Gornji Milanovac, Sept 25, 2003 - Serbian Prime Minister Zoran Zivkovic said in Gornji Milanovac on Thursday that 2004 will be a landmark year with Serbia set to introduce value added tax (VAT) in a bid to find the most efficient way to tackle the gray economy.

During a meeting with local businessmen from Gornji Milanovac, Zivkovic said that passing a VAT law was a big challenge for the government, adding that the law should take effect early next year.

Zivkovic said he is pleased with this year's export growth rate, but added that the state plans to offer subsidies to stimulate exports as part of attempts to improve the export-import ratio.

The Prime Minister went on to say that a 3.6 percent year-on-year drop in Serbia's industrial production in the first eight months of the year came as a result of reduced operation of loss-making companies.

Serbian Minister of Economy and Privatisation Aleksandar Vlahovic and Development Fund Director Olivera Bozic also attended the meeting.

As part of the visit, Zivkovic opened a new business centre of Gornji Milanovac-based cooking utensils maker Metalac, build under an investment of €3 million. The facility, spanning some 4,000 square metres, is the first business centre in Serbia to introduce Baan ERP business application software.

Congratulating Metalac management on successful governance, the Prime Minister said that the new centre proves that Serbia is on the right track.

Metalac is a good example of a company which used its own muscle to become competitive in the world markets, said Metalac General Manager Dragoljub Vukadinovic and added that the company's successful operation will contribute to reviving Serbia's economy.

Over the past ten year, Metalac has set aside some €25 million to build a new plant, launch new production lines, upgrade technology and train employees, investing some €10 million of the sum to raise production in the past 18 month.

The company, employing some 1,200 workers, has recently acquired a 65 percent stake in the local retail chain Proleter, taking over all of Proleter's 62 outlets and 260 employees.

As part of a strategy to boost exports, Metalac also opened a €1.5 million inox cookware production line on Thursday.

Wrapping up his visit to Gornji Milanovac, Zivkovic toured the Zvezda Helios paint and varnish producer.

The company, whose capital currently stands at some €7 million, exports 25 percent of its output. It expects to raise production ten percent by the end of the year.