czech f cus - Photon Systems Instruments

CZECH F
CUS
Magazine of the Association for Foreign Investment
CR could
adopt euro
in 5 years
Volume 2. Number 2/2005
Quarter in Review
2-3
Hard
to compete
with
Sector Focus
HARD TO
COMPETE WITH
4-7
“Di er ge jia”
for Asian
entrepreneurs
Country Focus
8-10
CR: future
leader in global
offshoring
Czech Investment
News
11-12
Clustered
to talk
about clusters
Events...
13
First grade
report card
Business Climate
14
Started out
in an atomic
shelter
Spotlight on People
15
In the
land
of beer
Focus on Czech microelectronics
and optoelectronics
sectors
Special supplement inside
INVESTOR OF THE YEAR
Living Czech
16
1
INVESTOR’S
CALENDAR
 INVESTOR’S CALENDAR
September - November 2005
September
6. - 7.9.
IQPC Shared Services Conference, Prague,
Czech Republic
13. - 15.9.
Doing Business in the Heart of Europe,
Investment Seminar, Toronto and Montreal,
Canada
14. - 15.9.
PABORD: Pharma & Bio, Trade Fair,
London, UK
20. - 21.9.
Investment and Business Forum, Ostrava,
Czech Republic
28. - 29.9.
Call Centre EXPO 2005, Trade Fair,
Birmingham, UK
October
3. - 7.10.
MSV (International Engineering Fair), Brno,
Czech Republic
10. - 12.10. Expo Real 2005, Trade Fair, Munich, Germany
13. - 18.10. Equip Auto 2005, Trade Fair, Paris, France
18. - 20.10. Biotechnics 2005, Trade Fair, Hannover,
Germany
24. - 26.10. BioNetwork, Conference, California, USA
24. - 27.10. Invex, ICT Trade Fair, Brno, Czech Republic
24. - 28.10. Systems, IT Seminar, Munich, Germany
28.10.
Los Angeles Seminar, Los Angeles,
California, USA
November
1. - 3.11.
Offshore Customer Management: International
Conference, Prague, Czech Republic
7. - 9.11.
BioEurope, Conference, Dresden, Germany
Dear Readers,
Two of Honeywell’s four main businesses are represented in
the Czech Republic: Aerospace and Automation and Control
Solutions. Both of these businesses are driven by technological
innovation and we see here local potential for growth opportunities in line with major societal trends like innovation, productivity, safety, security, comfort, and energy efficiency.
Honeywell came to the Czech Republic as a diversified technology investor and our experience doing business here has
shown us that Czech people excel in the disciplines of science,
technology and engineering. One of the principal reasons we
decided to invest here was the high quality of technical education and the culture of innovation.
Honeywell is a major supporter of Czech technical education
and we have worked hard to develop long-term relationships
with universities – primarily the Brno University of Technology
(VUT) and the Czech Technical University in Prague (CVUT).
In 2004, we donated $207,000 to Czech technical education, a
four-fold increase on our 2003 contribution. Our support is not
only limited to donations or sponsorship. Honeywell representatives collaborate with both schools in non-financial areas, too, by
giving lectures, assigning and supervising theses, and co-operating on research projects. Many students have worked in various
Honeywell businesses in the Czech Republic as interns, and
some of them later joined the company as full-time employees.
In order to foster the Czech culture of innovation, we would
like to see more focus on intelligent risk-taking, and fewer
administrative or operational barriers. When Honeywell first
opened its Prague Laboratory in 1993 – our first R&D facility
outside the United States – we had to learn how to be innovative in a different environment and in a different way. We
took risks and they paid off. Honeywell’s Prague Laboratory
is responsible today for developing and implementing global
energy efficiency solutions for the company.
As a member of the government’s Research and Development
Council I believe that intelligent risk-taking, supplemented by
life-long learning and education, is a necessary element when
setting out the Czech national innovation policy and long-term
research areas that are needed to
move our country closer to a knowledge economy. Those are also the
pillars in the Czech government’s
Strategy for Economic Growth.
15. - 18.11. Productronica, Trade Fair, Munich, Germany
16. - 19.11. Medica 2005, Trade Fair, Düsseldorf, Germany
Jaroslav Dolezal
National Executive of Honeywell
for Czech Republic
Contact: Editorial Board of Czech Focus
Association for Foreign Investment, [email protected]
Stepanska 11, 120 00 Prague 2, Czech Republic
Published by the Association for Foreign
Investment - AFI under the auspices of CzechInvest,
the Investment and Business Development Agency
of the Ministry of Industry & Trade.
2
QUARTER
IN REVIEW
Headline News
Economy
 The World Bank officially labelled the Czech Republic an advanced
economy at its spring meeting.
“The Czech Republic has made remarkable progress over the past decade
and a half and is now well poised to share its experience of successful transition with other countries,” said Shigeo Katsu, World Bank Vice President
for the Europe and Central Asia region.
“After 15 years of economic, social, and political transition, the Czech
Republic is a country with an advanced and growing economy, a member
of the European Union, integrating in the global economy, and striving to
re-establish its position among the world’s most developed economies,”
said Czech Finance Minister Bohuslav Sobotka.
Politics & Legislation
 The Czech economy is growing at the fastest rate in last eight years:
real GDP growth in 1Q 2005 was 4.4% against 1Q 2004. According to
the Czech Statistical Office, the economy was driven primarily by international trade. Exports of goods grew in the period by almost 20% and
were 6 percentage points higher than imports.
The Czech Finance Ministry estimates inflation for this year to be 1.8%.
Czech GDP should grow by 4.0%. Unemployment should fall only slowly,
from 8.3% and 426,000 jobless in 2004 to 8% and 411,000 jobless in 2005.
Investments should increase by 6.4% this year. Next year they should rise by
7.5%. The OECD in a new prognosis for Czech economic growth estimates
this year’s growth at 4.1% and next year’s at 4.3% .

 Improvement in the Czech Republic’s competitive strength is marked
 The coalition government of Prime Minister Jiri Paroubek won a confidence
vote in the Lower House of Parliament in May. The new cabinet will serve for
only about a year as the next general elections are scheduled for mid-next year.
But it has set itself a number of tasks. “In terms of economic policy, we would
like to approve the new bankruptcy law, which is very important, we would like
to focus on decreasing the bureaucratic burden on entrepreneurs, the government also wants to set up programmes for structural funds from the European
Union for the period from 2007-2013, also we are increasing funds for research
and development spending, we will be focusing on the development of transportation infrastructure and many other issues,” commented the deputy Prime
Minister for Economics Martin Jahn.
by its move from last year’s 43rd to this year’s 36th place on the list
compiled by the Swiss International Institute for Management Development (IMD). In terms of investment into telecommunications, the Czech
Republic is third internationally.
 In the export efficiency index, the CR has taken
3rd place in the world with 7.1%, behind China and
South Korea, which both scored 8.6%. Hungary placed
4th with 5.9%, followed by Turkey with 5.2%, according
to OECD statistics.
 The
CR could adopt the European currency in
5 years provided the conditions of economic growth
and public finance consolidation are met, according to
the OECD.
Business
Japanese automobile component manufacturer Toyoda Gosei
opened its second production hall in the industrial park in the municipality of Klasterec nad Ohri in the Czech Republic and plans to
complete another one in 2007.

Barclays, the third biggest bank in Britain and one of the top ten
banks in the world, is entering the Czech market, where it will be
financing mortgage loans.

The cabinet has approved Finance Minister Bohuslav Sobotka’s proposal for
cutting income taxes in all categories by up to CZK 30,000 (approx. EUR 988,
USD 1,334) a month as of next year. Sobotka describes the proposal, pending
Parliament’s approval, as the most massive income tax cut of the past decade.

The cabinet has agreed that employers will pay out sickness benefits to
employees for the first 14 days of sickness. Sickness insurance payments of
businesses will be reduced from 3.3% to 1.4% of employee pay.

 An amendment to the employment law, recently passed by the Lower House,
stipulates annual state subsidies to companies that hire fresh college
graduates. The government funding should cover all costs of graduates’ pay.
 A draft building bill, prepared by the Ministry for Regional Development, is
to simplify and speed up the approval process for construction projects.
The bill also streamlines and shortens the zoning process, removes conflicting or
overlapping legal standards, and tightens supervision of construction projects.
Last year, according to the Czech
Statistical Office’s macroeconomic
development analysis, the Czech Republic was the only new EU member
state from Central Europe to fulfil
three of the four Maastricht conditions for the implementation of the
euro.

Germany’s Bosch
Diesel has opened a
new
manufacturing
plant in the Czech Republic. The plant is an
expansion of an already
existing facility located
near the town of Jihlava and is designed
to manufacture highpressure pumps. The
new plant cost EUR
100 mln (USD 129.54 mln, over CZK 3 bln) to build and will provide up
to 1,000 jobs before the end of the year. Bosch Diesel is one of the largest foreign investors in the Czech Republic, employing more than 5,800
people in the Jihlava region with total investments exceeding EUR 505
mln (USD 654.18 mln, CZK 15.33 bln).

One of the most important IT companies worldwide, Sun Microsystems, confirmed definitively that it was going to build a research and development centre in Prague - one of five centres the company will have.
The number of jobs might triple from the current 200.

Out of 120 German investors surveyed, 77% would again
choose the CR for their investment projects, according to statistics
released by the Czech-German Commercial and Industrial Chamber.

3
QUARTER
IN REVIEW
 General
Electric Co. is planning to expand its activities in the Czech
Republic and open a new customer support centre next year. The corporation’s Czech subsidiary, GE Money Multiservis, plans to invest over
EUR 3 mln (USD 3.7 mln, over CZK 100 mln) in the centre it wants to
open next year in Ostrava, 350 km (218 miles) east of Prague.
 Czech firm Job Air is to build a service centre for Saab Aircraft AB at
the Ostrava Mosnov airport. The 2 companies have concluded a 10-year
contract for exclusive repair and maintenance of Saab civilian airplanes.
Holding CCG, which owns Job Air, also plans to start regular flight service from Ostrava to some European cities by the end of the year.
 Car parts maker Pegu-
form and international
company Exatec will
build a plant producing
high-tech car windows
in the Czech Republic.
Construction
should
begin this year. The plant
will be built in the Liberec
region. Production should
be launched in 2007.
Scottish company Incline opened a Prague centre for repair of flat
LCD TV screens, computer LCD monitors and plasma screens. Incline
plans to reach the full capacity of 80,000 repaired screens a year by the
end of 2005.

Japan’s Futaba, the world’s largest manufacturer of moulded auto
parts, opened a new production plant in the town of Havlickuv Brod. The
plant will supply auto components to Kolin-based automaker TPCA.

French concern Schneider
Electric built a
technical support centre in
Prague for Central and Eastern
Europe.
The
centre will handle customer inquiries pertaining to industrial
automation.

 Arla Plast AB, the 3rd largest producer of polycarbonates in Europe,
is to build a plant to produce polycarbonate boards in the town of Kadan. The facility is scheduled to launch production in November.
China’s biggest TV set producer Changhong Electric Appliance is
looking for a suitable Czech location for the construction of a new production plant intended to produce devices for the European market.

Miscellaneous
 The
CR placed 3rd in Central and Eastern Europe in preparedness for e-business, according to the Economist Intelligence Unit. On
a global list of 65 countries, the CR took 29th. In cell phone use and ICT
spending, the CR is catching up with West European countries.
The world’s largest
passenger plane, the
Airbus A380, which
can carry up to 840
passengers, is a truly
European cooperation.
Czech scientists, too,
had their share in the
project. “Many safety
parameters had to be
calculated but not only
concerning the safety of the aircraft itself but also other planes flying
in its wake,” described the task of the Czech team Ivo Vasa from the
Nuclear Physics Institute.

The first modern Europeans lived on the territory of the present
Czech Republic 31,000 years ago, a team of Austrian and U.S. scientists
concluded on the basis of the first direct determination of the age of
bones coming from the Mladec caves, North Moravia.

T-Mobile is to launch the wireless high-speed network UMTS in
Prague in 4Q 2005. By the end of 2006, another 80 cities will get UMTS
with the maximum connection speed of 2.2/1.1 Mb/s. British company
IPWireless is to supply the technology.

Czech Airlines again won this year’s award for best carrier in
Central and Eastern Europe. The prize, based on public voting, is annually
awarded by the international Official Airline Guide.

In May, the Czech hockey team defeated Canada 3-0 in the world
ice hockey finals and became world champions again after four years.

Internationally renowned architect Norman Foster, the designer
of Germany’s Bundestag and the Millennium Bridge in London, is considering designing a facility on 3 million m2 of land in south-western
Prague. Foster believes there is a market for such projects in the Czech
Republic.

Together with scientists at the Technical University in Liberec, Liberec-based firm Elmarco developed a machine that produces nanofibers
used primarily in health care to treat burns. A contract with Irish pharmaceutical firm Alltracel is to help win international recognition.

 Czech car maker Skoda Auto will launch production of the Roomster mod-
el in the Kvasiny plant in East Bohemia as of next year and plans to present
the new model at the
Geneva motor show
in March 2006. The
company intends to
use government incentives in the form
of tax relief amounting to roughly CZK
427 mln (approx.
EUR 14 mln, USD
19 mln) to co-finance
the project.
(Sources: Czech News Agency, Reuters Press Agency, Interfax,
Radio Prague, Prague Daily Monitor, weekly Euro,
dailies Hospodarske noviny, Pravo, MF Dnes and Lidove noviny)
4
SECTOR
FOCUS
Hard
to compete with
The Czech microelectronics
and optoelectronics sectors
When a field combines tradition, young blood, modern technologies and a quality
infrastructure, success is not long to follow. The Czech optoelectronics and microelectronics
sectors are unquestionable proof of this.
5
SECTOR
FOCUS
The Czech Republic offers cost structures competitive with China, the Czech university
system provides the full spectrum of microelectronics and semiconductor educated
manpower (including microelectronics study programmes at four technical universities),
an extensive investment incentives scheme is in play, the Czech accounting system
allows one of the fastest depreciation schemes in the world... Such advantages for
investing are indeed hard to compete with.
Intellectual capital - Czech Universities
Power semiconductor components have in the Czech Republic an outstanding
tradition both in design and fabrication. Transistors, diodes, tyristors and other
components have been manufactured in the Czech Republic since the 1960s
and have been supplied to final customers worldwide.
Excluding former East Germany, the Czech Republic has the only wafer fabrication facilities found in Central and Eastern Europe, namely ON Semiconductor
in the town of Roznov pod Radhostem, North-Moravian region.
Technical University
of Liberec
Liberec
4,201
Czech Technical
University in
Prague
University of
Pardubice
6,527
University of West
Bohemia Plzen
Pardubice
3,377
Prague
26,722
Plzen 3,688
2,138
Institute of Chemical
Technology Prague
Brno University
of Technology
2,741
Technical University
of Ostrava
Ostrava
13,921
Availability of qualified engineers on the market
0=are not available
6,527
Brno
16,501
Zlin
Tomas Bata
2,432 University in Zlín
10=are available
Czech Republic
Ireland
Total technical students: 70,842
Of which: Electrical eng. students: 15,258
Note: The figures are based on location of faculty
Japan
USA
Conclusions of Feasibility Study
on the Semiconductor Industry:
Germany
United Kingdom
According to a worldwide study1 of the semiconductor industry conducted by
AngelouEconomics in April 2004:
The Czech Republic was defined as a top region with secondary, technical, and university education programmes customized for the semiconductor industry and high enrolment in these programmes. The Czech Republic
scored 74 points out of 100 with regard to its qualifications for semiconductor
investment.
Labour is one of the country’s strongest selling points. Czech
workers are among the most technically skilled in Europe and cost
less than in most western European countries. The Czech Republic has
ample engineers (fab operators and technicians, designers) to supply
multiple fabs.
The Czech Republic was approved to become one of the regions with
a good base for developing semiconductor and microelectronics/electronics
activity. Most regions with this qualification contain a fab, foundry, or major
high-tech activity. High capacity infrastructure is available. Richmond (Virginia, USA); East Fishkill (New York, USA) or Scotland are a few benchmarking
examples.
In terms of infrastructure, the industrial sites in Zatec, Usti region, and
Brno in South-Moravian region were identified as suitable for wafer fabrication. Each of them rank among top regions with high-capacity and quality
water, power and natural gas infrastructure and many tracts of land available for large-scale manufacturing. The sites require minimal infrastructure
upgrades.
The manufacturing and electronics sectors are growing. A large number of
major foreign investors in the Czech Republic are global electronics companies.
The Czech Republic’s business climate is conducive for manufacturing companies.
AngelouEconomics is a Texas-based consulting firm specialized in microelectronics, which evaluated the Czech Republic and its ability to host a chip
foundry or a final microelectronics assembly plant.
1
1
2
3
4
5
6
7
8
Source: World Competitiveness Yearbook 2003, IMD
Average wages in electronics sector in 2004
POSITION
CZK/month
EUR/month
EE devices designer
30,650
961
Electronics and telecom systems designer
29,819
935
Technician of electronics and EE devices
24,277
761
Electronics and EE manufacturing foreman
21,509
674
Assembly electronics operator
12,976
407
Exchange Rate: 31.90 CZK/EUR (Average Exchange Rate in 2004)
Source: Trexima, Ministry of Labour and Social Affairs, 2004
Nearly one hundred years’ tradition
The tradition of the Czech electronic sector extends back to the early
twentieth century when companies such as Blaupunkt, Elektra-Philips,
Telegrafia, Prchal-Ericsson and Makrofon operated in then Czechoslovakia.
In early 1946, the national enterprise Tesla was founded, which during the post-war years of nationalization absorbed 68 companies in the
electronics and electrical field. During the second half of the twentieth
century Tesla had about 60 branches around the country that operated
in various fields and also had their own R&D centres, so-called research
institutes, that enabled them to keep pace with global technical and technological developments. Many of these centres were terrific successes
and some of them after the country’s return to a market economy (after
the Velvet Revolution in November 1989) became the main source of
the scientific work force for successful private companies. One example
of these is Tescan.
6
SECTOR
FOCUS
Made by Tescan – a real compliment for every
electron microscope
TESCAN is an originally Czech private company manufacturing scientific
instruments and laboratory equipment – namely electron microscopes.
TESCAN was established by a group of experienced R&D engineers of
the former state-owned company of TESLA Brno in summer 1991.
The company has very efficiently used the huge potential that was
created by TESLA Brno, which used to be the leading supplier of electron-optical devices and electronic measuring instruments in Eastern
Europe, and so TESCAN follows upon these activities taking advantage
of the many years’ experience of the best specialists. The close cooperation with universities and scientific institutes is another strength
of the enterprise.
The first products of the company were supplementary accessories for
scanning electron microscopes: image processors, special chambers, detecting systems, etc. Subsequently Tescan extended its activity in the field
of image processing into light optical microscopy and special applications.
Tescan successfully finished several custom projects of the development
and prototype manufacturing of electronic circuits and software in the
field of medical instruments and space research. It was awarded as an
“Innovative Company of the Year” in the Czech Republic in 1994. Tescan
succeeded in several research projects granted by the European Community and the Czech government (Copernicus, Technos, etc.).
Tescan now combines the experience of many years of the leading
scientists and research technicians from the traditional Brno electron
microscopy centre with the innovative and creative attitude of young,
highly-educated people. This enables the company to provide top level
technical solutions in electron microscopy and, through its satisfied customers, to maintain its position among the leading organizations in the
field of electron microscopy.
Key players on the microelectronics market
Motorola Freescale - worldwide Centre of Excellence for
motor control systems in the Czech Republic
Motorola as a world renown top company in microelectronics entered
the Czech market in the early 1990s. Motorola Freescale, its microelectronics design unit, deals in its Czech subsidiary with the development of
both software and hardware system engineering, specializing in automotive, industrial and household applications. Motorola started its activities
in the CR in autumn 1992. From the beginning, it focused on gaining
the best brains from the Czech technical universities, especially those in
Brno, Ostrava, Prague and even Bratislava (Slovakia).
In late 1992 a decision was taken to hire 20 engineers, former employees
of Tesla Roznov, which was the original integrated circuits design centre
in Roznov pod Radhostem. Tesla Roznov used to be the biggest fabrication site of bipolar technologies in former Czechoslovakia.
Currently, there is a successful System Application Laboratory in the CR
whose main task is to develop and manufacture prototypes of electronics
solutions followed by technical support to its customers. The main technical areas are automotive, telecommunication and household industry
applications. Skoda, the biggest Czech car manufacturer, uses Freescale
ICs designed in the Czech Republic since the beginning of their activities
here.
The principle activity of Motorola Freescale in the CR
is system engineering
The Motor Control department deals with the final applications of the R&D
centre’s results, such as control units for all types of electrical motors, such
as asynchrony, BLDC, synchrony, linear etc. In the development stages,
designers use the whole scale of Motorola products – starting from HC08,
to HCS12 to big performance devices of 56F8xx and MPC5xx.
The Analog Products department prepares hardware and software solutions using the components of APD – Analog Products Division of Freescale, used in cable and wireless communication systems, motor control
etc. Czech experts assure support to the APD division.
Embedded Software is provided by Czech experts especially for platforms
of HC08 (8-bit MCU), HC12 and HCS12 (16-bit MCU), MPC5xx (32-bit
MCU), DSP5680x and DSP5683x (16-bit DSP), which work in real time.
These applications require special software solutions.
The Czech subsidiary works also on LIN (Local Interconnected Network)
applications, used mainly in the automotive industry.
ON Semiconductor Czech: wafer fabrication in Central
and Eastern Europe
ON Semiconductor Czech has three types of activities here: wafer fab, crystal
growing of silicon ingot and production of 4" silicon wafers, and an IC design
centre. The activities are based on continuing the local semiconductor production tradition in the region
that goes back to the 1960s.
ON Semiconductor Czech
heavily cooperates with the
local technical universities of
Ostrava and Brno.
Wafer fab
ON Semiconductor Czech,
a former division of Motorola, produces in the CR
various types of integrated
circuits on silicon wafers,
such as control circuits for
switching power supplies,
+/- voltage stabilizers,
adjustable voltage controllers, simple and multiple
operating amplifiers and
motor control circuits. Silicon wafers with IC dice are
further processed in the
ON Semiconductor Czech
Republic Assembly Line.
7
Crystal growing of silicon ingot and production of silicon wafers
This process of silicon wafer production is unique in the CEE region, excluding
former East Germany. In the Silicon Manufacturing Unit, ON Semiconductor
Czech produces silicon polished prime, monitor/test and epitaxial wafers
made of Czochralski-grown single crystals in 100, 125 and 150 mm diameters
and doped by boron (B), phosphorus (P), arsenic (As) and antimony (Sb). The
available resistivity covers the whole range used in the semiconductor industry, including heavily doped phosphorus and arsenic materials.
ON Semiconductor Czech silicon products are mainly used to produce discrete components (Zener and Schottky diodes, rectifiers, small-signal transistors, etc.) and integrated circuits manufactured by bipolar and/or CMOS
technology.
IC Design Centre
SCG Czech Design Center, one of nine design centres of American corporation ON Semiconductor, develops analogue and mixed mode integrated
circuits (IC) for consumer, communication, computer, industrial, automotive and other market
segments. It has introduced more than 50
products in bipolar,
CMOS and Bi-CMOS
technologies loading
wafer fab lines worldwide. SCG Czech
Design Center is a
centre of the highest
quality that was created in the region by
a world-renown leader
in the high-tech microelectronics industry.
S3, Silicon &
Software
Systems
This is a Prague-based
chip design company.
The facility, owned in
part by Philips, designs
chips for mobile phones.
SECTOR
FOCUS
ST Microelectronics - Prague IP Design Factory
ST Microelectronics is ST’s fastest growing design and application centre. With
more than 200 employees, it is the largest individual design group in Central and
Eastern Europe excluding Russia. It provides application support for European customers, and designs high-performance linear circuits and automotive products.
Lumir Flajshans
Electronics and microelectronics specialist
CzechInvest
8
COUNTRY
FOCUS
“Di er ge jia” for Asian
entrepreneurs
Soon after Asian investors entered Europe through the “Czech gateway”, the Czech
Republic has become their favourite manufacturing and service hub in the middle of
Western and Eastern European markets. Here they found their second home (di er ge jia).
“Having finished my lunch in a Chinese restaurant in Prague, close to
my office, and I still need to pack my things for a trip, not to forget to
take enough business cards and to wear a tie – a gift from a Chinese
friend. I pull out my notepad full of notes from yesterday’s Chinese lesson from my bag so that it’s not so heavy and finish my cup of Oolong.
When I leave the office, I notice a black plastic fashion bag in the corner, which I won in a Chinese restaurant a week ago in a drawing after
having lunch. I rush to pick up the Taiwanese investors that have just
arrived at Ruzyne airport in Prague. I pass a group of Chinese tourists
in the street heading for Prague’s historical centre... I get to the airport
in time – I have to wait a bit and finally “my people” appear – instead
of the three confirmed there are four representatives of the Taiwanese
investor. I stay cool – I have a large Skoda Superb car....... My friends
get in the car and are curious what make it is, and I proudly pronounce
“SKODA”. They seem to be jetlagged but in reality they probably are
just recalling their experiences with Skoda cars in China. We are now
leaving the airport for Rudna u Prahy where we have a reference visit to
a private industrial park – home to three Taiwanese operations already.
But this is not the final destination of our trip today..... We also attend
a reference meeting with managers from Hon Hai Precision Industry in
Prague....... After less than two hours’ drive from Prague to the east,
during which I have been listening to a lot about Czech history from
Asians, we arrive in Brno, the Czech Republic’s second city, to have a
quick stop at a developer’s park where other Taiwanese entrepreneurs
keep a production hall...... Our final destination today is Ostrava, the
capital of the Moravian Silesian region, and headquarters of Asustek
- one of the most renowned manufacturers of motherboards in the
world. We check into a hotel and my friends are looking a bit tired
when suddenly another group of Asians have come in. It is a group of
Taiwanese businessmen that have arrived from Austria to investigate
investment opportunities in the Moravian Silesian region, too. I thought
my friends would continue upstairs but they have started a typical long
brainstorming session in the lobby, for which my knowledge of Chinese
language from my last ten lessons is not enough. Fortunately, they are
not competitors and later both companies settle down in the Czech
Republic.”
As former head of
the Department of
New Technologies
and Innovations at
CzechInvest, I assisted an increasing
number of visits of
foreign investors to
the Czech Republic
during recent years.
It proves the ever rising interest of foreign
entrepreneurs in this
country, but not only from the members of the EU – our biggest trading
partners – but also from a dynamic South East Asia region, especially
from Taiwan and Korea, despite its long geographic distance. According
to A.T. Kearney’s study from July 2004, the Czech Republic is
the world’s fourth most attractive location for offshoring, behind
India (1), China (2) and Malaysia (3), and ahead of Singapore (5) and
the Philippines (6), when comparing financial structure, business
environment and people skills and availability.
From production lines to technology centres
The major Asian investors – from mainland China, Taiwan, Korea and
Singapore – entered the European market back in the 1970s and 80s
when they established their manufacturing and later service operations
often in Germany, the Netherlands and the UK, mainly due to the convenient customer base and - in case of Netherlands - due to its competitive incentive structure for new logistics hubs.
During the early 90s when the Czech Republic began its economic
transformation, the first Asian private entrepreneurs started exploring
the investment opportunities in the country. The main reason was the
significantly cheaper operating costs compared to their West European
locations and still favourable logistic connections to their customers.
Their first intentions were to establish production lines for final
assemblies and sub-assemblies mainly of consumer electronics to ship to
Western markets, but later while expanding they often added a service
project, such as a repair or technology centre. Annual inflow of FDI
from SE Asia to the Czech Republic is estimated at around 60
million USD. The biggest investors come mostly from Taiwan,
Mainland China, Korea and Singapore. CzechInvest registers more
than 60 projects in different stages of development from this region.
In recent years we have also registered a rising interest of companies
in joint-venture projects, for instance from large semi-private Chinese
conglomerates in telecommunications and the shipbuilding industry.
Completed investment projects
The main incentive for
Asia Pacific companies investing in Europe is their
increasing market shares
and their success in building a global brand mainly
in electronics and microelectronics. 1/5 of the
world’s Top 50 global
electronics OEMs (Original Equipment Manufacturers) are from Korea
and Taiwan. This achievement can also be seen in
the Czech Republic. There
are so far eleven Taiwanese projects facilitated by CzechInvest and at
least another dozen in preparation.
Electronic components and consumer electronics manufacturers
The result of the cooperation of LG Electronics from Korea and Royal
Philips Electronics from the Netherlands was the founding of a jointventure project: LG.Philips Displays Czech in the town of Hranice na
Morave. The plant manufactures large TV screen picture tubes. The operation consists of three manufacturing lines installed during 2001 - 2002
and more than 95% of production is intended for export to Western
EU countries.
Taiwanese Tatung has recently opened its new plant in Plzen Borska
Pole to run two production lines for LCD TV and desktop PC semiassembly and manufacturing. Tatung has invested some 20 million USD
into new technologies, machinery and equipment. This new European
centre will supply Western EU countries but later also Eastern European
markets including Russia.
9
In late 2004, Taiwanese company Mustek acquired an existing facility in
Mesice north of Prague to start manufacturing DVD recorders and players for its customers from Western EU countries.
Recently, the multinational Taiwanese brand manufacturer BENQ has
decided to locate its new European project for LCD TV and monitor
manufacturing to Brno. Before start-up BENQ has been meeting its
customers’ demand through subcontractors in Hungary. Before the
decision, this investor shortlisted the Czech Republic and Slovakia. Brno
was chosen due to its unique transportation infrastructure, proximity to
major markets, reasonable start-up costs and attractive environment for
Taiwanese expatriates.
Computing technology
The Czech Republic is becoming one of the biggest producers of computers in Europe. Foreign direct investment in this branch significantly
contributed to the fact that nearly 40% of total European computer
production capacities are estimated to be in the Czech Republic.
Exports of computers from the Czech Republic create more than 50%
of the exports of the country’s high-tech production.
COUNTRY
FOCUS
It is popular among Asian investors to rent an existing facility for initial
start-up. There is a good selection of private developers in the Czech
Republic so the requirements of those investors are often met. For
instance, the Taiwanese company INVENTEC has kept existing
production build-on-order capacity in new leased building in Brno
since 2003.
ASUSTeK COMPUTER opened in May 2005 its new European centre
for computer production and repair in the Ostrava Hrabova industrial
zone. The production plant should be opened during this summer and
the centre’s production capacity should reach up to 200 thousand
personal computers a month. The repair centre project for electronic
equipment should be completed by late 2006. The company forecasts
that the repair centre in Ostrava will become a centre concentrating
repair activity of the holding in Europe.
An increasing interest from Mainland China and Korea
CHINA STATE SHIPBUILDING CORP. has recently decided to
establish a joint-venture project in Decin Kresice to build river ships for
customers in Germany and Belgium. The output is estimated to be more
than 50 new ships a year starting in 2006.
KINLOON TECHNOLOGY is investing into their manufacturing
project in Litvinov to start production of small motorcycles initially for
the German market during 2005.
Korean multinational companies such as LG and SAMSUNG have
invested heavily in Central and Eastern Europe in recent years into their
new manufacturing and service capacities to supply consumer electronics, especially LCD TV and monitors, to all Europe. This trend should
continue when considering their still increasing market shares. LG Czech
with its headquarters in Prague announced double-digit growth in sales
of brown- and white-goods just in Central Europe.
New centres of computing technology manufacture were built on order, mostly in the form of greenfield investment projects. FOXCONN
and FIC are among the pioneer projects in the early 1990s and soon
became among the most important manufacturers of computers on order and the biggest exporters. Not long after their start-up they were
followed by other industry leaders, such as LITE-ON, TATUNG and
ASUSTeK.
The Hon Hai Precision Industry Group
with
headquarters
in Taipei, which
presents itself under
the business name
FOXCONN, bought
out the existing TESLA Pardubice facility
and further invested
into a new centre to
manufacture desktop
computers in Pardubice. A further investment plan is the extension of
its high-tech repair centre to include servers, work stations, desktops,
notebooks and pocket computers.
The company First International Computer (FIC) from Taiwan completed construction of its production base in Rudna u Prahy in 2001.
Nowadays the company ranks among the top ten Czech exporting
companies.
Shortly after FIC set up its base in Prague, its vendor – the company
LITE-ON chose the Czech Republic to locate its production line to manufacture computer chassis. In April 2004, the parent company merged
with SILITEK and LITE-ON TECHNOLOGY and the project in Opava
even expanded to run production lines for desktop PCs on order.
Taiwanese CHICONY is another supplier to computer manufacturers in
the Czech Republic. The company is known as a leading world manufacturer and marketer of input devices, especially in computer keyboards
and power supplies.
Major Asian investment projects in the Czech Republic
Company
Country
of origin
Sector
MARWI
HUALON
AIDC
FOXCONN
FIC
LITE-ON
TECHNOLOGY
CHICONY
INVENTEC
QUANTA
ASUSTeK
ASUSTeK REPAIR
FOXCONN
REPAIR
TATUNG
Taiwan
Taiwan
Taiwan
Taiwan
Taiwan
bicycle pedal manufacturing
textiles
aviation – AE270 IBIS aircraft
electronics – computer
electronics – computer
Taiwan
Taiwan
Taiwan
Taiwan
Taiwan
Taiwan
electronics – computer
electronics – computer
electronics – keyboard
electronics – computer
electronics – computer
electronics – computer
Taiwan
Taiwan
VIVATEK
BENQ
Taiwan
Taiwan
electronics – computer
electronics – LCD TV,
computer
electronics – DVD recorder
electronics – LCD TV
monitor
CHINA STATE
SHIPBUILDING
CORP.
KINLOON
TECHNOLOGY
LG.PHILIPS
INFOSYS
FLEXTRONICS
SYSTEM ACCESS
AMTEK
China
river ships
China
Korea
India
Singapore
Singapore
Singapore
motorcycles
TV picture tubes
BPO
design services
software development
precision engineering
10
COUNTRY
FOCUS
Furthermore, the Czech Republic has become even more accessible for Korean businessmen and tourists since Korean Air –
a member of Sky Team – opened its direct flight from
Seoul Incheon to Prague Ruzyne three times a week
starting June 2004. Prague’s Ruzyne
airport with its on-going expansions
is becoming the largest airport in
Central and Eastern Europe. Consequently, China Airlines announced
the opening of a new cargo flight from
Taipei to Prague in early 2005.
Investments from India and Singapore
Business Processing Outsourcing (BPO)
has been practised by primarily US-based
large corporations. India has traditionally
been the most attractive destination for these
offshore operations. However, recently there has
been certain interest even from Indian companies to offshore business processes to the Czech
Republic following their US clients.
PROGEON is headquartered in the state-of-art INFOSYS
campus in Bangalore, India. Their centre in the Czech Republic
has been located in Brno since 2004 and currently offers services
in as many as eleven languages. Progeon is one of the leading BPO
companies in India. It is focused on high-end process outsourcing for
major global customers across industries.
There are three announced investors from Singapore – FLEXTRONICS,
SYSTEM ACCESS and AMTEK. FLEXTRONICS maintains its
operation on Design Services in Brno employing some 30 engineers. SYSTEM ACCESS is a leading financial software provider of
customer centric universal banking solutions for financial services
institutions worldwide. They established their service operation in
2002 in Prague. AMTEK is a leading global supplier of components
and products. It established its Czech base in 2000 in Pisek and Brno.
Amtek Precision Engineering CZ provides design and manufacturing
of knitting machines and engineering of electronics components and
automation devices.
Why?
Asian investors usually choose the Czech Republic for an opportunity to minimize costs, the availability and quality of Czech human
capital, location advantages and favourable business environment. For
instance, some investors look at the establishment of an operation in
the country as a way to avoid payment antidumping customs duties
on imports from Asia to the EU. It is also usual for the next stage
of a manufacturing project to be an additional service project, such as
repair or technology centre, and/or after expansion to concentrate
all activities into one hub. Many investors choose the country for the
Czech supplier base. Another reason is capacity management, especially in nearshoring. Asian companies having their hubs still located
in Western EU countries can easily cover excess customer demands
through their manufacturing and service capacities in the Czech
Republic, achieving significant cost savings by such outsourcing.
Useful contacts
Embassy of the Republic of Korea in
Prague, Czech Republic
Slavickova 5, Praha 6 – Bubenec, 160 00
Phone: +420 234 090 411
KOTRA Trade Center Prague
Vaclavske namesti 47, Praha 1, 110 00
Phone: +420 221 625 600
www.kotra.or.kr
Mainland China
Singapore
Taiwan
South Korea
Malaysia
India
The core processes are still kept in the home country. Later there is
often a shift from only outsourcing and non-core processes, and lowmargin product lines to more sophisticated processes and technology
shifts. For instance, it has taken four years for ASUSTeK from their
start- up in Prague in a rental building until they established their hub in
Ostrava. Investors also use the local supply chain and logistics closer
to their new customers’ locations. And, the Czech Republic
is a full-fledged EU member, which brings legal, economic and
political stability for long-term projects.
New directions
During recent years, South East Asian companies invested a lot in the
Czech Republic, mostly into assembly lines to meet the demand from
their European customers on order as OEM or ODM suppliers. It has
created a lot of capacities. Some operations have developed well so they
even expanded and also added a service centre, usually a repair or innovation centre. The Czech Republic has a
light engineering culture. This means that
the country is less suitable for labour-intensive assemblies but more for projects
using skills and brains.
Jaromir Cernik
Director of CzechInvest´s office
in Hong Kong
Embassy of the Republic of India in Prague
Valdstejnska 6, Praha 1 – Mala Strana
Phone: +420 257 533 490
www.india.cz
Embassy of the People’s Republic
of China in Prague
Pelleova 18, Praha 6 – Bubenec, 160 00
Phone: +420 224 311 323 (Protocol),
233 028 800
www.chinaembassy.cz
Taiwan Economic
and Cultural Office in Prague
Evropska 2590/ 33c, Praha 6, 160 00
Phone: +420 233 320 606
www.roc-taiwan-cz.com
Consulate- General of the Republic
of Singapore in Prague
Na Prikope 23, Praha 1, 110 00
Phone: +420 221 967 208
Sources:
• Czech Statistical Office, 2004
• Statistics of Ministry of Industry and Trade, 2005
The most important investors that decided to invest in manufacturing,
R&D and business support services in the Czech Republic over the past
year received the INVESTOR OF THE YEAR 2004 awards from Czech
ministers on 7th June. During this fifth annual awards ceremony held at the
Troja Chateau in Prague, investment projects making the greatest contribution to the development of the Czech economy were awarded.
The Investor of the Year awards were announced under the auspices of
the Czech Ministry of Industry and Trade in collaboration with the Association for Foreign Investment (AFI) and the CzechInvest Investment
and Business Development Agency. The gala event took place with the
participation of partners of the “Partnership to Support Foreign Direct
Investment in the Czech Republic”.
The awards were presented in the following categories:
“Greatest Economic Benefit – New Investment”
“Greatest Economic Benefit – Expansion”
“Investment with Greatest Innovative Potential”
“Special Award for Exceptional Contribution to the Development of Foreign Investment”
Representatives of award-winning companies and Czech government representatives
From the left: AFI Chairman Jan A. Havelka,
Siemens CEO Pavel Kafka and Minister of
Industry and Trade Milan Urban
Special award conferred by the Association for
Foreign Investment – AFI for Siemens’ outstanding
contribution to the development of foreign investment in the Czech Republic received by Ing. Pavel
Kafka, CEO of Siemens s.r.o. and Siemens’ representative in the Czech Republic
INVESTOR OF THE YEAR
INVESTOR OF THE YEAR
Greatest Economic
Benefit – New Investment
1st Place
Daikin Device Czech Republic
What countries did you choose from when deciding on which country to
place your investment and why did you decide to invest in the Czech Republic?
We chose from the Czech Republic, Slovakia, Hungary and Poland. We decided to
invest in the Czech Republic because of the following reasons. 1.The main purpose
to invest is to supply compressors to Daikin Industries Czech s.r.o. in Plzen, so it is
required to locate close to the factory. 2.There are good suppliers in the Czech Republic and its surrounding countries. 3.The Czech Republic is a traditionally industrial
country.
In what way did investment incentives influence your decision on investment
location?
We decided on the location (in Brno) because it is close to Daikin in Plzen and suppliers and it has a good and well kept up industrial area. The investment incentives were
not the main reason in the decision.
Hitoshi Ozawa, President Daikin Device Czech Republic s.r.o.
From the left: Daikin Device Czech Republic President
Hitoshi Ozawa and CzechInvest CEO Radomil Novak
2nd Place
3rd Place
Benteler Automotive Rumburk
RWE SCHOTT Solar CR
What countries did you choose from when deciding where to place
your investment and why did you decide to invest in the Czech
Republic?
Benteler ultimately decided between the Czech Republic and Slovakia to
locate its new investment. The site near Rumburk in North Bohemia was
chosen because of its infrastructure, preparedness, good logistical position
and sufficient qualified labour force. Another big advantage is the base of
existing production facilities in Straz nad Nisou and Chrastava, which will
guarantee the smooth production flow in the new plant.
What countries did you choose from when deciding on which country to
place your investment and why did you decide to invest in the Czech
Republic?
RWE Schott Solar headquartered in Alzenau, Germany is a joint venture between RWE
Solutions and Schott AG. We made investigations in which country we could match our
project to an existing location to one of our shareholders operations. In this context we
compared logistic aspects, labor force level and services the different options would
contribute to our project. A detailed comparison we have made for Germany, Asia,
Turkey and other East European countries. The key factors for the positive decision for
Valasske Mezirici were labor force quality, logistic aspects to our European key markets,
support of local authorities, services of the locations and expansion possibilities.
Petr Marijczuk, Technical Director, Benteler CR k. s.
What surprised you in the Czech Republic – either pleasantly or unpleasantly
– compared to production plants in other
countries?
RWE and Schott
AG have both very
positive experience
with projects and
activities in Czech Republic. The local support of the
project and the skilled labor force to realize our high tech
and high quality operation. Sometimes unpleasant is when
we have to deal with higher authorities ouside the region
regarding timing to finalize the tasks.
Alexander Berg
Managing Director RWE Schott Solar GmbH
Chief Executive Officer RWE Schott Solar Inc. Boston, MA
SPECIAL SUPPLEMENT
SPECIAL SUPPLEMENT
Greatest Economic
Benefit – Expansion
1st Place
ASUS Czech
Taiwan-based ASUSTeK COMPUTER INC. invested in a new
European centre for computer production and repair. Investment
into the new plant and repair centre will reach 20 million EUR.
“The important factors in deciding on the location of this plant
were mainly the preparedness of the industrial park in OstravaHrabova and the proximity to the Technical University of Ostrava
with which we intend to closely cooperate. We are interested
in their graduates and would like to take part in creating specific
study programmes for their electrical engineering departments.
We are already considering moving part of our technology-driven
activities to the Czech Republic,” said George Wu, Associate Vice
President of ASUSTeK COMPUTER INC.
The centre should produce up to 200 thousand personal computers per month and the capacity of the repair centre should reach
50 thousand computers per month.
From the left: Minister of Industry and Trade Milan Urban, Minister of Regional
Development Radko Martinek and ASUS Czech representative, Arthur Chen
2nd Place
3rd Place
BOSCH DIESEL
RONAL CR
What countries did you choose from when deciding on which country to place
your investment and why did you decide to invest in the Czech Republic?
Bosch had the choice of other European production sites in central, south and western Europe and worldwide. We decided to invest here for a lot of different reasons.
The main point is the good overall balance.
The factory itself showed low costs, high quality output and good delivery performance. The country has good availability of workers (not so good concerning
engineers). The workforce is well trained and motivated. Other important factors
were closeness to European customers, relatively good road conditions, authorities
who are open and pleasant to work with, sufficient availability of land, good stability
of society and good language skills in German and English.
What countries did you choose from when deciding on which country
to place your investment and why did you decide to invest in the Czech
Republic?
Slovakia, Poland, Romania. State aid, qualified labour force, the market, support
from an already existing company.
What surprised you in the Czech Republic – either pleasantly or unpleasantly – compared to production plants in other countries?
Still some things work surprisingly complicated or do not seem to be well coordinated.
But these are minor problems which we try to solve together with other companies
in the region and the state authorities on
all levels. One of the positive surprises we
experienced is the speed of action. With
the close cooperation of all authorities and
CzechInvest we were able to buy land,
get all permits and build a twenty thousand
squaremeter hall within less than ten months
including start of production of a new high
tech product – the latest diesel high pressure
pump for the Bosch common rail system.
From the left: Kersten Janik, Senior Vice
Kersten Janik, Senior Vice President,
BOSCH DIESEL
President, BOSCH DIESEL and Chairman
of the Takenaka Europe Board of
Directors, Yutaka Kawashima
In what way did investment incentives influence your decision on investment location?
Investment incentives were one of the decisive factors for locating our investment
in the Czech Republic.
What surprised you in the Czech Republic – either pleasantly or unpleasantly – compared to production plants in
other countries?
Adaptability and flexibility of the work force.
Do you already have any research or development activities in the Czech
Republic or are you planning to
have any, or are you planning further expansion of your activities?
RONAL CR s.r.o. has an R&D
centre that was established in
2001. This centre is being developed on an ongoing basis.
Jiri Hnizdo, chief executive,
RONAL CR s.r.o.
INVESTOR OF THE YEAR
INVESTOR OF THE YEAR
Investment with the
Greatest Innovation Potential
1st Place
SKODA AUTO
The largest Czech automaker - SKODA AUTO a.s. - has decided to build its technology centre for research, development and testing of passenger cars in Mlada Boleslav.
It plans to invest more than forty million euro into construction and to create 370
new job opportunities mostly for mechanical engineers and electrical engineers. The
investment in Mlada Boleslav is now the second announced expansion of Skoda Auto
this year.
According to Chairman of the Board Detlef Wittig, investment into the company’s own development is necessary because of the forthcoming expansion in the
number of model lines. Skoda now produces the Fabia, Octavia and Superb models. Next year they will introduce the Skoda Roomster model and are considering
series production of the Yeti off-road vehicle. They will appear on the market in
2008 at the earliest. Skoda announced back in April that it is investing three billion crowns into its subsidiary plant in Kvasiny and will create over 2000 new jobs
there. After the expansion the Kvasiny plant should also produce the Roomster in
addition to the Superb. The investment will include, for example, construction of
a new logistics centre, lay-bys for produced vehicles, an employee parking lot, bus
station and a new gatehouse for trucks.
From the left: Patrick
Daems, Chief Executive
and member of the Board
of Directors of CSOB,
Detlef Wittig, Chairman
of the Skoda Auto Board
of Directors, Martin Jahn,
Deputy Prime Minister
for Economic Affairs
2nd Place
3rd Place
Tyco Integrated Systems
Ricardo Prague
What countries did you choose from when deciding on which country
to place your investment and why did you decide to invest in the Czech
Republic?
We compared Europe with Asia first and decided to stay in Europe because of the
proximity to existing design centres in London and Munich including similar cultural
background, similar education, same time zone etc.. In Europe the Czech Republic
was our no. 1 choice as we got already several operations here including a development team in Tyco Fire & Security in Zettler s.r.o. where we had very good experience. We validated this choice by comparing factors with neighbouring countries
and beside low salary costs the high rate of technical graduates and generally the
high value of technical education in Czech Republic confirmed our choice.
What countries did you choose from when deciding where to place
your investment and why did you decide to invest in the Czech
Republic?
We chose from the Czech Republic, Slovakia, Poland and Hungary. There
were two decisive factors: knowledge of automotive industry history
in Central Europe, i.e. the automotive tradition in the Czech Republic;
personal knowledge and experience (from the time of privatization in the
Czech Republic).
In what way did investment incentives influence your decision on investment location?
It was not the primary reason, but without an incentive program it would have been difficult to justify the financials. We definitely would have looked at other options then.
What plans do you have
here for the future? Are
you planning a further expansion of your activities?
No fixed plans but options
for extension of the r&d activities as well as production
especially for final assembly.
Juergen Dulling, Design
Centre Manager Brno,
Tyco Integrated Systems
What plans do you have here for the future? Are you planning a
further expansion of your activities?
We plan to more than double the number of employees and to build up
our standard portfolio. From the signals we’ve been getting from the parent company we can expect further expansion of the company’s portfolio
also into non-traditional areas. Any changes in our plans of course will depend on the development in
the Czech Republic and in the
automotive industry globally.
Vladimir Volak, CEO,
Ricardo Group
From the left: Jurgen Dulling, Development Centre
Manager, Tyco Integrated Systems, CSA President
Jaroslav Tvrdik, Minister of Industry and Trade Milan Urban
From the left: Pavel Pilat, Metrostav Commercial
Manager, Vladimir Volak, CEO, Ricardo Prague,
CzechInvest CEO Radomil Novak
11
Czech Republic:
future leader
in global offshoring
CEO Briefing, Corporate Priorities for 2005, a report by the Economist
Intelligence Unit (EIU) released in early 2005 found that global offshoring
of IT services, manufacturing and other business functions will continue to
grow over the next three years. The report ranked Czech Republic third
behind India and China, respectively, as future leaders in global offshoring.
Singapore ranked fourth, and Poland rounded out the top five. The report,
in which 500 senior executives were surveyed, pointed to the Czech Republic’s attractiveness as both a near-sourcing and offshoring destination
due to its attractive regulatory environment, cultural ties and proximity to
other emerging and established markets in Europe.
CZECH INVESTment
NEWS
Offshoring Environment Rankings
India
China
Czech Republic
Singapore
Poland
Canada
Hong Kong
Hungary
Philippines
Thailand
Malaysia
Slovakia
Bulgaria
Romania
Score
7.76
7.34
7.26
7.25
7.24
7.23
7.19
7.17
7.17
7.16
7.13
7.12
7.09
7.08
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Source: EIU
Prague is the top “buy” European market
for office and industrial sectors
Real estate investors throughout Europe are optimistic about the industry’s
potential to generate healthy returns over the coming year, according to the
highly-regarded real estate investment report, Emerging Trends in Real Estate®
Europe 2005, published by PricewaterhouseCoopers and the Urban Land Institute (ULI).
Strong “buy” markets include Helsinki, Prague, Warsaw and Budapest; while
Athens and Dublin are listed as strong “sell” markets. Prague ranked as the top
“buy” market for both office and industrial property, and it was second for the
retail sector’s best buy.
Glen Lonie, Partner and Head of PricewaterhouseCoopers’ Real Estate Industry
Team for the Czech Republic and Central and Eastern Europe, said: “Prague has
made huge progress as a property investment location. In five years, from having
virtually no investment transactions it has hit the top of investors buy lists. This
ranking and similarly high rankings for Budapest and Warsaw show a high degree
of investor confidence in the future of Central Europe.”
Accenture expands in the Czech Republic
Accenture, a global management consulting, technology services and
outsourcing company, held an opening ceremony for their new facility in its shared services centre in Prague-Chodov. Accenture, which
arrived in the Czech Republic fourteen years ago, is growing more
quickly here than expected – employing more than 1,300 people and
continues to expand. The reason for continued expansion is a rising demand for services in outsourcing of business and IT processes, the fields
in which Accenture operates.
The new facility is part of Accenture’s BPO delivery centre in the
Czech Republic and will join the
company’s Global Delivery Centre
Network of 40 delivery centres
around the world to provide a full
range of consulting, technology
and outsourcing services to clients
across more than 30 industries.
The original shared services centre
that was created by Accenture in
2001 and based in Nove Butovice is
one of two business support services
companies for which the Czech Government approved tax incentives in
2001. “In addition to the high quality
infrastructure and supply of qualified
labour, support from the state is becoming a more and more important
factor to attract such advanced investments,” says Radomil Novak,
CEO of CzechInvest.
The new centre will provide the same services including finance &
accounting, procurement and customer support. In addition, the new
Chodov site will be the primary multi-lingual, multi-client European service
centre for Accenture HR Services, the Accenture business unit that
provides HR administration services to large, multinational organizations.
CZECH INVESTment
NEWS
12
Computer Associates to establish
Mainframe Centre of Excellence in Prague
€36 million investment to create world-class development facility for next-generation software solutions
Computer Associates International, Inc. (NYSE: CA) announced that it
will create its first worldwide Mainframe Centre of Excellence in Prague,
representing a major expansion of its operations in the Czech Republic
and a significant commitment to the mainframe computing market. The
new Centre will focus on software development, maintenance, validation and quality assurance for the mainframe computing environment.
The staff of CzechInvest, the Investment and Business Development
Agency of the Czech Ministry of Industry and Trade, is assisting CA by
providing expert advice and incentives under the Agency’s Framework
Programme for support of technology centres and business support
services.
“CA is proud to announce this partnership with CzechInvest to create a
state-of-the art mainframe development and support centre in the heart
of Europe,” said Guy Harrison, senior vice president, Development
Operations at CA. “This Centre of Excellence will provide mainframe
users worldwide with a host of innovations, and will help strengthen the
Czech Republic’s position as a hub of IT activity.”
CA’s Mainframe Centre of Excellence will be established in a 4,237
square meter (45,222 square foot) facility in Building 6 at The PARK in
Chodov, Prague 4 and is scheduled to open in August 2005. The Centre
expects to hire and train more than 200 people including talented students, mainframe experts and experienced managers.
“CA’s Mainframe Centre of Excellence brings investment from one of
the world’s most successful software companies to Prague and is a sign
that large multi-nationals see tangible business benefits in the Czech Republic,” said Radomil Novak, CEO of CzechInvest. “The opening of this
Centre is a testament to the skills and resources we have available in this
market, where our people and our infrastructure can provide the right
basis for strategic growth and improved competitiveness in the global
economy.”
Toyota Peugeot Citroen (TPCA) plant in the Czech Republic
has officially launched production
is reached by next January,” said Jean-Pierre Chantossel, the vice president
of TPCA, the joint venture running the factory.
The carmakers said the central location, close to important markets, a developed supplier network and infrastructure were key reasons for opting
for Kolin. Another was the Czech Republic’s rich industrial and automobile
manufacturing tradition.
Source: TPCA
PSA Peugeot Citroen and Toyota Motor Co officially inaugurated their
1.3-bln-eur (1.7 billion dollar, 39 billion koruna) joint carmaking plant in
the Czech Republic. Production of three small city car models designed
for fuel-frugal Europe officially began Tuesday, May 31st at a new Toyota
Peugeot Citroen (TPCA) auto plant in the town of Kolin, 60 kilometres east
of Prague. Not only will the plant employ 3,000 people by the end of this
year, but TPCA’s exports to other parts of Europe are expected to have a
huge impact on the Czech economy. Radomil Novak, director of the government agency CzechInvest, said the factory’s output is expected to boost
the country’s foreign trade balance by about 40 billion koruna annually.
The ceremony was attended by Jean-Martin Folz, chief executive of PSA
Peugeot Citroen, and Fujio Cho, president of Toyota, as well as Czech
Prime Minister Jiri Paroubek and other ministers and officials.
The plant makes small entry-level cars from a single production line to be
separately branded as Toyota Aygos, Peugeot 107s and Citroen C1s. Priced
at around 11,000 dollars each, the fuel-stingy models are designed for entry-level buyers in urban Europe. Production will be split equally among
the three brands, with one vehicle rolling out every minute once full annual
capacity of 300,000 vehicles is reached early next year.
“We are producing 400 cars daily but that will rise to 1,050 once full capacity
Alltracel has signed a development partnership
with Czech nanofibre technology specialists
Alltracel Pharmaceuticals Plc., the
healthcare technology company focused
on the consumer woundcare, oral
care and coronary health markets, announced the signing of a nanotechnology
and product development agreement
with nanofibre technology specialists
ELMARCO s.r.o. of the Czech Republic
for the development of a next generation delivery platform for Alltracel’s
m-doc(TM) technology.
Elmarco is a specialist R&D and manufacturing company specialising in advanced manufacturing for the semiconductor components industry as well as
equipment for industrial production of
nanofibrous non-woven materials. The
Technical University of Liberec (Czech Republic) came up with a breakthrough technology enabling industrial production of nanofibrous nonwoven materials. Elmarco became its partner in development of the manufacturing equipment and became an exclusive patent user of this very new and
unique technology that is far ahead of present nanofiber technologies.
Alltracel’s CEO Tony Richardson commented, “Alltracel has always been
committed to innovation in our markets and we are particularly excited
by the prospects for m-doc(TM) based nanofibrous advanced woundcare
delivery systems. Although at an early stage of development nanofibre
technology is showing market transforming potential in a number of our
markets and we are delighted to have formalised our partnership with
Elmarco and the nanofibre technology team at the Technical University
of Liberec. We are now focused on jointly reviewing a range of patent
protected potential applications for m-doc(TM) based nanofibre solutions,
initially for the advanced woundcare and surgical markets and bringing
these innovations to market via our network of existing and new commercial partners.”
13
EVENTS...
OR WHAT WE’VE FOUND OUT
Clustered to talk about clusters
Clusters are regional associations of business entities that operate in the same or related branch in order
to create a competitive advantage that would be unachievable alone. For this purpose they also work
with universities, research institutions and the public sector and fundamentally help the entire region’s
development. Aware of the importance of clusters to the economy and its potential in the Czech Republic,
CzechInvest organized an international “Cluster Conference 2005” in cooperation with OECD and the
South Moravian Innovation Centre, which took place in Brno at the end of May.
Entrepreneurs, regional authorities, university officials and others interested in this topic had the chance to meet with a number of foreign experts
who have rich experience with the concept of clusters. The conference
was accompanied by interactive workshops focusing on specific fields,
high-tech as well as traditional sectors of the Czech economy (plastics, automotive etc.), services, ICT, clusters based on competences or thematic
circles (e.g. the role of universities in developing clusters). In total 250 participants actively discussed the possibilities of using this tool to strengthen
the competitiveness of all interested parties in a cluster. Sharing their many
years of knowledge about clusters at the conference were, for example,
Ifor F. Williams, CEO of Cluster Navigators (New Zealand), Lars Eklund,
vice president of the Swedish Competitiveness Institute and director of
the Competitiveness Department at the Swedish agency for innovation
systems – VINNOVA, Dan Sjögren,
consultant for innovation systems and
cluster programmes in Sweden, Peter
Heydebrek, partner and executive of
the European consulting group inno AG
(Germany), Mark Copsey, the “father”
and implementer of many large-scale
development projects to found clusters in
Great Britain and New Zealand, and many
others. Also speaking on the fundamental
importance of clusters for the Czech economy was Vice Premier Martin Jahn.
“Experience from abroad shows that
building clusters is an effective method
of indirectly supporting prospective com-
panies as well as universities and entire regions,” said CzechInvest’s CEO
Radomil Novak, who opened the conference. “Cooperation in clusters raises
a company’s quality, speed and number of innovations. And these very factors
are essential for the successful functioning and growth of the economy.”
Nine million euros are available for projects to establish and develop clusters
in regions of the Czech Republic under the national Clusters programme,
funded by EU structural funds. Last September CzechInvest had already
launched a project named “Clusters – a tool to develop competitiveness of
companies and regions”.
This project included a
Clusters and potential clusters in the CR
series of seminars geared
Automotive
towards anyone interesEngineering
Project undergoing
Imitation jewellery Polygraphic
ted in this issue, and also
Beer Industry
Packaging tech.
Technical
textiles
Chemical
Initial activities
saw the training of the
Technical textiles
Glass
Waterworks eng.
Pharmaceuticals-medicine tech.
first group of “facilitators”,
Electronics
Beer industry
Chemicals
Automotive
namely experts in the reElectronics
Engineering
Engineering
gions who help to identify
Engineering
Liberec
Wood processing
suitable areas for starting
Technical plastics
ICT
Usti
Wood processing
clusters and who subseConstruction materials
Hradec Kralove
quently start them.
Metallurgy
Karlovy Vary
Renewable resources
“During the seminar we
Chemical industry
identified a large number
Wood processing
Praha
Musical instruments
of sectors in individual
Pardubice
Moravia-Silesia
Tableware
regions that are suitable
Central Bohemia
Spa / Tourism
Plzen
for creating economically
Olomouc
successful clusters, for
Vysocina
example wood processing, plastics, the textile
Zlin
South
industry, wine making
Moravia
South Bohemia
as well as modern fields
such as biotechnology
and
optoelectronics,”
Automotive
Plastics
Mechatronics
Wine-making
said
Lubos
Lukasik,
Electronics
Shoemaking
Electronics
Biotechnology
Wood processing
Director
of
CzechOptics
Automotive
Bridge technology
ICT
Water-treatment tech. Engineering
Nanotechnology
Invest´s Company comEngineering
Automotive
Wood procesing
petitiveness division.
Micro-eletronics
Renewable resources
Aviation
Source: CzechInvest
ed.
14
BUSINESS
CLIMATE
First grade report card
The Czech Republic’s first year in the European Union
Our first year’s experience of EU membership was altogether positive
and soberly hopeful. There were no fundamental shocks in the economy
that could be directly or indirectly related to EU accession. Before EU
accession some “arguments” appeared, most often from the ranks of
EU sceptics, showing how prices would rise without an adequate rise in
income, how external competition would “crush” our weak and inexperienced manufacturers and retailers, etc. It can be completely responsibly
stated that hardly any of this has come true. No direct or induced shocks
due to membership have occurred; to be sure the opposite is the case.
There was no destructive impact on prices, except perhaps a cosmetic increase
in prices due to a one-time need for tax harmonization (VAT, excise tax). With
customs duty it’s a different story. The permanent cancellation of duty and trade
barriers within the EU and the transition to a common customs tariff made many
commodities cheaper; but the overall impact on price levels has been negligible.
The Czech Republic has been ranked among the low inflation European economies for a long time.
On the whole it can be said that EU accession rather met positive expectations,
one of which was even that our economy has become a considerably growing
member and has shown a very positive mid-term outlook. It’s a question as to
how much EU accession influenced such respectable economic growth (4%).
Nonetheless, a positive mid-term outlook can also be the reason for favourable
evaluation and the impact of accession on this result is evident.
The following factors are characteristic for the first year in
the Union:
• an acceleration of economic growth
• keeping inflation of the values that fulfil the Convergence criteria
under control
• a slight reduction in unemployment
• an improvement in the current account due to the increased
annual inflow of Foreign Direct Investment (FDI)
The most positively influenced indicator is without a doubt foreign trade. The dynamics of growth of exports and imports is demonstrably enormous and unequivocally confirms the marked renewal of trade and business transactions involving
Czech entities within an enlarged EU.
The strengthening of foreign trade transactions was furthermore accompanied by
a corresponding rise in output of international goods and passenger traffic. The
effect of expansion is clear in the continuing influx of foreign direct investment.
The relocation of companies and their production and development activities
from traditional member countries to the countries of new members, including
the Czech Republic, is now easier since as of May 1, 2004 there are much simpler
administrative procedures. The change in foreign investors’ behaviour and view of
Czech reality has not been very noticeable as of yet; it will likely make itself known
after a longer period. The fact that we are EU members nonetheless improves
Main Macroeconomic Indicators
Gross domestic product
Consumption of households
Consumption of government
Gross fixed capital formation
GDP deflator
Average inflation rate
Employment (LFS)
Reg. unemployment rate (MoL)
Wage bill
Current account / GDP
increase in %. const.pr.
increase in %. const.pr.
increase in %. const.pr.
increase in %. const.pr.
increase in %
%
increase in %
average in %
increase in %. curr.pr.
%
2001
2.6
2.6
3.8
5.4
4.9
4.7
0.4
8.5
6.9
-5.4
our country’s references and is another
positive argument for our improving
reputation.
Our first year’s membership confirmed
that EU funds are no chimera, but a fact.
Some 5,000 project applicants now have
the support of these funds as a certainty.
In summary over 30 billion crowns have
found their recipients despite the large
excess of enquiries of some operational
programmes beyond their possibilities
while others have not yet made use
of their potential. From the date of
accession to the end of this year one
can realistically expect approximately 50
billion crowns.
One year is still too short a period to
meet the expectations in structural
reforms or to reduce unemployment. The new business opportunities will likely
lead to the creation of new jobs; however, this effect should be more visible after a
longer period. From this standpoint it seems at first sight “as if nothing happened”,
but the labour market’s demands have increased and structural reforms under the
pressure of EU policy will also occur. If we highlight and tally up it’s clear that the
overall tone and impression is definitely positive.
One key challenge is choosing the path to the euro. It’s certainly still true that
a common government and central banking plan counts on the transition to a
common European currency in the period 2009 – 2010, but with respect to the
development of inflation, interest rates and exchange rate stability we needn’t in
any way hesitate much in joining the eurozone. The question is, however, meeting
Convergence criteria, especially in the area of public finance (i.e. ability to reduce
the deficit and considerably decelerate public debt). At present the fulfilment of
the Convergence criteria is viewed as quite satisfactory. Last year, according to
the Czech Statistical Bureau’s macroeconomic development analysis, the Czech
Republic was the only new EU member state from Central Europe to fulfil three
of the four Maastricht conditions for the implementation of the euro.
It can be presumed that the Czech Republic’s accession to the EU definitely
helped. It opened up new business opportunities; students are pursuing education
in other countries in large numbers; EU funds have become a reality. We have
become members of a club in which the rules applied help us provided we abide
by them. Some other effects will nonetheless become apparent in several years or
decades, and so one year is too short for a thorough evaluation.
Sources:
• www.euractiv.cz, 30.5.2005
• www.europa.eu.int • Czech Ministry of Finance
2002
1.5
2.8
4.5
3.4
2.8
1.8
0.8
9.2
8.5
-5.6
2003
3.7
4.9
4.2
4.8
1.9
0.1
-0.7
9.9
5.6
-6.3
2004
4.0
2.5
-3.2
9.1
3.7
2.8
-0.6
10.2
5.0
-5.2
2005
2006
Forecast
Forecast
4.0
3.5
1.0
7.1
2.7
1.8
0.2
10.0
6.3
-5.0
4.1
3.5
-1.4
7.1
3.1
2.2
0.2
9.7
6.3
-3.9
Source: Macroeconomic Forecast, Czech Ministry of Finance (MoF), April 2005
15
SPOTLIGHT
ON PEOPLE
Global leader started out
in an atomic shelter
They started in a nuclear bomb shelter with tank doors and no windows. Now they are one of the two best
companies in the world in their field. The small Czech company called PSI (Photon Systems Instruments)
with 9 employees and which is celebrating its 10th anniversary this year attained its position by narrowly
specialising on fluorescent devices and by cooperating with Czech scientists.
The founder, general director, head of research, sales manager and even travelling
salesman, in short the man behind it all, is Martin Trtilek. He started business
back in his final year at the Brno University of Technology. It was of course a far
cry from how he makes his living today.
His big break came shortly after graduation when he met Dr. Nedbal from the
Microbiological Institute in Trebon. Dr. Nedbal had just returned from a lengthy
stay in the U.S. where he established numerous contacts in the scientific community including many in university circles. He wanted to measure something
for his research, which he did with the Americans, and realized that he didn’t have
the right instrument to do the measurements. A chance encounter with a recent
electronics graduate lead to cooperation that continues to this day.
Nedbal understood the scientists’ needs and had the contacts, while Trtilek knew
how to build the device. Moreover, they understood each other very well since
Dr. Nedbal, although a researcher in biology, has a degree in Mathematics and
Physics from Charles University and has no trouble with technical ideas. Together
they succeeded in making the first fluorometre to measure the fluorescence of
cells, algae, bacteria, leaves and lower plants.
Images from PSI´s FluorCam
post harvest lemon damage
FluorCam of PSI meaures Fluorescence of leaves, small plants, and algal or cyanobacterial colonies
The device was a hit
The Americans were excited about it and immediately proposed to commercialise it
in the U.S. An arrangement was reached and Photon Systems Instruments was born.
It was agreed that the company would have an American part and a Czech part and
that in time it would become a joint venture. Here fortune shined down upon Martin
Trtilek a second time: within two years the American part went bankrupt. With their
high costs the Americans couldn’t withstand the period when it was necessary to
invest into development without commercialisation of already developed instruments
bringing in sufficient cash flow.
The Czech part held tight. On the one hand costs were lower and on the other hand
Trtilek’s family was supported by an activity that was already up and running since he
was a student, and so they did not depend on income from PSI.
If it had been a joint venture right from the start the entire company would have gone
under. The situation in Brno continued this way until the end of the second year when
the company finally started to get itself slowly out of the red. An excellent production and sales strategy helped. Scientists, especially those who investigate the natural
world, don’t have it easy. Nature manifests itself in thousands of forms; thousands of
various processes take place in it; it has thousands of bonds. Among microbiologists
and biologists who measure and gauge nature, each one measures things differently.
This requires custom-made instruments to match their needs.
For this reason PSI from the outset focused exclusively on piece production. They do
quality, not quantity. Each instrument is optimised according to the individual needs
of each scientist. For eight years now they have been developing and commercialising
scientific instruments that are highly specialised and at a high level.
PSI is now so far along in efficiency that it can even afford to produce certain instruments
in small series “blindly” because it knows for sure that it will be able to sell them.
A satisfied customer is the best advertising
A small company from the Czech Republic cannot afford financially to pay for
advertising in global scientific magazines. Nonetheless its name has made it into the
most prestigious and influential magazines such as Nature. All scientists who perform
measurements are always aware of which instrument and under what conditions
the measurements were taken. Having one’s company appear in such a magazine
is worth dozens of television spots and conference appearances. PSI of course also
takes part in congresses and conferences, mainly to be seen and not to lose the
spotlight of the scientific community. At present they don’t encounter many major
competitors at such events. The only one remaining is their biggest rival, the German
company Waltz, which already has a thirty-year tradition and thanks to this and a
developed distribution network has for the time being a greater market share than
PSI. Other small firms, mainly American, usually rent one booth together and do not
pose a threat to the positions of those two companies.
It´s not all about price...
...although price is important, because scientists have deeper pockets than they
had, say, five years ago. Of course, when PSI first started to try to break into global
markets, things were different. At that time price was key, since quality among
scientific instruments is a given. The difference was severe. They were offering for
16 thousand dollars what the competition offered for 50 thousand. PSI thus sold
twenty instruments while their competitors didn’t sell a single one.
At one time the company even tried to push the price down to below 10,000 USD,
which is the limit up to which American scientists who receive a grant can freely
decide on what instruments to purchase. Currently, however, it is abandoning this
policy and prices are now approaching those of its competitors. It already has the
image of a company producing world-class instruments and so can afford to do it.
The company has two distributors in America and two in Asia (Japan and Korea).
Europe and the rest of the world are handled directly from Brno.
Source: weekly Ekonom (3.3.2005)
Micro FluorCam produced by PSI
16
LIVING
CZECH
In the land of beer
The world was astounded in 1913 when it was discovered that as many as 19 types
of beer were brewed in Mesopotamia 5,000 years ago. It is fitting that the
archaeologist who first deciphered the Sumerian tablets containing this
information was a Czech, Bedrich Hrozny.
• What are the “degrees”?
Beer is measured here with degrees, according to the method devised by
Professor Balling in the 17th century. The degree sign caused some confusion for consumers in the past, as international norms used it to signify the
temperature of brewing and other things. So it was changed to a percentage
sign, which causes confusion among consumers today. Many think that the
percent is the amount of alcohol, but it’s actually the amount of malt extract
used in the brewing process. The percentage of alcohol is about a quarter of
the “percent” shown on the bottle, so 12% beer is roughly 3.1% alcohol,
though it’s often higher. Czech beer comes in degrees from 6-19%, but 10%
and 12% are the most common. The highest degree is probably Pernstein
from Pardubice.
Beer was also brewed in the earliest Czech civilizations. There is evidence that
hops were already being cultivated here in 859 and were being exported in 903
- the first written documentation referring to brewing dates from 1088. Even
British beer authority Michael Jackson agrees that the Czechs are the number one
beer-brewing nation in the world today. Beer is considered a part of the national
heritage of the country.
• What are some good Czech urban legends about beer?
One of the best ones says that drinking beer makes you live longer, because it
reduces the aluminum in the body, saving it from the effects of aging and Alzheimer’s disease. Beer does contain natural B-complex vitamins, though, so it does
have some nutritional value (maybe that’s why it’s also known in Czech as “liquid
bread”).
• Which Czech beer is the best?
As a famous advertising slogan once proclaimed: “Beer is the best”. It didn’t specify
which brand. While the Czech Budvar (Budweiser) beer calls itself “the beer of
kings” (due to a royal inclination towards this brew in the early 16th century), it is
impossible to say which Czech beer is the best.
• How about some tips for drinking Czech beer?
The best temperature at which to drink beer is between 7-10 degrees
Celsius. You can keep your beer at this temperature by keeping it on
the seventh step down to the cellar (this tip is from the Oscar-nominated
Czech film “My Sweet Little Village”). When buying bottled beer, hold it up
to the light. It should be clear, not muddied in any way. And finally, drink it
each and every day.
• What to eat when drinking Czech beer?
Beer goes very well with the Czech national cuisine. For Czechs, it would be
unimagineable for the Czech national meal (roasted pork, cabbage and the famous Czech dumplings) to be accompanied by any beverage other than beer.
However, if you’re sampling beers and you’d like to clear your palate between
beers, try a piece of cheese (nothing fancy), a white bread
roll, or some mild salami. For the adventurous, try all three.
Want to know more about Czech beer?
http://www.iniciativapivovaru.cz/en/goals.php
The Czech beer firsts are:
1st in per capita beer consumption (160 liters
or 43 gallons per year)
According to Antonin Kratochvil, the executive director of the Czech Association
of Breweries, “Saying that some beer is better and some is worse is as nonsensical
as classifying women according to the color of their hair: some men like blondes,
some like brunettes.” Of the classical beer styles, mostly bottom-fermented beer
is brewed in the Czech Republic - that means lager (lezak), but especially, it means
Pilsner beer. Pilsner is without a doubt the world’s most famous style of beer.
Outside of the Czech Republic it is usually spelled Pilsener or abbreviated to Pils.
1st beer museum in the world
1st beer brewing textbook
1st Pilsener (Pilsner Urquell is a brand-name
• Where do the Czechs drink beer?
Czechs prefer to do their beer-drinking in pubs rather than at home. Drinking
beer is an opportunity to meet with friends. The milieu in pubs and country inns is
gregarious, the discussion are forthright. The subjects can be anything under the
sun: football, ice-hockey, politics and women. Draught beer is normally served in
half-liter glass mugs. There’s light-coloured (svetle) beer, which comes in ten-degree and twelve-degree varieties, and has more of a bitter flavor. Then there’s also
ten-degree dark (tmave), or black (cerne) beer, which is generally sweeter. Light
beer is more popular, although dark beer is gaining ground. For those watching
their figure, there are even diet (dia) varieties of both light and dark beer, which
are lower in sugar and alcohol. Beer is usually available in bottles rather than in
cans. Bottles of beer have too long a tradition for Czechs to be replaced by cans
easily. Canned Czech beers are available, but are mostly just for the consumption
of foreign tourists.
1st Budweiser (Budweiser is a brand-name
Czech beer produced in the town of Plzen
(or Pilsen) and is the original Pilsner)
Czech beer produced in the town of Ceske
Budejovice (or Budweis) and is the original
Budweiser)
1st school of brewing in the world was
founded in the Czech Republic at the
end of the 18th century. Since 1816
there has been a university-level college
of brewing, and since 1868 also a secondary
vocational school specialising in brewing.
ed.
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Phone: +420 296 342 500
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Mr. Jaromir Cernik, CzechInvest
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Mr. Tomas Novak, CzechInvest
E-mail: [email protected]
Phone: +1 408 376 45 55
51 East Campbell Avenue, Suite 107-F
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Stepanska 11, 120 00 Prague 2, Czech Republic
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