INTERVIEW-Slovakia hopes to lure more Samsung investment

By Martin Dokoupil

BRATISLAVA, Nov 21 (Reuters) - Slovakia is hoping Samsung Electronics' <005930.KS> large presence in the country will entice the South Korean company to build another plant there, a government official said on Tuesday.

Peter Hajas, director of state investment agency SARIO, told Reuters in an interview Slovakia was in intensive talks with Samsung Electronics about the plan to build a liquid crystal display panels plant.

Samsung operates its largest plant in Europe in the southwestern Slovak town of Galanta, where it produces LCD TVs and monitors, plasma screens, printers and other appliances.

"It could be a big plus as Samsung knows the production environment here. Having their production already here indicates we can be a very serious partner," he said, adding it gave Slovakia an advantage over neighbouring Czech Republic, Poland and Hungary.

Hajas declined to say how much money Samsung, the world's biggest LCD maker, was willing to invest in the new plant. Earlier this month, the economy ministry said the company was expected to inject 16 billion crowns ($577.4 million) by 2010.

Hajas said he had no indication of when Samsung would decide on the new investment. He added that investments from several Samsung suppliers were also linked to the project, but declined to give the amount.

Sales from Samsung's existing Slovak operation are expected to jump to around 80 billion crowns in 2006, from 49 billion last year, as demand in Europe rises.

In June, Samsung, one of Slovakia's top exporters, also opened a new logistics centre for central and western Europe in the country.

News of large foreign investment deals are closely watched by financial markets as inflows of foreign capital and prospects for new export-oriented businesses could boost the currency.

FDI FLOW

Hajas said the agency had secured 34 projects worth 620 million euros ($794.4 million) in January to September, adding that it was working on another 155 projects, although there was no investor of a similar size to Samsung.

"We do not have any big investor such as Samsung in sight yet where we could say the talks are in any (advanced) phase," he said.

But Hajas expected investment activity to be boosted by a new law on incentives, which should quicken the administrative process for smaller projects.

"This scheme will allow Slovakia to approve investment projects of up to 50 million euros and some projects even up to 100 million euros without the need to notify the European Commission," he said. "It's a positive impulse for investors."

The bill, which still needs to be approved by parliament, will also offer higher state aid for firms willing to invest in less developed eastern regions.

Foreign direct investment inflows have rebounded this year, reaching 34.2 billion crowns in January to July, the central bank's data show. Inflows fell to 17.3 billion crowns last year, from 22.4 billion in 2004. ((Editing by Sue Thomas; Reuters Messaging: martin.dokoupil.reuters.com@reuters.net; +421 5341 8402)) ($1=27.71 Slovak Crown) ($1=.7804 Euro)

Keywords: MANUFACTURING SLOVAKIA SAMSUNG