China's Hesteel Group to boost investments in Serbia’s Smederevo steel mill

China's Hesteel Group to boost investments in Serbia’s Smederevo steel mill
By bne IntelliNews May 16, 2017

Representatives of China's Hesteel Group, which acquired Serbia’s only steel mill Zelezara Smederevo in July 2016, plan to invest further into equipment at the factory, Serbia’s Prime Minister and president elect Aleksandar Vucic said during a visit to China on May 16. 

The acquisition of Zelezara Smederevo (now renamed Hesteel Serbia Iron & Steel) by the Chinese giant was crucial for the survival of the regional economy since the steel mill directly employs more than 5,000 people. It is also Serbia's second-largest exporter, with exports valued at €120.3mn in January-March. Above all, the acquisition was an important step towards stronger ties between the two countries.

“We are very grateful for what the province of Hebei and company Hesteel did for the Smederevo steelworks and for Serbia,” Vucic said after a meeting with the governor of the Hebei province Xu Qin, the Serbian government reported.

“I’m happy about the successful cooperation of Hesteel steelworks, which is located in the province of Hebei, and the Smederevo steelworks. This project is a good foundation for our even better future cooperation,” Xu commented during his meeting with Vucic. 

Hesteel representatives informed Vucic that they are satisfied with their business operations in Serbia and that they have not had losses since December, according to the government’s statement.

“This business cooperation is a true example within the framework of One Belt, One Road," Vucic said, expressing gratitude to President of China Xi Jinping for his support.

Vucic and other Serbian officials are currently paying an extended visit to China aimed at further improving bilateral ties as well as attracting additional Chinese investments. They initially came to attend the Belt and Road Forum for International Cooperation in Beijing on May 14-15.

Another member of the Serbian delegation to China, Minister of Construction, Transport and Infrastructure Zorana Mihajlovic, signed a $297.6mn loan deal with Chinese Exim Bank on financing the reconstruction and modernisation of the first section of Belgrade-Budapest speed railway on May 16. The preferential loan is designated for modernisation of the section of double track railway from the capital Belgrade to the northern town of Stara Pazova.

The high-speed 350km rail link is expected to cut travel time between Budapest and Belgrade by more than half, from the current eight hours to less than three. The project is part of Beijing’s aim to create a fast lane for importing and exporting products between China and Europe. The Balkans is a key part of this corridor, as it is on the transit route between the Greek port of Piraeus, recently taken over by China’s Cosco, and Central Europe. The route will run 184km across Serbia and 166km across Hungary and passenger trains will travel at 160km per hour.

Xi paid a three-day visit to Belgrade in June 2016 which was seen as a huge step ahead strengthening of the bilateral cooperation. He also visited Smederevo, where several thousands citizens gathered to cheer him for saving their jobs.

Related Articles

Planned coal-fired plants in Balkans fail to meet new EU pollution standards, CEE Bankwatch warns

A new analysis by environmental group CEE Bankwatch Network has concluded that the planned coal-fired power plants in the Western Balkans do not meet ... more

Serbia receives US Humvees, still waiting for Russian MIGs

Belgrade has not yet received a Russian donation of six used Mig 29 aircraft, announced in the run-up to Serbia’s April presidential election. Meanwhile, 19 HMMWV military vehicles or “humvees” ... more

RBI doubles net profit y/y in Q1 as Russian business recovers

Raiffeisen Bank International (RBI), the second largest bank operating across Central and Eastern Europe by assets, reported that net profit almost doubled year-on-year to €220mn in the first ... more

Dismiss