Nexen's Czech plant on stream in '18

CHANGNYEONG, South Korea (March 6, 2015) — Nexen Tire Corp.'s $1.1 billion plant in Žatec, Czech Republic, should be on stream by 2018, the company disclosed recently as part of a visit by Czech Republic Prime Minister Bohuslav Sobotka to Nexen's plant in Changnyeong.

The company also confirmed earlier reports that it plans to double the Czech plant's annual capacity at a later date to 12 million units in a second-phase expansion. The plant will employ 1,000 at full capacity.

The parties did not say whether construction has started yet in Žatec, a town of about 20,000 located 50 miles northeast of Prague.

Mr. Sobotka toured Nexen's highly automated Changnyeong plant on Feb. 27 as part of an official state visit to South Korea. His visit also coincided with the anniversary of the signing of the memorandum of understanding between Nexen Tire and the Czech government, Nexen said.

Prior to this announcement, the tire maker had not acknowledged publicly its intention to build the Czech factory.

Instead, the Czech government announced the project's existence last June when it disclosed details of its financial support for the plant.

“We are pleased to welcome Prime Minister Bohuslav Sobotka to Nexen Tire,” said Nexen Chairman Kang Byung-Joong. “We look forward to further cementing our partnership with the Czech government and to set up the best tire manufacturing facility with advanced technology in Europe.”

Nexen invited Mr. Sobotka to tour the Changnyeong plant, Mr. Byung-Joong said, because it will be the benchmark for the Žatec plant.

The project is intended to help Nexen meet rising demands in Europe, including the supply of OE tires to leading car manufacturers, including Fiat S.p.A. and Volkswagen A.G. and its Skoda Auto and Seat units.

Under terms of the contract signed last June, the Czech state will provide investment incentives valued at a maximum of $190 million, according to the Ministry of Industry and Trade.