CZECH REPUBLIC – CZECH REPUBLIC – investment opportunityinvestment opportunity!!
31 March 2005
Csaba Gyöpös
Director, South East Asia Operations
Presentation Structure
1. Role of CzechInvest
2. General information about the Czech Republic
3. FDI into Central and Eastern Europe and the Czech Republic
4. Czech investment climate
5. CEE Electronics and Automotive Industries
6. Life in the Czech Republic
VOur Organization
Chicago
Silicon ValleyBrussels
London
CologneParis Prague
Yokohama
Hong Kong
Steering committeeSteering committee
MarketingMarketing
Ministerof Industry and Trade CR
Ministerof Industry and Trade CR
Investment support
Investment support Enterprise
development
Enterprise development Smes
SmesBusiness properties and regions
Business properties and regions
Coordination of development programs
Coordination of development programs
The European investment promotion agency (IPA) of the year 2000 & 2001
Best IPA in the EU accession countries of the year 2002
CzechInvest - Investment and Business Development Agency
General information about the Czech Republic
Czech Republic: Basic Data
Source: Ministry of Finance, Czech Statistical Office, 2004
POPULATION 04 10.3 million
LABOUR FORCE 04 5.3 million
UNEMPLOYMENT DEC 04 9.5 %
GDP per capita (PPP) 03 USD 18 700
GDP growth 2.Q 2004 4.1 %
INFLATION RATE (CPI) DEC 04 2.8 %
AVERAGE MONTHLY WAGE 04 USD 716
1 USD = 23.50 CZK
SINGLE MARKET OF 455 million CONSUMERS
CZECH REPUBLIC: EU MEMBER from MAY 2004
Foreign Direct Investment (FDI) into Central and Eastern Europe
and the Czech Republic
FDI stock per capita in Central and Eastern Europe
By the end of 2003, the Czech Republic had attracted more FDI per capita than any other country in Central and Eastern Europe (in EUR):
362
418
462
1161
1207
1257
1673
1802
2005
2764
3997
4020
Russia
Romania
Bulgaria
Lithuania
Latvia
Poland
Slovakia
Croatia
Slovenia
Hungary
Estonia
Czech Republic
Sources: WIIW, Wiener Institut für internationale Wirtschaftsvergleiche, February 2004
….Attractive
The Czech Republic is in the Top 10 for investment
Source: Ernst &Young, Europe: The Opportunity of Diversity, 2004
1.1. China China
2.2. USA USA
3.3. Germany Germany
4.4. UK UK
5.5. Poland Poland
6.- 7.6.- 7. Czech Republic,Czech Republic, India India
8.- 9. 8.- 9. France, Russia France, Russia
10. 10. HungaryHungary
Inflow of foreign direct investment
Source: CNB, December 2004
2004 - 2008: Country Forecast, April 2004 Updater, EIU
USD BN
“2006-08: Compliance with EU regulations improves the business environment and sustains foreign direct investment (FDI) inflows of US$3.5bn-4bn annually“. Source: Country Forecast Czech Republic, EIU
0
1
2
3
4
5
6
7
8
9
10
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
1993 – Q3 2004 USD 42.1 BILLION
Q1 – Q3 2004: USD 3.5 BILLION
Top 10 CzechInvest investments
Toyota Peugeot Citroën Automobile Czech, s.r.o.
Japan, France automotive 850.20 2.000 March 2002 Kolín
LG. Philips Displays Czech Republic s.r.o.
Netherlands electronics 628.84 3.250 February 2000 Hranice na Moravě
Škoda Auto a.s. Germany automotive 562.00 600 December 1998
Mladá Boleslav
Nemak Europe s.r.o. Mexico automotive 317.15 1.361 November 2000
Havraň
DENSO MANUFACTURING CZECH s.r.o.
Japan automotive 254.53 936 May 2001 Liberec
BOSCH DIESEL s.r.o. Germany automotive 237.48 1.458 December 2000
Jihlava
Panasonic Mobil & Automotive Systems Czech, s.r.o.
Japan electronics 235.19 1.182 December 2000
Pardubice
DHL Information Services (Europe) s.r.o.
United Kingdom
IT 190.25 866 March 2003 Praha
VDO Česká republika, s.r.o. Germany automotive 178.99 1.900 February 2002 Brandýs nad Labem
Matsushita Electric Works (CZ), s.r.o.
Japan electronics 100.00 900 January 1996 Planá
Czech branch Country Sector Investment (mil. USD)
Jobs Announced Location
Source : CzechInvest, October 2004
Source: Czech National Bank, March 2004
Cumulative FDI inflow by country 1993 - 2003
Sweden 1%
Other 11%
France 9%
United States 7%
Switzerland 5 %
Belgium 6 %
Austria 11%
Netherlands 13%
Germany 32%
United Kingdom 4% Japan 1%Total EUR: 37.818 billion
Cumulative FDI inflow by sector 1993 – 2003
Czech investment climate
1004 respondents
0
10
20
30
40
50
fluent quite good sufficient not good I don't know
%
english (n=346) german (n=508) russian (n=415)
Source: FESSEL-GfK Omnibus Survey in Central and Eastern Europe, 2003
Language levels
72.977.482.682.987.293.4
0
10
20
30
40
50
60
70
80
90
100
CzechRepublic
Hungary France Belgium Germany Italy
Source: Progress towards the common objectives in education and training, EC 2004
Percentage of those aged 22 who have successfully completed at least an upper secondary education in selected countries, 2002
Completion of upper secondary education
Czech university students
Source: Institute for Information on Education, Statistical Yearbook, 2004
Bachelor’s programme
Master’s programme
Postgraduate
Total number
of students
259,674
Opava
1,845
Prague
96,692
Brno
55,181
Ostrava
25,331Olomouc
14,925
Plzen
14,594
H. Kralove
8,496
C. Budejovice
7,900
Usti n. L
7,578
Liberec
6,851
Pardubice
6,332
Zlin
5,622
Karvina
1,900
Cheb
1,597
Vyskov
1,195
J. Hradec
1,109
Lednice
893
K. Vary
587
Kunovice
526
M. Boleslav
266
Litomysl
61
Trebic
10
Kladno
183
Intellectual capital - Czech Universities
Source: Institute for Information on Education, 2004
Prague
Plzen
Hradec Kralove
Třebíč
Opava
Ostrava
2,135
9,394
57,830
15,020
2,015
1,675
9,202
10
112
1,916
6,522
26,051
104,530
total students: 274,192
IT students: *21,863
* The figures are based on location of faculty
Brno
Ostrava
Unemployment
Source: Czech Ministry of Finance, April 2004 forecast
* *
*
0
2
4
6
8
10
12
1997 1998 1999 2000 2001 2002 2003 2004 2005
%
0
200
400
600
800
1000
1200
Source: Czech Statistical Office, 2004
Average Exchange rate 2003: 31, 844 CZK/EUR
Average monthly wages in the Czech Republic in 2003
Transportation
-- strategic location in the centre of Europe
-- current 518 km of motorways represent about 50% of planned highways in 2010
-- the best transport network in Central and Eastern Europe
Infrastructure Density (km/km²)
Czech. Rep.
Slovakia Hungary Poland
Roads 161.4 35.6 32.0 118.8
Railways 12.0 7.5 8.2 7.3
Motorways 0.6 0.6 0.5 0.1
Source: Ministry of Transport, 2004
Investment incentives available in the Czech Republic
Manufacturing
Business Support Services & Technology Centers
Job creation in regions of high unemployment
Minimum investment - according to regions (Manufacturing)
SM
OV
LN
LBDC
PHRA
KD
TP
JC
PV
CV
CL
MBLT
MOUL
PRPE
PU
PJ
NA
ST
ZR
KO
PM
NB
PI
HB
SU
PB
TU
NJ
OP
SY
RO
AB
BK
BRUO
KV
JN
VS
JE
CRBE
RK
DO
KT
KH
PS
ME
OC
TA
PZ
BN
HK
TC
ZN
JI
BI
CHSO
BMTRJHPT CB
BVCK
KI
KM
UH
FM
VY ZL
HO
Group Minimum Investment
A 100 mil CZK / 3 mil. EUR / 4 mil. USD
B 150 mil CZK / 5 mil. EUR / 6 mil. USD
C 200 mil CZK / 6 mil. EUR / 8 mil. USD
D 200 mil CZK / 6 mil. EUR / 8 mil. USD Valid: January 1 – June 30, 2005
Tax incentive(Manufacturing)
╌ New firms: corporate tax relief
for max. 10 years
╌ Existing companies: partial tax
relief for max. 10 years
╌ Current corporate income
tax rate = 26 %
Job creation and training grants (Manufacturing)
╌Offered in regions with high unemployment only
╌200 000 CZK (app. 6 600 EUR / 8 000 USD) per each new job
created in regions „A“ and 100 000 CZK (app. 3 300 EUR / 4 000
USD) per each new job created in regions „B“
╌35% of total training costs in regions „A, B, C“
Job creation and training grants (Manufacturing)
Valid January 1 – June 30, 2005SM
OV
LN
LBDC
PHRA
KD
TP
JC
PV
CV
CL
MBLT
MOUL
PRPE
PU
PJ
NA
ST
ZR
KO
PM
NB
PI
HB
SU
PB
TU
NJ
OP
SY
RO
AB
BK
BRUO
KV
JN
VS
JE
CRBE
RK
DO
KT
KH
PS
ME
OC
TA
PZ
BN
HK
TC
ZN
JI
BI
CHSO
BMTRJHPT CB
BVCK
KI
KM
UH
FM
VY ZL
HO
GroupJOB CREATION
RE-TRAINING
A 200,000 CZK 35%
B 100,000 CZK 35%C 0 CZK 35%D 0 CZK 0%
Business Support Services and Technology Centres
Framework Programme for Support of Technology Centres and Centres of Business Support Services
Types of supported projects
╌ Development and innovation activities with the
close linkage to production of high-tech
products and technologies, including development of
specific software, in the following fields:
╌ aerospace
╌ computers and machinery
╌ electronics and microelectronics
╌ telecommunications
╌ pharmaceutics
╌ motor vehicles
╌ etc.
Technology Centres (TC)
Forms of support(BSS & TC)
╌SUBSIDY FOR BUSINESS ACTIVITY
╌ provided by the Ministry of Industry and Trade
╌ SUBSIDY FOR TRAINING AND RETRAINING
╌ provided by the Ministry of Labour and Social Affairs
Regions with average unemployment higher than 14%
Valid for the period: January 1 – June 30, 2005
SM
OV
LN
LBDC
PHRA
KD
TP
JC
PV
CV
CL
MBLT
MOUL
PRPE
PU
PJ
NA
ST
ZR
KO
PM
NB
PI
HB
SU
PB
TU
NJ
OP
SY
RO
AB
BK
BRUO
KV
JN
VS
JE
CRBE
RK
DO
KT
KH
PS
ME
OC
TA
PZ
BN
HK
TC
ZN
JI
BI
CHSO
BMTRJHPT CB
BVCK
KI
KM
UH
FM
VY ZL
HO
Eligibility criteria(Programme - regions)
╌Min. amount of investment 10 mil. CZK (cca 0,3 mil. EUR / 0,4
mil. USD) within 2 years
╌Min. of 10 newly created jobs within 2 years
╌Min. 5 mil. CZK (cca 0,16 mil. EUR / 0,2 mil. USD) of the
investment will be financed with own sources
╌At least 25 % of the total amount of investment must be
financed by resources, which do not include part of the State Aid
Investment risk rating
Source: Czech National Bank, May 2004 Last update: May 2004
COUNTRYSTANDARD AND POOR´S
MOODY´S FITCH-IBCA
Slovenia A+ Aa3 A+
Czech Republic A- A1 A-
Hungary A- A1 A-
Poland BBB+ A2 BBB+
Estonia A- A1 A-
Slovakia BBB+ A3 BBB+
Romania BB Ba3 BB
Russia BB+ Baa3 BB+
Investment Opportunities in the
Czech Electronics Sector
Contract electronics manufacturingEuropean production trends
3.857 4.32 5.356 7.186 8.624 10.6 13.05
16.05 19 20.4 18.96 19.97 20.66 20.72
0.38 0.518 0.697 1.025
1.433 1.905
2.63 3.67
5.15 7.5 11.5
14.83 19.14
24.7
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 WESTERN EUROPE EASTERN EUROPE
4.237 4.838 6
.053 8.211
3.534
10.057 12.505
19.72
24.15
27.97 30.45
34.8
39.8
45.42
PRODUCTION IN BILLION USD
Eastern Europe fuels growth
Source: EMS Opportunity in Europe, MHM, 2003
The Czech Electric and Electronics Sector in 2003
╌ 12.1 billion USD sales
╌ 11.4 billion USD exports
╌ 182,000 employees
╌ 15% of Czech manufacturing industry output
╌ 450 manufacturing companies
╌ 25% of foreign manufacturing investments
╌ 2.5 billion USD foreign investment since 1990
╌ 16% of manufacturing exports
BASIC DATA
Source: EIA, 2004
Structure of the Czech Electronics and EE Industry
Computer equipment, 23%
Electronics components, telecommunication and consumer electronics, 21%
Heavy-current technology, 44%
Instrument and automation equipment, 12%
Source: Czech and Moravian electrical and electronic association, 2004
COMPUTER ASSEMBLY
PilsenPrague
PardubiceOstrava
40% of European PC production is manufactured in the Czech Republic
1. PANASONIC AVC NETWORKS CZECH – TV SETS 1996-97* 2. MATSUSHITA ELECTRIC WORKS COMMUNICATION RELAYS – 1998 3. MATSUSHITA ELECTRIC INDUSTRIAL – EXPANSION – 1999-2000 4. PANASONIC MOBILE & AUTOMOTIVE SYSTEMS CZECH – 2000
*5 millionth TV set produced in March 2003
PRAHA
Ostrava
Brno
2
1+3*
4
USD 250 MILLIONTOTAL INVESTMENT
“WHY DID WE CHOOSE THE CZECH REPUBLIC?”1. QUALIFIED LABOR2. STRATEGIC LOCATION3. POLITICAL AND ECONOMIC STABILITY
Mr. KIYOSUKE IMAI, PRESIDENT MATSUSHITA ELECTRIC WORKS, 1999
Investment Opportunities in the Automotive Sector in the Czech Republic
Automotive Investments In CEE - Trends
╌ Automotive sector will continue to be the leading industrial
sector in CEE countries
╌ Knowledge and experience in this field remains an
enticement of FDI
╌ Creation of “regional” suppliers in CEE
Attractivity of the RegionWhich countries or regions are you likely to consider investing in?
Source: Trends in Advanced Engineering study, January 2004
200
km
70% of CEE’s OEMs and suppliers are here
Source: McKinsey&Company
LIVING POSSIBILITIES
0 1 2 3 4 5 6 7
Poland
Slovak Rep.
Hungary
Czech Rep.
GOOD QUALITY AT A GOOD PRICE!
Quality of life
Source: The World Competitiveness Yearbook 2003, IMD
55 60 65 70 75 80
Poland
Hungary
Czech Rep.
Slovak Rep.
Cost of living index consumer goods, excl. housing,
New York City = 100
WORLD CLASS GOLF COURSES
and Karlovy Vary – established 1933
Marianske Lazne – established 1905 & inaugurated by King Edward VII
チェコの日本企業
製造業
合弁 and OEM´S
PRAGUE
松下電器産業MATSUSHITA ELECTRIC
INDUSTRIAL Co. 東レ TORAY INDUSTRIES
京セラ KYOCERA(AVX)
昭和アルミニウムSHOWA ALUMINUM
JAPAN METAL CHEMICAL-NIKOM
日本重化学工業
ASAHI GLASS
旭硝子
松下電工 MATSUSHITA EL.WORKS
日本化薬NIPPON KAYAKU
アルプス電気ALPS ELECTRIC
TESLA Y. S.
MELCO
三菱電機
OPTREX
三洋電機 SANYO
ASAHI BEER
アサヒビール
大宝工業DAIHO KOGYO
JCCE
オークマOKUMA
KAWASAKI H.I.
川崎重工
KOMATSU
小松HITACHI SEIKO
日立精工HITACHI METAL
日立金属
TATSUNO
タツノ
豊田織機TOYODA A.W. LOOMS
SHIMANO
シマノ
AISAN
愛三工業
SIEMENS-MATSUSHITA
シーメンス松下
松下通信工業MATSUSHITA COMMUNICATION
INDUSTRIAL Co.
TOYODA GOSEI
豊田合成
KOITO
小糸製作所
KOYO SEIKO
光洋精工
ONAMBA
オーナンバ
DENSO
デンソー
FURUKAWA ELECTRIC
古河電工
Toyota Motor
トヨタ自動車
Tokai Rika
東海理化TRIS
ZEXEL-VALEO
FUTABA IND.
アイシン精機
AISIN SEIKI
SHIMIZU IND.
シミズ工業デンソーエアーズ
DENSO AIRS
光洋精工
KOYO SEIKO
5
PRAGUE
Updated in March 2005
Taiwan 台灣
LG Philips
Lite-On Enclosure松喬實業股份有限公司
Hualon 華隆
Foxconn Honhai鴻海精密工業股份有限公司 Daewoo
AIDC 漢翔航空工業 股份有限公司
FIC 大衆電腦 Asustek 華碩電腦
Marwi 台萬工業股份有限公司
Korea 韓國
Malaysia馬來西亞
Flex Design Centre Czech
Singapore 星加坡
Tatung 大同公司
在捷克投資的亞洲商務公司 ( 日本除外 )ASIA PACIFIC COMPANIES IN THE CZECH REPUBLIC
(Excluding Japan)
BRNO
OSTRAVA
Asustek 華碩電腦
Inventec 英業達
Chicony 群光電子
Beijing 北京
Amtek
Kinloon 北京中海信業科技
Lite-On Technology
光寶科技股份有限公司
System Access
Vivatek
Shanghai 上海
Hudong-Zhonghua Shipbuilding (Group)滬東中華造船 (集團 )有限公司
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Thank youThank you
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