Czech govt to provide EUR 139mn incentives for Nexen’s investment

By bne IntelliNews June 26, 2014

The Czech government will provide incentives of up to CZK 3.8bn (EUR 139mn) to South Korean tyre maker Nexen that plans to invest CZK 22.8bn (EUR 831mn) in a new plant in the country, CTK news agency reported.

The government signed the investment contract with Nexen on June 25. At the signing ceremony Prime Minister Bohuslav Sobotka said the deal is the result of 13 months of negotiations which will lead to the third-biggest direct investment in the country. The Czech Republic beat out Poland in the race to host the plant.

According to Adela Tomickova, spokeswoman of CzechInvest, the state agency in charge of negotiating with investors, the incentive package will include CZK 2bn in tax abatement, CZK 300mn for the creation of new jobs and material support worth CZK 1.14bn.

Nexen plans to start building the plant in 2015 and launch production within four years. The plant will be located in the industrial zone Triangle in the Ustecky region, north Bohemia, about 80km north-west of Prague. It will have an initial annual production of six million tyres. The plant will employ 1,000 people and at a later stage the company plans to boost the workforce to 2,300 people. The South Korean company has also said it will additionally invest CZK 40bn in the Tiangle zone to expand the plant in the future.

Succeeding in attracting Nexen’s investment is positive news for the new Czech government, which is trying to boost economic growth after a record-long recession.

The Czech Republic is a popular destination for South Korean companies, data from the Czech state investment and business development agency CzechInvest showed. Since 2005, South Korean companies launched 19 projects in the country investing a combined CZK 46.3bn and creating 8,432 jobs. The lion’s share of the investments came from car maker Hyundai that spent CZK 34bn to build a plant in the country in 2008.

The Czech Republic is also home to car plants run by Volkswagen's Skoda Auto and Toyota Peugeot Citroen Automobile Czech (TPCA).

Nexen’s chairman Kang Byung-Joong said his company decided to build the new plant in the Czech Republic to meet growing demand on the European market and be closer to its clients on the continent. 

Related Articles

Hungarian PM's "proxy" moves into the nuclear industry as Paks tenders approach

Firms controlled by Hungarian oligarch Lorinc Meszaros have purchased a 51% stake in the Hungarian subsidiary of Czech nuclear ... more

Czech PM accepts new nominee for finance minister

Reducing the political tension in the country a little, Czech Prime Minister Bohuslav Sobotka accepted on May 17 the nomination of a new finance minister from coalition partner Ano. Meanwhile, ... more

RBI doubles net profit y/y in Q1 as Russian business recovers

Raiffeisen Bank International (RBI), the second largest bank operating across Central and Eastern Europe by assets, reported that net profit almost doubled year-on-year to €220mn in the first ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss