April 18 (Bloomberg) -- Embassy Group, an Indian property developer, will start work on a 300 million-euro ($390 million) IT business park in Serbia, an investment that may be matched by its clients and that could ultimately create 25,000 jobs.
The Bangalore-based company will start the IT park in Indjija, 42 kilometers north of Belgrade, with a $40 million investment, its Chairman Jitendra Virwani said in Belgrade today. The investment will take at least five years to complete and half of the funds will come from the group’s “equity in India and the rest from banks,” he said.
“Serbia seems to be a better place to risk our investment than any other country in the neighborhood,” Virwani said in an interview. “It is much cheaper than neighboring countries in terms of construction cost, salaries and the cost of living.”
Serbia has 1,600 IT companies with 14,000 people working there. The industry grew 5 percent last year, generating exports worth 230 million euros compared with the country’s total sales abroad worth 11.7 billion euros at the end of 2011, said Bozidar Laganin, the head of the Serbian Investment and Export Promotion Agency, or SIEPA.
“A lot of business from eastern European countries can come here,” Virwani said.
Embassy has chosen Serbia for its first investment in Europe to get closer to its customers, many of whom may choose the new location in Europe for software development, ICT-shared services and cloud computing.
“We have already been engaged in intensive talks with our clients to come to the new business park in Serbia,” Goran Gencic of Embassy’s Serbian arm Embassy Techzones, said.
Its client list in Bangalore includes Alcatel-Lucent, Computer Science Corp., Fidelity National Financial Inc., Geometric Ltd., International Business Machines Crop., LG Soft India, McAfee Inc., Microsoft Corp., NetApp Inc., Nokia Siemens Networks Oy, Vodafone Group Plc and Yahoo!Inc.
Doing business from Indjija, a town of almost 26,000 people, will attract companies by offering significant cost savings, including tax breaks, customs-free exports of goods and services and other benefits, Embassy said.
“With 170 hectares of available land and 250,000 square meters of business premises” in the project’s final stage, the IT Park will turn into the biggest such center in Europe, “putting Serbia on a map of preferred locations to do business in the European Union,” Embassy said.
Real-estate developers do not qualify for state aid while the government will continue to subsidize investment in car industry, electronics and IT, Laganin said.
To contact the reporter on this story: Gordana Filipovic in Belgrade at email@example.com
To contact the editor responsible for this story: James M. Gomez at firstname.lastname@example.org