Investment Plan for Europe: EIB supports construction of Arctic white goods factory in Romania - Main contents
The European Investment Bank (EIB i) is lending EUR 68 million to white goods producer Arctic to finance the construction of a large-scale washing machine production plant featuring advanced manufacturing technologies and automation efficiency. This transaction is guaranteed by the European Fund for Strategic Investments (EFSI), which is the central pillar of the Investment Plan for Europe. The EFSI support will stimulate greenfield foreign direct investment to attract new investments and transform Romania into a white goods production hub for Europe.
After completion in 2019, the new factory will produce some 2.2 million washing machines a year. This will allow Arctic - currently the market leader in the Romanian white goods market with more than 40% market share - to meet increasing demand in the European market. Arctic is part of the Arçelik Group - the third largest producer of white goods in Europe and the seventh largest in the world.
The project is highly innovative, enabling the implementation of the latest automation processes and the integration of Internet of Things applications, including intelligent machines, inter connected devices and cooperative robotics technologies. Thanks to Arctic’s investment, the region will become an innovation centre with the potential to attract further investments.
EIB Vice President Andrew McDowell commented: “This highly innovative project, supported by the Investment Plan for Europe, will create 480 direct jobs and 900 additional working opportunities at a supplier level. The facility will be located in the South-Muntenia region, which is facing structural economic challenges following steel industry closures and is characterized by high unemployment and a low degree of technology manufacturing. For this reason, the investment has a great value for the region.”
Commissioner for Regional policy Corina Creţu said: "This project embodies Romanian excellence in terms of innovation and advanced technology. The Investment Plan for Europe is giving Arctic the financial boost it needs to expand beyond local markets and create quality, sustainable jobs in Romania. This is a concrete example of successful industrial modernisation, supported by the EU. I congratulate the EIB and Arctic on this great deal."
Arçelik CFO Polat Şen said: “We are pleased to enter into this lending arrangement with European Investment Bank, who has been a supportive financial partner of Arçelik, for the construction of our new factory in Romania. This investment will be a significant step towards making Romania a center of excellence in manufacturing. Having access to the official financing institutions of the European Union aligns with our strong commitment to Europe, both as a market and as a manufacturing base for our products.”
Background information:
The European Investment Bank (EIB) is the European Union's bank. It is the long-term lending institution of the EU and is the only bank owned by and representing the interests of the EuropeanUnion Member States. It makes long-term finance available for sound investments in order to contribute towards EU policy goals. The EIB works closely with other EU institutions to implement EU policy.
As the largest multilateral borrower and lender by volume, the EIB provides finance and expertise for sound and sustainable investment projects which contribute to furthering EU policy objectives. More than 90% of EIB activity is focused on Europe but it also supports the EU's external and developmentpolicies.
The Investment Plan for Europe (the Juncker Plan) is one of the EU's key actions to boost investment in Europe, thereby creating jobs and fostering growth. To this end, smarter use will be made of new and existing financial resources. The EIB Group is playing a vital role in this investment plan. With guarantees from the European Fund for Strategic Investments (EFSI), the EIB and EIF are able to take on a higher share of project risk, encouraging private investors to participate in the projects. In addition to EFSI, the European Investment Advisory Hub (EIAH) helps public and private sector project promoters to structure investment projects more efficiently. The investment plan should also create a more investment-friendly EU regulatory environment, particularly in the digital, energy and capital markets sectors. In December 2017, the European Parliament and Member States reached an agreement to extend the duration of EFSI and increase its financial capacity.
Arctic is the leader of the Romanian household appliances market and owner of the biggest household appliances factory in Continental Europe, with its Gaesti factory which has produced until now over 31 million refrigerators. Also, Arctic is one of the most important companies in Romania, with over 3,600 employees, including subcontractors, and a turnover of 2,2 billion lei in 2017. Currently, 87% of the total Arctic production is exported in over 80 countries.
In 2017, Arctic has started construction works for a new washing machine factory, in Ulmi, Dambovita. The new project is a Greenfield investment and will be the first production unit in Arçelik group built according to Industry 4.0 digital concept. The factory will integrate top notch technologies and wireless communication of the production lines with those in other countries part of the Arçelik group, and intelligent machines. On the local market, Arctic has consolidated its leadership position in 2016 and 2017, for its Arctic, Beko and Grundig brands, by offering products and services adapted to the needs and lifestyle of its consumers