Maribor-based MLM Group eyes two foundries in Serbia - partnership with Fiat as a condition for investment

- Slovenian manufacturer of automobile aluminum components MLM is interested in buying two foundries in the vicinity of Belgrade if the negotiations on supply of parts to Italian Fiat end in success - Darko Vide, the Sales Manager at the Maribor-based company, told eKapija. He did not want to reveal either the names of the foundries or the exact amount of the money that the company is ready to set aside for the units in Serbia, but he said that the price of each foundry may range between EUR 1m and 3m.

- Technology in the foundries we are interested in is very old, so that we will have to invest significant amount of money in their equipping and the staff training. Foreign automobile manufacturers have very strict standards that need to be respected, and our advantage lies in years-long experience in the supply of car parts to Volkswagen and General Motors - said Vide.

The Sales Manager in the Maribor-based foundry said that that company was very interested in cooperation with Fiat and that the negotiations with the Italian manufacturer had started one year ago.

- We expect Fiat to visit us in our headquarters in Maribor by the end of the year, which should be followed by more concrete talks about the cooperation - quantities, machines, technology. We would first verify the production in Maribor and then resume it in Serbia. Therefore, if we agree on the supply of parts to Fiat, it is in our interest to buy foundries in Serbia, that is, to expand our production capacities. We do not plan to move the existing production units from Slovenia, while the investments in Serbia would be realized by ourselves, with a support from banks. Also, we expect certain benefits, and maybe even loans from the Government of Serbia.

As Vide explained, minor share of the production in Serbia would be intended for the needs of Fiat, while the rest would be exported.

- Let me remind you that we are direct suppliers of Volkswagen and General Motors, so that I assume that these companies would also be interested in the products made in Serbia. Of course, these are only the supply plans for the period of next few years.

MLM produces transmission and engine parts, electronic components, as well as house radiators and sanitary equipment. The most famous product lines are Alutec, Baker, Armal and Aklimat.

Investments in Bosnia and Herzegovina

(Darko Vide)

MLM Group will soon open a factory in Bosnia and Herzegovina where it has bought a hall and the existing units of the foundry near Bugojno. In this way, the company will expand its capacities for production of aluminum castings for automotive and electric industry, that is, production of household appliances for strategic clients in Europe, which will be started soon by MLM Alutec Bugojno.

Let us remind that MLM, as the majority owner, founded company Alutec Bugojno together with its local partners in Bosnia and that it plans to invest over EUR 5m and employ more than 100 people in it.

The product portfolio of factory Alutec Bugojno consists of four segments - parts for automotive industry, radiator heads, integral parts for machines and parts for electric industry.

There are, currently, four presses for aluminum forms with complete equipment for production of pressed castings in Bugojno, while the procurement of eight presses for aluminum forms for completely automated process of pressed casting is in the pipeline.

The products from the foundry in Bugojno will be exported mainly to German, Austrian, Swiss, Italian and, partially, French market, while the largest buyers in these markets will be Volkswagen, General Motors, Opel, etc.

The Maribor-based foundry has 1,000 employees, its main market are the countries of western Europe, while the company's annual growth since 2005 amounts to 15%.

The foundry in Maribor participated in the First International South East Europe Automotive Suppliers Industry Trade Fair SEE Auto Compo Net 2010, which was held in Kragujevac between May 19 and 21.

T.S.