Kolin car plant sets new record for foreign investment in Czech Republic

The government unveiled plans this week for the biggest foreign investment project in recent Czech history - a new car assembly plant in the town of Kolin. The investors are France's PSA Peugeot Citroen and Japan's Toyota, and when complete in 2005 the plant will provide 3,000 jobs and create another 7,000 in services and supplies. As Rob Cameron reports, that can only be good news for a region suffering from high unemployment.

Vice President of PSA Peugeot Citroen Jean-Marc Nicolle (left), photo CTK

Kolin is a medium-sized industrial town lying about 50 km east of Prague. The town has some industry, but many people have been forced to seek jobs in the capital, and unemployment in the Kolin region now stands at around 10 percent. As Prime Minister Milos Zeman told reporters the plant would set a new record for foreign investment in the Czech Republic:

"This is the biggest foreign investment in the Czech Republic - greater than the investment of Volkswagen and greater than the investment of the Phillips company in Hranice."

As Mr Zeman pointed out, the Kolin plant - valued at 1.5 billion euros - will be bigger than Volkswagen's investment in Skoda and also the new Phillips electronics factory in the town of Hranice na Morave, another depressed area given a boost by foreign investors. The plant will produce a new range of smaller, cheaper cars - smaller and cheaper even than today's Peugeot 106, Citroen Saxo and Toyota Yaris. Jean-Marc Nicolle is the Vice President of PSA Peugeot Citroen:

"We have to launch three different models, one for each brand, but with different styling. These models will share the same platform and the same components, but for the customer they will look different."

Meanwhile Toyota's Masatake Enomoto said the plant would employ local people, and would offer retraining programmes for those lacking the right qualifications:

"We'll recruit our workers from the Kolin vicinity. So either they'll be experienced or not. We'll train them, so it's a matter of the ability of the individual worker, and if he or she doesn't have a skill we'll train them."

Milos Zeman and Vice President of Toyota Joshio Ishizaka, photo CTK

So good news for the people of Kolin then, and also for the Social Democrat government, which faces a general election in five months' time. Mr Zeman never tires of mentioning his government's record on foreign investment, although there was another, more personal reason for celebration, as the Prime Minister explained:

"It means a chain effect and a multiplier effect for the development of the city where I was born. But please believe me, this is not the main reason for the location of this investment in this city!"