HIP Petrohemija savings €13 million

Belgrade, Feb. 19, 2010 (Source: serbiangov.rs) – Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic said today that four months after the beginning of production, the savings of the petrochemical complex HIP Petrohemija stand at €13 million. The restructuring of the company has produced good results owing to favourable agreements with suppliers and the reduction of expenditure, said Dinkic.

Dinkic said that he is satisfied with today’s talks with Petrohemija executives and the factory trade unions and is pleased to see the results achieved since the completion of restructuring and the beginning of production. Major savings have been made compared to the previous period. Petrohemija should focus on increasing savings, improving energy efficiency and starting a new investment cycle, said Dinkic. We have decided to obtain a loan for new investments from the European Investment Bank as soon as possible. It is estimated that €70 million needs to be invested in the upcoming years, for since the 1980s no investments were made in the company, Dinkic said. He said that Petrohemija is potentially the most profitable state-owned company and that €200 million profits are expected this year. The factory can very soon make €300 million from exports, with previous financing. Dinkic said that new investments will satisfy the ecological aspect as well and that modernization of technology will make Petrohemija a factory that fulfils all EU ecological standards and citizens of Pancevo will no longer have to be fearful of pollution.

Government ready to support large investors

Kragujevac, Feb. 18, 2010 (Serbia Today, srbija.gov.rs) – Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic together with a delegation of the International Monetary Fund (IMF) today visited car manufacturer Fiat Automobili Srbija (FAS) in Kragujevac.

After meeting with company’s management that presented the results of work on launching the new car model, Dinkic pointed out to the importance of this company reaching the figure of €1.5 billion from annual export. He said that the meeting with IMF representatives addressed ways to improve competitiveness of Serbian exports and the economy and noted that the project implemented in Kragujevac is one of those ways. Dinkic confirmed that the Serbian government is ready to support large investors. He added that it is good that IMF representatives could see that Serbia has export potentials for companies such as Fiat. He expressed satisfaction over the fact that the Kragujevac factory has continuously recorded positive progress. Dinkic announced that the company’s CEO Giovanni de Filippis informed him that orders for reconstruction works in the factory start this week and their value will amount to approximately €150 million. We have seen new investment in the area of lacquering unit, new uniforms are arriving, a thousand people were admitted to FAS, and they can now earn their living by themselves and not live from government subsidies, said Dinkic.

According to Dinkic the Serbian government in cooperation with Fiat plans to organise a summit of suppliers from Italy, South Korea, Japan and Slovenia in spring, with the idea of presenting Serbia as the most suitable locations in Europe for investment in car industry. Dinkic, together with Governor of the National Bank of Serbia Radovan Jelasic and the IMF delegation, will also visit the winery Radovanovic in the village of Krnjevo later today.

A very “thin” minimum wage envelope in Serbia

Belgrade, Feb. 15 2010 (Serbia Today) – According to the last info released to media a minimum monthly wage in Serbia was in the second half of 2009 RSD 15.138 (155 Euros or 206 US dollars). When Labor Unions asked Government last year that this amount be raised for 3.5% to meet the growth of the living costs, the request was denied.
Recent proposal by the Labor unions in regard to the adjustment of minimum wages for 2010 is still not addressed by the government and it is expected that this question be resolved at the next session of the Social economy Committee. The prospects of the raising minimum wages are very small taking in the account the situation in the Serbian industrial sector. Last year industrial production went down 12.5%, the number of employees went down 5.1% and the average wages went down 8.6%.
According to economy experts in Serbia, bad economy policies and large public spending caused this situation in Serbia. If government raises minimum wage based only on the growth of the living costs, and not based on the realistic revenues from the business sector this will cause further problems for the Serbian economy.
Similar situation is in other countries of the former Yugoslavia with the exception of Slovenia. The minimum monthly wage there was recently raised for 22% ant it is now at 562 Euros ( $765).

EU strategy for Danube region

Belgrade, Feb. 12, 2010 (Serbia Today) – Deputy Prime Minister for EU integration Bozidar Djelic held the fifth meeting of the government’s working group for cooperation with the EU in the Danube region on Wednesday, of which he is president. The meeting was also attended by representatives of 27 municipalities and cities which are located on the banks of the Danube River.

Key priorities of local government were discussed at the meeting. Projects for utilizing the development potential of the Danube will be designed based on these priorities. Djelic presented the underlying principles of Serbia’s national platform for participating in the comprehensive EU Strategy for the Danube Region. The platform will soon be posted on the Serbian government website and citizens will be able to post comments, proposals and state their opinions. It was agreed at the meeting that a larger-scale gathering should be held in early April to include representatives from all towns and municipalities in the Danube region, at which local government projects will also be presented.

NBS sells EUR 10mn in order to enable normal functioning of the foreign exchange market

Belgrade, Feb.11, 2010 (Serbia Today) - National Bank of Serbia (NBS) sold EUR 10mn on the interbank foreign exchange market on Monday, Serbian News Agency Tanjug reports. The decision came in order to encourage trading and enable normal functioning of the foreign exchange market, the central bank said in a statement.The indicative euro exchange rate on Monday, determined by the morning trading on the interbank foreign exchange market, was RSD 98.6946 for one euro, said NBS. Including today's intervention, the central bank has sold a total of EUR 351.5mn since the beginning of the year, in order to alleviate excessive oscillations in the dinar exchange rate and enable normal functioning of the foreign exchange market. On Monday, the dinar continued its three-day recovery trend against the euro, as it went up by three paras (1 dinar=100 paras) or 0.03 percent, making the official middle exchange rate RSD 98.6519.

Program for starting up production in underdeveloped communities ready soon

Belgrade, Feb. 10, 2010 (Serbia Today) – Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic said today that a program for starting up production in underdeveloped communities should be prepared by the end of February and that more than €100 million will be set aside for that purpose.

At a meeting between the Business Council and Serbian businessmen, Dinkic called on companies which have secure export markets and that can sell their goods to take part in this program and assist in the development of underdeveloped areas. The Deputy Prime Minister explained that the program provides long-term loans through the Development Fund and that it also includes two sub-program. The first sub-program is intended for companies from active industries which would obtain loans from the Development Fund. The loans would be favorable in the sense that 50% of funds from the loan should be covered by a mortgage. The second sub-program is intended for very poor municipalities like Kursumlija, Merosina and others. A mortgage will not be needed for loans, but only collateral for equipment that will be purchased with the loan, the Minister said. Dinkic explained that any bigger domestic or foreign renowned company can apply for the program, as well as those wanting to build more capacity. He underlined that this is not privatization, but starting up production in underdeveloped municipalities and creating jobs. The Deputy Prime Minister said that lower exports and poor domestic demand are problems that are still present in Serbia’s economy. Last year exports dropped by over 20% in relation to 2008, while imports dropped by 28%. However, he said that exports of semi-finished goods and raw materials increased by 10% and of durable consumer goods by almost 9% in relation to 2008. Dinkic said that a hard year is behind us and that according to economic indicators, Serbia will already get out of recession by the first quarter of the year. He voiced hope that economic growth this year will be bigger than 1.5%. he Minister stressed that Serbia’s public debt stands at 32% of GDP, which is still much lower than the EU’s average public debt of around 73% of GDP. Except for the loans for several infrastructure projects and factories of strategic interest for Serbia, the state should not get into any further debt, he said. The state will take loans for the real sector and its large exporting companies, the first of them being the mining and smelting complex RTB Bor, to which the state has already issued a guarantee for a €135 million loan. These funds are to be invested in a new smelting facility and a sulphuric acid factory, the Minister explained. Dinkic added that the second company is the petrochemical producer Petrohemija, announcing that talks will be held with the European Investment Bank regarding a loan to help increase the company’s competitiveness and energy efficiency. The Deputy Prime Minister noted that a program for purchasing Serbian buses with state subsidies will be initiated this week.Dinkic said that the program for purchasing Ikarbus and Neobus buses envisages allocating over RSD 1 billion from the state budget for the purpose of public transport in Serbian cities, as well as the private sector. He stressed that both companies and private individuals will be allowed to purchase the buses with a 20% discount for those with a Euro 4 diesel engine and 30% for LPG powered buses. The program will help to produce and sell over 200 buses made in Serbia in 2010, Dinkic noted.

IMF mission in Belgrade on Monday

Belgrade, Feb. 09, 2010 (Source: Beta, Tanjug) – The International Monetary Fund (IMF) mission arrived on Monday to continue talks regarding the third revision of its credit arrangement with Serbia. The IMF delegation will hold talks with various technical experts of the government and National Bank of Serbia. The IMF has warned Serbia that is not honoring the decision for freezing wages and pensions and the plans for the rationalization of the administration. The international financial institution stated that the government adopted EUR 120mn more than was agreed for wages in the administration, while the implementation of the plan for cutting the number of employees in the public administration is running late. A member of the Serbian Prime Minister’s economic team, Dejan Šoškić, said that he expects the IMF to have understanding for the tardiness in letting people go from the administration.
“Some things need to be implemented in accordance with realistic possibilities. In other words, it is not realistic to expect to finish all this in one or two months,” he said. “Sometimes the procedural questions are such that they are impossible to solve in a short period of time, so I believe that it is important whether we are working in accordance with the chosen orientation, and whether there are some objective circumstances for the tardiness,” Šoškić said.

Laws on Privatization Agency, free shares amended

Belgrade, Feb. 08, 2010 (Serbia Today ) – The Ministry of Economy and Regional Development announced that the government approved amendments today to the Law on the Privatization Agency and the Law on free shares, which will allow citizens to receive shares of state enterprises before they are privatized.

The statement specifies that citizens will receive free shares of Telekom and Airport Nikola Tesla this year, as well as shares of oil company Naftna Industrija Srbije (EPS) in 2011.

These amendments introduce the formation of the Share Fund, which will not have management bodies or employees, with its portfolio of shares being managed by the Privatization Agency.

Amendments to the Law on the Privatization Agency envisage the merging of the Share Fund with the Privatization Agency, which will contribute to a rationalization in the number of employees and reduce costs.The process of free distribution of shares commenced on January 6, 2010, when citizens received free shares of NIS.

NIS should become an open joint stock company by June 30, 2010, after which citizens will be able to trade company shares on the stock market.

Serbian foreign debt reaches USD 33.26bn

Belgrade, Feb. 06, 2010, (Source: B 92) - Serbia's foreign debt reached USD 33.26bn at the end of November 2009 – 2.7 percent up compared to a month earlier. The figure also means there was a 8.3 percent increase compared to the end of 2008, Head of the Market Research Institute (IZIT) Miloje Kanjevac said on Wednesday. Serbia's foreign debt has increased 3.2 times since the end of 2000, when it totaled USD 10.83bn, Kanjevac told a press conference. For most of the last decade, the private sector incurred more debt, increasing it from 2.03bn in 2000 to 23bn, but the state took over the lead at the end of 2008. Private sector debt made up 18.8 percent of the total debt in 2000 and 70.7 percent in 2008. Private sector debt dropped to 69.2 percent of the total debt in November 2009, while state debt totaled 30.8 percent. The total public sector debt rose from USD 8.8bn in 2000 to USD 10.26bn in November 2009, and was up 14 percent compared to the end of 2008. Kanjevac said that the state increased its indebtedness under the pressure of the economic crisis. He assessed that the foreign debt will continue to grow, mostly because of the effects of the public debt.

Jovan Krkobabic: “Public sector salaries and pensions should not be increased in 2010”

Belgrade, Feb. 05, 2010 (Serbia Today) – Deputy PM Jovan Krkobabić said on Tuesday that the public sector salaries and pensions should not be increased in 2010, according to report by Serbian News Agency Tanjug.
Such a move would create the necessary conditions for their growth in 2011, he said, but added that pensions will have to be increased if the freeze on the public sector salaries were to be lifted. "The Serbian government decided to freeze the pensions and public sector salaries in 2010 when it adopted the budget for that year, and it is my strong view that the country's economy should be stabilized by the end of the year by investing all resources, both those domestic and foreign ones, like those coming from international financial institutions and business banks, to speed up the economic development and stabilize the economy," Krkobabić said. Krkobabić stressed that if salaries get raised in September in accordance with the announcements made by Minister of Economy Mlađan Dinkić, then the Party of United Pensioners of Serbia (PUPS), led by Krkobabić, will demand that the freeze on pensions be lifted as well. "Regardless of the agreement to freeze the salaries in 2009 as well, they went up by 7.1 percent, while the pensions stayed the same. If that were to happen again in 2010, then the PUPS would demand categorically that the pensions be raised by approximately the same percentage," Krkobabić noted. "We will not come out of the crisis if we do not stick to what the basic economic logic says, and that is to ensure a gradual recovery and growth of the economy before thinking about increasing salaries and pensions," Krkobabić concluded.

Serbian Railways reveal debt figure

Belgrade. Feb. 04, 2010 (Source: Tanjug) - Serbian Railways (ŽS) General Director Milovan Marković said on Monday that the pubic company had a debt of about RSD 2bn (EUR 20.3mn). Marković told Serbian Press Agency Tanjug that the direct debt refers to what the company owes for regular maintenance and repair. The debt was RSD 4.5bn at the beginning of 2009, which means that it has gone down by RSD 2.5bn , Marković stated. The RSD 100bn debt mentioned recently in the public represents the accounting loss, which is not a direct debt, Marković explained. "The figure circulating in some media is the accounting loss accumulated over years and decades, which is a whole different category," Marković added. "The accounting loss is a business category that does not paralyze us the way debts do," Marković noted, adding that the company paid some debts to EPS, NIS and Dunav Osiguranje (Dunav Insuranca) in 2009. Marković remarked that the accounting loss was actually the money not invested in Serbian Railways, adding that the company's total assets are at around RSD 3.5bn according to some estimates.

EU starts implementing Interim Trade Agreement

Belgrade, Feb. 03, 2010, (Source: Beta, Tanjug) - The Interim Trade Agreement (ITA) between the EU and Serbia will officially come into force on Feb. 1. This was announced in Belgrade last week by chief of the EU Delegation in Serbia Vincent Degert. He told the press in Belgrade that the economic significance of a full implementation of the Interim Agreement is that Serbia will be more attractive for foreign investors, whereas its political importance lies in the fact that monitoring the progress will be relevant when the European Commission decides to consider Serbia's candidacy for EU membership.
"The implementing of the Interim Agreement paves Serbia's way to EU accession," Degert stressed. He added that the EU Committee and the Serbian government should have the first meeting for monitoring the implementation of the agreement between March 10 and 15.
According to Degert, the application of the Interim Agreement will contribute to the predictability of business operation conditions, companies' competitiveness, and the equalizing of conditions for all market participants. On Dec. 7, the EU unfroze the application of the Interim Trade Agreement with Serbia, which envisages gradual trade liberalization in the period of six years. The trade deal is a part of the Stabilization and Association Agreement (SAA), which remains suspended. Serbia has been unilaterally implementing ITA since early 2009.

FlyNiki Airline will start flights to Belgrade

Belgrade, Feb. 01, 2010, (Serbia Today) - According to Belgrade daily “Vecernje Novosti” FlyNiki Airlines owned by famed Niki Lauda will start flying today on the route Belgrade – Vienna.
FlyNiki is the first low-cost airlines that received a license from the Serbian Government Agency of Civil Air Travel since the state parliament ratified the open air agreement. Asked what to expect from the Belgrade-Vienna route, Lauda said that in the first year, he hopes to break even. For about a year, we fly to new destinations without any income, but after that, the Belgrade line is expected to become profitable. Online reservations started several weeks ago and are going well,” Lauda said. He added that passengers from Serbia’s capital will be able to fly through Vienna with Niki to Zurich, Berlin, Hamburg, Hanover, Dusseldorf and Munich, as well as many other locations.
Lauda told daily Večernje novosti that his company has always made money, but that 2009 was the best year for the company thus far. The company's business achievements in 2009 will be made public in several weeks. FlyNiki was founded in 2003. Lauda owns 76 percent of the company, the rest is owned by Air Berlin. The company has a fleet of 12 planes and expects to have 17 by the end of 2010. The company will fly between Belgrade and Vienna six times a week. The promotional price of tickets is EUR 29 in one direction, including taxes, but the price increases as the date of the flight nears, so it is better to make reservations as early as possible. Passengers will also be served food and beverages and will not have to pay for luggage less than 20 kilograms in weight, which is something that most low-cost airlines do not offer.

Oil transportation contract signed by Jadranski Naftovod and Petroleum Industry of Serbia

Belgrade, Jan. 29, 2010 (Serbia Today) - Stock company Jadranski Naftovod – JANAF (Adriatic Pipeline) informed the Zagreb Stock Exchange that it had signed the contract with the Petroleum Industry of Serbia (NIS) on transportation of oil in 2010 - regional economic portal Seebiz.eu announced and added that the value of the contract had not been revealed yet. Shortly after that news was announced, the value of the stocks of JANAF grew by 0.8%.

JANAF announced at the end of the last year that it wanted to raise the degree of exploitation of the existing gas pipeline and ensure the new markets, as well as that it would invest 2.9 billion HRK (about 560m USD) in the enlargement of storage capacities.

“The contract with NIS and two-direction transportation will contribute to realization of these plans to a great extent “said the people from JANAF.
JANAF is a stock company with the headquarters in Zagreb whose stocks are in the possession of Croatian Pension Insurance Institute (37%), HANDA (26%), INA (12%), Republic of Croatia (10%), Croatian Electric Power Company (5%), the Government Agency for Rehabilitation of Banks (4%), while the remaining stocks are owned by minor stockholders.

Feasibility of intermodal terminal in Free Zone Pirot to be studied

Belgrade, Jan. 26, 2010 (Serbia Today) - The Italian company “Logik” will study the feasibility of an intermodal transportation-logistics terminal to be located in the Free Zone Pirot. The contract for the study was signed by the CEO of Free Zone Pirot, Dragan Kostić; by the Mayor of Pirot, Vladan Vasić; and by a representative of “Logik,” Zeno de Agostino. The EUR 170,000 cost of the study will be financed mainly by European funds.

Free Zone Pirot is located alongside Corridor 10 in the vicinity of Corridor 8 and Corridor 4. If built, the 10ha complex within the Free Zone would consist of a container terminal, many warehouses and a terminal for reloading of goods from freight cars to trucks and other transportation, said Kostić. Agostino said his company was experienced in both the documentation and the construction of such centers. Vasić added that the project would position Pirot as the first transportation-logistics center in Serbia. “It would also improve the position of Pirot and the reputation it enjoys with investors who would have another big motive to come and invest in this town.”

Closing of Money Exchange stores

Belgrade, Jan.25, 2010 (Serbia Today) - The National Bank of Serbia(NBS) announced on January 21, that by April 1st all the money exchange stores should be closed. Those operations and transactions will be fully transferred to commercial banks.
In mid-2006, when started running process of gradual withdrawal from the exchange operations, the participation of central banks in these operations was 80%, and banks involvement was 20%.
For the past three years the NBS has successively passed several measures that were aimed at banks and authorized dealers. Thanks to that, the reduced participation of the NBS in the performance of exchange operations resulted without negative effects on the Exchange and the total foreign exchange market, where Exchange operations still recorded a growing trend.
In January last year, the participation of the NBS in Exchange business was 19.3%. This percentage was reduced to 1.57% in October of the same year.
The National Bank of Serbia has enabled the conditions to discontinue the work of the authorized exchange offices, as a planned program of monetary policy for 2010. Date of termination is precisely April 1, 2010.