Last year CzechInvest reached agreements with foreign and domestic investors on 147 investment projects, far surpassing the investment agencies of the Czech Republic’s nearest neighbours – Slovakia, Poland and Hungary – which mediated a combined total of 139 projects. The investments mediated by CzechInvest have an aggregate value of nearly CZK 87 billion and should create more than 16,000 jobs, mostly in the Moravia-Silesia and Ústí regions, which have long suffered from high unemployment.
“The increased activity of foreign investors is connected with the gradual recovery of the European market driven especially by the automotive industry,” says Minister of Industry and Trade Jan Mládek,commenting on the current situation. “However, Czech firms are also active. An unprecedentedly large number of them are expanding through investments worth hundreds of millions or even billions of crowns. In particular, this involves mechanical-engineering, textile and food companies.”
“We registered most of the projects in the first half of the year, when investors could still receive the most favourable investment incentives. The second half was weaker, so we are now exerting greater effort in attracting investments to the country. An amendment to the Investment Incentives Act has been drafted to better accommodate investors and our new strategy calls for a far more active approach to investors,” says Karel Kučera, CEO of CzechInvest. “We have been helped tremendously also by the reinstatement of our foreign offices in strategic locations, to which South Korea has recently been added this year.”
Despite the major investments of Nexen Tire and Hyundai Mobis, Korean investors still do not rank among the most active in the Czech Republic. If we leave out domestic investors, the largest number of investors coming to the Czech Republic are traditionally from Germany and the United States. However, South Korea is indisputably the leader in terms of the amount of invested funds. Together with Nexan Tire and Hyundai Mobis, another two Korean investors, DONGHEE Czech and Hanwha Advanced Materials Europe, are investing CZK 25.77 billion and creating 2,429 jobs here.
Vehicle production is the historically dominant sector in all indicators. Based on investments announced last year, fifty projects in this sector are generating CZK 26.12 billion and creating 8,447 jobs. The metallurgy and metalworking, rubber and mechanical-engineering sectors are also of major importance.
Moravia-Silesia can look forward to the largest number of new jobs, as 3,851 positions will be created in the region in connection with 26 investment projects in the combined value of CZK 15.89 billion. A similar number of jobs is expected in the Ústí region, with3,231 positions to be created among 19 projects in the aggregate value of CZK 30.99 billion.
The ranking of the ten most significant investments mediated by CzechInvest last year according to investment amounts is topped by the aforementioned Nexen Tire, followed by the expansion of Brose CZ in Rožnov pod Radhoštěm and Kopřivnice in the amount of CZK 2.65 billion and, in third place, the expansion of Continental Automotive Czech Republic in the amount of CZK 2.63 billion in the Hradec Králové region. The rest of the top ten investments of last year include those of three Czech companies – AL INVEST Břidličná, KARSIT HOLDING and Lovochemie, a.s. – and the Swedish company Mölnlycke Health Care ProcedurePak operating in the biotechnology sector, on which CzechInvest intends to focus greater attention in accordance with its new strategy.
CzechInvest’s more active approach is already bearing results. “In these first months of 2015, we are registering extraordinarily strong interest from investors across sectors. We are also hearing from existing investors that are planning new projects. This shows that they are doing well here and that they appreciate the broader and more intensive service that we are starting to provide to them,” adds Karel Kučera.