Companies Object to Hankook Treatment

(Akron/Tire Review) Various companies are lining up, according to reports in the Slovak Spectator, to protest the special incentive package the Slovakian government has extended to Hankook Tire as an inducement to get the South Korean tyre maker to build a new plant there.

Slovakian tyre company Matador Púchov and members of Klub 500, an association of companies, say the investment incentives offered by the government are unfair and may exceed established limits. Matador, in particular, said the incentives place it at an unfair advantage.

The Slovakian government promised Hankook, which plans to build a 500 million euro plant in Levice, various forms of financial relief valued at 21 per cent of the investment. Reports say because the inducements are so great, the European Union must approve the offer. However, EU rules say government incentives cannot exceed 15 per cent of the proposed investment.

Klub 500 members said they want the country’s system of investment stimuli modified to the extent that if a foreign investor establishes itself in a market in which there is already a strong domestic producer, the domestic companies should also receive stimuli at a commensurate rate.