Crisis-hit U.S. Remington Freezes Cooperation Deal with Serbian Arms Maker Zastava Oruzje

Gromovic told SeeNews that Zastava Oruzje's revenue will not suffer much from the freeze, as the export-oriented Serbian company has been benefiting from the recent rise in the dollar.

“Remington has not cancelled its cooperation [with Zastava Oruzje]. What happened is that for the time being we put this cooperation on a standby until the global financial crisis eases,” he said.

“There will be some drop in sales but we expect to continue our cooperation next year,” Gromovic added but declined to give any figures.

Serbian daily Danas, however, quoted him as saying that the freezing of the contract with Radmington is a big blow to Zastava Oruzje, as it will cut by half its 2008 exports to the U.S. According to a draft contract Zastava Oruzje should export some $2.2 million (1.7 million euro) worth of firearms, Danas reported.

“We estimate that this year due to the global crisis on the world’s most developed markets, our export revenue will drop to $26.7 million from the planned $30 million, which is a good export result under the current circumstances,” Danas quoted Gromovic as saying.

In October 2005, Zastava Oruzje signed a deal with Remington to produce hunting rifles under the Remington brand and sell them in the United States, Mexico and Canada.

“The global crisis will have a positive impact on the company due to the jump of the dollar,” Gromovic told SeeNews.

“We are export-oriented so the foreign currency inflow will drastically increase our revenue. The effect has already been felt,” he said but declined to give figures.

Zastava Oruzje also sells its products in Iraq, Afghanistan, Australia and South Africa.

($=0.7828 euro)