Business News

Serbia Providing EUR 3M Subsidy for Gorenje's Plant in Zajecar

Belgrade, 30 May (STA) - Serbia will provide around EUR 3m in subsidies and an additional EUR 240,000 for training of workers to Slovenian household appliance maker Gorenje for its plant in Zajecar, whose construction was confirmed in a January agreement between Gorenje and the Serbian government.

Serbia will provide EUR 800 per employee for training and another EUR 10,000 in subsidies per employee for the plant expected to employ around 300 workers, according to Monday's Serbian daily Blic.

The paper says that with this move, Serbia wants to attract foreign investors, who generally do not perceive the country as an interesting market.

The Serbian Economy Ministry has assessed that the subsidies to Gorenje are not too high, adding that all countries in transition are offering major subsidy packages to foreign investors, says Blic.

According to Blic, Serbia is also to construct free of charge a gas pipeline for the plant, a railway link, an electrical sub-station and a water supply system, and will also construct linking roads. The investments in the pipeline and the sub-station alone will cost EUR 100,000.

The agreement on the construction of the EUR 2.9m plant which will assemble washing machines and driers bound for Serbia, Russia and other markets in the region was signed between Gorenje chairman Franjo Bobinac and Serbian Deputy PM Mladjan Dinkic on 27 January.

Dinkic said then that this was the first major foreign investment in eastern Serbia, adding that Gorenje was among the biggest investors in Serbia with around EUR 50m in investments.

The adaptation of a former porcelain plant for Gorenje's production is expected to be finished by the end of the year and around 100 workers are expected to be employed in the first phase. The agreement envisages that the plant will employ 300 workers by 2014.

The Velenje-based company already has two production sites in Serbia: a refrigeration appliance plant in Valjevo, and a water heater plant in Stara Pazova. Gorenje is also said to be planning relocation of its sink production from Slovenia to Zajecar.

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