Belgrade, Sept 2, 2003 - Serbian Privatisation Agency Director Mirko Cvetkovic and Phillip Morris regional President for Central Europe Jean Claude Kunz signed a €518 million strategic partnership agreement between Serbian tobacco company Duvanska Industrija Nis (DIN) and Philip Morris, in what marked one of the most successful tobacco industry privatisation deals in South Eastern Europe.
Serbian Prime Minister Zoran Zivkovic, Minister of Economy and Privatisation Aleksandar Vlahovic, Minister of Finance and Economy Bozidar Djelic, US Ambassador to Belgrade William Montgomery and DIN Director Slavoljub Dragicevic also attended the agreement signing ceremony.
The arrival of Philip Morris confirms that the Serbian market is interesting to the world's major companies in terms of its size, the safety of investment and profit, Zivkovic told the press following the ceremony and added that the sell-off agreement will send a strong signal to other investors.
The privatisation will have a positive effect on DIN's workers, the local self-government, as well as tobacco growers, said Vlahovic, noting that Philip Morris plans to double tobacco purchases. The move, Vlahovic went on to say, will also give a strong boost to Serbia's economy and its image abroad, making it the regional centre for cigarette production and distribution.
The revenues to be raised from the sale of DIN will be used for repairing infrastructure, increasing exports and boosting Serbia's competitiveness, said Djelic.
According to Kunz, Serbia has a dynamic and growing economy that holds tremendous future promise. "Our confidence in Serbia's long-term growth and economic reforms is the main reason for our investment," he said.
Kunz went on to say that Philip Morris is impressed with the speed of the Serbian government's economic reforms. "In particular, the efficient privatisation process and the development of a regulated industry environment through the tobacco and excise laws have allowed this transaction to come to a fruitful conclusion," said Kunz.
Under the sell-off agreement, the world's largest cigarette maker Philip Morris pledged €387 million for a 66.45 percent stake in DIN, €64.9 million in investments over the next five years and a social welfare programme of €59.1 million. The buyer also offered an accompanying social welfare programme of €7.07 million, including health protection measures, additional training, as well as contributions for the local community in Nis.
