Toyota and Peugeot-Citroen to build new car plant in Kolin

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France's PSA Peugeot Citroen and Japan's Toyota have announced a plan to build a new car assembly plant in the Czech town of Kolin, some 50 kilometres east of Prague. As Prime Minister Milos Zeman told journalists, the new facility will be the biggest foreign investment project in the Czech history. As Mr Zeman pointed out, the Kolin plant will be bigger than Volkswagen's investment in Skoda and also the new Phillips electronics factory in the town of Hranice na Morave. The project is valued at 1.5 billion euros. Although this amount includes the development of a new car to be produced at the plant, the value of real investment - around 800 million euros - still makes it the largest ever foreign direct investment project in the Czech Republic.

When complete in 2005, the plant will provide 3,000 jobs and create another 7,000 in services and supplies. Jean-Marc Nicolle, the Vice President of PSA Peugeot Citroen, gave us details of the project: Toyota's Masatake Enomoto said the plant would employ local people, and would offer retraining programmes for those lacking the right qualifications: According to Jean-Marc Nicolle, the plant will produce a new range of very small and cheap cars: According to the Czech government's CzechInvest agency, which assists foreign companies with placing their investment in the country, Japanese investors have invested and are planning to invest a total of 2 billion USD since 1991 to employ a total of 20,000 Czech workers. The volume makes Japanese investment the second largest, with neighbouring Germany maintaining the lead. Japanese companies choose the Czech Republic to build their production centres for European markets here mainly due to the strategic location of the country and the availability of cheap and skilled labour and a simple but attractive system of investment incentives.