The three manufacturers put Romania on their investment map with projects worth EUR160 million that should generate at least 3,500 new jobs, ZF has found.
Romania is therefore becoming an increasingly important actor in the European home appliances manufacturing industry, decreasing reliance on the automotive component manufacturing business.
“Romania is still attractive because of labor costs, this is a competitive edge we still have, since wages account for a great deal of the final price of bulky home appliances. We were rather late in realizing we need to encourage foreign investment, grant state aid, but the trend is good, we can expect further investment in the coming years,” says Radu Merica, chairman of the Romanian-German Chamber of Industry and Commerce.
In 2013, Italy’s De’Longhi started making espresso machines in the town of Jucu, near Cluj, replacing mobile phone manufacturer Nokia on the site, and posted EUR70 million revenue in the first two years alone. Over the next few years, Germany’s Kaercher and Turkey’s Arcelik (owner of local refrigerator manufacturer Arctic) should build EUR130 million plants from scratch, one of which to make vacuum cleaners and the other washing machines. The manufacturers applied for and got more than EUR57 million state aid, or one third of the value of the three projects.
“Many investments lately have relied on the state aid scheme. I think they would not have been made had there not been a state aid scheme in place. We must bear in mind that we compete with other countries which make good offers. Many try to woo such a large manufacturer,” Radu Merica added.
Romania is currently manufacturing only EUR500 million to EUR600 million worth of home appliances and has five major finished product plants and several other facilities that make components.
At the rate such investments are arriving, Romania might turn into a home appliances manufacturing hub, considering the presence of some manufacturers is bound to attract others in the same industry. The same thing happened in the automotive industry, where Dacia and Ford created manufacturing ecosystems around them.
(English version by Loredana Fratila-Cristescu)