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Among its many activities in Bosnia and Herzegovina, theUnited States Agency for International Development(USAID) is currently supporting the Privatization of

Strategic Enterprises in Bosnia and Herzegovina. In this

capacity, USAID through International Business &Technical Consultants Inc. (IBTCI) is providing technicalassistance to Privatization Agencies in the Federation of

BiH, and the Privatization Directorate in the RepublikaSrpska in the privatization of the enterprises presented in

this brochure.


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"Bosnia and Herzegovina has changed; because it has changed, I believeit is entitled to a fresh look from investors. You will not find everything toyour liking. There is still a great deal to be done.

But I can say with confidence that Bosnia and Herzegovina justifies verydetailed and extensive research. There are investment opportunitiesarising from the particular phase of transition in which this country findsitself.

Labour costs, rental costs and taxes remain extraordinarilycompetitive; infrastructure is improving noticeably month by month; andthe governments, from the state down to the municipalities, are startingto think in terms of what incoming businesses need.

This is fertile ground for economic success. BiH is, indisputably, openfor business."

Excerpt from the speech by the High Representative Paddy Ashdown

Economist Conference, Sarajevo, September 22, 2003


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Reasons to invest in Bosnia and Herzegovina

The Investment Opportunity

The privatization of state-owned property offers investment opportunities. In spite of the drawbacks, the

interest of foreign investors is picking up. Positive factors include a stable currency with lowinflation. The

proposed reduction of trade barriers among Balkan countries is also encouraging, and Bosnia &Herzegovina, with its lowlabor costs, could become an attractive regional export base.

There are many reasons to invest in Bosnia and Herzegovina, some of which are:

BiH has a very favorable geographic position - it is situated on the crossroads between Western Europe

and the Middle-East

High potential for economic growth in Central and Eastern Europe

Stable currency - the Convertible Mark - KM with fixed exchange rate against the Euro

Lowest inflation rate in Central and Eastern Europe

Opportunities for growth in tourism

Protection of foreign investments - Bosnia and Herzegovina is a member of Multilateral Investment

Guarantee Agency (MIGA)

Economy open towards the European Union and neighboring countries

Educated, highly skilled and motivated labor force

Competitive labor costs

Natural resourses

Reformed banking systemwith a significant number of foreign banks

Lawon Foreign Investments regulating the policy and principles of foreign investments

Foreign investors have equal rights to domestic ones

Rights of foreign investors are particularly protected (tax holiday for 5 years)

Several major foreign investors listed by the value of their investments are given in the table below:


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PRIVATIZATION SUCCESS STORIESThe following enterprises were the benefactors of USAID technical assistance during the process

of their privatization

Standard, Sarajevo

Furniture Factory

Company Profile

Standard is the largest furniture producer in Bosnia and Herzegovina and is well located in the industrial zone of

Sarajevo. Standard produces furniture both for the household and office markets. Standard has two groups of

products: Case products accounting for about two-thirds of sales, and upholstered products accounting for one-third

of sales. Standard has strengthened both its design and marketing capabilities in recent years, resulting in many

newproducts and nowhas a broad, modern product range.

Improvements since the privatization of the company

Germany's Schieder Gruppe, which owns 42 furniture production facilities in Europe, acquired 51.53%(book value

KM 9,947,976) of the Standard capital owned by the state in October 2001. Per the contractual agreement and a

three-year investment plan, Schieder Gruppe is to invest KM 4 million, keep all the existing workforce and employ

40 newworkers. Schieder Gruppe kept all of the 285 existing workers, has employed 28 newworkers and has

implemented 54%of the agreed investments so far.

Two years following the privatization, Standard has doubled its pre-privatization production, 75%of which is

exported. The company is still running at a loss, but this is a planned and controlled loss due to 10%and 9%

amortization rates for the years 2002 and 2003. The year 2004 is expected to be not only break even, but a

profitable business year. During 2002 and 2003, Standard has developed several newproducts: German chairs,

upholstered chairs and tables made fromthick wood boards.

FOGS, Sarajevo

Leather Footwear Manufacturer

Fabrika Obuce i Galanterije d.j.l. Sarajevo (FOGS) commenced operations in 1946 as a leather products factory. In

1957 the factory started producing plastic products under the name of Shoe Factory 'Novitet'. In 1962 the company

shifted production fromplastic products to leather footwear. From1966 to 1978 FOGS operated as a subsidiary of

KTKVisoko, the largest leather goods producer in B&H. In 1978 FOGS became an independent social enterprise

owned by the state.

Prior to the 1991-1996 war in BiH, revenues reached KM 12 million annually with 90 percent of sales going toexports. Export markets included the European Community, former Soviet Union and the United States. During the

war FOGS operated without interruption, utilizing about 20 percent of capacity producing footwear for humanitarian

organizations and the BiH military. In 1999, FOGS operated at 70%of capacity, realizing revenue of KM 7.5 million.


In April 2001, Slovenian company Alpina acquired 67%(book value KM 6,843,772) of the FOGS capital owned by

the state. Per the contractual agreement, Alpina took on KM 3 million of the FOGS debt and agreed to invest in the

next three years KM 1.5 million and keep 305 workers. Alpina employed an additional 22 workers and increased

production from300,000 pre-privatization level to 350,000 pairs of shoes per year. In order to become more

efficient, FOGS also went through considerable technological and organizational transformation.


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Vitaminka, Banja Luka

Food Processing Company

Company Profile

Vitaminka produces processed fruits and vegetables, juices and spirits. It started its operations in 1947 as a small

workshop. Over the years, Vitaminka has established its name in the food industry internationally as well as in theformer Yugoslavia. Until 1987, Vitaminka was a part of IPKBosanska Krajina, an agricultural state-owned holding

company, and since then it has been an independent entity.

Vitaminka produces 136 different kinds of products in four production halls (juice line, concentrate line; jams,

marmalades and vegetable processing line; and cold storage). Fifty percent of its products are fruit-based products

(production of juices, jams, spirits etc), and other 50%are vegetable-based products. In 1989 and 1990, average

yearly production represented 18,000 tons. The beginning of the 1980s are considered to be peak years when

Vitaminka produced 27,000 tons of produce, most of which was exported abroad.


In January 2002, Swiss company Kreis-Industriehandel AG purchased 66.35%of Vitaminka capital, that was owned

by the state, for KM 250,000. Per contractual agreement and investment plan, Kreis-Industriehandel AG took over

KM 5 million of Vitaminka debts, with a plan to invest KM 10.15 million within three years; in year one KM 2.4million, year two KM 3.75 million and year three KM 4 million. Kreis-Industriehandel AG invested in the first year

KM 3.3 million, currently plans over KM 4 million investment in newequipment and has kept all of the 205 workers

and employed an additional 15, as well as some 200 seasonal workers. Since the privatization, Vitaminka

purchased some 8,000 tons of rawproduce fromlocal farmers and co-ops, indirectly employing several hundred

rural households.

Vitaminka's production volume prior to privatization was 4,000 tons a year, and now, for two consecutive years since

the privatization, production volume has increased to 8,000 tons a year. Revenues for 2002 were KM 16 million,

resulting in minimal loss, and revenues for 2003 are expected to be around KM 20 million, making it a profitable

business year. At the moment, Vitaminka is working on development of newproducts, getting back to pre-war

levels of production, improving design, packaging and products promotion.

Fruktona, Banja LukaProducer of non-alcoholic and alcoholic beverages

Company Profile

Fruktona was founded in 1958, initially as a small producer for the local market. In 1967, the company began

producing carbonated drinks and fruit juices, and made significant capital investments to extend its coverage of the

former Yugoslav market. In 1974, Fruktona signed its first ten-year exclusive agreement with Pepsico Inc. to

produce and distribute Pepsi products in Bosnia and Herzegovina. At this time, the company also became part of an

agro-industrial holding company "Bosanska Krajina." In 1991, the company registered as an independent company -

MP "Bosanka" d.d. By this time, Pepsi products represented the bulk of the company's sales.

While the war in Bosnia and Herzegovina (1992-1996) did not damage any of the Fruktona's buildings and

equipment, it significantly impacted the company's business: production and sales declined (in 1996, only 15.6%of

the pre-war production was realized); equipment was not adequately maintained. Furthermore, from1992-1996

regular communication with Pepsico broke down, though reestablished in 1996, with contracts extended on an

annual basis, but relating only to the Republika Srpska market.


In June 2003, Swiss company Kreis-Industriehandel AG, the investor that is also majority shareholder in Vitaminka,

purchased 51.09%of Fruktona capital, that was owned by the state, for KM 25,000, taking on over KM 13 million of

Fruktona's debts. Although, contractually, Kreis-Industriehandel AG is not obliged to make any further investments

in Fruktona, in order to keep the Pepsi licence, Kreis-Industriehandel AG is expected to invest some KM 3-4 million

in Fruktona in the near future. By contract, Kreis-Industriehandel AG is to keep 150 workers and in the next couple

of years employ an additional 20. It was also agreed that Kreis-Industriehandel AG will arrange for pension and

severance packages for 40 workers.

According to Kreis-Industriehandel AG five-year business plan, the future is bright for Fruktona. Fruktona's

production capacity is expected to be increased even over pre-war levels, and Fruktona's leading market position is

expected to be regained once again.


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Hospitality

100% of the Holiday Inn Hotel capital, owned by the state, is offered for sale

The Holiday Inn Hotel Sarajevo is an international class hotel, which has been awarded five stars by local

authorities. It opened shortly before the winter Olympic Games of 1984. The hotel has 354 keys (338 rooms

52 single and 286 double, and 16 suites eight of thembeing two-bedroomsuites, six of themthree-

bedroomsuites and two five-bedroomsuites), an atriumstyle lobby, three restaurants, a pizzeria, coffee

shop, lobby bar, extensive conference facilities with booths for simultaneous translation for up to 500 guests,

discotheque, fitness center, business center, garage, parking, fountain and several business premises of

various dimensions.

The hotel is the most prominent in the country. It is situated in front of the Parliament Building and close to

the old city and the railway and bus station. The Holiday Inn Hotel is located on the main avenue of

Sarajevo. It is easily accessible fromthe international airport (10 km). Public transportation runs by the hotel

and there is a taxi stand at the entrance.

The hotel is Sarajevos main hotel and the venue for most international conferences and official visits to the

State of Bosnia and Herzegovina. It is the largest hotel in Sarajevo with 20.7%of the present available hotelbeds in the Canton Sarajevo that have been registered in the Cantonal Chamber of Commerce. The Holiday

Inn Hotel share within the competitive set is 28%of the total number of beds.

The hotel operated continuously even during the 1992 1995 war in Bosnia and Herzegovina. One of the

most successful years was 1996 when revenues reached KM 21.0 million.

Hotel Occupancy

Occupancy in the period from1998 to 2001 averaged 17.6%. The occupancy in 2002 increased

significantly reaching 45.9%, in part because the number of rooms taken as a basis for the calculation was

LATEST DEVELOPMENTOn November 10, 2003, the Director of the Sarajevo Cantonal Privatization Agency,as Seller, and representatives of Alpha Baumanagement GmbH (Austria), as Buyer,executed the Sale-Purchase Agreement for 100% of the capital of the Holiday InnSarajevo. The tender was launched on May 30, 2003, and expired on August 29,

2003. The sole bid, 44 million KM ($26 million), was submitted by AlphaBaumanagement GmbH, which was announced as winner of the bid in

mid-September. Closing of the transaction is scheduled for mid-December 2003.


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reduced to 222 rooms (I VII floor), in comparison to the total number of rooms

354, which used to be the basis for the calculation in the previous years. The top

three floors (VIII X), i.e. 132 rooms, have been

leased as business premises.

Sarajevo Canton

Years prior to the war years showSarajevo as a regional tourismhub. The best

year was 1987 with 608,000 visitors or 763,648 bed nights. While the majority of

visitors were fromthe former Yugoslav republics, 137,000 visitors came fromabroad. Not only was Sarajevo an

international destination, it was also part of a tourist circuit which included tours to

and fromDubrovnik and

other costal cities in Croatia,

Montenegro, Mostar, Medjugorje (center of pilgrimage) and other

regional cities. These tours are

starting once again, especially with the recent revival of Dubrovnik as the main re-

gional tourist center in this part of Europe.

In 1997, 40,565 visitors were

reported. In 2002, the number of the reported visitors was 80,269, out of which

54,866 foreign and 25,403

domestic visitors, which represents an increase of 10.7%in comparison to the year

2001. Should the 2002 tendency continue, the number of visitors is nowestimated

to reach 90,000 by the end of 2003.

Sarajevo Canton has an area of 1,277 km2 with approximately 400,000 inhabitants.

As the capital of Bosnia and Herzegovina, Sarajevo is the political, administrative,

economic and cultural center of the country. The city is easily accessible from

Europe by road, air (Munich, Vienna, Zurich, Ljubljana, Zagreb, Belgrade) and by

bus and rail. Telecommunications connections are good.

Sarajevo Canton has many tourist attractions. It has an architectural and cultural

heritage dating fromthe Austro-Hungarian and Turkish Empires embellished with

its own Bosnian history, culture and development. In the old town, one can feel the

true oriental spirit. Theatres, museums, galleries and other cultural institutions

contribute to the richness and diversity of this capital city. Sarajevo is a bustling

city, with open-air cafes, bars, restaurants, churches, markets, minarets and

mosques: a unique microcosmof western and eastern cultures.

Since the end of the recent war, Sarajevo has once again become the host city for

international scientific and professional conferences and seminars, symposiums

and gatherings. Many of these are being held at the Holiday Inn Hotel conference

center.

Investment Opportunity

An investment in the Holiday Inn Hotel offers the following advantages to an

investor:

The acquisition of the prime hotel in Sarajevo and Bosnia and Herzegovina

The hotel is one of the most prominent in the country situated in front of the

Parliament Building and close to the old city and the railway and bus station Holiday Inn Hotel is the prime location for international meetings and the hotel of

choice for foreign embassies. It also has far and away the finest meeting facilities

By acquiring this hotel the purchaser will own and control 28%of beds stock of

the main hotel market in the Sarajevo Canton

The hotel is in good physical condition. The renovation of 170 rooms and 16

suites situated on the first five floors (I V) was recently completed. It included

renovation of the bathrooms and installation of air-conditioning in the rooms and

suites

The casino is ready to be utilized, and the discotheque has recently been

refurbished and opened for business

The land surrounding the hotel, which is the property of the hotel, has potential

for future development

There are many opportunities for enhanced sales and profit The staff is experienced, trained and highly skilled in organization of seminars,

conferences, gatherings and various events


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Steel Casting Foundry

67% of the Energoinvest Livnica capital, owned by the state, is offered for sale

The Foundry was founded in 1950 and is situated on 36,000 m2 of land, five kilometers away fromthe

Sarajevo City Center and six kilometers away fromthe Sarajevo International Airport. The closest sea port

isPlo~e in Croatia on the Adriatic Sea, 198 kmfromSarajevo. Industrial rail track goes trough the factoryyard. Customs terminal is situated one kilometer fromthe factory.

During its longstanding business conduct the Foundry achieved remarkable results, and in 1990 it had one

thousand employees and granted scholarships to more than one hundred students. Almost the entire

production was sold on the former Soviet Union and U.S. markets.

Business-production buildings and facilities, totaling 16,500 m2, and located at a single location are mostly

functional. Generally, the buildings are in good condition, needing some smaller roof repairs and repair of

the heating system. The Headquarters building, 733 m2 in size, is functional, except for the second floor

that is yet to be finished and equipped.

The Foundry is fully equipped for processing almost all products fromits production program. Some of the

typical products of the Foundry include: components for armatures equipment, machine parts and industrial

production equipment, covers and grates of sewage systems, pipe and pipe fittings, parts for melting and

mining industry, castings for general engineering industry, stoves and fireplaces inserts, automotivecomponents, electrical components, components for cement, petrochemical and chemical industry and

components for power plants.

Energoinvest Livnica operates on the world market and has only a fewdomestic customers. A large

percentage of company sales goes through other Energoinvest companies, manufacturers of final products.

Before the Bosnian war, 70%of the total production was exported to the former USSR, while 20%was sold

on the U.S. market. The company was on the vendor list of well-known international oil companies like

Texaco, Chevron, British Petroleum, Exxon, etc. In the postwar period, various companies fromUSA,

Russian Federation, Germany, Croatia, Italy, Slovenia, Iran, Singapore, Norway and other countries showed

their interest in the Foundry's production program.

The Foundry produces castings used in the following industry branches:

Process equipment

Components for petrochemical and chemical industry Components for power plants

Machine parts and industrial equipment

Railroad building

Mining

Automotive components

Food and construction industry

Shipbuilding

Water supply

The Foundry has the following main product lines:

Production of steel castings of the following qualities:

carbon casting-construction

casting alloy-hard casting-steel for improvement highly alloyed-non rusty-fireproof

steel for specified purpose

livnica sarajevo


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Molding is being carried out in molding rooms, whose dimensions vary between 650x500/250/250 mmand

1020x800/450/450 mmfor mechanical molding, while manual molding is being carried out in the molding

rooms whose dimensions may go up to 2200 x 1950 x 880/1000 mm. Casting weight ranges from0.5 to

2,000 kg

Malleable Iron Casting whose weight ranges from0.5 to 500 kg

Services:

Thermal processing - gloving and tempering

Testing of quality control of the materials whose main component is either iron, aluminumor

copper and certifying themin accordance with the appropriate standards:

- Metallographic analysis

- Spectral and classical chemical method

- Mechanical testing on high and lowtemperatures

- Testing of castings by methods without blasting

Model making according to the delivered documentation or sample (metal, wooden,

plastic and combination of these materials).

Ductile iron casting is a newproduct line, which was developed in the year 2000. The Company

commenced developing this type of casting to meet the altered market requirements

Energoinvest Livnica is one of the larger steel casting foundries in the Balkans. There is one large foundry

in Belgrade, Serbia and Montenegro, but it is specialized for automobile industry. Therefore, it does not

represent a serious competitor to the Foundry. There is another Foundry in Tuzla that is also producing

steel castings, but the capacity of that foundry is smaller then the Energoinvest Livnica, Sarajevo. The

quality of casting produced in Sarajevo matches top quality in terms of steel castings production in Europe.


An investment in Energoinvest Livnica offers the following key advantages:

Foundry Sarajevo is one of the rare companies in Bosnia and Herzegovina that deals with steel castings,

particularly valves intended for petrochemical industry, processed equipment, wagon construction, food

and construction industries

Suitable location, in the western part of Sarajevo, with its own railway track

Foundry preserved production know-howof complex castings for nuclear valves

During the war period, Foundry obtained particularly significant experience in military production The capacities of Livnica are capable of meeting market needs

The Foundry managed to keep the majority of its highly skilled and trained staff

It is capable and willing to start processing newproducts/technologies/metals

There are many opportunities for final processing because one such processor is situated in the Factory

area (the company "Armature")


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Dairy

67% of the Milcos capital, owned by the state, is offered for sale

Milco's has the largest milk line capacity in Bosnia and Herzegovina of approximately 100,000 liters per one

eight-hour shift, while the ice creamline has the capacity of 6,000 kg per one shift. With a wide range of

products Milco's used to cover the biggest part of the market of Bosnia and Herzegovina. Milco's facilities

consist of the main production and administration building and several warehouses. These buildings are

located in an industrial zone in Sarajevo, on 14,413 m2 compound. All facilities are owned by Milco's.

Milco's product lines are:

pasteurized milk products fermented products: yogurt, kefir and sour cream

ice creamproducts

cottage cheese

butter

Markets

Milco's prime market is Sarajevo Canton. The Sarajevo Canton has an area of 1,277 km2 with approximately

400,000 inhabitants. As the capital of Bosnia and Herzegovina, Sarajevo is the political, administrative,

economic and cultural center of the country. The city is easily accessible fromEurope by air (Munich, Vienna,

Zurich, Ljubljana, Zagreb and Belgrade) and by bus and rail. Since 1996, the number of residents gradually

increased. Should the projected population levels continue to rise by 2.5%per annumin the upcoming years,

we can expect Sarajevo population to reach 540,000 inhabitants by 2015. Nowadays, approximately 10,000 -

15,000 expatriates live and work in Sarajevo and their presence is important to the Canton economy. The

expatriate population consists of many international community employees and other international

organizations in more than thirty missions. The Diplomatic Corps is significant: 39 embassies, 6 consulates,

and 33 non-residential embassies.

Milco's has good potential for geographic expansion outside its current prime target market to the entire BiH

market. In the Federation of Bosnia and Herzegovina, Tuzla and Mostar represent good future potential along

with the Middle-Bosnia Canton. In Republika Srpska entity, Milco's' primary interest could be focused on the

regions of Eastern Bosnia and Eastern Herzegovina. Furthermore,the Republika Srpska also has several

potential markets in the larger cities. In terms of ice cream, Banja Luka is certainly the largest region where

Milco's could focus its attention. With necessary investments in the production equipment and marketing

activities, while using its historical domestic position as a base, Milco's' strategic goal would be the export of

its products to the foreign markets.

RawMaterial Base

Milco's traditionally has bought rawcowmilk fromprivate farmers, state farms and other dairies. The main

supplier of Milco's used to be the state-owned farmin Butmir (10 kmaway fromthe Dairy). Currently, the farm

has around 500 milking cows producing daily between 8,000 and 10,000 liters of rawmilk. Apart fromthe big

farms in Butmir and Sokolac, there is a significant number of small farmers. Some of these small farmers

ceased their production of rawmilk because of unreliable sales. However, according to the latest data provided

by the Cantonal Ministry of Economy, there is a large interest on the part of the rural population in reviving the

milk production provided that they are offered reliable markets, prompt payments, training and favorable credit

lines. The small farmers could, thus, increase the sale of rawmilk by up to 50%. The Cantonal Ministry of

Economy will give its professional support in terms of the training in order to reestablish the rawmaterial base.

According to assessments by the Cantonal Ministry of Economy and its Sector for Agriculture, Water-

management and Forestry, there are 6,500 milking cows in Sarajevo Canton. However, if a larger region of

Sarajevo is taken into account, i.e. the area around Olovo (Nii}i Highland) and the areas around Visoko,Vare{, Breza, Kiseljak, Konjic, Sokolac (Romanija Highland), the number of milking cows is significantlylarger. Milco's used to satisfy a major part of its needs for rawmilk in the afore-mentioned regions.

The transportation costs are relatively lowgiven that these areas are very near Sarajevo. The future buyer of


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Milco's will have a solid basis to become a core initiator of this branch of industry in the

wider Sarajevo region.

The same rawmilk is used for production of ice creamas for the other products. Another

ingredient of ice creamis chocolate, which Milco's buys fromthe local producer "Sarabon."

Flavors and stabilizers are bought fromthe Austrian company "SA ROM." Milco's has had

good long-termrelations with these two companies.

The suppliers of packaging materials for milk and dairy products, like plastic bags

(polypropylene heat-sealed), pure-packs and plastic cups, are based both in BiH and

neighboring countries. Milco's buys cones, sticks, packaging paper, paper cups, lids, and

card boxes for the production of ice creamin the domestic market, in Croatia and Serbia

and Montenegro. Packaging materials like paper wrappings, lids, pure-packs and PVC bags

have Milco's logo on it.

Local public utility companies provide Milco's with adequate supplies of electricity and water.

The boiling chambers for steamproduction can burn both gas and heating oil.

Distribution

Milco's formerly had sales contracts with 1,800 retail shops and wholesalers all over Bosnia

and Herzegovina. These were annual contracts providing a framework for possible

cooperation by defining prices and terms of payment. They were usually renewed every

year. Milco's' customers were divided into three major categories with the following shares of

total sales: 1) private wholesalers 10%; 2) private retail shops 30%; and 3)enterprises and

institutions 60%. Milco's has its own fleet to distribute its products. In Sarajevo Canton, most

of the production was distributed directly to small private retail shops. If sent longer

distances, the products are distributed through large wholesalers.

Milco's' advantage relative to competitors is its factory location covering the most populated

part of Bosnia and Herzegovina. The distribution channels are mainly short, as well as the

supply channels (therefore, the transportation costs are low). Its range of products allows

Milco's to be responsive to its customers. It also has a large refrigerating capacity allowing

the company to absorb fluctuations in the market.


An investment in Milco's offers the following key advantages to an investor fromthe dairy industry:

Largest dairy in Bosnia and Herzegovina well located in major consumer market in

Sarajevo Well known brand name among consumers in Bosnia and Herzegovina

High capacity production equipment

Infrastructure in good working condition

Relatively newyogurt production line, which ensures yogurt production without any quality

oscillation

Established technology of fermented products

Well established network of retail and wholesale outlets

Good market position on the institutional market

Increasing amount of quality rawmilk available fromfarmers near Sarajevo

Well located facilities on a major site of 14,413 square meters

Potential for product line development and expansion

Potential for expansion of customer base to other parts of Bosnia and Herzegovina, and to

neighboring countries Skillful employees


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UNIS TADIVManufacturer of bolts, nuts, studs and special automobile parts

67% of the UNIS TADIV capital, owned by the state, is offered for sale

UNIS TADIV, founded in 1971, operates in an industrial park in the regional township of Konjic. The land on

which it is located occupies 36,918 m2 of which 15,035 m2 is workshop and warehouse buildings in operation.

The facilities and equipment in operation are in good working condition and the maximumproduction capacity

is 5,000 tons a year.

UNIS TADIV, a major producer of nuts and bolts, has the capability of making literally thousands of different

specifications with its range of tooling. The production process commences with the surface treatment of the

rawwire material. In the pre-war period, UNIS TADIV produced nuts and bolts of a generic type (50%) and

customized specification (other 50%), the latter of which was absorbed by the automotive industry, primarily

German Volkswagen. The most important advantage of UNIS TADIV is the facilities for rawmaterial

preparation, thus, UNIS TADIV can work with rolled steel wire as a rawmaterial, not the extruded one. UNIS

TADIV obtained ISO 9001 certification in February 2000.

Seventy-five percent of UNIS TADIV's current production is exported and the rest is either bartered or sold

inside Bosnia and Herzegovina to wholesalers. UNIS TADIV appears to enjoy a good reputation with some

significant customers in Germany and Slovenia, and the bulk of exports is sold in these markets. UNIS TADIV

has been prospecting for newcustomers in these countries and in the Czech Republic. UNIS TADIV's

primary customers are bound by buyer / supplier contracts of up to five years. Flexibility to customers has

been one of their strengths and some buyers come to themwith customspecifications, to which they respondpromptly in quality, quantity and design.

Production Facilities and Production Flow

UNIS TADIV applies cold forming technology when producing its products. The cold forming technology offers

a number of technological advantages with respect to scrap fillings removal (such as better mechanical

properties - the internal structure of the material remains the same, stress concentration is eliminated) and a


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number of financial advantages (such as rational material consumption, short technological processing, better

productivity, small production costs). A special emphasis is given to the advantages of the cold forming

technology when it comes to the castings used in automotive and motor industry.

UNIS TADIV deploys multistage transfer presses. These are very productive machines given that several

processing stages are being done on a single machine. In order to meet the costumers' requirements, UNIS

TADIV has the programwhich includes removal of scrap fillings on the machines (such as lathes, milling

machines, drilling machines and grinding machines). Heat treatment is performed on the electric flowfurnaces

with protective atmosphere. The surface protection (such as phosphating, zinc-plating, cadmium-plating,

chromium-plating, nickel-plating, silver-plating and other types of protection) is performed in up-to-date

equipped facilities. Inspection systemconsists of initial, current and final inspection. The inspection is

performed in a modern measuring laboratory.

UNIS TADIV currently manufactures standard and nonstandard products.

The main groups of standard products are bolts, studs and nuts by the following specification:

hex cap bolts of M4 to M24mm(length l = 8mmto 200mm)

hexagon socket head cap bolts; dimension of M4 to M16mm

hex socket head cap bolt - with short head height; M5, M6, M8, M10

hex socket pipe plug - with conical thread

cylindrical head bolts with welding nipples; M5, M6, M8, M10

semi-rounded head bolts with nose for general use; M6, M8, M10

studs of M6 to M24

hex cap bolts - finished 1/4" do 1"

hexagon nuts of M5 to M20

hexagon self-locking nuts

hexagon welding nuts M5 to M16

The nonstandard programof production covers the following:

special fasteners on request or drawing of the customers (bolts for motor, car and tractor industry and

similar)

dynamically loaded bolts (connecting rod bolts, linking bolt on motor where dynamic shape design is

required)

forgings of knobs for links for car and tractor industry

forgings of valve lifters for motor industry

valve spring seatings and other connecting elements for motor industry

special self-locking nuts with design of the self-locking part according to the customer's request special, various purposes nuts, and nuts for welding according to the customer's request

various closing plugs used in motor industry

various forgings which can be technologically formed by the technology of cold forging; maximumdiameter

30mmand maximumlength up to 220mm

The most profitable are the special, non-standard bolts manufactured according to special requests regarding

quality, complex configuration and shape. These are mainly bolts and forgings for motors and automobiles

(e.g., bolts for connecting rod, bolts for wheels, knobs for links, dynamic bolts, etc.)

The most profitable bolts fromthe standard line are bolts of higher consistency - quality 8.8; 10.9; 12.9, nuts

and hexagonal headed bolt. The products undergo continuous innovations and quality improvements.

Customer's requests are becoming more and more complex - followup is performed and continuous

improvement of the technological processes takes place in order to meet future customer's requests.


An investment in UNIS TADIV offers the following key advantages to a potential investor:

Continuous demand in the European market and the possibility of business expansion

Known name in the market of the former Yugoslavia and Europe

ISO 9001 Certification

Proven high quality products

Wide product range and possibility of customized production

Well-trained and experienced middle and top management

Lowlabor costs

Short terms of delivery

Good location with access to the European market

Easy access to raw materials (Italy and Czech Republic) and in the future also fromlocal market (Zenica)

Full production process cycle (material preparation, production, heat treatment, protection and packaging) Production processes in accordance with the existing regulations on environment protection


15/28

Food Processing Company

56.8% of the SAVAcapital, owned by the state, is offered for sale

SAVA is one of the most important food processing

companies in Republika Srpska (RS), Bosnia and

Herzegovina. Until 1988, SAVA was functioning as a part

of UPI Sarajevo, a large state-owned enterprise; sincethen it has operated independently. The company went

through a major reconstruction in 1984, at which time a

newproduction facility was built and newequipment from

West Germany was installed. During the Bosnian war

1992-1995, SAVA managed to operate continuously

despite enormous difficulties. Since the end of the war, its

efforts have been directed to the increase and

development of production and market expansion.

SAVA is located in the heart of the Semberia prairie,

famous for its fertile land. The company's main production

facility and plants/installations are placed on 10ha of the

prime land complex in Bijeljina in the eastern part of RS,

BiH, of which cca. 20,000 m2 are covered byadministration, factory, storage and other buildings. The

location provides a range of benefits, including easy

access to rawmaterials and markets. Bijeljina is, after

Banja Luka, the second largest city in RS, BiH. The

distance between Bijeljina and some major cities in the

region: Bijeljina - Beograd, 136 km; Bijeljina - Zagreb, 400

km; Bijeljina - Sarajevo, 186 km. Bijeljina has a good road

and rail network and it is only 30 kmfromthe highway

Beograd-Zagreb. The railway is 200 meters fromthe

factory and it leads to the rail center Sid in Serbia where it

connects to the international track.

SAVA is the largest food producer in the eastern part ofRS, BiH. Installed production capacity was 12,000 tons,

while the current capacity is 7,000 tons due to certain

obsolete equipment. The plants and infrastructure are in

relatively good condition, although some equipment has to

be replaced and some buildings need renovation. There

are ten production lines placed in the main production

facility: 1. green peas and string beans line; 2. carrot and

beets line; 3. pepper and cucumber line; 4. "Djuvec"; 5.

compotes and pasteurized fruits line; 6. "Pindjur" and

"Ajvar" line; 7. marmalade line; 8. tomato concentrate line;

9. filling line; 10. auxiliary line (sterilization). Freezing

plants for fruits and vegetables are placed in a separate

building.Fruits and vegetables produced in Semberia are of

exceptional quality and flavor. The use of pesticides is

reduced to a minimumand most crops would qualify as


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"organically produced" under internationally recognized

standards. This is an exceptional opportunity for SAVA to

create a market and develop a newline of natural

products, thus meeting increasing international demand for

this kind of food products.

SAVA's production programcan be divided into two

categories:

Sweet - production of jams and compotes Sour - processing of peppers, green peas, string beans,

beets and tomato processing

SAVA's major markets today are Bosnia and Herzegovina

and other ex-Yugoslavian republics. The company

realizes about 60%of its revenues in the domestic

market. SAVA exports to Montenegro, Serbia, Croatia,

Slovenia, Germany, Switzerland, Greece and Canada.


SAVA is an internationally recognized food producer with a

long tradition in production of high quality products. The

company meets the most important requirements for the

successful processing of fruits and vegetables.

SAVA's attributes are the following:

1) Reputation and tradition for over 50 years

2) Availability of rawmaterials: the factory is placed in the

center of the rawmaterials production area, practically

in the field and the nearest farmis only 20 kmdistant

3) Good supply of high quality water: the factory is

located on a source of water, which is an essential

resource in this type of business starting fromirrigationto the enormous utilization in the production process

4) Bijeljina is the city with the greatest number of sunny

days in ex-Yugoslavia

5) Quality of products is incomparable with others in the

market owing to the processing method. SAVA

products are mainly preservatives free, since after the

cooking and sealing they are being sterilized at a

temperature exceeding 100 Celsius, which is the

thermo method for extermination of all microorganisms

and funguses. Compared to some foreign producers

and even with the local "Vitaminka" company fromBanja

Luka, SAVA's products are more homemade, seemnot

to be gelatinous and after a long period of time, water

does not appear at the surface

6) High level of agricultural knowledge, 'know-how" among

farmers and factory workers

In brief, SAVA's advantages cover all processing stages,

fromthe resources to the final product.


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Dairy

65.75%of the Mljekara Banja Luka capital, owned by the state, is offered for sale

Mljekara Banja Luka is located in the city center of Banja Luka, capital of the RS, on 20,280 m2, out of which

14,284 m2 is occupied by the production yard and facilities. The distance fromBanja Luka to Vienna is 560 km,

Zagreb 200 km, Belgrade 320 kmand Sarajevo approximately 240 km. Banja Luka has a good road and rail

networkconnection to the Belgrade-Zagreb highway. There is an international airport "Mahovljani" Laktai, twenty

kmoutside Banja Luka.

Mljekara Banja Luka is the second largest dairy in Bosnia and Herzegovina, with an installed capacity of 90,000

litres per day. The plant consists of the following production lines: pasteurized milk, sterilized (UHT) milk,

fermented products, butter, fresh cheeses, feta cheese, semi-mature cheeses and an incomplete line for

production of ice cream(missing freezing tunnel). There are appropriate storage facilities for all products.

Mljekara Banja Luka used to sell most of its products on the Bosnia and Herzegovina market, and exported part

of its production to Croatia and Serbia. In 1991 the company realized its highest annual sales of over KM30

million.

Products

The production programof Mljekara Banja Luka consists of:

Pasteurized milk

Sterilized milk(UHT)

Yogurt Sour cream

Fresh cheeses

Melted cheese

Semi-mature cheeses ("Trapist" and "Edam" cheese)

Butter

Ice cream(bulk)

There are three laboratories in the dairy (acceptance, chemical, microbiological). It has a CIP washing system

installed and automaticsystems for neutralization and biological decomposition of waste waters. Cooling is

performed by an ammonia cooling system, which is a part of previously mentioned systems. The factory has its

own thermal energy production using fuel oil boilers.

The company organizes its own distribution of rawmilkand finished products. The surplus of milkis sent to the

city of Tuzla, FBiH, to be processed into milkpowder and in that formused during winter time.

Production Plants and Equipment

The dairy was originally built to meet the hygienicstandards and requirements at the time of construction. The

buildings were constructed with space left for prospective expansion. Even though the facilities of the Dairy have

been adequately maintained, they can easily be upgraded technically, to comply with current standards. The

production equipment is in good condition.

MLJEKARA

BANJA LUKA


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Acceptance of RawMilk

Three installed lines for acceptance of rawmilkcapacity 20,000, 15,000 and 10,000 l/h

Three depots for rawmilkstorage: 50,000 and two with 30,000 liters capacity

Thermal Processing Lines

There are four pasteurization lines installed: two for "low" pasteurization, and two for

"high" pasteurization:

"Low" pasteurization at 75 - 78 Celsius: capacity 8,000 l/h

"Low" pasteurization at 75 - 78 Celsius: capacity 15,000 l/h "High" pasteurization line at 95 - 98 Celsius, for fermented products: capacity 5,000 l/h

"High" pasteurization line at 95 - 98 Celsius, for pasteurization of sour cream: capacity

3,000 l/h

Storage Facilities for Pasteurized Milk

4 x10,000 liters for storage of sterilized or UHT milk

1 x10,000 liters for storage of milkfor skimmed cheese

1 x10,000 liters for UHT milkbottling/filling in case of breakin production

Facilities for Preparation, Treatment and Maturing of Fermented Products

12 Duplicators with Agitators. Capacity: 9 x2,000 liters, 1 x5,000, 1 x3,000, 1 x1,000

liters and 1 x10,000 liters for storage of milkfor skimmed cheese

Four Duplicators for pasteurized sour creamof the following capacity: 2 x2,500 and 2 x

2,000 liters

Packaging Machines

Machine for pasteurized milkfilling into PVC bags "Prepak" France (IS-6)

Machine for packaging into cups "Hamba" type BK6005/5 capacity 18,000 cups/h

Production Lines

Sterilized Milk: Three production Lines for sterilized milk: sterilization lines of 4,000

l/h and 8,000 l/h capacity and packaging/filling line of 3,600 l/h

capacity

Cheese: Two production lines for cheese: semi-hard cheese line capacity

10,000 liters, and fresh cheese line, capacity 8,000 liters

Feta Cheese: The pilot systemfor ultra-filtration is installed in the factory,

accompanied by the equipment for pasteurization of "permeates" and preparation of feta

cheese production

Butter: Duplicator (maturing chamber)

Duplicator (maturing), capacity 2,000 liters

Butter making (firming) machine Alfa - Laval, capacity 400 liters

Packaging machine "Benhil" for 1 kg packaging

Ice Cream: All equipment for production is installed, except for the shocktunnel for deep freezing.

Cleaning Systems: CIP cleaning systemis installed within the consumable products production plant. The

capacity of detergent containers is 4 x5,000 liters. An independent cleaning systemis

installed in the cheese production plant. There is a systemfor milktrucktanks cleaning.

Energy Supply: Power supply is reliable and there is a power generator installed in case of emergency.

Heating is provided fromthe fuel oil steamboilers.


Apart fromthe company's tangible assets, a future investor will benefit from:

Recognized brand name in Bosnia and Herzegovina

Skilled and experienced workforce

Developed networkof rawmilksuppliers and a well-developed distribution network

Producer of the high-quality "Trapist" trademarked cheese with an export potential


19/28

Industry of fabrics and garments66.63% of the Svila capital, owned by the state, is offered for sale

Svila is located in the vicinity of Celinac, 18 kmsouth-east of Banja Luka, RS, Bosnia and Herzegovina.The company is situated on 57,040 square meters of land, 15,345 square meters of which are occupied byadministrative buildings and production facilities. The company has a permanent right of use of the land.Svila consists of the following buildings: Production plant and offices Production facility for ready-made clothes, with warehouses and office

Maintenance facility Water supply and purification Wastewater filter, with pools for sedimentation Heating plant

Svila has the following installed capacities:

HistorySvila was founded in 1979. Following a test production period it commenced regular production in 1983.

The primary business of the newly founded factory was the production of synthetic filaments PES andPAM, as well as a mixture of these fibers with PAM and CELL fibers. Synthetic fabrics underwent varioustreatments and finishing procedures (i.e. scouring, bleaching, dyeing, printing and coating), to make themwaterproof, water resistant, glossy, durable, etc. In this way, their use was expanded fromtextileapplications also to be used in rubber, chemical and leather industries, specialty clothing and accessories,as well as in the production of furniture. Before the war, Svila was the only factory with this type of fabricproduction programin Bosnia and Herzegovina (B&H), and was one of the biggest producers of its kind inthe former Yugoslavia. In 1985, the sportswear production plant was constructed, which enabled thelaunching of value-added products and the expansion of the production programto garment production forchildren and adults. The companys most successful year since founding was 1989, when Svila had salesof about KM 22 million and employed 745 workers.

Production overview

Production is being performed on well-maintained equipment that was purchased fromwell-knownEuropean manufacturers. Due to its good choice of the acquired equipment, the companys productionprogramcan easily be adjusted to meet market requirements. The company produces a variety of products,

which could essentially be divided into two groups garments and fabrics. In addition to textile production,Svila produces steamthat is required in the production process.

Garments production - fashion, sportswear, workwear and protective clothingSvila entered the business of garment production in 1985. Currently the company produces good quality,well-designed ladies, gents, and childrens casual wear garments for customers in Bosnia and Serbia.

There are also occasional exports to Italy. The production capacity varies depending on the style andcomplexity of the garment or non-garment product being produced. Since production started in 1985, sales

of garments have continuously increased to reach KM 1.5 million in the year 2000.Depending on the marketsituation and customers requests, designers make models by sketches. Based on the models, a newcollection is made, which must undergo stages of teamapproval, further elaboration of the model and

commercial order for the model. Afterwards, the fabric is cut. The cutting roomprepares the fabric for theSewing Department, where the fabric is taken over by production lines. The Sewing Department makesconstant controls between stages, and a final control determines whether the produced garments have met

the required standards.


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Retail sales outletsSvila has two retail cash and carry outlets, which contribute positively to the companys cash flow. One of

these units is located in the town of Banja Luka and the other is a factory outlet.

Steam/heating productionIn addition to textile production, Svila produces steam, which is required for the production process.Depending on the level of production and other conditions, approximately 40%of the steamproduced isused for its own production processes, while the surplus is delivered to heat apartments, offices and

various institutions in Celinac.In addition to the production plant, there are auxiliary facilitieson the premises that ensure uninterrupted flowof production

fromthe companys own supply of water and electrical energy

to laboratory, maintenance workshops and employees cafeteria.

Investment opportunityIn addition to the fixed assets owned by the company, an

investment in Svila will offer the following benefits to a futuremajority shareholder:

Production with tradition and a recognized name in fabricproduction

Wide range of products and services

Ability to customize products and services to meet customersrequirements

Well-maintained equipment

Good infrastructure in and around the factory Potential for rapid and uncomplicated upgrading of existing or

introduction of newproduction lines Production location in close proximity to the European market Ambitious and highly-educated management team

Well-trained and experienced workforce Relatively low-cost labor Growing local market due to increased purchasing power of

the population Export opportunities for both fabrics and garments Opportunities to introduce newproducts in local market

Potential to introduce the brand name products of majorshareholder or to performlicensed products of trademark

garments

Duty free access to EU countries for products made in B&H Liberal lawon foreign investment


21/28

Production of machine tools and equipment for mechanization

65% of the Jel{ingrad .MU capital, owned by the state, is offered for sale

Jel{ingrad .MU is located in the industrial zone of Kotor Varo{, RS, Bosnia and Herzegovina, on 86,634square meters of land, 15,718m2 of which is occupied by the plant and equipment Kotor Varo{ is situated37 km south-east from Banja Luka and 85 km from the town of Doboj, famous as a strong railway hub Theinternational market for machine tools is estimated to be worth around 40 billion US dollars per year Theformer Yugoslav market is estimated to be around 50 million US dollars per year, with a growth potential as aresult of the expected increase of industrial production in the years to come

Plant and EquipmentThe company has production facility at 7,084 m2 of floor space and 8,634m2 of space in accompanyingbuildings, including restaurant for workers, parking place and playground All buildings are in good condition

and are functional, but do require minor repairs The .MU production is performed in the followingproduction facilities: Material preparation (gas cutting, saw cutting, shear cutting and straightening, etc) Cleaning and welding fittings Mechanical processing of parts (removal of chips is a dominant part of production) Semi-finished fittings and sub-fittings Thermal and surface processing (annealing, tempering and cementing) Assembly of finished products as follows Assembling fittings and sub-fittings Assembling electro and stirring equipment Assembling hydraulic and pneumatic components Quality controlDepending on weight, dimensions, and shape of the product, various means of internal transportation are

provided: hand trolleys, forklifts, electrical trolleys, console lifts, cranes, etc

ProductsEccentric presses Universal presses: EPU 50, EPU 63, EPU 100, EPU 125 where the mark of type presents, eccentric press

universal, with the power expressed in tons Inclinary presses are mostly aimed for the packaging industry The primary types of such presses are:

PEN 25, PEN 40, PENA 40, PENS 63, and PENS 80 This group of presses has also a special mini linefor making foil lids and plates for the food industry of the pressure 5KN, that also belongs to the group oftype PMP Universal eccentric presses originated from the cooperation with the company Schmeral Trnovafrom the Czech Republic

Sheet feeding devices

Sheet feeding devices are produced as mechanical devices with rolls, and NC (Numerical Control) with rolls,and when combined with a press, straightening machine and winch, they can make an automated line forsheet processing

Jel{ingrad.MU


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Mechanical sheet feeding devices are produced in 150 variations and are designed such that a maximumnumber of fittings and parts are universal for all of them Types of sheet feeders: V double- sided VJ one - sided VR double - sided with the straightening machine at the feed side VRJ one - sided with the straightening machine VRP double - sided with rollers on straightening machine VRPJ one - sided with rollers on straightening machine.or feeding over 2 Hz (120 mov/min) a break is built in This type of sheet feeder is designated with anHbefore every basic type (HV, HVJ, HVR, HVRJ, HVRP, and HVRPJ) Depending on the sheet width, there are100, 200, 300, 400 and 500 feeders, and, depending on the step of insertion, there are three types and thoseare: 100,200 and 300 NC feeding devices are based on mechanical feeders, with their own drive, engine and steering unit, which

provide perfect accuracy of feeding and continued intake of tin, as well as the fast change of tools (knives)Depending on the sheet width, five models are produced (DVP 3,2/100, DVP 3,2/200, DVP 3,2/300, DVP3,2/400 and DVP 3,2/500), where the first number indicates the maximum thickness of the sheet, and thesecond maximum width of the sheet

Heat-metal (formats) insertersHeat metal (formats) inserters are used in combination with inclined presses during the processing of sheettin They provide a very accurate tempo of insertion and continued feed of tin into the machine .our different

types are produced (U.1, U.2, U.3 and U.4)

Tin straightening machinesTin straightening machines are used for straightening sheets in automated production of tin parts, tin printsand tin cuts The following straightening machines are produced: Straightening machines for normal straightening with 7 rollers, with one or two pairs of towing rollers,

type (MR 125/2, MAR 250/2, MAR 250/4 , MAR 400/2), are combined with winch without engine Straightening machines for precise straightening with 19 rollers and supporting rollers types (SPRT

250/5, SPRT 400/3), are combined with winch with engine All straightening machines have their owndrives, with the ability to match their speed with the primary machine

Winches for rolling and unrolling sheetsWinches for rolling and unrolling sheets are used for carrying and unrolling rolls of sheets, and can be

combined with a sheet stretcher Winches without engine (drive): (MHD 125/5, MHD 250/2, MHD 250/4, MHD 400/2), and they arecombined with towing rollers, and

Winches with engine (drive): ( KSP 100, KSP 250/220, KSP 315/300, KSP 250/4, KSP400/2 )All types without engines are produced as double sided and with engines as one-sided

Shears Circular shears KM for cutting smaller format of tin in sheets or strips which can be used independentlyor as part of a production line Scrap shears MM 315/3 - which are used for disposal of scrap strips

Mechanical and thermal processing servicesDepending on the production capacity available, the factory also provides lathing, milling, drilling, thin worksand welding services, as well as thermal processing

The company focuses on the further development of its production program in terms of applying the latestachievements and findings in the area of mechanical construction and contemporary stirring systems A greatdeal of effort is also being given to the development of new products, and activities in adopting the followingnew products: Production line for making TWIST O.. lids (caps) Hydraulic presses of smaller pressures

Investment OpportunityIn addition to the companys tangible assets, the future investor will benefit from: An established brand in the region (metal industry) Skilled labor Complete technology and documentation for the existing production program

The ideal strategic investor would provide: Access to previous and new markets Working capital Capital equipment upgrades


23/28

Manufacturer of metalworking machinery

65% of the Jel{ingrad .AM capital, owned by the state, is offered for sale

Jelsingrad FAM is located 3 kilometers fromBanja Luka, RS, Bosnia and Herzegovina. Banja Luka has a

well-developed infrastructure, including road networks, railway, and international airport. Jelsingrad FAM is

situated on a total of 179,680 m2 of land, out of which various buildings cover 55,280 m2as follows:

Production building 21,600 m2

Assembly department 10,800m2

Warehouses 10,000m2

Auxiliary buildings 2,420m2

Office building 10,460m2

Total 55,280m2

All production facilities are fully operational

Jelsingrad FAM was founded in 1937 as a mechanical workshop and foundry. In 1952, production of

metalworking machines commenced, and in 1961 the factory started exporting machines. During this period

the company had very successful business operations. In 1977 a modernization programwas started with the

construction of a a newand modern factory, and this programwas concluded in 1986 with the construction of

a separate building for the assembling department. In 1987 Jelsingrad FAM achieved sales of more than

DEM 80 million, the highest level ever.

Jelsingrad FAM has been selling its products to over 40 countries for several decades. During that time, the

company sold more than 12,000 machines of various types (e.g. presses, shears and other machines) all

over the world. The largest export market was the former USSR, followed by Western European countries

e.g. Germany, Italy, Belgium, Switzerland, Denmark, Sweden. The company also sold their products to the

US and Canada. Beside final products, Jelsingrad FAM also sells spare parts and machine components,

which are mostly machine bodies (above all for presses and shears). Today, the company exports its

products, either directly or through sales agents, to Germany, Sweden, Australia, Switzerland, Belgium,

Egypt, South Africa, Denmark, Serbia and Montenegro, Slovenia, Croatia, Italy and Greece. Export sales re-

present about 75%of the companys total sales revenues, while sales to the local market is about 25%. The

biggest customer for machines, components and spare parts is LVD Belgium, with whomJelsingrad FAM has

had years of successful cooperation.

Production overview

Jelsingrad FAM uses modern technology and components in its production, enabling it to compete with the

global competitors (CNC, PC-NC managing systems, PLC systems, measuring systems, servo drives,

Jel{ingrad.AM


24/28

protection systemby European standards, etc.). The companys products are used in a

number of industries, including the automobile and home appliance industries. Production

takes place in two plants, which are connected by an industrial railway. Parts production

takes place in the first hall and assembly in the second. The company owns its own

transportation systemand a maintenance unit, as well as a restaurant for the workers.

Metalworking machines production takes place in the following production

departments:

1. Preparation of materials (gas cutting, sawcutting)

2. Welding of fittings (bearing structures of machinery)

3. Mechanical processing of parts (removal of chips is dominant part of production)

4. Making and assembling hydraulic components

5. Thermal and surface processing (annealing, tempering and cementing)

6. Assembling of finalized products

-. assembling of fittings and sub-fittings

-. adding electrical and stirring equipment

-. quality control

Depending on weight, dimensions and shape, various means of internal transportation are

provided: hand trolleys, forklifts, electrical trolleys, console lifts, cranes, etc. For assembling

of super-heavy machinery there is an assembling channel.

Products

The company produces:

Hydraulic shears (standard and CNC)

Mechanical shears

Billet shears

Hydraulic notching and punching machines with fixed angle 90

Hydraulic press (40-1000 tons, standard and CNC)

Hydraulic drawing press (315 tons)

Plate bending roll machines

Mechanical eccentric presses, C frame (160-400 tons)

High speed eccentric presses, H frame (150-400 tons)

Leveling machines

Coilers, decoilers, feeders Other products and services

Most of the standard products are the result of work of the local experts, as well as

cooperation and license agreements with LVD Belgium(1972), Raster Germany (1972),

Erfurt Germany (1971), Schmeral Czech Republic (1967).

Beside these standard products, Jelsingrad FAM also produces to order according to

customers requests. In that respect, production of presses for deep drawing, all types of

straightening machines, wrenches, sheet feeding devices, as well as a line for tin finishing,

have been developed.

Investment opportunity

In addition to the companys physical assets, the future investor will benefit from:

A recognized name in the metal industry

A wide assortment of products, developed in association with LVD Belgium, RASTERGermany, ERFURT Germany, SCHMERAL Czech Republic

Skilled labor

Liberal Lawon Foreign Investments in Republic of Srpska


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Metal processing and machinery production: production of

compressors, pneumatic tools and energy equipment

57.39%of the Trudbenik capital, owned by the state, is offered for sale

TrudbenikDoboj was established in 1949, and in 1952 produced its first types of compressors and pneumatic

tools. As an independent enterprise Trudbenikoperated until 1967 when it became a part of the Energoinvest

Sarajevo conglomerate. In November 2002 Trudbenikbecame an independent joint stockcompany. Since 1949,

Trudbenikhas gone through many different development stages resulting in its wide production program. The

main development feature is certainly development of screwcompressors in 1985 when Trudbenikdeveloped

its own screwprofile. Quality of Trudbenikproducts is confirmed by the certificate ISO 9001 of Lloyds Register.

Trudbenikis located in Doboj, RS, Bosnia and Herzegovina, 100 kmsoutheast fromBanja Luka. Favorable

geographical position and good transportation infrastructure (road and railroad network) enable quick

communication with all regions of Former Yugoslavia, Western and Eastern Europe. TrudbenikDoboj belongs tothe group of larger enterprises and consists of three factories at three different locations:

Compressors Factory Doboj-Usorawith management and administration of the enterprise located two

kilometers south of downtown

Pneumatic tools Factory Doboj-Barewith complete production some four kilometers north of downtown

Compressors equipment Factory-Teslicspecialized in production of pressurized tanks and other process

equipment, located some 25 kilometers south fromDoboj

Total land area including all three locations is 140,117 m and total surface of facilities is 35,161 m. The land is

registered as construction land and Trudbenikhas the right of permanent use.

Production overview

Compressors Factory Usoraproduces small compressors with specialized machines for casings, cylinders,

crankshafts and valves production, machines for surface protection, an assembly line and testing area. On the

same location but in a different building there is equipment for production of large and screwcompressors and

sets: lathe, boring and turning lathe, milling machines, processing centers, grinding machines, machinery for

toothed screws, sharpeners, assembling line for blocks and sets, presses, welding, surface protection, thermo

processing, foundry of light metals and galvanicprotection. Department for prototypes is a part of the Research

and Development Sector, that also includes Tools Shop and Testing Laboratory for development and testing of

compressors. Quality Control Sector consists of Chemical Laboratory, Machinery Measuring Department and

Testing station for compressor sets. Service Sector consists of Repair Workshop for disassembling and repair

and of Warehouse for spare parts.

Pneumatic tools Factory Bare, produces pneumatictools with specialized machinery for pneumatictools

and machines of smaller dimensions: drilling machines, lathes, milling machines, machinery for teething,

processing centers, grinding machines, thermo processing, preparation and material cutting, surface protection,

assembling and testing space.

Compressors equipment Factory Teslic, produces compressor equipment with installed hydraulicpresses,

cutting scissors for thin metal, up cant presses, welding automats EPP, argon and CO2 procedure, equipment

for curving and gas cutting and equipment for testing of welding spots.

Products

Production programincludes following groups:

1. large compressors

2. small compressors

3. compressor equipment

4. pneumatictools and accessories

Compressors

Screw, oil cooled, compressor blocks, five basictypesand graded by engines from250 kW and pressure of 15

bars

Small piston compressor sets up to 11 kW Piston stable compressor sets, air and water cooled up

to 110 kW

TRUDBENIK


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Rotational compressor sets and blowers up to 200 kW Screwoil stable, air and water cooled, sets up to 250 kW Mobile piston and screwcompressor sets up to 250 kW Screwcompressors with frequency switch (electricity saving)Beside standard type of compressor units for air, specifictypes for

railways and other pressures are available.

Compressor equipment

Tanks under pressure Cyclonicseparators Separators Coolers Driers Tanks Elements of pneumatictransport

Pneumatic tools

Drilling machine Grinding machine Screwdrivers (impact and rotational)

Saws Rasps Scissors Cutting hammers Construction hammers Breaking hammers Staplers Cranes Accessories and equipment for pneumatictools200 types of these products are available. Projection and creation of

compressor stations and pneumaticinstallations with existing

production programcan satisfy even customer specificrequirements.

All products are developed in accordance with world standards in this

area. Trudbenikalso offers its own construction-technologicalsolutions.

In addition to the production programthere is a foundry with thefollowing activities:

Casting with silumina (silica oxide) in sand up to 30 kg/pc Casting under pressure up to 5 kg/pc Stamping and pressing up to 10 kg/pc Tanks under pressure of all sizes and welding of constructions up to

500 kg/pc

Machine processing of drilling, grinding and milling

Investment opportunity

Beside material property owned by the enterprise, investment into

Trudbenikoffers the following benefits to a potential investor: a producer with tradition and recognized name competitive quality of products wide production program facilities and equipment in good condition good infrastructure significant machinery capacities trained and experienced labor force favorable location liberal Lawon foreign investments


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u Said Investment

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