JLR’s investment is stated to be the country’s biggest ever foreign direct investment in its history.
Jaguar Land Rover (JLR) has disclosed that it has picked Vces and Takenaka, a a Czech and a Japanese company respectively, as subcontractors for its Slovak factory.
Out of its planned investment of $1.3 billion, JLR has allocated 800 million on construction of the factory which will provide employment to 2,800 people. It has allocated 200 million in order to build its supply chain network.
With the heavy focus on manufacturing, the project is likely to contribute significantly to Slovakia’s economy, which is one of the poorest in the Eurozone.
JLR’s factory is expected to be operational in 2018. The company has stated that it will use the new conveyor belt technology which it will import from German manufacturer Kuka.
“We’ll produce two different models in some variants,” said Alexander Wortberg, the project’s operating director without disclosing any further detail.
The plant will have an initial capacity of 150,000 cars a year. JLR can double that capacity by infusing further capital into it, but a decision to this effect has yet to be taken, said Wortberg said.
Earlier in June, JLR had stated that Britain’s historic adventure to leave the European Union will not negatively impact the project, which is one of the biggest ever foreign direct investments in Slovakia, a nation of nearly 5.5 million.
“UK may be planning to leave the EU. But be sure JLR is not leaving Europe,” said Ralf Speth, JLR’s CEO on Tuesday.
As per the Automotive Industry Association, the car industry represents a quarter of Slovakia’s exports and almost 43% of its industrial output. The associations expects the country to produce more than a million cars this year.
Already Peugeot Citroen, Volkswagen and Kia build thousands of their car models in Slovakia, thus making it the car producing capital of the world: it is the world’s biggest per-capita car producer.
Acknowledging JLR’s FDI, Slovakia’s finance ministry stated last week that the country’s economy is set to grow at a rate of 3.2% this year, a big chunk of which can be attributed to the construction of the JLR factory.