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World / China-Serbia

Chinese company to boost Serbian metal industry: experts

(Xinhua) Updated: 2016-06-16 10:48

SMEDEREVO, Serbia - The Smederevo steel mill stands a good chance to recover and develop after it was sold to Chinese HeSteel Group (HBIS), experts and officials said.

Ljubisa Obradovic, secretary of the association of the metal-electro industry, metal mines and metallurgy at the Serbian Chamber of Commerce, said the Serbian metal-electro industry gained a lot by the arrival of Hesteel.

"The arrival of Hesteel to Serbia opens huge potential in the metal-electro industry and mining in the sense that the level of production will double," he told Xinhua.

Slobodanka Susa, director of the Serbian Association of the Steel Industry, said the steel mill is an important part of the "infrastructure of the Serbian economy" and new investors will need money to improve technology and offer a wider range of products.

"The HBIS is one of the biggest in the world and have the possibility to have cheap raw material to produce steel in Smedervo and that is most important for continuity of production in Smederevo," she said.

She explained that the continuation of production in Smederevo means regular delivery to domestic markets and to exports. For Serbia it means it can expect an increase in economic activity.

The Smederevo steel mill was founded in 1913. After it went bankrupt in 2003, it was sold to U.S. Steel for the price of 23 million U.S. dollars.

Serbia became the owner of the steel mill once again in 2012 when the investor from the United States withdrew and the country bought the factory back for 1 U.S. dollar. After the departure of U.S. steel, the country was looking for a new investor, while the company's 5,000 workers were sent on paid leave until April 2013 when the furnaces of the steel mill in Smederevo started operating again with limited capacity.

HBIS was the sole competitor at a tender which finished on April 6, and bought the factory for 46 million euros (51.6 million U.S. dollars).

Many workers were glad as the takeover of the steel mill ended years of uncertainty.

For Goran Gigic, a 38-year-old shift manager, the steel mill will gain a lot by becoming a part of Hesteel.

"I expect that production will increase, new technologies implemented, to work more and live better from our work," Gigic said.

Ivan Matkovic, 37, a deputy shift manager who spent 16 years in Smederevo, hoped the new owner will increase financial investments.

"We hope for better times, and that we continue to work professionally as always," he said.

 

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