Biggest investment in history of Czech Republic finally agreed

Kim In-so, photo: CTK

The biggest investment in the history of the Czech state has finally been agreed: after several months of negotiation, the South Korean carmaker Hyundai announced on Monday that it is going to invest up to 1.2 billion US dollars in a giant plant in north Moravia, providing thousands of much-need jobs.

Kim In-so with Evzen Tosenovsky and Milan Urban,  photo: CTK
Hyundai's investment in the Czech Republic really is big news: its new factory in Nosovice, north Moravia, will create 3,000 direct jobs and another 10,000 or so indirect jobs. That in a part of the country with high unemployment. Evzen Tosenovsky is the region's governor.

"I'm glad that the conditions that have been agreed are such that it really could have a significant impact on Moravia-Silesia. But I must say it is above all an important investment for the Czech Republic, because it will be felt outside the borders of our region."

Indeed it will. Once the plant goes into full operation it is expected to increase Czech gross domestic product by 1.5 percent in the first stage and 2.5 percent in the second. It will produce up to 300,000 vehicles a year. Hyundai's vice-president Kim In-so says locating in Moravia - near a sister Kia plant in Slovakia - is a key part of the company's long-term strategy.

Kim In-so,  photo: CTK
"It's very important, our global strategy is that we need a European plant for our global strategy. And it will be the main part of our strategy. It's [negotiations] almost finished and we agreed to do a very good job - a win-win situation, so no problems."

The state agency CzechInvest played a major part in mediating the Hyundai deal. I asked its head of public relations Alzbeta Honsova just how significant it will be for the Czech economy.

"I think we can compare it to the TPCA [Toyota Peugeot Citroen] project...."

Which is a car plant in Kolin.

"Yes. It doesn't occur every day. Sincerely, frankly we do not expect any such big investment in the next few years, so it's really a break-point for us. And we're glad that it's finalised now."

Negotiations lasted a few months - what were the sticking points, and why do you think they chose to invest in the Czech Republic?

"We think they were...focused on the Czech Republic from the very beginning. But as the sum they plan to invest is such a huge sum of money, of course there were so many details that had to be discussed.

"As you heard there are three parties negotiating: the Czech Republic, the Moravia-Silesia region, which really bears the burden of preparation of land, and then skilled people and when you take together all the complexities you see it's a long process. Every single issue has to be negotiated and approved by all the parties."

A binding memorandum has been signed, the full contract will be signed in May I understand. But will you and your team at CzechInvest be celebrating now?

"First of all we have to say that we expect a lot more work now, because it's not the end, it's the beginning. We of course are quite celebrating because we now are sure of what we can expect in the future, but it's going to be a lot of work."