A round up of the Foreign Direct Investment across Central & Eastern Europe this month reveals the biggest winner to be Poland, while Romania, Hungary and Bulgaria also receive siginificant investment.

As always, this isn't a definitive list of all FDI and if you have heard of anything significant we may have missed, do let us know.

ROMANIA

Kaufland opened a EUR 8 million store in Brasov, the retail chain's 26th hypermarket in Romania, with which its total investments in the country reach some EUR 320 million. Previously, Kaufland said that will invest some EUR 120-130 million to open 16 hypermarkets this year.

German group Lindl & Schwarz, intends to invest some EUR 150 million in over 100 stores to be developed in the country by 2011.

The huge market potential will allow the group to develop about 150 stores under the Lindl brand.

Mobexpert is going to put EUR 28 million in the construction of a new industrial park with a total area of 100,000 sq. m in Targu Mures, 15 km away from the city, in order to relocate the group's logistics and production activities there. The modernization of the company's own furniture producing plants is also a part of the project. The objective of this investment is to boost the growth of the company's output and the increase in the quality of its products. By 2011 a 50 percent jump in productivity and 50 percent increase in production is expected according to Dan Sucu, president of Mobexpert.

Austrian Immoeast has purchased a EUR 97 million shopping center project in Romania. Gold Plaza, which will be built in Baia Mare, a city of 150,000 residents in the economically strong northwest part of the country, will provide total usable space of 43,000 sqm. Golden Plaza is the first of an entire series of attractive large-scale projects the company is working on in Romania, Karl Petrikovics, Immoeast Director General indicated. He specified that Immoeast's 2007/2008 investment program envisaged investments of EUR 1.8 billion.

HUNGARY

Bács-Bio-Etanol Kft will build a bioethanol plant in Bácsalmás next year, Managing Director László Baricz announced. The investment will cost Ft 16 billion ($84.7 million). Construction is scheduled to start during H2 of 2008, and the factory would process 250,000 tons of locally produced corn annually. Local corn-farmers could be part-owners of the new company to be set up for the operation of the plant.

One of the largest Spanish property investment companies, Sedesa, is to carry out a giant investment in the vicinity of Sávoly, a small village in Somogy county (South-west Hungary), Spanish businessmen announced at the village community-center yesterday. President of the Sedesa group, Vincente Cotino promises that the village itself is to benefit from the project as well. Within the framework of the 252 hectare investment, an industrial and logistic center will be built on 102 hectares, while a residential park, two hotels and a golf course suitable to host international golf competitions will be established on 150 hectares. In response to daily Magyar Hírlap questions, Vincente Cotino said the total cost of the investment will add up to some ft 100 billion (€400 million, $531 million) adding that the company chose the site in the Eastern-Central-European region as its location is ideal from the point of traffic and transportation. The logistic center will be established at a strategic location, along a main route between Moscow and the Adriatic.

CZECH REPUBLIC

Dutch giant Heineken has just bought the Czech brewery Krusovice from Radeberger Gruppe KG. Heineken also owns the Czech brand Starobrno and this week's acquisition brings its share of the Czech beer market to eight percent, moving it up to third place in terms of market position. The royal brewery of Krusovice, located around 70 km west of Prague, was founded in 1517.

The Taiwanese firm Foxconn said this week that it is planning to spend almost 150 million USD on a new LCD and computer components plant in Kutna Hora, central Bohemia. The factory should employ 5,000 people; Foxconn has the same number of workers at another factory in Pardubice.

POLAND

Procter & Gamble (P&G), an international FMCG concern, has increased its plans regarding its new cosmetics factory in Aleksandrow Lodzki in the Lodz Special Economic Zone (LSSE). The company is to invest $50 million in its new plant by 2012 and employ 300 people. This will be the largest European cosmetics facility for Procter & Gamble. The company is not excluding the possibility of further expansion in that location and of increasing employment as a result.

"We began efforts to gain the necessary permission and I hope that by October, construction will commence," said Jacek Dziergwa, general director of P&G in Poland. "The opening is planned for the end of 2008 or beginning of 2009," he added. P&G already owns two factories in Poland: a diapers plant in Warsaw and safety razor plant in Lodz. It also runs a distribution centre in the capital.

Korea's SKC Eurodisplay Sp. z o.o. will begin production in the Walbrzych Special Economic Zone (WSEZ) casings for illuminated LCD monitors. The firm will invest at least PLN 52.8 million and employ about 100 workers. The recipient of the casings produced in the new factory will be, among others, the LG Group at Kobierzyce.

"This is one of the largest Korean firms. It's investing on a large site, so I assume that the project will finally be much larger than the one declared, particularly as major firms act as a magnet for other companies," said Mirosław Greber, president of the WSEZ. SKC Eurodisplay belongs to the SK Group - one of the biggest South Korean concerns, employing over 38,000 people worldwide. The group has branches in Asia, the USA and in Europe. The corporation operates in the fields of: electronics, chemicals, telecommunications and IT.

International investors purchased PLN 20 million worth of land in the Kammienna Gora SEZ. Among them is Irish door manufacturer Wilton Timber Products, which has already invested PLN 6m. German company Joh Clouth Composite Technology plans to invest PLN 10m in production lines for its papermaking tools, Polish clothing company Azarro and French interior design company Metaline also plan to invest heavily in establishing factories in the region.

Set for 2007 and 2013, the Polish Economic Innovation Program is charged with the allocation of EU funds totaling over PLN 2.1bn. Currently under debate are 95 investments that address a range of subjects such as research and development in new technology, expansion of IT, and the growth and promotion of the Polish economy on the international market. Among the many proposals, 8 major projects will cost around PLN 850m and require approval from the EU.

An estimated PLN 4.5bn is expected to be invested in airport upgrades throughout Poland in the coming years. Many upgrades are in the works as the airline industry prepares for the enacting of the Open Skies agreement that allows for an increase in the number of flights between Poland and the US. In June, a delegation of representatives of regional airports will travel to Washington to promote connections with Polish airports.

The railway company PKP Intercity said it plans to spend an estimated PLN 1.5bn in the next 3 years on 275 wagons, 10 engines, and faster trains. PKP Group competitors, PCC Rail and CTL logistics also planned to spend about PLN 1bn apiece within the next four to five years. Many of the funds for the new investments would come from the companies stock market holdings, such as PCC Containers, CTL Logistics, PKP Intercity and PKP Cargo, whose sum total valued at PLN 2bn

Banking - Q1 07 indicated a record number of credit cards on the Polish market, with 250,000 being distributed just in the 3 months of 2007. Banks such as GE Money boasted about distributing 65,000 credit cards between January and March, followed by Lukas Bank with 55,000 cards, and Kredyt Bank and Millennium Bank competing with 40,000 cards. This put the number of credit cards on the Polish market at 6.6 million, compared with less than 2 million in 2004. Head of Visa Poland Margaret O'Shaughnessy stated that this figure could reach between 8 and 9 million by the end of the year. However, the debt on the credit cards have not been growing relative to their distribution, as nearly half of the cards dispensed were never used.

Spokesman for GM Europe Carl-Peter Forster confirmed that the GM plant in Gliwice was one of the factories selected throughout Europe to produce the new generation of Opel Astras. GM would invest EUR 3.1bn in the construction and production of the vehicles, and nearly 30% of the 750,000 vehicles produced annually throughout Europe, would pass through Gliwice, in what spokesman for GM Poland Premyslaw Byszewsi calls a "huge success". While the factory in Gliwice currently produces 180,000 autos annually, Forster confirmed that production plans for the Astras in Poland is estimated at 210,000 each year. Since the announcement, tense negotiations have been underway with the 2.8 thousand factory employees demanding a PLN 500 raise in pay.

Bielnieftiechim, the national oil concern of Belarus is building a trade office chain to expand international sale of oil to the Central European market. Already registered in Lithuania Bielnieftiechim plans to expand into Poland, Holland, Germany, Turkey by the end of this year.

Statoil purchased the gas station chain Geant, known for low prices and for its prime location in front of shopping centres and supermarkets.

Gary International has started the construction in the Felicity shopping centre in Lublin. Gray selected Strabag for the PLN 57m general contract for infrastructure and external roads. The 200,000 square-metre centre is scheduled to open in the spring of 2009.

The Portuguese company Jeronimo Martins Dystrybucja, owner of the Biedronka chain, plans to open its 1,000th store in Poland and another distribution center. Employing over 16,000 people, Biedronka is a leader on the Polish retail trade market. Biedronka plans to open its next distribution center soon. This is only one of the stages in the company's strategy to establish itself and develop all over Poland. Its development plans include investment of zl.600 million annually, opening 120 new stores and creating about 2,000 jobs.

Australian firm Wildhorse Energy received permission from the environment minister to begin excavation in the Sudety region in search of uranium. The company plans to reopen a mine that closed 30 years ago in order to locate uranium to be sold on the profitable European energy market. Digging begins this month, while Wildhorses permit will be valid for at least six years.

French grocery chain Carrefour increased its budget by PLN 400m, raising its investment in Poland to nearly PLN 1bn. Carrefour currently has 116 locations in Poland, and competes with Auchan and Tesco in a sector worth nearly PLN 200bn. Tesco, a British enterprise, has 280 stores and a budget of PLN 600 million for Poland.

BULGARIA

Local Peugeot dealer Sofia France Auto will inaugurate a €12 million ($16 million) multi-purpose center on Sofia's Botevgradsko Shose boulevard in July. The complex will comprise of an auto service center, office and storage premises. The company already has two Peugeot centers in the Bulgarian capital and should open a further 3 across the country by the end 2007.

Through an investment volume of EUR 100 million, Eko Elda, the Bulgarian fuel retail subsidiary of the Greek Hellenic Petroleum, intends to increase its market share in the region to 10 percent over the next few years, PetrolPlaza reported, quoted by energy-business-review.com.

Eko Elda's executive director Yannis Polikandriotis comments the company plans to increase its current 44-unit fuel retail network in Bulgaria to 100 gas stations in the near future. A new station has been opened in Burgas as part of this plan and another 20 tanking stations are scheduled to be opened by the end of this year.
Eko Elda signed an agreement with Eko Petroleum, a fellow fuel retailer in Bulgaria, to lease a number of the company's petrol stations for 14 years, with an acquisition option. This turned Hellenic Petroleum into the fifth largest fuel retailer in Bulgaria.

Eko Elda entered Bulgaria's fuel retail segment in 2003 and following EUR 60 million investments made since this period, its rank has jumped, from to 1.5 percent in 2005, to the current 3.5 percent.

Mania Tower Ltd intends to put EUR 8 million in the construction of a 15-storey business center under the same name. Three of the floors shall belong to the commercial section with total area of 10,000 sq. m, while twelve floors are to be used for office spaces, Pari Newspaper reports. The complex will comprise conference halls, industrial catering, underground, as well as open air parking lots.

Commentary

This month was an impressive month for investment into Poland. Cities that have benefited from FDI and inward investment to the country include Lodz where Procter & Gamble have announced the construction of a $50 million cosmetics plant and third tier city Gliwice, where GM Europe has announced that the GM plant in Gliwice was one of the factories selected throughout Europe to produce the new generation of Opel Astras.

Ongoing investment into smaller economies in the region continues with an interesting investment was announced in Hungary with the development of a 252 hectare investment to be built in the south of the county - an industrial and logistic center will be built on 102 hectares, while a residential park, two hotels and a golf course suitable to host international golf competitions will be established on 150 hectares.