“We are on the verge of signing an agreement on establishing a new plant,” MTI news agency quoted GyurcsÁny as saying at a conference organised by the Confederation of Indian Industry (CII).
Apollo said it planned to spend 200 million euros in the first phase of setting up the plant, most likely in GyÖngyÖs, near Budapest. Should the plant be granted the necessary regulatory clearances, the first phase will be completed in 18 months. It will employ 1,500 people and is expected to pump out seven million tyres per year for the European and North American markets.
Major car manufacturers such as Suzuki and Audi have plants in Hungary, while other firms operate in neighbouring countries, and the proximity of such firms appears to have played a factor in the decision to locate the factory in Hungary.
“In the decision process related to the location, the basic influencing factor was the so called ‘reach cost’ – the cost of delivery of the product to the end-user,” GyÖrgy RÉtfalvi, CEO of the Hungarian Investment and Trade Development Agency, said in an e-mailed statement, adding that Hungary had beaten Slovakia in the race for the plant.
Hungary offered subsidies worth HUF 7 billion (EUR 27.43 million) to close the deal, far less than was offered to South Korean tyre manufacturer Hankook, which opened its EUR 535 million Hungarian plant in June last year. The European Commission approved EUR 92.6 million in subsidies for Hankook, far more than former Economy and Transport Minister JÁnos KÓka initially claimed. GyurcsÁny said that the Apollo subsidy equalled about two-thirds of the Hankook subsidy per employee.
Hungary has been keen to develop links with emerging economies such as India, and the plant is the biggest investment yet by an Indian firm in Hungary. (Tire Review/Akron)
