December 16 (SeeNews) - Chinese steel producer Hesteel expects Serbian steel mill Zelezara Smederevo to book a $20 million (19.1 million euro) profit in 2017, the Serbian government said, quoting the company's president Yu Yong.
Zelezara Smederevo will generate a net profit in December and the total value of its production next year will reach $800 million, the government said in a statement on Thursday following a visit by prime minister Aleksandar Vucic to the steel mill.
Hesteel plans to produce 2 million tonnes of steel in Smederevo in 2017, which will raise Serbia's GDP by 1%, Vucic said.
Earlier this week, Serbia's economy ministry said that Hesteel plans to invest $120 million in innovations and purchase of equipment for Zelezara Smederevo in 2017.
Hesteel officially took over the management and ownership of Zelezara Smederevo in July. In April, Serbia's government signed an agreement for the sale of Zelezara Smederevo to Hesteel for a total of 46 million euro.
Back then, Vucic said that Hesteel plans to invest at least $300 million in the steel mill and to keep its entire workforce of 5,000 employees.
The steel mill is equipped with two blast furnaces and three basic oxygen converters capable of producing 2.2 million tonnes of crude steel annually, but it has been operating well below capacity recently.
($ = 0.9571 euro)