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Chinese company promotes economic development in Serbia

Reporter: Xi Jia 丨 CCTV.com

06-17-2016 14:32 BJT

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In April, Chinese HeSteel Group (HBIS) - the world's second largest steel producer - bought Serbia's only steel mill for 300 million yuan. It set an example for international industrial capacity cooperation for China and central and eastern Europe.

Vladica Pavlovia is a crane operator at Smederevo Steel Works. For 34 years, he has seen all the ups and downs of this old steel factory.

Smederevo Steel Works was founded in 1913. After it went bankrupt in 2003, it was sold to US Steel for 23 million US dollars. Serbia bought it back in 2012 when the investor from the United States withdrew.

After the departure of US Steel, the country was looking for a new investor. The company's 5,000 workers were sent on paid leave until April 2013 when the furnaces of the steel mill started operating again, but with limited capacity.

HBIS was the sole competitor at a tender which finished on April 6, and bought the factory for 46 million euros.

"When we signed contract with China in April, I am on the scene when the President of Hesteel promised that they would improve working environment,and will restart a furnace to increase output. I hope it could be realized," said Vladica Pavlovic, crane operator of Smederevo Steel Works.

For the 5,000 workers at the factory, China's purchase was like timely rain. Years of substantial loss was like the sword of Damocles to the hardworking people here, as well as a hard hit to Serbia's economy.

"This is a great day, all the staff in Smederevo, your wait is worthy. You have been through years of uncertainty, every sleepless nights to think how to feed the family," said Aleksandar Vucic, Serbian prime minister.

Pavlovic also said, "Last year and the year before last year, we have only one furnace which even shut down from time to time, the income is very low. Now the two furnaces are all running ,we hope that our life would be improved after this. "

The director of the Steel Mill says that when the factory met financial and technical problems and continued its losses, the workers continued to be paid.

"When we start using the second furnace,  they cancelled their vacations and rests. They said they could do that after seeing the second furnace run smoothly. Stability and future, those are the two things that they never owned," said Dr. Peter Kamaras, director of Smederevo Steel Works.

"They know that our country support us, they work with their heart and soul, but they don't have a stable economic status and a stable technological environment. Now they have it, not only themselves, but their children."

Not only a business trade, about 55-hundred workers were helped by the purchase. Their skill and hard work can now push the factory to even greater heights.

"In fact we showed our point of view when during the purchase, we didn't regard the workers from Smederevo as a burden, because it is a professional team with lots of experience. They are very valuable to us," said Yu Yong, president of Chinese Hesteel Group.

"When Chinese companies carry out overseas mergers and acquisitions, we should never do it simply to change the fate of local people. Even if we own the company itself, we don't hold its future."

Hesteel Chairman Yu Yong said that the company plans to increase its annual overseas revenue by 30 percent by 2018 to $20 billion per year, 57.5 percent higher than in 2014.
The group owns holdings in around 70 foreign companies in more than 100 countries and regions. It has the most advanced equipment and the cleanest steel manufacturing process.

"When I visited Hesteel Group, I can not believe my eyes. They are much more advanced than us. I don't think we can find a better buyer than Hesteel," Dr. Peter Kamaras also said.

As China's biggest steel company, Chinese HeSteel Group has a global layout and target. The purchase will help raise employment and boost profits as global steel assets drop in value. It may also serve to promote economic development in those areas.

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