Week of February 11, 2002
Blockbuster Deal of the Week
from Site Selection's exclusive New Plant database
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Japan's Tokai Rika BuildingBy JACK LYNE, Site Selection Executive Editor of Interactive Publishing
$83 Million, 400-Worker Czech Plant
The availability of skilled labor was a major determinant steering the facility to the Czech location near the German border, according to officials who worked on the project. The plant near the will employ 250 workers by 2004, according to Tokai Rika officials. By 2007, the facility will employ 400, the estimated.
"The company will produce a wide range of high-tech components for automotive switch systems," said Martin Jahn, CEO of CzechInvest, the national investment promotion agency that worked with Tokai Rika in the expansion project.
The new plant will be part of TRCZ, the new wholly owned subsidiary that Tokai Rika is establishing in the Czech Republic.
The Lovosice operation, Tokai Rika executives explained, is part of the company's strategy to create extensive supply networks in its four major target markets - the Americas, Asia, Europe and Japan. The Czech plant will be the 18th operation that Tokai Rika has established outside Japan. The company's 18 non-Japanese operations span 12 nations. The Czech plant is the second European operation for Tokai Rika, which established a UK subsidiary in Denbighshire, Wales, in 1998.
Region Has Skilled Labor Cluster,
"In the Czech Republic we are going to produce our advanced products, such as multi-function switches with electronic control," he explained. "We believe that our Czech operations will give us an edge with which to gain sales and market share in the competitive European market, which is an essential sector of the global market for automobile parts."
Part of the business edge that Lovosice offers Tokai Rika is the area's supply of available skilled labor, according to CzechInvest Project Manager Tomas Novak.
"Lovosice is located in Northwest Bohemia, not far from the German border," Novak explained. "This region has a long industrial history, with abundant skilled labor. Furthermore, this is currently a region of relatively high unemployment, and so the investment incentives available are quite favorable for the investor."
(As of this writing, no details had been released regarding the incentives offered Tokai Rika.)
Japan Now No. 2 in Czech FDITokai Rika's pick of the Czech Republic continues the nation's strong investment inflow from Japan.
During 2001, Japanese investment in the Czech Republic increased to 21 percent of the nation's total foreign investment for the year, according to CzechInvest. That rising tally elevated Japan to the Czech Republic's No. 2 foreign investor for 2001. Germany, which accounted for 26 percent of 2001's foreign investment inflow, remains the nation's No. 1 foreign investor.
In like fashion, Tokai Rika's business niche is part of the industry that's dominating Czech investment inflows. During 2001, 44 percent of all announced foreign direct investment was in the automotive sector, according to CzechInvest.
Tokai Rika's expansion isn't the first time that location patterns in the Lovosice Industrial Zone have reflected those trends in inward Czech investment. Last year, for example, Japanese-based TRIS, which manufactures carbon brushes for the auto industry, decided to establish its European headquarters and a new manufacturing plant in the Lovosice zone.
Lovosice's newest Japanese auto-sector import, Tokai Rika will begin construction of its new Czech plant in April, with a projected December 2002 completion date. The plant will go online in 2003.
Tokai Rika executives are forecasting that sales at the Lovosice plant will reach $27.4 million in 2004. By 2007, the company is projecting that the plant's annual sales will reach $82.1 million.
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