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Kromberg and Schubert

Kromberg and Schubert Macedonia DOOEL Bitola

Realised

Investment value

Announced

20.000.000 euro

Invested

28.882.368 euro

Employment

Announced

3.500

Employed

3.116

The Government signed a contract with German company Kromberg & Schubert in December 2011, and two years later, in October 2013, they opened a factory for the production of car cables, located in the industrial zone Zhabeni, near Bitola.

The opening was attended by the Prime Minister at the time, Nikola Gruevski, where he stated that the company was initially to employ 2,500 workers. In the Accountability Report of the VMRO-DPMNE for 2016, however, it was noted that the contract signed with Kromberg & Schubert included a plan for the employment of 3,500 people and that at that point in time 2,800 people were already working there.

Officially, at the end of 2015, Kromberg & Schubert had 2.265 employees, while the following year this number increased to 3.116.

On one occasion, Deputy Prime Minister Vladimir Pesevski described the Kromberg & Schubert factory in Zhabeni as the biggest investment, in terms of the number of employees, in recent Macedonian history.

At the time of the opening of the factory, in an article posted on the government website, it was pointed out that the investment of the German company was worth 20 million euros, while media that covered the event reported an investment amount of 26 million euros.

According to their final financial statement for that same year, the non-current assets of the company amounted to 28.8 million euros.

At the end of 2011, the Government, through the relevant Minister for Foreign Investments, Vele Samak, and the municipality of Bitola, granted state aid to Kromberg & Schubert for, as it is stated in the decision of the Commission for Protection of Competition, supporting the investment project of the company.

The amount of financial assistance was not disclosed, but the decision of the Commission shows that Kromberg & Schubert shall be exempt from personal income tax on employees’ salaries and half of the total amount of workers’ social benefits and contributions.

"The municipality has invested in infrastructure and connectivity, while we as the Government have brought electrification, and we also built a 4.5 km transmission line," added Gruevski on the day of the factory opening.

Shortly after the opening of the factory, opposition councillors from the municipality reacted to a statement of the owner of Kromberg & Schubert, Hans-Otto Kromberg, for his disclosure of a part of the amount his company received, during his opening speech.

Namely, Kromberg at that time stated that he paid 1.5 million euros more than expected because he had to build water dikes because there was water on the land. After this he thanked the Government for their aid because the subsidies played a key part when buying the land.

According to him, the key reason for investing in Macedonia was cheap labour.

"High labour costs in Germany have forced us to spend the last three decades searching for locations with cheaper labour," media conveyed Kromberg’s statement.

In 2014, media reported that Kromberg & Schubert will build more plants in the industrial zone Zhabeni in order to complete the planned investment. According to reports in local media in Bitola, they started realising their promise after the summer of 2016 when the construction of a new factory had begun.

Last update: 04 april 2017