SETimes.comSuccess of US Steel Serbia Could Help Boost Foreign Investments
04/10/2005
Since purchasing the Sartid steel manufacturer in 2003, US Steel has turned the operation around, becoming Serbia's largest exporter and a major success story in the privatisation process.
By Dusan Kosanovic for Southeast European Times in Belgrade - 04/10/05
US Steel Serbia's success could encourage more foreign investment in Serbia-Montenegro, according to CFO John Quaid. He briefed visiting US Deputy Assistant of State Rosemary DiCarlo last month on the steel manufacturer's experience since 2003, when it purchased the former state-owned firm Sartid and its six subsidiaries for 19m euros, pledging to invest another 124.2m euros over the next half-decade.
As part of the deal, Pittsburgh-based US Steel made a three-year commitment to donate nearly 4.2 million euros to civic causes such as child welfare, sports and culture. The firm has become an engine of local economic growth, providing jobs to nearly 9,000 workers in the city of Smederovo. It is also Serbia's largest exporter. In June of this year, the company restarted a key blast furnace at Smederovo, enabling it to boost output to 1.6m tonnes this year and eventually double it to 2.2m tonnes.
The operation has become one of the most successful chapters in the Serbian saga of privatisation, a process marred by lack of regulation, widespread allegations of fraud and corruption, and a host of other problems since a 2001 law paved the way for selling off state assets. About 1,406 firms have been sold off so far, according to government data.
While in Serbia-Montenegro, DiCarlo paid a visit to the Economic Development Centre established by US Steel in downtown Belgrade. Praising the company's success as an inspiration for all potential investors, she said the United States government is committed to assisting economic development in Serbia.
At the same time, she cautioned, the government must do its part by fulfilling obligations to the international community, including pledges made to international financial institutions such as the IMF.
US Ambassador to Serbia-Montenegro Michael C. Polt echoed DiCarlo's remarks, emphasising that Washington considers it very important to step up economic co-operation with the Balkan country. He said he is an optimist about future developments, while noting that there are still challenges ahead.
It is up to the Serbian government to remove the remaining obstacles to a true market economy -- especially in the field of privatisation, which remains slow -- and to focus efforts on the implementation of reforms and infrastructure overhaul, Polt said.