Tanjug

SMEDEREVO - The contract with HPK Engineering BV as the new management of Zelezara Smederevo was signed in Smederevo on Saturday.

The contract was signed by Serbian Minister of Economy Zeljko Sertic, Executive Director Bojan Bojkovic on behalf of Zelezara steel mill and Dutch company HPK Engineering representative Peter Kamaras, and the signing ceremony was attended by Serbian Prime Minister Aleksandar Vucic.

The management contract was closed for the duration of three years with the possibility of interruption in case an adequate partner for Zelezara purchase is found.

The ownership over Zelezara Smederevo was transferred back to the Republic of Serbia in January 2012 when the previous owner, U.S. Steel, decided to sell the steel mill for USD 1 after nine years of operation due to the mill's losses caused by the drop of the price of steel on the global market.

Zelezara Smederevo employs around 5,000 people and currently has an annual output of around 350,000 tons of steel, although its total annual production capacities add up to around 2.2 million tons of steel.

Serbian Prime Minister Aleksandar Vucic stated on Saturday that the signing of the contract with the new Zelezara Smederevo management will directly impact the country's GDP and that the government will have no additional costs, adding that the new management will enter Zelezara as of Monday.

The Zelezara steel mill will become lucrative, salaries will increase and safe jobs will be provided for employees, Vucic told reporters after the signing of the management contract with Dutch company HPK Engineering BV.

The most important point for us is embodied in production increase, Vucic said and added that the output in the plant totalled 65,000 tons in February, the expected output for March adds up to over 80,000 tons and the expected production in April is set at 95,000 tons of steel.

This will significantly impact GDP growth, he said and added that Serbia's 2016 GDP will be higher by at least 0.8 percent than this year's figure.

This will have the best possible influence on the Serbian economy as a whole, Vucic said.

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