Five reasons to invest in Western Region of Romania

cbc_ timisoara socinroThe actual business environment of West Region is the result of several factors contributing to the stability and the overcoming the economic crisis. The high level of FDI reached before 2008 and the fact that 24% of the top 100 exporters in the automotive sector are located in West Region, made the way through the economic crisis with minor job losses and no „gates closed” among foreign companies.

  1. Dynamic Regional Economy

The industrial sector of the region covers nearly all branches: information and communication technology, machine building, electronic parts, wood processing, mining industry, chemical industry, medicine production, textiles, food industry, ceramics and glassware, etc. With 50,048 industrial, construction and service operational companies (9.3% of all companies in Romania), West Region has a density of 26.04 enterprises for each 1000 inhabitants, above the national average (24.82 enterprises for each 1000 inhabitants). Therefore to foreign investors, West Region is a promising investment location, where the substantial opportunities of an emerging market can be turned into a good account in a modern and continuously expanding business environment.

West Region is considered to be a growing region, with macroeconomic results above the national average. The GDP/inhabitant ratio has been above the national average each year, usually second only after the Bucharest-Ilfov Region. The GDP of West Region is 50.5% of the EU average.

Another significant part in the structural transformation of West Region was played by the foreign investors that encountered, on this emerging market, mentalities and attitudes similar to those on the more mature Western European markets.

Investments in the business infrastructure in West Region have materialised in the establishment and development of diverse industrial zones and parks. On the other hand, the land offer of the public administration brings in wide opportunities for greenfield projects. Nevertheless, big investments in office buildings were made (e.g. City Business Centre, Fructus Plaza Timişoara), which are targeting the services/BPO sector in Timişoara and Arad. Logistics is an actual successful domain in terms of investments. In the last two years for example, 6 logistics zones were built around Timişoara and all of them are privately- owned facilities.

2. Strategic Location

West Region has developed as a major logistic turning point to the assembly companies and importers of products for international markets. In this respect, West Region can be very attractive for logistic activities related to shipping goods to Central and Eastern Europe from Eastern Asia. 

Being situated at roughly the same distance from Vienna and Bucharest, Timişoara, West Region’s „seat”, has become during the past years a true Euro-regional hub. This status has been also attained due to its international airport, which is the most important regional airport within the Budapest-Bucharest-Belgrade triangle, with more than 20 international destinations.

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The inclusion of West Region in the two major transport networks – the TEN-T Network (Trans-European Network for Transport) and the Pan-European Corridors – is increasing the location advantages. Two Pan-European Corridors are present in the region: Corridor IV and Corridor VII, the latter one represented by the Danube, which make the connection between Central and South-Eastern Europe.            

The road infrastructure in West Region is constantly modernized and adapted to European standards. This fact is very important not only to those investors interested in exploiting the region’s resources, but also to those who want to use West Region as a major logistic hub. West Region is being crossed by five European roads, three of them being main roads and the other two secondary roads.

aeroport socinroIn West Region there are four airports, one in each county, and two of them are international and included on the TEN-T Network: Traian Vuia Airport of Timişoara and Aurel Vlaicu Airport of Arad. The International Airport of Timişoara represents an access gateway of Euro-regional importance, since it is the most deployed in the Budapest-Beograd-Bucharest triangle. The Aurel Vlaicu Airport of Arad has a cargo terminal which covers almost all the international freight traffic of the region and it also enables a few low-cost companies to operate within its premises.

The railway system in West Region is the second dense in Romania. The region is crossed by three international railways, two of them connecting the region with Serbia and the third one with Hungary.

3. High-quality of human resources

In 2009, the population of West Region was 1,919,434 inhabitants, which represented 8.94% of the population of Romania. In 2009, the total working age population (15-64 yrs age group) numbered 1.373.449 people. Of this total, the economically active population counted 867.000 people, of which 94% represented the employed population.

The competitiveness of the Eastern Europe is confirmed also by the labour costs, represented by the weekly average income in the private sector that is evaluated for Romania at 106 Euros (source FeDEE, 2010).

In West Region, the professional qualification is provided by the public education system during high school and university, ensuring a very good coverage of all the qualification domains (specializations and trades) at all qualification levels. The total employed population has the highest proportion of people with secondary education degrees – 37.7% -, followed by professionally trained people, representing 26.6% of the total. In the same time, an increasing value of 17.4% of the working age employed population (15-64 years old) in 2009, have university degrees.

West Region’s industrial infrastructure has been sustained also by a high-quality education and research infrastructure, centered on Politehnica University of Timişoara, one of the most prestigious technical universities in the South-East European space.

The sound professional qualification of West Region’s labour force is attained in the 14 universities of the region (7 state and 7 private universities) and through an extended network of technical education providers. Along with the professional qualification, the multi-linguism that characterises the multi-ethnic population of the region and the good knowledge of foreign languages have been other favourable factors to foreign investments in West Region. The dynamics of the university education is given by the number of graduates that reached in 2009 a total of 20,789.  

In this respect, it is worth mentioning that there are 12 high-schools in the region that award high-school diplomas in five different languages (German, Hungarian, Serbian, Slovakian, and Croatian) and, as of 1989, there are also high-schools of international language teaching. Moreover, the universities of the region provide courses in German and English for certain specializations.

The region’s research institutions cover a wide variety of scientific fields, such as:  rolling stock construction (railroad cars), machine construction, vine-growing, forestry, ironwork and metallurgy, mining and mining security, welding and material testing, chemistry and electrochemistry, physics, ecology, constructions, public health, hydraulic machines, agriculture, medicines, social sciences, etc.

4. Quality of life

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There is a wide variety of towns and cities in West Region, offering their citizens specific living conditions and leisure opportunities. The City of Timişoara, a multicultural ‘phenomenon’, is the largest city in the western Romania and is also called ‘Little Vienna’. The City of Arad, a character in the painted chronicle of Vienna, has the only star-shaped fortress entirely preserved in Romania and ‘Neptun’ Swimming Place, located in the Mureş ringlet, is one of the most beautiful places of amusement of this kind in our country. The City of Deva, the cradle of the Romanian gymnastics, was included in the world circuit due to renowned personalities as the gymnasts Nadia Comăneci and Ecaterina Szabó. Reşiţa, the oldest ironworks centre in Romania, is lying at the foot of the Semenic Mountain and in 1772 produced the first locomotive.

The presence of some unique natural elements in West Region is acknowledged in 131 protected natural areas, among them being one of the most important parks in Europe, the Retezat National Park.

The rich resources of the thermal, mineral and still waters of West Region have been known and used since very old times. The tourist potential of the thermal waters has been exploited in several regionally and nationally popular spas, out of which Băile Herculane Spa is internationally renowned. West Region owes its remarkable natural tourist potential to its diverse geography, rich natural resources, and spectacular landscapes. This potential enables the carrying out of numerous forms and types of tourism, which can be practiced, among others, in tourist resorts.

Wine tasting is a particular form of the gastronomic tourism popular in the region. The wine cellars of Recaş have been enjoying national and international recognition for their high-quality white, red, and rosé wines, exported in over 20 countries. Besides these, the vineyard of Miniş in the county of Arad is also famous, housing a vine research centre with a long tradition.

5. Advanced services for business

Timişoara had already established its reputation as a computer technologies hub in the 1970s, when the first Romanian computers were developed and mass-manufactured in the city. It now features strongly on the software offshoring map with international and local companies such as Continental Automotive Romania, SSI Schaefer, ACI Worldwide, Capgemini, Alcatel – Lucent, IBM, Lasting, Saguaro, QCT, Berg Computers, Infotim, Flextronics and OCE all active in the city. With over 500 relevant companies and almost 9 thou employees Timişoara’s ICT market is the second largest in Romania after Bucharest.

Timişoara is ready now for a third wave of corporations coming from financial and business services sectors, such as banking, real estate and healthcare, as the city moves up the BPO value chain. Companies such as KPMG, PWC and P&G are already present in the city. In October 2007 Bosch acquired Business Relations, a 150-employee strong leading Romanian supplier of communication centre services, whose customers operate in the telecommunications, publishing, commerce and public services sectors. Wipro, the Indian service company, took over a part of Alcatel Lucent outsourced services.

Automotive sector is also attracting new value added activities in the IT field. One example is Yazaki Engineering, located in Timişoara and acting in the automotive cockpit cluster software development, same as Continental Automotive Romania (the former Siemens VDO). ( Sourse: AGENŢIA PENTRU DEZVOLTARE REGIONALĂ VEST)

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