De’ Longhi and Bosch check into Jucu after Nokia departure

Italian white goods producer De’Longhi and German car parts manufacturer Bosch will invest in Jucu’s Tetarom industrial park. De’ Longhi has signed an agreement with Nokia Corporation to acquire the production unit in Jucu, Cluj, announced the Finnish company, confirming rumors on the media market.“De’ Longhi bought a large space including a production floor, distribution warehouse, training rooms and so on,” Anna Simai, Senior Communication Manager, Nokia Central Europe told BR.
The terms of the transaction, expected to be completed in the first quarter of this year, are being kept confidential.
„I would say that an opportunity has been taken in Jucu; there is an existing factory and a well qualified workforce which can easily be retrained in other domains. I think all the elements were there for the transaction,” Adrian Dimache, secretary general at the Italian Chamber of Commerce of Romania, told BR. “The fact that De’Longhi is entering Romania offers more security to the investment because its product is less vulnerable to cycles of fashion or purchasing power changes. De’Longhi products will be more marketable, more stable, than Nokia’s.”
Dimache added, “Nokia should have been assessed right from the start as a volatile investment. The investments that are wanted in Romania mustn’t be volatile. We mustn’t get carried away by the name of investors. Some are here to exploit a situation seeking only their interest.”
De’Longhi will integrate the production unit as a key part of its international development strategy.
“Several companies showed an interest in acquiring the facility. De’ Longhi was the ideal buyer since they had a clear plan for the site and are interested in making it all happen in the near future,” said Simai.
The Italian producer intends to adjust its manufacturing capabilities and diversify its production platform so as to balance the production in the Far East with production in Europe. In Europe, the white goods maker has a production unit only in Italy.
The Italian group has revenues of approximately EUR 1.8 billion and is listed on the Milan stock exchange. In Romania, De’Longhi has been distributing all its lines of products, which include coffee makers, kitchen appliances, irons, air conditioning units, air treatment devices, portable heaters and similar, via local company M&N Italy Trading SRL.
By opening a production unit on the Romanian market, the Italian company will be competing against producers such as Arctic, Electrolux and Miele. In line with the approach of these firms, De’Longhi could use Romania, which is part of the EU, as a regional hub from where it could export to neighboring countries.
Suggesting possible reasons behind the firm’s purchase of the Nokia plant, Dimache said, “The purchasing price was not an important factor in De’Longhi’s decision. When you make a long-term investment, there are things you don’t count as constant, such as the initial investment cost where the investment payback is subject to international standards. The small price is not the main factor that persuaded De’Longhi to establish operations in Romania, rather than in Vietnam or India where labor costs are lower,” he said. “Romanian law provides some fiscal advantages for investments of a certain type, so De’Longhi will probably enter the standardized system for the promotion of investments which is set up by the government.”
Bosch opens production unit in Tetarom Park in Jucu
German car parts manufacturer Bosch will also open a production unit in Jucu, as announced by Viorel Gavrea, general manager of Tetarom industrial park. “The contract with Bosch is ready and we are now waiting for it to be signed, after a certain file is approved by the Ministry of Finance,” Gavrea told the Transilvania L!VE television channel. The investment should create approximately 2,000 new jobs.
The GM said that Bosch would set up its production facilities on 21 hectares in the Tetarom III industrial park, which previously included the Nokia production unit, where it will manufacture electronic components for cars. Investments made by the German producer could reach EUR 60 million, which is approximately the same investment made by Nokia in its production unit in Jucu. Bosch as a group posted a turnover of EUR 47.3 billion in the fiscal year 2010 and has 283,500 employees.