Written on 22.03.2014 - Industry
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CZECH REPUBLIC: Nexen Tire mulls building plant in Czech Republic

Nexen Tire Corp., South Korea's smallest tiremaker, said Thursday (6 Mar. 2014) that it is reviewing various options in building a new overseas plant in the Czech Republic. The announcement follows foreign media reports that Nexen is actively contemplating building its second foreign factory in the East European country.

At present, the tiremaker has one overseas production facility in China that can churn out 10 million tires a year. This adds to the 19 million tires the company can produce at its South Korean plant, with the company expected to increase domestic production to 30 million units within the year.

Related to the media reports, a Nexen source said that it may have been triggered by the fact that the tiremaker had recently secured a deal to supply tires to Skoda Auto. Under the contract, Nexen will provide tires to Skoda's Rapid and Octavia small family cars. The leading Czech carmaker is a wholly owned subsidiary of Germany's Volkswagen Group.

"Like all tiremakers, Nexen has long-term expansion plans that naturally include building overseas plants," said the insider, who declined to be identified. He, however, said the company's management has never expressed commitment to any country.

He said that besides the Czech Republic, where some 1.2 million cars are expected to be produced this year, Nexen has been eyeing such large tire markets as the United States, Latin America and Southeast Asia as prospective locations for its next overseas plant.

Source: Yonhap News Agency, Seoul; 6 Mar 2014
(Syed Rashid Ali, Karachi, Pakistan)