CZECH The magazine of the Association for Foreign Investment and CzechInvest
The other jewel in the crown The Czech electronics sector comes of age
The Czech Republic and South Korea: a positively developing partnership Plzeň: a region where investors and beer succeed Location strategy: electronics manufacturing hotspots in the Czech Republic
Dear Readers, ContentContent The Czech Republic is often referred Sector Focus to as the Land of Industries. This is The other jewel in the crown: because of both the Czech Lands’ 8 the Czech electronics sector comes of age historical industrialisation, having served as an industrial hub in Europe Country Focus since the mid-19th century, as well as The Czech Republic and South Korea: the country’s large share of industrial 12 a positively developing partnership production in GDP, which is currently the highest in Europe as a whole. A big part of that comprises electrical engineering and M&A Focus electronics manufacturing. We have an extremely long 15 Warranty insurance in acquisition transactions tradition of both inventions and implementation and use of electrical-engineering and electronics products in our daily lives and exporting of such products around the world. We R&D Focus have dedicated this issue of Czech Focus to the current trends Industry 4.0: a major change is coming and investment opportunities in electronics and electrical 16 engineering in the Czech Republic, as we believe that this is an industry of the future for the world and one of the current Region Focus leading sectors in the Czech Republic. As we will see from Plzeň: a region where investors and beer succeed the articles that follow, electrical engineering in our country 18 dates back to the late 19th century – as early as in 1896, František Křižík was behind the opening of the first electrical Investment Climate public tram line in Prague and in 1903 the first electric railway Quality of technical education in the most industrialised connection in the Czech Republic (from Tábor to Bechyně country in Europe | Accounting principles of the Czech in south Bohemia) was opened. 20 Republic | M&A insurance in the Czech investment environment The electrical engineering and electronics industry in the Czech Republic is the second largest sector of the economy, with 17,000 companies employing more Questions & Answers than 180,000 workers. Everything you need to know about We also have an excellent, innovative and up-to-date system investment in the Czech Republic 24 of technical education. Established in 1707, the Czech Technical University in Prague is the oldest non-military Living Czech technical university in Europe. Last year, there were also more The Czech Republic – beer superpower than 74,000 university students enrolled in areas related 26 to electrical engineering and electronics. We have a very good overview of the research and development results of Czech technical universities, as our Cooperation of the Year competition, which we organise annually with the purpose of promoting the commercialisation of research and development and cooperation between public research institutes and companies, has had a large number of participating projects from the electronics sector. It also stands to mention that the sector has enjoyed and continues to enjoy the presence of a large number of foreign investors such as Bang & Olufsen, Foxconn and Panasonic, to name only a few examples. You can read more about investment in the Czech electrical engineering and MastheadMasthead electronics sector in the following pages. Also noteworthy are the current major trends that are directly Title: Czech Focus related to the electrical engineering and electronics sector: Number: 1/2016 Industry 4.0 has gained significant momentum, Publication periodicity: biannually particularly in the area of automated robotic systems Place of issue: Prague for automotive production in the Czech Republic. Date of issue: June 2016 smart cities, where electrical engineering and electronics will have a major role in the development and integration Ref. No: MK ČR E 18872 of daily life with modern technology and the use of energy Publisher: Association for Foreign Investment, resources (notably renewable) in transportation in our Štěpánská 11, 120 00, Prague 2 cities. Identification No.: 63835339 I hope you will enjoy reading this issue of Czech Focus and I Web: www.afi.cz would be excited to have the opportunity to speak with you Contact: [email protected] about any business and investment opportunities. Editorial board: Iva Fialová, Kamil Blažek, Eva Bendlová, Zdenka I look forward to seeing you in the Czech Republic. Hrabicová, Jaroslav Holý, Petra Menclová, Lucie Laštíková, Hana Chlebná, Adam Foks Kamil Blažek Chairman of AFI
CZECH FOCUS II 1 The Czech Republic - basic information
The Czech Republic in the world
CR
10.5 mil Population 78.866 km2 Area The Czech Republic in Europe
Population
4% Foreigners
96% Czechs
Note: Percentage of foreigners in total population Source: Eurostat, 2012
2% 1% 2% Romania USA 4% Bulgaria 22% Poland Others 4% The Czech Republic in detail Germany 8% Russia Germany
Liberec Region 12% Vietnam Ústí n. L. Region
23% K.V. Region Ukraine Central Bohemia H.K. Region Poland
22% Slovakia Prague Plzeň Region Note: Percentage of foreigners, by citizenship Prague Region Pardubice Region Source: Directorate of Alien Police Service, September 2015 Moravia-Silesia
Olomouc Ostrava Region Vysočina Region
South Bohemia Germany Brno Zlín Region South Moravia
Slovakia Austria
2 I CZECH FOCUS Travel distances from Prague (km | driving time, h:m) Economy Hamburg 640 | 6:00 GDP growth, 2015 Berlin Warsaw 4.3% 340 | 3:45 681 | 7:00 Amsterdam Unemployment rate, 880 | 8:00 6.3% February 2016 The 31st most competitive country according to the Global Brussels st Competitiveness Index, 2015 901 | 8:30 31 – 2016. The Czech Republic is also among the most competitive countries in the CEE region. Paris Source: Czech Statistical Office, 2016 1,030 | 9:45 Investment risk rating Munich Budapest Standard 529 | 5:00 Country Moody´s Fitch 380 | 4:00 and Poor´s Bratislava Czech Republic AA- A1 A+ Vienna 337 | 3:00 330 | 3:30 Slovakia A A2 A+ Milan 860 | 8:45 Poland A- A2 A- Zagreb Bulgaria BBB Baa2 BB+ Source: Google Route Planner, 2016 700 | 7:15 Hungary BB+ Ba1 BB+ Romania BB+ Baa3 BBB- Russia BB+ Ba1 BBB- Travel distances from Prague (flights per week | flight time, h:m) Source: Czech National Bank, 2015
Stockholm Oslo 19 | 1:50 11 | 2:00 Dublin Helsinki Industry 12 | 2:30 24 | 2:05 Moscow Industry’s share 61 | 2:35 47.3% in the commercial economy 1st The Czech Republic is the most London industrialised country in the EU. 80 | 2:00 Source: Eurostat, 2015 Beijing 2 | 9:00 Quality of life Seoul 8 | 9:55 The 10th safest country Madrid th in the world according 13 | 3:00 10 Rome to the Global Peace Index 2015. 23 | 1:45 Istanbul 26 | 2:40 The 27th happiest country th in the world according to World Dubai 27 Happiness Report issued Source: Vaclav Havel Airport Prague, 2016 18 | 6:00 by the United Nations, 2016. The Czech Republic is ranked st first among the newer EU 1 member countries in the same report. Recent history Sources: Global Peace Index, 2015; World Happiness Report, 2016
Velvet Revolution In November and December 1989 the people of Czechoslovakia held a series of non-violent Velvet Divorce Accession demonstrations against the communist govern- The federated Czechoslovakia was divided into to NATO ment, which resulted in the regime’s collapse. The the Czech Republic and Slovakia on 1 January The Czech Accession leading figure of the events, Václav Havel, was 1993 through a bilateral political decision. Due Republic became to the EU later named the first president of the free, post- to the peaceful course of the breakup, the event a member The Czech Republic joined communist Czechoslovakia. was called the Velvet Divorce. of NATO in 1999. the European Union in 2004.
1989 1993 1999 2004
CZECH FOCUS I 3 Investment News
Czech employers’ hiring outlook new sales professionals will play a key role highly sophisticated high-tech production, remains optimistic in the company’s growth in this region. Oracle R&D and services projects. Other highly rated ManpowerGroup Czech Republic has released announced its plans during a press conference aspects included the agency’s transparency and results of the Manpower Employment on 14 January 2016. “Central Europe attractive investment incentives, particularly Outlook Survey for the second quarter represents a tremendous opportunity for the incentives system, which can be seen in full of 2016. The survey was conducted Oracle and we are therefore focusing on hiring on the CzechInvest website. by interviewing a representative sample of 753 talented sales experts in order to take full employers in the Czech Republic. All survey advantage of this opportunity,” says Josef CzechInvest anticipates participants were asked, “How do you anticipate Švenda, general manager of Oracle Czech. million-dollar investments from China total employment at your location to change In 2015 CzechInvest negotiated investments in the three months to the end of June 2016 A123 Systems to open new from China in the value of more than USD 46 as compared to the current quarter?” Czech manufacturing plant million. This represents tremendous growth employers report an optimistic hiring outlook, in the Czech Republic in comparison with the previous year, when with 7% of employers forecasting an increase A123 Systems, which is involved the annual volume of Chinese investments in staffing levels, 3% anticipating a decrease in the development and sales of advanced fell short of USD 20 million. More investments, and 89% expecting no change. Twenty-six lithium-ion batteries and systems, is expanding which could bring more than USD 211 million percent of large employers with over 250 its operations in Europe. The company’s to the Czech Republic, are under discussion. employees indicate that they will create jobs new manufacturing plant, which it will open The latest investment enquiries were elicited in the coming period. in Ostrava with support from CzechInvest, will by CzechInvest, led by CEO Karel Kučera, supplement its existing technology centre during a visit to China. “The Czech Republic is in Stuttgart, Germany. The plant is being finally starting to reach the level of the other constructed in the CTPark industrial complex. It countries into which Chinese capital has is expected that the plant will produce 600,000 been flowing since 2003,” says Karel Kučera. batteries per year in the initial phase of operation. “For example, China was the biggest investor The company plans to employ 150 people at the in Germany in 2014 with a nearly 20% share new facility. A123 Systems provides alternatives in all investments.” to traditional technologies and thus offers more environmentally friendly systems with Czech labour market showing further reduced fuel consumption and lower emissions. growth and positive development General Electric to build The company currently operates production By the end of 2015, the unemployment turboprop-engine centre of excellence facilities also in China and the United States. rate had fallen below 6% and is expected in the Czech Republic to remain at that low level in 2016. The number GE Aviation has announced its plan to build of available jobs is growing, as is demand a new centre for development, testing for qualified candidates. This has made it and production of turboprop engines difficult for employers to fill positions in certain in the Czech Republic. The company segments, as applicants have the option confirmed the project in a memorandum of choosing from several job offers. Despite signed jointly with the Czech government. the significant rise in the number of available In 2020 the centre will begin manufacturing jobs and certain difficulty with filling them, modern advanced turboprop engines companies have not yet resorted to significant for use in a new single-engine aircraft from wage increases. A detailed overview the American company Textron Aviation, CzechInvest wins prestigious Site of the salary levels per segments and the full which was introduced in November 2015. Selectors Guild Award, named report are available at www.hays.cz. Before opening the new centre, GE Aviation Agency of the Year 2016 will develop and test the engine in the Czech CzechInvest has been recognised with CTPark Plzeň welcomes electronics Republic. The company plans to create more a Site Selectors Guild Excellence in Economic manufacturers than 500 jobs here. The investment is a result Development Award, which was presented CTPark Plzeň has registered a sharp of cooperation between GE Aviation and to the agency’s East Coast representative, increase in the number of new clients from CzechInvest, as well as the latter’s long-term Jan Chmelík, on Friday, 26 February 2016. the electronics and eCommerce sectors since strategy aimed at supporting the development The awards ceremony was held in connection the start of 2016. More than 55,000 m2 of space of key high-tech sectors in the Czech Republic. with the Site Selectors Guild Annual Conference has been leased by companies such as Lidl, 2016 in Nashville, Tennessee. The annual award a German retailer and eCommerce provider Oracle to hire 1,400 specialists is presented by the Site Selectors Guild for (30,000 m2), automotive manufacturer Lear in Europe, the Middle East and Africa. successes achieved in the area of economic (5,000 m2), and a major Chinese multinational A recruitment campaign will also development. Of the twelve nominees, white goods and electronics manufacturer be conducted in Prague three winners were selected from regions (10,000 m2). Japan’s SGL and Lagermax Oracle will create more than 100 of the United States. Only one agency, namely Spedice each took an additional 5,000 m2. jobs and open new offices in Prague. CzechInvest, was recognised with an award. Thanks to its strategic location near the city Development of the cloud-computing The main aspect judged in the competition centre with good access to the D5 motorway, business has led the company to recruit was the progress that CzechInvest has made CTPark Plzeň is ideal for companies engaged new employees, particularly specialists over two decades from implementation in high-tech manufacturing, R&D and product focused on sales of cloud solutions. These of purely production-oriented projects to development.
4 I CZECH FOCUS Investment News
CzechInvest arranged investments worth nearly USD 1.8 billion in 2015 A third of the investments involve high-tech projects
Top 5 investments by country of origin
106 investments arranged
in the aggregate value Country of origin Investment amount Number of projects Jobs in USD million of nearly USD 1.788 billion United States 397.62 22 3,464 Germany 373.47 21 2,468 high-tech projects Czech Republic 326.824 28 1,233 Taiwan 140.86 2 3,375 comprise 30% South Korea 127.05 4 802 of the investments Top 5 investments by sector
Country of origin Investment amount in USD Number of projects Jobs more than 14,000 newly million Vehicle manufacturing 491.92 25 3,097 Metalworking created jobs, of which 395.61 17 1,106 and metal-processing 2,500 in the Ústí and Electronics 183.51 7 4,194 Moravia-Silesia regions Mechanical engineering 166.31 6 770 Plastics 155.51 12 640
In 2015 CzechInvest arranged 106 introduced by a European Commission million, whereas last year that figure reached domestic and foreign investments, regulation in 2014 that has made it more USD 47 million. thanks to which nearly USD 1.788 billion difficult to attract investors to the country. As usual, the largest share of investments is will flow into the Czech economy and The largest volume of foreign investments is in the vehicle-manufacturing sector, as well exactly 14,040 new jobs will be created, from the United States, Germany and Taiwan. as in metalworking and metal-processing including 2,500 in the Ústí and Moravia- There has also been significant growth in and the electronics industry. However, Silesia regions, which have long struggled investments from China. In previous years, comparable investment growth can be seen with high unemployment. This is in spite CzechInvest mediated Chinese investments in the areas of ICT, technology centres and of a reduction of investment aid intensity in the maximum annual value of USD 21 shared-services centres.
Obligation to disclose agreements any businesses dealing with the public of eight members appointed in recent years, with public entities comes into force sector,” said Štěpán Štarha, senior associate namely Zdeněk Jana, František Dostálek, Seiji on 1 July 2016 at Havel, Holásek & Partners. Nakagoshi, Tomáš Ctibor, Jan Grozdanovič, Jan The Act on the Register of Agreements Ámos Havelka, Martin Jahn and Václav Petříček. will come into force on 1 July 2016. Its Honorary membership is granted to some aim is to facilitate greater transparency of the most important individuals who have in dealings with the public sector. In fact, significantly contributed to the positive image the act requires that any agreements of the Czech Republic, the AFI and CzechInvest entered into with specific public entities abroad, thus aiding the development be disclosed in full-text format on a of the investment environment in the Czech government website. If the given parties fail Republic. to disclose an agreement, such agreement will automatically become null and void; Exiteria is doubling its logistics however, this nullity sanction will only apply AFI appoints new honorary member network’s capacity to agreements entered into after 1 July 2017. The Association for Foreign Investment Leading CEE online furniture and household “Given the severity of this sanction, the act has appointed a new honorary member, accessories retailer Exiteria, which runs should receive appropriate attention from Mr. Tomáš Hruda, who thus joins the group the MABYT and MT-nabytek eshops
CZECH FOCUS I 5 Investment News in the Czech Republic, Slovakia and Hungary, parks in the portfolio of the developer CTP. of the evening were given by Kamil Blažek, is nearly doubling its logistics network’s Pfisterer selected the park for its convenient chairman of the AFI, and Karel Kučera, CEO capacity with a new warehouse at P3’s D11 location near the German border, the local of CzechInvest. The event featured the release park northeast of Prague. The 10,787 m2 facility workforce skilled in the area of power of the AFI’s Investors’ Guidebook, a unique is being developed for Exiteria on a build- technology and the possibility to immediately publication that has the purpose of promoting to-suit basis by P3, a top-five pan-European lease an existing facility. the Czech investment environment and specialist logistics property owner, developer easing investors’ entry into the country. “It and manager. Serving the Bohemia region, is exceptional that a group of renowned the new facility will supplement Exiteria’s companies in the areas of consulting, legal existing building in Brno. Exiteria’s investment services, HR, commercial real estate and was the catalyst for P3’s development of D11. engineering have come together with the aim The company is developing 20,000 m2 in total, of contributing to the promotion of the local with Exiteria taking half and the rest being investment environment. The result of this made available to lease. In addition, permits endeavour is not only the fact that the AFI has are in place for a further 100,000 m2 of logistics been in existence for twenty years, but also space at D11. the creation of this unique publication,” said Kamil Blažek. Pfisterer Holding is setting up a new production facility AFI celebrates its 20th anniversary The German company Pfisterer Holding is The Association for Foreign Investment setting up a new production facility in Kadaň. celebrated its 20th anniversary at Prague’s A leader in the field of electrical engineering, Žižkov Tower on 27 January. The event Pfisterer produces, among other things, commemorating this important milestone was components for power supply, industry and held under the auspices of the Czech prime transport. The 19,000 m2 facility will employ up minister, Bohuslav Sobotka. The event was to 400 people. Industrial real estate consultants attended by representatives of the Parliament, from CBRE assisted Pfisterer with site selection Senate, embassies, local government, and lease negotiations. The facility is part chambers of commerce, government of CTPark Kadaň, one of the latest industrial agencies and investors. The opening remarks
6 I CZECH FOCUS Association for Foreign Investment
Where did the AFI hold events in 2015?
About the AFI The Association for Foreign Investment (AFI) is a non-governmental, non-profit organisation representing a group of leading global and regional firms actively supporting investors. The AFI focuses on foreign direct investment, export of investments and services, commercialisation of R&D, support for innovative start-up projects and development of the Czech business environment. 7% UK 9% Germany 23% USA 8% Japan AFI was one of the instrumental From which organizations for our company when 5% countries do How to reach us deciding about the final location of China investors turn our investment project. AFI´s members 8% to the AFI? www.afi.cz delivered professional service from South Korea key advisory sectors and helped us @AFI_czech to understand the local tax/legal/HR/ 6% India 30% Others LinkedIn construction environment, which 4% was crucial for making the right France decision. This service is definitely worth Note: data for the period 8/2014 - 7/2015. recommending to any potential investor coming to the Czech Republic. AFI members provide professional services Petr Pospíšil in a broad range of areas General Manager External Affairs Nexen Tire Engineering Investment & Construction Advisory
The fact that a group of renowned Property Audit companies in the areas of consulting, Development legal services, HR, commercial property and engineering came together with the purpose of contributing to the promotion of the local business environment is an exceptional AFI occurrence in the world. We want Accounting Your One Stop Real Estate to offer our expert know-how and Advisory unique experience, enhance the Czech Shop Republic’s positive image abroad and help to demonstrate the country’s advanced state of development and readiness for further investments. M&A Human Advisory Resources Kamil Blažek Chairman Association for Foreign Legal Investment Tax CZECH FOCUS I 7 Sector Focus The other jewel in the crown While the automotive industry is generally considered to be the main driver of the Czech economy, the country’s electronics industry is also impressive in its own right.
ore than anything else, sold its products to aligned developing the Czech electronics and nations, such as Egypt, Algeria, Yemen and electrical engineering sector Syria, among others. M is based on its long tradition Tesla maintained its very good reputation and the extensive skills of its employees. in the CMEA countries and was a leading The entire industry accounts for more manufacturer of measuring instruments, than 14% of Czech manufacturing output, producing devices for medical facilities as Do you want to know more which makes it the second largest sector well as nuclear and analogue-computer about the electronics sector in the economy. Over 17,000 companies technology. in the Czech Republic? employ more than 180,000 workers During the transformation of Czech economy Download the free brochure from CzechInvest! in the sector here. Most of the sector’s from state-planned to open market, output is exported, mainly to markets within individual factories were gradually shut the European Union. Almost one-quarter down during the process of privatisation or of the country’s exported goods are made at some time thereafter. At its peak, the state- Selected investment projects in this particular industry. owned Tesla employed approximately 30,000 people. Even though the company fell out Company Country of origin of step with the technological development History Panasonic Japan The Czech electrical engineering and elsewhere in the world due to the political electronics can boast a long tradition based situation, Tesla’s 45-year existence fostered ABB Switzerland especially on the Tesla group. Tesla’s history effective cooperation among Czechoslovak TE Connectivity Taiwan in the Czech Republic dates back to 1946 engineers and electronics technicians, Foxconn USA and the trademark is nowadays registered thus creating a sufficient technology in more than 100 countries around the world. base for the Czech electronics sector after Laird Technologies Great Britain Tesla operated as a state-owned monopoly the revolution in 1989. Daikin Japan producing televisions, broadcasting equipment and radio receivers, as well as The Czech electronics today ON Semiconductor USA light bulbs and electronic components. Since the 1990s the Czech Republic has Bang & Olufsen Danmark In the area of the former Soviet Union welcomed numerous investors in various there are still more than 1,500 functioning sub-sectors of the electronics industry. Siemens Germany Tesla transmitters ensuring roughly The whole sector is growing, particularly FEI Company USA 60% of the region’s radio and television due to the current economic boom and broadcasting. Besides the Eastern Bloc, Tesla the presence of well-known manufacturers. Source: : CzechInvest, 2016
The Czech Technical The first “Piette First tramway Functional Thirty percent of University in Prague Křižík” arc lamp in the Austro- The first prototype First medium- prototype First television the world’s electron is the oldest non- designed by Hungarian Empire of the Kaplan wave radio trans- of the electron transmitter system Integrated circuits Tamara passive microscopes pro- military technical Dr. Ing. František operated turbine developed mitter produced microscope installed first manufactured radar system duced in the Czech university in Europe Křižík in Prague in Brno in Czechoslovakia developed in Prague in Czechoslovakia developed Republic 1707 1880 1896 1919 1932 1950 1953 1967 1987 2014
8 I CZECH FOCUS Sector Focus
Total expenditure on R&D AVX Czech Republic, a subsidiary of the US (Percentage of GDP) company AVX, started production of tantalum capacitors in Lanškroun in 1993. Czech Republic Hungary Poland Slovakia Fellow US group Vishay Intertechnology has 2,0 also moved production of capacitors and 1,8 resistors to the Czech Republic and operates 1,6 multiple plants in the country. 1,4 US-based ON Semiconductor has 1,2 a production facility in Rožnov, which has benefited from the company’s decision 1,0 to relocate production to the site from 0,8 France and the US. ON Semiconductor also 0,6 operates a design centre in Brno. In 2012, 0,4 ON Semiconductor announced that it had 0,2 expanded its operations in Rožnov with the opening of a new R&D facility. 0,0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 In March 2010, the Swiss industrial group ABB acquired the semiconductor business Source: Eurostat, 2016 of the Czech company Polovodiče. The additional production capacity for high- power semiconductors will help ABB to cope with the expected rising demand fuelled The country’s long tradition in the electronics Systems, Integrated Microelectronics Inc. by growth in renewable energy and efforts sector, together with its solid educational from the Philippines, and the American firm to improve energy efficiency. system and strategic location, has Flextronics, which also has a design centre One of the strongest parts of the Czech attracted numerous foreign companies in in Brno, the second largest city of Czech electronics industry consists in cooperation the electronics sector, which are evenly Republic. between universities and private companies. distributed across the entire country. Many electronics companies are also Dozens of foreign and domestic companies Consumer electronics production is important suppliers to other branches are collaborating with local technical represented by Panasonic, the largest flat- of industry, in particular the automotive and universities, thus providing impetus panel television manufacturer in the Czech mechanical-engineering industries. The rapid to improve the quality of education and Republic. Other television manufacturer development of the automotive sector the abilities of graduates. This trend is operating here is Chang Hong from China. in the Czech Republic and neighbouring the most visible in Ostrava and Brno, which One of the most important company in countries has attracted a number of well- are home to both great technical universities the consumer electronics segment is Bang known companies. Panasonic established its and great electronics companies. & Olufsen, which made its first expansion second Czech facility in the city of Pardubice, outside of Denmark when it set up a facility where it produces audio technology for Outlook in the Czech Republic serving not only for a wide range of European automotive The future is the biggest issue for electronics production of unique audio systems, but also OEMs. Continental makes dozens of types manufacturers. How is Industry 4.0 affecting as an R&D facility. The company is currently of electronic components for cars at its the sector? What about supply channels, transferring its entire production portfolio locations in the Czech Republic. The German the ability to find new clients and production to the Czech Republic, which means that company MD elektronik is continuously capacity of production? What effect will it its facility in Kopřivnice will serve the global expanding its automotive cable business have on employment? Topics like Industry market. in the Czech Republic was one of the most 4.0 and the Internet of Things are the most A great example of a successful company active investors here in 2015. Other discussed subjects among companies. that is expanding here is the Taiwanese automotive electronics suppliers operating Despite our inability to predict what electronics contract manufacturer Foxconn. here include, e for example, Siemens, Bosch, the future holds, CzechInvest is actively This company already has two factories Daikin, TE connectivity and Kostal. Lighting trying to connect people from various in the Czech Republic and now wants equipment for automobiles is manufactured fields of the economy in order to help them to grow bigger and has thus signed in the Czech Republic by Hella Autotechnik, communicate and find solutions. Such a memorandum with the Czech government Varroc Lighting Systems and Automotive activities are also conducted by the Electrical about new investments in an R&D and design Lighting. Engineering and Electronics Association centre that will serve the whole European With respect to high-value-added products, of the Czech Republic, which brings together market. Wistron, another Taiwanese OEM it is very important to mention that every companies of all sizes accounting for 70% company operating here, Wistron, is mainly third electron microscope manufactured of Czech electronics production. a manufacturer of LCD Panels, though it in 2014 originated in the Czech Republic. facility in Brno also produces computers The Brno-based companies FEI, Tescan Orsay Martin Kratochvíl and servers. Other leading EMS providers Holding and Delong Instruments are not only Sector Manager for Electrical with manufacturing facilities in the Czech producers, but also conduct R&D activities Engineering and Electronics Republic include the Belgian firm Connect with global impact. CzechInvest
CZECH FOCUS II 9 Sector Focus
Czech electron The one and only Bang & Olufsen’s Kopřivnice plant is the company’s biggest microscopes lead the world manufacturing facility and the only one outside of Denmark
he success of a company is not measured by a single eter Bang and Svend Olufsen, two young Danish engineers, milestone or award, but rather by its refusal to stagnate. founded Bang & Olufsen in 1925. Since then, Bang & Olufsen This is the path that TESCAN has taken since its inception – has grown into a global company with approximately 2,300 T from rented offices for its five founders, the company has P employees numerous subsidiaries in Europe, America and Asia. grown into a multinational corporation with more than 400 employees In 2004, Bang & Olufsen decided to establish a branch in the Czech Republic. and two thousand microscopes installed around the world. As one Considering the good local conditions, availability of highly qualified of the world’s five main players in the field of electron microscopy, TESCAN employees and fantastic leisure activities, the company located its new plant is strengthening its position and expanding its portfolio with optical in Kopřivnice, at the foot of the beautiful Beskids Mountains near Ostrava. microscopes and other technologies in the area of charged-particle optics. With more than 500 employees from ten countries, the Kopřivnice plant is A specialty of the company comprises systems modified precisely according currently Bang & Olufsen’s largest manufacturing facility and its only one to customers’ requirements in order to maximally meet their needs outside of Denmark. The Czech plant manufactures high-end, premium in research and industry. products with exceptional performance and design. Excellence in design is The company is continuously increasing its market share, especially by means not only reflected in the company’s products – visitors and new employees of its own development as well as through cooperation with prestigious are amazed by award-winning architecture of the factory building. institutions and the academic sphere in connection with technology Over the years, Bang & Olufsen has been a leader in creating innovative transfer. Examples of this are the Cooperation of the Year 2013 prize awarded and timeless audio and video products for homes across the globe. These to TESCAN and Brno University of Technology for their development days Bang & Olufsen manufactures a highly distinctive and exclusive range of a revolutionary holographic microscope (for more information about of televisions, sound systems, loudspeakers and multimedia products that Cooperation of the Year, see the R&D Focus section in this issue of Czech combine technological excellence with emotional appeal. That’s why Bang Focus) and the 2015 Photonics Prism Award for the company’s unique & Olufsen is one of the world’s top 20 brands. correlative electron microscope. In 2011, TESCAN’s research and development resulted in the first system of its kind integrating a xenon plasma ion source and a scanning electron microscope. Václav Janištin Pavel Merhout Head of Marketing Managing Director TESCAN ORSAY HOLDING Bang & Olufsen Kopřivnice Czech ELKO EP Panasonic’s starring role takes smart homes worldwide in the Czech Republic
he Czech company ELKO EP has been one of the leading anasonic Corporation, a global leader in consumer European players in the field of residential and industrial and system electronic products, operates in the Czech electrical installations for more than 22 years. Since 2007, Republic on two main fields: Panasonic AVC Networks T the company has been developing and producing its P Czech (PAVCCZ) manufacturers televisions in Plzeň and own intelligent electrical installation system called iNELS Smart Home Panasonic Automotive Systems Czech produces car audio products in the & Building Solutions. At present, ELKO EP Holding employs nearly city of Pardubice. Built in 1996, the television factory was the first major 300 people, exports to 66 countries around the world and already Japanese investment in the Czech Republic following the Velvet Revolution. has 11 foreign branches. The company is proud of its own production This year marks the twentieth anniversary of PAVCCZ and indeed there is of components and its own development and innovation of new a remarkable success story behind it. As Panasonic Corporation’s only TV products. It is also able to offer its customers instantaneous distribution manufacturing operation in Europe, PAVCCZ delivers products not only to all and rapid, flawless service. European countries, but also to Russia and South Africa and over the long Thanks to the company’s own R&D centre, ELKO EP is able to react term it has become the Czech Republic’s third-biggest exporter. To date, dynamically to today’s trends, allowing it to be one step ahead the Plzeň factory has produced over 34 million televisions, which in global of the competition. ELKO EP is aided by the fact that the entire solution terms makes PAVCCZ the largest Panasonic TV manufacturing company production process is “in house”, from design, software development and in the world. The plant’s production portfolio has indeed changed over time, applications to manufacturing, marketing, sales, aftercare and monitoring. from original CRT (cathode ray tube) televisions to plasma and LCD, and The uniqueness of iNELS lies in its versatility for use in a wireless version finally to the current LED and OLED products. Additionally, production of in apartments and houses. A BUS version is available for use in large DVD and Blu-Ray recorders was introduced in 2015. Panasonic has become buildings, such as villas, hotels, commercial buildings, office buildings and part of society in the Plzeň region, supporting numerous CSR projects and even airports. Regardless of the version used, the characteristics remain engaging in extensive cooperation with the University of West Bohemia. Its the same for all buildings with the following features: savings, convenience, business success comes from the symbiosis between Plzeň City Council and automation and security. the company’s management, as well as between Japanese executives and local employees. Jiří Konečný Radek Vach CEO Business Planning Department ELKO EP Panasonic AVC Networks Czech 10 I CZECH FOCUS Target sectors of the Czech Republic
Automotive The Czech Republic has one of the highest concentrations of automotive- related manufacturing and design activity in the world. With 122 motor vehicles per 1,000 inhabitants, the country has the second highest rate of production per capita in the world. It is also the biggest producer of passenger cars in Central and Eastern Europe with nearly 1.3 million units manufactured annually. Top investors: Hyundai Motor | Manufacturing Czech | Iveco Bus | Škoda Auto | Tatra Trucks | Toyota Peugeot Citroën Automobile Business Support Services Contact: Richard Schneider | Tel.: +420 296 342 513 | The Czech Republic is leader in the business support services sector e-mail: [email protected] in Central and Eastern Europe. The shared-services centres of DHL, Accenture, ExxonMobil, IBM and more than 200 other companies employ over 65,000 specialists in the Czech Republic. In addition to Prague, the country has several strong hotspots ready for international projects in regional centres. Aerospace Top investors: DHL | Accenture | ExxonMobil | IBM | Infosys With more than 32,000 aircraft 37,000 engines delivered, the country has Contact: Matouš Kostlivý | Tel.: +420 296 342 514 | made a name for itself in aerospace based on outstanding quality, reliability e-mail: [email protected] and innovation in the industry. From basic production to final aircraft assembly and cutting-edge R&D programmes, most Czech aerospace companies work with top industry players. Top investors: Aero Vodochody Aerospace | Bell Helicopter | GE Aviation Czech | Honeywell Aerospace | Latecoere Nanotechnology and advanced materials Contact: Marek Aubrecht | Tel.: +420 296 342 458 | The nanotechnology and advanced materials sector brings together e-mail: [email protected] the Czech Republic’s traditional focus on textiles, glassmaking, the chemical industry and electrical engineering with its current emphasis on the automotive industry, aerospace and biotechnology. The rapid development of this sector has been aided by innovations of global significance in electron microscopy and nanofibres, which have brought the Czech Republic to the forefront of global development in these fields. One-third of global production of electronic microscopes is carried out Electronics and electrical engineering in the Czech Republic. Manufacturing and R&D activities in the country include, for example, Top investors: AGC | Contipro | FEI | Saint-Gobain | semiconductors, optoelectronics, consumer electronics and even robotics. TESCAN ORSAY HOLDING The industry accounts for more than 14% of Czech manufacturing output, Contact: Jiří Fusek | Tel.: +420 296 342 809 | e-mail: [email protected] which makes it the second-largest sector of the economy. Top investors: ABB | Bang & Olufsen | Foxconn | Life sciences ON Semiconductor | Panasonic The Czech Republic has a rich heritage of discoveries and innovations in the Contact: Martin Kratochvíl | Tel.: +420 296 342 569 | field of life sciences, ranging the laws of genetics laid down by Gregor Johann e-mail: [email protected] Mendel to the invention of soft contact lenses and development of ground- breaking antiviral drugs by Professor Antonín Holý. Development of the life sciences sector is supported by effective patent protection, adoption of GMP, GLP and GCP standards and the country´s integrated healthcare system supported by cutting-edge research centres, making the Czech Republic an attractive location for both R&D and manufacturing. Top investors: Lonza | Merck | Otsuka Pharmaceutical | ICT Teva Pharmaceutical | Zentiva, member of Sanofi Group The Czech Republic is one of Europe’s top locations for ICT investments. Contact: Hana Chlebná | Tel.: +420 296 342 803 | Antivirus giants AVG and AVAST have both their origins and operations e-mail: [email protected] in the Czech Republic, which is also the only country using the Latin alphabet where Google is not the clearly dominant internet search provider, as it has a strong local competitor in Seznam.cz. Top investors: AVAST | AVG | Microsoft | Red Hat | Tieto Contact: Matouš Kostlivý | Tel.: +420 296 342 514 | High-tech mechanical engineering e-mail: [email protected] The high-level technical know-how found in the Czech Republic has been shared over centuries, resulting in the world-class level of today’s mechanical engineers, who are the sector’s greatest asset. Mechanical engineering plays a major role in the Czech economy and the country’s large concentration of mechanical-engineering companies makes the Czech Energy and environment Republic an engineering hub. Top investors: Bosch | Comco Europe | Edwards Vacuum | Siemens | OTIS Technologies for reusing industrial waste in new products, increased use Contact: Milan Kilik | Tel.: +420 296 342 805 | of renewable energy sources and support for energy savings through e-mail: [email protected] the introduction of smart energy distribution systems are of paramount importance in the sector. The country offers investors in these areas both technical competence and manufacturing excellence that, combined with cost effectiveness, create favourable conditions for new investments. Top investors: Doosan Škoda Power | Mavel | Solar Turbines | Stora Enso | Vyncke Contact: Jan Zapletal | Tel.: +420 296 342 515 | e-mail: [email protected]
CZECH FOCUS I 11 Country Focus The Czech Republic and South Korea: a positively developing partnership The miracle on the Han River has been a topic of discussion for a long time. South Korea is a country where incredible changes have happened within just the past fifty years.
society which faced famine Top 10 Korean investors in the Czech Republic during and after the Korean Investment volume Jobs Company Industry Year War has managed to become (in USD million) created the twelfth most developed A Hyundai Motor Company Automotive 1,401.89 3,514 2006 economy in the world. South Korea is the leading country in industries Nexen Tire Corporation Rubber 1,033.625 1,384 2014 such as semiconductors, electronics and Hyundai Mobis Automotive 183.42 1,775 2006, 2014 shipbuilding. Its strong position is recognised Sungwoo Hitech Automotive 157.59 1,541 2005, 2007 in automotive and steel production as well. The existence of Samsung, Hyundai and LG, ARRK – Plakor Automotive 72.02 504 2006 top brands well known around the world, Doosan Škoda Power Machinery 43.79 56 2013 suggests that the economy is export oriented Dymos Automotive 34.5 422 2006 and supported by giant conglomerates called Dongnee Automotive 32.74 238 2006 “chaebols”. Hyundai Hysco Automotive 23.08 70 2006 Partnership mainly Sejong Automotive 21.36 270 2006 in the automotive industry The official relationship between the Czech Republic and South Korea started right after Silesia region. Koreans have invested over its worldwide sales remarkably. Doosan’s the Velvet Revolution. The collaboration has CZK 76 billion (more than USD 3.25 billion) presence in the Czech Republic opens doors developed significantly in the past ten years. in the Czech Republic since then, thus placing to other energy projects within and beyond In February 2015, the Czech Republic signed South Korea among the top three non- Europe. a strategic partnership agreement with South European investing countries. Korean companies perceive the EU as Korea and in December of the same year About fifty Korean companies are currently the most competitive market. Success here the Korean president visited Prague to confirm operating in the country, providing represents a benchmark for the future and is the relationship and to support the opening jobs to almost twelve thousand people. respected worldwide. Therefore, both major of new areas of mutual business cooperation. The automotive industry dominates in terms conglomerates and mid-sized companies The first significant example of the Korean of Korean FDI in the Czech Republic. South are slowly changing their strategies. Focus presence in the Czech Republic and Korea is also gaining greater visibility on diversification of customers leads the beginning of intensive economic in the Czech Republic as new investments to business stability fitting the new business cooperation between the two countries are announced, e.g. the Nexen Tire plant and culture. In other words, Koreans looks occurred at the end of the last century. the expansion of Hyundai Mobis. Key suppliers to Europe not because of breathtaking sales The automotive division of the Daewoo of HMMC such as Sungwoo Hitech, Hanwha, but to gain an impressive reference. group (now GM) acquired Avia, a Czech truck Plakor, PHA and many others have proven Due to the trend of the main European manufacturer, in 1995. their competitiveness and started to expand companies demanding that their suppliers Nowadays, Korean companies rank among their production as orders from new clients be close to their manufacturing sites, Korean the most active exporters and investors as well. increase. The successful development of clients’ suppliers have moved here. They adopt The Czech Republic has become one of the key structure opens new opportunities for other measures in production in whatever industry countries for establishing branches and companies such as Tier 2 and Tier 3 vendors and establish in-house testing or R&D manufacturing facilities in the CEE region that to take similar steps. centres in order to fulfil clients’ requirements. are subsequently used for business expansion The Czech Republic offers many unique to other EU markets. Strategic decisions benefits that have a significantly greater In 2005, the car manufacturer Hyundai Motor In 2009, the Korean chaebol Doosan looked impact than just reduction of production Group decided to exploit the combination around the world to enrich its assortment costs. The country’s strong industrial tradition, of perfect location and traditionally strong by technologies enabling supplies of complete workers’ loyalty and skills, new ideas and manufacturing skills to establish its key solutions in power generation and decided creativity are strong points appreciated by European plant in Nošovice. This strategic to acquire Škoda Power for its top turbine Korean decision-makers. investment pushed Korean suppliers to follow manufacturing technology. The Czech Martin Jírovec their main client. Dozens of related production subsidiary has enjoyed positive synergistic Head of Seoul office facilities have been founded in the Moravia- effects since the acquisition and has increased CzechInvest
12 I CZECH FOCUS Country Focus A Korean success story in the Czech Republic: Hyundai Mobis orean companies have recently manufactured by Hyundai here. We supply front investment incentives and the strategically been gaining prominence while end modules, front and rear chassis modules, advantageous location in the region were becoming household names and cockpit modules for the Hyundai i30, the main reasons why the company decided K around the world. Most of us ix20 and Tucson models. The aforementioned to expand here and to build a new plant immediately think of the giants Samsung modules comprise 60% of all the cars that roll off for production of headlamps in Ostrava- and Hyundai. Mobis is affiliated with the later the assembly line at a rate of less than a minute. Mošnov. This project is the second-biggest and employes nearly one thousand people In 2015, Mobis assembled each type of module investment of the past five years in the Czech in the Czech Republic, a figure which will for 342,000 Hyundai cars produced in Nošovice, Republic. The new factory will supply lamps nearly double in the coming years thanks which is 12,200 more than originally planned. for Hyundai in Nošovice and Kia in Žilina. to the opening of a new plant for production We value the commitment of our employees, We plan to manufacture lamps for roughly of headlamps in Mošnov. whose work contributed to the achievement 750,000 vehicles per year during the first phase The Mobis Automotive Czech factory was of this demanding goal. Even though we have of the project from 2017 to 2020 and for one established on a greenfield site in Nošovice series production of modules for only one new million per year after 2020. We are also planning near Frýdek-Místek in December 2006. We model planned in 2016, this will not be an easy to create more than 900 jobs in the new are thus celebrating the tenth anniversary of year, as the production plan was increased plant, while approximately 600 more jobs will the company’s operations in the Czech Republic. to 350,000 cars. But like last year, we are sure be created by our suppliers. We are investing up Our factory covers an area of 74,000 m2 and the that the joint effort, commitment, abilities and to CZK 4 billion in the plant’s construction. total investment is equal to EUR 72 million. skills of our employees will enable us to achieve We are the biggest supplier of auto modules this objective. Ivan Leixner for Hyundai Motor Manufacturing Czech. Our Mobis’s ten years in operation in the Czech Manager, General Affairs & Facility & Public Relations employees are behind the heart of each vehicle Republic, preparedness of the chosen site, Hyundai Mobis
First Czech direct investment in Korea: Gold of Prague Brewery n 2014 we happened across where a Czech brewmaster will brew high- anything else, it is recommended that you an English newspaper article quality Czech beer from Czech ingredients. find a reliable “cultural translator”. Conversely, about the Korean beer market In many respects, ours is a pioneering project. a Czech can be reassured by the fact that if you I and its upcoming deregulation Among other things, it is the first Czech direct rely on the routine running of things, you won’t for smaller and medium-sized producers. There investment in South Korea and we are one be disappointed. are not many developed countries where such of the first independent companies to build South Korea and the Czech Republic are also a significant sector would be subject to such a brewery in Korea and the first to invest very similar, as they are emerging export a fundamental easing of restrictions. When we in the new Foodpolis zone. We are still fascinated economies without abundant natural resources took a closer look at the situation, we identified by the unbelievable opportunities that Korea and with strong neighbours. Trade between a number of factors that together created offers and, to the same extent, the regulatory the two countries will increase inexorably. a very interesting investment picture: brewing – and cultural differences between the Czech Because my colleagues and I wanted to share a traditional Czech sector in terms of both beer Republic and Korea never cease to surprise our experience and gain new experience, production itself and production of technology, us. “Lost in translation” is one of the most in 2015 we established a chamber of commerce a rich and developed country where people frequently used phrases in our company. Thanks in cooperation with the Czech-Korean Society like to enjoy themselves and don’t mind paying to the experience of our Korean and Czech (Chamber of Commerce of the Czech Korean for quality, the expectedly huge popularity employees, however, we have managed to avoid Society). The purpose of this chamber is to assist of the Czech Republic and Prague in particular, making any major mistakes. It is primarily Czech and Korean companies with their mutual and a stable business environment with good necessary to prepare for the omnipresent trade and establishing contacts. We believe that, enforceability of rights. We established a branch written and unwritten rules and customs. Every thanks to the chamber, other Czech investors will in South Korea in 2015 and secured a suitable field of human endeavour is caught in a web soon follow us to South Korea. plot of land in the Foodpolis investment zone. of such rules. A foreigner’s ignorance of these Lukáš Mikeska In 2016 we would like to obtain a building permit may be temporarily tolerated in some cases, but CEO and begin construction of a mid-sized brewery, you definitely cannot depend on that. Before Gold of Prague
CZECH FOCUS II 13 Foreign offices of CzechInvest [email protected] +44 (0) 77 8523 1520 +44 (0) 20 8748 3695 Lucie Polášková Contact Smiths Group | Tesco Covidien | Dixons Carphone Group | Ricardo Top investors: headquarters. forRepublic, their Central which chose the country European There are more operating firms Czech than 300 British in the partner. trade Mutual has more than doubled since 2000. Great is the Czech Republic’s Britain export fifth-biggest Great Britain and Ireland [email protected] + 1 (415) 794 0665 HoráčekRoman CzechInvest West Coast – California [email protected] +1 (347) 789 0570 Jan Chmelík CzechInvest East Coast – New York Contact | Johnson ControlsHoneywell AT&T | Caterpillar Solar Turbines | GE Aviation | Top investors services. in research and development, manufacturing with high value added and creates jobs especially skilled the European Union. fostersThis projects partnership in the second-biggest investor after in the Czech Republic terms of the number projects, In the United States States United [email protected] +49 211 250 56 192 +49 211 250 56 190 Partl Martin Contact | Siemens | ContinentalBosch | Daimler Hartmann Top investors: in the country. for approximately 22% of the total volume of investments investmentsdirect and accounting in the Czech Republic partner, occupying first place among source countries of foreign Germany is the Czech Republic’s trading most important Germany [email protected] +420 296 342 809 FusekJiří Contact Tieto Bang & Olufsen | KONE | LEGO Mölnlycke Health Care | Top investors: environment. in combination with the country’s innovation high-quality and professional emphasis on knowledge the rising skills the rest of Europe. These investments well illustrate very a gateway to the CEE region, primarily Germany and Scandinavian investors as view the Czech Republic often Scandinavia
[email protected] +81 3-5485-8277 +81 3-5485-8266 Žižlavský Michal Contact Toyota Motor Corporation | Olympus Panasonic | Denso Daikin | Top investors: CzechRepublic is first in per capita, the firms Europe. terms of the number Japanese manufacturing In largest volume of foreign investments in the country. and accountsin the Czech Republic for the second- Japan ranks among the traditional investors Japan [email protected] +82 10 2987 5632 Jírovec Martin Contact Sungwoo Hitech | Nexen Mobis | Hyundai | ARRK – Plakor | Hyundai Top investors: and currently in Asia. only strategic partner Nexen. Korea South is also the Czech Republic’s first and tire Hyundai manufacturer of the carmaker investments in the country’s history, such as those of investment inflow, as it is the source of the biggest European countries for in terms the Czech Republic Koreanon- South is one of the three most important KoreaSouth [email protected] +86 13817792614 Ondřej Koc Contact Gummi Czech | Xi’an Shaangu power | Changhong Europe | Saar BWI Electric Top investors: billion. in the aggregate value of more than CZK 2.6 twelve investment of Chinese firms projects To date, CzechInvest has helped to mediate originating to in China can be expected grow. two years and the number of investments over has been rising Republic the past Chinese companies’ interest in the Czech China
14 I CZECH FOCUS M&A Focus
Warranty insurance in acquisition transactions One issue that arises for both sellers and buyers in acquisition transactions is how to spread the risk equally between both parties.
ince the buyer’s knowledge of a target institutions in the Czech Republic. If insurance (default) of which the insured was aware. company is generally based on of the ownership title to real estate is a commonly The seller generally pays the insurance premium the content of a due diligence used insurance product, a blanket insurance up to the pre-agreed insurance limit and, most S investigation set up by the seller, policy for all (or the overwhelming majority of) frequently, as a lump-sum payment upon the scope and content of the representations representations and warranties is still new to both the conclusion of the insurance policy. The buyer and warranties in relation to the target are the Czech and European markets. However, it negotiates with the insurance institution about of vital importance for the entire transaction. appears, based on practice, that concluding this the scope and terms of the insurance according Although the content of such representations kind of insurance definitely helps in simplifying to the buyer’s needs and the purchase agreement and warranties differs depending on the target’s and accelerating negotiations over the conclusion is amended accordingly. activities, they tend to focus on: of a purchase agreement – the parties usually If the contracting parties intend to take out reach a compromise more easily over the scope insurance covering representations and the target’s financial situation and content of the representations and warranties, they must take into account that this ownership right to the target’s assets warranties. For instance, insurance can replace insurance is usually concluded under foreign authorisation to conduct business and other funds retained in an escrow account, thus freeing (most frequently English) law. The insurance activities operated by the target up money for the seller to use in a different and institution also carries out its own due diligence employees and statutory bodies, as well as more effective manner. investigation of the target (even though it relationships with affiliated entities This insurance relates to a highly specialised relies a priori on the results of the due diligence conflicts and lawsuits area of insurance coverage focused conducted by the buyer), which can prolong environmental, state aid and other issues. on the simplification and facilitation the period for completing the transaction or of acquisition-related processes. Therefore, might result in the discovery of hitherto unknown Any party engaged in an acquisition transaction an insurance policy transfers from the seller facts and risks, which have to be included when is fully aware of the complexity of negotiations to the insurance institution certain potential risks considering the timing of the transaction. regarding the accurate content and duration associated with the transaction. Another key factor is the proper setup of legal of the representations and warranties, where The insurance protects the buyer against financial relationships among all parties involved the buyer requires maximum assurances from damage or losses that could be suffered if in the transaction. A policy is concluded the seller with respect to the quality of the the situation of the target winds up being worse whereby the insurance covers the seller’s company being sold as well as any hidden risks. than the buyer was aware of or due to the fact liability for a breach of the representations and The situation becomes more complicated if, that the target lacks the specific features required warranties; therefore, the seller’s liability cannot for any reason whatsoever, the seller needs by the buyer. be excluded by means of any arrangement or to dismantle the structure that the target was The scope of insurance always depends provision. In addition, the insurance institution a part of before it was acquired, as soon as on the particular agreement between the parties has a general right to seek compensation possible after completion of the acquisition. concerned. However, it usually covers the buyer’s for damage from the liable party, which could A long validity period is generally required risks associated with: affect the entire purpose of insuring the risks for representations and warranties. For noted above. These factors must therefore instance, a standard ten-year period still applies false representations and warranties or tax be taken into account and proper action must to the ownership title to real estate, the standard obligations be taken in this regard when concluding buyer’s protection period for tax issues is four guarantees for future development of the target the insurance policy and purchase agreement. years, and a period ranging from six months administrative sanctions. Generally, we can conclude that the positives to four years is haggled over for other types outweigh the negatives. Therefore, the above- of representations and warranties. Insurance that covers claims under the mentioned insurance product is likely to see One solution that is acceptable to both representations and warranties is generally further growth. contracting parties could be an “Insurance offered to both the buyer and the seller. As of the Seller’s Representations and Warranties a general practice, the insurance excludes claims Roman Pečenka under the Purchase Agreement”, which is resulting from criminal activity, contractual Partner already offered by specialised insurance penalties and especially claims under a breach PRK Partners
CZECH FOCUS I 15 R&D Focus Industry 4.0 A major change is coming
Industry, the economy and society as a whole are undergoing fundamental changes brought about by the introduction of information technologies and artificial-intelligence systems into production, services and all other sectors of the economy. The impact of these changes is so radical that they are being spoken of as the fourth industrial revolution.
he essential aspect is the speed are the close ties between Czech enterprises to the fore to a far greater extent than in the past, at which change is taking place. and global technology leaders, which are often and this gives primarily small and medium-sized Over the course of centuries, the owners of Czech firms, as well as the qualified enterprises a chance. This new revolution will T employment has historically shifted human resources needed to develop innovative undoubtedly have an impact on employment, from agricultural to industry and from industry solutions. High-quality technical education is replacing boring and physically exhausting to services. The basic vision of the fourth one of the Czech Republic’s strengths. Czech work, but it will require new skills and new ways industrial revolution was first presented in 2011 engineers are accustomed to lifelong study and of thinking. None of this can happen without and the rate of change is no longer expressed improvement of their knowledge and skills. dynamic consideration at the government level, in decades, but in years or even months. The Czech government’s obvious interest whether that involves the drafting of legislation, The Czech Republic is well aware of the fact in investing in research and focusing it education reform, concentration of human that it must respond to these trends, mainly on improving the competitiveness of the Czech and financial capital at strategic junctions because it ranks among the most industrialised economy is demonstrated by well-prepared of the process and corresponding retraining countries in Europe. However, the recent rapid agencies (Technology Agency of the Czech of the workforce. development offers tremendous opportunities Republic, CzechInvest) that have the task Jiří Krechl with respect to sustainability and increasing of implementing support. Specifically, the Czech Director R&D the productivity of industrial production and Republic has a strong position on the global anti- CzechInvest services. In September 2015, the Ministry virus software market. The country’s engineering of Industry and Trade of the Czech Republic potential is able to absorb advanced computer drafted the Industry 4.0 National Initiative, which and system security solutions. Interconnection between explains the specifics of the Czech economy The Czech Republic’s low unemployment R&D and corporate sectors in relation to the start of the fourth industrial rate in the European and global context is growing revolution. indicate a good level of flexibility within The Czech Republic has abandoned its strategy the workforce, whose level of qualifications In the area of cooperation between firms and of keeping labour costs low in order to attract is evidenced by the share of specialists with universities and research institutes, the Czech foreign investment and has unambiguously tertiary education. The poverty and social Republic ranks among the countries with shifted its focus to the potential of business exclusion rate in the Czech Republic is currently growing interconnection between the research in sectors with high value added rather than one of the lowest among developed countries. and corporate sectors. The Association medium value added, as was previously the case. This provides a relatively good foundation for for Foreign Investment plays an active role For example, foreign investors are showing maintaining social stability in the conditions of in promoting the results achieved by the research an increasing tendency to invest in first-rate future technological and societal changes. and application spheres. workplaces. Unlike the assembly plants built here The Czech Republic also has newly built The Cooperation of the Year competition in the past, however, such advanced facilities infrastructure for basic and applied research, recognises projects involving cooperation require extensive reinvestments and a skilled especially in the area of additive manufacturing, between both spheres and, through examples workforce. and a high-quality research base at the Academy of successful collaboration, strives to motivate Smart factories using cyber-physical systems of Sciences of the Czech Republic and university the research and application spheres to work will take over simple and repetitive tasks that are faculties in the area of sensor technology and more closely together. This unique project maps currently performed by people. New positions big-data analytics. Top-level research in the areas trends in the field of innovation and subsequent requiring a high level of qualifications will of cybernetics, robotics and artificial intelligence commercialisation of science and research, and be created. Methods of machine perception, is carried out especially at certain technical promotes the results achieved by Czech scientists auto-configuration and auto-diagnostics, and universities. In industry, we find an expansive and researchers at home and abroad. computer interconnection of machines and parts production base for sensors and measuring Recent results of the coopetition available will gain prominence. systems. at www.afi.cz The Czech Republic is well positioned to join We must perceive the fourth industrial Sebastián Poche in and take advantage of this revolution. revolution not as a threat, but as an opportunity. Project Manager, R&D and Innovation Especially highly valued aspects in this respect The entrepreneurial spirit and agility are coming Association for Foreign Investment
16 I CZECH FOCUS University education in the Czech Republic
Main universities, 2015/2016
Technical University of Liberec Students: 326,909 UJEP Ústí nad Labem 6,618 1,532 Graduates: 82,004 8,701 1,744 University of Hradec Králové 7,200 Palacký University, Olomouc 1,905 University of West Bohemia 20,897 4,309 11,526 University of Pardubice 2,903 8,366 1,967 Ostrava University 9,189 2,411
Technical University of Ostrava 15,815 4,226
Czech Technical University, Prague 20,218 4,643 University of Tomáš Baťa
University of Life Sciences, Prague 9,427 2,736 19,172 5,487 University of South Bohemia
Charles University in Prague University of Economics, Prague 10,565 2,780 Brno University of Technology Masaryk University 47,010 15,566 20,741 32,950 8,520 4,358 5,478 8,375 Technical education at selected universities, 2015/2016
Students: 91,393 Technical University of Liberec Graduates: 21,629 2,875 589 PhD students: 8,268 315 University of Pardubice 4,154 947 376
Technical University of Ostrava University of West Bohemia 15,815 3,743 4,226 796 1,300 507
Czech Technical University, Prague
20,218 University of Tomáš Baťa 4,643 1,952 3,320 668 Institute of Chemical Technology Charles University in Prague 276 Brno University of Technology 4,026 2,475 932 443 20,741 812 584 5,478 1,791 Source: Ministry of Education, Youth and Sports, 2016 CZECH FOCUS I 17 Region Focus Pilsen: a region where investors and beer succeed Pilsen (Plzeň in Czech) ranks among the most successful regions in the Czech Republic. Other than the fact that it has the lowest unemployment rate and highest income level outside of Prague, the region also has a very low crime rate and high-quality health- care. The Pilsen region’s quality was recognised by the Datank agency, which in 2014 named it the Best Place to Live in the Czech Republic.
Pilsen in the Pilsen region, with turnover of EUR 370 technologies. Another important research million. The major German firms operating in facility in the region is the Biomedical Centre the region include MD Elektronik, a manufacturer of the Faculty of Medicine, which is focused of cable assemblies. With turnover of EUR exclusively on research and development in 178 million and more than 2,000 employees, the area of organ replacement and regeneration. the company is one of the leading employers Basic data in the manufacturing industry in the region. The sporting life in Pilsen The region’s capital, the city of Pilsen, is famous The Pilsen region has become a hotbed of sports Area: 7,561 km2 especially for beer production, which began here in recent years, with local athletic clubs and Population: 576,616 (2015) in 1842. The local company Plzeňský Prazdroj, individuals collecting one success after another, GDP: EUR 8.166 billion (2014) is a leading European brewer. However, beer which greatly contributes to the prestige and Average gross monthly wage: EUR 946 is not the only alcoholic beverage produced good name of the region not only in the Czech (according to CZ-NUTS, full time equivalent, year 2015) in the region. The company Bohemia Sekt Republic, but in Europe as a whole. Credit Unemployment: 4% (as at 30 April 2016) ranks among the most important producers for this is due mainly to the footballers of FC Source: Czech Statistical Office of sparkling wines in Central and Eastern Europe Viktorie Pilsen, who have already won four and annually sales 24 million bottles of bubbly. championships. In European competitions, STOCK Pilsen-Božkov, a maker of fernet and Viktorie has gone head to head with clubs such he region boasts a rich industrial rum, completes the trio of successful beverage as FC Barcelona, AC Milán, FC Bayern Mnichov tradition, particularly in the field producers in the Pilsen region. and Manchester City FC. Pilsen football has also of mechanical engineering. The most The Pilsen region is strongly focused given the world such names as Pavel Nedvěd, T advanced sectors of the regional on the industry of the future and thus supports winner of the Ballon d’Or, and world-famous economy include power generation and investments in high-tech services and research goalie Petr Čech. Hockey is also prominent transport systems. Other important sectors and development. A major advantage in this in the region. include vehicle-component manufacturing, regard is the region’s well-developed education The Pilsen has myriad opportunities mechanical engineering, electrical engineering, system, which includes the University of West for recreational sport. Ski centres are available electronics, plastics and the food industry, Bohemia and the Faculty of Medicine of Charles for winter-sports enthusiasts in the Šumava especially brewing, winemaking and distilling. University. Mountains. In summer, the region offers The Czech Republic’s first industrial zone, The University of West Bohemia operates a number of attractive places for walking, cycling the Borská pole Municipal Industrial Park, was four research centres. The New Technologies and canoeing, while lovers of flora and fauna can established in Pilsen in 1992. Research Centre is focused on development watch wild animals and study endangered plant of new, special materials and measuring species on trails in the Šumava National Park. Pilsen for investors of their properties, as well as laser technologies There are also several golf courses in the region. The Pilsen region is very attractive for investors, in the area of materials engineering. In its modern which is evidenced by its first-place finish laboratories and testing facilities, the Regional Pilsen – City of Culture in the Eastern European Regions – FDI Strategy Technology Institute carries out research In 2015, Pilsen got the opportunity to show category of the European Cities and Regions focused primarily on modern vehicle design that it is not only a city of beer and engineering. of the Future 2014/15 survey conducted by including drive systems. The Regional Innovation The European Union bestowed upon the city the British magazine fDi Intelligence. The largest Centre for Electrical Engineering took part in the prestigious title of European Capital number of foreign investors in the region the development of the Škoda ForCity tram and of Culture. With the help of its native-born artists, comprise German and Japanese companies. the Škoda H12 hybrid bus, and also developed such as Jiří Trnka, Gottfried Lindauer and Ladislav Doosan, a major Korean manufacturer of steam the REMCS modular control system, which Sutnar, Pilsen attracted a record number of nearly turbines, entered the company Škoda Power meets all requirements for safety applications one million visitors in 2015. in 2009. Since 2012 the company has operated in transport and power generation. The New under the name Doosan Škoda Power and Technologies for the Information Society centre Martina Malíková in 2015 it became the fourth-biggest firm specialises in cybernetics and information Pilsen Regional Office, CzechInvest
18 I CZECH FOCUS Regions of the Czech Republic
Karlovy Vary Pilsen Ustí nad Labem + International airport + Tradition of machine manufacturing + Advantageous location between Prague + Good transport connection with Germany + Good transport connections to Germany and Prague and Germany + Engineering industry tradition + University city + Dense, high-capacity transport network Reason to remember the region Reason to remember the region + Large number of industrial zones The richest occurrence of mineral and thermal springs Pilsen is known as the birthplace of the world’s first Reason to remember the region in the Czech Republic is in the so-called “spa triangle” Pilsner-style beer. The České Švýcarsko national part is guarded between the cities of Karlovy Vary, Františkovy Lázně Contact by Pravčická brána, the largest natural stone arch and Mariánské Lázně. Tel.: +420 296 342 965 in Europe. Contact E-mail: [email protected] Contact Tel.: +420 296 342 961 Tel.: +420 475 201 158 E-mail: [email protected] E-mail: [email protected]
South Bohemia Prague region Liberec + Strategic location - proximity + Highest number of university graduates + Strategic location near Germany and Poland to markets in Germany and Austria + Highest disposable income per citizen + Tradition of engineering + Stable economic structure + Most popular for FDI + Technical University of Liberec - Institute + Good infrastructure for research Reason to remember the region for Nanomaterials, Advanced Technology in biological disciplines According to Mercer’s annual Quality of Living survey and Innovation Reason to remember the region published in February 2016, Prague is the highest Reason to remember the region Český Krumlov (UNESCO World Heritage Site) is ranking city in Central and Eastern Europe. Jewellery of Czech granite, a unique gemstone of small the most visited tourist destination in the country Contact size and fire-red to blood-red in colour, is made here. after Prague. Tel.: +420 296 342 536 Contact Contact E-mail: [email protected] Tel.: +420 482 710 353 Tel.: +420 387 962 414 E-mail: [email protected] E-mail: [email protected]
Central Bohemia Pardubice + Favorable geographical location in the centre + Skilled workforce, scientific facilities and university of the country, proximity to Prague + Continuing industrial tradition (chemical industry, + Well-developed highway and railway networks mechanical and electrical engineering) + Diversified economy with potential for creation of + International airport; a main railway line traverses skilled jobs the region Reason to remember the region Reason to remember the region The most beautiful Czech castles – Křivoklát and The most prestigious horserace in Central Europe, the Karlštejn – are located in this region. The world-famous Grand Pardubice, has been held here annually for the Cathedral of St. Barbara (UNESCO World Heritage Site) past 125 years. is in Kutná hora. Contact Contact Tel.: +420 466 616 147 Tel.: +420 296 342 536 E-mail: [email protected] E-mail: [email protected]
Hradec Králové Vysočina Moravia-Silesia + Stable economic structure (manufacturing of motor + Advantageous location with good transport infra- + Major industrial center vehicles, electrical equipment and textiles, agricultu- structure + International airport re and services) + Strong background in the machinery industry + Developing IT sector; R&D and innovation potential + Significant potential for tourism (Giant Mountains) + High-quality environment with the country’s lowest (IT4Innovations supercomputing centre) + High quality of life crime rate Reason to remember the region Reason to remember the region Reason to remember the region Colours of Ostrava, the biggest international music PETROF, the biggest manufacturer of pianos and piani- A trio of UNESCO World Heritage Sites are located festival in the Czech Republic and one of the biggest nos in Europe, is based in this region. The company has in this region – the historic centre of Telč, the Jewish music events in Central Europe, is held in the centre been in operation for more than 150 years. Quarter and Basilica of St. Prokop in Třebíč, and of Ostrava every year. Contact the Pilgrimage Church of St. John of Nepomuk Contact Tel.: 495 817 711 at Zelená hora. Tel.: +420 595 198 481 E-mail: [email protected] Contact E-mail: [email protected] Tel.: +420 567 155 197 E-mail: [email protected]
South Moravia Zlín region Olomouc + Geographically favourable location on the border + Significant innovation potential of local companies + Very good transport infrastructure with Austria and Slovakia + Long business tradition + R&D centres of advanced technologies and + Highly developed transport infrastructure – interna- + Rapidly increasing quality of life biomedicine tional airporat Reason to remember the region + Very high level of language skills + Industrial tradition – skilled workforce In the city of Zlín, entrepreneur Tomáš Baťa established Reason to remember the region Reason to remember the region his world-famous, eponymous footwear brand. Baťa This region is the source of traditional Olomoucké Villa Tugendhat (UNESCO World Heritage Site) also had a major impact on the city in terms of its tvarůžky, ripe cheese made from non-fat pickled curd in Brno is one of the pioneering prototypes of modern architecture. with a very unique, sharp flavour and unmistakable architecture in Europe. Contact aroma. Contact Tel.: +420 573 776 260 Contact Tel.: +420 543 422 780 E-mail: [email protected] Tel.: +420 587 332 186 E-mail: [email protected] E-mail: [email protected] CZECH FOCUS I 19 Investment Climate Quality of technical education in the most industrialised country in Europe
he Czech Republic is the most the fact that learning languages is not The Czech Republic offers skilled and industrialised country in Europe prioritised at technical schools. Together educated tech professionals as well as fresh so it is not surprising that with the Czech Republic’s strategic location graduates in the following fields and sectors: T technical education is of great in the heart of Europe, this makes the country importance in here and that the Czech a very attractive investment and outsourcing Manufacturing system of technical education has a very destination. Lots of world-leading companies IT good reputation in the world. Thanks to searching for highly educated, motivated, Engineering the availability of graduates with degrees precise and cost-effective workers use local Logistics in technical fields at a highly competitive talent to support their business. Construction costs, the Czech Republic has become a popular location for many technology- The battle for tech talent know the environment or cooperate with oriented companies. Graduates of technical programmes and a competent recruitment partner. The Czech Republic has a long tradition experienced tech professionals have always To stay competitive and win the talent of technical education with a large been a much sought-after commodity battle, most companies offer various number of students graduating every year on the labour market. With the decreasing employee benefits and compensation in technical fields. To reinforce this tradition, unemployment rate and the growing packages. The standard benefits package 2015 was declared to be the Year of Technical number of technical positions offered usually includes sick days, a 13th salary and Education. The Ministry of Industry and in the Czech Republic, demand for qualified other financial bonuses, meal vouchers and Trade supported many events, technology candidates with a technical or engineering trainings. It is not uncommon nowadays conferences, forums, exhibitions and school background continues to rise. Employers for many employers to also offer education activities to attract the next generation thus face a challenge to find the right people. funding, a transport allowance, special to technical education and professions. To hire the best people in today’s economy, medical care, insurance or a retirement companies should be proactive and plan as well as gym memberships or Education system initiate cooperation with high schools wellness programmes. With the growing Graduates of Czech technical schools not only and universities in order to cultivate importance of work-life balance, many job possess very good technical skills, but many the talent they need. It is important to applicants highly appreciate non-financial of them also have some work experience offer competitive conditions, use the right compensation such as the possibility of and some also speak fluent English despite search tools, have the right contacts and flexible and alternative work arrangements.
Higher professional schools do not have the status of universities but they provide a three-year technical Higher education after completion of secondary professional education. Technical universities usually schools provide programmes covering five and a half years and leading to the equivalent Secondary technical schools and of a master’s degree. integrated secondary schools take students to a relatively high professional Secondary level. The education provided at these technical schools schools consists of theoretical classes and and integrated practical training in various fields, such secondary as machinery and engineering. Studies schools conclude after four years with a final Secondary vocational schools are exam called maturita (leaving exam) that focused more on practical and work-based allows students to apply for admission to training in specialised fields than on technical colleges and universities. general education. Students are prepared for technical jobs and the on-the-job Secondary training provided by these schools is one vocational of the most important parts of this type of schools education. Students finish their three-year Hana Púllová programmes with an apprenticeship exam. General Manager Randstad
20 I CZECH FOCUS Investment Climate Accounting principles of the Czech Republic
egal framework Fixed assets are recognised in historical costs up to three months before the end of the year, The Czech Generally Accepted (in some cases, in replacement costs in the the company may extend its financial year to 15 Accounting Principles (Czech GAAP) event that the assets are donated) and upward months in order to avoid compilation of financial L are defined by the Act on Accounting revaluation is generally not allowed with the statements. Similar rules apply for corporate relevant for all accounting units and by other exception of some mergers and demergers. income tax, which decreases the administrative rules and individual accounting standards which Spare parts and works in progress are burden for newly established companies. differ depending on the type of accounting unit recognised as part of inventory and not as (entrepreneurs, financial institutions, insurance fixed assets. Audit and financial statements companies, etc.). As a result, the same transactions Evaluation using the LIFO method is Large and medium-sized companies are always may be treated differently from the accounting prohibited as in the case of IFRS. subject to audit while small companies are point of view by different companies, but the key Tax deductible provisions for future repair subject to audit only if one of the following principles remain the same. of fixed assets may be created, which is not criteria is exceeded in two consecutive The Czech GAAP are binding for all accounting allowed in IFRS. Otherwise, provisions follow accounting periods: units with the exception of companies that similar rules as in IFRS. Value of assets > CZK 40 million have issued debt or equity securities traded Only the Czech koruna can be used for Net revenues > CZK 80 million on regulated financial markets within the EU, keeping the accounting books; no other Average number of employees > 50 which must use IFRS as adopted by the EU functional currency is allowed. The resulting Other accounting units must exceed two for preparation of their financial statements. exchange-rate differences realised during the of these three criteria to qualify for compulsory However, the tax base is still calculated according accounting period are charged to the income audit. to the Czech GAAP and therefore these statement. At the end of the year, assets and The information in the financial statements must companies must also be able to convert IFRS liabilities denominated in foreign currencies be reliable, comparable and understandable, figures to the Czech GAAP. are recalculated using the exchange rate and the financial statements must present a true The Czech GAAP define four categories announced by the Czech National Bank and and fair view of the company’s financial position. of accounting units based on the total assets, these unrealised exchange-rate gains or losses Companies that are subject to compulsory annual turnover and number of employees: are also recognised in the income statement. audit must prepare their financial statements micro, small, medium-sized and large. Different Fixed exchange rates can be used for a specific in the prescribed full format. Other companies categories follow specific rules with respect period. use the shorter and simplified version. to accounting, financial statements, required Revenue recognition under the Czech GAAP The financial statements must be prepared: disclosure, consolidation and compulsory audit. is usually driven by contractual arrangements, by the date of submission of the corporate but there is no specific guidance as in IFRS. income tax return (generally within three Czech GAAP vs IFRS Revenues (and expenses) are recognised months after the end of the year or within six Although the Czech GAAP are reasonably close on the date of delivery date of goods or months if the tax return is prepared by a tax to IFRS in many areas, there are differences services regardless of whether cash or its advisor). which may have a significant impact equivalent is received or paid. Percentage within six months after the end of the year for on the understanding of financial statements. of completion and inclusion of unrealised the purpose of the annual general meeting. The key differences and specifics of the Czech profits for long-term contracts are not allowed. at the latest, within 12 months after the end GAAP include: of the financial year. Finance leases are generally accounted as Financial year operating leases while the total rental cost of The financial year lasts 12 months and can start the lessee is charged to the income statement at the beginning of any month; however, most Soňa Bláhová and no liability is recognised on the balance Czech companies still opt for the calendar year. Head of the Accounting Department sheet. In the case that a company was established ASB Accounting
CZECH FOCUS I 21 Investment Climate M&A insurance in the Czech investment environment The Czech Republic is increasingly on the radar for private equity and real estate strategic investors who are taking advantage of the stable political and economic situation, skilled workforce, and many other characteristic features of this central European country.
ith M&A activity growing from II. intend to cap their liability at £1/€1/$1 (e.g. would file a claim against the seller, who would year to year in the market real estate transactions), or then in turn file a claim against the policy. This and creating more and more III. in some cases are unable to give warranties does not give a “clean exit” for the seller, which W transaction work for corporate and indemnities (e.g. family sellers or SPVs) is a main driver for this type of insurance. lawyers labouring over sale and purchase The product tends to be particularly attractive From the seller’s perspective, W&I insurance agreements (SPAs) as well due diligence work in competitive auction processes where can be used to limit liabilities and mitigate for professional consultants. The disclosure sellers are unwilling to provide warranties and balance sheet exposure. This allows a seller exercise conducted by the seller and the DD indemnities but can still provide a package to exit deals cleanly, free to use the proceeds operation conducted by the buyer results to prospective buyers enabling them to bring of the sale without having to reserve funds for in a suite of warranties given by the seller warranty claims against an insurer rather than any future claims. From the buyer’s perspective, to address the risk of an unexpected issue the seller. W&I insurance can be used to make a bid emerging post closing. The starting point for the insurer is that the more attractive to a prospective seller. It can A growing trend is to transfer this risk policy sits back to back with the SPA and therefore help a buyer secure a greater number of a warranty breach to the insurance market. indemnifies a party to a transaction (buyer, of deals. The warranty and indemnity (W&I) market has seller or interested party) for financial losses The W&I market in London and across Europe been in existence for a decade but has only arising out of the sale and purchase agreement. has grown tremendously in the past few years. become a staple deal tool in the last three This includes claims: More and more insurers are joining the market, years. In the London market, it is estimated I. for a breach of warranty (General, resulting in competition in both pricing that around 10% of M&A deals now have W&I Fundamental, Tax) and coverage positions. Markets are now attached. This product is Increasingly being II. under the tax covenant, and having to looking at more complex risks and used in deals across CEE and in Czech deals III. under an indemnity in respect of a known jurisdictions in order to gain market share. in particular. issue. As the product becomes more commonly The demand for using W&I has risen due to a Specific known issues such as tax or litigation used, claims data is starting to emerge from combination of factors. In particular, prices may also be covered by the W&I market with the market. AIG recently published their claims have decreased to a level where the insurance a separate policy. data noting a claim on 11% of policies written is seen as a very attractive option, the process Exclusions to the W&I policy include secondary in EMEA. The most common breaches were has been streamlined with most London teams tax liabilities, transfer pricing, environmental around financial statements, tax, contracts, having former corporate lawyers underwriting exclusions and construction defects. IP, and employee and litigation warranties. the risk, and knowledge of the existence Increasingly, clients are turning to other Interestingly, over 50% of claims arose of such insurance has increased, with law firms London markets to cover risks that that are not in the first 12 months of a policy being written. pushing the option to their clients as a viable covered by the W&I market. Pricing for W&I policies ranges from 1% to 3% deal tool. Policies can be held by either the buyer or of the limit purchased with underwriters The purpose of W&I insurance is to wrap the seller, but it is far more common for looking at the quality of DD, type of asset, the transactional risk in a policy so as the buyer to hold the policy. The benefit of jurisdiction and the transaction size to price to eliminate, or minimise, the impact a buy-side policy is that in the event of a claim, the risk. Real estate deals are now being priced of the liability on the parties to a sale and the buyer will be reimbursed directly by the as low as 0.75%, whereas IP-heavy software purchase agreement. The scope of coverage insurer, rather than the seller, for any covered companies would be priced at the higher end is determined by the issues in a particular financial loss under the contract, as a claim of this scale. transaction; therefore, each policy is bespoke that would have been against the seller will RENOMIA works in conjunction with Lockton in order to address those issues and implement now be against the insurer. This gives the buyer Transactional Risks team in London to gain the necessary cover. certainty that if any of those warranties they access to the London market. The policy fills the “warranty gap” in cases have relied upon are not correct or are even where sellers either: fraudulent, the policy will respond (assuming Vojtěch Toman I. are not prepared to provide warranties (e.g. a risk has not been specifically excluded). International Department Account Manager PE houses or family sellers) A seller-side policy would mean the buyer Renomia
22 I CZECH FOCUS Merck Hyundai Sharp Toyota Motor & Peugeot Škoda Auto Manufacturing Dohme Citroën (Volkswagen Czech Automobile Group) Zentiva (Sanofi- Novartis Aventis) Bosch Foxconn Interpharma (Otsuka Group) Precision Cast Parts
TEVA GE Aviation
Denso Panasonic Daikin AERO Vodochody
Lonza Honeywell Bang FEI Bell & Czech Helicopter Infosys Olufsen Life Republic Automotive (Textron) sciences
BASF Electrical SAP Pegas Aerospace Engineering Accenture Nonwovens
Nano AGC technology Business & support Spolchemie Advanced services IBM materials Selected clients DHL Tieto of AFI members Black Netsuite & ICT Engineering Decker
Hotel Food & Ingersoll Microsoft Sector Leisure Rand Banking Ness & Chemical ABB Czech Financial Industry services Merck Sharp Siemens & Dohme
Oracle PPF Nestlé Penta Hotels Pepsi
Hilton Pilsner Hotels Urquell
Shell Raiffeisen
Mandarin Coca-Cola Oriental BNP Johnson HBC Paribas Citibank Unilever & Johnson Barclays Unipetrol
CZECH FOCUS I 23 Questions & Answers
At what level is protection of intellectual property in the Czech Republic?
According to the conclusions of a recent report Republic is a party to all major international of intellectual property rights include the Czech (2014 Special 301 Report) issued by the Office agreements in the area of protecting intellectual Trade Inspection Authority, the Police of the Czech of the United States Trade Representative, which property. It is also a member of and closely Republic, the courts and the state prosecutor’s monitors the protection of intellectual property cooperates with the World Intellectual office, as well as the Customs Administration rights in individual countries, the Czech Republic Property Organisation, the European Patent of the Czech Republic, which is actively engaged ranks among the nations where such rights Organisation and the European Union in the fight against counterfeiting and piracy. are well protected. Protection of intellectual Intellectual Property Office (previously known The customs authorities are authorised to take property rights is indisputably important as the Office for Harmonisation in the Internal action against goods that are suspected of being for the Czech Republic, as it is a significant Market until 23 March 2016, when Regulation in violation of intellectual property rights and indicator of the country’s level of development, of the European Parliament and of the Council to enable protection of such rights for the holders as well as a motivational element for foreign (EU) No. 2015/2424 of 16 December 2016 came thereof. Thus, in answer to the initial question, investors. A high degree of protection of into force). Institutional protection of intellectual it can be confidently stated that the level of intellectual property rights is ensured in the property rights is ensured in the Czech Republic protection of intellectual property rights is very Czech Republic by legislation which is regularly primarily by the Industrial Property Office, high in the Czech Republic. amended in connection with developments and which is the country’s fully functioning patent Lenka Macáková needs in the area of strengthening the rights and trademark authority. Other authorities Attorney, Konečná & Zacha of intellectual-property owners. The Czech and organisations involved in the protection [email protected]
What is the attitude of Czech employees toward Korean employers?
Over the past decade, Korean companies this model of cooperation was difficult to accept, experience and the possibility to gain detailed have collectively become one of the leading especially in the initial years of employment. insight into the given company’s processes and employers in the Czech Republic. In the early Today, however, employees at all levels in the culture. years of cooperation, it was necessary Czech Republic especially value the opportunity With Korean companies having been active to mutually understand and clarify cultural to work with state-of-the-art technologies and on the Czech market for a number of years, conditions, especially in the system of company to benefit from sophisticated training systems the cultures have gradually grown closer and management and in setting up processes. and career growth. Korean employers welcome those companies have become sought-after For Korean companies and other Asian the outstanding technical education of the and respected employers. Korean investors are employers, there is typically strict hierarchisation Czech employees, their approach to ongoing seen as stable partners that offer long-term in management structures, long-term improvement and their willingness to learn new employment and room for professional and relationships with employees and emphasis processes. A very important aspect for both personal growth. on loyalty. For many employees accustomed parties is the mutual sharing of experience and Petr Vidmar to more active involvement in the company’s temporary assignment of workers to parent Permanent Placement Director, ADECCO management and a more dynamic career path, factories, which gives employees unique [email protected]
When and how should an investor start to “communicate”?
There is no doubt today that every company It is advisable to engage a PR agency far Today PR work involves far more than merely needs a way to communicate. For foreign in advance, in the phase when the investment is communicating with the media and ensuring investors entering a new market where being decided. It is better to forestall potential the greatest possible number of positive they do not currently have any ties, it can “communication noise” rather than to deal with mentions in the media. The action radius be difficult to decide when to begin with active it later. If the agency has enough time, it can, of a quality PR agency is much broader communication, who to entrust it to and how for example, identify sensitive issues in advance than that and includes all stakeholders and much to invest in it. and recommend steps that the investor should a considerable portion of public-affairs activities. Usually, negotiations are first conducted with take with respect to those issues. A typical An experienced PR agency is able to ensure local authorities, institutions and potential example of this is the situation when a new that all interested parties – including public investors over the course of long months via company enters a closed local community that institutions, local authorities and, for example, attorneys and other advisors. Investors often is not completely familiar with the investor’s political parties – receive relevant information do not even think about PR work at this time, project, which can give rise to rumours and that evokes a feeling of common interest. The nor do they have a budget for it. Only when false impressions. It is the job of PR consultants sooner such communication begins, the better. everything regarding the investment is more to recommend how to communicate with Such an approach is one of the prerequisites or less clear does an investor start to look for the local population, as well as with the local of every investor’s economic success. someone who can secure the new company’s authorities and interest groups, and how Jan Klíma (positive) image in the media and among the to present the company in relation to its Managing Director, AC&C Public Relations relevant target groups. competition. [email protected]
24 I CZECH FOCUS Questions & Answers
How can investors hedge against currency risks in the Czech Republic?
The Czech Republic is a small and very open and naturally involve currency risk. This risk The last option is not to hedge against currency economy where growth is primarily driven could be hedged by linking expected rental risk. Typical examples are companies where by foreign trade. As the Czech Republic is not part income to the euro and making loan payments several currency risks are present. These of the eurozone, foreign investors are exposed in the same currency. In the automotive companies most likely hedge against only to currency risks. However, not all such risks are industry, a significant part of the supply chain is the main currency risks and ignore the remaining necessarily material for each company. It is up denominated in euros to minimise currency risk ones. However, with the expected appreciation to management to analyse the impact of currency and the cost of currency conversions. of the Czech koruna following the termination risks on a company’s cash flows, reflect the results The second option is the use of financial of the Czech National Bank’s currency intervention in the risk management strategy and, if relevant, instruments. This type of hedging is typical regime, which is expected in 2017, FX hedging hedge against them. for companies that are able to predict their cash will start to be at the top of financial managers’ There are several ways to hedge against currency flows. There is a developed FX derivatives market agendas. risk. The first option is the natural hedge, which in the Czech Republic which allows efficient means matching cash flows directly in foreign hedging against most of the major currencies Ľuboš Briatka currency. Large real estate projects in the including complex structures involving exotic Manager, Deloitte Czech Republic Czech Republic are usually financed in euros derivatives. [email protected]
Location strategy: electronics manufacturing hotspots in the Czech Republic Interview with Jaroslav Kaizr, Business Director, CTP
Why should electronics Lease vs. freehold, which is better for me? in Germany, EUR 34.60 in France and EUR 22.30 manufacturers choose Electronics manufacturing often involves in the United Kingdom. the Czech Republic complex processes and more often than over other parts of not requires a complex space solution. How much will an A-Class facility cost me? the world or other CEE Fortunately, CTP has the know-how to smartly The price per square metre for a production/ countries? accommodate such requirements, which warehouse facility in the Czech Republic The Czech Republic is vary from super-stable anti-static flooring for compares favourably with that in Western a modern electronics hub based precision engineering to movable partition Europe. The number of ecologically friendly on many years of tradition, a solid educational walls to cater for seasonal overflows and buildings is also on the rise; the number system and strategic location. These days, production peaks. CTP remains the owner and of BREEAM-certified assets in the Czech the electrical engineering and electronics sector manager of the buildings we develop, which Republic stands upward of 60, which is more employs nearly 180,000 people and accounts for allows our clients to concentrate on their core than in other CEE markets such as Romania, more than 14% of Czech manufacturing output. business. Hungary and Slovakia. Investors are increasingly looking for ways in which to lower their What are the location hotspots in the Czech What about the labour pool, specifically ecological impact; since 2011, all CTP buildings Republic and centres of excellence? for the electronics industry? are built to BREEAM standards. The CTPark Network is home to many investors Labour costs in the Czech private sector stand from a number of fields, ranging from electron at 38% of the EU-28 average. Nevertheless, Industrial facility: Industrial facility: microscopy and robotics to consumer the main benefit of the Czech Republic consists primary locations secondary location electronics. Approximately 15% of CTP’s client in the excellent cost-quality ratio of the country’s EUR 4.25/m2 EUR 3.75/m2 portfolio comes from the electronics sector. highly educated and skilled workforce. This is Within our Czech portfolio, a number of locations especially relevant in comparison to other CEE How long will it take to build a facility? have emerged as preferred destinations for countries. Over the past five years the average CTP can construct and hand over a building electronics investors, such as CTPark Brno, which annual wage has risen by roughly 13%, though typically within nine months, which includes is home to electron microscope manufacturer FEI from a much lower base compared to Western all preparation, tendering and permitting. and hardware producer Acer, and is a key R&D Europe. For bespoke buildings, what we call our CTFit location for Honeywell. CTPark Plzeň in the west According to Eurostat’s data from 2014, solution, it might take a little longer depending of the country is an attractive location for both the Czech Republic’s labour costs remain very on the scope. However we have all designers manufacturing of electronic goods (China’s competitive in the EU. The Czech Republic can and engineers in-house, which dramatically Hisense recently took over 10,000 m2 space offer average labour-cost savings of 40% to 60% speeds up the process. For our standing in CTPark Plzeň) and as a logistics hub. Long- in comparison with costs in Western Europe portfolio, move-in time is much shorter and will term CTP client TechData operates a 50,000 or the United States. For instance, in 2014 depend entirely on the required interior fit-out m2 distribution centre in CTPark Bor, just a few the Czech hourly wage in the manufacturing and placement of machinery, which we can also kilometres from the Czech-German border. sector was EUR 9.40 as compared to EUR 31.40 assist with.
CZECH FOCUS II 25 Living Czech The Czech Republic – beer superpower
If there is anything that Czechs truly love, it’s beer and ice hockey, ideally in combination, either in a comfortable armchair in one’s living room or with friends at a favourite pub. In short beer is an essential part of Czech culture, an assertion that is backed up by the numbers.
nassailable supremacy the communist government For the past several years, the Czech Highest annual beer of the former Czechoslovakia Republic has held a big lead in beer consumption per capita nearly doubled the price of beer. U drinking, with annual per-capita Though this measure did not consumption totalling 143 litres, thus regularly 1. Czech Republic: 143 litres last one year, the communist surpassing the second-place Germans with 110 2. Germ any: 110 litres regime fell five years later litres and third-place Austrians with 108 litres, (which, of course, was not due 3.Austria: 108 litres according to data released from Euromonitor to the price of beer). Since then, International in 2014. 4. Estonia: 104 litres beer prices in the Czech Republic 5. Poland: 100 litres have remained relatively low. Home of Pilsner beer 6. Ireland: 93 litres Beer is still cheaper than bottled The world’s first golden beer brewed using water in a number of restaurants. 7. Romania: 90 litres the aging method was produced in the Czech Because of the low profit margin, city of Plzeň in 1842. With its rich colour and 8. Lithuania: 89 litres Czech breweries must focus bold, delicious flavour, this high-quality bottom- 9. Croatia: 82 litres on exports, from which they earn fermented lager subsequently captivated not 10. Belgium: 81 litres income for further investment. only other Czech cities, but also the whole world. Therefore, in 1859 the local Měšťanský Source: Euromonitor International, 2014 Early history pivovar (Municipal Brewery) registered the first As far back as the Middle trademark for “Pilsner Bier”, which is still Ages, the Czech Republic was the dominant type of beer in the Czech Republic Special types of beers comprise only a small destined to become a brewing superpower. and around the world to this day. The success fraction of production and thus also comprise Hops, the basic ingredient in beer, had been of Czech beer is due to the local hops and malt, the province of small breweries and brewpubs, grown here since the year 869. That this which over time became significant export which are now on the rise in the country. Other ingredient was highly valued is apparent commodities. In 2008, beers made in the Czech than “classic” beer, the product lines of these in the fact that King Wenceslas proclaimed that Republic were granted the “Czech Beer” breweries include non-alcoholic and light beers the death penalty would be imposed on anyone geographic designation, which introduced as well as flavoured beers. There are currently who was caught exporting hops vines from clear and strict rules pertaining to the location, 353 breweries operating in the Czech Republic, which new plants could be grown. The main methods and ingredients used in brewing Czech of which 45 are industrial-scale producers and area for cultivating hops was the Žatec district, beer. 308 are minibreweries. which features clayish red soil that maintains Czech beer is highly valued beyond the proper moisture level and hills that protect Czechs drink only Czech beer the country’s borders. This is evidenced hop fields from strong wind and rain. Czech beer lovers are very conservative and thus by the fact that a full range of breweries The oldest Czech tradition of brewing is mostly hang on to the established Czech brands around the world use recipes according that of the Břevnov Monastery, which was for which this country in the middle of Europe to Czech brewmasters and Czech hops. Czechs established in 933. During its consecration, is known around the world. New brands find themselves often refer to their local beer as the bishop allegedly had to prohibit the monks their way into the hearts of Czech beer drinkers “liquid bread” and praise its healing effects. from making beer because they focused more only with great difficulty. This is apparent on preparing and drinking it than on their flock. in the insularity of the Czech beer market, where Always low prices The oldest written record of beer production is imports account for only 1% of consumption. The famous Czech writer Jaroslav Hašek once a foundation charter issued by King Vratislav II Czech breweries mainly produce draft beers said that a government that raises the price in 1088 for the cathedral at Vyšehrad, in which and the aforementioned traditional lagers. of beer would fall within a year. In 1984 the king grants a tithe of hops to the canons.
26 I CZECH FOCUS Living Czech
Pilsner Urquell and Budweiser – the most local beer soon earned the brewery global firm Duvel Moortgat acquired a 50% stake famous Czech beer brands renown. The company registered the “Český in the Bernard brewery in 2000. However, Local innkeepers opened the new Měšťanský budějovický granát”, “Budweiser bier” and Bernard continues to produce its traditional pivovar in Plzeň in 1842. And it was here that “Budbräu” trademarks in the 1920s and, in 1930, pale, semi-dark and special dark beers, which the aforementioned Pilsner beer was born. the “Budvar” trademark, which it still uses are not pasteurised. Another brand worth trying Its creator was the brewmaster Josef Groll, today. The company later became involved is Lobkowicz, which is one of the oldest Czech who invented the new bottom-fermentation in disputes over the use of certain trademarks beers, as the brewery was established in 1466 method. However, other Plzeň breweries with the American company Anheuser-Busch. and belongs to the noble Lobkowicz family. benefited from the “Pilsner Bier” trademark and, As a result of these disputes, Budvar beer is sold Apart from those previously mentioned, furthermore, the general customs authority under the name “Czechvar” in North America. the Czech Republic is home to a large number in London created the designation “Pilsner Beer” Conversely, the Anheuser-Busch InBev concern of outstanding beer brands. The historical referring to a particular type of beer regardless is not allowed to use its key “Budweiser” brand development of Czech brewing, the quality of its place of origin. Therefore, the Plzeňský in nearly seventy countries. of Czech ingredients, the diligence and Prazdroj – Pilsner Urquell trademark was expertise of Czech brewmasters and perhaps registered in 1898. Today Plzeňský Prazdroj Other Czech breweries even the lack of investment in modernisation is the leading brewery in Central and Eastern Excellent local breweries can be found during the communist era have ensured that Europe. The company exhibits at the biggest in nearly every region of the Czech Republic. the traditional processes and recipes have been expositions and is the biggest Czech beer Furthermore, a number of new microbreweries preserved. Czech beer still retains its original exporter with its products sold in nearly fifty and brewpubs have recently been established. flavour, which is best experienced in the spring countries around the world. The only microbrewery to have survived or summer at a restaurant with a garden and A similarly famous Czech brewer is Budějovický the communist regime is U Fleků in Prague, view, ideally in combination with a light snack Budvar, whose predecessor was Český akciový which is also the oldest Czech brewery with or traditional Czech meal such as pork with pivovar in České Budějovice. This purely Czech a continuous history, dating back to 1499. sauerkraut and dumplings or sirloin in cream brewery was established in 1895 and built Originally established in the sixteenth century sauce. on the local historical tradition of brewing beer, and revived in 1991, the family-owned Bernard which dates back to the thirteenth century. brewery in Humpolec was the first private Iva Fialová The high quality and outstanding flavour of the brewery opened after 1989. The Belgian Czech Focus
Poultry paté, apricots and hazenuts - try it with fantastic Czech beer!
Taste a Czech treasure veal tartar with homemade mayonnaise. Veal is also the foundation of other Czech dishes, Beer is the national beverage of the Czech from Plzeň even has proven medicinal effects albeit with Viennese roots. Marek Šáda crafts veal Republic, and it’s no wonder that it goes and helps to digest hearty Czech food. schnitzel as veal filet mignon in triple breading perfectly with traditional Czech cuisine. Czech cuisine is the legacy of our ancestors. and serves it with potatoes, pickled carrots and Brewed in various forms throughout the country It contains primarily meat, dumplings, chive mayonnaise. The essence of Czech cuisine since the Middle Ages, beer has long since potatoes, cabbage and mushrooms. You can is found in slowly roasted duck with cabbage become a part of everyday life in the Czech try it in any pub, but the real experience lies and potato dumplings. In a dish for the new Republic. A revolutionary act was that carried in the quality of fine dining. At the Mlýnec millennium, imagine confit of duck leg cooked out by an association of Plzeň residents who restaurant, Chef Marek Šáda prepares Czech over seven hours with foam of red cabbage built the Měšťanský pivovar (Town Brewery) dishes using modern methods with respect and baked potato gnocchi on butter. A pale in that city in 1842. Brewing technology also to careful selection of ingredients from local beer enhances every bite and, at the same time, underwent a change during that period, as beer suppliers and healthy living. The atmosphere leaves you room for dessert. began to be brewed using Bavarian-type bottom of the Medieval building above the Vltava is fermentation instead of top fermentation. enchanting. From the terrace, you can enjoy Find more on: Therefore, the people of Plzeň invited a Bavarian the view of the 600-year-old Charles Bridge www.mlynec.cz brewmaster to the new brewery and Pilsner with Prague Castle in the background. With Restaurace Mlýnec Urquell soon became the paragon of Czech beer, its mildly bitter flavour, draft Pilsner Urquell Novotného lávka 9, Prague 1 the ideal of colour, taste and aroma. The lager perfectly accompanies fresh, lightly smoked Telephone: +420 277 000 777
CZECH FOCUS I 27 Expats Speak
Michael Mullen post-European integration. I also appreciate Museum, a concert at the Týn Theatre in PwC Legal that the population of business leaders is Prague, Prague Castle on an early Monday Partner ? small and it is relatively easy to orient oneself morning, Prague Zoo, the Prague Metro. among them. It is probably the dynamism and “It is probably the dynamism and changing nature of business here that I enjoy About my company changing nature of business here that the most. On a personal level, I also appreciate PriceWaterhouseCoopers Legal is a leading I enjoy the most. ” that Prague offers a combination of interesting Czech law firm with offices in Prague, Brno and culture and business, with the ability to escape Ostrava. Globally, we cover 87 countries and What do you like most about living the city easily into beautiful countryside. employ more than 2,500 lawyers. In the Czech in the Czech Republic? Republic, we cover all services required I’ve lived here now for half my life (25 years), What was the most surprising for you? of a top local law firm, with the professionalism so what I have liked about the Czech Republic Not much surprises me anymore. and integrity required? of an international has changed over the years. Initially it was organisation such as PwC. We also offer our the vibrant social and business environment What is your favourite Czech food? services at a fair “local” price, with a significant (post-revolution social changes, privatizations, Duck with dumplings and red cabbage! discount from what you would expect fast developing business) and the beer of from a global law firm focusing only on legal course. This has changed into an appreciation What would you recommend to visit services. We speak multiple languages and are of good wine and watching and participating in in the Czech Republic? experienced with multinational projects and the development of local expertise and capital, Terezín, a local pub in the middle of nowhere, the sometimes complicated international legal ?and seeing the effects of pre-European and the Šumava Mountains, the Czech Technical issues related to such projects. Hee Seok Kim very surprised by the taste of beer, especially corporation in 2006, Le Mars Group has been CEO Plzeňský Prazdroj. In Korea, I have never taste providing comprehensive industrial solutions Le Mars Group as delicious as this. for our clients worldwide. We have three main areas of business. The first one is construction. “I really enjoy seeking out What is your favourite Czech food? We are able to help our customers attractive opportunities to develop What I like is guláš with dumplings and beer. with everything then need from A to Z. businesses with new Korean investors I have also tried other Czech foods, such as We usually start with finding a proper location coming to the Czech Republic.” svíčková, vepřo knedlo zelo, etc., but guláš is and continue with the design and permit number one for me. processes. When these steps are completed, What? do you like most about living we arrange construction of the building with in the Czech Republic? What would you recommend to visit our partners. The second area of business is There are many potential Korean investors in the Czech Republic? ?focused on complete LED solutions, which in Czech Republic. So, I really enjoy seeking When Korean friends ask me this question, we provide through our professional team out attractive opportunities to develop I always tell them Old Town in Prague, as there of specialists. We initially create a simulation businesses with them. Also, I can enjoy are many historical architectural elements, like and then manage the LED installation. The last the fresh air because the Beskydy Mountains the Powder Tower, the Astronomical Clock and point//area is provision of quality-control are close to where I live. so on. services. Le Mars Group began operating in the automotive industry at? the end What was the most surprising for you? About my company of 2013. We always try to do the best for our When I arrived in the Czech Republic, I was Since its establishment as a professional customers.
Radwan Seddiqi What was the most surprising for you? About my company Executive Director I was quite pleasantly surprised how laid Starting in Switzerland more than 25 years ago, Redtoo back the people are. The next thing that we have grown into one of the most successful probably surprises most visitors to the Czech global IT consulting and service companies “I love the Czech Republic.” Republic is the fact that beer is cheaper than with offices spanning several countries. We soft drinks. are both strategic advisors and full-service What do you like most about living IT providers with comprehensive know-how in the Czech Republic? What is your? favourite Czech food? under one roof. Our customers’ core business The Czech Republic is very versatile; it is Pork with dumplings and sauerkraut (“Vepřo benefits from our optimisation of their business great for skiing (my favourite is the highest knedlo zelo”). processes and efficient implementation and mountain in the Krkonoše – Sněžka) and operation of their technology investment. Our hiking as well as family trips to many cultural What would you recommend to visit competence, reliability, precision, openness sights. Considering that it is quite tiny, in the Czech Republic? and loyalty form the very core of redtoo there is really much to see and experience Every visitor to the Czech Republic should and have allowed us to expand very quickly in the Czech Republic. It is interesting… just see the Astronomical Clock, Old Town Square in the Czech Republic, where we started with by writing this, I am reminded of how much and Charles Bridge and take a walk through a small team at end of 2012. Today, our seventy I actually love this country. For instance, the Golden Street at Prague Castle. Besides highly qualified specialists provide expertise Šumava, with its beautiful woods and Prague, must-sees are definitely Karlštejn and and services mainly in highly regulated and meadows and the River Berounka, watching the ossuary in Kutná Hora. complex technology environments of large it flow by while enjoying a family picnic enterprises from our two offices in Prague and ?on the banks. ?Brno. 28 I CZECH FOCUS ?
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