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CONSTRUCTION OF THE €700 MILLION FACILITY WILL START IN OCTOBER; PRODUCTION DUE IN 2006

Trnava car plant breaks ground

TOP managers of French auto giant PSA Peugeot Citroen and leading Slovak politicians on June 17 laid the cornerstone for the concern's €700 million euro factory in Trnava, 45 kilometres northeast of the capital, Bratislava.
Construction on the plant, announced in January, is set to begin in October, and PSA officials said they would start recruiting up to 3,500 future employees at the end of this year.
"Slovakia has machine industry know-how and strong human potential, which we want to incorporate into PSA," said the concern's president Jean-Marie Folz at the ceremony.


DZURINDA: Plant is "engine of Slovakia's train to Europe".
photo: Courtesy of PSA

TOP managers of French auto giant PSA Peugeot Citroen and leading Slovak politicians on June 17 laid the cornerstone for the concern's €700 million euro factory in Trnava, 45 kilometres northeast of the capital, Bratislava.

Construction on the plant, announced in January, is set to begin in October, and PSA officials said they would start recruiting up to 3,500 future employees at the end of this year.

"Slovakia has machine industry know-how and strong human potential, which we want to incorporate into PSA," said the concern's president Jean-Marie Folz at the ceremony.

"Industrial production was one of the priorities PSA looked at when choosing Slovakia as a new location," he said.

Keeping up with growing demand in central and eastern European markets was one of the key reasons given by PSA management for setting up shop in Slovakia. According to PSA officials, the firm's market share in six countries of the region, including Slovakia, has risen from 5 percent to nearly 14 percent in the last five years.

Car industry experts are predicting auto sales to rise sharply across central and eastern Europe over the next five years, even though they may fall in western Europe by as much as 3 percent.

Along with the Slovak expansion, PSA says it would like to increase production to 4 million cars per year by 2006, up from 3.2 million last year.

"The construction [of the Trnava plant] is essential, as the group's current capacities are filled to 117 percent," said Folz.

While PSA's factory is one of the largest investment projects in the history of Slovakia, the government granted tax and other incentives worth Sk4.2 billion (€101 million) to secure the plant, and will have to chip in around Sk6.5 billion (€157 million) for infrastructure development.

Once the plant comes on line, scheduled for 2006, it will employ 3,500 people directly and create up to 6,000 jobs indirectly. Production should reach 300,000 cars per year, or 50 cars per hour, say PSA officials.

Manufacture of cars and car parts has become the engine of Slovakia's industrial economy. Last year automotive production accounted for 20 percent of Slovakia's industrial sales and nearly 27 percent of export earnings.

With production steadily increasing at Volkswagen's Lozorno facility outside Bratislava and PSA's plant set to begin operations within three years, Slovakia's current output of 225,000 cars per year could triple by 2010.

According to PSA officials, the plant in Trnava will allow Slovak suppliers to expand their production for Slovak-based car factories and for facilities located elsewhere.

"Within the PSA concern, Slovak companies can export their products to plants in Spain, France, and Great Britain," said Folz.

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