The deal encompasses the companys Krusevac production facility, with more than 30,000 square meters of working and office space, according to Fams web site. The facility includes a 21,600 tons per year lubricants and greases plant, a unit for production of corrosion inhibiters and degreasers, as well as a packaging facility. With the deal, Valvoline also got the right to use Fams line of Fenix-branded motor oil products and its distribution network in the region.
We will invest here. This is just the first step, and we will retain the Fam brand. We will create a combination of Valvoline's strength and local heritage. Together we will grow and be leaders in the region, Diego Brodoni, vice president of Valvoline Europe, said in the news release.
The company chose Eastern Europe because it is a growing lubricant market, and the local supply chain established by Fam can help Valvoline and our partners meet customer demand in the region, a representative from Valvolines United States office told Lube Report on Monday.
The representative said that Serbia has favorable trading agreements with neighboring countries, the European Union and other regional markets. The transaction to purchase Fam represented a compelling opportunity for Valvoline to expand its supply chain capabilities into the region.
Serbian president Alexandar Vucic attended the signing ceremony for Valvolines acquisition of Fam - which is partially owned by Serbias government.
The deal is a result of a long process for seeking the best way in preserving the operation of Fam, a company that has certain authority in the domestic business environment, Fam General Director Jelica Djurovic Petronijvic said, noting that the money from the sale will be used to cover part of its accrued debt towards different lenders.
Fam is now ready to reorganize its business, led by the partners from Valvoline, she said.
Valvoline pledged to retain at least 100 employees from the total workforce of 218 now employed by Fam, and said that it expects to add new jobs in the coming months and years.
The plant is about 20 years old - fairly new by most standards, but there will be some modernization to add capabilities that the current facility does not have today.We do not expect these incremental investments to be material, the spokesperson said, adding that in addition to production of the Fam-branded products, the plant also has the capability to produce Valvoline-branded products as well.
Fam produces motor and industrial oils, greases, metalworking fluids, corrosion inhibitors, degreasers and other products. Its production facilities also include a storage tank park with total capacity of almost 19,000 metric tons.