Lucrative investment slips past Slovakia

GERMAN commercial vehicle and truck manufacturer MAN Nutzfahrzeuge chose Poland over Slovakia for its new factory site. The investment is worth an estimated €90 to 100 million.

GERMAN commercial vehicle and truck manufacturer MAN Nutzfahrzeuge chose Poland over Slovakia for its new factory site. The investment is worth an estimated €90 to 100 million.

The eastern Slovak city of Košice was among four competing sites, which included Miskolc in Hungary and Poland's Krakow. The Kechnec industrial park in Slovakia and a site in Krakow were shortlisted.

The new plant will roll out 15,000 trucks annually and give jobs to 650 people.

MAN Nutzfahrzeuge's Anton Weinmann said that a combination of factors influenced the company's decision to select Poland.

"The legal and political framework of the country was just as important as infrastructural issues and development possibilities," Weimann said in an official press release.

Nina Gutzeit, a spokesperson for MAN Nutzfahrzeuge, indicated that the company's decision was a positive reflection on Poland, not necessarily a criticism of Slovakia.

"There were so many criteria for the final selection," Gutzeit told The Slovak Spectator. "Slovakia was on the short list to the very last moment, which means that it still would have been a very good location. Otherwise, it would have not taken us so long to make our decision."

Infrastructure, the spokesperson said, played a crucial role.

"We have to supply engines, cabins and other spare parts from Munich and Nuremberg to the new plant."

According to Gutzeit, the company looked into the availability of local labour and expertise as well as opportunities for their German employees.

"When we require German management, for example, to move abroad, we ask ourselves whether there are good schools for their children, competitive universities and a positive social atmosphere. All of these considerations made Krakow the best choice for us," Gutzeit told the Spectator.

MAN Nutzfahrzeuge already has several plants in Poland. It produces truck and bus/coach components in Starachowice and scheduled-service busses in Poznan.

The new plant's first vehicles will be produced in the first half of 2007, according to MAN Nutzfahrzeuge's press release.

Analysts say the company's choice - Poland over Slovakia - is logical. The German media reported MAN Nutzfahrzeuge's selection in mid July.

The Slovak Investment and Trade Agency (SARIO) said that it did its utmost to persuade the investor that Slovakia constituted the best location.

"Unfortunately MAN Nutzfahrzeuge made a different decision, and we are accepting that," SARIO spokesman Ondrej Žember said.

Analysts are taking the manufacturer's decision in stride.

Recently, Korean carmaker KIA chose Slovakia as the best location for its new European site. The Economy Ministry says that negotiations with other significant investors are progressing well.

The ministry is currently working on eight major projects worth Sk70 billion (€180 million). If the deals go through, they would create about 20,000 new jobs in regions with particularly high unemployment.

Slovakia's negotiations with Korean tyremaker Hankook are hinging on an investment incentive worth Sk19.4 billion (€500 million). After the Slovak cabinet refused to approve the proposed incentive - worth 21.3 percent of the investment - Hankook reopened negotiations with Slovakia's neighbours.

Hankook is expected to make a decision by the end of August.

Reports from August 3, however, indicate that Hankook has not eased its demand for an incentive package worth 21 percent of the investment.

"The investor is still willing to accept only a moderately lower stimuli package," Economy Minister Pavol Rusko said.

According to MAN Nutzfahrzeuge, Slovakia's dealing with Hankook had no influence on the German company's decision to choose Poland.

"There was no major difference concerning incentive support from either country," Gutzeit told the Spectator.

The Economy Ministry says it needs at least Sk12 billion ( €308.5 million) in state support in order to attract new investors. Fulfilling this demand, however, would put considerable pressure on the state budget.

Slovakia's automotive industry has developed considerable muscle over the past few years, despite the fact that several international carmakers have decided against investing in Slovakia.

Five years ago, German carmaker BMW considered Prešov as the site of its new plant. Even though Slovakia offered the corporation considerable tax holidays, it decided to build in Germany. British car producer Rover also toyed with the idea of placing an investment worth Sk200 million (€5.14 million) in Slovakia but chose Poland instead.

Magdalena MacLeod
contributed to the report

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