The Czech government on Monday approved an investment agreement worth 22.8 billion crowns (1.14 billion U.S. dollars) with South Korean tyre manufacturer Nexen, Czech Prime Minister Bohuslav Sobotka said.
In the future, Nexen may invest up to 40 billion crowns in the triangle industrial zone in the Ustecky region, which would be the highest investment a foreign company has ever made in the Czech Republic.
"The decision made by the government, which approved an investment agreement with Nexen today, is a clear signal that our country in very interested in drawing new investors, and is attractive for the new investors," said Sobotka, adding the investment contract was won after seeing off competition from strong international rivals.
The first years of the project is expected to create at least 1,000 jobs in the Ustecky region, north Bohemia. In the future, it could provide as many as 2,300 jobs and the amount of investment could rise to up to 40 billion crowns.
The local employment office said the unemployment rate in the Ustecky region may drop by about 0.3 percentage points thanks to the investment. The Ustecky region has the highest unemployment rate of 11 percent in the Czech Republic.
Nexen supplies tyres to the Hyundai and Kia car plants in the Czech Republic and Slovakia, as well as to the Skoda Auto car plant in Mlada Boleslav, central Bohemia. Production in the Czech Republic is expected to begin within two years. (1 U.S. dollar = 20 Czech crowns)