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HRADEC KRÁLOVÉ

REGION
INSOLVENCY LAW: HOW
TO PROTECT CLAIMS?
PLZEŇ WANTS TO OPEN
ITS ARMS TO EUROPE
OECD’S GOOD EVALUATION
OF THE CZECH REPUBLIC

CZECH PAVILION
at 2010 EXPO 2
2010
attractive environment • prestigious presentation forms • international impact

Check in your dreams with us


www.mip.cz
CZECH BUSINESS AND TRADE

Czech Business and Trade


Economic Quarterly Magazine with  INTRODUCTION
a Supplement is Designed for Foreign
Questions of the Month for Petr Kužel, President of the Czech Chamber of Commerce 4
Partners, Interested in Cooperation with
the Czech Republic
 ECONOMIC POLICY
Issued by PP AGENCY s.r.o. in cooperation with Czech Industry: From Peak to Bottom and From Bottom Up 5
 Ministry for Regional Development of the Czech OECD’s Good Evaluation of the Czech Republic 7
Republic
 Ministry of Industry and Trade of the Czech  INVESTMENT
Republic FDI on Roller-coaster in CEE 8
 Ministry of Foreign Affairs of the Czech Republic
Important Investment in Žatec Triangle Zone 8
 Confederation of Industry of the Czech Republic
 Confederation of Employers‘ and Entrepreneurs‘
Czech System of Investment Incentives Among Most Open Ones 9
Associations of the Czech Republic Blu-Ray Discs Will Be Made at Loděnice 10
 Czech Chamber of Commerce
 Czech Export Bank  CZECH TOP
 CzechTrade Country Life, a Pioneer of New Lifestyle 11
EDITORIAL BOARD:  LEGISLATION
Michal Bakajsa, Zdena Balcerová, Helena Bamba-
Insolvency Law: How to Protect Claims? 12
sová, Martin Dvořák, David Füllsack, Josef Jílek,
Ivan Jukl, Dagmar Kuchtová, Marie Pavlů, Martin
 WE SUCCEED
Plachý, Pavla Podskalská, Josef Postránecký, Filip
Remenec, Libor Rouček, Jiří Sochor, Miroslav OHL ŽS to Build New Junction in Bosnia and Herzegovina 14
Somol, Jan Špunda, Martin Tlapa, Zdeněk Vališ,
Jan Wiesner  WE ARE INTRODUCING
Plzeň Wants to Open Its Arms to Europe 16
MANAGING EDITOR:
Šárka Kratochvílová  KALEIDOSCOPE
EDITORS: Czech SOLVIT – One of the Three Fastest Centres in the EU 18
Jana Pike, Jaroslava Bradová The Czech Republic Has Been among the Best in Economic Endurance
in the EU During the Crisis 18
REGULAR COLLABORATORS:
First Hopeful Firms in Silicon Valley 18
Ivana Šmejdová
AFSI in Most to Employ Almost 200 People 18
TRANSLATION: What is the Czech Republic’s Position on the EU Internal Market? 19
Vlasta Benešová, Alena Kenclová, Robert Krátký, Financial Arbiter’s Services More in Demand 19
Dagmar Šímová, Halka Varhaníková
The Czech Republic has Opened an Exchange of Unused Chemicals Called NECHELA 19
READ: Prague Hosted American and Russian Presidents 19
Matthew Booth, Pearl Harris, Ivana Kadlecová
 SERVICES
GRAPHIC DESIGN:
Art Director: Nina Nováková
All-embracing Methods of the Packaging Industry 20
Graphic designer: Jiří Hetfleisch Industrial Real Estate Market Stabilised Between Supply and Demand 22
Production: Anežka Zvěřinová
 RESEARCH
DEADLINE: 15/4/2010 Czech Scientists Unveil Another of Life’s Mysteries 24
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auditor, HZ Praha, s.r.o., member of PANNELL CZECH PAVILION AT 2010 EXPO
KERR FORSTER Worldwide. It is not allowed to
reproduce any part of the contents of this journal The Czech Pavilion at the 2010 World EXPO in Shanghai
without prior consent from the editor. welcomed its half a millionth visitor in the middle of May.
Attitudes expressed by the authors of articles car- Moreover, the Czech National Day at the Pavilion on 17th
ried by CBT need not necessarily be consistent with May introduced Czech culture in its many forms. The
the standpoint of the Publisher. MK ČR E 6379, ISSN exposition entitled “Fruits of Civilisation” introduces the
1211-2208 „Podávání novinových zásilek povoleno
Českou poštou, s. p., odštěpný závod Přeprava, č. j.
Czech Republic as the “crossroads of ideas, culture, and
3468/95, ze dne 24/10/1995“ technologies”. The Czech Pavilion presents a levitating
town with the use of tubes, which contain the various
Cover photo: www.czexpo.com exhibits, all hanging above an open space, evoking the
Czech undulating landscape. A highlight is the impos-
ing “drop of gold” 80 centimetres high, placed within a glass cube – which can be entered by every
500th visitor to the Czech Pavilion. An extraordinarily good idea was to display the bronze plaques
from the statue of John of Nepomuk on Prague’s Charles Bridge, which tourists touch for good luck.
INTRODUCTION

Questions of the Month for Petr Kužel,


President of the Czech Chamber of Commerce
try. Well-tried and tested informa- is to find modern business heroes.
tive instruments for foreign businessmen Can you tell us something about this
are the forums organised as part of busi- undertaking?
ness missions to other countries and the Besides a number of unpleasant impacts,
presentations of Czech firms at selected for most businessmen the recession also
international exhibitions. We co-operate had its positive features. This is what
closely with foreign Chambers, which are about two-thirds of the firms stated in our
also a useful information source for those survey. For one-quarter of the firms, the
wishing to do business in the CR. main positive effect in production or serv-
ices was the growth of efficiency, followed
You have launched a project called by the elimination of latent over-employ-
“Ensuring joint participation in special- ment, innovations, and the discovery of
ised exhibitions and trade fairs in other new markets. As far as we are concerned,
countries in the years 2010-2012”, the the decision was taken, as part of the
purpose of which is the strengthening of “Crisis Notwithstanding” project, to find
the competitiveness of Czech indus- and award the most successful “winners”
trial firms on foreign markets. Which in the crisis and to use their examples to
foreign markets are important to Czech show other firms the way. Our partner in
enterprises and which events will you evaluating the firms is the renowned in-
Petr Kužel support? ternational auditing company, Pricewa-
This year alone, together with the Ministry terhouseCoopers. Those wishing to learn
of Industry and Trade and the CzechTrade more about the project can find detailed
Agency, we are organising approximately information on the website: www.komora.
fifty specialised fairs on four continents: cz/krizinavzdory.
besides Europe, also in America, Asia, and
Africa. We are trying to meet the require- You have long been struggling against
ments of Czech enterprises. Their interest the bureaucratic burdening of enter-
in subsidised participation in specialised prises. How do we stand when compar-
fairs exceeds all expectations. By the end ing the Czech business environment
of May 2010, about 300 Czech firms and with that in the other EU states?
associations had taken part in the 36 fairs On the one hand, since 2005 the ad-
thus far organised. Therefore, the planned ministrative burden of businessmen has
number of 1400 participations within the been reduced by more than 10% which,
framework of 100 foreign trade fairs over for the business sector means, amongst
the three years during which the project other things, an approximate saving of
will last is a realistic goal. The firms are es- 10 billion crowns (approx. EUR 400 mil-
One of the priorities of the Czech pecially interested in engineering, arma- lion) per year. The process of entering
Chamber of Commerce is the support of ment and technical fairs. Of the number business and starting a trade is now
exports and foreign relations. How can of destinations that are being prepared, I’ll shorter, while a number of obligations
you assist foreign businessmen wishing just mention, at random, Shanghai, Cairo, towards the trade licensing authorities
to enter the Czech market? and Calcutta. We will also be in Iraq. The are in the process of being cancelled. On
Foreign businessmen will find a host of response of Czech exhibitors is absolute- the other hand, in the standard business
useful information and contacts in English, ly positive. The importance of trade fairs environment ratings published by the
Photo: The Czech Chamber of Commerce archives; www.sxc.hu

concerning the possibilities of doing busi- has been proved by a survey carried out World Bank, the Czech Republic unfor-
ness in the Czech Republic, on our web- by the Czech Chamber of Commerce this tunately, generally ranks 80th out of 180
site: www.komora.cz. Besides giving infor- year, which found that, according to 25% countries.
mation about the business environment of Czech firms, they are the most impor- Within the European Union, I think only
in the Czech Republic, we organise profes- tant instrument for successful expansion Poland and Greece lag behind us. As for
sional seminars and bilateral negotiations to export territories. Foreign missions and tax bureaucracy, we are even worse off
between Czech and foreign businessmen the use of the services of specialised busi- – on the global scale we rank 13th from
and entrepreneurs within the framework ness companies were only placed second the bottom. Only Bulgaria, out of the EU
of “incoming” missions. We also publish after trade fairs. countries, lags behind us. The problem is
foreign enquiries and offers, search out that bureaucracy is like the mythical Hy-
potential trading partners in the CR and The Czech Chamber of Commerce has dra. You cut off one of its heads, and two
supply fresh information about trade fairs started yet another project, “The Crisis more grow in its place. I am, nevertheless,
and similar events to be held in this coun- Notwithstanding”, the purpose of which confident that in the end we will triumph.

| 4
ECONOMIC POLICY

Czech Industry: From Peak To Bottom and From Bottom Up


The Czech Republic’s economic
development has been recording
an improvement in the last months,
according to assessments by econ-
omists and analysts. Compared to
the commentaries and uncertainty of
6 - 9 months ago, we are now miles
away. The Czech economy has re-
bounded and is moderately growing.
What do we owe this rebound to?

A look at the regularly published monthly a big fall, but this may be oversimplified. On
indicators shows that, besides the leading in- month-by-month examination of the data,
dicators of confidence, an improvement is re- industry headed steeply to the bottom
corded especially in foreign trade and industry. roughly at the turn of 2008-2009 and stayed
Even without a detailed analysis of the causes, there throughout the first half of 2009, but
it can be said that industrial production in the did not fall substantially deeper. From the
Czech Republic is closely linked with foreign peak at the beginning of 2008, Czech in-
trade, in both exports and imports. Recovery dustry fell to the bottom of the beginning
abroad has increased demand, from which of 2009 by approximately 20%. The average
Czech industry has profited, and the import fall in the EU 27 during the same period was
of production means and semi-finished prod- about 15%, and in the euro zone about 16%.
ucts has logically risen as well. This means that Czech industry was affected
above average. This was important in terms
 CZECH INDUSTRY RECOVERING of the economy as a whole. Czech industry
SINCE MAY 2009 creates about 30% of GDP, while the EU av-
What preceded this development? Czech in- erage is approximately 20%.
dustry peaked at the beginning of 2008. By
the middle of the year industrial production  STRUCTURE OF INDUSTRY
dropped slightly, during the summer its de- Let us have a closer look at the structure.
cline deepened, and from the autumn, and About 90% of Czech industry is manufactur-
particularly at the time of the greatest shock to ing, in the more detailed classification the
the global financial system, it tumbled in a free largest share of industry is accounted for by
fall. The downturn stopped at the beginning the manufacture of motor vehicles (approxi-
of 2009, when industry entered the phase of mately 20%). It is followed by the manufac-
stagnation and stabilisation. In monthly data, ture of food and metal products, electrical
the deepest bottom of industrial performance equipment, and electric power industry.
is May 2009. Since then, Czech industry has The classification is somewhat misleading
experienced a gradual recovery, and the first as the interrelation of the sectors is high. In
data show that it is entering the beginning of terms of dynamics, the record holder of the
2010 with rising dynamics. decade is the manufacture of computers,
Interpreting the year 2009 is problematic which has achieved almost a magic 1 000%
– in year-on-year comparison it recorded since the beginning of the millennium. The

5 |
ECONOMIC POLICY

share of this segment is small, in the order cles. An example is the manufacture of plas- of cyclic development. Adjustment for the
of units of per cent, but has been steadily tics and rubber. In this case, the manufactur- scrappage schemes effect has other pitfalls.
increasing. The year 2009 brought a 13.4% ing finds itself approximately 10% below the The competitiveness of the Czech car-mak-
fall in industry. As we have said, Czech in- peak, after an initial fall of 20%, which is com- ing industry is high. A year-on-year com-
dustry fell by about 20% from the peak at- parable with car production. Adjustment for parison is distorted by the start up of the
tained early in 2008 to the deepest bottom the one-off effect of the scrappage money Hyundai car factory and the presentation
and now finds itself about 15% below the is naturally a problem, especially because of of new models of Škoda Auto with which
highest point. The car industry fell from the the interrelation with other segments. If the the car maker seems to be scoring success.
beginning of 2008 to its bottom by some car-making industry found itself now where The Czech car-making industry has been af-
40%, but now finds itself about 10% below the manufacture of machinery is, then indus- fected by the crisis in its revenues, but it has
the peak. The highly cyclic character of car try as a whole would stand approximately probably gained a larger share of the global
industry development is well known, and 3.5% lower than the present level, provided market. Thus it might pull off a surprise in
thus also a risk for the Czech economy. Of the other factors remained unchanged. If the terms of future yields.
course, such a quick return to “mere“ 10% negative effect was applied to other sectors,
below the peak would be puzzling if the de- then the potential decrease could be twice  COMPETITIVENESS IS CRUCIAL
mand for cars was not boosted by the effect as strong, about 6 – 7%. Regardless of the recession, the question
of the scrappage premium for the purchase for the future is competitiveness, where the
of a new car while scrapping an old one in  WHAT IS THE OUTLOOK FOR 2010? Czech economy has so far demonstrated
countries of the area, especially Germany. Of course, this is merely a graphic theoretical a fairly good level. Compared to countries
For comparison, a number of sectors with construction. As we have said, adjustment in the area, the Czech economy has the fast-
a similar cyclic character find themselves in this case is very problematic. The fading est growing manpower costs after Bulgaria
much deeper below the peak at present of the effect of the scrappage premiums and Romania. In 2009, the average hourly
(end of March 2010). For example, the manu- is a variable which is a nightmare to prog- labour costs in the Czech Republic were
facture of computer, electronic, and optical noses for 2010. It is obvious that demand for approximately EUR 9 per hour. In 2006 they
products fell from the peak by about 25% vehicles which have had the advantage of amounted to EUR 7, about one euro above
and subsequently rebounded by some 6%. the scrappage premium is likely to be weak- neighbouring Poland. Compared to the
But it is about 20% below the peak, which ened this year. However, for the time being more developed and wealthier Germany,
is much deeper than the motor industry. At it seems that the prospects of industry in hourly wage costs in the Czech Republic
the same time some sectors are not showing the euro zone, the main market for Czech are still at about one-third of this level, but
clear signs of a rebound yet. For instance, ma- exports, are steadily improving. Also prom- a cause for concern is rather the growth
chinery manufacture dropped by 30% from ising is the growth in sectors which were rate than the present situation. Thus, if la-
the beginning of 2008 to early 2009 and until not affected by the scrappage programmes. bour productivity does not rise adequately,
now its fall has deepened to a chilling 34%. Examples include the manufacture of com- Czech industry will face competitiveness
The closer is the interrelation of the differ- puters, metal products, the paper industry, problems in future. This might also hinder
ent sectors with the car-making industry, the or perhaps the food industry, which, how- the trend of long-term strengthening of
more similar is logically the course of its cy- ever, displays different features in terms the Czech currency, the crown. Although
industrial production has been slowly ris-
INDUSTRIAL PRODUCTION (2005=100; SA, WDA) ing in the last few months, a look at the
200 structure of the recovery advises caution
180 against strongly positive forecasts.
160 In 2010 we expect Czech industry to grow
140 by approximately 2% and next year by 4%.
120 For Central Europe as a whole we expect
100 3.7% industrial growth this year and 5.3% in
80 2011, for euro zone 2.9% and 1.7%, respec-
60 tively. The uncertainty is high, in the analysts‘
40 language: the confidence intervals of the
20 prognoses are still much wider than what we
0 had been used to before the crisis, but the
2000 MO1

2001 MO1

2002 MO1

2003 MO1

2004 MO1

2005 MO1

2006 MO1

2007 MO1

2008 MO1

2009 MO1

2010 MO1

scissors point rather to growth, while a year


ago they were wide open on both sides.
Photo: www.sxc.hu

electrical equipment computers motor vehicles Michal Brožka


machinary and equipment food products Analyst
Source: Raiffeisenbank a.s., Czech Statistical Office Raiffeisenbank a.s.
(e-mail: michal.brozka@rb.cz)

| 6
CZECH BUSINESS AND TRADE

OECD’s Good Evaluation of the Czech Republic


During his April visit to the Czech to catch up rapidly with the devel- tial in cost programmes by increasing their
oped economies of the OECD, in particular effectiveness and restraining their growth.
Republic, Ángel Gurría, General
to restore public finance sustainability and It should become the foundation stone of
Secretary of the Organisation for enhance the business environment. In this a wider strategy in the preparation of the
Economic Co-operation and Develop- area, the Czech Republic has made signifi- economy to join the Eurozone.
cant changes in the process of company  Diversification of risks in health care
ment (OECD), presented the OECD’s
establishment (for example, in the decrease and pension system
economic overview in which the of costs for company establishment) and Due to the pressure of expense caused by
organisation evaluates the current in simplifying other legal procedures (from an ageing population, it is necessary to carry
the registration of a company to insolvency out further health care and pension system
state of the Czech economy, analyses
procedures). reforms to provide for their long-term fiscal
economic policy and makes several sustainability. In both cases, the first promis-
suggestions for further reforms. The  BANKS REPRESENT THE STRONG ing steps have been taken, but it is neces-
POINT OF THE CZECH ECONOMY sary to do more, especially to diversify the
OECD prepares this report individu-
Despite all suggestions, the overall OECD sources of pension income.
ally for all OECD member states. balance has been favourable to the Czech
Republic, even in comparison with 30 mem- In recent years, significant reforms in the
ber states. According to Gurría, this is partial- tax system and social benefits system
ly due to the caution of Jan Fišer’s govern- have been carried out. Even though
ment. It was also stressed that, to emerge many of the changes are welcome, there
from the crisis soon, it is necessary for the are still some unresolved issues:
Czech Republic to limit the country’s debt  Transferring the tax burden towards
and also to make some changes in the areas less distortion-causing taxes.
which increase budgetary expense and dis- It is possible to use indirect taxation much
courage the unemployed from returning to more, especially excise, ecological, and
the labour market. According to the OECD property taxes instead of direct taxation
report, banks are the strong point of the levied on labour and capital.
Czech economy – according to the report,  Better co-ordination of tax and ben-
it was positive that banks did not become efit policy.
involved in risky business practices; and Due to the fact that the policies in these two
besides, the Czech Republic does not have areas are not sufficiently co-ordinated, un-
a problem with loans in foreign currencies desirable interaction between the tax and
(income as well as loans are mainly in Czech benefit systems sometimes occurs. A more
crowns). The greatest problem is said to be systematic analysis of their interaction could
the growing budgetary deficits. According help to prevent these problems.
to the forecast, in 2010 the Czech Repub-  Removal of further deformities in
lic can expect revitalisation with a growth labour and capital taxation.
of 2%. Increased investments and foreign Different treatment of employees and self-
demand will be the main causes; on the employed entrepreneurs deforms the be-
other hand, low local consumption will be haviour of labour market participants. The
the greatest growth disincentive. The gov- law on Corporate Income Tax, which gives
ernment should also set a deadline for the preferential treatment to certain kinds of as-
country to join the Eurozone – i.e. the date sets and investment financing resources, has
of the adoption of the euro. a negative effect on investment allocation.
 Further lowering of rigidities on the
The economic report summarises its product and labour markets.
According to the OECD, the Czech economy suggestions for the Czech Republic in Despite recent reforms, it is still necessary to
has been affected by the global decline in the following points: lower the barriers for entry on the product
economic growth, due to its high level  Implementation of an ambitious me- market, to strengthen economic competi-
of openness and participation in global dium-term consolidation strategy. tion, especially in network sectors, and to
production chains. Its fiscal position also The government should formulate a clear liberalise labour market regulations.
suffered a loss and this situation required medium-term plan to achieve a structurally  Further development of initiatives in
a quick change from stimulation policy to balanced budget. The consolidation effort the field of e-government.
consolidation. The major medium-term must be supported by structural reforms Greater use of e-government methods
challenge is the creation of conditions and it should balance the provision of the could significantly facilitate the attainment
which would enable the Czech Republic income base and the use of savings poten- of these objectives.

7 |
INVESTMENT

FDI on Roller-coaster in CEE


The Central and Eastern Europe (CEE) During 2009, the CEE region experienced lion. Real estate and alternative energy were the
a collapse in inward flows of foreign direct in- other key sectors for FDI in 2008. In 2009, total
has experienced a roller-coaster ride
vestment. Analysis of PricewaterhouseCoopers FDI into the Czech Republic declined by 19%.
in foreign direct investment (FDI) in- experts also suggests that FDI inflows will not These key sectors experienced declines in FDI
flows since 2003. The strong growth immediately bounce back to previous highs. in 2009 of around 30% in real estate and alter-
The bust which followed the long boom will native energy, and 65% in automotive equip-
that followed the last two rounds
have persistent effects in the region. Under our ment and components combined.
of EU expansion was halted by the Central scenario, it will take until 2014 for the re-
global recession. FDI inflows in 2009 gion’s FDI inflows to surpass the 2008 level. The  DOZEN YEARS OF GROWTH
collapse coincided with the credit crunch and FDI inflows into Central and Eastern Europe
were 50% down on the amount
the economic recession. The intensity of the grew remarkably in the dozen years to 2008.
in 2008. Two important factors to recession was not uniform across the region. The growth was modest at first; FDI rose from
determine the recovery path of FDI Estonia, Latvia, and Lithuania are likely to have US$20 billion in 1997 to US$30 billion in 2003.
experienced double-digit rates of contraction From this base, however, inflows leaped more
flows to the region will be the speed
in economic output in 2009; Bulgaria and the than five-fold in five years, reaching US$155
with which investors’ perception of Czech Republic are expected to see milder de- billion in 2008. The increase in inflows coin-
country risk moderates, and how clines of less than 5% of output. Poland’s econ- cided with the accession of the Baltic and
omy is estimated to have grown in 2009. central European states to the EU in 2004. The
quickly the region’s wages - relative
Czech Republic, Poland, and Hungary have
to countries like Germany - start to  KEY SECTORS: REAL ESTATE been major regional destinations for FDI in-
pick up again. AND ALTERNATIVE ENERGY flows since the mid-1990s. These countries
The Czech Republic, which historically has at- also saw FDI rise from 2003, although by a pro-
tracted around 10% of FDI inflows into the re- portionately smaller amount than many of the
gion, experienced a much smaller 2009 decline other nations in the region.
than the region overall. In 2008, the Czech Re-
public saw significant FDI from the automotive Jiří Moser
sector; investments from Daimler, Volkswagen Managing Partner
and Peugeot-Citroen totaled almost US$1 bil- PricewaterhouseCoopers Czech Republic

Important Investment in Žatec Triangle Zone


Solar Turbines, an American company  450 NEW JOBS  TECHNOLOGICALLY
WILL BE CREATED CHALLENGING PROJECT
and a part of the world known Caterpil-
“In view of the current economic situ- “A number of our turbines are deployed in
lar Inc. conglomerate, has signed an ation and the competition of other Eu- the EMEA region today, which is why Solar
agreement of intent in March 2010, ropean countries, we consider it a great Turbines decided to strengthen their global
success to persuade, with the help of the capacities for technologically demanding re-
which should result in the construction
CzechInvest Agency, an important com- pairs necessary for general repairs,” explains
of a new high-tech repair centre for pany like Solar Turbines to announce Peter Taylor, Vice President of Solar Turbines
gas turbines of this brand in the Žatec their intention to invest in the Triangle Turbomachinery Products. “The Solar Tur-
industrial zone. We have been trying for bines repair centre is a technologically very
Triangle strategic industrial zone. If the
a long time to make the zone more ac- demanding project which perfectly utilises
investor‘s plans pan out, the only Solar cessible to smaller businesses that en- all the advantages of the Czech Republic
Turbines factory in the whole EMEA re- sure the creation of new jobs for the peo- – quality infrastructure, excellent geograph-
ple of the region. Thanks to the planned ical location, experienced employees, and
gion to be able to renovate key parts of
investment by Solar Turbines, some 450 above all, our long tradition of top machine
turbines necessary for their subsequent new qualified positions should be creat- production,” recounts Stanislav Martínek,
Photo: www.sxc.hu

general repairs will be built in northern ed. We plan to increase this number with the Director of the Investments division at
the influx of other potential companies,” the CzechInvest Agency.
Bohemia.
said Jana Vaňhová, the Governor of the
Region of Ústí nad Labem. More at www.czechinvest.org

| 8
CZECH BUSINESS AND TRADE

Czech System of Investment Incentives Among Most Open Ones


“The overall results of the study show that in
the long-term, one job created by investors
creates two jobs for suppliers,” says Alexan-
dra Rudyšarová, the General Manager of the
CzechInvest Agency. On top of that, the sup-
ported investors and their suppliers create
jobs in times when other industries let go of
employees. While the years 1998–2000 and
2003–2004 saw the elimination of several
thousand jobs in production, the supported
investors, on the other hand, hired new peo-
ple. “We can expect the number of positions
newly opened by investors and suppliers
to grow in the coming years. A record 265
companies acquired the promise of an in-
vestment incentive between the years 2006
and 2008,” the study says. Employee wages
have been climbing continuously in the
supported companies over the last years.
“However, average wages in the individual
industries do not differ significantly from
the wages of employees in companies that
have not drawn on the incentives. Therefore
it seems that the supported investors do
Investment incentives earned the Altogether, the state had provided Czech not try to push their wages higher to attract
and foreign investors with support in the employees from other companies,” adds
Czech Republic CZK 229.972 billion amount of CZK 30.068 billion (approx. EUR Luděk Niedermayer. The key industries in
(approx. EUR 9.2 billion) from their 1.2 billion), and collected CZK 260.041 billion which the incentive recipients conduct their
introduction in 1998 until 2008. (approx. EUR 10.4 billion) in taxes and em- business have shown such rapid growth of
ployee payments from the same companies turnover that it was undoubtedly a case of
According to the results of a study by and their suppliers. The study proved that ap- a strengthening of the whole field, and not
the Deloitte consulting firm, which proximately three quarters of new jobs, and only a strategy based upon taking over con-
described the benefits and costs of state budget earnings as well, are created at tracts of existing firms.
the suppliers used by the investors who had
all investment incentives provided been supported by incentives. “This proves  ONE -THIRD OF CZECH EXPORT
since the beginning of the system‘s that as the influence of the incentives mul- THANKS TO INCENTIVES
operation, some 308 thousand new tiplies as they spread through the economy, “The real amount of money transferred to in-
many other companies benefit from them vestors‘ accounts from 1998 out of the CZK
jobs have been created thanks to the although they themselves have not been 30 billion (approx. EUR 1.2 billion) provided
incentives. This means that almost directly supported,” explains Luděk Nieder- in the incentives from the state budget was
10% of all employees in the Czech mayer, the Director of the Consulting Depart- CZK 6.432 billion (approx. EUR 256 million).
ment in Deloitte. 486 entities drew on invest- It was used to support the creation of new
Republic today work in companies ment incentives until 2008. The investors put jobs, employee retraining, or in the form
supported by the incentives, or for CZK 357 billion into the supported compa- of capital support of investments. The re-
their suppliers. nies. Almost one-quarter of all the promised maining funds are composed of income tax
incentives was acquired by Czech firms, with abatement and price-cuts on the reduced
only German firms being more active, albeit prices of land in industrial zones. However,
by just one per cent. both of these sums are unrealised income
– not expenditures, i.e. the state does not
 308 THOUSAND JOBS have to make any direct payments which
By 2008, 308 thousand new jobs were cre- means the funds do not represent any
ated thanks to the investment incentives in burden for the state budget. Investors sup-
the Czech Republic. Most of the jobs, 73% ported through incentives exported goods
to be exact, were created by suppliers, the worth CZK 835 billion (approx. EUR 33.4
remaining 27%, or 83 thousand jobs, were billion) from the Czech Republic in 2008,
opened directly by the supported investors. which is 29% of all Czech exports.

9 |
INVESTMENT

 INVESTMENTS THAT REMAIN ticipation in the Czech Republic follow- that their suppliers conform to quality
Foreign companies operating in the ing their initial investment. Thus, their certificates, such as ISO, and approxi-
Czech Republic continuously increase operation in the Czech Republic is prob- mately one-third of them has stated they
the percentage of their profits they re- ably not based on an investment sup- cooperate with universities or the Acad-
invest. According to data from the Czech ported by an incentive and an attempt emy of Sciences. Both of these activities
National Bank, CZK 363 990 billion (EUR to withdraw the profit to their home help to further improve the quality of
14.6 billion) have returned in this way to company as quickly as possible. The in- the business environment in the Czech
the economy, which is 48% of the overall centive is used to make the initial invest- Republic.
amount of direct foreign investments in ment easier with plans to expand it later,”
the industry. “The collected data show says Luděk Niedermayer. Three quarters More at www.deloitte.com/cz
that companies often increase their par- of the supported investors also demand (e-mail: tpergler@deloitteCE.com)

Blu-Ray Discs Will Be Made at Loděnice


Loděnice near Beroun is a Czech  GZ DIGITAL MEDIA, A.S. including Blu-ray disc production facili-
town where Central Europe’s first INTRODUCES ITSELF ties, will be fully operational in January
GZ Digital Media, a.s. is the largest CD 2012, at the latest. “Currently we have an
plant to manufacture Blu-ray discs
and DVD manufacturer in Central and about four-per-cent share of the EU mar-
will be based. The Czech company Eastern Europe, with an output of around ket, and we hope that as a result of this
GZ Digital Media, a.s. will purchase 100 million optical carriers, of which ap- investment, our share could increase by
proximately 80% go for export, mainly to at least half a per cent,” Pelc said.
technologies worth more than
the UK, the USA, and to continental Eu-
CZK 250 million (approx. EUR 10 rope. Currently, the company is planning  INTEREST IN BLU-RAY
million). In addition to optical vast investments, the largest proportion DISCS IS GROWING
of which will go into modern machines According to Blu-ray Forum.cz, an organ-
discs, the company is known for the
and equipment. All the equipment will isation associating film distributors, car-
manufacture of conventional vinyl be installed in the company’s existing rier producers and player manufacturers,
discs, and is actually the world’s premises, so that there will be no need to the sale of Blu-ray film discs in the Czech
build new facilities on a green field. That Republic and in Slovakia in 2009 is esti-
largest manufacturer of those car-
is one of the reasons why the Czech com- mated at 90 000. Interest in the discs is
riers. The company is planning to pany GZ Digital Media has received state growing rapidly. In the first six months of
increase its DVD pressing capacity support in the form of partial corporate 2009, viewers and video-distributors in
income tax exemption. the two countries purchased 25 538 Blu-
and to enlarge the follow-up print-
“Naturally, our branch, too, was hit by ray films in the Czech language version;
ing production – the manufacture the global economic slowdown. Fortu- in the corresponding period one year be-
of sleeves and all accompanying nately, we reacted quickly and with our fore, they purchased only 8 538.
comprehensive offer we are prepared Demand for Blu-ray products is grow-
printed materials. The plant will
for new customers,” Zdeněk Pelc, Man- ing worldwide. The sale of Blu-ray films in
create about thirty new jobs. aging Director of GZ Digital Media, a.s., the USA last year is estimated at USD 89
explains. million in comparison with USD 24 mil-
“In the first phase we are planning the lion the previous year. In Europe, Blu-ray
purchase of more advanced and more film sales last year are estimated at around
economical machines for the manufac- USD 9 million. The Blu-ray format makes it
ture of DVD discs and for printing pro- possible to store an incomparably larger
Photo: Country Life archives

duction, and Blu-ray technology will fol- volume of data than ordinary DVDs. A DVD
low suit.” can store up to 17 GB of data, but standard
capacity is rather only 8.5 GB, while a Blu-
 PREPARING FOR BLU-RAY DISCS ray disc can store up to 50 GB.
The first new machines are already in op-
eration at GZ Digital Media. All of them, More at www.gzdm.cz

| 10
CZECH TOP

Country Life, a Pioneer of New Lifestyle


Country Life office building
It is nearly 20 years since Country Life
s.r.o. was founded, bringing the first
organic food to the Czech market. Ever
since its establishment, the company
has not only been selling organic
and health food, but has also been
growing and manufacturing it, cook-
ing with it, and simply looking upon
health food in an all-inclusive man-
ner. It has been trying to help people
by offering them a practical change to
their life style and inform and advise
them in this area. And also to educate AWARDS FOR COUNTRY LIFE:
1993 – Honourable Mention in the Eco-
more specialists in the branch. project of the Year Competition for
organic farm or the bakery, lectures and a con- Country Life’s organic farm
2005 – Melantrichova shop – Organic Shop
cert. Each year, thousands of people come to
of the Year Award. The winner is
celebrate the Organic Harvest Festival.
selected by a jury composed of
renowned experts in marketing,
 ORGANIC FARM food production, the media and
Country Life is attempting a comprehensive AND ORGANIC BAKERY consumer associations.
solution, at all levels of its activity – from or- Country Life has been running the organic 2006 – The Best Organic Farmer of the Year
ganic farm to wholesale and healthy lifestyle farm since 1992. On its fields it grows grain Prize.
courses. Besides an organic farm, a health- crops, vegetables and fruit, all organic. Each The prize is awarded each year by the Pro-
food wholesale outlet store and an organic year it harvests more than 60 different kinds bio Association of organic farmers. The prize
bakery can be found in the company’s eco- of crops, including the less well-known, such is a challenge cup full of gold pieces.
centre not far from Beroun, where a harvest as topinambures, black root and yakon. It is
festival is held each year. Also, the company also trying to cultivate its own organic seeds  ORGANIC SHOPS AND
runs several organic shops and restaurants and young vegetable plants, organic cereals RESTAURANTS
at different locations in Prague. and potatoes. The Country Life “organic family” also in-
The organic bakery bakes bread and sweet cludes four organic and health-food shops
 THE FIRST PASSIVE HOUSE IN pastries, which it sells in its own shops and res- in Prague. The first was opened in the early
THE CZECH REPUBLIC taurants, and it also supplies them to organic 1990s.
The Country Life eco-centre has been in shops all over the Czech Republic. The bakery Another facility, besides organic shops,
operation at Nenačovice near Beroun since uses grain from its own organic farm, which it is a restaurant, which offers a self-service
2003. Part of it is an organic farm, a wholesale grinds on a stone mill, so that all vitamins, min- choice, a hot and cold cuisine, a salad bar
store, an organic bakery, a stone mill, a pack- eral substances and fibre are preserved in it. and fruit and vegetable juices. The interiors
ing department, and the Company’s offices. of the restaurant and the shops in the centre
The office building is a reconstruction of the  HEALTH FOOD WHOLESALE of Prague are furnished in a natural style.
former cow-house. It is a low-energy building Country Life is the largest organic product
with an extension, which has the parameters importer and trader and one of the largest  HEALTHCARE AND
of a passive house. It is the first passive house health-food suppliers in the Czech Republic. EDUCATIONAL ACTIVITIES
to be built in the Czech Republic. Its wholesale store offers about 2 000 differ- An inseparable part of Country Life’s ac-
ent products, nearly 1000 of which are in tivities is healthcare and educational pro-
 ORGANIC HARVEST FESTIVAL organic quality. Its range comprises durable grammes. The company runs a Lifestyle
The eco-centre is a place where the Organic and cooled food, fruit and vegetables, bread, Institute, which organises courses aimed at
harvest festival is held each year. Since 2004, eco-detergents, and natural cosmetics. practical education in the area of ecology
every second Sunday in September life in Country Life is an importer and distributor and healthy life style. The courses are ac-
Nenačovice revives with a festive organic-style of world brand organic products and health credited by the Ministry of Education of the
spirit. The programme prepared for visitors food, such as Provamel, Oatly, Ekoland, Czech Republic.
comprises the sale of organic food and other Granovita, Eden, Molenaartje, Danival, Emile
eco-products, food tasting, excursions to the Noël, Voelkel, Monki, Muso, Ecover, etc. More at www.countrylife.cz

11 |
LEGISLATION

Insolvency Law: How to Protect Claims?


The number of business people The insolvency issue is regulated by Czech currency (claims in a foreign cur-
Act No. 182/2006 Coll., on bankruptcy and rency must thus be calculated in Czech
facing financial difficulties in this
the methods for its solution (the Insol- currency in accordance with the exchange
current economic crisis is higher vency Act). This Act became effective as of rate of the foreign currency market, valid
than ever before. Hence, a higher 1 January 2008 and, contrary to the former on the date of commencement of the in-
regulation, it emphasizes the influence of solvency proceedings or their due date, if
degree of diligence is required
creditors on insolvency proceedings and they became due prior to the insolvency
when doing business. Which are the provides more possible insolvency solu- proceedings‘ commencement). The value
basic principles of the Insolvency tions, namely enabling the sanitation of of non-monetary claims also has to be
a debtor‘s business and the continuation evaluated in money;
Law in the Czech Republic and the  Attachments – they differ in accordance
of its business activities, if this is effective
general recommendations to claim in a particular case. with the kind of registered claim. In prin-
protection? ciple, they shall prove the existence and
 INSOLVENCY SOLUTIONS amount of the claim; diligent evidence of
The Insolvency Act recognizes the fol- all claims is therefore recommended;
lowing fundamental insolvency solu-  Time limit – claims can be registered after
tions: (i) straight bankruptcy proceedings the commencement of insolvency pro-
(“Konkurz”), the purpose of which is the ceedings. The latest time limit for registra-
proportionate satisfaction of creditors tion is set out by the Insolvency Court in
from the proceeds of the conversion of the thus named Decision on Bankruptcy
the debtor‘s assets into liquid financial (“Rozhodnutí o úpadku”). This time limit is
means, (ii) restructuring (“Reorganizace”), mostly 30 days from the date of publica-
which enables the subsequent satisfaction tion of the Decision on Bankruptcy. Failure
of creditors while continuing to engage to abide by this time limit leads to a refus-
in the debtor‘s business activities within al of the application for claim registration
the scope of the so-called restructuring and the creditor thereby loses the chance
plan made with the purpose of sanitising to demand satisfaction for its claim in the
the debtor‘s business, and (iii) debt relief insolvency proceedings.
(“Oddlužení”), which is applicable only to
non-business debtors and is therefore not All information about insolvency pro-
the subject of this article. ceedings, including the announcement
of the commencement thereof and any
 FILING A CLAIM given decision important for the course of
After the commencement of insolvency time limits are published in an Insolvency
proceedings and until the termination Register maintained electronically at ht-
thereof, the satisfaction of claims towards tps://isir.justice.cz/isir/common/index/do.
a debtor is possible only through the Gathering information from the Insolvency
proceedings and in a manner that is fore- Register is free of charge and a particular
seen in the Insolvency Act. A claim can be debtor can easily be found, based on its
satisfied in insolvency proceedings only if company name or business identification
it is registered within the proper time limit number (“IČ”). Since creditors have prac-
by an Insolvency Court and meets the ap- tically no other possibility of acquiring
plicable formal requirements. This duty is knowledge about the pending insolvency
imposed on most creditors. Only a small procedure, regular monitoring of this Reg-
group of creditors, for example the debt- ister within due business management is
or‘s employees, are not obligated to file recommended.
their claims.
 SECURED CLAIM
 THE MAIN CLAIM REGISTRATION Whether his claim is secured (for example
REQUIREMENTS with a mortgage or right of retention) is
 Completion of a special Registration Form decisive for the satisfaction of a creditor.
(which is available at http://insolvencni- Secured claims are settled prior to the
zakon.justice.cz) and authenticated signa- proceeds of the sale of the assets or re-
ture thereon; ceivables of the debtor to which they hold
 Content – Claim Description, reason for a security right, whereas the settlement
its origination and its monetary value in can follow at any time during the insol-

| 12
CZECH BUSINESS AND TRADE

vency proceedings. Secured creditors are ceeding involved (see above). In the case is recommended. In doing so, it has to be
also deemed to be creditors who do not of straight bankruptcy proceedings, all of borne in mind that some legal actions can
have a direct claim towards the debtor, i.e. the assets of the debtor forming the in- be declared ineffective and consideration
creditors of a third person, whose claim solvency assets are sold with the approval gained as a result must be handed over
is secured by the assets of the debtor. of the creditors‘ council. After settling the to the insolvency assets. These legal ac-
Contrary to the former regulation, ac- costs of the insolvency proceedings and tions are: legal actions with insufficient
cording to which secured creditors were claims with priority settlement, the credi- or non-existent consideration, preference
satisfied at a maximum level of up to 70%, tors are satisfied (usually in part) out of – for example settlement of a debt before
the amount of satisfaction from secured the rest of the sales proceeds. Unsatisfied its due date, security of already existing
assets is not limited. If the claim value is claims or parts thereof can be enforced debt, etc. and fraudulently disadvantag-
lower than the value of the security, the after termination of the insolvency pro- ing transactions, i.e. transactions which
claim is for the difference considered as an ceedings. Practically, there are no assets intentionally disadvantage creditors, pro-
unsecured claim. In determining the rank of the debtor left after termination of the vided that the other contracting party
of secured creditors, what is decisive is the insolvency proceedings and the debtor‘s was aware of such intention. In the event
moment at which the respective security business activity is wound up. The actual of transactions between companies form-
right was created. A secured creditor is enforcement of such claims is therefore ing a holding group, it is assumed that
obligated to exercise its right to the set- rare. If insolvency is solved by restructur- the respective other party was aware of
tlement of its claim from the security in ing, debts are transformed according to the debtor‘s intention. Hence, special dili-
its registration of the claim and to specify the restructuring plan, i.e. into a share of gence is required.
a particular security right and to prove it the company, new debts, etc.
by respective attachments. Markéta Pechová
 GENERAL RECOMMENDATIONS Petr Syrovátko
 UNSECURED CLAIM Generally, when entering into a trans- Wolf Theiss, Advokáti s. r. o.
Unsecured creditors are satisfied depend- action, security of the claim by a proper e-mail: marketa.pechova@wolftheiss.com,
ing on the specific form of insolvency pro- security right (for example a mortgage), petr.syrovatko@wolftheiss.com

13 |
WE SUCCEED

OHL ŽS to Build New Junction in Bosnia and Herzegovina


In March 2010, a contract was
signed between OHL ŽS and Serbian
Motorways for the construction of
a motorway junction worth EUR
11.5 million north of Banja Luka,
the second largest city of Bosnia
and Herzegovina. This motorway
junction will link future motorways
Banja Luka – Gradiška, a town on
the state border between Bosnia
and Herzegovina and Croatia, and
Doboj – Banja Luka.

Bank for Reconstruction and Development scaffold bridges (each approximately 500m
(EBRD). The construction work is expected in length), as well as the necessary relaying
to take 24 months. It will be carried out by of engineering networks.
OHL ŽS together with Niskogradnja, a local
company based in the town of Laktaši. Foreign contracts make up about 20% of
your revenue. What challenges did you
We asked Zdeněk Zedníček, Head of the have to face abroad in the past?
Foreign Trade Department at OHL ŽS, Each project we work on abroad has its
to tell us more. own specifics, risks, and stumbling blocks.
Why do you think you have been entrust- Our company has a relatively broad “cov-
ed with this contract? In what way were erage” of activities. From the mentioned
you better than your competitors? far-off Azerbaijan to neighbouring Slovakia
The tender proceedings were made up of or Hungary. One of the greatest and most
two rounds – prequalification and the ac- interesting of our projects is the project for
tual offer. We passed the prequalification the construction of a motorway worth USD
thanks to our references, for example for the 150 million, currently nearing the end of its
construction of a motorway in Azerbaijan. execution phase. This project is financed by
Then followed the actual tendering pro- the Czech Export Bank and EGAP insurance.
The specific element of the motorway junc- cedure. In cooperation with Nizkogradnja,
tion is a 580 m long bridge. It will be the first a local construction company, we man- Which other interesting foreign projects
structure of its kind in Bosnia and Herzegovi- aged to prepare the lowest price offer. We await you this year?
na. "We value greatly the trust the investor obtained the contract in competition with This year we will continue in our business
has bestowed in us. I believe motorists and Croatian, Austrian, Slovenian, and Italian activities. We are preparing and imple-
future motorway junction users will also companies. menting a number of projects in a vari-
be satisfied with our work,“ František Leda- ety of countries where we already have
byl, Vice-chairman of the Board of Directors What will this construction project entail? a “permanent” presence – especially Slo-
and Director of Marketing and Commerce The project entails the construction of a mo- vakia, Hungary, Bulgaria, Montenegro, and
at OHL ZŠ commented at the occasion of torway fly-over junction. This junction will Bosnia and Herzegovina. At the same time,
the signing of the contract. Construction is serve as a connection between the motor- we are attempting to enter new territories
Photo: OHL ŽS archives

cofinanced by the European Commission, way currently under construction stretching such as Russia, Vietnam, Poland, Serbia,
which provided the Government of the Re- from Banja Luka to the border with Croatia and so on. Among the most interesting of
public of Serbia with a financial donation of and the future motorway from Banja Luka to projects we have in the pipeline is a project
EUR 5 million. The remaining amount, i.e. Doboj. The construction will include access for the construction of a new railway line in
EUR 6.5 million is a loan from the European ramps, a motorway segment and two main Russia in the Ural region.

| 14
www.ohlzs.cz

Modern face of building industry


WE ARE INTRODUCING

Plzeň Wants to Open Its Arms to Europe


Thanks to its history and tradition, This is precisely the purpose of the then. Therefore, after the completion of the
the West Bohemian metropolis project: to bring the Europeans closer togeth- first stage of the city’s transformation focused
er through culture. The question whether the mainly on the economic base, the vision was
can be associated with various title will be awarded to Plzeň or Ostrava will be born in 2003 to develop Plzeň especially in the
attributes. They do not have to be decided by the international committee this area of innovative enterprise, tourism, and cul-
just the engineering industry, the September. “Becoming a European culture ture. And this is precisely where the Plzeň 2015
centre in five years‘ time means great prestige, project offers a unique chance .“
world-famous beer, or business and for Plzeň it is a challenge which will not be
development. In addition, there is repeated for a long time. It is really worth to  PILSEN-OPEN UP!
now a real chance that in five years‘ fight for“, says Petr Dvořák, the PR and Market- Although Plzeň presents itself rather as
ing Manager of the Plzeň 2015 project. a conservative city, this does not mean that
time the city may be graced with it is not opening to new trends. The Plzeň
the title of European Capital of Cul-  VISION IS IMPORTANT 2015 project and its motto – Pilsen-open
ture for 12 months. Plzeň (Pilsen) The European Capital of Culture event (ECoC) up! – is a strong impulse for this place, which
was launched by a decision of the EEC Coun- has an indisputably tremendous creative
is one of the Czech candidate cities cil of Ministers in June 1985 and the title is potential in the area of art and technologies.
(the other is Ostrava) which want awarded to European cities for a period of And the important thing is that in the prep-
to open their imaginary arms to the one year. Among Czech cities, Prague was the aration of the strategic document The City
proud holder of the designation in 2000. The of Plzeň Culture Development Programme
European public within the broadly cultural and socio-economic dimension of the 2009–2019, its inhabitants have made it
conceived event. event surpasses the present common simpli- clear that they definitely desire a change in
fied conception of culture in all respects. quality, expect new impulses, and are ready
The Art Director of the Plzeň 2015 project to participate in this change and revival.
Yvona Kreuzmannová confirms this:“This Euro-
pean project is not designed to acknowledge  USEFUL INSPIRATION
the reputation of the given city as a city of cul- The best example in this respect can be the
ture. There is much more to it – what vision the results achieved by Glasgow as the European
city has for a period of five to ten years, what Capital of Culture in 1990. It was probably the
its concept of all-round development is“. first breakthrough in the understanding of cul-
Milan Svoboda, the Plzeň 2015 Project ture – not as a consumer area, but as a motor
Director, who worked in the development for kick-starting a healthy development of so-
branch of the municipal government of the ciety. This was the reason why the socio-econ-
West Bohemian metropolis from the 1990s, omic factors in Glasgow greatly improved after
speaks in a similar tone. “I saw the city of Plzeň 1990, and the level of the region as well as the
as an area with immense potential already gross domestic product rose by 20%.
At present, the European Capital of Culture
event is gradually moving from large metropo-
lises to medium-sized cities which can greatly
boost their development, provided they have
the courage and enlightened town halls. In-
spiration can be drawn from the experience of
Lille in 2004 or Liverpool four years later. Their
economic studies showed that every euro in-
vested in culture brought 8 euros of profit in
parallel effects. Indeed, if the event attracts
tourists, the level of accommodation and res-
taurant services, transport infrastructure, etc.
in the city rises. It is thus clear proof why the EU
is to support not only business, employment,
Photo: The City of Plzeň archives

and the environment, but also culture.


Of course, there are many other inspiring
examples from previous years for the candi-
date city of Plzeň. They include Linz and Graz,
where the organisers succeeded in building
the necessary infrastructure, offering an ex-
cellent programme and creating a generally

| 16
CZECH BUSINESS AND TRADE

favourable atmosphere. “In the German town


of Essen, which has received the title of the Eu-
ropean Capital of Culture for this year together
with Pécs in Hungary and Istanbul, Turkey, the
project has great support from the federal
government. In the Czech Republic we have
not experienced this so far, although there is
support from the city as well as certain po-
litical support from the region. I believe that if
the city of Plzeň succeeds in its candidacy and
wins the title, it will arouse the interest of other
possible partners“, the Plzeň 2015 Project Di-
rector Milan Svoboda says.

 PLZEŇ METAMORPHOSES
Sponsors will be needed without doubt. In-
vestment in Plzeň will be required in several
directions. “We are preparing the construc-
tion of a new theatre, the Region is planning
to build a new gallery, a new cultural centre is
to be set up by the conversion of the former
Světovar brewery“, Milan Svoboda lists the key
plans. “There are also projects for the revitalisa-
tion of public areas, for example the construc-
tion of greenways for hikers and cyclists in the
Štrunc Park, where a site is to be created for
the presentation of works of art. The linking of
public areas with art is actually one of our big
themes“, Milan Svoboda emphasises.
For Art Director Yvona Kreuzmannová, it
will be interesting about Plzeň‘s candidacy to
see whether and to what extent this conserv-
ative provincial city will be able to open up to
European culture. It is a fact that according to
PLZEŇ 2015 PROJECT
statistics, Plzeň is the second city in the Czech
Republic in the number of foreign residents. WHAT COMPANY PLZEŇ WILL HAVE AS A CANDIDATE
The Plzeň 2015 project is a chance to extend  Athens (ECC title in 1985), Paris (1989), Madrid (1992), Lisbon (1994), Stockholm (1998),
the necessary dialogue with minority com- Helsinki (2000), Bruges (2002), Luxembourg (2007), Istanbul (2010).
munities as well as other nations. WHAT PRINCIPLES PLZEŇ WANTS TO PROMOTE
And what cultural events would we see in AS A EUROPEAN CENTRE OF CULTURE
Plzeň in five years‘ time? The principal themes  Openness as courage for disputation and public dialogue.
to be highlighted are Art and Technology, Re-  Openness to new ideas, innovation, and creativity.
lationships and Sentiments, Transit and Minori-  Openness to minority genres, trends, and ethnic groups.
ties, Stories and Sources. The themes reach be-  Openness, transparency, and sophistication of the candidacy process and public affairs.
yond the dimension of culture, and we want WHAT PLZEŇ WILL GAIN BY THE TITLE OF EUROPEAN CAPITAL OF CULTURE
to address as many people as possible. For  At present, Plzeň takes 356th place in the EU by its size. In 2015, it can be one of the two
example, in the Stories and Sources cycle we most important cities in all Europe.
want to take up Plzeň’s past, which is unique  In 2009, Plzeň recorded almost three quarters of a million overnight stays of tourists. In
and which has a strong transatlantic relation 2015 the number may be much higher.
because the city was liberated by the Ameri-  At present, 15 new theatre performances a year can be attended in Plzeň, in five years
can army in the Second World War, and there the number may reach 365.
are many events in its history that are worth  A benefit in terms of sustainability will be the improvement of culture infrastructure. The
recalling“, says the Plzeň 2015 project Art Di- city is motivated for buildings that would otherwise not be given such a high priority.
 Culture and art can bring important economic benefit. The year 2015 can show
rector. “We can promise already now that the
whether one euro invested in culture will bring at least two more euros to the budget
themes of the programmes will be strong and
of the city or the state.
the artists and performers will be remarkable“.

17 |
KALEIDOSCOPE

First Hopeful Firms


in Silicon Valley
BoldBrick, Cognitive Security and Imagemetry
– these are the names of the Czech start-up
companies which, by 30 June, were lodged
in the CzechAccelerator of the CzechInvest
Agency in California. CzechInvest has organ-
ised office space for them free of charge in the
unique business incubator, Plug and Play Tech
Centre in Silicon Valley which is the seat of such
giants as Microsoft, Google, and Sun Microsys-
tems. BoldBrick is seeking new clients for their
key product, Mossquito, and opportunities for
financing further development in CzechAccel-
erator. “CzechAccelerator is an ideal opportunity
for us to start our business activities in the US,
Czech SOLVIT –One of the Three Fastest Centres in the EU which is our key market,” says Ondřej Tučný,
The Czech SOLVIT Centre, active at the Min- tion is ten weeks. The Czech SOLVIT centre, General Manager of BoldBrick. Imagemetry
Company sent part of its trade and research
istry of Industry and Trade, is a system of with 126 cases resolved, is evaluated by the
team, which specialises in the area of digital
informal problem solving on the EU inner European Commission as one of the most image processing and artificial intelligence. It is
market. In 2009 the Czech centre was one successful in the EU. The SOLVIT system seeking an opportunity in California for strategic
of the three fastest centres, together with provides free and fast assistance in the case support and expansion of their product, aimed
those of Ireland and Austria, which resolved where an office of a member state violates at security aspects of visual data.
issues within 28 days on average. The dead- the rights granted to a citizen or an entre-
line by which the centre should find a solu- preneur by European law.
AFSI in Most to Employ
The Czech Republic Has Been among the Best in Almost 200 People
Almost 200 people in North Bohemia will
Economic Endurance in the EU during the Crisis be employed by Advanced Filtration Sys-
The economic crisis revealed the deficien- try has attained average results (12th place tems Inc.(AFSI), the American produ cer
cies, but it also confirmed the strong as- in both factors). Labour costs are relatively of filters and filter inserts. Production in
pects, of the Czech economy. As noted by higher (18th among 29 evaluated European the new plant in the Joseph Industrial
the mid-year barometer of the Confeder- countries) and information related to labour Zone in Havraň in the Most Region was
ation of European Business (BusinessEu- productivity is unfavourable (22nd place). In launched in March 2010. “We decided
rope) representing 40 national employers’ labour productivity, the Czech Republic is on the Czech Republic as the location
federations from 34 countries, the evalua- behind Slovakia, but ahead of Hungary and of our first factory outside the United
tion of the Czech economy in comparison Poland. States, due to its excellent location in
with the other 28 countries is relatively the heart of Europe, decent infrastruc-
positive. The Czech Republic was placed ture, and reliable employees. Another
relatively well and, together with Denmark, factor that influenced our decision was
Germany, and Austria, it was judged the the good reference from our partner, the
Photo: www.sxc.hu, European Commission archives, Karel Pazderka

best at resisting the impact of the crisis. To- Donaldson company, which has been
gether with Slovakia, Poland, and Hungary, doing business in Kadaň and in Klášterec
it is approximating the average economic for 10 years,” says Radim Otipka, Head
level of the EU and it retains an excellent of the Havraň plant. The Most plant will
level of external competitiveness. In com- manufacture filters and filter inserts for
parison with other European countries, the Caterpillar machines and engines in Eu-
Czech Republic is judged relatively highly in rope, Africa, Asia, and Australia. As of July,
export performance (4th among 29 coun- there will be a new generation of filters
tries). Also in the area of public finance (10th for the British Perkins company. The con-
among 29 countries), despite worsening in struction of the AFSI plant in the Czech
2009 and the current worsening, the Czech Republic started in April 2008. To date,
Republic is among the countries with better 142 people have obtained employment
results. As regards tax burden and budget- there and their number should grow to
ary adjustment linked to ageing, our coun- 185 by the end of the year.

| 18
CZECH BUSINESS AND TRADE

The Czech Republic has Opened an Exchange of


Unused Chemicals Called NECHELA
The Internet auction exchange system of profitable to sell unused chemicals in time
unused chemicals opened in March 2010. than to keep them stored and in the end
The Ministry of Industry and Trade sup- pay for their ecologic removal or, in a worse
ported the establishment of an electronic case scenario, for their illegal storage. The
auction market, the aim of which is to help NECHELA (NEspotřebované CHEmické LAtky
small and medium-sized companies make = Unused Chemical Substances) allows the
use of the remains of chemical substances creation of the offer of chemicals on the In-
What is the Czech and products which they have left over from
production after transformation or end of
ternet in the database of unused chemical
substances and products, which is accessi-
Republic’s Position production. For a small company, it is more ble at www.cmkbk.cz.

on the EU Internal
Market? Prague Hosted American and Russian Presidents
The Czech Ministry of Industry and Trade has US President Barack Obama and his Russian pledged to liquidate parts of their arsenals
issued an Analysis of the Competitiveness counterpart, Dmitriy Medvedev, signed the of nuclear warheads, after negotiations in
of the Czech Republic. For almost six years, START treaty on nuclear arms reduction in Moscow on 6 July 2009. They agreed that
the Czech Republic has been a part of the Prague on 8 April of this year. The new Treaty they would reduce the number of nuclear
EU internal market, which provides Czech has supplanted the strategic arms reduction warheads on vehicles from 1675 to 1500 on
companies with greater opportunities for treaty (START) of 1991, which expired in De- each side and the number of vehicles from
business. The results show that, while the cember 2009. The negotiations for the new 1100 to 500. Why have the two Presidents
Czech Republic is successful in some areas, document took almost a year; Moscow and met in Prague? Mainly because Obama
even when compared to the best countries Washington could not reach agreement on gave a speech on his vision of a world with-
(technological environment), in other areas certain points of the Treaty. Russia demand- out nuclear weapons in Prague a year ago
of the comparison we are among the least ed that the treaty be relevant for all nuclear – on 5 April 2009. Thus, Barack Obama has
successful (institutions and infrastructure). In warheads and their strategic delivery vehi- visited Prague for the second time since his
the area of infrastructure, the Czech Republic cles (rockets, submarines, and bombers), inauguration, while this was the first visit to
has too low a share of the motorway trans- while the US wanted to concentrate mainly the Czech capital for the Russian President
port network and an insufficient number of on warheads. Obama and Medvedev jointly Dmitriy Medvedev.
border crossings for transmission systems.
The Czech Republic has a significant po-
tential for change in increasing educational
structure, especially in technical education.
The necessity for better interconnectedness
in research between public and private sec-
tors is related to this.

Financial Arbiter’s
Services More in Demand
In 2009, the Office of the Financial Arbiter in
the Czech Republic received a total of 757
suggestions and complaints from clients of
local financial institutions, which is an almost
100% increase in comparison with 2007. Sug-
gestions were mainly related to problems with
money transfers, to bank and non-bank loans
or incongruities in insurance. The Arbiter also
granted several sanctions and imposed fines
of CZK 254 000 (approx. EUR 10 000) on finan- Czech Prime Minister Jan Fischer
cial institutions, of which CZK 115 000 (approx. with US President Barack Obama
EUR 4 600) was for not observing information
obligations. More about the Financial Arbiter
at www.finarbitr.cz/en/. 19 |
SERVICES

All-embracing Methods of the Packaging Industry


An ever greater emphasis is placed in For every packaging that you place on the
the Czech Republic, as well as globally, on market and sell, you must examine and prove
the function of packaging from the view- that it does not negatively affect the living
point of design, which is seen as a feature environment of the manufacturer. The Act
that should correspond to the product binds the importers and distributors of pack-
brand and publicise it, attract consumers, aging to ensure the collection of packaging
and present its contents as sought-after and use of packaging waste, and defines the
merchandise. Czech customers look for the so-called authorised packaging company and
convenience brought on by developments its rights and duties, and states the duty to
in the packaging industry, whether it is, for file for registration in the list of persons who
example, the ergonomy of bottled drinks or introduce packaging or packaged products to
the easy opening of tinned liver pâté. Ac- the market or in circulation. The Act applies
cording to surveys, one of the important to business entities (corporate or individual),
factors for consumers, influencing their i.e. not to individual consumers - citizens and
shopping decisions, has lately also been the households. If, during your business activities,
aspect whether environmentally-friendly you introduce packaging, packaged goods
materials have been used in the manu- or packaging materials on to the market or in
facture of the packaging. Indeed, when circulation, you must proceed in accordance
looking at a packaged product, Czechs with the rules defined by this Act.
also subconsciously wonder whether the
Packaging is not only an important item of packaging can be recycled. This is  AWARDS FOR DESIGNERS
source of information for custom- one reason why the Czech Republic ranks To demonstrate their best packaging ideas
among the top European countries in terms and technologies, as well as to publicise
ers (with its shapes and graphic of the amount of sorted packaging waste. them, Czech designers were able to enter
features), but it also plays a role in In 2009, every Czech sorted on average ap- their packaging designs, by the end of May
manipulation (i.e. as storage space proximately 35.9 kilograms and 70.9% of all 2010, for the 16th competition organised
the packaging introduced on to the market. by SYBA, the Czech Packaging Institute.
for products), and ensuring the It is also important that the manufacture of This competition, Packaging of the Year, is
protection of products. packaging is dominated by cardboard and intended not only for the manufacturers
paper (42%), followed by plastics (32%), and users of packaging, but also for other
glass (11%), metals (10%), and other materi- participants in the creation of new pack-
als (5%). aging solutions, such as brand managers,
graphic studios, engineers and designers.
 PACKAGING LAW Any solution within one of the following six
If you decide to go into the packaging busi- categories was eligible for the competition:
ness in the Czech Republic, familiarise your- consumer packaging, consumer gift pack-
self with the Act on Packaging 477/2001 aging, sales packaging and displays, trans-
Coll., which came into effect in January 2002. port and handling packaging, packaging
A very good system has been put in place materials, and also labels, closures, affixation
for the management of packaging, which and other auxiliary packaging means. Sub-
ranks the Czech Republic every year among sequently, the winners can participate in the
the most successful countries in Europe. global WorldStar for Packaging Competition.

FROM THE HISTORY OF THE PACKAGING OF THE YEAR COMPETITION


OR EXAMPLE OF A PRIZE-WINNING PRODUCT
 The “Fromin – Voda z doby ledové“ (Ice the wide bottle-neck which makes it easier
Age Water) bottles are manufactured at to pour the water. (see Picture)
the client’s request to express, by their
appearance, the uniqueness, purity, and  Graphic purity, emphasis on product,
age of the water they contain. Therefore, original typography, accurately handled
this globally unique design creates the backdrop – these are the main attributes
impression of ice cubes melting away. The of this premium line of ethnic rice from the
Photo: SYBA archives

effect is enhanced by the choice of extra Vitana company. The quality of the graphic
transparent PET. The use of a translucent presentation in every detail, combined with
polyethylene label, which does not distract perfect pre-press, makes this packaging line
from the intended appearance, is also unu- an exceptional product with a high poten-
sual. The affixation of labels and the mate- tial of addressing the target group.
rials used respect the maximum ecological
requirements. Consumers also appreciate More at www.obalroku.cz
| 20
highly resistant strapping band

inzerce

SVITAPET – Introduction
Svitapet is a highly resistant strapping band, which was designed as an
extremely strong substitute for the steel and PP strapping bands and has
become their natural successor. It is ideal for use in medium- and high-
performance operations requiring the high protection of packed goods,
such as corrugated iron, timber, concrete products, and printed matter.

SVITAPET with Print


We can offer our clients SVITAPET with black print, for which we use
highly efficient ink-jet printers, which guarantee a high quality of print.
The print is done by the final section of the production equipment.

SVITAP J.H.J. spol. s r.o.


SVITAPET – Award
Svitapet was awarded the GRAND PRIX for the best product at
Kijevská 8, 568 02 Svitavy, Czech Republic
the FOR 3P Fair, held at the Prague-Letňany exhibition grounds on
Phone: +420 461 568 198
15-17 April 2009.
Fax: +420 461 568 300
E-mail: marketing@svitap.cz
www.svitap.cz SVITAPET – FACHPACK
We will be participating in the FACHPACK Fair in Nuremberg on
www.haly-svitap.cz 28-30 October 2010. We are looking forward to your visit.
SERVICES

Industrial Real Estate Market Stabilised Between Supply and Demand


The industrial real estate market
experienced a robust development
in the past years and has reached
the line between a developing
market and a saturated one. The
massive speculative construction
of the past years, when developers
were building warehouses without
a secured lease, was greatly slowed
down by the global economic crisis
in 2009. Paradoxically, this situ-
ation has brought market stabilisa-
tion in the supply-demand relation
in this country.

The fall in the demand for industrial prop- also went down significantly. At the end
erties rental was observed in the Czech of 2009, only 63 000 sq.m were under con-
Republic, especially in the first half of 2009, struction, while the three-year quarterly
when the volume of concluded transac- average of space under construction is
tions declined to 150 000 sq.m, while in 150 000 sq.m.
the second half the interest increased and
381 000 sq.m were leased. This is a 50%  MASSIVE CONSTRUCTION DID
drop compared to 2008. The number of NOT CORRESPOND TO DEMAND
industrial properties under construction Unoccupied space rate has risen over the
long term in the past years, which was
due to massive building that contrasted
SHARE OF INDUSTRIAL AREAS PER 1000 INHABITANTS with users‘ demand for industrial real
IN CENTRAL AND EASTERN EUROPE
estate. At the end of the year, the Czech
350 Republic had approximately 600 000
324
sq.m of vacant A class industrial real es-
300 tate, which means heated buildings with
full thermal insulation, and usable height
of 10 metres for logistics or 7 metres for
250
sq.m/1000 inhabitants

manufacturing. The halls must have dust-


proof flooring with loading capacity of at
186
200 least 5 t/sq.m. Another parameter is light
159 154 shafts, the presence of loading bridges
150 with balancing ramps, and the possibil-
ity to build in offices. The most affected
100 areas in terms of unoccupied space are
the regions of Plzeň and Ostrava, where
the vacancy rate is up to 25%. In Prague,
50
too, there are some 250 000 sq.m of unoc-
cupied space, which is about 18%. How-
Photo: www.sxc.hu

0 ever, it should be noted that Prague and


Czech Republic Slovakia Poland Hungary its surroundings still account for 50% of
the industrial real estate market, in both
Source: CB Richard Ellis
supply and demand. Given the absolute

| 22
CZECH BUSINESS AND TRADE

scaling down of speculative construction INDUSTRIAL REAL ESTATE MARKET IN THE CZECH REPUBLIC
and a stable interest, we expect the unoc- 250 000 50
cupied space rate to decline over the long
45
term and, in some regions, even demand
200 000 40
to exceed supply. We have witnessed this
35
situation in Brno for a long time.
150 000 30

sq. m
25
 CHANCE IN RELOCATION AND

%
100 000 20
FOUNDING OF NEW
15
DISTRIBUTION CENTRES
50 000 10
A great chance for the Czech Republic
5
is the interest of investors-producers in
the relocation of production lines from 0 0
Prague
North/Northeast

Prague
Southeast

Prague West

Central Bohemia

Southwest

Northwest

Northeast

Southeast

Central Moravia

Moravia–Silesia
the west, which is accelerated by the
availability of cheap but qualified labour
force. A second trend is the establish-
ment of new distribution centres for the
region of Central and Eastern Europe.
This increased interest is apparent espe- Total leasing activity in 2009 Vacancy rate at the end of 2009
cially in the Plzeň Region, which is eyed New completions in 2009 Vacancy rate Czech Republic at the end of 2009
by many international companies thanks
Source: CB Richard Ellis
to the perfect access for trucks, the short
distance to foreign markets in the west,
and the high unemployment rate. Lo- LIST OF MAJOR LOGISTICS PARKS
cal demand is generated by companies
seeking alternatives for their existing CTPARK BOR
older and to some extent inefficient real CTPark Bor is one of the most successful parks in the Czech Republic. It is an area sought by
estate. This transfer of companies from tenants who locate their business near the German border (10 minutes from border), situ-
old to new space will continue for many ated close to the D5 motorway.
years to come. The average demand in
terms of size is for 3 000-6 000 sq.m, and CTPARK PLZEŇ
an increased interest has been recorded CTPark Plzeň is quickly developing into a position of the best park focused on heavy indus-
recently in smaller units of 1000-2000 try. Its location makes it one of the most popular parks in the Czech Republic for foreign
producers and logistics companies. The park is situated on the main Prague - Plzeň - Nurem-
sq.m. But modern space of this size is ex-
berg motorway.
tremely scarce in the Czech Republic.
VGP PARK HORNÍ POČERNICE
 DEVELOPERS‘ AMBITION: LETTING VGP Park Horní Počernice is an important industrial park, easily accessible thanks to being
THE EXISTING VACANT SPACE very close to the Prague - Mladá Boleslav - Liberec high-speed road R10, which has an ap-
In the long term, the prices of a lease have proach and exit at this place. Combined with the immediate neighbourhood of the capital
been EUR 3-4.50/sq.m/month for storage city, the features of this location are considered very attractive. A regular bus line has eight
space and between EUR 7-9/sq.m/month stops in the park connecting it with the Černý Most metro station.
for office space or amenities. For the year
2010, we expect a similar result as in 2009, PROLOGIS PARK D1
which means that we expect a total renting ProLogis Park D1 is situated about 11 km southeast of Prague, close to the Říčany/Jesenice exit
from the D1 motorway. The history of ProLogis Park Prague D1, formerly known as D1 Logistics
activity in the order of 400 000 sq.m. Devel-
Park, was initiated in 1997, when the AIG/LINCOLN company launched its ambitious project
opers will endeavour to focus maximally to build a modern logistics complex. In September 2002, the project was taken over by the
on the lease of existing vacant space, and company ProLogis Czech Republic Management to continue its construction and operation.
will build new halls only if lease contracts
can be concluded with new clients. Also, RUDNÁ LOGISTICS PARK
we do not expect additional developers of Rudná Logistics Park is situated near the D5 motorway, exit 5 (Prague – Plzeň – Germany).
industrial space to enter the market. It has excellent access to the Ruzyně airport (approx. 10 minutes) and 80 bus connections
daily (Beroun, Zličín).
Filip Kozák
Head of Industrial Space Leases CTPARK BRNO
CB Richard Ellis s.r.o In the vicinity of the Brno-Tuřany international airport, this industrial park has an area of 2.2
million sq.m.
(e-mail: marcela.vesela@cbre.com)

23 |
RESEARCH

Czech Scientists Unveil Another of Life’s Mysteries


A team of scientists at the Laboratory 100%; however the age expectancy of Do you cooperate with other companies
of Growth Regulators, a joint facil- human beings can be prolonged. on a commercial basis?
Our Laboratory is developing several com-
ity of the Institute of Experimental
How is such research actually conducted? merce-based projects. Firstly, there is the
Botany of the Academy of Sciences At first we begin by synthesising a large traditional development of anti-tumour sub-
and the Faculty of Science at Palacký number of substances, from which we se- stances, where we cooperate with Cyclacel, C3
lect the most effective ones by different Bio, BioApex and BioPatterns. Secondly, there
University in Olomouc, have made yet
bio-assays. Furthermore, we select several is the long-term development of plant growth
another discovery in the research of candidates from these substances that are regulators in cooperation with Olchemim. And
plant hormones. Within a group of so- studied more deeply on animal (human) lastly, we have been very successful in prepar-
cells to ascertain whether they are effec- ing new growth regulators for agricultural and
called cytokinins, they have discov-
tive but also cytotoxic, mutagenous, and so biotechnological purposes. Our results have
ered an active substance that inhibits on. No substance can be dangerous to the attracted the interest of a number of compa-
the skin ageing process and cures human organism and at the same time ef- nies such as Fosfa, Sumimoto Chemicals, Bay-
fective. Next follows the formulation of the ern Crop Sciences, Syngenta, and others.
certain skin conditions. This modern
preparation and then clinical testing. The
elixir of youth goes by the name of development of substances is conducted Do you cooperate with other similar facil-
Pyratine-6. We asked Miroslav Strnad exclusively in the Laboratory of Growth Reg- ities abroad?
ulators. Only a part of the tests on animal Indeed, we cooperate with a large number
from the Laboratory of Growth Regu-
cells were conducted in cooperation with of facilities, and it would probably be difficult
lators about the future of the project. Aarhus University in Denmark and clinical to name them all. In order to achieve a high
studies were carried out in dermatological quality of research, it is necessary to cooper-
clinics in California. The research is financed ate with facilities abroad. I would go as far as to
In 2009 your facility, the Laboratory of mostly by Senetek of the USA. say it is absolutely essential. We cooperate on
Growth Regulators, developed an active a number of very diverse projects, the majority
substance that slows down ageing. What Your finding has been awarded a number of of which focus on plant hormones and their
exactly is it? patents resulting in a commercial prepara- use in all manner of areas of human activity,
It is a substance of cytokinin origin. Cytoki- tions with cosmetic and healing effects. Is ranging anywhere from agriculture all the way
nins are plant hormones that, among other the preparation already on sale? through to healthcare.
functions, slow down the ageing process in That is correct, these substances are the
plants. Previously, it has been demonstrated subject of several patent registrations. They Do you also use EU funds to finance you
that for instance the plant hormone kinetin have also been awarded a number of pat- projects?

Photo: Miroslav Strnad archives, Böttcher archives


prolongs the lifespan of skin tissue cultures, ents in various countries. Some ten patents Of course. We are involved in a number of
possesses antioxidation effects and destroys cover the finding at present. In the near fu- European projects. Most important of all
radicals. The long-term known anti-ageing ture, there will be dozens of such patents as I consider our involvement in an EU project
effects of cytokinins on plant tissues and or- we are developing a number of other prep- for the Centre of the Haná Region for Bio-
gans have led to further research and test- arations right now – some of which have al- technological and Agricultural Research,
ing of their derivates. Eventually this has led ready completed the clinical testing phase. launched in March 2010 and financed from
to the discovery of a substance with a sev- The patents have been licensed to Senetek. Operational Programme Research and De-
eral efficacious properties that slow down Sales are underway successfully, especially velopment for Innovations.
the ageing process - so-called antisenes- in the USA. The company also intends to en-
cence activity - in tests on ageing of human ter the European market this year. Jana Pike
fibroblast cells. The substance goes by the
commercial name Pyratine-6, under which
it is now also marketed.

In your opinion, is Pyratine-6 really the


elixir of youth?
In my opinion, we cannot yet call it an elixir
of youth. Human and animal organisms are
made up of an enormous amount of cells.
This substance displays effects on only one
particular cell type. Therefore it may not
function the same way with other cells in
our body. We do, however, want to contin-
ue studying it. Ageing cannot be stopped

| 24
Team of scientists at the Laboratory of Growth Regulators
FIRM ANNIVERSARY

15 Years of Quality and Tradition


them in Germany. We have gradually development of packaging equipment and
built a large network of agencies around the the flexo press, the Vyškov plant began sup-
globe. We have made use of the changes on plying “sleeves”, which are actually the press
the political map that took place after 1989 form for printing after direct laser gravitation.
to expand our markets in Central and East- The Vyškov experience serves the whole
ern Europe, and Böttcher Česká Republika Group and also manufacture in the USA.
was born. In the course of development, the range
of products was expanded with pressroom
How has the range of products been chemicals and detergents for the washing
changed and expanded during the com- and care of rollers, which have a noticeable
pany’s long existence? share in the total turnover of the company.
Far back in history, in the first half of the 18th Last but not least, I want to mention offset
century, a certain Jacob Loosen founded his blankets for the printing industry.
own tannery in Cologne. A century later, the
plant launched the manufacture of glue and, What has recently been your pride, what
later still, the manufacture of gelatine for successes have you had?
Jiří Volf press rollers. A second branch of the family We are glad when clients are satisfied, as
enterprise was founded in Leipzig in the late they confirm the quality of our products.
19th century, focusing on the manufacture We also provide a complete service. Be-
of press rollers. The two branches merged sides success at fairs, the best appreciation
in 1910 and the period of expansion com- is the satisfaction of clients for whom we
menced. Although the two wars were diffi- have created a service of consultations free
cult times, the roller production continued. of charge – within this service, our staff can
But the Iron Curtain divided both Germany solve technological problems of the press or
and Böttcher, so the company was re-inte- processes directly on the spot. I believe that
grated when Germany was re-united. And the combination of product-consultancy,
Almost 300 years of flourishing operations as I have said, the détente of the 1990s al- suitable logistics of deliveries, and compe-
is not a usual or frequent viewpoint when lowed us to expand to the markets of the tent co-operation with clients are our most
a production company looks back on its his- former East Bloc, and Böttcher Česká Repub- important successes on the market.
tory, but this is the case of Böttcher, a com- lika commenced the manufacture of rubber
pany which came into being in Germany rollers in the newly built factory in Vyškov in How has your branch been affected by the
in the 18th century. Over the years which Moravia. worldwide economic crisis and how are
have elapsed since then, the company has you tackling it?
been changing its appearance and range Please tell the uninformed what Böttcher The confidence of clients, our position on
of products, and expanding on to European actually produces and for what purpose. the market, the company structure and
and world markets... and so Böttcher Česká The parent company operating in Germany positive balance were preserved during the
Republika was established fifteen years ago. was in the past and is now the most impor- crisis at the end of 2008, as well as in 2009,
Its quality and size have gradually made it tant supplier of rubber-coated rollers, main- due to good and competent operations.
the most prominent enterprise in this Group ly for the printing industry. The possibility of
which operates on all continents. We spoke supplies to the Eastern countries naturally How do you see the future, and what are
to Jiří Volf, Secretary and Manager of Böt- led to the establishment of the manufacture your expectations?
tcher Česká Republika. of these rollers in the Czech Republic. Due to We are proceeding from a cautious estimate
success on the market, the factory in Vyškov of market revival. We would like to gain new
Böttcher Česká Republika is com- was enlarged, and a commercial network territories, and after the revival to make use
memorating the 15th anniversary of the of subsidiaries was formed in the countries of some adverse experiences from the cri-
beginning of its production in the town of of Eastern Europe, specifically in the Czech sis-ridden period. I think that I can proudly
Vyškov in Moravia. The depth of the com- Republic, Slovakia, Hungary, Poland, the say that this period showed our capabil-
pany roots in the past is interesting... Baltic countries, Russia, and the Ukraine. At ity to overcome adverse influences of the
Yes, Böttcher Česká Republika was es- the same time, we became the most impor- market, however strong they were. This is
tablished fifteen years ago as a company tant supplier of equipment for the printing our most important information for clients
whose service on the then new and de- and other industries. As time went on, roll- – we remain a stable, competent supplier of
veloping East European market supported ers for the printing industry ceased to be high-quality products and a proficient pro-
the existing “parent” producers. Böttcher the only products and the assortment was fessional service.
as such originated in Germany as a family expanded with so-called technical rollers,
firm whose roots reach back to 1725. At the which are used everywhere that anything Šárka Kratochvílová
present time, we have ten factories, four of is transported, driven or pressed. With the www.bottcher.cz

25 |
REGION

Hradec Králové Region


GERMANY
The Hradec Králové Region is one Liberec
POLAND
Ústí n/L Trutnov
of the most often visited regions
Karlovy Vary Hradec Králové

in the country. It can be described Praha


Pardubice Jičín
as predominantly agricultural and Plzeň Olomouc
Ostrava

Náchod
industrial, with thriving tourism. Jihlava
Brno Zlín Hradec Králové Rychnov n.Kněž.
České

Hradec Králové, the capital of the Budějovice

SLOVAKIA
Region, is a university city and its
AUSTRIA
architecture and urbanism make it
a European jewel. The regional capital of Hradec Králové is original EU product) is worth mentioning.
situated 112 km from Prague. This metropo- The Jičín District has a deposit of first-class
lis, with over 160 000 inhabitants and a rich glass sand (Hrdoňovice – Střeleč).
history, is an important transport junction,
the seat of many authorities, state institu- Náchod District
tions, banks and significant industrial com- The area of the Náchod District makes it
panies. A typical feature of the city is that the smallest district in the Hradec Králové
it lacks predominantly industrial zones. Region. Sectors with the largest share in
The range of classical industrial sectors is economic product formation are industry
represented mainly by medium-sized and and tourism. The main industrial sectors
smaller companies; among foreign inves- are the engineering, textile and rubber in-
tors, we could mention the American Arrow, dustries. Local mineral resources include
a manufacturer of medical devices. Hradec mainly the mineral spring waters in Ná-
Králové is also a university city. chod, Běloves and Hronov, and the peat
It is also the venue for numerous inter- bogs around Velichovky, together with
national congresses and symposia. The the spa town of the same name.
regional capital is not only the centre for
congress tourism, but also the starting Rychnov nad Kněžnou District
point of many interesting routes leading The Orlické hory Mountains, which form
to attractions and sites of natural beauty in part of the District, were proclaimed a pro-
the close vicinity. Its unique 20th-century tected landscape area due to their unique
building complexes contribute to making topography. In total, there are two national
Hradec Králové a textbook of modern ar- nature reserves in the District, 12 natural
chitecture admired throughout Europe. sites and 20 nature reserves. Industry, tour-
The Hradec Králové Region lies in the north- ism, and agriculture have the main share in
eastern part of the Czech Republic. Over Hradec Králové District the economic product formation. The main
one-third of the border of the Region lies The Hradec Králové District is the larg- industrial sector is engineering.
on the national border with Poland. The est district in the Region regarding the
Region in its current shape was established number of inhabitants. It is known for Trutnov District
in 2000 and today it comprises five districts. many cultural and historical sites. The The Trutnov District lies in the northern part
The landscape of the Hradec Králové Re- most significant is the historical centre of the Region where it changes from the
gion consists of mountains, valleys, rocks, of the regional capital. Industry and ag- foothills to the Krkonoše mountain range.
and woods. The southern part of the area riculture are mainly responsible for the The whole length of the northern border is
is formed by the lowland area of the Labe economic production. Main industrial formed by the state border with Poland. Its
River basin; the northern part by the highest sectors include the engineering, electri- area is the largest in the Region and it is the
Czech mountains, the Krkonoše (the Giant cal, chemical, wood-processing, and food second largest district in the Region regard-
Mountains), together with the Orlické hory industries. ing the number of inhabitants. Sectors with
Mountains. The Krkonoše with the high- the greatest share in the economic product
est mountain peak in the Czech Republic, Jičín District formation include tourism, industry, and
Sněžka, are geologically unique and were Jičín profits mainly from tourism and in- agriculture. The main industrial fields are
proclaimed a UNESCO Biosphere Reserve. dustry, followed by agriculture. The main represented by the textile, engineering,
Photo: CzechTourism

The natural potential of the Region is an industrial sectors are represented by the and electrical industries. Regarding mineral
excellent basis for the development of new textile, engineering, and food industries. resources, the Trutnov District has deposits
types of tourism (Agrotourism, Ecotourism, The production of the Genuine Hořice of black coal, to a lesser extent there is also
Cyclotourism etc.) Rolls (with the certificate of a protected copper ore and limestone.

| 26
The Krkonoše Mountains
CZECH BUSINESS AND TRADE

INTERESTING FACTS
ABOUT THE REGION
 The highest mountain range in the Czech Republic
– the Krkonoše – lies in the Hradec Králové Region.
The Krkonoše Mountains hold several primacies:
they are the most visited, highest, oldest, best
known, they have a unique character, combin-
ing highland and alpine vegetation, and a unique
climate resembling northern tundra.
 The highest peak, Sněžka, is at the same time the
highest mountain in the Krkonoše and in the Czech
Republic, with an altitude of 1602 m.
 The Hradec Králové Region is the birthplace of the
world renowned painter, František Kupka (1871-1957)

 ECONOMIC POTENTIAL
From the point of view of productivity and
sector structure, the Region’s economy
can be evaluated as semi-developed, with
a large share of production and services hav-
ing a lower added value. The Hradec Králové
District is characterised by more activities
and a higher added value. The majority of
business entities are small and medium-
sized companies (up to 250 employees).
According to the number of employees,
the prevalent industrial sector is the manu-
facturing industry, and within its framework,
textile production and the production of Population
Area
NUTS Population Municipalities density
electrical and optical appliances and facili- (in sq. km)
(persons/sq. km)
ties. According to sector structure, the most
prominent are companies focusing on trade LAU 1 – Hradec Králové 892 163 025 104 182
and motor vehicle repairs, enterprises in LAU 1 – Jičín 887 79 669 111 90
the field of immovables, the manufactur- LAU 1 – Náchod 852 112 495 78 132
ing industry, construction and basic metal
LAU 1 – Rychnov n. Kněžnou 982 79 299 80 81
production, and the production of metallur-
gical and metal-working products. A signifi- LAU 1 – Trutnov 1 147 120 372 75 105
cant position on the market is also held by NUTS 3 - Hradec Králové
4 795 554 860 448 116
food, beverage, and tobacco production. In Region
the field of wood processing, apart from the NUTS 1 – Czech Republic 78 867 10 506 813 6 249 133
production of wood processing tools, the Source: Czech Statistical Office (as of 30 September 2009), NUTS- territorial unit according to the EU classification, LAU 1 = district
Region also hosts several small and medium-
sized furniture and interior manufacturers. Latest data: Hradec Králové Region
A significant share in the list of significant
Inhabitants as of 31 December 2009 554 402
industrial sectors and fields also belongs to
the production of rubber and plastic prod- Gross wages 1st to 4th quarter 2009 CZK 20 621 (approx. EUR 780)
ucts, pulp, paper and paper products and, Unemployment as of 28 February 2010 8.74%
last but not least, publishing and printing.
Heavy industry and the mining industry areas, such as was the case in other indus- of the D11 motorway and the successive
(with the exception of smaller mining loca- trial areas in the Czech Republic. R11 in all its length all the way to Královec
tions) are not present in the Region, which and the R35 road. The density of the trans-
has proved to be a great advantage, espe-  TRANSPORT port network is sufficient. What is missing
cially during the economic transformation The Hradec Králové Region has a relatively are bypasses of towns and villages which
of the 1990s. The Region was thus, to a large dense transport network and the regional are extremely affected by transit transport.
extent, not affected by structural unemploy- capital is conveniently situated. The density of the railway network in the
ment caused by the significant attenuation The progress of the economic attractive- Region is above the average of the Czech
of this production, nor by a large number ness of the Hradec Králové Region is condi- Republic. The vicinity of the modernised 1st
and extent of environmentally damaged tioned by the finalisation of the construction Railway Corridor in the neighbouring Pardu-

27 |
REGION

“The Hradec Králové Region provides many op-


bice Region, which provides a rail connec-  Budapest 575 km portunities for future investors, thanks to which
tion with Prague, the capital of the Czech  Warsaw 750 km new directions in the development of villages
Republic, is strategically very important.  Brussels 1150 km and regions can be created. The Region is ready
to provide the maximum support for the develop-
The railway network in the main transport
ment of investment activities in this Region.
axis covers the decisive transport directions  EDUCATION I would like to invite you all to the Hradec Králové
in the Region and thus its extension in the The Hradec Králové Region has a dense net- Region and I wish you all the best.”
future is not being considered; only the re- work of secondary and apprentice schools.
construction and modernisation of selected University education is provided by the Hradec Lubomír Franc
sections. Air traffic has only a supplemen- Králové University with its three faculties (Fac- President of the Hradec Králové Region
tary function in the Region. There are eight ulty of Education, Faculty of Informatics and
public domestic airports in the Region. The Management, and Faculty of Arts). There are ment for International Relations of the
international non-public airport in Hradec also the Faculty of Pharmacy and the Faculty of Regional Office. Within the framework
Králové has the potential for development. Medicine of Charles University and the Faculty of its activities, it also administers grants
A significant factor is the proximity of the of Military Health Sciences of the University of for the support of international co-op-
public international airport in Pardubice, Defence. There is a great developing scientific eration. The Hradec Králové Region has
which is one of the five backbone airports and research base, particularly in the fields of signed a contract of co-operation with
in the Czech Republic. Medicine, Pharmacy, and Science, with tech- these partnership regions: Lower Silesian
nological parks being developed. This highly Voivodeship (Poland), Banská Bystrica Re-
Distance between Hradec Králové and developed educational system represents gion (Slovakia), Seine et Marne (France),
other European cities: a strong development potential for the Region. Sibiu (Romania) and Chuvash Republic.
 Prague 112 km It also has unsigned contacts with the
 Vienna 270 km  INTERNATIONAL RELATIONS Region of Jögeva (Estonia) and it sup-
 Bratislava 280 km International relations of the Region are ports Czech compatriots in South Banat
 Berlin 450 km in the sphere of the work of the Depart- in Serbia.

| 28
CZECH BUSINESS AND TRADE

SELECTED FIRMS IN THE HRADEC KRÁLOVÉ REGION


Name Based in Sector Contact
Veba, textilní závody, a.s. Broumov production of interior textiles www.veba.cz
Farmet a.s. Česká Skalice production of agricultural machines www.farmet.cz
KBA-Grafitec, s.r.o. Dobruška printing machines and accessories www.kba-grafitec.cz
PZP Komplet, a.s. Dobruška production of heat pumps and modern industrial technologies www.pzp.cz
Juta, a.s. Dvůr Králové nad Labem production of construction and insulation foils and textiles etc. www.juta.cz
Arrow International CR, a.s. Hradec Králové production of medical equipment www.arrow.cz
Bühler Motor, s.r.o. Hradec Králové production of electric motors www.buehlermotor.cz
Cerea, a.s. Hradec Králové production of livestock fodder www.cerea.cz
Excon Steel, a.s. Hradec Králové production of equipment for chemical and petrochemical industries www.exconsteel.cz
Profimont, a.s. Hradec Králové sale of welding, bevelling, and cutting equipment, exhaust systems www.quelle.cz
Rubena, a.s. Hradec Králové production of rubber, rubber products and semiproducts www.rubena.cz
Technistone, a.s. Hradec Králové production and deliveries of cured rock www.technistone.cz
KARSIT HOLDING, s.r.o. Jaroměř production of car parts – car seat metal structure, exhaust systems etc. www.karsit.cz
Continental Teves Czech
Jičín production of spare parts for cars www.contiteves.com
Republic, s.r.o.
LPM, s.r.o. Jičín production of plastic semiproducts www.lpm.cz
PFT, s.r.o. Jičín production of plastic windows www.pft.cz
Ronal CR, s.r.o. Jičín production of bathroom equipment and light alloy wheels www.ronal.cz
Vk-Sped, s.r.o. Jičín car transport, shipping www.vksped.cz
Federal-Mogul Friction
Kostelec nad Orlicí components for pro brakes and braking systems www.federal-mogul.cz
Products, a.s.
Mados MT, s.r.o. Kostelec nad Orlicí building of bridges, roads, water management constructions www.madosmt.cz
Deprag CZ, a.s. Lázně Bělohrad production of pneumatic and clamping tools, screws, and assembly systems www.depragindustrial.com
Ametek elektomotory, s.r.o. Náchod production of electric motors www.ametek.com
Atas elektromotory Náchod, a.s. Náchod production of electric motors www.atas.cz
Ammann Czech Republic, a.s. Nové Město nad Metují production of construction equipment www.ammann-group.cz
Verner Potraviny s.r.o. Nové Město nad Metují wholesale of groceries www.poverner.cz
Avon Automotive, a.s. Rudník production of rubber car products www.avon-rubber.com
Qpor, a.s. Trutnov production of building materials www.porobeton.cz
Esab Vamberk, s.r.o. Vamberk welding and cutting equipment www.esab.cz
Pewag, s.r.o. Vamberk production of strengthening and linking materials www.pewag.cz
Vaspo Vamberk, s.r.o. Vamberk production of machines and equipment www.vaspo.cz
Hašpl, a.s. Velké Poříčí production of nails www.haspl.cz
AGO-HYTOS s.r.o. Vrchlabí filtration & fluid management www.argo-hytos.com
Optrex Czech, a.s. Vrchlabí production of satellite and television equipment www.optrex.cz

HRADEC KRÁLOVÉ REGIONAL AUTHORITY JIČÍN MUNICIPAL COUNCIL MĚSTSKÝ ÚŘAD


KRAJSKÝ ÚŘAD MĚSTSKÝ ÚŘAD JIČÍN RYCHNOV NAD KNĚŽNOU
KRÁLOVÉHRADECKÉHO KRAJE Žižkovo náměstí 18 RYCHNOV NAD KNĚŽNOU
Pivovarské nám. 1245 50 601 Jičín MUNICIPAL COUNCIL
500 03 Hradec Králové Phone: + 420 493 545 111 Havlíčkova 136
Phone: + 420 495 817 111 Fax: + 420 493 545 222 516 01 Rychnov nad Kněžnou
Fax: + 420 495 817 336 E-mail: posta@mujicin.cz Phone: + 420 494 509 111
E-mail: posta@kr-kralovehradecky.cz www.mujicin.cz Fax: + 420 494 534 440
www.kr-kralovehradecky.cz E-mail: podatelna@rychnov-city.cz
NÁCHOD MUNICIPAL COUNCIL www.rychnov-city.cz
HRADEC KRÁLOVÉ CITY COUNCIL MĚSTSKÝ ÚŘAD NÁCHOD
MAGISTRÁT MĚSTA HRADEC KRÁLOVÉ Masarykovo náměstí 40 TRUTNOV MUNICIPAL COUNCIL
Československé armády 408 547 61 Náchod MĚSTSKÝ ÚŘAD TRUTNOV
502 00 Hradec Králové Phone: + 420 491 405 111 Slovanské náměstí 165
Phone: + 420 495 707 111 Fax: + 420 491 405 298 Phone: + 420 499 803 111
Fax: + 420 495 707 100 E-mail: podatelna@mestonachod.cz Fax: + 420 499 803 103
E-mail: epodatelna@mmhk.cz www.mestonachod.cz E-mail: podatelna@trutnov.cz
www.hradeckralove.org www.trutnov.cz

29 |
REGION

Hradec Králové Region – Ideal Site for Your Investment


The Hradec Králové Region  CONDITIONS IN THE However, other unoccupied localities are
REGIONAL METROPOLIS available to newly arriving investors. Cer-
has great potential for further The regional capital, along with the whole tainly worthy of mention is the newly built
economic development. Investors region, sees its future in the industries with industrial zone in Nový Bydžov, which has
will find interesting opportunities higher added value. Therefore, it focuses on become easily accessible to transport, due
attracting investments in the area of strate- to the completion of the D11 motorway.
and conditions for the expansion gic services or ICT, which require a qualified Other industrial zones have been prepared
of their business activities in the workforce. As it stands, the Region can of- in Dvůr Králové nad Labem, Hořice, and Po-
Region. fer educated employees to investors. These lice nad Metují which, because of its loca-
are mostly graduates from local secondary tion, is advantageous to investors with ties
schools and universities, the majority com- to neighbouring Poland. There is a strategic
posed of graduates who have studied the industrial zone for Škoda Auto in Solnice
development of Information Technologies, and Kvasiny. The company uses it to manu-
doctors and medics, and liberal education facture the Škoda Superb, Škoda Roomster
graduates. The City of Hradec Králové, in col- and the latest Škoda Yeti vehicles.
laboration with, among others, the CzechIn-
vest Agency, has built a Technology Centre  BROWNFIELDS
for firms with innovation potential. This – ONE OF THE OPPORTUNITIES
property, which allows entrepreneurs to Another opportunity for investors is in those
lease space, including accompanying serv- areas which were utilised in the past but,
ices, under favourable conditions, is located for various reasons, are not being used ef-
on the premises of a former military airfield. fectively today. In the past, the CzechInvest
Agency, in collaboration with the Regional
 CONDITIONS IN OTHER Office of the Hradec Králové Region, put to-
REGIONAL TOWNS gether an analysis of unused localities, the
Besides the regional capital, other important so-called brownfields. There were over 250
industrial centres include the towns of Jičín, located in the Hradec Králové Region. This
Trutnov, Náchod, Rychnov nad Kněžnou, study is available to investors. Our goal is to
Vrchlabí, and Červený Kostelec. Industrial achieve the revitalisation of currently un-
zones have been built and partially or fully used premises or larger areas.
occupied in some of them. For example,
Taiwan‘s Textonnia Czech, s. r. o., a producer  USING CO-OPERATION
of synthetic fabrics and yarns, has its seat in AGAINST COMPETITION
Červený Kostelec. Saurer Czech, a. s., a mem- Both the traditional and new branches of in-
ber of the supranational Schlafhorst con- dustry operate alongside each other in the
glomerate, manufactures textile machinery Hradec Králové Region. The traditional indus-
in Červený Kostelec in continuation of the tries are still dominated by the textile industry,
Elitex tradition. Numerous companies today even though it must deal with the cheap and
operate from the industrial zone in Jičín and, ferocious Asian competition. For this reason,
based on this success, the town has decided textile companies, not only from the Hradec
to invest in further expansion of the zone. Králové Region, have formed an association

SUCCESSFUL INVESTMENT PROJECTS IN THE HRADEC KRÁLOVÉ REGION


Country
Company Sector Investor Year Location
of origin
AEG Components s.r.o. electronic and electrical Germany AEG 1998 Jičín
Finnanciere Europeenne
Alcan Packaging Skřivany s.r.o. plastics France 2007 Nový Bydžov - Zábědov
D'emballages Pechiney S.A.
Continental Teves Czech Republic s.r.o. automotive Germany Continental Teves 2000 Jičín
Ronal CR s.r.o. automotive Switzerland RONAL 2000 Jičín
Kimberly Clark, a.s. other USA Kimberly Clark 2001, 2003 Jaroměř
JUTA a.s. plastics CR JUTA 2007 Dvůr Králové
SQS Vláknová optika a.s. electronic and electrical CR SQS Vláknová optika 2006, 2008 Nová Paka
Škoda Auto a.s. automotive Germany Volkswagen 2004, 2007 Kvasiny-Solnice

| 30
CZECH BUSINESS AND TRADE

called Clutex. They use the association to share  TRANSPORT IS VITAL the Orlické hory, and Český ráj, the chateaux in
information and experiences, co-operate with Any further development of the Region of Opočno and Častolovice, and the safari ZOO in
research institutions, and introduce new prod- Hradec Králové is closely tied to the develop- Dvůr Králové nad Labem are all attractive tour-
ucts. This helps them to maintain their impor- ment of the transport infrastructure. The last ist destinations. The easier it is to reach these
tant position ahead of their competition. Asso- remaining part of the D11 motorway should attractions, the sooner tourists will flock to the
ciation and co-operation between companies be completed shortly. This motorway con- Region. After all, who wouldn‘t want to enjoy
can also be seen in the new industries. The nects Hradec Králové to Prague and work has the snow-covered slopes of the Krkonoše
Region of Hradec Králové has great potential started on its extension towards the Polish Mountains or a round of golf in the gardens of
to become an important centre in the field of borders. A convenient transport link, not only the manor in Hrádek u Nechanic after a mere
computers and software. With this in mind, ex- to the capital, but to the rest of the country two-hour drive from Prague?
isting IT firms, along with the Faculty of Infor- and the whole of Europe is a good basis for
matics and Management at the University of the establishment of new companies and for Martina Chamasová
Hradec Králové, have started a project to build the development of the tourist trade. As it is, CzechInvest
an IT cluster. the mountainous areas, such as the Krkonoše, e-mail: martina.chamasova@czechinvest.org

Entrance for Innovation Activities


The project of the Hradec Králové  SEAT OF CLUSTERS clients. It is a unique project within the Hra-
TECHNOLOGICAL CENTRE (TC HK) AS WELL AS INVESTORS dec Králové Region with the highest stand-
During the relatively short period of its func- ard. TC HK is already collecting demands from
was formed with the cooperation of
tioning, the TC HK has become a part of the potential clients for various technological
the city of Hradec Králové, Hradec national network of science and technol- equipment. A significant advantage lies in
Králové University, and the EPIS ogy parks, a member of Omnipack clusters, the fact that the whole project is co-financed
Hradec Králové IT cluster, Hradec Králové from the EU funds.
Company with the goal to develop
Business Club, it started to cooperate with
the innovative environment of the several Czech and foreign universities. The  MICROSOFT
Region. Centre is one of the pillars of the innovation INNOVATION CENTRE
business in the Hradec Králové Region, it The last but not least activity of TC HK is
actively participates on the Hradec Králové cooperation with Microsoft, which has
Regional Innovation Strategy and on the resulted in the opening of the second
realisation of its pilot project called Czech- Czech Microsoft Innovation Centre. As is
Polish Innovation Portal (www.czeplinn.eu), the case with the first Czech MIC in Brno,
whose goal is to create a communication the Hradec Králové Centre will offer start-
platform aimed at increasing the know-how ing entrepreneurs, students, designers,
about the innovation environment in the and researchers an access to top quality
The modern science and technology centre border regions. information. Prospective clients can also
was ceremonially opened in June 2008, i.e. It also supports the entry of projects aimed appreciate the top equipment for testing
less than a year after the start of construc- at innovation in the Hradec Králové Region, and development of the latest technolo-
tion. It immediately housed its first clients to foreign investors it provides services relat- gies built on Microsoft platform, but they
and since then TC HK has been offering its ed to their entry into the Region, assistance can also expect a wide range of activities
potential clients variable spaces for innova- with the establishment of branches and new in the field of training and consultancy.
tion activities. With the help of the provided companies. In this respect, it cooperates with Those interested will also be able to ac-
services it supports technology transfer, in- several regional and national institutions and cess lectures and seminars around the
novation processes in companies and at partners in almost all sectors of business ac- world through a videoconference and
universities and it tries to merge these two tivities. At the moment (March 2010), TC HK thus they can communicate and share
worlds and to remove barriers between is preparing in cooperation with the city and their ideas and opinions.
them. Accredited Science and Technology an unnamed multinational corporation an-
Park searches for talented students at uni- other phase of its development with the aim Martin Dittrich
versities and using the business incubator, to build 4000 to 5000 sq. m of top adminis- Hradec Králové Technology Centre
it helps starting entrepreneurs and compa- trative space in the very centre of the town e-mail: martin.dittrich@tchk.cz
nies with innovation potential. intended for innovation activities of its future For more information, go to www.tchk.cz

31 |
REGION

Services for Foreign Entrepreneurs


OFFICE SPACE FOR RENT
Just like many other countries, the CZK 100 million (EUR 3.85 million), of (APPROXIMATE PRICES):
which at least 50% must be covered by own Hradec Králové – centre: CZK 3 000/sq.m/year
Czech Republic has a system of busi- capital and 60% of the investment must go (without energies) (EUR 115.5)
ness support, which is intended both into machinery and equipment. Hradec Králové – surrounds: CZK 1 000/sq.m/year
The Operational Programme Enterprise (without energies) (EUR 38.5)
for domestic as well as foreign busi-
and Innovation (OPEI) is a second and no
ness entities. This system includes less interesting area of business support. It gel network formation; for the support of
support from national and European is also aimed at companies in the manu- formation clusters and technological plat-
sources, but some are intended only facturing industry, but in some cases other forms and other activities.
areas are also supported. The advantage lies
for selected regions, the so-called in the fact that this support takes the form  EXAMPLE OF SUCCESSFUL
regions with concentrated state aid. of non-repayable financial aid, i.e. funding. AID APPLICATION
The minimum level of investment is from INNO-COMP BOHEMIA, s.r.o. (Ltd.), Invest-
approx. CZK 0.6 – 1 million (EUR 23 000 – ment Incentive for the Manufacturing In-
In the Hradec Králové Region, there are 38 500), depending on the programme and dustries, budget CZK 298 million (EUR 11.5
many opportunities to assist foreign busi- size of the applicant. million). INNO-COMP BOHEMIA, s.r.o. was
ness entities in developing their business in This ranks among the most interesting considering starting its business activities
the Czech Republic. This support is aimed programmes in the Hradec Králové Re- in the Czech Republic. Apart from other fac-
mainly at the manufacturing industry sec- gion, under the OPEI, from which it is pos- tors, the possibility of receiving support at
tor, Research and Development and other sible to receive funding, for example, for the time of its entry into the Czech market
hi-tech fields. The most significant forms investment in machinery and equipment was very important to it. In co-operation
of support can be structured into the fol- for firms with innovation potential; fund- with Asistenční centrum, a.s. (Assistance
lowing tools: Investment Incentives for ing for the purchase or reconstruction (or Centre, PLC), it produced an application
Manufacturing Industries, Operational Pro- construction of an annexed building) of for aid in the form of investment incentive,
gramme Enterprise and Innovation and a company’s property; for introduction of which was granted to it at the level of maxi-
other programmes. renewable energy sources, or the construc- mum CZK 119.5 million (EUR 4.6 million).
tion of small water power stations; for the This investment incentive was provided for
 PRESENTING THE TOOLS purchase of information and communica- the purchase of technologies, construction
FOR BUSINESS SUPPORT tion systems; for the development of soft- of a new factory, and job creation.
Investment incentives are an interest- ware, for investment into the infrastructure
ing support opportunity, intended for the for Research and Development, for invest- Jiří Zapletal
manufacturing industry. Foreign companies ment into the infrastructure for education, Asistenční centrum, a.s.
can receive full or partial tax relief (up to five for the support of establishing and further e-mail: zapletal@asistencnicentrum.cz
years). The main condition for obtaining an development of Science and Technology www.asistencnicentrum.cz
investment incentive is a minimum level of Parks, entrepreneurial incubators, centres Note: 1 EUR = 25.976 CZK (average monthly exchange rate
investment in the Hradec Králové Region of for technology transfer and business an- announced by the Czech National Bank, February 2010)

Company of the Year: Farmet, a. s.


Farmet, a. s., is a private Czech com- The annual turnover is now EUR 20 mil- chines for soil cultivation and sowing, espe-
pany founded in 1992. Since then, the lion, 80% of which is from exports. Especially cially for large-scale agricultural productions.
company has attained a leading posi- in the last few years, the company invested in The company specialises in high-performance
the expansion of its production capacities and machines with wide reach that can work with
tion in the field of its activities. A small modern technology equipment (CNC machin- the biggest tractors on the market (working
workshop has now transformed into ing, laser processing, robotic welding, powder reach up to 15 yards), and in design, develop-
a modern company with 200 employ- paintshop, etc.). Top of the line engineering ment, production, and complex supplies of
technologies and qualified employees – spe- machines and devices for the extraction and
ees and some very modern equipment cialists, technicians, and workers – are the basis further processing of vegetable oils. In this
for the area of construction, design (all and the driving force of the company. area, Farmet focuses on the continuous press-
in 3D models), and its own production. The company‘s main business is the devel- ing technologies of the so-called dry oil plants
opment and production of agricultural ma- (rapeseed, sunflower, soya, flax, etc.).

| 32
CZECH BUSINESS AND TRADE

WE HAVE CLEAR PROSPECTS started to realise our development projects


AND COMPETITIVE ADVANTAGE with the support of European funds. The build-
Czech Business and Trade asked Karel Žďárský, ing of new and modern production capacities,
the only shareholder, board chairman, and and especially the building of a research centre
chief executive about the future of the to find solutions for the screw press extrud-
company. ing-expelling process for vegetable oils, give us
a clear prospect and a competitive advantage.
The company development dynamics has WHAT DOES WINNING THE We will also continue to develop our business
been recognised several times with awards in COMPETITION MEAN TO YOU? network and our products to make the Farmet
various competitions in the category of me- It‘s a great pleasure and responsibility. It‘s brand a truly reputable European supplier of
dium businesses (up to 250 employees), such a recognition of our work as compared to agricultural machines and pressing technolo-
as the second place in the Exporter of the Year many other firms from various fields. The gies. In this regard, we have been successful
competition. Farmet‘s top achievement was award has given me, personally, a lot of energy in establishing partner relations with foreign
to further develop the company. companies with the aim of shared supplies of
the first place in the Company of the Year 2009
subsequent technologies for the processing of
competition in the Czech Republic. The com-
WHAT PLANS DOES THE COMPANY vegetable oils. We very much value our collab-
petition is open to all companies with turnover oration with Alfa Laval, where we realised the
HAVE FOR THE FUTURE?
not exceeding CZK 1.4 billion (approx. EUR 56 Our company has been, of course, also af- technology for the degumming of vegetable
million). A professional jury decides accord- fected by the current economic crisis, and we oils and prepared a number of shared offers
ing to gathered economic information and had to cope with a decrease in demand for the for the refinement of vegetable oils. Research
a personal presentation by each company‘s investment products we sold. That was a big and development as well as the collaboration
manager. Why has Farmet won? The jury es- change after many years of growth. Today, we with foreign companies must strengthen our
pecially appreciated its clear business vision see a growth in demand again and we have engineering and supplier abilities.
supported by investments into own research
and development of products and technolo- company has succeeded in acquiring funding long-term efforts to build a good name for the
gies, its ability to formulate development inten- from programmes for the support of research Farmet brand on European markets.
tions and convert them into successful projects and development, employee training, and in-
with the use of European structural funds (the vestments in production technologies), and its More at www.farmet.cz.

PETROF: Year of Crisis and Seized Opportunity


PETROF was founded by Mr Antonín founding and fears of the world- about for a long time, he had been look-
Petrof in Hradec Králové in 1864. Five wide economic recession. The company ing for a musical instrument that would,
generations of the Petrof family have had been forced to adopt some crisis according to his own words, “have a soul
measures at the end of the year before and would be capable of arousing emo-
owned and managed the firm, which last and it continued to observe them tions. It all depends not only on perfect
was awarded many prestigious prizes during the last year. The development preparation but also on the selection of
at international exhibitions and fairs of a new series of PETROF grand pianos the right instrument, preferably acoustic.
had been completed in 2008, which then I had been looking for it for quite a long
thanks to the continuous technical allowed the company to focus more on time but in the end I was lucky to find it
development and quality improve- supplementary manufacture of special in the PETROF piano.”
ments of its grand and upright pianos. products. Besides musical instruments, The intensive collaboration between
Petrof now also manufactures high qual- Mark Levinson and Petrof in 2009 resulted
The master instruments of the PETROF ity custom furniture and interior accesso- in a new series of high quality speakers of
brand have accompanied the world‘s ries, with emphasis on first class surface the Daniel Hertz brand, manufactured by
greatest artists, they are played in finish. Petrof. Mark Levinson says: “Every activity
and every product from Petrof makes it
Milan‘s La Scala or at Sydney‘s opera.  INSTRUMENT WITH SOUL clear that the people from this company
It was the quality of surface finish as well as are not just ordinary workers, business-
the characteristic and noble sound of the men, or managers, they live for music.
The PETROF brand is associated with such PETROF master grand pianos that caught Petrof not only understands music, but
names as Duke Ellington, Ray Charles, the attention of the audio legend and jazz also the importance of vibrations, sounds,
Ella Fitzgerald, Charles Aznavour, Rudolf musician, Mark Levinson. Levinson is leg- and the quality of workmanship. All this
Firkušný, or Svjatoslav Richter. The world endary for his extraordinary auditory ca- stems from manual work and craft skills
famous opera singer Peter Dvorský owns pabilities and his feeling for music, which that are disappearing from today‘s world.”
a PETROF grand piano and Paul McCartney, is why his nickname is “the Golden Ear”.
the famous ex-Beatle, bought one in 2000. For his project that includes an edition of Jan Ryšavý
The company has entered 2009 think- recordings with “the natural sound of in- Petrof, spol. s r.o.
ing of both the 145th anniversary of its struments” which he has been dreaming e-mail: marketing@petrof.com

33 |
REGION

Top University Education in the Hradec Králové Region


Education is the key competitive fac-
tor today. The pressure is increasing
on a better education as one of the
basic conditions for a career on the
labour market and a better position
in life. In the Hradec Králové Region,
increasing the educational level of the
inhabitants is an integral part of the
regional development strategy. The
University of Hradec Králové, and par-
ticularly its Faculty of Informatics and
Management, represents top quality
in the field of university education.

nies. The Faculty co-operates with numerous Intelligence, Version Control of SW products
regional, national, and international compa- in multiproject environment etc. Signifi-
nies on conducting educational IT courses or cant professionals are invited to lecture at
communication and managerial skills. In co- the Faculty, for example, top managers of
The Faculty of Informatics and Manage- operation with partners from the commercial companies such as PricewaterhouseCoop-
ment educates university-qualified profes- sphere, interesting workshops are organised ers, SUN Microsystems, Microsoft, and Tesco
sionals for a broad range of opportunities in (Student Business Forum in co-operation Stores ČR.
the private and state sectors. Apart from the with the Technology Centre, Hradec Králové, The Faculty of Informatics and Management
programmes delivered in Czech, there are IT Full Power – IBM Technical Academy, Mi- is a member of the Hradec IT cluster. The main
also two Bachelor’s degree programmes in crosoft Academic Conferences etc.), as well activity of the cluster is to ensure beneficial
Information Management and Applied Infor- as competitions (Best Java Programmer in co- services for cluster participants, with the aims
matics, a follow-up two-year Master’s degree operation with FG Forrest, and Top Ten ORTEX of improving the quality of management, in-
programme in Information Management in co-operation with ORTEX Company). creasing innovation potential, reducing costs
and a Doctoral study programme in Informa- and developing commercial opportunities
tion and Knowledge Management, delivered  VARIOUS INTERNATIONAL for individual companies. The University of
in English. Economic-management skills are PROJECTS Hradec Králové, nineteen companies, and the
an integral part of all fields of studies, along The Faculty also co-operates with other Eu- Hradec Králové Technology Centre have since
with a great emphasis on the effective use of ropean, Taiwanese, and American universi- provided active co-operation. These days,
modern Information Technologies. ties in participating in various international several projects are being prepared, which
projects. Every year, more than 60 students the Faculty is participating in with other
 SEVERAL ADVANTAGEOUS of the Faculty study at a European institu- member companies, e.g. innovative meth-
PROGRAMMES tion under the Erasmus Programme, 18 ods of performance analyses of database
The Faculty of Informatics and Management is students attend Taiwanese universities, and servers, research of tools, procedures and
aware of the necessity of maintaining strong two students attend universities in the USA. organisational structures which could be ap-
relationships with industrial and research in- Currently (in March 2010), co-operation is plied in the process of product management
stitutions. These links with the private sector continuing during the summer months, optimisation with impact on managing the
help us to ensure that our students receive working on the VitalMind Project with Cog- new ICT product development; research and
the most up-to-date education and that they niFit Ltd., Haifa, Israel, and Philips Innovative application of tools for mutual integration of
work with academic staff who keep pace Lab, Eindhoven, the Netherlands. algorithms and data in Java and Micro Focus
with changes. The valuable contact between The Faculty also fully supports a close link Cobol environments; proposal and definition
the prospective employers of our graduates with the practical life sphere. Many seminar of XMPP standards for the GIS area etc.
and our academic staff ensures that students and Bachelor’s papers and theses deal with
benefit from a realistic learning environment. very practical topics - cloud computing and Petra Poulová
Photo: FIM archives

Therefore, the Faculty has developed several company solutions, modern tools for creat- Vice-Dean of the Faculty of Informatics and
advantageous programmes with businesses ing context, help for company decision-sup- Management of the University
and institutions in our region, e.g. the IT Clus- porting systems of the GIST Company, mod- of Hradec Králové
ter Project, including more than ten compa- ern open-source technology for Business www.uhk.cz/fim

| 34
Hradec Králové
Region
place for investment
opportunities
Area . . . . . . . . . . . . . . . . . . . . . . . . . . 4 758 sq. km
Population . . . . . . . . . . . . . . . . . . . . . . . . 554 000
Centre . . . . . . . . . . . . . . . . . . . . . .Hradec Králové
Division . . . . . . . . . . . . . . 15 municipalities with
extended competences

Example of industrial zone


more on the enclosed DVD or web pages
www.kralovehradeckykraj.eu
www.kr-kralovehradecky.cz

Contacts:
Lucie Vomočilová
Department of Regional Development, Tourism
and Culture, Section of Regional Development,
Hradec Králové Regional Authority
Pivovarské náměstí 1245
500 03 Hradec Králové
Czech Republic
phone: + 420 495 817 450
e-mail: lvomocilova@kr-kralovehradecky.cz
www.kralovehradeckykraj.eu
www.kr-kralovehradecky.cz

Jana Smetanová
Special Consultant
Centre for European Projects Development
Regional Development Agency
Centre for European Projects Development
Regiocentrum Nový pivovar - Evropský dům
Soukenická 54
THE CURRENT INVESTMENT OPPORTUNITIES 500 03 Hradec Králové
IN THE HRADEC KRÁLOVÉ REGION Czech Republic
phone: + 420 495 817 815
GSM: + 420 724 971 702
e-mail: smetanova@cep-rra.cz

2010
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CZECH ECOLOGY AND AGRICULTURE
2

Supplement of Czech Business and Trade


2010
ONE CUT
AHEAD THROUGHOUT
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|2 www.neva.cz
C Z E C H E C O L O G Y A N D A G R I C U LT U R E

Czech Ecology
and Agriculture
Supplement of
Czech Business and Trade 2/2010

CONTENTS

Editorial 4

ANALYSIS
Towards a Common European Policy in
Food Production and Agriculture 4
Get Acquainted with Czech Agriculture 6

INVESTMENT
Brownfields to Turn into Shopping Centres and Eco Farms 8

LEGISLATION
Investments in Renewable Energy Sources in the Czech Republic 11

CZECH TOP
Champion among Czech Vintners 13

WE ARE INTRODUCING
Crisis Boosting Demand for “Green Buildings” 15

ENTERPRISE
Together to Support Trade Opportunities 16
Surface Finishing under the Wings of CzechTrade 18 MK ČR E 6379
This magazine is published as a supplement
Agriculture Is Drawing Finance from Various Programmes 20
of the economic quarterly Czech Business and Trade.
Managing Editor: Šárka Kratochvílová
SURVEY
Poll of Successful Companies Operating in the Areas of Ecology, Graphic Design: Art director: Nina Nováková
Graphic Designer: Jiří Hetfleisch
Agriculture, and Wood Processing 21
Cover photo: www.sxc.hu; page 3 photo: www.sxc.hu

Production: Anežka Zvěřinová


Address: PP Agency s.r.o., Myslíkova 25, 110 00 Praha 1
Czech Republic, Phone: +420 221 406 622
PRESENTATION OF FIRMS:
Fax: +420 224 930 016, e-mail: journal@ppagency.cz
NEVA - TRADE s.r.o.; PP Agency s.r.o.
www.ppagency.cz
Deadline: 15/4/2010
IN THE NEXT SUPPLEMENT TO CZECH BUSINESS AND TRADE
Attitudes expressed by the authors of articles in this magazine
The manufacture of machine tools and forming machines has been the main branch of Czech
are not necessarily consistent with the viewpoint of the Publisher.
engineering for dozens of years. Export is essential for the sector as a whole. What is the
present situation of the branch in the Czech Republic and what are its prospects? This is the © PP Agency, Company with the ISO 9001 certified quality
theme of the next Supplement to Czech Business and Trade. management system for publishing services

3|
A N A LY S I S

Dear Readers, Towards a Common European Policy


Environmentally friendly agriculture, in Food Production and Agriculture
organic food, renewable sources of
energy, low-energy “green” build-
ings... these are themes very fre-
quently discussed in the Czech Re-
public, Europe, and other countries
around the globe. It is not by chance
that ecology has been at the centre
of public interest for several years.
Individuals, institutions, enterprises, ing market instruments that will help to
and governments are facing the mitigate the negative impacts of such
decision how to make our planet fluctuations and see to it that the manu-
healthier, and how to change con- facturer is in a position to maintain ad-
duct and habits and thus alleviate equate income.
the impacts of inconsiderate treat- The development in the past few years
ment of nature. We, too, have been has shown that even a long period of rela-
dealing with ecology and agriculture tive stability and good economic results can
in this supplement. be followed by a sobering chill.

An analysis of the agricultural What challenges and dangers are facing


sector has been conducted by the the agro-food sector?
ČEKIA agency. After you have read Definitely it is the current economic crisis
it, you shall know how this sector is Jakub Šebesta and in the long run the pressure of cheaper
supported by the Government, what imports. I am confident that we can face up
it is focused on most of all, and also The future role of the common European to these problems by higher added value of
how agro-tourism is developing in policy in food production and agriculture production, based on innovation and top
the Czech Republic. in the globalised world is a basic issue in technology. Emphasis must be placed on
the current period, when debates on the high safety, quality, and tradition of Euro-
The possibility of using brown- future of European agriculture are com- pean production. This, in my opinion, is the
fields, i.e. dilapidating industrial com- plicated by the current economic crisis. way we must follow.
plexes, deserted former agricultural Jakub Šebesta, Minister of Agriculture of With the accession of new member
co-operatives, former military areas the Czech Republic, has shared with us his states, the European market has gradu-
and the like and their enumeration view of the common European agro-food ally grown into a compound, which in
are contained in another article of sector. 2009 comprised some 500 million peo-
this supplement. ple. Acute problems have emerged espe-
What can we do for European food cially in connection with the accession of
Export alliances facilitating foreign production and agriculture to flourish? new states in the past relating to the fu-
contacts of Czech enterprises have An important thing is to promote regional ture form of the future common agricul-
been established under the wings specifics and quality, combined with in- tural policy, which must now be tackled.
Photo: Ministry of Agriculture archives, European Commission archives

of the CzechTrade Agency in the novation and education. Globalisation is As a result of joining the EU, a number of
last years. We are introducing two of not a negative phenomenon, its benefits changes have taken place in the Czech
them - Czech Water Alliance and the are rapid development and progress. We Republic, such as restrictions in sugar
alliance České povrchové úpravy – in must keep pace with all that is new and and milk production, which have mark-
this supplement adjust our activities to demand. We can- edly affected us, while on the other hand
not expect that everybody will be satis- a number of new opportunities have
fied with current achievements for 50 opened up for us, which Czech business-
years. Consumers are very demanding. If men have used to great advantage.
anyone opts for a conventional product,
the product must be of the highest qual- What are the impacts of the economic
ity. If people do not want tradition, they crisis on food production and agriculture
must be offered new things. in the Czech Republic?
A great challenge is the rising volatil- In the current economically complicated
Šárka Kratochvílová ity of agricultural commodity prices. It is situation consumers are rather looking for
therefore necessary to find correspond- cheaper products, which is not a favourable

|4
C Z E C H E C O L O G Y A N D A G R I C U LT U R E

trend. It is to be expected that as soon as the tected geographic indications or appel- ners prone to sponge on the repu tation
situation starts improving, food buyers will lations of origin, with several more ap- of established indications. In the area of
once again be seeking better quality, which plications being in the pipeline. A great guaranteed traditional specialties, the
means higher added value. In the EU, the achievement was the registration last year Czech Republic co-operates closely with
fall of agricultural trade in 2009 was not so of the Czech Beer geographic indication, colleagues in the Slovak Republic – four
sharp as in other parts of the world, which which is of great commercial and econ- joint Czech-Slovak applications for the
testifies to the ability of the EU to cope with omic significance for traditional Czech registration of selected traditional meat
the global economic crisis in agriculture. beer brewers. Protected indications en- products have been submitted in Brus-
Two-thirds of EU exports are processed agri- able better protection against abuse by sels. In connection with traditional and
cultural products, where the impact of price other, rival trade or manufacturing part- regional foodstuffs, a project has just
fluctuations is less in evidence. been launched in the Czech Republic,
At the same time it has become evident SELECTED EXHIBITIONS AND FAIRS the aim of which is an information cam-
that the global market needs to be liberal- paign and effort to raise consumer inter-
Flora Olomouc 19-22 August 2010
ised to the highest possible degree. If the est in regional products. Regional prod-
 international gardening exhibition
market opens up to such a degree, and I am ucts especially have a great potential as
www.flora-ol.cz
persuaded that sooner or later this is what regards quality.
will happen, we must be prepared for it and Earth the Provider,
be able to react to the supply of cheaper České Budějovice 26-31 August 2010
commodities. I am certain that the Europe-  restoration and development of the countryside, crop

an market will be capable of such reaction and livestock production, farming equipment, food pro-
duction, forestry and water economy, gardening and
only if European consumers become aware
cultivation, services for agriculture
that domestic production is of a high stand-
www.vcb.cz
ard and will under all circumstances retain
that standard. Great attention in the EU Ekostyl, České Budějovice 26-31 August 2010
market liberalisation process, however, will  creation and protection of the environment, environ-

have to be paid to ensuring the competi- mentally friendly technologies


tiveness of European producers in the face www.vcb.cz
of third-country producers, especially as re- Pragolinga / Tooltex, Prague 4-6 November 2010
gards high standards in the area of hygiene,  11th contracting and sales exhibition of machines,
welfare, and quality of production, which EU tools, equipment, and materials for the woodworking
manufacturers must meet. industry / 15th specialised exhibition of machines, tools,
and hardware
Can European food production exist www.pragolinga.cz
without European agriculture, and vice
versa?
The only clear answer is NO, it can not. Not
only because there are local and traditional
links within the agro-food sector, but also
that we cannot neglect the environmental
and social aspects of the entire sector. What
has been grown at home must also be pro-
cessed at home. It can hardly be explained
why we should import raw materials from
across the world if we are able to produce
them at home. I know, it is not the cheap-
est way, but Europe sees to the observance
of its traditions, so let us observe them also
in agriculture and food production, only this
is the way to top-standard production, to
which we are all used and which consum-
ers in third countries expect from European
production.

How active is the Czech Republic in this


respect?
I am pleased to say that it is very active
indeed. The Czech Republic has 24 pro-

5|
A N A LY S I S

Get Acquainted with Czech Agriculture


Vladimír Melichar, analyst, Czech Capital Information Agency, e-mail: melichar@cekia.cz, www.cekia.cz

Before 1989, Czech agriculture was a strongly its ownership and to higher rentals, and the ance of standards applying to breeding
privileged sector within the country’s direc- enlargement of the eco-farming area by ap- equipment technology, environmental
tive system, which resulted in its dispropor- prox. 40% in comparison with the pre-entry protection, and other hygienic regulations.
tionate size. In spite of this, its economic ef- period. At the same time, higher claims were After the country’s accession to the EU and
ficiency was relatively high. The transition to placed on farmers resulting from participa- the opening up of its market, Czech agri-
a market economy system put high pressure tion in the EU Common Agricultural Policy, culture was faced with growing imports
to bear on farmers, forcing them to adjust to while the structure of the Czech national of cheaper foodstuffs. Self-sufficiency in
the new economic conditions and sales pos- economy was brought closer to that of the vegetable products, with the exception of
sibilities as regards the size, structure, and ef- EU, which resulted in a reduced share of agri- rape, has greatly increased and in all these
ficiency of their farming enterprise. culture, forestry, and fisheries in GDP genera- commodities domestic production ex-
tion and employment. ceeds domestic demand. In livestock pro-
Adjustment to EU duction, on the other hand, self-sufficiency
Agricultural Policy Analysis of Agricultural Entities has been reduced.
Farming in the Czech Republic comprises At the end of 2009, altogether 115 674 busi-
all crops characteristic of the country’s geo- ness entities were registered in the Czech Poultry Is Growing,
graphical position and its climatic condi- Republic, whose core business was agricul- Cattle Declining
tions. In addition to all the main grain crops ture, game keeping, and related activities. Livestock production covers commodi-
(wheat, barley, rye, oats, and maize), farmers 79.4% of this figure was accounted for by ties such as meat, milk, and eggs, which
grow sugar beet to make sugar, potatoes, oil natural persons and 36.2% by enterprises are placed on both the domestic and for-
bearing plants (rape), flax, hops, fruit, veg- (dominated by limited liability companies), eign markets. The animal category has also
etables, and grapevine. The livestock sector cooperatives and other entities. The core declined, especially as regards sheep and

Photo: www.sxc.hu
produces mainly cattle (for milk and meat business of most enterprises (50.2%) ac- goat breeding. Cattle and pigs, too, have
production), pigs, and poultry. Products of cording to the register was combined pro- witnessed a decline in production. On the
the Czech agrarian sector are used for both duction. Engaged in pure crop production other hand, the poultry sector has been
final consumption and further processing, are 11.9% of enterprises and 9.5% enter- growing.
especially in the food industry. The Czech prises devote themselves to pure livestock
Republic’s agrarian policy has developed production. The overwhelming major-
in two stages. The first stage (revitalisation), ity (90.7%) of companies are controlled by
focusing on the recovery and stabilisa- Czech entities. Besides conventional agri-
tion of the farming sector, was terminated cultural primary production, a number of
in 2001, while the second stage (adapta- enterprises pursue additional activities, add-
tion) concerned itself with the institutional ing value to their own production, such as
preparation of the country’s accession to seed, fertiliser, and fodder mixture produc-
the EU. The concept of the second stage tion and sale, slaughter-house operation,
(adaptation) was aimed at the fastest pos- food production, agricultural services, rental
sible general adaptation to the conditions of farm machinery, etc. In connection with
of the EU Common Agricultural Policy in all environmentally friendly energy production
its areas (structural, regional, environmental, requirements, Czech farmers have greatly
and rural). increased the cultivation of crops suitable
for that purpose, such as rape, which is also
Support to Agrarian Sector used for bio-fuel production. Another such
An important milestone in the development crop is sugar beet.
of the sector was the Czech Republic’s acces-
sion to the EU (1 May 2004). For the agrarian Competition Is Growing
sector, it meant a more than double growth Since the beginning of the 1990s, the share
of support it received and an important of agriculture in the country’s economy
increase in the share of EU states in Czech and in total employment has been declin-
agrarian trade (in exports, a rising share of ing, with a gradual dampening down of
raw materials, in imports, a growing share activity in certain manufacturing branches
of products with higher added value). This within the sector. The main causes are
was accompanied by greater interest in farm growing competition pressures and addi-
land, leading to changes in the structure of tional investments needed for the observ-

|6
C Z E C H E C O L O G Y A N D A G R I C U LT U R E

Arable Land Is in the Lead joining, agro-environmental measures were of holiday cottaging. Approximately one-
Farmland in the Czech Republic covers an introduced and money spent on eco-agro third of agro-farm clients are foreign tour-
area of 4.2 million ha. The decisive part of policy has practically trebled in comparison ists (mostly from Germany, Poland, and the
this area is arable land, on which different with the period before entry. Netherlands), whose favourite destinations
crops are rotated depending on the specific are the Šumava, South Bohemia, and the
production region and the farmer’s own Agro-tourism Krkonoše (Giant Mountains).
choice. Permanent cultures are grass stands, The number of people working in agricul-
grape vine and hops. The most widely ture has dropped to one-quarter of the Recommendations for the Future
grown crops are cereals, covering an area of pre-1989 level. After joining the EU, year- Czech agriculture will continue to be under
approximately 1.6 million ha, the largest pro- on-year decreases stabilised at 2% to 3%, the pressure of rising labour and land costs.
portion of which each year is accounted for which means a faster decrease in farming Investments are needed in technological
by wheat and barley. For the past few years, jobs than in the rest of the EU. The compet- modernisation with the aim of raising pro-
fodder crop, rape, and technical sugar beet itive environment on the commodity mar- ductivity of labour and overall production
cultivation has been on the decline. How- ket forces farmers in the EU to set up pri- efficiency, in addition to “non-productive”
ever, despite the general decline, Czech ag- mary production enterprises with the aim investments linked with the ever stricter
riculture as a whole is showing a production of raising their own competitiveness. Such cross-compliance requirements and other
surplus. entities hold an important position, there legislative restrictions. In the years to
are strong marketing organisations linked come, the land market will open up fully
Development after Joining the EU horizontally and vertically (production to buyers from EU states and third coun-
After the Czech Republic’s accession to the – processing – marketing). In this respect, tries. The most sensitive problem is live-
EU, the share of EU states in Czech agrarian the Czech Republic is still lagging behind stock production with all the scenarios of
trade increased significantly. Logically, the the EU, in a number of commodities mar- the EU Common Agricultural Policy giving
country’s foreign trade turnover rose sub- keting organisations are far from having absolute predominance to vegetable pro-
stantially, with slightly lower dynamics of ex- a significant, let alone a decisive share of duction and massive reduction of livestock
ports; the overall balance of trade, however, the market. Nevertheless, the situation is production.
remains unfavourable. Trade with third coun- changing gradually. For domestic farmers, The article is based on the Agriculture Sec-
tries has been limited. The Czech Republic’s agro-tourism still represents a mere alter- tor Analysis published by the Czech Capital
accession to the EU also meant higher trade native source of income and is developing Information Agency (www.cekia.cz), which
exchange in eco-farm products (by 40% in very slowly. Domestic demand is limited concerns itself with supplying economic in-
comparison with the pre-entry period). After primarily by the domestic phenomenon formation about firms.

7|
INVESTMENT

Building of the Zlín Technology Centre after reconstruction

the regeneration of abandoned cultural


Brownfields to Turn into Shopping complexes, and from which projects in the
Czech Republic, too, can benefit. Support
Centres and Eco Farms can be obtained from 13 EU or national
subsidy programmes. Dozen billion crowns
Jiří Sochor, e-mail: jiri.sochor@czechinvest.org, www.czechinvest.org can be obtained for projects ranging from
railway siding reconstruction to the build-
Abandoned and neglected brownfield lo- ply, however, has been declining in recent ing of new research and development cen-
calities cover more than three hundred years. Large repaired brownfield projects, or tres. When choosing a suitable subsidy pro-
square kilometres on the map of the Czech projects still under reconstruction, are to be gramme, one has to decide first of all what
Republic. Fortunately, not all lie next to each found in Prague, Brno, Ostrava and practi- purpose the brownfield should serve. The
other – if they did, the three hundred square cally in all larger cities across the country. Business and Innovation Operational Pro-
kilometres would be equivalent to a city of The cooling down of global economy, gramme can help investors wishing to use
half a million. For an area of just this size, however, has resulted in a slowing down the recuperated area for manufacturing in-
public support in the order of billions of of project re-generation or postponement dustry projects, strategic services or applied
euros can be drawn thanks to the European until a later time. On the other hand, the research and development; for brownfields
Union and national grants. burst of the property bubble made brown- to be used in agriculture after revitalisation
Dilapidating industrial structures, aban- field owners in the city centres speculating investors can draw support from the Rural
doned farmsteads of former agricultural co- on further property price rises and reluc- Development Programme.
operatives, derelict housing estates, former tant at the moment to sell dilapidating In other cases, support can be obtained
military areas, unused factories and old cas- buildings in attractive localities, start think- from Regional Operational Programmes.
tles falling apart. The list of brownfields scat- ing. Moreover, the property bubble was Projects in Prague are supported by the
tered all over the Czech Republic would be not extremely inflated in the Czech Repub- Prague – Competitiveness Operational Pro-
very long indeed. After all, perhaps the same lic, and subsequently for the past two years gramme. Contaminated brownfield sites
as in any other country. In the Czech Republic, property prices have been rather stagnant, can draw support from the Environment
there are more than 11 000 such localities ac- as they did not have anywhere to fall. Operational Programme. This programme
cording to CzechInvest Agency, which is try- also supports the decontamination of
Photo: Pavel Kostelník

ing to manage their regeneration centrally. Billions from the EU brownfields in protected areas. In addition,
At least some of them, especially those Very interesting in this connection is the fact there are also national subsidies, such as
near large city centres, provide interest- that the European Union has resources from the Programme for the Support of Business
ing investment opportunities. Their sup- which it makes generous contributions for Property and Infrastructure Development,

|8
C Z E C H E C O L O G Y A N D A G R I C U LT U R E

administered by CzechInvest Agency. Each chance on their way home from one of their use in the particular locality. This was done
year, the Ministry for Regional Development visits to another brownfield. on the basis of the history of the locality,
also launches support programmes for Before setting up the database, CzechIn- previous activities pursued there, the geo-
army brownfields coming under commu- vest undertook a study, the first ever to be graphical position of the brownfield, and
nity ownership. compiled, which mapped all brownfields in everything that could be important for the
the Czech Republic. One of the very positive ideal new use of the site.
Helpful Administration conclusions of the study was that only 7% It is not surprising that the new recom-
A great advantage of abandoned industrial of Czech brownfields were provably affect- mendations completely eliminated the
complex regeneration projects is that they ed by an ecological burden. On the other army. On the other hand, the share of
are unlikely to run up against opposition hand, however, another 37% of such locali- brownfields recommended for “mixed ur-
from the authorities. This may be of key im- ties may be assumed to have such a burden. ban functions”, a good technical term for
portance for certain branches of business. Nevertheless, this means that not more than
Squeezing a new foundry into the regional under 50% of brownfields in the Czech Re- PRAGUE: PALLADIUM
development plan would need a good deal public are contaminated, which in itself is an The former owner of land on which the Palladium
of courage from the mayor. If, however, such unexpectedly good result. shopping centre was constructed a few years ago
a project is to be set up on a site where activ- was, from the 1780s, the army, which built a vast bar-
ities in the same line of business were oper- Look for a Tractor racks complex there, complete with spacious stables.
ated maybe for decades except the past few on the Brownfield A number of famous personalities of the Czech nation
served at the barracks. Worth mentioning is Czech
years, the investor will not only find a quasi- Most brownfields in the Czech Republic
dramatist Josef Kajetán Tyl, actor, novelist, and jour-
developed infrastructure and trained and have their origin in agriculture, followed
nalist, who composed the Czech anthem there. The
experienced employees, but also a warm immediately by industrial activity. Taken to- army owned the former George of Poděbrady Barracks
reception from the local population. gether, they account nearly to the dot for for the next two centuries until 1996, although in the
The essential problems of brownfields in two-thirds of all brownfields in the country. latter half of the 20th century it did not practically
the Czech Republic – as in any other coun- Also important is the share of brownfields use it and the whole compound went into decay. At
try anywhere in the world – is that dozens of from abandoned houses of culture, stores the time when the barracks were used by the army,
owners may claim possession of one site. Of and other such facilities. Together with the compound was closed to the public. Finally, in the
course even the claim by just one of them housing, these two categories account for early 1990s, the Ministry of Defence decided on its
may be a problem, and the regeneration over 15% of all abandoned complexes in the more suitable use.
may come to nothing. The second problem Czech Republic. A scar on the map has been
is that physically it is not possible to describe left by the army, which is responsible for 5% BRNO: VAŇKOVKA
Vaňkovka, since 2005 serving as a shopping and cultural
in detail the more than 11 000 brownfields of all localities.
centre, stands in the place of a former factory founded in
which can be found on the map of the As regards the area of the brownfields, the
1865. The structure comprises some of the original build-
Czech Republic. situation is considerably different. The share ings of the former factory, to which new structures have
of army grounds, for example, will jump been added. In the reconstructed building of the original
Brownfields Online from the original 5% to nearly one-quar- machine plant in the eastern part of the original factory
CzechInvest Agency helps in solving both ter. This shows that the former shooting now stands the Wannieck Art Gallery. The name Vaňkovka
problems with its online database of Czech grounds and barracks and other facilities of is the distorted name of the German founder and original
brownfields (ww.brownfieldy.org/). Cur- the former Czechoslovak People’s Army oc- owner of the former factory. The reconstructed buildings
rently, the database offers several hundred cupied an absurdly vast area of the country’s of the original factory are examples of neo-Gothic indus-
brownfields described to the slightest de- surface at the time of the Warsaw Treaty. The trial architecture.
tail, which are prepared for regeneration, share of industrial brownfields, in terms of
with all property issues already solved. surface area, too, is very large, accounting OSTRAVA: KAROLÍNA
Karolína is a vast regeneration project standing in the
The database is freely available 24 hours for more than 40% of the total area. After
place of a former coal mine and coking plant. Histori-
a day from anywhere. It has been in opera- 1990, a number of overgrown giants, fed by
cally on the outskirts of Ostrava, the complex has become
tion since 2008, when one of the stimuli for centrally-managed economy, went bank- completely encompassed by the massive development of
its launching was the experience of an en- rupt, and the brownfield areas left behind the city, so that on completion New Karolína will link up
terprise in the north-east of the Czech Re- are beginning to be turned into industrial smoothly with the now historic parts of the city. Coal min-
public. The core business of the enterprise parks or are being re-built into residential ing in the locality started in 1837, and the coking plant
is metalworking. A few years ago, the enter- quarters. About 20% of the total brownfield was established in 1858. Both activities grew massively
prise was faced with the problem of space, area remains for agriculture, which is still with time. Coal was brought to the plant by cable-cars
which at that time was not sufficient for it a very important figure. from several galleries. In addition to coke, the plant also
to cope with its new orders. Considering made briquettes. In 1905, an electric exchange was built
the line of its business, the brownfield was What Next with Czech there, which supplied the galleries with power. The cok-
ing plant closed operations in 1964, the electric exchange
a clear choice. The firm’s managers spent Brownfields?
closed down ten years later. Two of the administrative
several weeks searching for an ideal site to Besides the original purpose of brownfields,
buildings have been preserved and are protected as reg-
meet their expansion plans. In the end, they the study prepared by CzechInvest also con- istered monuments.
found an ideal brownfield completely by cerned itself with proposing their ideal new

9|
INVESTMENT

small businesses, gymnasiums, cinemas, structures. At the same time, however, the activities – eco-farms, accommodation in
theatres, cultural facilities, playgrounds recommended use for most of such sur faces a natural environment, restaurants, and other
etc., increased significantly. This indicates is a combination of light industry manufac- such structures and activities.
that originally a large number of today’s ture and services, i.e. the combination of In the Czech Republic, as in other indus-
brownfields were located on the outskirts small-scale industrial production with shop- trialised economies the world over, oppor-
of towns. The dramatic town development ping centres. tunities for greenfield investment are be-
over the past few years, however, has sur- A similar situation exists in agriculture. The coming scarce. As a result, brownfields are
rounded these localities by new construc- centrally planned economy produced huge necessarily becoming increasingly attrac-
tion, and renewing former factories now collective farms in agriculture, which associ- tive. Ideally, in the long term, would be for
standing in the middle of a residential ated farmers from far and wide. This is where brownfields to be equally attractive for new
quarter wouldn’t make much sense. heaps of infrastructure were left behind, investments as greenfields. This of course is
On the other hand, somewhat surprising which could hardly be used for good ben- a very ambitious goal, so that a realistic tar-
may be that the study has recommended efit over the past twenty years. Here, too, the get will be bringing the attraction of brown-
an even larger number of brownfields for study in a number of localities recommended field investments as close to greenfield ones
industry than the original number of such the combination of agriculture with other as possible.

PREVIOUS USE OF BROWNFIELDS - NUMBER


civic
Region/use army housing tourism industry agriculture other
amenities
South Bohemia 21 20 1 32 62 68 8
South Moravia 19 1 0 17 72 64 9
Karlovy Vary 11 8 2 46 66 33 34
Hradec Králové 18 11 0 41 78 81 15
Liberec 2 9 7 30 79 52 23
Moravia-Silesia 9 2 0 29 116 50 26
Olomouc 10 9 5 24 35 105 18
Pardubice 11 13 0 12 60 79 6
Plzeň 24 5 0 26 62 95 2
Central Bohemia 11 1 0 8 35 34 3
Ústí nad Labem 9 12 7 18 87 100 24
source: CzechInvest

Vysočina 1 4 0 21 22 43 7
Zlín 5 0 0 0 11 17 2
TOTAL 151 95 22 304 785 821 177

PREVIOUS USE OF BROWNFIELDS - SURFACE


civic
Region/use army housing tourism industry agriculture other
amenities
South Bohemia 38.47% 8.04% 0.12% 1.57% 27.16% 22.49% 2.15%
South Moravia 19.33% 0.17% 0.00% 3.37% 52.48% 23.11% 1.56%
Karlovy Vary 17.78% 0.56% 0.06% 3.40% 43.00% 12.19% 23.02%
Hradec Králové 44.24% 0.48% 0.00% 3.19% 27.10% 20.40% 4.59%
Liberec 10.61% 1.07% 2.03% 6.27% 45.13% 29.35% 5.56%
Moravia-Silesia 10.41% 0.26% 0.00% 4.02% 63.95% 6.71% 14.65%
Olomouc 34.18% 1.54% 0.30% 1.97% 26.78% 28.87% 6.35%
Pardubice 37.91% 1.14% 0.00% 0.71% 41.55% 13.43% 5.22%
Plzeň 35.75% 0.13% 0.00% 2.65% 32.04% 24.47% 4.97%
Central Bohemia 21.09% 0.48% 0.00% 6.37% 38.39% 28.49% 5.20%
Ústí nad Labem 4.44% 0.55% 1.03% 0.77% 50.18% 15.15% 27.88%
source: CzechInvest

Vysočina 41.56% 0.06% 0.00% 20.70% 7.06% 12.42% 18.19%


Zlín 17.65% 0.00% 0.00% 0.00% 55.52% 24.85% 1.99%
TOTAL 23.10% 0.90% 0.22% 4.03% 42.64% 18.08% 11.04%

|10
L E G I S L AT I O N

energy sources at an agreed market price


to any end customer or electricity trader, or
that directly uses the generated electricity,
is entitled, upon the submission of relevant
documents, to collect green bonuses on top
of the price from the transmission system
operator (TSO) or the regional distribution
operator. The drawback of the green bonus
system is its higher risk, as the producer has
no guarantee of selling all the generated
electricity on the market, and of the price. It
must actively seek its electricity consumers
and negotiate the purchase price.

Interesting Investment
Opportunity
The minimum incentive period guaranteed
to the investor for generating electricity from
renewable energy sources is 15 years from
putting the generating facility into opera-

Investments in Renewable Energy tion, which is an interesting investment op-


portunity. The maximum incentive period is
not explicitly specified by the Act. The ERÚ
Sources in the Czech Republic Regulation (a piece of secondary legislation
of lesser legal force), however, stipulates that
Jakub Adam, Markéta Pašková, Wolf Theiss Advokáti, s.r.o., the feed-in tariff is guaranteed for the lifetime
e-mail: jakub.adam@wolftheiss.com, marketa.paskova@wolftheiss.com, www.wolftheiss.com of the electricity generating facility. The life
expectancy pursuant to the ERÚ Regulation
In the EU Accession Treaty, the Czech Re- choose between two incentives to renew- is 30 years for small hydro-plants, 20 years for
public committed itself to raise the propor- able energy generation: guaranteed feed-in biomass, biogas, wind, geothermal, and pho-
tion of electricity made from renewable tariffs for electricity supplied into the grid tovoltaic power plants, and 15 years for sew-
sources to 8% of gross electricity consump- (feed-in tariff ), or “green bonuses”, a sur- age, landfill, and mine gas power plants.
tion by 2010. Within the meaning of the charge on the generated electricity which Investors receive feed-in tariffs or green
law, renewable sources are renewable non- is used directly by the producer or sold di- bonuses in the amount set by the ERÚ Price
fossil natural energy sources such as wind rectly to the producer’s customer. The Act Decision effective in the year in which the
energy, solar energy, geothermal energy, hereby transposes Directive 2001/77/EC of facility was put into operation; feed-in tar-
hydropower energy, soil energy, air energy, 27 September 2001, on the promotion of iffs – except for biomass and biogas incin-
biomass energy, landfill gas energy, sewage electricity produced from renewable energy eration plants – are indexed by a minimum
gas energy, and biogas energy. sources in the internal electricity market. of 2% and a maximum of 4% year-on-year
These two types of incentives may not depending on the industrial price index de-
FINANCIAL INCENTIVES TO be combined in a single calendar year. The velopment. When designing a new facility,
PROMOTE ELECTRICITY producer of electricity is obliged to inform ,investors may take the ERÚ Price Decision
GENERATION FROM the transmission system operator by 30 No- as a guide, as the feed-in tariffs set by ERÚ
RENEWABLE SOURCES vember each year of the incentive for which for the following calendar year may not be
they opt for the following calendar year as less than 95% of the feed-in tariffs applica-
Feed-in Tariffs or Green Bonuses of 1 January. In the case of newly built facili- ble in the year in which the decision on the
As investment in renewable energy sources ties, the notification must be made no later new feed-in tariffs has been made.
would most probably not be profitable for than one month before the launch of the The Senate is currently debating a Govern-
potential investors without further incen- production. ment Bill to the Renewable Sources Act al-
tives, the Czech Parliament passed Act No. The level of feed-in tariffs and green bo- ready passed by the Chamber of Deputies of
180/2005 Coll., on the promotion of use of nuses is set annually by the Energy Regula- the Czech Parliament, which is to change the
renewable sources (“Renewable Sources tory Office (“ERÚ”) in its decrees (the current- guaranteed feed-in tariffs for renewable en-
Act”) in 2005, to promote the use of renew- ly applicable ERÚ Price Decisions are Nos. ergy from those sources whose rate of return
Photo: www.sxc.hu

able energy sources and ensure continuous 4/2009 Coll. and 5/2009 Coll.). The green bo- is less than 11 years. This change will concern
increase in the renewable energy share in nus consists in a premium on the electricity especially photovoltaics, where, as a result of
the consumption of primary sources of en- market price. A producer of electricity that the reduction of photovoltaic panel prices by
ergy; the Act gives investors the option to sells electricity generated from renewable up to 40%, investment costs have declined

11|
L E G I S L AT I O N

Decisions, which stipulate the level of feed-


in tariffs and green bonuses. As mentioned
above, the applicable decisions for 2010
are Decisions Nos. 4 and 5/2009 Coll. The
electricity market rules are set out by ERÚ
Regulation No. 541/2005 Coll. Decrees Nos.
475/2005 Coll., 51/2006 Coll., and 140/2009
Coll. were used as a basis for the implemen-
tation of certain provisions of the Renew-
able Sources Act, for setting the conditions
for connecting the sources to the grid, and
for electricity price regulation. Specific con-
ditions for the use of biomass in electric-
ity generation are laid down by Regulation
No. 482/2005 Coll. of the Ministry of the
Environment.

Licensing Procedures
The following steps must be taken be-
fore electricity generation from renewable
sources may start:
1. Prove the title to the land and buildings, if
applicable, where the electricity generat-
ing facility is to be built (ownership title to
the property, tenancy).
2. Perform fact-finding procedure under Act
No. 100/2001 Coll. on the Environmental
Impact Assessment (“EIA“). The procedure
is required especially for the following
significantly (their rate of return is allegedly for “green energy”. The recipients of the projects:
estimated to be 8 to 10 years). Under the cur- subsidies, however, are restricted to private  Fuel incineration facility with rated heat
rent legislation, ERÚ may reduce the feed-in individuals and municipalities. Other incen- output of 50 MW to 200 MW;
tariff for electricity generated by new facilities tives can be obtained for combined electric-  Wind power plants with total installed
by mere 5% year-on-year. ERÚ estimates that ity and heat generation and for secondary output of more than 500 kWe or with
if the Government Bill is passed, solar electric- sources of energy. tower height exceeding 35 m;
ity feed-in tariffs will be reduced by 30% start-  Hydro-power plants with a total in-
ing from 2011. LEGAL FRAMEWORK FOR stalled output capacity 10 MWe and
RENEWABLE ENERGY above;
Tax Benefits GENERATION  Hazardous waste disposal facilities;
Income from the operation of small hydro- Conditions for running business in the area  Projects that might affect bird protec-
electric power stations with an output up of electricity generation are regulated main- tion areas and natural sites of European
to 1 MW, income from wind power stations, ly by Act No. 458/2000 Coll., on business importance.
heat pumps, solar facilities, facilities for the conditions and public administration in the
production and use of biogas and wood gas energy sectors and on other amendments Facilities with outputs below the above-
for energy purposes, biomass-based elec- (“Energy Act“). The Energy Act sets out con- mentioned levels are subject to EIA only if
tricity and heat generation facilities, facilities ditions under which ERÚ may issue licences the authority concerned has issued a de-
for the production of biologically degrada- for energy generation, transmission, and cision to that effect. The actual procedure
ble substances defined by special regula- distribution. This Act transposes Directive lasts 5-8 months; in case that special docu-
tions, and facilities for the use of geothermal 2003/54/EC of the European Parliament and ments have to be prepared, it may last up
energy are exempted from personal and of the Council concerning common rules for to two years.
corporate income tax in the calendar year in the internal market in electricity and Direc-
which the facilities were first put into opera- tive 2003/55/EC of the European Parliament 3. Change of the zoning plan in case that
tion and in the following five years. and of the Council concerning common the existing zoning plan does not allow
Photo: www.sxc.hu

rules for the internal market in natural gas. for the construction of a power plant.
Other Potential Advantages The use of renewable sources is regu-
The Ministry of Industry and Trade and the lated primarily by the Renewable Sources 4. Obtain the zoning and building permits.
Ministry of the Environment offer subsidies Act mentioned above and by the ERÚ Price The competent authority is the building

|12
CZECH TOP

office of the relevant municipality. The 6. Obtain the licence from ERÚ for electricity application, supported by (ii) the con-
building office, similarly to other admin- generation. In specific cases, the licence sent of the transmission or distribution
istration authorities, has to issue its deci- may be obtained before the issue of the system operator, and (iii) a contract on
sion within 30 days from the opening of final approval for use. Licences are issued connection between the applicant and
the proceedings; in more complicated for no more than 25 years. the transmission or distribution system
cases the period may be prolonged by operator. The operator is required to
another 30 days. The preconditions for individuals to ob- give priority to plants generating elec-
Binding positions of the respective au- tain the license are: (i) minimum age of 21 tricity from renewable energy sources
thorities must be obtained for the issu- years, (ii) full legal capacity, (iii) integrity, if the producer applies for connection
ance of the zoning and building permits. and (iv) professional competence, or the and meets the conditions for electricity
The respective authorities issue their posi- appointment of an authorised representa- connection and transmission under the
tions within the same statutory deadlines tive, where professional competence usu- Energy Act.
as the building office. Depending on the ally means completed technical university
location of the land, the following author- education plus three-year experience in the 8. The last step is a contract with the
ities may be involved in terms of public field, or completed secondary technical ed- transmission or distribution system op-
interest protection: ucation plus six-year experience in the field; erator on electricity supplies or a con-
 Authorities of environmental protec- for smaller facilities, lower-level education is tract on the payment of green bonuses
tion, nature and landscape conserva- usually sufficient. (see above).
tion, water management, farmland For legal entities, conditions (i) to (iii)
protection; must be met by members of the statutory Acquisition of Projects
 Authorities of forest conservation, air body. A condition for awarding a licence to in Progress
protection, and waste management; a legal entity is also the appointment of an As it is obvious from the above, the li-
 Health-care authorities; authorised representative. The person ap- censing procedure is not a simple affair.
 Railway administration office; plying for the licence is required to prove its Potential investors in renewable energy
whereas the relevant state administration ownership title to or the right of use of the may want to purchase a project already
tasks are usually performed by respective power generation facility to be used for the in progress, at a certain stage of comple-
departments of the concerned munici- licensed operation, or the consent of the fa- tion. In view of the current uncertainty
pality authority. cility owner. The applicants must also prove regarding possible reductions of feed-in
their financial capacity for the operation for tariffs for electricity obtained from solar
5. Obtain the final approval for use of the which the license is required, and the capac- power stations beginning from 2011, an
electricity generation facility. The com- ity to discharge their obligations for at least interesting alternative is the purchase
petent authority is the building office of five years. of solar power stations already erected
the relevant municipality, whose deci- and connected to the grid, where the
sions are subject to the above-mentioned 7. To have the facility connected to the projection of future revenues is quite
deadlines. grid, the producer must file (i) a written simple.

Champion among Czech Vintners


Miroslav Majer, Vinselekt Michlovský, a.s., e-mail: majerm@michlovsky.com, www.michlovsky.com

Czech vintners know their 2009 champion. ers’ Fund and the National Winery Centre best domestic firm which breaks rank in
The wine-maker of the year is Vinselekt in co-operation with the Association of a positive way among wine-making com-
Michlovský, based in the well-known vine- Wine-makers of the Czech Republic. The panies. The wine-maker of the year com-
growing village of Rakvice in South Mora- prestigious title is awarded as an all-round petition differs significantly from standard
via. It persuaded the jury not only with the appreciation of the winery which in the competitions in the country, in which the
excellent taste of its wines, but also its sen- previous year best proved a steadily out- competing wines are those selected by in-
sitive approach to vine-growing. Vinselekt standing quality of its wines, carried awards dividual makers.
thus became the historically first winner of from domestic and foreign competitions, The Wine-maker of the Year 2009
the new competition. participated in promoting Czech wines competition assessed the vineries’ work
at trade fairs and exhibitions, organised throughout the year, using a number of
Wine-maker of the Year – dissemination activities and wine tourism criteria. In mid-January 2010, the assess-
a Somewhat Different events for the public, and used innova- ing commission visited five vineries which
Competition tive technologies in vine improvement had won the most nominations, awarded
The Wine-maker of the Year 2009 compe- and cultivation and in wine making. The points to them, and finally chose the of-
tition was announced by the Wine-mak- aim of the competition was choosing the ficial winner.

13|
CZECH TOP

Bio Wine, Winner of Vinex Grand


Prix Competition Vinselekt Michlovský a.s., established in 1993, in 2003 became a joint-stock company. Today it
Vinselekt vinery is linked with the per- has about 60 employees. It has 120 hectares of vineyards, where cultivation strictly observes
integrated production rules, with part of the area practicing ecological vine-growing. In addi-
sonality of Miloš Michlovský, currently
tion to its own grape production, it purchases about the same quantity from other suppliers
one of the most important Czech vine
under long-term contracts, who observe the same strict rules and instructions. The company’s
growers. A pioneer in biological vine cul- annual production is more than one million bottles of wine.
tivation, he farms 8 hectares of eco-vine- The highest production series is Premier, wines with a distinct taste of wines made from per-
yards and sells not only wines, but also fectly matured grapes processed by the most natural technologies and bottled without filter-
ciders made from grapes bearing the BIO ing. The Premier series include Vinum Palaviense with certified origin of the grapes coming
label. For his wine Hibernal 2008 late col- from Pálava’s limestone hills, Chateau Dowina – extractive wines with a characteristic bou-
lection BIO, he won the champion title quet, ripening in French oak barrels. Other product series are Latitude 49, Harmony, Passio
at the Grand Prix Vinex competition. It is Christi, Standard, and Private Archive for collectors. A separate category are original bottle-
the first time in the seventeen-year his- fermented effervescent wines Crémant de Vinselekt .
tory of this competition that the cham-
pion was a bio-wine. The untraditional samples, with one in every ten samples should have reflected
Hibernal variety has minimum require- being a foreign entry. our 2009 results, I think
ments for chemical protection. With its the Jury also took into
primacy, Vinselekt Michlovský defended Vinselekt Michlovský account our ‘merits’ of
its last year’s victory in competition with Collecting Prizes the previous year, our
another wine. At the Wine-maker of the Year prize award continuing and unending innovations,
Vinselekt Michlovský company is his- ceremony, the owner of the company, Miloš the improvement and successful launch-
torically one of the most successful par- Michlovský, commented on his remarkable ing into practice of new hardy varieties,
ticipants in this competition. It won its first success saying: “I am tremendously happy the large number of wines we have been
Vinex title in 2006, and in 2010 gained the that the first title in history has been as- sending to the Wine Salon of the Czech
prize for the best single maker wine collec- signed to our Vinselekt. Although accord- Republic each year, and our successes in
tion. The competition was entered by 373 ing to the competition statutes, the award regional, national, and international wine
competitions.”
In the past few years, Vinselekt
Michlovský wines have been cham-
pions in probably all Czech competi-
tions. At Austria’s Awc-Vienna, Vinselekt
Michlovský a.s. figured repeatedly among
the world’s 100 best vineries, Vinselekt
wines were decorated with MUNDUS Vini
gold and silver medals in Germany and
at Vinalies Internationales in France. Pál-
ava 2007 grape selection is the first wine
in the history of Moravian viniculture to
become absolute champion in a world
competition – Terravino Israel – held un-
der the auspices of O.I.V.
Miloš Michlovský, owner of the compa-
ny, appreciates the prestigious titles they
have won, but at the same time says, in
exaggeration, that they actually did not
deserve the credit. “First of all I must thank
the vineyard and the wine. The wine is the
winner.”
Wine is doing well in the Czech Repub-
Photo: Vinselekt archives; www.sxc.hu

lic, its consumption over the past few


years has been rising. While in 1993 wine
consumption amounted to 12 litres per
person and year, now it ranges around
17 litres. Even so, however, the Czech
Republic is lagging behind the rest of
Europe, where average consumption is
Miloš Michlovský, the founder of Vinselekt
between 25 and 32 litres.

|14
WE ARE INTRODUCING

Crisis Boosting Demand for “Green Buildings“


www.cbre.com

These days, we are witnessing a growing used, which must be based on renewable that the lowering of energy costs is the most
demand for low-energy, or at least energy- sources and provided by local suppliers, the important factor for Czech firms in looking
saving residential building projects. In com- use of renewable energy sources and various for and renting new office space. A full 77%
mercial construction, this trend is as yet not saving measures, but also things such as the of Czech respondents also said that in their
so much in evidence, but even there the possibility of using a bike for transport. opinion, energy saving was an indivisible
number of “green buildings” is steadily ris- The purchase costs of environmentally friend- part of every ecologically-minded building.
ing. A favourable feature is that the would- ly buildings are somewhat higher, but in future
be tenants of those buildings are becoming they will yield considerable savings. Also, it is to Futurama Business Park
increasingly aware that at the cost of higher be expected that companies will give priority to An example of a “green” office building can be
rent they will save on energies. “green buildings” and a good working environ- Futurama Business Park Administration Cen-
ment, that they will take the environment into tre in Prague’s Karlín District. It is designed as
Interest in “Green Offices” consideration, and in return will gain the benefit a complex of energy-saving buildings, which
It might be expected that at the time of of lower operating costs and other advantages. use the most up-to-date technologies. Ac-
economic crisis all firms looking for office cording to the criteria laid down by Directive
space will only be interested in the locality Low Energy Intensiveness 2002/91/EC of the European Council on the
– standard – price combination. Surprising- In view of the global economic crisis and energy performance of buildings, the Park was
ly, it is not so. Recently, it has appeared that problems with developer project financing, awarded Class A certification, acknowledging
with the decline in commercial office space the number of “green buildings” is not grow- its high energy-saving standard. There are sev-
rentals would-be tenants and owners are ing so fast. The keen interest of investors in eral ways of saving energies in the complex.
increasingly willing not only to buy “cheap”, these buildings, however, is putting pres- For example, the glazing and shading system
but also to invest in “green buildings”. sure on building them. The recently pub- is design so as to prevent excessive heat losses
Environmentally friendly buildings are in lished survey carried out by Skanska Office in the winter season and on the contrary to
short supply, and so certain tenants and buy- Index reveals that in looking for new office limit by shading the penetration of outer heat
ers are willing to invest in re-building their inte- space, Czech firms place emphasis on the into the interior in the summer months. The
riors so as to create a better working environ- following factors: satisfaction of employees centrally controlled shading of glazed surfaces
ment, but also to obtain a certain certification and a good working environment, parking brings up to a 20% saving of energy for cool-
label used for energy-saving buildings, which availability, and close vicinity of main roads. ing in comparison with buildings, which have
can also be obtained for separate spaces. As regards cost saving in office spaces, the no shading system at all. The main heat source
There is no uniform system in the world to most important consideration for Czech firms in the complex is a heat pump in combination
assess buildings with regard to environmen- is energy cost savings (58% of respondents). with an exchanger station. Heat losses will be
tal aspects. In a number of states there are A full 79% of respondents said they accept- prevented by the cooling and heating system,
non-government organisations dealing with ed measures to reduce the environmental which will prevent the simultaneous cooling
this issue. In the USA, the best-known certifi- impact of their activities. The main eco-activ- and heating of different spaces. The air-con-
cation label is LEED (Leadership in Energy & ity of the companies, according to the survey, ditioning units are designed so as to use the
Environmental Design), in the UK it is BREE- is “waste sorting”. The survey also showed heat from waste air by recuperation.
AM, in Germany DGNB. All these systems dif-
fer from each other, but in principle all assess
the “friendliness” of the building and its parts
to the environment and its users.

Purchase Costs
To obtain the certificate, the building or the
office spaces must meet specific require-
ments, for which points are allotted and the
total number of points then determines the
particular category. The LEED certification
system has three degrees, and to attain the
highest – platinum – practically all require-
ments must be met. The range of the areas
concerned is very wide. Emphasis is placed
not only on the location of the building (good
public transport accessibility), the materials

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ENTERPRISE

Together to Support Trade Opportunities


http://czech-water.czechtrade.cz

sia, China, Libya, Romania, Kuwait, Croatia, this aim, we want to use primarily simple
Egypt, Italy, and Greece. tools. As before, we want to provide services
for potential foreign clients and furnish sup-
The Alliance as a tool of raising port services to Czech exporters. I must not
the competitiveness of forget the efficient use of European funds
enterprises on foreign markets available to firms operating in the area of
In 2004, Czech Water Alliance became one water management. We are also taking ad-
of the first parts of the Alliance Project of the vantage of the valuable assistance provided
Czech trade promotion agency CzechTrade. by CzechTrade, which is helping us make the
The Agency decided to choose the most public aware of the benefits the firms asso-
advanced Czech export-oriented branches, ciated in CWA bring to the Czech economy.
which it associated in Export Alliances with
the aim of promoting Czech firms, their Which are the benefits Czech
products and technologies, and acquaint- water management firms can
ing foreign customers with them. “I am bring to foreign partners?
Ivan Nikl persuaded that Czech water management I am convinced that Czech water manage-
firms are absolutely legible to their foreign ment firms are absolutely legible to their
In 2004, an export aliance named Czech Water partners,” says CWA’s leader Ivan Nikl, direc- foreign partners, mainly thanks to the coun-
Alliance (CWA) was established with the help tor of MAEP, s.r.o. in Chomutov. try’s membership of the European Union, its
of CzechTrade government agency, which strategic geographic position in the centre
is entrusted with activities aimed at facilitat- What is the main aim of the Czech of Europe, and in particular the wide range
ing Czech firms’ entry on foreign markets. Water Alliance? of its reference deliveries and realisations
Czech Water Alliance associates Czech firms We are trying to improve the position of throughout Europe and beyond. I think
with experience in all areas of water manage- Czech firms in the area of service and technol- that a great asset is the availability of highly
ment; it currently has 14 members special- ogy exports in water management. Thanks to educated and trained experts with a corre-
ising in investing, construction, designing, the firms associated in this alliance we are in sponding knowledge of foreign languages.
and planning projects concerned with water a position to provide practically the full range The products and technologies are unequi-
management, hydroelectric power stations, of services, from the presentation of the firms vocally of the highest world standard. If, how-
water reservoirs and other structures, pump- and their technologies to the preparation of ever, we do not make our foreign customers
ing equipment, cleaning and revitalisation of the project, its delivery and realisation. acquainted with those facts, there can be no
water courses, diagnostics and the treatment talk of any expansion to foreign markets.
of all types of water (communal, industrial, To ensure the success of any project, one
etc.), construction and reconstruction of civil has to choose the right strategy. What is The words which you have just said may
engineering systems for whole residential actually your export strategy? be understood subjectively; can they be
quarters and separate units, geology, hydro- Our strategy is in harmony with the Export measured in an objective way?
geology, waste-free technologies, control Strategy of the Czech Republic for the years You are right. They may sound subjective.
systems used in ecology and related branch- 2007-2011, i.e. promotion of Czech exports. But they can be easily supported by facts. It
es across the entire water economy. Our intention is to raise the export share of is CWA’s aim that the firms it associates be
The Alliance is a response to current trends services and technologies supplied by the continuously benchmarked against foreign
of the world economy, such as internation- firms associated in the Alliance. In pursuing competitors. We make our own surveys to
alising business, merging of competitors,
production outsourcing and raising added
CZECH EXPORT ADVANTAGES a chance of winning. The point is to get together an association
value in procedurally managed companies. What is the potential of the Czech Republic in exports? of firms that will completely cover a large project, from designing
The principal aims of the Alliance are pro- The principal advantages are the country’s well-edu- and plan preparation to the supply of all parts and their assembly,
motion of its members and enhancement cated manpower, reasonable cost of the work of technical and with follow-up service. CzechTrade Agency has so far initiated
of the reputation of the Czech Republic in specialists, strategic geographical position of the Czech the creation of 21 export alliances.
water related issues and their solutions. The Republic in the heart of Europe, and close relations with
ways of supporting the members of the Al- Eastern Europe. SERVICES AVAILABLE
Photo: CWA archivesp

liance include the organisation of seminars, TO FOREIGN PARTNERS


publication of catalogues, overseas cooper- WHAT ARE EXPORT ALLIANCES?  Czech consulates
An export alliance is an association of firms operating in related  33 CzechTrade offices
ation and ensuring participation in presen-
branches of business, whose products or services complement  Information service
tations and exhibitions, for example in Rus-
each other and the aim of which is concerted action and op-  Help with choosing a partner
eration on foreign markets. Export alliances are a way of getting  Business trips and meetings
easier access to orders which smaller Czech firms have less of  Investment help and advice
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C Z E C H E C O L O G Y A N D A G R I C U LT U R E

find out whether foreign companies are in- export success at the presentation of water and the EU and the countries of the Russian
terested in firms associated in CWA. In this re- management firms in Petersburg, specifically Federation and Asia.
spect, we cooperate very closely with Czech- the firms PRESSKAN and VAPO. We managed www.maep.cz
Trade, specifically with the agency’s offices to address and win new customers, and now MARVES v.o.s.
abroad. We also promote cooperation with we are at the stage of preparing a project for The company’s core business is the pro-
the economic and commercial sections of the entry on the market by several members vision of comprehensive services in the
Czech embassies in other countries. of the Alliance. With the support of the Minis- area of technological process automation.
try of Industry and Trade, we are now prepar- It manufactures a variety of electronics
You also mentioned services ing for participation in exhibitions in Moscow, components.
for foreign partners; which specific Munich, and Lyon. www.marves.cz
services can you offer? MICO, spol. s r.o.
The character of such services is more or less LIST OF CWA MEMBERS The company provides services and under-
informative. Nowadays, information is one takes repairs of all industrial valves including
of the most valuable and most expensive ASIO spol. s r.o. separators, pressure vessels and exchangers.
commodities. We want to offer foreign part- Supplier of container packed wastewater www.mico.cz
ners assistance in their search for suitable products i.e. wastewater treatment plants, oil PRESSKAN system, a.s.
suppliers in the Czech Republic and offer separators, grease traps, shaft pumping, etc. The company offers its own know-how to
them tailor-made business trips and meet- www.asio.cz design pressure systems and is the exclusive
ings with Czech water management firms. BKG úprava vody s.r.o. supplier of the PRESSKAN® low-pressure
Leasing manufacturer of water treatment sewer system.
Where, besides getting information for plants for process, drinking, and ultrapure www.presskansystem.cz
your surveys of interest, do you see the water focusing primarily on the various de- REKUPER SYCHROV s.r.o.
usefulness of CWA’s cooperation with velopments of membrane technology. The company’s core activity is the manu-
CzechTrade offices abroad? www.bkg.cz facture of ventilation units with heat re-
The employees of CzechTrade’s foreign of- CENTROPROJEKT a.s. cuperation, intended in particular for hall-
fices are the best ambassadors of the firms Provider of professional design and consulting type buildings, including their design and
associated in CWA we can have abroad. engineering services with more than 80 years installation.
Their experience and know-how are instru- experience in the civil engineering sector. www.rekuper.cz
ments that lead to the provision of services www.centroprojekt.cz TECO, a.s.
for foreign partners, as we said before. CINK Hydro-Energy k.s. Is an important supplier of TECOMAT in-
One of the leaders in deliveries of technolo- dustrial controllers used by water sup-
What achievements can CWA and the gy for small and medium-sized hydropower ply and waste water plants. As TECOMAT
firms it associates pride themselves on? stations. The goal of the development team is a powerful general purpose control
I wouldn’t speak of separate achievements. of CINK Hydro-Energy is to change water system, it can be used in central heating
We are a team, and the firms associated in potentials in cooperation with our custom- plants, the food industry, the chemical in-
CWA look upon their achievements as the ers all over the world into profitable and en- dustry, and other sectors.
success of the entire Alliance. Confirmation vironment–friendly sources of energy. www.tecomat.cz
of this is the export success, for example of www.cink-hydro-energy.com TESLA, a.s.
ASIO, s.r.o. Other successful exporters are Tes- ECOFLUID Group, a.s. The Water Treatment Solutions Division of
la, a.s., Centroprojekt a.s., Vapo, s.r.o., Rekuper Highly innovative organisation oriented to the company has been successfully oper-
Sychrov s.r.o., PRESSKAN system a.s. and Teco the realisation of the innovation project of UP- ating for several years in waterworks en-
a.s., to name just some of them. Complete FLOW SLUDGE BLANKET FILTRATION (USBF) gineering and in water supply and waste-
CWA deliveries to foreign markets are worth technology used in the chemical treatment of water treatment plants. It supplies drinking
dozens of millions of EUR. These results could surface and ground water for municipal and and industrial water plants, including devel-
never be achieved if the firms’ experts were industrial use as well as the biological treat- opment, planning, production, and putting
not prepared to put all their professional skills ment of municipal and industrial waste-water. the units into operation.
and experiences to work to ensure their com- www.ecofluid.cz www.tesla.cz
mon success in meeting the highest – quality HSI com s.r.o. Plzeň VAPO, s.r.o.
requirements placed on the technology they One of the Czech most noted solution work- VAPO specialises in two fields: rubberised
supply. places of Integraph and Bentley Systéme fabric products and moulded mechanical
companies. Its activities are mostly targeted rubber parts. The rubberised-fabric products
Does CzechTrade also figure in these on geographical information systems. HIS include sealing bags for piping, lifting bags,
endeavours in some way? COM develops CAD applications. sealing bags for fissures, sealing wedges
Of course it does. CzechTrade did not help www.hsicom.cz and pipe rehabilitation packers. Other rub-
us only to attain our good results. Recently, MAEP s.r.o. berised-fabric products are made to the
thanks to the Agency’s cooperation, in par- A leader of CWA, company developing busi- specific requirements of customers.
ticular to Mr Martin Hlavnička, we scored an ness relations between the Czech Republic www.vapo-sro.cz

17|
ENTERPRISE

Alta Concrete Works Kiev – a technological unit of ALTA company

Surface Finishing under the Wings of CzechTrade


Martin Mokroš, Leader of Czech Surface Finishing Alliance, e-mail: mmokros@galatek.cz, www.galatek.cz

The Czech Surface Finishing Alliance (CPU) ated companies are certified in accordance liance. It recommended that in addition to
was established in June 2006 with the aim with ISO 9001:2000 quality standard and ISO arranging exhibitions, it should also focus
of offering potential clients a strong group 14001:2004 environmental management on the presentation of their supplier pos-
that will solve their problems in the area of standard. sibilities, addressing potential customers,
surface finishing comprehensively, with the while taking advantage of the information
corresponding guarantees. It is an associ- Comprehensive backing and the experience of CzechTrade.
ation of four firms – ALTA, EST+, GALATEK Execution of Orders Very successful, for example, were the pres-
and OTECO – all supplying equipment for As part of their engineering services, these entations in the Russian Federation, specifi-
the surface protection of materials. The Czech firms are in a position to meet the cally in Chelyabinsk, Ekateringurg, and Pe-
firms’ production programmes are designed specific requirements of customers at all tersburg and in Zagreb, Croatia.
so as to complement each other, thus stages of the project. They propose the use
eliminating competition within the Alliance of the most suitable technologies, with veri- Establishment of Trade Contacts
and strengthening its competitiveness as fication, prepare the complete project, in- The result of all these presentations is not
a whole, primarily on foreign markets. cluding its approval, evaluate the economy only information about the possibilities of
of operation, and prepare expert opinions. the Czech firms, but also the establishment
Czech Experiences of a large number of contacts, some of
These Czech firms offer their experience Under the Wings of CzechTrade which have already led to the realisation of
and know-how in dealing with surface fin- CPU was established under the auspices of business deals. Much of the success of these
ishing issues. They have a strong intellectual CzechTrade state-run agency, the main initi- presentations is due to CzechTrade Agency,
Photo: Firms archives

and material potential and in co-operation ator of its establishment being its represen- which is well acquainted with the local en-
with the specific customers they are in tation in the Russian Federation, specifically vironment. Each of CzechTrade’s represen-
a position to realise the surface finishing of Ekaterinburg. The Office has significantly tations – in Ekaterinburg, Petersburg, and
their products to a high level. All the associ- influenced the development of the new Al- Zagreb – has prepared for the Alliance, on

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C Z E C H E C O L O G Y A N D A G R I C U LT U R E

the basis of its knowledge, a list of potential gramme has been oriented towards the equipment, paint cabins for the application
partners and customers. All of them have development and production of spraying of liquid paints, cabins for powder plastic
organised their own presentations, with the equipment for the application of liquid and compound application, drying and burning
participation of representatives of the Czech powder paints, with deliveries of sets for furnaces, transport and handling machines
State and local state organisations. surface finishing. and application equipment.
EST+, a.s., Podolí 1237, 584 01 GALATEK a.s., Na Pláckách 647, 584 01
Trade Fairs and Exhibitions Ledeč nad Sázavou, Czech Republic, Ledeč nad Sázavou, Czech Republic,
Other important activities of CPU are its par- Phone: +420 569 726 097, +420 569 726 094, Phone: +420 569 714 111, +420 569 721 121,
ticipation in selected trade fairs and exhibi- Fax: +420 569 726 096, e-mail: est@estplus.cz Fax: +420 569 714 202,
tions. The Alliance participates regularly in www.estplus.cz e-mail: lakovny@galatek.cz,
ExpoCoating in Moscow, as well as in other www.galatek.cz
events, such as national exhibitions, mis- OTECO CZ, SPOL. S R.O. BASED IN BUČOVICE
sions of businessmen, etc. Shot Blasting Equipment ALTA, A.S. BASED IN BRNO
All these activities are of great economic OTECO CZ, spol. s r.o. was established in 1992 Comprehensive Commercial, Financial,
importance. Thanks to CzechTrade’s back- as a manufacturing firm for Austria’s OTECO and Engineering Services in the Area of
ing, greater attention is paid to the Alliance GmbH Wien, a company with a long shot Engineering
in various programmes, and jointly organ- blasting tradition. Today it manufactures the Since 1991, Alta, a.s. has specialised in trading
ised events, such as participation in select- full range of blasting equipment in its plant with Central and East European countries.
ed trade fairs, are subsidised financially. This in Bučovice. Its products comprise both The company’s core business is engineer-
brings valuable cost savings, especially in compressed air shot blasting machines and ing. Its activities comprise comprehensive
the area of marketing. shot blasting machines with impellers. The commercial, financial, and engineering serv-
Membership of CPU has a number of other machines are manufactured serially or are ices, which ensure the high competitiveness
advantages. Besides the amalgamation of “made to measure”, according to the specific of the company. It has a network of foreign
financial means for joint promotion the requirements of customers. representations: in the Russian Federation
member firms benefit from the exchange of OTECO CZ, spol. s r.o., Slavkovská 853, (Moscow, Ekaterinburg, and Petersburg), the
information about potential customers and 685 01 Bučovice, Czech Republic Ukraine (Kiev, and Komsomolsk), and Belarus
the experiences gained in the realisation of Phone/Fax: +420 517 383 506, (Minsk, and Zhodino). These representations
joint projects. +420 517 383 519, e-mail: oteco@oteco.cz are one of ALTA’s greatest assets. It special-
www.oteco.cz ises in the export of whole plants, machine
CPU Members tools, engineering goods, and machinery
Introduce Themselves GALATEK, A.S. for the heavy industry. Its main import items
EST+, A. S. BASED IN LEDEČ NAD SÁZAVOU BASED IN LEDEČ NAD SÁZAVOU are metallurgical and power generating ma-
Paint Shop Equipment with Accessories Paint Shops and Accessories chines and equipment.
EST +, a.s. is the only manufacturer of pro- GALATEK, a joint stock company established ALTA, a.s. – office, Štefánikova 41,
fessional spraying technology in the Czech in 1990, supplies complete paint shop 602 00 Brno, Czech Republic
Republic. It commenced development and equipment and surface finishing lines. Its Phone: +420 541 550 111,
manufacture of this equipment as far back machines and equipment for surface fin- Fax: +420 541 550 555, e-mail: office@alta.cz
as 1951. From the very beginning, its pro- ishing shops comprise surface preparation www.alta.cz

GALATEK Continuous lines OTECO CZ machinery

19|
ENTERPRISE

Rural Development Raises


Competitiveness Not Only
in Agriculture
The Czech Republic’s Rural Development
Programme covering the 2007-2013 period
is an instrument for obtaining EU support
from the European Agricultural Fund, which
serves four rural development purposes: to
improve the competitiveness of agriculture,
food production, and forestry (axis I), raise
biological diversity, protect the water and
the soil and mitigate climate change im-
pacts (axis II), improve the quality of rural life
and support the diversification of the econ-
omy of agriculture (axis III), and help the
local population in rural micro-regions to
prepare their own development strategies
based on the “from bottom to top“ principle
and support projects for their development
– the LEADER method. The total volume
of finance available for the Rural Develop-
ment Programme, together with a contri-
bution from the state budget, amounts to
about CZK 100 billion (EUR 3.6 billion) for
2007-2013.

The following measures are focused on


business promotion outside the agricul-
ture sector within axis III:
Measure III.1.1 Diversification of non-agri-
cultural activities. The measure supports
farmers wishing to start activities in the
area of production and processing, or en-
large them. The support is available for
selected areas of economic activity. An im-
portant part of the support is reserved for
the construction of facilities for renewable
energy source processing and use. The
budget for the entire period of the pro-
gramme is approx. CZK 3.8 billion (approx.
Agriculture Is Drawing Finance EUR 150 million).
Measure III.1.2 Support for starting en-
from Various Programmes terprises and their development. The
measure is aimed at supporting the start-
Communication Department, Ministry of Agriculture, www.eagri.cz ing of new enterprises of the smallest size
– micro-enterprises and the development
In the Czech Republic, the agriculture farming enterprises, whereby it differs no- of existing ones in the area of production
sector does not account for the larg- ticeably from the structure of European and processing. The aim of the measure is
Photo: www.sxc.hu, NEVA-TRADE archives

est share of GDP and employment, but agriculture formed mostly by small, often primarily to create new jobs and develop
its role in supplying the population with family farms. The average surface of tilled the economic structure of non-agricul-
foodstuffs and its importance for the so- land per farming enterprise in the Czech tural activities. The support is mainly fo-
cial area and the natural environment are Republic is 84.2 ha. The priority task of ag- cused on small businesses and trades (e.g.
irreplaceable. riculture, besides supplying good-quality joinery, carpentry, smith craft, upholstery,
The primary sector creates about 3% of food, is to ensure environmental protec- etc.), services for farmers (e.g. machine
total gross added value and accounts for tion, including good living conditions for and equipment repair services), and retail
3.8% of total employment. A characteris- animals, use of renewable energy sources, trade. Support is also available for the con-
tic feature of Czech agriculture is its large and care for the countryside. struction of renewable energy processing

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SURVEY

facilities – the budget for the programme once a year), the applicant will complete More detailed information about the terms and con-
period amounts to approx. CZK 2.6 billion the application form and submit his project ditions for obtaining a subsidy under the above meas-
(approx. EUR 100 million). to the regional department of the State ures can be found on the web sites of the Ministry of
Measure III.1.3 Tourism support is designed Agricultural Intervention Fund, which is Agriculture (www.eagri.cz) and the State Agricultural
to support the promotion of agrotourism, the financing agency. At that moment the Intervention Fund – SZIF (www.szif.cz).
especially the construction of low-capacity applicant can start work on the actual realis-
accommodation facilities, including cater- ation of the project. As in the case of most Fisheries Fund (EFF) for the years 2007-2013
ing and sports surfaces. Support can be measures, the subsidies are paid in retro- for the fisheries sector. Subsidies made avail-
obtained for pedestrian path building and spect. The applicant will first realise the able from the Fisheries OP amount to CZK
marking, with rest areas or riding paths; the entire project and pay for it, and after that 1 billion (approx. EUR 290 million). The sub-
budget for the programme period is approx. will submit an application for payment, to- sidies are designed for micro-enterprises
CZK 2 billion (EUR 80 million). gether with the required documents. If all and small, medium-sized, and certain large
requirements are met, the subsidy will be enterprises.
Application Processing paid. In the case of the above-mentioned Subsidies are provided on the basis of
All the measures mentioned above ap- measures, the subsidy is up to 60% of eli- applications to be submitted within the
ply to projects submitted within applica- gible expenses. time limit announced by the Minister of
tion reception deadlines. The applicant Agriculture. Subsidy applications are to
requesting the subsidy must first prepare Fisheries Operational Programme be addressed to the regional department
the project according to a binding project Another subsidy title for drawing money of the State Agricultural Intervention
outline shown in the Applicant Rules (the from EU funds coming under the compe- Fund in the region, in which the project
Rules are available at www.mze.cz or www. tence of the Ministry of Agriculture is the is realised. The subsidy amounts to 60%
szif.cz), to which the required annexes Fisheries Operational Programme 2007- of the eligible costs of the project and is
must be attached. As soon as the reception 2013 (Fisheries OP). Under this programme paid out after the payment application is
of applications opens (usually announced money can be drawn from the European approved.

Poll of Successful Companies Operating in the Areas


of Ecology, Agriculture, and Wood Processing
NEVA-TRADE, s.r.o. wooden lamellas. These lamellas can be used
without further processing in a variety of ap-
Husova 537, 378 21 Kardašova Řečice plications including flooring, parquets, multi-
Phone: +420 384 377 121 layer boards, windows, doors, furniture, sport
E-mail: neva@neva.cz, www.neva.cz equipment and music instruments.

Turnover: EUR 5 million Your company is a regular participant in


Number of employees: 130 the various international exhibitions that
Export: 90% of production occur throughout Europe. What do you
NEVA is a Czech engineering company with expect to achieve by participating? Has
a long tradition of excellence in the manu- your participation brought good results
facture of thin-cutting machinery. The com- for sales?
pany first opened its doors in 1793 and now Our company participates in these events in
NEVA machines are in production in over 30 order to get new contacts and trade part-
countries worldwide. ners. We frequently introduce new machin-
Neva machines are designed to cut wood ery and technology, and also use these oc-
into precision thin slats and are known casions to strengthen our existing contacts.
world-wide for their quality, reliability, and In recent years, our focus has been more
longevity. We produce: about meeting with our current customers
 Thin-cutting frame saws and enhancing our position in the market.
 Thin-cutting band saws
 Saw blade and band grinders How are you tackling the consequences of and have reduced our costs, just as most
 Stellite saw blades and bandsaw blades the economic crisis, and how do you see companies are doing. We are seeking
the future of the company? new markets and are being creative in
The machines and tools that we produce are We have adjusted the capacity of pro- our marketing in order to increase sales
designed for cutting very thin and accurate duction to meet the lower demands, and reduce costs.

21|
SURVEY

tensive experience in the field of wrapping


JIP - Papírny and printing paper and can offer a broad
range of paper for all purposes.
Větřní, a. s. What are the advantages of the paper Great emphasis is being laid on environ-
Papírenská 2, 382 11 Větřní you make? What properties would you mentally friendly manufacturing. How is
Phone: +420 380 909 231 emphasise? How are they achieved? your company taking care of the environ-
Fax: +420 380 909 274 We are focused on special thin paper prima- ment in this respect?
E-mail: info@jip.cz, www.jip.cz rily designed for food wrapping. Our main We are in compliance with all valid envi-
segments include paper bag manufacture, ronmental standards. The most recent sig-
Turnover: EUR 80 million paper waxing, lamination and printing, and nificant investment in this area included
Number of employees: 750 other production includes ribbed paper, the construction of a new waste-water treat-
Export: Exports go to Germany (16%), Slo- and wet-strength and grease-proof paper. ment plant, and the change of fuel from coal
vakia (11%), the United Kingdom (8%) and JIP has equipment for the annual manufac- to natural gas. Reference must be made of
other countries. ture of 3 000 tons of paper bags, 10 000 tons the increasing share of recycled paper, which
JIP – Papírny Větřní, a. s. endeavour for long- of sheets, and 500 tons of paper with flexo- is coming close to 1/3 of the total fibre con-
lasting prosperity is based on tradition, high graphic print. The main advantages of JIP sumption. The planned strategic investment
quality, flexibility, and super-standard rela- paper are super-standard quality and hygi- will be focused on ecology, specifically on
tions with our business partners. Due to suc- enic accreditation for food contact awarded further increase in the share of recycled pa-
cessful sales around the globe, we have ex- by the renowned company ISEGA. per and change of fuel to biomass.

GEOtest Brno, a.s. ronment, disposal of old ecological burdens,


hydrogeology, geotechnical work and engi-
cleaner production, hydro-chemical labora-
tories, and soil-mechanics laboratories.
Šmahova 112, 627 00 Brno neering geology, geophysics, environmental
Phone: +420 548 125 111 studies (Environmental impact assessment Where do you see the main interest of
E-mail: trade@geotest.cz, www.geotest.cz – EIA, environmental audit, environmental your clients at this time?
risk assessment, feasibility studies), manage- It is especially engineering geology research
Turnover: EUR 16 600 000 ment systems (ISO 9001, ISO 14001 or EMAS, for motorways and roads.
Number of employees: 133 IPPC, OHSAS), waste management, landfills,
Export: Turnover of exported services rang- Can you mention some of the largest and
es around EUR 1.1 million; services are the most important projects of your company
same in the Czech Republic and abroad. abroad?
GEOtest Brno, a.s., is one of the largest Czech Very important are our operations in Bos-
companies operating in geology and envi- nia and Herzegovina – we are supplying
ronmental protection. It is a reliable partner technology for the introduction of an in-
with a tradition of more than 40 years and an tegrated system of waste management in
established, experienced team of profession- the Una-Sana Canton. Another large project
als with a long practical international expe- is in Mongolia, where we are helping in ar-
rience. GEOtest Brno, a.s. provides services eas suffering from drinking water shortage;
in the following branches: protection and technology for water treatment and protec-
remediation of groundwater and rock envi- tion of water resources.

TOP FIRMS IN CZECH AGRICULTURE, ECOLOGY, AND WOOD-PROCESSING INDUSTRY


Name Based in Sector Contact
construction of water-management, engineering and ecological
Imos Brno, a.s. Brno www.imos.cz
structures
AGRICO s.r.o. Třeboň grain processing and storage, breeding www.agrico.cz
ŽDB Group, a.s. Bohumín wire production, foundry, and metallurgy www.zdb.cz
Dřevotvar - Řemesla a Stavby, s.r.o. Chýnov cabinet-joinery, special building work www.drevotvar-ptak.cz
Veolia Voda Česká Republika, a.s. Praha water production and distribution www.veoliavoda.cz
Photo: Firms archives

Živa zemědělská obchodní, a.s. Klášterec nad Orlicí machines sales and service, farming, wood production www.ziva.cz
A.S.A. České Budějovice, s.r.o. České Budějovice waste disposal and communal services www.asa-cz.cz
Beskyd Agro, a.s. Palkovice agricultural and forestry production www.beskydagro.cz
Zemcheba, s.r.o. Vodňany agriculture, fruit-growing, livestock production www.zemcheba.cz

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