Unexpected bond with China puts Serbian Steel Plant workers at ease

August 25, 2018 4:00 PM

by Gan Chun, Wang Huijuan, Han Chong
SMEDEREVO, Serbia, Aug. 20 (Xinhua) — When Aleksandar Duncevic took a job at the Smederevo steel plant in 2013, he did not expect just a few years later his life would be closely tied to China, a country some 6,800 kilometers away from Serbia.
The 25-year-old works as a maintenance electrician in the cold rolling mill of the steel plant, which was renamed Hesteel Serbia after being taken over by Chinese steel and iron manufacturing giant HBIS in April 2016.
“After the Chinese company bought the factory, the biggest change is that I now feel more certainty and security,” said Aleksandar, adding that many of his friends are envious of him for having a steady paycheck that allows him to “make plans for the future”.
The formerly state-owned steel plant, about 60 kilometers southeast of the Serbian capital Belgrade, was founded in 1913 and once the epitome of the country’s industrial success.
Struggling to face fierce market competition and resolve management issues, the factory found itself on the brink of bankruptcy years ago, putting at risk some 5,000 jobs.
When HBIS stroke a deal with the Serbian government to buy the steel plant for 46 million euros (52.3 million U.S. dollars), it promised to keep all the Serbian employees, ending the uneasy atmosphere inside the factory.
Aleksandar said he’s now fully confident in the new owners of the factory, and is working hard in the hope of getting a promotion.
“Every one of my colleagues is happy with the new management. We no long feel stressed,” he told Xinhua.
The workers’ regained confidence comes from the surprising turn in the performance of the factory.
Hesteel Serbia started to make profit in December 2016, just months after the takeover. Since the second half of 2016, it has been standing firmly as the second largest export enterprise in the country.
According to Song Sihai, executive director of Hesteel Serbia, the factory produced 1.46 million tons of steel last year, and paid the Serbian government 39 million U.S. dollars in taxes.

For Aleksandar and many other young workers in Hesteel Serbia, working in the steel plant means continuing a family legacy that has lasted several generations.
Aleksandar’s maternal grandfather Miodrag Markovic retired from the factory in 1991, and still remembers vividly how he started the job in 1958.
“They offered me money for transport to the factory, but I walked instead, and used the money to buy bread for the family,” he told Xinhua in his home in the village of Saraorci, 20 kilometers away from the factory.
Working as a steel worker back then was tough, as old-fashioned manufacturing techniques and extreme working conditions usually led to health problems, Miodrag, 83, recalled. “I’m one of the few that live this long.”
He said when his grandson told him about the latest developments in the factory, he could not believe it.
“I’m grateful for all the changes and improvements. All I want to say is praise and gratitude,” he added.
Aleksandar’s mother, Jasmina Duncevic-Markovic, who works in the steel plant’s accounting department, said the arrival of HBIS Group cleared the air of uncertainty lingering over the factory.
“We were worried about our future, but HBIS brought the sense of security that we needed,” she said.
She noted the company’s profit sharing scheme, thanks to which every employee received an extra 100 euros in June.
“I hope our production will continue to grow, and we will gain more competitiveness, as our lives and future plans are all tied to this factory,” she told Xinhua.
The Duncevic-Markovic family has great confidence and trust in the future of the steel plant.
Jasmina’s husband quit a job in Germany and returned home to join Hesteel Serbia, and her other child, Aleksandar’s older sister, is also seeking a job in the factory.
“As far as I know, China is a prosperous, stable country in terms of commerce and finance, and HBIS Group is a large manufacturer with stable production and revenue,” she explained, adding that paying a visit to China is now on her wish list.
With regards to skeptical views of the Chinese takeover, Jasmina commented that she could not understand why anyone would criticize the deal only because it was a Chinese company.
“We welcome any company willing to come to Serbia, provide us with good jobs and a good working environment, and bring us stability,” she said.

The Chinese takeover not only brings back vitality to the steel plant, but also injects momentum to the development of the city of Smederevo, according to mayor Jasna Avramovic.
The city’s annual tax revenue was around 2 million euros (2.27 million U.S. dollars) before the takeover, but has now exceeded 5 million, the mayor told Xinhua, adding that the population benefiting from the deal goes far beyond the 5,000 steel plant workers like the Duncevic-Markovic family.
She explained that with their steady income, the workers and their families feel more comfortable spending, thus boost local businesses.
Smederevo’s birth rate is now the highest in Serbia, which Avramovic considers another positive consequence of the revival of the century-old steel plant.
“Many local contractors have also found jobs,” she added. “We are also able to invest in and improve our municipal facilities.”
In an interview with Xinhua, Dragan Stevanovic, state secretary at the Serbian ministry of economy, estimated that the livelihood of some 20,000 people in Smederevo depend directly or indirectly on Hesteel Serbia.
He revealed that before the takeover the Serbian government had to finance the production at the steel plant with taxpayers’ money, which cost 10 million U.S. dollars per month.
“When we look from today’s perspective, Hesteel (Serbia) has increased profit and income by 77 percent, while the investments are at a so high level that we don’t dare to mention it, 485 percent compared to the period prior to the purchase,” said the state secretary.
Stevanovic added that revenue of the steel plant is estimated to account for 0.8 percent of Serbia’s GDP.
“These numbers can in the best possible way illustrate what HBIS means for Smederevo, whole Serbia and its government,” he said.
In addition to keeping its promise to save existing jobs, Hesteel Serbia creates 200 new vacancies every year, while investing large sums in technical upgrades and facility improvements.
Avramovic believes that the Chinese company will also bring new technology which can further develop the city’s historical steel industry.
“More importantly, you can see big smiles on people’s faces, as they are more certain about their future,” said the mayor.


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