NORDIC CHAMBER Enewsletter JYSKE GROWS DESPITE SLUGGISH MARKET

NORDIC CHAMBER eNEWSLETTER JYSKE GROWS DESPITE SLUGGISH MARKET

MAY 2015 he Nordic Chamber will in short time in those markets, while also contributing posi- and earnings CZK 80 million, which is a Tlaunch a new and modernized website. As tively to the company’s environmental impact 14-percent growth year-on-year. The Danish a service to its members the Chamber offers to by more effi cient transport of goods. “The new group established in the Czech Republic in publish press releases or any other company distribution centre will signifi cantly increase 2003; in its latest Annual Report the compa- information on the website and its Facebook our fl exibility and speed in how we reach our ny says it plans to expand its retail network in profi le. The service is free of charge. “Our customers in countries like Poland, Czech Re- the country. (E15) intention is that the Chamber’s new website public, Bulgaria, Romania, but also Russia and will fi ll the role of an information hub for Nor- Scandinavia,” says Magnus Welander, Thule MEET OUR NEW MEMBER dic business news in the Czech Republic, so Group’s CEO and President. (DI) Founded in Sweden in 1963, KGH Customs we are grateful for any contribution from our Services is one of Europe’s major play- members,“ Executive Director Lea Turcarová he media branch of Finance Minister ers within customs services. Our services says. For more information please contact TAndrej Babiš’s Agrofert Holding is, include mainly customs declarations and [email protected]. according to the news server Svobodne Fo- customs consulting. Our independent and rum, fi nalizing negotiations to acquire a 50 customs processes-specialized company has wedish-Swiss ABB has extended its pro- percent-stake in FTV Prima, the Czech Re- Sduction capacity in Brno and Trutnov with public’s second largest private broadcaster. a EUR 46-million investment for air-insulated Sweden’s Modern Times Group paid in medium voltage switchgear, instrument trans- 2010 GES Media Holding, then 100-percent formers and substation automation systems. owned by the Czech media entrepreneur Ivan The new facility in Brno will be one of the Zach, CZK 2.8 billion for a 50-percent share of the broadcaster. The Swedes have earlier denied that they plan to sell their stake in the television station. Currently, Finance Minis- ter Babiš’s Agrofert controls three Czech daily newspapers, one radio station and several web servers. (TBE)

ofﬁ ces in all the key ports and border cross- ings in Europe and more than 650 staff op- most-advanced plants of its kind in the world, erating in Austria, Belgium, the Czech Re- with specially automated lines. Trutnov is public, Denmark, Finland, France, Germany, home to ABB’s largest European engineering Italy, the Netherlands, Sweden and Norway. centre for substation controls and automation KGH Customs Services Czech Republic s.r.o. and also offers engineering- and project-man- started its activities on January 1st 2015; all agement services. ABB currently employs employees in the Prague ofﬁ ce have long ex- more than 3,400 people in eight locations perience within customs administration. We across the Czech Republic. (ABB) are thus able to provide you with high level espite macroeconomic uncertainty in of competence in customs issues, with added he Swedish Thule Group has opened a Dthe global economy the Danish furniture value of geographical coverage which brings Tnew distribution centre in Huta, western manufacturer JYSK Group last year booked cost-effectiveness to the clients. Poland. The centre, which has cost SEK 65 its best result ever, both in terms of turnover million, becomes a logistical hub for Thule’s (EUR 2.8 billion) and earnings (EUR 392 Radovan Šmídl growing sales in Central and Eastern European million). In the Czech Republic the sales in Country Manager markets and enables a better service to retailers JYSK’s 71 stores reached CZK 1.93 billion KGH Customs Services Czech Rep.

TOYMAKER LEGO EXPANDS IN KLADNO… FORMER BUSINESSMAN FINNISH PREMIER PRAGUE (CIA) – LEGO Group has opened a new 50,000 m2 hall PRAGUE (TBE) – The opposition Centre Party leader Juha Sipilä is at its production site in Kladno, raising the plant’s capacity by 30 set to become Finland’s next Prime Minister after winning the coun- percent. LEGO estimates that it will create around 600 new jobs in try’s parliamentary elections in April. Sipilä entered Parliament only the Central Bohemian city. Currently around 2,000 people work for in 2011 after ending his successful business career in the IT industry. LEGO in Kladno. The Danish toymaker’s Czech operation provides In the election campaign the former entrepreneur promised to create the basis for packaging of LEGO sets, decoration and assembly of 200,000 new jobs, stating that he has a lot of experience in turning LEGO elements, as well as research and development of packaging companies around and that the country can be managed just like a and decoration technologies. The size of the entire production area company. “The main principle is the same – you must have a clear now equals 22 soccer ﬁ elds. LEGO launched its operation in Kladno vision, a clear target and a plan how to reach it,” Juha Sipilä said. in 2000 with 80 employees.

… FACES ATTACKS BY DANISH MEP PRAGUE (TBE) – Member of the European Parliament Christel Schal- demose believes LEGO has violated EU regulations by accepting tax rebates and “DKK 200 million in state subsidies” from the Czech Re- public and Hungary to establish local production while cutting 380 jobs in Denmark. “I’d like to have an evaluation of this practice, so I will ask the EU Commission to check this case out,” MEP Schaldemose told Berlingske Business daily. “It’s problematic if LEGO has received money for moving from one EU country to another. If the ﬁ nancial support has been given after 1 July 2014, then I believe it’s illegal.” NORDIC CHAMBER eNEWSLETTER YIT STAVO LAUNCHES MILESTONE PROJECT

MAY 2015 YIT Stavo, the Czech subsidiary of the Fin- as “Finnish-styled”. Will the Vysočany pro- same area, preferably by walking distance. In nish construction company YIT Group, has ject also offer typically Nordic housing? all markets clients welcome high-quality sales acquired a nine-hectare brownfi eld location This project will defi nitely be in line with our service, openness and transparency. at the border between Prague’s Vysočany and other projects. We consider “Finnish-styled Currently, Czech mortgage rates are re- Hloubětín districts. housing” to be a competitive ad- cord-low. You are not afraid that a reality The project will result vantage through the whole project bubble may emerge in the future? in almost 900 fl ats. YIT development – from design, via the The current situation favours the entire resi- Stavo plans to start the construction process to the custom- dential sector. There is an expectation that the development, which er services we offer. Moreover the mortgages’ interest rates will remain at a low is valued to more than Vysočany project, as YIT’s Czech level at least for the next 1.5 year. At the mo- CZK 2 billion, already pilot area development project, ment we do not expect any threats of a reality this autumn. will offer much more than what we bubble, but as a residential developer operating “We are heading usually develop in other markets – in different markets for many years we have to among the top fi ve homes, shops, sport facilities and count with risks as well. For example, interest residential develop- parks – we are going to create a rates in Finland have been at a minimum level ers in Prague, and complete living environment. for a few years already, but still the economy is this requires that we Do the factors important to Czech not growing due to other economic challenges. also launch bigger, so clients when investing in a fl at dif- Compared to the years before the fi nancial cri- called area development projects,” says Zuza- fer signifi cantly from, say, Scandinavia? ses we clearly see that people are more careful na Martínková, YIT‘s Development Manager Since we operate in seven quite different mar- when investing in property, even though inter- for Central and Eastern Europe. kets we have great knowledge of our clients’ est rates are low in both countries. YIT has so far constructed around 450 preferences, and there are some basic factors At the recent AGM you were elected to the apartments in Prague, so will you manage similar to all markets. The key buying fac- Nordic Chamber’s Board. Do you have any to develop this huge project by yourself? tors not only for Czechs are location, layout special ambitions as Board member? We acquired Euro Stavokonsult in 2008 and and price. However, each country has its I will defi nitely continue strengthening the started our fi rst project under the YIT brand own specifi cs. In Finland a sauna in the fl at awareness and improving the image of the in 2010. Since then we have gradually in- and an energy-effi cient building are a must; Nordic Chamber, being an advocate of busi- creased our construction and sales targets with in the Baltics, the location of the fl at within ness development and helping Nordic/Finnish great results. The area development project in the building is very important while in Russia companies to understand Czech business en- Vysočany is a milestone for YIT that will fur- school and kindergarten must be present in the vironment and vice versa. I also believe I can ther strengthen our position help to attract more new among Prague’s developers. members and to develop The project will be developed a transparent business in several stages during the climate. My strong focus next eight years. We are very will be on gender diver- confi dent that we will achieve sity in Czech business the goals, thanks to the expe- life, because this fi eld still rience from similar area de- needs development even velopment projects in Finland though there are already and the Baltics, where we several initiatives going have been operating for many on. Gender diversity is years. Area development be- well-established in Scan- longs to our long-term targets dinavia and I believe we in all the markets we operate. can easily launch similar All of YIT’s projects in supporting programs in Prague have been marketed the Czech Republic.

SKANSKA ACQUIRES BROWNFIELD LOCATION CZECH VICTORY IN NORTH POLE MARATHON PRAGUE (VAB) – Skanska Reality has acquired a four-hectare brownfi eld PRAGUE (TBE) – Petr Vabroušek, a veteran of 152 ironman triathlons, location in Prague’s Michle district from the Michelské Pekárny bakeries. won this year’s edition of the North Pole Marathon in the impressive time of The existing production halls on the site will be demolished and replaced 4.22.24 hours. Forty-fi ve competitors from twenty-two countries took part by blocks of fl ats. “Our target is to create nice housing in an area that has in the ultra-tough contest; the course was a 3.5km marked loop around been dominated by industry,” Skanska Reality’s General Manager Naďa the science and expedition base Camp Barneo, with competitors enduring Ptáčková said. No fi nancial details have been released. Skanska earlier twelve laps to hit marathon standard. “I secretly hoped for a new course this year announced that it has launched the residential project River Gar- record, but [diffi cult] race conditions and effective temperature below minus dens Východ with totally 533 apartments in Prague’s Karlín district; the fi rst 40°C meant it otherwise,” the 41 year-old Czech commented. Mr Vabrou- phase of the project is scheduled to be completed in 2016. šek won both the 2013 Antarctic Ice Marathon and the 2013 Antarctic 100k.

SWEDEN LOVES THE PLANET PRAGUE (SWE) – Prior to the UN’s Climate Change Conference in Paris in late November, the Embassy of Sweden in Prague has cho- sen “Sweden Loves the Planet” as a theme for 2015/16. A number of environmental events are being planned, in cooperation with Business Sweden and other partners, in the Czech Republic and in Sweden. “We would like to inform about how Swedish society is adjusting to more sustainable conditions,” Ambassador Annika Jagander says. “We hope to intensify the dialogue with our Czech partners on experiences and solutions which can contribute, inter alia, to better energy efﬁ ciency and cleaner technologies.” NORDIC CHAMBER eNEWSLETTER SWEDEN’S SUPERSONIC LINK STRENGTHENING

MAY 2015 fective operations, for the price of a used F-16. They also offered leasing contracts and an in- dustrial offset agreement, set at 150 percent of the expected purchase value. On top of that Gripen clients have been invited to participate in various research programs. While the Czechs and the Hungarians went for the Swedish offer, the Poles in 2002 even- tually chose F-16s, predominantly because of the political emphasis placed on the strategic relationship between Warsaw and Washing- ton. Romania in 2013 bought 12 used F-16s from Portugal. Now, Slovakia, Croatia and maybe also Bulgaria have an additional reason for select- ing the Gripen. The Czech Republic and Slo- vakia recently signed a bilateral agreement with Slovakia on joint airspace surveillance. It was hardly a sheer coincidence. Less than has even located its global centre for the de- Hungary has discussed a similar agreement one week after General Libor Štefánik, Chief velopment and manufacture of virtual simu- with Croatia. of the Czech air force, visited Zagreb where lators in Slavkov outside Brno), the picture “In the future it’s not unrealistic that the four he praised his country’s acquisition of Gripen gets clearer: in some years over 50 Swedish- countries will create one united Gripen squad- jet fi ghters, Sweden’s Defence and Security produced jet fi ghters may cruise Central Eu- ron,” comments Jan Pejšek of the Czech Min- Exports Agency (FXM) issued this state- ropean skies. istry of Defence. Also the Visegrad-countries, ment: No. of aircraft Leasing expires Possible contract “Sweden makes an offer to Croatia on Grip- en.” The offer of eight JAS-39 supersonic Hungary 14 2026 — aircraft includes a support and training pack- Czech Republic 14 2027 — age for pilots and technicians, and a fi nancing Slovakia 8 — 2016 solution. Swedish industry is also offering in- Croatia 8 — 2017 dustrial cooperation via Saab, in connection Bulgaria 8 — 2018 with a purchase. “This offer has been prepared in close collaboration with Croatia,” FXM’s Deputy Director-General Peter Göthe said. At the outset the new NATO members in which include Poland, are discussing joint The overture in Croatia is not Gripen’s post-communist Europe have three options airspace protection. only recent move in Central and Southeast when upgrading their air force to the Alli- This will have signifi cant synergy effects. Europe. Saab has already made Bulgaria the ance’s standards. They can modify their ex- Joint training and purchase of spare parts, same offers as Croatia. And earlier this year isting MiG-29 fl eet, acquire second-hand jet weaponry and logistics may save the Gripen Slovakia’s Defence Minister Martin Glváč fi ghters from an Alliance partner or procure users in post-communist Europe lots of mon- confi rmed that his government has launched brand new aircraft compatible with NATO ey. The costs can be cut even more if the four talks with Sweden with the aim of leasing a standards. In reality, however, cash-strapped countries decide to share their airspace. With number of Gripen aircraft to replace its cur- governments that won’t rely on Russian spare cross-border operations a routine, a Czech rent fl eet of obsolete MiG 29 jet fi ghters. parts don’t have an easy choice. Gripen may patrol Croatian airspace and Hun- Considering that Hungary and the Czech That’s where Saab came up with a brilliant garian Gripens may refuel in Slovakia. The Republic for more than a decade have been solution. The Swedes not only offered a brand benefi t for all participants is more effective air operating squadrons of Gripen aircraft (Saab new JAS-39 Gripen, reputed for its cost-ef- operability for less money than today.

CLOSER DEFENCE TIES IN NORDIC COUNTRIES BANG & OLUFSEN CUTS 125 JOBS OSLO (REU) – Calling Russia the biggest challenge to European security, PRAGUE (TBE) – Danish home-electronics maker Bang & Olufsen will the Nordic countries in April agreed on closer defence ties and increased cut 125 jobs to reduce cost and complexity, mainly in its audio and video solidarity with the Baltic states, aiming to increase regional security through business. The company said the full scope of the restructuring, which will deterrence. Writing in a joint declaration, the defence ministers of Swe- cost DKK15-20 million, is expected to yield full-year cost savings of DKK den, Norway, Finland, Denmark and Iceland said Northern Europe must 100 million. Half of the full-time jobs will be cut in Denmark. B&O has prepare for possible crises or incidents because of Russia. “There is in- since 2004 operated a factory in Kopřívnice, north Moravia, with around creasing military and intelligence activity in the Baltics and in our northern 400 employees. “The job reductions don’t only affect Denmark and the areas,” the ministers said. “The Russian military is challenging us along our Czech Republic, but also other countries where B&O operates,” says borders and there have been several border infringements in the Baltics.” Pavel Merhout, managing director of B&O in Kopřívnice.

SCANDINAVIAN MINIMALISM IN PARKHOTEL PRAGUE (TBE) – Prague’s Parkhotel, an icon of Czechoslovak architec- ture of the late 1960s, has ﬁ nished a one-year reconstruction to bring the building back to its former glory. Inspired by Arne Jacobsen’s emblem- atic SAS Hotel in Copenhagen, the elegant Parkhotel was Czechoslo- vakia’s ﬁ rst design hotel when it opened in 1967. “Coming from Sweden, I can clearly see traits of Scandinavian minimalism in this unique building,” Parkhotel’s Managing Director Monika Hilm says. Professor Alena Šrámková has assisted in the CZK 100 million-reconstruction of the inspired. Czech furniture producer Ton’s legendary “Stockholm” chairs in one of the hotel’s restaurants underline the atmosphere of the 1960s. NORDIC CHAMBER eNEWSLETTER NOKIA TAKES UP COMPETITION WITH ERICSSON

MAY 2015 celand has been accepted as a founding will have stronger exposure to the important want to be responsible, it also helps with the Imember of the Asian Infrastructure In- North American market, with major AT&T bottom line,” Søren Toft, Maersk COO said. vestment Bank (AIIB), said one of the coun- and Verizon contracts. (Reuters) Last year Maersk saved DKK 550 million try’s senior offi cials. According to Gudmundur compared to 2013 thanks to improved fuel Arnason, permanent secretary of the Ministry orway’s Finance Ministry is reviewing consumption measures. About 90 percent of of Economics and Finance, Iceland now plans Nits subsidies for electric vehicles after all goods are transported by ships and the in- to be involved in AIIB-fi nanced energy pro- generous government incentives made the dustry makes up about three percent of the jects across Asia. “Future energy initiatives country the biggest user of battery powered global CO2 emissions. (Politiken) can include both geothermal and hydropower cars in the world. Norway last week registered its 50,000th electric car, almost three years uropean travel fi rm GoEuro looked into earlier than expected thanks to government Eissues such as how easy it is to get a schemes that have cut taxes and provided a passport, which countries it offers access to plethora of benefi ts, including an exemption without a visa, its price and how long it is from tolls and parking fees, free recharging valid for. Their study concluded that a pass- stations and the use of bus lanes. The current port from Sweden is the most powerful in the incentive scheme came under criticism last world, followed by Finland, Germany, the year when sales of the luxury Tesla Model S UK and the US. While those with a passport soared and the budget lost NOK 3 to 4 billion schemes,” Mr Arnason said. “Icelandic busi- in expected revenue. (Reuters) nesses may also offer consulting services for general and single projects.” The AIIB has hanks to larger ships, better planning and been initiated by China to fi nance infrastruc- Tlower speeds Maersk Line has reduced ture projects in Asia; totally 57 countries, in- its fuel consumption by almost 40 percent cluding Sweden, have joined the organization since 2007. The Danish oil and shipping gi- as founding members. (Icenews) ant aims to further reduce its fuel consumption by 60 percent, compared to 2007, by inland’s Nokia is to buy Alcatel-Lucent 2020. “We don’t do this only because we Fin an all-share deal that values its smaller French rival at EUR 15.6 billion, building up Nokia’s telecom equipment business to com- pete with market leader Ericsson. The deal will redefi ne a sector suffering weak growth prospects and pressure from low-cost Chi- from any of these top fi ve nations can enter nese players Huawei and ZTE. With about 174 countries without a visa, Sweden’s costs 114,000 employees and sales of around EUR only EUR 40. “It’s […] crucial to consider 26 billion, the combined company will rank a the ability of the average citizen to afford strong second in mobile equipment, with glob- purchasing the document,” Molly Levinson al market share of 35 percent. The new Nokia of GoEuro says. (The Local)

THE KORUNA-CROWN-EURO INDEX CZECH REPUBLIC STILL SCORES WITH NORDIC TOURISTS End IV/2015 End III/2014 2013 2014 y/y% Euro 27,400 CZK 27,455 CZK Denmark 105,307 93,618 88.9 Danish kroner 3,673 " 3,680 " Finland 59,425 65,368 110.0 Icelandic krónur 0,186 " 0,183 " Iceland 3,795 4,323 113.9 Norwegian kroner 3,217 " 3,239 " Norway 72,797 69,522 95.5 Swedish kronor 2,921 " 2,926 " Sweden 105,720 105,086 99.4

Source: ČNB Hotel guests Source: CzechTourism UPCOMING CHAMBER EVENTS Date Event Venue 1 May Skandinavian Hockey Hub VIDEO Hergetova Cihelna 1–10 May World Ice Hockey Championship screening Hergetova Cihelna 13/15 May Blue Heaven Big Band Reduta Jazz Club 21 May Nordic Chamber Golf Masters Casa Serena Golf Course 27 May BB: Energy savings in the production processes The Mark Luxury Hotel 29 May Launch of Labour Law Guide at European Law Firm Conference Hotel President 4 June BB: Trademark – how to protect your products Hotel Jalta 18 June Strawberry Gala Reception Embassy of Sweden For more details please see www.nordicchamber.cz/events. If you want more information about the Chamber’s activities please don’t hesitate to contact us at [email protected] or telephone +420 774 123 370.

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