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SK16.5 BLN PLANT TO BREAK GROUND - STAY TUNED FOR DETAILS, SAYS INVESTOR REPRESENTATIVE

Mystery investor plans Spiš factory

THE INVESTMENT-starved Spiš region, with its over-20 percent unemployment and minute fraction of overall Slovak FDI, has this year enjoyed a deluge of major development projects. The latest to land was the US financial group Simonstein & Henriks Finance Corporation, which on June 7 announced plans to invest Sk16.5 billion (€438 million) in a truck parts factory in eastern Slovakia's Špišský Hrhov.

THE INVESTMENT-starved Spiš region, with its over-20 percent unemployment and minute fraction of overall Slovak FDI, has this year enjoyed a deluge of major development projects. The latest to land was the US financial group Simonstein & Henriks Finance Corporation, which on June 7 announced plans to invest Sk16.5 billion (€438 million) in a truck parts factory in eastern Slovakia's Špišský Hrhov.

The factory, which should supply over 1,000 new jobs, comes only two months after the Spišská Nová Ves city council approved a Sk6.5 billion investment by the British developer Dorchester Group, which intends to build a recreation park just outside the Slovenský Raj National Park.

Špišský Hrhov Mayor Vladimír Ledecký said the Simonstein investment would be one of three machinery industry projects to be located in a 130-hectare industrial park the village is building. He said the village had so far also signed an investment contract with the Sitem engineering company of Italy.

The Simonstein investment will be the largest in the Spiš region and the third largest in Slovakia behind the carmakers PSA Citroen Peugeot in Trnava and Kia Motors in Žilina.

Simonstein & Henriks has applied for about Sk794 million in state aid, 4.8 percent of the total investment. The maximum support that the state is willing to give to foreign investors is 22 percent.

The investor has also requested regional aid from the state in the form of access roads and a railway connection.

The investment branded as Nordman will find its home at the Brusník industrial park in Levoča district.

To emphasize the importance of the investment, Prime Minister Mikuláš Dzurinda and Finance Minister Ivan Mikloš interrupted their election campaign to travel to eastern Slovakia to announce the investment to the local population.

Dzurinda said that construction on the factory should start in 2007 and that the first products should roll out in late 2008. The Slovak cabinet discussed the investment at its June 7 session.

According to the prime minister, final negotiations on the investment could take between two weeks and two months.

"If the investment contract is ready, we will approve it," the prime minister said.

The US investor said that Slovakia's favourable investment environment had convinced the corporation to settle here rather than in Poland, the Czech Republic or Hungary, where it had also been investigating sites.

"We decided to use the advantages of the Slovak investment environment and put a production company in Spišský Hrhov. I hope we will get through all the necessary negotiations as soon as possible and start to produce a whole variety of products for cars, vans and boats at the end of 2008 as intended," said Gerard Leroux, CEO of the Ackerman Advisory Association, which is representing Simonstein.

Milan Juráška, head of the SARIO state investment agency that led the negotiations, told the press that "this investment will have an enormous impact both on the local economy and on the investor, which can profit from the skilled labour force in Slovakia."

Despite the fanfare that greeted the investment, little is known about either Simonstein & Henriks or Ackerman Advisory, neither of which have a finished web site.

Leroux said Simonstein represented a group of financial investors who did not want to be identified.

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