British group Pilkington, a world-leading glassmaker, is preparing a $100 million investment for the construction of its own productive capacity in Romania.
The company is now attempting to build an investment in a glass-producing factory from scratch, for which it is considering three possible locations. The project is worth $100 million, but its achievement is delayed by Pilkington's wish to have the Romanian authorities guarantee the stability of the legislative norms on which the company could base its business.
At first, Pilkington was planning to take over the Buzau-based Geromed glass factory, which was attractive due to its good location, as well as glass production and processing facilities.
The company, however, gave up submitting a bid, unhappy with the progress of negotiations with the State Ownership Fund, and is now planning to build a float glass plant.
"The project has been completed, we have a clearly defined business plan," Teodor Mihaiescu, chairman of the company administrating SIF Muntenia, the institution involved in funding the project, told Ziarul Financiar. Bogdan Neagu, Pilkington representative in Bucharest, declined volunteering any details whatsoever, arguing he was not authorised to do so.
SIF Muntenia will provide 10% of the plant's financing. The British asked for the participation of Romanian private investors to reach 20%. Moreover, negotiations are being carried for obtaining credits from the EBRD and IFC.
The group's representatives were recently in Bucharest for talks with Romanian officials from the Development and Industry ministries.
"They want to be clearly informed on future legislative changes in the business field and on what elements they can count on for achieving this project," Mihaiescu says. Moreover, Pilkington considers that it would be entitled to certain benefits and incentives, given the size of the investment.
The British would also be interested in a potential financing granted by the Romanian state. "According to the schedule discussed with Pilkington representatives, all issues necessary for establishing a company should be clarified by this fall. The effective construction of the plant will begin next spring, but another two years are likely to go by until the unit starts functioning," Teodor Mihaiescu maintains.
Float glass is also imported in Romania and it has been used by companies such as West Bank, BRD (Romanian Development Bank), Crowne Plaza Hotel and Orizont Hotel from Predeal.
A plant making float glass can function non-stop for up to 12 years, producing approximately 6,000 kilometres of glass per year, with thickness ranging between 0.4 and 25 millimetres, and whose width can go up to three metres.
The group has granted licences for technology use to 40 producers from 30 countries. Revenues derived from these licences have brought it over 600 million pounds. Pilkington now has 24 float glass plants in 12 countries: Great Britain, Sweden, Finland, Poland, Germany, Italy, Spain, the United States, Argentina, Brazil, Chile and Australia.
It also holds stakes in another ten companies, operated by partners or associates. A float glass mill is currently under construction in France and production activity at this unit is estimated to begin at the end of this year or the beginning of next year.
The domestic market could take in 70% of the output and exports in this region have great potential.
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