By Noreen Lucey, Investment Analyst, Property Secrets

Poland remains THE strong attraction for the majority of FDI Central & Eastern Europe, but other countries - Romania and Buolgaria especially - are continuing to catch up.

If you know of any major developments on the FDI front, please let us know by emailing investments@propertysecrets.net.

Romania

US car maker Ford Motor Co bought 72.4 percent of Automobile Craiova, a car plant in southern Romania worth €57 million (US$ 77.9 million) in a deal signed in Frankfurt at the International Car Fair. The company intends to transform Automobile Craiova into Ford's headquarter factory in Central and Eastern Europe according to John Fleming, Ford Europe President and CEO.

Prime Minister Calin Popescu Tariceanu, said he believed the deal would turn Romania into the biggest car producer in the region, bringing more jobs to the country. Ford will invest €675 million (US$923 million) in the former Daewoo car factory. Ford also said it would buy supplies from the Romanian market worth €1 billion (US$1.39 billion). The first Ford car will leave Craiova plant at the end of 2008, Fleming said, adding that 90% of the production would be exported from Romania.

Ford has promised to increase production at Automobile Craiova from about 24,000 cars and 116,000 engines last year to 300,000 cars and 300,000 engines. Ford said it would increase the number of employees from 3,900 to between 7,000 and 9,000. Ford's investments to upgrade and modernize the site would reach US$1.37 billion (€0.99 billion) by 2012, it said.

Indian, car parts maker Amtek Auto will invest EUR7.25 million to build two plants in Romania and China respectively, said Amtek president Arvind Dham, quoted by Reuters. The firm produces steel and aluminium parts for cars.

US automotive supplier Delphi Corporation is opening a diesel engine management system (EMS) plant on an existing industrial platform in Iasi in what could raise up to 100 million Euro in investment. This move follows demand from customers, especially in Central and Eastern Europe, for diesel engine management systems that are Euro V compatible. The Iasi plant will produce high-precision diesel fuel injection components, mainly pumps and injectors for common rail systems.

Transport and logistic company Gebruder Weiss Holding has acquired 70,000 square metres of land facing the A1 Bucharest-Pitesti motorway, where it will develop the first phase of a 12,000 sqm warehouse. Investment in the land and the first phase of the project stands at 10 million Euro.

Belgium energy firm Electrabel said it plans to build a coal-fired thermal power plant with an installed capacity of 2 x 800 MW in the Port of Constanta. The project of the new power-generating capacity is a Greenfield investment that could exceed two billion Euro, one of the largest in Romania.

Greek company paint producer Atlas Corporation has invested over 6.5 million Euro in Atlas Production Park, an industrial facility for building materials. The new platform includes two production units for extruded polystyrene, emulsion paints, decorative plasters, fillers, putties and adhesives. Atlas Production Park lies on a total surface of 72,000 square meters in Tunari on the Bucharest ring road.

US oil industry service provider Cameron will invest 46 million Euro in Romania. The firm took over the main stake in oil equipment manufacturer Sterom Campina in 2004 and now, under the new move, the plant will make surface goods for the Russian, European, African and Caspian markets. Construction work is set to be finalised in 2008, according to the firm, with 330 people being employed at the plant.

Poland

FDI continues to increase into Poland during the first half of 2007. The Polish Information and Foreign Investment Agency (PAIiIZ), which is responsible for handling significant foreign investors, negotiated 31 projects during this period. The numbers will translate into 10,500 new jobs and EUR 746m in effective cash flowing into the country. There is a chance Poland will break the record FDI result of around EUR 12bn in 2006.

Finnish company Eltel signed an agreement last month to take over the Polish telecommunications firm TKC. Based in Poznan, TKC is a specialist in supplying services to the fixed line telecom markets. With the take-over Eltel hopes to strengthen its position in the Polish market servicing both fixed and mobile networks. Last year, Eltel acquired a similar telecoms service company, K-Tel.

German retail giant Aldi is to launch operations in Poland. The first Aldi markets will begin in January 2008 in Warsaw, Poznan and the Silesian region. The company has already started recruiting and is looking for German-speaking candidates to manage markets in Keilce, Wroclaw, Radom, Opole, Lodz and Poznan.

Construction firm Slaski signed a contract with the Slovenian producer of kitchen appliances, Gorenje, to build a warehouse and administration building in Ozarow Mazowiecki near Warsaw. The value of the investment for the project, which will have 12,000 square metres of building plus 8,000 square metres of car parking, is worth EUR 22m.

Bulgaria

The foodstuffs retailer Piccadilly has signed a preliminary contract with the Serbian company Delta Maxi which will enter the Bulgarian market by becoming the majority owner of the stores. The chain occupies the niche between the middle and the high price segment.

The company entered Sofia a year ago by opening the two malls, namely Mall of Sofia and Sofia City Center. Delta operates several different retail chain sizes like Mini Maxi (with commercial space of 400 sq. m), Maxi, including supermarkets with useful area between 400 and 2,000 sq. m each), Super Maxi - hypermarkets with a total surface of over 2,000 sq. m each, and Tempo - cash and carry outlets totaling 12,000 sq. m each. Last year's turnover of the holding amounted to EUR 1.4 bn, while planned sales for this year would reach EUR 1.8 bn.

A new, modern lighted athletics stadium, meeting all the requirements of the World's Light Athletics Federation will be built in Varna. The EUR 13.2m sports facility will be finished in 26 months after receiving construction permit.

A Dubai-based developer, specializing in high-rise buildings with current projects exceeding EUR 300m in the UAE, has decided to enter CEE markets. Abuali Malik Shroff, Managing Director of Sheffield Real Estate, said, quoted by Business Weekly, that the company is currently seeking parcels in Romania and Bulgaria to develop condominiums and work is scheduled to begin by mid-next year. According to the plans, USD 250 to 300 m is to be invested over a period of five years.

Inter Pipe AD, a local producer of seamless steel pipes, announced it would put about EUR 94 m in the construction of a cold stretch complex east of Kremikovtzi, near Sofia, on a 55 ha parcel. Construction of the complex is to start by the end of this year and to finish within 30 months.

Three new business projects with a total area of 41,000 sq. m are expected to be developed in the Bulgarian capital. The local construction company Birt Building Ltd will fund the developments. The first will be a commercial, administrative and sports complex. This ensemble with a total area of 12,000 sq m will be situated in Sofia quarter Mladost 4 on a 1.7 ha parcel. A residential section and spa center on a 1.8 ha piece of land, construction of a VIP complex with a total surface of 14,000 sqm, including administrative, has been planned in the Sofia location Manastirski Livadi.

Czech Republic

Icelandair has bought 50 percent of the largest Czech charter airline Travel Service, which also runs the low-cost Smart Wings airline.

In the Pipeline: The Czech government met on September 12th to discuss the planned privatization of state-owned Letiště Praha, the company running Prague Ruzyně Airport. In addition, Czech Airlines (ČSA) is set to be privatized. According to Karel Hanzelka, spokesman for the Ministry of Transport (MD), the government has approved the plan to privatize Letiště Praha.

Estonia

A group of foreign investors is planning to set up a 1.5 billion kroon (96 million euro) fish farm complex in Estonia, the Ministry of Agriculture announced August 30th. Alar Oppar, a ministry adviser, told the Baltic News Service that the project - by far the largest ever in the history of Estonia's fishing industry - belonged to a Danish investor and his partners from the United States and Switzerland.

Hungary

Pump producer Grundfos A/S inaugurated its new, Ft 4.5 billion ($24.64 million, €17.64 million) plant in Székesfehérvár on Tuesday, marking the company's third investment in Hungary. The plant sprawls on nearly 26,000 square meters and currently has a staff of 140-150 people. Grundfos plans to add 50-60 employees to its workforce by the end of the year and to expand payroll up to 300-320 by 2008. The new facility will have an initial output of 200,000-210,000 sewage pumps a year, which it plans to increase to 300,000 units next year.

Commentary

Romania continues to attract automobile firms investing in the country. Ford has bought 72.4 percent of Automobile Craiova, a car plant in southern Romania worth €57 million. US, Automotive supplier Delphi Corporation is opening a diesel engine management system (EMS) plant in Iasi in what could rise up to 100 million Euro in investment and Indian, car parts maker Amtek Auto will also invest in the country.

Poland continues to attract the bulk of FDI in Central and Eastern Europe. Half yearly results for Poland indicate the country could be set to break the EUR 12bn FDI that was attracted to the country in 2006. It is currently the leader of FDI in the region.

2006 turned out to be a record year for investment in the Czech Republic with EUR 4.4bn invested in the country. The Czech Republic's eastern neighbour, Slovakia, through its agency SARIO, managed to attract 65 investment projects worth EUR 607m in 2006, which contributed to the creation of over 11,200 jobs. Hungary's agency, ITDH, processed projects worth EUR 1.4bn and an estimated 14,560 jobs. Poland however remains the largest recipient for FDI in the region.