Investment Activity in the Czech Republic Continues To Be High

Euro Will Be Introduced Later than 2010

Favourable Foreign Trade Dynamics

Olomouc Region

01-02 2007 CONTENTS

Ministry of Industry and Trade

INTRODUCTION CZECH BUSINESS AND TRADE Question of the Month for Martin Tlapa, Deputy Minister of Industry and Trade...... 4 Economic Bi-monthly Magazine with a Supplement is Designed for Foreign ECONOMIC POLICY Partners, Interested in Cooperation with the Czech Republic Euro Will Be Introduced Later than 2010 ...... 5 Investment Activity in the Czech Republic Continues To Be High...... 7 Issued by: INVESTMENT PP AGENCY s.r.o. Myslíkova 25, 110 00 Praha 1, Czech Republic PP Agency Preparations for an Amendment to the Investment Incentives Act ...... 9 Company with the ISO 9001 certified quality management system for publishing services BUSINESS AND PRODUCTION

EDITORIAL BOARD: Six Linchpins of the Operational Programme Enterprise and Innovations Martin Tlapa (Chairman), Ivan Angelis, 2007-2013...... 11 Zdena Balcerová, Jiří Eibel, Zbyněk Frolík, Růžena Hejná, Alžběta Honsová, Josef Jílek, Favourable Foreign Trade Dynamics...... 13 Ivan Jukl, Marie Košťálová, Marie Pavlů, Castings to Sweden ...... 15 Pavla Podskalská, Josef Postránecký, Libor Rouček, Teamwork by UNISTAV...... 15 Jiřina Semanová, Jarmila Škvrnová, Ivan Voleš REGION MANAGING EDITOR: Jana Vápeníková NUTS 3 – Olomouc Region ...... 16–31 EDITORS: Jaroslava Bradová, Naďa Vávrová SERVICES

REGULAR COLLABORATORS: Development Projects Are Thriving in the Czech Republic ...... 32 Eva Tomášková PRESENTATION OF FIRMS TRANSLATION: Vlasta Benešová, Alena Kenclová, Robert Krátky, Dagmar Šímová, RESTA s.r.o...... 2 Halka Varhaníková Business Hotel Alley...... 23 FEICO – Spedition, s.r.o...... 27 READ: Koutný spol. s r.o...... 28 Mathew Booth, Ivana Kadlecová, Prague Investments Corporation, s.r.o...... 33 Katherine McCloghry, Zuzana Pavlíčková TENZOVÁHY, s.r.o...... 35 GRAPHIC DESIGN: Meopta – optika, s.r.o...... 36 Miloslav Bucvan, Helena Dvořáková Cover: www.orangedisc.cz

DEADLINE: 24/11/2006

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/cbt Press run: 13.500 copies. The number of printed and sold copies Olomouc of the journal is verified by auditor, HZ Praha, s.r.o., member of PANNELL KERR FORSTER Worldwide. It is not allowed to reproduce any part 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“

Investment Activity in the Czech Republic Continues Development Projects Are Thriving in the Czech To Be High Republic

3 | INTRODUCTION

Question of the Month for Martin Tlapa, Deputy Minister of Industry and Trade

What do you consider to be the three In November of last year, the European most important changes? Parliament approved the Directive on Certain conditions will remain unchanged. Services in the Internal Market, which For instance in each member state a so- makes it easier for companies to do called single point of contact will be business abroad. The Directive should established, where foreign entrepreneurs ultimately come into force within three will be provided with all information related years from now, by which time the to settling in a particular member state or countries of the European Union will related to cross-border provision of services. have transposed it into their national In addition they will be able to take care of legislation. Should the approval of the all necessary procedures via this single point Directive in its current wording be of contact. considered a victory, loss, or draw for The Directive removes particular obstacles the Czech Republic? What did the CR to cross-border provision of services. achieve and in which areas did it fail? Furthermore, each member state will be It is possible to say that the result was perhaps obliged to carry out a screening of its a draw, yet it was the maximum that could be legislation. This means that it will have to sort achieved at that time. Although from the very through all the relevant laws and remove from beginning the CR supported the original them the afore-stated obstacles. If the state liberal concept of the draft Directive, there wishes to maintain such obstacles within its were a number of European states, together system of law, it will have to duly substantiate with the European Parliament, that were them (public health, public order, and security) strongly opposed to the original version of the and it will have to do so vis-a-vis ` the European proposal. The resulting text is the outcome of Commission as well as in relation to each a compromise agreed among the 25 member member state. This procedure should ensure states and the European Parliament. For this a far greater transparency for short-term reason it is not as ambitious as the original provision of services. wording; however, it still possesses a high Another important point will be the added value in comparison with the former introduction of administrative cooperation state of affairs. Moreover, this was one of the among individual member states, specifically first legislative proposals the CR was able to the introduction of the internal market partake in from the very beginning as information system. Relevant bodies will a member of the EU. And in view of the communicate among themselves; the complexity and political sensitivity of entrepreneur will thus no longer have to take negotiations, the proposal served as an care of all formalities him/herself. excellent test of the ability of Czech experts and diplomats to promote our interests in Europe. Does the Directive provide sufficient We regret that the scope of the Directive guarantee that member states will no has been limited. The final version has excluded longer be able to hinder Czech many more services sectors than was originally entrepreneurs in their business foreseen. For instance, the provision of social activities? Are there any potential new and health services, audiovisual services, barriers? services provided by notaries, and the services It is possible to say that it does afford of security agencies have all been omitted. The a sufficient guarantee thanks in particular to country of origin principle was also removed the screening procedure. Each member state from the original Directive proposal. To put it will, for instance, have to draw up a list of simply, this principal would have made it applicable licensing regimes; it will have to possible for entrepreneurs to abide by the laws substantiate their necessity as well as all the of their home country abroad. We were, requirements contained within them. If the however, successful on a number of other substantiation does not appeal to the MORE AT: points. For instance, practically the entire European Commission, the member state will original chapter on administrative cooperation have to remove them from its system of law or www.mpo.cz was preserved, the screening of legislation was declare them void. In principle, it will be preserved in the original extent, and, moreover, possible to proceed in this way in the case of at the request of the CR and other member every obstacle a member state wishes to retain www.czechtrade.cz states, screening was broadened to include in its system of law. cross-border provision of services in exchange There should be no new barriers in future www.ceb.cz for the country of origin principle, the thanks to the so-called notification procedure, procedure of tacit assent was preserved, and whereby each new services-related provision is www.egap.cz services of general economic interest have to be submitted to the European Commission remained a part of the Directive. and to the other member states for examination. If they feel that such a provision www.export.cz contains a hidden obstacle, the member state Will the conditions for Czech concerned will have to either justify the entrepreneurs change considerably? provision or remove it.

| 4 CZECH BUSINESS AND TRADE

Euro Will Be Introduced Later than 2010

The Czech Republic’s entry into This assessment concerns both, the economy with the euro area also create the euro area will bring present and expected fulfilment of conditions for increased cyclical the Maastricht criteria, and the alignment with this currency area. numerous benefits to the Czech degree of alignment of the Czech A favourable aspect from this point of national economy, but also economy with the euro area. The objective view is also the high intensity of the intra- certain risks. The risks are is to assess the capability to meet the industry trade with the euro area. The formal terms for the euro introduction two favourable factors also include mainly connected with the loss years after joining the ERM II and the size convergence of the rate of inflation and of an independent monetary of the risks connected with the the nominal interest rates which prevent policy and of the possibility of introduction of the euro. a possible shock from their rapid macroeconomic adjustment to In keeping with this strategy, the Czech equalization with the euro area level National Bank annually prepares analyses shortly before entry into the monetary the largest trade partners by of the degree of the economic alignment union. The high similarity of the changes in the exchange rate. of the Czech Republic with the euro area. development of the exchange rate of CZK The common monetary policy These analyses focus on the and EUR to USD is another positive tailored for the whole euro characteristics of the Czech economy feature. which reduce the risks connected with the Some of the indicators, which had area does not necessarily need loss of the national currency (alignment of been rather unfavourable for the Czech to "fit" the Czech economy, the Czech economy with the economy of Republic concerning euro introduction, especially if its development the euro area as regards long-term trends, have been showing improvement in the economic cycle and structure, and last few years. A positive development differs fundamentally from the economic flexibility). has been the continued convergence of economic cycle of the euro the economic performance of the Czech area. The Government and the FACTORS FOR EURO Republic towards advanced countries. central bank were aware of INTRODUCTION The Czech per capita GDP expressed in The characteristics of the Czech economy the purchasing power parity has risen to these risks in 2003, when they which traditionally speak in favour of almost 70% of the euro area average in were drafting the Czech rapid introduction of the euro include the recent years. Concurrently, the price Republic’s Euro-area Accession a high degree of its openness and trade level is gradually converging towards the Strategy, and the and ownership links with the euro area. euro area average; it still remains at The euro area is a partner for 60% of about 55% of the euro area average, country’s readiness to join the Czech exports and more than 50% of however, and further convergence would Exchange Rate Mechanism ERM Czech imports, and the stock of direct therefore be beneficial before entry into II is therefore being annually investment to Czech Republic from the the euro area. Other factors which are euro area countries now amounts to developing in a positive direction include assessed. almost 40% of GDP. This strong changes on the financial market and interconnection enhances the benefits of partial improvement in business the euro introduction linked with the conditions. elimination of transaction costs in the exchange of CZK for EUR and possible REASONS FOR fluctuations of the mutual exchange rate. POSTPONEMENT OF EURO Strong economic links of the Czech INTRODUCTION Insufficient alignment of the Czech Republic with the euro area economy is mainly apparent from the major Convergence of selected euro area countries in 2005 (euro area average = 100) difference between the cyclical 140 development of the Czech and euro area GDP. As regards the flexibility of the 120 economy and its capability to adapt to

100 shocks, the labour market represents a bottleneck – it is characteristic by 80 relatively high long-term and structural unemployment and low regional mobility. 60 Moreover, the conditions for a high rate of employment of persons with low 40 qualification have not yet been created. The main risk factors include the 20 interaction of taxes and social benefits,

0 the continued increases of the minimum Czech Republic Germany Portugal Austria wage in relation to the average wage, per capita GDP in purchasing power parity average GDP price level and the costs of terminating open-ended Source: Eurostat, Czech National Bank calculation employment contracts.

5 | ECONOMIC POLICY

The broad opening up of the Czech economy and its close linkage with the Euro-zone speak in favour of an early introduction of the euro

Compared with the previous year, an Long-term unemployment: share of persons unemployed for more than one year unfavourable development was recorded in the labour force (%) in public finance. Public budgets do not 6 contribute to smoothing the economic cycle. The present budget deficits are 5 mainly structural in nature and their 4 reaction to the economic cycle is small. Moreover, they are increasing at a time of 3 solid economic growth. The medium-term 2 prospects of public finance show no improvement to be expected in the near 1 future. Increased effort will have to be 0 1998 1999 2000 2001 2002 2003 2004 2005 devoted to long-term stabilisation of Czech Republic Germany Portugal Austria public budgets for the functionality of the Source: Eurostat fiscal policy to be preserved also in the conditions of an ageing population. Concerning the risks connected with the euro introduction, a high degree of misalignment persists between the Czech economy and the euro area, which is Finance of the Czech Republic the euro area beyond the originally accompanied by a low degree of recommended the Government that the considered horizon of 2010. flexibility of the economy and a bad state Czech Republic should not attempt to of public budgets. This was why, in their enter the ERM II during 2007. This Dana Hájková, Tomáš Holub annual joint assessment, the Czech decision at the same time postpones the Czech National Bank National Bank and the Ministry of potential entry of the Czech Republic into (e-mail: [email protected]) Photo: www.orangedisc.cz

| 6 CZECH BUSINESS AND TRADE

Investment Activity in the Czech Republic Continues To Be High

The generally very high rate of ROBUST GROWTH ... industry is noticeable not only in investment in the Czech Republic A comparison of the growth rates at employment, revenues, the number of firms the beginning and at the end of the and their profits, but also in the volume of noticeable throughout the last 1995-2005 period shows that the greatest the money invested, where a multiplication decade varied considerably in percentage growth was shown by trade, effect in the resulting products is expected different economic branches. The where the volume of investments in 2005 (estimated by the volume of their gross trends, however, reveal that the was more than double the 1995 figure added value). While in 1995 CZK 122.2 (+112 %), the same as by education billion (or EUR 4.1 billion) in real terms (in leaders of investment activity in (+125 %), where, however, the volume of constant prices) was invested in the the Czech economy were invested money was much lower, as in health manufacturing industry, in 2005 the branches carrying great weight, care (+94 %). Firms operating in transport investments amounted to CZK 172.7 billion and telecommunications nearly doubled their (or EUR 5.8 billion), a 41 % growth. This is while the absolute majority of annual investments in the period under 25 % more than the growth of investments branches, where less money was review (+94 %). Investments in branches in the Czech economy as a whole. The expended on investment, pursue covering real estate, renting, and services for manufacturing industry thus further activities whose weight in the enterprises grew by more than two-thirds strengthened its position – mainly due to (+68%), mainly because of the growth in ownership changes and the resulting flow of economy was and continues to data processing and related activities in the foreign capital with developmental be low and even very low. With past two years (+358 %) and leasing (of strategies into the firms: according to 2004 their investment policy, the machinery and instruments, with a 130.4 % data, more than 56 % of assets in the "strong" branches have created growth) – the most massive growth in terms manufacturing industry are under foreign of volume is shown by the real estate sector, control, and according to the latest figures elbowroom for themselves for although in terms of growth rate the increase for the first half of 2006, firms controlled by further expansion, while the is not the highest (+55 %). foreign capital account for nearly two-thirds "weak" branches are tending to An above-average growth of investments of total revenues (63.3 %) and for more in the economy, in addition to the branches than three-quarters of direct export lose a still greater share of the mentioned above, is shown by the entire revenues (76.6 %). country’s economic activity. manufacturing industry, with a wide range Placing second in terms of the volume of According to an analysis of the of the growth of investments in its branches investments in 2005 was the transport past decade, total investments in of industry (+41 %), in the branch of other sector, warehousing, and postal and public, social, and personal services (+41 %) telecommunication services. Here, too, an the Czech economy – in figures and in construction (+37 %). important shift took place in comparison cleared of price fluctuations – with 1995, when investments amounted to rose by approximately one- ... STEEP FALLS CZK 67 billion (or EUR 2.2 billion), which quarter, from CZK 586.3 billion On the other hand, a below-average growth ranked the branch fourth in investment rate over the period under review was volume. Of key importance at the end of the in 1995 (about EUR 19.7 billion) recorded by agriculture. Some other branches period under review were investments to CZK 731.2 billion (EUR 24.6 even showed a real decline in the volume of connected with transport (construction of billion) in 2005. invested money in the 1995-2005 period: in Terminal II at Ruzyně Airport), and at the catering by more than one-tenth and in turn of the decade investments in the mobile accommodation services by -13 %. In the networks of operators engaged in mining industry investments dropped by one- telecommunications. third and in the power industry and utilities to The third position, in terms of invested approximately half the1995 volume. The money, continues to be held by the branch largest decline in investing, however, was comprising a wide range of activities relating recorded by banks and insurance companies, to immovable property, leasing, computing which last year spent a mere one-third of their equipment, research and development and expenses on investment in comparison with services for enterprises. In 2005, investments one-half in the 1990’s. This can be explained in the branch as a whole amounted by important changes, both as regards the to CZK 125.1 billion (or EUR 4.2 billion), reduction of the number of companies in the which, the same as in transport and banking sector and strong pressure placed on telecommunications, means twice the 1995 cost reduction (less than half the number of volume, but with the difference that here banks operate on the market in comparison the year 2005 signifies the climax of the with 1995, and a large part of the network of gradually rising trend in the volume of branches built at a high cost was replaced by investments. The strength of developer firms internet banking, etc.). is shown by the fact that the volume of money invested in their projects in 2005 was MOST INVESTMENTS WENT two-and-a-half times higher (CZK 103 INTO THE MANUFACTURING billion, or EUR 3.5 billion) than the INDUSTRY investments in the remaining part of the The strength of the Czech manufacturing branch (CZK 40.3 billion, or EUR 1.4 billion).

7 | ECONOMIC POLICY

economy (19.7 %). The greatest weight in terms of the volume of investments, with a 23.6 % share in 2005, continues to be held by the manufacturing industry (a full 28 % in 2004). The rate of investment in transport and telecommunications is very high - while in 1995 activities in transport, warehousing, and postal and telecommunication services accounted for approximately one-third (33.9 %) of total added value in the branch, in 2005 they were responsible for more than one-half (52.4 %) of total added value. The high investments at the time when mobile telephone operators were building their networks, correspond to the highest investments in 2000 and 2001 – in those years firms in that sub-sector invested more than CZK 50 billion (or EUR 1.7 billion) respectively each year, which accounted for 89.1 % and 83 % of gross added value generated by the sector annually. In the following years, however, the investments of telecommunication firms declined significantly – from 2003 to 2005 they even dropped below the average level of investment in the economy as a whole.

THE HIGHEST INVESTMENT RATE IN THE POWER INDUSTRY ON A LONG-TERM BASIS Despite the rapid growth of investments in transport described above, on a long-term It is a positive feature that large investments also go into research and development basis the electricity, gas and water production and distribution sector continues DECLINE RUNNING INTO The most massive decline in investment to maintain its leading position in terms of DOZENS OF BILLIONS activities was shown by banking and investment. From 1995 to 2005 investment A massive retreat from the position can be insurance, mainly because of the accounted for 77.7 % of the gross added noticed especially in the power industry – the development in the commercial bank sector value the sector generated, on an average whole branch covering electricity, gas, and described above. While in 1995 the entire (the power industry itself, with its high water production and distribution in 1995 branch providing money services invested weight within the branch, accounted for invested CZK 76.6 billion (or EUR 2.6 billion), CZK 35.4 billion (or EUR 1.2 billion), in 2005 74.2 %, and water distribution and which at that time was the second highest the investments amounted to only CZK 11.7 treatment, with its low weight, for as much volume, after the manufacturing industry. On billion (or EUR 0.4 billion). The fastest as 100.6 %). It has to be commented, the other hand, investments in this branch decline occurred between 1995 and 1999, however, that the period under review amounted to CZK 40.3 billion (or EUR 1.4 when the difference between the volumes covers the investment intensive finalisation billion), which pushed it down to fifth of investments in the first and the last year of the Temelín nuclear power station and position in terms of the volume of totalled CZK 21.4 billion (or EUR 0.7 billion). that the volume of investments in absolute investments. Figures for the whole branch terms from 1995 to 2002 declined steadily. show the dominance of the power industry, MASSIVE INVESTMENT IN This development was responsible for the which in the first year of the period under TRANSPORT fact that the weight of the said branch was review accounted for 87 % (CZK 66.4 billion, An analysis of the structure of transport, declining gradually in the Czech economy or EUR 2.2 billion), and in the last year for warehousing, and postal and (from a 4.5 % share of total gross added 71.8 % (CZK 29 billion, or approx. EUR 1 telecommunication services sector reveals value in 1995 to a 3 % share in 2005). The billion). The significantly higher volumes of that in the decade under review, thanks to absolute decline in the value of investments money used for investment in 1995-1999 are strong investment trends, the weight of that became projected into the relative decline, obviously due to the prolonged construction sector increased in the total volume of so that the weight of that branch in total of the Temelín nuclear power station. The investment in the economy – from 11.4 % in investments in the Czech economy also next important investment wave in the power 1995 to 17.6 % in 2005. The highest share declined (from 13.1 % in 1995 to 5.5 % in industry can be expected after the year 2010, was achieved in 2001, when this sector 2005 – its share in total investments when coal-burning power stations are to be accounted for nearly one-fifth of the total declined faster than its share in total gross added value. This shows that the building of renewed in the north of Bohemia. volume of investments in the Czech Photo: archives

| 8 CZECH BUSINESS AND TRADE

large structures decisively influences the personal services sector (47.5 %), which also investment to the branch product ratio, i.e. investment rate in the branch. covers activities concerned with waste its gross added value, was the lowest in the liquidation, where the investment rate has catering and accommodation sector DIFFERENT LEVELS OF been more than 70 % annually since 1999 (18.5 %), construction (15.4 %) and INVESTMENT RATE (the 1995-2005 average is 85.8 %). In the education (12.9 %). The rate of investment in the Czech economy real estate sector, the investment rate is high between 1995 and 2005 was 31.9 % on a long-term basis in view of the boom on annually on an average. Investment thus the real estate market (77.6 %). A higher Drahomíra Dubská accounted for nearly one-third of gross than average investment rate in the economy Macroeconomic Analyses Department domestic product. Moving above this was achieved also by banking and insurance Czech Statistical Office considerably high value, even in international (35.7 %), mainly thanks to the strong (e-mail: [email protected]) comparisons of annual averages, were not investment wave in 1995-1997. After that, www.czso.cz only the analysed branches electricity, gas the investment rate in the sector was and water production and distribution (77.7 %) considerably reduced by the problems of the and transport, warehousing, and postal and commercial banking sector. In the remaining Editorial note: CZK values in the article have telecommunication services (49.3 %): a very branches the investment rate is lower than been converted into EUR by the average high investment to branch product ratio was the figure for the Czech economy as 2005 rate of exchange equaling 29.784 achieved in the other public, social, and a whole. In 1995-2005, the volume of CZK/EUR.

Preparations for an Amendment to the Investment Incentives Act

The system of investment BRIEF HISTORY totalled EUR 11 billion. Domestic and incentives must respond to the The system of investment incentives foreign firms have undertaken to create originated in 1997 and 1998, when almost 80 000 new jobs in the Czech development of the economy the Czech Republic had no such system in Republic. This number can be at least and support trends which are contrast to its rival countries – Poland, doubled since every newly created job important to the particular Hungary, Ireland, Spain, and Portugal. At adds one or two jobs on the side of country. In our case it is that time, several very important foreign suppliers. The largest number of incentives companies invested in other countries. For has been awarded to firms in the electrical investment that brings advanced example, Adam Opel built an automobile engineering, automobile, and plastics technologies and know-how, and plant in Poland, and Sony invested into industries, and these sectors have also offers employment to qualified a consumer electronics factory in Hungary. created most of the new jobs. The Czech Republic was one of the last people. This was why the European countries to have no system of PRESENT SYSTEM Ministry of Industry and Trade investment incentives. An advantage of the present system is its and the CzechInvest Agency have In April 1998, the Government transparency. It sets the terms and drafted an amendment to the approved a system of investment percentage amounts of incentives and incentives which was amended several applicants can see in advance if they can investment incentives act. times in the following years. The required be awarded investment incentives and minimum investment was gradually their amount. This eliminates the stage of reduced to allow more applicants to be negotiations. The system supports only entitled to investment incentives and also successful firms and cannot be used to to allow increased number of Czech firms rescue firms heading towards bankruptcy to access them. A more advantageous as the main incentive is tax relief which can minimum investment was introduced in be used only when the investor generates areas with a high rate of unemployment. a profit in the Czech Republic. Statistics show that investment The system supports all firms which incentives have been awarded to 333 pledge to invest the required minimum. projects in the manufacturing industry The present rule states that at least 40% of since 1998. The promised investment the total investment must be used to

9 | INVESTMENT

New investment incentives will be targeted at hi-tech projects purchase machinery and at least one half to the Government, includes the following This group includes, for example, the of this machinery must be on the OECD list changes: aeronautical and pharmaceutical of high-tech machines. – Reduces the required minimum industries, and the manufacture of Although the minimum investment has investment by 50%, i.e. to CZK 100 computers and scientific apparatus. The been reduced several times, the incentives million (approx EUR 3.5 million) and to second group, which will include, for are gained mainly by large firms. Support CZK 50 million (approx EUR 1.8) for example, the rubber industry, to small and medium-sized enterprises investment from equity capital. This will woodworking, and the manufacture of comes from programmes financed by enable a larger number of domestic firms food or metal products will be entitled to structural funds. But there is a gap to apply for investment incentives. 75% of the maximum support. between the two systems – medium-sized – Increases the requirement for at least Investment incentives will thus be firms with 250–1 000 employees do not 40% of the total investment to be used targeted on high-tech investment. apply for investment incentives because to purchase machinery to 60%.This will the projects are not large enough, and are support mainly projects placing higher If the draft amendment is approved by not entitled to support from programmes demands on technology. the Government and passed by Parliament, for small and medium-sized enterprises. – Simplifies the process for incentive it could become valid in the second half of Since this group of Czech firms has the approval – reduces the number of 2007. The amendment is in full keeping best prospects and potential to become commenting authorities and shortens with the new European Union rules for Central European or even European the time limit for state institutions and granting public support in the 2007-2013 players, the draft amendment to the investors to express their opinion. The period. It is important to recall in investment incentives act reduces the two-phase system of discharging conclusion the changes which are being minimum investment to CZK 100 million applications would be replaced with prepared in investment support to (approx EUR 3.5 million) throughout the a single-phase system. technology centres and centres of strategic Czech Republic. – In keeping with the OECD method, the services, i.e. reduction of the required new system would divide the production minimum investment and increase in the MAIN CHANGES sectors into two groups. The first group, required number of newly created jobs. The draft amendment to the investment which includes production requiring Tomáš Hruda incentives act concerning the a higher share of science and research Director General of CzechInvest Agency manufacturing industry, which will now go would be granted bigger tax incentives. (e-mail: [email protected]) Photo: LG archives

| 10 CZECH BUSINESS AND TRADE

Six Linchpins of the Operational Programme Enterprise and Innovations 2007–2013

The Czech Republic’s accession The Ministry of Industry and Trade has see a wider supply of tools for the financing to the European Union in 2004 been charged with the preparation of of the projects of small entrepreneurs the new Operational Programme entering business with minimum own opened the path for Czech Enterprise and Innovations. Its title alone capital, especially where it involves plans entrepreneurs to the use of demonstrates a certain qualitative shift of committed to innovations or the resources from EU structural focus towards an increased innovative development of the so-called spin-off performance in the sectors of industry and companies applying the outcomes of funds. Within the framework of services so that by the year 2013 they can research and development in practice. the Operational Programme make significant progress towards alignment The second OPEI priority area is focused Industry and Enterprise they with the level of the leading industrial on the development of existing small and could be awarded and utilise countries of Europe. medium-sized enterprises (exceptionally also In a follow-up to the National Strategic larger ones) with a short history, again by grants or advantageous credits Reference Framework, which forms the basis the form of bank instruments with exceeding CZK 10 billion for the Czech Republic’s negotiations with advantageous conditions (i.e. bank credits, (approx. EUR 347.8 million) from the European Commission on the extent and especially secondary ones, with lower the available 11 support forms of support using resources from the interest rates and newly also by a bank EU structural funds and the Cohesion Fund, guarantee), and by the form of subsidies for programmes that were organised the Operational Programme Enterprise and the support of investment in modern by the Ministry of Industry and Innovations (OPEI) deals in detail especially technologies, on the enhancement of ICT Trade for the shortened with the strategic objective "A Competitive infrastructure in companies and increase in Czech Economy". The Operational the share of services in GDP. Besides the programming period 2004-2006. Programme is to contribute to its full well-known and popular programmes of the Hundreds of successful projects implementation by supplying support type of DEVELOPMENT (support for the have been implemented in the funding within the framework of six acquisition of new technology, this time, area of purchases of new priorities that will be reflected in 15 specific however, limited to the regions of the Czech support programmes. Up to CZK 100 billion Republic with the most structural difficulties) production technologies, (approx. EUR 3.5 billion) is to be available for quite new support programmes are being introduction of production the seven-year period. prepared, such as the programme specially innovations, significant energy targeted at the extension of information and saving in production, EMPHASIS ON THE communication technologies in firms. DEVELOPMENT OF COMPANIES introduction of alternative The first area of interest is the creation of FUNDING FOR ALTERNATIVE energy sources, etc. conditions for the emergence and ENERGY SOURCES The 1st January 2007 opens development of new companies, especially As in the current programming period great small ones (i.e. up to 10 employees), attention will be paid to the area of reducing a new seven-year programming underpinning those committed to the use of energy in production and the period for all the European innovations. Just as in the current consumption of fossil primary energy Union member states. The Czech programming period, this area provides for sources as well as increasing the share of Republic will be one of those a wide use of returnable financial support renewable energy sources. In the scope of instruments, namely interest-free loans for the third OPEI priority, this area will receive countries where most of their newly launched small businesses (start-up attention under the ECO-ENERGY territory will fall under the companies). European legislation for the programme where the range of available Convergence programme (in the 2007-2013 new programming period also support funding will react to the continuing Czech conditions it will be the sets out the conditions for new financial high energy consumption in our production instruments in support of investment for the which greatly affects the ability of our whole territory of the country development of small and medium-sized producers to increase their own except Prague), in which support enterprises, based on cooperation between competitiveness and that of their products from the EU structural funds is private capital and public funds, in the form especially in comparison with the developed of new financial engineering instruments of countries of Western Europe. We have quite most intensive. the type of risk capital, guarantee funds and a number of very good results in this area as credit funds. The Commission itself offers well. For example, some bakeries have been the JEREMIE programme in cooperation with assisted in cutting their energy costs by the European Investment Fund of the suitable measures financed with the help of European Investment Bank, but it also allows European financing, leading to the the establishment of new managed funds exploitation of waste heat from their own FURTHER INFORMATION operating fully in the national competence operation, small water and wind power AVAILABLE AT: of each member state. It is to be expected stations are being built to supply local that following the launching of START, now electricity consumption, etc. www.mpo.cz/en/business-support/opei/ already a well-known and very popular www.strukturalni-fondy.cz/ programme that offers interest-free credits ASSISTANCE TO INNOVATIVE http://strukturalnifondy.cz/cms/ from the Czech-Moravian Guarantee and COMPANIES Development Bank, the Czech Republic will The fourth OPEI priority is focused on the

11 | BUSINESS AND PRODUCTION

January 2007 marks the beginning for all EU states of a new seven-year programming period for drawing money from EU structural funds area of innovations, both with a view to entrepreneurs starting new businesses management systems. Enhancing the stimulating the innovative activities of (especially in cases of innovative projects - in marketing capacity of small and medium- enterprises and to building capacities for the form of business incubators), to support sized enterprises and strengthening their industrial research and development. The for improving cooperation between the international competitiveness is gaining in well-known and very successful programme business sphere and research and importance as well. In addition to the INNOVATION will continue to support development institutions and educational traditional programme, MARKETING, which activities aimed at increasing the technical organisations (building additional science is focused on the provision of training, and use value of products, technologies and and technology parks, technology transfer assistance, information, and consulting services, at enhancing the effectiveness of centres, etc., and attention will also be paid services in international trade, support will production processes and at providing to the development of sector cooperating be newly given to the joint participation of services and introducing new methods of groupings of the type of clusters, poles of businessmen in foreign fairs and exhibitions, organisation of company processes. In excellence, technology platforms) up to the with the aim to reduce the individual costs addition, it will be extended to cover the development of infrastructure for education of enterprises in entering foreign markets. possibility of support for patent activities in industry (the current programme is known aimed at the quick transfer of the results of as TRAINING CENTRES) and development of The OPEI thus constitutes the basis for research and development to practical use, business property especially focused on a truly comprehensive effective support both on the part of businesses, and science brownfield regeneration (the programme for enterprise in all the phases of and research institutions and universities IMMOVABLE PROPERTY substituting the a company’s development. However, the because the latter are often ignored exactly existing REAL ESTATE programme). different forms of subsidies will no longer be because of the high financial costs involved earmarked for the support of, for example, in the protection of industrial property SUPPORT FOR SERVICES routine technology purchases, but really for rights. POTENTIAL, a programme to be The last OPEI priority focus will be the area areas that can significantly influence the newly launched, will assist the introduction of business support services. This effort will growth of competitiveness of our businesses and enhancement of companies‘ capacities be aimed at the further development of and that, as defined by the European Union, for the implementation of research, a quality and professional network of are linked with the so-called Lisbon Strategy development and innovative activities, i.e. it consulting services for entrepreneurs focused on the solution of long-term will help companies not only to cooperate (National Register of Consultants, regional macroeconomic and structural problems of with research and development consulting networks, "best practices" the EU as a whole and its individual organisations, but mainly to create enhancement, development of consulting members as well. The Czech Republic has conditions for their own research, in eco-energies and environmental reflected them in its National Reform development, and innovations. management systems). Technical and Programme the microeconomic aspect of The area that is to become the financially economic information will be provided and which can be implemented in close strongest OPEI priority is the one aimed at systematically prepared for entrepreneurs conjunction with the OPEI. the creation of a suitable environment for about the application of the latest findings Břetislav Grégr the emergence and development of from research and development as well as Ministry of Industry and Trade innovative enterprise, from the creation of innovative processes, and about the best Director, Structural Funds Department the necessary infrastructure for forms of enterprise and effective (e-mail: [email protected]) Photo: www.orangedisc.cz

| 12 CZECH BUSINESS AND TRADE

Favourable Foreign Trade Dynamics

The Czech Republic’s foreign In the first nine months of 2006 and developing economies) in exports to the trade has been experiencing (compared to 2005), foreign trade CIS, European transition economies, and surplus was EUR 146 million higher. other states. This development weakened a relatively favourable Foreign trade balance, which was in the the position of the EU25 countries, though development in 2006. This is black in all quarters of 2006 quarters, still crucial with a share of 83.9 %, and documented by values achieved recorded a surplus of EUR 1.4 billion. developing economies in overall exports. Territorially, the foreign trade balance was A favourable phenomenon was the in exports and imports, the size influenced by an increase in the trade improvement in the position of the CIS, of the balance of trade surplus, surplus with the EU25 countries from EUR European transition economies, and other as well as changes in the 6.7 billion to EUR 8.5 billion and with the states (from 5.9 % to 6.5 % overall) in total commodity and territorial European transition economies from EUR exports. 0.7 billion to EUR 0.9 billion, and by a rise in Imports rose year on year from all the structures. the trade deficit with other countries3), main territories. Above-average increases Compared to the same period of developing economies and the CIS4) (from characterised imports mainly from other 20051), the growth rate of both EUR 4.8 billion to EUR 6.7 billion overall). In states, European transition economies, and exports and imports increased. commodity structure, the balance of trade the CIS, imports from EU25 states and worsened in all the SITC sections except developing economies were below average. The export and import increase machinery and transport equipment, where The achieved dynamics of imports from the were high and amounted to the surplus increased year on year from EUR main territories resulted in the weakened double digit figures – exports to 19.9 % and imports 20.2 %. BALANCE OF TRADE DEVELOPMENT BY 2005 AND 2006 QUARTERS Foreign trade turnover soared by 2005 2006 one-fifth and totalled EUR 108.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q in EUR million billion. Exports, which increased Balance of trade total 789 151 7 38 941 271 180 by EUR 9.1 billion, accounted for of which: - with EU25 2 521 2 277 1 905 2 427 3 094 2 725 2 719 50.4 % of the year-on-year rise, of which: Germany 908 611 568 526 820 725 745 imports, EUR 8.9 billion higher, Slovakia 436 513 483 637 443 552 621 - with non-EU25 - 1 732 - 2 126 - 1 898 - 2 389 - 2 153 - 2 454 - 2 539 represented 49.6 % of the figure. of which: China - 531 - 646 - 737 - 1 013 - 866 - 867 - 1 041 As a result of the CZK Russia - 511 - 578 - 606 - 690 - 753 - 852 - 777 strengthening to the EUR, exports and imports in EUR were 2) 5.2 billion to EUR 7.4 billion. A significant orientation at EU25 countries (from 71.6 % rising more quickly than in CZK . increase of deficit occurred in trade in to 70.1 %) and at developing economies mineral fuels, lubricants and related (from 5.6 % to 5.5 %), a considerably materials (from EUR 2.5 billion to EUR 3.8 stronger representation was gained by the billion), remaining the highest of all the SITC CIS and other states, and to a lesser degree categories; the second highest deficit (EUR by European transition economies (from 2.3 billion) continued in foreign trade in 13.4 % to 15.4 %). chemical products. Movements in foreign trade commodities TERRITORIAL INCREASES IN EXPORTS structure appeared in the 1st to 3rd AND IMPORTS quarters of 2006 as compared to the same Exports rose year on year to all the main period of 2005 in: destinations. Above-average dynamics was – machinery and transport equipment (SITC apparent (besides exports to EU25 states 7) by high above-average export growth, and thus increase in the share of this Foreign trade development in the 2005 and 2006 quarters export (from 50.0 % to 52.5 %) in total exports. With the rise of EUR 5.9 billion, 30 the export represented 65.1 % of total

25 exports growth. Above-average growth was also recorded by the import of 20 machinery and transport equipment, and 15 this impacted on the strengthening of the position of engineering products in total 10 imports from 39.6 % to 40.0 %. 5 – manufactured goods classified chiefly by year-on-year changes in % material (SITC 6) by below-average export 0 quarter 1.Q/05 2.Q/05 3.Q/05 4.Q/05 1.Q/06 2.Q/06 3.Q/06 and import dynamics, and thus by the Exports Imports lowering of their share in both total

13 | BUSINESS AND PRODUCTION

surplus in passenger cars soared from EUR 2.5 billion in the 1st to 3rd quarters of 2005 to EUR 3.8 billion in the 1st to 3rd quarters of 2006, and in motor vehicle parts and accessories amounted to EUR 1.5 billion in both periods being compared. – improvement of the economic situation in the world and in the EU states in particular – unfavourable Terms of Trade

Export prices declined by 1.2 % in the 1st to 3rd quarters of 2006 as against the 1st to 3rd quarters of 2005 and import prices were 1.6 % higher in the same period. The movements in foreign trade prices were influenced mainly by the development of prices in the world market and the strengthening of the CZK to both the EUR and the USD. The world prices of industrial raw materials and food increased in the 1st to 3rd quarters year on year by a total of 30.6 %,5) their growth was under strong influence from the growth of petroleum and natural gas prices which went up by 31.4 % year on year overall. The higher petroleum and natural gas prices impacted negatively on the overall trade balance and significantly reduced the achieved surplus. In the 1st to 3rd quarters of 2006, the balance of trade deficit in petroleum, petroleum products In 2006, CR’s trade showed a favourable trend again and related materials amounted to EUR 2.9 billion and in gas, natural and exports (from 22.3 % to 21.2 %) and total growth exceeding export growth was manufactured, totalled EUR 1.6 billion. imports (from 20.8 % to 20.6 %). Foreign reflected in an increase in the deficit (from Compared to the development of foreign trade surplus in these products dropped EUR 0.6 billion to EUR 0.8 billion). trade in the EU25 states as a whole, the year on year (from EUR 0.9 billion to EUR dynamics of the Czech Republic’s foreign 0.6 billion). Foreign trade development in the 1st to trade was more favourable, but compared to – industrial consumer goods (SITC 9) by 3rd quarters of 2006 was under the impact the new EU member states the foreign trade higher growth in import than export, of some positive as well as negative growth was similar. According to Eurostat which was reflected in a slight decrease in factors, some of which were e.g.: data of 17 November 2006, the EU 25 trade the surplus (from EUR 0.4 billion to EUR – continuing industrial production growth balance from January to August 2006 ended 0.3 billion). From January to September 2006, in a deficit of EUR 2.7 billion, in the case of – chemicals and related products (SITC 5) by industrial production index reached110.5, of the new member states the deficit was EUR below-average dynamics of both export which 111.4 in the manufacturing industry. 2.0 billion. The Czech Republic was the only and import. Foreign trade deficit in these The highest year-on-year increase (by 22.8 one of the new EU member states to record products increased from EUR 2.1 billion to %) was recorded by the manufacture of a foreign trade surplus in the given period. EUR 2.3 billion. The highest deficit transport equipment. Production growth in Jiřina Semanová continued to be concentrated in medicinal the manufacturing industry accounted Czech Statistical Office and pharmaceutical products (EUR 0.8 decisively for the year-on-year rise in overall (e-mail: [email protected]) billion). exports. The most important item in www.czso.cz – inedible crude materials and mineral fuels manufacturing industry export was road 1) 2005 data are final as at 28 August 2006 and (SITC 2+3) by the highest import growth vehicles (SITC 78). In the 1st to 3rd quarters January to September 2006 data are updated as of all the SITC sections and below-average of 2006 export of road vehicles made up at 29 November 2006 closing date. 2) export growth. This development, under 17.4 % of total exports, of which export of For CZK to EUR conversions, the Czech Statistical Office uses average monthly exchange rates strong pressure from the high prices of passenger cars (SITC 781) was 9.2% and based on Czech National Bank data. In 1Q – mineral fuels, impacted on the year-on- export of motor vehicle parts and 3Q 2006 exports and imports in CZK increased year on year by 14.0 % and 14.2 % respectively. year increase of the deficit in this SITC accessories (SITC 784) was 5.7 %. The 3) China, North Korea, Cuba, Laos, Mongolia, and category. export rises in passenger cars and in motor Vietnam. – agricultural and food raw materials and vehicle parts and accessories accounted 4) Commonwealth of Independent States. 5) See the September 2006 indexes of the world products (SITC 0+1+4) by below-average respectively for 15.7 % and 5.7 % of total prices of industrial raw materials and food, Czech Statistical Office, October 2006 growth of both export and import. Import exports growth. The balance of foreign trade Photo: www.orangedisc.cz

| 14 CZECH BUSINESS AND TRADE

Castings to Sweden

The manufacturer of steel and Another important territory where marketing support, PR in the press, ductile iron castings, welded almost 40% of the company’s invitations to firms, organisation of the products are headed is Scandinavia. stand, etc. This documents not only the components, and railway bogies, The company has been operating great interest of Scandinavian firms in and at the same time upholder successfully on the Swedish market for subcontractors from the Czech Republic, of an almost century-old ten years and include sales to the car but also the perfect marketing manufacturer Volvo. Thanks to last preparation of the fair. This was one of tradition, ČKD Kutná Hora a.s., year’s participation in the Swedish Elmia the aspects thanks to which we met for exports over 85% of its Subcontractor Fair, organised by the first time representatives of the production to the markets CzechTrade, the company’s activities have Danish producer who is number one in in Western Europe, the USA, expanded to Denmark. "In 2004 we had the world market of wind power plants", a joint exhibition stand with the Petr Berka has noted. ČKD Kutná Hora and Canada. Its overall annual CzechTrade Agency at Elmia supplies 15 types of welded structures for production capacity is 46 000 Subcontractor and since this cooperation the Danish company. In 2006 the business tonnes of castings. In 2005 its was successful several Czech firms started and sales generated about CZK 70 sales exceeded CZK 2.2 billion appeared at the fair under the Czech million (approx. EUR 2.3 million), the Republic symbol in 2005", says marketing anticipation for 2007 is three times the (approx. EUR 73 million) and sales director Petr Berka. "I must 2006 output. and a further slight increase praise the work of the CzechTrade Stockholm office director in this respect is expected in 2006. Further information about ČKD Kutná and appreciate his professional approach. Hora is available at www.ckdkh.cz He organised the exposition, including

Teamwork by UNISTAV

The joint stock company PROJECTS Czech Republic from France, Switzerland, UNISTAV, which was founded IMPLEMENTED IN THE Austria, Germany, and Taiwan. In the RUSSIAN FEDERATION tender for this contract UNISTAV outbid in 1990, ranks among well The "OOO UNISTAV" subsidiary (set up in a number of well renowned construction established construction firms in 2003) based in St Petersburg, holds companies, primarily by offering the the Czech Republic and is one of a building license up to 2009. Its successes Russian client the possibility of project a few which are still solely Czech include the award of a special license by financing in the form of an export credit. the Russian Ministry of Culture for the owned. The main part of the reconstruction of historical buildings in the PROJECTS UNDER operations of the UNISTAV joint Russian Federation. Examples of projects PREPARATION stock company are complete implemented by the company in Russia The success of this project and the include the construction of the Moscow satisfaction of the Russian client with the deliveries not only for new Sheremetyevo airport terminal for the above described procedure placed building projects, but also for French company FM Logistic, UNISTAV in a position to open negotiations the reconstructions of housing, reconstruction of the "Premium" on another contract in 2006. In addition to amenities, industrial, and civil restaurant in Moscow, and reconstruction the wrapping paper and box-making plant, and expansion of a tinned pate and meat the Russian client wants to build a paper engineering works. After plant for HAMÉ Babice. mill with an annual capacity of 200 000 achieving a stabilised position tonnes of cardboard, an investment worth in the Czech construction market LEADER IN UNIQUE EUR 110 to 115 million. A similar project is in the 1990’s UNISTAV founded CONTRACT being negotiated by UNISTAV with In 2005 the company concluded a unique a partner from St Petersburg - the Italian its subsidiaries - limited contract with a Russian client. It concerns ICKM company. The deal is to result in companies – one by one the construction of a wrapping paper and a "joint-venture" for cooperation on in Slovakia, the Ukraine box-making plant in the town of Dmitrov, projects in St Petersburg and Moscow. Moscow Region, worth EUR 20.1 million. and the Russian Federation. This "turnkey" delivery is unique in that it includes subcontracts for deliveries of Further information about UNISTAV is technology from six countries, besides the available at www.unistav.cz

15 | REGION

NUTS 3 – Olomouc Region

The Olomouc Region lies in Jeseník central Moravia and in its northern parts forms a 104- kilometre-long state border with ·umperk Poland. With an area of 5 267 sq. km, it is the eighth largest of the Olomouc

14 regions in the Czech Republic Prostûjov Pfierov and its share of the total area of the Czech Republic is 6.6%. From the point of view of regional administration, the The statutory town is the regional capital region of Haná, i.e. the Olomouc, Přerov, Olomouc Region together with Olomouc with 110 000 inhabitants. and Prostějov Districts. the Zlín Region form the area of Geographically the Region is divided into • This southern and central part of the the northern mountainous area of the Region includes the most fertile lands. Central Moravia (NUTS 2). It is Jeseníky Mountains, whose highest peak is The average yields of grown crops – divided into five districts (NUTS 4) Praděd (1492 metres altitude), and the spring barley, winter wheat, rape and – Jeseník, Olomouc, Prostějov, southern part of the Region consisting of sugar beet for technical use reach the the Haná flatlands. The Morava River flows highest values in the Czech Republic. Přerov, and Šumperk. The through the Region; the lowest point of the inhabitants of the Olomouc Region (190 metres altitude) lies on its TRANSPORT Region live within 397 surface near Kojetín in the Přerov District. The land transport accessibility of individual municipalities, of which 30 have parts of the region is secured by a network ECONOMIC of 750 km of railways and roads. While been granted the title of town. CHARACTERISTICS railways are relatively evenly placed in the The Olomouc Region has a strong industrial Region, motorways and roads are located in tradition supported by a varied sector and the southern central part of the Region. branch base and a qualified labour force. It Přerov is home to an important railway provides very good conditions for the intersection and the town is a crossroads of further development of all kinds of entrepreneurial activities. Employment according to sector division • The industrial centres of the Region are Agriculture mainly the towns of Olomouc, Přerov, Building and forest and Prostějov. industry 6 % management 6 % Krajský úřad Olomouckého kraje • Main industrial sectors, creating 72% (Regional Office of the Olomouc Region) added value in production: Jeremenkova 40a – engineering 779 11 Olomouc, Czech Republic – electric machinery and appliances Phone: +420 585 508 111 – food industry Fax: +420 585 508 813 – metalworking industry Services 40 % Industry 48 % e-mail: [email protected] – glass, ceramics, and building materials www.kr-olomoucky.cz industry important road routes providing transit – clothes industry transport in the direction north – south Informační centrum Olomouc • GDP reaches 78% of the average in the (Poland – Austria and further), in the (Olomouc Information Centre) Czech Republic and 55.3% in the EU. direction east-west (Slovakia and further) Horní náměstí – radnice • The Region’s centres include good and it connects northern and southern Phone: +420 585 513 385, 585 513 392 conditions for the expansion of services Moravia and eastern Bohemia. The most Fax: +420 585 220 843 and in the whole region there are good important routes are D1 – Prague – Brno – e-mail: [email protected] conditions for the development of Olomouc – Ostrava, D2 motorway to www.olomouc-tourism.cz tourism. Vienna, E 442, I/35 Liberec – Hradec Králové www.olomouc-travel.cz • The economy has also been strengthened – Olomouc – Poland. by the arrival of foreign investors. In The nearest airports for international Katastrální úřad pro Olomoucký kraj recent years the investments have mainly public transport are in Brno-Tuřany Airport Katastrální pracoviště Prostějov included engineering, the textile industry, (www.airport-brno.cz) approx. 70 km (Land Register Office for the Olomouc electroengineering, the food industry, away, Ostrava-Mošnov (approx. 80 km) and Region, Land Register Office in Prostějov) and the chemical and processing in Prague-Ruzyně 270 km away Komenského 4/82, 79601 Prostějov industries. (www.prg.aero/cs). There is an airport for Phone: +420 582 302 511 • The food industry, which is based on international public transport with limited Fax: +420 582 302 520 primary agricultural production, holds traffic near the town of Olomouc (3.8 km) e-mail: [email protected] a significant place, especially in the ([email protected]). This airport is run by

| 16 CZECH BUSINESS AND TRADE

the Olomouc municipal office. There is also BRIEF CHARACTERISTICS OF THE REGION an army airport in Přerov. NUTS Area (sq. km) Population Municipalities Population density (persons/sq. km) EDUCATION, CULTURE, AND NUTS 4 – Jeseník719 41 862 24 58 TOURISM NUTS 4 – Olomouc 1 618 228 736 95 141 The network of educational facilities NUTS 4 – Prostějov 770 109 524 96 142 consists of 353 pre-schools, 279 elementary schools, 20 grammar schools, NUTS 4 – Přerov 845 134 497 104 159 48 specialised secondary schools, 41 NUTS 4 – Šumperk1 316 124 912 78 95 vocational schools and 7 higher education NUTS 3 – Olomoucký kraj 5 267 639 531 397 121 schools. The centre of education is the NUTS 1 – Czech Republic 78 867 10 268 607 6 248 130 Palacký University which offers bachelor Source: Czech Statistical Office (as of the first half of 2006) and master educational programmes at seven faculties (science, education, medicine, philosophy, law, theology and visit the Protected Landscape Area of DISTANCES TO SELECTED EUROPEAN physical culture) with 20 000 students Jeseníky with the largest Moravian peatbog CITIES (www.upol.cz). The university founded the of Rejvíz (www.rejviz.info) and the 45- European cities km technological park and biotechnological metre-long Vysoký waterfall, the Dlouhé Berlin 500 centre which will help increase the standard Stráně water reservoir and power station, Budapest 389 London 1473 of research and development in the region. and other natural sights. Moscow 1715 Since 2004 there has been a private There are also many caves in the Paris 1302 College of Logistics in Přerov (www.vslg. Olomouc Region – the Javořičské, Vienna 198 cz). Mladečské and Zbrašovské aragonite caves Warsaw 474 From the point of view of the number (http://jeskyne.unas.cz/index2.htm). Bratislava 197 and significance of natural and cultural sites, the Olomouc Region is among the richest in the Czech Republic and it is an Average gross monthly wages 2001–2005 (EUR) Unemployment rate 2001–2005 (%) important area for tourism. There are many Olomouc Region CR Olomouc Region CR castles, chateaus, churches, museums, 700 641 655 602 14 11.78 12.2 12.48 11.73

575 % galleries and curative spas in the region EUR 600 559 548 521 508 12 10.31 10.65 (www.hrady.cz, www.priessnitz.cz, www. 475 9.81 9.47 500 444 8.9 8.88 lazneslatinice., www. lazneskalka.cz). 10 400 The historical town of Olomouc is 8 300 renowned for its many Romanesque, 6 200 4 Gothic, and Baroque monuments. The 100 2 mountainous area in the northern part of 0 0 the region offers great opportunities for 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 sport and curative recreation. Tourists often EUR exchange rate as of 31 December 2005 (29 CZK).

OLOMOUC REGION – VACANT AREAS FOR INVESTORS Name District Area (ha)sq.m. Price (EUR/sq.m) Contact Jeseník – Za podjezdem Jeseník 17.06/170 600 negotiable The town of Jeseník, e-mail:[email protected] Zlaté Hory – PZ západní (west) Jeseník16.95/169 500 negotiable The town of Zlaté Hory, e-mail: mě[email protected] PZ Litovel Olomouc 10/100 000 3-7 The town of Litovel, [email protected] Olomouc – Holice, Šlechtitelů Olomouc 4.3/43 000 5-9 Olomouc Municipal Office, e-mail: [email protected] Chválkovice, Železniční Olomouc 5/50 000 19-22 Chválkovické sklady Olomouc a.s.( Chválkovice Storehouses Olomouc PLC), Jaroslav Šafrata, Phone: 585311408, Fax:+420 585311406 Šternberk – Lhota jihovýchod (southeast) Olomouc 24/240 000 negotiable The town of Šternberk, e-mail: mě[email protected] Šternberk – Lhota sever (north) Olomouc 16.2/162 000 negotiable The town of Šternberk, e-mail: mě[email protected] Prostějov – Kralická (Sector B,C) Prostějov 12.81/128 100 negotiable The town of Prostějov, e-mail:[email protected] Hranice – V Poli Přerov 20.2/202 000 negotiable The town of Hranice, e-mail: radka.ondriasova@město-hranice.cz Lipník nad Bečvou Přerov 20.5/205 000 negotiable The town of Lipník nad Bečvou, e-mail: dlesková@meu.lipnet.cz Přerov – Újezdec Přerov 1.5/15 000 negotiable The town of Přerov, e-mail:[email protected] Šumperk – PZ III Šumperk 6.5/65 000 negotiable The town of Šumperk, e-mail: [email protected] Zábřeh – Leštinská Šumperk 22.69/226 900 negotiable The town of Zábřeh, e-mail: [email protected] Prostějov/Kralice na Hané – Sektor G Prostějov 26.8/268 000 negotiable The town of Prostějov, e-mail: [email protected] Mains in all zones: water, gas, electricity, sewerage. PZ Litovel, Olomouc - Holice, Šlechtitelů and Chválkovice, Železniční - heat supplies

17 | REGION

New Opportunities in the Olomouc Region

The accession of the Czech The offer of labour exceeds demand and this (approx EUR 7.2 million) from the structural Republic to the European Union is could facilitate the arrival of new investors funds of the European Union, and used for whom it will not be difficult to find a credit of CZK 900 million (approx EUR 30 a great challenge and opportunity professionally qualified employees. One million) from the European Investment Bank. for the Olomouc Region, since it benefit in this respect could be our co- The Olomouc Region has also used puts emphasis on the economic operation with the employers, as the money from the structural funds of the development which belongs to the Olomouc Region establishes secondary European Union for the improvement of life schools and training centres and can adapt within the Region, education, the social main objectives of its strategic the newly studied subjects to the infrastructure, and publicity for tourism. development plans. requirements of the labour market. In the One great opportunity for the Part of the Olomouc Region future, more graduates could follow up their development of the Olomouc Region has good connections to the studies with work in these firms. Partnership involved the grant programmes in the in negotiations with entrepreneurial framework of the Joint Regional Operation motorway network and this representatives and employees rank among Programme of the Czech Republic and the certainly is an advantage. the strengths of our activity. An integral role Operation Programme of Human Resources But the Region is tackling high is played by the offer of university education Development, which focused on supporting unemployment and a low in the Region. Palacký University in business in the disaster areas of the Region, Olomouc, the second oldest university in the as well as social integration, tourism, and per capita share in the GDP.These Czech Republic, currently has almost 20 000 professional education. Through these grant two aspects are adverse on the students. Also important for the Olomouc programmes, the Region has distributed one hand, but could be an Region are the initiatives of the new schools, money from the European Union structural opportunity on the other. such as Moravian College in Olomouc, funds to entities operating in the Region which offers studies in economics and (377 projects for CZK 75 million - approx management, and the uniquely focused EUR 2.5 million have been completed). University of Logistics in Přerov. Of greatest importance for regional The Olomouc Region will continue to development in the 2007-2013 programme support small and medium-sized enterprises, period is the Central Moravian Regional which have been the backbone of its Operation Programme of Cohesion. Its chief economy for several years. The regional priorities are transport, integrated government intends to co-ordinate development, and restoration of the Region, assistance with the firms which will combine and, last but not least, tourism. A total of their own resources and money from central CZK 19 billion (approx EUR 640 million) will state and European sources. be divided. This programme will be In the 2004-2006 programme period, the managed by the newly established Regional Region has been striving to attain these Council Office for the Olomouc and Zlín objectives in several ways. For example, it Regions. has realised its own development projects in the transport infrastructure. Besides investing its own financial means into the infrastructure, the Region had received up to Ivan Kosatík November 2006 a total of CZK 217 million President of the Olomouc Region

EU Funding Attracts Great Interest

The Olomouc Region belongs Investors have learned to cooperate with total of CZK 184.5 million (approx. EUR 6.3 among the areas into which state agencies mediating the support for million). their plans. In the Olomouc Region 169 a great number of investments projects applied for the Operational INTEREST IN THE ROZVOJ have been made. This concerns Programme Industry and Enterprise alone, (DEVELOPMENT) PROGRAMME various sectors. which was organised by the Ministry of Entrepreneurs were most interested in the Industry and Trade. So far (until the end of Rozvoj (Development) Programme (under November 2006) financial support was the Operational Programme Industry and granted to 71 projects, amounting to the Enterprise). Out of the 58 projects

| 18 CZECH BUSINESS AND TRADE

entered into this programme, support was MORE COMPLEX PROJECTS positions of companies working in this field. pledged to twenty companies SUPPORTED FROM EU The sector of producers of trailers and trailer representing funding of total amount CZK FUNDING bodies is exceptionally dynamic in turnover 137.564 million (EUR 4.913 million). The In the Olomouc Region several more increase as well as in export. Former army largest funding, exactly CZK 20 million complex projects were realised thanks to barracks in Neředín in Olomouc will also (approx. EUR 0.7 million), was granted to funding from structural funds. One of them receive support from the European Union. the Olomouc firm PRESBETON Nova s.r.o. is the establishment of a cluster for The dilapidated grounds of the army (www. presbeton.cz) for the purchase of producers of trailers, semi-trailers, and barracks will be renovated thanks to the a fully automated line for the production trailer bodies from the Olomouc Region Olomouc Municipal Office and companies of interlocking and shaped paving, kerbs, supported from the KLASTRY (Clusters) will thus gain 7 new hectares of very and shaped pieces. The new production programme. In cooperation with the Brno attractive land for their business. Total cost line will help to lower production costs, University of Technology they want to in the first phase of construction will exceed selling prices and to increase support innovations, increase their CZK 36 million (approx. EUR 1.2 million). competitiveness. competitiveness and strengthen export More at www.czechinvest.org

The Chamber Supports Activities and Competitiveness of Companies

The priority for the Chamber of Representatives of the Chamber of provide a high-quality consulting and Commerce of the Olomouc Commerce of the Olomouc Region information activity and business service. participate on foreign trips organised by Region is the support of the Regional Council (e.g. in 2006 to the PREPARATION FOR NEW entrepreneurial activities on US, Russia, and Serbia). The Chamber of PROGRAMMES a regional level, representing Commerce of the Olomouc Region The Chamber of Commerce of the establishes contacts with foreign business Olomouc Region also participates on joint and promoting interests of and commercial chambers, presents regional operational programmes of the businessmen and chambers of business activities of the Olomouc Region Olomouc Region. Within the framework commerce in the districts of and mediates contacts for these of the Partnership for the Development of Jeseník, Olomouc, Prostějov, companies. the Olomouc Region project and in At the moment the Chamber of cooperation with the Representation of Přerov, and Šumperk. Commerce of the Olomouc Region the Olomouc Region in Brussels, the The Chamber of Commerce of cooperates with the Olomouc employment Chamber of Commerce of the Olomouc the Olomouc Region closely agency on the project With Education to Region is currently preparing a conference cooperates with the Regional Prosperity – Olomouc Region within the aimed at the programming period 2007- framework of the Development of Human 2013. The planned conference will focus Council of the Olomouc Region Resources Operational Programme. especially on the issue of new as well as with the The aim of this project is to increase the programmes for competitiveness, Representation of the Olomouc employers’ and employees’ adaptability to innovation, and increase of productivity in the changes in economic and technological the sectors of industry and services. The Region in Brussels. conditions and the support of small and Chamber of Commerce of the Olomouc medium companies’ competitiveness. Region will prepare several seminars for The Chamber of Commerce of the the year 2007 which will cover this matter. Olomouc Region and its partner chambers Through euromanagers of the Chamber of commerce in districts realise training of Commerce of the Olomouc Region a trip courses aimed at language learning, to Belgium and Holland for entrepreneurs marketing, ISO norms, or environmental from the Olomouc Region is being issues. Another extensive activity is the prepared. establishment and maintenance of an Eva Stachová information network for entrepreneurs Chamber of Commerce (InMP) within the framework of the of the Olomouc Region national InMP project whose main aim is to www.khkok.cz

19 | REGION

TRUMF Continues in the Family Tradition

TRUMF International s.r.o. was Immediately after its foundation, TRUMF developed on the basis of customers’ established in 1992 and has International s.r.o. became a dynamic and specific demands. A product thus progressive company. The main turning developed is checked in the presence of resurrected the sixty-year family point in the development of the firm was in the customer in the development business tradition in meat and 1995, when the company launched its own workshop on production equipment which smoked meat production. The line of products for the food industry with simulates large production plants. The family ties go back as far back the TRUMF brand name. It is a group of project was co-financed by the European meat products popular in the Czech Fund for Regional Development and the as 1933. Republic as well as in the rest Czech Ministry of Industry and Trade. of Europe. It uses extracts of natural spices TRUMF products are produced to the as an irreplaceable ingredient. highest European standards. The level of the quality management is attested by the SPICES FOR THE WHOLE certificate under the international ISO WORLD 9001:2000 norm as well as the ISO The company uses spices and other 14001:2004 certificate for the natural ingredients from various countries for its environment granted by the prestigious production. Purchase is done in countries company BVQI. The consistency of quality where spices and the relevant raw inspection is proven by the fact that materials have the best sensory profile, TRUMF International s.r.o. was audited e.g. paprika in Hungary, black pepper in several times by supranational food India, carrageenan in Chile. The spices are companies – always with success. always purchased from certified producers At the moment there are 130 and suppliers to ensure the high quality employees in the company, the yearly standards. All suppliers have to undergo an turnover in 2005 was CZK 397 million initial audit and their reliability and (approx. EUR 13.2 million). TRUMF capability to sustain a stable high-quality International Ltd. successfully exports to standard is tested. Russia, Latvia, the Ukraine, Kazakhstan, The product range of TRUMF includes Belarus, Slovakia, Germany, Poland, not only products in the traditional Kyrgyzstan, Estonia, Romania, Hungary, categories (small and long-life meat and Moldavia. products, hams, smoked meats), but there are many others (cooked meat products, semi-finished products, and additives).

DEVELOPMENT WORKSHOP In order to improve the quality of customer service, a development workshop was set For more information, go to For the production of spices, the firm uses raw mate- up in 2005, where new products are www.trumf.cz rials from various countries

Students and Czech University Graduates Attract Investors

Investment incentives, a good Olomouc has a large potential to become 2006. This investment of almost CZK 40 infrastructure, and a location in the centre of international services due to million (EUR 1.3 million) will provide more Palacký University. In contrast to other than 300 jobs mainly for qualified persons. the centre of Europe are not the universities, its studies are focused on the The centre will serve clients from the whole only advantages attracting humanities and foreign languages. of Europe, and so high demands are placed investors from around the world on the knowledge of foreign languages. ESTABLISHMENT OF NEW Another example of successful co-operation to Czech towns. A qualified and CALL CENTRES is the investment of more than CZK 22 erudite workforce is playing an This was used by the prominent company million (approx EUR 0.73 million) by the ever bigger role. Schneider Logistics, which opened its new British company Westcombe International European centre of client support and Research s.r.o. into a call centre in Olomouc. accounting services in Olomouc in March This is the first British investment placed in Photo: Trumf

| 20 CZECH BUSINESS AND TRADE

Olomouc with the participation of other languages and who can do well at the centres. Technically educated graduates CzechInvest. The company conducts centre. from universities and secondary schools with international marketing research for firms knowledge of foreign languages are in high such as Accenture, Hewlett Packard, IBM, A SHIFT TOWARDS SHARED demand," according to Tomáš Hruda, and Microsoft. The Olomouc centre is to SERVICES CzechInvest Director General. commence operations in February 2007. "But employees having a good knowledge Westcombe Managing Director Justine of foreign languages are not only sought by Kemp says that this type of investment can call centres. In 2006 some twenty firms be placed anywhere, but the company chose announced a plan to set up a Czech Centre www.westcombe.com Olomouc because of Palacký University and of Shared Services, and another 10 www.schneiderlogistic.com plenty of students who speak English and companies intend to invest in technology www.czechinvest.cz

440-year History of University Education in Olomouc

Olomouc has been a significant Nowadays, Palacký University has seven centre of erudition and culture faculties: St. Cyril and Methodius Theological Faculty, Faculty of Medicine, since the Middle Ages. The Philosophical Faculty, Faculty of Science, history of the Olomouc Faculty of Education, Faculty of Physical University starts in 1566 with Culture, and Faculty of Law. There are some the establishment of a Jesuit 20 000 students and over 1400 lecturers. college, which received the same SUPPORT FOR rights as other European TECHNOLOGIES universities in 1573. This second After 1990 the University opened to Europe and the world and started to establish oldest university (after Charles various international contacts to support University) in the Czech Republic the exchange of ideas. The University also Part of the University is a Scientific and Technical Park not only influenced Moravia and operates the Science and Technology Park, supporting beginning and developing small and me- dium-sized businesses Silesia, but many times its which is one of the accredited science and technology parks in the Czech Republic. It nanoup.cz) and the laboratory of growth influence reached as far as was founded in 2000 as the Centre for regulators. Austria, Germany, Poland, East Innovation and Technology Transfer and its The Information Centre appears almost Europe, and Scandinavia. The premises were reconstructed by Palacký symbolic, being equipped with the latest University is connected with the University with financial help from the technology and consisting of a library, an Czech Government through the funding audiovisual centre, centre for computer names of many excellent support of the Czech Ministry of Industry technology, and university press located in scientists, e.g. Jakub Kresa and Trade and the Czech Ministry for the old Baroque armoury. The academic ("Euclid of the West") and the Regional Development and the pilot project community and the public use the Art of the Phare programme. Its aim is to Centre located in the monumental Baroque founder of genetics, Gregor support the establishment and complex of the old Olomouc University. The Mendel. development of small and medium centre provides excellent facilities for enterprises in the Olomouc Region, to theoretical as well as practical education. create conditions for the localisation of Olomouc with its unique atmosphere is high-tech companies, to support the a sought after centre of international creation of new qualified jobs, and to conferences and festivals. Academia Film encourage technology transfer Olomouc, an international festival of (www.vtpup.cz). At the moment it documentaries and video programmes provides space for four innovative firms (www.afo.cz), has a tradition of over forty concentrating on biotechnologies, optical years. electronics, and automation. The park also includes two laboratories; the Centre for Nanomaterial Research (www. For more information: go to www.upol.cz Photo: Palacký University

21 | REGION

Olomouc Olomouc District

Region. Olomouc makes up 31% of the total BRIEF STATISTICS Magistrát města Olomouce area of the Olomouc Region. Indicator District Region The centre of the District – the town of (Olomouc Municipal Office) Area (in sq. km) 1618 5267 Horní náměstí 1 Olomouc (www.olomouc.com) with its Population 228 736 639 531 771 27 Olomouc 110 000 inhabitants has been a historical centre Czech Republic since the times of the Great Moravian Empire. Inhabitants / sq. km 141 121 Phone: +420 585 513 111 It is the seat of the second oldest university in Source: Czech Statistical Office (as of the first half of 2006) Fax: +420 585 513 433 the Czech Republic – the Palacký University e-mail: [email protected] (www.upol.cz), founded in 1573, and it is Apart from improving the conditions for www.olomoucko.cz currently the seat of the Olomouc Region. foreign investors and larger companies, the From an economic perspective, it is town is also preparing areas of investment for a district with developed agriculture, the food the support of smaller local firms. Together The Olomouc District lies in the southeast of and processing industries, and mechanical with Palacký University, it has prepared the the Olomouc Region. The majority of the engineering. “Šlechtitelů“ industrial zone project and Olomouc District lies in the flatlands of the Foreign investors have taken advantage of entrepreneurial incubator, which was realised Hornomoravský úval Basin, through which the the prepared industrial zones. Since 1998, two with EU financial support within the Morava River and its tributaries flow. Its largest industrial zones have been set up, both are framework of the Phare programme. The part consists of the fertile flatlands known as now fully occupied, mostly by foreign town also focuses on the reconstruction of Haná. investors. In 2006, another zone of 16 ha was obsolete and unused areas, the so-called With a total area of 1512 sq. km, it is the opened and new developers’ projects are brownfields. largest of the five districts of the Olomouc starting up. The Olomouc District is an important area from the point of view of tourism. It has many SELECTED FIRMS natural attractions (lakes, water reservoirs, Name Based in Sector Contact caves) and cultural sights concentrated mainly Olma , a.s. Olomouc food industry www.olma.cz in the town of Olomouc (www.olomouc- UNEX, a.s. Uničov engineering www.unex.cz tourism.cz). Farmak , a.s. Olomouc chemical, plastics, The Olomouc District has a relatively dense rubber-making industry www.farmak.cz network of regional and local cycle paths and Sigma Group, a.s. Lutín pump production www.sigma.cz there are also two long-distance cycle paths A-Gross, s.r.o. Holice textile costume jewellery that traverse the District – the Moravian Cycle production www.a-gross.cz Path and the Amber Cycle Path that cross Gemo Olomouc, s.r.o. Olomouc building industry www.gemo.cz Moravia from northwest to southeast and Výstaviště from northeast and southwest respectively and Flora Olomouc, a.s. Olomouc management of exhibitions www.flora-ol.cz meet in Olomouc (www.cykloserver.cz). Beta Olomouc, a.s. Olomouc building materials www.betaol.cz Mobilia Interier,s.r.o. Olomouc furniture manufacture www.mobilia.cz Informační centrum Olomouc Presbeton Nova, s.r.o. Olomouc concrete products www.presbeton.cz (Olomouc Information Centre) Armatmetal, s.r.o. Olomouc radiators www.armatmeral.cz Horní náměstí – radnice Phone: +420 585 513 385, 585 513 392 Siwatec, a.s. Olomouc pumps www.siwatec.cz Fax: +420 585 220 843 GMMS, s.r.o. Olomouc skates www.gmms.cz e-mail: [email protected] Mora-Ttop, s.r.o. Uničov gas boilers www.moratop.cz www.olomouc-tourism.cz Univit, s.r.o. Uničov veterinary medicines www.univit.cz www.olomouc-travel.cz

FOREIGN INVESTORS Investor Country of origin Czech partner Sector Contact Leroy somer S.A. France M.L.S.Holice generator production www.leroy-somer.com Rheinische Post Germany Mafra, a.s. printing www.mafra.cz Nestlé Food Switzerland Nestlé, závod Zora food industry www.jojo.cz/onestle/zora.htm Fardis NV Belgium Fardis CZ, s.r.o. chemical industry www.fardis.cz WEBA Holding, GmbH Austria SIWE, a.s. engineering www.siwe.cz RAF Rubinetterie S.p.A. Italy RAF Armatury water taps www.raf.cz Ingersoll-Rand European Netherlands IRCR Manufacturing, s.r.o. pump manufacturing www.ircr.cz Holding Company B.V. Timken Comp. USA Timken ČR, s.r.o. metalworking www.timken.com Onamba Co.Ltd. Japan Czech Onamba, s.r.o. cables www.onamba.co.jp Kappa Packaging Group Netherlands Kappa Empak, s.r.o. cardboard packaging www.kappapackaging.cz Gorenje Slovenia Mora Moravia, s.r.o. cooking appliances www.mora.cz Grundfos Holding AG Switzerland Grundfos, s.r.o. pumps www.grundfos.cz Exerion Precision Technology Netherlands Exerion Precision metalworking www.exerion.cz Holding B.V. Technology Olomouc s.r.o. EIKA, S. COOP Spain Foundeik, s.r.o. foundry industry www.foundeik.cz Schneider Logistics Europe B.V. Netherlands Schneider Logistics international www.schneiderlogistic.com Europe s.r.o. forwarding

| 22 REGION

Olomouc Is Developing Education and Research and Supporting Business

Olomouc is one of the most Olomouc, has the second most important important towns in the Czech and largest urban monument reserve in the Czech Republic, after Prague. It is the Republic. Due to its eventful capital of the Olomouc Region in which history, ancient university, many significant institutions are based. cultural and historic traditions, TRADITION OF INDUSTRIAL and primarily its situation in the PRODUCTION centre of Moravia, it has always Industrial production has a long tradition been attractive for tourists, in Olomouc. The main sectors are the food tradesmen, and entrepreneurs industry and engineering with the others being the chemical industry, electrical alike. Olomouc is home to engineering, plastics processing and the Palacký University, four building industry. Engineering, electrical vocational schools, and 24 engineering, and the printing industry are secondary schools of various being further developed due to foreign investment, especially in the industrial orientations including three zones of the town. The town wants to bilingual grammar schools. The maintain the competitiveness of the private Moravian College in traditional industrial sectors, and to improve conditions for the development of Olomouc – Town Hall Olomouc, which is focused on new branches and firms. The services and economics, management, and trade sector is developing dynamically. The zones. Two industrial zones which opened information systems, opened in town has become the regional shopping in 1998 are fully occupied, mainly by 2005. The education levels of the centre with important retail chains and foreign investors, including TIMKEN newly established distribution centres. (manufacture of automobile bearings), and Olomouc population is above the Olomouc clearly belongs among the LEROY SOMER (generators for wind-power Czech average and this creates towns with growth potential, and attracts plants). Foreign manufacturers have good conditions for the economic investors for its industry and services created approximately 2 000 new jobs and development of the Region. because of its tradition, well-educated established co-operation with local firms in workforce, and excellent transport sub-supplies. The US company Schneider availability. In September 2005, the Logistics Europe, which deals in Olomouc Assembly of Deputies approved outsourcing, is also established in the the updated "Strategic Plan for the town. In addition to the conditions for Development of the Town of Olomouc and foreign investors and large firms, the town Micro-region". Its original version in 2001 is preparing areas for the development of formulated the strategic local firms and co-operates with the visions and objectives for university for the development of a science future development. The and technology park. The completed updated plan responds “Šlechtitelů“ technology and business to the need to develop park also offers space in the business economic education, incubator for new firms operating in and incorporates the biotechnology, nanotechnology, and range of opportunities optoelectronics. The further development connected with financial of the town of Olomouc is connected with assistance from the its co-operation with developers in the European Union. In view new industrial parks on some 150 of the university hectares, which should attract investors character of the town, into manufacture, technology centres, and emphasis is to be laid on strategic services. New housing projects science and research, the are also being considered. light manufacturing industry, sophisticated BROWNFIELD PROJECTS ARE production, and also LAUNCHED strategic services. Besides the new development areas, the town is focusing on brownfield conversion. EMPHASIS ON A strong demand for buildings and INDUSTRIAL complexes suitable for business has ZONES inspired the private sector to take steps Foreign investors are along this line. The town is preparing to taking up the offer of tackle the situation in several complicated Olomouc – Arion’s fountain the prepared industrial and contaminated areas with the use of EU Photo: Regional Office

| 24 CZECH BUSINESS AND TRADE

funds. These include the former Soviet reconstruction of this area will create the information for the 2005 rating provided Army maintenance complex in Neředín. space for the seat of the Regional Office by Olomouc and awarded the rating: Another project concerns the conversion and other regional institutions, commercial A-/positive/A-1. of the area between the railway station areas, and a congress venue. and the historic centre, which includes Standard & Poor‘s has been rating the Contact: many valuable localities attractive to town of Olomouc since 1997. The www.olomoucko.cz investors. The ambitious project of the Standard & Poor‘s rating team assessed the (e-mail: [email protected])

Olomouc – Centre of Nanotechnologies

It took no more than five months "Nanotechnology is a term to find companies for the used for technical disciplines which work with establishment of the first Czech objects over one thousand Nanotechnology Cluster founded times smaller than the in August 2006 in Olomouc. Its width of a human hair," co-founding members are says the president of the Cluster Professor Miroslav NanoTrade, s.r.o., InovaPro, s.r.o., Mašláň from Palacký B-W Topas, s.r.o., ENVI-AQUA, University in Olomouc. He s.r.o, EKOTEST-AQUA, s.r.o., and adds, "The further the TZÚ s.p. Palacký University development of nanotechnologies requires in Olomouc is an associated not only strong financial member. support, but also The application of research a scientific and skill base. results in practice is one of the The main mission of the cluster, therefore, is to main goals of the established support the sharing of Czech Nanotechnology Cluster. information and modern Testing the surface of natural materials It should help companies gain technologies among its members." antibacterial properties, resistance to access to information on new scraping, dirt etc. methods and uses of CONNECTING RESEARCH Thanks to their unique qualities, nanotechnologies, to provide AND PRACTICE nanomaterials are widely used in areas the opportunity for education, One of the founding firms is NanoTrade such as medicine, engineering, the textile s.r.o. (www.nanotrade.cz) from Olomouc. industry and electrotechnology. In the research, and development and The company cooperated with end users Olomouc Region, nanotechnologies have last but not least, to encourage and applied the results of research in the a long tradition. Thanks to the their cooperation with science field of nanotechnologies for example in establishment of the Cluster, however, and research institutions, the production of packaging with Olomouc can become the centre of antibacterial qualities. Nanoparticles with research and development of new primarily with Palacký University antibacterial properties are added to applications and it can attract the in Olomouc and Moravian polymer products which are subsequently attention of the foreign specialist public College in Olomouc. used to produce packaging for drinks and and companies as well. food. The packaging thus forms a protective atmosphere against the formation and growth of fungi and selected types of bacteria. The company also engages in transformations of the surface of different materials providing For more information on nanocluster new qualities such as UV constancy, go to: www.nanoklastr.cz Photo: NanoTrade

25 | | Skalka Spa specialises in the treatment of the locomotive system and digestive disorders digestive and system locomotive the of treatment the in specialises Spa Skalka fertile the is District the of half One Region. of Moravia in the southwest of the Olomouc The Prostějov District is situated in the centre www.mestopv.cz [email protected]: 338 342 582 +420 fax: 111 329 582 +420 phone: Republic Czech Prostějov 01 796 T.G.Nám. 12 Masaryka Office) Municipal (Prostějov Prostějov úřad Městský REGION 26 netrCutyo rgnCehprnrSco Contact www.amfreece.cz www.gordex.cz www.alika.cz Sector www.mubea.com www.gala.cz www.feico.cz machines sewing www.melzer.cz www.belvedere.cz accessories automobile Contact www.toray.cz equipment farming transport international www.vpo.cz www.kendrion.de technologies information industry food manufacture electromagnet www.slevarna-anah.cz s.r.o. CR, Reece AMF Prostějov doors and windows plastic r.o. s spol. Spedition, Feico- www.modeva.cz magnety,Binder Kendrion s.r.o. Prostějov partner Czech Britain Great industry textile industry textile www.op-profashion.cz Prostějov www.koutny.cz www.micos.cz Mubea-HZP,s.r.o. TorayTextiles Protivanov s.r.o. Europe, Central origin of Germany Country balls Germany Switzerland systems installation electrical www.hzap.cz Prostějov manufacture textile Sector GmbH Feico-Spedition AG Engineering Mubea Prostějov manufacture clothing Japan www.dtvm.cz www.starorezna.czReece AMF foundries Prostějov GmbH Magnete industry textile Binder KENDRION in Based Konice Prostějov TorayInc. Industrie, Prostějov Investor technologies point rail INVESTORSFOREIGN Prostějov manufacture spirits s.r.o. Gordex, springs Protivanov,VPO a.s. Prostějov Melzer,s.r.o. Prostějov Textil,Belvedere s.r.o. a.s. Alika, Prostějov StarorežnáProstějov,stromu Zeleného k.s. u Palírna Prostějov,SLÉVÁRNAANAH a.s. družstvo oděvní Moděva, r.o. spol.s MICOS, a.s. GALA, r.o. Koutný,s spol. mostárna,a.s. a výhybkárna DT a.s. podnik, Oděvní pérovny,a.s. a železárny Hanácké Name FIRMS SELECTED Prostûjov Haná, which ranks among the best land in land best the among ranks which Haná, in soil fertile the by has influenced been always economy Its character. agricultural area. Region Olomouc the of 15% for Prostějov accounts District The here. based are enterprises industrial District important the and of population, 45% by inhabited is the (www.prostejov.cz)Prostějov which of town is District the and of centre cultural administrative The towns. are which the half, other Highlands. Drahanská the and flatlands Haná Prostějov h Dsrc hs n nutil and industrial an has District The of five municipalities, 96 has District The District n dgsin iodr (www. disorders digestion lazneskalka.cz). and system locomotive the of treatment the for serve springs sulphur alkaline Its spa. its for renowned is Nouveau village Skalka Art House. National the and and tower clock, a astronomical with Hall Town the chateau, Renaissance the include ones valuable most of Prostějov itself has many monum galleries and chateaux, (www.hrady.cz,www.turistika.cz). town The castles, museums, its to churches, due tourism of textile the construction. industry,and are working, metal sectors important Other spirits. and malt manufactures and produce forested. is 20% almost and area, District the of 71.4% over spreads Farmland Republic. Czech the www.mestopv.cz [email protected]: 338 342 582 +420 fax: 723 722, 329 582 +420 phone: Prostějov 01 796 T.G.MasarykaNáměstí 12 Centre) (Information centrum Informační naiat s.k)12121 531 639 Region 267 5 524 109 142 District 770 2006) of half first the of (as Office Statistical Czech Source: km) (sq. Inhabitants Population km) sq. (in Area Indicator STATISTICSBRIEF The Prostějov Districtisanimportantarea farm the processes industry food The ents. The

Photo: Skalka Spa CZECH BUSINESS AND TRADE

Jeseník Jeseník District

sources, wood processing, and stone BRIEF STATISTICS Městský úřad Jeseník processing. Indicator District Region Its greatest asset is its splendid natural (Jeseník Municipal Office) Area (in sq. km) 719 5267 Masarykovo nám.1/167 environment, good living environment, and Population 41 862 639 531 790 01 Jeseník, Czech Republic traditional balneology. As early as in 1822, Phone: +420 584 498 111 Vincenc Priessnitz founded the first Inhabitants/sq. km 58 121 Fax: +420 584 498 156 hydrotherapy centre in the world here. Source: Czech Statistical Office (as of the first half of 2006) e-mail: [email protected] Today asthma, the blood circulatory system www.mujes.cz and the nervous system ailments are treated here (www.priessnitz.cz). One of location and the vicinity of the Polish the no less important spas is Lázně Lipová, market. Information for investors can be The Jeseník District lies in the northernmost where the locomotive system, diabetes, found at www.jesenik.org. part of Moravia and Silesia next to the disorders of thyroid gland and skin illnesses Polish border. It lies in the north of the are treated (www.lipova-lazne.cz). Olomouc Region and in the south it borders An integral part of the development of the Šumperk District. In the east the Jeseník the business and entrepreneurial District borders with the Bruntál District of environment is the support that comes the Moravia-Silesia Region. from outside investment. One of the With an area of 719 sq. km, it is the marketing goals of Jeseník is to create an smallest district in the Olomouc Region. environment in which investors will be Its share of the total area of the region is willing to invest their available resources in 13.6 %. Being a mountainous district, the town of Jeseník, which can provide it has a very low population density: various spaces, buildings, technological 58 inhabitants per sq. km. units, as well as labour force. One of the Its most important settlements are the advantages it can offer is its geographical Jeseník provides a number of winter sport resorts three towns: Jeseník, the cultural and administrative centre of the District, with 31 % of the inhabitants of the District living here (www.info-jesenik.cz), Javorník (www.javornicko.cz/javornik) and Zlaté Hory (www.zlatehory.cz). Industry, tourism, and agriculture are the most important economic sectors. The Jeseník District has a significant potential for economic development, especially in the field of tourism, alternative energy

Informační centrum Jeseník (Jeseník Information Centre) Masarykovo nám. 167 790 27 Jeseník, Czech Republic Phone: +420 584 498 155 Fax: +420 584 401 279 e-mail: [email protected], www.jesenik.org View of the town of Jeseník SELECTED FIRMS Name Based in Sector Contact Vítkovice Hard, a.s. Jeseník steel constructions, www.hard.cz family homes construction Slezský kámen Jeseník stone mining and treatment www.kamen.cz Moravolen, a.s. Jeseník textile industry www.moravolen.cz Schroth, s. r.o. Dolní Lipová spa industry www.lazne.cz Priessnitzovy léčebné lázně, a.s. Jeseník spa industry www.priessnitz.cz Řetězárna, a.s. Česká Ves chains www.retezarna.cz Ondřejovická strojírna, s.r.o. Zlaté Hory engineering www.ondrstroj.cz Naturfyt, a.s. Jeseník cosmetics www.naturfyt.cz Jesan Adolfovice, a.s. Bělá pod Pradědem blinds and curtain systems www.jesan.cz/ Fenix Group, a.s. Jeseník electric heating systems www.fenixgroup.cz Stomix, s.r.o. Žulová thermal insulation systems www.stomix.cz

FOREIGN INVESTORS Investor Country of origin Czech partner Sector Contact OMYA GmbH Austria Omya, a.s. stone mining and treatment www.omya.cz Photo: archives

29 | REGION

Pfierov Přerov District

Morava and Bečva Rivers. The District has BRIEF STATISTICS Městský úřad Přerov three geographically different parts: the Indicator District Region central Přerov area is flat with no mountains (Přerov Municipal Office) Area (in sq. km) 845 5 267 Bratrská 34 or forests, the Hranice area is hilly up to Population 134 497 639 531 750 11 Přerov mountainous with large forests, and the Czech Republic Kojetín area resembles the Přerov area, but Inhabitants (sq. km) 159 121 phone:+420 581 268 111 is wooded and has large water surfaces. The Source: Czech Statistical Office (as of the first half of 2006) fax: +420 581 268 279 Bečva River flows across the whole District. e-mail:[email protected] The District has 104 municipalities, six of www.mu-prerov.cz which are towns. The District centre is (engineering, electrical engineering, and Přerov (www.mu-prerov.cz), which is the chemical and food industries) is inhabited by 35% of the District dominant in the economic structure in The Přerov District is situated in the very population. terms of output and employment. Several centre of Moravia, in the southeast of the The District has an industrial and foreign investors have chosen this district in Olomouc Region, on the confluence of the agricultural character. Industry the last few years and put money into engineering, electronics, optics, and the building industry. The District has exploited localities of gravel sand, brick earth, limestone, and construction stones. The historic monuments and the natural beauty allow for the prediction of the development of tourism. The most interesting monuments include Helfštýn Castle (www.helfstyn.cz), Renaissance chateaux in the centre of Přerov and Tovačov (www.tovacov.cz), and the Jewish synagogue in Hranice (www. mmghranice.cz). Teplice nad Bečvou is a famous spa for the cure of heart diseases (www.ltnb.cz).

Informační středisko (Information Centre) Kratochvílova 14 750 02 Přerov phone: +420 581 217 187 e-mail: [email protected] View of the town of Přerov SELECTED FIRMS Name Based in Sector Contact PRECHEZA, a.s. Přerov chemical industry www.precheza.cz KAZETO spol. s r.o. Přerov luggage production www.kazeto.cz PSP Slévárna, a.s. Přerov metal casting www.pspslevarna.cz Signalbau, a.s. Přerov railway safety equipment www.signalbau.cz Ahorn CZ, s.r.o. Vlkoš lamellar grids www.ahorn.cz Antares-AZV, s.r.o. Přerov water treatment technologies www.antaresazv.cz Baden, s.r.o. Hranice custom-made engineering items www.baden.cz SIGMA PUMPY Hranice, s.r.o. Hranice pump manufacture www.sigmahra.cz Cement Hranice, a.s. Hranice cement manufacture www.cement.cz Strojtos Lipník, a.s. Lipník nad Bečvou machine tools www.strojtos.cz MetalPlast Lipník nad Bečvou, a.s. Lipník nad Bečvou manufacture of plastic and metal items www.metalplast.cz Lázně Teplice nad Bečvou,a.s. Teplice nad Bečvou balneology www.lazneteplicenb.cz Mosaic, s.r.o. Bělotín parquet manufacture www.parketymosaic.cz FOREIGN INVESTORS Investor Country of origin Czech partner Sector Contact L.G.Philips Display Holding Netherlands L.G.Philips Display CR, s.r.o. electronic components www.lgphilips-displays.com TONDACH Gleinstatten Austria TONDACH Česká republika, s.r.o. building materials www.tondach.cz TCI Group USA Meopta-Optika, a.s. optical apparatus www.meopta.cz Wedel GmbH Germany PSP Engineering, a.s. engineering www.pspeng.cz Astron Buildings S.A. Luxembourg Astron Buildings,s.r.o. metal production www.astron.biz OLYMPUS C&S spol. s r.o. Germany Olympus Service Facility Czech,s.r.o. electronics, optics www.olympus.cz Photo: archives

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·umperk Šumperk District

The Šumperk District is an attractive BRIEF STATISTICS Městský úřad Šumperk area of tourism with opportunities to rest Indicator District Region in the mountains and visit the cultural (Šumperk Municipal Office) Area (in sq. km) 1 316 5 267 Náměstí Míru 1 monuments. Loštice has a unique Population 124 912 639 531 787 01 Šumperk, Czech Republic museum showcasing the local speciality – phone: +420 583 388 111 the sharp tasting and strong smelling Inhabitants (sq. km) 95 121 fax: +420 583 214 188 "Olomouc cakes of cheese" Source: Czech Statistical Office (as of the first half of 2006) e-mail: [email protected] (www.tvaruzky.cz), and a synagogue. Also www.musumperk.cz worth visiting is the Renaissance chateau in Velké Losiny (www.losiny-zamek.cz). The rise of the Morava river, which The Šumperk District is situated in the supplies water for the whole of Moravia, north of the Olomouc Region, where it and the watershed of three seas – North, shares an 18-km border with Poland. Baltic, and Black – are on the southern With its area of 1 316 sq. km it is the slope of Klepý Hill. The original character second largest district of the Olomouc of the alluvial forests which spread Region and accounts for 25% of regional around the rivers and water surfaces is area. maintained by regular floods. The Velké The Hrubý Jeseník and Kralický Sněžník Losiny spa (www.lvl.cz) was established in ranges give the Šumperk District its Rychlebské Mountains around the sulphur rugged character. A typical feature of the water springs. Curd cheese – a specialty from Loštice District is the low share of urban population. The major centres of the District in terms of population and employment in industry are the towns of Šumperk (www.sumperk.cz), which is the cultural and administrative centre inhabited by 23% of the District population, Zábřeh (www.zabreh.net) with 15 000 inhabitants, and Mohelnice (www.mu-mohelnice.cz) with 9 800 inhabitants. The District has a qualified labour force. Industry, tourism, and agriculture are dominant in the economy. The main sectors are engineering, electrical engineering, the paper industry, woodworking, mineral mining and the food industry. Sugar beet, beetroot, grain, potatoes, and fodder plants are grown in areas at lower altitudes. Velké Losiny

SELECTED FIRMS Name Based in Sector Contact Dols, a.s. Šumperkdoors, windows www.dols.cz A.W., spol.s r.o. Loštice cheese specialty www.tvaruzky.cz Olšanské papírny, a.s. Lukavice paper manufacture www.olpa.cz RapoSklo, spol. s r.o. Rapotín glassworks www.sklarny.cz MEP Postřelmov, a.s. Postřelmov electrical production www.mep.cz Fortex -AGS, a.s. Šumperkconstruction www.fortex.cz Metra Šumperk, s.r.o. Šumperk thermostats www.metra-su.cz CanTech, s.r.o. Šumperkfeeders for telecommunications www.cantech.cz Sulko, s.r.o. Zábřeh plastic windows and doors manufacture www.sulko.cz Tilak, a.s. Šumperk sports equipment www.tilak.cz

FOREIGN INVESTORS Investor Country of origin Czech partner Sector Contact Pramet Scandinavia AB Sweden Pramet Tools, s.r.o. engineering www.pramet.cz EPCOS AG Germany EPCOS, s.r.o. magnets www.epcos.com Fels-Werke GmbH Germany Vápenka Vitošov, s.r.o. limestone mining www.vapenka-vitosov.cz Photo: Regional Office

31 | SERVICES

Development Projects Are Thriving in the Czech Republic

The Czech real estate market has STRESSING THE booming in recent years. Logistics is been developing in a positive REGIONS flourishing thanks to Czech Republic’s The individual regions are beginning status as a transit country and thanks to direction during the last three to have a great share in the office real estate great demand in Central Europe. years. Several important bills market, mainly Brno, Plzeň and Ostrava, Establishment of industrial objects is have been passed and several which were not so progressive in the past. supported by substantial intervention of have been amended. A very The developers’ interest, materialised in the the CzechInvest state agency which construction of new buildings and successfully stimulates the supply of rented significant event, which is reconstruction of older ones, is so great that production houses. Developers’ interest is expected to influence current for example in Brno, vacancy is estimated at spreading and focusing on other regions in and future real estate market, is over 20 %. Nevertheless the Prague office the Czech Republic and it will continue to market retains its current growth tendency do so in future years. A problem which the ending of the exception to and it will continue to produce some might occur in the future is insufficient the accession contract valid until 200 000 sq. m. of new 2007 and a relevant change in utility space per year. the lower VAT rate. Foreign Similar uncertainties as with the expected level investors’ interest remains high of vacancy in Brno were which is also reflected for experienced two years example in the demand for office ago in the commercial and storage spaces. sector. In spite of that, new shopping centres, including hyper- markets, are being and will continue to be constructed.

PROSPERITY OF STORAGE SPACES Production and storage real estates have been Brno – Spielberk Office Centre supply of qualified labour in some locations.

GROWTH OF TOTAL VOLUME The total volume of transactions has been steeply growing for several years in a row. Two new phenomena have occurred, though: secondary sale of real estates by investors and the so-called forward purchase where an investor enters the real estate in the initial stages of construction. Until the first half of 2006 ten out of 28 purchases were realised in this form. Among the most significant events was the sale of the Prague shopping centre Šestka (www. tkdevelopment.cz) or the sale of the Prague Trianon office complex which was taken over from Hochtief Development by the DIFA fund.

CONSTRUCTION OF NEW SHOPPING CENTRES In the Czech Republic there is one square metre of shopping space per inhabitant; this represents eighty per cent of the average in Western Europe. In the second half of 2006 the threshold of two hundred hypermarkets in the Czech Republic was crossed. Whilst in Prague – Luxembourg Plaza the West this type of shopping format Source: TK Development

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newly built shopping centres and enlarged shopping centres could increase by over 600 thousand square metres. Real estate analysts expect that the volume of transactions in 2005 will reach approximately EUR 1.8 billion, which is approximately EUR 200 million more than in 2005. For comparison in 2003 this figure fluctuated around EUR 580 million.

Jana Horáková More at: Association for Real Estate Market Development www.artn.cz/ Source: TK Development Prague – Šestka Centre started to develop in the 1970s, THE YEAR 2006 WAS AN OUTSTANDING YEAR FOR THE hypermarkets started to appear in the PRAGUE MARKET FOR OFFICE SPACE transit economies of Central Europe in the second half of the 1990s. In 2006 the The volume of rented space in Prague reached 213 924 sq. m. in the first three quarters of Prague Centrum Chodov (www. 2006. centrumchodov.cz), Vaňkovka Brno (www. The amount of office spaces in Prague continues at the level of 1 890 000 sq. m., which galerie-vankovka.cz), or Varyáda Karlovy is the same figure as in the last quarter. It includes modern office buildings, of which most Vary (www.emcm.cz/varyada_kv.php) were have been completed or reconstructed to international standards since 1993. The greatest opened to the public. In the horizon of the volume of office space is in Prague 4 (22.7 %), followed by Prague 1 (19 % of total volume next three years, the total area of shopping of office spaces) and Prague 5 (13.1 %). centres in the Czech Republic comprising

Prague – Lofty Palmovka residentia project

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