SWEDISH furniture maker Swedwood has announced plans to expand its Slovak empire with a new plant worth 10 million euros.
After signing a pact on the project with Agriculture Minister Pavol Koncoš on January 15, Swedwood launched the first phase of its new investment, a plant for processing beech logs.
The facility, which will start production in 2003, will become Swedwood's fourth factory in Slovakia. The plant is expected to employ at least 150 people in addition to Swedwood's 500 current Slovak staff; its location has not been disclosed.
Swedwood became one of the first foreign investors in Slovakia after the 1989 revolution when its mother company, furniture giant Ikea, bought a small stake in the western Slovak furniture maker Spartan in Trnava.
The company says its investment decisions have since been shaped by purely business reasons rather than state assistance such as tax holidays and other subsidies.
"For us the main reason to expand in Slovakia is the supply of material - there is a quantity of beech logs which are not used optimally - and good logistics because Slovakia is close to our main markets such as Great Britain, Italy and Germany," said Swedwood's managing director, Bruno Winborg.
"Government assistance is not so important for us, and as far as I know we have not taken a major subsidy yet," Winborg added.
Unlike other foreign firms investing in Slovakia, Swedwood has not had many bad experiences with bureaucracy and corruption, reported Winborg, another factor in the firm's decision to expand.
In a recent survey of business leaders and analysts by Slovak think tank IVO, respondents identified corruption as a major obstacle to doing business in Slovakia.
But Winborg said that Swedwood had not encountered higher levels of corruption in Slovakia than in other post-communist countries such as Poland.
"We've had no problems with it [corruption] that we couldn't handle. It's important to say 'no' to all forms of corruption as soon as they arise," Winborg said.
Government officials declared themselves satisfied with Swedwood's decision to expand in Slovakia, saying it would allow better use of the Slovak wood supply. Swedwood has signed a 20-year deal for supply of logs with state forests company Lesy SR.
"This wood is currently being exported to Austria and Germany and processed. Swedwood then imports it back to Slovakia and uses it to make boards which are later turned into furniture. Every year Swedwood imports at least Sk600 million in veneer for chipboard to Slovakia," said František Šulek, director of wood-processing at the Economy Ministry.
"With the new plant this will no longer be necessary as the wood will be processed and turned into furniture in Slovakia," Šulek added.
Swedwood currently operates a chipboard and furniture plant in western Slovakia's Malacky, a furniture plant in Trnava, and a solid-wood furniture plant in central Slovakia's Jasná. The company would not disclose the value of its investments so far in Slovakia.
28. Jan 2002 at 0:00 | Peter Barecz