Thursday, May 8, 2008

Foreign Company Drops Romania Investment

07 May 2008
Bucharest _ The international industrial group Vimetco announced that its planned investment for Romania’s Alro Slatina aluminium plant will be relocated to China.

Vimetco, which bought Alro in 2002, said a year ago that it will invest about $ 750 million to double the production capacity of aluminium in Romania.

Marian Nastase, the Vice-President of Alro’s board, said at a press conference that the decision is a good one because the aluminium market opportunities are better in China than in Europe.

Alro is the most important energy consumer in Romania and in 2005 the company asked the Romanian authorities to ease its access to cheaper energy.

The Government rejected this request, so Alro decided to build its own power plant, which would be functional from 2013.

Nastase claimed that the relocation of Vimetco investments to Asia is “not necessarily” linked to the refusal by the Romanian Government to ensure cheap energy for Alro.

However, he explained that Vimetco aluminium plants in China have their own power generators, and the salaries for employees are lower.

About 80% of Alro’s production costs are energy aquisitions. Alro produced in 2007 over 280,000 tones of aluminium.

Vimetco NV is an international industrial and investment group focusing on the aluminium industry, with its corporate centre in Netherlands and management and services centre in Switzerland.

For many years, Romania has been the target for Western companies keen to invest in factories and plants here due to a cheaper labour market.

1 comment:

karan said...

dead on point blog. we see china as the next big threat to the world market coz getting cheap labour does no good to the chineese ppl the companies and the govt laugh towards the bank with huge sum and doing WOT....organizing a colorful olympics ceremony. WOW .