THE SLOVAK arm of the South Korean carmaker, Kia Motors Slovakia, will get another state subsidy of Sk1.153 billion (€34.6 million) to expand its plant near Žilina.
The Slovak cabinet made the decision on October 24 by approving a proposal from the Economy Ministry, the SITA newswire wrote.
The subsidy will come from the Economy Ministry budget in the form of a direct subsidy to cover capital investment costs. The amount and purpose of the subsidy has already been approved by the European Commission. Kia asked the Slovak government in the summer of 2006 for a subsidy to expand production in the Žilina plant by 100,000 cars, to 300,000 cars annually. The total investment is to reach €216 million. The project is expected to finish in 2008.
With the increased production, the company expects to create 663 more jobs with an average gross monthly salary of more than Sk17,000. Kia Motors Slovakia estimates that nearly 1,000 more jobs would be created indirectly in connection with the expansion.
The carmaker plans to produce the multifunctional MPV-B model in the plant, which is currently under development. Almost the entire output is intended for export.
The Kia car plant in Teplička nad Váhom, near Žilina, is the first Kia plant in Europe. Production was launched in December 2006. Kia's total investment in Slovakia, including expansion, has been approximately €1 billion.
Compiled by Spectator staff from press reports
