Bosnian Defense Industry Shoots for Record Revenues

[Osmanovic]

Bosnia's reborn arms industry targets record revenues​

Bosnia's arms industry, which almost died in the decade after the country's 1992-95 war, has become a rare bright spot for the country's struggling economy with output and exports almost tripled in the past five years.

Rebuilt factories, modernized machinery and a crackdown on corrupt managers have all helped turn it into a sector that now sells arms and ammunition to over 60 countries, including the United States, Saudi Arabia, Turkey and Switzerland.

Revenues for the 12 arms factories in the Bosniak-Croat Federation this year are set to top 100 million euros, triple their level of 2010, Erdal Trhulj, outgoing industry minister in the federation, told Reuters.

"Our military industry will certainly reach output of 200 million marka (105 million euros) in 2015," he said.

The growth in the arms sector contrasts with Bosnia's slow progress in implementing needed economic reforms and a expected growth rate of 2.5 percent this year after 0.7 percent in 2014 following devastating floods.

Bosnia's arms industry, inherited from its once-mighty Yugoslav predecessor, specializes in products such as small arms ammunition, blasting caps, pistols, grenades and mines.

Most of Bosnia's weapons mills are located in the federation, one of two autonomous regions that emerged from a war in which around 100,000 people died.

Apart from wartime destruction of some factories and outdated technology, Trhulj said, the arms sector was held back by corrupt managers who profited by smuggling Bosnian weapons and ammunition to break arms embargos around the world.

Factories in the federation were operating at a loss and faced closure. Revenues in 2010 amounted to only 73 million marka, with export earnings of 40 million.

"Until 2011, the military industry was run by individuals who used it to enrich themselves or to smuggle weapons in cooperation with others," he said. "For us, the priority was to eliminate such people, and we have succeeded in doing so."

By 2014, output in the sector, which employs 2,300 workers, reached 145 million marka and exports over 100 million marka.

Trhulj said the federation had signed contracts worth 165 million marka this year and new deals were in the pipeline.

Igman Konjic, a producer of ammunition for small arms, is targeting 90 million marka of exports this year, having almost closed several years ago. Trhulj said the company had increased its workforce from 356 in 2011 to 1,000 in 2014.

Bosnia's reborn arms industry targets record revenues| Reuters