Grammer opens new auto parts plant in Serbia

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German auto supplier Grammer AG has expanded its production capacity in Serbia with the recent launch of its second plant in the south east of the country.

The Amberg-based supplier, which already produced seat headrests for car manufacturers including Audi, BMW and Fiat there, acquired and has redeveloped a site in the town of Aleksinac.

Grammer already employed 740 at its original Serbian plant and has initially added 120 workers through the new facility. The firm is expected to create a further 500 jobs by mid 2015 as the plant grows.

Under a deal signed with Serbia's Economy Minister Mladjan Dinkic last July, Grammer was granted incentive support equivalent to 7,000 euros ($9,565) for every new job it created in the factory project.

The new operation included the construction of a production hall, expansion of the warehouse and procurement of new equipment for the plant which will turn out armrests, side linings and door pads, according to Serbian press reports.

Meanwhile, Grammer group has reported strong revenue and earnings growth for the first nine months of 2013. Sales for the period were up 12 percent to 952.9 million euros ($1.3 billion) and after tax profit up 24.5 percent to 23.9 million euros ($32.6 million)

The group's automotive parts business showed a marked advance with growth in revenue of 15.7 to 607.2 million euros ($829.7 million). This was based on strong organic growth, higher sales from development projects and the acquisition of headrest specialist Nectec Automotive in the Czech Republic, explained Grammer.

The expansion to Serbia comes on top of statements by the auto supplier earlier this year that it is looking to expand in North America, with plans to build a new plant either in the United States or Mexico.