Serbia’s foreign cement makers looking forward to better times

BELGRADE – Serbia’s three foreign cement plant owners said yesterday that sales and output shrank by 15 percent in 2003 as much-needed reconstruction in the country was held up by political emergency, a hard winter and bureaucracy. But France’s Lafarge, Switzerland’s Holcim and Greece’s Titan Cement said that building projects would eventually come to fruition – though not as quickly as 2004 – after a decade of isolation and neglect during Slobodan Milosevic’s rule. They added that the country’s efforts to join the European Union would also mean big investment in infrastructures which would benefit the firms. Majority stakes in Serbia’s three cement plants were sold to Lafarge, Holcim and Titan via an international tender in late 2001 in the first major sell-off of the post-Milosevic era. But the assassination of Prime Minister Zoran Djindjic in March this year and the ensuing state of emergency, hard on the heels of a grim winter, meant barely any new projects until May. George Bobvos, the CEO of the Beocin plant Lafarge-BFC, said 2002, when they took over, was a «great, great year» but that 2003 was below plan. He saw chances of only «slight growth» in 2004. «In the long run there will be nice business here for our industry,» he told Reuters. «This year we have a big drop in the market… the market is some 10 to 15 percent down on last year.» Lafarge-BFC had planned to increase production to 1.2 million tons in 2003 from 1.1 million tons in 2002, which included 100,000 tons sold in neighboring Bosnia. Instead, its 2003 output is likely to be just 900,000 for Serbia alone, Bobvos said. Holcim expects 2003 output in Serbia of 650,000 tons, down from 826,000 in 2002. Its 2004 production will remain at this year’s level. «We do not expect any boom next year,» said general manager Darko Krizan. George Kyrtatos, head of the board of directors of Titan cement’s Kosjeric plant, the smallest of the three, said they also felt the pinch and estimated 2003 output at 450,000 tons, below a planned 500,000. Its 2002 output was 475,000 tons. Investments on track Kyrtatos said bureaucracy was a problem. A change in legislation in April had slowed things down because permit requests had to be refiled. But he was hopeful that the administration would ultimately streamline the process; currently 14 to 15 documents are needed in order to get one single permit. Despite the problems, all three cement makers said their investment pledges, made under privatization pacts, stayed on track and in some cases they increased their investment targets. Instead of 36 million euros pledged over five years, Lafarge would invest 50 million euros by April or May 2004, Bobvos said. Titan will invest some 15 million euros in Kosjeric by the spring of 2004 and will spend another 10 million by mid-2005. Holcim invested some 25 million euros in the plant in the first two years and would complete the pledged 85-million-euro investment over the five years, Krizan said. The new owners managed to resolve the problem of surplus labor by offering workers attractive redundancy packages. Lafarge cut the work force to 950 from 1,010, Kosjeric to 400 from 650 and Novi Popovac slashed the number to 850 from 2,350.