SITA Slovenska Tlacova Agentura reports that the Slovak Investment and Trade Development Agency (SARIO) continues to negotiate with South Korean tyre maker Hankook Tyre on placing a EUR 500 million investment in Levice.

SARIO is further negotiating with the investor on providing investment incentives, which should be 70 percent lower than proposed by the former economy minister, according to Peter Papanek, advisor to Finance Minister and temporary Economy Minister Ivan Miklos.

Slovakia had until August 31 to come up with a new offer for South Korean rubber company Hankook Tyre. In early July the Slovak cabinet rejected an investment contract with Hankook due to too high investment incentives proposed by the then Economy Minister Pavol Rusko. The incentives were projected at 21 percent of the total investment, i.e. over SKK 4 billion.

The company was willing to abate from the originally proposed 21 percent state assistance to 19 percent of the total investment, while direct financial assistance should amount to 13 percent. Slovak Prime Minister Mikulas Dzurinda stated that Slovakia’s maximum acceptable state assistance to the tyre maker is only 6 percent of the total investment and SKK 1 million per created job.

Former Economy Minister Pavol Rusko originally proposed a state subsidy for the creation of one job at SKK 3.6 million, which he later reduced to SKK 1.6 million. In May South Korean tyre maker Hankook Tyre selected Slovakia as the site for its new plant. It planned to invest EUR 500 million (about SKK 19.5 billion) in its Slovak plant in Levice with an annual production capacity of 5 million tyres.