AMERICAN INVESTORS' INTEREST IN SLOVAKIA IS UNDETERRED BY ECONOMIC CRISIS

US-Slovak economic ties hold steady

THE STRONG economic ties between the USA and Slovakia continue to grow, even in spite of the distance that separates the two nations and the difficulties brought on by the global economic crisis.

THE STRONG economic ties between the USA and Slovakia continue to grow, even in spite of the distance that separates the two nations and the difficulties brought on by the global economic crisis.

US companies in Slovakia are mainly involved in information technologies and the steel and automotive industries. While Slovakia has had to bid goodbye to some US firms in recent times, it has also welcomed new ones which have moved in to take their place.

“There is a high level of cooperation between Slovakia and USA,” said Dagmar Hlavatá of the Ministry of Economy and Construction’s press department while commenting on the two countries’ current economic ties. “In spite of the great distance between our two countries we still see a high turnover in bilateral trade. There are only afew Slovak companies successfully doing business in the US (for example the IT security company ESET), though on the other hand there are over 120 American companies operating on the Slovak market.”

When considering bilateral trade between Slovakia and the USA, the ministry sees the most intensive cooperation in the automobile, machinery, furniture and pharmaceutical industries.



American companies operating in Slovakia are involved in a variety of economic sectors. Companies such as IBM, Dell, Microsoft, Accenture and HP are all active in Slovakia’s information technologies sector, and Slovakia’s steel industry includes companies like U.S. Steel, which has been operating a branch in Košice since 2000.

Hlavatá said that potential for further cooperation can be seen especially in sectors with a higher added value and with a notable increase to the knowledge-based economy, such as the IT and R&D sectors, with an aim at applied research. Other possibilities include cooperation between Slovak and US universities, schools and research facilities, especially those connected to R&D.



The global economic downturn has not had a dramatic influence on US investors’ interest in Slovakia: on the contrary, it seems to have encouraged them to search for new locations overseas where they can optimise their production.

“Statistics from 2008 and 2009 indicate that there were two to three monthly enquiries on the part of US-based companies, investors, consultancies and other interested institutions,” said Hlavatá. “We have not seen any significant changes in 2010 and we are seeing a very similar number of monthly requests. Thus, the peak of the crisis last year did not dramatically influence US investors’ attention towards the country, but rather investment opportunities were sought out as a way to optimise costs by relocating parts of production and business processes to Slovakia and the central and eastern Europe region.”

US investors have expressed a foremost interest in sectors involving the production of metal, glass and plastics and then, to a lesser degree, shared service centres with focus on IT. In addition, the Slovak Investment and Trade Development Agency (SARIO) often receives enquiries into Slovakia’s energy production and renewable energy sectors.

“US investors, like their western European counterparts, focus first on a country as whole as an ideal investment environment and, after identifying the most suitable conditions in certain regions, narrow down their target,” said Hlavatá.

Out of the projects that have been successfully implemented in Slovakia by US-based companies, SARIO contributed to the arrival of two investors in both 2008 and 2009.

In 2008 investments by US investors accounted for €57.5 million and created from 135 to 160 jobs in the chemical and metallurgy industries.

Although general interest by US investors remained the same in 2009 the investments that SARIO arranged had lower value, at €14.64 million, but created up to 710 new jobs in the rubber industry.

“Between 2002 and 2009 we successfully implemented 18 projects amounting to €311 million which created more than 4,900 new jobs, with the potential to increase this number up to 5,800 jobs,” said Hlavatá.

SARIO is currently negotiating over 16 US investment projects that together represent €493.3 million, with additional potential investments of €824.2 million and the possibility of creating between 2,166 and 4,001 new jobs.

As examples of some of the most successful investment projects of US investors in Slovakia, Hlavatá listed U.S. Steel, IBM International Services Center, Dell EMEA Center of Excellence, Emerson, HP European IT Operations Centre, Johnson Controls R&D Center, AT&T Shared Services Center and Accenture Technology Solutions. Other recent projects undertaken by Crown Bevcan and ICU Medical were also mentioned.



Departures and arrivals



Although some US investors have pulled out in recent years, others have quickly moved in to take their place. One example can be found in the small village of Kechnec in eastern Slovakia.



In early 2009 Molex Slovakia, the US-based company's biggest plant in Europe, which produced connector systems for the automotive industry, announced the gradual closure of the plant and the layoffs of around 1,000 employees after nine years of operation. The production was moved to China. In August 2010 the premises were completely empty, but Jozef Konkoly, mayor of Kechnec, thinks that Molex may return as at the moment the company is only renting out the premises and has not actually sold it. Molex was the first company established in the Kechnec industrial park.

But the Kechnec industrial park has also had some new arrivals. In late April, Crown Holdings, a leading producer of packaging for various products which was founded in 1892 in the US, officially launched production of beverage cans in its new Kechnec factory , the SITA newswire reported. The director of the new factory, Ken Jeffs said that the new plant is its first in eastern Europe and will allow Crown to react better to customer needs in the Central and Eastern Europe region.


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