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BUSINESS FOCUS - ASIA II - INVESTMENTS FROM THIS ASIAN COUNTRY OFFER MUCH POTENTIAL FOR SLOVAKIA'S DEVELOPMENT

Samsung and Kia attract Korean suppliers

WHEN speaking about South Korean investments in Slovakia, the giant carmaker Kia is mentioned the most often. However, there are more companies from this Asian country already operating in Slovakia.
According to the Slovak Investment and Trade Development Agency (SARIO), the volume of investments of South Korean origin reached $2.03 million (€1.65 million) as of March 31, 2004.
This volume implies that South Korea belongs among the smaller investors in Slovakia, but by their nature, these investments provide great potential for further development.

WHEN speaking about South Korean investments in Slovakia, the giant carmaker Kia is mentioned the most often. However, there are more companies from this Asian country already operating in Slovakia.

According to the Slovak Investment and Trade Development Agency (SARIO), the volume of investments of South Korean origin reached $2.03 million (€1.65 million) as of March 31, 2004.

This volume implies that South Korea belongs among the smaller investors in Slovakia, but by their nature, these investments provide great potential for further development.

Samsung Electronics has operated in the southern Slovak city Galanta for several years and not only does it employ hundreds of people, it also attracted other Korean firms to the country, mainly to operate as its suppliers.

In 2002 the company bought the premises of an old furniture factory. Samsung renovated the buildings and started to produce TV sets and monitors the same year.

Samsung Electronics Slovakia wanted to secure a base from which to export its production to the central and eastern European markets to meet its increasing demand for monitors and TVs .

Only recently, Samsung Electronics Slovakia announced that it had invested Sk1 billion (€25 million) to construct and equip a new production hall that will create more than 1,000 jobs.

The company expects that the new hall's turnover will grow from last year's Sk8 billion (€200 million) to Sk65 billion (€1.6 billion) when it reaches full capacity in 2005. The new hall will be opened this year and produce laser printers, TV sets, and DVD recorders.

Woo One, a Korean producer of plastic computer casing, decided to come to the Slovak town of Šurany in 2002. It invested about Sk400 million (€10 million) in its production facilities and its main customer is again Samsung Slovakia.

Woo One was attracted mainly by low labour costs. The company also wanted a good location for supplies on European markets.

Before its arrival, the firm had many customers, for example in eastern Germany, but it had problems serving the market because of a disadvantageous location.

Koam Elektronic is also one of the main component suppliers for Samsung Electronics Slovakia. It has operated near Sládkovičovo since April 2003 and plans to increase its production when Samsung expands.

About 230 new jobs will be created before the end of 2004. Koam Elektronic also hopes to be a supplier for the new Kia Motors investment.

South Korean Dong Jin Precision Slovakia, based in Britain, will build a new €6.5 million plant in the southern Slovak town of Dunajská Streda. The plant will supply Samsung with components, the economic daily Hospodárske noviny recently wrote.

The new plant will create 350 jobs and should reach an annual output of €40 million. Operation should be launched next year.

According to SARIO, the Korean company Hansung Electronics recently announced that it wanted to establish its production base in Slovakia as well.

"The company wants to invest approximately Sk20 million (€499 million) and in the preliminary stage it will employ about 20 people. In the near future the number of employees will grow to 50 - it will be established in Nové Zámky," reads the SARIO press release.

Hansung's production will focus on cable bunches for Samsung in Hungary and Galanta.

"We chose Slovakia mainly because of the qualified and experienced labour, liberalised market, and the ideal logistic position of the town of Nové Zámky to our main supplier - the company Samsung Electronics," said Viliam Krajči, the general manager of Hansung Electronics Slovakia.

New production halls of the car colossus Kia Motors should become the largest South Korean investment in Slovakia so far. In March 2, 2004 Kia chose Žilina, Slovakia over Poland as the site of its new plant.

The overall investment should reach €700 million and the new plant should employ around 2,800 people.

However, there is a real threat that the whole investment will be postponed due to the refusal of some owners of the land where the future plant should be built to sell for the state's officially determined price.

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