Late last week, Serbian President Aleksandar Vucic officially opened a new commercial drone manufacturing facility in partnership with Israeli defense giant Elbit Systems, a development that delivers a dual boost to Serbia’s domestic military capabilities and pre-election economy just weeks ahead of the country’s 25 October general election.
The inauguration comes as Vucic, who has held the Serbian presidency since 2017, is set to transition to the role of prime minister, a move prompted by constitutional term limits that bar him from seeking re-election to the presidency in 2027. When the partnership was first revealed by BIRN and Haaretz in April 2025, it was framed as a 51-49 joint venture between Elbit Systems and Serbia’s state-owned arms producer Yugoimport-SDPR. But official corporate filings tell a far different story, leaving defense analysts questioning the venture’s true structure and strategic motives.
Contrary to initial announcements, Serbian business records list the factory’s parent entity as SDS Technologies, a firm registered in the country in April 2025 under the original name Cupa Enterprises. SDS Technologies is in turn wholly owned by a United Kingdom-based firm that only recently rebranded: previously known as Cupa Limited, the company changed its name to Liberty Blue International Ltd with UK Companies House on 15 September 2025.
As of 17 September 2025, SDS Technologies lists three directors on its Serbian registry: Greek national Maria Kardamaki, Israeli attorney Zion Amir – who has previously represented Israeli Prime Minister Benjamin Netanyahu – and George Antoine Elghossain, a U.S. citizen of Lebanese descent. Liberty Blue International’s sole active director is Polychronis Tsianakas, who lists a registered address in London’s prestigious St James’s district. Another Greek director, Athanasios Rammos, resigned from both the UK firm in July and from SDS Technologies in mid-September, though Companies House records confirm Rammos still retains a 75 percent controlling stake in Liberty Blue.
Notably, neither Yugoimport-SDPR nor Elbit Systems appears anywhere in official Serbian or UK corporate ownership records, leaving their actual roles in the venture unconfirmed. Middle East Eye reached out to Elbit Systems for comment on the factory’s ownership structure and the firm’s connection to SDS Technologies, but no response was received prior to publication. Despite the absence of public disclosure, Elbit’s executive vice president for international marketing and business development Ran Kril was seated alongside Vucic at the official inauguration ceremony, alongside Israeli Ambassador to Serbia Avivit Bar-Ilan.
In a social media announcement posted to Instagram and Facebook following the opening, Vucic framed the facility as a major milestone for Serbian domestic defense production. “The drones you see starting today are being produced in Serbia. The plans are big. I’m only showing a small part of what I’m allowed to show,” Vucic said, adding that additional defense factories with Israeli partners are planned across the country. After demonstrating operation of one of the precision weapons, Vucic praised the drones’ capabilities, noting “They go through the windows and chase the opponent, they are incredibly efficient.” He confirmed that Serbia’s state-owned Krusik arms factory will supply warheads for the drones produced at the new facility.
The Israeli embassy in Serbia also celebrated the opening in a Facebook post, calling it “another milestone in our strong and strategic partnership, strengthening economic and industrial ties and taking Israel-Serbia cooperation to a new level.” Senior cybersecurity industry figures also attended the event, with Daniel Martin, executive director of Israeli cybersecurity group Cyber 7, noting his presence was aimed at sharing expertise with Serbian partners.
Defense analysts say the gulf between the initial announced structure and the actual registered ownership raises serious red flags over transparency. “An enormous discrepancy exists between what was originally announced and what appears in the formal documents,” Vuk Vuksanovic, a lecturer in foreign policy and grand strategy at King’s College London’s Department of War Studies, told Middle East Eye. While Vuksanovic acknowledged Elbit almost certainly provides core drone technology for the facility, he argued the opaque ownership demands further scrutiny, noting “non-transparency and opaque, secretive agreements have been the norm in the Serbian defence industry, which is heavily captured by political elites. This secrecy and lack of transparency have been particularly acute in Serbia’s procurement of weapons systems from external suppliers.”
Serbia already has a deep existing defense relationship with Elbit: in 2025, Belgrade signed a $335 million deal to purchase Elbit’s Puls artillery system and Hermes 900 combat drones. Elbit is also expanding its regional footprint across Europe, opening a drone production facility and flight training school in Albania in 2025 and already operating multiple production sites in Romania as Israel shifts more of its defense manufacturing overseas.
Vuksanovic explained that Israel’s push for European-based defense production is rooted in long-term national security strategy. “Israeli interests are strongly dictated by national security planning, as Israel wants to expand its strategic periphery beyond the conflict-laden Middle East. Supply chain planning follows the same logic, as Israel wants to ensure its defence industry has supply chains in countries beyond the immediate flashpoints,” he said.
Analysts add that the strategy also serves a second, less widely discussed goal: embedding Israeli defense industry interests in European economies to create lasting political and economic stakes that make future policy shifts against Israel far costlier, particularly amid widespread European public opposition to Israel’s military campaign in Gaza. The approach aligns with a recent proposal from a prominent pro-Israel Washington-based think tank, which called on Israel to deepen economic, military and technological integration with the U.S. to the point that any U.S. policy to constrain Israeli actions would impose significant domestic costs on Washington. The strategy has been labeled “weaponized interdependence” by analysts.
“Israel is trying to move from being an arms exporter to becoming part of other countries’ defence industrial bases,” explained Andreas Krieg, associate professor of security studies at King’s College London. “If Elbit simply manufactures a system in Israel and sells it to Romania or Britain, the relationship remains essentially transactional. Once it is manufacturing locally, employing local engineers, working with domestic suppliers and transferring parts of the production process, it becomes embedded in that country’s national security infrastructure.”
This is not a new strategy for Israel: as early as 2004, a research paper from Israel’s Institute for National Security Studies outlined how local production partnerships could tap into domestic political and industry networks to act as “a safety net against unfavorable political changes.” More recently, another Israeli think tank, the Jerusalem Institute for Strategy and Security, argued that joint production, shared procurement and technology transfer “reduce the danger posed by a unilateral embargo.”
“This is quite close to what I would call weaponised interdependence,” Krieg said. “Israel is inserting itself into defence networks in ways that make disentanglement progressively more expensive. Another Israeli think tank, the Misgav Institute for National Security and Zionist Strategy, has explicitly framed the expansion into Serbia and Albania as part of a broader strategy to engage European countries individually, rather than through the European Union as a single bloc, to deepen divisions among European states over policy toward Israel.
Krieg pointed to the scale of Elbit’s growing European footprint to illustrate the long-term aim of the strategy: Elbit already operates seven production facilities in Romania, more than a dozen sites across the United Kingdom, and is expanding its presence in Germany and Sweden, alongside its new drone production venture in Serbia. “This is no longer simply an export strategy. Israel is gradually internationalising its defence industrial base. Israel is creating networks of governments, companies and defence establishments that have something tangible to lose from a serious rupture in relations,” he added.