Pardubice - Ministerstvo průmyslu a obchodu · by the TPCA car plant. The success of these...

09–102006

PardubiceRegion

The Czech Republic IsExperiencing a Period of Robust Boom

Fall in Unemployment Rate

Stricter Measures to Protectthe Consumer

The Czech Republic – King Among Spa Venues

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C O N T E N T S

Ministry of Industry and Trade

CZECH BUSINESS AND TRADEEconomic Bi-monthly Magazine with a Supplement is Designed for ForeignPartners, Interested in Cooperation withthe Czech Republic

For the Ministry of Industry and Trade of the Czech RepublicIssued by:

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EDITORIAL BOARD:Martin Tlapa (Chairman), Ivan Angelis, Zdena Balcerová, Jiří Eibel, Zbyněk Frolík, Růžena Hejná, Alžběta Honsová, Josef Jílek, Ivan Jukl, Marie Košťálová, Marie Pavlů, Pavla Podskalská, Josef Postránecký, Libor Rouček, Jiřina Semanová, Jarmila Škvrnová, Ivan Voleš

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DEADLINE: 31/07/2006

ADDRESS:Myslíkova 25, 110 00 Praha 1Czech RepublicPhone: +420 221 406 623, +420 221 406 626Fax: +420 224 934 383e-mail: [email protected]/cbtPress run: 13.500 copies.The number of printed and sold copies of the journal is verified by auditor, HZ Praha, s.r.o.,member of PANNELL KERR FORSTER Worldwide.It is not allowed to reproduce any part of the contents of this journal without prior consent from the editor.Attitudes expressed by the authors of articles carried by CBT need not necessarily be consistentwith the standpoint of the Publisher.MK ČR E 6379, ISSN 1211-2208„Podávání novinových zásilek povoleno Českou poštou, s. p., odštěpný závod Přeprava, č. j. 3468/95, ze dne 24/10/1995“

View of the historical part of Pardubice

Trade of the Central European "Foursome" IsPicking Up


■ INTRODUCTIONQuestion of the Month for Martin Tlapa, Deputy Minister of Industry and Trade.........................................................................................................4

■ ECONOMIC POLICYThe Czech Republic Is Experiencing a Period of Robust Boom ..........................5Trade of the Central European "Foursome" Is Picking Up ................................7Fall in Unemployment Rate ..............................................................................9

■ INVESTMENTInvestment for More Than 2.3 Billion Euros....................................................11

■ BUSINESS AND PRODUCTIONStricter Measures to Protect the Consumer ....................................................12New Ways Of "Changes" Are Popular Among Businessmen..........................15

■ EXPORTExamples of Successful Czech Exports............................................................14

■ REGION NUTS 3 - Pardubice Region ...................................................................16 – 29

■ SERVICESThe Czech Republic – King Among Spa Venues .............................................30Where Else But to the Czech Republic?..........................................................34

■ PRESENTATION OF FIRMSMY HOTEL s.r.o. ..............................................................................................2Lázně Teplice nad Bečvou a.s. .......................................................................35M.I.P., a.s. .....................................................................................................36

KORADO, a.s.; ELMET, spol. s r.o.; Východočeská tiskárna, spol. s r.o.; CallipsoProSport s.r.o.; Lázně Teplice v Čechách a.s.; GRANDHOTEL PUPP Karlovy Vary,a.s.; COSMETIC KARL HADEK INTERNATIONAL s.r.o.; Hotel Zámeček Mikulov;CENTRUM BABYLON, a.s.

Question of the Month for Martin Tlapa,Deputy Minister of Industry and Trade

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I N T R O D U C T I O N

M O R E A T :

www.mpo.cz

www.czechtrade.cz

www.ceb.cz

www.egap.cz

www.export.cz

■

Why, in your opinion, have the WTO talksin Geneva on trade liberalisation failed? The WTO negotiations were suspended, notterminated. Participants to the negotiationsinclude 149 WTO members, who are nota uniform group either in terms of theirachieved level of economic development, orin terms of their interests and priorities inthe negotiations. It is apparent that findingan agreement acceptable to all members isnot an easy task. In addition, certain majorplayers have been reluctant to agree toa compromise that, with regard to thesituation on their domestic political scene(e.g. forthcoming elections), could turnvoters away. The "apple of discord" was theissue of domestic support to agriculture: thecommitment offered by the USA did notmeet the expectations of the other tradingpartners. I do not fully share the view of theformer WTO Director-General PeterSutherland that WTO members have failedto reach consensus because they insist onconcluding an agreement that is perfect.However, I concur with his conclusion thatwe should adopt a good agreement, onewhich has been within our reach for sometime.

■

Who will lose out the most?First and foremost, the suspension ofnegotiations is a negative signal for thesystem of multilateral trade relations.Multilateral agreements and rules bring themost benefit to those who are unable toconclude similarly advantageous tradeagreements on the level of bilateralrelations. The ambitions of the ongoingbroadly conceived round launched in Doha,Qatar, in 2001 are high. The adoptedprinciple of a single undertaking andbalanced outcome means that potentialfailure would be to the detriment of allparties, as access to the markets of new fastdeveloping economies in Asia and SouthAmerica would not improve. Thesuspension will also delay pressure for theimplementation of an agricultural reform inthe USA which, together with the EUcommon agricultural policy already in place,would signif icantly help to removeimbalances in trade in farm products.Moreover, the situation governing marketaccess will not improve for the providers ofservices - the sector of the future. There willbe no agreement on quota-free and duty-free access of the least developedeconomies to the markets of developedcountries, nor any agreement on thefacilitation of trade.

■

Would you consider the adoption ofa more moderate version - the so-called"light liberalisation" - useless, as theAmerican negotiators see it? I encountered the reference to "Doha light" ina standpoint by John Engler, President of theUS National Association of Manufacturers,who said in a commentary on the talks that"no deal is absolutely better than a bad deal".This is the position of a representative ofAmerican manufacturers, who urge theirnegotiators to win an agreement that "mustbenefit American manufacturers as well asfarmers and services-providers". In myopinion, it is not productive to judge thesubmitted package by the criteria of oneinterest group. Perhaps the participant mostentitled to speak on the subject of "low-calorie" negotiations is the EU which, for thesake of resuming talks after the failure inCancun, allowed three of the four so-calledSingapore issues (public procurement, tradeand competition, investment) to be droppedfrom the agenda. In addition, the ambitions ofthe submitted proposals surpass the results ofthe previous Uruguay Round. Specifically:undertakings under consideration includeremoving all agricultural export subsidies by2013, improving market access along thesouth-north and south-south axes, providingquota-free and duty-free access to themarkets of developed countries for the leastdeveloped economies, and concludinga multilateral agreement on the facilitation oftrade. A clarification and improvement isforeseen for rules governing the application ofprotective measures and for the Aid for Trademechanism.

■

What was the position of the CzechRepublic?The Czech Republic is an advocate of liberaltrade policies. This approach is in accordancewith the structure of our economy, with itsstrong dependence on foreign trade and focuson the export of services. Naturally, at the nextsession of the so-called 133 Committee ofPermanent Representatives of EU memberstates in September, I will present the CzechRepublic’s interest to resume negotiations assoon as possible. I am bound to do this bothby the "power of attorney" delegated to meto promote the interests of our businesssector, and the current European Commissionmandate for WTO negotiations. Together withour allies in the EU, we want to exert pressureto exercise this mandate in full in future,especially the manoeuvring scope andflexibility it offers.

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C Z E C H B U S I N E S S A N D T R A D E

Czech economic growth graduallygained in strength last year, untilachieving a record 6.9 % at the end

of the year. The first quarter of this yearbeat even this record, when GDP grew toas much as 7.4 %. However, on the basisof seasonally adjusted data it can beassumed that the first quarter representsa climax of the Czech economic boom todate and that the next quarters will bringlower growth rates. By no means,however, does the slowdown of economicgrowth mean an end of the boom, buta return to values sustainable over thelonger term, as former strong pro-growthimpulses especially from the car industryare being gradually exhausted. Thequickening economic growth of theprevious quarters thus establishes highstatistical base figures from which thisyear’s economic dynamics will derive.A gradual deceleration of GDP growthrate to 5 % can thus be expected at theend of the year, but the annual result willprobably break last year’s record.

■ G R O W T H I S D R I V E N B Y T H EM A N U FA C T U R I N G I N D U S T RY,S E R V I C E S A D I S TA N T S E C O N D From the viewpoint of the supply side ofGDP it is thus no surprise that Czech GDPgrowth has been fuelled for over twoyears mainly by the fast developingmanufacturing industry, which is followedat a distance by some branches ofservices. The good economic results aremain ly due to fore ign-contro l ledcompanies in the manufacturing industry,which have made extensive investments inthis country in the last few years, orientedat the production of goods for Westernmarkets. The structure of exports showsthat the role of the leader is played by thecar industry, represented for a long timeby the successful Škoda Auto company,

which has been joined quite recently alsoby the TPCA car plant. The success ofthese companies is reflected in thesignificant growth of car export (+22.6 %in 2005), which contributes decisively tothe Czech Republic’s balance of tradesurplus. It should be noted that thesurplus in the road vehicles category hasmore than doubled since 2003, up to thecurrent CZK 171 billion (about EUR 5.9billion - May 2005).

■ I N V E S T M E N T H E A D I N G N OTO N LY T O C A R P L A N T SFrom the viewpoint of the demand side ofGDP, its growth was furthered the most bynet exports last year. This year the mainrole has been taken over by domesticdemand, but net exports still contribute toeconomic growth as imports are laggingbehind exports (although this may not beobvious from the monthly current pricesdata). The Czech economy is beginning to re ly increas ingly on domest icconsumption, and also on investmentbased on the continuing inflow of foreigncapital (including re-invested profit) andlow interest rates, which mostly remainbelow the euro zone rates level. Lastyear’s inflow of foreign direct investment(FDI) was the second highest in the historyof the Czech Republic. Of the total of EUR8.8 billion that flowed into the country,less than a half was represented byrevenues from the sale of privatisedcompanies. However, the total FDI extentis better documented by its overall volumein the economy, which climbed to almostEUR 52 billion at the end of the 2006 firstquarter. The Czech Republic thus retainedits second position in FDI per inhabitant inthe region of the Central European newEU member states. Foreign investment,and the growing profits of domestic firms,created conditions for the continuation ofthe investment wave, which is likely tofurther intensify this year. In addition, bigFDI in the offing is a promise that theCzech Republic will not lack foreigninvestors in the future years either. Thebiggest investment will be made by theHyundai automobile factory, which plansto locate here its plant with an output ofa minimum 200 000 cars. Besidesautomobile makers and their suppliernetworks, also service providers figureprominently as investors are moving theirlogistics and development centres to theCzech Republic ever more often.

The success of the Czech economy iswell reflected in the living standard of thepopulat ion. Real wage growth i s

The Czech economy achieveda record 6.1 % growth last year.It thus joined the group of thefastest growing EU economiesand with Slovakia shared thefifth position in GDP growthrate. This result is particularlygood as compared to the euroarea, which grew 4.6 timesslower, as well as to the EU asa whole, which recorded only 2.3 % last year. The recordeconomic growth accelerates theprocess of the Czecheconomy’s catching up with theEU level. According to Eurostatdata, GDP per inhabitantincreased last year to almost 73 % of the EU average and theCzech Republic thus overtookthe weakest member of theformer EU fifteen - Portugal -and assumed the position of the17th most developed EU country.

The Czech Republic Is Experiencing a Period of Robust Boom

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maintained at between three and four percent, unemployment has been falling and,on the other hand, the confidence of thepopulation in the economy is growing.Despite a slight acceleration in wages theirdynamics trails behind labour productivityrates . There i s no explos ion ofconsumpt ion because people areincreasingly investing in housing thanks tomortgages being available at low interestrates. Thus, it is still true that householdsincreasingly prefer investment in housingto short-term consumption.

■ G R O W T H W I L L C O N T I N U EThe Czech economy continues to grow ata record pace this year as well, despite thehigh prices of imported oil and naturalgas, which increase the costs ofcompanies and households and arenegatively reflected in production andconsumer prices. These cost pressuresnotwithstanding, inf lat ion remainsrelat ively low, and, in addit ion, isinfluenced to an ever greater degree bythe growth of regulated prices, and thusmakes it possible to maintain low interestrates that are favourable for the economy.The quite low interest rates can partlycompensate the impact of the long-termCzech currency appreciation. Last yearalone the crown strengthened in relationto its reference currency (euro) by morethan 7 %, and has gained another 2 %since the beginning of this year.

We assume that the Czech Republic willmaintain its position among the fastestgrowing EU countries also in 2006 and itseconomic level will advance to as much as76 % of the European average. This resultwill be assisted not only by the continuinginterest of investors in the Czech marketbut also by a boom in Western Europe.Optimism for a good result is also being The growth of GDP in the CR witnesses a record growth

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increased by money from the EU funds,which are d i rected at pro jects ininfrastructure and env i ronmenta lprotection. In this area the Czech Republicstill has an untapped potential, and thusalso great opportunities.

Petr DufekAnalyst

ČSOB(e-mail: [email protected])

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Graph 2: Foreign trade balance (annualised, in CZK billion)

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All the new EU members fromthe Central European regionshowed an increase in trade withtheir foreign partners afterjoining the EU. The CzechRepublic, however, was the onlyone to score a remarkablesuccess in the aggregateparameter measuring the resultof trade with other countries:while Hungary, Poland, andSlovakia did not eliminate theirforeign trade deficit in the pastsix years, the CR in 2005 showeda favourable balance of trade.Noticeable is the improvement ofthis country’s competitiveness:last year, Czech exporters raisedtheir share of aggregate EU25imports to 2.6 % (in 1999 theshare was 1.5 %), which isapproximately the same as thatof Poland, whose economy,however, is substantially largerin size (2.5 times in terms ofGDP). The fact that over the pastsix years the share of Czechexports to the EU in relation toEU aggregate imports rose bythree-quarters, is further proof ofthe great ability of the Czecheconomy to compete ondeveloped markets.Joining the European Union inMay 2004 was a dramaticchange for the economies ofeach of the new CentralEuropean member states. Thestronger the trade links werewith the old EU states and theirtrading partners in the group ofthe new ten countries then thechange was even more dramatic.

Trade of the Central European "Foursome" Is Picking UpThe abolition of customs duty and theelimination of administration limitsboosted significantly trading of the CR,

Hungary, Poland, and Slovakia. The intensityof their trade exchange with foreign countries,however, was without any doubt alsoinfluenced by the rapid economic growth inthe past several years, typical of the entireCentral European Region. All the countriesmentioned above raised their share of exportsto the EU25 in relation to the EU total imports.

In 1999, the Czech Republic accounted for1.5 % of total EU 25 imports, and in 2005 foras much as 2.6 %. Interestingly, in the year ofits joining, its share rose by nearly one-fifth,which was the highest increase in comparisonwith Poland (+14 %), Slovakia (+6%), andHungary (+5 %). In 2005, the share of Czechexports to the EU in relation to total EUimports rose slightly less on a year-on-yearbasis (more slowly than in the case of Polandand Slovakia), but the figures for the two yearsit was 0.5 p.p. higher than in 2003, the sameas in the case of Poland. The other twocountries increased their shares much less,which is especially true of Hungary. With lessthan two years of its membership of the EU

the share of Hungarian exports in relation toaggregate EU imports rose by only +0.1 p.p.A similar development was shown by theSlovak economy, which is much smaller in size.

■ C O M P E T I T I V E N E S SM E A S U R E D B Y C H A N G E S O F T H E S H A R E I N E U I M P O RT SThe change of these shares illustrates thedevelopment of the trade of the countriesbeing compared better than the rates ofgrowth of their trade expressed in euros. Atthe same time, this indicator of changes in theshares partly influenced by the countries’economic structure and the resultingcontribution of foreign trade to the growth ofGDP illustrates the development of thecompetitiveness of the countries concerned.With its 2.57 % share of exports in total EU25imports in 2005 the Czech Republic ranksimmediately after Poland (with a share of

2.68 %), which, however, is a substantiallylarger economy. Taking into consideration, theexport efficiency of the Czech economy istherefore higher than that of Poland. Still in1999, Polish exports to the EU accounted foronly 1.4 % of total EU25 imports and theirshare was smaller than that of Czech exports(1.5 %).

Measured by the change of the size of theshares, due to its very good starting position in1999, the competitiveness of the CzechRepublic rose slightly less in comparison withthat of Poland or Slovakia – as the share of itsexports to EU25 in relation to its total importsfrom EU25 between 1999 and 2004 rose 1.71times, while Polish exports rose 1.86 times andSlovak exports 1.80 times. The least successfulfrom this point of view was Hungary, whoseshare rose only 1.38 times. According to theseindicators, optically the Czech economy madeless progress in comparison with the twocountries mentioned above, but in this regardits position in 1999 must be taken intoaccount, with a share of 1.5 %, was markedlybetter than that of the other three countries(the share of Poland 1.44 %, that of Hungary1.35 %, and Slovakia 0.59 %).

■ S L OVA K E C O N O M Y I S T H E M O S T O P E NOne of the indicators published by Eurostat isthe share of the exports and imports ofcountries in relation to their GDP expressed incurrent prices, the criterion of the openness ofa country’s economy is considered. It showsthat the new Central European EU membersare much more open than the EU25. Poland,too, whose exports in 2005 accounted forapproximately 31.3 % of GDP in current prices(less than one-third and 1 p.p. less than in2004), and imports for 32.4 % of GDP, isshowing greater openness than the EU asa whole – in EU25 last year the shares of bothexports and imports accounted for 28.5 % (in2004 for 27.4 % and 27.0 %, respectively).

Hungary, the CR, and Slovakia are showingsubstantially greater openness of theireconomies than is the case of the EU25, ascan be seen in Chart 1. Last year, Czech

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exports accounted for 64 % of thecountry’s GDP with a 1.8 p.p. year-on-yeargrowth. On the contrary, in Czech imports,which in 2005 amounted to 62.6 % of GDP,the year-on-year share declined by 0.6 p.p.,with the subsequent effect of improving theCzech balance of trade. The greatest degreeof openness is shown by Slovakia, with thevalue of exports exceeding two-thirds of GDP(68.1 %) and the value of imports close onthree-quarters of GDP of the Slovak Republic(73.4 %).

■ G E R M A N M A R K E T R E M A I N ST H E G R E AT E S T O U T L E T. . .For all the four countries under review, themain export partner is Germany. This feature ismost evident in the case of the CzechRepublic, which in 1999-2004 nearly doubledits exports to Germany (from EUR 10.6 billionto EUR 20.3 billion), the same as Poland (fromEUR 9.3 billion to EUR 18.0 billion). Mostdynamic, however, was the growth of Slovakexports to the German market, but with a lowvolume in comparison with the othercountries (from EUR 2.7 billion in 1999 to EUR6.4 billion in 2004). Hungarian exports toGermany grew more slowly in the periodunder review (from EUR 9 billion to EUR 14.1billion). Evidence of the strong ties of Czechexports to the German market is the fact thatin absolute terms, the CR exports to Germanymore than Poland, which also has a commonfrontier with that country (with some

simplification, the rather lower intensity ofHungarian and Slovak exports can beexplained by the non-existence of animmediate cross-border link, as in the case ofthe CR and Poland).

■ G R OW I N G P R O P O RT I O N O FM AC H I N E RY E X P O RT SWhile in 1999 the Czech Republic exportedgoods to the value of EUR 24.6 billion, ofwhich machinery and equipment were worthEUR 10.8 billion, in 2004, according toEurostat, total Czech exports exceeded theEUR 54 billion mark, with machinery exportsamounting to EUR 28.4 billion. Their sharethus rose from 43.8 % in 1999 to 52.6 % in2004. The highest proportion among the"foursome" under review is shown byHungary (62 % in 2004), with a 6.4p.p increase in comparison with 1999, while inthe case of the CR the increase was 7.8 p.p.Although Poland raised the proportion ofmachinery in its total exports over the periodof five years by as much as 9.7 p.p., incomparison with the remaining countriesunder review it is still low (35.8 % of totalPolish exports in 2004). Slovak machineryexports, too, are relatively low, amounting toless than half of the country’s total exports,although they rose from 38.2 % in 1999 to45.7 % in 2004, which in comparison withthe remaining countries is the fastest averageyear-on-year growth (+18.8 %) in the periodunder review. Approximately the same

average year-on-year growth of machineryexports in 1999-2004 is shown by the CR andPoland (17.3 % and 17.2 %, respectively),with Hungarian machinery exports growingmore slowly (by 13.7 % annually on anaverage). In the year of its accession to the EU,the Czech Republic increased its exports bymore than one-quarter (by 25.5 % incomparison with 2003), which was the fastestgrowth in comparison with Poland (+21.9 %),Hungary (+17.3 %) and Slovakia (+15.4 %).

■ T H E R O L E O F I M P R OV E DE X P O RT O P P O RT U N I T I E SAccording to average quarter-on-quartergrowth rates calculated from Eurostat figures,in 2005 the German economy did better thanin 2004. Figures for GDP in current pricesshow an increase from 0.3 % to 0.5 %, forGDP in constant prices an increase from 0.1 %to 0.4 % (the data are adjusted seasonally for the number of working days). Thisdevelopment is showing an increase of exportopportunities for the Central Europeancountries under review. This is logical in viewof the great importance of the Germanmarket for their exports. This finding issupported by the growth of German imports,which in 2004 grew by an average 2.2 % ona quarter-on-quarter basis, while in 2005 thegrowth was 2.5 %. Imports into the euro-zone rose as well, growing from quarter toquarter from 2.1 % to 2.3 % in 2005 on anaverage. The area of the common Europeanmarket also improved from the exporters’point of view, when in addition to Germanylast year average quarter-on-quarter GDP (incurrent prices) also rose both in the euro-zoneand in the EU25. Apart from this, the CzechRepublic also benefited from faster growth inten countries, which are its largest outlets: theeconomy grew in Italy, Great Britain, and theNetherlands. On the contrary, a slight declinetook place in Austria and France.

For the Czech Republic, it is also importantthat imports rose on the part of other bigtrading partners, to whom the CR exports itsgoods, for example Slovakia (No. 2 exportoutlet with an 8.6 % share of total Czechexports), which every quarter of last yearincreased its imports from the CR by 5.3 % onan average in comparison with 3.5 % in 2004.Higher growth was also recorded by exportsto Great Britain, which is the sixth largestoutlet for Czech exports with a share of 4.6 %.

Drahomíra DubskáMacro-analysis Dept., Czech Statistical Office

(e-mail: [email protected])www.czso.cz

Accession to the European Union has intensified the exchange of Czech goods with other countries

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■ U N E M P L OY M E N T R AT ED I F F E R S B Y D I S T R I C T

The rate of registered unemployment forthe month of June was 7.7 (May 2006 -7.9 %, June 2005 - 8.6 %,). The lowestunemployment rate was in the districts ofPraha-východ (Prague-East) and Praha-západ (Prague-West) (both 2.2 %), Prague(2.8 %), Mladá Boleslav (3.3 %), Benešov(3.6 %), and Pelhřimov (3.7 %). The rateof unemployment higher than thecountry's average was found in 31districts: Most (20.5 %), Karviná (17.9 %),Teplice (15.9 %), and Ostrava (14.2 %).The rate of registered unemployment forwomen was 9.6 % and 6.3 % for men.Differences in unemployment rate ofindividual districts are caused by the socalled structural unemployment. Thatmeans employers offering jobs but havingproblems finding suitable employees with

adequate experience and education. Anexample of this situation are the newlybuilt factories, who report half of theirhired employees to be foreigners, eventhough there is a high unemployment ratein the region.

■ M A I N FA C TO R S A R ED E M O G R A P H Y A N D T H EG R O W T H O F T H E E C O N O M YThere is an interesting point in thestat ist ics : dur ing the past years,unemployment rate always stagnated inJune because fresh absolvents fromschools appeared on the labour marketwhich compensated for seasonal jobs verywell. In some years, the seasonal jobs onoffer were even weaker and theunemployment rate rose by one tenth ofa per cent point. It is not the case this year– the decrease in the rate of

unemployment by 0.9 % from the previousyear is due to the fast growth of theeconomy and demographic factors. Theeconomic boom enables companies tocreate new positions while the demand forthem is lower because people from weakeryears are entering the labour market andpeople from stronger post-war years areretiring. While there were 8.6 applicantsper one job position one year ago, todaythe number is 5.2.

■ C Z E C H R E P U B L I C I S B E L O WE U R O P E A N U N I O N AV E R A G EThe harmonised rate of unemploymentproduced by EUROSTAT for internationalcomparison reached 7.1% in the CzechRepublic for May. In other EU countries itwas the following: EU25 8.0 %, Germany8.7 %, Spain 8.3 %, France 8.3 %, Ireland4.1 %, Italy 8.0 % (December 2005),Hungary 7.2 %, the Netherlands 3.9 %,

According to a report by theMinistry of Labour and SocialAffairs, unemployment ratedecreased to 7.7 % in June 2006from 7.9 % in May of the sameyear. By the last day of June,employment bureaus had 451 106 persons on file, 11 936less than by the end of theprevious month. In comparisonwith the same period in 2005,the overall number of jobseekers is lower by 38 982. Fromthe overall number of jobseekers, 422 925 is reachable,which is 8 800 less than by theend of the last month. Incomparison with the sameperiod in 2005, the number ofreachable job seekers is lower by68 982 persons.

Fall in Unemployment Rate

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Austria 4.4 %, Poland 16.0 %, Slovenia6.1 %, and Slovakia 15.2 %.

■ U N E P L OY M E N T I N T H E 1 S T Q U A R T E RAverage number of unemployed persons inthe 1st quarter decreased by 3 900 whencompared to the 4th quarter in 2005. Thenumber of unemployed persons reached414.1 thousand, of which 221.7 thousandwere women (53.5 %). In comparison withthe 1st quarter of the year 2005, theoverall number of unemployed decreasedby 15 000. The majority (72.0 %) of theunemployed are persons with secondaryschool education without school leavingexam and persons with primary schooleducation. There has, however, been anincrease in the number of universityeducated unemployed persons whencompared to the 1st quarter in 2005. Anextraordinarily large portion of long-timeunemployed are from the group ofunemployed with pr imary schooleducation (67.5 % of all unemployed withprimary school education); it is over half ofall the unemployed (51.6 %) in the group

of unemployed with secondary educationwithout school leaving exam. Long-timeunemployment is seen less in the group ofunemployed with secondary schooleducation with school leaving exam (41.3 %) and in the group of persons withuniversity education (39.8 % of all

unemployed university educated persons).The overal l number of personsunemployed for more than four yearsdecreased by 5 600 to 62 500.

Daniel KubátEconomist

(e-mail: [email protected])Ph

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People with adequate practice and education have no problem finding work

■ E V E R G R O W I N G N U M B E R O F T H E C Z E C H R E P U B L I C C I T I Z E N SC O M M U T E S TO W O R K

Even though foreign investors may get the impression that the Czechs do not like tocommute to work, it is not so. According to data from the Czech Statistical Office, over660 thousand employees commute to a different district or region every day, sometimesfor hundreds of kilometers. The incentive being a shortage of jobs in the place of theirhome. Some 170 thousand persons commute to Prague only, some of them all the wayfrom Moravia. From the Central Bohemia Region it is a hundred thousand, while ten yearsearlier it was one third less. People are not put off by the fact that they must spend longhours on the road every day. It is the young university educated people withoutcommitments who commute in ever growing numbers. Sometimes there is as much ashalf of the employees who have their permanent residence hundreds of kilometres fromthe capital. From the point of view of professions, it is mostly people working in industryand building who commute the most.

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■ S H I F T TO W A R D S M O R ES P E C I A L I S E DP R O D U C T I O N

A welcome feature is that mostinvestments go to regions with highunemployment rates. The Moravia-SilesiaRegion has been found attractive by 20investors (CZK 37.8 billion, i.e. approx.EUR 1.26 billion) and the Ústí Region hasbeen chosen by 18 companies (CZK 74billion, i.e. approx. EUR 250 million). Thestructure of projects within the branches isimproving as wel l . St i l l s t ronglyrepresented are the automobile andengineering industries, but even herea distinct shift towards more complicatedand more specialised production can beobserved. Investors in the Czech Republic

are building new manufacturing plantsf i t ted with the most up-to-datetechnologies and equipment, so that very

often their standard is higher than that ofthe companies’ branches in West Europebuilt before.

The best proof of the favourabledevelopment of the Czech economy is thefact that for the first time investors comingfrom the Czech Republic (23 projects) holdfirst position in the number of newprojects. Traditionally, they are followed byGerman investors (19 projects) and thethird place is held by the USA (10 projects).For example, Czech projects beingprepared in the Moravia-Silesia Region areat the same time among the largest.Vítkovice Cylinders, a company specialisingin the manufacture of high-pressurebottles intended for the reconstruction ofmotor vehicles to be driven by LPG, is

preparing a project to cost approximatelyCZK 1 billion (approx. EUR 33 million),which will create at least 114 new jobs.Another prosper ing Czech f i rm isOstravské opravny a strojírny engineeringworks planning to invest up to CZK 430million (EUR 14.3 million). As a result of itsenlargement and modernisation, another170 workplaces will be created. Thecompany is one of the largestmanufacturers of railway freight vehiclesand spare parts. The third example ofa successful Czech firm is the FinidrCompany, which will provide employmentto 186 people. Its investment in ČeskýTěšín will amount to CZK 482 million(approx. EUR 16 million). It will make softand hard book bindings.

Alžběta HonsováCzechInvest

(e-mail: [email protected])www.czechinvest.org

In the first half of 2006,CzechInvest, the business andinvestment promotion agencymediated 84 new investmentprojects, both foreign anddomestic. Thanks to theseinvestment projects worth morethan CZK 70 billion (more thanEUR 2.3 billion), more than 17 500 new jobs will be createdin the Czech Republic in the nextfew years."In comparison with the sameperiod of last year, the numberof new projects has increased by14, the number of new jobspromised by investors will be upby 9 500 and the total value ofinvestments has grown by asmuch as CZK 45 billion (approx.EUR 1.5 billion)," said TomášHruda, Managing Director ofCzechInvest Agency. "Out of thetotal number of projects, 21 areprojects with high added value,i.e. investments in strategicservices or technologicalcentres."

Investment for More Than 2.3 Billion Euros

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SURVEY OF THE LARGEST INVESTORS IN THE FIRST SIX MONTHS OF 2006

Investor Sector Country of origin Jobs Region Locality

Hyundai Motor automotive Korea 3 000 Moravia- NošoviceCompany SilesiaAutomotive Lighting parts for Germany 632 Highlands PávovReutlingen the automobile (Vysočina)

industryIPS Alpha electronic Japan 2 000 Ústí ŽatecTechnology equipment nad LabemVÍTKOVICE metalworking Czech 114 Moravia- Moravská CYLINDERS Republic Silesia OstravaBehr parts for the Germany 130 Moravia- Mošnov

automobile industry Silesia

Vítkovice Cylinders specialises in the manufacture of high-pressure bottles

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B U S I N E S S A N D P R O D U C T I O N

■ D E T E R R I N G F I N E S ?Fines for all violations of rules laid downby the act on the protection of

consumers have been raised from the originalmaximum amount of CZK 1 million to CZK 50million (from approx. EUR 33 000 to EUR 1.7million). Also increased were fines providedfor by the general safety of products act, theact on the technical requirements of productsand the food and tobacco act. The aim ofthese measures is to deter businessmen fromviolating the law. This, however, does notmean that the highest possible fine could beimposed even for a small offence. Indetermining the amount of the fine thesupervising body must always consider thenature of the unlawful action and the extentof its consequences.

The number of authorities entitled toimpose fines on businessmen for the violationof consumer protection rules has alsoincreased. They include the Czech BusinessInspection, the Czech Agriculture and FoodInspection Authority, public health bodies,veterinary administration bodies and recentlyalso trade licensing boards and customsauthorities, whose competence has beensignificantly broadened. Besides imposingfines, the officers of these bodies have far-reaching competences in executing theircontrol powers: the right to enter the entirebusinessman’s facilities and buildings, requestthe necessary documents and data from him,verify his identity, take samples againstcompensation, etc.

■ W R I T T E N F O R M B E C O M E SO B L I G ATO RYOther changes that have been made includethe businessman’s duty to issue writtenconfirmation of his acceptance of the order,which must be issued to the consumer in casethe service is not provided while the customerwaits. The confirmation must contain thedescription of the object of service, its extent,quality, the price charged for providing theservice and the date when the service will becarried out. In case the customer lodgesa claim, the businessman or another personresponsible for making the repair is alsoobliged to give to the consumer writtenconfirmation as to when the claim waslodged, what is its content, and which modeof settlement the customer requires,including confirmation that the repair wascarried out and how long it took, possiblya written explanation why the claim wasrejected. In case the businessman providesservices or sells products outside his registeredbusiness facility, he is obliged to inform theconsumer in writing about the conditions oflodging a claim and with whom the claim

Recently, the Czech Republic hastaken a number of measures toprotect consumers. Thesemeasures cover both the actualprotection of consumers againstunfair business practices and theregulation of advertising, prices,and legal provisions concerningthe enforcement of the right tointellectual property. In an effortto prevent unsuitable businesspractices, state authorities aretaking stricter measures towardsbusinessmen and their controlsare more and more intensive.The most recent change asregards consumer protection wasbrought by the amendment ofthe Consumer Protection Act of29 May 2006. The change waspreceded, among other things,by the passage of a new act onthe enforcement of rights fromindustrial property, whichbecame effective on 26 May andwhich unifies legal provisionsscattered in a number of lawsinto a single act. Anotheramendment passed earlier thisyear is the amendment of the acton the regulation of advertising.What impact do theseamendments have on Czech andforeign businessmen?

Stricter Measures to Protect the Consumermay be lodged, and about guaranty repairs.The non-fulfilment of these new obligationsand other duties imposed by the law may bepunished by fines up to the fixed level.

■ U N FA I R B U S I N E S S P R AC T I C E SFrom the beginning of this year, theadvertising regulation act banned advertisingmaking "special offer" without there beinga sufficient supply of goods guaranteed inrespect of the expected demand. This ban isonly the first of a number of bans to preventdeceitful and aggressive business practicescontained in the new EU directive on unfairbusiness practices towards consumers on theinternal market. In the middle of next year atthe latest, when the time allowed for thetransposition of that directive into Czechlegislation will have expired, Czechbusinessmen can expect other explicit bansand restrictions of different businesspractices.

The EU directive specifies nearly 30different business practices which must beconsidered unfair under all circumstances.This includes, for example, the ban on paidadvertising in newspapers and TV, if theconsumer cannot distinguish that it is anadvertisement, the ban to attach an invoiceor similar documents for making paymentsto marketing materials, whereby theconsumer may get the impression that hehas already ordered the advertised product,although this is not so. The directive alsomakes it possible for the burden of proofconcerning allegations of fact used in certainbusiness practices to rest on thebusinessman, in which case, unless thebusinessman can prove the veracity of hisallegations, those allegations will beautomatically considered incorrect.

■ A R E B U S I N E S S M E NT H R E AT E N E D B Y C O L L E C T I V EAC T I O N S O F C O N S U M E R S ?Collective actions to defend consumerinterests and other rights of citizens are notcustomary in the Czech Republic so far. Thesuit by nearly three thousand Prague dwellersliving by the noisy Prague trunk road againstthe Prague Municipality, however, isconfirmation of the changing trend, which iscoming to us from the USA across the wholeof Europe. Consumers are beginning to takethe defence against unfair business practicesin their own hands no longer relying on juststate supervision. A welcome fact is that legalregulations are becoming more and morefavourably inclined to these suits.

The amendment of 29 May 2006 broughtthe consumer protection act in harmony withthe EU directive on this subject. Under this

M O R E I N F O R M A T I O N :Sdružení obrany spotřebitelů (ConsumersDefence Association of the Czech Republic)www.spotrebitele.info/lang/

Česká obchodní inspekce (Czech CommercialInspection) www.coi.cz

Státní zemědělská a potravinářská inspekce(Czech Agriculture and Food InspectionAuthority)www.szpi.gov.cz

European Consumer Centrewww.mpo.cz/cz/ochrana-spotrebitele/esc/

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A number of changes have taken place in the Czech Republic recently in the area of consumer protection

C O N S U M E R S D E F E N C E A S S O C I AT I O N O F T H E C Z E C H R E P U B L I CThe Consumers Defence Association (SOS) regards the newly implemented regulation on fraudulent business activities as very beneficial.We expect greater effectiveness of consumer rights as a result of this new legal amendment. These specific fraudulent business activitieswhich are newly implemented into Czech legal system were often ignored by relevant state authorities, or they were not sanctionedalthough consumer organisations regularly drew attention to them. Relevant state authorities, including prosecution authorities, could notrely on the effective legislation and many transgressions of consumer rights were not prosecuted. The newly passed European legislativethus opens up a new potential for consumer organisations in their field of activity and it will result in the growth of the level of consumerdefence. As a member of the European Consumers’ Organisation we supported this directive.

Consumer organisations have also been calling for legislative amendment of the so-called class-action lawsuits. The reason is theeffectiveness of this useful instrument which lies in a more efficient prevention of violation of legal rights and indemnity. Currently thepossibilities of class-action lawsuits are sometimes substituted by the so-called model lawsuits of individual subjects. Other participants’further conduct is coordinated on the basis of the results of these lawsuits. Current legislation enables consumer organisations to sueentrepreneurs to refrain from illegal conduct; nevertheless this amendment does not fully correspond to the claims of the so-called class-action lawsuits. We do not want to sue only, though. That is why we try to oblige firms and entrepreneurs in their effort to meet therequirements of consumer defence. We offer companies regardless of their economic situation to participate in training in the practicaluse of consumer rights. We have also prepared an instrument for improvement – an audit of a firm’s trade conditions from the perspectiveof effective rules for consumer protection. We also try to function as a mediator in disputes between entrepreneurs and consumers. Wewant to help both parties to quickly and fairly solve the existing problem with which usually neither party wants to go to court. Severalthousands of SOS members expect that they will be able to rely on legislation in the field of mediation which will allow for an effectiveinvolvement in consumer–entrepreneur disputes with the goal of a faster and cheaper solution. Mediation presupposes willingness of bothsides to participate. It is often the offering side that lacks this willingness. Therefore we welcome ethical codex and other self-regulatorymechanisms of professional business unions. We see business unions as important participants and we have a useful dialogue with manyof them. We regard contacts and consultation with the world of business as a challenge and an opportunity which will pay off toconsumers and clients as well as to companies.

David Šmejkal (e-mail: [email protected])

directive, a list is kept of persons entitled tofile a suit in any EU member state againstunlawful conduct in the area of consumerrights protection. According to the latestCommission report, altogether 272 suchassociations have been registered in the entireEuropean Union, including 5 Czech ones.

Czech legislation, however, does not

recognize real collective, so called "class"actions. The Consumers Defence Associationsmay file suits against unlawful conduct, butthey have no right to bring action for therecovery of property obtained as a result ofunjust enrichment, for adequate satisfactionor the compensation of damage. Anexception is the new act on the enforcement

of rights from industrial property, whichallows professional organisations operating inthis area to file such suits.

Mojmír JežekAttorney-at-law

(e-mail: [email protected])

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E X P O R T

"In total, six different internationalconsortia submitted their applicationin the two-round tender process.

The offer that we submitted in associationwith construction company Háfell ofIceland best met the requirements ofVegager in, the investor (an institutionsimilar to the Road and MotorwayDirectorate of the Czech Republic). Wewere not only able to offer the best pricebut we also met other criteria, includingthe construction deadlines and qualityguarantees," said Pavel Pilát, Metrostav’sSales Director.

Within the construction area, whichalso inc ludes a br idge over the Hé insfjar ará River and the total lengthof which amounts to 14.1 km, Metrostavwill build two segments of the tunnel,partly bored, partly excavated, 10 995m in total length. The shorter one,Siglufjördur, will be 3 871 m in length, andthe other, Ólafsfjördur, will be 7 124 m long.Entrances to the tunnels will be providedwith protective concrete collars to ensure

that the underground road is accessibleeven in periods of severe winter weather.Throughout the length of the boredtunnel segments, work will be carried outin igneous rocks; unstable layers may onlybe expected in the excavated segments.The height of the overburden is relativelyhigh, up to 600 m in the section below theHólsfjall peak.

For the implementation of projects,Metrostav draws on i ts extens iveexperience in underground work whilstemploying advanced technologies, theundisputable benefits of which haveconvinced many domest ic andinternational investors. In many cases,Metrostav was the first to employ suchtechnologies in the Czech Republic andthe first to use them to such a largeextent.

For more information, seewww.metrostav.cz

M E T R O S TAV TO B U I L DT U N N E L S I N I C E L A N D Metrostav, a joint stockcompany, is to build two tunnelsin Iceland of almost 11 km intotal length and at a cost of ISK5.7 billion. These tunnels are to link the towns of Siglufjördurand Ólafsfjördur on the northcoast, forming part of a newsegment of the island’s mainarterial road. The significance of the project is also evidencedby the fact that four members of Iceland’s Parliament, threeministers of Iceland’sGovernment (the Minister ofTransport, the Minister of Healthand the Minister of SocialAffairs).

Examples of Successful Czech Exports

The project alsoincludes thebuilding of

a power plant whichwill supply not only theport and the economiczone, but it will enablethe sale of electricity toother Indian states.Finally the project alsoincludes theconstruction ofa factory to produceartificial fertilisers. It isthe largest exportproject not onlyregarding financialextent, but also in itscontents. Škodaexportwill build both thepower plant for theport, the economic zone, and the needs ofAndhra Pradesh as well as the factoryproducing artificial fertilisers virtually asa turn-key project.

"The power plant is standard workŠkodaexport is used to. We work as a turn-key supplier, of course in cooperation withCzech suppliers Škoda Power from Plzeň,a producer of turbines and turbine-generator units, with ZVVZ Milevsko, AlstomBrno. We might realise the traditionalCzecho-Slovak cooperation in the field ofsupplying boilers," said the company’s

director Jaroslav Hubáček. Hubáček also saysthat the so far largest Czech export project,in fact a "quadruple project", is also anexpression of the willingness of AndhraPradesh to cooperate with the CzechRepublic. The whole project was a subject ofnegotiations during the prime minister JiříParoubek’s visit to India in January 2006.

For more information, seewww.skodaexport.cz

Š KO DA E X P O R T R E A L I S E S T H E L A R G E S T C Z E C H E X P O RTP R O J E C T I N H I S TO RYIndia is one of the high priorityregions of Czech export policy.It is in this country thatŠkodaexport reaps great success.The company prepares the so farlargest Czech project abroad ofIndia, an investment of onebillion dollars. The project is themodernisation of the port ofNizapatman. In fact it is fourprojects in one – it comprisesthe modernisation of a port onthe eastern shore of India, in theBay of Bengal, in AndhraPradesh.

Škodaexport also built a power station in Ennore, India

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■ S H A R E S D I R E C T LY F O R PA R T N E R S

A significant new feature is the fact thatcommercial or stock share of successioncompanies is not given to the companythat is being split, but directly to itspartners. This was not possible with thecurrent ways of splitting commercialcompanies. In accordance with this newlegislation, partners of the company that isbeing split shall keep their share of thecompany that is being split and shall alsobecome partners in the successioncompanies.

Determination of shares of the partnersof the company that is being split in thesuccession company depends, according tothe new legis lat ion, ent i re ly uponnegotiations between the partners. Thecommercial code accepts both a so calledequal exchange rate, which constitutes thepartners' right to identical shares, and a socalled unequal exchange rate, which allowsto div ide the success ioncompanies according to theneeds of individual partners.In a l l cases, however,a condition of suitability andevincibility of even an unequalexchange rate must be met.

■ P R OT E C T I O N O F C R E D I TO R SCommercial company splitaffects not only involvedcompanies, but also everydebtor and creditor of thecompany that is being split.For this reason, thecommercial code expresslyconsiders a situation in whichit may not be, in a particularcase, clear to third personsfrom a project or anagreement about a split, whatobligations and claims weretransferred from the companythat is being split to thesuccession company. In thiscase, all debatable assets andobligations remain with thecompany that is being split.Should it not be clear whatparts of the assets orobligations were transferredto succession companies, theybecome joint owners of thetransferred assets and theyshall share the transferredobl igat ions one and al l .Protection of creditors is –among other things – ensured

by joint liability of involved companieswhich is, however, limited by the amountof net business property as ascertained byan expert's account in the successioncompanies and by the amount of its owncapital as showed in the starting balance inthe company that is being split.

The new legislation is achieving successamong the Czech businessmen. Starting inMarch, many companies made use of thenew ways of splitting off, including Českápojišťovna, Radiokomunikace, Group 4Falck, and others. Potential ambiguityregarding the application of the newlegislation cannot overshadow its clearbenefits for the Czech businessmen andforeign investors.

Mojmír JežekAttorney-at-law

(e-mail: [email protected])

With effect from 8 March 2006,the commercial code codifiesnew ways of splittingcommercial companies which nolonger require unconditionalelimination of the company thatis being split. For many years,legal experts and theory hasbeen calling for this change thatwould correspond to the socalled sixth European regulation.The commercial code now allowsto perform a split ofa commercial company by the socalled "splitting off" by whichthe company that is being splitdoes not cease to exist and onlya part or parts of its assets aretransfered by the splittingprocess to one or more newlycreated companies (so called"splitting off with the creationof new companies"), or to analready existing company (socalled "splitting off bymerging").

New Ways Of "Changes" Are Popular Among Businessmen

The Commercial Code Amendment gives greater protection tocreditors

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R E G I O N

NUTS 3 – Pardubice Region

■ E C O N O M I CC H A R A C T E R I S T I C SThe Pardubice Region can be characterisedas an industrial and agricultural entity. Itsindustrial production has a diversifiedstructure, with strong representation fromthe general engineering and chemicalindustries, followed by the textile, electricalengineering and food industries, andconstruction.

In 2004, its per capita gross domesticproduct amounted to 60.4 % of the EU25average. Five branches of industry are mostresponsible for the creation of theRegion’s GDP, generating 71.8 % of its grossadded value. Of decisive importance is themanufacturing industry, which in 2004accounted for 33.3 % of the Region’s grossadded value. Other branches with highproportions of the Region’s gross addedvalue are trade (11.8 %) and publictransport, warehousing and communi-cations (10.6 %). Also important wereactivities in the area of real estate (9.2 %)and construction (6.9 %). Agriculture is

another important sector, which accountedfor 5.8 % of the Region’s gross added value.Farmland occupies 60.6 % of theRegion’s total area, with forests covering29.4 % and water 1.35 %. Agriculturefocuses on vegetable production and theproduction of milk, eggs, and meat. TheRegion also has deposits of gravel sand andbrick clay.

■ T R A N S P O R TThe most widely used modes oftransportation in the Pardubice Region areroad and railway transport. The Region has531 km of railway lines, with Pardubice itselfbeing one of the country’s most importantrailway junctions. It is part of the E040international railway line (Paris – Nuremberg– Prague – Vienna) and the E061 (Berlin –Prague – Brno – Vienna) line. Importantnational lines in the direction of Liberec andvia Chrudim and Hlinsko to Havlíčkův Brodare connected to the main corridor inPardubice.

The most important road link is the I/37,

View of the historical part of Pardubice Phot

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T E R R I TO R I A L D I V I S I O N ,L O C AT I O N , P O P U L AT I O NThe Pardubice Region is situatedin the eastern part of Bohemia,and together with the HradecKrálové and Liberec Regions,forms a territorial cohesion unitcalled NUTS 2 – North-East.A section of the Region’s north-eastern border forms the Czech-Polish state border and fromthere on, the Region is fringed bythe southern slopes of theOrlické Hory Mountains and thewesternmost slopes of the HrubýJeseník range. The south andsouth-east is bordered by thehills of the Žďárské Vrchy andŽelezné Hory Mountains. Thecentral and western parts of theRegion are formed by the fertileLabe basin, which has the Labe(Elbe) River meandering throughit. The Orlické Hory, ŽďárskéVrchy, and Železné HoryMountains belong to theRegion’s protected landscapeareas (www.orlickehory.cz).With its area of 4518 sq. km, theRegion occupies 5.7 % of thecountry’s total area. Itspopulation, living in four districts– Pardubice, Chrudim, Svitavy,and Ústí nad Orlicí –amounts to506 000. The regional capital isthe statutory town of Pardubicewith a population of 88 200(www.mesto-pardubice.cz).

Krajský úřad Pardubického kraje (Regional Office of the Pardubice Region)Komenského nám. 125532 11 PardubiceCzech Republicphone: +420 026 111fax: +420 466 220e-mail: [email protected]

Ústí nad Orlicí

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running from the North through Pardubiceand Chrudim to Ždírec nad Doubravou, andI/17 in the direction of Čáslav via HeřmanůvMěstec and Hrochův Týnec to Zámrsk. Anintersection of important roads in the south-eastern part of the Region is located atSvitavy. From there, road I/35 runs to theNorth-West via Litomyšl, Vysoké Mýto, andHolice to Hradec Králové. A basic change inPardubice Region’s road transport will be the new section, now under construction, ofthe existing Prague – Poděbrady motorway, to be linked to the R35 thoroughfare, whichwil l become the backbone of theRegion’s transport system.

In air transport, a decisive role is played bythe Pardubice international airport withmixed military and civilian air traffic(www.airport-pardubice.cz).

As regards river transport, the PardubiceRegion can only use a short navigablesection of the Labe. A necessary conditionfor the realisation of a logistic port zone isthe canalisation of the 23 km Pardubice –Chvaletice section of the Labe. After that,Pardubice will be directly connected, notonly to the important sea port of Hamburg,but also to the whole network of Europeanwaterways (www.pristav-pardubice.cz). Oneinteresting tourist attraction is the regularseasonal pleasure cruising programme downthe Labe from Kunětice via Pardubice toPřelouč.

■ E D U C AT I O N , C U LT U R E ,TO U R I S MThere are 239 elementary schools in theRegion, and its 20 grammar schools providesecondary education for more than 7 200students. In addition, there are 42 secondaryvocational schools, 32 secondary-levelapprentice training centres and 11 higher-level vocational schools. Pardubice also hasa university with four faculties(www.upce.cz). The Pardubice Region hasgood prerequisites for the development oftourism. It has a beautiful environment,featuring vast planes alternating withmountain slopes, a favourable climate andopportunities for swimming, water sports,hiking, cycling, and winter sports. Agro-tourism is developing in themountain foothills throughout the Region,which is also traditionally known forbreeding famous Kladruby horses(www.nhkladruby.cz). Tourism is naturallylinked with cultural activities. The Pardubicecastle hosts expositions of the EastBohemian Museum and the East BohemianArt Gallery (www.vcm.cz). Chrudim’sattraction is its well-known Puppet Museum(www.puppets.cz), and in Holice, the

African Museum is a memorial to the Czechtraveller Dr Emil Holub (www.holice.cz)

The Pardubice Region is also a region ofmusic. Its most renowned undertakings arethe Pardubice Musical Spr ing andperformances by the Pardubice ChamberPhilharmonic Orchestra representing theCzech Republic in other countries onvarious occasions. Other musical events areSmetana’s Litomyšl and music festivals inPolička. Among the Region’s theatres, themost popular is the East Bohemian Theatre

in Pardubice (www.vcd.cz). As regardssporting events, the best-known is the Great Pardubice Steeplechase(www.pardubice-racecourse.cz). A familiarevent for the lovers of motorcycle racing isthe race for the "Golden Helmet of theCzech Republic". In many other sports, too,the Pardubice Region plays a distinguishedrole. For example, the Pardubice extra-league ice-hockey club has becomea nursery for ice-hockey talents of worldstature.

B R I E F C H A R A C T E R I S T I C S O F T H E R E G I O NNUTS Area (sq. km) Population Municipalities Population density

(persons/sq. km)NUTS 4 – Chrudim 1 029 104 575 113 102NUTS 4 – Pardubice 889 160 931 115 181NUTS 4 – Svitavy 1 335 101 827 113 76NUTS 4 – Ústí nad Orlicí 1 265 138 691 111 110NUTS 3 – Pardubice Region 4 518 506 024 452 112NUTS 1 – CR 78 868 10 251 079 6 248 130

Source: Czech Statistical Office (as of 31 December 2005)

BASIC DATA

Area of the Region 4 518 sq. km

Population 506 000

Regional capital Pardubice

Unemployment rate 8.6 % (February 2006)

Per capita GDP CZK 230 880 (EUR 770) (year 2004)


UNEMPLOYMENT RATE BY DISTRICT (%)

Chrudim 8.3

Pardubice 6.7

Svitavy 12.3

Ústí nad Orlicí 8.3

Source: Ministry of Labour and Social Affairs (as of 28 February 2006)

100

200

300

400

500

600

700

0 2001

449

521 482559 519

602554

641583

655

2002 2003 2004 2005 2001 2002 2003 2004 2005

2

4

6

8

12

10

0

7.93

8.9 8.66

9.819.42

10.31

8.949.47

8.35 8.88

EUR exchange rate as of 31 December 2005 (EUR 1 = CZK 29)

EUR

%

Average gross monthly wages 200–2005 (EUR)Pardubice Region CR

Unemployment rate 2001–2005 (%)Pardubice Region CR

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The Pardubice Region Is Drawing on EU FundsAmong the most important projects that havebeen accepted as eligible for support from theStructural Funds, there are three involving themodernisation of selected sections of 2nd and3rd class roads in the Pardubice Region. Theseprojects will receive a subsidy from theStructural Funds to the amount of approx.CZK 145 million (approx. EUR 5 million).A project for the construction ofa multifunctional education, community, andcultural centre in Svitavy is to be supportedwith approx. CZK 90 million (EUR 3 million)from the Structural Funds and a project forActive Tourism in the Orlicko-Třebovsko areawill receive a subsidy from the Structural Fundsof approximately CZK 55 million (EUR 1.8million). The Pardubice Region has alreadytaken the opportunity of drawing money fromEU pre-accession funds, e.g. for themodernisation of railway corridors on theterritory of the Pardubice Region witha subsidy of approx. CZK 1.2 billion (approx.EUR 40 million) and for the modernisation ofroads in the border areas of the PardubiceRegion, specifically in the Ústí nad OrlicíDistrict with a subsidy of approx. CZK 90million (approx. EUR 3 million). In sum, it canbe said that the Pardubice Region has receivedor will receive financial means from theEuropean Union to the amount of approx.CZK 2.5 billion (approx. EUR 83 million).

The new 2007-2013 EU planning period

provides the possibility of drawing muchhigher sums from EU funds. In the frameworkof the NUTS 2 North-East Regional OperatingProgramme alone, the Region will be able todraw more than CZK 700 million (approx. EUR23 million) a year. Currently the PardubiceRegion is intensively preparing for thispossibility. It necessitates an active approach topreparing the operating programmes and the preparation and realisation ofa comprehensive information system to makeall those interested broadly informed of thepossibilities of drawing money from thePardubice Region Structural Funds and to helppotential applicants to prepare their projects.

The Pardubice Region is fully aware of thisunique opportunity and wants to take fulladvantage of it. In my opinion, the possibilityof using the money during the seven-yearperiod provides a tremendous opportunity forthe development of our region. At the sametime, in my position as the main negotiatorwith Brussels for the conditions for theRegional Operational Programme for all threeregions, I am feeling great responsibility forthe successful realisation of the programme.I am sure that most citizens in our region willbenefit from being able to use the funds thatare made available to us.

Roman LínekVice-President of the Pardubice Region

The Czech Republic’s accession tothe European Union has openedup possibilities to draw onimportant financial sources fromEU Structural Funds and entitiesthroughout the Pardubice Regionare drawing considerable benefitfrom this opportunity.

Electrotechnical Cluster of the Pardubice RegionThe Pardubice Region supports the idea ofcreating clusters in the Region. It thereforehas appointed the Pardubice RegionalDevelopment Agency to draft a projectknown as "Searching for CompaniesSuitable for the Creation of anElectrotechnical Cluster in the PardubiceRegion". The project is supported by theprogramme CLUSTERS (OperationalProgramme Industry and Entreprise).

The project has been completed by theend of July and its conclusion includesa recommendation for the establishment ofthe cluster. Within the Pardubice Region,about 17 companies have already promisedto participate, including small and medium-sized enterprises (for example CESA a. s.,RCD Radiokomunikace s. r. o., Radom s. r. o.,Bohemiatech s. r. o. etc.) and largecompanies (KIEKERT-CS). Five workshops

were organised during the screening projectin order to discuss topics such as the futurecooperation within the cluster, itsorganisational configuration etc. Membersof the cluster agreed upon possiblecooperation in areas such as employees’education, marketing, advertisement,common research and development, etc.Educational and scientif ic-researchinstitutions are also an imminent part of thecluster. Pardubice University, as representedby the Institute of Electrical Technologies,the Secondary Vocational School of ElectricalEngineering, and Pardubice currentlycooperate on the project.

More information at: www.elektroklastr.cz

The electrical engineeringindustry has a long tradition inthe Pardubice Region. It wasestablished at the beginning ofthe 20th century and it hassurvived until recently despite theeconomic and political changesafter the Second World War andafter 1989. This is one of thereasons why the electricalengineering industry was selectedas a sector with a high potentialfor the creation of a cooperationstructure, the so-called cluster.

R E G I O N

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The Agency’s other concern is helpingcommercial entities, for whom several

successful projects have been prepared, onegreat example for all: a project supported bythe Operational Programme Industry andEnterprise – Properties, that is also taken bythe implementation agency CzechInvest asthe sample project; other successfullydeveloping project is the Electroclusterproject that supports electro technicalsector.

Regarding cross-border co-operation,a project successfully completed under theINTERREG I I IA init iative focused onmodernising the road in the area of ČervenyPotok–Upper Morava River. In theframework of trans-national co-operationof countries in the CADSES-INTERREG IIIBarea, the Agency prepared the projectconcentrating on innovative flood riskmanagement now being completed, whichhas been evaluated very well. AnotherInterreg project that has been realised is theproject focusing on inter-regional co-operation in agricultural sector – eFarmer(INTERREG IIIC).

■ S E R V I C E S F O RB U S I N E S S M E N A N D I N V E S TO R SThe Agency provides information aboutinvestment opportunities in the PardubiceRegion and about investment incentives,and organises educational seminars. TheAgency also prepares the "RegionalDevelopment Programme" and selectedprojects concerning the development of thePardubice Region. Going with it arespecial ised services faci l i tat ingcommunication with the EU administration.Furthermore, the Agency prepares strategicplans for the town and communityassociations development. Naturally, itrepresents the Region at exhibitions andconferences concerning tourism,investment, enterprise, and innovation. Oneof the most important events of this kindwas the presentation of the NUTS 2 North-

East Region in Brussels last year, wheresuccessful projects co-financed from EUfunds in the area of transport, tourism,education, investment, innovation, andenvironment – all implemented in the NUTS 2North-East Region – were presented torepresentatives of European institutions andBelgian business companies.

This year, the Regional DevelopmentAgency and its Euro Info Centre arepreparing the presentation of the PardubiceRegion for the important "Open Days",conferences held in Brussels in October2006. The Euro Info Centre East Bohemiainforms small and medium-sizedenterprisers and businesses about EUlegislation, new regulations and in generalabout the effects of the Czech Republic’saccession to the EU on business. The EuroInfo Centre also helps businesses withestablishing commercial and industrial co-operation abroad through its Business Co-operation Database so that all co-operationventures are co-ordinated in a systematicway and made more efficient.

The Regional Development Agency ofthe Pardubice Region is a member of theCzech Association of DevelopmentAgencies (ČARA) and on the level of thePardubice Region it represents the AIPInnovation Enterprise Association. It co-operates closely with the CzechInvestAgency in the sphere of attracting foreigninvestments into the country and providesinformation about investmentopportunities, industrial zones, andbrownfields in different localities. It helps torealise investment projects of foreign ordomestic investors and promotesinvestment and entrepreneurial activities inthe Region.

Hana PindurováConsultant, RDA PR and Euro Info Centre

Pardubice(e-mail: [email protected])

www.rrapk.cz

The Regional DevelopmentAgency of the Pardubice Region(RDA PR), pursuing its activitiesin the Pardubice Region forseven years was established in 1999 as a non-governmental,non-political, and independentassociation of legal entitiesAfter the Czech Republic joinedthe EU, the Agency began to occupy itself with theStructural Funds of theEuropean Union and thefinancial mechanism of theEuropean Economic Area (EEA)and Norway, the so-calledNorwegian Funds.In 2005, the Agency prepared28 projects. Among the mostimportant projects in theframework of the JointRegional Operating Programmeare those projects covering thearea of transport infrastructure,human resources development,social integration in regions,development of tourism, and ecology and nature protection.

Agency Serving the Region, Businessmen, and Investors


P R O J E C T F O R T H E S U P P O R T O F B U S I N E S S D E V E L O P M E N T

The Regional Economic Chamber of the Pardubice Region was established as an independent subject three years ago, when thedistrict economic chambers of Pardubice, Chrudim, and Orlicko were merged. Apart from its seat in Pardubice, the Chamber alsohas its local offices in Česká Třebová and in Chrudim. The Chamber provides high quality services, which can be demonstrated forexample by the fact that it was awarded the ČSN EN ISO 9001:2001 in 2003 for the following field of activity: Support of BusinessActivities and the Provision of Services to Business People. The task of the Chamber is to support business development and to standfor the interests of business people, as well as to provide related services. The Chamber successfully cooperates with the RegionalDevelopment Agency and it participates on the creation of the Regional Development Plan, with the Pardubice Region andPardubice University as their partners.

More information at: www.khkpce.cz

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Agrarian Region Grown into a Tiger

Even though the Region ofPardubice is one of the smallestregions and a large part of itreaches into the agriculturalVysočina, it has become the thirdstrongest exporter in the CzechRepublic. Investors, promisingmore opportunities for smallersuppliers, keep on coming. This ishelped by the industrial zonespresent in the Region.

■ PA R D U B I C E I N D U S T R I A LZ O N EMany big investors have chosen thePardubice industrial zone (710 000square metres) to be the place of theirbusiness. A local master plan hasprovisions for the expansion of theindustrial zone up to 1.2 square km. Thesite is intended for l ight industrialmanufacture, manufacture and strategicservices, or technology centres. Currentlythere a re compan ies that supp lycomponents for the automotive industry,eg. Panasonic Automotive SystemsCzech, JTEKT Automot ive CzechPardub ice , Rona l CR, and KybManufacturing Czech. Among newlyplanned investments for the industrialzone, there is a developer project by CTPInvest Company called CTPark Pardubice,whose intention is to build rental halls for

smaller investors or start-up units.Another developing project in theindustrial zone is the construction ofa science and technology park; the soca l led TechnoPark Pardubice. I t i ssponsored by the University of Pardubice,the Pardubice Region, and Free ZonePardubice Company. In the future, theTechnopark should become a centre ofstrategic services, development, andresearch. Cooperation with the Universityand secondary schools from the townthat contribute expertise so as to expandthe number of professionals in theelectrical, chemical, and engineeringindustr ies i s yet another p lus forbusinessmen – there is no great shortageof qualified workers in Pardubice.

Pardubice offers its industrial zone toinvestors mainly through CzechInvest –State Inves tment and Bus inessDevelopment Agency. In 2002, the zonewas the only one awarded by CzechInvestfor its complex readiness, and in thefollowing two years it finished second inthe category called "Zone with theGreatest Economic Benefit".

■ F O R M E R M I L I TA R Y Z O N EPossibilities for investment in Pardubiceare by no means limited to the industrialzone. There are large sites right in thec i ty offe r ing good prospects forinvestments in commerce and theentertainment industry. A 10 hectare areaof former military barracks that will bemodernised by the Pardubice town hall isan excellent offer for investors. This areashould be earmarked for housing,administrative and commercial purposes,or sports and culture.

More at:www.mmp.cz/en/industry_and_business/investment_opportunities/zone/

R E G I O N

A R E A S AVA I L A B L E TO I N V E S TO R SName District Area (ha/sq. m) Usage ContactChrudim Chrudim 73/730 000 industry Ladislav Libý Phone: +420 469 645 239

Lanškroun Ústí nad Orlicí 4/40 000 light industry Ladislav Urban Phone: +420 465 385 238

Letohrad Ústí nad Orlicí 7.76/77 600 light industry Vlastimil Mlynář Phone: +420 465 676 426

Litomyšl Svitavy 10/100 000 industry Pavel Chadima Phone: +420 461 653 370

Pardubice Pardubice 75/750 000 light industry Hana Svobodová Phone: +420 466 859 463

Ústí nad Orlicí Ústí nad Orlicí 27.2 /272 000 light industry Přemysl Šťovíček Phone: +420 465 514 249

Vysoké Mýto Ústí nad Orlicí 38.55/385 500 light and medium industry Oldřich Pavelka Phone: +420 465 466 151

Water, gas, drainage, electricity, and telecommunication networks available in all areas.

Pardubice industrial zone

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Promoting the Competitiveness of Pardubice Companies

The main purpose of theenterprise promotion system inthe Czech Republic is to raise thecompetitiveness of industry andthe country’s entire businessenvironment. Supportprogrammes in the framework of the Operational ProgrammeIndustry and Enterpriseadministered by the Ministry of Industry and Trade andCzechInvest are intendedprimarily for forward-lookingfirms with growth potential, firmsintending to invest in theirdevelopment.Thanks to the InnovationProgramme, which is its part,enterprises had an opportunity to receive support for therealisation of projects aimed at raising the technical and use value of their products,technologies, and services or the introduction of advancedmethods of management andother non-technical innovations.


OT H E R I N D U S T R I A L Z O N E S I N T H E PA R D U B I C E R E G I O N :

Chrudim – Industrial zone - www.chrudim-city.cz, e-mail: [email protected]škroun – Industrial zone – West – www.mesto-lanskroun.cz, e-mail: [email protected] zone – Letohrad – www.letohrad.cz, e-mail: [email protected]šl – Industrial zone Benátská, www.litomysl.cz, e-mail: [email protected]á Třebová - Industrial zone, www.mtrebova.cz, e-mail: [email protected]řelouč – Industrial zone, www.mestoprelouc.cz, e-mail: [email protected] zone - Ronov nad Doubravou – www.ronovnd.cz, e-mail: [email protected] – Industrial zone "Paprsek" - www.svitavy.cz/inv/paprsek.htm, e-mail: [email protected] zone Třemošnice – www.tremosnice.cz, e-mail: [email protected]Ústí nad Orlicí – Industrial zone "Hylváty", www.ustinadorlici.cz , e-mail: [email protected] zone Vysoké Mýto, www.vysoke-myto.cz, e-mail: [email protected]

MAIN EXPORT ITEMS ACCORDING TO SITC, REV. 3 OF THE PARDUBICE REGION (SHARES IN %)752 Devices for automated data processing 42.0764 Telecommunication devices and accessories, TV accessories 4.1778 Electrical devices (batteries, bulbs) 3.9759 Parts etc. for office machines and automated data processing 3.6728 Machines and equipment for particular industrial branches 3.3783 Road motor vehicles (for public transport), tractors 3.2784 Parts and accessories for motor vehicles 2.6776 Electron tubes, ray tubes, diodes, transistors etc. 2.4772 Electrical devices for switching of circumferences 2.3762 Radios, combined receivers 1.9

wide patent. Hyodin is an originalpreparation used for healing wounds, whichwas developed by the institute itself in co-operation with Hradec Králové UniversityHospital. It is one of the most uniqueprojects supported under the Innovationprogramme.

"A significant potential of projects inforward-looking branches is building in thePardubice Region, where projects resultingin highly competitive products on theinternational scale have been supportedunder the Innovation Programme. Inaddition, linking up with these projects,a cluster is developing in the PardubiceRegion focused on the application ofnanotechnologies in medicine andpharmacy", Jan Vanýsek, Project Manager ofCzechInvest’s Pardubice regional officepointed out.

■ E X P O RT S F R O M T H EPA R D U B I C E R E G I O NThe share of the Pardubice Region in overallCzech exports stands at 7.6% (CZK 142 674million – approximately EUR 4 759 million),which is a value that is close to the Czechaverage. The Region’s exports per oneinhabitant is CZK 282 200 (approximately EUR9 407), which is over average (4th place in theCzech Republic).

More at www.czechinvest.cz

The subsidies will serve, for example, for thepurchase of machinery and equipment,reconstruction and technical improvementof long-term tangible assets or the coverageof publicity costs. Financial support underthe programme of from three to twenty-fivemillion crowns (approx. from EUR 100 000to EUR 830 000) was available to firmsregardless of their size. The maximumamount of the subsidy was 46 % ofrecognisable project costs.

■ S P E C I A L R E G A R D TO P H A R M A C YOne of the largest projects covered by theInnovation Programme was the constructionof a new plant for the manufacture of oxy-cellulose at Synthesia Pardubice. The wholeproject will cost more than CZK 150 million(approx. EUR 5 million), one-third of whichwas gained by the firm in the form ofsubsidy. The new plant will be makingoxygenated cellulose derivatives, which,because of their astringent bactericidal andhealing effects, have a wide use in medicine,pharmacy, cosmetics, and the food industry.The technologies required for this purposewere developed in co-operation with thePardubice University and the OrganicSyntheses Research Institute.

Under the same programme, support wasgiven to the CPN project – Hyaluronanproduction by extraction and Hyodinpreparation, which is covered by a world-

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Expansion of the Kiekert ConcernKiekert – CS, s. r. o. isa subsidiary of the Germanconcern Kiekert AG, the worldlargest producer of caraccessories with its seat inHeiligenhaus near Düsseldorf. Itsmost important customers arecar factories such as Volkswagen,Peugeot, General Motors,Mercedes, Opel, Seat, Saab,Škoda, Renault, and others.In 2005, the investor decided todouble its production capacitiesin the Czech Republic by buildinga new production plant inPřelouč. This plant offered 1 100new jobs. The investment of CZK300 million (approximately EUR10 million) was completed withinone year and production iscurrently (July 2006) beinglaunched.

Development – Production – Trade The company was originally concentratedon products for foreign customers, but thisproduction has recently been replaced bythe production of their own models thatnow make for up to 25 % of thecompany’s sales.

The company is especially successful inthe production of certified firefighters’shoes that find their customers amongprofessional and voluntary firemen in theCzech Republic as well as in Germany,Poland, Austria, Slovenia, Croatia, Israel, aswell as in other countries. Thanks to this,the company expects sales of these shoesto double in comparison to theprevious year.

■ D E V E L O P M E N TI N T E G R A LThe above-mentioned

success can beattributed, aboveal l , to thed e v e l o p m e n tgroup thatprepares modelsat least one yearin advance, inreact ion toc u s t o m e r s ’needs. In orderto resist thes t i l l

The three above wordscharacterise SAM Trade a. s. andits subsidiary SAM Shoes s. r. o.The company focuses on theproduction of working, safety,and special shoes and itsproduction has been growingannually up to the current 80000 pairs of shoes, produced bythe company each year.

R E G I O N

The company selected the Czech Republicas the place for its crucial expansionbecause it could offer a sufficient numberof qualified workers, especially in the areaof mechatronics.

The installation and completion ofcentral car locks is the most important partof the company’s activities. Locks thatcombine both mechanical and electricalcontrol functions are the most modernproducts produced by Kikert-CS.

"The world becomes more global and

competition tougher. Therefore, the Czechsubsidiary is of utmost importance to us, aswe need it in order to sustain our positionand compet i t iveness in the worldmarkets", said Wolfgang Theis, Chairmanof the Board at Kiekert. Such expansion isthe best reference for all potentialinvestors that are considering investing inthe Czech Republic.

More information at: www.kiekert.cz

■ R E S E A R C H A N D C O M P U T E R S F I R S T A N D F O R E M O S TAccording to CzechInvest, the Pardubice Region offers the best opportunities especially forresearch and IT companies, biomedicine, pharmacy, and the creation of technologicalcentres. "The influx of investors should continue for a few years. Their structure, however,will change, as more companies with higher added value linked with companies alreadyexisting in the area are coming", said Tomáš Vaníček, Director of the Pardubice Office ofthe CzechInvest Agency. The town of Pardubice with companies like Foxconn(www.foxconn.cz) and Panasonic (www.panasonic.cz) is the best example of sucha background. Recently, the company Ronal (www.ronal.cz) also came to this town. TheKayaba Company (www.kyb.co.jp), along with several developers offering plants for leaseand producers of car components will fill the remaining areas in the Pardubice zone.Pardubice has therefore already started, apart from the tradition of chemical and electricalindustries, to take advantage of the vicinity of the TPCA car factory.

More information at: [email protected]

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growing pressure of Asian production, thegroup – when preparing new models –dedicates a lot of attention to theproduction of shoes featuring high addedvalue, which increases theircomfortableness and usefulness. Thecompany’s management tries to sustainhigh production effectiveness and to applynew technologies and product ionmethods. The l icense for themanufacturing of Gore-Tex materials thatwas granted to the company in 1996 canserve as an example, as the company has

produced more than 500 000 pairs ofshoes since that year.

The company also dedicates a lot ofattention to the application of newknowledge from the area of health care. Inreaction to the progressively growingnumbers of patients with diabetes aroundthe world, the company has drafteda project focusing on the research,development, and production of work,safety shoes for patients with diabetes.The company is cooperating on this projectwith the Second Internal Clinic of the

Charles University Medical Faculty and itsDiabetes Department. The Ministry ofIndustry and Trade awarded this projectand provided it with a grant.

Trade is also an imminent part of thecompany’s activities. The company sells itsown products above all through directsales to production factories and it mainlycooperates with the Safety technicians ofthese factories.

More information at: www.samtrade.cz

50 Years of Tradition – The University of PardubiceI t s e ight thousandstudents place it amongthe medium-sized publicuniversities in the CzechRepublic. There are fivefaculties for the studentsto choose from and twouniversity institutions:Facul ty of Chemica lTechnology, Faculty ofEconomics andAdminist rat ion, JanPerner Transport Faculty,Faculty of Arts, Faculty ofRestoration, Institute ofHeal th Studies , andInst i tute of E lectr ica lEngineer ing andInformatics.

■ I N T E R N AT I O N A LP R O J E C T S,R E S E A R C H A C T I V I T I E SBesides education, the University boastsrich scientific and research activitiesthrough which its faculties have gained therespect of both domestic and internationalscientific public. This is also aided byseveral specia l ised s i tes and otherorganisations, institutions, and groups thatwork with the University of Pardubice. Animportant part in supporting educational,study, and scientific activities is played bythe Endowment Fund of Miroslav Jurečekand the Endowment Fund of Jan Perner.

University workshops participate in

international projects. Within the scope ofagreements with international partnersand research and university institutions,international cooperation takes place inthe form of student and teacher mobility,the exchange of experiences, the solvinga of number of scientific-research tasks,and organisat ion of importantinternational meetings of professionals atconferences and seminars.

More at: www.upce.cz/english

The University of Pardubice wasoriginally founded as thePardubice College of Chemistryand later transformed into thePardubice College of Chemistryand Technology. With the creationof other departments andcolleges after 1990, the schoolstructure has been changed froma single college school witha focus on chemistry into aninstitution providing higheruniversity education. Since 1994it has been known under itscurrent title: the University of Pardubice.The University's educational,scientific, research, development,and other activities are beingcultivated towards the EuropeanHigher Education Area andEuropean Research Area.

Universities participate in international projects

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R E G I O N

Pardubice District

Magistrát města Pardubic(Pardubice City Hall)Perštýnské nám. 1530 21 PardubiceCzech RepublicPhone: +420 466 859 111Fax: +420 466 859 436e-mail:[email protected]ěsto-pardubice.cz

Pardubice

The District of Pardubice is situated in thewestern part of the Pardubice Region. Thearea of the fertile Elbe lowlands spreadingover 889 sq. km is home to almost 32 %of the Region’s population. The settlementstructure is formed by 115 municipalities, 7of them towns. The administrative,cultural, and social centre of both theRegion and the District is the statutory cityof Pardubice, with 88 200 inhabitants(www.mesto-pardubice.cz).

From an economic viewpoint, theDistrict is an area with strong industrialproduction, concentrated mostly in towns,with the regional capital of Pardubicebeing the most important centre of

industry. The majority of big firms arebased in the town, mostly on its outskirtswithin the developing industrial zones.Over the long term, the dominantbranches have been the chemical andpetrochemical industries, engineering, andthe food industry with tradit ionalgingerbread product ion. E lectr ic i typroduction is secured by the only twothermal power stations in the Region – atOpatovice nad Labem (www.eop.cz) andChvaletice (www.cez.cz). Electronic andelectrical industries have been developingin the recent years thanks to thecontribution of foreign investors. The largeconstruction companies were divided intosmaller units after 1989. A relatively goodcl imate and soi l composit ion offerfavourable conditions for agriculture. Cropproduction is represented by grain, beet,fodder, oil seed, and vegetables. Meat,milk, and egg production prevail in animalfarming.

Thanks especially to the regional capital,the Pardubice District is a major centre ofeducation, cultural and social life, as wellas sport. The University of Pardubice(www.upce.cz), established in 1994, enrolsboth Czech and foreign students and

provides education in a wide range ofspecialisations. Prominent features of thecultural scene include the East BohemianTheatre and the Chamber Philharmonic.An area attracting many visitors is the spatown of Lázně Bohdaneč(www.laznebohdanec. cz).

Through the town of Pardubice theDistrict participates in activities within theEuroregion Glacensis (www.euro-glacensis.cz). This grouping of Czech andPolish municipalities supports cross-borderco-operat ion in economics, t rade,environmental care, infrastructurecreation, and also plays an important rolein the promotion of tourism.

B R I E F S TAT I S T I C SIndicator District RegionArea (in sq. km) 889 4518Population 160 931 506 024Inhabitants/sq. km 181 112Average gross monthly wage (in EUR) 636 583Unemployment rate (%) 6.70 8.35Source: Czech Statistical Office (as of 31 December 2005)Note: EUR 1 = CZK 29 (as of 31 December 2005)

F O R E I G N I N V E S TO R SInvestor Country of origin Czech partner Sector ContactKiekert GmbH & Co. Germany Kiekert-CS, s.r.o. car industry www.kiekert.czFoxconn Holdings B.V. Netherlands Foxconn CZ, s.r.o. electrical equipment www.foxconn.cz Nedcon Groep N.V. Netherlands Nedcon Bohemia, s.r.o. racking and www.nedcon.com

construction systemsEiba Betriebsanlagen GmbH Germany Eichenauer, s.r.o electrical equipment www.eichenauer.deMatsushita Electric Japan Panasonic Automotive electronic industry www.panasonic.czIndustrial Co., Ltd Systems Czech,s.r.o.Kayaba Industry Corp. Japan KYB Manufacturing Czech, s.r.o. car industry www.cyb.co.jpRealtime Technologies Limited Ireland Realtime Technologies, s.r.o. electronic industry www.realtimetechnologies.com

S E L E C T E D F I R M SName Based in Sector ContactAliachem, a.s. Pardubice chemical industry www.synthesia.czParamo, a.s. Pardubice chemical industry www.paramo.cz2VV,s.r.o. Pardubice air handling technology www.2vv.cz Cesa, a.s. Pardubice electronics, communication systems www.cesa.czAwos, s.r.o. Pardubice electronics www.awos.czBet Systém, s.r.o. Pardubice wall insulation systems www.betsystem.czTvar, v.d. Pardubice protection helmets www.tvar.cz/prilbyLéčebné lázně Bohdaneč, a.s. Lázně Bohdaneč spa care www.laznebohdanec.czAgrostav Pardubice, a.s. Pardubice building www.agrostav-pce.czUniplast Pardubice, s.r.o. Pardubice plastic mouldings www.uniplast.czElplast, s.r.o. Přelouč manufacture of moulds and plastic mouldings www.elplast.czExplosia, a.s. Pardubice explosives www.explosia.czTritón Pardubice, s.r.o. Pardubice electrical equipment www.triton.czBohemiatech, s.r.o. Pardubice printed circuits www.bohemiatech.czElmet, spol.s r.o. Přelouč electronics www.elmet.czProkop Invest, a.s. Pardubice engineering www.prokop.cz

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Pardubice is easily accessible. It isa part of the Berlin – Prague – Viennahigh speed railway corridor. Prague is

about 100 km away and it is thereforepossible to reach the capital in almost anhour by train. An important asset is thepresence of an international airport withmixed traffic. The civilian airport isoperated by the town company EastBohemian Airport and it is already clearinga large number of passenger, charter, andcargo flights. More than 50 thousandpassengers checked in at Pardubice lastyear and the traffic and capacity areincreasing year by year. After completionof a new terminal, the airport’s capacitywill increase severalfold, estimated up tohundreds of thousands of passengers peryear. Road traffic will be boosted shortly bya strategically important traffic artery – thePardubice Region D11 highway, which willcircle the town. Pardubice lies on the LabeRiver and in the coming years a river port,primarily for freight transport, shouldfinally be built near the industrial zone.Many big investors have chosen thePardubice industrial zone to be their placeof business. Apart from the above-mentioned transport accessibility, there arethe advantages connected with an area

completely prepared for investment andthe possibility of utilising the foreign tradezone (more about the industrial zone andinvestment opportunities in a separatearticle on page 20).

We should not forget to mention theindustrial companies with firm roots inPardubice that have built a good name forthemselves. These include, for example,the chemical company of world renown –Synthesia, mineral oil refinery Paramo, orthe Taiwanese company Foxconn, whichhas become Europe's greatest producer ofcomputers.

To the town's advantage is also the factthat local educational institutions are readyfor teaching foreign languages – fromUNESCO certified grammar schools to theUniversity of Pardubice. The town is alsohome to the following foreign institutions:The British Centre, Alliance Francaise, andGoethe Institut.

Alexandra TušlováPardubice City Hall

www.mesto-pardubice.cz

The regional town of Pardubiceis one of the largest of the EastBohemian towns. It is itsindustrial centre and a trafficcrossroads of European import. Itis also often called the town ofhorses (every year the GreatPardubice Steeplechase is heldhere, an important part ofinternational competitions),gingerbread (Pardubice is linkedto the traditional making of thisdelicacy, which is commemoratedby the Museum of Gingerbreadand Gingerbread Festivities),culture, and greenery. Surveysfrom recent years show thatpeople enjoy living in Pardubice.According to sociologists,Pardubice tops the list offavourite towns in the CzechRepublic. Investors are alsosatisfied because of the qualitytradition of the chemical andelectrical industries and thenewly emergent automotiveindustry. There are branches ofimportant domestic banks andinsurance companies; for manyof them, Pardubice has becometheir hometown.

View of Pardubice

Pardubice – A Town of Opportunities

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R E G I O N

Chrudim District

Městský úřad Chrudim(Chrudim Municipal Office) Resselovo nám. 77537 16 ChrudimCzech RepublicPhone.:+420 469 645 111Fax: +420 469 622 013e-mail: [email protected]

Chrudim

B R I E F S TAT I S T I C SIndicator District RegionArea (in sq. km) 1 029 4 518Population 104 575 506 024Inhabitants/sq. km 102 112Average gross monthly wage (in EUR) 553 583Unemployment rate (%) 7.99 8.35Source: Czech Statistical Office (as of 31 December 2005)Note: EUR 1 = CZK 29 (as of 31 December 2005)

FORE IGN INVESTORSInvestor Country of origin Czech partner Sector ContactHolcim Auslandbeteiligungs GmbH Germany Holcim ČR, a.s. cement production www.holcim.czMehler Aktiengesellschaft Germany Technolen technický textil, a.s. textile manufacture www.technolen.czLiechtex Establishment Liechtenstein Komutex, spol. s r. o. electric motors, generators www.komutex.czGroupe Electropoli S.A. France Electropoli-Galva, s.r.o. metal galvanisation www.electropoli.com

S E L E C T E D F I R M SName Based in Sector ContactBotas, a.s. Skuteč footwear industry www.botas.czDako CZ, a.s. Třemošnice engineering www.dako-cz.cz ETA, a.s. Hlinsko electrical appliances www.eta.czPrvní stavební Chrudim, a.s. Chrudim building industry www.psch.czTechnolen technický textil a. s. Hlinsko textile industry www.technolen.czTMT, s.r.o. Chrudim Chrudim engineering www.tmt.czKovolis Hedvikov, a.s. Třemošnice foundry industry www.kovolis-hedvikov.czSamas ČR, s.r.o. Krouna furniture manufacture www.samas.czTMT, s.r.o. Chrudim technological transport units www.tmt.czSamtrade, a.s. Skuteč protective footwear www.samtrade.cz

The District is situated in the south-western part of the Pardubice Region - its104 575 inhabitants l ive in 113municipalities, 8 of which have the statusof town. The centre of the District is thetown of Chrudim (www.chrudim-city.cz),with 24 180 inhabitants.

From an economic viewpoint, Chrudim

District is an industrial and agriculturalarea. The industry, however, is not one-sided, as the structure of the sectors isquite varied. Major industrial centresinclude Chrudim (engineering, food andtextile industries), Hlinsko (electrical, fur,and food industries), Skuteč (leather andtexti le industries), Nasavrky (texti leindustry), Prachovice (building materials),Třemošnice (engineering), Chrast (foodand wood-working industries), HrochůvTýnec (sugar product ion, bui ld ingmaterials). Thanks to the development ofsmall private firms the number of peopleemployed in the building industry isincreasing. Crop production in agriculture,especially in the northern part of theDistrict (the Labe lowlands), is focused ongrain and sugar beet. The heart of theDistrict is a potato growing area, in the

southern part, which has characteristics ofa foothill area, the soil is suitable forgrowing potatoes, flax, and less sensitivegrains. Animal farming is dominated by theproduction of milk, beef and pork, andeggs.

Nové Hrady Rococo chateau, also referred to as "Little Schönbrunn" or "Bohemian Versailles"

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R E G I O N

Svitavy District

Městský úřad Svitavy(Svitavy Municipal Office)T.G.Masaryka 25/35568 02 SvitavyCzech RepublicPhone:+420 461 550 211Fax: +420 461 532 141e-mail:[email protected]

Svitavy

accounted for by food and textile plants, whilethe share of glass fibre manufacture has beengrowing. Also notable is metal production,engineering, and the manufacture of transportmeans, including accessories. Less extensivemanufacturing includes wood products, printing,refractory materials, ready-made clothing andspecial footwear. The biggest investments inindustry were represented by the operations offoreign investors, "greenfield" projects wererealised by the firms Westvaco in Svitavy, Rehau inMoravská Třebová, Ravensburger in Polička, andASCI in Jevíčko.

The District‘s production characteristics aremixed. The share of farming in the regionaloutput is higher than the share of industry.Agricultural production is traditionallyrepresented by grain and potato farming.Industry in the District is not one-sided, thestructure of the sectors is quite varied. In previousyears, the decisive volumes of production were

B R I E F S TAT I S T I C SIndicator District RegionArea (in sq. km) 1 335 4 518Population 101 827 506 024Inhabitants/sq. km) 76 112Average gross monthly wage (in EUR) 550 583Unemployment rate (%) 11.75 8.35Source: Czech Statistical Office (as of 31 December 2005)Note: EUR 1 = CZK 29 (as of 31 December 2005)

B R I E F S TAT I S T I C SIndicator District RegionArea (in sq. km) 1 265 4 518Population 138 691 506 024Inhabitants/sq. km 110 112Average gross monthly wage (in EUR) 557 583Unemployment rate (%) 8.06 8.35

Source: Czech Statistical Office (as of 31 December 2005)Note: EUR 1 = CZK 29 (as of 31 December 2005)

FORE IGN INVESTORSInvestor Country of origin Czech partner Sector ContactSaint-Gobain France Saint-Gobain Vertex, a. s. glass fibres www.vertex.czMeadwestvaco Spain S.L. USA Westvaco Svitavy, s.r. o. paper industry, packaging www.meadwestvaco.czGillette Eastern Europe Inc. USA Gillette Czech, s. r. o. consumer goods www.gillette.czASCI Holdings Czech (DE), Inc. USA Automative Safety Components car industry www.scieurope.cz

International, s. r. o.

S E L E C T E D F I R M SName Based in Sector ContactHedva, a. s. Moravská Třebová textile industry www.hedva.czZŘUD - Masokombinát Polička, a.s. Kamenec u Poličky food industry www.mkp.czPoličské strojírny, a. s. Polička engineering www.pos.czTOS Svitavy, a. s. Svitavy engineering www.tos.czSvitap J. H. J., s. r. o. Svitavy textile industry www.svitap.cz

Ústí nad Orlicí District

The District’s territory includes 10 relativelysmall towns, the largest among them is ČeskáTřebová (www.ceskatrebova.cz) with 16 800inhabitants and Ústí nad Orlicí with 15 300inhabitants, the administrative centre of theDistrict (www.ustinadorlici.cz). In previousyears the largest production volumes havebeen recorded by the electrical industry, thetextile and clothing industries, and themanufacture of machinery and equipment.The importance of textiles has fallen lately,

but the electricalequipment sharecontinues to rise onthe other hand.

Ústí nad Orlicí

FOREIGN INVESTORSInvestor Country of origin Czech partner Sector ContactRieter Switzerland Rieter car industry, www.Holding CZ, a.s. engineering rieter.comAVX Limited United AVX Czech electronics www.

Kingdom Republic, s.r.o. avxcorp.comSchott Germany Schott Electronic electrical www.Electronic Packaging, s.r.o. equipment schott.comInt.H.GmbH Lanškroun

S E L E C T E D F I R M SName Based in Sector ContactKorado, a.s. Česká radiators www.korado.cz

TřebováForez, s.r.o. Ostrov metal www.forez.cz

u Lanškrouna productionOEZ, s.r.o. Letohrad electrical www.oez.cz

equipment Isolit -Bravo, s.r.o. Jablonné electrical www.

nad Orlicí appliances isolit-bravo.czFormplast Jablonné plastic www.Purkert s.r.o. nad Orlicí injection formplast.czKarosa, a.s. Vysoké Mýto buses www.karosa.czLux, s.r.o. Jablonné machinery www.lux.cz

nad Orlicí and equipment

Městský úřad Ústí nad Orlicí(Ústí nad Orlicí Municipal Office)Sychrova 16562 24 Ústí nad OrlicíCzech RepublicPhone: +420 465 523 035Fax: +420 465 525 563e-mail: [email protected]

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For example North Moravia andSilesia offer Lázně Jeseník (www.info-jesenik.cz/mesto/cz/historie/

lazne.htm), which can boast of one of theworld primacies. It was here that, in 1882,the world’s first hydrotherapeutic institutewas founded. In the beautiful mountainenvironment nearby lies the picturesquespa town of Karlova Studánka (www.k.studanka.cz), the place with the cleanestair in central Europe.

■ S PA T R I A N G L EIn West Bohemia lie the most renowned spatowns of Karlovy Vary (www.karlovyvary.cz),Františkovy Lázně (www.frantiskovy-lazne.cz), and Mariánské Lázně (www.marianskelazne.cz), which together formthe so-called western Bohemian spatriangle. The number of healing mineralsprings in this region has no equal in theworld. The springs are used to heal ailmentsof the digestive, locomotive, circulatory, andrespiratory systems, illnesses resulting frommetabolic disorders and gynaecologicaldiseases. The charm and uniqueatmosphere of these spa towns werediscovered many centuries ago by world-famous figures such as Goethe, Bach,Schiller, Beethoven, Chateaubriand, orGogol. You can meet many popular andsignificant persons from the world ofpolitics or culture here even today. In

Mariánské Lázně, visitors can admire theunique neobaroque colonnade built in1889. The music and light performance ofthe Singing Fountain are also a remarkableexperience. The last spa town of thetriangle, Františkovy Lázně, are thanks to itsbeautiful environment and classicistarchitecture considered the gem of Czechspa industry. West Bohemian spas hold oneworld primacy; in 1906 the first radon spain the world, was founded here. LázněJáchymov (www.laznejachymov.cz) canboast of a unique thermal radioactive springcure, still unique on the world scale. In 2006it will celebrate its centenary. Last year over17 000 visitors came to this spa town.

The oldest and also one of the mostmodern spas in the Czech Republic is LázněTeplice (www.lazneteplice.cz), whichspecialises in the disorders of locomotive,circulatory, and nervous systems. The firstmention of its healing springs are almosttwo thousand years old. In no way lesssignificant is the spa town of Poděbrady(www.lazne-podebrady.cz). It lies in a fertilevalley only 50 km away from Prague and itis a sought after spa for the ailments of theheart. We should not forget to mentionLázně Luhačovice (www.lazneluhacovice.cz), the largest Moravian spa aimed atillnesses of the respiratory and digestivesystems, metabolic disorders and disordersof the locomotive system.

The Czech Republic is rightlyrecognised as a spa heaven.There are over thirty spalocations with natural healingsources scattered around thecountry. The uniqueness lies inthe use of natural healingsources for curing many ailmentsand disorders ranging fromlocomotive, nervous, andrespiratory diseases to skinproblems. Despite the fact thatthe healing aspect still plays themain role in Czech spa industry,nowadays people do not come tospas solely to be cured. Spaprocedures are also used asprophylaxis against ailments andare a suitable means to increasephysical and mental fitness.Supplementary wellness andfitness programmes, relaxation,anti stress and specialbeautifying procedures attractmore and more guests. A featureto add is the professionalapproach, reasonable prices, andmodern spa equipment, whosequality and facilities will satisfyeven the most demandingclients.


S E R V I C E S

C O N TA C T S :

Svaz léčebných lázní(Spas Association of the Czech Republic)www.lazne-kur-spa.cz

Sdružení lázeňských míst ČR(Association of the Spa Places) in the Czech Republicwww.spas.cz

Seznam lázeňských míst ČR(A List of Spa Places in the CzechRepublic)www.spa.czecot.com/ Jáchymov spa takes pride in unique treatment based on its thermal radioactive waters

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S E R V I C E S

■ F I R S T B E E R S PA I N T H EC O U N T RY

A bath full of a frothy liquid, everywherethe air is full of the characteristic odour.A bath, then a massage and a pack usingmalt flower. This relaxation procedure isoffered by the Chodov family brewery(www.chodovar.cz/pivni-lazne) in ChodováPlaná in the Tachov Region from March2006. They were the first to open a uniquebeer spa in the Czech Republic. The beerprovides the spa guests with its curativeeffects and relaxation. The bath consists ofwater from local mineral spring, dark ten-degree Chodovar beer draught into thebath right from the tap, and a secretmixture of herbs. The important thing isthat beer contains thiamine; the wholemixture affects skin directly and can helpto cure some types of eczema. Hopcontains calming substances, carbondioxide promotes blood circulation.

Lázně Bechyně (www.laznebechyne.cz)is also one of the oldest spas. It is locatedin South Bohemia and it specialises incuring and reconditioning the locomotivesystem (rheumatic arthritis, spondylitis orosteoporosis). Peat rich in resin andaromatic substances is used as the natural

healing source here. It is mined from thespa’s own peat bog in Komárovská blata.

Karin ŠeligováCzechTourism

(e-mail: [email protected])www.czechtourism.cz

Mariánské lázně

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Where Else But to the Czech Republic?

S E R V I C E S

20000

5000000

10000000

15000000

20000000

25000000

2001 2002 2003 2004 2005

The Development of the number of foreign tourists and number of nights spent in the Czech Republic from 2000 to 2005


The year 2005 was a record yearregarding the incoming touristindustry in the Czech Republic in all its history since the CzechStatistical Office started tomonitor numbers of foreigntourists in public accommodationfacilities. 6 336 128 foreigntourists visited the CzechRepublic, which is 4.5 % morethan in 2004. Their spendingincreased by 3.5 % compared to 2004 and reached the level of CZK 110.9 billion (approx.EUR 3.7 billion).The Czech Republic witnessesnot only the trend of growingnumber of visitors using hotels,boarding houses, and otherpublic accommodation facilities,but also the trend of growingnumbers of nights spent here;in 2005 it reached the level of 19 595 035 nights.

"The world trend in the field of touristindustry in recent years is severalshorter holidays every year, which

corresponds to the average tourist stay inthe Czech Republic. It is 4.1 days and stayson the level of the year 2004", says theanalyst of the Public Relations departmentHana Fojtáchová.

Over a quarter of the foreign tourists whostayed here are traditionally from Germany.Compared to 2004, their number grew by2.4 % to the level of 1 606 947.

The British are again on the second place;657 110 British tourists came to the countryand the increase represents 6.4 %.

Very pleasant is the increase in thenumber of incoming Polish tourists; thenumber of Poles coming to the CzechRepublic increased by 3 %. The BalticRepublics’ interest in the Czech Republic hasalso grown. The number of tourists fromLithuania increased by 20 % compared tothe year 2004 (35 258), from Latvia by 16.4 % (12 627), and from Estonia by a full

37.4 % (12 579). Among the Scandinaviancountries we are still most favoured amongNorwegian tourists of which 30.9 % (86 360) more came to our countrycompared to the previous year.

The 26 % growth of incoming Japanesetourists is also significant, as Japanesetourists spend more on their holiday incomparison to tourists of other nationalities.Chinese tourists have similar shoppinghabits; 7 806 of them came here last year.Statistics of Chinese tourists have been keptonly since 2005. China as a source countryrepresents a great potential for internationaltourism and Chinese tourists come veryclose to the Japanese regarding theirexpenditures on their travels abroad.

Karin ŠeligováCzechTourism

(e-mail: [email protected])www.czechtourism.cz

Number of foreign tourists in PAF Number of nights in PAF(public accommodation facilities)

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