Swiss FDI to Romania going strong at EUR 1.1 bln

Foreign direct investments to Romania from Swiss companies amounted to EUR 1.1 billion last year, putting the country around seventh position among foreign investors in Romania by country of origin, according to a report by the Swiss Embassy to Bucharest. The embassy evaluated data from Swiss companies active locally, as well as data from the Romanian Trade Registry (ONRC).

With strong exports and an internationally connected economy, Switzerland has long been present with investments in Romania, but the focus and sums intensified at the beginning of the 90s. According to a Swiss Investment Report released recently by the Embassy of Switzerland in Romania, there was some reluctance from Swiss investors in the beginning due to the country’s difficult legal and business environment. This remains a problem.

According to Swiss investors, the current investment climate for foreign companies in Romania is between poor and satisfactory, closer to satisfactory. Legal stability and transparency, transparent and efficient bureaucracy and the potential of the internal market are, generally speaking, the three most important factors driving investments, according to the report. The top three barriers to investment for Swiss companies in Romania are the lack of bureaucratic transparency and efficiency, poor governmental budgetary discipline and inconsistent government economic policies.

The single most important Swiss investor in Romania is Holcim, which makes up about half the overall Swiss investment. Other top investors are Expur, Intercontinental, Nestle, Novartis, Ringier, Roche, Swisspor, Rieker, TopBrands and the companies of investor Jean Valvis. Further well-known Swiss investments are Angst, Carpatair, Franke, Heidi Chocolates, Helvetica Profarm, Inter-Spitzen and Sefar.

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One active investor recently was Jean Valvis. The former owner of dairy producer Dorna has announced that he has taken out a EUR 9.2 million loan from BCR to fund the opening of a mineral water factory in Suceava. The factory, which will open in summer this year, will require a EUR 12.5 million investment which will be made through Carpathian Springs. The production of the factory will cater both for local and external demand. The new mineral water, Aqua Carpatica, will be launched on the market this summer. Valvis sold Dorna to French group Lactalis in 2008 and Dorna Apemin mineral water producer to Coca Cola in 2002.

In the cement industry, construction materials producer Holcim, another significant Swiss investor, saw a drop of 19 percent in its sales volume of domestic clinker and cement from 2008, according to the company’s recent financial report. Domestic cement prices were up 1.5 percent in local currencies last year on the previous, according to the firm.

The drop in Holcim’s sales was higher in other countries in the region. On the Slovakian market, sales fell 47.8 percent, and in Bulgaria 46 percent. The Russian market was down 33.6 percent for the firm. Romania, Azerbaijan and Croatia brought the lowest sales volume falls for Holcim. In Russia, clinker and cement prices sank 38.2 percent, in Azerbaijan 13.4 percent and in Spain 15.5 percent, the biggest price drops for the group last year. Holcim runs three factories in Romania, in Turda, Campulung and Alesd, as well as 20 ecological concrete work points and five aggregate work stations.

In 2010, Switzerland will start its first projects in the EUR 120 million Swiss EU Enlargement Contribution to Romania. Economically, Switzerland will consolidate its position as one of the top ten investors in Romania, and bilateral trade should pick up after a difficult 2009, according to Livio Hurzeler, the Swiss ambassador to Bucharest.