Slovakia’s manufacturing economy has been booming in the last decade since its entry into the Eurozone in 2004 and the adoption of the Euro as currency in 2009. Currently, the manufacturing industry is responsible for more than 30% of Slovakia’s gross domestic product. Their unemployment rate is hovering around 8% in 2017. Slovakia has lower wages than some of its trading partners such as Germany or the Czech Republic, making it a magnet for foreign investors who prefer to move manufacturing operations to Slovakia for cheaper labor. As a matter of fact, some of its major companies are subsidiaries of renowned automakers such as Volkswagen and KIA, which has also placed the country as a leader in the automotive industry.
Volkswagen is one of the largest automotive companies in the world, and it has a major headquarters in Slovakia. It is in the capital and commercial point of the country. Volkswagen has helped to make Slovakia a European power in the production of cars, where the annual production has already exceeded one million units.
The German company takes its Slovakian plant seriously, and they have invested hundreds of millions in this plant to train and to extend the production and efficiency. Just this last year they spent 150 million euros in building an on-site logistics center next to the plant. Volkswagen’s operations are directly responsible for Germany being the main exporter in Slovakia, as about 90% of the assembly parts are shipped. Until 2016, the commercial relations between both countries produced exports from Germany and Slovakia for a value close to 16 billion euros. Total sales of Volkswagen Slovakia are close to 6 billion euros.
It is the world’s largest cellphone salesman, and it has also relied on the manufacture and workforce of Slovakia to carry out some of its operations on the European continent. Currently, the subsidiary of the South Korean company in Slovakia invoices more than 3 billion euros and employs hundreds. Although the Eastern European countries are mostly focused on the automotive industry, metallurgy, and engineering, Slovakia is the exception here.
Foreign investment is of vital importance to the Slovak economy. Samsung is one of the few technology companies that have decided to invest in Slovakia, and the results have been more than satisfactory for the country and the company. The main floor located in Voderady, however, does not correspond to finished electronic items but to the development of LCD screens for televisions and other devices, which makes the country an electronic importer. Samsung is the largest producer of LCD screens in the world.
Another prestigious automobile company, KIA Motors Slovakia is among the most important manufacturers in the country, with operations that exceeded 1,500 million euros in 2016. Its plant in Zilina is dedicated to the production of both engines and finished vehicles, where its share has surpassed 300,000 units annually since 2014. It provides employment to about 5,000 people.
Together with Samsung, both companies have managed to make South Korea the sixth largest trading partner of Slovakia. The exports between the two countries are currently around 5 billion euros. As we can see, Slovakia’s top manufacturing companies correspond to automotive activities. Imports of machinery and equipment related to this sector correspond to more than 40% of the national total, which shows that it is a reference center for automotive manufacturing.
U. S. Steel Košice
The Slovak subsidiary of the US company U.S. Steel is currently the largest manufacturer in the metallurgical sector. Its commercial activities last year were slightly lower than 3 billion dollars. U.S. Steel is the 15th largest steel producer in the world, which reaffirms the fact that Slovakia has immense appeal for manufacturing companies and industries in general.
Since the adoption of the Euro, Slovakia has experienced significant growth in several socio-economic aspects, supported by two key sectors that serve as pillars: services and manufacturing. Between those two sectors are represented more than 90% of the European country’s gross domestic product.
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