"Dongfeng" like "Fiat" - Memorandum on cooperation between Chinese manufacturer and Priboj-based FAP to be signed soon

(One of Chinese trucks)

After a long search for the right solution for privatization, Priboj-based FAP has found a potential partner in the world's most populated country. As the result of the recent visit of our national delegation to China and the agreement on business cooperation, Chinese company "Dongfeng", which produces 1,300,000 vehicles a year, 300,000 of which are trucks, and employs 120,000 people, expressed a serious interest in the truck manufacturer from Priboj. The fact that two groups of Chinese experts and managers have already visited FAP is seen by many as a story similar to the story of "punto" in Kragujevac, and all of them are of the opinion that "Dongfeng" can do the same thing in Priboj.

– Yes, the negotiations on strategic partnership with company "Dongfeng" have commenced and the chances for future cooperation are good. At the Business Forum Serbia-China, which will take place next week in Belgrade, the memorandum on the bases of that cooperation will be signed between FAP and "Dongfeng". Chinese partner intends to do so-called CKD assembling in FAP, that is, to supply the parts for trucks that would be assembled in our units, just like "punto" did in "Zastava" – the Director General of FAP, Mirko Stojović, told "Politika".

The cooperation between the Priboj-based and Chinese factories would lead to either privatization of FAP or formation of a joint venture with the Chinese on the basis of joint investments. As Stojović explains, the representatives of our country have expressed the willingness to back either of the options. In case of final agreement, that would mean that the progress can be made from the first phase - the assembly of the supplied parts, to a more complex procedure - production of fits for trucks in Priboj. What is especially important for this business cooperation is the fact that FAP's product portfolio is present in many markets, African and Asian markets in particular, from a long time ago.

(Mirko Stojović)

– In addition to that, the interest in privatization of FAP has also been expressed by factories from Turkey and Syria. We will keep negotiating with them on both privatization and business cooperation. All these talks are the chance for greater employment of capacities in our factory and cooperation, as well as the opportunity for employment of younger personnel as a result of the production growth – Stojović points out.

The Government has provided a good base for the negotiations on partnership to the Priboj-based factory by adopting the Regulation on subsidized sale of FAP's trucks, which enabled the discount of 20%, as well as additional discount of 10% for all those who offer to replace their old trucks (of any make, older than 15) for new ones. In that way, the buyer pays 70% of the full price of a freight vehicle, and he also can take a loan from a bank or a leasing company with the most favorable interest rate of 4.5% on annual basis.

Chance for bigger production: FAP's unit in Priboj

– In that way, the promise that the state will offer a model that will stimulate production of trucks, which was given by the authorized Minister Mlađan Dinkić on the occasion of his recent visit to FAP, has been fulfilled. And the results can already be seen. We have been contacted by large number of buyers, so that we are going to produce about 200 trucks by the end of January, which is the number of trucks that we used to produce on annual basis. Minister Dinkić promised us that the Government would prolong the validity of the Regulation, which would enable continuity in production and greater safety for 1,600 workers – says CEO Stojović.

(Note: complete text is taken over from newspaper "Politika" of November 21, 2009)

FAP Korporacija a.d. Priboj

FCA Srbija Kragujevac

FIAT Torino Italia

Vlada Republike Srbije

Ministarstvo privrede Republike Srbije

Ambasada NR Kine Beograd