10.10.2014.

Minister of Defence visiting "Zastava-arms" factory in Kragujevac

During his visit to the oldest company from the Serbian Defence Industry Group “Zastava-arms” LLC Kragujevac, Minister of Defence Bratislav Gasic talked with the company’s manager about the situation in this company.
Minister was presented with the level of engagement of production capacities and human resources, and special emphasis was put on the realization of investments from their own assets into contemporary equipment, which had partially renewed the mechanical processing engines in both programs.

Minister Gasic stated that all the issues that “Zastava-arms” is facing were presented at the meeting.
- The Ministry of Defence and the Armed Forces of Serbia want to make the national special purpose industry the leading factor in modernization of our military. We have also discussed the ways to find status solutions for all special purpose factories in the future and to arrange the procedure of conversion of debts, and, above all, the ways to continue the production process, because the average age of the employees is over 50. We also need to consider employing younger staff who will continue the production process and learn the craft so that “Zastava-arms” could sustain. It has its market, but does not have a substantial financial support – Minister of Defence said.

He added that the situation in the last decade was such that companies have “lived” without paying contributions, pension, social and health security.

- Debts of “Zastava-arms” have passed 12 and a half billions. Debt conversion has to come at some point, and we need to work on paying salaries for 2200 employees. In the next period, we will seek the solution through talks, because significant Serbian means come from the arms export – Defence Minister said.

According to him, all statuses of special purpose companies have been made accordant with the Ministry of Justice, and a contest for the position of directors will be announced in the next period.
- We wish for the company managers to guarantee with their assets, knowledge and skills that the factories will do business without any losses.
Minister Gasic was also introduced with the issues this company has in realizing the contracting obligations to the Ministry of Defence and the Armed Forces of Serbia and the business financial consolidation concerning the conversion of debts into state assets, which would significantly improve the balance, and finding the way to secure favorable investment loans with the goal of continuing the modernization.

Director of “Zastava-arms” LLC Company Rade Gromovic said that today’s meeting has confirmed total commitment of the Ministry of Defence and the Armed Forces of Serbia to maintaining and sustaining special purpose companies.
- The main issue is finding a way to get this company “on its feet” because the state is ready to make the conversion, but, from that moment, our company must start settling all its commitments to the state. Current position of our company on the market on the basis of arranged businesses is such that we can start settling all our obligations concerning paying taxes and contributions this month. Great tasks ahead of us are the modernization of the factory and raising the level of productivity to the maximum level. Last year, we have employed 250 young production workers, and next comes the employment of younger higher technical staff and the all-encompassing activities of the business financial consolidation of the company with an active engagement of the unions – Gromovic said.

Currently, around 80 different products are in serial production, mostly intended for the international market, where 94 percent of production is exported. It has been confirmed that “Zastava-arms” exports its products to more than 40 countries across the world, with most significant buyers from the territory of USA, UAE and African countries, and from the Far and Near East. Positive effects in the business financial consolidation have been presented, which are primarily reflected in the fact that this company has been financed from its own sources and has not been using subsidy loans for three years.