Car part maker to invest in Walbrzych SSE
Faurecia, one of the world's biggest automotive equipment manufacturers, is to invest another zl. 150 million ($34.8 million) in its factory in the Walbrzych special economic zone (SSE) in southwest Poland, Faurecia representatives said.
Since arriving in Poland two years ago, the French-based company has focused on developing its factory, Faurecia Fotele Samochodowe, which produces seat-adjustment mechanisms and frames in Grojec, a city 30 kilometers south of Warsaw. Faurecia has already invested zl. 150 million in Poland, primarily in the factory.
The company's major clients for the Faurecia plant are Volkswagen and General Motors, said Faurecia's Malgorzata Zieba.
The company's investment in the SSE will profit from an initial 10-year tax holiday followed by a 50% tax exemption for the next 10 years granted to companies that invest in zones. Faurecia has announced that it increased its initial commitment of zl. 117 million ($27.2 million) and moved up its factory start date from the first quarter of 2002 to October 2001. "This is mainly due to the good cooperation of the Walbrzych zone management and a simplification of procedures," said Faurecia President Alain Paillet.
The 15 special economic zones have sparked investor interest since they were set up in 1994. The zones had encouraged investors to commit more than $6 billion in declared investment by the end of 1999. Total foreign investment in Poland by the end of last year amounted to $38.9 billion, according to the Polish Foreign Investment Agency (PAIZ).
But the halcyon days of the initial 10-year, tax-free zones will soon come to an end. Due to European Union (EU) pressure, after Jan. 1, 2001 Poland will no longer offer investors 100% tax holidays. In line with the EU rules, which allow 50-75% tax breaks to entice would-be investors, Poland will grant investors 50% off their initial tax bills. As a result of the pending changes, a handful of investors are starting to hurry.
"A significant rise in interest can be seen," said Natalia Bartoszewicz, an employee in the marketing department of Invest-Park, the Walbrzych SSE's management company. She added that investors were pushing to speed up the bureaucratic process to get into the zones before the deadline.
The change to the SSE law is expected to weaken investor interest in the zones after the end of this year. The Walbrzych zone, however, expects to reserve 85% of its space by December, Bartoszewicz said. "We are in the fortunate situation that the majority of SSE is up and running," she added.
