Asustek to invest US$24 million in Czech factory

Asustek Computer Inc (華碩電腦), the world's biggest maker of boards for connecting computer chips, will build a production and service facility in the Czech Republic, which will enter the EU in six weeks.

Taipei-based Asustek will build the 648 million-koruna (US$24 million) factory in an industrial park in Hrabova, a suburban district of Ostrava, in the northeast, CzechInvest, the government agency for promoting investment, said said in an e-mailed press release.

The Czech Republic lured more investment per capita from abroad in the past decade than any of the other nine EU entrants.

Companies such as Matsushita Electric Industrial Co have set up factories to take advantage of the nation's future access to Europe's single market and labor costs that are a quarter of the German level.

"It was crucial for us that the industrial park in Hrabova was ready and that it was close to the Ostrava Technical University, with which we want to cooperate," Asustek vice president George Wu (吳兆錡) said in the press release.

"We are also thinking of shifting part of our development activities to the Czech Republic," he said.

Asustek's investment will create 1,000 jobs in the Ostrava region, where the jobless rate is almost double the Czech average of 10.9 percent, CzechInvest said.

The new plant, located in the country's third-largest city, will be open within a year with a monthly production capacity of 200,000 computers, Wu said.

As many as 50,000 computers should also be repaired at the facility per month.

The Czech Republic, which has the second-largest economy among the countries joining the EU, has started promoting itself as a place for companies to find qualified labor and not necessarily cheap labor.

The effort to win that kind of investments comes as rising incomes and high taxes have led some foreign companies to bypass the Czech Republic for new investment. The Czechs have lost several high-profile investments over the last year, including new car assembly plants by France's PSA Peugeot Citroen and Korea's Hyundai Motor Co. In both cases, the carmakers picked Slovakia.

The Czech government has reacted by offering investors with high-technology investments more subsidies and other incentives and will allow them faster write-offs of technology starting next year.

LogicaCMG Plc, Europe's third-largest provider of computer services, is building a Czech research and development center worth 100 million koruna, and Deutsche Post AG's DHL Worldwide Express, the world's largest logistics company, will set up a new information technology center in Prague, which will cost it 500 million euros (US$614 million) in the next five years.