Firestone Expands to Europe by Way of Spain

Firestone Expands to Europe by Way of Spain

Firestone Expands to Europe by Way of Spain

Spain’s reputation as a leading manufacturing country is attracting foreign firms keen to expand their business and also take advantage of the country’s strategic location as a gateway to Europe.

Since 2008, Spain’s export sector has grown by around 15 per cent, and its dynamism helped pull the economy out of a two-year recession in the third quarter of 2013.

Semi-finished goods, ships, cars, pharmaceuticals and electronic devices account for over 50 per cent of total exports. The country’s factories are keeping busy!

Spain’s success beyond its shores has been supported by a by-product of the global economic crisis – increased competitiveness. This advantage has fuelled overseas investors’ appetites.

And recent Purchasing Managers’ Index (PMI) data for the manufacturing sector has shown a solid improvement in business conditions.

SPAIN: FIRESTONE’S FIRST OVERSEAS BASE

One of the biggest venture capital deals in Spain last year was Philadelphia-based Crown Holdings‘ purchase of Spanish canning firm Mivisa. The US group’s ambition to grow its canned food business in Europe, including North Africa, was behind the move.

Firestone Building Products Company, a US manufacturer and supplier of commercial building products, is the latest multinational to bet on Spain with the acquisition of the manufacturing assets and brands of Giscosa at the end of last year.

Giscosa produces EPDM rubber – a type of synthetic rubber – at its plant in Terrassa, near Barcelona.

Firestone Building Products is one of the most prominent manufacturers of EPDM rubber roofs in the US and already had a long-standing commercial partnership with Giscosa’s sister company Rollgum.

The acquisition of Giscosa’s plant will enable Firestone to establish its first overseas manufacturing base and strengthen its position in the European and global markets.

SPAIN OFFERS ATTRACTIVE BUSINESS CLIMATE

While Spain still has some way to go before it returns to solid economic growth, it still offers an alluring M&A environment.

The country boasts one of the largest financial institutions in the Eurozone (Banco Santander), one of the largest consumer markets in Europe and labour costs which are well below the average for the economic bloc.

In the automobile industry, for example, the labour market is an estimated 40 per cent less expensive than those of Europe’s other biggest car-making countries, Germany and France. As a result, top car manufacturers like Opel and Ford have increased output at their Spanish plants.

But other industries, like new technologies, are also attracting overseas investors. Last September, US computer giant Intel acquired Spanish start-up Indisys. The company, specialising in natural voice recognition software, has built a solid reputation in Europe over the past eight years.

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

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