Inter Groclin Auto looks to Ukraine for new manufacturing facility for euro 10 m

Inter Groclin Auto, a producer of car seats and seat covers, will employ almost 2,000 people at its new plant in Uzgorod in Ukraine, scheduled to open in September 2003. The company presently employs 95 workers at its Ukrainian headquarters, but they are not directly involved in production. The total cost of the investment will amount to euro 10 million. The subsidiary will operate under special tax rules which will allow for substantial additional savings. Groclin spokesperson Jerzy Pieta has not revealed the extent of the savings his company is counting on, saying only, "Everything is being analyzed at present and, according to representatives of the Ukrainian government, our investment might be exempt from income tax for the first two years. Furthermore, we may have to pay only 50% of this tax for the following three." These exemptions, along with reduced labor costs, will allow Groclin to improve efficiency. However, Jerzy Pieta is not concealing the fact that Ukrainian workers are far less efficient. In his view, however, the new investment will not mean any lay-offs at Groclin's Polish plant. (Prawo i Gospodarka, p. 15, Parkiet, p. 4) M.M.