* 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 South Korean tire maker Nexen
Tire Corp 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 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
Nexen Tire said it plans to start production at the factory
in 2018 and eventually expand its annual capacity to over 12
The company, which has manufacturing facilities in South
Korea and China, is also a supplier to Hyundai Motor
, 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.
($1 = 1,017.80 South Korean won)
(Reporting by Hyunjoo Jin; Additional reporting by Jason Hovet
in PRAGUE; Editing by Matt Driskill)