Hankook Tire Denies It’s Walking Away From Slovakia

Hankook Tire Co, Korea’s largest tyre manufacturer said it is still considering Slovakia as the site for a 500 million euro ($603 million) plant, contradicting a Korean newspaper report that the plan had been scrapped. Now the Slovak government is saying that it has up until 31 August to come with a new offer for Hankook, local media sources have reported.

The cabinet rejected the original investment proposal due to investment incentives of 21 per cent of the total investment. Now the government insists that six per cent will remain the maximum level of the investment stimuli for the company.

Hankook chose the city of Levice two months ago as the site for its first factory in Europe, saying on 4 May that it may hire as many as 1,600 workers to begin production in 2008.

“Slovakia is still on the table,” Suh Min-chul, assistant manager of Hankook’s investor relations department, said yesterday. He was denying a Korea Economic Daily report on 16 July that Hankook Tire had scrapped plans to build the Slovakian plant.

Hankook, which also has factories in China, wants to expand overseas production to Eastern Europe to supply Kia Motors Corp. and France’s PSA Peugeot Citroen, taking advantage of lower taxes and cheaper labour costs.

Kia, Korea’s second-biggest carmaker, is building a 1.1 billion euro factory to produce 300,000 vehicles a year in Slovakia.