Pfeiffer hails Eastern Germany as investment venue for Korea

Germany Trade and Invest CEO cites subsidy, infrastructure, dedicated workers


Ever since German unification 20 years ago, the eastern part of the country has been clawing back the economic gap with its western counterpart.

“We want a level playing field for companies in the west and the east, we want to have the same chances for people,” Michael Pfeiffer, chief executive of Germany Trade and Invest, said in an interview at a seminar aimed at highlighting the advantages of investing in the former communist part of the country.

Eastern Germany last year saw its per capita gross domestic product increase to about 73 percent of western Germany’s. It also has the advantage of being one of the only regions permitted by the European Commission to offer subsides to foreign companies looking to set up shop.

Pfeiffer said that the subsidies they offer ― which can be as high as 40 percent of the initial investment ― are more advantageous than tax holidays.

Germany’s federal government also invested heavily in infrastructure while building new clusters in promising sectors, including those involved in photovoltaics, renewable energy and industrial chemicals. Germany’s gets 25 percent of its energy from renewable sources.

Another advantage for Korean firms looking to invest outside of the traditional cities of Frankfurt, Hamburg and Munich is that eastern Germany offers a strong pool of qualified, loyal and highly committed workers.

“Even the unions in eastern Germany are committed to the benefit of the company and the people because they want them employed,” he said.

Pfeiffer added that eastern Germany’s competitive tax conditions, secure investment environment and quality of life help to round off the region’s attractiveness.

Korea, the second largest Asian investor in Germany after Japan, has so far invested a total of $3.6 billion as of 2010.

Pfeiffer noted that the future growth for the country lay in renewable energy.

By Yoav Cerralbo (yoav@heraldcorp.com)