Basf to Expand Investment in Tarragona

Basf to Expand Investment in Tarragona

Basf to Expand Investment in Tarragona

With the Spanish economy continuing to expand at a faster rate than its European neighbours, there was further good news on the foreign investment side for Spain.

Basf, the largest chemical producer in the world, has announced that it is planning to invest 21 million euros with the opening of a new line at their agrochemical plant in Tarragona, in the country’s Cataluña region.

Currently the plant is the largest in southern Europe and the new line is expected to be opened for operation in 2016, creating new employment opportunities in the area.

Foreign Investment Continues To Grow

After many difficult years following the collapse of the booming property market and having to ask for financial assistance from the EU, the Spanish economy is finally beginning to kick into gear.

This, coupled with more competitive salaries and costs, has lead to an upsurge in foreign interest as companies and businesses strive to get the best return on their investment.

Productive foreign investment – which generates business and jobs – rose 9.8 percent in 2014 compared to the previous year.  This figure is particularly significant within a context of falling direct global investment.

However, Spain’s qualified and flexible workforce, coupled with its competitive production costs, are encouraging overseas companies to invest in new plants or expand existing ones, such as Basf is planning to do.

Basf’s delegate in Spain, Erwin Rauhe, stated that the reasoning behind the expansion of the plant in Tarragona was based upon the “know how” of the existing staff at the Spanish base, and highlighted their skills and capabilities.

This is particularly significant considering that the German producer has bases in over 80 countries around the world.

A Bright Future Ahead

As investment continues to grow and internal demand starts gathering pace, Spain’s battered labour market can finally begin to see signs of optimism after years of savage job cuts.

The IMF applauded the reforms to the Spanish labour system but warned that job creation remained worryingly low, in relation to the quickly accelerating economy.  Recent figures suggest that the Spanish economy is set to grow by 3.1% in 2015, up from previous estimates of 2.5% a few months ago.

This figure is significant as it represents an increase that should lead to rapid and sustainable job creation. In the previous 6 months, more than half a million jobs were created although there is still a long way to go to reach the employment levels seen in 2008, just before the property collapse.

For more information on investment in Spain, contact corporate law firm Argali Abogados.

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