CzechInvest

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CzechInvest
Tomas Novak,DirectorCzechInvest, US West
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Our Organization
MINISTER
OF INDUSTRY AND TRADE CR
STEERING
COMMITTEE
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Czech Republic

• -- Highlights

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Czech Republic EU member

• SINGLE MARKET OF 455 million CONSUMERS

old members
new members
Czech Republic Population 2004 10.2
million GDP growth 2004 3.1 Unemployment
2004 10.3 Annual inflation 2004 2.9 Average
monthly salary 2003 USD 632
Source Czech Ministry of Finance, July 20042004
forecast
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Top Location for Offshoring
A.T.KEARNEY Offshore location attractiveness
index 2004
3.72
1.31
2.09
3.32
0.93
1.36
0.73
1.77
3.09
2.64
2.02
0.92
Czech Republic (4)
1.47
2.63
1.36
3.59
0.94
0.92
1.41
0.86
3.17
1.00
2.48
1.94
2.99
1.68
0.70
2.88
0.88
1.57
2.71
1.68
0.90
1.33
3.06
0.67
2.83
1.21
0.94
2.05
1.12
1.38
0.62
2.48
1.39
Note The numbers in the bars are index numbers.
The weight distribution for the three categories
is 403030, meaning that the financial structure
is rated on a scale of 1 to 4, an that business
environment, and people skills and availability
are on a scale of 1 to 3.
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Software Development

• Entered the CR in 1994, acquisition of NetBeans
  in 1999
• 90 software engineers in Prague develop Java
  Tools for Sun worldwide
• Software development for parent company in
  Germany
• 50 software engineers in Brno
• In CR since 1994, Central European expert
  solution centre in 1998
• More than 100 IT professionals
• In CR since 1991, European expert solution centre
  in 2001
• investment 8.8 mil. USD
• 385 employees
• European Configuration Centre for EMEA
• IT services SW and HW support, project
  management and outsourcing

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Shared Services

• Opened in October 2001 in Prague
• Provides accounting and financial services to its
  global clients from the manufacturing sector
• Now 450 employees working in 12 languages, 1,500
  people by 2008
• In CR since 2002, Competence Centre for desktop
  services, 40 employees
• Supports desktop users from countries from
  Central and Eastern Europe and Scandinavian
  countries with IT expert services
• Opened in September 2004 in Prague
• Support to global DHL IT systems, one of three
  DHL strategic data centres worldwide
• Wants to employ 1,000 people by 2008
• In CR since 2004, in Prague
• Credit services and IT support, Customer service
• Now 300 employees, wants to employ 1,300 people
  in the near future

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Selected U.S. investment projects
LAIRD TECHNOLOGIES
JOHNSON CONTROLS
JOHNSON CONTROLS
MERITOR
MERITOR
OWENS ILLINOIS
-
DELPHI PACKARD
DELPHI PACKARD
PITSBURGH CORNING
JOHNSON CONTROLS
JOHNSON CONTROLS
PROCTER GAMBLE
PARKER HANNIFIN
TRW
TRW
KIMBERLY
-
CLARK
KIMBERLY
-
CLARK
EXXON MOBILE
BAXTER
EASTMAN CHEMICALS
ARROW
ARROW
LEAR
PRAGUE
PRAGUE
YOUNGER OPTICS EUROPE
INGERSOLL RAND
INGERSOLL RAND
EDS
ACCENTURE
OSTRAVA
PHILIP MORRIS
PHILIP MORRIS
HONEYWELL AEROSPACE
HAYES LEMMERZ
HAYES LEMMERZ
AVX
AVX
ROPER
WESTVACO
WESTVACO
VISTEON
TRW
VISTEON
TRW
KIMBERLY
-
CLARK
KIMBERLY
-
CLARK
PRECISION CAST CORP.
MARS (MASTER FOODS)
MARS (MASTER FOODS)
TORRINGTON
TCI
DURA AUTOMOTIVE
GILLETTE
DURA AUTOMOTIVE
ON SEMICONDUCTOR
ON SEMICONDUCTOR
(MOTOROLA)
(MOTOROLA)
METHODE
METHODE
TYCO
TYCO
ITW
ITW
LEXMARK
LEXMARK
IBM
HONEYWELL
TECUMSEH
TECUMSEH
BRNO
TEXTRON
TEXTRON
COLLINS AIKMAN
OTIS
OTIS
Update 8.12.2004.
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Prague airport the next major hub in Europe?
Number of passengers through Prague airport 1991
- 2004
Source Czech Airport Authority 2005
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Investment Inflow

• INVESTMENT INCENTIVES for
• -- Manufacturing
• -- Technology Centres and Centres of Business
  Support Services
• -- Job Creation in Regions Most Affected by
  Unemployment

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FDI inflows
Includes estimates of re-invested earnings
Source Economist Intelligence Unit, 2003
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FDI stock per capita as of 2003
in EUR
Sources WIIW, Wiener Institut für internationale
Wirtschaftsvergleiche, February 2004
13
Inflow of foreign direct investment
2006-08 Compliance with EU regulations improves
the business environment and sustains foreign
direct investment (FDI) inflows of US3.5bn-4bn
annually. Source Country Forecast Czech
Republic, EIU
1993 Q3 2004 USD 42.1 BILLION
USD BN
Source CNB, December 2004 2004 - 2008 Country
Forecast, April 2004 Updater, EIU
Q1 Q3 2004 USD 3.5 BILLION
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Inflow of FDIand exchange rates
CZK/EUR CZK/USD
USD BN
Source Czech National Bank, January 2004, note
exchange rates are not yearly averages, but
selected monthly averages to illustrate the
extreme value or trend in that year.
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Cumulative FDI inflow by sector 1993 2003
Total EUR 37.818 billion
Financial intermediation 20
Manufacturing 33
Transport, storage and communications 15
Other 5
Trade, hotels and restaurants 13
Electricity, gas and water supply 6
Real estate and business activities 8
Source Czech National Bank, March 2004
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Investment mediated by CzechInvest by sector
Investment commitments mediated 9,839.9 mil. USD
Source CzechInvest, October 2004
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Cumulative FDI inflow by country 1993 - 2003
Total EUR 37.818 billion
Sweden 1

1. Germany
2. Netherlands
3. Austria

United Kingdom 4
Japan 1
Switzerland 5
Other 11
Belgium 6
United States 7
Germany 32
France 9
Austria 11
Netherlands 13
Source Czech National Bank, March 2004
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Investment mediated by CzechInvest by country of
origin
Investment commitments mediated 9,839.9 mil. USD

1. Germany
2. Japan
3. Netherlands

Source CzechInvest, October 2004
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More value added projects
1994
2003
Wood-processing Industry 8
RD 11
Automotive industry 29
Construction industry 14
Business support services 19
Manufacturing 100
Chemical industry 14
Electrical industry 29
Manufacturing 70
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Top 10 CzechInvest investments
Czech branch Country Sector Investment (mil. USD) Jobs Announced Location
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 Morave
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 Havran
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 Ceská 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
Source CzechInvest, October 2004
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Enterprises under foreign control

• Continual increase of industrial output
• Foreign enterprises account for
• -- 35 of employment
• -- 47 value added
• -- 48 output
• -- 55 profit
• -- Over 70 of export (EU 96 )

Source Ministry of Industry Trade, 2002
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Czech Contributions to the US and to the World

• Beer battle
• over the brand Budweiser Czech Republic vs
  Anheuser Busch

• 1961
• Soft gel contact lense invented by Otto Wichterle

• 1900
• Niagara Falls power plant manufactured in Pilsen

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Quiz I

• How many jet airplanes were produced in the Czech
  Republic during the last 50 years
• A. none, the Czech Republic is not
• capable of producing a jet
• B. around 500, some of them are still flying
  today
• C. more than 10,000 trainers and fighters

?
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Quiz II

• 40 is the
• A. average yearly consumption of beer in the
  Czech Republic per capita in gallons
• B. number of senators in the Czech senate
• C. the estimated percentage share of the Czech
  Republic on European computer production

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Quiz III

• The gentleman on this cover of a California band
  Faith No More 1997 Album of the Year is
• A. Czech philantropist Milos Neruda, who
  financially supported the band in the 80s
• B. The first Czechoslovak prezident, Tomas
  Garrigue Masaryk
• C. One of the Czech passengers on the Titanic

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THANK YOU

• Tomas Novak
• tomas.novak_at_czechinvest.org
• www.czechinvest.org

CzechInvest, the Investment and Business
Development Agency, is an agency of the Ministry
of Industry Trade of the Czech Republic