A German car parts manufacturer is investing $61.5 million to open a factory in Costa Rica. The company, Continental AG, made the announcement Wednesday at Casa Presidencial, accompanied by President Oscar Arias and Foreign Trade Minister Marco Vinicio Ruiz.
“This is a very important step toward the attraction of high-tech companies,” said Gabriela Llobet, director of the Costa Rican Investment Promotion Agency (CINDE), a private organization.
The first phase of the new factory will be up and running by the end of 2008 and employ 350 people. An expansion of the factory, provisionally planned for completion in 2011, would add another 200 jobs.
Continental is one of the world’s largest manufacturers of electronic components for the automotive industry. Specifically the company specializes in designing and manufacturing sophisticated braking and balance systems, power trains, chassis and transmission controls, among other things.
The Costa Rican plant will be producing electronic components for export to car manufacturers in the North American Free-Trade Agreement (NAFTA) market, said Continental Vice-President of Electronics Plants Henner Cnyrim.
Continental opted to build a new factory in Costa Rica rather than expand existing operations in Mexico and Brazil because of Costa Rica’s political stability, number of highly skilled engineers, and low costs, Cnyrim said.
“We have to say, we are very happy to see that the Costa Rican people decided in favor of CAFTA,”Cnyrim said, referring to the Central American Free-Trade Agreement with the United States (CAFTA) that Costa Ricans narrowly approved in a referendum Oct. 7.
Cnyrim said the market access afforded by CAFTA was the final piece that made Costa Rica attractive for investment, although the company had been considering Costa Rica since 2006.
Arias called the new investment a “magnet that will attract other European investment.” “Having Continental here will make it much easier to get those other companies on their way here,” Arias said, referring to German manufacturing companies he visited during the World Cup soccer tournament in Germany last year.
Continental is constructing its factory in the new Coyol Free Zone and BusinessPark in the province of Alajuela, west of San José.
At the Coyol Free Zone and BusinessPark the company joins medical equipment manufacturer CYTYC and BeamOne, a medical equipment sterilizer.
Continental AG does more than $21 billion in annual sales, operates in 19 countries and employs 89,000 people worldwide.