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The Czech Republic attracted a record 2.8 billion dollars of foreign direct investment in the first half of 2006

In the first half of 2006 The Investment and Business Development Agency CzechInvest, mediated a total of 84 new foreign and domestic investment projects worth over 2.8 billion dollars (over 70 billion crowns*). This figure approaches the volume of investment successfully gained throughout the whole of last year. Thanks to these investment projects, more than 17.5 thousand new jobs will be created in the Czech Republic in coming years.

19.07.2006

“Against the same period last year, the number of projects grew by 14, the number of jobs to be created rose by 9.5 thousand and the total investment value grew by 1.8 billion dollars,” says Tomas Hruda, CEO of CzechInvest. “Of the total number of projects, 21 are with high added value, thus investment in business support services or technology centres.”

“The two greatest successes of the last half-year are represented by the record investment of the Korean carmaker Hyundai and the entry of the Japanese strategic investor IPS Alpha into the Triangle industrial zone (northwestern Bohemia),” adds Tomas Hruda.

The most favourable evidence of the Czech economy’s development is the fact that for the very time investors from the Czech Republic rank first in the number of new projects (23), a result which was in large part due to the expansion of Czech branches of multinational firms.In the ranking of projects received, traditionally strong Germany is second with 19 projects, followed by the United States with 10.

The structure of projects within individual fields is also improving.The automotive and precision-engineering sectors continue to be strongly represented, although even in these fields there is an unmistakable shift towards more sophisticated and specialized production. One example is the new investment of the German companyBehr(see the table below), which is a leading supplier of automotive air-conditioning and engine-cooling systems and places emphasis on top technological quality of its products. Another example is the massive expansion of the company Automotive Lighting, which delivers lighting technology to leading world carmakers. Among investments in technology centres is the prepared development and technology centre of Bang & Olufson in Koprivnice, North Moravia, which will employ 70 top-notch Czech engineers.

According to a June survey by Ernst & Young, the Czech Republic is the seventh most attractive location for foreign investors in the world. The country is number one in Europe in terms of automobile-industry investments. “Central and Eastern Europe is attractive for all large carmakers, primarily thanks the region‘s skilled workforce, lower production costs and proximity to the Western European market," comments Tomas Hruda. “A positive aspect of this industry is that it includes a full range of various sectors, from plastics and electronics to textiles, and extensive use is made of advanced technologies. The concentration of this industry thus creates potential for other projects which can be of smaller volume but still have significance from the technological perspective.”

The Czech Republic also excels in the number of jobs that have been created as a direct result of foreign investment. Germany has long been the largest investor in the Czech Republic, closely followed by Japan, which is unique in comparison with the level of Japanese investment in the rest of Europe. In most cases, this concerns completely new projects.

Over the course of its existence, CzechInvest has taken part in 687 investment projects with a total value exceeding 17 billion dollars. Thanks to these investments,141 thousand direct jobs have already been created in the Czech Republic or will be created in coming years.

Overview of the largest investors in the first half of 2006

Investor
Sector
Country
of origin
Investment (USD mil.)
Jobs
Region
Location
Hyundai Motor Company
automotive
Korea
1221.55
3 000
Moravia-Silesia
Nosovice
Automotive Lighting Reutlingen
parts for motor vehicles
Germany
106.42
632
Jihlava
Pavov
IPS Alpha Technology
electrical equipment
Japan
105.87
2 000
Usti nad Labem
Zatec
VITKOVICE CYLINDERS
metalworking
Czech Republic
40.72
114
Moravia-Silesia
Moravska Ostrava
Behr
parts for motor vehicles
Germany
20.36
130
Moravia-Silesia
Mosnov
* according to the Czech National Bank exchange rate as of 2 January 2006 (24.559)