AD FABRIKA ELEKTRODA ,,PIVA PLUINE

Goransko bb Pluine, Crna Gora REGISTAR. BROJ: 4-0000952 CRPS PG PIB : 02039630 iro raun: 505-4010000001121-35 PDV reg.br: 20/31-00094-8 Tel: +382 40 271 900; web adresa: www.fep.co.me; e-mail: fep@ t-com

_____________________________________________________________________ AD FEP Pluine is a Montenegros leader in production of welding cousumables and implementation of new welding materials and technologies. AD FEP produce the flux coated electrodes, cored and solid electrode wire rods for welding and overwelding of all steel grades and nails for civil engineering. Our logo-part of the blue Globe with a red spark out of the electric arc with there electrodes extending from it horizontally-represents a primary strategic course of the enterprise estabilished to meet most rigorous criteria for quality and placement of our products on the European and world markets. Piva Electrode Plant Pluzine (hereinafter referred to as AD FEP Pluzine) is situated at the plateau of Goransko, the municipality of Pluine, on the highway Podgorica-Niki-Pluine-Sarajevo. The construction of the plant commenced in 1982 and the production started in 1986. The product range of AD FEP Pluine includes the welding consumables as follows: Electrodes for steel welding and overwelding, Electrodes for steel grooving and cutting, Electrodes for high-alloyed steel and grey cast iron welding, Wire rods for welding into CO2 gas shielded, Wire rods for welding based on EPP practice, Wire rods for welding in protection gas based on TIG practice, Wire rods for oxygen and acetylene welding, Cored wire rods for overwelding and repairing based on EPP practice Nails for civil engineering/construction and steel casting foundries. The trial run and start-up production was based on production of one product only - flux coated electrodes and then production of C02 wire under the international licences. Nowadays, AD FEP produces 65 welding consumables in 5 (five) different size ranges developed according to its own technology and recipes. The employees (103) have an availability to produce up to cca 6.000 tons of welding consumables or 9.000.000 within the production area of 10.000 m. AD FEP's products have 3Y approvals for high strength steels, 3 SA approvals for semi-automatic welding, 3 YTM approvals for double-layer welding technique and 4YSH10 approval which prove all tests are done at 40 C. The products of AD FEP Pluzine are all audited and certified by the internationally recognized classification societies, among which would single out:
GL LR ABS MRS DNV TV DB JRM ZJ

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AD FEP's have 17 type's of products that are under CE certificates and declaration.

Commitment to the product quality required the introduction of the quality management system as to meet the requirements of standard JUS ISO 9002 from 1996. Today AD FEP Pluine has got the quality management system fully agreed and in conformity with the requirements of standard EN ISO 9001:2008. AD FEP Pluzine is continuously developing its products and improving its technology cooperating very closely with the leading national and international institutions in the field of welding: Faculty of Metallurgy and Technology, University of Podgorica PATON Institute in Kiev, Ukraine Welding Institute of Belgrade etc.. The partners of AD FEP Pluzine are the worldwide known companies: Sandvik - Sweden, Trinec Czech Republic, Ori Martin - Italy, Griler - Austria, Voestalpina-Austria , Hascor - Turkey and others. Despite being over 30 years old already, the production equipment of AD FEP is well maintained; a lot of machinery was upgraded with a number of innovative solutions so that todays production capacities of the equipment are higher than when they were installed. The complete production lines are high-quality and tightly specialized so that they can provide a steady production of 2000-3000 ton/year with no additional investments required. AD FEP also possess its own Welding Laboratory Mechanical Laboratory Chemical Laboratory witch is fully equipped storage area of 2.500m2 for raw materials and finished products,Solid Fuel Boiler Units for heating; Compressor Stations for technical compressed air manufacturered by Fagre YU; The Mechanical Workshop for manufacture of spare parts. Market and competition Currently interesting and active markets for AD FEP are the territory of Montenegro, Serbia, Bosnia, Macedonia, Kosovo. The market of Montenegro in the particular case, is quite narrow, but it still stands important because it is fully covered directly from AD FEP. At present the markets of Serbia and Bosnia are the most interesting because of huge quantity of the AD FEP products being distributed and sold there; moreover, the sale potentials are quite higher, so they are to be restored to the former level. This could help the company to reach the threshold of profitability/breakeven point. Although the market has significantly dropped in the first place because of the global economic crisis and the transitional problems in the regional economy, the market of the former Yugoslavia has been occupied by the world's largest companies: Lincoln, Esab, Ihtiman, Oerlikon, Bouller, Ductil, Elga, ISAF, Hyundai, Pertini , ETC, etc as well as The Electrode

Plant Zagreb, Jesenice Electrodes, Elvaco Bijeljina and a number of Chinese manufacturers who are of a big danger because their aggressive approach to the market and extremely low prices. The most serious market problems faced by the AD FEP: 1. Larger market supply than market demand along with the unfair competition. 2. Insolvency of majority of the customers from the metal industry, what imposes a price as the most important parameter based on which selection of bidders takes place. 3. Incapacity of timely delivery of the ordered goods to customers, due to the lack of the working capital what consequently makes impossible fulfill the obligations to customers. 4. Despite having contracts signed with AD FEP, some customers ,when engaging subcontractors 5. to carry out the works for them, they use the products of AD FEP competitors. 6. Until recently lack of own working capital prevented AD FEP from making a more aggressive campaign on the market for the purpose of achieving better business results. 7. Low selling prices fixed on the tenders which are more and more presented by severe lobbying of the competitors. 8. Cyclical price adjustments of certain raw materials, energy products and services, which, due to the insolvency, cannot be taken as a chance for timely stocked purchases , do not allow any reduction of selling prices of the finished products to the competitive levels Expectations from a new owner of AD FEP? 1. A new owner to be already active in the field of electrode production or metal production and processing, I.e. to have the knowledge of the product 2. To use the brand "Piva" through the existing sales channels of AD FEP and to valorize it in the best way possible through their own new sales channels 3. To initiate a further development of AD FEP ; it means for modernization and introduction of new technologies and products 4. To recruit the management with new people and ideas 5. To run the company in the way to convince the employees that AD FEP has a good chance on the market and exploit the willingness and readiness of the employees to work and contribute to the prosperity of the company.