More employment is coming to Croatia, more precisely to Kerestinec near the Croatian capital of Zagreb, thanks to an ammunition factory.
As Poslovni Dnevnik/VL/Davor Ivankovic writes on the 2nd of August, 2019, the exact location of the ammunition factory, an investment of strategic interest to the Republic of Croatia, was revealed at a session of the Croatian Government when consent that the former military property in Kerestinec near Zagreb be handed over to Alan d.o.o. was given.
At this Kerestinec warehouse and forest, there used to be an anti-aircraft missile base which has gone unused by the Croatian Army for a long time, but the property was managed by the Ministry of State Property.
The Alan Agency, a state-owned company that deals with the placement of Croatian-made weapons, products and services for military use, and also imports weapons, will now incorporate this former military property into its core capital for the purpose of “launching the production of arms and military equipment of strategic importance to the Republic of Croatia”.
Alan’s CEO, Ivica Nekić, has since confirmed the news that this location in Kerestinec was designated as the place where the chosen strategic partner would build a munitions factory relatively quickly, which would then start producing several types of basic caliber ammunition.
A big consumer of that ammunition is the Karlovac-based giant, the respected manufacturer of pistols and assault rifles, HS-Produkt. It has been estimated that they use between 10 and 15 million bullets per year. The security problem was that the military and police were dependent on imports of basic ammunition, so the state finally decided to support the construction of an ammunition factory here in Croatia that would supply Croatian defense forces as well.
This does not mean that the future plant will be under state ownership, however. On the contrary, Nekić says that the best industries are private ones, and the state no longer intends to participate in production as it did with shipbuilding, an enfeebled field which constantly had to be rescued in some manner or another.
Nekić has stated that in August or September, Alan will send inquiries to all interested investors and manufacturers. The tender will therefore be opened, and “the door is open to everyone, and the job will be given to the one whose offer is the best,” Nekić says. Israel’s Elbit is also in the game, whose interest was also discussed during an official visit to Israel by President Kolinda Grabar-Kitarović.
The former military base in Kerestinec, which is now mainly covered by forest, covers 141,348 square metres, and the Croatian Government’s document states that the market value is estimated at 3.95 million kuna. It has also been stated that this is an investment of 150 million kuna, and that the factory is expected to export 90 percent of its production, equal to about 200 million kuna per year.
Nekić expects potential investors to submit their bids quickly, and by the end of the year, Croatia will contract the deal and choose a strategic partner. This is followed by the assembly of the machines. From the optimistic claim that a ”test run” of the ammunition could start in a mere eighteen months, it seems that preliminary discussions with a potential investor in the ammunition factory have already taken place, as the short deadline suggests that the machines are already ready.
Ordering and designing a new production line and building stands can of course take several years. Nekić says the technological framework and management is the main concern of potential investors.
What the Republic of Croatia receives from such a commercial investment is the long-term contracted and secured procurement of ammunition for its own needs, the re-launching of what is primarily known as “dead” capital of former military facilities, and the creation of 50 to 100 new jobs in the first phase alone.
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