Zorka-Obojeni metali looking for a strategic partner, Britons/Indians not interested

At the end of 2003, the news that the Government of Serbia decided to postpone the tax liabilities of Zorka-Obojeni metali for as long as the lease agreement with the English company Binani, i.e. its Indian branch Indo zinc smelters is in force, was received with a sigh of relief in Zorka. At that time the wider scope of engagement in the production process was expected on the part of the infrastructural companies Zorka Transport and Zorka Energetika, as well as Zorka Ekstrudirana ambalaza with its tinfoils.

Sixteen months later only a part of the optimistic forcasts was fulfilled. The Zinc company (Cinkara), as it is popularly called, works from time to time but even besides its irregular functioning, the workers get the average pay of 20.000 dinars. Indo zinc smelters invested significant means in repairing the plant, but there are still lots of problems because the equipment is extremely old. However, the Zinc company accomplishes extraordinary results in using the zinc concentrate.

Obviously, the lease was an interim solution, and the exit lies in privatization, where the partner would have to invest immediately $10m in the factory, estimated at $8.5m. Before that the debt of $48m, mostly commercial, ought to be dealt with as well as the mortgage that Balkan steel put on the property of the factory. It can be expected that the Republic signes off one fifth of the total debt, the liability of public companies.

The lease contract was signed on the 3 years' period, with the possibility to cancel it after 18 months if mutual agreement is reached. (review)