April 10, 2013 / 2:50 PM / 5 years ago

German tyre maker Continental invests in Slovakia

PRAGUE, April 10 (Reuters) - German tyre maker Continental AG plans to expand its Slovak operations in an investment the Slovak government says is worth 250 million euros ($326 million).

The government said Prime Minister Robert Fico would travel to Hanover, Germany, later on Wednesday to sign a memorandum of understanding on the investment.

The plan should create 600 jobs at the firm’s operations in Puchov in western Slovakia, the government said.

Continental spokesman Alexander Bahlmann confirmed the memorandum would be signed, but declined to comment on the volume of the investment or the number of jobs, saying the plan would be implemented gradually, according to market conditions.

He said if the project was fully implemented, annual capacity at the Puchov plant would rise by 5 million tyres, compared with 11 million made last year.

The European car market has been shrinking due to the euro zone debt crisis.

Slovak media have reported the government was prepared to provide unspecified aid to secure the investment.

Slovakia has avoided the debt crisis that has hit many fellow euro zone members, but its economic growth has also slowed, and the central bank expects an expansion of just 0.7 percent this year.

The country has also struggled to bring down unemployment, which reached 14.71 percent in February.

$1 = 0.7658 euros Reporting by Jan Lopatka; Editing by Mark Potter

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