ZATEC, Czech Republic—Nexen Tire Corp. has broken ground on its $1 billion tire plant project in Zatec, which the South Korean tire maker plans to use in part to supply its growing portfolio of OE contracts in Europe.
Nexen said it expects the plant, on a 160-acre site, to start production by 2018 and gradually increase annual production capacity to more than 12 million units, based on market conditions.
The company expects to create more than 1,000 jobs in the region with the new plant.
Nexen Chairman Kang Byung-Joong said establishing a plant in Europe was needed to help ensure a stable supply of OE tires for global car manufacturers, including Volkswagen A.G., Renault S.A, Skoda, SEAT and others with assembly plants in Europe.
Nexen noted that Czech Republic is strategically located to serve as a bridge to the Eastern European market, which has been emerging as a promising market for the rest of Europe, and to provide easy access to the biggest European markets, such as Germany, France and the United Kingdom.
The Czech plant will be Nexen's second outside of Korea—where it operates two factories, in Yangsan and Changnyeong; the other is in Qingdao, China.