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Hebei Iron and Steel interested in Železara Smederevo Steelworks

19 October 2015
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Photo: Železara Smederevo

 

According to the Serbian prime minister, Aleksandar Vucic, negotiations with a group of Hebei Iron and Steel are in progress as a future strategic partner for the Železara Smederevo.

 

Last Friday in Železara Smederevo the second blast furnace is put into operation, which will double the current production of steelworks. According to the expectations, by working with both furnaces, additional US $ 400 million production will be achieved, or as Vucic said: "This is a new 1% growth for the whole Serbia in the next year."
At a ceremony marking the ignition furnace, the Serbian prime minister particularly praised steelworks employees who believed in the survival of the company: "We believed in you, I'm proud of you and it's good that I've listened to you and we saved the copmany - you made this great success for whole Serbia. "

Until 2012 Železara Smederevo was led by the American company US Steel, which shut down the blast furnace No. 1 in 2011. After unsuccessful business in Serbia, the Americans withdrew, and the state took over the steelworks again. Since 2012, about 120 million US dollars was pumped in the Železara Smederevo through the subventions to help the company continue to operate and provide jobs for about 5,000 workers. This year, better days appeared for the Serbian steelworks. In March, the government entrusted the management to the Dutch company HPK Engineering BV. It seems to be a decisive moment because under the new leadership Železara Smederevo works better and better. The Serbian government signed the agreement with Dutch company under which they manage the steelworks to its full privatization.

 

Zelezara Smederevo Steel Coil Storage

 

Serbia is now looking for a buyer or strategic partner to take over the steelworks, with a goal to meet the conditions as soon as possible, for a loan of 1.2 billion euros from the International Monetary Fund. In this context, Aleksandar Vucic pointed out that the intensive negotiations are led with the Chinese group Hebei Iron and Steel. After the representatives of Chinese company visited the factory in Smederevo four times, Serbian Prime Minister publicly announced that Hebei Iron & Steel is interested to invest over 300 million euros in the steel galvanizing plant. "It would mean a new life not only for Smederevo, but also for the whole Serbia. People in Serbia should be informed about that." - Vucic added.

He stressed that this is an extremely difficult time for the steel industry. The price of 380 € / t barely covers basic operating costs, but as soon as it reaches the 480 € / t Železara Smederevo will work with a big profit, and raising salaries will be possible.

Hebei Iron & Steel Group is the second largest steel producer in the world. They produce more than 47 million tons of steel annually. Everyone will agree that the interest of such enterprise is flattering for the Serbian steelworks.

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