of its production.

Rade Gromović, general manager of Zastava Arms says that in the last four years the largest export of Serbia’s military industry has been to countries engaged in UN peacekeeping missions, Iraq and Afghanistan all through American companies.

Gromovic cited that Serbia’s exports mainly consist of small arms, automatic rifles, machine guns. Recently, Zastava Arms exported 20,000 pieces of its CZ-99 semi-automatic pistol to Iraq.

Exports worth 1.2 billion dollars US

In the last three years exports of Serbian arms and military equipment was worth 1.2 billion US dollars.

“The revenue goes to the defense industry factories and into public enterprises.” said Deputy Defense Minister Elias Pilipović.

“About 50 per cent of that profit is received by the Serbian Ministry of Finance to invest in the development and reconstruction of technological capacity. This is not sufficient enough to make a technological leap as expected as Serbia’s military industry requires significantly higher investment aprart current activities from their financial resources we invest.” [Emphasis by Balkan Monitor] says Nenad Miloradović, Assistant Director-General Jugoimport SDPR.

The seven defense industry factories in Serbia employ nearly 9,000 people and since 2007 2,000 workers have retired and 3,000 new workers were taken on causing a shift in worker qualification and the age structure of the Serbian military industry.

Serbia estimates that the modernization of its military factories in the next three years will be around 45 million euros.

Balkan Monitor: Judging from the tone of this article and particularly the above quote from Nenad Miloradovic, Serbia may be looking for foreign investors in its military industry as currently this sector is run and funded by the state.

Related:

JDW 27-Jan-2011 Serbia considers military privatisation as exports soar

from Jane’s Defence Weekly

The value of Serbia’s defence exports has jumped 229 per cent to USD247 million since 2007 while the payroll of the country’s military industries has swelled by 33 per cent to 9,000 employees, Defence Minister Dragan Sutanovac has said. Sutanovac added – in comments posted on the Serbian Ministry of Defence (MoD) website on 24 January – that the privatisation of Serbia’s military ventures is now under consideration, with a view to investing proceeds from partial privatisation in plant … – 2011/01/27 00:00:00

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