Đuro Đaković Hoping for ‘Deal of the Century’ with Kuwait

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Croatian defence industry hopes that the newly-opened embassy in Kuwait will improve its chances in tenders.

Will Đuro Đaković Group finally be awarded a huge contract in Kuwait, which has been rumoured about for four years and is reportedly worth about 3.5 billion kuna? Many call it “the deal of the century”, reports Jutarnji List on February 9, 2017.

The potential contract includes sale of armoured vehicles for the Kuwaiti army. The recent visit by Croatian President Kolinda Grabar-Kitarović and the opening of the embassy could help, because they demonstrated that the state supports the project, said Tomislav Mazal, CEO of Đuro Đaković Group, which is majority state owned.

It is not known when the final decision could be made. The company has passed all preparatory stages for the tender and has been patiently waiting since 2015 for the Kuwaitis to finally decide from whom they will buy the vehicles.

Back in the summer of 2013, Đuro Đaković, after testing the vehicles in Kuwait, entered the second round of the tender, and at the end of 2014 it received an invitation from the Ministry of Defence of Kuwait, together with two other bidders, to submit its technical and financial offer for the purchase of armoured vehicles. The offer was submitted in January 2015, and during the summer the plant in Slavonski Brod was visited by a military delegation from Kuwait in order to inspect production capabilities of the plant. Since then, no new information has been received about the tender, and no formal deadlines have been set.

The potential contract with the Kuwaitis includes, in addition to the vehicles, a whole package which consists of arms, ammunition and equipment for these vehicles, support, training and everything else. Although the cost has not been disclosed, Mazal noted that such contracts are always in the range of several hundreds of millions of euros, with the final amount depending on equipment selection.

Technology for Patria AMV 8×8 vehicles has been acquired from Patria in Finland, with whom contracts on the transfer of knowledge and technology have been signed. Last year, a contract was signed for the production of armoured vehicles worth 26 million euros for third countries. This was the first export project in the defence sector for Đuro Đaković after almost 30 years (when the company manufactured and delivered M-84 tanks for Kuwait).

Đuro Đaković Group is majority owned by the state (50.66 percent), and in 2016 it had a net loss of 20.2 million kuna. It had revenues of 583.2 million kuna, 185.5 million kuna more than in 2015.


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