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 CZECH BUSINESS AND TRADE

Czech Business and Trade

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Questions of the Month for Petr Kužel, President of the Czech Chamber of Commerce 4
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 ECONOMIC POLICY
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 INTRODUCTION
Questions of the Month for Petr Kužel,
President of the Czech Chamber of Commerce
Petr Kužel
One of the priorities of the Czech
Chamber of Commerce is the support of
exports and foreign relations. How can
you assist foreign businessmen wishing
to enter the Czech market?
Foreign businessmen will find a host of
useful information and contacts in English,
concerning the possibilities of doing busi-
ness in the Czech Republic, on our web-
site: www.komora.cz. Besides giving infor-
mation about the business environment
in the Czech Republic, we organise profes-
sional seminars and bilateral negotiations
between Czech and foreign businessmen
and entrepreneurs within the framework
of “incoming” missions. We also publish
foreign enquiries and offers, search out
potential trading partners in the CR and
supply fresh information about trade fairs
and similar events to be held in this coun-
| 4
try. Well-tried and tested informa-
tive instruments for foreign businessmen
are the forums organised as part of busi-
ness missions to other countries and the
presentations of Czech firms at selected
international exhibitions. We co-operate
closely with foreign Chambers, which are
also a useful information source for those
wishing to do business in the CR.
You have launched a project called
“Ensuring joint participation in special-
ised exhibitions and trade fairs in other
countries in the years 2010-2012”, the
purpose of which is the strengthening of
the competitiveness of Czech indus-
trial firms on foreign markets. Which
foreign markets are important to Czech
enterprises and which events will you
support?
This year alone, together with the Ministry
of Industry and Trade and the CzechTrade
Agency, we are organising approximately
fifty specialised fairs on four continents:
besides Europe, also in America, Asia, and
Africa. We are trying to meet the require-
ments of Czech enterprises. Their interest
in subsidised participation in specialised
fairs exceeds all expectations. By the end
of May 2010, about 300 Czech firms and
associations had taken part in the 36 fairs
thus far organised. Therefore, the planned
number of 1400 participations within the
framework of 100 foreign trade fairs over
the three years during which the project
will last is a realistic goal. The firms are es-
pecially interested in engineering, arma-
ment and technical fairs. Of the number
of destinations that are being prepared, I’ll
just mention, at random, Shanghai, Cairo,
and Calcutta. We will also be in Iraq. The
response of Czech exhibitors is absolute-
ly positive. The importance of trade fairs
has been proved by a survey carried out
by the Czech Chamber of Commerce this
year, which found that, according to 25%
of Czech firms, they are the most impor-
tant instrument for successful expansion
to export territories. Foreign missions and
the use of the services of specialised busi-
ness companies were only placed second
after trade fairs.
The Czech Chamber of Commerce has
started yet another project, “The Crisis
Notwithstanding”, the purpose of which
is to find modern business heroes.
Can you tell us something about this
undertaking?
Besides a number of unpleasant impacts,
for most businessmen the recession also
had its positive features. This is what
about two-thirds of the firms stated in our
survey. For one-quarter of the firms, the
main positive effect in production or serv-
ices was the growth of efficiency, followed
by the elimination of latent over-employ-
ment, innovations, and the discovery of
new markets. As far as we are concerned,
the decision was taken, as part of the
“Crisis Notwithstanding” project, to find
and award the most successful “winners”
in the crisis and to use their examples to
show other firms the way. Our partner in
evaluating the firms is the renowned in-
ternational auditing company, Pricewa-
terhouseCoopers. Those wishing to learn
more about the project can find detailed
information on the website: www.komora.
cz/krizinavzdory.
You have long been struggling against
the bureaucratic burdening of enter-
prises. How do we stand when compar-
ing the Czech business environment
with that in the other EU states?
On the one hand, since 2005 the ad-
ministrative burden of businessmen has
been reduced by more than 10% which,
for the business sector means, amongst
other things, an approximate saving of
10 billion crowns (approx. EUR 400 mil-
lion) per year. The process of entering
business and starting a trade is now
shorter, while a number of obligations
towards the trade licensing authorities
are in the process of being cancelled. On
the other hand, in the standard business
environment ratings published by the
Photo: The Czech Chamber of Commerce archives; www.sxc.hu
World Bank, the Czech Republic unfor-
tunately, generally ranks 80th out of 180
countries.
Within the European Union, I think only
Poland and Greece lag behind us. As for
tax bureaucracy, we are even worse off
– on the global scale we rank 13th from
the bottom. Only Bulgaria, out of the EU
countries, lags behind us. The problem is
that bureaucracy is like the mythical Hy-
dra. You cut off one of its heads, and two
more grow in its place. I am, nevertheless,
confident that in the end we will triumph.
 ECONOMIC POLICY
Czech Industry: From Peak To Bottom and From Bottom Up
The Czech Republic’s economic
development has been recording
an improvement in the last months,
according to assessments by econ-
omists and analysts. Compared to
the commentaries and uncertainty of
6 - 9 months ago, we are now miles
away. The Czech economy has re-
bounded and is moderately growing.
What do we owe this rebound to?
A look at the regularly published monthly
indicators shows that, besides the leading in-
dicators of confidence, an improvement is re-
corded especially in foreign trade and industry.
Even without a detailed analysis of the causes,
it can be said that industrial production in the
Czech Republic is closely linked with foreign
trade, in both exports and imports. Recovery
abroad has increased demand, from which
Czech industry has profited, and the import
of production means and semi-finished prod-
ucts has logically risen as well.
 CZECH INDUSTRY RECOVERING
SINCE MAY 2009
What preceded this development? Czech in-
dustry peaked at the beginning of 2008. By
the middle of the year industrial production
dropped slightly, during the summer its de-
cline deepened, and from the autumn, and
particularly at the time of the greatest shock to
the global financial system, it tumbled in a free
fall. The downturn stopped at the beginning
of 2009, when industry entered the phase of
stagnation and stabilisation. In monthly data,
the deepest bottom of industrial performance
is May 2009. Since then, Czech industry has
experienced a gradual recovery, and the first
data show that it is entering the beginning of
2010 with rising dynamics.
Interpreting the year 2009 is problematic
– in year-on-year comparison it recorded
a big fall, but this may be oversimplified. On
month-by-month examination of the data,
industry headed steeply to the bottom
roughly at the turn of 2008-2009 and stayed
there throughout the first half of 2009, but
did not fall substantially deeper. From the
peak at the beginning of 2008, Czech in-
dustry fell to the bottom of the beginning
of 2009 by approximately 20%. The average
fall in the EU 27 during the same period was
about 15%, and in the euro zone about 16%.
This means that Czech industry was affected
above average. This was important in terms
of the economy as a whole. Czech industry
creates about 30% of GDP, while the EU av-
erage is approximately 20%.
 STRUCTURE OF INDUSTRY
Let us have a closer look at the structure.
About 90% of Czech industry is manufactur-
ing, in the more detailed classification the
largest share of industry is accounted for by
the manufacture of motor vehicles (approxi-
mately 20%). It is followed by the manufac-
ture of food and metal products, electrical
equipment, and electric power industry.
The classification is somewhat misleading
as the interrelation of the sectors is high. In
terms of dynamics, the record holder of the
decade is the manufacture of computers,
which has achieved almost a magic 1 000%
since the beginning of the millennium. The
5 |
 ECONOMIC POLICY
share of this segment is small, in the order
of units of per cent, but has been steadily
increasing. The year 2009 brought a 13.4%
fall in industry. As we have said, Czech in-
dustry fell by about 20% from the peak at-
tained early in 2008 to the deepest bottom
and now finds itself about 15% below the
highest point. The car industry fell from the
beginning of 2008 to its bottom by some
40%, but now finds itself about 10% below
the peak. The highly cyclic character of car
industry development is well known, and
thus also a risk for the Czech economy. Of
course, such a quick return to “mere“ 10%
below the peak would be puzzling if the de-
mand for cars was not boosted by the effect
of the scrappage premium for the purchase
of a new car while scrapping an old one in
countries of the area, especially Germany.
For comparison, a number of sectors with
a similar cyclic character find themselves
much deeper below the peak at present
(end of March 2010). For example, the manu-
facture of computer, electronic, and optical
products fell from the peak by about 25%
and subsequently rebounded by some 6%.
But it is about 20% below the peak, which
is much deeper than the motor industry. At
the same time some sectors are not showing
clear signs of a rebound yet. For instance, ma-
chinery manufacture dropped by 30% from
the beginning of 2008 to early 2009 and until
now its fall has deepened to a chilling 34%.
The closer is the interrelation of the differ-
ent sectors with the car-making industry, the
more similar is logically the course of its cy-
INDUSTRIAL PRODUCTION (2005=100; SA, WDA)
200
180
160
140
120
100
80
60
40
20
0 had been used to before the crisis, but the
2000 MO1
2001 MO1
2002 MO1
2003 MO1
2004 MO1
electrical equipment
machinary and equipment
| 6
cles. An example is the manufacture of plas-
tics and rubber. In this case, the manufactur-
ing finds itself approximately 10% below the
peak, after an initial fall of 20%, which is com-
parable with car production. Adjustment for
the one-off effect of the scrappage money
is naturally a problem, especially because of
the interrelation with other segments. If the
car-making industry found itself now where
the manufacture of machinery is, then indus-
try as a whole would stand approximately
3.5% lower than the present level, provided
the other factors remained unchanged. If the
negative effect was applied to other sectors,
then the potential decrease could be twice
as strong, about 6 – 7%.
 WHAT IS THE OUTLOOK FOR 2010?
Of course, this is merely a graphic theoretical
construction. As we have said, adjustment
in this case is very problematic. The fading
of the effect of the scrappage premiums
is a variable which is a nightmare to prog-
noses for 2010. It is obvious that demand for
vehicles which have had the advantage of
the scrappage premium is likely to be weak-
ened this year. However, for the time being
it seems that the prospects of industry in
the euro zone, the main market for Czech
exports, are steadily improving. Also prom-
ising is the growth in sectors which were
not affected by the scrappage programmes.
Examples include the manufacture of com-
puters, metal products, the paper industry,
or perhaps the food industry, which, how-
ever, displays different features in terms
2005 MO1
2006 MO1
2007 MO1
2008 MO1
2009 MO1
2010 MO1
computers motor vehicles
food products
Source: Raiffeisenbank a.s., Czech Statistical Office
of cyclic development. Adjustment for the
scrappage schemes effect has other pitfalls.
The competitiveness of the Czech car-mak-
ing industry is high. A year-on-year com-
parison is distorted by the start up of the
Hyundai car factory and the presentation
of new models of Škoda Auto with which
the car maker seems to be scoring success.
The Czech car-making industry has been af-
fected by the crisis in its revenues, but it has
probably gained a larger share of the global
market. Thus it might pull off a surprise in
terms of future yields.
 COMPETITIVENESS IS CRUCIAL
Regardless of the recession, the question
for the future is competitiveness, where the
Czech economy has so far demonstrated
a fairly good level. Compared to countries
in the area, the Czech economy has the fast-
est growing manpower costs after Bulgaria
and Romania. In 2009, the average hourly
labour costs in the Czech Republic were
approximately EUR 9 per hour. In 2006 they
amounted to EUR 7, about one euro above
neighbouring Poland. Compared to the
more developed and wealthier Germany,
hourly wage costs in the Czech Republic
are still at about one-third of this level, but
a cause for concern is rather the growth
rate than the present situation. Thus, if la-
bour productivity does not rise adequately,
Czech industry will face competitiveness
problems in future. This might also hinder
the trend of long-term strengthening of
the Czech currency, the crown. Although
industrial production has been slowly ris-
ing in the last few months, a look at the
structure of the recovery advises caution
against strongly positive forecasts.
In 2010 we expect Czech industry to grow
by approximately 2% and next year by 4%.
For Central Europe as a whole we expect
3.7% industrial growth this year and 5.3% in
2011, for euro zone 2.9% and 1.7%, respec-
tively. The uncertainty is high, in the analysts‘
language: the confidence intervals of the
prognoses are still much wider than what we
scissors point rather to growth, while a year
ago they were wide open on both sides.
Photo: www.sxc.hu
Michal Brožka
Analyst
Raiffeisenbank a.s.
(e-mail: michal.brozka@rb.cz)
 CZECH BUSINESS AND TRADE
OECD’s Good Evaluation of the Czech Republic
During his April visit to the Czech
Republic, Ángel Gurría, General
Secretary of the Organisation for
Economic Co-operation and Develop-
ment (OECD), presented the OECD’s
economic overview in which the
organisation evaluates the current
state of the Czech economy, analyses
economic policy and makes several
suggestions for further reforms. The
OECD prepares this report individu-
ally for all OECD member states.
According to the OECD, the Czech economy
has been affected by the global decline in
economic growth, due to its high level
of openness and participation in global
production chains. Its fiscal position also
suffered a loss and this situation required
a quick change from stimulation policy to
consolidation. The major medium-term
challenge is the creation of conditions
which would enable the Czech Republic
to catch up rapidly with the devel-
oped economies of the OECD, in particular
to restore public finance sustainability and
enhance the business environment. In this
area, the Czech Republic has made signifi-
cant changes in the process of company
establishment (for example, in the decrease
of costs for company establishment) and
in simplifying other legal procedures (from
the registration of a company to insolvency
procedures).
 BANKS REPRESENT THE STRONG
POINT OF THE CZECH ECONOMY
Despite all suggestions, the overall OECD
balance has been favourable to the Czech
Republic, even in comparison with 30 mem-
ber states. According to Gurría, this is partial-
ly due to the caution of Jan Fišer’s govern-
ment. It was also stressed that, to emerge
from the crisis soon, it is necessary for the
Czech Republic to limit the country’s debt
and also to make some changes in the areas
which increase budgetary expense and dis-
courage the unemployed from returning to
the labour market. According to the OECD
report, banks are the strong point of the
Czech economy – according to the report,
it was positive that banks did not become
involved in risky business practices; and
besides, the Czech Republic does not have
a problem with loans in foreign currencies
(income as well as loans are mainly in Czech
crowns). The greatest problem is said to be
the growing budgetary deficits. According
to the forecast, in 2010 the Czech Repub-
lic can expect revitalisation with a growth
of 2%. Increased investments and foreign
demand will be the main causes; on the
other hand, low local consumption will be
the greatest growth disincentive. The gov-
ernment should also set a deadline for the
country to join the Eurozone – i.e. the date
of the adoption of the euro.
The economic report summarises its
suggestions for the Czech Republic in
the following points:
 Implementation of an ambitious me-
dium-term consolidation strategy.
The government should formulate a clear
medium-term plan to achieve a structurally
balanced budget. The consolidation effort
must be supported by structural reforms
and it should balance the provision of the
income base and the use of savings poten-
tial in cost programmes by increasing their
effectiveness and restraining their growth.
It should become the foundation stone of
a wider strategy in the preparation of the
economy to join the Eurozone.
 Diversification of risks in health care
and pension system
Due to the pressure of expense caused by
an ageing population, it is necessary to carry
out further health care and pension system
reforms to provide for their long-term fiscal
sustainability. In both cases, the first promis-
ing steps have been taken, but it is neces-
sary to do more, especially to diversify the
sources of pension income.
In recent years, significant reforms in the
tax system and social benefits system
have been carried out. Even though
many of the changes are welcome, there
are still some unresolved issues:
 Transferring the tax burden towards
less distortion-causing taxes.
It is possible to use indirect taxation much
more, especially excise, ecological, and
property taxes instead of direct taxation
levied on labour and capital.
 Better co-ordination of tax and ben-
efit policy.
Due to the fact that the policies in these two
areas are not sufficiently co-ordinated, un-
desirable interaction between the tax and
benefit systems sometimes occurs. A more
systematic analysis of their interaction could
help to prevent these problems.
 Removal of further deformities in
labour and capital taxation.
Different treatment of employees and self-
employed entrepreneurs deforms the be-
haviour of labour market participants. The
law on Corporate Income Tax, which gives
preferential treatment to certain kinds of as-
sets and investment financing resources, has
a negative effect on investment allocation.
 Further lowering of rigidities on the
product and labour markets.
Despite recent reforms, it is still necessary to
lower the barriers for entry on the product
market, to strengthen economic competi-
tion, especially in network sectors, and to
liberalise labour market regulations.
 Further development of initiatives in
the field of e-government.
Greater use of e-government methods
could significantly facilitate the attainment
of these objectives.
7 |
 INVESTMENT
FDI on Roller-coaster in CEE
The Central and Eastern Europe (CEE)
has experienced a roller-coaster ride
in foreign direct investment (FDI) in-
flows since 2003. The strong growth
that followed the last two rounds
of EU expansion was halted by the
global recession. FDI inflows in 2009
were 50% down on the amount
in 2008. Two important factors to
determine the recovery path of FDI
flows to the region will be the speed
with which investors’ perception of
country risk moderates, and how
quickly the region’s wages - relative
to countries like Germany - start to
pick up again.
Important Investment in Žatec Triangle Zone
Solar Turbines, an American company
and a part of the world known Caterpil-
lar Inc. conglomerate, has signed an
agreement of intent in March 2010,
which should result in the construction
of a new high-tech repair centre for
gas turbines of this brand in the Žatec
Triangle strategic industrial zone. If the
investor‘s plans pan out, the only Solar
Turbines factory in the whole EMEA re-
gion to be able to renovate key parts of
turbines necessary for their subsequent
general repairs will be built in northern
Bohemia.
| 8
During 2009, the CEE region experienced
a collapse in inward flows of foreign direct in-
vestment. Analysis of PricewaterhouseCoopers
experts also suggests that FDI inflows will not
immediately bounce back to previous highs.
The bust which followed the long boom will
have persistent effects in the region. Under our
Central scenario, it will take until 2014 for the re-
gion’s FDI inflows to surpass the 2008 level. The
collapse coincided with the credit crunch and
the economic recession. The intensity of the
recession was not uniform across the region.
Estonia, Latvia, and Lithuania are likely to have
experienced double-digit rates of contraction
in economic output in 2009; Bulgaria and the
Czech Republic are expected to see milder de-
clines of less than 5% of output. Poland’s econ-
omy is estimated to have grown in 2009.
 KEY SECTORS: REAL ESTATE
AND ALTERNATIVE ENERGY
The Czech Republic, which historically has at-
tracted around 10% of FDI inflows into the re-
gion, experienced a much smaller 2009 decline
than the region overall. In 2008, the Czech Re-
public saw significant FDI from the automotive
sector; investments from Daimler, Volkswagen
and Peugeot-Citroen totaled almost US$1 bil-
 450 NEW JOBS
WILL BE CREATED
“In view of the current economic situ-
ation and the competition of other Eu-
ropean countries, we consider it a great
success to persuade, with the help of the
CzechInvest Agency, an important com-
pany like Solar Turbines to announce
their intention to invest in the Triangle
industrial zone. We have been trying for
a long time to make the zone more ac-
cessible to smaller businesses that en-
sure the creation of new jobs for the peo-
ple of the region. Thanks to the planned
investment by Solar Turbines, some 450
new qualified positions should be creat-
ed. We plan to increase this number with
the influx of other potential companies,”
said Jana Vaňhová, the Governor of the
Region of Ústí nad Labem.
lion. Real estate and alternative energy were the
other key sectors for FDI in 2008. In 2009, total
FDI into the Czech Republic declined by 19%.
These key sectors experienced declines in FDI
in 2009 of around 30% in real estate and alter-
native energy, and 65% in automotive equip-
ment and components combined.
 DOZEN YEARS OF GROWTH
FDI inflows into Central and Eastern Europe
grew remarkably in the dozen years to 2008.
The growth was modest at first; FDI rose from
US$20 billion in 1997 to US$30 billion in 2003.
From this base, however, inflows leaped more
than five-fold in five years, reaching US$155
billion in 2008. The increase in inflows coin-
cided with the accession of the Baltic and
central European states to the EU in 2004. The
Czech Republic, Poland, and Hungary have
been major regional destinations for FDI in-
flows since the mid-1990s. These countries
also saw FDI rise from 2003, although by a pro-
portionately smaller amount than many of the
other nations in the region.
Jiří Moser
Managing Partner
PricewaterhouseCoopers Czech Republic
 TECHNOLOGICALLY
CHALLENGING PROJECT
“A number of our turbines are deployed in
the EMEA region today, which is why Solar
Turbines decided to strengthen their global
capacities for technologically demanding re-
pairs necessary for general repairs,” explains
Peter Taylor, Vice President of Solar Turbines
Turbomachinery Products. “The Solar Tur-
bines repair centre is a technologically very
demanding project which perfectly utilises
all the advantages of the Czech Republic
– quality infrastructure, excellent geograph-
ical location, experienced employees, and
above all, our long tradition of top machine
production,” recounts Stanislav Martínek,
Photo: www.sxc.hu
the Director of the Investments division at
the CzechInvest Agency.
More at www.czechinvest.org
 CZECH BUSINESS AND TRADE
Czech System of Investment Incentives Among Most Open Ones
Investment incentives earned the
Czech Republic CZK 229.972 billion
(approx. EUR 9.2 billion) from their
introduction in 1998 until 2008.
According to the results of a study by
the Deloitte consulting firm, which
described the benefits and costs of
all investment incentives provided
since the beginning of the system‘s
operation, some 308 thousand new
jobs have been created thanks to the
incentives. This means that almost
10% of all employees in the Czech
Republic today work in companies
supported by the incentives, or for
their suppliers.
Altogether, the state had provided Czech
and foreign investors with support in the
amount of CZK 30.068 billion (approx. EUR
1.2 billion), and collected CZK 260.041 billion
(approx. EUR 10.4 billion) in taxes and em-
ployee payments from the same companies
and their suppliers. The study proved that ap-
proximately three quarters of new jobs, and
state budget earnings as well, are created at
the suppliers used by the investors who had
been supported by incentives. “This proves
that as the influence of the incentives mul-
tiplies as they spread through the economy,
many other companies benefit from them
although they themselves have not been
directly supported,” explains Luděk Nieder-
mayer, the Director of the Consulting Depart-
ment in Deloitte. 486 entities drew on invest-
ment incentives until 2008. The investors put
CZK 357 billion into the supported compa-
nies. Almost one-quarter of all the promised
incentives was acquired by Czech firms, with
only German firms being more active, albeit
by just one per cent.
 308 THOUSAND JOBS
By 2008, 308 thousand new jobs were cre-
ated thanks to the investment incentives in
the Czech Republic. Most of the jobs, 73%
to be exact, were created by suppliers, the
remaining 27%, or 83 thousand jobs, were
opened directly by the supported investors.
“The overall results of the study show that in
the long-term, one job created by investors
creates two jobs for suppliers,” says Alexan-
dra Rudyšarová, the General Manager of the
CzechInvest Agency. On top of that, the sup-
ported investors and their suppliers create
jobs in times when other industries let go of
employees. While the years 1998–2000 and
2003–2004 saw the elimination of several
thousand jobs in production, the supported
investors, on the other hand, hired new peo-
ple. “We can expect the number of positions
newly opened by investors and suppliers
to grow in the coming years. A record 265
companies acquired the promise of an in-
vestment incentive between the years 2006
and 2008,” the study says. Employee wages
have been climbing continuously in the
supported companies over the last years.
“However, average wages in the individual
industries do not differ significantly from
the wages of employees in companies that
have not drawn on the incentives. Therefore
it seems that the supported investors do
not try to push their wages higher to attract
employees from other companies,” adds
Luděk Niedermayer. The key industries in
which the incentive recipients conduct their
business have shown such rapid growth of
turnover that it was undoubtedly a case of
a strengthening of the whole field, and not
only a strategy based upon taking over con-
tracts of existing firms.
 ONE -THIRD OF CZECH EXPORT
THANKS TO INCENTIVES
“The real amount of money transferred to in-
vestors‘ accounts from 1998 out of the CZK
30 billion (approx. EUR 1.2 billion) provided
in the incentives from the state budget was
CZK 6.432 billion (approx. EUR 256 million).
It was used to support the creation of new
jobs, employee retraining, or in the form
of capital support of investments. The re-
maining funds are composed of income tax
abatement and price-cuts on the reduced
prices of land in industrial zones. However,
both of these sums are unrealised income
– not expenditures, i.e. the state does not
have to make any direct payments which
means the funds do not represent any
burden for the state budget. Investors sup-
ported through incentives exported goods
worth CZK 835 billion (approx. EUR 33.4
billion) from the Czech Republic in 2008,
which is 29% of all Czech exports.
9 |
 INVESTMENT
 INVESTMENTS THAT REMAIN
Foreign companies operating in the
Czech Republic continuously increase
the percentage of their profits they re-
invest. According to data from the Czech
National Bank, CZK 363 990 billion (EUR
14.6 billion) have returned in this way to
the economy, which is 48% of the overall
amount of direct foreign investments in
the industry. “The collected data show
that companies often increase their par-
Blu-Ray Discs Will Be Made at Loděnice
Loděnice near Beroun is a Czech
town where Central Europe’s first
plant to manufacture Blu-ray discs
will be based. The Czech company
GZ Digital Media, a.s. will purchase
technologies worth more than
CZK 250 million (approx. EUR 10
million). In addition to optical
discs, the company is known for the
manufacture of conventional vinyl
discs, and is actually the world’s
largest manufacturer of those car-
riers. The company is planning to
increase its DVD pressing capacity
and to enlarge the follow-up print-
ing production – the manufacture
of sleeves and all accompanying
printed materials. The plant will
create about thirty new jobs.
| 10
ticipation in the Czech Republic follow-
ing their initial investment. Thus, their
operation in the Czech Republic is prob-
ably not based on an investment sup-
ported by an incentive and an attempt
to withdraw the profit to their home
company as quickly as possible. The in-
centive is used to make the initial invest-
ment easier with plans to expand it later,”
says Luděk Niedermayer. Three quarters
of the supported investors also demand
 GZ DIGITAL MEDIA, A.S.
INTRODUCES ITSELF
GZ Digital Media, a.s. is the largest CD
and DVD manufacturer in Central and
Eastern Europe, with an output of around
100 million optical carriers, of which ap-
proximately 80% go for export, mainly to
the UK, the USA, and to continental Eu-
rope. Currently, the company is planning
vast investments, the largest proportion
of which will go into modern machines
and equipment. All the equipment will
be installed in the company’s existing
premises, so that there will be no need to
build new facilities on a green field. That
is one of the reasons why the Czech com-
pany GZ Digital Media has received state
support in the form of partial corporate
income tax exemption.
“Naturally, our branch, too, was hit by
the global economic slowdown. Fortu-
nately, we reacted quickly and with our
comprehensive offer we are prepared
for new customers,” Zdeněk Pelc, Man-
aging Director of GZ Digital Media, a.s.,
explains.
“In the first phase we are planning the
purchase of more advanced and more
economical machines for the manufac-
ture of DVD discs and for printing pro-
duction, and Blu-ray technology will fol-
low suit.”
 PREPARING FOR BLU-RAY DISCS
The first new machines are already in op-
eration at GZ Digital Media. All of them,
that their suppliers conform to quality
certificates, such as ISO, and approxi-
mately one-third of them has stated they
cooperate with universities or the Acad-
emy of Sciences. Both of these activities
help to further improve the quality of
the business environment in the Czech
Republic.
More at www.deloitte.com/cz
(e-mail: tpergler@deloitteCE.com)
including Blu-ray disc production facili-
ties, will be fully operational in January
2012, at the latest. “Currently we have an
about four-per-cent share of the EU mar-
ket, and we hope that as a result of this
investment, our share could increase by
at least half a per cent,” Pelc said.
 INTEREST IN BLU-RAY
DISCS IS GROWING
According to Blu-ray Forum.cz, an organ-
isation associating film distributors, car-
rier producers and player manufacturers,
the sale of Blu-ray film discs in the Czech
Republic and in Slovakia in 2009 is esti-
mated at 90 000. Interest in the discs is
growing rapidly. In the first six months of
2009, viewers and video-distributors in
the two countries purchased 25 538 Blu-
ray films in the Czech language version;
in the corresponding period one year be-
fore, they purchased only 8 538.
Demand for Blu-ray products is grow-
ing worldwide. The sale of Blu-ray films in
the USA last year is estimated at USD 89
million in comparison with USD 24 mil-
lion the previous year. In Europe, Blu-ray
film sales last year are estimated at around
USD 9 million. The Blu-ray format makes it
possible to store an incomparably larger
Photo: Country Life archives
volume of data than ordinary DVDs. A DVD
can store up to 17 GB of data, but standard
capacity is rather only 8.5 GB, while a Blu-
ray disc can store up to 50 GB.
More at www.gzdm.cz
 CZECH TOP
Country Life, a Pioneer of New Lifestyle
It is nearly 20 years since Country Life
s.r.o. was founded, bringing the first
organic food to the Czech market. Ever
since its establishment, the company
has not only been selling organic
and health food, but has also been
growing and manufacturing it, cook-
ing with it, and simply looking upon
health food in an all-inclusive man-
ner. It has been trying to help people
by offering them a practical change to
their life style and inform and advise
them in this area. And also to educate
more specialists in the branch.
Country Life is attempting a comprehensive
solution, at all levels of its activity – from or-
ganic farm to wholesale and healthy lifestyle
courses. Besides an organic farm, a health-
food wholesale outlet store and an organic
bakery can be found in the company’s eco-
centre not far from Beroun, where a harvest
festival is held each year. Also, the company
runs several organic shops and restaurants
at different locations in Prague.
 THE FIRST PASSIVE HOUSE IN
THE CZECH REPUBLIC
The Country Life eco-centre has been in
operation at Nenačovice near Beroun since
2003. Part of it is an organic farm, a wholesale
store, an organic bakery, a stone mill, a pack-
ing department, and the Company’s offices.
The office building is a reconstruction of the
former cow-house. It is a low-energy building
with an extension, which has the parameters
of a passive house. It is the first passive house
to be built in the Czech Republic.
 ORGANIC HARVEST FESTIVAL
The eco-centre is a place where the Organic
harvest festival is held each year. Since 2004,
every second Sunday in September life in
Nenačovice revives with a festive organic-style
spirit. The programme prepared for visitors
comprises the sale of organic food and other
eco-products, food tasting, excursions to the
organic farm or the bakery, lectures and a con-
cert. Each year, thousands of people come to
celebrate the Organic Harvest Festival.
 ORGANIC FARM
AND ORGANIC BAKERY
Country Life has been running the organic
farm since 1992. On its fields it grows grain
crops, vegetables and fruit, all organic. Each
year it harvests more than 60 different kinds
of crops, including the less well-known, such
as topinambures, black root and yakon. It is
also trying to cultivate its own organic seeds
and young vegetable plants, organic cereals
and potatoes.
The organic bakery bakes bread and sweet
pastries, which it sells in its own shops and res-
taurants, and it also supplies them to organic
shops all over the Czech Republic. The bakery
uses grain from its own organic farm, which it
grinds on a stone mill, so that all vitamins, min-
eral substances and fibre are preserved in it.
 HEALTH FOOD WHOLESALE
Country Life is the largest organic product
importer and trader and one of the largest
health-food suppliers in the Czech Republic.
Its wholesale store offers about 2 000 differ-
ent products, nearly 1000 of which are in
organic quality. Its range comprises durable
and cooled food, fruit and vegetables, bread,
eco-detergents, and natural cosmetics.
Country Life is an importer and distributor
of world brand organic products and health
food, such as Provamel, Oatly, Ekoland,
Granovita, Eden, Molenaartje, Danival, Emile
Noël, Voelkel, Monki, Muso, Ecover, etc.
Country Life office building
AWARDS FOR COUNTRY LIFE:
1993 – Honourable Mention in the Eco-
project of the Year Competition for
Country Life’s organic farm
2005 – Melantrichova shop – Organic Shop
of the Year Award. The winner is
selected by a jury composed of
renowned experts in marketing,
food production, the media and
consumer associations.
2006 – The Best Organic Farmer of the Year
Prize.
The prize is awarded each year by the Pro-
bio Association of organic farmers. The prize
is a challenge cup full of gold pieces.
 ORGANIC SHOPS AND
RESTAURANTS
The Country Life “organic family” also in-
cludes four organic and health-food shops
in Prague. The first was opened in the early
1990s.
Another facility, besides organic shops,
is a restaurant, which offers a self-service
choice, a hot and cold cuisine, a salad bar
and fruit and vegetable juices. The interiors
of the restaurant and the shops in the centre
of Prague are furnished in a natural style.
 HEALTHCARE AND
EDUCATIONAL ACTIVITIES
An inseparable part of Country Life’s ac-
tivities is healthcare and educational pro-
grammes. The company runs a Lifestyle
Institute, which organises courses aimed at
practical education in the area of ecology
and healthy life style. The courses are ac-
credited by the Ministry of Education of the
Czech Republic.
More at www.countrylife.cz
11 |
 LEGISLATION
Insolvency Law: How to Protect Claims?
The number of business people
facing financial difficulties in this
current economic crisis is higher
than ever before. Hence, a higher
degree of diligence is required
when doing business. Which are the
basic principles of the Insolvency
Law in the Czech Republic and the
general recommendations to claim
protection?
| 12
The insolvency issue is regulated by
Act No. 182/2006 Coll., on bankruptcy and
the methods for its solution (the Insol-
vency Act). This Act became effective as of
1 January 2008 and, contrary to the former
regulation, it emphasizes the influence of
creditors on insolvency proceedings and
provides more possible insolvency solu-
tions, namely enabling the sanitation of
a debtor‘s business and the continuation
of its business activities, if this is effective
in a particular case.
 INSOLVENCY SOLUTIONS
The Insolvency Act recognizes the fol-
lowing fundamental insolvency solu-
tions: (i) straight bankruptcy proceedings
(“Konkurz”), the purpose of which is the
proportionate satisfaction of creditors
from the proceeds of the conversion of
the debtor‘s assets into liquid financial
means, (ii) restructuring (“Reorganizace”),
which enables the subsequent satisfaction
of creditors while continuing to engage
in the debtor‘s business activities within
the scope of the so-called restructuring
plan made with the purpose of sanitising
the debtor‘s business, and (iii) debt relief
(“Oddlužení”), which is applicable only to
non-business debtors and is therefore not
the subject of this article.
 FILING A CLAIM
After the commencement of insolvency
proceedings and until the termination
thereof, the satisfaction of claims towards
a debtor is possible only through the
proceedings and in a manner that is fore-
seen in the Insolvency Act. A claim can be
satisfied in insolvency proceedings only if
it is registered within the proper time limit
by an Insolvency Court and meets the ap-
plicable formal requirements. This duty is
imposed on most creditors. Only a small
group of creditors, for example the debt-
or‘s employees, are not obligated to file
their claims.
 THE MAIN CLAIM REGISTRATION
REQUIREMENTS
 Completion of a special Registration Form
(which is available at http://insolvencni-
zakon.justice.cz) and authenticated signa-
ture thereon;
 Content – Claim Description, reason for
its origination and its monetary value in
Czech currency (claims in a foreign cur-
rency must thus be calculated in Czech
currency in accordance with the exchange
rate of the foreign currency market, valid
on the date of commencement of the in-
solvency proceedings or their due date, if
they became due prior to the insolvency
proceedings‘ commencement). The value
of non-monetary claims also has to be
evaluated in money;
 Attachments – they differ in accordance
with the kind of registered claim. In prin-
ciple, they shall prove the existence and
amount of the claim; diligent evidence of
all claims is therefore recommended;
 Time limit – claims can be registered after
the commencement of insolvency pro-
ceedings. The latest time limit for registra-
tion is set out by the Insolvency Court in
the thus named Decision on Bankruptcy
(“Rozhodnutí o úpadku”). This time limit is
mostly 30 days from the date of publica-
tion of the Decision on Bankruptcy. Failure
to abide by this time limit leads to a refus-
al of the application for claim registration
and the creditor thereby loses the chance
to demand satisfaction for its claim in the
insolvency proceedings.
All information about insolvency pro-
ceedings, including the announcement
of the commencement thereof and any
given decision important for the course of
time limits are published in an Insolvency
Register maintained electronically at ht-
tps://isir.justice.cz/isir/common/index/do.
Gathering information from the Insolvency
Register is free of charge and a particular
debtor can easily be found, based on its
company name or business identification
number (“IČ”). Since creditors have prac-
tically no other possibility of acquiring
knowledge about the pending insolvency
procedure, regular monitoring of this Reg-
ister within due business management is
recommended.
 SECURED CLAIM
Whether his claim is secured (for example
with a mortgage or right of retention) is
decisive for the satisfaction of a creditor.
Secured claims are settled prior to the
proceeds of the sale of the assets or re-
ceivables of the debtor to which they hold
a security right, whereas the settlement
can follow at any time during the insol-
 CZECH BUSINESS AND TRADE
vency proceedings. Secured creditors are
also deemed to be creditors who do not
have a direct claim towards the debtor, i.e.
creditors of a third person, whose claim
is secured by the assets of the debtor.
Contrary to the former regulation, ac-
cording to which secured creditors were
satisfied at a maximum level of up to 70%,
the amount of satisfaction from secured
assets is not limited. If the claim value is
lower than the value of the security, the
claim is for the difference considered as an
unsecured claim. In determining the rank
of secured creditors, what is decisive is the
moment at which the respective security
right was created. A secured creditor is
obligated to exercise its right to the set-
tlement of its claim from the security in
its registration of the claim and to specify
a particular security right and to prove it
by respective attachments.
 UNSECURED CLAIM
Unsecured creditors are satisfied depend-
ing on the specific form of insolvency pro-
ceeding involved (see above). In the case
of straight bankruptcy proceedings, all of
the assets of the debtor forming the in-
solvency assets are sold with the approval
of the creditors‘ council. After settling the
costs of the insolvency proceedings and
claims with priority settlement, the credi-
tors are satisfied (usually in part) out of
the rest of the sales proceeds. Unsatisfied
claims or parts thereof can be enforced
after termination of the insolvency pro-
ceedings. Practically, there are no assets
of the debtor left after termination of the
insolvency proceedings and the debtor‘s
business activity is wound up. The actual
enforcement of such claims is therefore
rare. If insolvency is solved by restructur-
ing, debts are transformed according to
the restructuring plan, i.e. into a share of
the company, new debts, etc.
 GENERAL RECOMMENDATIONS
Generally, when entering into a trans-
action, security of the claim by a proper
security right (for example a mortgage),
is recommended. In doing so, it has to be
borne in mind that some legal actions can
be declared ineffective and consideration
gained as a result must be handed over
to the insolvency assets. These legal ac-
tions are: legal actions with insufficient
or non-existent consideration, preference
– for example settlement of a debt before
its due date, security of already existing
debt, etc. and fraudulently disadvantag-
ing transactions, i.e. transactions which
intentionally disadvantage creditors, pro-
vided that the other contracting party
was aware of such intention. In the event
of transactions between companies form-
ing a holding group, it is assumed that
the respective other party was aware of
the debtor‘s intention. Hence, special dili-
gence is required.
Markéta Pechová
Petr Syrovátko
Wolf Theiss, Advokáti s. r. o.
e-mail: marketa.pechova@wolftheiss.com,
petr.syrovatko@wolftheiss.com
13 |
 WE SUCCEED
OHL ŽS to Build New Junction in Bosnia and Herzegovina
In March 2010, a contract was
signed between OHL ŽS and Serbian
Motorways for the construction of
a motorway junction worth EUR
11.5 million north of Banja Luka,
the second largest city of Bosnia
and Herzegovina. This motorway
junction will link future motorways
Banja Luka – Gradiška, a town on
the state border between Bosnia
and Herzegovina and Croatia, and
Doboj – Banja Luka.
The specific element of the motorway junc-
tion is a 580 m long bridge. It will be the first
structure of its kind in Bosnia and Herzegovi-
na. "We value greatly the trust the investor
has bestowed in us. I believe motorists and
future motorway junction users will also
be satisfied with our work,“ František Leda-
byl, Vice-chairman of the Board of Directors
and Director of Marketing and Commerce
at OHL ZŠ commented at the occasion of
the signing of the contract. Construction is
cofinanced by the European Commission,
which provided the Government of the Re-
public of Serbia with a financial donation of
EUR 5 million. The remaining amount, i.e.
EUR 6.5 million is a loan from the European
| 14
Bank for Reconstruction and Development
(EBRD). The construction work is expected
to take 24 months. It will be carried out by
OHL ŽS together with Niskogradnja, a local
company based in the town of Laktaši.
We asked Zdeněk Zedníček, Head of the
Foreign Trade Department at OHL ŽS,
to tell us more.
Why do you think you have been entrust-
ed with this contract? In what way were
you better than your competitors?
The tender proceedings were made up of
two rounds – prequalification and the ac-
tual offer. We passed the prequalification
thanks to our references, for example for the
construction of a motorway in Azerbaijan.
Then followed the actual tendering pro-
cedure. In cooperation with Nizkogradnja,
a local construction company, we man-
aged to prepare the lowest price offer. We
obtained the contract in competition with
Croatian, Austrian, Slovenian, and Italian
companies.
What will this construction project entail?
The project entails the construction of a mo-
torway fly-over junction. This junction will
serve as a connection between the motor-
way currently under construction stretching
from Banja Luka to the border with Croatia
and the future motorway from Banja Luka to
Doboj. The construction will include access
ramps, a motorway segment and two main
scaffold bridges (each approximately 500m
in length), as well as the necessary relaying
of engineering networks.
Foreign contracts make up about 20% of
your revenue. What challenges did you
have to face abroad in the past?
Each project we work on abroad has its
own specifics, risks, and stumbling blocks.
Our company has a relatively broad “cov-
erage” of activities. From the mentioned
far-off Azerbaijan to neighbouring Slovakia
or Hungary. One of the greatest and most
interesting of our projects is the project for
the construction of a motorway worth USD
150 million, currently nearing the end of its
execution phase. This project is financed by
the Czech Export Bank and EGAP insurance.
Which other interesting foreign projects
await you this year?
This year we will continue in our business
activities. We are preparing and imple-
menting a number of projects in a vari-
ety of countries where we already have
a “permanent” presence – especially Slo-
vakia, Hungary, Bulgaria, Montenegro, and
Bosnia and Herzegovina. At the same time,
we are attempting to enter new territories
Photo: OHL ŽS archives
such as Russia, Vietnam, Poland, Serbia,
and so on. Among the most interesting of
projects we have in the pipeline is a project
for the construction of a new railway line in
Russia in the Ural region.
www.ohlzs.cz

Modern face of building industry

 WE ARE INTRODUCING
Plzeň Wants to Open Its Arms to Europe
Thanks to its history and tradition,
the West Bohemian metropolis
can be associated with various
attributes. They do not have to be
just the engineering industry, the
world-famous beer, or business
development. In addition, there is
now a real chance that in five years‘
time the city may be graced with
the title of European Capital of Cul-
ture for 12 months. Plzeň (Pilsen)
is one of the Czech candidate cities
(the other is Ostrava) which want
to open their imaginary arms to the
European public within the broadly
conceived event.
| 16
This is precisely the purpose of the
project: to bring the Europeans closer togeth-
er through culture. The question whether the
title will be awarded to Plzeň or Ostrava will be
decided by the international committee this
September. “Becoming a European culture
centre in five years‘ time means great prestige,
and for Plzeň it is a challenge which will not be
repeated for a long time. It is really worth to
fight for“, says Petr Dvořák, the PR and Market-
ing Manager of the Plzeň 2015 project.
 VISION IS IMPORTANT
The European Capital of Culture event (ECoC)
was launched by a decision of the EEC Coun-
cil of Ministers in June 1985 and the title is
awarded to European cities for a period of
one year. Among Czech cities, Prague was the
proud holder of the designation in 2000. The
cultural and socio-economic dimension of the
event surpasses the present common simpli-
fied conception of culture in all respects.
The Art Director of the Plzeň 2015 project
Yvona Kreuzmannová confirms this:“This Euro-
pean project is not designed to acknowledge
the reputation of the given city as a city of cul-
ture. There is much more to it – what vision the
city has for a period of five to ten years, what
its concept of all-round development is“.
Milan Svoboda, the Plzeň 2015 Project
Director, who worked in the development
branch of the municipal government of the
West Bohemian metropolis from the 1990s,
speaks in a similar tone. “I saw the city of Plzeň
as an area with immense potential already
then. Therefore, after the completion of the
first stage of the city’s transformation focused
mainly on the economic base, the vision was
born in 2003 to develop Plzeň especially in the
area of innovative enterprise, tourism, and cul-
ture. And this is precisely where the Plzeň 2015
project offers a unique chance .“
 PILSEN-OPEN UP!
Although Plzeň presents itself rather as
a conservative city, this does not mean that
it is not opening to new trends. The Plzeň
2015 project and its motto – Pilsen-open
up! – is a strong impulse for this place, which
has an indisputably tremendous creative
potential in the area of art and technologies.
And the important thing is that in the prep-
aration of the strategic document The City
of Plzeň Culture Development Programme
2009–2019, its inhabitants have made it
clear that they definitely desire a change in
quality, expect new impulses, and are ready
to participate in this change and revival.
 USEFUL INSPIRATION
The best example in this respect can be the
results achieved by Glasgow as the European
Capital of Culture in 1990. It was probably the
first breakthrough in the understanding of cul-
ture – not as a consumer area, but as a motor
for kick-starting a healthy development of so-
ciety. This was the reason why the socio-econ-
omic factors in Glasgow greatly improved after
1990, and the level of the region as well as the
gross domestic product rose by 20%.
At present, the European Capital of Culture
event is gradually moving from large metropo-
lises to medium-sized cities which can greatly
boost their development, provided they have
the courage and enlightened town halls. In-
spiration can be drawn from the experience of
Lille in 2004 or Liverpool four years later. Their
economic studies showed that every euro in-
vested in culture brought 8 euros of profit in
parallel effects. Indeed, if the event attracts
tourists, the level of accommodation and res-
taurant services, transport infrastructure, etc.
in the city rises. It is thus clear proof why the EU
is to support not only business, employment,
Photo: The City of Plzeň archives
and the environment, but also culture.
Of course, there are many other inspiring
examples from previous years for the candi-
date city of Plzeň. They include Linz and Graz,
where the organisers succeeded in building
the necessary infrastructure, offering an ex-
cellent programme and creating a generally
 CZECH BUSINESS AND TRADE

favourable atmosphere. “In the German town

of Essen, which has received the title of the Eu-
ropean Capital of Culture for this year together
with Pécs in Hungary and Istanbul, Turkey, the
project has great support from the federal
government. In the Czech Republic we have
not experienced this so far, although there is
support from the city as well as certain po-
litical support from the region. I believe that if
the city of Plzeň succeeds in its candidacy and
wins the title, it will arouse the interest of other
possible partners“, the Plzeň 2015 Project Di-
rector Milan Svoboda says.

 PLZEŇ METAMORPHOSES
Sponsors will be needed without doubt. In-
vestment in Plzeň will be required in several
directions. “We are preparing the construc-
tion of a new theatre, the Region is planning
to build a new gallery, a new cultural centre is
to be set up by the conversion of the former
Světovar brewery“, Milan Svoboda lists the key
plans. “There are also projects for the revitalisa-
tion of public areas, for example the construc-
tion of greenways for hikers and cyclists in the
Štrunc Park, where a site is to be created for
the presentation of works of art. The linking of
public areas with art is actually one of our big
themes“, Milan Svoboda emphasises.
For Art Director Yvona Kreuzmannová, it
will be interesting about Plzeň‘s candidacy to
see whether and to what extent this conserv-
ative provincial city will be able to open up to
European culture. It is a fact that according to
PLZEŇ 2015 PROJECT
statistics, Plzeň is the second city in the Czech
Republic in the number of foreign residents. WHAT COMPANY PLZEŇ WILL HAVE AS A CANDIDATE
The Plzeň 2015 project is a chance to extend  Athens (ECC title in 1985), Paris (1989), Madrid (1992), Lisbon (1994), Stockholm (1998),
the necessary dialogue with minority com- Helsinki (2000), Bruges (2002), Luxembourg (2007), Istanbul (2010).
munities as well as other nations. WHAT PRINCIPLES PLZEŇ WANTS TO PROMOTE
And what cultural events would we see in AS A EUROPEAN CENTRE OF CULTURE
Plzeň in five years‘ time? The principal themes  Openness as courage for disputation and public dialogue.
to be highlighted are Art and Technology, Re-  Openness to new ideas, innovation, and creativity.
lationships and Sentiments, Transit and Minori-  Openness to minority genres, trends, and ethnic groups.
ties, Stories and Sources. The themes reach be-  Openness, transparency, and sophistication of the candidacy process and public affairs.
yond the dimension of culture, and we want WHAT PLZEŇ WILL GAIN BY THE TITLE OF EUROPEAN CAPITAL OF CULTURE
to address as many people as possible. For  At present, Plzeň takes 356th place in the EU by its size. In 2015, it can be one of the two
example, in the Stories and Sources cycle we most important cities in all Europe.
want to take up Plzeň’s past, which is unique  In 2009, Plzeň recorded almost three quarters of a million overnight stays of tourists. In
and which has a strong transatlantic relation 2015 the number may be much higher.
because the city was liberated by the Ameri-  At present, 15 new theatre performances a year can be attended in Plzeň, in five years
can army in the Second World War, and there the number may reach 365.
are many events in its history that are worth  A benefit in terms of sustainability will be the improvement of culture infrastructure. The
recalling“, says the Plzeň 2015 project Art Di- city is motivated for buildings that would otherwise not be given such a high priority.
 Culture and art can bring important economic benefit. The year 2015 can show
rector. “We can promise already now that the
whether one euro invested in culture will bring at least two more euros to the budget
themes of the programmes will be strong and
of the city or the state.
the artists and performers will be remarkable“.

17 |
 KALEIDOSCOPE
Czech SOLVIT –One of the Three Fastest Centres in the EU
The Czech SOLVIT Centre, active at the Min-
istry of Industry and Trade, is a system of
informal problem solving on the EU inner
market. In 2009 the Czech centre was one
of the three fastest centres, together with
those of Ireland and Austria, which resolved
issues within 28 days on average. The dead-
line by which the centre should find a solu-
The Czech Republic Has Been among the Best in
Economic Endurance in the EU during the Crisis
The economic crisis revealed the deficien-
cies, but it also confirmed the strong as-
pects, of the Czech economy. As noted by
the mid-year barometer of the Confeder-
ation of European Business (BusinessEu-
rope) representing 40 national employers’
federations from 34 countries, the evalua-
tion of the Czech economy in comparison
with the other 28 countries is relatively
positive. The Czech Republic was placed
relatively well and, together with Denmark,
Germany, and Austria, it was judged the
best at resisting the impact of the crisis. To-
gether with Slovakia, Poland, and Hungary,
it is approximating the average economic
level of the EU and it retains an excellent
level of external competitiveness. In com-
parison with other European countries, the
Czech Republic is judged relatively highly in
export performance (4th among 29 coun-
tries). Also in the area of public finance (10th
among 29 countries), despite worsening in
2009 and the current worsening, the Czech
Republic is among the countries with better
results. As regards tax burden and budget-
ary adjustment linked to ageing, our coun-
| 18
tion is ten weeks. The Czech SOLVIT centre,
with 126 cases resolved, is evaluated by the
European Commission as one of the most
successful in the EU. The SOLVIT system
provides free and fast assistance in the case
where an office of a member state violates
the rights granted to a citizen or an entre-
preneur by European law.
try has attained average results (12th place
in both factors). Labour costs are relatively
higher (18th among 29 evaluated European
countries) and information related to labour
productivity is unfavourable (22nd place). In
labour productivity, the Czech Republic is
behind Slovakia, but ahead of Hungary and
Poland.
First Hopeful Firms
in Silicon Valley
BoldBrick, Cognitive Security and Imagemetry
– these are the names of the Czech start-up
companies which, by 30 June, were lodged
in the CzechAccelerator of the CzechInvest
Agency in California. CzechInvest has organ-
ised office space for them free of charge in the
unique business incubator, Plug and Play Tech
Centre in Silicon Valley which is the seat of such
giants as Microsoft, Google, and Sun Microsys-
tems. BoldBrick is seeking new clients for their
key product, Mossquito, and opportunities for
financing further development in CzechAccel-
erator. “CzechAccelerator is an ideal opportunity
for us to start our business activities in the US,
which is our key market,” says Ondřej Tučný,
General Manager of BoldBrick. Imagemetry
Company sent part of its trade and research
team, which specialises in the area of digital
image processing and artificial intelligence. It is
seeking an opportunity in California for strategic
support and expansion of their product, aimed
at security aspects of visual data.
AFSI in Most to Employ
Almost 200 People
Almost 200 people in North Bohemia will
be employed by Advanced Filtration Sys-
tems Inc.(AFSI), the American produ cer
of filters and filter inserts. Production in
the new plant in the Joseph Industrial
Zone in Havraň in the Most Region was
launched in March 2010. “We decided
on the Czech Republic as the location
of our first factory outside the United
States, due to its excellent location in
the heart of Europe, decent infrastruc-
ture, and reliable employees. Another
factor that influenced our decision was
the good reference from our partner, the
Photo: www.sxc.hu, European Commission archives, Karel Pazderka
Donaldson company, which has been
doing business in Kadaň and in Klášterec
for 10 years,” says Radim Otipka, Head
of the Havraň plant. The Most plant will
manufacture filters and filter inserts for
Caterpillar machines and engines in Eu-
rope, Africa, Asia, and Australia. As of July,
there will be a new generation of filters
for the British Perkins company. The con-
struction of the AFSI plant in the Czech
Republic started in April 2008. To date,
142 people have obtained employment
there and their number should grow to
185 by the end of the year.
 CZECH BUSINESS AND TRADE
What is the Czech
Republic’s Position
on the EU Internal
Market?
The Czech Ministry of Industry and Trade has
issued an Analysis of the Competitiveness
of the Czech Republic. For almost six years,
the Czech Republic has been a part of the
EU internal market, which provides Czech
companies with greater opportunities for
business. The results show that, while the
Czech Republic is successful in some areas,
even when compared to the best countries
(technological environment), in other areas
of the comparison we are among the least
successful (institutions and infrastructure). In
the area of infrastructure, the Czech Republic
has too low a share of the motorway trans-
port network and an insufficient number of
border crossings for transmission systems.
The Czech Republic has a significant po-
tential for change in increasing educational
structure, especially in technical education.
The necessity for better interconnectedness
in research between public and private sec-
tors is related to this.
Financial Arbiter’s
Services More in Demand
In 2009, the Office of the Financial Arbiter in
the Czech Republic received a total of 757
suggestions and complaints from clients of
local financial institutions, which is an almost
100% increase in comparison with 2007. Sug-
gestions were mainly related to problems with
money transfers, to bank and non-bank loans
or incongruities in insurance. The Arbiter also
granted several sanctions and imposed fines
of CZK 254 000 (approx. EUR 10 000) on finan-
cial institutions, of which CZK 115 000 (approx.
EUR 4 600) was for not observing information
obligations. More about the Financial Arbiter
at www.finarbitr.cz/en/.
The Czech Republic has Opened an Exchange of
Unused Chemicals Called NECHELA
The Internet auction exchange system of
unused chemicals opened in March 2010.
The Ministry of Industry and Trade sup-
ported the establishment of an electronic
auction market, the aim of which is to help
small and medium-sized companies make
use of the remains of chemical substances
and products which they have left over from
production after transformation or end of
production. For a small company, it is more
Prague Hosted American and Russian Presidents
US President Barack Obama and his Russian
counterpart, Dmitriy Medvedev, signed the
START treaty on nuclear arms reduction in
Prague on 8 April of this year. The new Treaty
has supplanted the strategic arms reduction
treaty (START) of 1991, which expired in De-
cember 2009. The negotiations for the new
document took almost a year; Moscow and
Washington could not reach agreement on
certain points of the Treaty. Russia demand-
ed that the treaty be relevant for all nuclear
warheads and their strategic delivery vehi-
cles (rockets, submarines, and bombers),
while the US wanted to concentrate mainly
on warheads. Obama and Medvedev jointly
profitable to sell unused chemicals in time
than to keep them stored and in the end
pay for their ecologic removal or, in a worse
case scenario, for their illegal storage. The
NECHELA (NEspotřebované CHEmické LAtky
= Unused Chemical Substances) allows the
creation of the offer of chemicals on the In-
ternet in the database of unused chemical
substances and products, which is accessi-
ble at www.cmkbk.cz.
pledged to liquidate parts of their arsenals
of nuclear warheads, after negotiations in
Moscow on 6 July 2009. They agreed that
they would reduce the number of nuclear
warheads on vehicles from 1675 to 1500 on
each side and the number of vehicles from
1100 to 500. Why have the two Presidents
met in Prague? Mainly because Obama
gave a speech on his vision of a world with-
out nuclear weapons in Prague a year ago
– on 5 April 2009. Thus, Barack Obama has
visited Prague for the second time since his
inauguration, while this was the first visit to
the Czech capital for the Russian President
Dmitriy Medvedev.
Czech Prime Minister Jan Fischer
with US President Barack Obama
19 |
 SERVICES
All-embracing Methods of the Packaging Industry
Packaging is not only an important
source of information for custom-
ers (with its shapes and graphic
features), but it also plays a role in
manipulation (i.e. as storage space
for products), and ensuring the
protection of products.
| 20
An ever greater emphasis is placed in
the Czech Republic, as well as globally, on
the function of packaging from the view-
point of design, which is seen as a feature
that should correspond to the product
brand and publicise it, attract consumers,
and present its contents as sought-after
merchandise. Czech customers look for the
convenience brought on by developments
in the packaging industry, whether it is, for
example, the ergonomy of bottled drinks or
the easy opening of tinned liver pâté. Ac-
cording to surveys, one of the important
factors for consumers, influencing their
shopping decisions, has lately also been the
aspect whether environmentally-friendly
materials have been used in the manu-
facture of the packaging. Indeed, when
looking at a packaged product, Czechs
also subconsciously wonder whether the
item of packaging can be recycled. This is
one reason why the Czech Republic ranks
among the top European countries in terms
of the amount of sorted packaging waste.
In 2009, every Czech sorted on average ap-
proximately 35.9 kilograms and 70.9% of all
the packaging introduced on to the market.
It is also important that the manufacture of
packaging is dominated by cardboard and
paper (42%), followed by plastics (32%),
glass (11%), metals (10%), and other materi-
als (5%).
 PACKAGING LAW
If you decide to go into the packaging busi-
ness in the Czech Republic, familiarise your-
self with the Act on Packaging 477/2001
Coll., which came into effect in January 2002.
A very good system has been put in place
for the management of packaging, which
ranks the Czech Republic every year among
the most successful countries in Europe.
FROM THE HISTORY OF THE PACKAGING OF THE YEAR COMPETITION
OR EXAMPLE OF A PRIZE-WINNING PRODUCT
 The “Fromin – Voda z doby ledové“ (Ice
Age Water) bottles are manufactured at
the client’s request to express, by their
appearance, the uniqueness, purity, and
age of the water they contain. Therefore,
this globally unique design creates the
impression of ice cubes melting away. The
effect is enhanced by the choice of extra
transparent PET. The use of a translucent
polyethylene label, which does not distract
from the intended appearance, is also unu-
sual. The affixation of labels and the mate-
rials used respect the maximum ecological
requirements. Consumers also appreciate
For every packaging that you place on the
market and sell, you must examine and prove
that it does not negatively affect the living
environment of the manufacturer. The Act
binds the importers and distributors of pack-
aging to ensure the collection of packaging
and use of packaging waste, and defines the
so-called authorised packaging company and
its rights and duties, and states the duty to
file for registration in the list of persons who
introduce packaging or packaged products to
the market or in circulation. The Act applies
to business entities (corporate or individual),
i.e. not to individual consumers - citizens and
households. If, during your business activities,
you introduce packaging, packaged goods
or packaging materials on to the market or in
circulation, you must proceed in accordance
with the rules defined by this Act.
 AWARDS FOR DESIGNERS
To demonstrate their best packaging ideas
and technologies, as well as to publicise
them, Czech designers were able to enter
their packaging designs, by the end of May
2010, for the 16th competition organised
by SYBA, the Czech Packaging Institute.
This competition, Packaging of the Year, is
intended not only for the manufacturers
and users of packaging, but also for other
participants in the creation of new pack-
aging solutions, such as brand managers,
graphic studios, engineers and designers.
Any solution within one of the following six
categories was eligible for the competition:
consumer packaging, consumer gift pack-
aging, sales packaging and displays, trans-
port and handling packaging, packaging
materials, and also labels, closures, affixation
and other auxiliary packaging means. Sub-
sequently, the winners can participate in the
global WorldStar for Packaging Competition.
the wide bottle-neck which makes it easier
to pour the water. (see Picture)
 Graphic purity, emphasis on product,
original typography, accurately handled
backdrop – these are the main attributes
of this premium line of ethnic rice from the
Photo: SYBA archives
Vitana company. The quality of the graphic
presentation in every detail, combined with
perfect pre-press, makes this packaging line
an exceptional product with a high poten-
tial of addressing the target group.
More at www.obalroku.cz
highly resistant strapping band
inzerce
SVITAP J.H.J. spol. s r.o.
Kijevská 8, 568 02 Svitavy, Czech Republic
Phone: +420 461 568 198
Fax: +420 461 568 300
E-mail: marketing@svitap.cz
www.svitap.cz
www.haly-svitap.cz
SVITAPET – Introduction
Svitapet is a highly resistant strapping band, which was designed as an
extremely strong substitute for the steel and PP strapping bands and has
become their natural successor. It is ideal for use in medium- and high-
performance operations requiring the high protection of packed goods,
such as corrugated iron, timber, concrete products, and printed matter.
SVITAPET with Print
We can offer our clients SVITAPET with black print, for which we use
highly efficient ink-jet printers, which guarantee a high quality of print.
The print is done by the final section of the production equipment.
SVITAPET – Award
Svitapet was awarded the GRAND PRIX for the best product at
the FOR 3P Fair, held at the Prague-Letňany exhibition grounds on
15-17 April 2009.
SVITAPET – FACHPACK
We will be participating in the FACHPACK Fair in Nuremberg on
28-30 October 2010. We are looking forward to your visit.
 SERVICES
Industrial Real Estate Market Stabilised Between Supply and Demand
The industrial real estate market
experienced a robust development
in the past years and has reached
the line between a developing
market and a saturated one. The
massive speculative construction
of the past years, when developers
were building warehouses without
a secured lease, was greatly slowed
down by the global economic crisis
in 2009. Paradoxically, this situ-
ation has brought market stabilisa-
tion in the supply-demand relation
in this country.
SHARE OF INDUSTRIAL AREAS PER 1000 INHABITANTS
IN CENTRAL AND EASTERN EUROPE
350
324
300
250
sq.m/1000 inhabitants
200
150
100
50
0 ever, it should be noted that Prague and
Czech Republic
| 22
The fall in the demand for industrial prop-
erties rental was observed in the Czech
Republic, especially in the first half of 2009,
when the volume of concluded transac-
tions declined to 150 000 sq.m, while in
the second half the interest increased and
381 000 sq.m were leased. This is a 50%
drop compared to 2008. The number of
industrial properties under construction
186
159 154
Slovakia Poland Hungary
Source: CB Richard Ellis
also went down significantly. At the end
of 2009, only 63 000 sq.m were under con-
struction, while the three-year quarterly
average of space under construction is
150 000 sq.m.
 MASSIVE CONSTRUCTION DID
NOT CORRESPOND TO DEMAND
Unoccupied space rate has risen over the
long term in the past years, which was
due to massive building that contrasted
with users‘ demand for industrial real
estate. At the end of the year, the Czech
Republic had approximately 600 000
sq.m of vacant A class industrial real es-
tate, which means heated buildings with
full thermal insulation, and usable height
of 10 metres for logistics or 7 metres for
manufacturing. The halls must have dust-
proof flooring with loading capacity of at
least 5 t/sq.m. Another parameter is light
shafts, the presence of loading bridges
with balancing ramps, and the possibil-
ity to build in offices. The most affected
areas in terms of unoccupied space are
the regions of Plzeň and Ostrava, where
the vacancy rate is up to 25%. In Prague,
too, there are some 250 000 sq.m of unoc-
cupied space, which is about 18%. How-
Photo: www.sxc.hu
its surroundings still account for 50% of
the industrial real estate market, in both
supply and demand. Given the absolute
 CZECH BUSINESS AND TRADE

scaling down of speculative construction INDUSTRIAL REAL ESTATE MARKET IN THE CZECH REPUBLIC
and a stable interest, we expect the unoc- 250 000 50
cupied space rate to decline over the long
45
term and, in some regions, even demand
200 000 40
to exceed supply. We have witnessed this
35
situation in Brno for a long time.
150 000 30

sq. m
25
 CHANCE IN RELOCATION AND

%
100 000 20
FOUNDING OF NEW
15
DISTRIBUTION CENTRES
50 000 10
A great chance for the Czech Republic
5
is the interest of investors-producers in
the relocation of production lines from 0 0
Prague
North/Northeast

Prague
Southeast

Prague West

Central Bohemia

Southwest

Northwest

Northeast

Southeast

Central Moravia

the west, which is accelerated by the
availability of cheap but qualified labour
force. A second trend is the establish-
ment of new distribution centres for the
region of Central and Eastern Europe.
This increased interest is apparent espe-
cially in the Plzeň Region, which is eyed
by many international companies thanks
to the perfect access for trucks, the short
distance to foreign markets in the west,
and the high unemployment rate. Lo-
cal demand is generated by companies
seeking alternatives for their existing
older and to some extent inefficient real
estate. This transfer of companies from
old to new space will continue for many
years to come. The average demand in
terms of size is for 3 000-6 000 sq.m, and
an increased interest has been recorded
recently in smaller units of 1000-2000
sq.m. But modern space of this size is ex-
tremely scarce in the Czech Republic.
 DEVELOPERS‘ AMBITION: LETTING
THE EXISTING VACANT SPACE
In the long term, the prices of a lease have
been EUR 3-4.50/sq.m/month for storage
space and between EUR 7-9/sq.m/month
for office space or amenities. For the year
2010, we expect a similar result as in 2009,
which means that we expect a total renting
activity in the order of 400 000 sq.m. Devel-
opers will endeavour to focus maximally
on the lease of existing vacant space, and
will build new halls only if lease contracts
can be concluded with new clients. Also,
we do not expect additional developers of
industrial space to enter the market.
Filip Kozák
Head of Industrial Space Leases
CB Richard Ellis s.r.o
(e-mail: marcela.vesela@cbre.com)
Moravia–Silesia
Total leasing activity in 2009 Vacancy rate at the end of 2009
New completions in 2009 Vacancy rate Czech Republic at the end of 2009
Source: CB Richard Ellis
LIST OF MAJOR LOGISTICS PARKS
CTPARK BOR
CTPark Bor is one of the most successful parks in the Czech Republic. It is an area sought by
tenants who locate their business near the German border (10 minutes from border), situ-
ated close to the D5 motorway.
CTPARK PLZEŇ
CTPark Plzeň is quickly developing into a position of the best park focused on heavy indus-
try. Its location makes it one of the most popular parks in the Czech Republic for foreign
producers and logistics companies. The park is situated on the main Prague - Plzeň - Nurem-
berg motorway.
VGP PARK HORNÍ POČERNICE
VGP Park Horní Počernice is an important industrial park, easily accessible thanks to being
very close to the Prague - Mladá Boleslav - Liberec high-speed road R10, which has an ap-
proach and exit at this place. Combined with the immediate neighbourhood of the capital
city, the features of this location are considered very attractive. A regular bus line has eight
stops in the park connecting it with the Černý Most metro station.
PROLOGIS PARK D1
ProLogis Park D1 is situated about 11 km southeast of Prague, close to the Říčany/Jesenice exit
from the D1 motorway. The history of ProLogis Park Prague D1, formerly known as D1 Logistics
Park, was initiated in 1997, when the AIG/LINCOLN company launched its ambitious project
to build a modern logistics complex. In September 2002, the project was taken over by the
company ProLogis Czech Republic Management to continue its construction and operation.
RUDNÁ LOGISTICS PARK
Rudná Logistics Park is situated near the D5 motorway, exit 5 (Prague – Plzeň – Germany).
It has excellent access to the Ruzyně airport (approx. 10 minutes) and 80 bus connections
daily (Beroun, Zličín).
CTPARK BRNO
In the vicinity of the Brno-Tuřany international airport, this industrial park has an area of 2.2
million sq.m.

23 |
 RESEARCH
Czech Scientists Unveil Another of Life’s Mysteries
A team of scientists at the Laboratory
of Growth Regulators, a joint facil-
ity of the Institute of Experimental
Botany of the Academy of Sciences
and the Faculty of Science at Palacký
University in Olomouc, have made yet
another discovery in the research of
plant hormones. Within a group of so-
called cytokinins, they have discov-
ered an active substance that inhibits
the skin ageing process and cures
certain skin conditions. This modern
elixir of youth goes by the name of
Pyratine-6. We asked Miroslav Strnad
from the Laboratory of Growth Regu-
lators about the future of the project.
In 2009 your facility, the Laboratory of
Growth Regulators, developed an active
substance that slows down ageing. What
exactly is it?
It is a substance of cytokinin origin. Cytoki-
nins are plant hormones that, among other
functions, slow down the ageing process in
plants. Previously, it has been demonstrated
that for instance the plant hormone kinetin
prolongs the lifespan of skin tissue cultures,
possesses antioxidation effects and destroys
radicals. The long-term known anti-ageing
effects of cytokinins on plant tissues and or-
gans have led to further research and test-
ing of their derivates. Eventually this has led
to the discovery of a substance with a sev-
eral efficacious properties that slow down
the ageing process - so-called antisenes-
cence activity - in tests on ageing of human
fibroblast cells. The substance goes by the
commercial name Pyratine-6, under which
it is now also marketed.
In your opinion, is Pyratine-6 really the
elixir of youth?
In my opinion, we cannot yet call it an elixir
of youth. Human and animal organisms are
made up of an enormous amount of cells.
This substance displays effects on only one
particular cell type. Therefore it may not
function the same way with other cells in
our body. We do, however, want to contin-
ue studying it. Ageing cannot be stopped
| 24
100%; however the age expectancy of
human beings can be prolonged.
How is such research actually conducted?
At first we begin by synthesising a large
number of substances, from which we se-
lect the most effective ones by different
bio-assays. Furthermore, we select several
candidates from these substances that are
studied more deeply on animal (human)
cells to ascertain whether they are effec-
tive but also cytotoxic, mutagenous, and so
on. No substance can be dangerous to the
human organism and at the same time ef-
fective. Next follows the formulation of the
preparation and then clinical testing. The
development of substances is conducted
exclusively in the Laboratory of Growth Reg-
ulators. Only a part of the tests on animal
cells were conducted in cooperation with
Aarhus University in Denmark and clinical
studies were carried out in dermatological
clinics in California. The research is financed
mostly by Senetek of the USA.
Your finding has been awarded a number of
patents resulting in a commercial prepara-
tions with cosmetic and healing effects. Is
the preparation already on sale?
That is correct, these substances are the
subject of several patent registrations. They
have also been awarded a number of pat-
ents in various countries. Some ten patents
cover the finding at present. In the near fu-
ture, there will be dozens of such patents as
we are developing a number of other prep-
arations right now – some of which have al-
ready completed the clinical testing phase.
The patents have been licensed to Senetek.
Sales are underway successfully, especially
in the USA. The company also intends to en-
ter the European market this year.
Team of scientists at the Laboratory of Growth Regulators
Do you cooperate with other companies
on a commercial basis?
Our Laboratory is developing several com-
merce-based projects. Firstly, there is the
traditional development of anti-tumour sub-
stances, where we cooperate with Cyclacel, C3
Bio, BioApex and BioPatterns. Secondly, there
is the long-term development of plant growth
regulators in cooperation with Olchemim. And
lastly, we have been very successful in prepar-
ing new growth regulators for agricultural and
biotechnological purposes. Our results have
attracted the interest of a number of compa-
nies such as Fosfa, Sumimoto Chemicals, Bay-
ern Crop Sciences, Syngenta, and others.
Do you cooperate with other similar facil-
ities abroad?
Indeed, we cooperate with a large number
of facilities, and it would probably be difficult
to name them all. In order to achieve a high
quality of research, it is necessary to cooper-
ate with facilities abroad. I would go as far as to
say it is absolutely essential. We cooperate on
a number of very diverse projects, the majority
of which focus on plant hormones and their
use in all manner of areas of human activity,
ranging anywhere from agriculture all the way
through to healthcare.
Do you also use EU funds to finance you
projects?
Photo: Miroslav Strnad archives, Böttcher archives
Of course. We are involved in a number of
European projects. Most important of all
I consider our involvement in an EU project
for the Centre of the Haná Region for Bio-
technological and Agricultural Research,
launched in March 2010 and financed from
Operational Programme Research and De-
velopment for Innovations.
Jana Pike
 FIRM ANNIVERSARY
15 Years of Quality and Tradition
Jiří Volf
Almost 300 years of flourishing operations
is not a usual or frequent viewpoint when
a production company looks back on its his-
tory, but this is the case of Böttcher, a com-
pany which came into being in Germany
in the 18th century. Over the years which
have elapsed since then, the company has
been changing its appearance and range
of products, and expanding on to European
and world markets... and so Böttcher Česká
Republika was established fifteen years ago.
Its quality and size have gradually made it
the most prominent enterprise in this Group
which operates on all continents. We spoke
to Jiří Volf, Secretary and Manager of Böt-
tcher Česká Republika.
Böttcher Česká Republika is com-
memorating the 15th anniversary of the
beginning of its production in the town of
Vyškov in Moravia. The depth of the com-
pany roots in the past is interesting...
Yes, Böttcher Česká Republika was es-
tablished fifteen years ago as a company
whose service on the then new and de-
veloping East European market supported
the existing “parent” producers. Böttcher
as such originated in Germany as a family
firm whose roots reach back to 1725. At the
present time, we have ten factories, four of
them in Germany. We have gradually
built a large network of agencies around the
globe. We have made use of the changes on
the political map that took place after 1989
to expand our markets in Central and East-
ern Europe, and Böttcher Česká Republika
was born.
How has the range of products been
changed and expanded during the com-
pany’s long existence?
Far back in history, in the first half of the 18th
century, a certain Jacob Loosen founded his
own tannery in Cologne. A century later, the
plant launched the manufacture of glue and,
later still, the manufacture of gelatine for
press rollers. A second branch of the family
enterprise was founded in Leipzig in the late
19th century, focusing on the manufacture
of press rollers. The two branches merged
in 1910 and the period of expansion com-
menced. Although the two wars were diffi-
cult times, the roller production continued.
But the Iron Curtain divided both Germany
and Böttcher, so the company was re-inte-
grated when Germany was re-united. And
as I have said, the détente of the 1990s al-
lowed us to expand to the markets of the
former East Bloc, and Böttcher Česká Repub-
lika commenced the manufacture of rubber
rollers in the newly built factory in Vyškov in
Moravia.
Please tell the uninformed what Böttcher
actually produces and for what purpose.
The parent company operating in Germany
was in the past and is now the most impor-
tant supplier of rubber-coated rollers, main-
ly for the printing industry. The possibility of
supplies to the Eastern countries naturally
led to the establishment of the manufacture
of these rollers in the Czech Republic. Due to
success on the market, the factory in Vyškov
was enlarged, and a commercial network
of subsidiaries was formed in the countries
of Eastern Europe, specifically in the Czech
Republic, Slovakia, Hungary, Poland, the
Baltic countries, Russia, and the Ukraine. At
the same time, we became the most impor-
tant supplier of equipment for the printing
and other industries. As time went on, roll-
ers for the printing industry ceased to be
the only products and the assortment was
expanded with so-called technical rollers,
which are used everywhere that anything
is transported, driven or pressed. With the
development of packaging equipment and
the flexo press, the Vyškov plant began sup-
plying “sleeves”, which are actually the press
form for printing after direct laser gravitation.
The Vyškov experience serves the whole
Group and also manufacture in the USA.
In the course of development, the range
of products was expanded with pressroom
chemicals and detergents for the washing
and care of rollers, which have a noticeable
share in the total turnover of the company.
Last but not least, I want to mention offset
blankets for the printing industry.
What has recently been your pride, what
successes have you had?
We are glad when clients are satisfied, as
they confirm the quality of our products.
We also provide a complete service. Be-
sides success at fairs, the best appreciation
is the satisfaction of clients for whom we
have created a service of consultations free
of charge – within this service, our staff can
solve technological problems of the press or
processes directly on the spot. I believe that
the combination of product-consultancy,
suitable logistics of deliveries, and compe-
tent co-operation with clients are our most
important successes on the market.
How has your branch been affected by the
worldwide economic crisis and how are
you tackling it?
The confidence of clients, our position on
the market, the company structure and
positive balance were preserved during the
crisis at the end of 2008, as well as in 2009,
due to good and competent operations.
How do you see the future, and what are
your expectations?
We are proceeding from a cautious estimate
of market revival. We would like to gain new
territories, and after the revival to make use
of some adverse experiences from the cri-
sis-ridden period. I think that I can proudly
say that this period showed our capabil-
ity to overcome adverse influences of the
market, however strong they were. This is
our most important information for clients
– we remain a stable, competent supplier of
high-quality products and a proficient pro-
fessional service.
Šárka Kratochvílová
www.bottcher.cz
25 |
 REGION
Hradec Králové Region
The Hradec Králové Region is one
of the most often visited regions
in the country. It can be described
as predominantly agricultural and
industrial, with thriving tourism.
Hradec Králové, the capital of the
Region, is a university city and its
architecture and urbanism make it
a European jewel.
The Hradec Králové Region lies in the north-
eastern part of the Czech Republic. Over
one-third of the border of the Region lies
on the national border with Poland. The
Region in its current shape was established
in 2000 and today it comprises five districts.
The landscape of the Hradec Králové Re-
gion consists of mountains, valleys, rocks,
and woods. The southern part of the area
is formed by the lowland area of the Labe
River basin; the northern part by the highest
Czech mountains, the Krkonoše (the Giant
Mountains), together with the Orlické hory
Mountains. The Krkonoše with the high-
est mountain peak in the Czech Republic,
Sněžka, are geologically unique and were
proclaimed a UNESCO Biosphere Reserve.
The natural potential of the Region is an
excellent basis for the development of new
types of tourism (Agrotourism, Ecotourism,
Cyclotourism etc.)
| 26
GERMANY
Liberec
Ústí n/L
Karlovy Vary
Praha
Plzeň
Jihlava
České
Budějovice
AUSTRIA
The regional capital of Hradec Králové is
situated 112 km from Prague. This metropo-
lis, with over 160 000 inhabitants and a rich
history, is an important transport junction,
the seat of many authorities, state institu-
tions, banks and significant industrial com-
panies. A typical feature of the city is that
it lacks predominantly industrial zones.
The range of classical industrial sectors is
represented mainly by medium-sized and
smaller companies; among foreign inves-
tors, we could mention the American Arrow,
a manufacturer of medical devices. Hradec
Králové is also a university city.
It is also the venue for numerous inter-
national congresses and symposia. The
regional capital is not only the centre for
congress tourism, but also the starting
point of many interesting routes leading
to attractions and sites of natural beauty in
the close vicinity. Its unique 20th-century
building complexes contribute to making
Hradec Králové a textbook of modern ar-
chitecture admired throughout Europe.
Hradec Králové District
The Hradec Králové District is the larg-
est district in the Region regarding the
number of inhabitants. It is known for
many cultural and historical sites. The
most significant is the historical centre
of the regional capital. Industry and ag-
riculture are mainly responsible for the
economic production. Main industrial
sectors include the engineering, electri-
cal, chemical, wood-processing, and food
industries.
Jičín District
Jičín profits mainly from tourism and in-
dustry, followed by agriculture. The main
industrial sectors are represented by the
textile, engineering, and food industries.
The production of the Genuine Hořice
Rolls (with the certificate of a protected
POLAND
Trutnov
Hradec Králové
Pardubice Jičín
Olomouc
Ostrava
Náchod
Brno Zlín Hradec Králové Rychnov n.Kněž.
SLOVAKIA
original EU product) is worth mentioning.
The Jičín District has a deposit of first-class
glass sand (Hrdoňovice – Střeleč).
Náchod District
The area of the Náchod District makes it
the smallest district in the Hradec Králové
Region. Sectors with the largest share in
economic product formation are industry
and tourism. The main industrial sectors
are the engineering, textile and rubber in-
dustries. Local mineral resources include
mainly the mineral spring waters in Ná-
chod, Běloves and Hronov, and the peat
bogs around Velichovky, together with
the spa town of the same name.
Rychnov nad Kněžnou District
The Orlické hory Mountains, which form
part of the District, were proclaimed a pro-
tected landscape area due to their unique
topography. In total, there are two national
nature reserves in the District, 12 natural
sites and 20 nature reserves. Industry, tour-
ism, and agriculture have the main share in
the economic product formation. The main
industrial sector is engineering.
Trutnov District
The Trutnov District lies in the northern part
of the Region where it changes from the
foothills to the Krkonoše mountain range.
The whole length of the northern border is
formed by the state border with Poland. Its
area is the largest in the Region and it is the
second largest district in the Region regard-
ing the number of inhabitants. Sectors with
the greatest share in the economic product
formation include tourism, industry, and
agriculture. The main industrial fields are
represented by the textile, engineering,
Photo: CzechTourism
and electrical industries. Regarding mineral
resources, the Trutnov District has deposits
of black coal, to a lesser extent there is also
copper ore and limestone.
 The Krkonoše Mountains
CZECH BUSINESS AND TRADE

INTERESTING FACTS
ABOUT THE REGION
 The highest mountain range in the Czech Republic
– the Krkonoše – lies in the Hradec Králové Region.
The Krkonoše Mountains hold several primacies:
they are the most visited, highest, oldest, best
known, they have a unique character, combin-
ing highland and alpine vegetation, and a unique
climate resembling northern tundra.
 The highest peak, Sněžka, is at the same time the
highest mountain in the Krkonoše and in the Czech
Republic, with an altitude of 1602 m.
 The Hradec Králové Region is the birthplace of the
world renowned painter, František Kupka (1871-1957)

 ECONOMIC POTENTIAL
From the point of view of productivity and
sector structure, the Region’s economy
can be evaluated as semi-developed, with
a large share of production and services hav-
ing a lower added value. The Hradec Králové
District is characterised by more activities
and a higher added value. The majority of
business entities are small and medium-
sized companies (up to 250 employees).
According to the number of employees,
the prevalent industrial sector is the manu-
facturing industry, and within its framework,
textile production and the production of Population
Area
NUTS Population Municipalities density
electrical and optical appliances and facili- (in sq. km)
(persons/sq. km)
ties. According to sector structure, the most
prominent are companies focusing on trade LAU 1 – Hradec Králové 892 163 025 104 182
and motor vehicle repairs, enterprises in LAU 1 – Jičín 887 79 669 111 90
the field of immovables, the manufactur- LAU 1 – Náchod 852 112 495 78 132
ing industry, construction and basic metal
LAU 1 – Rychnov n. Kněžnou 982 79 299 80 81
production, and the production of metallur-
gical and metal-working products. A signifi- LAU 1 – Trutnov 1 147 120 372 75 105
cant position on the market is also held by NUTS 3 - Hradec Králové
4 795 554 860 448 116
food, beverage, and tobacco production. In Region
the field of wood processing, apart from the NUTS 1 – Czech Republic 78 867 10 506 813 6 249 133
production of wood processing tools, the Source: Czech Statistical Office (as of 30 September 2009), NUTS- territorial unit according to the EU classification, LAU 1 = district
Region also hosts several small and medium-
sized furniture and interior manufacturers. Latest data: Hradec Králové Region
A significant share in the list of significant
Inhabitants as of 31 December 2009 554 402
industrial sectors and fields also belongs to
the production of rubber and plastic prod- Gross wages 1st to 4th quarter 2009 CZK 20 621 (approx. EUR 780)
ucts, pulp, paper and paper products and, Unemployment as of 28 February 2010 8.74%
last but not least, publishing and printing.
Heavy industry and the mining industry areas, such as was the case in other indus- of the D11 motorway and the successive
(with the exception of smaller mining loca- trial areas in the Czech Republic. R11 in all its length all the way to Královec
tions) are not present in the Region, which and the R35 road. The density of the trans-
has proved to be a great advantage, espe-  TRANSPORT port network is sufficient. What is missing
cially during the economic transformation The Hradec Králové Region has a relatively are bypasses of towns and villages which
of the 1990s. The Region was thus, to a large dense transport network and the regional are extremely affected by transit transport.
extent, not affected by structural unemploy- capital is conveniently situated. The density of the railway network in the
ment caused by the significant attenuation The progress of the economic attractive- Region is above the average of the Czech
of this production, nor by a large number ness of the Hradec Králové Region is condi- Republic. The vicinity of the modernised 1st
and extent of environmentally damaged tioned by the finalisation of the construction Railway Corridor in the neighbouring Pardu-

27 |
 REGION
bice Region, which provides a rail connec-
tion with Prague, the capital of the Czech
Republic, is strategically very important.
The railway network in the main transport
axis covers the decisive transport directions
in the Region and thus its extension in the
future is not being considered; only the re-
construction and modernisation of selected
sections. Air traffic has only a supplemen-
tary function in the Region. There are eight
public domestic airports in the Region. The
international non-public airport in Hradec
Králové has the potential for development.
A significant factor is the proximity of the
public international airport in Pardubice,
which is one of the five backbone airports
in the Czech Republic.
Distance between Hradec Králové and
other European cities:
 Prague 112 km
 Vienna 270 km
 Bratislava 280 km
 Berlin 450 km
| 28
 Budapest 575 km
 Warsaw 750 km
 Brussels 1150 km
 EDUCATION
The Hradec Králové Region has a dense net-
work of secondary and apprentice schools.
University education is provided by the Hradec
Králové University with its three faculties (Fac-
ulty of Education, Faculty of Informatics and
Management, and Faculty of Arts). There are
also the Faculty of Pharmacy and the Faculty of
Medicine of Charles University and the Faculty
of Military Health Sciences of the University of
Defence. There is a great developing scientific
and research base, particularly in the fields of
Medicine, Pharmacy, and Science, with tech-
nological parks being developed. This highly
developed educational system represents
a strong development potential for the Region.
 INTERNATIONAL RELATIONS
International relations of the Region are
in the sphere of the work of the Depart-
“The Hradec Králové Region provides many op-
portunities for future investors, thanks to which
new directions in the development of villages
and regions can be created. The Region is ready
to provide the maximum support for the develop-
ment of investment activities in this Region.
I would like to invite you all to the Hradec Králové
Region and I wish you all the best.”
Lubomír Franc
President of the Hradec Králové Region
ment for International Relations of the
Regional Office. Within the framework
of its activities, it also administers grants
for the support of international co-op-
eration. The Hradec Králové Region has
signed a contract of co-operation with
these partnership regions: Lower Silesian
Voivodeship (Poland), Banská Bystrica Re-
gion (Slovakia), Seine et Marne (France),
Sibiu (Romania) and Chuvash Republic.
It also has unsigned contacts with the
Region of Jögeva (Estonia) and it sup-
ports Czech compatriots in South Banat
in Serbia.
CZECH BUSINESS AND TRADE

SELECTED FIRMS IN THE HRADEC KRÁLOVÉ REGION

Name Based in Sector Contact
Veba, textilní závody, a.s. Broumov production of interior textiles www.veba.cz
Farmet a.s. Česká Skalice production of agricultural machines www.farmet.cz
KBA-Grafitec, s.r.o. Dobruška printing machines and accessories www.kba-grafitec.cz
PZP Komplet, a.s. Dobruška production of heat pumps and modern industrial technologies www.pzp.cz
Juta, a.s. Dvůr Králové nad Labem production of construction and insulation foils and textiles etc. www.juta.cz
Arrow International CR, a.s. Hradec Králové production of medical equipment www.arrow.cz
Bühler Motor, s.r.o. Hradec Králové production of electric motors www.buehlermotor.cz
Cerea, a.s. Hradec Králové production of livestock fodder www.cerea.cz
Excon Steel, a.s. Hradec Králové production of equipment for chemical and petrochemical industries www.exconsteel.cz
Profimont, a.s. Hradec Králové sale of welding, bevelling, and cutting equipment, exhaust systems www.quelle.cz
Rubena, a.s. Hradec Králové production of rubber, rubber products and semiproducts www.rubena.cz
Technistone, a.s. Hradec Králové production and deliveries of cured rock www.technistone.cz
KARSIT HOLDING, s.r.o. Jaroměř production of car parts – car seat metal structure, exhaust systems etc. www.karsit.cz
Continental Teves Czech
Jičín production of spare parts for cars www.contiteves.com
Republic, s.r.o.
LPM, s.r.o. Jičín production of plastic semiproducts www.lpm.cz
PFT, s.r.o. Jičín production of plastic windows www.pft.cz
Ronal CR, s.r.o. Jičín production of bathroom equipment and light alloy wheels www.ronal.cz
Vk-Sped, s.r.o. Jičín car transport, shipping www.vksped.cz
Federal-Mogul Friction
Kostelec nad Orlicí components for pro brakes and braking systems www.federal-mogul.cz
Products, a.s.
Mados MT, s.r.o. Kostelec nad Orlicí building of bridges, roads, water management constructions www.madosmt.cz
Deprag CZ, a.s. Lázně Bělohrad production of pneumatic and clamping tools, screws, and assembly systems www.depragindustrial.com
Ametek elektomotory, s.r.o. Náchod production of electric motors www.ametek.com
Atas elektromotory Náchod, a.s. Náchod production of electric motors www.atas.cz
Ammann Czech Republic, a.s. Nové Město nad Metují production of construction equipment www.ammann-group.cz
Verner Potraviny s.r.o. Nové Město nad Metují wholesale of groceries www.poverner.cz
Avon Automotive, a.s. Rudník production of rubber car products www.avon-rubber.com
Qpor, a.s. Trutnov production of building materials www.porobeton.cz
Esab Vamberk, s.r.o. Vamberk welding and cutting equipment www.esab.cz
Pewag, s.r.o. Vamberk production of strengthening and linking materials www.pewag.cz
Vaspo Vamberk, s.r.o. Vamberk production of machines and equipment www.vaspo.cz
Hašpl, a.s. Velké Poříčí production of nails www.haspl.cz
AGO-HYTOS s.r.o. Vrchlabí filtration & fluid management www.argo-hytos.com
Optrex Czech, a.s. Vrchlabí production of satellite and television equipment www.optrex.cz

HRADEC KRÁLOVÉ REGIONAL AUTHORITY JIČÍN MUNICIPAL COUNCIL MĚSTSKÝ ÚŘAD

KRAJSKÝ ÚŘAD MĚSTSKÝ ÚŘAD JIČÍN RYCHNOV NAD KNĚŽNOU
KRÁLOVÉHRADECKÉHO KRAJE Žižkovo náměstí 18 RYCHNOV NAD KNĚŽNOU
Pivovarské nám. 1245 50 601 Jičín MUNICIPAL COUNCIL
500 03 Hradec Králové Phone: + 420 493 545 111 Havlíčkova 136
Phone: + 420 495 817 111 Fax: + 420 493 545 222 516 01 Rychnov nad Kněžnou
Fax: + 420 495 817 336 E-mail: posta@mujicin.cz Phone: + 420 494 509 111
E-mail: posta@kr-kralovehradecky.cz www.mujicin.cz Fax: + 420 494 534 440
www.kr-kralovehradecky.cz E-mail: podatelna@rychnov-city.cz
NÁCHOD MUNICIPAL COUNCIL www.rychnov-city.cz
HRADEC KRÁLOVÉ CITY COUNCIL MĚSTSKÝ ÚŘAD NÁCHOD
MAGISTRÁT MĚSTA HRADEC KRÁLOVÉ Masarykovo náměstí 40 TRUTNOV MUNICIPAL COUNCIL
Československé armády 408 547 61 Náchod MĚSTSKÝ ÚŘAD TRUTNOV
502 00 Hradec Králové Phone: + 420 491 405 111 Slovanské náměstí 165
Phone: + 420 495 707 111 Fax: + 420 491 405 298 Phone: + 420 499 803 111
Fax: + 420 495 707 100 E-mail: podatelna@mestonachod.cz Fax: + 420 499 803 103
E-mail: epodatelna@mmhk.cz www.mestonachod.cz E-mail: podatelna@trutnov.cz
www.hradeckralove.org www.trutnov.cz

29 |
 REGION
Hradec Králové Region – Ideal Site for Your Investment
The Hradec Králové Region
has great potential for further
economic development. Investors
will find interesting opportunities
and conditions for the expansion
of their business activities in the
Region.
SUCCESSFUL INVESTMENT PROJECTS IN THE HRADEC KRÁLOVÉ REGION
Company
AEG Components s.r.o.
Alcan Packaging Skřivany s.r.o.
Continental Teves Czech Republic s.r.o.
Ronal CR s.r.o.
Kimberly Clark, a.s.
JUTA a.s.
SQS Vláknová optika a.s.
Škoda Auto a.s.
| 30
 CONDITIONS IN THE
REGIONAL METROPOLIS
The regional capital, along with the whole
region, sees its future in the industries with
higher added value. Therefore, it focuses on
attracting investments in the area of strate-
gic services or ICT, which require a qualified
workforce. As it stands, the Region can of-
fer educated employees to investors. These
are mostly graduates from local secondary
schools and universities, the majority com-
posed of graduates who have studied the
development of Information Technologies,
doctors and medics, and liberal education
graduates. The City of Hradec Králové, in col-
laboration with, among others, the CzechIn-
vest Agency, has built a Technology Centre
for firms with innovation potential. This
property, which allows entrepreneurs to
lease space, including accompanying serv-
ices, under favourable conditions, is located
on the premises of a former military airfield.
 CONDITIONS IN OTHER
REGIONAL TOWNS
Besides the regional capital, other important
industrial centres include the towns of Jičín,
Trutnov, Náchod, Rychnov nad Kněžnou,
Vrchlabí, and Červený Kostelec. Industrial
zones have been built and partially or fully
occupied in some of them. For example,
Taiwan‘s Textonnia Czech, s. r. o., a producer
of synthetic fabrics and yarns, has its seat in
Červený Kostelec. Saurer Czech, a. s., a mem-
ber of the supranational Schlafhorst con-
glomerate, manufactures textile machinery
in Červený Kostelec in continuation of the
Elitex tradition. Numerous companies today
operate from the industrial zone in Jičín and,
based on this success, the town has decided
to invest in further expansion of the zone.
Country
Sector Investor
of origin
electronic and electrical Germany AEG
Finnanciere Europeenne
plastics France
D'emballages Pechiney S.A.
automotive Germany Continental Teves
automotive Switzerland RONAL
other USA Kimberly Clark
plastics CR JUTA
electronic and electrical CR SQS Vláknová optika
automotive Germany Volkswagen
However, other unoccupied localities are
available to newly arriving investors. Cer-
tainly worthy of mention is the newly built
industrial zone in Nový Bydžov, which has
become easily accessible to transport, due
to the completion of the D11 motorway.
Other industrial zones have been prepared
in Dvůr Králové nad Labem, Hořice, and Po-
lice nad Metují which, because of its loca-
tion, is advantageous to investors with ties
to neighbouring Poland. There is a strategic
industrial zone for Škoda Auto in Solnice
and Kvasiny. The company uses it to manu-
facture the Škoda Superb, Škoda Roomster
and the latest Škoda Yeti vehicles.
 BROWNFIELDS
– ONE OF THE OPPORTUNITIES
Another opportunity for investors is in those
areas which were utilised in the past but,
for various reasons, are not being used ef-
fectively today. In the past, the CzechInvest
Agency, in collaboration with the Regional
Office of the Hradec Králové Region, put to-
gether an analysis of unused localities, the
so-called brownfields. There were over 250
located in the Hradec Králové Region. This
study is available to investors. Our goal is to
achieve the revitalisation of currently un-
used premises or larger areas.
 USING CO-OPERATION
AGAINST COMPETITION
Both the traditional and new branches of in-
dustry operate alongside each other in the
Hradec Králové Region. The traditional indus-
tries are still dominated by the textile industry,
even though it must deal with the cheap and
ferocious Asian competition. For this reason,
textile companies, not only from the Hradec
Králové Region, have formed an association
Year Location
1998 Jičín
2007 Nový Bydžov - Zábědov
2000 Jičín
2000 Jičín
2001, 2003 Jaroměř
2007 Dvůr Králové
2006, 2008 Nová Paka
2004, 2007 Kvasiny-Solnice
 CZECH BUSINESS AND TRADE
called Clutex. They use the association to share
information and experiences, co-operate with
research institutions, and introduce new prod-
ucts. This helps them to maintain their impor-
tant position ahead of their competition. Asso-
ciation and co-operation between companies
can also be seen in the new industries. The
Region of Hradec Králové has great potential
to become an important centre in the field of
computers and software. With this in mind, ex-
isting IT firms, along with the Faculty of Infor-
matics and Management at the University of
Hradec Králové, have started a project to build
an IT cluster.
Entrance for Innovation Activities
The project of the Hradec Králové
TECHNOLOGICAL CENTRE (TC HK)
was formed with the cooperation of
the city of Hradec Králové, Hradec
Králové University, and the EPIS
Company with the goal to develop
the innovative environment of the
Region.
The modern science and technology centre
was ceremonially opened in June 2008, i.e.
less than a year after the start of construc-
tion. It immediately housed its first clients
and since then TC HK has been offering its
potential clients variable spaces for innova-
tion activities. With the help of the provided
services it supports technology transfer, in-
novation processes in companies and at
universities and it tries to merge these two
worlds and to remove barriers between
them. Accredited Science and Technology
Park searches for talented students at uni-
versities and using the business incubator,
it helps starting entrepreneurs and compa-
nies with innovation potential.
 TRANSPORT IS VITAL
Any further development of the Region of
Hradec Králové is closely tied to the develop-
ment of the transport infrastructure. The last
remaining part of the D11 motorway should
be completed shortly. This motorway con-
nects Hradec Králové to Prague and work has
started on its extension towards the Polish
borders. A convenient transport link, not only
to the capital, but to the rest of the country
and the whole of Europe is a good basis for
the establishment of new companies and for
the development of the tourist trade. As it is,
the mountainous areas, such as the Krkonoše,
 SEAT OF CLUSTERS
AS WELL AS INVESTORS
During the relatively short period of its func-
tioning, the TC HK has become a part of the
national network of science and technol-
ogy parks, a member of Omnipack clusters,
Hradec Králové IT cluster, Hradec Králové
Business Club, it started to cooperate with
several Czech and foreign universities. The
Centre is one of the pillars of the innovation
business in the Hradec Králové Region, it
actively participates on the Hradec Králové
Regional Innovation Strategy and on the
realisation of its pilot project called Czech-
Polish Innovation Portal (www.czeplinn.eu),
whose goal is to create a communication
platform aimed at increasing the know-how
about the innovation environment in the
border regions.
It also supports the entry of projects aimed
at innovation in the Hradec Králové Region,
to foreign investors it provides services relat-
ed to their entry into the Region, assistance
with the establishment of branches and new
companies. In this respect, it cooperates with
several regional and national institutions and
partners in almost all sectors of business ac-
tivities. At the moment (March 2010), TC HK
is preparing in cooperation with the city and
an unnamed multinational corporation an-
other phase of its development with the aim
to build 4000 to 5000 sq. m of top adminis-
trative space in the very centre of the town
intended for innovation activities of its future
the Orlické hory, and Český ráj, the chateaux in
Opočno and Častolovice, and the safari ZOO in
Dvůr Králové nad Labem are all attractive tour-
ist destinations. The easier it is to reach these
attractions, the sooner tourists will flock to the
Region. After all, who wouldn‘t want to enjoy
the snow-covered slopes of the Krkonoše
Mountains or a round of golf in the gardens of
the manor in Hrádek u Nechanic after a mere
two-hour drive from Prague?
Martina Chamasová
CzechInvest
e-mail: martina.chamasova@czechinvest.org
clients. It is a unique project within the Hra-
dec Králové Region with the highest stand-
ard. TC HK is already collecting demands from
potential clients for various technological
equipment. A significant advantage lies in
the fact that the whole project is co-financed
from the EU funds.
 MICROSOFT
INNOVATION CENTRE
The last but not least activity of TC HK is
cooperation with Microsoft, which has
resulted in the opening of the second
Czech Microsoft Innovation Centre. As is
the case with the first Czech MIC in Brno,
the Hradec Králové Centre will offer start-
ing entrepreneurs, students, designers,
and researchers an access to top quality
information. Prospective clients can also
appreciate the top equipment for testing
and development of the latest technolo-
gies built on Microsoft platform, but they
can also expect a wide range of activities
in the field of training and consultancy.
Those interested will also be able to ac-
cess lectures and seminars around the
world through a videoconference and
thus they can communicate and share
their ideas and opinions.
Martin Dittrich
Hradec Králové Technology Centre
e-mail: martin.dittrich@tchk.cz
For more information, go to www.tchk.cz
31 |
 REGION
Services for Foreign Entrepreneurs
Just like many other countries, the
Czech Republic has a system of busi-
ness support, which is intended both
for domestic as well as foreign busi-
ness entities. This system includes
support from national and European
sources, but some are intended only
for selected regions, the so-called
regions with concentrated state aid.
In the Hradec Králové Region, there are
many opportunities to assist foreign busi-
ness entities in developing their business in
the Czech Republic. This support is aimed
mainly at the manufacturing industry sec-
tor, Research and Development and other
hi-tech fields. The most significant forms
of support can be structured into the fol-
lowing tools: Investment Incentives for
Manufacturing Industries, Operational Pro-
gramme Enterprise and Innovation and
other programmes.
 PRESENTING THE TOOLS
FOR BUSINESS SUPPORT
Investment incentives are an interest-
ing support opportunity, intended for the
manufacturing industry. Foreign companies
can receive full or partial tax relief (up to five
years). The main condition for obtaining an
investment incentive is a minimum level of
investment in the Hradec Králové Region of
Company of the Year: Farmet, a. s.
Farmet, a. s., is a private Czech com-
pany founded in 1992. Since then, the
company has attained a leading posi-
tion in the field of its activities. A small
workshop has now transformed into
a modern company with 200 employ-
ees and some very modern equipment
for the area of construction, design (all
in 3D models), and its own production.
| 32
CZK 100 million (EUR 3.85 million), of
which at least 50% must be covered by own
capital and 60% of the investment must go
into machinery and equipment.
The Operational Programme Enterprise
and Innovation (OPEI) is a second and no
less interesting area of business support. It
is also aimed at companies in the manu-
facturing industry, but in some cases other
areas are also supported. The advantage lies
in the fact that this support takes the form
of non-repayable financial aid, i.e. funding.
The minimum level of investment is from
approx. CZK 0.6 – 1 million (EUR 23 000 –
38 500), depending on the programme and
size of the applicant.
This ranks among the most interesting
programmes in the Hradec Králové Re-
gion, under the OPEI, from which it is pos-
sible to receive funding, for example, for
investment in machinery and equipment
for firms with innovation potential; fund-
ing for the purchase or reconstruction (or
construction of an annexed building) of
a company’s property; for introduction of
renewable energy sources, or the construc-
tion of small water power stations; for the
purchase of information and communica-
tion systems; for the development of soft-
ware, for investment into the infrastructure
for Research and Development, for invest-
ment into the infrastructure for education,
for the support of establishing and further
development of Science and Technology
Parks, entrepreneurial incubators, centres
for technology transfer and business an-
The annual turnover is now EUR 20 mil-
lion, 80% of which is from exports. Especially
in the last few years, the company invested in
the expansion of its production capacities and
modern technology equipment (CNC machin-
ing, laser processing, robotic welding, powder
paintshop, etc.). Top of the line engineering
technologies and qualified employees – spe-
cialists, technicians, and workers – are the basis
and the driving force of the company.
The company‘s main business is the devel-
opment and production of agricultural ma-
OFFICE SPACE FOR RENT
(APPROXIMATE PRICES):
Hradec Králové – centre: CZK 3 000/sq.m/year
(without energies) (EUR 115.5)
Hradec Králové – surrounds: CZK 1 000/sq.m/year
(without energies) (EUR 38.5)
gel network formation; for the support of
formation clusters and technological plat-
forms and other activities.
 EXAMPLE OF SUCCESSFUL
AID APPLICATION
INNO-COMP BOHEMIA, s.r.o. (Ltd.), Invest-
ment Incentive for the Manufacturing In-
dustries, budget CZK 298 million (EUR 11.5
million). INNO-COMP BOHEMIA, s.r.o. was
considering starting its business activities
in the Czech Republic. Apart from other fac-
tors, the possibility of receiving support at
the time of its entry into the Czech market
was very important to it. In co-operation
with Asistenční centrum, a.s. (Assistance
Centre, PLC), it produced an application
for aid in the form of investment incentive,
which was granted to it at the level of maxi-
mum CZK 119.5 million (EUR 4.6 million).
This investment incentive was provided for
the purchase of technologies, construction
of a new factory, and job creation.
Jiří Zapletal
Asistenční centrum, a.s.
e-mail: zapletal@asistencnicentrum.cz
www.asistencnicentrum.cz
Note: 1 EUR = 25.976 CZK (average monthly exchange rate
announced by the Czech National Bank, February 2010)
chines for soil cultivation and sowing, espe-
cially for large-scale agricultural productions.
The company specialises in high-performance
machines with wide reach that can work with
the biggest tractors on the market (working
reach up to 15 yards), and in design, develop-
ment, production, and complex supplies of
machines and devices for the extraction and
further processing of vegetable oils. In this
area, Farmet focuses on the continuous press-
ing technologies of the so-called dry oil plants
(rapeseed, sunflower, soya, flax, etc.).
 CZECH BUSINESS AND TRADE
The company development dynamics has
been recognised several times with awards in
various competitions in the category of me-
dium businesses (up to 250 employees), such
as the second place in the Exporter of the Year
competition. Farmet‘s top achievement was
the first place in the Company of the Year 2009
competition in the Czech Republic. The com-
petition is open to all companies with turnover
not exceeding CZK 1.4 billion (approx. EUR 56
million). A professional jury decides accord-
ing to gathered economic information and
a personal presentation by each company‘s
manager. Why has Farmet won? The jury es-
pecially appreciated its clear business vision
supported by investments into own research
and development of products and technolo-
gies, its ability to formulate development inten-
tions and convert them into successful projects
with the use of European structural funds (the
PETROF: Year of Crisis and Seized Opportunity
PETROF was founded by Mr Antonín
Petrof in Hradec Králové in 1864. Five
generations of the Petrof family have
owned and managed the firm, which
was awarded many prestigious prizes
at international exhibitions and fairs
thanks to the continuous technical
development and quality improve-
ments of its grand and upright pianos.
The master instruments of the PETROF
brand have accompanied the world‘s
greatest artists, they are played in
Milan‘s La Scala or at Sydney‘s opera.
The PETROF brand is associated with such
names as Duke Ellington, Ray Charles,
Ella Fitzgerald, Charles Aznavour, Rudolf
Firkušný, or Svjatoslav Richter. The world
famous opera singer Peter Dvorský owns
a PETROF grand piano and Paul McCartney,
the famous ex-Beatle, bought one in 2000.
The company has entered 2009 think-
ing of both the 145th anniversary of its
WE HAVE CLEAR PROSPECTS
AND COMPETITIVE ADVANTAGE
Czech Business and Trade asked Karel Žďárský,
the only shareholder, board chairman, and
chief executive about the future of the
company.
WHAT DOES WINNING THE
COMPETITION MEAN TO YOU?
It‘s a great pleasure and responsibility. It‘s
a recognition of our work as compared to
many other firms from various fields. The
award has given me, personally, a lot of energy
to further develop the company.
WHAT PLANS DOES THE COMPANY
HAVE FOR THE FUTURE?
Our company has been, of course, also af-
fected by the current economic crisis, and we
had to cope with a decrease in demand for the
investment products we sold. That was a big
change after many years of growth. Today, we
see a growth in demand again and we have
company has succeeded in acquiring funding
from programmes for the support of research
and development, employee training, and in-
vestments in production technologies), and its
founding and fears of the world-
wide economic recession. The company
had been forced to adopt some crisis
measures at the end of the year before
last and it continued to observe them
during the last year. The development
of a new series of PETROF grand pianos
had been completed in 2008, which then
allowed the company to focus more on
supplementary manufacture of special
products. Besides musical instruments,
Petrof now also manufactures high qual-
ity custom furniture and interior accesso-
ries, with emphasis on first class surface
finish.
 INSTRUMENT WITH SOUL
It was the quality of surface finish as well as
the characteristic and noble sound of the
PETROF master grand pianos that caught
the attention of the audio legend and jazz
musician, Mark Levinson. Levinson is leg-
endary for his extraordinary auditory ca-
pabilities and his feeling for music, which
is why his nickname is “the Golden Ear”.
For his project that includes an edition of
recordings with “the natural sound of in-
struments” which he has been dreaming
started to realise our development projects
with the support of European funds. The build-
ing of new and modern production capacities,
and especially the building of a research centre
to find solutions for the screw press extrud-
ing-expelling process for vegetable oils, give us
a clear prospect and a competitive advantage.
We will also continue to develop our business
network and our products to make the Farmet
brand a truly reputable European supplier of
agricultural machines and pressing technolo-
gies. In this regard, we have been successful
in establishing partner relations with foreign
companies with the aim of shared supplies of
subsequent technologies for the processing of
vegetable oils. We very much value our collab-
oration with Alfa Laval, where we realised the
technology for the degumming of vegetable
oils and prepared a number of shared offers
for the refinement of vegetable oils. Research
and development as well as the collaboration
with foreign companies must strengthen our
engineering and supplier abilities.
long-term efforts to build a good name for the
Farmet brand on European markets.
More at www.farmet.cz.
about for a long time, he had been look-
ing for a musical instrument that would,
according to his own words, “have a soul
and would be capable of arousing emo-
tions. It all depends not only on perfect
preparation but also on the selection of
the right instrument, preferably acoustic.
I had been looking for it for quite a long
time but in the end I was lucky to find it
in the PETROF piano.”
The intensive collaboration between
Mark Levinson and Petrof in 2009 resulted
in a new series of high quality speakers of
the Daniel Hertz brand, manufactured by
Petrof. Mark Levinson says: “Every activity
and every product from Petrof makes it
clear that the people from this company
are not just ordinary workers, business-
men, or managers, they live for music.
Petrof not only understands music, but
also the importance of vibrations, sounds,
and the quality of workmanship. All this
stems from manual work and craft skills
that are disappearing from today‘s world.”
Jan Ryšavý
Petrof, spol. s r.o.
e-mail: marketing@petrof.com
33 |
 REGION
Top University Education in the Hradec Králové Region
Education is the key competitive fac-
tor today. The pressure is increasing
on a better education as one of the
basic conditions for a career on the
labour market and a better position
in life. In the Hradec Králové Region,
increasing the educational level of the
inhabitants is an integral part of the
regional development strategy. The
University of Hradec Králové, and par-
ticularly its Faculty of Informatics and
Management, represents top quality
in the field of university education.
The Faculty of Informatics and Manage-
ment educates university-qualified profes-
sionals for a broad range of opportunities in
the private and state sectors. Apart from the
programmes delivered in Czech, there are
also two Bachelor’s degree programmes in
Information Management and Applied Infor-
matics, a follow-up two-year Master’s degree
programme in Information Management
and a Doctoral study programme in Informa-
tion and Knowledge Management, delivered
in English. Economic-management skills are
an integral part of all fields of studies, along
with a great emphasis on the effective use of
modern Information Technologies.
 SEVERAL ADVANTAGEOUS
PROGRAMMES
The Faculty of Informatics and Management is
aware of the necessity of maintaining strong
relationships with industrial and research in-
stitutions. These links with the private sector
help us to ensure that our students receive
the most up-to-date education and that they
work with academic staff who keep pace
with changes. The valuable contact between
the prospective employers of our graduates
and our academic staff ensures that students
benefit from a realistic learning environment.
Therefore, the Faculty has developed several
advantageous programmes with businesses
and institutions in our region, e.g. the IT Clus-
ter Project, including more than ten compa-
| 34
nies. The Faculty co-operates with numerous
regional, national, and international compa-
nies on conducting educational IT courses or
communication and managerial skills. In co-
operation with partners from the commercial
sphere, interesting workshops are organised
(Student Business Forum in co-operation
with the Technology Centre, Hradec Králové,
IT Full Power – IBM Technical Academy, Mi-
crosoft Academic Conferences etc.), as well
as competitions (Best Java Programmer in co-
operation with FG Forrest, and Top Ten ORTEX
in co-operation with ORTEX Company).
 VARIOUS INTERNATIONAL
PROJECTS
The Faculty also co-operates with other Eu-
ropean, Taiwanese, and American universi-
ties in participating in various international
projects. Every year, more than 60 students
of the Faculty study at a European institu-
tion under the Erasmus Programme, 18
students attend Taiwanese universities, and
two students attend universities in the USA.
Currently (in March 2010), co-operation is
continuing during the summer months,
working on the VitalMind Project with Cog-
niFit Ltd., Haifa, Israel, and Philips Innovative
Lab, Eindhoven, the Netherlands.
The Faculty also fully supports a close link
with the practical life sphere. Many seminar
and Bachelor’s papers and theses deal with
very practical topics - cloud computing and
company solutions, modern tools for creat-
ing context, help for company decision-sup-
porting systems of the GIST Company, mod-
ern open-source technology for Business
Intelligence, Version Control of SW products
in multiproject environment etc. Signifi-
cant professionals are invited to lecture at
the Faculty, for example, top managers of
companies such as PricewaterhouseCoop-
ers, SUN Microsystems, Microsoft, and Tesco
Stores ČR.
The Faculty of Informatics and Management
is a member of the Hradec IT cluster. The main
activity of the cluster is to ensure beneficial
services for cluster participants, with the aims
of improving the quality of management, in-
creasing innovation potential, reducing costs
and developing commercial opportunities
for individual companies. The University of
Hradec Králové, nineteen companies, and the
Hradec Králové Technology Centre have since
provided active co-operation. These days,
several projects are being prepared, which
the Faculty is participating in with other
member companies, e.g. innovative meth-
ods of performance analyses of database
servers, research of tools, procedures and
organisational structures which could be ap-
plied in the process of product management
optimisation with impact on managing the
new ICT product development; research and
application of tools for mutual integration of
algorithms and data in Java and Micro Focus
Cobol environments; proposal and definition
of XMPP standards for the GIS area etc.
Petra Poulová
Photo: FIM archives
Vice-Dean of the Faculty of Informatics and
Management of the University
of Hradec Králové
www.uhk.cz/fim
Hradec Králové
Region
place for investment
opportunities
Area . . . . . . . . . . . . . . . . . . . . . . . . . . 4 758 sq. km
Population . . . . . . . . . . . . . . . . . . . . . . . . 554 000
Centre . . . . . . . . . . . . . . . . . . . . . .Hradec Králové
Division . . . . . . . . . . . . . . 15 municipalities with
extended competences

Example of industrial zone

more on the enclosed DVD or web pages
www.kralovehradeckykraj.eu
www.kr-kralovehradecky.cz

Contacts:
Lucie Vomočilová
Department of Regional Development, Tourism
and Culture, Section of Regional Development,
Hradec Králové Regional Authority
Pivovarské náměstí 1245
500 03 Hradec Králové
Czech Republic
phone: + 420 495 817 450
e-mail: lvomocilova@kr-kralovehradecky.cz
www.kralovehradeckykraj.eu
www.kr-kralovehradecky.cz

Jana Smetanová
Special Consultant
Centre for European Projects Development
Regional Development Agency
Centre for European Projects Development
Regiocentrum Nový pivovar - Evropský dům
Soukenická 54
THE CURRENT INVESTMENT OPPORTUNITIES 500 03 Hradec Králové
IN THE HRADEC KRÁLOVÉ REGION Czech Republic
phone: + 420 495 817 815
GSM: + 420 724 971 702
e-mail: smetanova@cep-rra.cz

2010
www.cep-rra.cz
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CZECH ECOLOGY AND AGRICULTURE
2

Supplement of Czech Business and Trade

2010
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|2 www.neva.cz
 C Z E C H E C O L O G Y A N D A G R I C U LT U R E

Czech Ecology
and Agriculture
Supplement of
Czech Business and Trade 2/2010

CONTENTS

Editorial 4

ANALYSIS
Towards a Common European Policy in
Food Production and Agriculture 4
Get Acquainted with Czech Agriculture 6

INVESTMENT
Brownfields to Turn into Shopping Centres and Eco Farms 8

LEGISLATION
Investments in Renewable Energy Sources in the Czech Republic 11

CZECH TOP
Champion among Czech Vintners 13

WE ARE INTRODUCING
Crisis Boosting Demand for “Green Buildings” 15

ENTERPRISE
Together to Support Trade Opportunities 16
Surface Finishing under the Wings of CzechTrade 18 MK ČR E 6379
This magazine is published as a supplement
Agriculture Is Drawing Finance from Various Programmes 20
of the economic quarterly Czech Business and Trade.
Managing Editor: Šárka Kratochvílová
SURVEY
Poll of Successful Companies Operating in the Areas of Ecology, Graphic Design: Art director: Nina Nováková
Graphic Designer: Jiří Hetfleisch
Agriculture, and Wood Processing 21
Cover photo: www.sxc.hu; page 3 photo: www.sxc.hu

Production: Anežka Zvěřinová

PRESENTATION OF FIRMS:
NEVA - TRADE s.r.o.; PP Agency s.r.o.
IN THE NEXT SUPPLEMENT TO CZECH BUSINESS AND TRADE
The manufacture of machine tools and forming machines has been the main branch of Czech
engineering for dozens of years. Export is essential for the sector as a whole. What is the
present situation of the branch in the Czech Republic and what are its prospects? This is the
theme of the next Supplement to Czech Business and Trade.
Address: PP Agency s.r.o., Myslíkova 25, 110 00 Praha 1
Czech Republic, Phone: +420 221 406 622
Fax: +420 224 930 016, e-mail: journal@ppagency.cz
www.ppagency.cz
Deadline: 15/4/2010
Attitudes expressed by the authors of articles in this magazine
are not necessarily consistent with the viewpoint of the Publisher.
© PP Agency, Company with the ISO 9001 certified quality
management system for publishing services

3|
 A N A LY S I S
Dear Readers,
Environmentally friendly agriculture,
organic food, renewable sources of
energy, low-energy “green” build-
ings... these are themes very fre-
quently discussed in the Czech Re-
public, Europe, and other countries
around the globe. It is not by chance
that ecology has been at the centre
of public interest for several years.
Individuals, institutions, enterprises,
and governments are facing the
decision how to make our planet
healthier, and how to change con-
duct and habits and thus alleviate
the impacts of inconsiderate treat-
ment of nature. We, too, have been
dealing with ecology and agriculture
in this supplement.
An analysis of the agricultural
sector has been conducted by the
ČEKIA agency. After you have read
it, you shall know how this sector is
supported by the Government, what
it is focused on most of all, and also
how agro-tourism is developing in
the Czech Republic.
The possibility of using brown-
fields, i.e. dilapidating industrial com-
plexes, deserted former agricultural
co-operatives, former military areas
and the like and their enumeration
are contained in another article of
this supplement.
Export alliances facilitating foreign
contacts of Czech enterprises have
been established under the wings
of the CzechTrade Agency in the
last years. We are introducing two of
them - Czech Water Alliance and the
alliance České povrchové úpravy – in
this supplement
Šárka Kratochvílová
|4
Towards a Common European Policy
in Food Production and Agriculture
Jakub Šebesta
The future role of the common European
policy in food production and agriculture
in the globalised world is a basic issue in
the current period, when debates on the
future of European agriculture are com-
plicated by the current economic crisis.
Jakub Šebesta, Minister of Agriculture of
the Czech Republic, has shared with us his
view of the common European agro-food
sector.
What can we do for European food
production and agriculture to flourish?
An important thing is to promote regional
specifics and quality, combined with in-
novation and education. Globalisation is
not a negative phenomenon, its benefits
are rapid development and progress. We
must keep pace with all that is new and
adjust our activities to demand. We can-
not expect that everybody will be satis-
fied with current achievements for 50
years. Consumers are very demanding. If
anyone opts for a conventional product,
the product must be of the highest qual-
ity. If people do not want tradition, they
must be offered new things.
A great challenge is the rising volatil-
ity of agricultural commodity prices. It is
therefore necessary to find correspond-
ing market instruments that will help to
mitigate the negative impacts of such
fluctuations and see to it that the manu-
facturer is in a position to maintain ad-
equate income.
The development in the past few years
has shown that even a long period of rela-
tive stability and good economic results can
be followed by a sobering chill.
What challenges and dangers are facing
the agro-food sector?
Definitely it is the current economic crisis
and in the long run the pressure of cheaper
imports. I am confident that we can face up
to these problems by higher added value of
production, based on innovation and top
technology. Emphasis must be placed on
high safety, quality, and tradition of Euro-
pean production. This, in my opinion, is the
way we must follow.
With the accession of new member
states, the European market has gradu-
ally grown into a compound, which in
2009 comprised some 500 million peo-
ple. Acute problems have emerged espe-
cially in connection with the accession of
new states in the past relating to the fu-
ture form of the future common agricul-
tural policy, which must now be tackled.
Photo: Ministry of Agriculture archives, European Commission archives
As a result of joining the EU, a number of
changes have taken place in the Czech
Republic, such as restrictions in sugar
and milk production, which have mark-
edly affected us, while on the other hand
a number of new opportunities have
opened up for us, which Czech business-
men have used to great advantage.
What are the impacts of the economic
crisis on food production and agriculture
in the Czech Republic?
In the current economically complicated
situation consumers are rather looking for
cheaper products, which is not a favourable
 C Z E C H E C O L O G Y A N D A G R I C U LT U R E

trend. It is to be expected that as soon as the
situation starts improving, food buyers will
once again be seeking better quality, which
means higher added value. In the EU, the
fall of agricultural trade in 2009 was not so
sharp as in other parts of the world, which
testifies to the ability of the EU to cope with
the global economic crisis in agriculture.
Two-thirds of EU exports are processed agri-
cultural products, where the impact of price
fluctuations is less in evidence.
At the same time it has become evident
that the global market needs to be liberal-
ised to the highest possible degree. If the
market opens up to such a degree, and I am
persuaded that sooner or later this is what
will happen, we must be prepared for it and
be able to react to the supply of cheaper
commodities. I am certain that the Europe-
tected geographic indications or appel-
lations of origin, with several more ap-
plications being in the pipeline. A great
achievement was the registration last year
of the Czech Beer geographic indication,
which is of great commercial and econ-
omic significance for traditional Czech
beer brewers. Protected indications en-
able better protection against abuse by
other, rival trade or manufacturing part-
SELECTED EXHIBITIONS AND FAIRS
Flora Olomouc 19-22 August 2010
 international gardening exhibition
www.flora-ol.cz
Earth the Provider,
České Budějovice 26-31 August 2010
 restoration and development of the countryside, crop
ners prone to sponge on the repu tation
of established indications. In the area of
guaranteed traditional specialties, the
Czech Republic co-operates closely with
colleagues in the Slovak Republic – four
joint Czech-Slovak applications for the
registration of selected traditional meat
products have been submitted in Brus-
sels. In connection with traditional and
regional foodstuffs, a project has just
been launched in the Czech Republic,
the aim of which is an information cam-
paign and effort to raise consumer inter-
est in regional products. Regional prod-
ucts especially have a great potential as
regards quality.

an market will be capable of such reaction
only if European consumers become aware
that domestic production is of a high stand-
ard and will under all circumstances retain
that standard. Great attention in the EU
market liberalisation process, however, will
and livestock production, farming equipment, food pro-
duction, forestry and water economy, gardening and
cultivation, services for agriculture
www.vcb.cz
Ekostyl, České Budějovice 26-31 August 2010
 creation and protection of the environment, environ-

have to be paid to ensuring the competi- mentally friendly technologies

tiveness of European producers in the face www.vcb.cz
of third-country producers, especially as re- Pragolinga / Tooltex, Prague 4-6 November 2010
gards high standards in the area of hygiene,  11th contracting and sales exhibition of machines,
welfare, and quality of production, which EU tools, equipment, and materials for the woodworking
manufacturers must meet. industry / 15th specialised exhibition of machines, tools,
and hardware
Can European food production exist www.pragolinga.cz
without European agriculture, and vice
versa?
The only clear answer is NO, it can not. Not
only because there are local and traditional
links within the agro-food sector, but also
that we cannot neglect the environmental
and social aspects of the entire sector. What
has been grown at home must also be pro-
cessed at home. It can hardly be explained
why we should import raw materials from
across the world if we are able to produce
them at home. I know, it is not the cheap-
est way, but Europe sees to the observance
of its traditions, so let us observe them also
in agriculture and food production, only this
is the way to top-standard production, to
which we are all used and which consum-
ers in third countries expect from European
production.

How active is the Czech Republic in this

respect?
I am pleased to say that it is very active
indeed. The Czech Republic has 24 pro-

5|
 A N A LY S I S

Get Acquainted with Czech Agriculture

Vladimír Melichar, analyst, Czech Capital Information Agency, e-mail: melichar@cekia.cz, www.cekia.cz

Before 1989, Czech agriculture was a strongly
privileged sector within the country’s direc-
tive system, which resulted in its dispropor-
tionate size. In spite of this, its economic ef-
ficiency was relatively high. The transition to
a market economy system put high pressure
to bear on farmers, forcing them to adjust to
the new economic conditions and sales pos-
sibilities as regards the size, structure, and ef-
ficiency of their farming enterprise.
Adjustment to EU
Agricultural Policy
Farming in the Czech Republic comprises
all crops characteristic of the country’s geo-
graphical position and its climatic condi-
tions. In addition to all the main grain crops
(wheat, barley, rye, oats, and maize), farmers
grow sugar beet to make sugar, potatoes, oil
bearing plants (rape), flax, hops, fruit, veg-
etables, and grapevine. The livestock sector
its ownership and to higher rentals, and the
enlargement of the eco-farming area by ap-
prox. 40% in comparison with the pre-entry
period. At the same time, higher claims were
placed on farmers resulting from participa-
tion in the EU Common Agricultural Policy,
while the structure of the Czech national
economy was brought closer to that of the
EU, which resulted in a reduced share of agri-
culture, forestry, and fisheries in GDP genera-
tion and employment.
Analysis of Agricultural Entities
At the end of 2009, altogether 115 674 busi-
ness entities were registered in the Czech
Republic, whose core business was agricul-
ture, game keeping, and related activities.
79.4% of this figure was accounted for by
natural persons and 36.2% by enterprises
(dominated by limited liability companies),
cooperatives and other entities. The core
ance of standards applying to breeding
equipment technology, environmental
protection, and other hygienic regulations.
After the country’s accession to the EU and
the opening up of its market, Czech agri-
culture was faced with growing imports
of cheaper foodstuffs. Self-sufficiency in
vegetable products, with the exception of
rape, has greatly increased and in all these
commodities domestic production ex-
ceeds domestic demand. In livestock pro-
duction, on the other hand, self-sufficiency
has been reduced.
Poultry Is Growing,
Cattle Declining
Livestock production covers commodi-
ties such as meat, milk, and eggs, which
are placed on both the domestic and for-
eign markets. The animal category has also
declined, especially as regards sheep and

produces mainly cattle (for milk and meat
production), pigs, and poultry. Products of
the Czech agrarian sector are used for both
final consumption and further processing,
especially in the food industry. The Czech
Republic’s agrarian policy has developed
in two stages. The first stage (revitalisation),
focusing on the recovery and stabilisa-
tion of the farming sector, was terminated
in 2001, while the second stage (adapta-
tion) concerned itself with the institutional
preparation of the country’s accession to
the EU. The concept of the second stage
(adaptation) was aimed at the fastest pos-
sible general adaptation to the conditions
of the EU Common Agricultural Policy in all
its areas (structural, regional, environmental,
and rural).
Support to Agrarian Sector
An important milestone in the development
of the sector was the Czech Republic’s acces-
sion to the EU (1 May 2004). For the agrarian
sector, it meant a more than double growth
of support it received and an important
increase in the share of EU states in Czech
agrarian trade (in exports, a rising share of
raw materials, in imports, a growing share
of products with higher added value). This
was accompanied by greater interest in farm
land, leading to changes in the structure of
Photo: www.sxc.hu
business of most enterprises (50.2%) ac- goat breeding. Cattle and pigs, too, have
cording to the register was combined pro- witnessed a decline in production. On the
duction. Engaged in pure crop production other hand, the poultry sector has been
are 11.9% of enterprises and 9.5% enter- growing.
prises devote themselves to pure livestock
production. The overwhelming major-
ity (90.7%) of companies are controlled by
Czech entities. Besides conventional agri-
cultural primary production, a number of
enterprises pursue additional activities, add-
ing value to their own production, such as
seed, fertiliser, and fodder mixture produc-
tion and sale, slaughter-house operation,
food production, agricultural services, rental
of farm machinery, etc. In connection with
environmentally friendly energy production
requirements, Czech farmers have greatly
increased the cultivation of crops suitable
for that purpose, such as rape, which is also
used for bio-fuel production. Another such
crop is sugar beet.
Competition Is Growing
Since the beginning of the 1990s, the share
of agriculture in the country’s economy
and in total employment has been declin-
ing, with a gradual dampening down of
activity in certain manufacturing branches
within the sector. The main causes are
growing competition pressures and addi-
tional investments needed for the observ-

|6
 C Z E C H E C O L O G Y A N D A G R I C U LT U R E
Arable Land Is in the Lead
Farmland in the Czech Republic covers an
area of 4.2 million ha. The decisive part of
this area is arable land, on which different
crops are rotated depending on the specific
production region and the farmer’s own
choice. Permanent cultures are grass stands,
grape vine and hops. The most widely
grown crops are cereals, covering an area of
approximately 1.6 million ha, the largest pro-
portion of which each year is accounted for
by wheat and barley. For the past few years,
fodder crop, rape, and technical sugar beet
cultivation has been on the decline. How-
ever, despite the general decline, Czech ag-
riculture as a whole is showing a production
surplus.
Development after Joining the EU
After the Czech Republic’s accession to the
EU, the share of EU states in Czech agrarian
trade increased significantly. Logically, the
country’s foreign trade turnover rose sub-
stantially, with slightly lower dynamics of ex-
ports; the overall balance of trade, however,
remains unfavourable. Trade with third coun-
tries has been limited. The Czech Republic’s
accession to the EU also meant higher trade
exchange in eco-farm products (by 40% in
comparison with the pre-entry period). After
joining, agro-environmental measures were
introduced and money spent on eco-agro
policy has practically trebled in comparison
with the period before entry.
Agro-tourism
The number of people working in agricul-
ture has dropped to one-quarter of the
pre-1989 level. After joining the EU, year-
on-year decreases stabilised at 2% to 3%,
which means a faster decrease in farming
jobs than in the rest of the EU. The compet-
itive environment on the commodity mar-
ket forces farmers in the EU to set up pri-
mary production enterprises with the aim
of raising their own competitiveness. Such
entities hold an important position, there
are strong marketing organisations linked
horizontally and vertically (production
– processing – marketing). In this respect,
the Czech Republic is still lagging behind
the EU, in a number of commodities mar-
keting organisations are far from having
a significant, let alone a decisive share of
the market. Nevertheless, the situation is
changing gradually. For domestic farmers,
agro-tourism still represents a mere alter-
native source of income and is developing
very slowly. Domestic demand is limited
primarily by the domestic phenomenon
of holiday cottaging. Approximately one-
third of agro-farm clients are foreign tour-
ists (mostly from Germany, Poland, and the
Netherlands), whose favourite destinations
are the Šumava, South Bohemia, and the
Krkonoše (Giant Mountains).
Recommendations for the Future
Czech agriculture will continue to be under
the pressure of rising labour and land costs.
Investments are needed in technological
modernisation with the aim of raising pro-
ductivity of labour and overall production
efficiency, in addition to “non-productive”
investments linked with the ever stricter
cross-compliance requirements and other
legislative restrictions. In the years to
come, the land market will open up fully
to buyers from EU states and third coun-
tries. The most sensitive problem is live-
stock production with all the scenarios of
the EU Common Agricultural Policy giving
absolute predominance to vegetable pro-
duction and massive reduction of livestock
production.
The article is based on the Agriculture Sec-
tor Analysis published by the Czech Capital
Information Agency (www.cekia.cz), which
concerns itself with supplying economic in-
formation about firms.
7|
 INVESTMENT
Building of the Zlín Technology Centre after reconstruction
Brownfields to Turn into Shopping
Centres and Eco Farms
Jiří Sochor, e-mail: jiri.sochor@czechinvest.org, www.czechinvest.org
Abandoned and neglected brownfield lo-
calities cover more than three hundred
square kilometres on the map of the Czech
Republic. Fortunately, not all lie next to each
other – if they did, the three hundred square
kilometres would be equivalent to a city of
half a million. For an area of just this size,
public support in the order of billions of
euros can be drawn thanks to the European
Union and national grants.
Dilapidating industrial structures, aban-
doned farmsteads of former agricultural co-
operatives, derelict housing estates, former
military areas, unused factories and old cas-
tles falling apart. The list of brownfields scat-
tered all over the Czech Republic would be
very long indeed. After all, perhaps the same
as in any other country. In the Czech Republic,
there are more than 11 000 such localities ac-
cording to CzechInvest Agency, which is try-
ing to manage their regeneration centrally.
At least some of them, especially those
near large city centres, provide interest-
ing investment opportunities. Their sup-
|8
ply, however, has been declining in recent
years. Large repaired brownfield projects, or
projects still under reconstruction, are to be
found in Prague, Brno, Ostrava and practi-
cally in all larger cities across the country.
The cooling down of global economy,
however, has resulted in a slowing down
of project re-generation or postponement
until a later time. On the other hand, the
burst of the property bubble made brown-
field owners in the city centres speculating
on further property price rises and reluc-
tant at the moment to sell dilapidating
buildings in attractive localities, start think-
ing. Moreover, the property bubble was
not extremely inflated in the Czech Repub-
lic, and subsequently for the past two years
property prices have been rather stagnant,
as they did not have anywhere to fall.
Billions from the EU
Very interesting in this connection is the fact
that the European Union has resources from
which it makes generous contributions for
the regeneration of abandoned cultural
complexes, and from which projects in the
Czech Republic, too, can benefit. Support
can be obtained from 13 EU or national
subsidy programmes. Dozen billion crowns
can be obtained for projects ranging from
railway siding reconstruction to the build-
ing of new research and development cen-
tres. When choosing a suitable subsidy pro-
gramme, one has to decide first of all what
purpose the brownfield should serve. The
Business and Innovation Operational Pro-
gramme can help investors wishing to use
the recuperated area for manufacturing in-
dustry projects, strategic services or applied
research and development; for brownfields
to be used in agriculture after revitalisation
investors can draw support from the Rural
Development Programme.
In other cases, support can be obtained
from Regional Operational Programmes.
Projects in Prague are supported by the
Prague – Competitiveness Operational Pro-
gramme. Contaminated brownfield sites
can draw support from the Environment
Operational Programme. This programme
also supports the decontamination of
Photo: Pavel Kostelník
brownfields in protected areas. In addition,
there are also national subsidies, such as
the Programme for the Support of Business
Property and Infrastructure Development,
 C Z E C H E C O L O G Y A N D A G R I C U LT U R E
administered by CzechInvest Agency. Each
year, the Ministry for Regional Development
also launches support programmes for
army brownfields coming under commu-
nity ownership.
Helpful Administration
A great advantage of abandoned industrial
complex regeneration projects is that they
are unlikely to run up against opposition
from the authorities. This may be of key im-
portance for certain branches of business.
Squeezing a new foundry into the regional
development plan would need a good deal
of courage from the mayor. If, however, such
a project is to be set up on a site where activ-
ities in the same line of business were oper-
ated maybe for decades except the past few
years, the investor will not only find a quasi-
developed infrastructure and trained and
experienced employees, but also a warm
reception from the local population.
The essential problems of brownfields in
the Czech Republic – as in any other coun-
try anywhere in the world – is that dozens of
owners may claim possession of one site. Of
course even the claim by just one of them
may be a problem, and the regeneration
may come to nothing. The second problem
is that physically it is not possible to describe
in detail the more than 11 000 brownfields
which can be found on the map of the
Czech Republic.
Brownfields Online
CzechInvest Agency helps in solving both
problems with its online database of Czech
brownfields (ww.brownfieldy.org/). Cur-
rently, the database offers several hundred
brownfields described to the slightest de-
tail, which are prepared for regeneration,
with all property issues already solved.
The database is freely available 24 hours
a day from anywhere. It has been in opera-
tion since 2008, when one of the stimuli for
its launching was the experience of an en-
terprise in the north-east of the Czech Re-
public. The core business of the enterprise
is metalworking. A few years ago, the enter-
prise was faced with the problem of space,
which at that time was not sufficient for it
to cope with its new orders. Considering
the line of its business, the brownfield was
a clear choice. The firm’s managers spent
several weeks searching for an ideal site to
meet their expansion plans. In the end, they
found an ideal brownfield completely by
chance on their way home from one of their
visits to another brownfield.
Before setting up the database, CzechIn-
vest undertook a study, the first ever to be
compiled, which mapped all brownfields in
the Czech Republic. One of the very positive
conclusions of the study was that only 7%
of Czech brownfields were provably affect-
ed by an ecological burden. On the other
hand, however, another 37% of such locali-
ties may be assumed to have such a burden.
Nevertheless, this means that not more than
under 50% of brownfields in the Czech Re-
public are contaminated, which in itself is an
unexpectedly good result.
Look for a Tractor
on the Brownfield
Most brownfields in the Czech Republic
have their origin in agriculture, followed
immediately by industrial activity. Taken to-
gether, they account nearly to the dot for
two-thirds of all brownfields in the country.
Also important is the share of brownfields
from abandoned houses of culture, stores
and other such facilities. Together with
housing, these two categories account for
over 15% of all abandoned complexes in the
Czech Republic. A scar on the map has been
left by the army, which is responsible for 5%
of all localities.
As regards the area of the brownfields, the
situation is considerably different. The share
of army grounds, for example, will jump
from the original 5% to nearly one-quar-
ter. This shows that the former shooting
grounds and barracks and other facilities of
the former Czechoslovak People’s Army oc-
cupied an absurdly vast area of the country’s
surface at the time of the Warsaw Treaty. The
share of industrial brownfields, in terms of
surface area, too, is very large, accounting
for more than 40% of the total area. After
1990, a number of overgrown giants, fed by
centrally-managed economy, went bank-
rupt, and the brownfield areas left behind
are beginning to be turned into industrial
parks or are being re-built into residential
quarters. About 20% of the total brownfield
area remains for agriculture, which is still
a very important figure.
What Next with Czech
Brownfields?
Besides the original purpose of brownfields,
the study prepared by CzechInvest also con-
cerned itself with proposing their ideal new
use in the particular locality. This was done
on the basis of the history of the locality,
previous activities pursued there, the geo-
graphical position of the brownfield, and
everything that could be important for the
ideal new use of the site.
It is not surprising that the new recom-
mendations completely eliminated the
army. On the other hand, the share of
brownfields recommended for “mixed ur-
ban functions”, a good technical term for
PRAGUE: PALLADIUM
The former owner of land on which the Palladium
shopping centre was constructed a few years ago
was, from the 1780s, the army, which built a vast bar-
racks complex there, complete with spacious stables.
A number of famous personalities of the Czech nation
served at the barracks. Worth mentioning is Czech
dramatist Josef Kajetán Tyl, actor, novelist, and jour-
nalist, who composed the Czech anthem there. The
army owned the former George of Poděbrady Barracks
for the next two centuries until 1996, although in the
latter half of the 20th century it did not practically
use it and the whole compound went into decay. At
the time when the barracks were used by the army,
the compound was closed to the public. Finally, in the
early 1990s, the Ministry of Defence decided on its
more suitable use.
BRNO: VAŇKOVKA
Vaňkovka, since 2005 serving as a shopping and cultural
centre, stands in the place of a former factory founded in
1865. The structure comprises some of the original build-
ings of the former factory, to which new structures have
been added. In the reconstructed building of the original
machine plant in the eastern part of the original factory
now stands the Wannieck Art Gallery. The name Vaňkovka
is the distorted name of the German founder and original
owner of the former factory. The reconstructed buildings
of the original factory are examples of neo-Gothic indus-
trial architecture.
OSTRAVA: KAROLÍNA
Karolína is a vast regeneration project standing in the
place of a former coal mine and coking plant. Histori-
cally on the outskirts of Ostrava, the complex has become
completely encompassed by the massive development of
the city, so that on completion New Karolína will link up
smoothly with the now historic parts of the city. Coal min-
ing in the locality started in 1837, and the coking plant
was established in 1858. Both activities grew massively
with time. Coal was brought to the plant by cable-cars
from several galleries. In addition to coke, the plant also
made briquettes. In 1905, an electric exchange was built
there, which supplied the galleries with power. The cok-
ing plant closed operations in 1964, the electric exchange
closed down ten years later. Two of the administrative
buildings have been preserved and are protected as reg-
istered monuments.
9|
 INVESTMENT

small businesses, gymnasiums, cinemas,
theatres, cultural facilities, playgrounds
etc., increased significantly. This indicates
that originally a large number of today’s
brownfields were located on the outskirts
of towns. The dramatic town development
over the past few years, however, has sur-
rounded these localities by new construc-
tion, and renewing former factories now
standing in the middle of a residential
quarter wouldn’t make much sense.
On the other hand, somewhat surprising
may be that the study has recommended
an even larger number of brownfields for
industry than the original number of such
structures. At the same time, however, the
recommended use for most of such sur faces
is a combination of light industry manufac-
ture and services, i.e. the combination of
small-scale industrial production with shop-
ping centres.
A similar situation exists in agriculture. The
centrally planned economy produced huge
collective farms in agriculture, which associ-
ated farmers from far and wide. This is where
heaps of infrastructure were left behind,
which could hardly be used for good ben-
efit over the past twenty years. Here, too, the
study in a number of localities recommended
the combination of agriculture with other
activities – eco-farms, accommodation in
a natural environment, restaurants, and other
such structures and activities.
In the Czech Republic, as in other indus-
trialised economies the world over, oppor-
tunities for greenfield investment are be-
coming scarce. As a result, brownfields are
necessarily becoming increasingly attrac-
tive. Ideally, in the long term, would be for
brownfields to be equally attractive for new
investments as greenfields. This of course is
a very ambitious goal, so that a realistic tar-
get will be bringing the attraction of brown-
field investments as close to greenfield ones
as possible.

PREVIOUS USE OF BROWNFIELDS - NUMBER

civic
Region/use army housing tourism industry agriculture other
amenities
South Bohemia 21 20 1 32 62 68 8
South Moravia 19 1 0 17 72 64 9
Karlovy Vary 11 8 2 46 66 33 34
Hradec Králové 18 11 0 41 78 81 15
Liberec 2 9 7 30 79 52 23
Moravia-Silesia 9 2 0 29 116 50 26
Olomouc 10 9 5 24 35 105 18
Pardubice 11 13 0 12 60 79 6
Plzeň 24 5 0 26 62 95 2
Central Bohemia 11 1 0 8 35 34 3
Ústí nad Labem 9 12 7 18 87 100 24
source: CzechInvest

Vysočina 1 4 0 21 22 43 7
Zlín 5 0 0 0 11 17 2
TOTAL 151 95 22 304 785 821 177

PREVIOUS USE OF BROWNFIELDS - SURFACE

civic
Region/use army housing tourism industry agriculture other
amenities
South Bohemia 38.47% 8.04% 0.12% 1.57% 27.16% 22.49% 2.15%
South Moravia 19.33% 0.17% 0.00% 3.37% 52.48% 23.11% 1.56%
Karlovy Vary 17.78% 0.56% 0.06% 3.40% 43.00% 12.19% 23.02%
Hradec Králové 44.24% 0.48% 0.00% 3.19% 27.10% 20.40% 4.59%
Liberec 10.61% 1.07% 2.03% 6.27% 45.13% 29.35% 5.56%
Moravia-Silesia 10.41% 0.26% 0.00% 4.02% 63.95% 6.71% 14.65%
Olomouc 34.18% 1.54% 0.30% 1.97% 26.78% 28.87% 6.35%
Pardubice 37.91% 1.14% 0.00% 0.71% 41.55% 13.43% 5.22%
Plzeň 35.75% 0.13% 0.00% 2.65% 32.04% 24.47% 4.97%
Central Bohemia 21.09% 0.48% 0.00% 6.37% 38.39% 28.49% 5.20%
Ústí nad Labem 4.44% 0.55% 1.03% 0.77% 50.18% 15.15% 27.88%
source: CzechInvest

Vysočina 41.56% 0.06% 0.00% 20.70% 7.06% 12.42% 18.19%

Zlín 17.65% 0.00% 0.00% 0.00% 55.52% 24.85% 1.99%
TOTAL 23.10% 0.90% 0.22% 4.03% 42.64% 18.08% 11.04%

|10
 L E G I S L AT I O N
Investments in Renewable Energy
Sources in the Czech Republic
Jakub Adam, Markéta Pašková, Wolf Theiss Advokáti, s.r.o.,
e-mail: jakub.adam@wolftheiss.com, marketa.paskova@wolftheiss.com, www.wolftheiss.com
In the EU Accession Treaty, the Czech Re-
public committed itself to raise the propor-
tion of electricity made from renewable
sources to 8% of gross electricity consump-
tion by 2010. Within the meaning of the
law, renewable sources are renewable non-
fossil natural energy sources such as wind
energy, solar energy, geothermal energy,
hydropower energy, soil energy, air energy,
biomass energy, landfill gas energy, sewage
gas energy, and biogas energy.
FINANCIAL INCENTIVES TO
PROMOTE ELECTRICITY
GENERATION FROM
RENEWABLE SOURCES
Feed-in Tariffs or Green Bonuses
As investment in renewable energy sources
would most probably not be profitable for
potential investors without further incen-
tives, the Czech Parliament passed Act No.
180/2005 Coll., on the promotion of use of
renewable sources (“Renewable Sources
Act”) in 2005, to promote the use of renew-
Photo: www.sxc.hu
able energy sources and ensure continuous
increase in the renewable energy share in
the consumption of primary sources of en-
ergy; the Act gives investors the option to
choose between two incentives to renew-
able energy generation: guaranteed feed-in
tariffs for electricity supplied into the grid
(feed-in tariff ), or “green bonuses”, a sur-
charge on the generated electricity which
is used directly by the producer or sold di-
rectly to the producer’s customer. The Act
hereby transposes Directive 2001/77/EC of
27 September 2001, on the promotion of
electricity produced from renewable energy
sources in the internal electricity market.
These two types of incentives may not
be combined in a single calendar year. The
producer of electricity is obliged to inform
the transmission system operator by 30 No-
vember each year of the incentive for which
they opt for the following calendar year as
of 1 January. In the case of newly built facili-
ties, the notification must be made no later
than one month before the launch of the
production.
The level of feed-in tariffs and green bo-
nuses is set annually by the Energy Regula-
tory Office (“ERÚ”) in its decrees (the current-
ly applicable ERÚ Price Decisions are Nos.
4/2009 Coll. and 5/2009 Coll.). The green bo-
nus consists in a premium on the electricity
market price. A producer of electricity that
sells electricity generated from renewable
energy sources at an agreed market price
to any end customer or electricity trader, or
that directly uses the generated electricity,
is entitled, upon the submission of relevant
documents, to collect green bonuses on top
of the price from the transmission system
operator (TSO) or the regional distribution
operator. The drawback of the green bonus
system is its higher risk, as the producer has
no guarantee of selling all the generated
electricity on the market, and of the price. It
must actively seek its electricity consumers
and negotiate the purchase price.
Interesting Investment
Opportunity
The minimum incentive period guaranteed
to the investor for generating electricity from
renewable energy sources is 15 years from
putting the generating facility into opera-
tion, which is an interesting investment op-
portunity. The maximum incentive period is
not explicitly specified by the Act. The ERÚ
Regulation (a piece of secondary legislation
of lesser legal force), however, stipulates that
the feed-in tariff is guaranteed for the lifetime
of the electricity generating facility. The life
expectancy pursuant to the ERÚ Regulation
is 30 years for small hydro-plants, 20 years for
biomass, biogas, wind, geothermal, and pho-
tovoltaic power plants, and 15 years for sew-
age, landfill, and mine gas power plants.
Investors receive feed-in tariffs or green
bonuses in the amount set by the ERÚ Price
Decision effective in the year in which the
facility was put into operation; feed-in tar-
iffs – except for biomass and biogas incin-
eration plants – are indexed by a minimum
of 2% and a maximum of 4% year-on-year
depending on the industrial price index de-
velopment. When designing a new facility,
,investors may take the ERÚ Price Decision
as a guide, as the feed-in tariffs set by ERÚ
for the following calendar year may not be
less than 95% of the feed-in tariffs applica-
ble in the year in which the decision on the
new feed-in tariffs has been made.
The Senate is currently debating a Govern-
ment Bill to the Renewable Sources Act al-
ready passed by the Chamber of Deputies of
the Czech Parliament, which is to change the
guaranteed feed-in tariffs for renewable en-
ergy from those sources whose rate of return
is less than 11 years. This change will concern
especially photovoltaics, where, as a result of
the reduction of photovoltaic panel prices by
up to 40%, investment costs have declined
11|
 L E G I S L AT I O N
significantly (their rate of return is allegedly
estimated to be 8 to 10 years). Under the cur-
rent legislation, ERÚ may reduce the feed-in
tariff for electricity generated by new facilities
by mere 5% year-on-year. ERÚ estimates that
if the Government Bill is passed, solar electric-
ity feed-in tariffs will be reduced by 30% start-
ing from 2011.
Tax Benefits
Income from the operation of small hydro-
electric power stations with an output up
to 1 MW, income from wind power stations,
heat pumps, solar facilities, facilities for the
production and use of biogas and wood gas
for energy purposes, biomass-based elec-
tricity and heat generation facilities, facilities
for the production of biologically degrada-
ble substances defined by special regula-
tions, and facilities for the use of geothermal
energy are exempted from personal and
corporate income tax in the calendar year in
which the facilities were first put into opera-
tion and in the following five years.
Other Potential Advantages
The Ministry of Industry and Trade and the
Ministry of the Environment offer subsidies
|12
for “green energy”. The recipients of the
subsidies, however, are restricted to private
individuals and municipalities. Other incen-
tives can be obtained for combined electric-
ity and heat generation and for secondary
sources of energy.
LEGAL FRAMEWORK FOR
RENEWABLE ENERGY
GENERATION
Conditions for running business in the area
of electricity generation are regulated main-
ly by Act No. 458/2000 Coll., on business
conditions and public administration in the
energy sectors and on other amendments
(“Energy Act“). The Energy Act sets out con-
ditions under which ERÚ may issue licences
for energy generation, transmission, and
distribution. This Act transposes Directive
2003/54/EC of the European Parliament and
of the Council concerning common rules for
the internal market in electricity and Direc-
tive 2003/55/EC of the European Parliament
and of the Council concerning common
rules for the internal market in natural gas.
The use of renewable sources is regu-
lated primarily by the Renewable Sources
Act mentioned above and by the ERÚ Price
Decisions, which stipulate the level of feed-
in tariffs and green bonuses. As mentioned
above, the applicable decisions for 2010
are Decisions Nos. 4 and 5/2009 Coll. The
electricity market rules are set out by ERÚ
Regulation No. 541/2005 Coll. Decrees Nos.
475/2005 Coll., 51/2006 Coll., and 140/2009
Coll. were used as a basis for the implemen-
tation of certain provisions of the Renew-
able Sources Act, for setting the conditions
for connecting the sources to the grid, and
for electricity price regulation. Specific con-
ditions for the use of biomass in electric-
ity generation are laid down by Regulation
No. 482/2005 Coll. of the Ministry of the
Environment.
Licensing Procedures
The following steps must be taken be-
fore electricity generation from renewable
sources may start:
1. Prove the title to the land and buildings, if
applicable, where the electricity generat-
ing facility is to be built (ownership title to
the property, tenancy).
2. Perform fact-finding procedure under Act
No. 100/2001 Coll. on the Environmental
Impact Assessment (“EIA“). The procedure
is required especially for the following
projects:
 Fuel incineration facility with rated heat
output of 50 MW to 200 MW;
 Wind power plants with total installed
output of more than 500 kWe or with
tower height exceeding 35 m;
 Hydro-power plants with a total in-
stalled output capacity 10 MWe and
above;
 Hazardous waste disposal facilities;
 Projects that might affect bird protec-
tion areas and natural sites of European
importance.
Facilities with outputs below the above-
mentioned levels are subject to EIA only if
the authority concerned has issued a de-
cision to that effect. The actual procedure
lasts 5-8 months; in case that special docu-
ments have to be prepared, it may last up
to two years.
3. Change of the zoning plan in case that
the existing zoning plan does not allow
Photo: www.sxc.hu
for the construction of a power plant.
4. Obtain the zoning and building permits.
The competent authority is the building
 CZECH TOP
office of the relevant municipality. The
building office, similarly to other admin-
istration authorities, has to issue its deci-
sion within 30 days from the opening of
the proceedings; in more complicated
cases the period may be prolonged by
another 30 days.
Binding positions of the respective au-
thorities must be obtained for the issu-
ance of the zoning and building permits.
The respective authorities issue their posi-
tions within the same statutory deadlines
as the building office. Depending on the
location of the land, the following author-
ities may be involved in terms of public
interest protection:
 Authorities of environmental protec-
tion, nature and landscape conserva-
tion, water management, farmland
protection;
 Authorities of forest conservation, air
protection, and waste management;
 Health-care authorities;
 Railway administration office;
whereas the relevant state administration
tasks are usually performed by respective
departments of the concerned munici-
pality authority.
5. Obtain the final approval for use of the
electricity generation facility. The com-
petent authority is the building office of
the relevant municipality, whose deci-
sions are subject to the above-mentioned
deadlines.
Champion among Czech Vintners
Miroslav Majer, Vinselekt Michlovský, a.s., e-mail: majerm@michlovsky.com, www.michlovsky.com
Czech vintners know their 2009 champion.
The wine-maker of the year is Vinselekt
Michlovský, based in the well-known vine-
growing village of Rakvice in South Mora-
via. It persuaded the jury not only with the
excellent taste of its wines, but also its sen-
sitive approach to vine-growing. Vinselekt
thus became the historically first winner of
the new competition.
Wine-maker of the Year –
a Somewhat Different
Competition
The Wine-maker of the Year 2009 compe-
tition was announced by the Wine-mak-
6. Obtain the licence from ERÚ for electricity
generation. In specific cases, the licence
may be obtained before the issue of the
final approval for use. Licences are issued
for no more than 25 years.
The preconditions for individuals to ob-
tain the license are: (i) minimum age of 21
years, (ii) full legal capacity, (iii) integrity,
and (iv) professional competence, or the
appointment of an authorised representa-
tive, where professional competence usu-
ally means completed technical university
education plus three-year experience in the
field, or completed secondary technical ed-
ucation plus six-year experience in the field;
for smaller facilities, lower-level education is
usually sufficient.
For legal entities, conditions (i) to (iii)
must be met by members of the statutory
body. A condition for awarding a licence to
a legal entity is also the appointment of an
authorised representative. The person ap-
plying for the licence is required to prove its
ownership title to or the right of use of the
power generation facility to be used for the
licensed operation, or the consent of the fa-
cility owner. The applicants must also prove
their financial capacity for the operation for
which the license is required, and the capac-
ity to discharge their obligations for at least
five years.
7. To have the facility connected to the
grid, the producer must file (i) a written
ers’ Fund and the National Winery Centre
in co-operation with the Association of
Wine-makers of the Czech Republic. The
prestigious title is awarded as an all-round
appreciation of the winery which in the
previous year best proved a steadily out-
standing quality of its wines, carried awards
from domestic and foreign competitions,
participated in promoting Czech wines
at trade fairs and exhibitions, organised
dissemination activities and wine tourism
events for the public, and used innova-
tive technologies in vine improvement
and cultivation and in wine making. The
aim of the competition was choosing the
application, supported by (ii) the con-
sent of the transmission or distribution
system operator, and (iii) a contract on
connection between the applicant and
the transmission or distribution system
operator. The operator is required to
give priority to plants generating elec-
tricity from renewable energy sources
if the producer applies for connection
and meets the conditions for electricity
connection and transmission under the
Energy Act.
8. The last step is a contract with the
transmission or distribution system op-
erator on electricity supplies or a con-
tract on the payment of green bonuses
(see above).
Acquisition of Projects
in Progress
As it is obvious from the above, the li-
censing procedure is not a simple affair.
Potential investors in renewable energy
may want to purchase a project already
in progress, at a certain stage of comple-
tion. In view of the current uncertainty
regarding possible reductions of feed-in
tariffs for electricity obtained from solar
power stations beginning from 2011, an
interesting alternative is the purchase
of solar power stations already erected
and connected to the grid, where the
projection of future revenues is quite
simple.
best domestic firm which breaks rank in
a positive way among wine-making com-
panies. The wine-maker of the year com-
petition differs significantly from standard
competitions in the country, in which the
competing wines are those selected by in-
dividual makers.
The Wine-maker of the Year 2009
competition assessed the vineries’ work
throughout the year, using a number of
criteria. In mid-January 2010, the assess-
ing commission visited five vineries which
had won the most nominations, awarded
points to them, and finally chose the of-
ficial winner.
13|
 CZECH TOP
Bio Wine, Winner of Vinex Grand
Prix Competition
Vinselekt vinery is linked with the per-
sonality of Miloš Michlovský, currently
one of the most important Czech vine
growers. A pioneer in biological vine cul-
tivation, he farms 8 hectares of eco-vine-
yards and sells not only wines, but also
ciders made from grapes bearing the BIO
label. For his wine Hibernal 2008 late col-
lection BIO, he won the champion title
at the Grand Prix Vinex competition. It is
the first time in the seventeen-year his-
tory of this competition that the cham-
pion was a bio-wine. The untraditional
Hibernal variety has minimum require-
ments for chemical protection. With its
primacy, Vinselekt Michlovský defended
its last year’s victory in competition with
another wine.
Vinselekt Michlovský company is his-
torically one of the most successful par-
ticipants in this competition. It won its first
Vinex title in 2006, and in 2010 gained the
prize for the best single maker wine collec-
tion. The competition was entered by 373
Miloš Michlovský, the founder of Vinselekt
|14
Vinselekt Michlovský a.s., established in 1993, in 2003 became a joint-stock company. Today it
has about 60 employees. It has 120 hectares of vineyards, where cultivation strictly observes
integrated production rules, with part of the area practicing ecological vine-growing. In addi-
tion to its own grape production, it purchases about the same quantity from other suppliers
under long-term contracts, who observe the same strict rules and instructions. The company’s
annual production is more than one million bottles of wine.
The highest production series is Premier, wines with a distinct taste of wines made from per-
fectly matured grapes processed by the most natural technologies and bottled without filter-
ing. The Premier series include Vinum Palaviense with certified origin of the grapes coming
from Pálava’s limestone hills, Chateau Dowina – extractive wines with a characteristic bou-
quet, ripening in French oak barrels. Other product series are Latitude 49, Harmony, Passio
Christi, Standard, and Private Archive for collectors. A separate category are original bottle-
fermented effervescent wines Crémant de Vinselekt .
samples, with one in every ten samples should have reflected
being a foreign entry. our 2009 results, I think
the Jury also took into
Vinselekt Michlovský account our ‘merits’ of
Collecting Prizes the previous year, our
At the Wine-maker of the Year prize award continuing and unending innovations,
ceremony, the owner of the company, Miloš the improvement and successful launch-
Michlovský, commented on his remarkable ing into practice of new hardy varieties,
success saying: “I am tremendously happy the large number of wines we have been
that the first title in history has been as- sending to the Wine Salon of the Czech
signed to our Vinselekt. Although accord- Republic each year, and our successes in
ing to the competition statutes, the award regional, national, and international wine
competitions.”
In the past few years, Vinselekt
Michlovský wines have been cham-
pions in probably all Czech competi-
tions. At Austria’s Awc-Vienna, Vinselekt
Michlovský a.s. figured repeatedly among
the world’s 100 best vineries, Vinselekt
wines were decorated with MUNDUS Vini
gold and silver medals in Germany and
at Vinalies Internationales in France. Pál-
ava 2007 grape selection is the first wine
in the history of Moravian viniculture to
become absolute champion in a world
competition – Terravino Israel – held un-
der the auspices of O.I.V.
Miloš Michlovský, owner of the compa-
ny, appreciates the prestigious titles they
have won, but at the same time says, in
exaggeration, that they actually did not
deserve the credit. “First of all I must thank
the vineyard and the wine. The wine is the
winner.”
Wine is doing well in the Czech Repub-
Photo: Vinselekt archives; www.sxc.hu
lic, its consumption over the past few
years has been rising. While in 1993 wine
consumption amounted to 12 litres per
person and year, now it ranges around
17 litres. Even so, however, the Czech
Republic is lagging behind the rest of
Europe, where average consumption is
between 25 and 32 litres.
 WE ARE INTRODUCING
Crisis Boosting Demand for “Green Buildings“
These days, we are witnessing a growing
demand for low-energy, or at least energy-
saving residential building projects. In com-
mercial construction, this trend is as yet not
so much in evidence, but even there the
number of “green buildings” is steadily ris-
ing. A favourable feature is that the would-
be tenants of those buildings are becoming
increasingly aware that at the cost of higher
rent they will save on energies.
Interest in “Green Offices”
It might be expected that at the time of
economic crisis all firms looking for office
space will only be interested in the locality
– standard – price combination. Surprising-
ly, it is not so. Recently, it has appeared that
with the decline in commercial office space
rentals would-be tenants and owners are
increasingly willing not only to buy “cheap”,
but also to invest in “green buildings”.
Environmentally friendly buildings are in
short supply, and so certain tenants and buy-
ers are willing to invest in re-building their inte-
riors so as to create a better working environ-
ment, but also to obtain a certain certification
label used for energy-saving buildings, which
can also be obtained for separate spaces.
There is no uniform system in the world to
assess buildings with regard to environmen-
tal aspects. In a number of states there are
non-government organisations dealing with
this issue. In the USA, the best-known certifi-
cation label is LEED (Leadership in Energy &
Environmental Design), in the UK it is BREE-
AM, in Germany DGNB. All these systems dif-
fer from each other, but in principle all assess
the “friendliness” of the building and its parts
to the environment and its users.
Purchase Costs
To obtain the certificate, the building or the
office spaces must meet specific require-
ments, for which points are allotted and the
total number of points then determines the
particular category. The LEED certification
system has three degrees, and to attain the
highest – platinum – practically all require-
ments must be met. The range of the areas
concerned is very wide. Emphasis is placed
not only on the location of the building (good
public transport accessibility), the materials
used, which must be based on renewable
sources and provided by local suppliers, the
use of renewable energy sources and various
saving measures, but also things such as the
possibility of using a bike for transport.
The purchase costs of environmentally friend-
ly buildings are somewhat higher, but in future
they will yield considerable savings. Also, it is to
be expected that companies will give priority to
“green buildings” and a good working environ-
ment, that they will take the environment into
consideration, and in return will gain the benefit
of lower operating costs and other advantages.
Low Energy Intensiveness
In view of the global economic crisis and
problems with developer project financing,
the number of “green buildings” is not grow-
ing so fast. The keen interest of investors in
these buildings, however, is putting pres-
sure on building them. The recently pub-
lished survey carried out by Skanska Office
Index reveals that in looking for new office
space, Czech firms place emphasis on the
following factors: satisfaction of employees
and a good working environment, parking
availability, and close vicinity of main roads.
As regards cost saving in office spaces, the
most important consideration for Czech firms
is energy cost savings (58% of respondents).
A full 79% of respondents said they accept-
ed measures to reduce the environmental
impact of their activities. The main eco-activ-
ity of the companies, according to the survey,
is “waste sorting”. The survey also showed
www.cbre.com
that the lowering of energy costs is the most
important factor for Czech firms in looking
for and renting new office space. A full 77%
of Czech respondents also said that in their
opinion, energy saving was an indivisible
part of every ecologically-minded building.
Futurama Business Park
An example of a “green” office building can be
Futurama Business Park Administration Cen-
tre in Prague’s Karlín District. It is designed as
a complex of energy-saving buildings, which
use the most up-to-date technologies. Ac-
cording to the criteria laid down by Directive
2002/91/EC of the European Council on the
energy performance of buildings, the Park was
awarded Class A certification, acknowledging
its high energy-saving standard. There are sev-
eral ways of saving energies in the complex.
For example, the glazing and shading system
is design so as to prevent excessive heat losses
in the winter season and on the contrary to
limit by shading the penetration of outer heat
into the interior in the summer months. The
centrally controlled shading of glazed surfaces
brings up to a 20% saving of energy for cool-
ing in comparison with buildings, which have
no shading system at all. The main heat source
in the complex is a heat pump in combination
with an exchanger station. Heat losses will be
prevented by the cooling and heating system,
which will prevent the simultaneous cooling
and heating of different spaces. The air-con-
ditioning units are designed so as to use the
heat from waste air by recuperation.
15|
 ENTERPRISE
Together to Support Trade Opportunities
Ivan Nikl
In 2004, an export aliance named Czech Water
Alliance (CWA) was established with the help
of CzechTrade government agency, which
is entrusted with activities aimed at facilitat-
ing Czech firms’ entry on foreign markets.
Czech Water Alliance associates Czech firms
with experience in all areas of water manage-
ment; it currently has 14 members special-
ising in investing, construction, designing,
and planning projects concerned with water
management, hydroelectric power stations,
water reservoirs and other structures, pump-
ing equipment, cleaning and revitalisation of
water courses, diagnostics and the treatment
of all types of water (communal, industrial,
etc.), construction and reconstruction of civil
engineering systems for whole residential
quarters and separate units, geology, hydro-
geology, waste-free technologies, control
systems used in ecology and related branch-
es across the entire water economy.
The Alliance is a response to current trends
of the world economy, such as internation-
alising business, merging of competitors,
production outsourcing and raising added
value in procedurally managed companies.
The principal aims of the Alliance are pro-
motion of its members and enhancement
of the reputation of the Czech Republic in
water related issues and their solutions. The
ways of supporting the members of the Al-
liance include the organisation of seminars,
publication of catalogues, overseas cooper-
ation and ensuring participation in presen-
tations and exhibitions, for example in Rus-
|16
sia, China, Libya, Romania, Kuwait, Croatia,
Egypt, Italy, and Greece.
The Alliance as a tool of raising
the competitiveness of
enterprises on foreign markets
In 2004, Czech Water Alliance became one
of the first parts of the Alliance Project of the
Czech trade promotion agency CzechTrade.
The Agency decided to choose the most
advanced Czech export-oriented branches,
which it associated in Export Alliances with
the aim of promoting Czech firms, their
products and technologies, and acquaint-
ing foreign customers with them. “I am
persuaded that Czech water management
firms are absolutely legible to their foreign
partners,” says CWA’s leader Ivan Nikl, direc-
tor of MAEP, s.r.o. in Chomutov.
What is the main aim of the Czech
Water Alliance?
We are trying to improve the position of
Czech firms in the area of service and technol-
ogy exports in water management. Thanks to
the firms associated in this alliance we are in
a position to provide practically the full range
of services, from the presentation of the firms
and their technologies to the preparation of
the project, its delivery and realisation.
To ensure the success of any project, one
has to choose the right strategy. What is
actually your export strategy?
Our strategy is in harmony with the Export
Strategy of the Czech Republic for the years
2007-2011, i.e. promotion of Czech exports.
Our intention is to raise the export share of
services and technologies supplied by the
firms associated in the Alliance. In pursuing
CZECH EXPORT ADVANTAGES
What is the potential of the Czech Republic in exports?
The principal advantages are the country’s well-edu-
cated manpower, reasonable cost of the work of technical
specialists, strategic geographical position of the Czech
Republic in the heart of Europe, and close relations with
Eastern Europe.
WHAT ARE EXPORT ALLIANCES?
An export alliance is an association of firms operating in related
branches of business, whose products or services complement
each other and the aim of which is concerted action and op-
eration on foreign markets. Export alliances are a way of getting
easier access to orders which smaller Czech firms have less of
http://czech-water.czechtrade.cz
this aim, we want to use primarily simple
tools. As before, we want to provide services
for potential foreign clients and furnish sup-
port services to Czech exporters. I must not
forget the efficient use of European funds
available to firms operating in the area of
water management. We are also taking ad-
vantage of the valuable assistance provided
by CzechTrade, which is helping us make the
public aware of the benefits the firms asso-
ciated in CWA bring to the Czech economy.
Which are the benefits Czech
water management firms can
bring to foreign partners?
I am convinced that Czech water manage-
ment firms are absolutely legible to their
foreign partners, mainly thanks to the coun-
try’s membership of the European Union, its
strategic geographic position in the centre
of Europe, and in particular the wide range
of its reference deliveries and realisations
throughout Europe and beyond. I think
that a great asset is the availability of highly
educated and trained experts with a corre-
sponding knowledge of foreign languages.
The products and technologies are unequi-
vocally of the highest world standard. If, how-
ever, we do not make our foreign customers
acquainted with those facts, there can be no
talk of any expansion to foreign markets.
The words which you have just said may
be understood subjectively; can they be
measured in an objective way?
You are right. They may sound subjective.
But they can be easily supported by facts. It
is CWA’s aim that the firms it associates be
continuously benchmarked against foreign
competitors. We make our own surveys to
a chance of winning. The point is to get together an association
of firms that will completely cover a large project, from designing
and plan preparation to the supply of all parts and their assembly,
and with follow-up service. CzechTrade Agency has so far initiated
the creation of 21 export alliances.
SERVICES AVAILABLE
Photo: CWA archivesp
TO FOREIGN PARTNERS
 Czech consulates
 33 CzechTrade offices
 Information service
 Help with choosing a partner
 Business trips and meetings
 Investment help and advice
 C Z E C H E C O L O G Y A N D A G R I C U LT U R E
find out whether foreign companies are in-
terested in firms associated in CWA. In this re-
spect, we cooperate very closely with Czech-
Trade, specifically with the agency’s offices
abroad. We also promote cooperation with
the economic and commercial sections of
Czech embassies in other countries.
You also mentioned services
for foreign partners; which specific
services can you offer?
The character of such services is more or less
informative. Nowadays, information is one
of the most valuable and most expensive
commodities. We want to offer foreign part-
ners assistance in their search for suitable
suppliers in the Czech Republic and offer
them tailor-made business trips and meet-
ings with Czech water management firms.
Where, besides getting information for
your surveys of interest, do you see the
usefulness of CWA’s cooperation with
CzechTrade offices abroad?
The employees of CzechTrade’s foreign of-
fices are the best ambassadors of the firms
associated in CWA we can have abroad.
Their experience and know-how are instru-
ments that lead to the provision of services
for foreign partners, as we said before.
What achievements can CWA and the
firms it associates pride themselves on?
I wouldn’t speak of separate achievements.
We are a team, and the firms associated in
CWA look upon their achievements as the
success of the entire Alliance. Confirmation
of this is the export success, for example of
ASIO, s.r.o. Other successful exporters are Tes-
la, a.s., Centroprojekt a.s., Vapo, s.r.o., Rekuper
Sychrov s.r.o., PRESSKAN system a.s. and Teco
a.s., to name just some of them. Complete
CWA deliveries to foreign markets are worth
dozens of millions of EUR. These results could
never be achieved if the firms’ experts were
not prepared to put all their professional skills
and experiences to work to ensure their com-
mon success in meeting the highest – quality
requirements placed on the technology they
supply.
Does CzechTrade also figure in these
endeavours in some way?
Of course it does. CzechTrade did not help
us only to attain our good results. Recently,
thanks to the Agency’s cooperation, in par-
ticular to Mr Martin Hlavnička, we scored an
export success at the presentation of water
management firms in Petersburg, specifically
the firms PRESSKAN and VAPO. We managed
to address and win new customers, and now
we are at the stage of preparing a project for
the entry on the market by several members
of the Alliance. With the support of the Minis-
try of Industry and Trade, we are now prepar-
ing for participation in exhibitions in Moscow,
Munich, and Lyon.
LIST OF CWA MEMBERS
ASIO spol. s r.o.
Supplier of container packed wastewater
products i.e. wastewater treatment plants, oil
separators, grease traps, shaft pumping, etc.
www.asio.cz
BKG úprava vody s.r.o.
Leasing manufacturer of water treatment
plants for process, drinking, and ultrapure
water focusing primarily on the various de-
velopments of membrane technology.
www.bkg.cz
CENTROPROJEKT a.s.
Provider of professional design and consulting
engineering services with more than 80 years
experience in the civil engineering sector.
www.centroprojekt.cz
CINK Hydro-Energy k.s.
One of the leaders in deliveries of technolo-
gy for small and medium-sized hydropower
stations. The goal of the development team
of CINK Hydro-Energy is to change water
potentials in cooperation with our custom-
ers all over the world into profitable and en-
vironment–friendly sources of energy.
www.cink-hydro-energy.com
ECOFLUID Group, a.s.
Highly innovative organisation oriented to
the realisation of the innovation project of UP-
FLOW SLUDGE BLANKET FILTRATION (USBF)
technology used in the chemical treatment of
surface and ground water for municipal and
industrial use as well as the biological treat-
ment of municipal and industrial waste-water.
www.ecofluid.cz
HSI com s.r.o. Plzeň
One of the Czech most noted solution work-
places of Integraph and Bentley Systéme
companies. Its activities are mostly targeted
on geographical information systems. HIS
COM develops CAD applications.
www.hsicom.cz
MAEP s.r.o.
A leader of CWA, company developing busi-
ness relations between the Czech Republic
and the EU and the countries of the Russian
Federation and Asia.
www.maep.cz
MARVES v.o.s.
The company’s core business is the pro-
vision of comprehensive services in the
area of technological process automation.
It manufactures a variety of electronics
components.
www.marves.cz
MICO, spol. s r.o.
The company provides services and under-
takes repairs of all industrial valves including
separators, pressure vessels and exchangers.
www.mico.cz
PRESSKAN system, a.s.
The company offers its own know-how to
design pressure systems and is the exclusive
supplier of the PRESSKAN® low-pressure
sewer system.
www.presskansystem.cz
REKUPER SYCHROV s.r.o.
The company’s core activity is the manu-
facture of ventilation units with heat re-
cuperation, intended in particular for hall-
type buildings, including their design and
installation.
www.rekuper.cz
TECO, a.s.
Is an important supplier of TECOMAT in-
dustrial controllers used by water sup-
ply and waste water plants. As TECOMAT
is a powerful general purpose control
system, it can be used in central heating
plants, the food industry, the chemical in-
dustry, and other sectors.
www.tecomat.cz
TESLA, a.s.
The Water Treatment Solutions Division of
the company has been successfully oper-
ating for several years in waterworks en-
gineering and in water supply and waste-
water treatment plants. It supplies drinking
and industrial water plants, including devel-
opment, planning, production, and putting
the units into operation.
www.tesla.cz
VAPO, s.r.o.
VAPO specialises in two fields: rubberised
fabric products and moulded mechanical
rubber parts. The rubberised-fabric products
include sealing bags for piping, lifting bags,
sealing bags for fissures, sealing wedges
and pipe rehabilitation packers. Other rub-
berised-fabric products are made to the
specific requirements of customers.
www.vapo-sro.cz
17|
 ENTERPRISE
Alta Concrete Works Kiev – a technological unit of ALTA company
Surface Finishing under the Wings of CzechTrade
Martin Mokroš, Leader of Czech Surface Finishing Alliance, e-mail: mmokros@galatek.cz, www.galatek.cz
The Czech Surface Finishing Alliance (CPU)
was established in June 2006 with the aim
of offering potential clients a strong group
that will solve their problems in the area of
surface finishing comprehensively, with the
corresponding guarantees. It is an associ-
ation of four firms – ALTA, EST+, GALATEK
and OTECO – all supplying equipment for
the surface protection of materials. The
firms’ production programmes are designed
so as to complement each other, thus
eliminating competition within the Alliance
and strengthening its competitiveness as
a whole, primarily on foreign markets.
Czech Experiences
These Czech firms offer their experience
and know-how in dealing with surface fin-
ishing issues. They have a strong intellectual
and material potential and in co-operation
with the specific customers they are in
a position to realise the surface finishing of
their products to a high level. All the associ-
|18
ated companies are certified in accordance
with ISO 9001:2000 quality standard and ISO
14001:2004 environmental management
standard.
Comprehensive
Execution of Orders
As part of their engineering services, these
Czech firms are in a position to meet the
specific requirements of customers at all
stages of the project. They propose the use
of the most suitable technologies, with veri-
fication, prepare the complete project, in-
cluding its approval, evaluate the economy
of operation, and prepare expert opinions.
Under the Wings of CzechTrade
CPU was established under the auspices of
CzechTrade state-run agency, the main initi-
ator of its establishment being its represen-
tation in the Russian Federation, specifically
Ekaterinburg. The Office has significantly
influenced the development of the new Al-
liance. It recommended that in addition to
arranging exhibitions, it should also focus
on the presentation of their supplier pos-
sibilities, addressing potential customers,
while taking advantage of the information
backing and the experience of CzechTrade.
Very successful, for example, were the pres-
entations in the Russian Federation, specifi-
cally in Chelyabinsk, Ekateringurg, and Pe-
tersburg and in Zagreb, Croatia.
Establishment of Trade Contacts
The result of all these presentations is not
only information about the possibilities of
the Czech firms, but also the establishment
of a large number of contacts, some of
which have already led to the realisation of
business deals. Much of the success of these
presentations is due to CzechTrade Agency,
Photo: Firms archives
which is well acquainted with the local en-
vironment. Each of CzechTrade’s represen-
tations – in Ekaterinburg, Petersburg, and
Zagreb – has prepared for the Alliance, on
 C Z E C H E C O L O G Y A N D A G R I C U LT U R E
the basis of its knowledge, a list of potential
partners and customers. All of them have
organised their own presentations, with the
participation of representatives of the Czech
State and local state organisations.
Trade Fairs and Exhibitions
Other important activities of CPU are its par-
ticipation in selected trade fairs and exhibi-
tions. The Alliance participates regularly in
ExpoCoating in Moscow, as well as in other
events, such as national exhibitions, mis-
sions of businessmen, etc.
All these activities are of great economic
importance. Thanks to CzechTrade’s back-
ing, greater attention is paid to the Alliance
in various programmes, and jointly organ-
ised events, such as participation in select-
ed trade fairs, are subsidised financially. This
brings valuable cost savings, especially in
the area of marketing.
Membership of CPU has a number of other
advantages. Besides the amalgamation of
financial means for joint promotion the
member firms benefit from the exchange of
information about potential customers and
the experiences gained in the realisation of
joint projects.
CPU Members
Introduce Themselves
EST+, A. S. BASED IN LEDEČ NAD SÁZAVOU
Paint Shop Equipment with Accessories
EST +, a.s. is the only manufacturer of pro-
fessional spraying technology in the Czech
Republic. It commenced development and
manufacture of this equipment as far back
as 1951. From the very beginning, its pro-
GALATEK Continuous lines
gramme has been oriented towards the
development and production of spraying
equipment for the application of liquid and
powder paints, with deliveries of sets for
surface finishing.
EST+, a.s., Podolí 1237, 584 01
Ledeč nad Sázavou, Czech Republic,
Phone: +420 569 726 097, +420 569 726 094,
Fax: +420 569 726 096, e-mail: est@estplus.cz
www.estplus.cz
OTECO CZ, SPOL. S R.O. BASED IN BUČOVICE
Shot Blasting Equipment
OTECO CZ, spol. s r.o. was established in 1992
as a manufacturing firm for Austria’s OTECO
GmbH Wien, a company with a long shot
blasting tradition. Today it manufactures the
full range of blasting equipment in its plant
in Bučovice. Its products comprise both
compressed air shot blasting machines and
shot blasting machines with impellers. The
machines are manufactured serially or are
“made to measure”, according to the specific
requirements of customers.
OTECO CZ, spol. s r.o., Slavkovská 853,
685 01 Bučovice, Czech Republic
Phone/Fax: +420 517 383 506,
+420 517 383 519, e-mail: oteco@oteco.cz
www.oteco.cz
GALATEK, A.S.
BASED IN LEDEČ NAD SÁZAVOU
Paint Shops and Accessories
GALATEK, a joint stock company established
in 1990, supplies complete paint shop
equipment and surface finishing lines. Its
machines and equipment for surface fin-
ishing shops comprise surface preparation
equipment, paint cabins for the application
of liquid paints, cabins for powder plastic
compound application, drying and burning
furnaces, transport and handling machines
and application equipment.
GALATEK a.s., Na Pláckách 647, 584 01
Ledeč nad Sázavou, Czech Republic,
Phone: +420 569 714 111, +420 569 721 121,
Fax: +420 569 714 202,
e-mail: lakovny@galatek.cz,
www.galatek.cz
ALTA, A.S. BASED IN BRNO
Comprehensive Commercial, Financial,
and Engineering Services in the Area of
Engineering
Since 1991, Alta, a.s. has specialised in trading
with Central and East European countries.
The company’s core business is engineer-
ing. Its activities comprise comprehensive
commercial, financial, and engineering serv-
ices, which ensure the high competitiveness
of the company. It has a network of foreign
representations: in the Russian Federation
(Moscow, Ekaterinburg, and Petersburg), the
Ukraine (Kiev, and Komsomolsk), and Belarus
(Minsk, and Zhodino). These representations
are one of ALTA’s greatest assets. It special-
ises in the export of whole plants, machine
tools, engineering goods, and machinery
for the heavy industry. Its main import items
are metallurgical and power generating ma-
chines and equipment.
ALTA, a.s. – office, Štefánikova 41,
602 00 Brno, Czech Republic
Phone: +420 541 550 111,
Fax: +420 541 550 555, e-mail: office@alta.cz
www.alta.cz
OTECO CZ machinery
19|
 ENTERPRISE
Agriculture Is Drawing Finance
from Various Programmes
Communication Department, Ministry of Agriculture, www.eagri.cz
In the Czech Republic, the agriculture
sector does not account for the larg-
est share of GDP and employment, but
its role in supplying the population with
foodstuffs and its importance for the so-
cial area and the natural environment are
irreplaceable.
The primary sector creates about 3% of
total gross added value and accounts for
3.8% of total employment. A characteris-
tic feature of Czech agriculture is its large
|20
farming enterprises, whereby it differs no-
ticeably from the structure of European
agriculture formed mostly by small, often
family farms. The average surface of tilled
land per farming enterprise in the Czech
Republic is 84.2 ha. The priority task of ag-
riculture, besides supplying good-quality
food, is to ensure environmental protec-
tion, including good living conditions for
animals, use of renewable energy sources,
and care for the countryside.
Rural Development Raises
Competitiveness Not Only
in Agriculture
The Czech Republic’s Rural Development
Programme covering the 2007-2013 period
is an instrument for obtaining EU support
from the European Agricultural Fund, which
serves four rural development purposes: to
improve the competitiveness of agriculture,
food production, and forestry (axis I), raise
biological diversity, protect the water and
the soil and mitigate climate change im-
pacts (axis II), improve the quality of rural life
and support the diversification of the econ-
omy of agriculture (axis III), and help the
local population in rural micro-regions to
prepare their own development strategies
based on the “from bottom to top“ principle
and support projects for their development
– the LEADER method. The total volume
of finance available for the Rural Develop-
ment Programme, together with a contri-
bution from the state budget, amounts to
about CZK 100 billion (EUR 3.6 billion) for
2007-2013.
The following measures are focused on
business promotion outside the agricul-
ture sector within axis III:
Measure III.1.1 Diversification of non-agri-
cultural activities. The measure supports
farmers wishing to start activities in the
area of production and processing, or en-
large them. The support is available for
selected areas of economic activity. An im-
portant part of the support is reserved for
the construction of facilities for renewable
energy source processing and use. The
budget for the entire period of the pro-
gramme is approx. CZK 3.8 billion (approx.
EUR 150 million).
Measure III.1.2 Support for starting en-
terprises and their development. The
measure is aimed at supporting the start-
ing of new enterprises of the smallest size
– micro-enterprises and the development
of existing ones in the area of production
and processing. The aim of the measure is
Photo: www.sxc.hu, NEVA-TRADE archives
primarily to create new jobs and develop
the economic structure of non-agricul-
tural activities. The support is mainly fo-
cused on small businesses and trades (e.g.
joinery, carpentry, smith craft, upholstery,
etc.), services for farmers (e.g. machine
and equipment repair services), and retail
trade. Support is also available for the con-
struction of renewable energy processing
 SURVEY

facilities – the budget for the programme
period amounts to approx. CZK 2.6 billion
(approx. EUR 100 million).
Measure III.1.3 Tourism support is designed
to support the promotion of agrotourism,
especially the construction of low-capacity
accommodation facilities, including cater-
ing and sports surfaces. Support can be
obtained for pedestrian path building and
marking, with rest areas or riding paths; the
budget for the programme period is approx.
CZK 2 billion (EUR 80 million).
Application Processing
All the measures mentioned above ap-
ply to projects submitted within applica-
tion reception deadlines. The applicant
requesting the subsidy must first prepare
the project according to a binding project
outline shown in the Applicant Rules (the
Rules are available at www.mze.cz or www.
szif.cz), to which the required annexes
must be attached. As soon as the reception
of applications opens (usually announced
once a year), the applicant will complete
the application form and submit his project
to the regional department of the State
Agricultural Intervention Fund, which is
the financing agency. At that moment the
applicant can start work on the actual realis-
ation of the project. As in the case of most
measures, the subsidies are paid in retro-
spect. The applicant will first realise the
entire project and pay for it, and after that
will submit an application for payment, to-
gether with the required documents. If all
requirements are met, the subsidy will be
paid. In the case of the above-mentioned
measures, the subsidy is up to 60% of eli-
gible expenses.
Fisheries Operational Programme
Another subsidy title for drawing money
from EU funds coming under the compe-
tence of the Ministry of Agriculture is the
Fisheries Operational Programme 2007-
2013 (Fisheries OP). Under this programme
money can be drawn from the European
More detailed information about the terms and con-
ditions for obtaining a subsidy under the above meas-
ures can be found on the web sites of the Ministry of
Agriculture (www.eagri.cz) and the State Agricultural
Intervention Fund – SZIF (www.szif.cz).
Fisheries Fund (EFF) for the years 2007-2013
for the fisheries sector. Subsidies made avail-
able from the Fisheries OP amount to CZK
1 billion (approx. EUR 290 million). The sub-
sidies are designed for micro-enterprises
and small, medium-sized, and certain large
enterprises.
Subsidies are provided on the basis of
applications to be submitted within the
time limit announced by the Minister of
Agriculture. Subsidy applications are to
be addressed to the regional department
of the State Agricultural Intervention
Fund in the region, in which the project
is realised. The subsidy amounts to 60%
of the eligible costs of the project and is
paid out after the payment application is
approved.

Poll of Successful Companies Operating in the Areas

of Ecology, Agriculture, and Wood Processing
NEVA-TRADE, s.r.o. wooden lamellas. These lamellas can be used
without further processing in a variety of ap-
Husova 537, 378 21 Kardašova Řečice plications including flooring, parquets, multi-
Phone: +420 384 377 121 layer boards, windows, doors, furniture, sport
E-mail: neva@neva.cz, www.neva.cz equipment and music instruments.

Turnover: EUR 5 million Your company is a regular participant in

Number of employees: 130
Export: 90% of production
NEVA is a Czech engineering company with
a long tradition of excellence in the manu-
facture of thin-cutting machinery. The com-
pany first opened its doors in 1793 and now
NEVA machines are in production in over 30
countries worldwide.
Neva machines are designed to cut wood
into precision thin slats and are known
world-wide for their quality, reliability, and
longevity. We produce:
 Thin-cutting frame saws
 Thin-cutting band saws
 Saw blade and band grinders
 Stellite saw blades and bandsaw blades
The machines and tools that we produce are
designed for cutting very thin and accurate
the various international exhibitions that
occur throughout Europe. What do you
expect to achieve by participating? Has
your participation brought good results
for sales?
Our company participates in these events in
order to get new contacts and trade part-
ners. We frequently introduce new machin-
ery and technology, and also use these oc-
casions to strengthen our existing contacts.
In recent years, our focus has been more
about meeting with our current customers
and enhancing our position in the market.
How are you tackling the consequences of and have reduced our costs, just as most
the economic crisis, and how do you see companies are doing. We are seeking
the future of the company? new markets and are being creative in
We have adjusted the capacity of pro- our marketing in order to increase sales
duction to meet the lower demands, and reduce costs.

21|
 SURVEY

tensive experience in the field of wrapping

JIP - Papírny
Větřní, a. s.
Papírenská 2, 382 11 Větřní
Phone: +420 380 909 231
Fax: +420 380 909 274
E-mail: info@jip.cz, www.jip.cz
Turnover: EUR 80 million
Number of employees: 750
Export: Exports go to Germany (16%), Slo-
vakia (11%), the United Kingdom (8%) and
other countries.
JIP – Papírny Větřní, a. s. endeavour for long-
lasting prosperity is based on tradition, high
quality, flexibility, and super-standard rela-
tions with our business partners. Due to suc-
cessful sales around the globe, we have ex-
and printing paper and can offer a broad
range of paper for all purposes.
What are the advantages of the paper
you make? What properties would you
emphasise? How are they achieved?
We are focused on special thin paper prima-
rily designed for food wrapping. Our main
segments include paper bag manufacture,
paper waxing, lamination and printing, and
other production includes ribbed paper,
and wet-strength and grease-proof paper.
JIP has equipment for the annual manufac-
ture of 3 000 tons of paper bags, 10 000 tons
of sheets, and 500 tons of paper with flexo-
graphic print. The main advantages of JIP
paper are super-standard quality and hygi-
enic accreditation for food contact awarded
by the renowned company ISEGA.
Great emphasis is being laid on environ-
mentally friendly manufacturing. How is
your company taking care of the environ-
ment in this respect?
We are in compliance with all valid envi-
ronmental standards. The most recent sig-
nificant investment in this area included
the construction of a new waste-water treat-
ment plant, and the change of fuel from coal
to natural gas. Reference must be made of
the increasing share of recycled paper, which
is coming close to 1/3 of the total fibre con-
sumption. The planned strategic investment
will be focused on ecology, specifically on
further increase in the share of recycled pa-
per and change of fuel to biomass.

GEOtest Brno, a.s. ronment, disposal of old ecological burdens,

Šmahova 112, 627 00 Brno
Phone: +420 548 125 111
E-mail: trade@geotest.cz, www.geotest.cz
Turnover: EUR 16 600 000
Number of employees: 133
Export: Turnover of exported services rang-
es around EUR 1.1 million; services are the
same in the Czech Republic and abroad.
GEOtest Brno, a.s., is one of the largest Czech
companies operating in geology and envi-
ronmental protection. It is a reliable partner
with a tradition of more than 40 years and an
established, experienced team of profession-
als with a long practical international expe-
rience. GEOtest Brno, a.s. provides services
in the following branches: protection and
remediation of groundwater and rock envi-
hydrogeology, geotechnical work and engi-
neering geology, geophysics, environmental
studies (Environmental impact assessment
– EIA, environmental audit, environmental
risk assessment, feasibility studies), manage-
ment systems (ISO 9001, ISO 14001 or EMAS,
IPPC, OHSAS), waste management, landfills,
cleaner production, hydro-chemical labora-
tories, and soil-mechanics laboratories.
Where do you see the main interest of
your clients at this time?
It is especially engineering geology research
for motorways and roads.
Can you mention some of the largest and
most important projects of your company
abroad?
Very important are our operations in Bos-
nia and Herzegovina – we are supplying
technology for the introduction of an in-
tegrated system of waste management in
the Una-Sana Canton. Another large project
is in Mongolia, where we are helping in ar-
eas suffering from drinking water shortage;
technology for water treatment and protec-
tion of water resources.

TOP FIRMS IN CZECH AGRICULTURE, ECOLOGY, AND WOOD-PROCESSING INDUSTRY

Name Based in Sector Contact
construction of water-management, engineering and ecological
Imos Brno, a.s. Brno www.imos.cz
structures
AGRICO s.r.o. Třeboň grain processing and storage, breeding www.agrico.cz
ŽDB Group, a.s. Bohumín wire production, foundry, and metallurgy www.zdb.cz
Dřevotvar - Řemesla a Stavby, s.r.o. Chýnov cabinet-joinery, special building work www.drevotvar-ptak.cz
Veolia Voda Česká Republika, a.s. Praha water production and distribution www.veoliavoda.cz
Photo: Firms archives

Živa zemědělská obchodní, a.s. Klášterec nad Orlicí machines sales and service, farming, wood production www.ziva.cz
A.S.A. České Budějovice, s.r.o. České Budějovice waste disposal and communal services www.asa-cz.cz
Beskyd Agro, a.s. Palkovice agricultural and forestry production www.beskydagro.cz
Zemcheba, s.r.o. Vodňany agriculture, fruit-growing, livestock production www.zemcheba.cz

|22
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