Skanska Expands in Romania, Banks on Growth: Exec
Swedish construction company Skanska is expanding to Romania, banking on growth potential and infrastructure needs in the European Union's newest member, Skanska Executive Vice President Roman Wieczorek told CNBC.com.
Romania, which joined the EU in 2007 and enjoyed an economic boom and fast rising property prices, was hit hard by the financial crisis that followed the collapse of Lehman Brothers in 2008. However, investors and analysts have said the country of 22 million is recovering.
Last month, a property investor in Central and Eastern Europe told CNBC.com that commercial property in Romania's capital Bucharest and in neighboring Hungary's Budapest was underpriced.
Skanska is taking a similar view. "We want to expand to Romania. It has a big potential, there are a lot of needs and there is money from the EU to come," Wieczorek said in an interview on the sidelines of the World Economic forum on Europe and Central Asia in Vienna last week.
"We are starting in Bucharest as a developer with offices and later we want to go, among other types of businesses, to PPP (public-private partnership) projects," he added.
"We want to grow organically and we want to be there for the long term. At the beginning we are using our own money, we want to buy the land and build the offices," Wieczorek said.
"We want to work according to our own values which are openness, transparency, honesty, responsibility," he added.
Critics have pointed out that Romania is a laggard among Central and Eastern European peers largely because of corruption which has been hampering investment, harming the business environment and discouraging private initiative.
But Wieczorek said things were moving in the right direction and gave the example of his native Poland, where corruption fell gradually after it joined the EU in 2004.
"According to my experience it looks like Romania today is similar to Poland before it joined the EU,” he said. "I am sure that the EU is the strong change factor. And it will change very fast."
Wieczorek did not disclose how much Skanska intends to invest in the country, saying only that a first project may start in 2012, with Bucharest "the first target."
"We are taking Romania as a long-term strategy, we don't expect to see big money tomorrow," he said.