Serbia to acquire stake in Slovenia’s Gorenje local unit via EUR 15mn recapitalisation

By bne IntelliNews July 10, 2013

The Serbian government and Slovenian household appliances maker Gorenje have signed a preliminary agreement to jointly invest in raising the company’s production capacities in the Serb cities of Zajecar, Valjevo and Stara Pazova, the finance ministry said in a statement.

Under the deal, Serbia will participate in the recapitalisation of all three Gorenje factories on its territory with EUR 15mn in the next two years until January 31, 2015 and thus gain a minority ownership stake and an equal right to the profits, finance minister Mladjan Dinkic said earlier this week in the statement.

The government funding will go mainly to the modernisation and expansion of the washing machines factory in Zajecar, which will absorb an overall EUR 22mn in investment in the coming two years. The Zajecar plant will also roll out appliances under the Panasonic brand under a strategic partnership deal signed recently between the two firms. The factory should produce 450,000 units annually mostly for export.

The joint Serbia-Gorenje agreement will enable the opening of 700 new jobs in the coming three years in all Gorenje plants in Serbia. It will also raise their combined output value to EUR 230mn in 2016 from EUR 108mn in 2012. The exports will increase to EUR 210mn in 2016 from EUR 95mn in 2012. Furthermore, under the deal Gorenje will buy 40% of the spare parts and repromaterial it needs from local companies.

Earlier this week, on July 9, Gorenje opened its second plant in Valjevo worth EUR 21mn that will produce refrigerators and freezers – just like the existing one opened back in 2006. Gorenje has invested EUR 50mn so far in Valjevo where it plans to produce 800,000 units annually. Some 85% of the output will go to buyers in Europe and Middle and Far East. On the roof of its new factory Gorenje has installed a 250 kW solar plant, which production could meet the needs of 75 households.

Gorenje is already Serbia’s seven biggest exporter with this year’s exports seen at EUR 130-140mn. It sells 90% of its output to Russia, Germany, Ukraine, Croatia and Slovenia, among others. The Slovenian company has so far invested EUR 100mn in Serbia and currently employs some 1,300. 

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