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Monthly Newsletter - March 2007

Topics: Changhong launches production • Czech economy grew by 6.1% in 2006 • Czech firms investing in research and development etc.

03.04.2007

Business

Changhong launches production in Nymburk

The Chinese consumer electronics manufacturer Changhong has officially launched production of televisions at its facility in Nymburk. The company invested USD 15 million in opening the plant and launching production. It also has plans to build an innovation and development centre in Nymburk. The firm is planning to produce up to 1 million TVs per year and intends to expand both production and its product line in the future to include computers, refrigerators, mobile phones, and air-conditioning units.

Cromodora Wheels to build plant in Mosnov

The Italian cast-alloy wheel manufacturer Cromodora Wheels will build a production facility in the Mosnov industrial zone. Annual production is to be in excess of 310,000 wheels. In the first phase, the firm will create more than 90 jobs in Mosnov. It will supply its products to the Hyundai plant in Nosovice and the Kia plant in Zilina. The total investment could reach CZK 1 billion.

Czech branch is Microsoft's best

Microsofthas announced that its Czech operation is the best of the firm's 103 branches worldwide. The Czech Republic was followed by Ireland and Russia in the assessment of the company’s overseas operations for the first half of the 2007 fiscal year. Microsoft conducts the assessment every six months according to a range of criteria including, for example, per capita income, growth and the firm’s efficiency. The Czech branch’s high ranking is also the result of the opening in Prague of Microsoft’s first technology centre for the support of mobile technologies.

Nitto Denko building a facility in Cernovicka Terasa

The Japanese firm Nitto Denko will build a facility for the production of foils for LCD monitors in the Cernovicka Terasa industrial zone in Brno. The facility should employ more than 80 people in 2008 and twice this number over the following two years. The total investment should exceed CZK 700 million in the next three years.

Dymos coming to Nosovice

The Czech branch of Korean firm Dymos is preparing to build a facility for the production of automobile seats in North Moravia's Nosovice in May. The firm expects to launch production in October 2008, when its customer, Hyundai Motor Manufacturing Czech, is also expected to begin production. Dymos will invest roughly CZK 850 million in Nosovice and employ 430 workers once the plant is fully operational in 2011.

Carmaker TPCA: five successful years in the Czech Republic

The Kolin-based carmaker TPCAToyota Peugeot Citroën Automobile – is celebrating the fifth anniversary of its establishment and two years since the start of full production with full capacity of 300,000 cars annually. The TPCA joint-venture project is currently the largest completed foreign investment in the Czech Republic. According to econo-mists’ estimates, TPCA con-tributed 1.5 - 2% to GDP growth of the Czech economy in 2005, which is also due to the fact that 80% of its components are sourced locally.

Briggs & Stratton opens a production facility in Ostrava

The American company Briggs & Stratton, which produces motors for garden equipment, has opened its first European factory in Ostrava’s Hrabova industrial zone. Within five years, the plant should turn out one million motors annually and employ up to 250 people. The planned total investment in the plant, which will supply the whole of Europe, is USD 24 million.

Daikin plans to double production

Daikin’s plant at Cernovicka terasa in Brno will employ an additional 200 people this year. From September, the plant will operate in three shifts at full production capacity. A year after its opening, the firm employs 585 people. Last year it produced 380 thousand air-conditioning compressors worth CZK 750 million; production will nearly double beginning in September. By 2011, the firm plans to expand in two additional phases, eventually employing up to 1,200 people.

SQS Vlaknova optika plans expansion

The Czech company SQS Vlaknova optika is responding to the growing trend of data transfer via the internet by expanding its plant in Nova Paka, in which it will produce components for optical transfer systems of computer networks. Expansion of the plant, which currently employs just under 300 people, should result in the hiring of several times as many new employees, particularly univer-sity-educated specialists.

Economy

Czech economy grew by 6.1% in 2006

The Czech economy grew by 6.1% last year and thus managed to maintain the record growth rate of 2005. Analysts had expected growth to total only 5.9%. The Czech Republic's per capita GDP calculated at purchasing power parity is now equal to roughly 76% of the EU average. The growth rate, which was 2.1 times higher than the EU average, was primarily driven by high household consumption and investments last year, as well as by exports in 2005. Economists expect growth to total roughly 5% this year.

Average gross monthly wage increased to CZK 20,211 last year

Last year the average gross monthly wage in the Czech Republic increased by CZK 1,226 to CZK 20,211. In a y/y comparison, this represents an increase of 6.5%. Real wages, with inflation taken into account, increased by 3.9%. According to analysts, the wage-growth rate is healthy and is not endangering the economy's competitiveness thanks to increasing labour productivity.

R&D

Czech firms investing in research and development

The Czech company ZAT has built a new development centre at a cost of CZK 100 million in Plzen. ZAT will transfer its hundred-member development team to the new centre, which is focused mainly on the development of control and automation systems for nuclear and conventional power engineering. At the beginning of this year, the company D.S.K. announced that in Teplice it would conduct research and development of further versions of combustion units for using all types of biomass and waste in the production of energy from renewable resources. The firm is investing CZK 77 million and is creating 50 new, specialised positions. ELCOM, which em-ploys 19 specialists in de-velopment and production of automated measuring, control and testing systems for various fields of industry, is planning to invest nearly CZK 50 million in the Ostrava Science and Technology Park.

Czech scientists share in the Descartes Prize

This year, the European Commission's most prestigious scientific award – the Descartes Prize –  was awarded to the HESS Project, whose inter-national team of scientists from seven countries includes Prof. Ladislav Rob from Charles University's Faculty of Math-ematics and Physics, as well as his graduate student Dalibor Nedbal. The aim of the project is to discover the origin of gamma rays, a type of cosmic ray with a million times more energy than visible light, involved setting up of complex telescopes in Namibia, where the world's largest observatory of this type is located.

Miscellaneous

Czech road and highway network to get 73.7 new km in 2007

This year the Czech Road and Motorways Directorate plans to begin operating 73.7 kilometres of new roads and highways worth more than CZK 35 billion. The directorate's priority is to complete the highway network by 2013. The Czech Republic currently has roughly 640 km of highways and will have 948 km when the network is completed.

The Czech Republic is the golf leader among CEE countries

The Czech Republic is the leading CEE country in terms of the popularity of golf. More than half of the region’s golfers, specifically 57%, are from the Czech Republic. The country is unique in this part of Europe not only in the number of registered golfers (over 23,000), but also in that it has the most golf courses. Since 1990, the number of courses here has experienced an eightfold increase to the current 68. The CEE region has a total of 134 golf courses, which represents two percent of the total number of courses in Europe.

Shared Services Week 2007 in Prague

For the first time, the leading European conference on shared services will be held in the CEE region. Hosted by CzechInvest, the Shared Services Week 2007 conference is a unique networking opportunity where participants can find out more about shared services opportunities in Central Europe and gain insights into key issues through in-depth presentations and workshops. It will take place between May 21 and 24 at the Prague Hilton Hotel. For further information and registration, please visit www.iqpc.com.