GLOBAL EXPANSION: Manufacturers Turn to Central and Eastern Europe for Expansions

Expansion Management Online:

"GLOBAL EXPANSION: Manufacturers Turn to Central and Eastern Europe for Expansions

Companies like L.G. Philips, Hewlett-Packard find lower costs of doing business in this growing region.

[ 8/7/2006 ] By: Karen E. Thuermer E-mail This Article To A Friend

China is turning mature nations on end. But for Western Europe, the continually emerging economies of Central and Eastern Europe are giving countries like Germany, France, the UK and the Netherlands a run for their money.

The United Nations Conference on Trade and Development (UNCTAD) maintains that Asia and Eastern Europe offer the most positive foreign direct investment (FDI) prospects through 2008.

Supachai Panitchpakdi, secretary-general of UNCTAD, said the findings suggest that countries need to seize the investment opportunities but must also pay attention to the quality of FDI, given the fierce competition for investment.

Among the Central and Eastern European countries the UNCTAD deems most attractive are Poland and the Ukraine. In 2005, the Ukraine attracted 121 foreign companies with $4.07 billion in investments; Poland attracted 259 companies for $8.94 billion in investments.

Poland has rapidly become a hot location for producing components for the automotive industry. Ernst & Young pointed to Poland’s low labor costs, qualified labor force and network of 650 subcontractors (200 having ISO/TS 16949 certificates of quality) as being the key reasons. "