U.S. Steel leaves Serbia, state buys factory back, for 1 $

One of the biggest corruption buseness in balkan, about 10 years ago.

| Friday 27.01.2012 | 20:12

U.S. Steel leaves Serbia, state buys factory back
Source: B92, Beta

BELGRADE — The Serbian government is once again the owner of Železara Smederevo (Smederevo Steel Factory), Prime Minister Mirko Cvetković has announced.

(novosti.rs, file)

The factory - previously also knowns as Sartid - described as “the backbone of Serbia’s economy”, was acquired by U.S. Steel in 2003 for USD 23mn. The government bought it back for one U.S. dollar.

The Americans are leaving because of the economic crisis, the premier said in Belgrade on Friday, and announced that the move would become official with the signing of a contract planned for next Tuesday.

“We do not plan to be the owners of the factory for a long time. We will instead seek a strategic partner,” Cvetković said, and added that the company will in the meantime be managed by a team about to be set up by the government, while it was “possible that foreign experts will be a part of it”.

The prime minister explained that Železara was debt-free, and put the value of “basic means necessary for work”, now owned by the state, at USD 250mn, coupled with net current assets of USD 100mn.

Finance Ministry State Secretary Dušan Nikezić also addressed reporters today to say that the factory will continue with the same amount of activity as before - with only one blast furnace employed, while both furnaces would be used “if the demand increases”.

In 2010, U.S. Steel Serbia reported losses of EUR 150mn, while the figure was USD 73mn last September.

Should the factory shut down, 5,500 workers and about a thousand others engaged by the company would lose jobs. Out of the town’s 18,000 employed residents, as many as two thirds are either employed by U.S. Steel, or are otherwise linked to the company.

Železara amounts for five percent of Serbia’s economic performance, and for 14 percent of the country’s exports. 40 percent of Serbian Railways freight traffic is tied to the company.

Another state secretary at the Finance Ministry, Miodrag Điđić, told reporters that the government’s priority for this year will be to save existing jobs.

Economic analyst Milan Kovačević, meantime, voiced his opinion that the decision to buy back the factory was “not good”, and that the state should “finalize the privatization, instead of buying capital”.

“If the state bought back Železara and all its obligations for one dollar, that means it cost more than when U.S. Steel acquired it for USD 23mn, with no obligations,” said Kovačević.

STOPPING CLOSURE: Serbia’s government will try to avert the closure of its single biggest exporter, U.S. Steel Serbia, despite poor financial results.

THE PLAN: The government will form a special team that will offer an “action plan” to help the Pittsburgh-based giant maintain production and keep its workforce of over 5,000 people in its factory in Smederevo, about 37 miles southeast of Belgrade.

BIG BUSINESS: U.S. Steel Serbia, which accounts for about 10 percent of the country’s exports with $35 million in 2010, is mulling turning off the second of the two blast furnaces in Smederevo because of mounting losses amid the global economic slowdown. A decision is in the next week.

9. Juni 2004, 12:56 Uhr

Was aus den Krediten geworden ist, der Deutschen Geschäftemacher, in diesem grössten Balkan Korruptions Geschäft, davon hörte man nie wieder etwas.

Serbien-Montenegro: Wirtschaftskrimi um Stahlwerk Sartid neu aufgerollt

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