German lighting systems supplier Hella KG Hueck & Co. is relocating six product lines from the Czech Republic into a new $12 million factory in Slovakia.
The plant in Rakoluby will be operating by April. Hella expects to have 300 workers there by 2005.
The factory will produce 1.7 million to 2.1 million headlights annually, mostly for trucks and commercial vehicles. It will supply Scania and other truckmakers.
A spokesman says Hella's goal is to add capacity rather than to relocate from the Czech Republic.
"Only part of production will be relocated. The change is centered on increasing production in central Europe," says spokesman Jan Krampla.
The change should not affect employment levels at Hella's Mohel-nice factory in the Czech Republic, he says. As the Slovak lines come on line, capacity at Mohelnice will be converted to headlights for cars instead of commercial vehicles.
Hella is pleased that PSA/Peugeot-Citroen SA is building an assembly plant in Trvana, Slovakia, by 2006. But Krampla says Hella's decision to build a plant within 31 miles was not influenced by the PSA plant.
"When we decided, PSA had not yet chosen between Poland, Hungary, Slovakia and the Czech Republic," he says.
Krampla cited four primary reasons for choosing the Slovak site: similar conditions to the Czech Republic; Volkswagen Group's assembly plant in nearby Bratislava; good transportation connections; and a skilled local work force.
Hella's move is just a small jump to the East. The new factory is nine miles from the Czech border and 100 miles from Mohelnice.
Krampla says the proximity would make cooperation convenient. Both countries' operations are managed through Hella's offices in Lippstadt, Germany.
Hella has been in the Czech Republic since 1992. It has two plants in the country. The 690 employees at the Mohelnice plant produce headlights, turn-signal indicators and brake lights.
The 150 employees at Mnichovna Hradiste make front-end components for the Skoda Fabia.
Hella's Czech operations supply Audi, DAF, DaimlerChrysler, GAZ, Ford Motor Co., Mitsubishi, Renault, Scania, Skoda, VW and Volvo.
More than 18,000 of Hella's 23,000 global employees are in Europe, with 12,800 in Germany.