Dr. Thomas Langweider manages Human GmbH, a medical diagnostic kit producer, on a site being developed by KGE Kommunalgrund GmbH near the Port of Magdeburg.

   On the opposite side of town, tenants are moving into a 300- hectare (741- acre) site called Rothensee near the Port of Magdeburg that KGE Kommunalgrund GmbH is developing under a contract with the City of Magdeburg. (Such arrangements bring more financial resources to bear on the development than would be available from a municipality developing the area on its own.) Here, too, labor supply is an area asset, not liability – even in the life science arena. Wiesbaden- based Human GmbH recently opened a production facility at the site, where it makes a range of medical diagnostic kits for hospitals, clinics, labs and medical offices.
   "Our employees are educated enough, the city authorities made the permitting process smooth, and access to the two main motorways are the main reasons behind this location," says Dr. Thomas Langweider, head of manufacturing at the facility. While he may not be able to hire all of his employees locally, Langweider says the same would be true almost anywhere else in eastern Germany, and the issue has not yet posed a major problem.
   Shipping Human's finished products to end- users might be slightly problematic if those products were any more time sensitive. As it is, customers tend to keep a supply of test kits on hand and simply order more when the supply begins to run low. None of the area airports – in Berlin, Liepzig and Hannover – are particularly strong in terms of international service relative to Frankfurt, so trucking arrangements are in place linking the Magdeburg

'Hinterland' Port Is Central to Region's Logistics Goals K ey to the Magdeburg area's emerging role as a logistics hub for eastern Europe is the Magdeburger Hafen GmbH, or Port of Magdeburg (www.magdeburg- hafen.de). The second- largest deep- inland or hinterland port in Germany after Duisburg, Magdeburg is equidistant to the North and Baltic Seas and is easily accessible via the River Elbe to Hamburg, one of the busiest maritime ports in the world. Water depths prevent most ships from journeying beyond Magdeburg for much of the year, but that's where the port has some tricks up its sleeve.    An east- west canal system intersects with the north- south River Elbe at Magdeburg, enabling goods to be offloaded from barges coming from Hamburg, for example, and transported into Poland and other points east, or west to Hannover and the industrial cities along the Rhine. This intersection is achieved with locks that elevate one canal linking the Elbe (the Rothensee Canal) with another canal heading east. The latter canal (the Mittelland canal) actually crosses the Elbe via a Waterway Bridge. Port of Magdeburg Managing Director Karl- Heinz Ehrhardt is overseeing development of a new industrial zone that will give transshipment operators a logistics edge by being at a critical waterway intersection. A gantry crane capable of lifting 50 tons can reach ships, rail and trucks.    Add abundant rail service and two autobahn motorways nearby, and you have a multimodal port complex for the "New Europe."    The port is developing a 40- hectare (99- acre) industrial zone, known as Hansehafen, on the north side of the port complex that will feature full multimodal connections and a new container terminal. The €38- million (US$50- million) project, funded by EU, federal, state and local subsidies, will be complete in 2008.    The original port was turned over to the City of Magdeburg for urban development projects like the Port of Science (see page 6). The city, in turn, gave the port the larger region to develop north of the city.    "My colleagues in other federal states in western Germany have conflicts with their city governments when the city wants to build housing in the port area," says Port of Magdeburg Managing Director Karl- Heinz Ehrhardt. "The ports want to develop the area for industrial use, so there is constant conflict. That is not the case here. Each party can develop completely independent of the other, which is a very good situation."

facility with the one in Wiesbaden and the Frankfurt airport.
   On the academic side, Human conducts the bulk of its research and development in- house, but it does collaborate with the local branch of the Max Planck Institute and the University of Magdeburg on occasion.
   Langweider says he would welcome additional companies in his field to the area. But for that to happen, people will need to shed their pre- reunification notions of the city as the machinery manufacturing engine for markets east of the Iron Curtain. Such notions are anachronistic, he says, and investors would be impressed by the industriousness of the area's workers today.
   "On the production lines, the employees think like they are owners, making suggestions to improve different processes," he relates. "I never saw this in Berlin or in Vienna when I worked in those places."
   Other companies located at KGE's Rothensee site include Schuberth Head Production Technology, which makes safety helmets for sports and industrial uses; Dascher, a logistics operation; and windmill- blade manufacturer Enercon GmbH; among others.
   Magdeburg Artholith began construction in 2006 on a facility on a 10- hectare (24- acre) parcel for manufacturing artificial stone used in building façades. Even before opening for production, the plant has contracts for producing products for customers in the United States and the United Arab Emirates that will provide a year's worth of work – at three shifts per day.
   The facility will take advantage of the region's sandy soil, which is a key ingredient in the production of Artholith's building materials. Three glass plants in the area, including e-glass AG's new, US$157- million raw float- glass plant in Sülzetal- Osterweddingen, also benefit from the sandy soil composition. Flat glass is used extensively in the automotive and building construction industries. In April 2004, the European Commission authorized financial aid of 35 percent of eligible investment costs, given the facility's location in an assisted area or economic zone.
   Other factors in the selection of the Rothensee site include its logistics infrastructure, meaning access to the two autobahn motorways and the nearby port; and a supply of skilled labor that is a third less expensive than elsewhere in Germany. The project will create 105 new jobs and two to three times as many related jobs in the service sector.
   In essence, KGE Kommunalgrund acts as a trust for the City of Magdeburg during development of the site. Once it is developed, the site will be handed over to the city along with the tenants' debt financing, which will provide a revenue stream for the city.

Anna Wohlthat, KGE Kommunalgrund GmbH

"This arrangement allows us to get into the project early on and invest money in infrastructure, and also to take advantage of subsidies from the European Union," says Anna Wohlthat, KGE's head of marketing.
   KGE first purchased land at the site from private owners and then put in place the legal structure for developing an industrial area. It then invested in the appropriate infrastructure needed to attract industrial tenants and is currently marketing space still available at the location. "We have an area of 100 hectares [247 acres] still available," says Wohlthat.
   KGE facilitates the entire site selection, development and project management processes at Rothensee, eliminating hurdles an investor might otherwise encounter along the way. The services cost nothing to the investor.
   "Our aim is to make investors' lives easier when they come here to invest, and that has been the case with all our investors," says Wohlthat.