A steel mill in the Serbian city Smederevo has turned a profit, ending a seven year loss, after being taken over by China's Hesteel Group last year, according to the Chinese iron and steel manufacturing conglomerate.

The steel mill, which started operations in 1913, was a State-owned Serbian enterprise, but fierce international competition and poor management was leading it to closure, until it changed to Hesteel Serbia after a 46-million-euro ($49 million) purchase by the Hebei-based conglomerate in April 2016.

By the end of December Hesteel Serbia was turning a profit, after November earnings before taxes and interest, ending the mill's consecutive seven year loss, Hesteel told Xinhua.

Since the take-over, the Chinese steel giant has engaged managerial and technical personnel to help the 5,000-employee Smederevo mill tackle problems in management, equipment, technology and craft.

Yu Yong, chairman of Hesteel Group, said that it had taken only half a year for Hesteel Serbia to turn a profit, an illustration of the advantages that China has in iron and steel.

The steel mill in Smederevo is expected to produce 2 million metric tons of steel in 2017, according to the Chinese group.

Yu said Hesteel would invest $120 million in the steel factory in 2017, as it did in 2016, for new equipment and technology, adding that it was expected to generate revenue of $800 million and profit of $20 million.

Hesteel Group, he said, would further strive to tap into the potential of the century-old Serbian steel mill, making Hesteel Serbia a competitive company in both Europe and globally as well as an exemplary model of China-Serbia cooperation.

The group had earlier announced that it would continue to respect local customs and cultural traditions, and follow a local-centered principle to bring in advanced technological and managerial expertise for rapid growth of Hesteel Serbia.

Source: China Daily