Written on 02.07.2014 - Industry
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CZECH REPUBLIC: Nexen gets green light for Czech tire factory

Nexen Tire, Korea’s third-largest tire manufacturer, will build a plant in the Czech Republic after local authorities approved the deal worth 22.8 billion korunas (USD 1.1 billion), according to Czech media outlets.

The Czech News Agency cited Prime Minister Bohuslav Sobotka in reporting the deal, saying documents will be signed next Wednesday in Prague.

In addition, the news agency also said the tire manufacturer may invest an additional 40 billion korunas in the future, which would be the single largest investment by a foreign company in the Czech Republic.

The new plant will be located in the industrial zone Triangle in the Ustecky region of northern Bohemia and is expected to provide 1,000 jobs when it begins operation in 2016. The additional investment could mean 1,300 more jobs, CTK added.

It will be Nexen’s second overseas plant after Qingdao, China. Nexen supplies tires to the Skoda and Hyundai Motor plants in the Czech Republic and a Kia Motors plant in Slovakia.

Czech Foreign Minister Lubomir Zaoralek said once the investment is made, Korea will be the Czech Republic’s third-largest investor country after Germany and Japan.

According to the news agency, the deal pays Nexen 200,000 korunas for each job created and the government will provide support for employee training. The company already received a discount on the purchase of the 60-hectare factory site earlier this month.

The Ustecky region where the factory will be built has an unemployment rate of 11 %, the highest in the Czech Republic.

Source: “Korea JoongAng Daily”, Seoul; 19 June 2014
(Syed Rashid Ali, Karachi, Pakistan)