ElcoBrandt chooses Poland over Romania

The French producer, ElcoBrandt, the most important French player on the home appliances market, has cancelled its plans to invest 11 million euros in a washing machine plant in Bucharest, opting instead for Poland, representatives of the French group told Ziarul Financiar.

“When making this decision we took into account the fact that Fagor (the Spanish group that is the main shareholder in ElcoBrandt) already has a production facility in Poland, while, on the other hand, we also considered the level of received incentives,” added the ElcoBrandt officials.

The French group confirmed their investment in the Bucharest washing machine plant earlier this year. However, after the shareholder structure changed, Poland also joined Romania on the list of potential locations.

The Spanish company, Fagor, a member of the MCC (Mondragon Corporacion Cooperativa) in April became the sole shareholder in ElcoBrandt after acquiring 90% in the group at a cost of 162.5 million euros. Since 2002 and until that time, Fagor had owned a 10% stake.

Fagor has a production facility in Poland in the Dolny Slask area and has received subsidies from the Polish government to the tune of 52.6 million zloty (around 13 million euros) linked to its 131.4 million zloty (over 32 million euros) factory investment plan.

Last month the French group said they were awaiting the Romanian authorities” reaction to the new situation, saying that the incentives offered by Poland were “much superior”.

ElcoBrandt confirmed that Romanian authorities had made an offer to the group, however the decision had already been made, with the most advantageous location being Poland.

ElcoBrandt”s decision comes two months after the truck producer, MAN, chose Poland to be the location for a 40-million-euro plant, after Romania had also been shortlisted.

French group Montupet also decided against making a large investment in Romania worth 120 million euros, choosing instead to build a car parts factory in Ruse, in Bulgaria, for 80 million euros. The expected 120m-euro investment had previously been declared a done deal by the Romanian authorities.

Last year Romania, together with Poland, also made it to the shortlist for another washing machine factory planned by Swedish giant Electrolux.

The value of that investment was estimated at 50-60 million euros, however the Swedish group postponed the investment amid a rise in steel prices.

The list of investors changing their minds about investing in Romania does not stop here. According to the Romanian Agency for Foreign Investment, the next such case is likely to be a group of investors that include businessman Gerald Schweighofer, the owner of Holzindustrie Schweighofer that has a timber plant in Sebes.