February 22 (SeeNews) - Chinese steel producer Hesteel said it plans to diversify the output of Serbian steel mill Zelezara Smederevo in response to customer demand.
The company will focus on manufacturing high-quality products with added value, such as sheet metal and cold-rolled steel, satisfying industrial demand in Serbia and the region, Hesteel said in a statement on Wednesday.
Zelezara Smederevo has an annual production capacity of 2.2 million tonnes of steel, which is equal to 1% of demand in the EU, but Hesteel sees the potential of the market in Serbia and Southeastern Europe (SEE) as its main development chance, the Chinese group said.
Hesteel plans to invest $120 million (114 million euro) in improving the functionality of Zelezara Smederevo's equipment and optimising its costs in 2017, but has decided not to include the launch of a hot zinc spraying production line in the programme for this year.
The European Commission launched in February 2016 a probe into whether Chinese-made hot-rolled flat steel is being sold at prices below their normal value, a practice known as “dumping”, on the European market. The probe includes the production of Zelezara Smederevo.
In January 2017, the delegation of the European Union to Serbia said the introduction of anti-dumping duties by the EU on steel products originating in China will not affect the exports of the Serbian steel mill.
Hesteel officially took over the management and ownership of Zelezara Smederevo in July. In April, Serbia's government agreed to sell the steel mill to Hesteel, after the Chinese investor submitted a binding offer to buy all 98 property units of Zelezara Smederevo for a total of 46 million euro.
($ = 0.9524 euro)