Factory on the front line eschews profits for patriotism: In Breza, beneath the Bosnian Serb snipers, Christopher Bellamy found a new sort of work ethic

'NO, we don't pay the workers anything. They work because they want something to do. It takes their mind off the war.' It was a promising formula for national recovery. Not only are the workers unpaid, but they have to start work before dawn and leave after dark to avoid the Bosnian Serb snipers. Because the Bretex factory in Breza, once the largest textile factory in the Balkans, is operating just 200 to 300 metres from the Serb frontline.

'Watch out. There's a sniper over there, about 200 metres,' warned Izet Bajramovic, a distinguished looking businessman who is the Bretex factory director. We moved swiftly from the factory gate to the safety of one of the buildings, which had been hit by a rain of artillery shells. Inside, three rows of blackened spinning machines and piles of scorched wool were all that remained of that workshop. The factory had been closed for two years, from the start of the Bosnian civil war. It lies in the main body of Bosnian government territory, just 18km from the edge of Sarajevo and therefore, just, within the 20-kilometer UN 'exclusion zone'. It reopened about two months ago, though that was not directly connected with the Sarajevo ceasefire.

Breza is a surprising little town. Nobody stops there - I was just going to pass through it on my way back from Vares, where I had spent a fruitless morning in pursuit of a mythical 20,000 Muslim refugees. The Serb lines cut across the main road junction to the south of Breza, so you turn west there down a side road improved by the UN, to link up with the main road to Zenica.

But I stopped for a coffee, in the Mimoza cafe, like a conservatory, its chairs all purple upholstery and gold frames. Next door, aid was distributed, and there were lots of Bosnian army military police, and some wild-looking types with red ribbons, worn as a kind of battle honour. The frontline with the Bosnian Serbs was 6km away.

I was conspicuous, and I was joined by Alma Bajramovic, a 17- year-old English speaker, and her friend, a 20-year-old policeman, carrying his Zastava assault rifle. He had spent four years at police college, had just graduated, and also spoke English. He was a proper policeman, and proud of it.

Alma's father ran the factory where his uniform was made. After a coffee or two, she took me to her father's office nearby. The factory, Mr Bajramovic said, could employ 1,000 people. Before the war, there were 550; now, there were 60. The workers are mostly women. The factory worked seven days a week and exported to Germany, Britain, Sweden and Switzerland. His turnover had been about pounds 12m a year. It was the biggest textile factory in the Balkans.

As we moved between the factory buildings, we saw a bus with 'Bretex' still emblazoned on the side which had been hit by mortar fire. Some of the buildings had been completely wrecked. 'Big shells,' said Alma. Selma, her 11- year-old sister, sped around on roller skates, seemingly oblivious to the Serb snipers in the village just across the field. In the centre of the factory complex, they had ploughed up a piece of ground about half the size of a football pitch. 'It's to grow flour,' explained Alma. 'Wheat, yes, I understand.'

In another building, the machinery was being used. But some of this was out of action. 'Sabotage,' explained Mr Bajramovic. 'We had about 100 Serb workers. Seven or eight went over to the Serb side - it might have been them.'

Back in the office, Mr Bajramovic showed me what the factory now made: thick socks, mittens, balaclavas and a serviceable oatmeal sweater. 'We give it all away,' he said, 'as presents to the refugees and to the army.'

Was it not impossible to make a profit operating in that way? 'Money has become irrelevant, Mr Bajramovic explained. 'We are dealing with people's lives. You can't let children die in the winter. We don't pay any wages, just taxes. People work because of patriotic duty. Not only me, everybody. That is patriotism. That is honour - you understand?'