Hungarian minister explains impac of Hankook Tire deal

After a 655 billion won ($ 634 million) deal to build a factory in Hungary was agreed Monday between the European nation and Hankook Tire Co., Hungary`s minister of economy and transport outlined the shared benefits of the new venture.

"It means a significant amount in Hungary. One of the largest investments in a decade and the largest automotive investment coming in," said Janos Koka, Hungary`s minister of economy and transportation during an exclusive interview with The Korea Herald.

Hungary was the second choice for Hankook Tire after Slovakia which offered incentives and tax breaks worth about 21 percent of the project`s value, but a combination of existing and planned benefits in Hungary swung the deal in its favor.

"We are decreasing taxes over the next couple of years. We also have a very advanced administration. A one-stop-shop type of concept for those who come to invest in Hungary. So, if you invest in our country you don`t need to go to authorities to get papers, approvals, etc, you come to one agency and we do the rest," he said.

These factors were further supported by the agreed location of the factory, close to the Danube River and 60 kilometers from Budapest. "We are currently building the highway from Budapest to Dunaujavaros (the site of the Hankook Tire factory)," he said.

The deal will benefit both parties by opening up trade opportunities for Hankook Tire into one of the biggest markets of the world and creating around 1,500 jobs in the Eastern European country.

Koka believes that the entry point to the European market for South Eastern and Eastern Asian companies should be Hungary.

"We have the best figures among the Central Eastern European countries. It means that productivity surplus overbalances the higher wages so unit labor cost productivity is high" he said.

(yoav@heraldm.com)



By Yoav Cerralbo