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Dutch companies investing in improving Southern European economies09 May 2014, by Alexandra Gowling
The troubled economies of Southern Europe are starting to garner attention from Dutch business, as companies not only start investing again, but in some cases moving production there.
While companies in the Netherlands point to a slowly improving consumer confidence in southern Europe as one reason, another is the cost of labour. Salaries in Southern Europe nations have in some cases declined by almost a fifth due to the crisis.
Southern Europe returns to growth
This has made it attractive enough for some Dutch companies, including electronics leader Philips and packaging manufacture Tetra, to open a factory in these regions.
While conglomerate Unilever is not yet investing in manufacturing plant expansions in the south, they are keeping an eye on developments.
"We see a return to growth in Spain, Italy and Greece," says a spokesman for Unilever, following statements by Finance Director Jean Marc Huet, who said last week that the situation in Southern Europe is improving.
Chemical multinational AkzoNobel agrees. "We are seeing the first signs of growth in Southern Europe," said CEO Ton Büchner recently. The group plans to build a huge paint factory in Southeast Europe, possibly in Turkey or Greece.
One boon for AkzoNobel is the slight recovering in the housing market in Southern Europe, as more people moving house usually means a greater demand for paint.
Work moving away from the Netherlands
Some companies are even moving work away from the Netherlands. Philips has moved a small part of the production of its LED light fixtures from Emmen in Drenthe to Spain.
Cigarette manufacturer Philip Morris has done even more: it recently invested 500 million euros in a new e-cigarette factory in Bologna, creating 600 new jobs, while it closed another factory in Brabant. Tetra Moerdijk also moved work to Spain and Serbia.
Reaching a tipping point
Other companies, such as trade credit insurer Atradius and Dutch exporter company Fenedex, are talking of a tipping point, as exports to Portugal, Italy and Spain are no longer in decline.
Employments firm Randstad is also seeing increased demand for workers for industrial, logistics and automotive sectors in Spain, Portugal and Italy.
Lastly, growing consumer confidence has seen retailer Hema open its first store in Spain, as has American discount chain Costco.
Source: Financieele Dagblad