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Record in gaining new investment broken in 2005

In 2005 Investment and Business Development Agency CzechInvest, mediated a total of 154 new foreign and domestic investment projects worth over 3.2 billion dollars* (73 billion crowns). This means eight projects and nearly 890 million dollars more than in the previous year. Thanks to these new investments, at least 21,663 new jobs will be created in the Czech Republic, roughly half of which will engage qualified employees – graduates of secondary schools (31.75%) and universities (14.68%).

09.01.2006

“This demonstrates that the pessimistic scenarios, which predicted a loss of interest from investors and their tangible business to cheaper countries, were not realistic. On the contrary, last year we noted the opposite trend, that existing investors are not only further expanding and enhancing production, but are establishing shared-services centers and transferring their research and development activities to the Czech Republic,” states Vaclav Petricek, Deputy Minister of Industry and Trade.

In 2005, the Czech Republic gained the historically largest number of investment projects.

“In the area of investments with high added value, which are the most fiercely sought on the international scale, the CR maintained its high level of success. As in 2004, last year we succeeded in mediating 39 new projects,” says CzechInvest CEO Tomas Hruda, adding: “The total increase in the number of projects is a positive indication of the Czech business environment’s condition. Medium-size firms will continue to be the engine of the economy. It is important that these are not confined to one sector, but that their activities cover a wide spectrum of production and development.”

Most investors, whether in production, development, or from the area of strategic services, have traditionally come from Germany (42). Immediately after Germany on the notional list are the Czech Republic (29) and the United States (21). Last year, the most attractive region for investors was South Moravia, followed by the Usti and Moravia-Silesia regions. These regions received investments in the amount of almost 1.16 billion dollars (26 billion crowns).

The year 2005 was extraordinary not only from the perspective of the number of new investment projects, but could also be the best, or one of the best, years from the perspective of the total inflow of foreign investment, as monitored by the Czech National Bank. In the first three quarters, 9.96 billion dollars (224 billion crowns) came into the Czech Republic, whereas the amount was only 5.12 billion dollars (115 billion crowns) in the year 2004. “Even if the inflow of investment did not in fact surpass the sum of 12.36 billion dollars (278 billion crowns) in 2002, from the standpoint of international comparison, a record was achieved in the first three quarters. This is due to the fact that against the dollar, the crown increased in value by nearly a third and the overall results compiled by the UN subcommittee are expressed for individual countries in dollars,” says Rene Samek, director of CzechInvest’s Investment and Applied Research Division.

Throughout its existence CzechInvest has already taken part in 605 investment projects worth over 15 billion dollars in total. Owing to these investments almost 125 thousand direct jobs are to be gradually created.

Largest Investment projects in 2005 – Production

Investor
Sector
Country of origin
Investment (USD million)
Jobs
Region
Tivall
food
Israel
130,75
300
Usti
SUNG WOO HITECH
automobile
South Korea
111
1041
Moravia-Silesia
SWP Trading
chemical
Czech Republic
53,90
76
Moravia-Silesia
PEGAS
chemical (textile)
Czech Republic
53,14
35
South Moravia
Agroethanol
chemical
Czech Republic
52,83
40
South Bohemia


Largest Investment projects in 2005 – technology centers and shared-services centers

Investor
Sector
Country of origin
Investment (USD million)
Jobs
Region
Czech Airlines
aviation
Czech Republic
52,34
400
Prague
Computer Associates International
information technology
USA
48,92
218
Prague
FTE automotive **
automobile
Germany
46,24
588
Usti
Lonza Group
biotechnology
Switzerland
18,35
50
Central Bohemia
LATECOERE
aviation
France
8,90
150
Prague


* According to the CNB exchange rate to 3 March 2005 (22.484)
** Production plant + technology center