ElcoBrandt, the leading supplier of home appliances on the French market, is now likely to redirect its planned 11m euro investment in the top-loading washing machine factory near Bucharest announced for the first half of this year to a location in Poland.
"Our plans for a factory in Romania have not been abandoned. However, Romania is now competing with Poland," ElcoBrandt representatives told Ziarul Financiar.
The Polish authorities have offered "much higher incentives", the company representatives say, and it now falls to the Romanian authorities to raise their game.
"We haven''t reached a decision as yet because we are waiting for an answer from the Romanian authorities," the company representatives added.
The chairperson of the Romanian Agency for Foreign Investments (ARIS), Ana-Maria Cristina, confirmed that the French company had been offered "substantial" incentives by the Polish authorities, something Romania could not equal at this point.
"Competition for foreign investors is very tight, and we need to come up with state aid schemes that do not breach European competition legislation - if we don''t, we will loose out to other EU member states in the competition for investors," Cristina said.
She explained that ElcoBrandt''s decision to redirect the investment was also due to the fact that the majority shareholder in the company already has operations in Poland and is familiar with the Polish environment. In fact, Poland''s emergence as a possible choice for the ElcoBrandt plant came to light after the French producer changed its shareholding structure. Spanish company Fagor, a member of the MCC group (Mondragon Corporacion Cooperative), became the sole shareholder in ElcoBrandt this April after acquiring 90% of the shares in the French company.
Fagor has a factory in Poland and has been granted incentives of more than 13 million euros by the Polish government for a project involving the investment of over 32 million euros in a factory. "Their willingness to renounce the investments they already made in Romania - for the acquisition of land, licences and staff selection - is a big warning signal for us," Cristina warned.
According to the firm''s officials, added Cristina, the final decision will be made by July 1, following another round of negotiations that will take place next week.
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