Bosch to Start Major Investment in Romania

German automotive components producer Bosch will invest in a new production facility in Jucu, northwest Romania.

The German company Bosch has confirmed plans to start investing 77 million euro in a new production facility in Jucu, northwest Romania, in a move which is good news for the country, struggling with recession.

The plant, which will create 340 jobs in the production and development of automotive components, will open on the site of the former Nokia plant that shut last November. The new production facility will be 215,000 square metres.

Romanian officials previously said state aid would be granted to the company.

Furthermore, home appliance producer De’Longhi will buy the former Nokia plant, with the transaction expected to be completed soon, according to media reports. Local authorities have said the investment is worth 30 million euro and at least 600 people will get jobs at the new facility.

When Nokia announced the closure of the 60 million euro plant last year, the move took Romania by surprise. Many of the 2,200 employees were laid off. The closure, announced for the end of the year, was brought forward by one month owing to a lack of orders.

In its last two years, the Nokia subsidiary in Romania was the country's second largest exporter. But the company decided to move its operations to cheaper countries.

Ironically, Romania benefited from the same economic logic in January 2008, when Nokia announced it was closing its plant at Bochum, Germany, with 2,300 employees, and moving production to Romania, where costs were lower.

The plant in Jucu, where the 1200 series of mobile phone was produced, opened in September 2008.

The move created anger in Germany, while the European Union asked Romania to provide details of any subsidies it had granted to Nokia as part of the deal to open a plant in the country.