RIYADH, 29 November 2007 -- A Saudi company has bought controlling stake in Romanian Electroputere company, which manufactures train engines, generators and electrical transformers. The Romanian government has already signed the deal to sell 63 percent of Electroputere Craiova to Al-Arrab Contracting Co. Ltd., in which the Saudi firm intends to invest $1 billion to upgrade the existing facilities in a staggered schedule.
In a press conference here yesterday on the occasion of Romania's national day that would be celebrated on Dec. 1, Romanian Ambassador Dr. Ion Dobreci said "this is one of the major investments made by Saudi Arabia, which has so far invested $2.2 billion in that country." The move to buy this Romanian company at a total cost of $174 million is significant keeping in view the fact that Saudi Arabia intends to develop its railway infrastructure in which Electoputere engines can be used.
The priorities for Al-Arrab will be to invest in new technology for the production of train engines and to make Electroputere Craiova profitable by the end of 2009. At the moment, the Romanian company carries debts of more than $64 million and hence the only solution to continue production and modernize the facility was the involvement of a strong investor like Al-Arrab. Al-Arrab intends to export engines produced in Craiova, 200 kms west of Bucharest, to countries in the Middle East.
Dobreci further said that "Romania, which became a member of the European Union on Jan. 1 this year, is all set to boost its ties in different sectors with the Kingdom and the Gulf states."
He said Zamil Group and Amiantit are also working to invest in steel and pipe projects. This is in addition to a major housing project in which another Saudi company is involved with a Romanian partner. This joint venture company has announced plans to build some 25,000 housing units in Romania.
The ambassador said Saudi businessmen can benefits from a flat tax rate with greater incentives offered by Romania. "With an upward trend in economy, Saudi investors can go to Romania and avail of a large market, which also boasts of low costs, cheap labor, land and cheap utilities besides economic and political stability," he explained, adding that the Romanian Agency for Foreign Investment (ARIS) has been set up to extend all assistance to Saudi and Gulf investors.
Moreover, he said total Saudi-Romanian trade is about $200 million annually, noting that more contacts between the government officials and private companies will further lead to the growth in bilateral trade.
To this end, the envoy noted the recent visit of an eight-member Shoura delegation to Romania. He pointed out that many senior Saudi and GCC officials have been invited to visit Romania and the two sides are working on suitable dates. More that 200 Saudi students are also currently on the rolls of the various academic institutions of that country. Also, business and the tourism traffic between the two countries is growing. More than 2,300 Saudis visited Romania in 2006.
The press conference was also attended by George Gabriel Alexe, first secretary and Bogdan Soglu, counselor for economic affairs.
By M. Ghazanfar Ali Khan
© Arab News 2007
