Not every investment project is bound to come true, as proven by the British glass company Pilkington, which halted the construction of a window plant in Romania. The investment had been estimated at $100 million.
"The British have waived their Romanian-based project," sources from the Ministry of Economy and Trade told Ziarul Financiar.
The company was planning a greenfield investment in a plant set to make float windows, with the outskirts of Brasov deemed as the most likely location for the production unit. However, the company's officials had been looking at other locations, as well.
Bogdan Neagu, Pilkington representative to Bucharest, would not comment on the information, saying he was not mandated to release statements on this specific issue.
According to the quoted sources, the investment got cancelled because competition in the area was likely to intensify, as several companies operating in the same field had disclosed investment plans for Romania or the neighbouring countries.
A Turkish company was planning to build a plant in Bulgaria, while one of the world's main glass producers, French company Saint Gobain, also said it was mulling an investment in a Romanian-based window plant.
According to Saint Gobain officials, the company will decide this month whether to invest in Romania or not, considering the plant could be built in other countries in the area, as well.
The domestic market was supposed to absorb some 70% of the Pilkington plant's output, with the rest to be exported.
Float windows are used for buildings, but also for vehicles. In fact, according to statistics, this kind of windows accounts for 98% of the world window output. Romania is one of the few countries where the old technology is still being used for window making.
In Romania, about a third of the output is comprised of float windows, which are partly exported, so that imports play a significant role on this market.
On the other hand, the decision to pull the plug on the Romanian investment may have been caused by the worldwide economic downturn, which seems to have affected Pilkington.
Thus, the company's operating income dropped about 9% in the fiscal year ended on March 31, 2003, while turnover amounted to 2.7 billion pounds, down from the previous year's 2.8 billion pounds (about 4.4 billion euros).
According to other sources, Pilkington officials were not happy with the result of their discussions with the Government, to whom they had asked for fiscal incentives. The project was already good to go, but the British were still waiting for guarantees regarding the legislation stability.
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