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Foreign investors buoy central Slovakia

Central Slovakia is proving an attractive destination for foreign investors, to judge by the number of new factories that have recently begun construction around the town of Martin. Investment experts put the influx down to the Martin municipal government's attractive investment package, as well as to the improving image of Slovakia as a whole.
In mid-March, an agreement was signed on the construction of a new factory for production of car passenger compartment linings in the town of Koštany nad Turcom, about 20 kilometers south of Martin. The investor is the American concern Johnson Controls, one of the biggest worldwide suppliers of automobile seats and interiors.
The factory is just one of a number that are being built in the Martin region, bringing jobs to an area with an unemployment level of around 14%.

Central Slovakia is proving an attractive destination for foreign investors, to judge by the number of new factories that have recently begun construction around the town of Martin. Investment experts put the influx down to the Martin municipal government's attractive investment package, as well as to the improving image of Slovakia as a whole.

In mid-March, an agreement was signed on the construction of a new factory for production of car passenger compartment linings in the town of Koštany nad Turcom, about 20 kilometers south of Martin. The investor is the American concern Johnson Controls, one of the biggest worldwide suppliers of automobile seats and interiors.

The factory is just one of a number that are being built in the Martin region, bringing jobs to an area with an unemployment level of around 14%.

"I think the mayor [of Martin] understands the dynamics of the FDI [foreign direct investment] business very well," said David Brown, principal adviser to the Slovak Agency for Foreign Investment (SNAZIR). Brown explained that the Martin government's policy of providing cheap real estate to investors went a long way towards "removing the initial pain involved" in building a factory in Slovakia.

According to the head of the Martin Regional Council, Jozef Országh, the construction of the new Johnson Controls factory should begin after all agreements are signed and the necessary permissions to build are obtained. The factory should come on line within 10 months, he said.

Johnson Controls plans to invest as much as 850 million Slovak crowns ($20.5 million) in its Slovak operations, Országh said. The factory is expected to produce 1 million passenger compartment linings per year, which will be sold to Volkswagen as well as the French Renault and Japanese automotive companies.

Országh said that the Johnson Controls factory will create 500 to 600 jobs.

Other large investment projects are already afoot in Martin. The Danish shoe company Ecco, which set up a branch factory in Martin in mid-1998, is set to produce 2,000 pairs of shoes a day, and will employ 260 to 300 people in 1999. Within three years, however, Ecco intends to build three production premises and to employ 1,300 people. The company plans to invest some $15 million in its Slovak operations.

And in the village of Suďany, near Martin, the production premises of Auto Martin are almost complete. The factory is to produce annually more than 12 billion crowns ($300 million) worth of automobile components for Volkswagen, which will invest some 5.5 billion crowns in the factory from 1999-2000. The new Auto Martin factory will employ 1,450 people.

A foreign investor is also expected to settle in the town of Krupina, about 70 kilometers south of Martin. Danish firm Lind Mobler plans to build a factory for production of upholstered furniture. An agreement between Krupina town officials and the Danish investor is to be signed in April. The firm plans eventually to employ some 330 people.

Jozef Kirschner, deputy director of the Martin Regional Council, explained that the central Slovak area was attractive to investors because it had excellent rail and road connections to the central European region. "We are situated on a railway junction connecting all points of the compass," he said.

Kirschner also noted that the region's workforce was very attractive to foreign investors planning to set up manufacturing operations in Slovakia. Martin region workers, he said, had long been employed in the armaments industry, once the area's main employer but now in deep decline and mired in debt. With their experience in heavy manufacturing and their current desperation for work, Kirschner said, Martin area workers were a magnet for investors. "There is an extreme need to create new job opportunities here," he added.

Kirschner, who is also head of the Martin Regional Development Office, said that his office had been pro-active regarding foreign investors, setting up business parks in outlying districts for investors to build in. "We also charge foreign investors only a symbolic price for real estate," he added.

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