INTERVIEW – IKEA Approaches Croatia's Rugvica Municipality To Build Store – Municipal Governor

Rugvica, located some 20 kilometres southeast from the capital Zagreb, comprises 26 villages with population of some 7,600.

"We received a letter of intent for this project from IKEA seeking our opinion and help to solve some problems and in our answer we pledged to support it," Ivan Remenar told SeeNews in a phone interview. IKEA officials were not immediately available to comment. 

"For us, this is a very important project given that we are neither a big nor a rich municipality and this is the first large project here. Moreover, IKEA is not an insignificant name in Europe and worldwide," he added.

A precondition to carry out the project is to amend the existing municipal plans and to adopt an urban plan for this area and Remenar said this will take some time.

"IKEA's wish is to open the store in 2011," he added.

IKEA's project calls for a store of 30,000 square metres, another shopping centre of 122,000 square metres and parking space - all located on a land plot of 40 hectares. Currently, there is no infrastructure provided to that land plot located near the Zagreb-Lipovica motorway.

According to unofficial information, IKEA has agreed to buy 85% of the land with its current owners so far and was expected to approach the remaining 13 owners last week, Remenar added.

He expects the municipality to receive around 30 million kuna ($6.2 million/4.2 million euro) in various taxes and fees until the shopping complex opens, which is a significant figure compared to its annual budget of 12 million kuna. IKEA has estimated that the project will create 2,000 jobs when completed.

IKEA is known for its low-priced, flat-packed furniture and is considered the world's largest furniture retailer.

The IKEA Group owns 253 IKEA stores in 24 countries and during its fiscal year 2008 it has planned to open about 22 new stores. Overall, there are 285 IKEA stores in 36 countries. The other stores are owned and run by franchisees outside the IKEA Group in 16 countries.

(1 euro = 7.1147 Croatian kuna)