The 1000th Company Privatized - Aims Achieved

Socially owned company Metal Trade from Sabac is the 1000th privatized company in Serbia, thus achieving one of the aims set by the Serbian Government after adoption of the Law on Privatization in 2001. The aim of Serbian privatization concept is change in economic structure and creation of strong and efficient private sector, which invests in production and modernization of companies, creates new job openings and raises the competitive edge of the economy.

The first tender privatization, and at the same time the first privatization transaction altogether in Serbia, was realized on January 30th 2002, when three cement plants acquired renowned world leaders in cement industry for strategic partners. The first auction buyer bought a company from Priboj - Autoservis. Since the adoption of the Law on Privatization in mid-2001, the budget proceeds from privatization have reached a sum of 1.3 billion Euros, agreed compulsory investments are worth 700 million Euros and investments in workers’ protection programs ca. 280 million Euros.

The implementation of the privatization model so far confirmed the principle of social justice, but at the same time managed to fulfill two more goals - to secure the highest level of investments and improve the quality of corporate management. The losses of privatized companies were cut by half, and the real effects of privatization on the volume and quality of industrial production will become noticeable in the year 2004.

The privatization proceeds were largely used for commencing the restructuring of large socially owned systems and workers’ protection programs in those companies, as well as for subsidizing their work capital thus enabling their successful privatization and competitiveness on the market.

Pursuant to the Law on Privatization, 10% of the proceeds was paid to the Republic fund for pension and disability insurance of employed individuals. Five percent of the proceeds go to the special fund for compensating the owners of the companies nationalized after the World War II. The means of employment of these funds will be regulated by law on denationalization. One part of the privatization proceeds is used for debt settlement in cases where the Republic of Serbia is guarantor or obligor. The amount of funds allocated for this purpose is set by Serbian Government, in accordance with the law. Finally, five percent of the privatization proceeds are used for reconstruction of road and railway infrastructure in the home regions of the privatized companies. Those funds are used for reconstruction of road and railway network, renovation of the heating system, waterworks and sewage system, as well as for development of other infrastructural installations. The implementation of this project is financed through special programs for economy development and environment protection, adopted by local governments. Smaller part of the privatization proceeds is placed through the Development Fund as favorable credits for small and medium enterprises.

The Ministry for Economy and Privatization and the Privatization Agency will celebrate the realization of its aims by a benefit auction. This auction will be in many ways different from all other auctions held so far in the privatization procedure; it will raise substantial funds for Citizens’ Association "Children First”, intended for orphan children. For the first time, the auction will gather the largest buyers in the privatization process so far, who responded to humanitarian appeal, and returned as buyers, but this time for a quite different occasion, thus showing not only their confidence in the privatization process and institutions, but also confirming themselves as long-term Serbian partners and friends.

Subjects of the sale will be "the symbols” of the privatization - auction gavel, whose thump signified 800 auction buyers at 96 auctions, the first published Company Prospect announcing the beginning of privatization in Serbia, the first published Public Invitation for tender sale of three cement plants, later to became the first concluded privatization transaction, the first Public Invitation for a Public Auction held on April 3rd 2002, and the Official Gazette containing the Law on Privatization, which started the whole process.

The Citizens’ Association "Children First” was founded at the initiative of Mr. Zoran Djindjic and Mrs. Ruzica Djindjic. The Ministry for Economy and Privatization and the Privatization Agency chose this foundation in token of gratitude to Mr. Zoran Djindjic, for all his support and faith.
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