Serbia will ask Danieli SpA (DAN), Italy’s biggest steel-mill engineering company, to keep a planned 500 million-euro ($624 million) investment in the country, even after it opted for iron mills in neighboring Croatia.
Danieli has “postponed until further notice” the plan to set up a steel plant in Sabac, western Serbia, after buying CMC Sisak d.o.o., a unit of U.S. Commercial Metals Co. (CMC:US), in Sisak, eastern Croatia, said Boris Tadic, Serbia’s former president, who aspires to become the new prime minister.
“We will fight for them, but this is not a good signal,” Tadic told reporters in Belgrade today, after meeting with President Tomislav Nikolic on efforts to gather a ruling coalition. He said he’d urge Danieli officials to resume the Serbian investment.
Political uncertainty in Serbia where parties have been unable to form a government a month after May 6 elections, was a factor in the Danieli decision, Tadic said.
Buttrio, Italy-based Danieli signed a memorandum of understanding with Serbia on March 29 on developing the plant in Sabac that would produce some 750,000 tons a year and whose clients might include Fiat SpA (F)’s car factory in Kragujevac, central Serbia.
Danieli spokesman Paolo Messina declined to comment when contacted by Bloomberg.
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