Omnium close to choosing Slovakia

Plastic Omnium, the French auto parts producer which had threatened to take what would have been the fourth biggest investment in the history of Slovakia to Hungary, is now "99.9% decided" to build its two plants in Slovakia, a senior company official said.
Omnium is expecting the final contract to be signed with the government before mid-July, with construction of the plants - which will produce bumpers and fuel tanks for VW Slovakia - to begin in August in the area near the village of Lozorno, 15 kilometres from Bratislava. The firm's total investment into Slovakia will reach 70 million euros ($65 million), while production should begin in the first quarter of 2001.
Plastic Omnium had considered abandoning Slovakia for Hungary after its third meeting with Deputy Prime Minister for Economy Ivan Mikloš, when doubts arose as to whether the company would receive the incentives it had been originally promised. Michel Lacombe, Omnium's consultant for the Slovak investment, characterised the Mikloš meeting as a "catastrophe," and blamed Alan Sitár, an advisor fo Prime Minister Mikuláš Dzurinda, for sowing confusion between the parties and being poorly prepared.

Plastic Omnium, the French auto parts producer which had threatened to take what would have been the fourth biggest investment in the history of Slovakia to Hungary, is now "99.9% decided" to build its two plants in Slovakia, a senior company official said.

Omnium is expecting the final contract to be signed with the government before mid-July, with construction of the plants - which will produce bumpers and fuel tanks for VW Slovakia - to begin in August in the area near the village of Lozorno, 15 kilometres from Bratislava. The firm's total investment into Slovakia will reach 70 million euros ($65 million), while production should begin in the first quarter of 2001.

Plastic Omnium had considered abandoning Slovakia for Hungary after its third meeting with Deputy Prime Minister for Economy Ivan Mikloš, when doubts arose as to whether the company would receive the incentives it had been originally promised. Michel Lacombe, Omnium's consultant for the Slovak investment, characterised the Mikloš meeting as a "catastrophe," and blamed Alan Sitár, an advisor fo Prime Minister Mikuláš Dzurinda, for sowing confusion between the parties and being poorly prepared.

However, Sitar and other government officials who took part in the meeting said they hadn't been aware of Omnium's distress. "I think that other people who have taken part in coordinating this investment should say whether I have done anything wrong. But my feeling is that Omnium was only trying to see how big an incentive package they could get in Slovakia," Sitár said.

Besides poor communication, another problem Omnium had to solve before choosing Slovakia was finding 100,000 square metres of available land with the necessary infrastructure such as water, gas and electricity mains. "This is very difficult to find in Slovakia," Lacombe said.

However, at the end of May, Omnium finally obtained a suitable site after VW Slovakia, also unable to acquire the land it was after, abandoned its plans to build an industrial park in the Lozorno area.

According to Lacombe, Omnium was satisfied with a smaller plot than VW had been seeking, meaning that - final approval forthcoming - its path into Slovakia is now cleared.

He added that a recent meeting between Mikloš and Plastic Omnium officials in Paris, where Mikloš had assured Omnium representatives that they would receive all the promised incentives, had also helped to steer Omnium back to Slovakia.

"However, I have to say that if VW hadn't stepped back from their construction in Lozorno we would have gone to Hungary," Lacombe said.

Lacombe added that the local presence of the VW plant as the main destination of Omnium's new products in Slovakia had virtually clinched the investment. He explained that if Omnium had decided to go to Hungary, it would have had to send 40 trucks from Hungary to Slovakia every day, which would have well cost French company one million euro per year. "Forty trucks per day, how could Omnium have managed it?," Lacombe asked.

The firm was expected to sign a memorandum of understanding on the investment at the beginning of July.

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