The American company Procter & Gamble, one of the world's two largest producers of cosmetics and household goods, has big plans in the Czech Republic: the company is expanding and increasing production in Rakona, to which it will also transfer its engineering centre. Thus from March the company's managers will make decisions on European investments from Rakovnik (Central Bohemia). "We chose the Czech Republic for two reasons: its labour market offers a lot of talented people, and the country lies in the middle of Europe, from which it is well connected to the rest of the world," says Carlo Quercetti, CEO of Rakona.
HN: Procter & Gamble entered the Czech Republic in 1991. Besides production, many companies have also opened development centres here. Are you also considering using the intellectual potential of the Czech people?
Yes, Procter & Gamble will also open its own engineering centre in the Czech Republic in March. The centre will provide technical support not only to Rakona, but also to our other enterprises in Central and Eastern Europe. It will be based in Rakovnik and start out with ten people, but we want to expand the centre in coming years. A team of specialists will be tasked with preparing and implementing projects in Russia, Ukraine, Turkey and Romania, and will also make decisions on investments in the region.
HN: How much will the centre cost? And have you filled the management positions?
We have the space, so it isn't necessary to build a new building. The centre will be housed in an unused building in Rakovnik, so we are counting only on the necessary costs for renovation. Not only people from the Czech Republic will work at the centre, but also Russians and Hungarians. We are currently recruiting people and we haven't yet put the whole team together.
HN: How important is a university degree for your managers? Do members of the upper management have to have degrees from prestigious universities?
With us, even people without a university degree can be successful. I graduated from university, but I don't have an MBA degree, for example.
HN: How important is Rakona for the concern as a whole?
Rakona is very important for the group, especially due to the production of washing powders and cleansers. Our biggest plants are in the United States, France and Great Britain. In terms of importance, Rakona is currently number four, but is growing rapidly and it will not be long until it is number three. The Rakovnik operation generates roughly thirty percent of the entire CEE region's revenues. Rakona is one of the essential parts of the company. Nearly ninety percent of local production is exported to thirty countries.
HN: Why is the Czech Republic so attractive for you? Wouldn't other, cheaper countries bring greater savings?
Rakona has excellent employees and an excellent technology base. We now have an ideal growth opportunity. The region is one of the fastest growing, and the company is in a splendid location. These combinations put Rakona in the position of market leader. In the past, costs were actually one of the most important reasons why we started production here. Today production in the Czech Republic is not cheap, but that doesn't change the fact that we want to stay in Rakovnik.
HN: You mentioned Rakona's favourable location. The main plant is in the centre of the city; where can you expand production?
In addition to the plant in the centre of the city, we have spaces roughly one kilometre from the plant. Also, several years ago we purchased new plots on which we can further expand the plant if necessary. The expansion next year will be within the existing plant.
HN: Are you considering opening another plant in the Czech Republic?
Centralisation is typical for our company. This is the case in all countries where Procter & Gamble operates, so I don't expect that we would go to another city in the Czech Republic. This is an amazing country but it isn't very big. On the other hand, if you compare the size of the country with the size of the operation, the Czech Republic is then at the peak of the company's interest.
HN: What surprised you most three years ago, when you came to the Czech Republic to run the company?
I was surprised by the Czech Republic's development and the fact that people here are not behind the rest of the world. Before I came here, I assumed that there were still big differences. But the concentration of the market, quality and variety are really comparable to those of the rest of the world. Tesco in Prague is the same Tesco as in Britain or Italy, and the Czechs have even higher demands for quality than other nations.
More about Procter & Gamble in the Czech Republic
Procter & Gamble is among the leading American investors in the Czech Republic. In 1991 the company acquired the Rakona plant in Rakovnik (Central Bohemia) for production of washing powders. By 2005, the Americans had invested more than 150 million dollars in modernisation of the plant. Rakona thus became one of Procter & Gamble's largest plants in Europe. In the course of that period, its production volume grew by a factor of thirteen. The company exports four-fifths of its production to 30 countries. From next year, it will also be home to a new engineering centre.