Business bustles between Belgium and Slovakia

POLITICAL and business ties between Belgium and Slovakia are active. Even so, Belgium is not among Slovakia's biggest investors. Apart from global giant Punch International, an electronics manufacturer with a presence in Trnava and Námestovo, Belgian capital is largely wrapped up in small- and medium-sized companies.

POLITICAL and business ties between Belgium and Slovakia are active. Even so, Belgium is not among Slovakia's biggest investors. Apart from global giant Punch International, an electronics manufacturer with a presence in Trnava and Námestovo, Belgian capital is largely wrapped up in small- and medium-sized companies.

During recent years, liaisons between Belgian and Slovak officials have increased. In 2001, Belgium initiated a meeting in Luxembourg between prime ministers and foreign affairs ministers of Visegrad Four and Benelux countries. Since then, the summit has become a regular affair. The second, in 2002, took place in Trenčín in western Slovakia, while the third happened in 2004 in Brussels.

Prime Minister Mikuláš Dzurinda last visited his Belgian counterpart on an official visit in February 2003.

Cooperation between Belgium and Slovakia on a regional level has been particularly successful as well. Flanders, Walloon and Brussels - three distinct regions in Belgium - have reached out to establish ties with Slovakia.

In 2001 and 2002, Slovakia signed agreements with Flanders and Walloon aimed at developing cooperation in various sectors, including transportation, the environment, education and science.

In 2004, Bratislava and Brussels also entered into a mutual agreement. The Slovak Embassy in Brussels organized several presentations on Bratislava, Trnava, Nitra and Trenčín to showcase Slovak regions for potential business investment.

The volume of foreign trade between the countries is increasing every year, buoyed by political and regional cooperation as well as Slovakia's accession to the European Union.

"Belgium is one of the few developed countries with which Slovakia reaches foreign trade surplus [Slovakia exports more to Belgium than it imports]," reads the official website of the Slovak Foreign Affairs Ministry.

And according to the Slovak Statistical Office, Slovak exports to Belgium in 2003 increased by 18 percent, or Sk16 billion (€420 million). On the other hand, Slovakia imported Sk14 billion (370 million) worth of goods from Belgium, which is 3.3 percent more than in 2002.

Plastics and plastic products, pharmaceuticals, nuclear reactors, electrical machines and equipments, vehicles and organic chemical products are goods that Slovakia imports from Belgium.

Slovakia exports vehicles, electrical machines and equipment, clothes, nuclear reactors and iron and steel products to Belgium.

Slovakia is 52nd supplier and 43rd customer of Belgium.

The size and the character of both countries are similar. Economists think that Slovakia could use Belgium as an inspiration for further development.

For example, Belgium takes advantage of its central geo-political location. Like Slovakia, it offers very little in terms of raw material sources and is therefore impacted by their price development on international markets.

The Belgian economy is very open, which means it is strongly based on exports and imports. Almost two thirds of Belgian foreign trade is directed towards EU countries. Comparing to Sweden or Switzerland, all of which have similar populations, Belgium posts a double volume of exports.

Belgium thus considers exports as one of its most important sources of economic growth. The county mainly exports machines and equipment, chemicals, pharmaceuticals, metal products, textiles and clothes, as well as food, drinks, tobacco and energy.

Belgian businesses take advantage of an effective network of institutions that support exports, including the Belgian Foreign Trade Office, the National Office for Export Insurance, the Flemish Agency for Foreign Trade Support, the Walloon Agency for Export Support and the Agency of Brussels Region Ministry for Export Support.

The value of Belgium's exported goods in 2001 represented €254 billion.

Belgian industry is mainly concentrated in Flanders, where there is a higher density of inhabitants. So far, the development of services has reached a vigorous pace. The area of services is mainly export-oriented and its share of gross domestic product reaches 75 percent.

Despite all this economic activity, the share of Belgian investments as a percentage of foreign direct investments in Slovakia is less than 1 percent.

But optimists say the volume of Belgian investment is about to increase. Recently, several Belgian firms announced an intention to develop production facilities in Slovakia.

According to news agency TASR, Jonckheere, a manufacturer of long-distance coaches, plans to invest Sk120 million (€3 million) and create 100 industrial welding jobs in Košice. Jonckheere has decided moving eastward, even though it has not received investment incentives from the Slovak government.

The decision to target Košice came after detailed analyses of Slovakia's regions. The Belgian company selected Košice for its location, favourable investment conditions, infrastructure, airport, high unemployment and skilled worker base.

Belgian Parts & Components intends to invest $30 million (€24.8 million) in a factory in eastern Slovakia as well. The project, which should create up to 200 jobs, would be a joint venture with an as yet unnamed Slovak company.

Meanwhile, industrial electronic cable maker Van Geel announced it would join Belgian laser-devices firm Gilbos at the Kechnec industrial park by building a production plant there.

Recently, Furni Finish announced it intends to develop its production of leather furniture in Šahy.

The biggest Belgian investor in Slovakia continues to be Punch Industrial. Based in both Western and Northern Slovakia in Trnava and Námestovo, respectively, Punch employs more than 2,000 people, according to the news wire SITA.

Punch started production in Slovakia in 1994 when it established an assembly plant in Trnava. Four years later the company expanded to Námestovo after acquiring United Electronics. The following is a list of Belgian-owned companies in Slovakia as they are listed on Slovak Foreign Affairs Ministry website:

Amylum Slovakia, Boleráz food products
Fragicslov, Šahy leather clothes
Jadeslov, Šahy bag- and saddle-maker
Ledeslov, Šahy warehouse
VSŽ Keramika  
Dolomit - Carmeuse ceramics and heat-resistant materials
Deva Trebišov - Leonidas sweets
KBC - ČSOB bank finance
Tractebel tourism
Bekaert, Sládkovičovo steel reinforcements in tyres

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