Timeline of SARIO negotiations on the strategic investment of the Volvo Group 2021

Friday, 01. July 2022
Timeline of SARIO negotiations on the strategic investment of the Volvo Group


Business Sweden (Swedish Trade & Invest Council) contacted SARIO directly with a request to identify suitable regions for new strategic investment into industrial production by a secret Swedish investor. Without the specification of the sector, it was communicated that it should be a sophisticated production and the investment will have fundamental requirements for the area. The project was given in SARIO the code name AION. 

Presentation of the project in the talk with Business Sweden – investor´s expectations were communicated and an agreement on the next steps was reached. Along with Slovakia, several countries were in the game (on the so-called long list of potentially interesting candidates). The main factors in the selection of the final location would include the availability of qualified labor, a prepared industrial park, good infrastructure, logistical availability, and the availability of green and low-carbon electricity sources.

The agency sent the initial comprehensive information reflecting the key decision-making factors of the potential investor and from the very beginning directed this investment primarily to the east of Slovakia. SARIO prepared extensive background materials (RFI - request for information) for the Valaliky site, including, for example, a comprehensive analysis of the availability of skilled labor within walking distance, vocational training analysis, information on permitting processes, information on support mechanisms, options to ensure climate neutrality of the plant using green and low carbon electricity sources, information on existing and planned transport and technical infrastructure, information on potential suppliers, labor and tax rules and regulations, information on various costs items, etc.

Investor´s visit to Košice. Prior to the meeting, a non-disclosure agreement was signed, under which the agency learned that the investor was Volvo. The investor's representatives, accompanied by consultants from Business Sweden, visited Košice and the Valaliky Strategic Park and attended presentations and meetings on pre-agreed topics. Richard Sulík, Deputy Prime Minister and Minister of Economy of the Slovak Republic, also took part in the meeting on behalf of the Slovak Republic, and a meeting with the President of the Košice Self-governing Region took place as well. The investor assessed the visit by communicating that Slovakia had a very strong position. Also saying that by the end of 2021, the potential sites were expected to be narrowed from the initial 10 to 3-4, with the provision that if Slovakia advanced to the shortlist at the beginning of the year, due diligence and legal teams should come to Slovakia. On the basis of the visit, the agency processed and sent other complex materials.

The investor showed a clear interest in the Valaliky, the locality was shortlisted, meaning the Valaliky got into the top 3 considered localities. The investor was also presented with a detailed timeline for the preparation of the Valaliky Strategic Park. On the Slovak side, a permanent dedicated expert team.

Communication with the investor on the topic of park preparation, infrastructure, and related schedule, as well as on investment aid and other support mechanisms.

Investor´s visit to Košice. The SARIO agency organized extensive negotiations for the investor with more than 30 Slovak technical experts. After the negotiations, the investor confirmed that the presented locality and Slovakia as such are expected to meet all requirements. Special discussion and attention were paid to the schedule of preparation of the Valaliky Strategic Park.

The agency prepared the documents and the representatives took part in negotiations at the Volvo headquarters in Gothenburg, which took place with the participation of the Prime Minister of the Slovak Republic, the Minister of Economy, and the Minister of Finance of the Slovak Republic.

The agency organized for the investor further extensive meetings with technical experts in Košice, while the investor communicated that all his key topics were satisfactorily answered.

The negotiations on an investment agreement and continuation of the preparation of the Valaliky Strategic Park. Valaliky Industrial Park (VIP) was established to prepare the location and the infrastructure for the project.

June 20, 2022
The investor informed the representatives of the agency and the Ministry of Economy that they had chosen the location of the Valaliky Strategic Park for the investment. It is to be a modern plant for the production of premium electric SUVs of the Volvo brand with an annual capacity of 250 thousand cars per year. The investment should create 3,300 new direct jobs. Taking into account the multiplier effect in the automotive sector from 1: 4 to 1: 7, the new plant could indirectly create up to 23,000 indirect jobs. The start of construction of the plant is planned for January 2023. The plant will be 100% climate neutral. This investment may be followed by other projects of the Volvo Group in this location. It is one of the most significant investments in the history of the Slovak Republic and the most significant in eastern Slovakia since the establishment of the Slovak Republic.
The Volvo Group
The Volvo Car Group has been owned by the Chinese company Geely Holding Group (majority owner) since 2010. Volvo is listed on the Stockholm Stock Exchange (Nasdaq Stockholm). The Geely Group is owned by private capital
The Volvo Group has been owned by the Chinese company Geely Holding Group (majority owner) since 2010. Volvo is listed on the Stockholm Stock Exchange (Nasdaq Stockholm). The Geely Group is owned by private capital (billionaire LiShufu).

Volvo Group plans to achieve full electrification of its product portfolio by 2030.

In June 2021, a joint venture (50:50) between Volvo and Swedish battery manufacturer Northvolt was announced. The Volvo Group also owns 49.5% of the sister brand Polestar and 30% of the sister brand Lynk & Co.
The current production plants (final car assembly) of the Group are: in Sweden (Torslanda), Belgium (Ghent), the USA (Ridgeville), China (Chengdu, Daqing, Luqiao), India (Bangalore), Malaysia (ShahAlam), and Russia. (Kaluga).