The Korea Herald reports that Kia Motors has broken ground on its first European plant in Slovakia, quelling rumours that a land dispute would derail the project.
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According to Kia officials in Seoul, the company began construction of the plant near the northern town of Zilina yesterday. It obtained the go-ahead for the project from the Slovak government the previous day.
The government in the spring reached a land deal with Kia for the facility. But landowners who controlled about 20 percent of the designated site rejected the government’s purchase offer, demanding higher prices for their properties. The dispute prompted mounting speculation that Kia would scrap the plan and seek another European host.
In order to rescue the investment, the Slovak government in August decided to expropriate the unsecured land. Kia officials said the expropriation is still ongoing but will soon be completed. “Although we had a minor problem in the country, our commitment to the plan is the same,” said Kim Bong-kyung, the company’s senior vice president.
Construction is scheduled for completion in 2006. The plant will have annual production capacity of 300,000 vehicles and create more than 2,800 jobs.
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