Saxony seeks hi-tech investments

CHENNAI, JAN. 20. The Free State of Saxony, one of the five New States (Lander) of the Federal Republic of Germany (FRG), is wooing foreign investment, both from within Europe and from outside, in modern sectors of industries to accelerate economic growth.

It has already achieved a measure of success in this direction as is evidenced by the presence of leading manufacturers in this province (capital: Dresden) which was before national unification a part of the German Democratic Republic (GDR).

For instance, the AMD (Advanced Micro Devices) facility at Dresden produces the fastest microprocessors of the world. Infineon of the Siemens group makes high performance memory chips at Dresden. Compound Materials GmbH, an Israeli company in Freiberg, is the sole manufacturer of gallium arsenide wafers in Europe.

A vote of confidence in Saxony has been given in a big way by leading German automobile manufacturers whose base for long has been western Germany. ``BMW looked at 250 sites in the world for its latest plant, and shortlisted four including its native Bavaria (western Germany, where it has three plants), Mecklenberg (eastern Germany) and Czechoslovakia, and ultimately plumped for Saxony'', said Lixfeld, Head of the Department of Economic Development in the Saxony Economic Development Corporation.

Talking to The Hindu recently at the office of the Saxon State Ministry for Economics and Labour in Dresden, Mr. Lixfeld said expeditious administrative decision-making at the State and local levels in Saxony was the clincher of BMW's decision in favour of the State.

Another recent milestone was the inauguration, in December 2001, of Volkswagen's "glass manufactory" where the high technology, functionality and aesthetics in the production of upmarket automobiles is transparent to the viewer from outside.

Saxony produces right-hand-driven cars from VW meant for markets like India. Porsche (with its headquarters in Stuttgart, capital of Baden-Wurttemberg State) has set up a plant near Leipzig in Saxony to assemble Rover vehicles, having its biggest market in the U.S.

The State's strategy focusses on select modern sectors — automotive, machinery, Information Technology (IT), new materials, biotechnology and microelectronics — according to Mr Lixfeld. Its approach to creation of an investment climate rested on two basic tenets — that infrastructure development would have to take place concomitant with industrial investment and that the economic policy should be based on human motivation and individual initiative, he observed.

Investors in Saxony could get subsidies up to 35 per cent under various State, Federal and European Union (EU) programmes. Between October 1990, when the scheme for regional promotion of economic development was launched, and October 2001, a total of 17,057 industrial projects in Saxony with an investment of DM 64 billion had been subsidised to the extent of DM 13 billion and made possible the creation of 206,200 jobs. Another 750 projects were awaiting approval.

Under the category of ``economy-oriented infrastructure'', 4,386 applications, involving investments to the tune of DM 8.9 billion, had been approved, while the 104 pending applications involved infrastructure projects with investments of DM 393 million.

Saxony, which had planned a delegation to visit Hyderabad and Bangalore in late January 2002 in view of the importance of these two cities in computer software, is taking advantage of the modernised Leipzig/Halle international airport and the popular trade fair site in Leipzig to buttress it as an investment destination, according to Mr. Lixfeld.

The Saschen (Saxon) State Ministry of Economics and Employment has decided to modify shortly the regulations for promotion of telematics which came into effect in 1999.

The modifications are intended mainly to strengthen the position of small and medium enterprises.

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