Nexen Tire to invest $1.2 bln in new factory in Czech Republic (updated)

Nexen Tire

23/06/2014 08:19

* Plans to supply tires to Volkswagen, Skoda and Seat 
    * Plant will start production in 2018 
 
 (Adds the factory's location and background) 
    SEOUL, June 23 (Reuters) - South Korean tire maker Nexen 
Tire Corp  002350.ks  said on Monday it plans to build a $1.18 
billion production facility in the Czech Republic from 2016 to 
2023 to tap into rising demand in Europe and offer stable 
supplies to automakers like Volkswagen  VOWG_p.DE  and its Skoda 
Auto and Seat units. 
    The investment in the Czech town of Zatec, will be one of 
the largest ever in the central European state which is 
recovering from a record-long 18-month recession that ended in 
2013.  ID:nA5N0NZ02C  
    Nexen Tire said it plans to start production at the factory 
in 2018 and eventually expand its annual capacity to over 12 
million units. 
    The company, which has manufacturing facilities in South 
Korea and China, is also a supplier to Hyundai Motor 
 005380.KS , which has a factory in the Czech Republic. 
    "Nexen Tire targets not only European carmakers, but the 
region's replacement tire market. Local production will help 
save logistics costs and tariffs," said Song Sun-jae, an analyst 
at Hana Daetoo Securities. 
    The Czech government said it was due to sign an investment 
contract with Nexen officials on Wednesday and said the spending 
will create at least 1,000 jobs in the first two phases and that 
figure could grow later.  ID:nA5N0NZ02C  
    ($1 = 1,017.80 South Korean won) 
 
 (Reporting by Hyunjoo Jin; Additional reporting by Jason Hovet 
in PRAGUE; Editing by Matt Driskill) 
 ((hyunjoo.jin@thomsonreuters.com)(82-2-3704-5685)(Reuters 
Messaging: hyunjoo.jin.thomsonreuters.com@reuters.net)) 
 
Keywords: NEXEN TIRE EUROPE/