The agreement was signed by a representative of Gorenje management,

Branko Apat, Serbian Deputy Prime Minister Verica Kalanović, Valjevo Mayor

Zoran Jakovljević and the president of the Stara Pazova borough Goran

Jović, the Serbian press agency Tanjug reported.

The production

facilities in Valjevo will be expanded by some 30,000 sq. metres and 400

new jobs will be created there by 2015. The project is worth some EUR 20m.

In line with a memorandum signed in February, Serbia will chip in EUR

5-7m

Kalanović said in her address that the move showed that Gorenje

was Serbia's $traditional partner and friend$ and represents

$our potential for economic development and job

creation$.

Apat said today's signing of the agreement was a big

step both for Gorenje and Vlajevo and Stara Pazova. He noted that this made

Serbia Gorenje's second biggest production location after

Slovenia.

Apart from the plants in Valjevo and Stara Pazova, Gorenje

also has a facility in Zaječar employing about 100 people. Gorenje employs

a total of 1,100 people in Serbia and has invested about EUR 70m in the

plants there in the last seven years.

The Velenje-based company has

told the STA that the expansion of production in Serbia is a part of the

company's strategy for the 2012-2015 period. It has chosen Serbia because

it encourages foreign investment and because Gorenje already has a network

of suppliers there.