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Business News

16-12-2016 15:52 | Chris Johnstone

In this week’s Business News: a Slovak businessman seeks the confiscation of Zdeňek Bakala’s property; Mountfield heads into Chinese hands; army radar contract won by Israeli firm; Airbnb-style stays soar; and Czech banks could face off crisis.

Police called on to confiscate Bakala assets

A Slovak businessman has moved for the Czech police to confiscate all the assets of one of the country’s richest businessman, Zdeněk Bakala. Head of the Arca Capital investment group, Pavol Krúpa, has filed a demand with the national police centre for combatting organised crime on the grounds that Bakala effectively tunnelled tens of billions of crowns out of the hard coal mining company OKD when he was the main shareholder. OKD is now under insolvency management. Bakala is the owner of the country’s main business newspaper, Hospodářské Noviny, as well as other titles in the Economia group, as well as a host of other ventures.

Mountfield bought up by Hong Kong company

One of the Czech Republic’s biggest DIY and garden equipment firms, Mountfield, has been sold to a Hong Kong based company. The purchase of the 56-strong network of stores is being made by Eurasia Development Group Limited. The Czech founder of Mountfield, Ivan Drbohlav, explained that he has been seeking a buyer for some time. He created the company in 1991. At one time Mountfield’s launch on the Prague stock exchange was mulled.

Israeli company lands radar contract

An Israeli company has won a tender for the supply of mobile radars for the Czech military, Defence Minister Martin Stropnický informed on Wednesday. The eight radars, which should replace the outdated Soviet technology, are expected to cost 2.9 billion crowns. The Czech Army should receive them by the end of 2021. Another three companies from France, Britain and Sweden took part in the tender. The 3D radio-locators will be partly produced in the Czech Republic, the minister said.

Airbnb-style stays rise by 40 percent

The number of tourists staying in Airbnb-style private accommodation in the Czech Republic grew by 40 percent year on year to 2.2 million in the first nine months of this year, suggests research conducted for Czech Tourism. The state agency also said on Tuesday that the overall number of visitors had grown by 12.6 percent in the first three-quarters to reach 9.3 million. Hotels saw an upswing of 6.3 percent in overnight stays in the same period.

Czech banks weather stress tests

 

Stress tests on Czech banks show that the sector is sufficiently resilient to withstand unexpected shocks, the central bank said on Monday. The tests were based on banks’ results to the end of the third quarter of this year. The Czech National Bank said the sector’s capital adequacy was considerably higher than the 8 percent regulatory minimum, even in a stress scenario in which there was a marked downturn in the domestic and international economies.

© 1996–2015 Český rozhlas


Business News

25-11-2016 15:38 | Ruth Fraňková

In Business News this week: OKD to close Paskov by end-March; Hundreds of small pubs closing down ahead of EET; Grandi Stazioni to get compensation for lost investments; Czechs spend hundreds of millions more on books; Czech internet retailer makes first drone delivery.

OKD to close Paskov by end-March

The hard coal mining company OKD will terminate mining at its Paskov mine in the Frýdek-Místek district, northern Moravia, by the end of March, 2017. Around 700 miners are set to lose their jobs as a result of the closure. The rest of the employees will be moved to other mines that are still in operation. OKD, which employs some 12,000 people altogether, faces severe financial difficulties and filed for insolvency in March of this year.

Hundreds of small pubs closing down ahead of EET

Hundreds of small pubs closing down ahead of EET Hundreds of small pubs around the country are closing down due to the law on electronic cash registers which is due to come into effect on December 1st. Breweries say many small regular clients have announced they are quitting the market. Plzen Prazdroj says several hundred small outlets have scrapped orders as of December. This concerns largely small village pubs that do not serve food. The right-wing opposition parties, TOP 09 and the Civic Democrats have called on the government to scrap the project.

Grandi Stazioni to get compensation for lost investments

Czech Railways will pay the Italian developer Grandi Stazioni 565 million crowns in compensation for the money invested in the reconstruction of the Main Railway Station in Prague. Grandi Stazioni lost its 30-year lease of the station in October of this year after repeatedly failing to meet the reconstruction deadline. The Czech Railway Infrastructure Administration rejected its request for another two-year extension and asked Grandi Stazioni to vacate the premises. The developer is demanding 765 million crowns in compensation, but Czech Railways says it has not produced evidence the extra 200 million were actually invested.

Czechs spend hundreds of millions more on books

Czechs last year spent roughly 7.5 billion crowns (the equivalent of around 31.4 million euros) on books, a rise of around five percent year-on-year, according to the Association of Czech Booksellers and Publishers. The rise amounts to an increase of between 300 and 400 million crowns. The increase marks a turnaround after several years’ stagnation; according to the association, spending on books increased due to a lowering of the VAT rate on books as well as the improving economy.

Czech internet retailer makes first drone delivery

The Czech Republic’s second-biggest internet retailer, Mall.cz, delivered its first package by drone on Tuesday. The unmanned aerial vehicle took around five minutes to bring the delivery from a distribution centre near Prague to a customer 1.7 km away, landing on their garden. Boss Jakub Havrlant said the test made Mall better prepared for a discussion on possible legislative changes relating to the use of drones in the Czech Republic. 

© 1996–2015 Český rozhlas


Business News

18-11-2016 14:45 | Chris Johnstone

In Business News this week: Robert Bosch gets incentives for České Budějovice expansion; Czech Republic seeks balanced trade with China; growth eases in third corner; PPF still in running for Plzeňský Prazdroj; finance ministry ups growth and budget prospects.

Robert Bosch to receive government incentives of up to 44 million crowns

German automotive supplier Robert Bosch will receive government incentives totalling up to 44 million crowns to expand production and establish a technological centre at České Budějovice. The government approved the plan on Wednesday, Prime Minister Bohuslav Sobotka wrote on his Twitter account. According to him, the investment could create up to 620 new jobs. The company plans to invest 2.2 billion crowns to expanding production and expanding its development centre. Robert Bosch is the biggest mechanical engineering company in South Bohemia. Last year it increased its turnover by 23 percent to 18.3 billion crowns.

Sobotka: Prague wants balanced trade and investment partnership with Beijing

The Czech Republic would like to have a balanced trade and investment partnership with China, the Czech prime minister, Bohuslav Sobotka, said at the ceremonial opening of the Czech-China Investment Forum at Prague Castle on Tuesday. At present, China exports over 10 times as much to the Czech Republic as it imports from the country. Mr. Sobotka said relations between the two states were developing dynamically, particularly in the engineering sector but also in transport, science and research and healthcare. He also told the Chinese delegates that the Czech Republic was interested in a dialogue with Beijing on human rights.

Economic growth slows in third quarter

The Czech Republic’s economic growth contracted in the third quarter of the year, slowing to 1.9 percent year-on-year from 2.6 percent year-on-year in the second quarter. The news stems from a provisional gross domestic product estimate published by the Czech Statistics Office on Tuesday. Analysts had been expecting slightly higher growth in the July to October period.

PPF in shortlist for Plzeňský Prazdroj and other brewing assets: report

The PPF group of the richest Czech Petr Kellner is on the shortlist to bid for Plzeňský Prazdroj and other brewery assets of SABMiller in Central Europe according ot Reuters. Other companies featuring on the list are Japanese brewery Asahi, the Swiss investment group Jacobs Holding and investment companies Bain Capital and Advent. The sale off has been sparked by the planned acquisition of SABMiller by Anheuser-Busch InBev with asset sales demanded by the European Commission as a price for the deal to proceed.

Czech finance ministry ups growth figures, sees budget surplus in 2018

The Czech Ministry of Finance has upped its GDP growth expectations for this to 2.4 percent from the previous 2.2 percent. And the forecast for 2017 has also risen to 2.5 percent from 2.4 percent. The ministry expects a modest budget deficit of 0.2 percent of GDP both this year and next. But the budget should swing into a slight 0.1 percent surplus in 2018 and rise to 0.5 percent of GDP in 2019, according to the latest figures released Monday.

© 1996–2015 Český rozhlas


Business News

11-11-2016 13:23 | Chris Johnstone

In Business News this week: Agrofert companies under scrutiny; Czech Railways in dumping probe; Czech steelmakers protest Chinese imports; bumper tourist season; inflation quickens, and ČEZ profits down.

Anti-corruption watchdog focuses on Andrej Babiš empire

The anti-corruption watchdog HlidaciPes.org says that companies in the Agrofert conglomerate of Finance Minister Andrej Babiš won public contracts to the tune of 35 billion crowns in the years between 2007 and 2016. According to the report, published on the organization’s web page, eight of the companies won a public tender for the first time only after Andrej Babiš became finance minister. Mr. Babiš is frequently under fire for conflict of interest, but claims that his companies are closely watched and any tenders won are won in fair and open competition.

EU Commission probes Czech Railway prices

The European Commission has opened an investigation to assess whether Czech Railways is not charging prices below costs with the aim of shutting out competition in rail passenger transport services in violation of EU anti-trust laws. EU Commissioner in charge of competition policy Margrethe Vestager said that while the Commission welcomes vigorous price competition to the benefit of passengers it is concerned that Czech Railways may have charged prices that are so low they could not cover the costs of the services provided. Czech Railways is the main railway operator in the Czech Republic and until 2011 it was the only rail company active on the Prague – Ostrava route. Following the arrival of rival companies RegioJet in 2011 and LEO Express in 2012 Czech Railways significantly decreased the prices it charged passengers.

Czech steelmakers join Brussels protest over Chinese imports

Around 100 Czech steelworkers took part in a demonstration in Brussels on Wednesday over a European Commission decision about China’s market status. A decision whether to recognise China as a market economy would make protective European measures against cheap Chinese steel imports much more difficult. Chinese imports have been stepped up because of the slowdown of the domestic economy. Czech steel workers say around 15,000 jobs, mostly at steel plants in the east of the country, as well as 45,000 jobs indirectly linked to the plants, are threatened. They also warn that the next steps in EU moves to penalise polluters could seriously damage the continent’s steel sector.

Czech tourism sees best nine months since 2000

The Czech tourism sector has enjoyed a bumper season in the first nine months of the year with 14.6 million tourists staying in accommodation. That is the highest total since 2000 and 7.1 percent above the total during the same period in 2015. Many more Czechs visited sites at home with stays up by just over half a million at 7.4 million. The number of foreign visitors climbed by 419,000 to 7.1 million. Germans counted for 1.4 million of those visitors. There were strong rises as well in the number of visitors from China, Taiwan, and South Korea.

Inflation speeds up in October

Czech inflation speeded up in October to 0.8 percent year-on-year from September’s 0.5 percent. Among the main factors for the rise were more expensive clothes and shoes and also alcoholic beverages. On the other hand, the increased prices for petrol and other fuel, which in September exceeded 7.0 percent, fell back to just over 3.0 percent in October. The Czech National Bank has a target inflation rate of 2.0 percent which it needs to approach before it can safely drop its current ‘low crown’ policy.

ČEZ sees profits fall on low power prices

The Czech power giant ČEZ recorded a net profit of 14.7 billion crowns in the first three quarters of this year, according to data it released on Tuesday. That figure represented an 11-percent fall in profits compared to the same period in 2015. ČEZ’s revenues dropped by 5 percent year-on-year in the January to October period. The declines have been blamed on shutdowns at the firm’s nuclear power stations. ČEZ, which is majority owned by the Czech state, is the country’s largest energy producer.

© 1996–2015 Český rozhlas


Business News

04-11-2016 13:19 | Ruth Fraňková

In Business News this week: Czech National Bank ups growth forecast for 2016; Exports seen topping 4.0 trillion crowns in 2016; Brussels poised to clear massive Czech renewables aid payment; Komerční Banka profits rise in first nine months; Czech Export Bank (ČEB) given 2.5 billion crown bailout:

Czech National Bank ups growth forecast for 2016

The Czech National Bank has upped its forecast for growth this year. The figure for 2016 GDP now stands at 2.8% compared to the 2.4% given in August. But the bank sees growth easing to 2.9% in 2017 compared with the previous figure of 3.0% and the same 2.9% rate should continue into 2018. The bank sees inflation continuing to pick up and slightly exceed the target 2.0 rate by late 2017 or early 2018. It expects to discontinue it low crown policy by mid-2017 at the earliest.

Exports seen topping 4.0 trillion crowns in 2016

Czech exports this year are set to rise by 3.0 percent and top the 4.0 trillion crown market for the first time, according to the vice-president of the Association of Exporters, Otto Daněk. He said the figure should be surpassed in spite of the chronic lack of workers in some sectors. Around 160,000 workers are needed with 90% of the vacancies in the manufacturing sector. Czech exports have been helped by the long term low crown policy of the Czech National Bank.

Brussels poised to clear massive Czech renewables aid payment

The European Commission is set in the next days to give final clearance to Czech subsidies for solar and wind power totalling around 40 billion crowns, according to Thursday’s edition of the business daily Hospodářske Noviny. The aid covers renewable power facilities put into operation between 2006 and 2011. For many years the annual aid to the owners was paid without Brussels clearance but the Czech energy regulator finally warned that this would have to stop. Last year the aid was paid after a top official a the Czech energy regulator signed off on it. He later lost his job with the Energy Regulatory Office head Alena Vitásková once again in a clash with the Ministry of Industry and Trade over whether the massive payment will be made this year. A decision must be taken by the end of November.

Komerční Banka profits rise in first nine months

One of the three big Czech banks, Komerční Banka, declared a rise in profit for the first nine months of the year of 7.7 percent to 10.6 billion crowns (around 392 million euros). That figure was boosted by many exceptional items, such as Komerční Banka’s, sale of its stake in the car company Visa Europe. Without that boost the profit figure would actually have fallen by 8.9 percent to 9.1 billion crowns. The number of bank clients rose by around 8,000to stand at 1.65 million.

Czech Export Bank (ČEB) given 2.5 billion crown bailout

The government on Wednesday agreed to a cash injection of 2.5 billion crowns into the Czech Export Bank (ČEB), which helps Czech companies funds export projects in risky financial environments. Much of that sum will be aimed at covering losses from a Czech project to build a power station in Russia. The Czech Ministry of Finance has complained that losses by the bank since 2014 have climbed to around 18.4 billion crowns and have called for its shake up as well as that of the state export insurance agency. Some of the ČEB support has been investigated by the police.

Arca Capital files state aid complaint with European Commission

The company Arca Capital Bohemia has filed a complaint with the European Commission against alleged Polish state subsidies of hard coal mines. Arca says the state subsidies amount to around 27 billion crowns (around 1.0 billion euros) and it argues that such help has contributed to the woes of Czech hard coal mining company OKD. Without such aid, OKD, would have been able to export coal across the border to Polish customers. Arca was a minority shareholder in now bankrupt OKD. Management have been tasked to draw up a restructuring plan for the Czech mining company.

© 1996–2015 Český rozhlas


Trade minister: EU-Canadian trade deal will open new opportunities

30-10-2016 17:11 | Daniela Lazarová

The Czech Republic has welcomed the signing of CETA, a long-delayed landmark trade deal, between Canada and the EU. The agreement was signed in Brussels by Canadian Prime Minister Justin Trudeau and top EU officials, following weeks of uncertainty due to opposition in Belgium. The Czech prime minister signed the agreement two weeks ago. Czech Trade Minister Jan Mládek said the Czech Republic and Canada share the same principles in trade and that the country would not have a problem meeting the set conditions. The Czech Republic expects the agreement to create new jobs, simplify exports and open up new markets for Czech firms in the area of engineering, chemicals production and health products


Business News

21-10-2016 14:31 | Jan Velinger

Business round-up this week: Central bank could maintain weak crown policy longer; New record for Czech car industry with million output; Government signs contract with GE; Lower house moves to extend diesel tax rebate.

Governor: Central bank could maintain weak crown policy to 2018

The Czech National Bank could under certain circumstances maintain its policy of keeping the crown weak until 2018, its governor Jiří Rusnok told the newspaper E15. Mr. Rusnok said, however, that the second quarter of next year was still the most likely date for ending the policy. It is, however, certain that it won’t be discontinued before then, he said. Since November 2013 the CNB has spent nearly 600 billion crowns on the currency markets keeping the crown at around 27 to the euro.

New record for Czech car industry with million output in nine months

Car production in the Czech Republic was just over 1 million for the first nine months of this year, an increase of 7 percent on the same period in 2015. It is the first time that the million mark has been surpassed in the first three quarters of a year. The head of the Automotive Industry Association, Martin Jahn, told iHned.cz that the growth was due to increased domestic demand and greater interest in Czech cars in Western Europe. Škoda Auto accounted for more than half of the output, registering increased production of nearly 10 percent.

Government signs contract with GE for aviation engines plant

The Czech government has signed an investment contract with the US company General Electric for a plant to develop, test and produce turboprop aircraft engines. The centre is expected to create around 500 jobs. The Czech News Agency said the deal was worth at least 1.35 billion crowns, considerably less than the 9.5 billion crowns previously reported. Prime Minister Bohuslav Sobotka tweeted in connection with the contract that “cheap assembly was not the future” for the Czech Republic.

Lower house moves to extend diesel tax rebate program to livestock farmers

The lower house of Parliament has voted to extend a diesel tax rebate program to livestock farmers and other agricultural workers. Currently the program, under which farmers are able to claim 40 percent of the consumption tax they pay on diesel gas back from the state, applies only to grain farmers. Under the present amendment it should also apply to fisheries and forestry workers. The amendment, which still needs to win approval in the Senate, aims to raise the competitiveness of Czech farmers in the EU.

Marked rise in state employees seen in recent years

The number of state employees in this country has grown by around 23,000 since 2012, according to data released by the Ministry of Finance. Nearly 440,000 people are now employed by the state in the Czech Republic, which has a population of 10.5 million. Annual salaries for such workers have increased by 16.6 billion crowns in the last four years to reach 149 billion crowns. The average state employee receives 27,000 crowns a month.

 © 1996–2015 Český rozhlas


Business News

14-10-2016 15:57 | Jan Velinger

Business round-up this week: Government approves CETA agreement between EU and Canada; Škoda records best ever monthly worldwide sales in September; Solana Neratovice tops Czech polluters ranking; Budget Committee approves state budget proposal.

Government approves CETA agreement between EU and Canada

The government on Wednesday approved the comprehensive Economic and Trade Agreement, a free-trade agreement between the EU and Canada, the government spokesman Martin Ayrer said on his Twitter account. CETA could be signed and ratified on October 27 at the EU-Canada summit. The sectors that could benefit most from the CETA agreement in the Czech Republic are engineering, metallurgy and the chemical industry.

Škoda recorded best ever monthly worldwide sales in September

The country’s biggest car maker Škoda Auto has recorded its best ever monthly worldwide sales in September, the company announced on Wednesday in a press release. The carmaker sold 107,100 cars and recorded a year-on-year increase by 14.4 percent. Sales have increased both on the European market as well as in China. Škoda Octavia remains the best-selling model, with nearly 50,000 models sold in September.

Arnika: Spolana Neratovice again tops Czech polluters ranking

The Spolana chemical plant in Neratovice in central Bohemia tops the rankings of the biggest Czech polluters in 2015, presented by the environmental association Arnika on Wednesday. According to Arnika, the quantity of carcinogenic substances released by plants decreased year-on-year for a second time in a row, but the quantity of substances harming the ozone layer of the Earth and dioxins has increased. Other large polluters include Kovohutě Holding DZ and the Peter GFK laminate producer. Most polluters are located in the Moravia-Silesia, north Bohemia and Vysočina regions.

Parliament’s Budget Committee approves state budget proposal for 2017

Parliament’s Budget Committee has recommended the lower house approve the basic parameters of the state budget proposal for 2017. The budget put forward by the finance minister Andrej Babiš and approved by the government is counting on a 60 billion crown deficit. The committee turned down a proposal by TOP 09 leader Miroslav Kalousek who appealed for the proposal to be sent back to the government for changes; he said the government needed to slash spending next year by an additional 30 billion crowns or more.

Huge outlet centre to open near Prague airport in 2017

 A huge outlet retail centre is set to open near Prague’s Václav Havel Airport in autumn next year. Named Prague The Style Outlets, the centre will feature 190 shops on an area of 30,000 square metres, according to a news release on Tuesday from its backers, the companies Neinver and The Prague Outlet. The outlet centre, which will cost over one billion crowns to complete, will be the third facility of its kind in the Czech Republic.

 © 1996–2015 Český rozhlas


Business News

07-10-2016 15:25 | Ruth Fraňková

In Business News this week: Czech National Bank makes second highest monthly forex intervention in August; Two ČEZ managers accused of licensing fraud; Grandi Stazioni loses lease of Main Railway Station in Prague; Transport of crude oil reserves from Germany may be at risk; Škoda Auto to extend working week in Kvasiny:

Czech National Bank makes second highest monthly forex intervention in August

The Czech National Bank announced Friday the volume of its foreign currency interventions in August aimed at sustaining its low crown policy. The bank said it spent 28.6 billion crowns buying euros. That’s the second biggest monthly total for intervention this year, exceeded only by the 58.2 billion crown total for January. The bank is aiming to keep the crown at a rate of 27 crowns to the euro or lower under a policy started in November 2013. The rate of intervention is a sign of what sort of upward pressures on the crown the bank is forced to resist.

Czech trade rebounds in August to 13.8 billion crown surplus

The Czech trade balance in August recorded a surplus of 13.8 billion crowns (around 511 million euros). That compares with a deficit of 1.7 billion in the same month a year earlier. The biggest factors in the turnaround were higher exports of machinery and cars and lower spending on imported oil and other fuels. The trade surplus with other EU countries reached 47.9 billion crowns. The surplus so far this year runs to 146.6 billion crowns, a 55 billion crown advance on the first eight months of 2015.

Two ČEZ managers accused of licensing fraud

Two managers of the power giant ČEZ have been charged with fraud over the licencing of a solar power plant in Čekanice, South Bohemia. The accused allegedly gave the plant final building approval although it was far from completed so that the owner could get a higher purchase price for electricity. ČEZ has refrained from commenting on the case. Police are investigating similar cases of fraud in connection with dozens of other solar power plants around the country.

Grandi Stazioni loses lease of Main Railway Station in Prague

Grandi Stazioni has lost its 30-year lease of the Main Railway Station in Prague, where it was supposed to complete a general reconstruction by October 2016. The original deadline, in 2013, was repeatedly extended and Czech Railway Infrastructure Administration has rejected a request for another two-year extension. It has officially requested that Grandi Stazioni vacate the premises.

Transport of crude oil reserves from Germany may be at risk

The Czech company FAU which was to guarantee the transport of Czech oil reserves from Germany is deep in debt and may face insolvency proceedings, Czech Radio reported on Thursday. According to the company’s lawyer, Alfred Šrámek, the start of bankruptcy proceedings would put the operation at risk. FAU was to transport over 80 million liters of crude oil from the storage facility of the bankrupt Viktoriagruppe company in Germany’s Krailling, a process expected to take between six and eight months. The transfer was delayed by a drawn out dispute between the Czech State Material Reserves Administration and Viktoriagruppe's insolvency administrator Mirko Mollen over the ownership of the crude oil. The Czech Republic was later given the go ahead to proceed with the transport.

Škoda Auto to extend working week in Kvasiny

Škoda Auto’s plant in Kvasiny in east Bohemia plans to extend its working week from five to six days due to growing demand for models produced in the facility, starting in January 2017, the daily Hospodářské noviny reported on Wednesday. The plant in Kvasiny manufactures Škoda Superb, Yeti and Seat Ateca and is preparing production of the new SUV Kodiaq. Due to the high demand, Škoda Auto will also supply the European market with cars produced in its plant in Russia.

© 1996–2015 Český rozhlas


Business News

 30-09-2016 16:10 | Jan Velinger

Business round-up for this week: Czech National Bank to keep interventions against Czech crown; Czech competition agency approved acquisition of Čedok by Polish Itaka; SkyToll files official complaint over extended contract with Kapsch; Production of L-410 planes to remain in Moravia.

Czech National Bank to keep interventions against Czech crown

The Czech National Bank has decided to continue intervening against the Czech crown to keep the exchange rate at around 27 crowns per euro, the bank’s spokesman Marek Zeman said after a meeting of the bank board on Thursday. The bank will also leave interest rates unchanged at all-time lows. The bank board repeated in August that it is likely to end the interventions against the Czech crown in the second half of 2017. The Czech National Bank launched currency interventions in November 2013 to head off the danger of deflation and weakened economic growth.

Czech competition agency approved acquisition of Čedok by Polish Itaka

The Czech anti-monopoly office on Thursday approved the acquisition of the oldest Czech travel agent Čedok by Polish tour operator Itaka. The former owner of Čedok, US-based Odien Group, is stepping out of the tour operator market altogether to focus on hotels and resorts. According to server e15.cz, the new owner paid over half a billion crowns for the acquisition. With turnover reaching around 2.0 billion last year, Čedok is estimated to rate as the country’s fourth biggest tour operator.

Czech Republic's spot in Global Competitiveness report remains unchanged

The Czech Republic neither improved nor worsened in the Global Competitiveness Report 2016-2017, remaining 31st out of 140 countries ranked. In the report released by the World Economic Forum, Switzerland came first for the eighth time in a row. The study, which uses 70 per cent survey data and 30 per cent hard data, takes into consideration 12 pillars of competitiveness to determine the country’s ranking. Areas studied include health care, infrastructure, education and the labour market.

SkyToll files official complaint over extended contract with Kapsch

SkyToll has filed a complaint with the the Czech competition watchdog, the Office for the Protection of Economic Competition, over the Transport Ministry’s decision to prolong the motorway toll collection contract with the Austrian company Kapsch without holding a competitive tender. Although the contract with Kapsch was deemed disadvantageous, the ministry failed to prepare the ground to end the country’s dependency on the firm and, earlier this year, extended the contract for fear that a fall-out in the tolling system would mean the country would be overrun by trucks. The decision came under fire both from coalition and opposition deputies who warned that the government was laying itself open to arbitration procedures from rival companies.

Production of L-410 planes to remain in Moravia

The production of L-410 airplanes manufactured by the Russian-owned company Aircraft Industries will remain in Kunovice, South Moravia, representatives of the Russian company confirmed in talks with Czech Trade and Industry Minister Jan Mádek on Monday. The company’s employees had been holding a strike alert over fears that production would be reduced or moved to Russia. The situation in the company had been deteriorating, with sales of the LET aircraft in one of the main markets, Russia, dropping sharply. Many of the company's 900 employees have been forced to take leave with reduced wages. According to the company’s management the firm has acquired new orders from China and full operation should be renewed by November.

© 1996–2015 Český rozhlas



Business News

23-09-2016 14:49 | Jan Velinger

Round-up of business news this week: The government approved the draft budget for 2017; Foreign debt rose to over 3.350 trillion crowns in second quarter; Škoda Transportation completed the first part of a major German contract; Bělobrádek apologised for VAT confusion; top brewer says it will raise prices.

Government agrees on draft state budget for 2017

The government approved a draft state budget for 2017 with a deficit of 60 billion crowns this week. The decision was tweeted by Prime Minister Bohuslav Sobotka on Wednesday. The draft is counting on wage increases for teachers and healthcare workers as well as increases in old age pensions. The state is also counting on an increase in revenues from health insurers. Among those seeing wage rises are other public sector employees, firefighters, the police, and in all likelihood, soldiers.

Foreign debt rises to over 3.350 trillion crowns in second quarter

The Czech Republic’s foreign debt increased by 133 billion crowns in the second quarter of this year to reach 3.353 trillion crowns, according to figures just released by the Czech National Bank. The country’s foreign debt is equivalent to 72 percent of its gross domestic product. The Czech Republic’s foreign debt exceeded the 3 trillion mark for the first time last year. It crossed the 2 trillion crown line in 2010, six years after reaching 1 trillion for the first time.

Škoda Transportation completes first part of major German contract

The Czech company Škoda Transportation has completed its first train as part of an order for Germany’s Deutsche Bahn, iDnes.cz reported on Monday. The order is seen as a major breakthrough for Škoda Transportation. However, production delays mean that the company will not be presenting the new train at next week’s Innotrans railway trade fair, the news website said. Under the 2.6 billion crown deal, the Czech firm is supplying Deutsche Bahn with six six-wagon, bi-level trains including locomotives.

Bělobrádek apologises for VAT confusion

Deputy Prime Minister Pavel Bělobrádek apologised this week for creating apparent confusion by maintaining that leaders of the ruling coalition of the Social Democrats, ANO, and his own party, the Christian Democrats, had agreed on the lowering of VAT on draught beer and basic foodstuffs. He corrected information made public by saying that the matter in fact had not yet been approved. The idea being floated is that the VAT on beer on tap and basic food items could be lowered from 21 to 15 percent next year, and dropped to ten the year after. Fellow party leaders Prime Minister Bohuslav Sobotka and ANO’s Andrej Babiš said they were not aware of any agreement after details were released by Agriculture Minister Marian Jurečka, a member of the Christian Democrats.

Brewer Plzeňský Prazdroj to raise prices from next month

One of the Czech Republic’s leading breweries, Plzeňský Prazdroj, is set to raise its prices by an average of 3.2 percent from the start of October. It will cost pubs and restaurants an extra 60 hellers a half-litre for the 10-degree lager Gambrinus and one crown more a half-litre of the 12-degree Pilsner Urquell. The brewer said it was raising its prices to cover more expensive raw materials, in particular hops, and investment in modernizing and expanding its sales.

© 1996–2015 Český rozhlas


Business News

16-09-2016 14:03 | Chris Johnstone

In Business News this week: Czech banks boost collective profits; apartment prices surge in second quarter; uncertainty over future of Aircraft Industries; ČEZ extends outage for Temelín reactor; exports to Russia continue to slide.

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Banks see profit rise in first half of year

The aggregate net profit of banks in the Czech Republic increased in the first six months of 2016 by 7.27 billion crowns year-on-year to 44.73 billion, according to the data release by the Czech National Bank on Thursday. The banking sector’s total assets amounted to 5.84 billion crowns at the end of June, which is an increase by 375 billion compared to the end of 2015. The banks recorded a 98.43 billion profit from financial and operational activities, a year-on-year increase by 10.3 billion crowns.

Apartment prices soar in second quarter

The average price of apartments in Prague and other regional towns in the Czech Republic increased by 11.1 percent year-on-year in the second quarter of 2016, according to the price-tracking website cenovamapa.org. The average price per square metre in Prague was 60,300 crowns, while in Ústí nad Labem, square metre is sold for 11,400 crowns. The quarterly increase was 6.1 percent, which is the fastest growth since 2010. The sales of apartments in the second quarter amounted to 20 billion crowns.

Industry minister seeks assurance over Aircraft Industries’ future

Minister of Industry and Trade Jan Mládek has appealed for intervention by his Russian counterpart, Denis Manturov, to intervene in the problems of Czech aircraft company, Aircraft Industries. Mládek said the Russian-owned company has run up debt and without help from UGMK it’s future is uncertain. Aircraft Industries, based in the far east of the country, had a wealth of technological know-how and many skilled craftsmen, the minister added. Unions earlier warned that they would take strike action because of the deteriorating situation at the Czech company. Mládek added that he had proposed a meeting in Prague of all parties concerned. The company makes the LET aircraft but sales in one of the main markets, Russia, have dropped sharply. Many of the 900-strong workforce have been forced to take leave with reduced wages with fears now that production will be shifted to Russia.

More nuclear woes for ČEZ

Czech dominant domestic power company ČEZ said Wednesday that it has revised its target for the second reactor at Temelín to start producing power again. The company, which is around 70 percent state owner, said on September 8 that it expected a two week outage to check on turbine systems. That target has now been put back to October 1. The reactor previously returned to service for around one day after an outage lasting from the start of June. The Temelín power plant is a sore point with neighbouring Austria particularly after the many early problems following its commission.

Double digit drop in exports to Russia to July

Czech exports to Russia have continued to decline this year, falling by 12 percent year-on-year in the period from the start of January to the start of July, according to figures released by the Czech Statistics Office on Tuesday. While the Russian federation was the destination of nearly 4 percent of Czech exports in 2012, that figure has now fallen to just 1.7 percent. EU sanctions imposed on Russia over its role in the annexation of Crimea are seen as a main reason for the trend. However, the Czech Chamber of Commerce says there are other factors involved, including Germany’s increased share of Czech exports on the back of the Czech crown’s weakness toward the euro.

© 1996–2015 Český rozhlas


Business News

09-09-2016 14:41 Ruth Fraňková

In Business News this week: Škoda Auto seen rolling out four new models in 2017; Average wages rise by 3.9 percent in second quarter; Union groups call for hike in minimum wage to 11,500 crowns a month; Central bank announces modest foreign currency interventions in July; Finance ministry revises expenditure and revenues but deficit proposal stands; Unemployment drops to 5.3 percent in June.

Škoda Auto seen rolling out four new models in 2017

The Czech Republic’s biggest car producer Škoda Auto will roll out four new models next year, including a new version of the Yeti, according to various sources within the company cited by the agency ČTK on Monday. Other new models should be updates of the small Citigo, Rapid, and mid-range Octavia. Škoda Auto should also unveil its first plug-in hybrid car in 2019, according to the report.

Average wages rise by 3.9 percent in second quarter

Average monthly wages in the Czech Republic rose in the second quarter by an average 3.9 percent year on year, according to the Czech Statistical Office on Monday. The average rise of just over 1,000 crowns boosts the average to 27,297 crowns. When inflation is factored in, the average percentage rise comes in at 3.7 percent. Compared to the first quarter, wages rose by 0.8 percent.

Union groups call for hike in minimum wage to 11,500 crowns a month

Union leaders and representatives from across the Czech Republic called Wednesday for an increase in minimum wages in the private sector from the start of next year to 11,500 crowns a month from the current level of 9,900 crowns. The meeting in Prague was organised by the Czech and Moravian Confederation of Trades Union, the biggest association grouping individual trades unions in the country, under the overall banner of “End Cheap Labour.” The government has been indicating that it wishes to seek a hike in the minimum wage to 11,000 crowns. Employers’ organisations dismissed the demand as unrealistic, adding that it would represent an increase of around seven percent while current wages settlements are running at around four percent. The government has set a target for minimum wages to reach around 40 percent of the average wage. The meeting also called for average across the board wage rises next year of around 5.0 percent.

Central bank announces modest foreign currency interventions in July

The Czech National Bank announced that it spent 8.29 billion crowns in July on currency interventions aimed at preventing the appreciation of the Czech crown. The level of intervention is slightly higher than the 8.45 billion of June but way below the double digit figures from May, April, and February this year and the 58.16 billion crown figure for January. The central bank has spent around 563 billion crowns since it begin the so-called low crown policy of keeping the crown at or below 27 crowns to the euro in November 2013.

Finance ministry revises expenditure and revenues but deficit proposal stands

The Finance Ministry has announced lower overall expenditure and revenues expectations for next year's draft of the state budget to the tune of 15.4 billion crowns. The measure was taken as a result of revised expectations of revenue from the EU, which was cut by more than 18 billion crowns as opposed to the previous June proposal. The proposed deficit for 2017 budget remains at 60 billion crowns. The government is scheduled to debate the budget draft on Monday. It has to be approved and sent to the lower house by the end of the month.

Unemployment drops to 5.3 percent in June

Unemployment in the Czech Republic fell in August to 5.3 percent, according to freshly released figures from the country’s Labour Office. Employment offices registered 388,474 job seekers, which is the lowest figure for the month of August since 2008. Meanwhile, the number of jobs available last month was the highest in eight years. Unemployment in the Czech Republic had been gradually falling since February this year until July this year, when it slightly increased.

© 1996–2015 Český rozhlas


Business News

02-09-2016 14:45 Ruth Fraňková

In Business News this week: Škoda Auto unveils new Kodiaq SUV in Berlin; Budget airline Ryanair planning two new routes from Prague next summer; ANO justice minister backs more powers for customs officials; Chinese investors CEFC free to buy high-end Prague hotel; Prisoners to keep working at call centre for mobile operator:

Škoda Auto unveils new Kodiaq SUV in Berlin

Czech car maker Škoda Auto officially unveiled its new SUV model, the Škoda Kodiaq, on Thursday evening in Berlin. Škoda Kodiaq is sharing the construction platform with the Volkswagen Tiguan and SEAT Ateca and sports a 4.7-metre long body to accommodate a seven-seat layout. It is set to enter the market early next year, with a choice of two petrol and two diesel engines.

Budget airline Ryanair planning two new routes from Prague next summer

The budget airline Ryanair is planning to increase its number of routes from Prague by two next summer, adding the English city of Liverpool and Trapani in Sicily. The company currently has three routes from the Czech capital and had already planned two new ones – to Rome and Bergamo – from November. Ryanair said the new lines would mean an annual increase of around a quarter of a million people travelling from Prague.

ANO justice minister backs more powers for customs officials

The minister of justice, ANO appointment Robert Pelikán, is working on an amendment to the Criminal Code that would give customs officials powers to investigate crimes. Mr. Pelikán said the move would increase efficiency as it would do away with a situation under which customs officials hand cases over to the police who then go over the same ground. A similar idea was put forward last week by ANO leader and finance minister Andrej Babiš, whose ministry oversees the Customs Administration. The interior minister, Milan Chovanec of the Social Democrats, has come out against the proposal. He recently announced the creation of a new financial police unit to focus on tax crime from the start of next year.

Chinese investors CEFC free to buy high-end Prague hotel

The Chinese company CEFC is free to purchase Prague’s high-end Mandarin Oriental hotel after the deal was approved by the Office for the Protection of Competition. The news was announced by a spokesperson for the anti-trust agency on Wednesday. The Chinese firm will buy the Malá Strana property through its company Karmelitská Hotel and says it aims to capitalise on the rapid rise in the number of tourists between the two countries. CEFC has already made substantial investments in the Czech Republic, buying Slavia Prague football club, the Lobkowicz brewery and a large chunk of air carrier Travel Service.

Prisoners to keep working at call centre for mobile operator

 

Inmates at a prison in Vinařice, central Bohemia are to be allowed to continue working in a call centre, Czech Television reported. They will again offer the services of mobile operator T-Mobile, a project that was previously halted over fears that the prisoners could get access to customers’ private information. However, the Office for the Protection of Personal Data dismissed those concerns as unfounded. The Ministry of Justice says working can encourage prison inmates to learn work habits and reduces the likelihood of their reoffending.

© 1996–2015 Český rozhlas


Business News

26-08-2016 14:29 | Ruth Fraňková

In Business News this week: Ostrava court starts bankruptcy proceedings against Vitkovice Power Engineering; Finance Ministry wants customs officials to investigate tax crime; Tax payers warned not to respond to fraudulent text messages asking them to pay arrears; Arbitration court rules Prague will not have to pay ČKD Praha DIZ 1.7 billion crowns; iDnes: Czech firearms, military equipment manufacturers, exported goods last year worth a record 15 billion crowns; Supreme Audit Office finds serious shortcomings in manner of funding renovation of heritage sites:

Ostrava court starts bankruptcy proceedings against Vitkovice Power Engineering

The regional court in Ostrava has started bankruptcy proceedings against the company Vitkovice Power Engineering. Creditors have two months in which to file claims. According to earlier reports the company owes close to two billion crowns to over 700 creditors. The company filed for “reorganization” bankruptcy last week in what many see as an attempt of the mother company Vitkovice to retain some control over the bankruptcy proceedings.

Finance Ministry wants customs officials to investigate tax crime

The Ministry of Finance has put forward a proposal under which customs officials would be able to investigate tax-related crimes, which are currently the domain of the police. In addition, the plan envisages allowing the Customs Administration to examine complaints in more areas of taxation than the present VAT and consumer tax. Customs officials would also get powers to investigate illegal earnings, under the proposal, which was presented on Tuesday by Finance Minister Andrej Babiš of ANO. The minister of the interior, Milan Chovanec of the Social Democrats, recently announced the creation of a new financial police unit to focus on tax crime from the start of next year. Mr. Chovanec said there would need to be a detailed debate on expanding the powers of customs officers.

Tax payers warned not to respond to fraudulent text messages asking them to pay arrears

The country’s tax bureau, the Financial Administration, has issued a warning to tax payers to not respond to a fake text message making the rounds asking them to pay off arrears and providing a bank account number. Neither the number nor the information is genuine, the bureau’s spokeswoman confirmed. The Financial Administration has filed charges with the police.

Arbitration court rules Prague will not have to pay ČKD Praha DIZ 1.7 billion crowns

An arbitration court has ruled that Prague does not have to pay ČKD Praha DIZ roughly 1.7 billion crowns the firm had sought for work on the city’s Blanka Tunnel complex. The company, which provided technology for the infrastructure, sought the amount over an alleged rise in costs when completion of the tunnel was delayed. The company will now have to pay almost 17 million crowns to cover the City of Prague’s legal fees. The court’s decision is binding and cannot be appealed.

iDnes: Czech firearms, military equipment manufacturers, exported goods last year worth a record 15 billion crowns

Czech arms manufacturers and producers of military equipment such as gas masks or filters, last year exported goods worth a record 15 billion crowns, news website iDnes reports. The highest number of exports, 28 percent, was to EU countries and was worth 4.3 billion. Czech arms exports to Bulgaria alone were worth one billion crowns; exports to Slovakia saw similar numbers as did countries outside of the European Union such as the United States and Iraq.

Supreme Audit Office finds serious shortcomings in manner of funding renovation of heritage sites 

The country’s Supreme Audit Office has found serious shortcomings in the Culture Ministry’s handling of funds for the renovation and preservation of cultural heritage sites. The bureau reports that funds in a number of programmes were released in a non-transparent manner and that projects were funded without proper rules, regulations, or oversight. Some programmes, long behind schedule, were allegedly prolonged without proper assessments made. Projects which failed to meet deadlines were completed, on average, three years late.

© 1996–2015 Český rozhlas


Business News

19-08-2016 10:26 | Jan Velinger

Business roundup: The average price of Prague flats has continued to go up; the military is assessing offers of mobile radars; an extra billion crowns from budget will go toward university teachers' pay; the Regiojet rail company posts numbers in the black.

Average price on new flats in Prague increased by 11 percent year-on-year

The average price of new flats in Prague increased in May and June by 11.2 percent year-on-year to 75,600 crowns per square metre, according to the recent data released by Deloitte consultancy on Wednesday. Compared to the previous two months, it represents an increase by 2.8 percent. At the end of June there were 4,700 new flats available in the Czech capital, which is a 30-percent drop on 2015.

Vitkovice Power Engineering files for “reorganization“ bankruptcy

Vitkovice Power Engineering has filed for “reorganization“ bankruptcy. The company owes hundreds of millions of crowns to over 700 creditors. It currently employs over 1,000 people. The regional court in Ostrava which was scheduled to deal with a proposal for bankruptcy by one of the firm’s biggest creditors Westag Invest on Friday has cancelled the hearing.

Military assessing offers of mobile radars for the army

The Czech Defence Ministry is looking at offers to supply the Czech military with mobile radars, to replace outdated Soviet-made technology. According to ministry sources offers have been made by French, Israeli and Swedish companies. According to information released earlier, the Defence Ministry is expecting to pay around 3.6 billion crowns for eight mobile radars. The offers are being assessed by a team of 33 experts and a decision is expected by the end of the year.

Extra billion crowns to go toward university teachers’ pay in 2017

An extra one billion crowns is set to go toward university teachers’ pay next year, the minister of education, Kateřina Valachová, said after talks with Finance Minister Andrej Babiš on Tuesday. Minister Valachová said the news meant that third level institutions could now count on receiving a clear amount in 2017. She had previously negotiated 350 million crowns to increase school capacity around Prague. No further budget talks with Minister Babiš will take place, Ms. Valachová told reporters.

RegioJet posts 37 percent year-on-year increase in sales

The private bus company Student Agency and RegioJet rail service owned by businessman Radim Jančura have posted a significant year-on-year increase in sales in 2015. Student Agency reported a jump by 23 percent to 2.88 billion crowns, while RegioJet increased its sales by 37 percent to 718.5 million. It is the first time that RegiotJet ended in black numbers since its establishment in 2011. The success of both companies was fueled by strong economic growth. Student Agency and RegioJet transported some 13.4 million passengers in 2015, which is an increase by one fifth compared to the previous year.

© 1996–2015 Český rozhlas

Business News

12-08-2016 13:19 | Chris Johnstone

In this week’s Business News: mining company OKD heads for restructuring; hop crop seen rebounding; unemployment back on the up; Cobra delivers on tax evasion clampdown; more and older cars on road; and local wines make mark.

Creditors clear OKD restructuring

Creditors of the struggling Czech hard coal mining company OKD voted overwhelmingly that a restructuring of the firm be pursued to try and return it to profit. Only one creditor out of around 100 present at the regional court in Ostrava voted for the alternative of bankruptcy in which the company would be split up and assets sold off. Company management have been tasked with drawing up a restructuring plan which will be submitted to the court and creditors. The insolvency manager will remain Lee Louda. Louda earlier warned that creditors had little hope of reclaiming any of their debts if bankruptcy was the option chosen and added that it was unrealistic to sell off the assets and keep together the business as an operating concern.

Hops harvest rebounds

The Czech hops harvest this year is expected to reach around 6,000 tones, just over a third more than the drought damaged harvest of around 3,800 tons in 2015, according to the association of hop growers. The total area devoted to cultivating hops has risen this year for the third year in a row. It now totals around 4,700 hectares, around 160 hectares more than in 2015. Most of the harvest will be gathered over the next two weeks.

June jobless total rises

Unemployment in the Czech Republic rose in June according to the Labour Office. The bump ended a steady drop in unemployment since February. The rate rose from 5.2 percent unemployment in June to 5.4 percent in July. Since the start of the summer holidays, some 393,000 people have been looking for work – up by around 8,000. At the same time, the number of jobs being offered went up to the highest level in eight years: some 136,000.

Cobra delivers 2.0 billion on tax clampdown

Cobra, a special team established to fight tax dodging, has prevented tax evasion to the tune of more than two billion crowns in the first half of 2016, the spokesman of the National Centre against Organised Crime, Jaroslav Ibehej, announced on Wednesday. Nearly 50 percent of that amount was secured by regional teams. The anti-tax evasion squad Cobra was set up in June of 2014. According to the police, the team has prevented tax evasion of up to 6.2 billion crowns since its establishment.

More, and older, cars on Czech roads

The number of passenger cars in the Czech Republic has increased by 116,000 to nearly 5.3 million cars in the first half of 2016, according to data of the Car Importers Association released on Wednesday. The average age of passenger cars has also increased, from 14.3 to 14.9 years. Škoda Auto remains the most popular make of car with nearly 1.8 million registered vehicles, followed by Volkswagen and Ford.

Czech wines please French taste buds

Twenty-five wines from the Czech Republic have made this year’s list of the world’s best wines, the Vins du Monde publication, which is released annually by the Union of French Winemakers, the Czech Wine Fund informed on Tuesday. The samples were tested by 130 members of the international jury at the end of February and beginning of March.

 © 1996–2015 Český rozhlas 

 

Business News

05-08-2016 13:43 | Chris Johnstone

In Business News this week: first half homes loan figures set new record; central bank raises growth expectations for 2016; new car sales ease in July for first time this year; Komerční Banka squeezed on stock exchange after six month figures; and financial police poised to make a return.

Record home loan contracts and volume

A record 54,000 home loans totalling around 102 billion crowns were awarded in the first half of the year according to figures from the Ministry of Regional Development. That compares with 50,000 loans amounting to 88 billion crowns given out in the same period of 2015. In June alone loans worth 23.8 billion were agreed, a record monthly figure for the last 21 years.

Czech National Bank gives mixed news on growth

The Czech National Bank has upped its forecast for growth this year but dropped its expectations for 2017. Growth this year is expected to reach 2.4 percent, a slight advance on May’s previous figure 2.3 percent. But GDP growth has been shrunk in the latest prediction to 3.0 percent from the previous 3.4 percent. That 3.0 percent growth rate is now seen continuing into 2018. The bank board added that it does not expect its current low crown policy backed up by foreign exchange interventions to end before mid-2017 but that term could be stretched further if the 2.0 target annual inflation figure is not reached.

July figures take polish off new car sales outlook

Sales of new cars in July in the Czech Republic have fallen year on year for the first month since the start of the year. Sales were down 12.5 percent compared with the same month in 2015 and by just over 27 percent compared with June. Total car sales for the first seven months of the year, at almost 152,000, are still 12.5 percent up on the same period last year. The Czech Republic’s biggest car producer Škoda Auto has seen sales climb by around a third so far this year and retains around a third of the local market.

Komerční Banka says margins severely squeezed in first half

Czech bank Komerční Banka reported a 0.8 percent rise in profit for the first half of the year to 6.7 billion crowns. The increase was largely the result of a one off payment for the bank’s stake in credit card company Visa Europe. Without that boost profit would have fallen by almost 11 percent compared with a year earlier. The bank said that more customers and higher amounts on accounts could not compensate for the pressure on margins. Komerční is the first major Czech bank to report first half earnings figures. Shares took a beating following the news and likelihood of smaller dividends in the future.

Interior minister says financial police to return from 2017

A financial police squad will be created from the start of 2017 as part of a wider police reorganisation, Minister of Interior Milan Chovanec announced on Thursday. Negotiations will take place with the Customs Administration about the division of responsibilities, he added. Terrorism, cybernetic crime, and the fight against corruption were picked out as the priorities for the new centralised police unit for combatting organised crime which started operations at the beginning of August. The minister added that only five police had left the service over the controversial reorganisation, which merged previous specialised units, with two or three more saying that they would leave. The reorganisation sparked a major row between government parties.

© 1996–2015 Český rozhlas 


Business News

29-07-2016 14:48 | Chris Johnstone

In Business News this week: OKD thrown 700 million crown lifeline; helicopter purchase tender ready for take-off; Forever 21 to launch in Czech Republic; audacious proposal for planning permissions; and interior ministry held to account.

OKD offered 700 million to keep mining operations going

A loan of 700 million crowns from the state will be offered to struggling hard coal mining company OKD. The amount and terms of the loan to ensure mining operations can continue while the future of the company is resolved has been fought over during recent weeks by the Ministry of Finance and Ministry of Industry and Trade. The mining company, which itself launched insolvency proceedings, has said that 1.0 billion crowns would be needed. OKD had warned that the state could be faced with massive costs if mining operations were halted.

Helicopter tender likely to be open to only EU and NATO bidders

The Czech Republic is planning to buy 12 military helicopters at a cost of around 10 billion crowns, Prime Minister Bohuslav Sobotka said on a visit to a helicopter base in Náměšť nad Oslavou on Tuesday. The new aircraft will replace existing Russian ones and only firms from NATO and EU states are likely to be allowed enter the tender process. The state will also put over 500 million crowns into renovating the base in Náměšť nad Oslavou, a process that should be completed in 2018, according to Mr. Sobotka.

US fashion firms seeks Prague store launch

Forever 21, the American chain of fast fashion retailers, is to open its first store in the Czech Republic this autumn. The chain is expanding to nine more European countries including Poland, Slovakia, Romania and Portugal. Its first store in the Czech Republic should open at the Černy Most shopping centre in Prague.

Proposal to drop planning permission for houses

Czechs will be able to build houses without having to acquire planning permission according to a plan put forward by the minister of regional development, Karla Šlechtová, iHned.cz reported. Under her proposal, people would just have to register a declaration of intent to build with their local authority. At present that is possible only for structures of 150 square metres or less. Minister Šlechtová’s plan is contained in a draft amendment to the building law, which the government is expected to consider in around a month’s time. If approved, it would come into effect next year.

Accounting errors of around 5.0 billion crowns at interior ministry

State spending watchdog, the Supreme Audit Office, has reported auditing mistakes to the tune of 4.9 billion crowns in the books of the Ministry of Interior for 2014. The main factors in the flawed accounting were failures to properly account for the impact of a series of agreements made by the ministry and its estimation of property assets. The ministry said that no cash was missing and that steps have been taken to address the accounting mistakes.

© 1996–2015 Český rozhlas 


Business News

22-07-2016 13:13 | Ruth Fraňková

In Business News this week: Change of hands looms for Prague’s tallest office bloc; Dubai company launches arbitration over payments for Prague plots; Czech total of unpumped EU funds shrinks to 6.8 billion crowns; Czech Republic ranks 26th on BDO’s investment potential list; ČEZ applies for EIA over new blocks at Dukovany; Mortgage rates reach new low of 1.87 percent:

 

Change of hands looms for Prague’s tallest office bloc

The REICO investment company, owned by one of the Czech Republic’s biggest banks Česká Spořitelna, is poised to buy the tallest office block in Prague, the City Tower. The pending purchase, with an estimated value of around 4.9 billion crowns, is being examined by the country’s competition office. The current owner is the PPF company of the country’s richest man, Petr Kellner. City Tower, at 109 metres, is the second tallest building in the country.

Dubai company launches arbitration over payments for Prague plots

Dubai-owned company Alcor Holdings has launched an international arbitration proceeding against the Czech Republic. The company is claiming 483 million crowns connected with its claimed failure to get compensation for the use of around 23,000 m2 of land dotted around Prague. Most of the land has been built on for key highways around the capital. The proceedings were announced by the Czech Ministry of Finance.

Czech total of unpumped EU funds shrinks to 6.8 billion crowns

The Czech Republic failed to pump 6.8 billion crowns in European funds earmarked for the county according to figures from the Ministry of Finance. The latest figure is an improvement on the 10 billion crown shortfall estimated by the Ministry for Regional Development at the start of this year and the 36 billion crown figure given in the middle of 2015. The Czech Republic is looking to use up 620 billion crowns earmarked for it under the latest spending period between 2014 and 2020.

Czech Republic ranks 26th on BDO’s investment potential list

The Czech Republic has placed 26th on BDO’s 2015 list ranking the investment potential of 174 states. The country slipped one place down the ladder compared to last year, but it is still the second best ranking since 2012, the ctk news agency reports. According to the BDO list, the Czech Republic is the most investment-friendly country of the post-communist bloc. The top three places went to Hong Kong, Singapore and the Netherlands. South Korea is bottom of the list. BDO, one of the world’s largest accountancy networks, ranks countries’ investment potential by comparing them over several categories using measurable factors relating to labour market performance. Countries are compared in three main areas: economic, political-legal and socio-cultural.

ČEZ applies for EIA over new blocks at Dukovany

The energy giant ČEZ applied on Wednesday for an assessment of the environmental impact at the Dukovany nuclear power plant in case new reactors are constructed there. The analysis, known as an EIA, is necessary for reaching a decision whether or not the new blocks can be permitted and built. According to Dukovany spokesman, Jiří Bezděk, the step is part of the country’s National Action Plan for the Development of the Nuclear Energy Sector, which calls for at least one reactor to be built at Dukovany by 2037 to take over from the ageing reactors currently operating at the site.

Mortgage rates reach new low of 1.87 percent

Average mortgage rates in the Czech Republic reached an all-time low of 1.87 percent in June, according to consultants Fincentrum, who have been monitoring the market since 2003. The average rate last month was down slightly on the 1.89 percent recorded in May. Fincentrum’s Josef Rajdl told the Czech News Agency that lenders had agreed a record number of new mortgages – over 12,000 – in the pre-holidays month of June.

© 1996–2015 Český rozhlas


Business News

15-07-2016 13:22 | Chris Johnstone

In this week’s Business News: Brexit is Czech business opportunity says top government official; foreign workers on the rise; ČEZ starts fresh arbitration proceedings in Balkans; inflation remains at low levels; and single payment site costs billions without result.

 

Czech Republic can tempt British-based companies

The United Kingdom’s departure from the European Union represents an opportunity for the Czech Republic to attract EU agencies and the headquarters of multi-national companies currently located in the UK, says the state secretary for European affairs, Tomáš Prouza. He made the comment after the first meeting on Thursday of a working group created to draw up a strategy on Brexit and the future of the EU. Mr. Prouza called on the Ministry of Industry and Trade and CzechInvest to draw up a list of firms that may be interested in moving to the Czech Republic.

Foreign workers triple over 15 years

The number of foreign workers in the Czech Republic has more than tripled in the last 15 years, according to a new government report. Three-quarters of non-native employees are from the European Union and therefore do not require work permits; the highest number are from Slovakia. At the end of last year there were 323,000 such workers in the country; that figure was nearly 40,000 higher than in 2008, when the financial crisis began.

ČEZ launches arbitration over Bulgarian distribution and sales units

The Czech energy giant ČEZ has launched an international investment arbitration case against Bulgaria, company spokesperson Barbora Půlpánová said on Tuesday. ČEZ is seeking hundreds of millions of euros from the Bulgarian state. Ms. Půlpánová said that ČEZ had decided on the step following a number of interventions on the part of Bulgarian institutions that had harmed the firm’s business activities in the country. The antitrust authority in Sofia fined ČEZ over EUR 600,000 for abusing its dominant position on the local market.

Inflation still way below central bank target level

Inflation in the Czech Republic remains close to zero, reaching 0.1 percent year-on-year for the second month in a row in June, according to figures released by the Czech Statistics Office on Tuesday. An analyst with Komerční banka told the Czech News Agency that inflation was unlikely to rise significantly in the coming months. Fuel prices increased by four percent compared to May, but overall inflation was pulled down by reductions in the prices of foodstuffs.

Single payment point a black hole with no results says audit office

The country’s spending watchdog, the Supreme Audit Office, has castigated moves by three government bodies to try and create a single payment site for all tax, customs, social security and health transactions. In a report published Monday, it said that around 3.5 billion crowns was spent, mostly on non-related activities which did not advance the project at all. The project aimed at simplifying payments and collection was approved by the government in 2008. It was originally supposed to be completed by 2014.

© 1996–2015 Český rozhlas


Business News

08-07-2016 14:18 | Ruth Fraňková

In Business News this week: Industrial production accelerates in May to 8.6 percent; Government approves increased tax credit for families with two or more children; Foreign trade surplus shrinks to 18.2 billion crown in May; Foreign trade surplus shrinks to 18.2 billion crown in May; Avast to acquire Dutch rival AVG Technologies; Czech truck manufacturer Tatra Trucks making inroads in Middle East, Asia, looking to increase workforce.

Industrial production accelerates in May to 8.6 percent

Industrial production accelerated in May, achieving year-on-year growth of 8.6 percent, which is the highest figure since June 2015. In April, industrial production climbed by 4.2 percent. The main factor fuelling the output increase was higher production of cars. The growth in the construction sector, by contrast, slowed to 4.3 percent from April’s 13.7, which is the worst result since March 2013.

Government approves increased tax credit for families with two or more children

The government on Thursday agreed to increase tax credits for parents with two or more children. Next year, parents will be able to deduct more from their tax for second and third children. At present, parents get an annual tax credit of 13.400 crowns for the first child, 17,000 crowns for a second child, and 20,600 crowns for every subsequent child. In 2017, parents will be able to deduct 2,400 crowns more from their tax returns for a second child and 3.600 crowns more for every child thereafter.

Foreign trade surplus shrinks to 18.2 billion crown in May

The Czech Republic recorded a foreign trade surplus of 18.2 billion crown in May, which is an improvement of 7.7 billion crowns compared to the same month last year. At the same time, it is the lowest foreign trade surplus figure recorded so far this year. In previous months, it always exceeded 20 billion crowns. Exports in machinery and cars were among the main factors fuelling the surplus

Avast to acquire Dutch rival AVG Technologies

Czech based computer anti-virus and security company Avast Software is set to acquire its Dutch rival AVG Technologies for nearly 32 billion crowns (some 1.3 billion dollars). According to the Reuters agency, the company made the move to expand its presence in emerging markets. Avast provides both free and paid for security software for PCs and mobile devices and has more than 230 million users worldwide. After acquiring its Dutch rival, the number of users will exceed 400 million.

Social housing bill should be passed by government: Jiří Dienstbier

Minister for Human Rights, Jiří Dienstbier, has said a new bill on social housing should be passed during the current government’s term. The comments to the Czech News Agency follow delays to the proposed law which was originally destined to be in place at the start of 2017. A half year delay to that target has already been announced and the prime minister’s main advisor, Vladimír Špidla, has suggest another similar delay is probably in the pipeline. The bill would aim to make emergency, social, and cheap housing available to those with below average incomes.

Czech truck manufacturer Tatra Trucks making inroads in Middle East, Asia, looking to increase workforce, writes iDnes

The Czech truck manufacturer Tatra Trucks, owned since 2013 by Jaroslav Strnad, is making new inroads in Middle Eastern and Asian markets, looking to increase its workforce by some 200, the Czech daily iDnes reported on Monday, noting that the manufacturer wants to build 1,300 vehicles this year. In 2015, it rolled out 858. the truck producer recently signed military contracts in Egypt and Jordan, with India looming as a promising market, the daily writes. In its heyday in Communist Czechoslovakia, the then state-owned truck maker produced some 15,000 vehicles annually.

© 1996–2015 Český rozhlas


Business News

01-07-2016 12:54 | Ruth Fraňková

In Business News this week: Finance ministry cuts funds earmarked for servicing national debt; Czech Statistical Office improves figures on Czech economy growth; Czech Republic wins clearance for key transport projects to go ahead; New bill means large retail outlets must close on state holidays; Czech arms makers see healthy growth in exports; ČEZ seeks to claw back billions from Dukovany closure.

Finance ministry cuts funds earmarked for servicing national debt

The Czech Ministry of Finance has cut the estimated cash set aside this year for servicing the state debt. The total has been reduced to 337.4 billion crowns from 342 billion crowns. Last year the total was 311.2 billion crowns. The cut is the result of the latest mid-term economic outlook and April’s macro-economic estimate. The expected public deficit for this year has been set at 70 billion crowns.

Czech Statistical Office improves figures on Czech economy growth

The Czech Republic’s Gross Domestic Product rose by 4.5 percent year-on-year in 2015 and by 2.7 in the previous year, according to the revised data released by the Czech Statistical Office on Thursday. The revised figures are slightly higher than the previous estimates, according to which the Czech economy grew by 4.2 percent last year and by 2 percent in 2014.

Czech Republic wins clearance for key transport projects to go ahead

The Czech Republic has won clearance from the European Commission to proceed with 10 large transport and infrastructure projects without the need to launch new Environment Impact Assessments (EIAs). Brussels has had problems with the fact that dozens of Czech projects were given approval under old assessments that in some cases pre-date the country’s accession to the European Union in 2004. The news was given by prime minister Bohuslav Sobotka, currently in Brussels for a European Summit. Some of the key projects have a European as well as Czech dimension.

New bill means large retail outlets must close on state holidays

Large retail outlets in the Czech Republic will have to close on seven state holidays every year after the Chamber of Deputies approved a Senate bill implementing the change. The lower house was voting for the second time on the matter; it had originally voted that big shops be closed only on three state holidays but the Senate insisted that it reconsider its original wording. It must now be signed by the president. The ban – which applies to stores with floor space of 200 m2 or more – has been condemned by the Chamber of Commerce and was rejected by the right-wing parties in the lower house.

Czech arms makers see healthy growth in exports

Czech arms manufacturers increased their exports last year to CZK 15 billion, according to figures released on Tuesday by the head of the Defence and Security Industry Association of the Czech Republic, Jiří Hynek. In 2014 the industry’s exports totalled CZK 11.8 billion. Mr. Hynek attributed the jump to a marked increase in sales to the United States and the European Union. Czech arms makers export 90 percent of their products.

ČEZ seeks to claw back billions from Dukovany closure

Czech electricity producer ČEZ has began proceedings to reclaim billions of crowns lost after the prolonged closure of three out of four of its nuclear reactors at the Dukovany plant following faulty safety checks on pipes. Czech Radio reported that proceedings have begun against engineering company Škoda JS to reclaim around 3.5 billion crowns. Škoda JS recruited a sub-contracted to carry out X-ray checks on pipes at the plant which were later found to be flawed. Much of the reactor was closed in late 2015 and into 2016 as a result. Škoda JS has denied being guilty.

© 1996–2015 Český rozhlas


Business News

24-06-2016 15:51 | Jan Velinger

Business round-up this Friday: Brexit will slow Czech economy says analysts; government commits to teacher pay rise; Country plans for more agricultural attachés; Fruit harvest expected to see 28 percent drop.

Brexit to slow down Czech economy: analysts

Brexit could slightly slow down the growth of Czech economy in 2016, economic analysts predict. According to estimates, the growth of the country’s Gross Domestic Product could drop by several tenths of a percentage point. Despite Brexit, the Czech economy is expected to grow by about two percent this year. The slow- down will be caused by a weakening demand for export to the EU, fuelled by uncertainty on world markets. At the same time, experts say that economic relations with Great Britain are not threatened in any way.

Government commits to minimum six percent pay rise for teachers

The country’s teachers should see a pay rise next year of at least six percent (but as high as eight depending on personal evaluation); the news was confirmed via twitter by Prime Minister Bohuslav Sobotka. In his tweet, the prime minister stated that teachers and education were a priority for the government; teachers' unions have been pushing for an increase of at least 10 percent. Besides education, the government is putting special emphasis on the health sector and science, the prime minister added. The draft budget, as outlined, is counting on a deficit of 60 billion crowns next year.

Czech Republic planning to post more agricultural attachés abroad

The Czech Republic wants to post agricultural attachés with diplomatic status in three more countries in the coming months, the Czech Agriculture Ministry confirmed on Thursday. Prague already has agricultural attachés in Saudi Arabia, China, Russia and Serbia and wants to post them in the US, Japan and Lebanon in the near future. Their main task is to assist Czech firms in finding new export opportunities.

Fruit harvest expected to see 28 percent drop year-on-year

The 2016 fruit harvest is expected to see a 28 percent drop year-on-year due to the late frosts which hit the country at the end of April. Fruit growers estimate losses of around 400 million crowns. According to the head of the Fruit Growers Union Martin Ludvik the fallout should not affect prices on the market. The most severe damage is reported in southern Moravia.

Hotel to open in Prague’s Dancing House

Part of the Dancing House, perhaps Prague’s most distinctive modern building, is to be turned into a hotel. The four-star Dancing House Hotel will accommodate its first guests in August, the operators said. It will offer 21 rooms, including suites in the towers of the Dancing House, which was designed in the mid-1990s by the world-renowned Frank Gehry and local architect Vlado Milunič.

© 1996–2015 Český rozhlas


Business News

17-06-2016 14:03 | Chris Johnstone

In this week’s Business News: deal signed for ICBC bank branch to establish in Czech Republic; car production rockets in first five months; low crown promotes laziness warns president; nuclear energy coordinator given green light; and financial sector still looking robust.

ICBC cleared to open Czech unit

One of the world’s leading banks, China’s ICBC, will open a subsidiary in the Czech Republic. The Czech Secretary of State for European Affairs, Tomáš Prouza, signed a memorandum confirming the bank’s entry onto the Czech market on Thursday, during Prime Minister Bohuslav Sobotka’s visit to China. The bank has also launched a Czech section of its online platform e-Mall. ICBC is China’s second biggest bank after Bank of China. Prime Minister Bohuslav Sobotka said after the signing of the memorandum that the Czech Republic fulfils its target to become the financial centre for Chinese institutions for Central and Eastern Europe.

Czech car production climbs 13 percent

Car production in the Czech Republic has increased by 13 percent to 593,743 vehicles over the past five months, according to data from the Automotive Industry Association released on Thursday. At the same time, exports of Czech cars and light commercial vans increased over the same period by 7.5 percent to 686,694 vehicles. That suggests some previous production had been held in reserve. Domestic sales grew by nearly eight percent to 3,229 cars. Last year, Czech car makers produced a record 1.3 million vehicles and the association expects further growth this year.

Low crown damages exporters warns president

Czech president Miloš Zeman has warned that while the low crown regime of the Czech National Bank might have short term gains for exporters, there might also be a longer term cost. The low crown encouraged laziness, a lack of innovation, and improved productivity, Zeman warned. He added that the Czech Republic should not compete abroad on the basis of its low cost workforce but on their skills and education. He added that small countries could not afford to take the moral high ground when negotiating export contracts.

Nuclear point man appointed

The Czech government has appointed its nuclear energy coordinator whose main task over the next four years will be to oversee and coordinate moves aimed at constructing at least two new nuclear reactors in the country. The man appointed for the four year term is Jan Štuller, who until now headed the nuclear safety department at the State Office for Nuclear Safety and previously worked for the International Energy Authority. The country’s nuclear energy development plan calls for at least one reactor to be built at Dukovany by 2037 to take over from ageing reactors currently operating at the site.

Central bank sees few worries over financial stability

The Czech banking sector's ability to deal with potential shocks is strong and banks could cope with a severe recession, the central bank said in a yearly health check of the sector on Tuesday. According to Governor Miroslav Singer in a worst-case scenario only seven banks would fall under the eight percent regulatory minimum and would have to top up their capital by approximately seven billion crowns. Highlighting one potential risk, the bank said in its annual financial stability report it would tighten mortgage lending rules from October due to "highly relaxed" conditions, although it did not assess any overheating in home loans, which have been a strong driver of loan growth in recent years.

© 1996–2015 Český rozhlas


Business News

10-06-2016 14:03 | Chris Johnstone

In this week’s Business News: police seek charges over Blanka tunnel; Czechs bet on future; fewer jobless and more jobs; state debate loans for miner OKD; and the central bank spends around 11 billion crowns in April in undermining the crown.

Prague Police recommend charges over Blanka tunnel

Police in Prague have recommended that charges be pressed against a City Hall official in connection with the Blanka tunnel construction project, Czech Television reported on Thursday. Jan Beránek, the one-time head of a City Hall investments department, is accused of agreeing to an overpriced contract that caused over 30 million crowns of damage to the city. The Blanka tunnel was opened last year, four years behind schedule and around 10 billion crowns over-budget.

More bets but lower takings for betting companies

Czechs last year placed bets totalling 152.2 billion crowns. That’s a rise of just over 10 percent on the previous year. Winnings paid out from bets came to almost 122 billion crowns, an increase of just over 14 percent, leaving the betting companies with outright earnings of just over 30 billion. According to the Czech Ministry of Finance that is around a billion crowns down on the 2014 results.

Unemployment drops to 5.4 percent in May

The jobless rate in the Czech Republic in May dropped to 5.4 percent from April’s 5.7 percent. The overall number of unemployed has fallen to just under 395,000, that’s the lowest total since January 2009. The number of vacancies being offered through the national labour office stands at just over 129,000. That is the highest total since October 2008. The office expects the jobless total to continue shrinking in the coming months.

Industry minister says 1 billion crown loan possible for OKD

The state should lend bankrupt mining company OKD up to 1 billion crowns, the minister of industry and trade, Jan Mládek, said on Wednesday morning. A day earlier Finance Minister Andrej Babiš said he was looking into the conditions under which the state could make loans to OKD. Mr. Babiš put forward a figure of 400 million crowns that the firm would need to keep operating until August; however, Mr. Mládek said he did not know how his cabinet colleague had arrived at that amount. The industry minister said that only the state would risk making a loan to OKD but there was no 100-percent guarantee it would be repaid.

Czech National Bank spends 11 billion crowns in April on low crown

The Czech National Bank intervened on the foreign exchange market to the tune of 11 billion crowns in April in order to combat the growing strength of the Czech crown, according to figures it released on Tuesday. This brings to 530 billion crowns the total amount the central bank has spent on euros since November 2013, when it first intervened in a bid to keep the crown at around 27 to the common European currency. Last month the board of the Czech National Bank said it would probably maintain its weak crown policy until the middle of next year.

© 1996–2015 Český rozhlas


Business News

03-06-2016 14:18 | Ruth Fraňková

In Business News this week: State budget surplus for May the best since 1993; Economic confidence falls according to PMI index; Number of grocery stores in Czech Republic keeps dropping; Tax freedom day advances to June 2 for Czechs; Czech economy grew by lowered 3.0 percent in first quarter.

State budget surplus for May the best since 1993

The state budget ended May with a surplus of 22.4 billion crowns, the best May result since 1993. Details were given by Minister of Finance Andrej Babiš to the lower house of parliament. The minister added that tax revenues during the first five months of the year are nearly 24 billion more than during the same period in 2015. The target budget deficit for the whole of 2016 has been set at 70 billion crowns.

Economic confidence falls according to PMI index

Economic confidence has dropped in the Czech Republic for the fourth month running according to a poll of key managers in manufacturing. The Purchasing Managers’ Index (PMI) fell to 53.3 points in May from April’s 53.6 points according to the monthly index released by Markit Economics. The index is based on the state of new orders, stocks at factories, delivery deadlines, and the recruitment of new workers. Any score higher than 50 is still in positive territory. The fact that many companies are still hiring is seen as an indication that growth is not going to peter out altogether.

Number of grocery stores in Czech Republic keeps dropping

The number of grocery stores in the Czech Republic has dropped by four percent since 2013, to 12,294, according to data released by the Nielsen consultancy company on Thursday. Small grocery stores with a shopping area under 400 square metres saw the biggest drop in numbers. The number of supermarkets went down as well, by 28 over the past three years, while the number of hypermarkets increased by 19. Supermarkets and hypermarkets account for 80 percent of the overall sales of grocery items in the Czech Republic, which is the highest proportion in Central Europe.

Tax freedom day advances to June 2 for Czechs

Czechs could celebrate tax freedom day on June 2 according to the calculations of the Liberal Institute, that’s after a total of 153 working days. Last year Czechs had to work 155 days before they started earning for themselves. The institute said that the Czech Republic is still trailing many advanced OECD countries where day freedom day comes earlier. According to consultancy, Deloitte, tax freedom day this year comes later, on June 20.

Czech economy grew by lowered 3.0 percent in first quarter

The Czech economy grew by 3.0 percent year-on-year in the first quarter of 2016, according to revised figures released by the Czech Statistical Office on Friday. Compared to the previous quarter, the country’s gross domestic product grew by 0.4 percent. The figures are slightly lower than the previous estimate which expected a year-on-year growth of 3.1 percent and quarterly growth of 0.5 percent.

© 1996–2015 Český rozhlas


Czech exports to US see rapid growth

31-05-2016 14:46 | Daniela Lazarová

Czech exports to the United States have grown rapidly in the past three years, approaching the 100 billion crown mark for the first time ever, according to the Czech Statistics Office. This makes the US the country’s biggest export partner outside the EU and the most dynamically growing market for the Czech Republic regarding mutual trade.

 

The Czech Republic has the 30th largest export economy in the world and although 83 percent of the country’s exports are destined for EU member states, trade with the US has seen a significant boost in recent years. Exports to the US have almost doubled in the past decade and since 2011 the volume of Czech exports to the country has exceeded the volume of US imports. The US market is now one of the top ten export destinations in terms of export volume. In terms of value creation the United States ranks among the top three countries. In 2015 Czech companies exported goods to the US worth 92.2 billion crowns, a 2.4 percent share of the country’s overall exports, and an export volume comparable to that with Spain or Belgium.

In terms of economic added value, the United States is becoming a key destination for the export-dependent Czech economy, with an almost 6% share of added value, putting it in second position behind Germany (19%), according to the Czech Association of Small and Medium Sized Businesses. This is also reflected in the composition of exported product ranges, as the Czech Republic is exporting more and more products with higher added value to the US, whereas previously the country exported a cheaper line of products.

The most common export commodities to the US are now cars and vehicle parts, engines and tyres, turbines and turbine pumps, pharmaceuticals and microscopes. The amount of tyres exported to the US has grown by 175 percent in the past ten years and last year the sales volume exceeded 4.6 billion crowns. On the other hand, the amount of semi-products and materials exported has dropped. A further point of interest is that services now account for almost a third of the total volume of exports.

American imports to the Czech Republic, dominated by machinery and transport equipment, reached 81.9 billion crowns in 2015, making up 2.4 percent of overall imports. This puts the US in twelfth place as regards the volume of imports. The US is also the fifth largest investor in the Czech Republic, where the amount of American investments is approximately a quarter compared to German investments.

© 1996–2015 Český rozhlas


Business News

27-05-2016 | Jan Velinger

Business round-up: Finance Ministry envisages budget deficit of 48.5 billion crowns; PM outlines plan for rise in minimum wage; bus drivers threaten action over low wages; Rusnok named new central bank governor.

Finance Ministry envisages next year’s budget deficit at 48.5 billion

A Finance Ministry proposal for next year’s budget, which is to be debated by the government on Monday, sets next year’s deficit at 48.5 billion crowns, the Czech News Agency reported on Thursday. For 2018 the ministry envisages a deficit of 38.5 billion and for 2019 18.5 billion. The Finance Ministry is willing to increase the deficit in case of higher spending by ministries and other state authorities. Under the agreement between coalition parties, the deficit could reach up to 60 billion crowns next year and 50 billion crowns in 2018.

Sobotka outlines plan for rise in minimum wage

The Ministry of Labour and Social Affairs is to send a proposal to the government to increase the minimum wage in the Czech Republic from next year, Prime Minister Bohuslav Sobotka told a gathering of trade union leaders on Tuesday. The plan envisages a rise from the current figure of 9,900 crowns a month to 11,000 at the start of January. While the unions would like an increase of 1,500 crowns from the present level, employers say they regard a rise of 600 or 700 crowns as realistic.

Bus drivers warn of escalating action over minimum wages

Bus drivers have warned they will be starting an escalated series of industrial action over claims for minimum wages including extended strikes. Drivers on public service routes say they warned of action six months ago but negotiations since have not got anywhere. Many of the drivers, now on wages of around 70-80 crowns an hour, say the government should set a 100 crown an hour minimum wage. They say wages are being undermined by public tenders for operating bus routes in which the bus company making the lowest bid and often offering worst conditions to drivers often land the contract.

Jiří Rusnok appointed as next governor of Czech National Bank

Czech President Miloš Zeman this week appointed former caretaker prime minister and minister of finance Jiří Rusnok as the next governor of the Czech National Bank. Rusnok, already a member of the central bank board, will take over from Miroslav Singer whose mandate officially ends in June. Zeman highlighted the policy differences with Rusnok over the current low crown policy but pointed out that he had been appointed for his expert and practical public and professional experience. Zeman has called for an ending of the low crown policy as soon as possible while the central bank sees it continuing until at least mid-2017.

Rudolf Jelínek spirits producer posts record turnover

Czech spirits producer Rudolf Jelínek posted a record turnover last year amounting to nearly 470 million crowns. The company’s profit was 70 percent higher than in the previous year, the general director Pavel Dvořáček told the Czech News Agency on Thursday. The traditional plum liquor producer has finally recovered from the methanol scandal of 2012, during which 47 Czechs died of alcohol poisoning and which resulted in a decrease in demand for hard alcohol. In 2012, the company suffered losses to the tune of 19 million crowns.

© 1996–2015 Český rozhlas


Business News

20-05-2016 15:06 | Ruth Fraňková

In Business News this week: Bulgarian competition watchdog accuses Energo Pro of abusing dominant position on market; Pig breeding in severe crisis; Minister for Foreign Affairs says staffing to be boosted to deal with Ukrainian job seekers; New World Resources fails to announce first quarter results; Seznam hits new turnover and profit figures.

Bulgarian competition watchdog accuses Energo Pro of abusing dominant position on market

Bulgaria's competition watchdog has accused the Czech power distributor Energo Pro of abusing its dominant position in the electricity market. The Commission for Protection of Competition said that Energo Pro's refusal to sign a long-term contract to purchase electricity generated from renewable sources at a price set by Bulgaria's energy regulator was unjustified. Earlier this week the commission also accused the local unit of the Czech power utility CEZ of abusing its dominant position and acting against the interests of consumers.

Pig breeding in severe crisis

Pig breeding in southern Moravia is reported to be down by 11 percent in the first quarter, according to the Czech Statistics Office. Pig breeding has suffered a serious setback due to severe competition within the EU, low meat prices and the Russian embargo. Pig farms around the country have been reducing animal numbers and are now only able to cover half of the country’s port consumption.

Minister for Foreign Affairs says staffing to be boosted to deal with Ukrainian job seekers

Minister for Foreign Affairs Lubomír Zaoralek has said that officials will this year be able to process around 5,000 Ukrainians seeking jobs in the Czech Republic. The minister said staff at the consulate in Lvov would be boosted in the next weeks and officials would also be added in Prague so that visa applications and other procedures could be dealt with. Around 5,000 applications from workers, around four times the total for last year, could be handled in 2016, he added. Employers have criticized the slow pace at which Ukrainians are being brought into the Czech Republic to fill jobs since a new programme was introduced in November last year. The Ministry of Industry and Trade last week said 69 Ukrainians were involved in the new project and 40 had or were in the process of getting work permits as a result.

New World Resources fails to announce first quarter results

New World Resources (NWR) said Wednesday that it is not in a position to announce first quarter results. The results were due to be announced on May 18. NWR, the biggest shareholder in the Czech hard coal mining company, OKD, said results could not be made public as planned due to the filing for insolvency made last week for the mining company. Trading of NWR shares have been suspended on London, Prague, and Warsaw exchanges. An insolvency manager for the mining company, which employs around 10,000 in the Moravia-Silesia region, has already been appointed.

Seznam hits new turnover and profit figures

Turnover and profit for the Czech Republic’s biggest Internet search engine company Seznam rose by around 10 percent last year. Turnover climbed by 9.0 percent to 3.41 billion crowns and profit before tax by 10 percent to 1.25 billion compared with 2014. Both figures are new records. Income related to Seznam’s search related ads was up more than 20 percent year-on-year. Those ads represent around 40 percent of the company’s overall ad income.

© 1996–2015 Český rozhlas


Business News

13-05-2016 12:38 | Jan Velinger

Business roundup: Škoda Auto union seeks wage hikes for companies linked to car producer; Cabinet backs welfare payments for laid off OKD workers; One week paternity leave approved; Globus planning billion crown investments in Czech outlets.

Škoda Auto union seeks wage hikes for companies linked to car producer

The KOVO union which represents many workers at the Czech Republic’s biggest carmaker, Škoda Auto, says that it is pressing for sub-contractors and other companies closely linked to the car maker to make adequate offers of pay rises to their employees. The union’s move follows its success in agreeing an 11.2 percent pay hike over two years at the car maker. Letters calling for collective negotiations to start with the company AB Facility, SAPE, and ISS Facility Services were due to go out this week according to the union newsletter, the ČTK agency reported. Škoda Auto announced a 6.5 percent rise in profits to a record euros 708 million last year.

Cabinet backs welfare payments for laid off OKD workers

The government has approved special welfare payments for workers laid off by the bankrupt mining company OKD. Under a plan announced on Wednesday by Prime Minister Bohuslav Sobotka, they are to receive between 7,000 and 8,000 crowns a month for a period of between three months and five years, depending on years of service and age. The payments will go to all staff at OKD, not just miners. The company has around 10,000 employees in a region – Northern Moravia – with relatively jobless rates.

Government approves week’s paternity leave

The Czech government has approved a week’s leave for men who have become fresh fathers, the prime minister, Bohuslav Sobotka, announced on Wednesday. If men subsequently go on paternity leave they will receive 70 percent of their base salary, which is the same percentage currently received by women on maternity leave. The cabinet vote had been delayed after Finance Minister Andrej Babiš came out against the plan. It will now go before the Chamber of Deputies.

Globus planning billion crown investments in Czech outlets

The hypermarket chain Globus has announced it is planning to invest four billion crowns into its Czech outlets in the next three years. The plans entail a modernization of its present stores, an expansion of the network and the setting up of a new e-shop. Last year Globus’s sales in the Czech Republic reached 23 billion crowns and the hypermarket chain is aiming to increase them by another 10 billion crowns. Globus came to the Czech Republic twenty years ago and operates 15 hypermarkets in the country.

Sale of Fairtrade products in Czech Republic stagnating

The sale of Fairtrade products in the Czech Republic has reached a plateau after several years of growth, according to the head of Fairtrade Czech Republic and Slovakia Hana Chorváthová. In 2015 Czechs bought 200 million crowns worth of Fairtrade goods, mostly coffee and chocolate. Coffee accounts for 61 percent of all Fairtrade products sold in the country, followed by chocolate, tea, sugar and biscuits.

© 1996–2015 Český rozhlas


Business News

06-05-2016 14:27 | Ruth Fraňková

In Business News this week: CNB reports zero foreign currency intervention in March; Tax Freedom Day to come on June 2; twelve construction companies fined for cartel activity; betting company Fortuna sees operating profit slump on higher Czech taxes; companies named after their owners benefit from greater trust, says study.

CNB reports zero foreign currency intervention in March

The Czech National Bank reported Friday that it did not intervene in the foreign currency markets in March to maintain its low crown policy. In February the central bank intervened to the tune of 623 million euros and in January by just over 2.15 billion euros to keep the crown near or lower than 27 crowns to the euro. Since the start of the low crown policy at the end of 2013 it has spent around 19 billion euros on maintaining the target exchange rate. The bank says it will maintain the low crown policy until at least the middle of next year when it hopes inflation will approach its annual target rate of 2.0 percent.

This year’s Tax Freedom Day to come on June 2

This year’s Tax Freedom Day in the Czech Republic falls on June 2nd, according to the Prague-based Liberal Institute, referring to estimates by the OECD. Tax Freedom Day is the day in the year when the average Czech has earned enough to pay his annual tax bill. This means that people’s entire earnings in the first 153 days of the year will be paid to the authorities, which is the lowest figure since 2000, while anything earned after that is theirs alone. This year, the Tax Freedom Day comes three days earlier than last year, and four days later than the OECD average.

Twelve construction companies fined for cartel activity

The Czech competition office has announced a fine of 278 million crowns on a group of 12 construction companies. The ČTK agency said that the largest fine, amounting to tens of millions of crowns, had been imposed on the Hochtief company. The Polish-based building company, Swietelsky, had cooperated with the competition watchdog in a bid to reduce its fine, the agency added. The cartel allegedly covered building contracts in South Bohemia and the Vysočina. The companies can still appeal the fines and findings of the authority.

Betting company Fortuna sees operating profit slump on higher Czech taxes

Betting company Fortuna said it business boomed in the first quarter of the year with the value of bets placed rising by around 26 percent to total around 250 million euros. But operating profit plummeted by around 37 percent to 4.6 million euros. Fortuna, majority owned by the Penta group, said one of the main factors was a steeper betting tax in the Czech Republic. The group operates in the Czech, Slovak, Polish, and Hungarian markets.

Study: Companies named after their owners benefit from greater trust

Companies in the Czech Republic named after their owners more easily nurture customer trust, which translates into increased profit, a study by the analytical firm Bisnode suggests. The study examined limited private companies with majority owners and other firms. It suggests that profitability among companies named after the owner was 0.5 percent higher than those with neutral names. Eleven percent of company founders 60 or older name their firm after themselves; while those under the age of 30 who do so are just five percent. Consumers seemed more likely to trust a company where the CEO was unafraid to put his or her name up front, standing fully behind their product, the analysis suggests.

© 1996–2015 Český rozhlas


Business News 

29-04-2016 12:25 | Chris Johnstone

In Business News this week: OKD warns of insolvency declaration; Tatra lands massive order for Egypt and Jordan; Direct Fly plane maker to shift production to China; average apartment prices rising by 6.0 percent; and 1.0 billion Chinese investment in Sokolov car parts plant.

OKD owners warn of insolvency declaration

The Ad Hoc Group, which controls New World Resources, is considering a declaration of insolvency of the hard coal mining company OKD as early as this Friday unless the government steps in to help. A meeting between both sides was scheduled this Monday. Ad Hoc Group took control of NWR in February but on Monday said it would not continue to waive a deadline for seeking debt repayments from the ailing mining firm.

On Sunday, the Ad Hoc Group reportedly offered to sell OKD for less than 150 million euros, the equivalent of less than four billion crowns. Industry and Trade Minister Jan Mládek said the real value of the company was far less and he couldn’t imagine why the government would buy at such a price. OKD currently employs almost 10,000 people, and also provides additional jobs in the sector for suppliers and various other companies.

Tatra to supply chassis for military vehicles to Egypt and Jordan

Truck maker Tatra is to supply chassis for military vehicles to the Egyptian and Jordanian armies in deals worth a total of around 800 million crowns, iHned.cz reported on Tuesday. Tatra director Petr Rusek said the contracts had been agreed on a visit by Industry and Trade Minister Jan Mládek and a Czech delegation to the two states. Tatra, which is based in the Moravian town of Kopřivnice, went bankrupt three years ago. However, after being bought out by two Czech businessmen it saw a profit of nearly 400 million crowns last year.

Direct Fly to launch Chinese production of ultralights

The Czech producer of ultralight aircraft Direct Fly will manufacture their aircraft in China, the company’s co-owner, Ivo Lederer, told the Czech News Agency on Wednesday. Company representatives signed an agreement on transfer of technologies with the Chinese company Wanfeng Aviation. The company will launch large-scale production in China, initially producing about 100 to 150 aircraft a year. The Chinese company will invest about four million crowns into cooperation with the Czech partner.

Czech flat prices on steep rising curve

The average price of apartments in the Czech Republic in 2015 increased by six percent on average year-on-year, according to a survey carried out by Deloitte. The average price per metre was 41,800 crowns. The most expensive apartments were sold in Prague (for 56,400 crowns per metre), while the cheapest apartments could be found in Ústí nad Labem region (for 10,000 crowns per metre). Last year, the overall sales of apartments amounted to 70 billion crowns, which is a 15 percent increase on the previous year.

Chinese company signs 1.0 billion crown investment deal for Sokolov

The Chinese auto and farm machinery producer Shijiazhuang Zhogxing group has signed an agreement with Czech company Czech Industry Group which includes the investment of 1.0 billion crowns in a new plant near the West Bohemian town of Sokolov to make car discs. The Chinese company is one biggest producers of such discs in the world. The new factory is expected to employ 100 initially, eventually rising to 200 people. There is an above average unemployment rate of around 8.6 percent around Sokolov.

© 1996–2015 Český rozhlas


Business News 

22-04-2016 16:09 | Jan Velinger

In Business News this week: Škoda workers to see record pay increase; Prague apartment prices hit record high; mortgages hit all-time low.

Unions at Škoda win 11.5 percent pay increase over two years

Carmaker Škoda has agreed to give its workers a record salary increase of 11.5 percent on average over the next two years, according to trade union leaders. Negotiations between the two sides had previously reached a stalemate and the unions had threatened strike action. The unions calculate that the pay rises will cost the company 2.6 billion crowns. Škoda is the biggest player in the Czech auto industry and last year saw record sales.

Prague apartment prices reach record high

The average price of apartments sold in Prague grew by 8 percent year-on-year in the first quarter of 2016, according to figures compiled by a group of developers cited by the Czech News Agency. The average price per metre in the period from the start of January to the end of March was a record 60,517 crowns, the survey found. The rise has been attributed to a marked decline in supply; the developers said the number of flats offered on the capital’s property market had fallen 20 percent year on year.

Average mortgage rate falls below 2 percent for first time

Average mortgage rates in the Czech Republic have reached a new record low. The figure in March was 1.97 percent, down from 2.02 percent the previous month, according to consultants Fincentrum, who have been monitoring the market since 2003 and do not take into account fixed-rate duration. Fincentrum analyst Josef Rajdl told the Czech News Agency that mortgage rates were likely to fall further. He said anybody with sufficient income seeking a loan of up to 85 percent for a longer fixed-rate period who was not now being offered less than 1.9 percent was “at a bad bank”.

Poll: Two-thirds of Czechs believe too many foreigners working in CR

Two-thirds of Czechs believe that there are too many foreigners working in the Czech Republic, suggests a new opinion poll conducted by the STEM agency. Three in every five respondents expressed the view that foreigners are depriving Czechs of jobs. Though both views prevail, they are down on last year. A similar survey in 2015 indicated that 80 percent of Czechs thought there was an excessive number of foreigners employed in the country and over 70 percent believed incomers took Czechs’ jobs

Ruling parties set to clash over wage increase in public sector

The ruling parties look set to clash over a proposed increase in wages in the public sector next year. The Social Democrats are proposing a 10 percent increase in wages in the health and education sectors and a five percent increase for others in the public sphere. Finance Minister Andrej Babiš told Czech TV he was willing to discuss a 3 percent increase for selected public sector workers. Trade unions in the health sector are demanding a significant increase, saying that the health sector suffers from a crippling shortage of doctors and nurses which is affecting the quality of health care afforded. 

© 1996–2015 Český rozhlas


Business News 

15-04-2016 12:28 | Chris Johnstone

In this week’s Business News: Czech exporters highlight skills shortfall; Moody’s say Czech rating not under threat; hops exports shrivel in drought; Škoda Auto-Volkswagen partnership highlighted as success; and tax proposal on church restitution kicked into long grass.

Czech exporters highlight skills shortages

Czech industry is currently lacking at least 70,000 workers and thousands of university educated experts, such as chemists and mechanical engineers, a new analysis by the Czech Exporters’ Association suggests. According to the analysis, there are currently more than 117,000 vacancies on the Czech jobs market. The Exporters’ Association has called on the Czech government to loosen its visa policy to simplify attracting foreign workforce from countries such as Ukraine, Vietnam, and Russia to the Czech Republic.

Moody’s says Czech A1 rating not under threat, sees 2015 growth at 2.5 percent

Czech economic growth this year should be around 2.5 percent, according to an estimate by the international ratings agency Moody’s released on Wednesday. The estimate is along the same lines at the Czech Ministry of Finance but slightly lower than the Czech National Bank, which sees growth this year at around 2.7 percent. Growth will be slightly higher, at just over 3 percent, in Poland, Slovakia, and Romania. Moody’s says the Czech Republic’s high rating of A1 is not under any threat with a stable outlook confirmed. It points out that the health of many local banks, such as ČSOB and Česká Spořitelna, is actually better than the parent company, Belgium’s KBC and Austria’s Erste Bank.

2015 hops exports slide after drought

Czech export of hops have dropped by 10 percent in 2015 compared to the previous year, to total 3,668 tonnes of hops. According to the Hop Growers Association, the slump in profits amounted to over 250 million crowns. Last year’s crops were damaged by unexpectedly high temperatures and drought. Dry weather also caused hops to have a lower concentration of alfa acids, which are responsible for the bitter flavour in beer. Most of the hop exports went to non-EU markets, mainly to Asia.

Volkswagen takeover of Škoda Auto highlighted as success story

The partnership of Škoda Auto and Volkswagen is an example of successful European partnership, the chairman of Volkswagen, Matthias Müller, said on Tuesday. Mr. Müller was speaking at a meeting at the Škoda museum in Mladá Boleslav marking the 25th anniversary of the takeover of the Czech carmaker by the German company. The Czech prime minister, Bohuslav Sobotka, told the assembled that recent government support for a new industrial zone was proof that Škoda was one of the most important investors and employers in the Czech Republic. In 1991 Škoda produced 170,000 cars a year in Czechoslovakia; in 2015 it produced over half a million at 14 plants on two continents for over 100 markets, Mr. Müller said.

Tax proposal on church restitution payments shunned by government

Ministers in the Czech government failed to agree a position on a proposal by a Communist MP which would alter details of a property settlement between the state and church which was passed by the previous government in 2012 and took effect in 2013. The proposal suggests that funds to be paid out over 30 years – a total of 59 billion crowns plus inflation – to compensate for property which was seized by the former Communist regime and could not later be returned – could be taxed. The junior party in the ruling coalition, the Christian Democrats, slammed the proposal as“populist”. In the cabinet, the bill received support solely from the finance minister, Andrej Babiš. MPs in the lower house will decide the fate of the bill.

© 1996–2015 Český rozhlas


Business News

08-04-2016 13:50 | Chris Johnstone

In this week’s Business News: breweries set records in 2015; central bank forced to intervene against firming crown in February; exporters say foreign sales boosted by up to 450 billion crowns due to weak crown; trade balance at record surplus in February; and car showrooms see record business in March.

Czech breweries set production record in 2015

Czech breweries recorded the highest beer production in history last year, for the first time increasing the level of production beyond 20 million hectolitres. The figures represented an increase by 2.2 on the previous year, the Czech Beer and Malt Association said on Thursday. Czech beer exports increased by 13.4 percent to 4.14 million hectolitres, while the import of beer increased by 7.3 percent. Domestic consumption of beer per person dropped by one litre in 2015 to 143 litres.

Low crown policy costs 17 billion crowns in interventions in February

The Czech National Bank spent 17 billion crowns in February intervening on the forex market against the firming crown, according to data released by the bank on Wednesday. The bank launched the interventions in November 2013 with the aim to keep the crown's rate below 27 crowns to the euro. From then until February the Czech National Bank spent around 520 billion crowns on the interventions.

Exporters say low crown pays off with higher sales

Czech exporters say the central bank’s policy of keeping the crown weak has meant between 400 billion and 450 billion crowns in extra exports in the last two years. The Czech National Bank intervened to bring the crown down to around 27 to the euro in November 2013 and has maintained the policy ever since. The deputy head of the Association of Exporters, Otto Daněk, said on Tuesday that if the bank had not taken action the crown would today stand at around 25 to the euro. Mr. Daněk said Czech exports could this year reach a record of over 4 trillion crowns.

Trade balance at record high in February

The Czech trade balance in February recorded a surplus of 22 billion crowns, a rise of 4.5 billion crowns compared with the same month in 2015. The biggest contributors to the surplus was engineering goods and automobiles with payments for imported mineral oils making a much smaller dent in the surplus due to low oil prices.

Car sales set records in March


March saw the highest ever number of car sales in one month in the Czech Republic, according to the Car Importers Association. Almost 23,000 new vehicles were registered in March, a rise of 8 percent on the same month in 2015. Sales for the first quarter were 12 percent up year on year, with the country’s biggest automaker Škoda Auto enjoying a 21 percent increase in sales in that period.

© 1996–2015 Český rozhlas


Business News

01-04-2016 13:39 | Ruth Fraňková

In Business News: Statistics office confirms Czech economy grew by 4.3 percent in 2015; CEFC boosts stake in Travel Service to just under 50 percent; Škoda to double its deliveries to China by 2020; CzechTourism: Over 350,000 Chinese visitors expected in 2016; Prague council backs purchase of Bohemians 1905 stadium.

Statistics office confirms Czech economy grew by 4.3 percent in 2015

The Czech economy grew by 4.3 percent in 2015 compared with the previous year, the Czech Statistical Office reported Thursday in news which confirmed its earlier prediction of GDP growth. The office also confirmed its 4.0 percent growth year on year figure for the last quarter. The 2015 growth is the best the Czech economy has achieved over the last eight years. Separate figures showed the average Czech wage last year climbed to 26,787 crowns, a rise of 2.6 percent on 2014.

CEFC boosts stake in Travel Service to just under 50 percent

Chinese company CEFC has boosted its stake in Czech airline operator Travel Service to 49.9 percent, the business daily E15 reported Thursday. Previously, CEFC had a stake of around 10 percent. As well as operating scheduled and regular flights, mainly through the carrier SmartWings, Travel Service also owns a third of the national airlines Czech Airlines (ČSA). The increased Chinese stake should allow SmartWings to boost its offer of scheduled flights according to management.

Škoda to double its deliveries to China by 2020

Czech car producer Škoda Auto wants to double its deliveries to China to over half a million cars by 2020, the company announced in a press release on Wednesday. Last year the Czech carmaker sold 281,700 cars in China. The company also plans to invest over 50 billion crowns into the development of new technologies. Representatives of Volkswagen, Škoda Auto and Chinese SAIC Motor Corporation signed a memorandum on their future cooperation at the Czech-Chinese business forum in Prague on Wednesday. At the moment, the Chinese market represents about one fourth of the company’s worldwide sales.

CzechTourism: Over 350,000 Chinese visitors expected in 2016

Over 350,000 Chinese tourists could visit the Czech Republic in 2016, according to the state agency CzechTourism. Last year the figure was 285,000. Most visitors from China enter this country from another European state. However, the number arriving by air last year reached 50,000, a year-on-year jump of nearly 50 percent that followed the introduction of direct flights between the two countries.

Prague council backs purchase of Bohemians 1905 stadium

Prague City Hall has agreed to buy most of the stadium of top flight football club Bohemians 1905. The council has agreed to pay 121.1 million crowns for the Ďolíček stadium in Prague 10 district with the club chipping in around 7.0 million crowns. Several dozen Bohemians fans turned up at the council meeting to back the purchase from the current owner, the company Bohemians Real. The club, nicknamed the Kangaroos after a famous tour of Australia, had feared they might have to quit the stadium at the end of this season. In the past, various real estate development projects have been mooted for the prime Prague site.

 © 1996–2015 Český rozhlas 


 Business News

18-03-2016 13:06 | Chris Johnstone

In this week’s business news: worker and management still far apart on wage rises at Škoda Auto; two Czech power companies but no ČEZ bid for German coal assets; electronic cash registers clear Senate; till ring slower in January; public deficit seen down to 60 billion in 2017.

Škoda Auto unions warn bosses as pay talks reach critical stage

Union leaders at the Czech Republic’s biggest car maker Škoda Auto say they are prepared to take unlimited strike action to push their wage claims for this year. The current collective agreement runs out at the end of March. Management is currently offering a wage hike of 3 percent with the unions demanding 8 percent. Škoda Auto, part of the Volkswagen group, this week announced record profits for 2015. Last year the two sides agreed on a pay rise of 3.5 percent.

ČEZ makes no big for German brown coal assets

Czech electricity producer ČEZ has said that it will not make a binding bid for the German coal mine and power plant assets of the Swedish-based power company Vattenfall. CEZ said that low wholesale electricity prices and uncertainty over whether brown coal power plants might have to be closed early deterred it from making a bid. The state controlled company added though that it was still prepared to talk about other options for the German assets. Separately, Czech Coal said it had made a bid for the assets. Later, Czech energy group EPH said it made a joint bid along with the PPF Investments company.

Senate approves electronic cash registers bill

The Czech upper house, the Senate, has approved on of finance minister Andrej Babiš’ flagship measures aimed at combatting tax avoidance, so-called electronic cash registers. Attempts to amend the proposal or stall debate from members of right-wing parties failed. The controversial move now just needs to be approved by head of state, Miloš Zeman. The minister reckons the measure will curb tax avoidance to the tune of 18 billion crowns a year. Opponents say it adds another burden to small business and will not deliver on the promise of extra tax revenues. 

Czech retail sales slip in January

Czech retail sales in January, not counting the automotive sector, fell by 4.6 percent year-on-year compared to a 6.7 percent rise in December 2015. The figures were released by the Czech Statistics Office on Monday. Czech consumers spent significantly more online, an increase of 15.4 percent year-on-year, while retail sales of food and fuel also increased. By contrast, consumers spent less on pharmaceutical items and medical goods. Prices decreased year-on-year in the categories of fuel, food and computers. Higher prices were registered in the categories of culture, sports and recreation, clothing and footwear and pharmaceutical and medical goods.

Public deficit seen at 60 billion crowns in 2017

The public finance deficit in 2017 should be 60 billion crowns, Finance Minister Andrej Babiš said in a debate on commercial TV Prima. The minister indicated that meeting that target would not be easy, saying he expected to come under considerable pressure from individual cabinet members. Babis said he was counting on an increase in pensions, more funds for sports and emphasized the need for investment projects which he said would be given priority. The 2015 deficit in public finances was 62.8 billion, which is 37.2 billion less than originally projected.

© 1996–2015 Český rozhlas


Business News

11-03-2016 16:29 | Chris Johnstone

In this week’s Business News: public tender bill wins lower house backing; profits from farm sector slump; Škoda Auto sets record February sales; inflation falls back in February; country on wrong tracks for rail corridors

New public tender bill passes first reading

A new on law on holding public tenders was passed in the lower house of parliament at first reading on Wednesday. Among the changes proposed are greater scope for the tender organizer to include other factors in the evaluation rather than just the lowest price. It also allow bidders with a poor past record to be disqualified and sets a 10,000 payment for appeals against tender decisions made to the competition office. The bill was originally supposed to be passed last week but was caught up in a arguments about whether to limit the influence of billionaire businessmen in politics and whether to disqualify them from public tenders. The bill is an attempt to put some order in the conflict over how to frame clear, effective, and fair tender rules. Opponents though says it paves the way for corruption.

Farm sector profits cut by a third in 2015

The Czech agricultural sector last year saw overall profits slide dramatically from the record year of 2014, according to the Czech Statistical Office. Profits for the sector dropped by around 27 percent to around 16.9 billion. The main factor was lower prices for goods, in particular milk and pork but earnings were also affected by the drought over the summer. Overall sales in the sector amounted to 127 billion crowns with crops making up around 75 billion crowns of that. The Agricultural Association, which uses different figures and calculations, says profit more than halved last year to 9 million crowns from 19 billion.

West Europe, China boost for Škoda Auto sales

The country’s biggest car maker Škoda Auto has announced its best ever bruary for worldwide sales. The manufacturer racked up total sales of 78,800 over the month, 3.6 percent more than in 2015. Sales in Western Europe and China were particularly strong. Škoda was also helped by the launch of new models of the top of the range Superb and down range Fabia.

Inflation recedes in February

The rate of year-on-year inflation slowed in February to 0.5 percent from January’s 0.6 percent, according to figures released by the Czech Statistical Office released on Wednesday. One of the main factors for the slowdown were weaker price rises for alcohol and tobacco and more moderate cost increases for utilities and housing. Prices rose 0.1 month-on-month. The inflation figure is well below the target rate of the Czech National Bank of 2.0 percent.

Spending watchdog attacks rail corridor roll-out

The Czech spending watchdog, the National Audit Office, has released a critical report on the progress of renovation and improvements of some of the country’s key rail corridors. The report points out that a series of projects approved in 2001 and 2002 were originally supposed to be completed by 2010 but now look they will not finished until 2021. It added that the costs of one kilometre of new track was sometime three times the expense of the cheapest and that standard cost evaluations were only introduced at the start of 2015. In the remains of that year that move already saved 23.2 billion crowns.

© 1996–2015 Český rozhlas



 

 

 

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EUCCAN News Flash
Legal review of CETA completed
 
Brussels, February 29, 2016 - Canada's Minister of International Trade, Chrystia Freeland, and the European Union's Commissioner for Trade, Cecilia Malmström, announced the completion of the legal review of CETA.

As part of it, Canada and the EU agreed on modifications related to investment protection and investment dispute resolution provisions. The Agreement is currently undergoing translation into French, and the other 21 EU Treaty languages. Following translation, the process required to approve the agreement in Canada and the EU along with the steps necessary to bring policies, regulations and legislation into conformity with the obligations under CETA will begin.

 


Business News

26-02-2016 13:52 | Jan Velinger

Business News round-up: Česká Spořitelna sees net profit drop in 2015; Škoda Auto has 60 percent brand loyalty says board chairman; Close to 100 Czech construction projects at risk; Conference marks opening of branch of European Investment Bank in Prague.

Česká Spořitelna sees net profit drop in 2015

One of the Czech Republic’s biggest banks, Česká Spořitelna announced a drop in net profits for 2015 of 5.2 percent to 14.3 billion crowns. High provisions for bad loans and low interest rates eroded profits, the bank said. Most of the other big banks on the Czech market have already announced much better results. Česká Spořitelna is regarded as the biggest Czech bank according to the volume of client deposits.

Ombudswoman: Lower minimum wage for disabled pure discrimination

The ombudswoman, Anna Šabatová, has asked the Constitutional Court to overturn a government decree setting a lower minimum wage for people on disability benefits. At present the minimum monthly wage for the disabled is 9,300 crowns, 600 crowns less than for able-bodied employees. Ms. Šabatová described the state’s approach as pure discrimination. She called on labour inspectors not to wait for the verdict of the Constitutional Court but to immediately force employers to create equal conditions for all employees.

Škoda Auto has 60 percent brand loyalty says board chairman

Škoda Auto has more brand loyalty from owners than fellow Volkswagen company Porsche, company board chairman Bernhard Maier said on Thursday. Maier, who joined that biggest Czech car maker in Autumn last year, said that 60 percent of Škoda Auto owners bought the car again compared with 58 percent of Porsche owners. Maier said Škoda will develop more SUV and eco models over the next decade. He confirmed that the first hybrid car to be rolled out will be the top of the model Superb.

Governor of South Moravia: Close to 100 Czech construction projects at risk

A total of 98 transport construction projects in the Czech Republic worth 130 billion crowns in total face problems in drawing EU subsidies, according to the governor of South Moravia Michal Hašek. Previously officials said 64 construction projects worth 90 billion were endangered. The EU requires new Environmental Impact Assessment studies (EIA) for these projects, which will delay their construction and the drawing of EU subsidies. The Czech Republic is negotiating a special regime for the projects in question with the European Commission. In case the talks fail, Hašek has proposed an alternative solution in drawing subsidies for regional rail and road projects for which EIA is not required.

Conference marks opening of branch of European Investment Bank in Prague

An international conference is being held in Prague on Monday in connection with the opening of a branch of the European Investment Bank in the city. Among those due to attend are the bank’s president, Werner Hoyer, the Czech Republic’s European commissioner, Věra Jourová, Czech finance minister, Andrej Babiš, and Miroslav Singer, the governor of the Czech National Bank. The new branch will provide information to public institutions and companies on opportunities to finance projects using funding from the EIB and the European Fund for Strategic Investments.

© 1996–2015 Český rozhlas


Business News

12-02-2016 15:17 | Jan Velinger

Business roundup: Education minister voices support for 10 percent pay increase for teachers; Czech mortgage loans market surges in 2015; Court declares significant manufacturer Motorpal unable to meet debts; around 15 percent of Czech elderly people are faced with poverty.

Education minister voices support for 10 percent pay increase for teachers

Education minister Kateřina Valachová has backed a demand by teaching unions for a hike in wages of 10 percent. Valachová said the increase was large but legitimate given the level of teachers’ pay and the difficulty in finding qualified and motivated staff. The minister said she would begin talks with the minister of finance, Andrej Babiš, about inserting the raise in the budget for 2017 and 2018. The cost of a 10 percent rise would be around 13 billion crowns a year. Average teachers’ wages are currently around 26,000 crowns a month, some of the lowest for university graduates across all professions in the country.

Czech mortgage loans market surges in 2015

The total worth of mortgage loans offered last year came to a record 184 billion crowns, according to figures released by the Ministry for Regional Development. The number of clients taking out loans jumped to around 102,000. The main factor in the booming market was the low average interest rates on mortgages of around 2.14 percent. The mortgage loans total in 2014 came to around 143 billion crowns.

Fifteen percent of elderly facing poverty says survey

Around 15 percent of Czech elderly people are faced with poverty, a survey commissioned by the Czech Statistical Office has reported. It found those living on their own in old age, mostly women, are particularly vulnerable to hardship with around 75,000 elderly people falling into the poverty trap. Poverty is defined as having less than 60 percent of the average monthly income.

Court declares significant manufacturer Motorpal unable to meet debts

Brno regional court has declared the Jihlava-based diesel engine and auto parts producer Motorpal unable to meet its debts. The company is a player on world markets and employs around 1,300 in Jihlava and more at other plants in the Czech Republic. It is a world player on the market for fuel injection systems for diesel engines. A restructuring plan, which was reported to have the backing of most of the banks and companies owed money, was not accepted by the court. Motorpal is reported to owe around 800 million crowns. It’s annual turnover in 2014 was around 1.3 billion crowns.

Gap between amount Prague pays into and draws from EU highest ever last year

Last year the Czech Republic drew nearly 152 billion crowns more from the European Union than it paid into the bloc, according to figures released by the Ministry of Finance on Tuesday. It was the highest such gap since the country joined the EU in May 2004. The Czech Republic drew a total of 157 billion crowns from the union’s Structural and Cohesion Funds, as well as receiving 31 billion crowns under the Common Agricultural Policy. Since its accession the Czech Republic has contributed 429 billion crowns to the EU’s coffers and received 990 billion crowns.

© 1996–2015 Český rozhlas


Business News

05-02-2016 16:45 | Jan Velinger

Business round-up: Czech Republic reaches 21st spot on Economic Freedom Index; European Commission sees Czech growth at 2.3 percent; Municipal court rejects legal complaint against Prague 7 shopping centre and administrative building.

Czech Republic reaches 21st place on Economic Freedom Index

The Czech Republic has jumped three places on the Index of Economic Freedom, reaching the 21st position among the 178 countries included on the list. The country’s economic freedom score for 2015 is 73.2 out of a maximum 100, which is its best score ever. The Index of Economic Freedom was introduced in 1995 by the Heritage Foundation and The Wall Street Journal. According to the assessment, Hong Kong is the most economically free country, while North Korea was placed at the bottom of the ladder.

European Commission sees Czech growth at 2.3 percent in 2016

The European Commission expects Czech economic growth this year to slow down considerable to around 2.3 percent from an expected 4.5 percent in 2015. The latest figures were released in the Commission’s winter economic prognosis. Growth in 2017 is expected to climb slightly to 2.7 percent. One of the factors curbing Czech growth is lower pumping of EU cash at the start of a new funding period.

Municipal court rejects legal complaint against Prague 7 shopping centre and administrative building

The Municipal Court this week rejected a legal complaint by Prague 7 residents who had hoped to block the construction of a shopping and administrative complex on Veletržní Street. The news was released by Václav Matoušek, the head of the firm behind the development project, the British firm Lordship. Permit has been given for construction to begin on lower parking levels of the site but questions remain over the building above ground. The matter is currently being negotiated with the local administration. The local city hall has charged the firm had not met all terms agreed in a contract signed with the previous administration. City Hall has been against the project long-term, as the site was meant to include a memorial and new apartments. The firm had threatened to take the matter to arbitration court but its boss has suggested some headway in talks has been made.

Czech Republic, Iran, hope to cooperate in area of nuclear safety

The Czech Republic and Iran are hoping to cooperate more closely in the area of nuclear safety and a meeting between both countries nuclear energy watchdog authorities is planned for later this year, Deputy Industry and Trade Minister Eduard Muřický said at a seminar on Wednesday discussing possibilities of trade with Iran after the lifting of economic sanctions. Czech State Nuclear Safety Authority chairwoman Dana Drábová confirmed to ČTK that a meeting with Ali Akbar Salehi, the head of Atomic Energy Organization of Iran, is being planned. No definite date has been set. Industry and Trade Minister Jan Mládek issued an invitation to Salehi during his visit to Iran in January. In September last year, Czech Foreign Minister Lubomír Zaorálek visited Iran in the accompaniment of a business mission. Czech business representatives may also find opportunities in Iran in the area of mining of raw materials, the petrochemical industry, engineering and aircraft industry, Deputy Foreign Minister Martin Tlapa said at Wednesday's seminar.

Teachers’ unions call for 10 percent pay rise

The Czech Republic’s teachers’ unions have called for a pay rise for teachers and other employees in the education sector by at least 10 percent by 2017, the head of the Czech and Moravian Trade Union of Workers in Education, František Dobšík, said at a press conference on Tuesday, adding that it should be included among the priorities of the Education Ministry. According to Mr Dobšík, teachers’ starting salary should be raised by at least 2,000 crowns to 23,000. The overall amount allocated to the increase of wages would amount to some eight billion crowns. The unions want to discuss their demands with Finance Minister Andrej Babiš and Prime Minister Bohuslav Sobotka.

© 1996–2015 Český rozhlas


Business News

29-01-2016 14:09 | Ian Willoughby

In Business News this week: Ministers clash over aid to car parts plant; economic confidence reaches new heights; new committee to oversee nuclear power development; and EU rules could hold up dozens of road projects;

Czech ministers clash over aid to new car parts plant at Svitavy

Czech Minister of Industry and Trade Jan Mládek and finance minister and ANO leader Andrej Babiš have clashed over a 225 million crown package of incentives for a car parts and components company to expand in the country. The Social Democrat industry minister said on Monday that the aid for the INA Lanškroun firm which would help create around 900 jobs but is being blocked by Babiš. The finance minister has rebutted the claim but accused Mládek of trying to gain extra cash not cleared in his 2016 spending. The aid is focused a package of 2.5 billion crowns in spending on a new plant in Svitavy, which has one of the highest jobless rates in Eastern Bohemia.

Czech economic confidence rises to new heights in January

Confidence in the overall performance of the Czech economy has risen to its highest level since the peak of the last boom in June 2008, the Czech Statistical Office announced on Monday. The office’s composite confidence index advanced by 1.9 percent points in January compared with the previous month. The rise was largely due to more optimism among consumers but producers’ sentiment is also at its strongest level for the last five years, the office said.

Czech government sends signal over nuclear power

The Czech government has cleared the creation of a new committee to coordinate the development of nuclear power in the country as well as the position of a nuclear “envoy” appointed as the main point person for developments in the sector on Monday. Minister for Industry and Trade Jan Mládek said in a press conference after the government meeting that the moves sent the “right signal” that the Czech Republic is committed to nuclear power and in particular to fulfill the Development Plan for Nuclear Energy adopted by the government in June last year. As well as piloting the construction of new nuclear reactors, the envoy and committee should also oversee national plans for a long-term storage site for nuclear waste; the national nuclear supply chain for the industry; international nuclear cooperation; and safeguarding Czech nuclear power know-how.

Czech grown medicinal cannabis to be delivered in February

Czech medicinal cannabis producer Elkoplast Slušovice says it will deliver its first consignment of locally grown and produced product in the second half of February. Three similar consignments of 10 kilogrammes should follow by the end of this year. The Czech company signed a contract to supply cannabis to the state drugs authority last year. Use of medicinal cannabis is legal in the country since April 2013. Some local critics say medicinal cannabis is still difficult to find in pharmacies and the price is too high.

EU rules could delay 64 road construction projects, says PM

Dozens of road construction projects in the Czech Republic could be held up due to European Union regulations, Prime Minister Bohuslav Sobotka said after a meeting of economic ministers on Tuesday. Sixty-four construction projects are concerned; they have been in the process of acquiring authorization for so long – up to 15 years – that they are required by EU law to get fresh environmental impact assessments. Mr. Sobotka said this process could take years and could impact efforts to draw CZK 90 billion from EU funds.

Competition office starts examination of Brno fair company

The Czech competition office has started to probe the takeover by Brno City Council of the company behind most of the city’s international trade fairs, Veletrhy Brno. The city council last year bought a 61 percent stake in the fairs company from a Dusseldorf company for 224 million euros. The German company has been running the Brno fairs site and events for 17 years. Brno is particularly noted for its annual engineering and farm technology fairs.

Banking association lowers growth expectations for 2016

The Czech Banking Association has revised slightly down its economic growth prediction for this year to 2.4 percent from November’s 2.5 percent. It has, however, upped its forecast for 2015 to 4.2 percent. The association sees growth in 2017 rising to 2.7 percent. Inflation, however, will only rise to something near the level of the central bank’s expectations in 2017 when it is expected to average around 2.2 percent.

© 1996–2015 Český rozhlas


Business News

22-01-2016 13:34 | Ruth Fraňková

In Business News this week: Regulator to consult public on shake up of electricity charges; Betting company Synot cuts backing for Czech sports; Nuclear fuel supply contract being prepared for Temelín; Czech advertising market climbs in 2015; Škoda: Czech car sales to increase by five percent this year.

Regulator to consult public on shake up of electricity charges

The Czech energy regulatory office on Thursday unveiled that it will be undertaking a near year-long consultation on a proposed shake up of electricity distribution tariffs in the country. The consultation is aimed primarily at getting feedback from households and small consumers. An original study prepared for the shake up proposed an increase of up to 90 percent for the many Czechs having country homes. This has been pared back to around 45 percent but is still likely to spark an angry reaction from around half of the Czech population who have such country retreats. The shake-up has been sparked by wider changes in the electricity market such as a sharp increase in renewable and local power production and the need to re-balance the charges burden for the network.

Betting company Synot cuts backing for Czech sports

Czech-based betting company Synot announced Thursday that it is ending its sponsorship of the top Czech football league. It will also terminate its sponsorship of first league clubs Sparta Prague, Jablonec, and the Nymburk basketball club as well as its wider support for the Czech Sporting Union. Synot said its move was prompted by changes in betting legislation which will cost it hundreds of millions of crowns. It would not be possible to support its Czech activities with earnings from foreign operations it added. Synot said it would continue supporting sport in other countries which provided an environment for activities to prosper.

Nuclear fuel supply contract being prepared for Temelín

State-controlled power company ČEZ has confirmed that it will prepare this year a tender for nuclear fuel supply for its Temelín nuclear power plant. The tender could be held at the latest by mid-2017. The current contract is held by the Russian supplier TVEL, which has raised concerns in some quarters over Czech energy security. US supplier Westinghouse at one stage supplied fuel for Temelin and has in the past said it would like to be in the running again.

Czech advertising market climbs in 2015

The overall Czech advertising market climbed last year by around 8 percent to 65 billion crowns according to figures released by the agency Nielsen Admosphere. Television grabbed the biggest slice of the market with revenues rising to 35.5 billion crowns. Radio ad income rose by around 5 percent to 6.0 billion but revenues for newspapers and magazines were flat at just short of 18 billion crowns. There was no separate breakdown for internet ad income.

Škoda: Czech car sales to increase by five percent this year

Sales of new passenger cars on the Czech market are expected to rise this year by about five percent, the head of Škoda Luboš Vlček said on Wednesday. Sales could reach 220,000 to 240,000 cars compared to last year’s 230,000. Estimates of the international consultants PricewaterhouseCoopers are more optimistic, putting the growth at 10 to 15 percent. Last year, local car sales were up by 20 percent with Škoda taking around a third of the local market for new car sales.

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Business News

15-01-2016 14:10 | Ruth Fraňková

In Business News This Week: Brussels seeking return of 810 million crowns handed out to Czech farmers; Economic growth in 3Q 2015 better than previously thought; Ministers meet over future of OKD mining company; Czech trade mission headed by minister flies to Tehran; Fischer boosts tourists, turnover, and profits.

Brussels seeking return of CZK 810 million handed out to Czech farmers

The European Commission is seeking the return of CZK 810 million from the Czech Republic due to oversights in the allocation of subsidies between 2010 and 2013, the minister of agriculture, Marian Jurečka, said on Tuesday. The money has already been paid out to Czech farmers and they would not be required to send it back, the minister said. EU auditors said that Czech inspectors had failed to check whether farmers had up-to-date livestock registers and had carried out other procedures.

Economic growth in 3Q 2015 better than previously thought

The Czech economy grew more quickly in the third quarter of last year than a previous estimate had suggested. Gross domestic product expanded by 4.7 percent not 4.5 percent between the start of July and the end of September, according to revised figures released on Tuesday. Only five other OECD members saw faster growth in the third quarter of 2015.

Ministers meet over future of OKD mining company

Government ministers met Thursday with managers of the struggling mining company OKD. Minister of Industry and Trade, Jan Mládek, said after the meeting that it had been agreed that any fundamental steps agreed by company management would have to be approved as well by the company’s creditors. He added that ongoing negotiations would focus on a possible restructuring plan for the company and the sale of the Frenstat mine to the state. Coal at that mine has not been exploited yet. The future of the OKD mines are threatened by low coking coal prices with around 13,000 immediate jobs at stake.

Czech trade mission headed by minister flies to Tehran

Czech Minister of Industry and Trade Jan Mládek flies out to Tehran Friday accompanied by a 60-strong business delegation to Iran. The minister starts a four day working visit which includes the opening of a Czech Trade office in the Iranian capital. Iran is the target for many worldwide trade delegations with numerous export opportunities as the decades of business isolation and embargoes appear to be coming to an end.

Fischer boosts tourists, turnover, and profits

Czech tour operator Fischer last year achieved a record turnover of around 4.0 billion crowns, around a fifth higher than in 2014. The final profit rose to 145 million crowns with the number of clients climbing to 300,000 from 266,000. The tour operator said that it has increased its offer of winter and summer destinations.

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Business News

 08-01-2016 15:53 | Jan Velinger

In this week’s Business News roundup: Car production in Czech Republic reaches all-time record in 2015; Finance minister wants bill on electronic registers approved in January; Czech nuclear plants see significant production drop; President slams government for failure to draw 35 billion crowns; Česká rafinérská reaches deal with Mero ČR on shipping and storage of crude.

Car production in Czech Republic reached all-time record in 2015

Car production in the Czech Republic grew by 4.5 percent last year, reaching an all-time record for the year. Close to 1.3 million cars were manufactured in the country in 2015, which is about 50,000 more than in the previous year, the head of the Czech Automotive Industry Association, Antonín Šípek, announced on Thursday. Bus production grew by 30 percent last year, reaching a record of 4,200 vehicles. Škoda Auto remained the biggest car producer with nearly 700,000 cars, followed by Toyota, Peugeot, and Citroen plant, which recorded the biggest year-on-year growth of 9.7 percent.

Finance minister wants bill on electronic registers approved in January

Finance Minister Andrej Babiš has said he wants the bill on electronic registers approved by Parliament by the end of January. The finance minister said the coalition government would do everything in its power to see this come about, even if it had to use its majority in the lower house to end the protracted debate on the bill and call a vote. The three ruling parties have enough votes to see the bill through. Meanwhile, the opposition right wing parties which have used filibustering tactics to block the bill for months threaten to take the matter to the Constitutional Court if the coalition enforces a vote.

Internet retailers recorded record turnover in 2015

The turnover of Czech internet retailers in 2015 rose by 20 percent year-on year to a record amount of 25 billion crowns, the Association for Electronic Commerce announced on Thursday. This year, domestic e-commerce turnover is expected to grow at least by another 15 percent, reaching 100 billion crowns. According to the head of APEK, Jan Vetyška, the Christmas season contributed to nearly a third of the overall sales. Consumer electronics, mobile phones, toys and clothing were traditionally among the best-selling goods.

Czech nuclear plants see significant production drop in 2015

Czech energy giant ČEZ announced on Monday a sharp drop in electricity production from its two nuclear plants, Dukovany and Temelín, in 2015. The total net production from the two plants last year came to 26.83 TWh compared with around 30.32 TWh a year earlier. The biggest production drop came from Dukovany, where 2015 power production reached 12.60 TWh, around 2.77 TWh down on the 2014 output figure of 15.37 TWh. Three out of the four Dukovany units were closed from mid-September when flaws in X-ray safety checks on pipes by a sub-contractor were revealed.

President slams government for failure to draw 35 billion crowns in EU funds

In his interview for Czech Radio Plus on Monday, President Zeman criticized the government for failing to draw around 35 billion crowns in EU funds. He suggested the failure to draw the money was the result of laxness and incompetence. Originally, before corrective measures were taken, the country stood to lose up to one hundred billion. The president maintained that ‘even’ 35 billion crowns was an enormous amount. Over the period of 2007 to 2013, the Czech Republic had at its disposal the equivalent of 800 billion crowns from EU funds.

Česká rafinérská reaches deal with Mero on shipping and storage of crude

Crude oil processing company Česká rafinérská, owned by petrochemical holding Unipetrol, has reached a deal on the shipping and storage of crude with state owned Mero ČR. The move was confirmed by Mero spokesman Mikuláš Duda. The new contract is valid as of January 1, 2016. Mero is the owner and operator of the Czech section of the Družba crude oil pipeline and the IKL crude oil pipeline and is the only transporter of crude oil into the Czech Republic. Unipetrol CEO Marek Świtajewski said on Monday that the open-ended contract was the result of extensive negotiations which began in 2010.

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Business News

Imminent major change to VAT system will affect over 500,000 payers

23-12-2015 13:44 | Ian Willoughby

The biggest changes in the value-added tax system since its introduction in the Czech Republic in 1993 will come into effect in two weeks’ time after the minister of finance, Andrej Babiš, succeeded in definitively pushing the move through on Tuesday.


Companies and the self-employed will have to supply the state with far more information than at present under the new rules, the newspaper Hospodářské noviny reported. One of them will require around 550,000 VAT payers to file their tax returns by February 25.

Tax returns may now only be submitted in electronic form, perhaps posing a challenge to the 150,000 small firms and individuals who filed theirs on paper this year.

Martin Diviš, an expert on indirect tax at consultants PwC, told Hospodářské noviny that electronic-only tax returns were a step in the right direction and a logical trend. Practically everybody has an internet connection today so it shouldn’t cause anybody any problems, he said.

The most attention-grabbing aspect of the new system is the fact that VAT payers will be required to send tax officials a regular overview of all invoices or other non-cash documents that they have received or issued in the previous month.

This change – going by the term “inspection reports” – will provide the state with a huge volume of sensitive data on all Czech companies. For instance, it will make clear which other businesses a particular firm is involved with.

Unusually for tax legislation, which tends to be pushed through at the last minute by Czech legislators, the “inspection reports” were rubberstamped a year in advance.

Hospodářské noviny writes that the requirement has been rather overshadowed by the debate surrounding electronic cash registers – despite the fact the former will have a greater impact on those in business.

The right-wing parties the Civic Democrats and TOP 09 have called for the change to be delayed for a further 12 months to allow people to prepare. They say also that it had been linked to a bill on electronic cash registers that was rejected.

However, according to the head of the Financial Administration, Martin Janeček, the measure has been in the law for a year. It is therefore untrue that the public were unable to prepare for it, he said.

Government officials say the new measure will prevent large-scale VAT fraud. Mr Janeček’s agency estimates that up to CZK 80 billion is unpaid every year.

The monthly filing of invoices will make the Financial Authority’s work easier and allow it to uncover fraud more effectively. Special software will look for discrepancies between issued and received invoices.

Some companies fear the leak of sensitive data. But Mr. Janeček told Hospodářské noviny says the information supplied will reveal no more than that company A has done a transaction with company B. The fact firms do business together is already quite publicly known, he argued.

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Business News

18-12-2015 14:13 | Jan Velinger

In Business News: Farmers estimate losses at 2.6 billion crowns; International centre to explore medical use of cannabis; Amazon plans new centre on edge of Prague; Arms manufacturer Česká Zbrojovka signs agreement with Slovak Interior Ministry; Central bank upholds weak crown policy.

 

Czech farmers estimate losses caused by drought at 2.6 billion crowns

Czech farmers estimate the damages caused by this year’s drought at 2.6 billion crowns, the president of the Agrarian Chamber, Miroslav Toman, told the Czech News Agency on Thursday. He also said that the Agriculture Ministry has prepared a financial injection of 600 million crowns that will be distributed among the farmers hit by the hottest and driest year on record. The harvest of corn, beet root, and potatoes, took the biggest hit, but fruits and vegetables and hops were also affected. The government’s national strategy in coping with drought should be concluded by 2016.

International centre to explore medical use of cannabis opens in Prague

A center for research into the use of cannabis in medicine has been opened in Prague. The International Centre for Cannabis and Cannabinoids Institute has been created with the help of 500 million crown donations from the US and Canada. Health minister Svatopluk Němeček said the sum represents the biggest foreign investment in Czech medicine in recent years. The centre has been tasked to explore the use of cannabis and its components both with regard to existing medical knowledge and the experiences of patients. Although legal for some conditions, Czech doctors are said to be still cautious about prescribing medicinal cannabis.

Amazon envisages new centre on edge of Prague

US-based Amazon is proposing to locate its European centre for returned goods on a site on the outskirts of Prague. The site earmarked for the giant hall is at Horní Pocernice with the possibility of 3,000 workers on the site. Around 1,000 workers could be located from Amazon’s existing site at Dobrovíz, which would remain as a logistics centre for the e-commerce giant.

Česká Zbrojovka to provide guns to Slovak armed forces

The arms and military equipment producer Česká Zbrojovka has signed an agreement with the Slovak Interior Ministry to provide the country’s police and other armed forces with over 26,000 guns. Interior Minister Robert Kaliňák announced the news at a press conference on Thursday. The Slovak Interior Ministry is set to pay 383 million crowns (over 14 million Euro) for the items. Česká Zbrojovka has won the tender, the biggest of its kind in Slovakia’s history, together with the Austrian company Glock. The first dispatch of guns should be delivered to Slovakia at the start of next year.

Central bank upholds weak crown policy

The Czech National Bank board on Wednesday confirmed its commitment to intervene on foreign exchange markets until the end of 2016 in order to weaken the crown and maintain an exchange rate of CZK 27/EUR. The board also agreed to keep interest rates, now at a historic low, unchanged. The two-week repo rate will be maintained at 0.05%, the discount rate at 0.05% and the Lombard rate at 0.25%.

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Business News

11-12-2015 16:43 | Ruth Fraňková

In Busines News this week: The lower house approves 2016 budget; Inflation falls to 0.1 percent in November; Industrial production speeds up in October; October trade balance climbs to 13.3 billion crowns; Energy Regulatory Office not to pay out support for renewable sources; Prague-Shanghai air link to launch in April.

The lower house approves 2016 budget

The lower house of Czech parliament approved the draft of the 2016 state budget in its final reading on Wednesday. The proposal envisages expenditures of 1.251 trillion crowns and revenues of 1.181 trillion, creating a deficit of 70 billion crowns, i.e. 30 billion lower that this year’s. The lower house has also transferred more funds to be spent on social services, education and sport. The 2016 budget will have to be signed into law by the president.

Inflation falls to 0.1 percent in November

Year-on-year inflation in November fell to 0.1 percent from October’s figure of 0.2 percent, according to figures released on Wednesday by the Czech Statistics Office. Last month’s year-on-year rise in consumer prices is the lowest since February, contrary to the expectations of analysists, who predicted a year-on-year inflation rise of 0.4 percent. Compared to October, prices dropped by 0.4 percent, which was the highest month-on-month decline since September 2013. The slowdown of inflation was caused mainly by the fall in prices of foodstuffs, spirits and fuel.

Industrial production speeds up in October

Industrial production in October climbed by 3.8 percent compared with the same month in 2014. When adjusted for the number of working days, the output increase stood at 6.4 percent. The value of new orders over the month climbed by 6.5 percent. The main factor fuelling the output increase was higher production of cars but production of electricity and chemicals fell back sharply.

October trade balance climbs to 13.3 billion crowns

The Czech trade balance for October ended with a surplus of 13.3 billion crowns, according to figures released Monday by the Czech Statistical Office. That is an advance of 1.2 billion crowns on the figure for the same month in 2014. The surplus, however, could take a major dent of 9.9 billion crowns if a new deal for the Czech army to rent Gripen jet fighter planes is taken into account. The trade balance so far this year shows a surplus of almost 138 billion crowns, that is almost 4 billion crowns more than in the first 10 months of 2014.

Energy Regulatory Office not to pay out support for renewable sources

The Czech Energy Regulatory Office (ERU) will not pay out support for renewable sources of energy next year unless it is approved by the European Commission, ERU chairwoman Alena Vitásková told Czech Television. According to Vitásková, only about 7 percent of domestic renewable sources have received approval from the EC. The Czech Republic pays out about Kc45bn annually in support of renewable sources. One of the reasons why most renewable energy producers have not received approval from the EC is that they allegedly receive excessive support from the state. Vitásková´s position was criticised by the Industry and Trade Ministry, the Czech Photovoltaic Industry Association and the Alliance for Energy Self-sufficiency.

Prague-Shanghai air link to launch in April

A direct airline link between Prague and Shanghai should be launched by China Eastern Airlines on April 2 of next year, a spokeswoman for Prague airport’s operator announced. The flights should take place three times a week. Direct flights to Beijing were launched at the end of September this year by Hainan Airlines. The start of flights to Shanghai isregarded as further proof of the Czech Republic’s stepped-up business and economic links with China.

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Business News

04-12-2015 15:11 | Jan Velinger

In Business News: The average monthly salary jumps by almost 950 crowns; police investigate solar power corruption; Czech lawmakers will challenge VAT proposal; Czech oligarchs seek to buy up Mladá Fronta publishing house.

Average monthly salary reaches 26,072 crowns

The average monthly salary in the Czech Republic in the third quarter of 2015 rose by 944 crowns, compared to the same period last year, according to the figures released by the Czech Statistical Office on Friday. Accounting for inflation, real growth was 3.4 percent. The average monthly pay is currently 26,072 crowns (around 960 euros). The results exceeded expectations of analysts, who anticipated a wage hike of up to three percent.

Police investigate solar power corruption case

The Czech anti-corruption police squad is investigating several people connected to the country’s third largest solar power plant, Ševětín, in south Bohemia, the website lidovky.cz reported on Thursday. Two top-managers from Czech energy group ČEZ are reported to have been questioned following a raid on their offices. A spokesman for the anti-corruption unit said no-one was arrested or charged, but refused to provide any further information. The ČEZ-owned power plant, which was put into operation in 2010 under a generous government renewable energy support, has aroused suspicions of corruption in the past.

Czech lawmakers to challenge VAT proposal in Constitutional Court

A group of 21 members of the Czech upper house, the Senate, said Wednesday that they would challenge moves to clamp down on Value Added Tax fraud in the Constitutional Court. They say that the moves which should take effect next year are in conflict with data protection and collection rules. The Ministry of Finance says it is convinced the changes are in order. 

Politicians to discuss Dukovany shutdown in coalition council

Government political parties are to discuss the ongoing shutdowns and past safety failures at the Dukovany nuclear power plant next week. Minister of Industry and Trade, Jan Mládek, said a meeting of the coalition council will discuss the shutdown of three out of four of the reactor units since October. The closures have been caused by flawed past X-ray safety checks on reactor pipes by a sub-contracting firm.

Czech oligarchs seek to buy up Mladá Fronta publishing house

The publishing house controlled by Czech billionaires Daniel Křetínský and Patrik Tkáč has confirmed that it is seeking to buy up part of the Mladá Fronta newspaper and magazine group. Preliminary clearance from the Czech competition office has been sought for the deal. Mladá Fronta, which has no connection to the daily newspaper, is one of the biggest publishing houses in the country with the business daily E15 part of its stable. Křetínský and Tkáč already own the company publishing the best selling tabloid Blesk and the daily Sport.

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Business News

27-11-2015 15:07 | Ruth Fraňková

In Business News this week: Lower house seeks up to 44 billion crowns for 2016 budget; Electricity prices to remain unchanged in 2016; Farmers and local councils threatened by refusal to pay power support says ministry; Country’s largest insurer agrees on 2016 plan; Electronic motorway payments to be phased in within three years: ministry.

Lower house seeks up to 44 billion crowns for 2016 budget

Members of the lower house of parliament proposed additional spending in the 2016 budget totalling up to 44 billion crowns on Wednesday as they debated next year’s spending package. Most of the extra spending was focused on the army, border protection, education, and social services. Finance Minister Andrej Babiš said he would address the new demands in the final third reading. He added though that many ministries are currently now able to spend all the funds they are already allocated. The Ministry of Defence has been earmarked 50 billion crowns this year but appears on course to spend just 34 billion, he added.

Electricity prices to remain unchanged in 2016

The price of electricity for end clients will stay roughly the same in 2016 as this year, while the price of gas will drop by one to two percent, the Energy Regulatory Office announced on Thursday. The office raised the regulated part of the electricity price, which is comprised mainly of the fee for transmission and distribution and a contribution to renewable energy sources, but said the growth would be compensated for by a drop in electricity prices on the market. The regulated part accounts for over 50 percent of the end price of electricity; the price of baseload electricity is set by the suppliers. The regulated part of gas price currently accounts for one quarter of the final price, but its size is expected to drop by some 3 to 5 percent next year.

Farmers and local councils threatened by refusal to pay power support says ministry

The Czech Ministry of Industry and Trade warned Monday that farmers and local councils could be hard hit if a stand-off with the country’s energy regulator over support payments for 2016 continues. The ministry pointed out that around a third of the state support which threatens to be blocked is earmarked for bio-gas facilities which have been constructed by farmers and many local Czech councils. Since loans were taken out on many of the projects, the situation is even graver, the ministry added. The energy regulator is refusing to sign off on around 40 billion crowns of support for 2016 because it says the aid has not been cleared by the European Commission.

Country’s largest insurer agrees on 2016 plan

The executive council of the country’s largest insurance company VZP agreed on its health insurance plan for 2016, the board’s chairman Jiři Běhounek announced on Monday. The insurer, he said, would provide 152.8 billion crowns for health care in 2016, a rise of four percent year-on-year, for almost six million clients. For the second straight year the company fill reserve funds; the insurer is also counting on rising costs in treatment. The firm will now send the proposal to the Health Ministry. It will have to be approved by the government and later in Parliament.

Electronic motorway payments to be phased in within three years: ministry

The Ministry of Transport says that it will make the transition from paper to electronic motorway tolls within three years. A similar electronic system will already be up and running in Slovakia next year. The ministry says that the new system will allow it to clamp down on counterfeit motorway stickers, a problem that was particularly evident at the start of 2015. Prices for year-long stickers will be the same next year as this at 1500 crowns.

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Business News

20-11-2015 14:05 | Ruth Fraňková

In Business News this week: Czech currency in circulation exceeds 500 billion mark for first time; Spending watchdog finds 2.2 billion in irregular spending at defense ministry; Škoda Auto to raise prices of most popular models; New stretch of Prague metro’s A line to get mobile phone signal; Ruling on late train delivery could lead to ticket price hike.

Czech currency in circulation exceeds 500 billion mark for first time

The value of bank notes and coins in circulation in the Czech Republic has for the first time exceeded the 500 billion crown mark, the Czech National Bank announced on Monday. The total is made up of of more than 2 billion individual notes and coins in circulation, the most popular being the 1,000 crown note and, at the other end of the value chain, the one crown piece.

Spending watchdog finds 2.2 billion in irregular spending at defense ministry

The state spending watchdog, the National Audit Office, has highlighted spending irregularities at parts of the Ministry of Defence. Altogether it found irregularities of around 2.2 billion crowns in the period from 2009 to 2014. The worst were in the ministry’s arrangements for security at its munitions stores where contracts were awarded to one company without a tender and irregularities amount to 2 billion crowns. Other problems were found in purchasing of food, without regard to the number needing to be fed, and provision of accommodation.

Škoda Auto to raise prices of most popular models

Czech car maker Škoda Auto has raised prices of its most popular cars on the Czech market, the website aktualne.cz reported on Thursday. According to the company, prices were increased due to inflation. They also said the price hike will be compensated by an improvement in the basic equipment offered on models. As of next week, the price for a Škoda Superb will increase by 15,000 crowns and the price for an Octavia by 5,000 crowns. The price of a Fabia currently starts at 239,000 crowns and the top of the range Superb at 614,000 crowns.

New stretch of Prague metro’s A line to get mobile phone signal

Three mobile phone operators have signed a contract with the Prague transport authority on providing a signal along the new stretch of Prague metro’s A line. The pilot project should give passengers the luxury of making calls and using LTE internet along the entire length of the recently opened stretch of the line linking the stations Bořislavka, Veleslavín, Petřiny and Motol Hospital. Work on wiring up the tunnels has been underway since the contract between T-mobile, Vodafone, 02 and Prague City Transport was signed at the end of June and should be concluded by the end of the year.

Ruling on late train delivery could lead to ticket price hike

If an appeal against an arbitration ruling under which Czech Railways must pay CZK 1.2 billion to Škoda Transportation proves unsuccessful the price of train tickets in the Czech Republic could go up, the Minister of Transport, Dan Ťok, has warned. Czech Railways had been seeking close to a CZK 1 billion from the engineering company over the late delivery of nearly two dozen of Škoda Transportation’s 380 line locomotives. However after years of deliberation (the original deal was done in 2004), the court of arbitration attached to the country’s economic and agricultural chambers found in favour of Škoda Transportation in a verdict that one news site said meant that Czech Railways now had the most expensive trains in the world.

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Business News

13-11-2015 16:25 | Jan Velinger

Business round-up this week: Government agrees on early retirement package for miners; Health minister declares new victory in Diag Human arbitration battle; Finance minister says environment clean up can be done for half previous price; ČEZ reports fall in profits, rise in revenues, Czech Telecommunications Infrastructure new sponsor of Prague Spring festival.

Government agrees on early retirement package for miners

The country’s miners will be allowed to retire five years earlier than the rest of the working population the government agreed at its cabinet meeting on Monday. The plan was put forward by the Ministry for Labour & Social Affairs; if passed into law, it would mean miners would be able to retire at the age of 58. The ministry tabulates that the total cost of the early retirement package will be an estimated 11.6 billion crowns until 2055 – the estimated expiry date for brown coal mines in the country.

Health minister declares new victory in Diag Human arbitration battle

The Czech Republic has won another round in its international arbitration battle with the blood products company Diag Human. A court in Amsterdam backed earlier rulings that the country was not liable to pay more than 8 billion crowns in damages to the blood products company. That some was set in a 2008 ruling of the alleged damages to the company when the Czech Republic withdrew from an earlier agreement. The latest success was announced Thursday by Minister of Health Svatopluk Němeček

Finance minister says environment clean up can be done for half previous price

Minister of Finance Andrej Babiš said Thursday that his ministry can now arrange for the clear up of long running environmental problems in the country for around half the costs of a tender run by the previous centre-right coalition government. Babiš said the clean-up should cost 25-30 billion crowns compared with the 57 billion offered to underrate the work under the previous government headed by former prime minister Petr Nečas. The clean-up should cover chemicals at the Neratovice site in Central Bohemia, the famous oil and chemical lagoon in Ostrava, and other environmental damage centred around Ústí nad Labem.

CEZ reports fall in profits, rise in revenues, in first three-quarters

The Czech energy giant CEZ has reported a net profit of CZK 16.6 billion for the first nine months of this year, a fall of CZK 3 billion on the same period in 2014. Meanwhile, CEZ’s revenues increased by CZK 3.5 billion to CZK 150.6 billion in the first three quarters, according to a press release issued by the semi-state company on Tuesday. The main causes of the fall in profits were a drop in electricity prices and lower output.

Czech Telecommunications Infrastructure new sponsor of Prague Spring festival

The company Czech Telecommunications Infrastructure, owned by the richest Czech Petr Kellner, has become the new general sponsor of the Prague Spring international music festival, the head of the festival, Roman Bělor, said on Wednesday. The Česká Spořitelna bank, which had been sponsoring the Prague Spring festival since 2001, stepped down from its sponsorship in April this year. The budget for this year’s 70th edition of the festival amounted to over 80 million crowns.

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Business News

06-11-2015 11:29 | Daniela Lazarová

In Business News: the unemployment rate drops to 4.9 percent, lower house backs hike in gambling charges, new car sales continue to surge, Czech Republic seeks to recruit qualified Ukrainians and shadow economy makes up 15 percent of Czech GDP.

Czech unemployment rate drops to 4.9 percent in third quarter

The unemployment rate in the Czech Republic has dropped to 4.9 percent and is the lowest since 2008, according to data released by the Czech Statistics Office. In the third quarter labour offices registered just over 257,000 unemployed, down by 55,000 compared to the same period last year. According to analysts the figures confirm the revitalization of the Czech economy which is in its best shape since the global crisis.

Lower house committee backs hike in gambling charges

The lower house of parliament’s budget committee on Wednesday gave overwhelming support to a government proposal to hike taxes on gambling. The government proposal counts on betting taxes climbing from the current 20 percent to 23 or 28 percent. Daily taxes on slot machines should also rise by around a third. The combined measures should bring in an extra 2 billion crowns. Parliament should vote on the proposed measure by the end of this month.

New car sales continue to surge in October

New car sales in the Czech Republic are continuing to surge. Sales in the first 10 months of the year ending October are up just over 19 percent compared with the same period in 2014. Total sales stand at just over 191,000. The Škoda Octavia is the most popular single model counting for around one car in 10. Manufacturer Škoda Auto has around a third of the total new car market in the Czech Republic followed by Volkswagen with just over a fifth.

Czechs seek to recruit qualified Ukrainians with fast track visas

Speeded up and simpler visa procedures will be offered in November to Ukrainians who may be able to work as IT specialists or expert technicians in other fields. The speeded up blue cards will be launched as a pilot project for up to 500 Ukrainian university and high school graduates who can fill immediate vacancies.

Shadow economy makes up 15 percent of Czech GDP

The shadow economy makes up 15 percent of the Czech GDP, according to data released by the Czech Statistics Office. Transactions to the tune of 614 billion crowns annually go untaxed. In addition to large-scale VAT evasion this concerns undeclared income from smaller transactions in cash for services provided. According to the Centre for Economic and Market Analyses the overall sum lost to state revenues could help create 1.5 million new jobs.

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Business News

30-10-2015 16:11 | Daniela Lazarová

In Business News: the central bank board is likely to extend forex interventions into 2017, the EC rejects a bid for extension of VAT reverse charge mechanism, a Czech firm is rated fastest growing technology company in Central and Eastern Europe, the logistics company Geis CZ is planning to build a new transhipment point in Prague and Millionaire Gallery opens a Prague branch.

Analysts predict forex interventions will be extended to 2017

Analysts are predicting that the central bank board will decide to extend forex interventions until 2017 at its upcoming meeting on November 5th, the ctk news agency reported Friday. Analysts cited by the news agency say that in its November forecast the bank is likely to predict a slower inflation growth which has been the main factor behind its intervention policy to keep the crown weak against the euro. In earlier statements the central bank said interventions might end in mid-2016. Interest rates are expected to remain at an all-time low.

EC rejects Czech application for extension of VAT reverse charge mechanism

The European Commission has rejected a bid by four EU member states including the Czech Republic for an exception allowing a broader application of the reverse charge in order to prevent tax evasions. Czech Minister of Finance Andrej Babiš, who has long been pushing for EU member states to be able to decide for themselves what goods and services will be subject to reverse charge, said he was disappointed by the outcome. According to the Ministry of Finance, the Czech Republic was ready to test the possibility of a broader application of the method with help of a pilot project similar to the one prepared by the European Commission in 2008.

Czech firm rated fastest growing technology company in Central and Eastern Europe

A Czech company has been rated by Deloitte as the fastest growing technology company in Central and Eastern Europe. The software company Simplity got top ranking on the Technology Fast 50 list followed by the mobile payments company Skycash Poland and last year’s overall leader, Hungarian online real estate business Szallas.hu. Interestingly, Simplity was sixth in last year’s Rising Star category, when it was still too young to feature in the Fast 50 ranking itself. Four other Czech firms made it into the first fifty.

Geis CZ to build central transhipment point in Prague

Logistics company Geis CZ is planning to build a new transhipment point in Prague in the first quarter of 2016. According to the company’s marketing department it also plans a substantial investment into the sorting technology in the new transhipment facility. Geis CZ reported revenues from the sale of its own products and services totalling 2.06 billion crowns in 2014.

Millionaire Gallery opens in Prague

The Millionaire Gallery, which sells celebrity memorabilia, this week opened a branch in Prague, the fifth in the world, after Miami, Key West, London and Dubai, the ctk news agency reported. According to the head of the Czech branch collectors and investors will be offered a minimum of 60 items at a time. Besides, customers can order artefacts from the depository in Miami or have new memorabilia tailored on request. The items now on display include a collection of photographs with the signatures of all the actors who ever played James Bond and a collection of grand slam titles won by golf champion Tiger Woods. The most expensive item on offer is the prototype of Steve Job's first keyboard, priced at one million crowns.

© 1996–2015 Český rozhlas


Otto Jelinek, Part 2: Success in business and politics and return to Prague

26-10-2015 17:00 | Ian Willoughby

Prague-born Otto Jelinek became Canada’s ambassador to the Czech Republic in 2013, six and a half decades after his family moved to the North American state from communist Czechoslovakia. After becoming figure skating world champion in his early 20s, Mr. Jelinek was also successful in his next venture as a skating goods manufacturer. That was followed by a political career with the Progress Conservative party that included a string of ministerial positions.

In the second half of this two-part interview, I asked Canada’s envoy to Prague whether – being the son of a wealthy industrialist – business had been in his genes.

“Yes, it was. My whole family is business oriented. We grew up in a business-oriented environment, so it was a natural for me to go into business.

“Clearly with the name being known in Canada it was easier to sell skates than anything else.

“I started a manufacturing business, manufacturing skates both hockey and figure skating. Then I added other lines to that and built up a nice business.”

You later became an MP and eventually held several ministerial posts. What drew you into politics?

“I never planned to go into politics. But as I was running my business, and because of the fact that Canadians knew my name quite well from my having the World Championships, I got to speak at local Rotary Clubs and Lions Clubs and things of that nature.

“When speaking I complained about small business owners like myself having a lot of red tape thrown at them by all levels of government and all political parties.

“So I was then singled out as someone who could be saying the same thing on the floor of the House of Commons.

“I kind of laughed at that, because I never planned to go into politics. I never considered myself a politician. I still don’t consider myself a politician, although I served 21 years in Ottawa, nearly 10 of them as a cabinet minister.”

During all those years, did you pay much attention to events in Czechoslovakia?

“Yes and no. Obviously we knew what was happening when there were major events here. But did we follow daily activities…?

“We had some family here from my mother’s side – we still see them, we’re quite close – so we were in touch with them.

“But we didn’t follow what was happening because we had written Czechoslovakia off. Meaning we never expected that the Berlin Wall, the Iron Curtain, the Soviet Union would fall.

“We didn’t expect it. We didn’t dream about it. We didn’t think about it. We didn’t plan our life around, Oh, we’re waiting until something happens and then we’re going to go back to Czechoslovakia. That was never, never, in our minds.

“Was the fact that we were historically Czech and culturally Czech in our minds? Yes. We were a Czech family living in Canada.

“We ate Czech food. We spoke Czech at home. Thank goodness – I hated to do that when I was a kid, but if I hadn’t spoken Czech at that time I wouldn’t be speaking Czech now.”

Tell us about the first time you came back to Prague after November 1989.

“I actually came with a delegation of business people, seeing whether the changes here would bring business opportunities, which they obviously did, from an investment standpoint, from a privatisation standpoint.

“There were great, great opportunities and I wanted to, as a Czech… we were so positively shocked that this happened, that suddenly there was freedom and democracy here.

“We were very, very excited about what was happening here – the transition, the transformation. I came back several times as a cabinet minister, leading investment and trade delegations.

“Some of those investments are still here, from auto parts manufacturing to the Four Seasons Hotel and many others in between that our delegations brought here…”

Tomáš Baťa was also part of the delegations, is that right?

“I was just going to say. Who helped me very much was Tomáš Baťa. He came on several of those delegations. He was very helpful to me and of course the delegation as a whole – he was always very positively involved.

“So it was a new world. It was a new life. To the point where one I brought my wife to show her beautiful Prague and she loved it here.

“One fine May afternoon, sitting at one of the outdoor cafés with the sun shining, she said, You know Otto, you’ve done enough of politics – why don’t you quit and move here just on a sabbatical and be part of this transformation of your country?

“We thought about it – not very long. At that time there was a leadership election going on in the party in Canada and some people thought I may be seeking the leadership of the party.

“I called a press conference at which I announced that not only am I not seeking the leadership, I’m also after so many years leaving politics.

“We moved to Prague on a sabbatical but I turned that into business opportunities and started my own business here, eventually chairing Deloitte & Touche, now called Deloitte.”

Was it hard for you to adjust to life here after so many years in Canada?

“You know it wasn’t if you didn’t fight it. You had to accept the fact that there would be differences. You had to accept the fact that the bureaucracy was an even more ingrained way of life than it was in Canada.

“So not fighting the changes, not fighting the difficulties of the transition, it wasn’t that difficult. And speaking the language, even though I spoke it very badly at that time, and I’m still not perfect at it, it helped.”

People called that period in the 1990s the Wild East period. Regulations weren’t so tight, there was a lot of corruption. How did you find doing business at that time?

“Very difficult. Corporate governance was unheard of. I wanted to help the transition into a more rule of law environment.

“That’s where I joined forces with Deloitte & Touche, the large international accounting advisory firm, and eventually became chairman of Deloitte Czech Republic and then Deloitte Central Europe. Specifically to help bring in rules, laws and regulations with the then governments that would cut through the Wild, Wild East feeling.

“Corruption, transparency, is still a problem to some extent. But it’s now being dealt with. It’s certainly being talked about by the politicians and others – and major progress has been made over the last 20 years.”

From your perspective, how well did Czechs take to business after so many years of communism?

“I think very well, some. Some not so well. As would be expected.

“But Czechoslovakia prior to the war was one of the easy top 10 economies in the world. So Czechs and Slovaks have it in their genes to be entrepreneurial and business oriented.

“Because of that Czechoslovakia did very well in the transition. There were problems as any country changing so dramatically would have. But Czechoslovakia did exceptionally well.

“And when there was the friendly split-up of Czechs and Slovaks, everyone thought that the Slovaks would go bankrupt, because they maybe didn’t have the industrial depth that the Czechs had.

“But that didn’t happen either. The Slovaks have done very well. In some cases better than the Czechs. So there’s a friendly, competitive spirit between the two and that’s healthy, too.”

Two years ago you became Canadian ambassador to the Czech Republic. I presume in business straight talking is helpful but in diplomacy you have to be more careful what you say?

“Well if you know what you’re talking about, and in business I think I do… everything we do is trying to help Canadian businesses see opportunities in the Czech Republic and Central Europe.

“Everything I do and the embassy does in terms of trade and business is to open doors for Canadian businesses, to create opportunities for them to meet their counterparts here on every level, to open the doors when they need to political support.”

Could you possibly compare the two national characters, if such things exist?

“I think there’s a lot in common. We’ve already covered the fact that both Czechs and Slovaks are business-oriented – so are Canadians.

“Canadians are innovative. They’ve invented a lot of things, from the telephone to field hockey, if I should use a sports reference [laughs]. So have the Czechs – from contact lenses to robots and everything in between.

“The Czechs love nature. So do the Canadians. In fact there’s a part of the Czech Republic which is called Czech Canada. It reminds me of Northern Ontario, and I lived in Ontario.

“So there are a lot of similarities. Someone asked me what the dissimilarities are. I think that Czechs are not as optimistic as the Canadians.

“When they see a half full glass, Canadians tend to say it’s half full, whereas Czechs tend to say it’s half empty. But that’s changing.”


Business News

16-10-2015 15:47 | Jan Velinger

In Business News this week: Czech Turbolet passenger planes could be manufactured in Russia in 2020; the average cost of a Prague taxi is 20 crowns per kilometre gas and diesel prices continue to fall; beekeepers see more than 60 million crowns in subsidies; vegetable prices higher than usual.

Czech L-410s could be built in Russia in 2020

Czech L-410 Turbolet passenger planes could be manufactured in Russia in 2020, according to Andrej Kozicyn, the head of the Russian industrial holding firm UGMK, which became the wholesale owner of LET Kunovice Aircraft Industries in 2013. UGMK presented the first L-410NG aircraft design this summer. Some model parts could already be produced within two years. The L-410s manufactured in Russia will be primarily for the Russian market and neighbouring countries.

Average cost of Prague taxi per kilometre is 20 crowns

The average cost per kilometre of a taxi ride in the Czech capital is 20 crowns, alternative taxi service firms Taxify and Liftago have revealed. City Hall enforced a cap on the price per kilometre at a maximum 28 but is offering to raise the price to 32 crowns; taxi companies, however, are lobbying for the ceiling to be lifted to 38 or even 45. Other data gathered showed that taxi drivers, on average, drive between 200 and 300 kilometres per day, but only 25 percent of the distance covered is with customers.

Gas and diesel prices continue to fall

Gas and diesel fuel prices have continued to drop in the Czech Republic: the cost of tanking up is the lowest since February. Over one week, Natural 95 fell by 25 hellers to an average of 30.53 crowns per litre; diesel dropped by six hellers to an average 29.38 crowns, CCS, a company monitoring sales, said. Prices in Prague remain higher than in the rest of the country; by region, Ústí, Liberec and Moravia-Silesia, have the lowest, all currently sell diesel for less than 28 crowns per litre, Ústí has the lowest average price for unleaded gas.

Sixty-four million crowns go to beekeepers

Beekeepers received a total of 64.5 million crowns in subsidies in 2015 and will receive a similar amount next year, the State Agricultural Intervention Fund has confirmed. Half of this year’s subsidies came from the state budget and the rest from EU funds. The Czech Beekeepers’ Association said that more than 50,000 bee keepers, owning almost 600,000 bee colonies, applied for funding this year; they asked for more funding than was available. Despite winter losses, the spring saw good conditions; a kilo of honey currently sells for 130 – 180 crowns. Dark honey costs around 180, the Czech News Agency added.

Vegetable prices rise

Prices have continued to go up for vegetables including potatoes, carrots and paprika peppers, the Czech Statistics Office reports. The Czech Vegetable Growers Union of Bohemia and Moravia, Jaroslav Zeman, confirmed he did not expect prices to fall before the next harvest. He confirmed the conventional wisdom that by this time of the year prices usually fall by 30 – 40 percent, but 2015 had proven an exception. For example, the price of carrots rose by five percent to more than 20 crowns per kilo, a difference of six crowns from the same period last year. Low-cost imports could still influence a drop in prices, but Mr Zeman suggested that was unlikely given yields in the rest of Europe.

© 1996–2015 Český rozhlas


Business News

09-10-2015 15:36 | Ruth Fraňková

In Business News this week: Czech unemployment rate at lowest level since March 2009; Czech consumer annual prices growth accelerates to 0.4 percent; number of Czechs facing four or more property seizures sharply increases; Export of used cars from Czech Republic grows by 45 percent; the Czech Republic has rolled out its first wine vending machine or “vinomat”.

Czech unemployment rate at lowest level since March 2009

The Czech unemployment rate is at its lowest level since March 2009. According to the figures released by the country’s Labour office this week, unemployment in September dropped to 6 percent from 6.2 percent the previous month. The office currently registers 441.892 unemployed persons and there are on average 4.1 applicants for every vacancy. The positive trend has been driven by strong economic growth. A slight increase in the jobless rate is expected towards the end of the year with the end of seasonal work.

 

Czech consumer annual prices growth accelerates to 0.4 percent

Czech consumer prices inflation accelerated in September to 0.4 percent year-on-year, the Czech Statistical Office reported on Friday. The inflation figure was 0.1 percentage point higher than in August. Analysts had expected the inflation rate would be flat or fall. The increase was fuelled mainly by price increase of holidays and services as well as by the higher prices of alcohol and tobacco.

Number of Czechs facing four or more property seizures sharply increases

The number of Czechs who are facing four or more property seizures has markedly grown despite the overall number of property seizures going down in the long-term, the Czech Chamber of Bailiffs has warned. While the number of people facing property seizures in the Czech Republic has dropped by 27 percent over the past two years, from one million in 2013 to 730,000 in 2015, the number of seizures has increased at the same time by 29 percent, from 3.3 million to 4.4 million.

 

Export of used cars from Czech Republic grows by 45 percent

The export of used cars from the Czech Republic will grow this year by 45 percent to 91,000 vehicles, compared to 2014. The reason behind the steep increase is the artificially weakened Czech currency. According to the vehicle-security firm CEBIA, which monitors the origin of cars on Czech roads, the exported cars are usually less than five years old and they are exported mainly to other EU countries. The number of used cars imported into the Czech Republic has increased by around 25 percent, and more than fifty percent of these cars are over 10 years old.

Czech Republic launches its first wine-vending machine

  The Czech Republic has rolled out its first wine vending machine or “vinomat”. The trial operation of the wine-selling machine, which functions like a normal coin operated drink dispenser, was launched in Ostrava earlier this week. Buyers are required to insert their ID card into the machine in order to verify their age. Vinomat, which is operated by the Pavlovín company from the wine town of Velké Pavlovice, currently offers four types of wine.

© 1996–2015 Český rozhlas


Business News

02-10-2015 12:07 | Chris Johnstone

In this week’s Business News: finance ministry offers multi-billion crown pardon for firms; furniture makers look to record year; Japanese car parts firm follows the lead to Kolín; Kofola drinks company moves forward with Prague shares launch; and O2 demands no show for top football games.

 

Almost 11 billion crowns in tax dues and penalties pardoned

The Czech Ministry of Finance headed by businessman Andrej Babiš is showing exceptional clemency towards companies. Last year the ministry pardoned unpaid tax totaling almost 6.0 billion crowns and forgave interest and penalties amounting to 5.0 billion. Those figures represent jumps of around 200 percent and more 150 percent respectively. Authorities say one of the reasons for the increase is a change in the European rules for clawing back funds.

Far from wooden performance from furniture makers

The Czech furniture sector is expecting a record year for sales this year. The Czech Association of Furniture Makers says turnover this year should total around 43 billion crowns, around 3.0 billion more than in 2014. Around half of Czech production is exported with the biggest buyer neighbouring Germany. But imports, mostly from Poland and China, account for almost half of furniture sales on the domestic Czech market.

Tsubakimoto heads towards Kolín cluster of Japanese firms

Japanese car components producer Tsubakimoto has chosen the Czech Republic for its first European factory. The company is investing around 440 million crowns in a plant near the central Bohemian city of Kolín for producing timing systems for car engines. Production at the plant should start in 2017. Tsubakimoto will be the fourth Japanese investor attracted to the industrial zone on the outskirts of Kolín. The Japanese company looked at other investment possibilities in the region including Slovakia.

Drinks producer Kofola pushes forward with Prague listing

Czech-Slovak drinks company Kofola this week made its debut on the Prague Stock Exchange. It has been given what is termed a “technical listing” with no shares as yet changing hands. The latest move follows the switch of the drinks’ company headquarters from Warsaw to Ostrava. And the listing raises expectations that Kofola shares will be fully launched and trading on the Prague Stock Exchange by the end of the year. A prospectus paving the way for the launch of the shares has already been cleared by the Czech National Bank. Kofola is one of the leading non-alcoholic drinks companies in Central Europe.

O2 calls wins red card over Champions League screenings

Telecommunication company O2 is playing hard ball over the rights to screen top football games from the Champions League in the Czech Republic. It won an order from a Prague court this week demanding cable companies black out images of the top games shown on foreign television channels available in the Czech Republic. O2 won the rights to screen most of the top football games on its television and cable channels for this and the next two seasons, sharing a few games with Czech public service broadcaster Czech Television. O2 is owned by the PPF company of richest Czech Petr Kellner.

© 1996–2015 Český rozhlas

 


Business News

25-09-2015 14:02 | Chris Johnstone

Czech plane maker targets ‘unfair’ French tender; offer to keep Důl Paskov mine operating; ČEZ offloads hydro unit but eyes German coal plants; slim picking for Czech IT managers; and richest Czechs see wealth eroded.

Aero Vodochody to challenge French tender

Czech aircraft producer Aero Vodochody is to challenge a French decision to close off its chances in a tender for around 20 training aircraft for the army. The company failed to make it through to the tender shortlist with its offer of the L-39NG aircraft. It says some of the conditions laid down were discriminatory and procedures dubious. The complaint will initially target the state authority for armaments purchases with a court challenge likely to follow in the case that this fails.

OKD mine offered extended lifeline

Continued mining at one of the Czech Republic’s last deep mines looks likely to continue in spite of low world prices. Mining company OKD is reported to be willing to prolong a deal with the government to keep the Důl Paskov mine going for at least a further six months. OKD has the option to exit an original deal aimed at safeguarding the thousands of jobs at the mine until 2017. That option opened up in September when coal prices remained for nine months in a row below 110 dollars a tonne.

ČEZ sells Turkish hydro plant, eyes Vattenfall assets

State-controlled power company ČEZ has sold off one of its Turkish assets, an 80 MW hydro electric plant in the northeast of the country, for around 2.0 billion crowns. The near 70 percent state owned firm said it had an attractive opportunity to sell up to a local power company. ČEZ has meanwhile, along with fellow Czech power company EPH, said it is interested in buying the German coal fired power plants being sold by Sweden’s Vattenfall.

Czech IT managers among world’s worst paid

Czech IT managers are among the worst paid in the world, according to a survey by the global jobs consultancy MyHiring Club. Average monthly wages are around 86,000 crowns, around three-and-a-half times the Czech average wage, but still in the bottom 10 countries of the worldwide survey. Czech IT pay rates come in just ahead of those in China and India but below those of, for example, Argentina. Many West European and American companies have outsourced some of their less demanding IT workload to the Czech Republic.

Top three Czech billionaires buck trend with shrunken assets

The three wealthiest Czechs have had lean times of late according to a study by Capgemini and RBC Wealth Management. Number one on the local wealth ladder, Petr Kellner of the PPF empire, saw his estimated material worth slump almost 6.0 percent, partly due to the problems of his Home Credit business in Russia. Head of the Agrofert agro-chemical group, Andrej Babiš, has seen his wealth shrunk by just over 16 percent, according to the study. And coal and energy business billionaire Pavel Tykač, witnessed a 2.4 percent drop. They were the exceptions to the rule with most of the top 100 Czech and Slovak crown billionaires adding to their assets.

© 1996–2015 Český rozhlas


Business News

18-09-2015 15:41 | Ruth Fraňková

In Business News this week: Czech foreign debt grows to CZK 2.9 trillion in second quarter; hop harvest worst in 45 years; Czech aviation firms increase turnover by 15 percent; and Czech Republic has EU’s highest number of breweries per head.

Czech Republic’s foreign debt grew to 2.9 trillion in second quarter of 2015

  The Czech Republic’s foreign debt grew by CZK 137 billion year-on-year to CZK 2.9 trillion in the second quarter of this year, amounting to 66.4 percent of gross domestic product, the Czech National Bank said on Friday. The foreign liabilities of the government sector accounted for 21.3 percent of the total external debt, while the banking sector is responsible for 29.4 percent. The external liabilities of the corporate sector accounted account for the remaining 49.3 percent.

Hops harvest of worst in 45 years

This year’s Czech hop harvest is likely to be the worst in the past 45 years, the Hop Growers Association announced this week. According to preliminary results, the yield of hops this year dropped by 35 percent compared to 2014, to 4100 tonnes of hops. Czech hop growers expect a slump in profit amounting up to 350 million crowns, the chairman of the Hop Growers Association, Luboš Hejda, said. This year’s crops were damaged by very high temperatures and droughts. Dry weather has also caused hops to have a lesser concentration of alfa acids, which are responsible for the bitter flavour in beer.

Czech aviation firms increase turnover by 15 percent

Czech firms associated in the Confederation of the Czech Aviation Industry this year have increased their turnover by 15 percent compared to the previous year to CZK 11.9 billion, the association’s representatives said this week. Last year’s export amounted to CZK 10.5 billion. Thanks to a growing number of commissions last year, the number of employees in the Czech aviation industry increased by 14 percent. However, firms are complaining of a lack of people with adequate technical qualification.

Czech Republic has highest number of breweries per head

The Czech Republic has the highest number of breweries per head among EU countries. According to data released this week by the European Association of Breweries there is one brewery for 31, 333 people in the Czech Republic. Denmark placed second with one for every 37,500 people, followed by Austria, Lithuania and Great Britain. The Czech Republic moved to first position from last year’s third place. According to the monthly Pivo, Bier & Ale, there are currently 336 breweries in the Czech Republic.

Čedok owner buys luxury hotel complex in Croatia

The Odien financial group, which owns the Čedok travel agency in the Czech Republic, has acquired a luxury hotel complex in Croatia’s Split from the Austrian state company Heta Aset Resolution, the marketing head of Čedok, Tomáš Brejcha, announced this week. The transaction reportedly amounted to billions of crowns. Grand Hotel Lav is the biggest five-star hotel in Croatia. It features over 380 rooms, 800 metres of beaches and promenades, a private marina and one of the country’s largest conference facilities. According to Mr Brejcha, the hotel will also be available to Čedok clients.

© 1996–2015 Český rozhlas



Business News

11-09-2015 11:34 | Dominik Jůn

In this week's Business News: Unipetrol announces its largest ever investment project; Czech firms say they could put 5,000 migrants to work; inflation growth slows for third consecutive month; China’s Changhong electronics firm announces it is to expand its Nymburk plant; and the Czech Republic sees boom in dollar millionaires


Unipetrol announces huge investment

Czech oil distributor Unipetrol is preparing to undertake its largest round of investments in Czech history. The company will build a new oil processing facility worth CZK 8.5 billion after signing a deal with Italian engineering firm Technip. The deal will see a new polyethylene manufacturing plant built in Záluží in north-western Bohemia, planned to go in to operation in 2018. According to Unipetrol’s CEO Marek Świtajewski, the move will enable the company – owned by Poland’s PKN Orlen – to utilise the most modern available technologies.

Czech firms could put 5,000 migrants to work

Czech firms are able to immediately put to work 5,000 immigrants, according to a study published by the Czech Transport and Industry Association. As the country experiences a period of strong growth, demand is high for qualified technical workers, which, the Association argues, could even be sourced from among the wave of Syrian migrants entering the EU. However, such employment could also be hindered by language barriers and the long process of applying for a work permit, writes Novinky.cz. The Association is set to discuss with the Czech government how to devise a programme to retrain migrant labourers and also school them in the Czech language.

Inflation growth slows for third consecutive month

The rate of inflation growth in the Czech Republic slowed for the third month in a row, according to new figures released by the Czech Statistics Office. Previously, the Czech National Bank had forecast 0.7 percent growth in August – but the real number was only 0.3 percent. Chiefly responsible for the trend are falling fuel prices, while the prices of a number of groceries, including grain and dairy products also fell. The Czech National Bank forecasts inflation levels of 2 percent by 2017.

China’s Changhong to expand Nymburk operations

The European arm of Chinese consumer electronics manufacturer Changhong has announced that it is set to invest CZK 650 million to expand its plant in the Czech town of Nymburk, which currently employs 300 people. Changhong’s investment in the plant began back in 2006, at the time representing a rare example of Czech-Chinese economic cooperation. According to President Miloš Zeman – a staunch advocate of closer economic ties with China – the volume of overall Chinese investments in the Czech Republic could soon rise as high as CZK 10 billion.

Czech Republic sees boom in dollar millionaires

The number of dollar millionaires living in the Czech Republic climbed last year by 10 percent to a record 21,400 people, according to the results of a new worldwide survey published by French consulting firm Capgemini and US firm RBC Wealth Management. The data also shows that the rate of growth in Czech millionaires considerably exceeds the global average. Among the contributing factors are strong Czech GDP growth and strong exports. 

© 1996–2015 Český rozhlas


Business News

04-09-2015 15:57 | Ruth Fraňková

In Business News this week: average monthly salary reached 26,278 crowns in second quarter of 2015; EC approves government’s plan to extend support for biofuel; cyber-security firm CyberGym to build commercial Training Arena in Czech Republic; Česká spořitelna to launch pre-paid debit card for children; Czech firm opens household utensils manufacturing plant in Vietnam.

Average monthly salary reached 26,278 crowns in second quarter of 2015;

The average monthly salary in the Czech Republic in the second quarter of 2015 rose by 3.4 percent, compared to the same period last year, according to the figures released by the Czech Statistical Office on Friday. Accounting for inflation, real growth was 2.7 percent. Average monthly pay stood at 26,287 crowns (over 970 euros) at the end of August. The results exceeded expectations of analysts, who anticipated a wage hike of about two percent.

EC approves government’s plan to extend support for biofuels

The European Commission has approved the Czech government’s plan to extend the support of the so-called first generation biofuels, based on food or animal crops, the daily Hospodářské Noviny wrote this week. The draft legislation, which extends the fuel support, has been repeatedly debated in the lower house of parliament since April this year. The legislation has come under fire from opposition deputies who claim that it benefits the agro-chemical group Agrofert owned by Finance Minister Andrej Babiš. The extended tax benefits, which should be in place until 2020, should amount to nine billion crowns.

Cyber-security firm CyberGym to build commercial Training Arena in Czech Republic

Israeli cyber-security firm CyberGym plans to build its first commercial Training Arena in the Czech Republic. Customers will be able to acquire defensives against even the most sophisticated cyber-attacks, the company says. It will mainly serve institutions using key infrastructure for which a potential cyber-attack could impact the whole of society, such as banking, energy and telecommunication providers. The arena is set to open in Řitka near Prague in February next year. According to CyberGym’s head, Ofir Hason, the Czech Republic was selected because it had some of the best IT experts in the world and is one of the first countries to a adopt law on cybernetic security.

Česká spořitelna to launch pre-paid debit card for children

The country’s largest bank, Česká spořitelna, plans to launch a pre-paid debit card for children in mid-September, the daily E15 reported on Friday. The biip project consists of a prepaid Mastercard debit card, on which parents load money and monitor their child’s transactions with a mobile banking application. It is intended for children from the age of 10 upwards. Similar schemes have recently made their way on Czech market, including CSOB’s Cool karta or Napka by Rockaway.

Czech firm opens household utensils manufacturing plant in Vietnam

Czech company Elmich Group has opened a new household utensils manufacturing plant in Vietnam. The company invested over 430 million crowns in the project. The new plant in northern Ha Nam province currently employs around 100 people and plans to create another 200 workplaces in the future. Some 80 percent of the factory’s products are to be exported to European and Asian markets. Overall investments of the Czech Republic in Vietnam exceed 100 million US dollars to date.

© 1996–2015 Český rozhlas


Business News

21-08-2015 13:33 | Jan Velinger

In Business News this week: Many companies are not happy with the new minimum monthly wage rate; Regional Development minister says Czech Republic could fail to draw 50 billion crowns in EU funds; Škoda Auto rated most dependable car maker in British report; up to 1,500 small and mid-level Czech businesses can benefit from Juncker package; construction companies say there are not enough skilled labourers on Czech market.

Firms less than happy with new minimum wage

Employers are less than happy with the monthly minimum wage rate being raised by 700 crowns as of January next year, saying the rise could affect firms' competitiveness and lead to lay-offs. The government took the step to raise the minimum monthly salary to 9,900 crowns. Employers had recommended a rise of 500 crowns instead - a difference of two hundred. The Czech Chamber of Commerce has warned that the rise could negatively affect firms in sectors which are stagnating such as the textile industry or security. A poll conducted by financial daily Hospodářské noviny suggests that 70 percent of businesses were against the rise.

Czech Republic could lose up to 50 billion crowns in EU funds, says Regional Development minister

The Czech Republic could lose between 36 billion and 50 billion crowns in EU funds for projects in 2015, the Minister for Regional Development, Karla Šlechtová revealed on Thursday; she stressed that that was in the worst-case scenario. Earlier, the ministry rejected an assessment by the Supreme Audit Office that the number could reach 105 billion - suggesting the estimate was old and that the ministry was working with a much lower variant. Minister Šlechtová said the latest analysis of drawing of subsidies from EU funds had revealed a "positive shift". The main factors that the estimates take into consideration are the accumulation of expenditures at the end of the programme period, delays in some administrative procedures and problems related to the Environmental Impact Assessment (EIA), she said.

Škoda rates as "most dependable car maker" in British study

The Mladá Boleslav-based Škoda Auto now ranks as the most dependable car brand in Great Britain, according to the last annual J.D. Power Vehicle Dependability Study (VDS), the manufacturer said in a press release on Thursday. South Korean car maker Kia finished second, while Japanese manufacturer Suzuki was third. The study polled owners of cars manufactured over the last three years and catalogued their experience. How companies scored is based on problems experienced per 100 vehicles and Škoda posed the fewest. All Škoda models ranked above average, with the Fabia ranking third in the supermini class, Škoda Auto elaborated. Britain is the second most efficient market for Škoda Auto in Western Europe, and it is the fourth most powerful market in the world. In the first six months of 2015 the carmaker sold more than 41,000 vehicles in Britain, approximately the same number as last year.

Small and mid-sized Czech companies will get to use money from Juncker package

Domestic companies will get the chance to use money from the Juncker package for the first time in the coming two years, an amount totaling the equivalent of 4.4 billion crowns, the Industry and Trade Ministry announced this week. The Czech guarantee and development bank CMZRB has agreed with the European Investment Fund on further support to small and medium-sized Czech businesses. CMZRB will support loans for up to 1,500 small and mid-sized companies. It will provide guarantees for investment loans and loans for getting operating reserves up to the aforementioned amount. Eligible applicants will be companies with fewer than 50 employees.

Two-thirds of construction firms say skilled labour lacking on Czech market

Two-thirds of construction companies on the Czech market have cited a lack of skilled workers as a continuing problem - with larger companies suffering the most. Firms estimated earlier already that more than 50,000 people lost jobs in construction over the past years due to the economic crisis. Almost a third of companies said they had problems filling specialized positions while 37 percent said it lacked staff in general. Jiří Vacek, the director of CEEC Research, confirmed that Czech construction lacks technicians, machine operators, bridge builders, qualified people for work on railways, as well as plasterers, masons, electricians and other personnel.

© 1996–2015 Český rozhlas


Business News

07-08-2015 14:07 | Chris Johnstone

In Business News this week: central bank see faster growth but lowers inflation expectations; Hamleys to open flagship store in Prague; German owners seen selling up chain of regional dailies; Caterpillar mining unit to closes; and Czech unmanned aircraft company targets 2016 production.

Central bank ups 2015 growth but lowers inflation expectations

The Czech National Bank has upped its growth forecast for this year to 3.8 percent from its previous 2.6 percent. But it now sees a more gloomy outlook for 2016 with expected growth cut to 2.8 percent from May’s 3.2 percent. The bank lowered its inflation expectations, seeing a 1.8 percent rate by the end of 2016 instead of its previous expectation of 2.1 percent. The bank has a target for inflation to be around 2.0 percent.

Global toyshop chain to open flagship Prague store

Legendary toys retailer Hamleys is set to open one of its biggest stores worldwide in the centre of Prague. The new store, covering more than 6,000 square metres, will be slightly bigger than Hamleys flagship outlet in London but is expected to emulate its success and visitor numbers. Around one million customers, big and small, cross the threshold of the Regent Street store every year. The Prague store will be the company’s first on Central Europe.

Last German media owner seen exiting Czech market

The last major Czech newspaper group in German hands should be sold to the local investment group Penta within two weeks, the business daily Hospodářské Noviny announced this week. Penta is reported to be finalizing terms for the takeover of the publisher Vltava-Labe-Press. It’s main asset is a network of regional daily papers with a total readership of around 630,000. German newspaper groups piled into the Czech media market in the early 1990s but have been bought out by Czech companies and oligarchs in recent years.

Czech mining equipment company set for closure

Caterpillar Global Mining Czech, the Czech mining division of the US corporation, will shut down its Ostrava factory by the end of the year with the loss of just over 200 jobs. The US-based global machinery and equipment company says it has worldwide overcapacity for production of mining equipment and components and that some production will be shifted to China. Caterpillar took over the Ostrava company in 2011.

Unmanned Czech aircraft set for production launch in 2016

A Czech company which has developed a mid-sized unmanned aircraft capable of taking moderate loads of up to 10 kilos expects to start production by the end the year. Primoco UAV says it hopes to start production in January after receiving dozens of orders on the basis of its prototype plane. The unmanned aircraft can fly more than 400 kilometres and stay in the air for around eight hours. The company says its business applications include surveying work, checking telecommunications infrastructure, and crowd surveillance.

© 1996–2015 Český rozhlas


Business News

31-07-2015 14:25Chris Johnstone

 

In Business News this week: 2015 growth seen reaching almost 4.0 percent; takeover bid reported for Unipetrol; massive bill presented to Vítkovice boss; Karlovy Vary mineral water giant snaps up domestic rival; and state emergency reserve considers live animals over dead meat.

 

Economic growth in 2015 seen at just under 4.0 percent

The Ministry of Finance has dramatically upped its forecast for economic growth this year. The latest prediction out this week sees Gross Domestic Product climbing by 3.9 percent. As recently as April the forecast was for only 2.7 percent. But the ministry sees 2016 growth at a more modest 2.5 percent The main reason for the revision for this year was the higher than expected 4.0 percent growth performance in the first quarter.

Consortium buyout offer reported for main Unipetrol shareholding

The Czech Republic’s biggest oil and petrochemical holding, Unipetrol, is the subject of a 30 billion crown bid from a consortium made up of Czech businessman Daniel Křetínský, the J&T Group, and PPF investment group. Business daily Hospodářské Noviny revealed the bid citing several independent sources. The Czech holding is currently majority owned by Poland’s PKN which is reported to be mulling the bid. J&T has long been the second biggest shareholder in the group which numbers among its assets the biggest network of Czech petrol stations, Benzina, and dominant refiner, Česká Rafinérská.

Vítkovice shareholder wins major payout ruling over shares in engineering giant

The main shareholder in the Czech Republic’s biggest engineering group, Vítkovice, Jan Světlík, is facing a bill for almost 1.7 billion crowns in the latest instalment of an almost 13 year battle over ownership of the company. The payment has been ordered in a ruling by the Chamber of Commerce. It found in favour of former Vítkovice shareholder David Beran who appealed an earlier ruling that had offered him a paltry 75 million crowns for his former 45 percent stake in the engineering giant. The case is far from closed with Světlík calling for the police to intervene in what he describes as a manipulated decision.

KMV to acquire Czech mineral water rival

The biggest Czech mineral water company, Karlovarské Minerální Vody, strengthen its grip on the domestic market with the purchase of rival Hanácká Kyselka. KMV previously had a 30 percent stake in the firm. The owner of the 70 percent stake, investment group D.K. Invest, says it is selling up in the face of shrinking sales over the last two years. The Karlovy Vary based mineral water company says it will invest in the brand and seek new markets.

Emergency reserves authority favors live cattle over frozen meat

Meat on the hoof rather than in large warehouses is an idea that has been floated by the state authority for emergency reserves. The authority has suggested that it earmark live cattle and other animals for emergency stores from 2017 rather than having the dead meat in warehouses. Savings on warehouse costs could be considerable. But the idea has met with some opposition from the Ministry of Agriculture. It warns that the live animals could be wiped off the potential reserves if, for example, there was an outbreak of a major disease.

© 1996–2015 Český rozhlas


Business News

17-07-2015 15:45 | Jan Velinger

In Business News: Czech Airlines posts first profit in several years; General director of AcelorMittal meets with PM; higher excise taxes on liquor and tobacco fails to meet expectations; Becherovka produces its first kosher liquor.

Czech Airlines posts first profit in several years

Czech Airlines has posted its first profit in several years: 12.9 million crowns in the first half of 2015. Last year, in the same period, the carrier registered losses of 408.2 million. The airline says the turn-around is the result of crucial and often difficult restructuring – which included asset sales, layoffs and pay cuts. For example, stewards and stewardesses’ average gross monthly wages were scaled back from a previous 43,000 to around 32,000 crowns. On Friday, the airline management thanked employees who had accepted changes and helped the firm back on course.

General director of ArcelorMittal meets with PM

Prague this week played host to the general director of the world’s biggest steelmaker, ArcelorMittal. Lakshmi Mittal met with Prime Minister Bohuslav Sobotka and industry minister Jan Mládek to discuss plans for massive investments at its Ostrava plant. The Ostrava site could be in the frame for the construction of a state of the art steelwork which could safeguard thousands of jobs in the city. Discussions are believed to have focused on the state support that could bring that sort of investment to the Czech Republic.

Supreme Audit Office says collection of excise tax lagging behind numbers projected in state budget

Higher excise taxes on spirits and tobacco products have not brought in as much revenue long-term as expected, the country’s Supreme Audit Office reveals in its EU 2015 report. According to the bureau, the state last year collected excise taxes worth a total of 141.3 billion crowns or 96.2 percent of the figure projected in the state budget; the amount collected on tobacco was slightly higher, at 93 percent while the number for liquor brought in four percent more than expected. The Supreme Audit Office began monitoring the situation last year to determine whether customs officials were effectively gathering excise taxes in line with the law. The operation will end in August and the results will be published a month after.

Czech Republic rates among top countries for German investment

The Czech Republic has been placed second on a list of countries attracting the most German investment, after Poland, a poll conducted by ČNOPK – The German-Czech Chamber of Commerce and Industry found. In all, some 15 countries were ranked. Estonia, Slovakia, and Latvia were also placed in the top five. Spokesman Christian Rühmkorf confirmed that while the Czech Republic, for example, received high marks for economic stability, R&D, and the availability of local suppliers, it fared poorly in the area of skilled labour, contributing to the country’s second-place result.

First bottle of kosher Becherovka produced

Publicists for the Karlovy Vary-based liquor company Jan Becher announced on Friday the manufacturer had capped the first bottle of its brand-name liquor Becherovka Original certified kosher. Prior to receiving an international certificate signed by Rabbi Menachem Kalchheim, the production process and ingredients were verified. The kosher version of the brand is being produced largely for the Israeli market but will also be available in the Czech Republic.

© 1996–2015 Český rozhlas


Business News

10-07-2015 15:42 | Ruth Fraňková

In Business News this week: Czech E-commerce sales rise by 20 percent in second quarter of 2015; Hainan Airlines to launch services from Beijing to Prague; storms result in over 100,000 cubic metres of timber; most Czech 12-year-olds own mobile phone; Czechs have up to 400,000 private pools.

Czech E-commerce sales rise by 20 percent in second quarter of 2015

Czech E-commerce sales rose by 20 percent in the second quarter of the year compared with the same period in 2014 according to a survey by the consultancy Acomware. The same pace of growth is expected for the next three months. For the first time purchases over mobile phones surpassed those on tablets. Top e-commerce purchases are electronic and children’s items and household goods.

Hainan Airlines to launch services from Beijing to Prague

Hainan Airlines, the first Chinese carrier to launch direct flights to Prague, has filled in details of its plan to launch services from Beijing. Three flights a week from the Chinese capital will start on September 23 with return tickets priced at just over 14,000 crowns. The start of direct services between Prague and Beijing has been billed as a great opportunity for the Czech Republic to boost trade with China and re-balance some of the enormous trade deficit with the country.

Storms damage over 100,000 cubic metres of timber

Trees amounting to around 100,000 cubic metres of timber were felled in recent storms around the country, mainly in the Olomouc and Pardubice regions, the state forestry company announced on Thursday. That amounts to about one percent of the planned annual timber production, which is expected to reach 7.67 million cubic metres this year. The total extent of the devastation is still being assessed. Authorities in the regions hardest hit by storms have warned visitors not to walk in the forests due to the danger of falling trees. The worst damage was recorded in 2007 when hurricane Kyril caused over five million cubic metres of wood to come to the market.

Most Czech 12-year-olds own mobile phone

Some 90 percent of Czech children own a mobile phone by the age of 12, according to a study carried out by NMS market research. Most Czech kids get their first mobile phone between the age of eight and 10 and nearly two fifths have had five or more telephones by the age of 19. The majority of children, 39 percent, spend on average 60 minutes a day on the phone, while 18 percent use it for more than 180 minutes. Children mostly use their phones for sending text messages and for calling, as well as for listening to music and taking pictures. Some 74 percent of Czech children admitted to using their phone during classes.

Czechs own up to 400,000 private pools

Every third house in the Czech Republic has a private swimming pool in its back-yard, a study carried out by the Czech gardening and outdoor equipment chain Mountfield suggests. The survey points out there are between 360,000 to 400,000 privately owned swimming pools in the Czech Republic and the same number of inflatable pools. According to swimming pool provider Abixon, Czechs prefer swimming pools sized three to six and four to eight metres. Czechs belong among Europe’s leaders in terms of private pools per head. According to figures from the European Union Swimming Pool and Spa Association from 2012, Czechs are placed third in EU in terms of the number of private swimming pools per head, trailing only Italy and Spain.

© 1996–2015 Český rozhlas


Business News

03-07-2015 15:26 | Ruth Fraňková

In Business News this week: the Czech economy grew by four percent year-on-year in first quarter of 2015; E15: MAFRA shows interest in acquiring Slevomat; Car sales in the Czech Republic went up by five percent in the first six months of this year; Czech cinemas charge an average 129 crowns for a seat.

Czech economy grew by four percent year-on-year in first quarter of 2015

The Czech economy grew by four percent year-on-year in the first quarter of 2015, according to a revised estimate by the Czech Statistical Office, which was published on Friday. The previous estimate from the end of May put growth at 4.2 percent. The office also downgraded its estimate for quarterly Gross Domestic Product growth from the original 3.1 percent to 2.5 percent. The revision was caused by new data on value added tax. Despite the revision, the figures still show the biggest year-on-year growth since 2007 and the strongest quarter-on-quarter growth ever.

Moody’s: Czech government accounts look solid in 2015-2016

The Czech Republic’s government accounts will likely remain solid in 2015-2016, supported by prudent fiscal policy and relatively low debt level, the international rating agency Moody’s Investors Service indicated in the country’s annual Credit Analysis. However, the agency notes that political uncertainty represents a certain risk. “The Czech Republic benefits from the government's track record of prudent fiscal policy and balance sheet strength. This is supported by relatively low government debt ratio and strong debt-affordability," Moody’s analyst Marco Zaninelli said. Moody’s notes that the Czech economy is experiencing a strong rebound and forecasts an increase in real GDP growth to 2.5% in 2015 and 2.7% in 2016, driven mainly by domestic demand.

MAFRA shows interest in acquiring Slevomat: E15

The publishing house MAFRA, purchased by Andrej Babiš in 2013, is interested in acquiring Slevomat, the biggest Czech Internet site offering bargain buys, the daily E15 reported this week. The company, owned by investment group Miton a Enern, has paid off initial investments and posts profit margins of around 10 percent. Some 1.2 million people have shopped on Slevomat and the company has information about 1.7 million users in its database. Slevomat and MAFRA representatives refused to comment on the possible acquisition.

Car sales in Czech Republic up by fiver percent in first half of 2015

Car sales in the Czech Republic rose by five percent in the first six months of this year, compared with the same period in 2014. Some 113,261 new vehicles were sold between January and the end of last month. Czech car maker Škoda Auto was the best-selling brand in the country with over 36,500 sold cars, followed by Hyundai and Volkswagen. The most popular model was the Škoda Octavia, followed by the Fabia and Rapid. Low mid-sized class cars represented 23 percent of total sales, followed by small cars (19 percent) and sport utility vehicles (18 percent).

Czech cinemas charge on average 129 crowns per ticket

Czech cinemas on average charge 129 crowns for a seat this year, which is roughly 2.5 percent more than in the previous year, according to a study Global Entertainment Media Outlook 2014-2018 carried out by the consultancy PwC. The price of cinema tickets is expected to rise at the same pace over the next four years. The average price of a cinema ticket worldwide is 101 crowns or 3.7 euros. The difference between the admission price to small local cinemas and large multiplexes in the Czech Republic has been increasing. While local cinemas charge around 100 crowns, ticket prices at multiplexes sometimes reaches over 300 crowns. Revenues from online video streaming in the Czech Republic this year for the first time surpassed revenues from the sale of DVDs or Blu-ray.

© 1996–2015 Český rozhlas


Business News

19-06-2015 16:23 | Chris Johnstone

In this week’s Business News: Czech Republic is wealthiest post-communist EU country; more state funds promised for local filmmakers; US chopper firm gets cosy with Czech company; free carriages to be offered to rail companies; and state broadcaster threatened with fine for promoting fast food giant.

Czechs overtake Slovenes in wealth stakes

The Czech Republic has leapfrogged Slovenia to become the wealthiest post-Communist state in the European Union. The Czech Republic now has a slender lead over Slovenia both in terms of actual individual consumption - a measure of household wealth - and Gross Domestic Product per person. Czechs scored 75 to Slovenia’s 74 on the first measure and 84 to 83 on the second, according to the latest June figures from the European statistics office. The EU average is 100. Slovenia for long led the field as the most developed part of former Yugoslavia.

Stepped up state funds for local films

The government is preparing to offer Czech filmmakers more state money. In a meeting with prime minister Bohuslav Sobotka and culture minister Daniel Herman filmmakers were promised that around 180 million crowns a year could be set aside for them. Combined with payments earmarked for filmmakers from private sources, mostly commercial television companies, this could amount to around 360 million crowns a year. Czech filmmakers say they have some of the strongest local audience figures for domestic films in Europe but often do not have the financing to increase output.

Bell Helicopters seals LOM deal

US company Bell Helicopter has a signed a contract with Czech firm LOM Praha under which it will undertake services, alterations, and improvements for its military helicopters across the whole of Central Europe. Czech state owned company LOM currently mainly specialises in repairs and modernisation of Russian helicopters. Bell Helicopter says it is hoping to land a Czech army contract for 12 multipurpose helicopters which would replace ageing Russian models.

Free rail carriages on track

The Czech state is to offer rail carriages for free to firms which win contracts for operating subsidized regional passenger routes under plans being drawn up by the Ministry of Transport. The ministry would claim 85 percent of the costs of providing the carriages from European Union funds and meet the rest of the costs through state funds. The purchases of just over 12 billion crowns worth of carriages is being interpreted as one way of pumping European funds. Private as well as the state owned passenger rail company, Czech Railways, could benefit from the offer.

Fine threatened over fast food placement

And finally public broadcaster Czech Television looks like it could have got into trouble for what appears to be some pretty blatant product placement advertising. The national broadcasting watchdog is investigating how one of the moderators of an afternoon hockey program was shown passing the fast food giant McDonald’s tent with a hamburger and chips and offered her a chip as she tried to present the show. A fine of 2.5 million crowns could follow.

© 1996–2015 Český rozhlas


Business News

12-06-2015 13:27 | Chris Johnstone

In this week’s Business News: Czech redundancy payments some of lowest Europe-wide; inflation rises but still way below target rate; rail company faces one billion crown bill; survey reveals happy Czech bank customers; and car sector sees turnover soar in 2014. 

Czech dismissal costs some of lowest in Europe

The costs of sacking top and experienced managers in the Czech Republic for their employers are some of the cheapest in Europe, according to a survey by Deloitte Legal, the arm of the international consultancy. It carried out a survey of dismissal costs in 29 European counties. Czech labour rules result in basic dismissal charges being cheaper than in neighbouring Poland and Slovakia. One factor is that redundancy payments are the same if you have served two years with the same company or more than 15.

Inflation rate climbs but central bank cautious

Czech year-on-year inflation ramped up in May to the relatively high level of 0.7 percent. That is the highest rate since October 2014. But the news of more robust price rises than expected did not bring rejoicing from the Czech National Bank, which is keen to see prices rises moving up to its target of around 2.0 percent. It pointed out that the core inflation rate was 0.5 in May if you take out the impact of some indirect tax rises. Higher prices for fruit and vegetables, cigarettes, and utility charges apart from electricity were among the biggest factors in latest figures.

Rail company faces one billion bill for cancelled power contract

The Czech company responsible for maintaining the rail network has lost a five year court battle and now faces a more than one billion crown bill. The state controlled company signed a long term contract to buy electricity from dominant electricity producer ČEZ in 2008. The rules then changed and the rail company sought to cancel the long term contract and shop around for cheaper supplies. ČEZ objected and sued for 800 million crowns. Interest and legal costs have now taken that bill to over one billion crowns.

Czech bank customers second happiest in world says survey

Czech bank customers are some of the most satisfied in the world according to the, perhaps surprising, survey results by the company Capgemini and grouping of banks and insurers, EFMA. Their annual retail banking survey put Czech customers as the second most satisfied in the world after Canada. The overall satisfaction score in the Czech Republic jumped by 3.5 points to 77.5 points compared with the last survey in 2013. The overall trend, especially in Western Europe, was of lower customer satisfaction and an increasing number of clients saying they are ready to switch to another service. One of the reasons is the closure of local branches and increased competition from everyone from supermarkets to phone companies now offering financial services.

Car sector responsible for quarter of industrial production

Czech car and car parts producers boosted their turnover in 2014 by almost 15% to total around 991 billion crowns, the Automobile Industry Association announced this week. Their industrial exports rose by just over 15% to 845 billion crowns. The car sector now counts for a quarter of all Czech industrial production, just over 23 percent of exports, and just under 7.5 percent of total Gross Domestic Product. 

© 1996–2015 Český rozhlas


Business News

05-06-2015 15:31 | Ruth Fraňková

In Business News this week: Czech average wage rises to 25,306 crowns; this year’s tax freedom day to fall on June 5; Tatra Trucks expects to sell over 1,000 vehicles in 2015; and online grocery market Kolonial.cz enters Czech market. 

Czech average wage increased to 25,306 crowns

The average wage in the Czech Republic increased by 552 crowns (or 2.2 percent) in the first quarter of 2015 to 25,306 crowns a month, the Czech Statistical Office announced on Friday. Adjusted for inflation, real wages went up by 2.1 percent. Two-thirds of employees earn less than the average wage. Eighty percent of Czech employees earn between around 10,200 crowns and 40,000 crowns.

Czech retail sales in April increase by six percent year-on-year

Czech retail sales, both adjusted and non-adjusted for working days, increased by six percent in April compared to the same period last year, the Czech Statistical Office informed on Friday. It is the fastest retail sales growth recorded since 2007. Analysts estimate that retail sales could increase by 3.5 percent for the whole of 2015. The fastest sales growth was recorded by web retailers, whose sales went up by 19 percent year-on-year. Sales growth in the automotive segment slowed compared to the previous month.

Tax freedom day falls on June 5

This year’s tax freedom day in the Czech Republic has fallen on June 5, five days earlier than in 2014, the think tank Liberal Institute announced, referring to estimates by the OECD. Tax Freedom Day is the first day in the year when the nation has theoretically earned enough income to pay its taxes. This year it has taken 155 days to reach this point, the fewest days since 2000. The OECD average is May 31.

Tatra Trucks expects to sell over 1,000 vehicles in 2015

Czech heavy vehicles manufacturer Tatra Trucks expects to sell over 1,000 vehicles this year, the highest number in the last five years, Petr Rusek, chairman of the board and business operations director for Tatra Trucks, said on Thursday. The company currently employs some 850 people and plans to sign up around 80 new employees this year. The company sold 850 trucks last year and posted a profit of over 3.7 billion crowns, roughly a billion more than in 2013, which was the best result for Tatra since 2008.

Online grocery market Kolonial.cz enters Czech market

A new online grocery market, Kolonial.cz, has entered the Czech market this week. According to its head, Petr Vyhnálek, it will supply consumers in and around Prague but the company would like to expand beyond the capital in future. The Czech market in home deliveries of foodstuffs is currently dominated by UK retailer Tesco and the Czech-owned Rohlik.cz. According to a recent survey by the consultancy Nielsen, 14 percent of Czechs shop for groceries on-line. Kolonial.cz says it wants to offer a wider range of fresh foodstuffs than its competitors and plans to supply part of them directly from the producers

© 1996–2015 Český rozhlas


Business News

29-05-2015 15:35 | Ruth Fraňková

In Business News this week: Czech economy grows by 4.2 percent year on year in first quarter; Škoda Auto receives 49-million-crown fine for fixing margins with distributors; employment rate is lowest in 22 years; and over 50 percent of Czechs favour restricting shopping hours.

Czech economy grows by 4.2 percent in first quarter

The Czech economy grew by 4.2 percent year on year in the first quarter of 2015, which is an improvement by 0.3 percent against a preliminary estimate from mid-May, the Czech Statistical Office announced this week. GDP expanded by 3.1 percent compared with last quarter of 2014. According to data from the Czech Statistical Office, the year on year increase is the highest since the last quarter of 2007, when the economy grew by 5.3 percent year-on-year.

Škoda Auto fined 49 million for fixing margins with distributors

The Czech anti-monopoly office has fined Škoda Auto, owned by German car giant Volkswagen, 49 million crowns for fixing margins with distributors in the years 2011 and 2012. The fine was imposed in December but the office only made the announcement on Thursday. The public release was postponed due to confidential information, a spokeswoman for the anti-monopoly office has said. Škoda Auto employs around 24,000 people and is the biggest car producer in the country. Last year it made a record profit of 817 million euros.

Employment rate is lowest in 22 years

The employment rate in the Czech Republic in April reached 69.8 percent of those of working age, which is the lowest in 22 years, the Czech Statistical Office reported. The number of Czechs in work now exceeds 4.9 million, the highest number since January 1993. The increase has been fuelled mainly by economic growth, which in the first quarter of this year increased to 4.2 percent compared with the same period a year earlier. The number of employed women has also reached a record high, exceeding 62 percent of the potential female workforce.

Czech Airlines slashed losses last to 631 million crowns last year

Czech carrier Czech Airlines slashed their losses last year by nearly a third to 631 million crowns. Meanwhile, CSA’s operating losses were cut from over 1 billion crowns to 518 million last year. Czech Airlines’ passenger numbers dropped by a fifth to 2.27 million last year, mainly due to the situation in Ukraine. The company’s revenues decreased 6.5 percent to 9.5 billion crowns, the daily E15 wrote on Thursday.

Over 50 percent of Czechs favour restricting shopping hours

Some 51 percent of Czechs agree with a restriction on shopping hours in large shops on public holidays, according to an on-line survey carried out by Czech National Panel Society. Some 44 percent said there was no reason to change current legislation. Those in favour of the restriction are people between 25 and 34 years of age, while people between the age of 18 and 24 are mostly against. Three quarters of respondents said they wouldn’t mind if supermarkets and shopping mall were closed on Sundays. The Senate approved bill, under which all large stores would have to close on all public holidays, including Christmas and Easter, is to be debated by the lower house in the coming months.

© 1996–2015 Český rozhlas


Business News

22-05-2015 16:18 | Jan Velinger

In Business News: Czech national bank puts pressure on domestic banks to curb long-term mortgages; steel industry rebounds; the cheque is not in the mail, at least regarding Czech Post; energy giant ČEZ hangs on to coal-fired plant.

Central bank seeks clamp down on over 30s

The Czech National Bank is putting pressure on domestic banks to curb long term mortgage loans to clients. According to the business daily Hospodářské Noviny, the central bank is attempting to convince banks that loans of more than 30 years should only be made in exceptional circumstances. It is also seeking to clamp down on so-called 100 percent loans, where borrowers have no savings to put on the table. The national bank says loans of over 30 years are higher risk because borrowers are unlikely to be able to generate extra cash to repay loans for so long over their lifetime.

Steel sector shows mettle in 2014

The Czech steel industry showed signs of revival in 2014. The quantities of iron produced last year rose by 2.8 percent and steel production was up 3.6 percent. The sector is being helped by the pick up in the local construction, civil engineering, and car manufacturing sectors. But in spite of expectations of continued buoyant demand, production is seen slipping slightly in the next years before picking up again in 2020.

Czech Post sees lean times

Czech Post says it expects a slender profit of 50 million crowns this year. That is around a fifth of the 241 profit declared for 2014. The public service mail operator says it is losing letter and parcel income to the tune of around 700 million crowns a year. And one of the biggest employers in the country has also been hit by a 3.5 percent pay rise. Director Martin Elkán says that investments are being savagely curbed as a result.

Počerady to stay within ČEZ fold

Power giant ČEZ says it will hold onto the massive Počerady coal-fired plant for now. A sale to the mining company Vršanska uhelná for at least 8.1 billion crowns was possible under a peace deal agreement between the companies in 2013. Another sale option becomes operable in 2019 and can be exercised by 2024. Počerady is one of the biggest coal fired power plants in the country with capacity of 1,000 MW.

Sign of the times at Transport Ministry

The Transport Ministry is planning on introducing or updating traffic signs as of next January, which could include warning signs of frog or deer crossings. Others could designate rollerblade users and Segways, or areas where trucks will be banned from overtaking other vehicles. The ministry also wants to clarify some signs for motorists, such as a traffic sign designating horses but featuring a pictogram of a cow. The ministry said it may take up to 10 years to introduce some of the changes, writes iDnes. There has been no word so far on how much the changes will cost.

© 1996–2015 Český rozhlas


Business News

15-05-2015 12:10 | Chris Johnstone

In this week’s Business News: low inflation seen through 2015; Hopin taxi offer rides in from Slovakia; two-thirds of Czech companies see corruption as part of environment; Kofola mulls share offer; and legal battle beckons for ‘Little Mole’ rights

Prices seen flat lining near zero for 2015

The Czech National Bank has predicted that inflation this year will stay around zero before climbing back towards its target 2.0 percent level in 2016. The central bank also said it expects the Czech economy to grow by 2.6 percent this year and growth to speed up to 3.2 percent in 2016. It reiterated that the low crown policy aimed at boosting growth and inflation should continue until into the second half of 2016.

Phone app taxi war in Prague

A high-tech taxi war looks to be coming to the streets of Prague with the announcement by Slovak company Hopin that it is launching its services in the capital. Hopin is reported to be the third taxi firm allowing clients to use mobile phone applications to call up cabs rather than go through traditional dispatchers. The Czech company Liftago and international Uber have already started services. Hopin says it eventually aims to have 200 drivers in Prague responding to its mobile customers.

Corruption still seen as normal part of business environment

Corruption is regarded by around two-thirds of Czech companies to be a run of the mill part of business life, according to a survey by the international consultancy Ernst & Young. The proportion compares with an average of around one third of companies across Western Europe. The Czech figure of 61 percent is nonetheless an improvement on the 73 percent from a similar survey carried out two years ago. Many companies said they didn’t want to take steps to counter corruption because it might put them at a disadvantage.

Drinks shareholder shake-up mulled by Kofola

A shareholder shakeup appears imminent at one of the Czech Republic’s iconic drinks companies, Kofola. Kofola’s second biggest shareholder with a 43.1 percent stake is the Polish-based investment company Enterprise Investors. It has signaled that it wants to cash in some of its stake and Czech majority shareholder, Jannis Samaras, has suggested a partial float of shares on Warsaw and Bratislava exchanges could allow that and also raise cash for further development. The timeline for such a sale is still unclear.

Little Mole goes to court

The legal battle to the rights to use the ‘Krtek’ or ‘Little Mole’ image for marketing has just gotten deeper. The Constitutional Court has cleared two Czech companies to challenge the rights of rivals to use the mole logo. The battle stems from the legal confusion caused by the death of mole’s creator Zdeněk Miler in 2011. Some rights were already sold off during Miler’s lifetime and the lawyer responsible then claimed the right to continue afterwards. But Miler’s granddaughter stepped in with her claim on Miler’s main creation and formed the ‘Little Mole’ company which has already sold the rights round the world.

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Business News

24-04-2015 15:02 | Ruth Fraňková

In Business News this week: Czech public finance deficit to gradually drop to 0.6 percent in 2018; Škoda Auto agrees with unions on 3.5 percent salary hike; Zdeněk Bakala steps down from NWR board of directors; Cetelem discusses purchase of loss-making Zuno bank; Prague loses 40 million a year on SMS transport tickets.

Czech public finance deficit to gradually drop to 0.6 percent in 2018

The Czech public finance deficit is to gradually drop from this year’s estimated 1.9 percent of Gross Domestic Product to 0.6 percent in 2018, the Finance Ministry announced on Friday. The estimate is based on an updated version of the Convergence Programme that will be discussed by the government on Monday. Last year the public finance deficit reached 1.98 percent of Gross Domestic Product. The Convergence Programme expects the Czech economy to grow by 2.7 percent this year and to slow down to 2.5 percent in 2016.

Škoda Auto agrees with unions on 3.5 percent salary hike

Car maker Škoda Auto has reached an agreement with trade unions on a 3.5 percent wage hike, the carmaker’s main union group said on its website. Unions at the biggest Czech carmaker threatened last week to stage protests to advance their claims for a 6.5 percent wage hike. The two sides had already agreed on a record bonus for workers of 25,000 crowns for last year. Škoda Auto employs around 24,000 people and is the biggest car producer in the Czech Republic. The average monthly salary for workers is 34.000 crowns.

Zdeněk Bakala steps down from NWR board of directors

Czech businessman and investor Zdeněk Bakala has not been re-elected to the board of directors of the New World Resources (NWR) mining company, the owner of the Ostrava-based coal producer OKD, the company wrote on its website on Thursday. Bakala already announced in mid-March that he would be leaving NWR’s management. One of the richest Czechs, Bakala acquired a stake in OKD in 2004 and became a co-owner in NWR, which is among Central Europe’s leading producers of hard coal for coke. Analysts say that Bakala’s departure from NWR’s board signals that he wants to be free for other activities.

Cetelem discusses purchase of loss-making Zuno bank

The biggest provider of non-bank loans in the Czech Republic, Cetelem, is discussing the purchase of the loss-making Zuno bank in Slovakia and the Czech Republic owned by Austria’s Raiffeisen Bank International, the daily E15 reported on Friday, citing two unnamed sources. Zuno was launched four years ago and has around 250,000 customers, mostly in the Czech Republic. Its accumulated losses currently exceed 2.5 billion crowns. The owner of Cetelem, BNP Paribas, has previously announced its plan to open up a bank in the Czech Republic.

Prague loses 40 million a year on SMS transport payments

Prague loses 40 million crowns a year on the sale of city transport tickets via SMS messages, the opposition Pirate Party said on Thursday. The Pirates carried out a survey of regional cities around the country. According to the results, Prague is paying the highest percentage fee in the country for every SMS ticket sold, which is 24 percent. Other cities allegedly charge from 10 to 20 percent. Pirate Party spokesman Mikuláš Ferjenčík said the result is alarming, and added that Prague councillors should try to agree on a lower price with the contractor, the company Erika.

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Business News

17-04-2015 16:10 | Jan Velinger

In Business News: Financial assets of Czech households grew at steady six percent rate annually over five years; Czech companies get ready for Shanghai trade fair; confidence survey suggests overwhelming majority of German firms happy with investing in Czech Republic; gold mining could be renewed at a location in the Jeseníky Mountains.

Financial assets of Czech households grew by six percent annually on average over five years

Financial assets of Czech households grew by six percent annually on average in the previous five years and reached the equivalent of 194 billion US dollars in 2014, according to the Global Wealth Report by The Boston Consulting Group which was released earlier this week. The study ranked 63 countries. Among the financial assets included in the study are cash, bank deposits, mutual funds, shares, and pension and life insurance. Five percent of the richest Czechs own 45 percent of the total financial wealth, compared with 48 percent in Poland, 49 percent in Slovakia, 52 percent in Germany and 77 percent in the United States. Assets worth over 100,000 US dollars are owned by 200,000 Czech households, that is around 5 percent. Some 10,000 Czech households (0.2 percent) are dollar millionaires.

Czech firms gear up for Shanghai trade fair

More than 60 Czech firms are gearing up for a technology trade fair to be held in Shanghai, China, next week. In all, some 900 exhibitors are taking part. The Czech Republic is the main international partner, meaning Czech companies should benefit with regards to the most advantageous and most prestigious floor space. Jaroslav Tvrdík, the head of the Czech-Chinese Chamber of Commerce, said that China was interested in automobile and plane manufacture, engineering projects as well as biotech and nanotechnology.

Confidence survey suggests German firms happy to have chosen to invest in Czech Republic

A confidence survey conducted by the Czech-German Chamber of Commerce suggests that a vast majority of German firms investing in the country would pick the Czech Republic again. According to results released by the chamber this week, 92 percent of investing companies replied in the affirmative. Two-thirds of the companies assessed the current economic situation in the Czech Republic as satisfactory and 29 percent replied it was in good shape – almost double the number of firms compared with last year's survey. The number of companies describing the current economic situation as bad dropped to 7 percent this year; the figure last fell below the 10 percent mark in 2008. Previously, almost 20 percent of the respondents assessed the situation as bad.

Gold mining could resume at Jeseníky mountains location, under ministry proposal

The Czech Industry and Trade Ministry announced this week it had prepared a new proposal for renewed mining of metals including gold; Industry and Trade Minister Jan Mládek made the announcement this week. The town of Zlaté Hory in the Jeseníky mountain range is one area where mining could be renewed, Mládek told journalists. The town’s mayor, Milan Rác, said the renewed activity would help the district which suffers from 11 percent unemployment. The state-run company Diamo has been commissioned to work out a feasibility study on gold mining in the area.

Historically, mining in Zlaté Hory began at the turn of the 10th and 11th centuries. It was halted there in the mid-1990s. At that time the gold price was about $270 per ounce, while now the price is $1,300, according to the minister. Diamo has estimated gold deposits in the vicinity of Zlaté hory could range from three to nine tonnes.

Authorities uncover ten tons of salmonella-tainted poultry from Poland

The authorities have uncovered more than ten tons of poultry from neighbouring Poland containing salmonella bacteria. According to the spokesman for the State Veterinary Administration, the tainted meat from the same supplier made its way to shelves at three locations: Louny, Baška near Frýdek-Místek and Sadská near Nymburk. The authorities ordered the immediate removal of deep frozen boneless chicken by the distribution company – which could face a fine of up to one million crowns.

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Business News

10-04-2015 15:23 | Ruth Fraňková

In Business News this week: Czech industrial production up by 4.5 percent year-on-year in February; Czech antimonopoly office confirms provider of medical cannabis; lower house passes controversial energy law; CEZ wins arbitration against Romanian firms; and clean-up of former military area in Ralsko completed.

Czech industrial growth up by 4.5 percent year-on-year

Czech industrial production in February improved on January’s 2.8 percent growth, rising by 4.5 percent compared to the same period last year, according to figures from the Czech Statistical Office released on Friday. The growth was mainly fuelled by the increased production of cars and electrical equipment. The Czech Republic’s construction sector, meanwhile, expanded by six percent year-on-year in February and experts are predicting that the growth will continue throughout the year.

Czech antimonopoly office confirms provider of medical cannabis

The Czech Office for the Protection of Competition has refused to cancel the results of a public tender for a license to grow medical cannabis. The winner of the public tender, Elkplast Slušovice, claims it can provide a gram of cannabis for 68 crowns. One of the unsuccessful bidders, Velvana, has filed a complaint against the results, arguing that it is impossible to sell cannabis at this price. The State Institute for Drug Control can only sign a contract with the winning firm when the administrative procedure is completed. Cannabis can only be acquired using an electronic prescription and is provided to people suffering from multiple sclerosis, chronic pain and other ailments. Czech pharmacies started to sell the drug, which is now legally imported from the Netherlands, in mid-November.

Lower house passes controversial energy law

The lower house of the Czech Parliament on Friday passed a controversial new energy law. The bill was pushed through by a slim majority. Most coalition deputies voted in favour of the new legislation, while the MPs of the opposition Dawn Party, which was the biggest critic of the law, voted against. The draft law will, among other things, cushion the burden on industrial users for supporting renewable power. The national energy regulator, ERÚ, which has strongly opposed the new bill, has warned that that it could trigger a massive drain on public and state resources. A controversial proposal, which would allow the division of existing solar power plants into several smaller ones, was not passed by the lower house.

CEZ wins arbitration against Romanian firms

The International Court of Arbitration in Paris has rejected the vast majority of claims by the Romanian companies Electrica and Energie against the Czech power company ČEZ. This is the third time ČEZ has managed to win an arbitration hearing. The Romanian firms had sought compensation of more than 81 million euros for the alleged failure of ČEZ to meet their obligations arising from privatization agreements from the years 2005 and 2009, under which the Czech power giant privatized the Romanian distribution company Electrica Oltenia.

Clean-up of former military area in Ralsko completed

The clean-up of the environmental damage in the former Soviet Army military training ground in Ralsko, north Bohemia, has been completed. The operation, funded by the Czech Republic and the EU, started in 1993 and has cost nearly half a billion Czech crowns. The area of 250 square kilometres, which also includes the nearby Hradčany airport, was used by the Soviet Army between the years 1968 and 1991 and was left heavily polluted, mainly by aviation fuel, oil and petrol. The region of Liberec is hoping to boost tourism in the area.

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Business News

03-04-2015 15:45 | Jan Velinger

In Business News: Car sales in Czech Republic rise by 24 percent in Q1; Czech Statistics Office lowers GDP growth figure for Q4; Unipetrol “okayed” to acquire refinery; state-owned Railway Infrastructure Administration to renovate 200 largest railway stations; fewer Czechs vacationing abroad.

Car sales rise by 24 percent in Q1

New car sales rose in the Czech Republic by 24 percent in the Q1, with more than 53,000 vehicles sold. Almost 76 percent were bought by companies, the Car Importers Association said. Škoda Auto topped the field with almost 32 percent of sales. The firm was followed by Volkswagen, Hyundai, Ford and Dacia.

Czech Statistics Office lowers GDP growth figure for Q4 to 1.4 percent

The Czech economy grew by 1.4 percent year on year in the fourth quarter of last year, the Czech Statistics Office announced this week, a worsening of 0.1 percentage point against the earlier estimate from the end of February. The office confirmed last year’s 2 percent GDP growth, while a 0.4 percent quarter-on-quarter GDP expansion in the last quarter of 2014 also remained unchanged. The updated figures on the development of the Czech economy for the fourth quarter last year are positive for 2015, analysts told the Czech News Agency. GDP growth of around 2.5 percent is expected this year.

Unipetrol gets green light for refinery acquisition

Petrochemical group Unipetrol can gain full control over the Česká rafinérská refinery group as the antitrust office this week greenlighted the acquisition for the second time. The bureau turned down a protest filed by one of participants in the approval procedure. The decision is final. The transaction is expected to go through during the second quarter. Unipetrol CEO Marek Switajewski announced on the company’s website the company had opted to purchase the stake in Česká rafinérská to ensure raw material inputs for petrochemical production.

Railway Infrastructure Administration to renovate 200 largest stations

The state-owned Railway Infrastructure Administration is planning on renovating 200 of the largest railway stations in the Czech Republic at a cost of roughly 8.2 billion crowns. The stations should be reconstructed within the next three years, deputy head Tomáš Drmola said on Friday. According to the official, stations undergoing improvements should be comparable to railway stations in western Europe once complete. For the renovation to go ahead, the transfer of the properties from Czech Railways must be completed, which has proved to be a problem in the past.

Fewer Czechs vacationing abroad, according to Statistics Office

Czech holidaymakers are buying fewer package vacations abroad, the Czech Statistics Office revealed this week. According to the bureau’s numbers, the number of foreign trips fell by three percent while longer vacations by families opting to stay in the Czech Republic grew by eight percent. The weaker crown was cited by the Association of Travel Agencies as one reason for the drop in demand. According to the Statistics Office, Hungary and Egypt were popular destinations abroad last year, while fewer vacationers opted for Turkey and France. Croatia remains one of the top summer destinations.

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Business News

27-03-2015 13:02 | Chris Johnstone

In this week’s Business News: central bank talks up low crown policy; Asian and Middle East investors seen targeting Czech hotels; drug companies get pick-up from court decision; more, and more annoying Internet ads; and anonymous elephant shit deliveries promised by Prague firm.

Low and even lower crown policy suggested by central bank

The Czech National Bank has signalled that it ready to vigorously pursue its low crown policy. In a statement after the board meeting on Thursday, the Czech central bank said that it was ready to react automatically, without the need of a board decision, to weaken the crown if it started to strengthen beyond the target mark of 27 crowns/euro. And it significantly indicated that it is ready to shift that target to an even lower level if need be. Analysts have previously talked about a new target of 28 or even 29 crowns to the euro. The low crown policy should remain in place until at least the second half of 2016.

Hotel investments seen at 6.0 billion crowns

Investment in Czech hotels this year is likely to top six billion crowns. The main reason is the enthusiasm of investors from the Asia and Middle East to invest in Central Europe and boost their hotel capacity there, according to real estate consultancy Cushman and Wakefield. Some of the investments are expected to boost the number of beds on offer and quality of services, but are also expected to result in higher charges for guests. Room prices for top hotels have been on a gradual downward slope over the last 10 years.

Drug companies celebrate landmark ruling

Major pharmaceutical firms have won what has been described as a landmark ruling allowing them much bigger scope to challenge decisions and rulings by the State Institute for Drug Control. The Supreme Administrative Court ruled that current procedures by the state body setting prices for drugs were unconstitutional in a case brought by major drug firms such as US-based Abbot. The ruling is expected to kick start a series of stalled court cases brought by the drugs companies. 

Internet advertising grabs bigger share of ad spending

Internet advertising rose by around 10 percent last year to total 14 billion crowns. That’s still around half as much as for the biggest advertising medium, television, but getting close to the spending on ads in newspapers and magazines. And a 15 percent rise in Internet advertising spend is expected this year as well. But the aggressiveness of Internet advertising is annoying an increasing number of surfers, according to the Czech advertising evaluation company Emerite. It found the number of antagonised Czech Internet users had doubled in four years to 16 percent.

One lump or two

And finally a Prague-based business has been launched delivering elephant shit to all destinations. The business ‘Give a shit’ is the brainchild of Jaroslav Šimek with deliveries of small consignments of the excellent manure guaranteed within a couple of days following the order - supplies permitting. Supplies can be sent anonymously, giving a perhaps not so subtle message to the receiver. And part of the profits are promised to help save endangered elephants in Africa.

© 1996–2015 Český rozhlas


Business News

20-03-2015 13:02 | Chris Johnstone

In Business News this week: Vodafone seeks damages over high speed Internet connections; KMV bags Hungarian bottled water company; second Chinese bank announced Czech expansion; Škoda Auto looks to remedy slack Indian sales; Gufex gets showcase at world championships.

Czech telecom giants face court clash

Two of the big three Czech Telecoms companies look like they will be facing off in court. Vodafone has lodged a complaint with a Prague court saying that O2 abused its dominant position and shut it out of the fast internet market. Vodafone says it is seeking just under 400 million crowns in damages. O2 provides around 80 percent of the connections to fast internet services in the country. Vodafone says the charges levied by O2 for connections were exorbitant and meant that it could not offer services to companies and individuals. It says the damages were run up between 2011 and 2014 and are continuing at the rate of around 100 million crowns a year.

Czech mineral water firm seeks Hungarian expansion

The biggest Czech mineral water producer Karlovarské Minerální Vody (KMV) is continuing its European expansion with the purchase of one of Hungary’s leading bottled water companies. Kékkúti Ásványviz’s best known product is the Theordora brand of bottled water. The price paid to Nestlé Waters was not disclosed. KMV says it plans to give its Hungarian purchase the same high profile and results it has achieved in the Czech Republic and Austria. It is the leader on the Czech mineral water market and is in second place on the Austrian market after buying a local company in 2008.

China Construction Bank to launch Czech branch

One of China’s big four banks, China Construction Bank, says it wants to open its first branch in the Czech Republic, according to the Ministry of Finance. The announcement followed a meeting between the bank’s top management and ministry officials. China Construction follows hard on the heels of rival Bank of China which was the first Chinese bank to announce a Czech presence with the branch expected to be operating by the end of this year. Direct flights between Prague and Bejing or Shanghai should also be agreed soon, according to Minister of Industry and Trade Jan Mládek.

Škoda Auto aims to put Indian sales back on track

Car maker Škoda Auto is to revamp its sales network and after sales service in India in order to boost disappointing results, according to the business daily E15. The Czech Republic’s biggest car maker sold around 15,500 cars in the sub-continent last year. The paper said Škoda Auto’s models are not price competitive on the local market with leading Japanese and South Korean rivals. It added that the reputation for after sales service is also weak. An attempt will be made to reintroduce the Fabia hatchback to the Indian market after it was earlier withdrawn amid poor sales, the paper said.

Gufex to co-star in ice hockey championships

A Czech family firm has scored even before the first games of the Ice Hockey World Championships take place in Prague and Ostrava at the start of May. Gufex is again supplying around 1,000 puks to the world championships as part of a long term deal with the International Ice Hockey Federation. The company produces around 1 million puks a year with around 90 percent of production exported. The Czech puks have been used at the Nagano, Salt Lake City, and Turin Winter Olympics but a rival Russian supplier was roped in for the Sochi games in 2014.

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Business News

13-03-2015 14:52 | Ruth Fraňková

In Business News this week: the current account of Czech Republic’s balance of payments shows the first surplus ever recorded; Czech household debt reached 1.7 billion crowns last year; Czechs spent over 13 billion crowns in foreign online stores in 2014; Honeywell expands its innovation centre in Brno; Skoda Auto launches production of new Superb:

Czech balance of payments shows first surplus in history

The current account of the Czech Republic’s balance of payments, a broad measure of goods and money flowing in and out of the country, showed a surplus of 26.1 billion crowns in 2014, the first surplus ever recorded, the Czech National Bank announced on Friday. In 2013, the balance of payments showed a deficit of 57 billion crowns. According to CSOB analyst Petr Dufek the results suggest that in the long-run, the domestic economy is based on very solid foundations. Last year witnessed a big jump in the trade surplus in goods and services to 294.8 billion from 232 billion in 2013.

Czech household debt grows to CZK 1.7 billion

Czech household debt to banks and financial institutions grew by 220 billion to 1.7 trillion crowns last year, compared to the previous year, according to the data published by Czech Credit Bureau this week. Some 3.1 million Czechs sought loans last year, which is a year-on-year increase of 163,000. The interest in mortgages also continued to grow and currently amounts to 1.1 trillion crowns. The average mortgage size is two million crowns.

Czechs spent over 13 billion in foreign online stores

Czechs spent some 13.3 billion crowns in purchases from foreign online stores last year. In the last quarter of 2014 alone they bought goods worth 4.1 billion crowns, which represents a year-on-year increase of 57 percent, according to the Czech Bank Card Association. Czech customers altogether carried out 10.6 billion on-line transactions in foreign online stores. The average value of purchases amounted to 1, 251 crowns. According to the credit card company Visa, Czechs have been mainly shopping on line in Great Britain, Ireland, the US, Germany and Luxembourg.

Honeywell expands its innovations centre in Brno

US global technology and systems company Honeywell has launched operations at three new research and development laboratories at its technology and innovations centre in Brno. The centre is Honeywells biggest in Europe. The company is going to invest around 250 million crowns (about ten million US dollars) in the facility and plans to employ around 300 people. Another five research labs are scheduled to open at the site in the coming months. The research centre in Brno was established in 2003 and currently employs more than 1500 people.

Škoda Auto launches production of new Superb

The first Superb of the new third-generation model rolled off the assembly line at Škoda Auto’s factory in Kvasiny in east Bohemia this week. The new Škoda Superb model should go on sale in June and retailers started taking orders this week. The Czech car manufacturer is hoping to increase sales of the Superb by a quarter compared with the two previous models. Some 700,000 Superbs have been sold since 2001. The price of the third-generation Superb will range from 599,900 to 830,000 crowns.

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Business News

 

06-03-2015 13:14 | Chris Johnstone

In this week’s Business News: Tesco rings up Czech losses; massive nuclear contract for Czech engineering firm; national bank governor says no bonus from euro entry; PPP projects under consideration again at transport ministry; and tram maker angered by price and cost ‘slur’

Tesco takes big hit on 2014 performance

British-based supermarket chain Tesco rang up losses of almost 4 billion crowns last year. That’s almost a fourfold increase compared with 2013. The company says that the heavy loss was largely caused by exception write-offs of land and other property but that the retailer is still making an operating profit. Speculation has surfaced this week that Tesco could sell its Czech operations, either on their own or together with the businesses in Slovakia and Hungary.

Škoda JS lands Paks modernization contract

Czech engineering company Škoda JS has sealed a massive contract to install new safety and operating systems for Hungary’s Paks nuclear reactor. The total value of the contract comes to around 1 billion crowns, that amounts to around a quarter of the total orders racked up in 2014. Škoda JS competed for the contract against French nuclear giant Areva and Ukrainian contractor Impulz. In spite of the healthy order book, Škoda JS expects only a modest operational profit of around 100 million crowns for 2014.

CNB governor repeats euro adhesion scepticism

The governor of the Czech National Bank said this week that Czech entry into the Eurozone would not bring any appreciable boost to the local economy. Miroslav Singer added that it had not been proved that membership of the single currency area means higher growth. He said most analyses showed Eurozone countries did better than outsiders during the early years of the currency union but outsiders have been doing better in recent years. Singer’s Eurosceptic views are at odds with those of Czech President Miloš Zeman, who repeated this week that he is looking to replace the governor and correct the central bank’s mistakes within the next two years.

PPP projects seek to find favour at transport ministry

The Ministry of Transport is again looking at the possibilities of using so-called Private Public Partnerships (PPPs) to fund some of the country’s stalled highway and motorway construction projects. Minister Dan Ťok declared this week that two sections of highway construction are being examined to determine whether they might be suitable as pilot PPP projects. PPP projects, where, for example, a private company builds infrastructure and is then paid a fee for its use, are a controversial means of cushioning the bill for expensive projects.

Tram maker angered by ‘most expensive’ label

Tram, or streetcar, manufacturer Škoda Transportation is reported to have launched legal action after a former top member of Prague council who dubbed their trams ‘the most expensive in the world.’ Former leading local politician Jan Vašíček highlighted not only the 19.2 billion crown bill that Prague must pay for delivery of 250 trams, he also pointed out their high maintenance costs. Vašíček says these will amount to around 31 billion crowns over 20 years, or around five times the costs incurred for rival types of trams. Some of the higher costs are said to be caused by the excessive wear and tear on the tram lines.

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Business News

27-02-2015 15:04 | Jan Velinger

In this week's Business News: Fewer companies announce mass layoffs in January than the previous year; in a working paper, the EC says the state of public finances has improved; the minimum monthly wage in the Czech Republic is one of the lowest in Europe.

Fewer companies opt for layoffs in January, labour office reports

Eleven firms announced mass layoffs in January affecting a total of 296 employees, the Czech labour office has revealed. Most of the layoffs are situated in the regions of Moravia-Silesia and the Czech capital, while the highest number of expected layoffs in coming months will be in Ústí, in North Bohemia, according to the office. The January layoffs are lower than in December and dropped six percent year-on-year: in the same period in 2014, 581 more employees were let go. The layoffs are largely the result of improving effectivity at companies. Jobs affected were in administration, sales, manufacturing and other areas.

State of public finances improves significantly but problems remain, says European Commission

The overall state of public finances in the Czech Republic has significantly improved, the European Commission reports in its working paper, releasing results earlier than was the case in the past to promote greater debate. The final results are expected in May or June. Seen as positive in the Czech Republic are improved employment figures as well as a greater effectiveness in drawing EU funds. But a number of outstanding problems remain. One of the criticisms is the lack of transparency in public institutions and alleged corruption; also criticized were high costs in the pension, health care and tax systems.

Minimal monthly wage one of lowest in Europe

The minimum monthly wage paid to employees in the Czech Republic is nothing to cheer about, one the lowest in Central Europe, according to the European statistics office, Eurostat. According to the office, the Czech minimum monthly wage is lower than in neighbouring Slovakia and Poland as well some of the Baltic states and some of the countries from the former-Yugoslovia, amounting to the equivalent of just 332 euros per month. For comparison, the minimum monthly wage in Slovakia is 380 euros, it is 791 euros in Slovenia and 1473 in Germany. The findings are based on the latest numbers in January.

Czech Republic produces record level of FAME used in biodiesel

The Czech Republic produced a record 220,000 tonnes of FAME (Fatty acid methyl esters - a component of biodiesel) last year, the Czech News Agency has learned. The last time the numbers reached similar levels was in 2011, but production had declined every year since. Production in 2013, for example, was 23 percent lower than last year. The head of the Association for Biodiesel Production, Petr Jevič, told ČTK one of the factors spurring production numbers was a requirement for fuel distributors to lower greenhouse gas emissions by two percent, effective as of January 2014.

Czech Mint produces massive commemorative coin

The Czech Mint in Jablonec nad Nisou has struck a massive one kilo commemorative gold coin in honour of late Czech artist Oldřich Kulhánek, who would have turned 75 this year. The coin, which will cost buyers 1.5 million crowns, features the likeness of Holy Roman Emperor and King Charles IV (the same image as an the country's 100 crown note) and the seal of Charles University. Kulhánek, who died in 2013, designed all of the Czech Republic's current banknotes.

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Business News

20-02-2015 15:32 | Ruth Fraňková

In Business News this week: Czech Export Bank renews euro loans for exports to Russia; Tatra Trucks sign memorandum for supply of parts to India; President set to become first owner of new-generation Škoda Superb; breweries Radegast and Krušovice win UK’s International Brewing Awards; and spirits producer Rudolf Jelínek to enlarge orchards in Chile.

Czech Export Bank renews euro loans for exports to Russia

The Czech Export Bank has renewed euro loans for exports to Russia, which were suspended last December due to the market situation in the country, Mladá fronta Dnes reported on Friday, citing the bank’s CEO Karel Bureš. Mr Bureš told the daily that the new conditions for providing loans to Russia will be stricter than for other countries. The Czech Export Bank renewed the loans after the Russian rouble stopped weakening in January. According to Mladá fronta, the bank has provided loans worth 30 billion crowns to Russia, which represents about a third of all its loans.

Tatra Trucks sign memorandum for supply of parts to India

Czech heavy vehicles manufacturer Tatra Trucks on Thursday signed a memorandum of understanding with India’s BEML company for the supply of its truck parts to India. Under the agreement, Tatra will not supply finished trucks but only parts, which will be put together at a BEML assembly plant. The memorandum was signed in the presence of the Czech Defence Minister Martin Stropnický. Petr Rusek, chairman of the board and business operations director for Tatra Trucks, told the Czech News Agency that a final contract with BEML is still being negotiated.

President Zeman to become first owner of new-generation Škoda Superb

Czech President Miloš Zeman is set to become the first owner of the third- generation Škoda Superb, produced by the Czech car-manufacturer Škoda Auto, which was officially introduced this week. Mr Zeman announced the news during his visit of the Hradec Králové region. Mr Zeman, who is currently using the top-of-the-range Laurint &Klement version of the second generation Superb, said that Czech presidents should be driving in Czech cars.

Czech breweries Radegast and Krušovice win International Brewing Awards

The Czech non-alcoholic beer Birrel, produced by the north Moravian brewer Radegast, has won the gold and silver medals at the International Brewing Awards in Great Britain. Radegast’s semi-dark Birell won in the category of non-alcoholic beers and the classic light Birell placed second. Birell has long been the best-selling brand of non-alcoholic beer in the Czech Republic. Another Czech beer, Krušovice Imperial, took the silver in the category of lagers with alcohol content of 4.8 to 6.9 percent. The International Brewing Award competition was established in 1886. This year, the jury was selecting among 841 beers from 50 countries.

Liquor and spirits producer Rudolf Jelínek to enlarge its orchards in Chile

Rudolf Jelínek, Czech producer of fruit spirits and liquors, is planning to enlarge its pear orchards in Chile, the E15 daily reports. The company’s Chilean subsidiary was established in 2007 and specializes in the production of Williams pear brandy. The company has been buying fruits from other growers but plans to be more self-sufficient in the future. The company currently has a 15 hectare pear orchard and according to its export director, Martin Déva, plans to extend the area by 10 to 20 hectares a year. Rudolf Jelínek’s Chilean branch produces up to 600,000 litres of Williams pear liquor a year.

© 1996–2015 Český rozhlas


Business News

13-02-2015 19:33 | Ruth Fraňková

In Business News this week: the Czech economy grew by 1.3 percent in the last quarter of 2014; Czech brewer Plzeňský Prazdroj announces record sales for 2014; natural gas sales lowest in the last decade; British developer threatens legal action over shopping mall project; mineral water producer Poděbradka increases its sales by 10 percent.

Czech economy grows by 1.3 percent in last quarter of 2014

The Czech economy grew by 1.3 percent in the last quarter of 2014, according to the latest figures from the Czech Statistics Office released on Friday. The office estimates growth for the whole of 2014 at 2 percent, which is slightly lower than previously expected. Even so, the result is significantly better than in 2013, when the GDP dropped by 0.7 percent. The office says the year-on-year increase was driven primarily by foreign trade and exports.

Plzeňský Prazdroj announces record sales for 2014

The biggest Czech brewer Plzeňský Prazdroj announced record beer sales in 2014. The brewery sold 10 million hectolitres of beer last year, which is an increase of 4.5 percent compared with 2013. Export sales climbed by 6 percent year-on-year to around 3.5 million hectolitres. The total sales of the premium lager Pilsner Urquell last year exceeded two million hectolitres for the first time in the company’s history. Domestic sales of the flagship lager went up by 10 percent and exports increased by four percent.

Consumption of natural gas lowest in last decade

The Czech Republic’s consumption of natural gas in 2014 fell to the lowest levels in the last decade, according to the latest figures released by energy regulator ERÚ. In total, 7.28 billion cubic metres of gas were consumed in the country last year, which is 12 percent less than in 2013. Experts say exceptional warm weather was behind the low consumption. The average temperature in the Czech Republic last year was 9.7 degrees Celsius, which is 1.8 degrees above the average.

British developer threatens with legal dispute over shopping mall project

The British real estate and development group Lordship has got into a fight with Prague 7 local council over a potential shopping centre project. The plan to build a 30,000-square-metre shopping centre just opposite the National Gallery’s Veletržní Palác has sparked opposition from a local citizens’ group. Newly elected representatives at the town council are now demanding changes to the project. The developer, who has been renting the building site on Veletržní street since 2002, claims that the delays have already cost it around one billion crowns and is threatening to take legal action over the latest demands which could potentially end in arbitration.

Mineral water producer Poděbradka posts 10 percent increase of sales in 2014

Czech mineral water producer Poděbradka increased its turnover by around 10 percent to 534 million crowns in 2014. The increase was mostly generated by the launch of a line of soft drinks. In 2013, the company posted a net profit of 54 million crowns. Poděbradka mainly produces flavoured mineral water and during the peak summer season it can produce up to 45,000 bottles an hour

© 1996–2015 Český rozhlas


Business News

06-02-2015 17:11 | Ruth Fraňková

In Business News this week: Czech National Bank announces prolonged forex intervention until second half of 2016; Czech firm Excalibur Army to provide tanks for Iraq; nearly 25,000 new firms established in Czech Republic last year; 47 percent of Czechs in favour of relaxing limits on coal mining; Czech Airlines to launch signature aroma. 

Czech National Bank to continue forex intervention by second half of 2016

 The Czech National Bank has announced it will continue intervening against the Czech crown to keep the exchange rate at around 27 crowns per euro at least until the second half of 2016. The governor of the Czech National Bank, Miroslav Singer, announced the decision at a press conference after the meeting of the governing board on Thursday. The bank previously declared that the low crown regime will end by 2016. The Bank Board also announced that it was ready to depreciate the crown even further in case it was necessary. According to Mr Singer, the potential weakening of the crown will depend mainly on the effectiveness of measures against deflation taken by the European Central Bank.

Czech firm to provide tanks and armoured vehicles to Iraq

The Czech firm Excalibur Army is set to provide around a hundred tanks and armoured vehicles to Iraq to help with the fight against Islamic radicals, the website Aktualne.cz reported on Friday. The contract has been approved by the Czech Ministry of Foreign Affairs, defence and interior ministries. According to Excalibur Army’s owner, Jaroslav Strnad, it is one of the most significant contracts in the company’s history, amounting to hundreds of millions of Czech crowns. The first shipment has been received by Iraqi arms experts this week.

Nearly 25,000 new firms established in Czech Republic last year

Nearly 25,000 new firms were founded in the Czech Republic last year, the highest number since 2007, according to a study by the Bisnode consultancy released this week. The total number of companies increased by five percent and now exceeds 400,000. Nearly 50 percent of all the newly registered firms were established in Prague. According to the analysts, the renewed interest in establishing companies is a sign that the Czech economy is recovering.

Poll: 47 percent of Czechs in favour of easing coal-mining limits

 Nearly half of Czechs support the easing of limits on brown coal mining in the country, according to a survey conducted by the STEM agency this week. Forty-seven percent of respondents said they would support relaxing the limits while 17 percent were against it. A fifth of respondents said they were in favour of searching for new brown-coal deposits. The Minister of industry and trade, Jan Mládek, in January sparked a heated debate after proposing a partial lifting of limits on lignite mining on north Bohemia.

Czech Airlines to launch signature aroma

Czech Airlines is planning to launch its own signature aroma as part of the company’s branding strategy. The press spokesman for the Czech Airlines, Daniel Šabík, told the Hospodářské noviny daily on Friday that the company has been considering using a unified “eau d’aeroport” that would be sprayed in aircraft cabins in all their planes. Signature aroma has become increasingly popular in recent years with hotels and retail chains. A number of other carriers, such as Delta Airlines, Turkish Airlines and United Airlines, have already launched their individualised fragrances.

© 1996–2015 Český rozhlas


Business News
30-01-2015 15:40 | Ian Willoughby

In Business News this week: Study suggests grey economy equal to 15 percent of GDP; meat production up after over decade of decline; personnel agencies warn of huge shortfall in some specialists; VAT rise on cigarettes to kick in next month; and smart phones pass out classic mobiles on Czech market.

Study: Czech grey economy equal to 15 percent of GDP


The grey economy in the Czech Republic grew slightly to CZK 612 billion last year, according to a study released on Friday by the card company Visa. The informal sector was therefore equivalent to 15 percent of the country’s entire gross domestic product for 2014. This is below the European average of 18.5 percent but twice as high as the level in Austria or Switzerland, according to the report. The grey economy is particularly big in former communist states and Bulgaria was judged to have Europe’s largest at 38 percent of GDP.

Czech meat production climbs slightly after over decade of decline

After 11 straight years of decline, meat production increased slightly in the Czech Republic in 2014. According to figures released by the Czech Statistics Office on Friday, there was a 0.8 percent rise to just over 450,000 tonnes last year. Marginal meats such as horse and goat saw a fall in production but all other types registered growth. Meanwhile, there was a 1.3 percent year on year rise in milk production in 2014.

Personnel agencies: Economy to face catastrophic shortage of specialists in coming decades

The Czech economy is set to face a catastrophic shortage of specialists in some fields over the next quarter century, the Czech News Agency reported this week, quoting personnel agencies. It said that there was already a marked lack of workers with technical skills at all levels of education from apprenticeship to university. A representative of Stanton Chase said 30 to 35 was the biggest age group in the Czech Republic and that generation would stop working in around 25 years, leading to a “huge crisis” on the labour market.

Increase in VAT on cigarettes to kick in in coming month

 

Cigarettes are set to increase in price by CZK 5 or 7 in the Czech Republic in the coming weeks. Value added tax on cigarettes rose at the start of the year but retailers are allowed to sell previously stockpiled supplies at the old rate until the end of February. A pack of 20 Camels will, for instance, go up in price from CZK 84 to CZK 89. VAT was increased in line with a European Union regulation that sets a minimum rate of 90 euros per 1,000 cigarettes.

Smart phones now more popular than classic mobiles on Czech market

The number of smart phones in the Czech Republic last year exceeded the number of classic mobiles for the first time, suggests a survey conducted by Mediaresearch. In 2014 59 percent of users had a mobile with an operating system. The study also found that Facebook was the main source of news for over 20 percent of Czechs.

© 1996–2015 Český rozhlas

 

 


Business News

 23-01-2015 14:00 Chris Johnstone

In this week’s Business News: Czech companies look to manufacture new generation of drones; toy makers see international playground; sale sign goes up on Zuno bank; Czech crown for Miss Universe event; and pay as you stay coffee shop revolution promised for Prague.

 
 

Czech consortium targets civil market for drones

 A Czech consortium has been created to develop a new generation of airborne drones that can be used on civil building projects such as the construction of motorways or gas pipelines and also by emergency services and police for searching for missing persons. Two of the partners in the cooperation are a subsidiary of the Metrostav construction company and the state Military Technical Institute. Series production could start within a few months.

Producers expect Czech toys to play big abroad

 Czech toy producers are expecting a record year for exports in 2015 with sales abroad jumping by 17 percent to around 2 billion crowns. There are around 230 such Czech producers who reckon they have held onto a local market share of between seven and ten percent. Products vary from traditional wooden toys to the latest hi tech Lego bricks.

Internet bank Zuno up for sale

 The Czech and Slovak operations of the internet bank Zuno have been put on sale by their Austrian owner, Raiffeisenbank. Total customers in the two countries amounted to only around 250,000 with Zuno failing to make a significant breakthrough into the loans market. The bank also suffered from the proliferation of similar low cost banks which, however, have also recently sought to develop local branch networks.

Czech crown assured at Miss Universe competition

 Whoever triumphs in the Miss Universe competition in Miami this Sunday, one Czech company will certainly be among the winners. Czech-based diamond jewellery company Diamonds International Corporation provides the crowns for the competition and will be doing so for the next nine years under a contract signed last year. The company was established in Prague in 2005 and has since become an international byword for glittering creations. It also provides the crowns for Miss USA and Miss Teen USA.

Coffee shop revolution promised for Prague

 The revolutionary coffee shop concept Ziferblat – where you get the coffees and food free but pay for the time you stay there – is planning to open up in Prague. The intention to open in the Czech capital was announced on the Facbook pages of its recently opened London site. The concept was launched by the Russian Ivan Mitin with around a dozen outlets now existing. Prices per hour in the London and Moscow coffee shops each work out at around 66 Czech crowns.

© 1996–2015 Český rozhlas

 


Business News
16-01-2015 16:13 | Chris Johnstone

In this week’s Business News: Ikea doubles Czech profits; oil explorer gets seismic in South Moravia; Leo Express says breaks even on passenger operations; South Bohemia plots international airport aspirations; and new step for Internet commerce.

Ikea boosts sales but sticks with modest expansion plans

Iconic furniture seller Ikea is maintaining its cautious expansion policy in the Czech Republic in spite of solid sales and profit figures. The Swedish-based company doubled Czech profits for the 2013-2014 financial year to almost 370 million crowns with turnover up by around 5.0 percent to 7.7 billion crowns. Ikea though is still only looking to add one new store in Prague to its existing two in the capital. Mooted plans for a new store in Plzeň and one between Hradec Královė and Pardubice are on hold.

Czech oil explorer seeks new reserves

In spite of a glut of oil on world markets and tumbling prices, the Czech Republic’s sole significant oil and gas producer, Moravskė Naftovė Doly (MND), is pushing ahead with seismic tests in south Moravia around Kyov. The tests cover almost 200 square kilometers of territory and will be followed up by analysis and bore holes in a process taking several years before any oil or gas are likely to be extracted. MND produces around two percent of the Czech Republic’s annual oil consumption and one percent of its natural gas needs.

Leo express see operating breaking even

Private passenger rail operator Leo Express says it broke even at an operating level in 2014, a fact which bosses describe as a success. Even so, a final loss of around 120 million crowns is still being counted on for last year. The rail passenger company launched in November 2012 on the route between Prague and Ostrava and has expanded services to Košice, Slovakia, together with a combined train and bus link to Katovice, Poland.

Region readies development plans for Českě Budějovice airport

The South Bohemia region is preparing next month to make a final decision on a 500 million crown investment into the development and expansion of Českě Budějovice airport. The aim is the upgrade the airport to international level with a target of attracting around 80,000 travellers a year with a mixture of charter and scheduled flights. The facilities were mainly developed for military and recreational aviation.

Idea has legs says internet tailor

Internet commerce appears to have taken a new step forward in the Czech Republic with an offer for on-line tailoring services. The so-called ‘krejčomat’ service is at the moment limited just to trousers with its Prague founder saying that the biggest challenge so far is persuading customers to make the nine accurate size measurements necessary for orders to be made up. E-mailed orders are delivered within two weeks.

© 1996–2015 Český rozhlas


 

Business News 09-01-2015 16:03 | Ruth Fraňková

In Business News: fuel prices in Czech Republic fifth lowest in Europe; Jan Řežáb of Socialbakers makes Forbes 30 under 30 list; number of bankruptcies up in 2014; inflation at lowest level since 2003; Czech e-shops post record sales for 2014.

Fuel prices in Czech Republic fifth lowest in Europe

Fuel prices in the Czech Republic are currently the fifth lowest in Europe, according to figures released by UAMK, one of the country’s biggest motoring organisations. The cheapest gasoline can be bought in Estonia, Poland, Luxembourg and Latvia, and the most expensive in Italy. Gasoline and diesel prices started to decline in autumn last year due to falling prices of crude oil on world markets. The average price of gasoline in the Czech Republic dropped by 4.27 crowns to some 30 crowns per litre year-on-year, while the average price of diesel decreased by 4.97 crowns to 32.12.


Jan Řežáb of Socialbakers makes Forbes 30 under 30 list

 Jan Řežáb, the founder of Socialbakers, a Czech firm providing social media network statistics and brand analysis, has been included on the 30 under 30 list of young innovators, put together by the US Forbes magazine. The 27-year old Řežáb is the first Czech to be included on the list. Forbes has praised his Prague-based company for having the largest social-media data pool of any social analytics company. Socialbakers currently employs around 300 people and runs 11 offices across the globe

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Number of bankruptcies higher in 2014

 The number of bankruptcies in the Czech Republic reached 2,403 in 2014, which is 179 more than in the previous year, the debt consultancy Creditreform said this week. It is the highest number of bankruptcies filed since 2008, when the new law on insolvency came into force. The number of bankruptcies of self-employed entrepreneurs increased by 261 to 1,110, while the number of corporate bankruptcies fell slightly to 1,293

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Inflation in 2014 at lowest level since 2003

The average inflation rate for 2014 fell to 0.4 percent from the previous year’s figure of 1.4 percent, according to figures released by the Czech Statistical office this week. It was the lowest rise in consumer prices seen in the Czech Republic since 2003 and the second lowest in the country’s history. Consumer prices in December went down by 0.1 percent compared to the previous month, mainly due to dropping prices of fuel.


Czech e-shops post record sales for 2014

 Czech internet retailers in 2014 registered record sales of up to 68 billion crowns. That figure is 16 percent higher than in the previous year, according to estimates released by the electronic commerce association APEK. Internet stores currently account for more than seven percent of the overall retail turnover, which is a year-on-year increase by one percentage point. The number of e-shops on the Czech market grew by 200 compared to the previous year to some 37,200.

© 1996–2015 Český rozhlas

 


Business News
02-01-2015 14:01 | Ruth Fraňková

In Business News this week: Czechs optimistic about their finances for 2015; minimal wage increases to 9,200 crowns; Czech betting firms enjoyed record sales last year; fuel prices dropped by 4.15 crowns in 2014; real estate market boosted by record low interest rates.

Czechs optimistic about their finances for 2015

Czechs are optimistic about their financial situation for the year ahead, according to a poll conducted by the Ipsos agency. The number of those who think they will be worse off financially in the coming year has dropped by six percent, to 17 percent. Only five percent of respondents regard their financial situation as hopeless, compared to seven percent last year. Most respondents are worried about the growing cost of foodstuffs as well energy, water and gas prices.

Minimal wage increases to 9,200 crowns

Starting this January, the minimal monthly wage in the Czech Republic will increase by 700 crowns to 9,200 crowns (roughly 330 euros). The minimal wage was last raised in August of 2013 by 500 crowns. The Czech Republic’s minimal wage has been sinking in the European rankings and is currently the fourth lowest in the European Union, followed only by Bulgaria, Romania and Lithuania. The government hopes that the increase will motivate people to work rather than staying on welfare benefits.

Czech betting firms enjoyed record sales last year

Czech betting agencies registered a record number of bets in 2014 thanks to a number of large sporting events, representatives of the country’s most prominent betting agencies said. Czechs spent nearly 3 billion crowns betting on the major sports events, the winter Olympic Games, the World Hockey Championship and the Football World Cup, which is twice as much as the average. Two biggest Czech betting firms, Fortuna and Synot, registered an increase in sales by 20 percent year-on-year.

Fuel prices down by 4.15 crowns last year

The average price of gasoline in the Czech Republic over the past two weeks dropped by 1.40 crowns to 31.92 crowns per litre, while the average price of diesel decreased by 1.21 crowns to 32.06 crowns. At some gas stations in the country, gasoline prices have gone below 30 crowns per litre. The decline in gasoline and diesel prices, which started in October last year, is driven mainly by falling prices of crude oil on world markets. In the course of last year fuel prices at Czech petrol stations dropped by roughly 4.15 crowns.

Real estate market boosted by record low interest rates

The average mortgage interest rates in the Czech Republic dropped to a historic low in 2014, giving a boost to the slumping real-estate market. Analysts say the real-estate market was also revived by decreasing prices of property. According to the most recent estimates, some 5600 new apartments were sold in Prague last year, which is comparable to 2007, when housing construction in the Czech Republic reached its peak. The real-estate market revival is expected to continue this year.

© 1996–2015 Český rozhlas
 


 

 

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