American technology giant 3M (Minnesota Mining & Manufacturing), with turnover worth over 25 billion dollars worldwide, has frozen plans regarding the construction of a plant in Romania, a possibility that had been under examination by the American shareholders as early as the beginning of last year.
"We have a plan to start production in Romania, but this plan is frozen for the time being. We are hoping to unfreeze it by the end of the year," explained Andrei Holban, Managing Director of 3M Romania, the local subsidiary of 3M, with turnover worth over 30 million euros at the end of 2008 on the Romanian market.
3M Romania is known in particular for its Post-It products and for Scotch Brite scrub sponges, while its clients include Romtelecom, Automobile Dacia and Vesta Investments.
Holban did not specify what the facility would produce, but said it would most likely be FMCG products, i.e. products that can be retailed. Company representatives did not specify the location of the plant or whether the plot had already been acquired.
"We started to think about opening the plant as early as last year. We received the go-ahead from the corporation, but in the second half of the year came the effects of the current economic situation, and then we put things 'on hold' in order to see what happens and wait until a balance is reached again," added the managing director of the Romanian subsidiary of 3M, which numbers tens of rather large plants worldwide.
When the decision to start production is made, the value of the investment will depend on how many divisions will be brought onto the Romanian market. Therefore, according to 3M data, the investment could range from several million euros to over 100 million euros.
This is hard to assess, according to the 3M representative, who added that last year, the company's turnover went up 20% against 2007, and the profit margin amounted to 20%. For this year, the company's goals are to keep the turnover at the 2008 level.
"The turnover rise in a country like Romania has two components: the market growth and the increase in the penetration degree, which is highly accelerated on the Romanian market, when compared with the rises that can occur on mature markets. From this point of view, 3M Romania is interested in staying and growing locally, in order to reap the benefits of this accelerated growth," said Andrei Holban, managing director of 3M Romania.
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