Jucu - A Romanian Silicon Valley. Will Mercedes take the bait?

Vineri, 1 februarie 2008, 13:51 English | Business

Warmed up by the Nokia scandal, the German media rushed to comment on the possibility of having Daimler production facilities opened in Romania or Poland. Even though some companies rather absorb than put in money, Romania wants investments at any cost, attracting investors in a fiscal paradise near Cluj, in Jucu, where investors will be exempted from paying taxes on the buildings. The profit tax is just as tempting: 16%. The question is whether Daimler will prefer this offering or the logistics offered by Poland.

In the Nokia case, the company will not pay taxes on the buildings it is currently constructing for the following 30 years, Sueddeutsche Zeitung reads, quoting Deutsche Presse Agentur (DPA). In case the company once again decides to relocate before the 30-year term, the tax will be paid in full, the manager of the Tetarom Industrial Park, Viorel Gavrea, said.

Gavrea said that a deal will be signed during the next 2 months. All other investors in the area will benefit from the same incentives. Once the contract is signed, the Jucu terrain automatically obtains the industrial park statute. In Jucu, the building tax is 1% of the building value.

Nokia currently holds 90 hectares out of the 159 hectares owned by Tetarom. The other 69 hectares are to be occupied by Nokia factory providers. At this moment, Tetarom wants to expand its surface by 170 hectares. German media speculate that the supplementary 170 hectares may be required for Daimler.

Tetarom holds three industrial parks, Jucu being only one of them. According to general manager Gavrea, there is a demand for other 700 hectares. For investments over 50 million euro, the lots in the industrial park can be offered after a direct negotiation. For investments lower than 50 millions, a bid is required.

Daimler didn't confirm the speculations in the media, but local officials in Cluj confirmed that there are direct negotiations between the Romanian prime minister and high Daimler officials. Tetarom officials also denied the existence of such negotiations, but say that Daimler could be indeed interested in investing in the area.

According to Automobilwoche, a magazine quoting a top manager at Daimler, it seems that the company currently analyzes both options: Romania and Poland.

The quoted manager said that the rough competition on the A- and B- classes makes Daimler need a new production facility, in order to reach the expected cost level. Still, Daimler will not quit the production in Rastatt, the current producer of the two classes.