July 26, 2017 / 12:51 PM / in 5 months

Slovenia aims to approve Magna Int'l project by September

LJUBLJANA, July 26 (Reuters) - Slovenia hopes to give Canadian car parts maker Magna International a green light to start construction of its planned paint factory by September, Economy Minister Zdravko Pocivalsek said on Wednesday.

The new factory would create 400 new jobs and be the first phase of Magna’s potential investment of 1.24 billion euros in the southeastern European country.

“We have to meet conditions for the start of the investment by September, otherwise the investor (Magna) will seek another location,” Pocivalsek told a news conference.

He declined to speculate when the Slovenian Environment Agency could decide on whether to approve Magna’s investment from the environmental point of view.

That approval is the last major step in clinching the investment and the agency is expected to decide on the matter in the coming weeks.

Magna had said that it would probably build the paint factory in neighbouring Hungary if Slovenia’s investment plan fell through.

Pocivalsek also said Slovenia’s foreign direct investment could this year rise by a similar amount as in 2016, when it expanded by 11.2 percent, providing that Magna’s investment is approved.

In May three farmers complained to the Constitutional Court that Magna should not be allowed to build on agricultural land but this was rejected by the court earlier this month.

Magna’s investments would be among the largest in Slovenia so far. The ex-Yugoslav republic, which joined the eurozone in 2007, exports about 70 percent of its production with cars and car parts being among the most important export products.

France’s Renault owns a production plant in the country, while a number of Slovenian companies produce metal and textile products for most global car producers.

Slovenia narrowly avoided an international bailout for its banks in 2013 and returned to growth a year later. The government expects the economy to expand by 3.6 percent this year, up from 2.5 in 2016, boosted by a rise of exports and investments.

Reporting by Marja Novak; editing by Mark Heinrich

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