Bulgaria Still Stands Chances to Attract Huge Investment by Austria's Voestalpine

Voestalpine may be considering Bulgaria again as a potential investment destination in 1-2 years. Photo by voestalpine.com

The decision of the Austrian steel giant Voestalpine AG to make a large-scale investment in a new steel plant in the Black Sea region is still up in the air, the company told Novinite.com (Sofia News Agency).

Voestalpine announced in early 2008 that it planned to invest EUR 5 B in the building of a steel plant in either Bulgaria, Romania, Turkey or Ukraine.

Bulgaria appeared to be the forerunner in the competition for attracting the massive Austrian investment with Bulgaria’s former Minister of Economy and Energy Petar Dimitrov and Alfred Dusing - Chief Financial Director of the steel department and member of the Board of Directors of the Austrian Steel Company Voestalpine - signing a memorandum of understanding back in 2008.

Also to attract the project, the former Bulgarian government even paid international law consultants BGN 300 000 to prepare an investment agreement and conduct negotiations with the Austrian company.

The inception of the global financial crisis, however, forced Voestalpine to postpone its decision until 2009 at first, and then even longer.

“It is still one to two years early to be discussing the enlargement of Voestalpine. We are not over the crisis,” Voestalpine Investor Relations Manager, Aesch Gerald told Novinite.com (Sofia News Agency).

Although the Austrian steel giant has made some progress since the recession hit, shipment levels have yet to return to pre-crisis levels. 

This must be achieved before Voestalpine can begin to discuss expansion outside of Austria again, Gerald stated.   

If talks about the construction of the steel plant resume, Gerald said he is unsure whether Bulgaria will win the investment.

The future of the plant depends on the stability of both the Austrian economy and that of the chosen nation. Due to the shear size of the investment, the host country's economy must be strong enough for the government to provide support for the steel plant.

The massive investment was expected to create 4 500 new jobs and to indirectly employ some 25 000 people in the respective region.

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