ITS LOCATION at the heart of Europe is more than a tourism jingle - it is a competitive advantage that could turn Slovakia into an important distribution and logistics centre on the continent, say market researchers.
Although Slovakia has only 5.4 million inhabitants, its five neighbours - Ukraine, Poland, the Czech Republic, Austria and Hungary - are home to more than 113 million consumers. Slovakia thus combines a European Union business environment and proximity to the eastern markets of the Commonwealth of Independent States.
According to the Terno market research company, the number and the total area of logistics parks in Slovakia could rise by 50 percent before 2010, following a boom in 2004 and 2005. Further growth will be driven by the car industry and its cooperation with contractors.
The Slovak IPEC developer of entrepreneur Ivan Čarnogurský, along with Austrian firm UBM Realitatenentwicklung AG, is building one of the largest logistic centres in the country at 100,000 square metres.
"We expect the construction of logistics centres to increase by about 20 percent in Slovakia. Apart from local demand for logistics services and premises, the growth is also being driven by savings, such as on labour costs, which can be about 20 percent of what they would be in Slovakia's Western neighbours," IPEC's Ivica Forrová told The Slovak Spectator.
According to Forrová, the construction of logistic centres is linked to the growth of the country's freeway and highway network, and tends to occur near large distribution points such as cities. Forrová sees the eastern Slovak city of Košice becoming a potential logistic centre connected to the Hungarian highway network.
Although the British distribution firm Wincanton has been operating in Eastern Europe for a long time, Slovakia never greatly interested the company. However, Wincanton representatives recently announced at a press conference that the company wanted to develop its activities in Slovakia, establishing a Bratislava headquarters and in January opening new storage premises of 6,000 square metres near the village of Senec, about 20 kilometres northeast of Bratislava.
"Slovakia is a strategic area for Wincanton with regards to opportunities to expand further east, for example to Russia," said Wincanton Trans European CZ CEO Lukáš Rek.
Rek said that Slovakia is the geographic centre of the region, and the logistics complex in Senec plays a strategic role in meeting the needs of Slovakia, the Czech Republic, Hungary, and - maybe in two years time - northern Austria.
Terno analyst Ľubomír Drahovský said that at the end of 2005 there were 16 logistics parks in Slovakia with a storage area exceeding 3,000 square metres, each. Most are located Western Slovakia, near Senec, in the Záhorie region, as well as in the vicinity of Nitra. Logistics centres are also located between Prešov and Košice and near the Hungarian border.
J&T Global, the real estate wing of the J&T capital group, predicted in a 2004 analysis that Slovakia would become increasingly involved in multinational distribution networks, justifying investments in logistics facilities.
J&T Global's analysis identified 2004 as a turning point in the construction of new warehouse premises. While in 2003 warehouses represented only 6 percent of the overall area of new industrial premises, in 2004 it was already 20 percent.
According to Jozef Gnap and Bibiana Poliaková from Žilina University, the majority of logistics centres and parks are located at new factories or near freeways and main railway corridors. Apart from Bratislava and its vicinity, the Bratislava-Žilina freeway has become a popular location for new logistics centres.
Gnap and Poliaková emphasized the opinion of developers that the supply of premises will continue to grow for two to three years, and then drop as these investments move further east.
Select logistics projects
The logistics park for the customers and subcontractors of PSA Peugeot Citroen near the Trnava exit of the D1 freeway is the largest logistics park in Slovakia to date. It was developed by J&T Global and IIG, and will occupy 500,000 square metres when complete, of which warehouse premises will represent 180,000 square metres.
New projects are planned in Dubnica nad Váhom, Trenčín, Nitra, and Žilina in connection with the new KIA Motors Slovakia factory.
Another location suitable for new premises is the western stretch of the freeway network in Slovakia towards Brno in the Czech Republic. This area already houses the Devínska Nová Ves logistics park in the vicinity of the Volkswagen Slovakia car plant. The park primarily serves the needs of Volkswagen, and covers 20 hectares in total with warehouse space of 80,000 square metres.
Merrill Lynch and developer Pinnacle recently announced a logistics project called Westpoint D2 Distribution Park near Lozorno in the Záhorie region, not far from VW. The first of four logistics centres in this park, covering 24,000 square metres, should be finished this summer. The whole logistics area of 85,000 square metres, including storage and office premises, should cost Sk1.4 billion and should be finished in 2009.
Several logistics centres are also under construction near Senec. IPEC and UBM are already building the €250 million Senec Cargo Centre, which will provide jobs to 1,500 to 2,000 people. Karimpol is planning to construct another logistics centre in this location.
Samsung Electronics Slovakia began constructing a logistics centre for Central and Eastern Europe in Galanta at the end of last year. The logistics centre should come on line this year.
The oil and fat producer Tukový priemysel firm opened a 9,000 square metre distribution and logistics centre near Nitra at the end of the last year.
Retail chains operating in Slovakia have also invested heavily into logistics centres in various parts of Slovakia. Billa completed a logistics centre near Senec, while Kaufland and Carrefour built near Ilava, Lidl in Nemšová and Tesco in Beckov. Tesco's Beckov logistics centre is the company's largest and most modern logistics centre in Central Europe. So far only the first part is finished with an area of 10,000 square metres.