Smederevo steelworks "will not be closed"

Smederevo steelworks "will not be closed"

Vučić addressed the steel mill's workers after talking with the management and representatives of the relevant trade unions and touring the plant.

He noted that progress has been made in the negotiations aimed at selecting a strategic partner, and voiced his expectation that they would be finished by the end of the year.

Vučić noted that the steel mill owes EUR 260 million to banks and EUR 120 million to other suppliers and that the state of Serbia would have to assume the debts.

Those wishing to invest in the plant are asking much of the state, the prime minister said, urging workers to demonstrate that they can work hard, and raise the annual output to over two million tons.

“In that sense, the price of the ore is working to our advantage at the moment, as it has dropped from RSD 137 to 78,” Vučić said.

He underlined that Serbia would also launch some new projects in the following year, which will trigger a greater demand for steel.

“According to the talks with those interested in the steel mill to date, it seems that they will be no layoffs. Quite the contrary, according to their plans, another 200 people will be hired,” Vučić said.

The prime minister noted that the state earmarks between EUR 8.5 and 10 million for the steel mill on a monthly level, adding that another EUR 250 million are needed to start both blast furnaces, and that is why the state is looking for a strategic partner.

He underscored that the Železara Smederevo steelworks makes up a significant part of Serbia's gross domestic product (GDP) and that the state invests in it so that instead of the production worth EUR 340 million could have the output worth EUR 1.4 billion, and then channel goods worth EUR 1.2 billion into exports.

After touring the construction site at which Finland's PKC Group is building a factory that will produce cable sets for commercial vehicles in Smederevo, Vučić told reporters that “the closing of the steel mill would be the easiest solution”, but that it is certainly worth investing in.

He specified that the negotiations on the strategic partnership with Esmark Steel Group from America are well underway, but that the talks are also held with companies from Russia and India, and the opportunities are opening up for talks with some Chinese companies.

“In this case, we are taking care about the steel mill's workforce, and this will not be a political decision,” the Serbian prime minister concluded.

Once a giant of the Serbian industry, the steel mill is producing and selling hot and cold-rolled products and has branch units in Sabac and Kucevo.

The Železara Smederevo steelworks accounted for five percent of the total production and 14 percent of Serbia's overall exports, and hires around 5,500 people.

In 2003, U.S. Steel bought the plant, the then bankrupt Sartid, but it operated at a loss, so the Serbian government purchased it back for one dollar in 2012.