Ljubljana, 11 May (STA) - Economy Minister Darja Radic has signed an agreement with the German concern BSH Bosch and Siemens and its Slovenian subsidiary BSH Hisni aparati under which the company will get a EUR 7.89m subsidy for a EUR 26.3m worth investment project.
The investment is aimed at expanding and diversifying production of small household appliances at the company in the northern town of Nazarje. The investor is Austrian holding BSH Home Appliances, which is in sole ownership of the German concern.
The investment will create at least 51 new jobs, but will also have wider implications as 50% of the suppliers are Slovenian companies, Minister Radic said as she signed the agreement in Ljubljana on Tuesday.
"The important thing is that the expansion will also include the development division and development activity in Slovenia," she said.
The company plans cooperation with the research institute Jozef Stefan and the Faculty of Engineering in Ljubljana. As part of the investment, a development unit will be launched in Ljubljana later this year.
The whole investment is slated for completion in 2014, and the subsidy will be allocated in three installments, Radic told reporters.
The production premises in Nazarje will be expanded by 1,300 sq metres. The new production facilities will mainly serve design construction, laboratories and support services.
"This investment is a recognition that the Slovenian government acknowledges our efforts and resources that we have invested in the past years," BSH Hisni aparati general manager Rudolf Kloetscher said.
According to him, the company generated EUR 271m in revenues last year, which is up 12% on the year before and 5% above targets. He called first quarter results "very satisfactory" without specifying.
"The planned investment in this project indicates a long-term interest not only in keeping this location, but also in keep adding value to Slovenian know-how and human resources," Kloetscher noted.
The head of Consumer Products at the German concern, Ralf Fuchs, said that future investments would yet improve and enhance the Slovenian plant's position within the group, establishing it as a "successful location with added value that we have long-term plans for".
Manufacturing of small household appliances in Nazarje goes back to 1970. The company was taken over by the BSH group in 1993, and employs some 1,300 people. Its development and production line serves as the group's competence centre for development of small household appliance and coffee makers.
Slovenia is still lagging behind EU average in terms of foreign direct investment (FDI). In 2009, FDI equalled a little below 31% of GDP, the EU average being 35%. "We are trying to reduce the gap," Radic said.
She reported an increasing interest among foreign investors in government incentives. The government has already approved three FDI this year, supporting projects at the French-owned car assembly plant Revoz and Julon, an Italian-owned synthetic fibres manufacturer, last year.
Meanwhile, the Economic Ministry is examining an application by Revoz for an incentive for Edison, the Daimler-Renault venture. Radic expressed satisfaction that interest was being expressed not by companies only interested in cheap labour but by those generating high-tech products.