THE SONY electronics firm is to build a Sk2.8 billion factory for making TV sets in Nitra, about 40 kilometres from its plant in Trnava in western Slovakia, which the company plans to close at the same time.
The new factory will employ about 3,000 people, many of whom will be recruited from the 1,500 who currently work for Sony in Trnava.
Serge Foucher, the deputy executive director of Sony Europe, said in an interview with the Pravda daily that the Trnava factory had proven too small for the expansion the company planned.
"It would have been more logical to expand the Trnava site, and we tried it, but it was a question of capacity," he said. "We will be offering all of our Trnava employees comparable work in Nitra."
The Nitra site will concentrate Sony's production of LCD sets from Trnava and Barcelona under one roof to serve the European market. The facility will gradually expand to include the manufacture of video equipment.
Construction should begin this year, while production should start in August 2007.
Vlado Kalina, the head of the Slovak Electro-Technical Industry association, said Sony would have no problem finding employees near Nitra.
"They will find plenty of available labour in the vicinity, and will benefit especially from the former employees of the Tesla Vrable [bankrupt electronics plant]," Kalina said.
Sony has so far invested Sk1.6 billion in its plant in Trnava, which it built in 1996.
The investment is the first large FDI deal secured by the socialist Robert Fico government since coming to power in July. The cabinet's early plans to revise privatization contracts on energy firms to secure lower prices for consumers, as well as other proposed economic changes, caused some investors to speak of a chill in the Slovak business environment.
But Foucher said the company had not been put off by the accession of the Fico government to power, as it had "purely economic" motives for choosing Slovakia, largely its positive experience in Trnava.
"The prospects of the Slovak economy give us security for the future," he said.
The Samsung electronics company is currently also looking at nearby Galanta as the location of a further Sk15 billion factory for LCD panels. The firm already makes LCD and plasma TV sets at its existing Galanta plant, along with computer monitors and printers, and DVD and MP3 players.
The Sony investment represents a success for Nitra after its failure to land major investments by Dell and LG Electronics, both of which chose Poland instead.