BRATISLAVA, Slovakia -- Germany's Continental AG will spend up to 60 million euros ($77 million) to build a brake plant in Slovakia, joining other major carmakers investing in the new European Union member.
The plant will be built in the central Slovak town of Zvolen, the company said in a statement Monday.
Production will start in late 2005 and give jobs to 500 over the next five years.
"The investment will amount to up to 60 million euros over the next five years to create a facility making high-performance front and rear brake disc calipers," the company said.
Continental ranks itself Europe's second-largest automotive systems supplier by sales, with annual sales of $14.69 billion.
Unlike Germany and other western European countries, new European Union member states including Slovakia have seen a flood of foreign investment into new manufacturing capacity, especially in the automobile sector.
An attractive mix of a cheap, skilled work force, proximity to western and eastern European markets, low taxes and other business-friendly reforms have made the region a beacon for foreign companies.
"Slovakia was chosen for the new facility on the basis of labor costs and transport costs to Continental's key customers in Europe," the company said.
South Korea's Kia Motors and France's PSA/Peugeot-Citroen SA are also building car factories in Slovakia.