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WOODWORKING INDUSTRY IN NORTHERN SLOVAKIA TO SEE 1,000 NEW JOBS FROM JOINT EU-SLOVAK PROJECT

Backers of Spiš region industrial park prepare to break earth

FINAL preparations are underway for a woodworking industrial park in Spišská Nová Ves.
The park, which is due for completion in June 2003, is a co-operative effort between the town and district governments, local development agency Agentúra pre rozvoj Spiša, the European Union (EU), and private investors to revive the traditional woodworking industry in an area struggling with high unemployment and unused capacity.
According to the head of Spišská's district state office, Juraj Beňa, all required documentation and work schedules will be completed this month. A press conference is to be announced by the end of the month by wood processing firm Pilvud, which owns the plant now occupying the site, and a group of Greek investors.


OLTMAN, PM Dzurinda, Magulák and Beňa (left to right) go over project plans.
photo: TASR

FINAL preparations are underway for a woodworking industrial park in Spišská Nová Ves.

The park, which is due for completion in June 2003, is a co-operative effort between the town and district governments, local development agency Agentúra pre rozvoj Spiša, the European Union (EU), and private investors to revive the traditional woodworking industry in an area struggling with high unemployment and unused capacity.

According to the head of Spišská's district state office, Juraj Beňa, all required documentation and work schedules will be completed this month. A press conference is to be announced by the end of the month by wood processing firm Pilvud, which owns the plant now occupying the site, and a group of Greek investors.

"By the end of June building permits will be granted, and by September we will open a tender for the reconstruction work. In the second quarter of next year, reconstruction of the park should be completed," said Beňa.

The park, which will be situated on the underused grounds of the Nový Domov furniture manufacturer, will see 2.8 million euro invested and up to 1,000 jobs created in the wood-working sector, long key to the region's economy.

The Spišská Nová Ves district had one of the country's highest rates of unemployment at 27.4 per cent at the end of March, compared to a national rate of 20.7 per cent.

While two million euro will come from the EU's Phare economic restructuring programme, the remainder, about Sk35 million, will come from state and local governments, said Peter Magulák, director of the Pilvud firm which owns Nový Domov.

Spišská Nová Ves, which lies just east of Slovak Paradise national park and about 35 kilometres south-east of the High Tatras mountain range, has a long tradition in forestry and woodworking. The industry has struggled, however, since the fall of communism.

The Nový Domov plant has seen its workforce fall from around 800 in 1989 to today's 350, according to plant director Štefan Oltman, as the firm struggles to make a profit with ageing machinery and poor infrastructure. The plant was acquired by Pilvud in 1998.

Nový Domov now occupies only about half of its nine-hectare compound, and several of its buildings lie vacant. While part of the industrial park project will be to revamp the disused facilities, an additional 9,000 square meters of factory space is slated to be built on an adjacent 20,000 square-meter area.

Spišská district office head Beňa points out: "This is a very intelligent investment because it will create many jobs at a relatively low cost.

"Spišská Nová Ves used to be a major centre for the wood industry, but the sawmills in the area have had to lay off most of their workers since 1989. However, all the key infrastructure is still in place. The buildings are already there, so limited new construction will be required. There is also a woodworking school on the premises which turns out skilled labourers."

But while the existing facilities reduce the costs of creating the park, there are considerable infrastructure requirements, including upgrading an existing heating plant, reconstructing and upgrading a waste-water treatment facility, rebuilding three production halls as well as gas connections, sewage systems and other improvements Magulák identified as conditions set by the European Union.

According to Magulák, several investors have already expressed interest in entering the project, including an English manufacturer of children's furniture, an Italian manufacturer of upholstered furniture, and a German firm specialising in furniture and building supplies.

Out of 105 such projects received by Phare officials in Brussels, the Spiš park is one of five to be approved so far. Magulák thinks Spišská, based on its location and tradition, is uniquely suited for an industrial park.

"I think Spišská was selected as the site for a woodworking industrial park because there is a long-term tradition of woodworking here. To a large extent there are favourable conditions here with raw materials and the experience of people who have been active in this field for decades," said Magulák

Despite the investor interest, some foreign firms have also expressed reservations about Slovakia as an investment destination. Following a meeting between Nový Domov and an interested German firm, said Magulák, "their evaluation was that Slovakia is not an interesting country at the moment, because we are not able to spell out what conditions we offer for their investment - what kind of tax breaks they will be eligible for, what the state, the town and regional administrations will do for them and so on.

"A number of times the firm's director, whom I won't name, underlined that corruption in Slovakia, especially in state organs, in his experience has caused major problems. His position is to maybe wait a year until there's a new government and then see what the new conditions are."

But Beňa downplayed corruption as a factor deterring investment.

"It won't be a problem," he said. "Investors will concentrate on the positives - the high skill level of our people, the cheap workforce, the high level of unemployment, and other advantages we can give foreign investors."

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