Nexen Tire has reportedly confirmed that the Czech Republic has won the right to host its first European plant. The South Korean company will invest over €600m in the construction of a new factory in the village of Nosovice, at the eastern tip of the country, according to unconfirmed reports.
The incoming investment has sparked the sort of scrap amongst the Visegrad countries that was regularly seen through the 1990s and early in the century. In early March, local news reports claimed the Czechs had won the fight, before Poland insisted it may in fact be in the box seat. However, Tyres & Accessories says sources close to the company have now confirmed that the company has opted for Nosovice.
The village also hosts the giant plant of South Korean carmaker Hyundai, while just across the border in Slovakia sits cousin Kia. According to the publication, the factory will be on-stream by the end of 2017 and will initially manufacture some 6m tyres annually.
Unnamed Nexen sources have peppered the conflicting reports with quotes in the regional press over the last month, suggesting the company has been keen to increase the competition amongst the potential host countries. Without an official announcement from the company, it's possible that the latest report of victory for the Czechs could yet be reversed by "sources".
The tussle between the Czechs, Poland, Slovakia and Hungary for the investment is reminiscent of the 2005 race to land another South Korean tyre producer: Hankook. At the time, Prague said it refused to offer investment incentives, insisting that it was only interested in high added value projects. However, with the crisis having pulled the rug from under the country's formerly successful drive for investment, the new government has made FDI a top priority.
Hungary eventually fought off Poland and Slovakia for the Hankook plant. On March 12, the European Commission gave approval to €57.9m in investment aid to the company, which is planning a third phase expansion of its Hungarian facilities.
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