The Yonhap news agency reports that Hankook Tyre Co., South Korea's largest tyre manufacturer, plans to set up an office in Slovakia to prepare for the establishment of a production plant in Eastern Europe.

Hankook Tyre has been negotiating with Hungary, Poland and Slovakia on investment terms for the establishment of a production unit in East Europe.

Hankook Tyre plans to spend 500 million euros, including an initial 300 million euros, for the facility which is scheduled to begin operation in 2007.

"We decided to set up a local office there since Slovakia is likely to be our pick as long as there is no significant change," an official from Hankook Tyre said.

"A signing ceremony with the Slovakian government for investment is scheduled for later this month," he added.