Two Journeys of Gruža

Aleksandar Djordjevic went from mergers and acquisitions to manufacturing. His factory went from making cannons to winches.

On March 19, 2021, Fortaco Gruža in Serbia was born from the acquisition of Rapp Zastava by the Fortaco Group.

What is now Fortaco Gruža may trace its history to October 1853, when Zastava Arms cast its first cannons and howitzers. Zastava would become a large holding company, its subsidiaries making military and hunting arms, as well as automobiles.

Zastava Machines would be created to provide parts and services to the auto-manufacturing subsidiary, and would be privatized in 2006 by Norwegian investors, who would convert the factory to produce deck equipment and winches for the marine industry.

A knack for the business

Aleksandar Djordjevic, Fortaco Gruža’s business site manager, entered the picture in the early 2000s, as Serbian companies were being privatized. Serbia’s privatization history began in 1990, but lack of legislation and other factors caused a decade-long delay before the process began in earnest.

Djordjevic represented Serbia’s privatization agency, overseeing the sale of companies, helping them restructure. “I noticed that I was providing advice to management teams that had been in place for 30 years,” he says. “I had no factory floor experience, but I had a knack for pinpointing important issues in their businesses. I thought I could be good at it.”

An opportunity arose for Djordjevic to move to China as the general manager of a Serbian-Chinese venture to galvanize steel. Eventually, the partnership dissolved and he found himself back in Serbia, this time running the M&A department at Société Générale. But he still longed for the factory.

Rapp Zastava

Zastava Machines was now Rapp Zastava, having been acquired by the Norwegian investors, Rapp Marine Group. The company needed help preparing a business plan to get grants from the state, and Djordjevic played that role. When the general manager of Rapp Zastava retired, the COO in Norway suggested Djordjevic for the job. “I had the skills which were needed at the time, like change management and financial analysis.” He took the job. Five years later Rapp Marine Group became part of Cargotec, whose policy was not to operate far-flung offices. Rapp Zastava was carved out of Rapp Marine Group and then sold to Fortaco in March 2021 by the Norwegian owners.

Expanding the footprint

What does Fortaco see in Gruža? Lars Hellberg, Fortaco Group’s President and CEO, has remarked that the factory is aligned with Fortaco’s strategy to be the leading partner to the off-highway and marine equipment industries. The acquisition, he’s noted, “provides customers with increased value in steel fabrication and assemblies.“

From the factory floor in Gruža, Djordjevic sees it as a great way for Fortaco to expand. “Cargotec is a large client of Fortaco. In my opinion, this acquisition allows Fortaco to expand its presence in a new market niche with known clients. By manufacturing winches, Fortaco now expands its footprint.”

It’s an acquisition that makes sense, even though Gruža’s business does differ in some key respects.

Fortaco Gruža operates a 10,000-square-meter modern factory and employs 150 employees, but it relies less on automation than other Fortaco plants. “There’s really no such thing as a standardized winch,” says Djordjevic. “We do single pieces or small series manufacturing, where CNC equipment and automation are used less. It’s a business where manual work still replaces modern equipment. And that’s also our competitive advantage.“

Another difference is temperament. How do hot-blooded Serbians work with cool northern Europeans? „Countries like ours on the hot seas are accustomed to emotions and raised voices,“ laughs Djordjevic. „You can imagine how the Norwegians saw us – the loud bunch. And we saw them as too cold.“ But the two parties quickly learned to work together. „Bad news or criticism isn’t meant to be taken personally. Because everyone wants the exact same thing: to have a positive impact.“