Resources of Business Sector of Czech Economy Up by a Third

Foreign Trade Has Reached a Record Surplus

The Offer of Legal Services in the CR Is Broad

Karlovy Vary Region

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Ministry of Industry and Trade

CZECH BUSINESS ■ INTRODUCTION AND TRADE Question of the Month for Milan Urban, Minister of Industry and Trade...... 4

Economic Bi-monthly Magazine with ■ a Supplement is Designed for Foreign ECONOMIC POLICY Partners, Interested in Cooperation with Success or Merely a Delay of Crisis? Tough Battle for World Trade the Czech Republic Liberalisation ...... 5 For the Ministry of Industry and Trade of the Czech Republic ■ HOW TO DO BUSINESS IN THE CZECH REPUBLIC Issued by: Resources of Business Sector of Czech Economy Up by a Third...... 7 PP AGENCY s.r.o. Myslíkova 25, 110 00 Praha 1, Czech Republic New Building Act – Several Minor Changes, Chief Principles Remain...... 10 PP Agency Company with the ISO 9001 certified quality ■ BUSINESS AND PRODUCTION management system for publishing services Foreign Trade Has Reached a Record Surplus ...... 12 EDITORIAL BOARD: Martin Tlapa (Chairman), Ivan Angelis, Zdena Balcerová, Jiří Eibel, Zbyněk Frolík, ■ INVESTMENT Jiří Havlíček, Růžena Hejná, Alžběta Honsová, Josef Jílek, Ivan Jukl, Marie Košťálová, Marie Pavlů, The Year 2005 Marks a New Record in Attracting Investment into the CR...... 14 Pavla Podskalská, Josef Postránecký, Libor Rouček, Kaleidoscope...... 34 Jiřina Semanová, Jarmila Škvrnová, Ivan Voleš

MANAGING EDITOR: ■ REGION Jana Vápeníková NUTS III – ...... 16 – 31 EDITORS: Jaroslava Bradová, Naďa Vávrová ■ SERVICES REGULAR COLLABORATORS: Eva Tomášková The Offer of Legal Services in the CR Is Broad ...... 32

TRANSLATION: ■ Vlasta Benešová, Alena Kenclová, PRESENTATION OF FIRMS Petra van Benten-Knotová, Dagmar Šímová, Daniel Thelen, Eva Vergeinerová HOTEL AMBASSADOR ZLATÁ HUSA spol. s r.o...... 20 – 21 Veletrhy ...... 35 READ: M. I. P. Group, a.s...... 36 Ivana Kadlecová, James Maxwell, Katherine McCloghry, Zuzana Pavlíčková DINOCOMMERCE, spol. s r.o., Elektro, výrobní družstvo v Bečově nad Teplou, GRAPHIC DESIGN: K.V., a.s., HEXION SPECIALTY CHEMICAL, a. s., LÉČEBNÉ Miloslav Bucvan, Helena Dvořáková LÁZNĚ MARIÁNSKÉ LÁZNĚ a.s., MARIENBAD WATERS a.s., PETERKA & PARTNERS DEADLINE: 31/01/2006 v.o.s., Richmond a.s., ROTAS Strojírny spol. s r.o., SOKOLOVSKÉ STROJÍRNY a.s.

ADDRESS: Myslíkova 25, 110 00 Praha 1 Czech Republic Phone: +(420) 221 406 623, +(420) 221 406 626 Fax: +(420) 224 934 383 e-mail: [email protected] www.ppagency.cz www.mpo.cz/eng Press run: 13.500 copies. The number of printed and sold copies of the journal is verified by auditor, HZ Praha, s.r.o., member of PANNELL KERR FORSTER Worldwide. Resources of Business Sector of Czech Economy Up It is not allowed to reproduce any part by a Third of the contents of this journal without prior consent from the editor. Attitudes expressed by the authors of articles carried by CBT need not necessarily be consistent with the standpoint of the Publisher. MK ČR E 6379, ISSN 1211-2208 „Podávání novinových zásilek povoleno Českou poštou, s. p., odštěpný závod Přeprava, č. j. 3468/95, ze dne 24/10/1995“

The Year 2005 Marks a New Record in Attracting Karlovy Vary Region Investment into the CR

3 | INTRODUCTION

Question of the Month for Milan Urban, Minister of Industry and Trade

■ one of the high-tech sectors listed as such by The Czech trade balance had shown the law or into another branch of the a record surplus last year. It has been manufacturing industry, with the proviso that the first overplus since the at least 50 % of the price of the production establishment of the independent line will be the cost of high-tech machinery Czech Republic. that the firm will purchase. It must involve the Great part of this success belongs to introduction of new production, enlargement the exporters who were granted of existing production or its modernisation. investment incentives by the Czech The investor must invest at least CZK 200 Government, that means especially car million (approx. EUR 6.72 million); in areas producers. How effective, in your with an unemployment rate at least 25 % opinion, are the investment incentives higher than the national average, the amount introduced eight years ago, from required can be reduced to CZK 150 million which firms have been able to use the (approx. EUR 3.36 million). In addition, the preferential conditions granted to proposed production must meet all Czech them so as to introduce new or to environmental requirements. The Czech modernise existing production Government offers investment incentives in facilities? several forms: a bonification of income tax for Perhaps the most persuasive reply is that the a period of 10 years, the transfer of leaders in Czech exports are firms which have technically equipped land at an advantageous used the incentives. Thanks to these price, the transfer of land under special incentives, foreign firms have brought into regulations, financial support up to CZK the country not only know-how and orders 200 million per employee (approx. EUR for Czech subcontractors, but also, and more 6.72 million), for the creation of new jobs and importantly, their contacts to foreign markets, support in the form of re-qualification or the where they place a large part of their output. training of employees. In each individual case The Czech economy, which can be it depends on the concrete agreement. characterised as a small and open economy, is strongly dependent on its export ■ performance. The nearly 250 firms (including Many incentives went into the 42 Czech firms), which have taken advantage automotive industry. Currently, of the investment incentives during the past another car manufacturer, eight years, are contributing significantly to Korea’s Hyundai, is preparing to come. the economic growth of the Czech Republic. Aren’t you afraid that the CR will We estimate that in the year 2005 alone, become excessively dependent on these firms accounted for more than 3 % of a single manufacturing branch? the Czech generated GDP, and they are Yes, indeed, the Czech export leader is responsible for nearly 15 % of added value in Škoda-Auto of Mladá Boleslav, the firm the manufacturing industry. It can be said that TPCA started up production near Kolín, and enterprises which obtained this form of Hyundai is another car factory. Although the support from the Czech Government, are automobile industry has a great influence on showing a productivity level twice as high as the Czech economy, it nevertheless accounts the Czech average is. In addition, large for only 18 % of total revenues from foreign firms, which came to the CR just industry as a whole. I think that investments MORE AT: because of the incentives, are establishing in the car industry are effective. In addition, long-term contacts with Czech a large share of this production goes to the www.mpo.cz subcontractors. This is also a very valuable credit of Czech subcontractors, who make consideration which we must bear in mind. deliveries to car factories all over . www.czechtrade.cz Therefore, the benefit of the incentives must And this is not the only argument. Another necessarily be assessed positively. reason, for example, is the fact that car www.ceb.cz making has been one of the most long-term ■ globally stable sectors. Compared with www.egap.cz What are the conditions that must be electrical engineering and electronics, met to obtain investment incentives? for example, it is showing minimum www.export.cz There are a lot of such conditions. In brief, the fluctuations. And capital investments in the investment must go into the manufacturing sector are so intensive that they always industry. Specifically, it must go either into involve long-term projects.

| 4 CZECH BUSINESS AND TRADE

Success or Merely a Delay of Crisis? Tough Battle for World Trade Liberalisation

The 6th Ministerial Conference Moreover, the text of the draft the talks on the Doha Development of the World Trade Organisation Declaration was changed in the Programme. The use of the "Swiss second half of the conference to the formula" for line-by-line liberalisation was (WTO) in Hong Kong in detriment of European Union interests so confirmed, agreement on its coefficients mid-December 2005 was markedly that it jeopardised its adoption. was not reached, however. This formula is expected to reach an agreement Only intensive efforts by European of a non-linear nature and therefore Commission negotiators and professionals lowers progressively higher tariffs and on full negotiation’s modalities, from the member countries towards the eliminates significantly high customs which would considerably very end of the conference gave the tariffs and tariff peaks. Suitable accelerate the completion of the Declaration a shape at least partially coefficients must be used in order to Doha Development Round of acceptable to Europe. achieve this. And so, the debate on the number of these coefficients, their values, WTO talks. But failure to agree ■ GREATER PROGRESS and to which groups of countries they will on many basic approaches to IN AGRICULTURE THAN apply will continue in Geneva. The the topics of negotiation became IN SERVICES Declaration includes a new paragraph evident as the date of the The key issue of the talks was again concerning "sectoral initiatives", however, agricultural reform in the World Trade in the context of overall liberalisation the conference drew nearer. Organisation, focusing this time on the Czech Republic considers these merely Under these circumstances the part concerning export competition. a supplementary element. conference was threatened with Agreement was reached in the final text, Some of the developing countries led determining that WTO member countries by Brazil, India, and the Republic of South failure that would have harmed would eliminate all forms of export Africa associated in the NAMA 11 group the credit of the World Trade subsidies by the end of 2013 at the latest, and pushed through into the Declaration Organisation and confidence and the majority of them by 2010. Under a completely new text on the balance in the multilateral system of preferential treatment, developing between Agriculture and NAMA. This was countries will continue to benefit these in fact the first mention of a link between world trade as a whole. And instruments for the next five years after the two areas. No detailed talks on this so ambitions were lowered these dates. Talks will immediately follow balance had been held until then and its and partial progress accepted in Geneva on the precise definition of advocates did not present a deep analysis. as beneficial in order to enable specified forms of export subsidies, such Future negotiations will show the extent as export credits or export guarantees and of influence this principle will have on progress. However, there were safeguards, the functioning of exporting overall multilateral talks. The protection of still some expectations that the state trading enterprises and procedures agricultural and non-agricultural product presence of ministers responsible in the granting of food aid. Consensus markets has undergone varied was not reached on modalities on other development, and many of the for trade would allow the agricultural matters, namely access to the instruments used in the two areas are not achievement of better results. market and domestic support. Progress entirely comparable even today. This was not the case. The threat was made in all areas of talks on the On the initiative of the European Union, of a failure was averted and cotton trade, which is particularly sensitive noticeable improvement was made in for some of the least developed African trade in products originating in the the ministers agreed on countries. poorest, least developed countries. The a Declaration, which enabled We were striving for some ministers approved an opening of their the continuation of talks in the improvement in the agenda of trading in markets for goods coming from these Doha spirit, however progress services - new objectives, approaches, and countries. By 2008, all developed schedules for talks were suggested in this countries, and the developing countries was made only in a few areas. area in a supplement to the Declaration. declaring themselves in a position to do so The influence of the atmosphere However, it became evident during the will introduce duty free and quota free of Hong Kong, this motor conference that this outline was not market access for the mentioned goods. acceptable for a number of the developing They will have the right to exclude of East Asian trade with its countries. Following complicated talks, sensitive products from this process to an liberal attitude to trade, the relevant annex was allowed to remain extent of 3% of the volume of imports. was not strong enough to bring a part of the Declaration although in Talks will continue to simplify and increase about a decisive turn. a rather compromised form. Nonetheless, the transparency of rules of the origin of even this version safeguards the future goods for these imports, possibly to allow possibility to promote European interests. some forms of cummulation of origin.

■ NAMA BRINGS ■ THE CZECH REPUBLIC DISAPPOINTMENT PREFERS EXTENSION OF GL’S The outcome of talks on the further No significant progress was made in liberalisation of trade in non-agricultural negotiations on other agendas of the draft products (NAMA) was not entirely Declaration. On the whole, the Czech satisfactory in view of Czech priorities in Republic is satisfied that consultative

5 | ECONOMIC POLICY

Pascal Lamy, Director General of the World Trade Organisation (WTO) on the left, and John Tsang, Secretary of Commerce, Industry and Technology of the Hong Kong Special Administrative Region (in the middle) process related to the extension of the trade facilitation, and trade and elements of the multilateral rules of trade, protection of geographical indications are environment). The decisive date for the and trade and the environment. Achieving expected to be intensified. The Czech achievement of progress will be July 2006, a balance in the final result, i.e. a balance Republic seeks this protection for beer. We when the General Council adopts between the real opening of the markets would welcome greater progress in several conclusions for further steps on the basis of partners and the creation of new other areas, such as matters relating to of results for the first half of the year. possibilities for Czech exports, will be of trade and the environment, the trade key importance. facilitation, and negotiation of multilateral ■ PRIORITIES OF THE CZECH The forthcoming Geneva talks are rules. However, the agreed formulations REPUBLIC FOR COMING expected to be very complicated and make this progress possible in the near NEGOTIATIONS tough in view of the approach of partners. future. The Czech Republic will remain active in Although these multilateral talks have As indicated, progress was very limited the coordination talks of the European a clearly pro-development character, the when dealing with concrete issues. Union in harmony with its liberal approach results must benefit all partners and not However, this did not prevent ministers to continuing world trade liberalisation. only the developing and least developed from including in their Declaration As a landlocked country with negligible countries. a number of tasks and especially dates for mineral resources, it is dependent on continued talks in Geneva. The deadline manufacture and thus on the open for agreement on modalities in agriculture markets of partners and on new export and NAMA, i.e. end of April 2006, is possibilities. Its priorities remain the especially tough. A similarly short period liberalisation of trade in non-agricultural František Peer was set for talks on services. On the products and services, the extension of the Department of Multilateral Trade Policy contrary, it seems that no similar schedules protection of geographical indications and Common EU Trade Policy were set for the other agendas broader additional protection of Ministry of Industry and Trade (particularly the multilateral rules of trade, geographical marking, and certain (e-mail: [email protected])

| 6 CZECH BUSINESS AND TRADE

Resources of Business Sector of Czech Economy Up by a Third

At the time of the founding of The business sector of the Czech industry equalled CZK 1478.3 billion the independent Czech Republic economy, that is, all legal entities (approx. EUR 46.3 billion). Of this volume, and individuals subject to double-entry shareholder capital totalled CZK 536.3 (1993) and in the years of accounting with the exception of banks, billion (approx. EUR 16.8 billion), including transformation to a market had at the close of 2004 resources in their CZK 537.4 billion (EUR 16.8 billion) in basic economy, Czech businesses balance sheets amounting to CZK 6748.4 capital. The fact that the aggregate basic billion (approx. EUR 212 billion.) and capital of businesses was in fact higher suffered from a lack of capital – shareholder capital amounting to CZK than the volume of their shareholder naturally, the governing element 2 800 billion (approx. EUR 88 billion). Yet capital reflects the fact that the business of their balance sheets were in 1997, the share of resources of domestic sector in the processing industry was not foreign resources in the form businesses in the total volume of resources profitable in 1997. of the entire business sector was almost Despite an increase of almost half of bank loans. This has, however, 70 %. The significance of this sector to the a billion over the seven-year period, the changed. Over the last seven Czech economy was therefore no longer processing industry has failed to years, the business sector in the dominant, it was, however, still strong. strengthen its relative share in resources Czech Republic has undergone Seven years later, their share decreased to among other branches of the economy – a mere 51.5 %. this has remained almost unchanged: a remarkable recovery and the At the same time, the volume of whilst in 1997 the total resources of volume of resources available shareholder capital for the sector of businesses in the processing industry for entrepreneurship has domestic businesses as a whole decreased accounted for 28.4 % of total resources of less in the years 1997-2004 than their total the entire business sector, in 2004 this increased by almost a third. resources, which is a positive trend that share was 28.2 %. In 2004 their In 2004, businesses had at their reflects the growing capital resources of shareholder capital exceeded CZK 857 disposal overall resources domestic businesses. billion (EUR 26.9 billion) and was 1.6 times (in total liabilities) amounting This circumstance is one of several other higher than in 1997. At the same time, significant structural changes – besides the total resources in the processing industry to almost CZK 7 000 billion mentioned transfer of resources to the increased just 1.3 fold. The processing (approx. EUR 233 billion), over sector of businesses under foreign control, industry has thus improved its share in 40 % of which were accounted shareholder capital has increased capital resources, the gap between it and for by shareholder capital. An throughout the entire economy and in other sectors of the economy has not, domestic businesses in particular. The however, increased any further. analysis of the years 1997-2004 volume of granted bank loans has also shows that during the specified decreased significantly, expressed both as ■ INDUSTRY LAGS BEHIND period, this share did not further an absolute figure and as a share in the IN GROWTH OF RESOURCES foreign resources in the balance sheets of The greatest dynamics of growth of total increase substantially. Great businesses or as a share in the overall resources was noted in a sector that shifts were, however, noted resources available to the business sector. encompasses, according to the NACE in an unprecedented growth of classification, activities related to real the capital resources of domestic ■ DOMINANCE OF estate and lease of property, computer PROCESSING INDUSTRY technology, research and development as businesses. Nevertheless, the The share of the processing industry in the well as other entrepreneurial activities – its greatest structural change that economy of the CR measured by the total resources totalled CZK 1 404 billion ( EUR has occurred in the business of own and foreign resources (CZK 1 901 44 billion) in 2004 and were 81 % higher sector of the Czech economy billion in 2004, i.e. approx. EUR 59.6 that in 1997. Domestic businesses in this billion) remains the highest. The same can sector had at their disposal resources has been the huge shifting be said of the sector of domestic amounting to CZK 613 billion (EUR 19.2 of resources to the sector businesses operating in the processing billion). of businesses under foreign industry, which has, however, seen a great The NACE-defined "Activities related to reduction of resources – firstly due to the real estate and the lease of property; control and the subsequent transfer of businesses under the ownership entrepreneurial activity" thus comprise effects of their utilisation. of foreign companies and secondly due to a very colourful variety of activities, the the closure of companies and higher most significant of which, by volume of efficiency with which resources are put to resources, are activities related to real use. estate – in 2004 businesses operating in In the sphere of businesses across all this area had at their disposal balance institutional sectors (statistically, under the sheet resources amounting to CZK 885.9 categorisation of the system of national billion (approx. EUR 27.8 billion), CZK accounts, these include "public 314.6 billion (EUR 9.9 billion) of which was enterprises", "private national shareholder capital. The increase here in enterprises" and "private enterprises comparison to 1997 was indeed huge – in under foreign control") in 1997 the total particular, however, in aggregate amount of resources in the processing resources, which increased 2.3-fold during

7 | HOW TO DO BUSINESS IN THE CZECH REPUBLIC

The weight of the manufacturing industry in the Czech economy remains highest measured by its own and foreign resources (CZK 1.901 billion in 2004, i.e. approx EUR 59.6 billion) this short time, which is the most in ■ NO BUSINESS IN RESEARCH Development", which are very low, comparison to other sectors of the Czech AND DEVELOPMENT amounting to CZK 6.739 billion in 1997 economy (according to NACE The stagnation of the very weak resources (approx. EUR 0.211 billion) have further classification). Shareholder capital also of the underdeveloped business sector that shrunk, totalling CZK 6.665 billion (approx. increased significantly in comparison to deals independently with research and EUR 0.209 billion in 2004). From the other sectors (1.4 fold), however, in development in the CR is alarming. The structural aspect, it is interesting to note comparison with the afore-mentioned existing volumes of overall resources of the an increase in resources of domestic dynamics of the aggregate resources of NACE section entitled "Research and research and development companies, businesses operating in real estate, this growth was significantly lower. It has TABLE 1: SHAREHOLDER CAPITAL OF DOMESTIC BUSINESSES AND ALL resulted in a decrease in capital resources. BUSINESSES (EXCEPT BANKS) FOR THE PERIOD 1997-2004 The development of the resources of businesses operating in computer NACE section All businesses Domestic businesses technology serves as evidence of the fact in the CR in the CR that businesses under foreign control are Shareholder capital/ Shareholder capital/ swiftly occupying positions on the market. total liabilities total liabilities Their growth was significantly higher 1997 2004 1997 2004 (+460 %) than that of the aggregate for A Agriculture, hunting, and forestry 56.4% 68.1% 41.6% 55.3% this sphere of the "new economy" B Fishing, operation of fish hatcheries and related activities 33.2% 67.0% 56.6% 73.5% (+230 %). Overall, however, the volume of C Mining and quarrying 67.6% 68.3% 64.6% 74.3% resources (CZK 50.8 billion in the 2004 – D Manufacturing 36.3% 45.1% 35.9% 45.4% approx. EUR 1.59 billion) as well as the E Electricity, gas and water supply 59.0% 59.0% 57.8% 59.0% volume of shareholder capital (CZK 17.8 F Construction 20.5% 29.6% 20.6% 29.5% billion – EUR 0.56 billion) is lower in this G Wholesale and retail trade; repair of motor vehicles, area than in the real estate sphere or in motorcycles and personal and household goods 16.0% 31.5% 15.9% 31.0% other areas of entrepreneurial activity that H Hotels and restaurants 13.9% 20.3% 13.5% 25.6% are included in this NACE sector. Shifts in I Transport, storage, and communication 65.5% 63.1% 35.3% 57.1% the volume of total resources (to CZK 430 J Financial intermediation 39.7% 12.7% 43.0% 14.3% billion in 2004 – approx. EUR 13.5 billion) K Real estate, renting, and business activities 47.4% 43.7% 51.1% 52.2% and of shareholder capital (to CZK 267 L to O* 38.4% 44.9% 43.0% 42.4% billion – approx. EUR 8.4 billion) in the C+D+E 55.3% 47.9% 41.6% 50.1% "other entrepreneurial activity" area A to O 40.8% 41.4% 37.7% 44.3% clearly reflect the great changes that L= public administration and defence; compulsory social security, M=education, N=health and social work, occurred in particular in the sector of small O=other community, social and personal service activities and medium enterprises. Source: calculations of the Czech Statistical Office

| 8 CZECH BUSINESS AND TRADE

which is, however, most probably Graph 1: Share of domestic businesses in the total resources of the business sector attributable entirely to privatisation as the in 1997 degree to which the resources of public enterprises decreased roughly equals the 31.8 % degree to which the resources of domestic businesses operating in the area of research and development increased. The operation of businesses under foreign control is more tangible here, resources are, however, insignificant (with CZK 0.423 billion, i.e. approx. EUR 0.013 billion in 2004 against CZK 0.163 billion, i.e. approx. EUR 0.005 billion in 1997). It is, 68.2 % however, necessary to keep in mind that development sites as organisational units Total resources of domestic businesses (i-sector "private national enterprises") of industrial or other businesses are not Total resources of businesses form other i-sectors included in this classification. Graph 2: Share of domestic businesses in the total resources of the business sector ■ SIGNIFICANT RESOURCES in 2004 OF TRADE SECTOR In 2004, as in 1997, the third place in the 48.5 % ranking of sectors of the Czech economy by volume of overall resources belonged summarily to businesses from the NACE sector of "Trade incl. repairs of motor vehicles and products for personal consumption, especially for the household". In 1997, this sector still ranked in second place behind the processing industry. In 2004 the volume of 51.5 % total resources in trade reached CZK 961.6 billion (approx. EUR 30.1 billion) and in Total resources of domestic businesses (i-sector "private national enterprises") comparison to 1997 (CZK 762.2 billion – Total resources of businesses form other i-sectors EUR 23.4 billion) increased by roughly a quarter. A very sharp rise in shareholder capital is also apparent here, with own in the total resources of the business sector factoring or straightforward agreements resources of businesses rising by almost of the Czech economy. In areas such as on the postponing of the maturity date. 150 % in the given period (from CZK education, the public health system, public This is helping to improve the competitive 121.7 billion in 1997 – approx. EUR 3.81 administration and defence, compulsory strength of businesses and to stimulate billion to CZK 302.7 billion in 2004 – social security and other community, social market growth. In the first half of the approx. EUR 9.49 billion). and personal services, the resources of nineties, for example, there existed in businesses amounted to merely CZK 130.1 principle no surrender of claims in the CR ■ WEAKENING OF BASIC billion (EUR 4.08 billion) in 2004, and the business dealings of factoring INDUSTRY, GROWTH OF accounting for just 1.9 % of the resources companies focused merely on the PUBLIC SERVICES of the business sector in the CR. The surrender of claims related to exports and The basic industry sectors have noted significant growth in comparison to the imports. Today, domestic factoring is larger a slump in resources. The farming industry year 1997 is attributable to the low initial in volume than factoring related to exports has seen a reduction in part due to base. and imports. This is reflected by a decrease in long-term and short-term a substantial elimination of risks related to liabilities as the volume of basic capital ■ CONCLUSION mutual business relations on the domestic decreased only very slightly (to CZK 70.5 The growth of total resources in the market. The impact on the finances of billion in 2004 (approx EUR 2.21 billion) as business sector of the Czech economy was businesses is thus evident from the apposed to CZK 73.7 billion in 1997 generally accompanied by rising profits, growing volume of liabilities, both long- (approx. EUR 2.31 billion). The high degree reductions in the volume of drawn bank term and short-term. of capital in forestry (89.5 % own loans and by a significant growth in long- Drahomíra Dubská resources in proportion to total liabilities) is term and short-term liabilities in the Department of Macroanalysis in part attributable to non-monetary balance sheets of businesses, which also Czech Statistical Office deposits (the value of woods) in the basic include supplier credits. The latter allows (e-mail: [email protected]) capital of forestry companies. us to deduce that there is evidently www.czso.cz Public services have seen a significant a significant cultivation of the commercial Editor’s note: the approximate figures in the growth in resources, however, businesses environment in progress employing article are calculated on the basis of the average operating in this area partake only slightly alternative financial services, such as CZK/EUR exchange rate for the year 2004

9 | HOW TO DO BUSINESS IN THE CZECH REPUBLIC

New Building Act – Several Minor Changes, Chief Principles Remain

As of 1 January 2007, a new As mentioned above, the new in connection with the planning authority Building Act will most probably Building Act was to be aimed mainly itself but with other administrative at accelerating the approval process authorities. And it should be noted that come into effect, replacing legal and at its simplification. However, the draft the investor is required to obtain all these regulations that have been in submitted to Parliament by the Ministry for expert opinions by himself. The notion that force for 30 years. Work on the Regional Development brings no the planning authority should be the one revolutionary change to the basic concept; to take care of the expert opinions did not proposal lasted about five years, it does contain a number of partial win support. Instead of circulating a file, it and the main objective was to improvements, but preserves all the basic will thus be the citizen who will continue be the simplification and features of the former system that can to make rounds of the different acceleration of planning hardly be considered ideal. The prevailing authorities. view had been that new legislation should After a relatively short lapse of time permission proceedings. raise services provided to the public in this since the latest amendment, the new Act First and foremost, it should be area to quite a new qualitative level, once again changes the set of area noted that these comments however, the new law brings no new planning materials and documentation concern the text of the Act which substantial elements to the existing required at present and forces practice. Some views presented in and regions to provide new is not yet final. The new law has parliamentary debates were to the effect documents and revise all area plans so far only been approved by the that the new Act had such fundamental approved to date. Doubts persist on Chamber of Deputies, and is shortcomings that it would soon be whether increased expenditure and the necessary to replace it by new legal hiring of additional staff will produce currently in the Senate. Just regulations. tangible results. On the other hand, what before the deadline for this Acceleration is to be made possible by can be described as an indisputably article, we received information means of a diversified approach to the positive aspect is the newly enacted that the Act had been passed different types of buildings. Buildings of responsibility of the authority approving a more complex nature should thus be the area plan for any detriment suffered by back to the Chamber with given more detailed attention than those the owners of land in cases where the amendments. However, these of a simpler design. However, as zoning of the land is changed and rather concern politically a consequence of this, legal regulation has construction upon it is prohibited. sensitive issues, and do not become more complicated and less Regrettably, though, this legal regulation transparent both for the public and the will not come into effect until 2012. impact decisively on the staff of planning authorities, who usually The basic process from the first idea to approval process, which is of have a technical education background setting the building into operation will not interest to the public and, rather than legal training. Naturally, the undergo any major change from 2007. If Building Act has thus gained considerably the building conforms with the area plan, it mainly, to investors. The in volume. is first necessary to obtain a planning Chamber of Deputies may now permission, and/or another decision or approve the law in its original ■ NO CHANGE TO ROLE OF measure of the planning authority which wording, or in the wording PLANNING AUTHORITIES substitutes it. Subsequently it is necessary An important aspect regarding the to apply for a building permission or to approved by the Senate. There practical effect of the law is that it does notify the planning authority, which then is the theoretical possibility that not change in any way the role of planning examines the technical details of the the President will exercise his authorities. No plans have been made for proposed building. In each of these stages veto, but the Act will most planning authorities to be staffed by there is a separate administrative specialists in all the relevant professions, procedure, approval must be obtained from probably come into force as of who would be able to assess buildings the specialised authorities, and participants 1 January 2007. comprehensively from all aspects, and to in the procedure may appeal. This hardly issue decisions on this basis. Planning helps to speed up the procedure, but the authorities will continue mainly to examine new Building Act seeks to address this at the expert opinions issued on buildings by least to some extent and allows to apply specialised authorities, such as sanitary simultaneously for both the planning and officers, transport experts, building permission in case of a relatively environmentalists, firefighters, etc., and broad range of building types. issue approving decisions only with the Perhaps the most distinct example of consent of these specialised bodies. The a diversified approach to the different number of statements and expert opinions types of buildings can be found in the issued by specialised authorities and other approval proceedings stage. At present the entities is increasing and up to several granting of a planning permission is dozen are required even for the simplest of required for most structures. However, buildings. Anyone who has ever tackled after the new act comes into force, there proceedings before a planning authority will be a number of new measures that the knows that problems do not usually arise planning authority will be able to use to

| 10 CZECH BUSINESS AND TRADE

The new Building Act doubtlessly simplifies the putting of a completed building into use substitute the planning permission in ■ APPROVED INSPECTORS The Building Act not only addresses the certain cases. To be specific, these will be The law also introduces approved inspectors, issue of approval process but also many the planning consent, the simplified an independent profession that would to related problems. One of the most approval procedure, and the so-called some extent take over the tasks of planning controversial regulations in the new law public contract, i.e. a contract between the authorities in assessing the design and other gives the state, municipalities, and the investor and the planning authority that documents and materials necessary for regions a pre-emptive right to purchase determines the conditions for the a decision. Buildings the documents of land earmarked for development of implementation of the building project. which would be assessed by an approved facilities in public interest and Different terms are prescribed for each of inspector would then be allowed to be built development of public parks etc. This these measures, and different procedures on the basis of mere notification, rendering provision is a major encroachment on are applicable, which naturally raises the building permission unnecessary. ownership rights and in practice means question whether this is always that when land is transferred, it will always appropriate and beneficial. ■ PROCEDURE OF PUTTING be necessary to examine thoroughly The advertising catchphrase for the new COMPLETED BUILDINGS INTO whether any development in the public law was that a family house with up to 150 USE MADE SIMPLE interest or public area is planned on any sq. m of built-up area may be constructed New regulations on putting completed part of it. If this is the case, then a delay of on the basis of a notification submitted to structures into use have without doubt more than half a year may occur. the planning authority. This is indeed so, brought simplification. Lots of buildings The new Building Act is an extensive and the number of structures for which can begin to be used merely on the basis of piece of legislation that cannot be a mere notification will suffice has been a notification to the planning authority, described exhaustively in this limited extended. Paradoxically, however, the new without the need for the planning authority space. By all means it brings numerous law complicates the notification of to issue permission. If the course of positive elements, however, only practice a structure because, contrary to the past, construction is monitored by an approved will answer doubts on whether it will soon a much higher number of expert opinions inspector, an inspection of the structure by be necessary to begin drafting another is required and documentation must be the planning authority will not be required piece of new legislation. submitted in greater detail. In some even for the remaining group of buildings Ladislav Chundela respects notification is thus similar to the before an approval for putting completed Attorney-at-law traditional planning permission. buildings into operation is given. PETERKA&PARTNERS v.o.s..

11 | BUSINESS AND PRODUCTION

Foreign Trade Has Reached a Record Surplus

In 2005, foreign trade1) recorded its Most instrumental in the favourable strengthened by 7.1 % on average in best results since the creation of the development of the balance of trade relation to the EUR and by 7.3 % on average was the growth of industrial in relation to the USD, and the world prices Czech Republic. The trade turnover production in the manufacturing industry. of industrial raw materials and foodstuffs by reached a record height, with This growth is largely due to production in 38.3 %, on a year-on-year basis. This growth exports for the first time exceeding newly-built plants set up with the help of was strongly influenced by world petroleum foreign direct investments, which is also and natural gas prices, which rose by 46.3 the level of imports and the trade greatly responsible for the current % on a year-on-year basis. High petroleum balance showing its first surplus. favourable development of exports. In and natural gas prices had an unfavourable addition, it helps realize certain sub- impact on the balance of trade and strongly IN 2005, IN COMPARISON WITH deliveries for domestic manufacturers, thus reduced the surplus of the total balance of 2004, FOREIGN TRADE WAS reducing their import needs. This is trade. In 2005, the balance of trade deficit in CHARACTERISED BY: especially true of the continuing growth in petroleum, petroleum products, and related – a 14.1 % growth in turnover.The production in new car factories, but also of materials reached EUR 3.1 billion (EUR electrical engineering production, as well as 2.0 billion in 2004) and the trade deficit in trade turnover amounted to EUR the production of computers, rubber and gas, natural and manufactured, EUR 124.4 billion, and its year-on-year plastic products, metals and metal products. 1.6 billion (EUR 1.0 billion in 2004). increase was predominantly due ■ ■ to the share of exports accounting LEADING CZECH EXPORTS IMPORTS AND EXPORTS WERE MOTOR CARS ESPECIALLY GREW IN TRADE for 57.3 %, with imports totalling The most important export items in the WITH CIS AND EUROPEAN 42.7 %. Exports were up by manufacturing industry were road vehicles TRANSITION ECONOMIES 16.3 % on a year-on-year basis accounting for 16.2 % of total exports, – Exports showed an increase in trade with mainly motor cars (with a share of 7.9 %) all the main territorial groupings. and amounted to EUR and parts and accessories of the motor A relatively high growth was recorded by 62.9 billion, imports increased by vehicles (7.2 %). Motor cars accounted for exports to CIS2) (especially and the 12.0 % on a year-on-year basis, more than one-fifth of the total export Ukraine), to developing economies (mainly to EUR 61.5 billion; increase, while parts and accessories of the Asian), and to European transition motor vehicles for 9.3 %. The favourable economies (especially Romania); the – faster growth of exports in balance of trade in motor cars rose from EUR position of these areas strengthened and comparison with imports, which 2.0 billion in 2004 to EUR 3.4 billion in their share rose to 9.1 % of the export led to a significant improvement 2005, and the balance of trade in parts and total. The growth of exports to the other 3) in the balance of trade. In 2005, accessories of the motor vehicles from EUR states was negligible (low exports to 1.7 billion in 2004, to EUR 1.9 billion in China). The highest increase in absolute the balance of trade surplus 2005. terms (although at a below-average totalled EUR 1.4 billion, in growth rate) was recorded by exports to comparison with the deficit of ■ PETROLEUM AND GAS developed market economies, specifically PRICES HAD AN to the EU25 states; the growth of exports EUR 0.8 billion in 2004. In the UNFAVOURABLE EFFECT to the other developed market economies territorial structure, the main ON TRADE BALANCE (especially Japan and the United States) source of the balance of trade The development of export and import was above-average. The higher exports to improvement are the EU 25 states prices had a particularly unfavourable impact the EU25 were characterised by different on the balance of trade, and the balance growth rates in relation to individual (EUR 2.4 billion), and in the was also adversely affected by the states. Trade with most of the EU25 states commodity structure, it is extraordinary import of Jas-Gripen army (especially France, Poland, and ) machinery and transport fighters. The export and import prices were was marked for its growth in Czech equipment (EUR 3.1 billion). affected by the growth of world prices and exports. the strengthening of the Czech currency in – Higher imports were recorded in trade relation to the euro and the dollar. Between with developed market economies, CIS January and December 2005, the CZK (due to imports from Russia), European transition economies, and other states Long-term development of trade balance (mainly from China); imports from 3 developing economies were practically 2 stagnant. The growth of imports from 1 developed market economies was 0 especially prompted by higher imports -1 from the EU25 states; imports from the

-2 other developed market economies rose in EUR billion negligibly. The growth of imports from the -3 EU25 was below average and was -4 1999 2000 2001 2002 2003 2004 2005 influenced by the different level of imports trade balance year-on-year changes from individual states. An above-average

| 12 CZECH BUSINESS AND TRADE

growth was especially seen in imports MAIN TRADING PARTNERS from and the Netherlands. On the Exports Imports other hand, a decrease in imports from the State EUR 2005/2004 Share State EUR 2005/2004 Share United Kingdom and Italy was recorded. million index (%)1) million index (%)1) – the favourable balance of trade was the 20 874 106.8 33.2 Germany 18 411 105.8 29.9 result of a higher surplus in trade with Slovakia 5 456 119.2 8.7 Russia 3 448 154.9 5.5 developed market economies and Austria 3 434 105.6 5.5 Slovakia 3 308 112.1 5.4 European transition economies, and Poland 3 429 120.7 5.5 China 3 178 111.4 5.2 a lower deficit in trade with developing France 3 365 134.8 5.4 Poland 3 017 115.5 4.9 economies. The deficit increased in trade United Kingdom 2 904 114.1 4.6 Italy 2 916 99.9 4.7 with CIS and other states. Highest surplus Italy 2 658 113.5 4.2 France 2 784 106.9 4.5 was shown by trade with the EU25. 1) Percentage of total Czech exports/imports. A further increase was recorded in the favourable balances of trade with Slovakia, the United Kingdom, Poland, and Germany; the trade deficit with Italy declined significantly and trade with slightly (51.2 %) in total exports. A high products increased by EUR 1.4 billion on France showed an improvement in the growth was recorded for the import of a year-on-year basis. balance, with the deficit turning into mineral fuels, agricultural and food raw Jiřina Semanová a surplus. The balance of trade with China materials and products; the import of Czech Statistical Office and Russia showed a high deficit. machinery and transport equipment, on the (e-mail: [email protected]) other hand, was below average. Trade in www.czso.cz As regards the commodity structure, machinery and transport equipment, 1) All of the data and calculations made on their exports and imports grew in all the SITC miscellaneous manufactured articles and basis are in EUR and have been drawn from the classes. An above-average growth in exports semi-finished products and materials ended statistical sources of the Czech Statistical Office. was shown for agricultural and food raw with a surplus of EUR 9.0 billion (EUR 3.6 The data up to 2004 are final. The data for 2005 materials and products, chemicals and billion up on a year-on-year basis); on the are estimates, and final data will be available in related products, raw materials inedible, and other hand, the deficit (of EUR 7.6 billion) in August 2006. mineral fuels, as well as for machinery and agricultural and food raw materials and 2) The Commonwealth of Independent States. transport equipment. This growth was products, raw materials inedible, and 3) China, North Korea, Cuba, Laos, Mongolia, and responsible for strengthening the position mineral fuels and chemicals and related Vietnam.

EXAMPLES OF CZECH EXPORT SUCCESS

■ INTEREST IN ČZ TURBOCHARGERS IS ON THE Ever growing demands on the producers of engines also require RISE great changes in the design of turbochargers. ČZ is succeeding in ČZ a.s., of Strakonice, is a renowned Czech company and the meeting these demands by continuously developing new designs producer of a broad range of products for the automobile and arms that include turbochargers with a variable turbine geometry and industry as well as handling trucks, all sorts of moulds, tools, and electronic steering and turbochargers for multistage supercharging. machining equipment. The specific object of demand from Russia, More at: www.czas.cz which ČZ a.s. has prospered from, were turbo-compressors. The use of turbo-superchargers for supercharging of combustion engines, ■ CZECH BUSINESSES CONQUER SERBIAN produced in Strakonice, applies not only to the Diesel engines of MARKET trucks and utility vehicles, , tractors, but also to stationary use. The representative of the Czech Trade Promotion The quality of products is based on the use of a range of special Agency/CzechTrade in Belgrade initiated an intensification of technologies that enable the company to export approximately 80 % business ties of the domestic company PREMOT Františkovy Lázně of its products. The chief customers of ČZ include one of the largest a. s. This company is the producer of combustion engine pistons for global producers of agricultural technology - John Deere. ČZ a.s. of agricultural machinery and trucks. It also assembles maintenance Strakonice enjoys, for a number of years now, renown in Russia. kits for the repair of mobile technology manufactured both Several years ago, a joint Czech-Russian business was in fact domestically and abroad. “We have succeeded thanks to our founded in Nizhny Novgorod. For the time being, it produces quality, prices, and flexibility of conduct and by employing the a limited range of turbochargers, however, the Russian partner is services of CzechTrade during key negotiations. The business interested in long-term cooperation in other areas. potential for the future is represented by the fertile areas of Bačka Thanks to the correct evaluation of market developments in the and Banát, where we have at present directed our forces together area of turbochargers, ČZ made a timely investment into with CzechTrade. These areas hold significant business potential as expanding its production capacity by purchasing new machine here, an entire range of old types of agricultural machinery and technology and by doing so succeeded, in time, in laying hold on trucks is still in operation and we are therefore working together the enormous rise in market demand. It is no news that ČZ is with CzechTrade to establish a stable business representative of increasingly considering further possibilities of expansion to other PREMOT Františkovy Lázně a. s. in this area”, says Mr Petr Černík, markets by establishing new production capacities in locations Company Director. outside the Czech Republic. More at: www.premot.cz

13 | INVESTMENT

The Year 2005 Marks a New Record in Attracting Investment into the CR

In 2005, CzechInvest, the "This shows that pessimistic indicating the favourable conditions of Investment and Business scenarios predicting a loss of the Czech business environment. The interest on the part of investors and leaders of this economic trend are Development Agency, mediated their move to cheaper countries have not increasingly medium-sized firms. It is 154 new foreign and domestic come true. On the contrary, last year important that they are not tied to investment projects worth showed a trend in the opposite direction, a single sector, and that their activities with existing investors not only expanding cover a broad range of production and more than CZK 73 billion and enlarging their production here, but development." (USD 3.2 billion*), which is also setting up shared services, centres 8 projects and CZK 20 billion and moving their research and ■ MOST INVESTORS COME more than in the previous year. development activities to this country," FROM GERMANY said Václav Petříček, Deputy Minister of Most investors, whether in the area of As a result, at least 21 663 Industry and Trade. production and development, or that of new jobs will be created in the The number of investment projects strategic services, traditionally come from Czech Republic in the coming which the Czech Republic gained in 2005 Germany (42), and are followed by years. About half of them are is historically the highest. "The CR has companies from the Czech Republic (29) been especially successful in attracting and the USA (21). Many projects have intended for skilled workers – investments with high added value, which been directed successfully into regions secondary school and university are the object of keen international with high unemployment rates. Last year, graduates (31.75 % and competition. As in 2004,also last year we the South Moravia Region was the most mediated 39 new projects," Tomáš Hruda, attractive for investors with 32 new 14.68 % respectively). Managing Director of CzechInvest said, projects worth CZK 7.7 billion. The next and added: "The overall increase in the two were the Ústí nad Labem and the number of projects is a positive sign Moravia-Silesia Regions, both suffering from severe structural imbalance. These regions attracted 49 investment projects worth CZK 26 billion, which will create at THE LARGEST INVESTMENT PROJECTS IN 2005 – PRODUCTION SECTOR least 6 865 new jobs. Investor Sector Country Investment Number Region www of origin (CZK of jobs ■ THE FLOW OF INVESTMENT million) INTO THE COUNTRY IS ALSO Škoda car Germany 6 121.802 150Hradec www.skoda-auto.cz UNIQUE Auto industry Králové The year 2005 is exceptional not only as food Israel 2 940.00300 Ústí www.tivall.co.il regards the number of new investment Tivall industry nad Labem projects, but it can also be considered the SUNG WOO South 2 500.00 1041 Moravia- www.swhitech.co.kr/ best, or one of the best, as regards the HITECH car industry Korea Silesia total influx of foreign investment SWP chemical Czech 1 212.0076 Moravia- www.pegasas.cz monitored by the Czech National Bank. In Trading industry Republic Silesia the first three quarters of 2005, CZK 224 PEGAS chemical Czech 1 195.0035 South www.pegasas.cz billion flowed into the CR, in comparison (textile) industry Republic Moravia with only CZK 115 billion invested in the country during the whole of 2004. "Even if the flow of investment into the country did not exceed the CZK 278 billion mark recorded in 2002, in terms of THE LARGEST INVESTMENT PROJECTS IN 2005 – TECHNOLOGY CENTRES international comparisons we reached AND SHARED SERVICES CENTRES a record already in the first three quarters Investor Sector Country Investment Number Region www of last year. This is due to the fact that the of origin (CZK of jobs Czech crown improved by nearly one- million) Czech Czech Airlines aviation Republic 1 347.00400 www.csa.cz Computer Associates information International technology USA 1 100.00 218 Prague www.ca.com During its existence, CzechInvest has FTE auto- Ústí participated in 605 investment projects motive ** car industry Germany 1 039.80 588 nad Labem www.fte.de/ totalling a value of more than CZK 460 Lonza Central Group biotechnology Switzerland 412.70 50 www.lonzabiotec.cz/ billion (about USD 15.3 billion). Thanks to LATECOERE aviation France 200.00 150 Prague www.latecoere.fr/ these investments, nearly 125 000 direct

** Manufacturing site + technology centre jobs will gradually be created.

| 14 CZECH BUSINESS AND TRADE

The largest investment in technological centres and centres of shared services was made in 2005 by Czech Airlines third in relation to the dollar, and the Number of projects mediated by CzechInvest classified by country of origin global results processed by the UN Belgium, subcommittee for individual states are Other countries Luxembourg expressed in dollars," said René Samek, 3% 4 % USA 14 % Czech Republic 19 % Director of CzechInvest’s Investment and Taiwan 2 % Applied Research Division. Austria, Switzerland 6 % Finland, Sweden 2 % Canada 1 % Tomáš Grombíř France 4 % CzechInvest www.czechinvest.org Ireland and Great Britain 6 % * CNB exchange rate as on 3 January 2005 Italy, Germany 27 % Japan Spain 6 % (USD 1 = CZK 23.95, EUR 1 = CZK 29.78) 4 % Netherlands 2 %

NUMBER OF PROJECTS Number of projects mediated by CzechInvest in different sectors MEDIATED BY CZECHINVEST IN 2005 Other sectors 16 % Car industry 16 %

Total number Aviation 3 % Electrical of announced projects...... 154 Information engineering technology 5 % 12 % Number of new long-term Textile industry 3 % jobs...... 21 663

Expected volume of investment (USD million) ...... 3 245 Engineering, precision engineering, Chemical, biotechnological, metalworking 18 % Construction, Expected volume of investment building materials Woodworking, pulp plastic, rubber industries 19 % 3 % and paper, printing (CZK million) ...... 73 014 industries 5 %

15 | REGION

NUTS III – Karlovy Vary Region

In connection with the Czech resources are lignite, ceramic clay, small Republic’s accession to the EU, deposits of metal ore, and, in particular, mineral and curative water springs. The eight statistical territorial units border location provides the possibility for known as NUTS II have been effective co-operation in production, Karlovy created in the CR in accordance Sokolov Vary infrastructure development, environmental protection, cultural and educational with the binding regulations of activities, and especially tourism. The the European Parliament and the Euroregion Egrensis (www.euregio- EC Council concerning the egrensis.org), which was established for common European classification this purpose, greatly benefits cross-border co-operation. of statistical territorial units (NUTS). The purpose is to Together with the Ústí Region, the Karlovy ■ AREA, POPULATION facilitate an objective evaluation Vary Region forms the territorial unit The Karlovy Vary Region is the second and comparison of different known as NUTS II – North West, which the smallest region of the Czech Republic - it European Union defines as a border area. has a share of 4.2% in its total area and European regions, especially for The territory of the Karlovy Vary Region approximately 3% of the total population, tasks related to drawing finances includes three districts (NUTS IV) – Karlovy but a much higher share in the urban from EU Structural Funds. Vary, Sokolov, and Cheb. population (81%). Large numbers of small municipalities are typical. The Region has ■ TERRITORIAL DIVISION, 132 municipalities including 28 . LOCATION Almost 18% of inhabitants live in the The Karlovy Vary Region is situated in the regional capital of Karlovy Vary, more than west of the Czech Republic. It borders with 10% in Cheb (www.mestocheb.cz), and Germany - namely with in the west 8.5% in Sokolov (www.mu-sokolov.cz). Krajský úřad Karlovarského kraje and in the north. In the Czech (Regional Office of the Karlovy Vary Republic, its neighbours are the Plzeň Region) Region to the south and the Ústí Region in ■ ECONOMIC Závodní 353/88 the east. The landscape is mainly hilly. The CHARACTERISTICS 360 21 Karlovy Vary climatic and soil conditions are not suitable The economic structure of the Region is Czech Republic for the development of agriculture. This is very varied. The industry and tourism phone: +420 353 502 111 the only region in which the area for are dominant in the Districts of Karlovy fax: +420 353 502 108 farmland is smaller than the forested area, Vary (www.mmkv.cz) and Cheb e-mail: [email protected] which accounts for 43.2% of the total area (www.mestocheb.cz). Lignite mining, the www.kr-karlovarsky.cz of the Region. Its most important natural power industry, and chemical and engineering production are concentrated in the District of Sokolov (www. mu-sokolov.cz). Traditional within the Region is the production of glass and porcelain, spirits, mineral waters, and musical instruments. In recent years, the construction of industrial zones, especially in the , attracted German investors, who developed light industry. Statistics show an annual rise of 1% in the number of employees for economic entities based in the Region. In 2004, the Karlovy Vary Region accounted for 2.4% of the GDP of the Czech Republic, and recorded a year- on-year rise of 4.9% in its GDP in the first half of 2005. The rise was mainly due to foreign trade.

■ CULTURE AND TOURISM The main of the Czech Republic are concentrated in the Karlovy Vary Region. These are the spas of Karlovy Vary (www.karlovyvary.cz) and Jáchymov (www.jachymov.cz) in the Karlovy Vary Karlovy Vary – view of the District, and Mariánské Lázně

| 16 CZECH BUSINESS AND TRADE

(www.marianskelazne.cz), Františkovy Lázně (www.frantiskovylazne.cz), and BRIEF CHARACTERISTICS OF THE REGION Lázně Kynžvart (www.laznekynzvart.cz) in NUTS Area (sq. km) Population Municipalities Population density the Cheb District. (persons/sq. km) Many cultural and sports facilities are NUTS IV – Karlovy Vary 1 628 121 006 55 74 connected with the spa tradition of the NUTS IV – Sokolov 754 93 404 38 124 Region, as are regular cultural events such NUTS IV – Cheb 933 90 130 39 97 as the Karlovy Vary International Film NUTS III – Karlovy Vary Region 3 315 304 540 132 92 Festival, Dvořák’s Karlovy Vary Autumn, NUTS I – CR 78 868 10 246 522 6 248 130 Tourfilm, the International Jazz Festival, Source: Czech Statistical Office (as of 30 September 2005) Beethoven’s Days, Antonín Dvořák’s International Singing Competition, and the Ota Hofman Festival of Films and Television Programmes for Children. The best known sports events include Canoe Mattoni, Canon Cup, and Carlsbad Triatlon. Almost ■ TRANSPORT Děčín, I/20 Karlovy Vary – České Budějovice 70% of the several thousand visitors come Road transport, freight in particular, has and I/25 from Ostrov to Germany. The main from 80 countries of the world. Although been soaring since the borders opened, and railway lines are No. 140 – Cheb – Karlovy their main destinations are spas, they also the transport structure has ceased to meet Vary – – Prague, and 147 – Cheb visit many other attractive sights such as the requirements of regional development. – – Germany. Karlovy Vary also has the historic centres of the towns of Cheb, The Karlovy Vary Region has a dense an international airport (www.airport-k- Jáchymov, (www.loket.cz), Ostrov network of roads and railway lines. The most vary.cz) with regular flights to Moscow and (www.ostrov.cz), and Horní Slavkov important roads include No. I/6 from Prague Tel Aviv. The other nearest airport is at (www.muhslavkov.cz). to Germany via Cheb, I/13 Chomutov – Prague-Ruzyně (110 km).

Average gross monthly wages 2001–2004 (EUR) Unemployment rate 2001–2004 (%) Karlovy Vary Region CR Karlovy Vary Region CR 700 583 620 % 12 10.62 10.75 EUR 600 10.07 9.81 10.31 505 541 491 522 9.47 10 8.71 8.9 500 427 459 400 8 300 6

200 4 100 2 0 0 2001 2002 2003 2004 2001 2002 2003 2004 EUR exchange rate as of 31 December 2004 (EUR 1 = CZK 30.465)

During 2005, exports from the Karlovy Vary Region reached CZK 49 324 million from a total of Czech exports (CZK 1 871 439 million), however, its share among the other regions was the smallest (2.6 %). The Region's scant exports are influenced by its smaller industrial production, which, to a certain extent, is compensated by its strong export of services (e. g. tourism) as opposed to the overall export structure of other regions. However, counting exports per capita, the Region of Karlovy Vary sit at the 8th position among 14 Czech regions. In 2005, its most important export items were metal products (SITC 69) – 17.5 %1), electrical machinery, appliances, and equipment (SITC 77) – 12.8 %, products made of non-ferreous minerals (SITC 66) – 11.1%, road vehicles (SITC 78) – 6.7 %, and textile fibres (SITC 26) – 5.8 %. The listed items represented more than half (53.9 %) of the Region's exports in 2005.

1) The share in the total exports of the Karlovy Vary Region in 2005.

Note: The 2005 data are preliminary, based on the closing of 27 January 2006.

17 | REGION

Karlovy Vary Region: A Gateway to the Czech Republic

Karlovy Vary Region is small but The 650-year existence of the spa industry the highways. The international airport in strategically very important. It is has brought the Region world renown – Karlovy Vary is also owned by the Region. millions of people around the globe know Extensive reconstruction of the runways the westernmost part of the the names of the towns of Karlovy Vary and the terminal is about to begin with Czech Republic, and its (), Mariánské Lázně (Marienbad), help from EU funds. Modernisation of the advantages and disadvantages Františkovy Lázně (Franzensbad), and guidance systems will allow traffic in Jáchymov (St. Joachimsthal). There are also adverse weather conditions, and the new have always stemmed from its important mineral resources, in the Middle terminal will prepare the airport for the location. The Region was Ages, the region was renowned for its moment when the Czech Republic accedes a forlorn borderland during the deposits of precious metals, especially to the Schengen agreements on transport Cold War, and a prosperous area silver, which was mined in Jáchymov and in Europe. Industrial zones, which are from which the Joachimsthalers, Thalers in of great importance for business in peaceful days. This prosperity short, and tolary in Czech, were minted development, are being established near was mainly due to the sensible and valued for their purity and quality. the industrial towns of the Region. The use of its natural resources. They eventually became the basis of the largest of these will be set up near Sokolov, present US dollar. Tin, copper, gold, and which is the industrial centre of the wolfram were also mined in the Region. Region, on re-cultivated areas of former Lignite deposits are still being exploited, as open-pit lignite mines. I believe that this is also kaolin for the manufacture of china. industrial park will be very suitable for The unfavourable period prior to 1989 left investors, as lignite mining will gradually the Region with an unsuitable industrial be reduced and also the Sokolov area has structure, and an insufficient and a huge supply of technically educated and technically neglected transport professionally trained labour. infrastructure. The Karlovy Vary Region therefore offers The Region is doing its best to eliminate good conditions for business due to its these problems as quickly as possible. natural resources, the constant Transport infrastructure is being constantly improvement of the transport improved with large-capacity roads. The infrastructure which reflects the most important R6 road Prague – Karlovy development of industrial centres, and also Vary – Sokolov – Cheb – Germany is being because of the high-quality human modernised into a four-lane express road. resources who have benefitted by the Equally important are the roads I/13 structure of education in the Region. Our Karlovy Vary – Ostrov – Ústí Region, and region is not large, but it does have a big I/21 Cheb – Mariánské Lázně – Plzeň potential for future growth and prosperity. Region. The Karlovy Vary Region also owns, manages, and maintains a large network of second and third class roads, which Josef Pavel serve regional transport and the links with President of the Karlovy Vary Region Parkhotel Richmond

K A R L O V Y V A R Y

The Richmond Parkhotel is located in a calm part of Karlovy Vary on the bank of the Tepla river and is surrounded by an English-style park. It belongs to the most beautiful spa hotels in the city. The entire capacity of the hotel is 83 luxury rooms, five of them are appartments. The Spa Hotel Richmond offers the top quality services. All medical treatments are performed in the hotel, for our guests there is a splendid swimming pool available. Apart from traditional spa treatment the hotel also offers an extensive scale of special medical and reconditioning programmes.

e Comprehensive Spa Treatment e Beauty Week e e Antistress Programme e Golf Week e.t.c. Beauty parlour e e Corrective dermatology Wide range of medical massages and baths e e Swimming pool, sauna e

Richmond, a.s., Slovenská 567/3, 360 01 Karlovy Vary, Czech Republic Tel.: +420 353 177 505, Fax: +420 353 222 169 [email protected], www.richmond.cz

| 18 CZECH BUSINESS AND TRADE

Innovations Are the Trend

Egrensis Regional Development The development of small and medium after the first round) or 4.1.2 for small and Agency (Regionální rozvojová sized enterprises is another priority on medium sized enterprises from the area of which the RRAE focuses. The Agency has tourism. agentura Egrensis – RRAE) that cooperated with the CzechInvest Agency Innovations are an important factor for has been operating in the Karlovy since 2001 in its efforts to find immovable the commercial success of industrial Vary Region since 1998 acquired property and in providing services to small production and services in both developed and medium foreign enterprises operating and developing countries, and the Czech a great deal of experience in the in the Karlovy Vary Region. Investor Republic is following this trend as well. period before the entry of the interest, especially throughout the border The RRAE serves as a regional Czech Republic into the European regions, has grown since the entry of the representative of the Association for Union, when it administered the Czech Republic into the European Union. Business Innovation in the Czech Republic The industrial park in Cheb and the Ostrov for the Karlovy Vary Region since 2002. so-called "small" Phare CBC 2000 industrial zone were occupied with Together with the agencies from the Ústí projects. This experience is now investors very quickly; therefore, second nad Labem and the Regions, the being used for drafting feasibility stages of both these zones are being RRAE has drafted a proposal for regional studies for different development prepared at the moment. Further growth and innovation strategies in 2004 using in the interest of foreign investors is the experience taken from Germany and projects, for preparing applications expected after the I/6 road is upgraded to Italy. The exchange of experience for grants in national programmes the status of highway. concerning innovations, transfer of and within structural funds. The Agency offers help not only to technologies, and strengthening economic domestic companies from traditional ties in is one of the main Another important activity was industrial branches but also to business goals of the ongoing 3-CIP (Three the work on the creation of the people specifically from the branch of Countries Economic Push) project. In this Programme for Development of tourism, which is particularly significant project, the RRAE cooperates – apart from Karlovy Vary Region and on for the development of Karlovy Vary the above-mentioned Czech regions – Region. This help consists especially of the with the German lands of Saxony and strategic documents for some preparation of business plans and Brandenburg and with the Polish regions micro regions and towns in the applications for grants and subsidies from of Lubush, Lower Silesia, and Grand Karlovy Vary Region. structural funds and European Union Poland. A newly established Internet initiatives. Some business subjects in the portal www.3-cip.com that exists in four Karlovy Vary Region have taken the languages will enable small and medium opportunity offered by the Operational sized companies from these countries to Programme of Industry and Business (30 open contacts, to start working in existing successful applicants will use subsidies networks or to create new ones. and preferred loans totaling approximately CZK 61 million – approximately EUR 2 million), others have used grant schemes Jana Michková from the Common Regional Operations Director Programme, provision 1.1 (22 applications Egrensis Regional Development Agency

19 | AMBASSADOR GROUP

Ambassador Group is offering luxurious accommodation for congress participants, relaxation lovers and golf players in Prague as well as in West Bohemia.

Václavské námûstí 5-7, Operator: Reservation: GDS Access Codes: 111 24 Prague 1, tel.: 00420-224 193 111 tel.: 00420-224 193 876 Amadeus – TPPRGAMB, Czech Republic Reception: fax: 00420-224 226 167 Sabre – TP37657, e-mail: tel.: 00420-224 193 121 Banquet Dpt.: Worldspan – TP24542, [email protected] fax: 00420-224 230 620 tel.: 00420-224 193 817 Galileo – TP75154 www.ambassador.cz fax: 00420-224 193 651

Tyr‰ova 31, 353 01 Marienbad, Czech Republic Reception: tel.: 00420-354 611 111, fax: 00420-354 622 754 e-mail: [email protected] • www.hotel-agricola.cz AMBASSADOR GROUP

Ambassador Group is offering luxurious accommodation for congress participants, relaxation lovers and golf players in West Bohemia as well as in Prague

member of

Karlovarská 438, Operator: Reservation: GDS Access Codes: 353 01 Marienbad, tel.: 00420-354 676 111 tel.: 00420-354 627 855 Amadeus - GW KLVESP, Czech Republic Reception: fax: 00420-354 627 860 Apollo/Galileo - GW 41889, e-mail: tel.: 00420-354 622 162 Banquet Dpt.: Sabre/Abacus - GW 5588, [email protected] fax: 00420-354 627 850 tel.: 00420-354 627 853 Worldspan - GW 5111 www.esplanade-marienbad.cz fax: 00420-354 627 863 REGION

Our Support Is Focused on Business Development

The Poohří (Ohře River Valley) Your Chamber is helping the studies, and completing applications for Regional Economic Chamber development of business within the Czech and EU programmes of development and support. On 1 January (RHK Poohří) supports business Region. What are its other activities and services at this time? 2006, this Centre was transformed into development within the Region, the Poohří Regional Consultation Centre and provides professional We arrange business meetings and (RPCP) providing services to the same services, especially consultations consultation days for Czech and foreign extent. The Information Points for firms, and co-operate in the organisation Entrepreneurs project is being applied concerned with the of regional exhibitions, and conduct throughout the Czech Republic, and the establishment of firms and courses and workshops for entrepreneurs. RHK Poohří is its co-ordinator and trades, and the search for We are participating in projects such as guarantor in the Karlovy Vary Region. In the framework of this project, we provide domestic and foreign partners. Information Points for Entrepreneurs, the Contact Centre for Czech-German Co- information about business in the EU, We spoke about its other operation, the Regional Consultation and Czech and European laws involving objectives with Director Josef Information Centre (RPIC), and Partnership entrepreneurs, the procedure of Písecký. for the Future, which is being realised establishing a trade or a firm and the like. together with the Karlovy Vary Region. Our important activities include support and The RHK Poohří Contact Centre for participation in the creation of clusters in Czech-German Co-operation, which the Region. has been operating since January 2005, co-operates with the Contact Can you specify some of the Centre attached to the projects? Economic Chamber. What are its activities? Until the end of 2005, the RHK Poohří had been operating as the Regional This Centre provides a broad range of Consultation and Information Centre services – it arranges consultation days for (RPIC) for small and medium-sized Czech and German entrepreneurs, branch enterprises in the Karlovy Vary Region. The meetings of entrepreneurs (contact RPIC was providing these enterprises with exchanges), and workshops on topical advantageous subsidised services, matters of the economy and legislation. It including consultations and the drafting of also helps Czech and German enterprises applications, projects, and feasibility to establish contacts with partners in the neighbouring country, supports bilateral trade, provides information about sectors, countries and regions, the EU market, and about fairs and exhibitions in Germany.

How do you co-operate in the formation of clusters?

The RHK Poohří had an important share in preparations for the formation of two clusters in the Karlovy Vary Region. It made a mapping study for the TABLE WARE cluster (glass, china, household textiles), and is involved in preparations for its establishment. Its co-operation in preparations for the formation of the second cluster in the Region – MUSICAL PRODUCTION – is also important.

Eva Tomášková

More at www.rhkpoohri.cz Meeting of the Region’s entrepreneurs in engineering-metal working sector at the RHK Poohří

| 22 CZECH BUSINESS AND TRADE

Investments from Germany Help Employment in the Region

The WITTE company has WITTE Nejdek is an independent enterprise majority of the company’s production is been operating in the car with a foreign ownership share owned by exported to EU markets, while value added the German company Ewald Witte created in the Czech Republic corresponds industry for fourteen years, Verwaltungsgesellschaft mbH. It launched to more than 20 %. The company’s during which it developed, production with ten employees in rented turnover reached more than CZK 5 billion thanks to its annual growth, premises in the year 1992. Since that time, (approximately EUR 166 million) in 2005, the company has experienced rapid and according to its realistic strategic plan, from a small assembly plant development. it plans to double this by 2011. into the second biggest In 2003, the company invested CZK 700 In announcing the expansion of its employer in the Karlovy Vary million (approximately EUR 23.3 million) activities in the Czech Republic, WITTE Region. The company was into construction of their third production Nejdek follows in the trend established by hall. It was employing approximately 1 300 several German companies. Companies awarded with the Employer of employees that year. Further 310 like Linde, Demag, Continental, Kostal, the Year 2005 for Karlovy Vary workplaces have been created over the last and many others have announced similar Region award and so was its two years, also thanks to material support plans. This proves that German companies project entitled System for the company received from the Ministry of are satisfied in the Czech Republic and that Labour and Social Affairs in the form of they see a big potential for further Education and Certification of investment incentives. business in this country. Furthermore, they Employees. During these years, The future of the company is being also believe in the capabilities of Czech the company has succeeded in created in their own development working employees and they count on them for sites. Development working sites for their future activities. establishing a stable position in construction and technical preparation of the area of the production and production that enable implementation of development of locking systems development projects and constitute an for cars not only in the inseparable part of their product developments. WITTE Nejdek fully European market. complies with all the demands for car Contact: www.witte.cz producers throughout the world. The vast

23 | REGION

Moser – Glass of Kings, King of Glass

Ever since 1857, the A typical feature of Moser products is the highest, in 2006 the glassworks is also glassworks has been proudly bevel cut named "papal", after pope Pius XI. expecting a favourable development. The The finest decoration technique, reflecting markets mentioned above are expected to promoting the heritage of its the unique workmanship of Moser’s masters account for more than 50 % of the founder, Ludwig Moser, an is found in the glass engraving. firm’s estimated export revenue. Of its total outstanding engraver and revenue, 46 % will be from export sales and ■ MOSER GLASS PRODUCTS 54 % from domestic sales. The talented businessman. The DECORATE TABLES ON FESTIVE firm’s production plan for this year includes famous tradition of its manual OCCASIONS orders for the Jordanian Royal Palace and the production has been continued The current glasswork’s range of products Norwegian Royal Court. Work is in progress and its style has been comprises primarily conventional drinking on valuable engravings depicting Apocalyptic sets, which have won the Moser trademark its Riders on 38 cm high vases for customers in maintained to this day in fame. Some of these, such as Maharani, Taiwan and Japan. Negotiations are also traditional glassmaking Splendid, and Paula, have been made since under way on an important delivery to techniques such as glass the end of the 19th and the beginning of the Morocco and . blowing, hand cutting, 20th century, but their exquisite design keeps them modern and ageless. One special group decorating with 24-carat gold, of products are the limited series and unique gold polishing, and engraving. pieces. Thanks to co-operation with leading Moser products, shaped from Czech and foreign artists, ever-new pieces emerge, enriching the range with modern Contact: lead-free soda potassium and original works. A common feature of e-mail: [email protected] crystal glass, are marked for both traditional glass and the current www.moser-glass.com their specific hardness and creations is the high brilliance. Moser glass is quality and excellent workmanship of the mechanically harder than lead glassmakers. Moser glass crystal, evidence of which is decorates the tables of seen in the sharply cut edges prominent customers and the refined engravings of from around the world (British Queen Elisabeth the products. Production is II, Spanish King Juan environmentally friendly, as the Carlos I, Norwegian King air is not contaminated with Haakon VII, and others). Sets and pieces from the heavy metals during the Moser glassworks can be melting process, and the health found in many places of the glass workers is not throughout Europe, damaged. North and South America, and Asia. At the beginning of 2006, the glassworks had more than 360 employees. Last year, its export results reached a record height. In 2005, the glassworks exported 15 % more than the previous year. Its number one market is the United States of America. Other key markets are Russia, Japan, Taiwan, and United Kingdom.

■ FURTHER GROWTH EXPECTED IN 2006 Although last year Moser’s export results Classical sets of table glass are the main products of the glassworks at this were historically the time

| 24 CZECH BUSINESS AND TRADE

Cheb District Cheb

Thanks to its favourable position, the BRIEF STATISTICS District is a very suitable area for Městský úřad Cheb Indicator District Region (Cheb Municipal Office) investment. The industries represented Area (in sq. km) 933 3 315 nám. Krále Jiřího z Poděbrad 14 here include engineering, textile and Population 90 130 304 540 350 20 Cheb ceramics production, and woodworking. Czech Republic A typical feature in the past decade has Inhabitants/sq. km 97 92 Phone: +420 354 440 111 been the growth of small and medium- Average gross monthly Fax: +420 354 440 550 sized firms making components for the wage (in EUR) 538 542 e-mail: [email protected], automotive industry and parts for a variety Unemployment rate (%) 7.47 9.47 www.mestocheb.cz of products manufactured by German Source: CzechStatistical Office (as of 30 September 2005) firms (textiles, electrical engineering, and Note: EUR 1 = CZK 29.55 (as of 30 September 2005). ceramics) or engaged in tourism, trade and The District has 39 municipalities, nine of services, and also in construction. which are towns. Its administration centre Industrial zones have been built in Cheb is the town of Cheb (www.mestocheb.cz), and Aš, which have significantly important role in the District, especially with nearly 32 000 inhabitants. Other broadened the District’s economic base thanks to the spa towns of Františkovy larger towns are Mariánské Lázně (www. and helped reduce unemployment. The Lázně (www.frantiskovy-lazne.cz), with its marianskelazne. cz) with a population of Cheb industrial zone is already fully 24 mineral springs, and Mariánské Lázně, 14 400 and Aš with 12 560 inhabitants occupied, mainly by German investors. known for its 40 curative springs with (www.muas.cz). Tourism and the spas also play an ferrous, alkaline and saline components.

SELECTED FIRMS Name Based inSector Contact Lázně Františkovy Lázně, a. s. Františkovy Lázně spa treatment, tourism www.franzensbad.cz Tekaz Cheb Cheb building materials and construction www.tekaz–cheb.cz Eutit, s.r.o. Stará Voda basalt castings www.eutit.cz Akord Kvint, s.r.o. u Chebu stringed instruments www.akordkvint.com Bohemia Lignum, s.r.o. Cheb wooden products www.bohemialignum.cz

FOREIGN INVESTORS Investor Country of origin Czech partner Sector Contact Danubius Hotels , Léčebné lázně Group United Kingdom Mariánské Lázně, a.s. spa treatment www.marienbad.cz Schneeberger AG Switzerland Schneeberger, s.r.o. engineering www.schneeberger.cz Dachser GmbH Germany Dachser, s.r.o. logistics www.dachser.cz Playmobil Merchandising GmbH Germany Playmobil CZ, s.r.o. plastic products www.playmobil.cz JSP International S.A.R.L. France JSP International, s.r.o. plastic products www.jsp.com

25 | REGION Karlovy Vary Karlovy District Vary

with the Sokolov and the Cheb Districts in BRIEF STATISTICS Magistrát města Karlovy Vary the west, with the Plzeň-sever District in the Indicator District Region (Karlovy Vary Municipal Office) south, and with the Chomutov and Louny Moskevská 21 Districts in the east. The town of Karlovy Area (in sq. km) 1 628 3 315 361 20 Karlovy Vary Vary (www.karlovyvary.cz) is the Population 121 006 304 540 Czech Republic administrative and cultural centre of the Inhabitants/sq. km 74 92 Phone: +420 353 118 111 District. Approximately 45 % of the District’s Average gross monthly Fax: +420 353 222 913 population live here and it is also one of the wage (in EUR) 535 542 e-mail: [email protected] most visited spa areas in the Czech Republic. Unemployment rate (%) 14.1 11.7 www.mmkv.cz Foreign clients account for 70% of the spa Source: CzechStatistical Office (as of 30 September 2005) visitors. Another world famous spa, Lázně Note: EUR 1 = CZK 29.55 (as of 30 September 2005). Jáchymov (www.laznejachymov), is also The area close to the town of Karlovy Vary located in the District. It is famous for the has a mild mountain climate influenced by excellent curative effects of its radioactive the Krušné hory Mountains and by the springs. The spa is surrounded by centres of glass, Karlovy Vary china, produced from the surrounding forests. winter recreation. Tourism and balneology, high quality local kaolin and the world The District shares its northern border which are dominant in the District, are famous herbal liquer Jan Becher. The local with the Federal Republic of Germany. however balanced by industry, represented mineral waters Mattoni and Magnesia are Within the Czech Republic, it shares borders above all by the world famous Moser brand also very popular..

View of the Karlovy Vary spa town

SELECTED FIRMS Name Based inSector Contact Swiss-Form, a.s. Nejdek engineering www.swissform.cz Epiag Lofida – Porcelán CZ s.r.o. Karlovy Vary production of china www.lofida.cz Karlovarský porcelán, a.s. Karlovy Vary production of china www.thun.cz Moser, a. s. Karlovy Vary production of glass and china www.moser-glass.com Škoda Ostrov, s. r. o. Ostrov buses www.skoda.cz/ostrov Starorolský porcelán MZ, a. s. Karlovy Vary production of china www.starporc.cz Vlnap, a. s. Nejdek textile production www.vlnap.cz BMP Bohemia Metal Produkt, s.r.o. Karlovy Vary tanks, containers www.bmp.cz G.Benedikt Karlovy Vary, s.r.o. Karlovy Vary production of china and ceramics www.hotelovy-porcelan.cz Demio, s.r.o. Nejdek production of furniture www.demio.cz Actum Trade, s.r.o. Karlovy Vary hot spring salt www.vridelnisul.cz

FOREIGN INVESTORS Investor Country of origin Czech partner Sector Contact G.Modiano Limited United Kingdom Nejdecká česárna vlny, a.s. wool treatment www.ncv.cz Jan Becher – production of liquers Pernod Ricard France Karlovarská Becherovka, a.s. and beverages www.becherovka.cz E.W.Bowman, Incorporated USA – glass for beverages www.ewbowman.com Ronaldsay B.V. Itály, Holland Karlovarské minerální vody, a.s. beverages www.mattoni.cz Schindler Group Switzerland Schindler CZ, a.s. Lifts www.schindler.com Witte GmbH Germany WITTE Nejdek, s.r.o. car components www.witte.cz

| 26 CZECH BUSINESS AND TRADE

Karlovy Vary – Town of Spa Colonnades and Festivals

The town of Karlovy Vary is Karlovy Vary is known as the town of Launching of the Spa Season, the located at the confluence of the "colonnades". The colonnades are best able International Film Festival in Karlovy Vary to express the spa character of this town. (www.iffkv.cz), the festival of films focusing Teplá and Ohře Rivers on the They were constructed with the idea of the on tourism called Tourfilm (www.tourfilm.cz) edge of the Slavkovský les therapeutic cure being supplemented by and several musical festivals and contests are (Slavkov Forests) natural walks and by drinking mineral water directly among the most important events. from its springs, but they also became Karlovy Vary is highly attractive for protected area, in West a symbol of spa life. tourists. This is not only because of the Bohemia. The Czech king and The town of Karlovy Vary is visited curative springs and architecture, but also Holy Roman Emperor Charles IV annually by tens of thousands of hotel thanks to its attractive surroundings. We can awarded the town with guests. Of these guests, approximately 70% find several nice view points and lookout are foreign tourists from many countries towers in the surrounding hills, and there are municipal rights in 1370. Silver around the world. Tourists from Germany, also several summerhouses and markers in and non-ferrous metals were Russia, Austria, the Netherlands, the the spa forests. Cable railways, mostly built mined in the town during the USA, and from Italy are the most widely in the 19th century, are another curiosity of , while ceramic and represented. Balneology is therefore the town. a priority for the town, especially after the The town is also becoming more and china clays, as well as coal, Czech Republic’s entry into the European more a venue for internationally important were mined there later. The Union. The town of Karlovy Vary welcomes sporting events. Several sports centres also most important treasure located investors from both the Czech Republic and offer a broad spectre of relaxation options – abroad who offer cooperation and we could mention golf as being among the beneath the surface are, contribute to the development of most popular of these. The golf course in however, its springs, thanks balneology. Olšová Vrata is one of the most beautiful to which Karlovy Vary became Karlovy Vary, as a town open to places in the Czech Republic. There are also the oldest and the most popular, cooperation and as a town with a long tennis courts, horse riding, beach-volleyball, international tradition, also recently bowling, ricochet, squash, a rifle range, world renowned spa. Karlovy launched official partnerships with towns fitness centres, and many other facilities. Vary hot springs produce from Europe and all around the world, for Traditional productions of glass and china 2 000 litres a minute and example the town of Carlsbad in California, are the most important sectors of local they bring to the surface Kusatsu in Japan, Casino in Italy, and industry. Production of the herbal liqueur, Varberg in Sweden. The Conference of Jan Becher, as well as production of the approximately 18 tonnes European Partner Cities has been organised mineral water Mattoni and of spa wafers are of mineral salts every 24 hours. annually in Karlovy Vary since the entry of also typical for the town. Curative hot mineral springs rise the Czech Republic into the European The town of Karlovy Vary also became the Union. The goal of this conference is to capital of the Karlovy Vary Region in 2000. to the surface from a depth of bring together people from different Karlovy Vary is the second most popular 2 000 metres and the water is countries, to improve services, and above all tourist destination in the Czech Republic 35 000 years old. It is used for to support the ongoing development of after Prague, which proves its popularity at drinking treatment, for bath towns. an international level. This is thanks to its Not only the guests, but also the annual architecture, rich cultural life, and above all treatment, for inhalations, cultural events make life in the spa town to its inexhaustible treasures. and many other procedures. a richer experience every year. Karlovy Vary Contact: www.mmkv.cz Other natural curative sources is home to many festivals. The official (natural gas, mud, peat) are also being used in combination with most modern treatment methods.

View of the spa colonnade

27 | REGION

Sokolov District Sokolov

which gained fame both at home and BRIEF STATISTICS abroad for the success of its sportsmen, Městský úřad Sokolov Indicator District Region (Sokolov Municipal Office) especially weightlifters, and ice-hockey and Area (in sq. km) 754 3 315 Rokycanova 1929 basketball players. The second largest town Population 93 404 304 540 356 20 Sokolov within the District is Chodov (www. Czech Republic mestochodov.cz) with a population of 15 000. Inhabitants/sq. km 124 92 Phone: +420 352 623 321 Unlike its neighbours, it is a largely industrial Average gross monthly Fax: +420 352 602 510 district, including industries such as wage (in EUR) 557 542 e-mail: [email protected] engineering, brown coal mining and Unemployment rate (%) 13.2 11.7 www.mu-sokolov.cz processing, the chemical industry, electricity Source: CzechStatistical Office (as of 30 September 2005) generation, glass and china production, the Note: EUR 1 = CZK 29.55 (as of 30 September 2005). manufacture of musical instruments, the The is situated at the Czech textile industry, and the production of spirits. business opportunities can be found in the Republic’s western frontier, in the centre of Industrial zones providing investment and towns of Sokolov, Chodov, and Dolní Rychnov. the well-known Karlovy Vary – Mariánské Lázně – Františkovy Lázně spa triangle. In the SELECTED FIRMS north it is rimmed by the Krušné hory Name Based inSector Contact Mountains (www.krusnehory.net) and in the Amati-Denak, s. r. o. musical instruments www.amati-denak.cz south by the Český les (Bohemian Forest) Sametex, s.r.o. Kraslice manufacture of velvet textiles www.sametex.cz (www.ceskehory.cz). In the north, the Chodos Chodov, s.r.o. Chodov engineering www.chodos.cz District borders on Germany, and its Sokolovská uhelná, a. s. Sokolov coal mining www.suas.cz intrastate neighbours are the Districts of Sokolovské strojírny, a. s. Sokolov engineering www.sokstr.cz Karlovy Vary and Cheb. Together with these Svatavské strojírny, s.r.o. engineering www.svssro.cz neighbouring Czech Districts it is part of the Hexion Specialty Euregio Egrensis Euroregion (www.euregio- Chemicals,a.s. Sokolov chemicals www.hexion.cz egrensis.org). The District’s largest centre is the town of Sokolov (www.sokolov.cz), with Kornet, s.r.o. Kraslice brake systems www.imteso.cz 35 % of the population of the District. It is Torf Krásno, s.r.o. Krásno spa peat products www.torf.cz not only an industrial town but also a town Stax Metal Fibers, s.r.o. Sokolov manufacture of metal fibres www.stax.cz

FOREIGN INVESTORS Investor Country of origin Czech partner Sector Contact Eastman Chemicals USA Eastman Sokolov, a.s. chemicals www.eastman.com Lias International GmbH Germany Lias Vintířov, k.s. production of light building materials www.liapor.cz Car Trim GmbH Germany Car Trim, s.r.o. car seats www.cartrim.cz EPT GmbH Germany EPT Connector, s.r.o. plastics www.ept.de Linde AG Germany Linde Gas, a.s. production of technical gases www.lindegas.cz Wieland Holding GmbH Germany Wieland Electric, s.r.o. production of electronic components www.wieland.cz

| 28 CZECH BUSINESS AND TRADE

LINDE GAS: Number One on the Czech Industrial Gas Market

Industrial gases from Linde play Linde Gas a. s. launched production of The technology produces virtually no an important role in the majority industrial gases in Vřesová near the town waste and it is therefore highly of Sokolov in September 2005. Two years environmentally friendly. of industrial applications: ago, the company signed a contract with Linde Gas a. s. also partially participated in metal-processing and the company Sokolovská uhelná, a. s. for in modernisation of hydrogen production metallurgical industries, the construction of a plant. It invested CZK in the BorsodChem MCHZ Company in 1.8 billion (approximately EUR 60 million) . The total volume of investment in in the chemical industry, in the into the construction of the state-of-the- the filling station for hydrogen trailers has electricity supply industry, art condensation and air-separation unit; exceeded CZK 90 million (approximately in the food-processing industry, construction of this device lasted two EUR 3 million). Hydrogen filled in trailers in environmental protection, years. This new technology will guarantee for the Czech market accounts for about a stable and fail-free supply of pipe gases 70 % and the rest will be exported to in the glass industry, electronics, for lignite gasification, and it will support Poland and Slovakia. in the building industry, rubber the use of these resources for the The launch of this source will partially industry, and in healthcare, as production of electric energy from replace imports of hydrogen from abroad. well as in the area of research domestic resources. By implementing this investment, the Linde This way, it will also indirectly support Gas a. s. company has become one of the for scientific purposes. They also employment in the region of Sokolov. The main players on the hydrogen market improve the quality of life and overall capacity of the above-mentioned within the Czech Republic. Linde Gas a. s. they make production more production device is such that it enables is a joint stock company with foreign the production of liquid products together ownership (the parent company Linde AG cost-effective, helping to create with small amounts of rare gases like Wiesbaden is a 100% owner of its shares). confidence for the future. xenon and krypton. Linde Engineering constructed the air- separation mechanism in Germany. Compared to other usually used devices, the system has lower consumption of Contact: www.lindegas.cz electric energy per unit of produced gas.

Rotas Strojírny spol. s r.o. Nejdecká 183, 357 01 Czech Republic Phone: +420 352 668 289 Fax: +420 352 668 211 e-mail: [email protected]

– thirty-year tradition of manufacturing vulcanizing presses 55", 63.5", 65", 75", 90", 100", 110" and 120".

– Important clients: the Michelin Group, the Continental Group, Bridgestone-Firestone, STIP, and Mitas.

29 | REGION

Cheb Industrial Park Is One of the Most Successful Industrial Zones in Bohemia

Only three plots are left for will create up to two would-be investors in the hundred jobs in Cheb. From the logistic Industrial Park at Dolní Dvory on point of view, the the eastern outskirts of the town. Cheb Industrial Park is In an unexpectedly short time, especially attractive for German investors. just eighteen months after the At the turn of 2004 completion of the infrastructure Altogether 29.7 hectares out of the total and 2005, the entry of two important networks, the Cheb area of the originally offered 35.9 hectares German companies into the zone was has distributed most of the area with the required technical facilities and agreed. The firm Playmobil (www. networks, i.e. more than 82 % of the playmobilcz), well-known manufacturer of of this new industrial zone entire area, are occupied. As mentioned the favourite plastic toys and among investors. Now, thirteen above, only the last three smaller plots are constructional sets is currently completing firms are realising their left, one of which, however, is already the construction of its plant. In May 2005, investment projects within reserved for a German printing firm, and the entry into the zone of the Dachser another German manufacturing company (www.dachser.com) firm was approved. the zone. is also considering taking one, so that in This firm is one of the largest logistic The firms will invest nearly fact only a smaller plot, with an area of companies in Germany (employing about CZK 2.5 billion (about EUR 0.5 hectare, is available. 12 000 people in Europe), and is planning In co-operation with the CzechInvest to build a centre for the so-called end 8.3 million) in their projects, Government Agency we have gained an logistics in Cheb. The two firms will which are to be built on a green important investor in the company JSP employ one hundred people each. field, and by the end International (www.jsp.cz). This firm, In spring 2005, the Cheb municipality of 2007, they will have created which is part of the large Japanese JSP opened talks with the Swiss Schneeberger Concern, started negotiations with the Company. This manufacturer of precision approximately 450 new jobs. Cheb municipality concerning the location engineering machines came to Cheb If everything goes well, by of its project in the Industrial Park in April through the CzechInvest Government 2013 some 1 100 new job 2004. In September, the company Agency, and following short but intensive opportunities are expected to be obtained the town’s consent as to the negotiations, its entry and the contractual location of its investment project, and conditions of the transfer of land was created in the zone. The first following the agreement on the technical approved in June 2005. The firm will create project has already been conditions of the investor’s undertaking, about 60 jobs. completed and another four are a contract was signed at the beginning of The largest investment project in terms January 2005. Currently, construction is of area and the number of new jobs under construction. Next year, under way of the plant. The investment of created is the project of the Hammerwerk seven more firms will start JSP International in Cheb is the sixth firm from Fridingen, Germany, or rather its construction. largest investment in the Czech Republic affiliation, HF-Czechforge. It is planning announced in the year 2004. Gradually, JSP the construction of its engineering plant in two stages – by the year 2009, some 100 people are expected to find work there, and after the completion of the second stage it is planning to have 300 employees. The investor decided to enter the Cheb Industrial Park last July, and after three months a contract was signed. Last year, Cheb won the Industrial Zone of the Year competition in the category of Industrial Zone with the Best Town Planning Solution. This year, the Industrial Park entered the competition in the main category: Industrial Zone with the Best Economic Benefit, where the principal criteria is the percentage of the zone’s occupation within a particular period of time, the number of new jobs to be created, and the amount of the announced investments, among other economic indicators. Only the winning Černovice Terrace Industrial Zone in Brno Cheb was last year’s winner in the Industrial Zone with the Best Town Planning Solution category of the and the second-place-winning industrial Industrial Zone of the Year competition zone in achieved better results than

| 30 CZECH BUSINESS AND TRADE

Cheb. With its area of only thirty hectares, for the finals in the Manager of the and networks for another two medium- the Cheb Industrial Park’s third place ranks Industrial Zone of the Year category. sized plots to be completed by the end of it among the largest and best-prepared This year, the Cheb municipality is this year. industrial zones in the Czech Republic. preparing the second stage of the zone’s Great success in this competition was construction, when the area within the achieved by the manager of the Park, Jiří Industrial Park is to be enlarged by Strádal, who was selected from thirty approximately 15 hectares. Cheb Contact: www.mestocheb.cz proposed candidates as one of the three municipality would like to prepare roads

VACANT AREAS FOR IVESTORS IN THE KARLOVY VARY REGION Name District Owner Area Price Use of the area Mains ** Contact (ha) EUR/sq. m * Karlovy Ostrov Industrial Ostrov 2000 *** Vary town 9.I 1.7 production G, W, S, E, H, C [email protected] Průmyslový park Cheb Industrial (Industrial Park Cheb)*** Cheb Cheb town 35 13 production G,W,S,E,H,C [email protected] Industrial production, Sokolov – Vítkov PF ČR,**** small-scale – Staré Sedlo Sokolov private owner 73 negotiable production and services G,W,E [email protected] Industrial production, Sokolov – Jih PF ČR,**** small-scale (Sokolov-South) Sokolov private owner 20 negotiable production and services E, C [email protected] Industrial production, Dolní Rychnov – PF ČR,**** small-scale Silvestr Sokolov private owner 24 negotiable production and services G,W,S,E,H,C [email protected] Hospodářský park Aš Hospodářský Industrial (Economic Park Aš) Cheb park Aš,a.s. 75 6.9 production G, C [email protected]

Source: Regionální rozvojová agentura Egrensis (Egrensis Regional Development Agency), as of 31 January 2006 *EUR = CZK 29 as of 30 December 2005 ** G - Gas, W - Water, S - Sewerage, E - Electricity, H - Heat, C - Communications *** already full, second stage is being prepared **** Land Fund of the CR

31 | SERVICES

The Offer of Legal Services in the CR Is Broad

According to the Czech Bar LEGAL SERVICES Conference of EU Notaries (Conférence Chamber, there are nearly IN LARGE TOWNS des Notariats de l’Union Européenne). ARE MORE EXPENSIVE 8 000 attorneys-at-law and Lawyer’s average hourly rates in larger ■ NOTARIAL SERVICES more than 2 000 articled clerks Czech towns are around CZK 1 000 ARE NEEDED ESPECIALLY in the Czech Republic. Foreign (approx. EUR 33.6). In Prague, legal IN THE FOLLOWING CASES: services are rather more expensive – – transfer of property trade partners may sometimes roughly between CZK 2 500 and CZK Buildings or land are usually transferred by find it difficult to know where 3 000 (approx. EUR 100.7). In general, it a contract of purchase or a contract of to turn with such a large can be said that the attorney’s fee always donation. The notary will make out number of legal representatives, depends on the mutual agreement a contract for the transfer of property in between the lawyer and the client, taking the form of a notarial deed, which, unlike and are not sure how much into account the way in which the legal contracts made, for example by a lawyer or legal advice could cost them. If, service is provided. Hourly fees are the a real estate agency, is a legal instrument. however, you start doing most frequent choice, used by ordinary This means that in the case of a dispute, business in the Czech Republic, citizens, while firms are advised to agree a copy of the notarial deed may be used in on a lump sum. The lump sum is agreed for court as unequivocal evidence attesting to it is recommended to seek a definite period of time (a month, six the veracity of the facts stated therein. The counsel from a lawyer. He/she months, twelve months) for the whole documents needed for making the can help you in more complex package of legal services. In connection contract are documents proving the with the prices charged for legal services, transferor’s ownership right to the business cases, as well as with you may also come across extra-judicial property (e.g. inheritance decision, formal and procedural charges, which are strictly defined by the contract of purchase), which the transferor requirements. A limited liability lawyer’s fee tariff (www.lawyers.cz/czech/ usually holds. An extract from the Land company, for example, will not dokumenty/atarif.htm). The lawyer is also Register is also needed. entitled to charge compensation for ready manage without a notarial deed expenses. These are expenses connected – mortgage/security interest contracts when drafting its Memorandum with court proceedings, postal charges, and the Mortgage Register of Association, and a number or lost time compensation. Such Making a mortgage/security interest of other business procedures compensation is charged to the client, for contract is one of the possibilities to secure example, if the lawyer must travel to the creditor’s claim against the debtor. will also need legal advice. a remote place for the client (in that case Property, movable things, and other assets the cost of fuel is also charged), or if he may be the object of a mortgage or must wait for the client somewhere. The a security interest contract. Special charge is around CZK 50 - approx. EUR legislation applies to cases involving the 1.7 - for every thirty minutes. It is quite mortgage right, where the object of common for law offices to grant their a mortgage is property not recorded in the regular clients discounts, ranging from Land Register (e.g. cellars), collective 10 to 30 %. property (e.g. an enterprise), a set of things (e.g. collections), or a movable thing ■ NOTARIES PUBLIC: WHEN DO (e.g. a motorcar), which are not handed YOU NEED THEIR SERVICES? over if a mortgage/security interest In connection with certain services you contract is made in the creditor’s favour. may need notarial help. If you do not know A mortgage/security interest contract must where to go, you can turn for help to the be made in the form of a notarial deed, Czech Chamber of Notaries, formed by and in such a case the security interest is eight regional chambers – in Brno, České created by its entry in the Mortgage Budějovice, Hradec Králové, Ostrava, Register administered by the Czech Plzeň, Ústí nad Labem, the Chamber for Chamber of Notaries, arranged by the the capital of Prague, and in Prague for the notary. A contract on the creation of Central Bohemia Region (more in the mortgage on property recorded in the Central European Register of Notaries, at Land Register can also be made by the www.central-europe-notaries.org/, notary; in that case, the mortgage right is Chamber of Notaries at www.nkcr.cz). The created by a record in the Land Register. Chamber represents notaries public in relation to Government and legislative – verification and certification bodies, and bodies of public Any notarial office will verify the administration, and in relation to the authenticity of your signature (legalisation) public. It also represents notaries in or the conformity of a copy of a document international relations (since 1994, it has with its original (vidimus). While in the When you are becoming involved on the Czech market, a lawyer will help you with trade and business been a member of the International Union case of legalisation the presence of the matters and with formal and procedural requirements of Latin Notaries) and since 2004 of the person whose signature is being verified,

| 32 CZECH BUSINESS AND TRADE

and the submission of his/her identity card ■ WHERE TO FIND WHAT YOU about Czech law at www.lexdata.cz/ are required, the authenticity of the copy NEED web/lexdata.nsf. whose conformity with the original If you are looking for a lawyer and do not document is to be verified may be know how to go about it, try the portal of ■ OTHER SUGGESTIONS submitted by anyone. Some documents the Czech Bar Chamber, where in the full Information from the Company Register are excluded from verification by law. If text finder you can find a lawyer not only can be found at www.justice.cz/xqw/ you need to submit a verified document on by the area of his competence, but also by xervlet/ insl/index, and on the web sites of the territory of another state, it must be region (www.cak.cz). Useful information the Ministry of Finance you can find signed by the notary or his official can also be found on the law web sites reference to business persons not recorded representatives and must have a higher www.epravo.cz and www.ipravnik.cz. in the Company Register, at www. level of verification, which is provided by Reference to the collections of laws and info.mfcr.cz/ares/ares_fr.html.cz. the Ministry of Justice. international treaties of the Czech Republic is available at www.mvcr.cz/sbirka/, or Milan Zelený ■ THE FEE IS DEFINED www.sbirka.cz; and essential information Attorney-at-law BY A FIXED RATE: • for drawing up the testament or the deed of disinheritance or deeds of disaffirmation of those acts in the form NEW LEGISLATION: THE BAR ACT AMENDMENT of a notarial deed (CZK 900 - approx. The Chamber of Deputies has passed in the third reading the Government Bar Act EUR 30) Amendment. The Amendment sets out more detailed rules for the calculation of the length • for drawing up the testament containing of an attorney’s apprenticeship, lays down the obligation of life-long education for attorneys, simultaneously a provision of regulates the rules for the election of members of the Bar Association bodies, puts the Act disinheritance, in the form of a notarial in harmony with existing legislation concerning administration judiciary, supplements certain deed (CZK 1 500 - approx. EUR 50.-) provisions applying to established European attorneys so as to ensure that in principle the • for drawing up the power of attorney in provision of legal services in the Czech Republic be governed by the same conditions as those the form of a notarial deed (CZK 1 000 - governing the provision of services by established European attorneys. The Amendment also approx. EUR 33.3) • for acceptance of the testament or specifies in greater detail the compulsory insurance of attorneys to cover their liability for another document into custody, except damage and provides for the Chamber’s authority to arrange common insurance for securities (CZK 800 - approx. EUR 26.7) attorneys. The amendment sets out new possibilities for attorneys to provide legal services: • for the issue of an extract from the in addition to existing forms of providing the services of an attorney independently, in notarial deed CZK 200 for each page and association and as partners in a public limited company, the Amendment provides for the part of a page of the text of the extract; possibility of pursuing the legal profession in limited partnership companies, limited liability • for the execution of the sum of acts companies, or as employees of other attorneys or companies, with the proviso that the object needed to have changes made in the of business of such a company is exclusively to pursue the legal profession, and that its Mortgage Register (CZK 200 - approx. partners may only be attorneys. EUR 6.7)

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33 | INVESTMENT

Kaleidoscope

SPANISH LANA people should be working there as early as CONSTRUCTION German Playmobil to the end of 2006", CzechInvest’s General STRENGTHENS ITS Manufacture Plastic Toy Manager Tomáš Hruda said. "Thanks to this ACTIVITIES IN THE CZECH Parts in the Czech project, we will reduce the total operating REPUBLIC costs and at the same time be able to Republic considerably increase our production The renowned Spanish manufacturer of capacity in Europe. This will enable us to three-layer wooden construction panels, Playmobil CZ, the subsidiary of the German provide clients with better services not only Lana, decided to strengthen its activities Horst Brandstätter HoldingGmbH, will build in this area, but also in the Middle East and in the Czech Republic by building a new a factory for manufacturing plastic and Africa", Ross Ferguson, ADC KRONE’s production plant in Ždírec nad rubber toys in the town of Cheb. The Executive Manager, stated, adding: "The Doubravou. Its construction will start this company will invest almost CZK 220 million Czech Republic is logistically convenient to spring and will cost the company CZK (approx. EUR 7.4 million) in the coming us with regard to servicing our clients in key 350 million (approx. EUR 11.8 million). three years and gradually employ 65 European markets". ADC KRONE is The new plant will employ at least 50 people. "The firm plans to expand its a leading producer of network people. "We decided to expand our production and, because it is now renting infrastructure equipment, such as copper production capacity in the centre of premises in the town of Aš, it has decided and optical cables, cable joints, or Europe to be able to satisfy the growing to build its own plant in Cheb's industrial distribution panels. Ross Ferguson expects demand for our products", Pablo Rozas, park", Tomáš Hruda, CzechInvest’s General that thanks to the new plant in Brno, the Lana Construction’s Production Manager Manager, said. "In addition to increasing share of ADC KRONE on the European says, adding: "After ample research we turnover, the objective of this investment is communications market could increase, decided to choose the Czech Republic, to increase labour productivity and improve which is very important in this fast- because it offers an experienced the working conditions for its employees", developing sector. workforce and an excellent transport he added. "The project is divided into two More on www.adckrone.com infrastructure". "The fact that Lana will phases. In the first phase, we will build the be building right next to Stora Enso production and assembly hall with the Timber Ždirec, a large wood-processing administrative building. Later, we will Electronic Components company which is a subsidiary of the expand the complex and buy the pressing to Be Produced in North international wood-processing Stora and injection machinery for the production Enso concern, is no coincidence", the of the plastic toy parts", Playmobil CZ Moravia CzechInvest project manager Radek manager Kurt Gertler described the Zatloukal says. "In Europe, the Czech investment. "So far, Playmobil only CTS Corporation, the American leading Republic is known as an exporter of completes and packs the parts imported to constructor and producer of electronic quality timber, which was one of the the Czech Republic from Germany. But components for the automotive and reasons why the Spanish investor these machines will already produce semi- electronics industry, is planning to invest included it among the locations in which manufactured goods – plastic toy parts, almost half a billion CZK (approx. EUR 17 it would want to expand its production". which will then be completed using million) in the construction of a new plant in assembly and packaging equipment." In the the industrial park Ostrava-Hrabová. In the More on www.lana.coop future, the Playmobil group intends to course of three years, it will create more convert the Czech subsidiary into one of the than 160 new jobs. "Thanks to this pivotal foreign plants for assembling and investment in the Czech Republic, we will be producing toy parts and figures. The main able to increase our production capacity and ̈ reasons for this include the lower better supply the European market, which production costs and the proximity of its we currently cover from our plant in Great mother plant in Dietenhofen. Britain", the CTS European Representation Manager Ron Bell says. He adds: "In the Ostrava plant, electronic components and sensors for the automotive industry, as well Brno Chosen by ADC as other electronic components will be KRONE Mainly for manufactured." Logistics Reasons "Besides Great Britain, the Czech Republic is the second European country in The international ADC KRONE company which CTS Corporation is investing in a new providing network products and services plant", CzechInvest’s Project Manager comes to the Černovická terasa industrial Marcela Kolveková points out. "The vast park in Brno from Great Britain. The majority of the production of the CTS' company's management has already signed Ostrava subsidiary will, however, be a lease contract with the Dutch developer exported and directed to the same markets CTP Invest for the production hall in the as the production from Great Britain. local industrial zone. "The company plans Ostrava should start production as early as German Playmobil to Manufacture Plastic Toy to invest hundreds of millions of crowns in June 2007. Parts in the Czech Republic establishing its new plant. Roughly 200 More on www.ctscorp.com

| 34 48th International Engineering Fair

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Trade Fairs Brno 48th International 5th International Výstaviště 1 Engineering Machine Tools 647 00 Brno Fair Measuring, control, automation Exhibition Czech Republic and regulation technology Tel.: +420 541 152 926 Fax: +420 541 153 044 [email protected] [email protected] www.bvv.cz/msv www.bvv.cz/imt Prestigious forms of presentation prominently displayed in Prague airport

Organisation of prestigious foreign trade fairs

Reklama & Polygraf 13 th international trade show of advertising services, marketing and media, March 29 – 31 2006, Exhibition Grounds Prague 7

Conferences and seminars

M. I. P. Group, a.s., Hollarovo náměstí 11, 130 00 Praha 3, Tel.: +420 267 315 585-8, Fax: +420 267 315 589, E-mail: [email protected], www.mip.cz