Austria-based Rieker Romania, dealing in footwear production, started building a new factory in Faget, Timis County, early this month. The investment is worth some DM5-6 million.
To build this factory, the company got the concession of 20,000 square metres in Faget, with the construction scheduled to end in December 2001. The factory will have 600 employees, as soon as it reaches its productivity peak.
"Based on the feasibility studies we conducted, we decided to start a new investment in Faget, an area which has two advantages: the low cost of the work force and the proximity of the Lugoj City where the company is headquartered," Ernst Holzhaimer, the company's general manager, stated.
"We tried to help the Austrian investor by issuing it the urban development certificate as quickly as possible," says Doru Covaci, Faget mayor.
"The outskirts of the town have undergone substantial changes over the past few years, due to several state-run companies closing down, so that this work force supply prompted Rieker to invest in the area," Covaci added.
The Austrian company has been operating in Romania since 1998, when Rieker Romania was established in Lugoj, where 1,200 people are now making footwear for the Western European market. The main outlets for the company are Germany, Austria, France, Italy and Switzerland.
"The trend to shift production to the lohn system is gaining more and more ground on the Western market, due to cost cutting, but mainly to globalisation and conquering new outlets," says the company general manager.
The lohn system in the light industry (ready-made clothes and footwear) at the end of 2000 accounted for 35.5% in the total exports, that is $1.757 million.
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