U.S. Private Investment in Serbia and Montenegro
Private Sector investment is another important component of the partnership
between the United States and Serbia and Montenegro. The United States is
the largest source of foreign direct investment (FDI) in Serbia, with total
committed investments of over $1 billion.
Through the active promotion of U.S. investment in Serbia and Montenegro,
through our Foreign Commercial Service and the promotion of Serbia as a great
place to invest, the number of large investors continues to grow. U.S. investment
in Serbia and Montenegro strengthens the economy, while preserving and even
creating jobs. Such investments also increase bilateral trade, creating new
opportunities for both U.S. exporters and local businesses.
In 2002, the U.S. ranked as the fifth largest source of foreign direct investment,
but gained the top spot in 2003 due to the completion of more large investments.
In August 2003, The Philip Morris Corporation purchased
the Nis Tobacco Factory (DIN) through the privatization process, so far investing
EUR 580 million,
becoming the single largest foreign investor in Serbia. Earlier in 2003,
U.S. Steel announced its acquisition of Serbia’s steel
producer, SARTID; total investment will exceed $250 million. In February
2003, Galaxy
Tire purchased Ruma Guma, a specialty tire producer, through privatization.
The Colorado-based Ball Corporation made the largest
green-field investment in Serbia to date with $75 million in the recently
completed construction
of a factory for the production of metal cans.
In 2005 American companies continued to
invest in Serbia. In February, The Coca Cola Company purchased bottled
water producer Vlasinka, for
EUR 21.5
million, and Dyncorp International has won a USD 60.6 million tender
to build a cargo terminal and set up a joint venture with Belgrade Airport
following
a USTDA feasibility study.
We are active engaging with Serbian Diaspora
groups in the United States to explore ways to build greater connections
between Americans of Serbian
and Montenegrin origin and their ancestral homeland. We hope to identify
certain activities that will foster Diaspora contributions to the USG policy
goals of economic development for Serbia and Montenegro.
Details
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On April 1, 2003 USS acquired Serbia’s only steel producer SARTID
and six subsidiaries. USS has already invested $125 million and is
committed
to investing an additional $100+ million in the facility. Through
these investments, U.S. Steel has increased production by 140% and
increased exports by 250% to 420
million dollars for 2004, while preserving the jobs of
9,000 Serbian workers. Due to the company's tremendous success, it
is now
preparing
to bring
a second blast furnace on-line, further increasing production.
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- The Philip Morris Corporation
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In August 2003, The Philip Morris Corporation purchased the Nis Tobacco
Factory (DIN) through the privatization process. Phillip Morris' total
investment of EUR 580 million makes it the single largest foreign investor
in Serbia. Of that 580 million, 40.9 million EUR represents a reinvestment
in their operations and more than 2 million EUR of contributions to the
development of the community of Niš in the first year after acquisition.
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In January 2003, the Massachusetts-based Galaxy Tire acquired Serbian
tire producer Ruma Guma located in Ruma in the northern province
of Vojvodina, through a privatization tender. Galaxy has further committed
itself to
a $5.1 million investment program to improve the competitiveness
of its facilities. Additionally, Galaxy will provide $2.2 million
for a program of social support to workers and the community. The
company produces primarily specialty tires for agricultural and commercial
vehicles.
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The Illinois-based privately-held company invested in an agro-processing
venture in late 2002. The first phase of investment was $15 million and
is expected to increase to $40 million. The facility engages in the drying/freezing/crushing
of fruits to develop extracts and flavors for biotech uses. It is preparing
the majority of its products for export.
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Colorado-based Ball Corporation has made the largest green-field investment
in Serbia to date, with construction of a new factory for the production
of aluminum beverage cans. Total investment will be $75 million. The
facility would export more than half of its production to support Ball
customers in other markets within the region.
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In February 2005 Coca-Cola Co. and Greek Coca-Cola Hellenic Bottling
Co. (CCHBC) have joined forces to acquire 100% of water bottler Vlasinka
from Serbian furniture maker Simpo. Coca-Cola paid EUR 21.5 million for
Vlasinka’s capital. Estimated value of the entire transaction, which
also includes investment for development projects, is expected to be
around EUR 100 million.
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