Samsung venture means 3,000 jobs for Teesside

SAMSUNG, the Korean electronics group, is to create 3,000 new jobs by the end of the decade on Teesside, with a pounds 600m investment in a five- factory complex at Wynyard Park. It is expected that further jobs will be generated during construction.

The company has been lured by pounds 58m in Government grants under the regional selective assistance programme. The is the largest amount ever awarded to one company by the Department of Trade and Industry.

There is speculation that the magnitude of the deal is a reason for the DTI's strong resistance to Treasury demands for a review of its development budget.

A spokeswoman for the DTI said the money would be made available while the complex was being built. She added that a larger amount of regional aid might have been granted to Nissan for its Sunderland car factory, but nothing on the scale of the Samsung aid had ever been promised in a single tranche.

The investment is the biggest made in Europe by a Korean company. Samsung, which is also expected to move its European headquarters to London from Frankfurt, said that good industrial relations and low labour costs were factors in deciding on the location. The company has already invested pounds 20m in a colour television factory at nearby Billingham, which has been in operation since 1987.

The announcement was hailed as a coup for the jobs blackspot of Teesside where in some areas male unemployment runs at more than 50 per cent. David Walsh, chairman of Cleveland County Council's development committee, which fought hard to win the investment, said the effect was comparable to the coming of the chemical industry to the area in the 1920s.

He estimated that with work created in related industries the total number of new jobs could be 5,000.

Samsung had also considered building the factories in the Republic of Ireland, Spain and Hungary. The choice of Wynyard Park follows a year of discussions with the British Government.

Samsung said the investment was part of the group's plan to create five main production bases serving markets in Europe, Japan, South America, the US and China.

The first of the factories, making personal computer screens and microwave ovens, will be operating by next August and will create 900 jobs.

Work on the second phase - factories making products including facsimile machines and personal computers - will begin in 1997. These, with training and administration centres, will create a further 2,300 jobs.