11-122008

The Czech Republic to preside over theCouncil of the EU in the first half of 2009

■ Czech Republic: Research andDevelopment Surpasses Manufacturing

■ Investment in the Czech Economy

■ Security Services in the Czech Republic

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CZECH BUSINESS AND TRADE

Economic Bi-monthly Magazine with a Supplement is Designed for ForeignPartners, Interested in Cooperation with the Czech Republic

Issued by PP AGENCY s.r.o. as an exclusive commission for the Ministry of Industry and Trade of the Czech Republic

EDITORIAL BOARD:Milan Hovorka (Chairman), Ivan Angelis, Zdena Balcerová, Jiří Eibel, Růžena Hejná, Josef Jílek, Zdeněk Kočárek, Tomáš Kopečný, Marie Pavlů, Pavla Podskalská, Josef Postránecký,Libor Rouček, Jiřina Semanová, Jiří Sochor, Jarmila Škvrnová

MANAGING EDITOR:Petr Kamenický

EDITORS:Jiří Bouzek, Jaroslava Bradová

REGULAR COLLABORATORS:Eva Tomášková

TRANSLATION:Vlasta Benešová, Alena Kenclová, Robert Krátký, Lucie Pavlíčková, David Stránský, Dagmar Šímová, Halka Varhaníková

READ:Mathew Booth, Pearl Harris, Ivana Kadlecová, Zuzana Pavlíčková

GRAPHIC DESIGN:

Helena Dvořáková, Lobby Česká republika

DEADLINE: 23/9/2008

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ADDRESS:Myslíkova 25, 110 00 Praha 1Czech RepublicPhone: +420 221 406 623, +420 221 406 626Fax: +420 224 930 016e-mail: journal@ppagency.czwww.ppagency.czwww.mpo.cz/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“

Security Services in the Czech Republic South Moravia Region

■ INTRODUCTIONQuestions for the Prime Minister of the Country Presiding over the EuropeanUnion ..............................................................................................................4

■ ECONOMIC POLICYCzech Republic: Research and Development Surpasses Manufacturing .............5CZK/EUR Exchange Rate and Its Impact on the Czech Economy........................7

■ KALEIDOSCOPE16th Eurochambres Congress 2009 and Business Forum .................................9The Czech Republic – One of the Most Attractive Locations in Europe for Industrial and Logistics Facilities.................................................................10Czech Firms among 500 Largest Companies in Central Europe.......................10Employment of Foreigners Will Be Easier ........................................................10

■ INVESTMENTInvestment in the Czech Economy ..................................................................11

■ CZECH TOPCzech Glass Celebrates Success ......................................................................13Expansion of SolarWinds Brno Development Centre ......................................13Near East Opens Up to Czech Industry............................................................14Good Prospects for Filtration Technology ........................................................14

■ SERVICESSecurity Services in the Czech Republic...........................................................16

■ REGIONNUTS 3 – South Moravia Region.............................................................18 – 34

■ PRESENTATION OF FIRMSGOLF BRNO a.s. ...............................................................................................2Trade FIDES, a.s. .............................................................................................15Veletrhy Brno, a.s. ..........................................................................................26UCB TECHNOMETAL, s.r.o. .............................................................................27Karel Kaňák, s.r.o. ..........................................................................................30KORONA Lochovice, spol. s r.o. .....................................................................32Böttcher ČR, k.s. ............................................................................................35REKONIX, spol. s r.o. ......................................................................................36

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

The Czech Republic will preside over the Council of the EU in the first half of 2009.The Presidency of the Council of the EU is one of the most important and mostprestigious tasks ensuing from membership of the EU. The task of the presidingcountry is, for instance, to summon and chair meetings of the Council of the EU, actas the mouthpiece of the EU, and to represent the Community abroad. The main mottoof the Presidency is "Europe without Barriers". One of the topics of the Presidency willbe, for example, completing the liberalisation of the labour market. The CzechRepublic will present the programme of chief Presidency objectives to the EuropeanParliament at the beginning of the Presidency. Further information on the Czech EUPresidency will be available during the Czech Presidency in the first section of themagazine under the title Questions for the Prime Minister of the Country Presidingover the European Union.

Front cover: Photocombo

Questions for the Prime Minister of the Country Presidingover the European Union

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The third priority contains primarily furtherEU enlargement and the continuation ofnegotiations on a common asylum policy,solution to the problem of migration andintegration of foreigners.

We cooperate on our priorities withinthe presidential trio with France andSweden, i.e. the country which precedesus and the country which succeeds us. Wehave drafted a joint programme of thepresidential trio, which is essential forcontinuity in addressing problems. Work isstill continuing on the details of ourpriorities and, as usual in the EU, their finalform will be made public just before ourPresidency, which means in the second halfof December.

■

Can you give concrete examples ofthe proposals for change that theCzech Republic will make during itsPresidency? For example, we are proposing that oncethe Lisbon Treaty comes into force,summits with third countries on EU soil behosted by the presiding country. We alsofavour the role of the permanent presidentof the European Council to be that of amoderator of debate rather than a policymaker of the whole EU. We also want towork for new member states to berepresented in appointments to high postsin the EU institutional structure. With aview to effective functioning of the EU alsoafter the Lisbon Treaty comes into force itis necessary to involve the highest politicalrepresentatives of the member states inthe performance of the EU CouncilPres idency. We wi l l propose theestablishment of an informal consultativemechanism between the prime minister ofthe presiding country and the president ofthe European Council at the beginning ofthe presidency and before EuropeanCouncil meetings.

■

You have indicated that the CzechRepublic will promote debate on arevision of the EU budget, whatshould the outcome of this debatebe?We want primarily to support steps whichwill promote the competitiveness of theEuropean economy and Europeanenterprises, such as modern technologies

and innovation. We are working withSweden for the debate to open on a fullscale at the beginning of 2009 at thelatest, which means during our Presidency.As I have said, we consider a reform of theCommon Agricultural Policy (CAP) as avery important item in the EU budgetreform. In the CAP reform debate theCzech Republic will primarily strive for cutsin CAP expenditures after 2013, and onlythen for a reduction in expenditures ondirect payments in support of ruraldevelopment. The Czech Republic supportsthe removal of all historically developedinequalities in CAP subsidies among themember states and is pushing for equalconditions.

■

What contribution will the CzechRepublic make to the process ofEuropean integration? Can weexpect any significant changes inEuropean integration?I do not think we need anything like that.Let us adhere to the values on which theoriginal community was established. Ourfirst president, T.G.Masaryk, said thatstates are maintained by the ideals whichthey were founded upon. The originalgoals of European integration are sopowerful, so viable, and so universal thatthey have survived for fifty years and willeasily survive for centuries to come. Allthat may be added (artificially) will beweaker, less inspiring, and worse to shareuniversally.

The or ig inal goals contain thefundamental values without which humanlife loses its crucial quality. Today weconsider these goals a matter of course,but this should not certainly lead us toforget what stones form the truefoundations of European integration:peaceful cooperation between formerenemies, and emphasis on the role of freemarket as the most efficient tool ofgeneral prosperity. Not a single one of thefundamental values was automatic afterthe Second World War. Trust among thenations of Europe was strongly shaken.Free market had tough opponents in therising socialism as well as in the survivingmercantilist protectionism. Despite that,the founding fathers succeeded in givingthe European community a dynamismwhich continues until the present day.

■

Mr Prime Minister, could youdescribe the Czech Republic’spriorities for the Presidency ofthe Council of the EuropeanUnion in the first half of 2009?Our priorities currently have theform of "three E’s": Economy,Energy, External Relations, orCompetitive Europe, Energy andClimate Change, and Open and SafeEurope. The first priority includes fullapplication of the four fundamentalfreedoms of the EU - the freemovement of persons, goods,capital, and services. We particularlyseek the lifting of the transitionalmeasures on the free movement ofworkers from the new countries, andcomplete implementation of theservices directive. It also includessupport for small and medium-sizedenterprises, a revision of the EUbudget - especially the CommonAgricultural Policy, assessment of theimpact of bureaucratic burden onentrepreneurs, and implementationof a revised Lisbon Strategy. As faras energy is concerned we willparticularly work for energy safetyand for the accommodation ofclimate protection with the needs ofthe economy. We will also preparefor the climate summit that will beheld in Copenhagen.

Mirek Topolánek

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■ I T I N V E S T M E N TP R E VA I L S The Czech Republic has become

especial ly popular with softwaredevelopers. Sixteen of them came to settlein the heart of Europe withCzechInvest’s assistance in the first half of2008, accounting thus for the majority ofnew companies. For the first time theirnumber exceeded that of traditionalchampions - manufacturers of car parts andengineering. "In the past the largestnumber of projects were traditionally thoseof investors from the motor industry, whilenowadays companies specialising ininformation technologies are on an equalfooting", Ms Rudyšarová says. "The regionmost successful in attracting IT investmentis South Moravia, which attracted thelargest number of software developers, sixcompanies to be precise, in the first half ofthis year thanks to the concentration oftechnical schools and talented specialists."

■ C Z E C H S A R E M O S T A C T I V EThe majority of new investment projectswhich CzechInvest dealt with in the firsthalf of this year had been prepared bycompanies based in the Czech Republic.There were 78 such projects worth almostEUR 200 million. Companies from Germanyare the second most numerous, at quitea distance with 12 projects.

Despite this, for German companies theCzech Republic remains the most attractivecountry for foreign investment from amongthe new members of the European Union.This is the conclusion of a recent survey ofthe German-Hungarian Chamber ofCommerce. According to far moreextensive worldwide research conducted byErnst & Young, the Czech Republic is the9th most sought-after country for newinvestment on a global scale. It also ranksamong the ten most suitable countries forinvestment in new shared service centres.

■ I N V E S TO R S D O I N G W E L L I NT H E C Z E C H R E P U B L I CThe statistics of projects mediated byCzechInvest demonstrate that almost 65%of new investment is accounted for by the

expansion of companies already doingbusiness in the Czech Republic. "Thismeans that they are doing so well in thiscountry they have no reason to leave but,on the contrary, they are expanding theiractivities here. This is obviously the mostsignificant indicator of the quality of ourbusiness environment", Ms Rudyšarováexplains.

Many foreign companies have launchedtheir Czech activities by setting upmanufacturing plants. Now they areoperating research centres and trainingtheir key employees here. One such firm is,for example, Panasonic, and similar casesare those of Ingersoll-Rand or Honeywell.

"CzechInvest has thus proved to be rightin its decision to focus attention on existinginvestors and intensify aftercare aimed atcreating an ideal environment for furtherexpansion in the Czech Republic", MsRudyšarová notes.

■ B I O, N A N O, I T, A N D OT H E RP R I O R I T I E SCzechInvest works to attract exceptionalforeign investment to the Czech Republic.The Agency has identified eight prioritysectors where the Czech Republic has themost to offer.

Besides traditionally strong sectors suchas the motor industry and engineering, thelist for example includes the aircraftindustry, electronics, medical equipment, ITand software development, biotechnology,and nanotechnology.

Especially the last two mentionedsectors – biotechnology andnanotechnology – promise very interestingresults in the near future. Companies ableto pride themselves on their results are forexample Optaglio, whose original Czechhologram technology is used by CalvinKlein for anti-pirate protection of itsclothing, or by the United Arab Emirates forthe protection of driving licenses againstcounterfeiting.

■ E U R O P E ’ S B I OT E C H N O L O G YC E N T R EBrno, the second largest city in the CzechRepublic, is also the setting for a unique

Two-thirds of new incomingcompanies to the CzechRepublic invest in research anddevelopment or services. Thistrend is evident from thestatistics of CzechInvest, thegovernment agency entrustedwith attracting new investment.For the first time research anddevelopment makes up themajority of new projects, whilemanufacturing prevailed up tothe first half of this year. "Thecore of new investment isconstituted rather by relativelysmall sophisticated projectswhich do not require extensivefunding but rely primarily onthe capabilities and knowledgeof employees", says AlexandraRudyšarová, Chief ExecutiveOfficer of CzechInvest.Figures confirm this trend. Inthe first half of this year,CzechInvest mediated 124 newinvestments, 80 of which are inresearch and development orservices. Altogether they areworth more than EUR 720million. "Compared to last year,the overall value of newinvestments fell, but theirnumber has increased and whatincreased particularly is theirtechnological level", MsRudyšarová adds. In the firsthalf of last year, CzechInvestmediated 83 projects for theCzech Republic worth EUR 1.8billion. However, 90% of theseinvolved investments inmanufacturing.

Czech Republic: Research and Development SurpassesManufacturing

INVESTMENT PROJECTS OF CZECHINVEST – 1ST HALF OF 2008 Type of investment Jobs created Investment (EUR million)Manufacturing 4 542 613.9Shared services 4 587 46.6Technology centres 540 51.3Total 9 669 711.8

These statistics reflect the projects of domestic and foreign companies that invested in the Czech Republicwith CzechInvest’s assistance between 1 January 2008 and 30 June 2008. Source: CzechInvest

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International Clinical Research Centre,which is being established here. The localSt. Anne's University Hospital, a teachingfacility, cooperates with the US-based MayoClinic, one of the world’s three mostrespected institutions in biotechnology, toset up and operate the centre.

Thanks to the future project, the CzechRepublic is able to send large numbers ofstudents and specialists for training to theMayo Clinic. For comparison – the list of allapplicants for the highly prestigioustraining at the Mayo Clinic contains thenames of 50 000 physicians from the worldover.

The International Clinical ResearchCentre is expected to greatly accelerate thedevelopment of new technologies andprocedures in medicine. Companies doingbusiness in the Czech Republic willnaturally have the best chance to use thepotential of these findings. Currentinvestors in this area for example includeBaxter and Lonza pharmaceuticalmanufacturers, as well as Olympus, whichoperates a service centre in the Czech

Republic as well as a developmentlaboratory and prototype workshop for themanufacture of endoscopes.

■ C E R N M A D E I N T H E C Z E C HR E P U B L I COriginal Czech technologies are also beingused within the most complex device evercreated on Earth. Czechs are partaking inthree experiments conducted on the LHC1)

particle accelerator at the CERN in theAlpine foothills: ATLAS, ALICE, and TOTEM.The most extensive participation of Czechscientists and technicians is in the ATLASexperiment. They have produced for ita calorimeter for measuring the energy of

originating particles, and, most importantly,a detector to measure the paths of newparticles close to collision.

The detector is the part of the apparatuswith the most complex technology. Its

sensors, 50 by 400 microns in size, must beresistant to extreme radiation, which isgenerated in the accelerator duringexperiments. The miniature sensors havebeen produced by the Czech-based ONSemiconductor.

This technology can be applied ineveryday use for example in medicine fordiagnosis of malignant tumours. It allowsquality images to be obtained at far lowerenergy levels. The device will thus exposepatients to far lower radiation thanequipment in use at present. Otheropportunities for its use include qualitycontrol of critical parts of structures inaviation for instance.

Czechs are great fans of cutting-edgetechnology. This is evident for examplefrom the interest Czechs have shown in theSETI@home project – a legendaryprogramme for analysing radio images ofthe sky in order to scan them for extra-terrestrial intelligence through a volunteer

TOP-10 LARGEST INVESTMENTS IN THE FIRST HALF OF 2008Investor Sector Country Investment Jobs

of origin (USD million)Synthos S.A. chemicals and Poland 149.80 101

pharmaceuticalsapt Hiller engineering Germany 99.22 85VTK CYLINDERS engineering Czech Republic 77.56 86Brück AM 2 engineering Germany 64.56 110KOVOSVIT MAS, a.s. engineering Cyprus 58.11 29PANASONIC AUTOMOTIVE electronic and Japan 43.59 274SYSTEMS CZECH, s.r.o. electricalTafonco a.s. metalworking Czech Republic 25.39 176Taforge a.s. manufacture of Czech Republic 24.04 44

transport equipment Frýdlantské strojírny engineering Czech Republic 20.60 329DART other Belgium 21.16 36

Source: CzechInvest

Number of projects by type of investment, 1st half 2008

Technology centres 45%

Manufacture 35%

Shared services 20%

Source: CzechInvest

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grid comprising thousands of computers.Czechs rank sixth in the world in terms ofthe volume of processed data, i.e. in thenumber of involved volunteers.

■ TA R G E T ? H I G H - T E C H !The Czech Republic is home to a number ofrevolutionary scientific discoveries andtechnologies. Polarography, soft contactlenses, the most efficient drugs againstAIDS or the original electron microscopetechnology - all these originated in theCzech Republic.

This is precisely the type of investment

intensely targeted by the Czech Republic.The positive news is that such projects canreceive co-financing both from nationalresources and from European Union fundsat least up to the year 2013.

EU funds support investment byindividual companies – the establishing ofa research centre or, for instance, thelaunch of a shared service centre, as well assoftware development. Indeed, EU grantsalso help to create an extensive researchand development base.

The map of the Czech Republic is thusstudded with some fifty science and

technology parks. Over 9 000 studentsgraduate from universities each year. Allthis means that the Czech Republic’sresearch and development potential hasreached the critical mass for the foundingof new clusters and spin-offs. An idealenvironment for new high-tech investment.

Jiří SochorPR Executive, CzechInvest

www.czechinvest.org(e-mail: jiri.sochor@czechinvest.org)

1) LHC Large Hadron Collider

What, then, influenced the exchangerate the most? About 80% ofmovements in the Czech exchange rate

this year can be explained by changes in thetrends on the euro-dollar market. In the firsthalf of the year the euro was improvingagainst the dollar, but then the situationturned around. In the first half investors werewithdrawing money from the USA and puttingthem in Central European currencies. Theyheaded back to the dollar mainly in the thirdquarter, thus causing a correction of theexchange rate to the Czech crown. Ten, fifteenper cent of Czech currency movements can beexplained by the monetary and fiscal policiesof our region. Model examples include thechange in the Czech National Bank’s monetarypolicy from the raising of interest rates to theirlowering, Poland’s politically proclaimed effortto quickly introduce the euro, or the problemsarising from the risks associated withHungary’s national debt. Naturally, there isalways a small "remainder" of exchange ratedevelopments for which a rational explanationis hard to find.

■ S T R E N G T H E N I N G C R OW N N OWA T R E N DThe crown has strengthened in the past. Thishas become a tradition - a trend. However, thesituation has changed somewhat recently. Inthe last three years, the increase in the earningsof Czech companies abroad has been higherthan the strengthening of the exchange rate. In2008, this trend reversed and because of

a recession, companies could no longercompensate their exchange rate losses bygrowing revenues. What’s important for theCzech economy now is how Czech companieswill succeed in changing their focus fromWestern markets to Eastern ones. Emergingmarkets are recording great increases in sales atpresent. If Czech companies succeed in re-directing at least part of their production and ifthe crown behaves reasonably well, I considerthe return of the Czech economy to 6% GDPgrowth in several years a realistic prediction.

What is apparent in the Czech economy atpresent is not a dramatic slow-down, but rathera "sobering return to reality". Recently,a number of companies received ordersexceeding their capacity. Orders have nowdropped to values of the production potential.Companies will be cancelling extra shift workand returning to normal operation. However,the policy of severe cost saving will once againbe the order of the day.

■ S E C TO R A N A LYS I S O F T H EC Z E C H E C O N O M YWhat impact has the triple combination ofa financial crisis, the eurozone slow-down, plusthe pressure of the strengthening EUR/CZKduring the last 12 months had on Czechenterprises, or what impact will it have? Onepossible approach is to analyse new ordersand revenues from sales abroad across thesectors. The idea is as follows: whererevenues from exports have been falling forseveral months, while new orders do not

A year ago, no one expectedthe euro to exchange for 24Czech crowns in the 2008 thirdquarter. It was a 13% increaseyear on year. Steven Levitt,a professor from Chicago, andStephen Dubner of the NewYorker magazine have writtena brilliant book,"Freaconomics". Its title is anapt word to describe themonetary conditions in theCzech Republic. To rephrase it:a freaky economy, meant frommy side in all respect anddecency. You may have read allclassical macroeconomictextbooks day and night. Youmay have drawn up on papera good model of the monetaryconditions from statistical data.But you have had no chance ofpredicting the exchange rate ofthe Czech crown this year.

CZK/EUR Exchange Rate and Its Impact on the Czech Economy

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indicate an improvement, there is a bigproblem, or there will soon be one.

Textiles, clothing, glassPractically throughout this year, bothrevenues from exports and new orders havebeen lower in these segments by year-on-year comparison, both on average by 20%.Large-scale production in these segmentswill soon come to an end. Only companiesthat will slim down and will have up to about100 employees will survive. At the same timethey must quit mass machine production,stake their future on quality and handwork,bui ld a luxury brand and win loyalcustomers.Car makers, machine manufacture andrepairs, computers, pulp and paper,chemical and pharmaceutical industriesOrders in these sectors have been droppingfor most months of this year, but it was nodrama. Revenues from the sale of productsabroad have still been mostly rising. A casestudy: one effect of the financial crisis is thatpeople in West Europe will put off new carpurchases. The lower demand may impacton Czech car makers in the West. Many willstart cutting production and adopt a waitand see approach. Metals and metallurgySurprise winners? This dimension of theanalysis has shown fair increases in sales inthese sectors hand in hand with rising ordersfrom abroad. Indeed, from this angle themanufacture of basic and other non-ferrousmetals and fabricated metal products iscurrently the most dynamic sector of theCzech economy.

■ E U R O I N T R O D U C T I O N In terms of the exchange rate of the crown, it isoften said the Czech Republic’s entry into theeurozone may be a solution to the unstableexchange rate of the Czech currency. This iswhy the analysis also deals with this issue.

When the leaders of the European Unionapproved the launch of the eurozone at theBrussels summit in May precisely ten years ago,no one expected the euro to be 50% strongerthan the dollar today compared to its startingposition. It has won the confidence of thefinancial market. Contracts in euros are

accepted as standard and trouble-free just asthose in the American currency. Over the lastten years the European currency has, ona technical level, been a brilliant success.

Average inflation in the euro area over thelast ten years has been 2.1%, with 1.6% in theUnited Kingdom, and 2.7% in the USA. GDPgrowth was higher in both America and the UKin the 1999-2007 period. The difference,however, does not exceed 0.6 percentagepoints on average.

Thus, we are witnessing no drama. Thegeneral macroeconomic evaluation is differentfrom the technical perception. Looking atfigures, the euro does not appear to guaranteehigher or lower economic growth. Similarly, itdoes not guarantee faster or slower inflation.

However, due to the short timelines and thelow number of economic cycles, there is no wayof verifying this accurately by applying aneconomic model. However, with deepermacroeconomic insight, we arrive at twoprincipal conclusions:

The euro did not help members of the clubwith structural problems of their economy. The eurozone’s average annual growth oflabour productivity over the last ten years hasbeen 0.8%. The figure in the USA and theUnited Kingdom for the same period was more

than double – 1.8%. Members of the eurozonehad managed to attain the same productivitygrowth in their own history – in the years 1980to 1990. However, patents, innovation andmodel examples of cooperation betweenschools and companies are still to be foundrather on the other side of the Atlantic than onour continent. The list of the most competitivecountries compiled by the World EconomicForum is topped again by the USA.

The Euro has most benefited those whowere prepared. Let us compare textbook examples: Italy on theverge of recession on the one hand, andIreland’s dynamics on the other hand. Let uslook at the real estate crisis in Spain andcompare it with the stability of the sector inAustria. Where a country itself experiencesa specific slump, the club will not help witha monetary policy change - by lowering interestrates in this case. Either the countries have rulesin place allowing the market enough freedomand motivation to adapt, or they trust theabilities of the fiscal policy of the state.

This is also my reasoning in relation to euroadoption by Slovakia and the Czech Republic. Ifwe take a look at the last ten years, we canstate: the euro will not implement reforms onour behalf. It is necessary to persevere with thestarted reform efforts.

If our vision is a knowledge-based society,and if our strategic goals are secured pensions,competitiveness of Czech products, productivityof our companies and corresponding wagegrowth, then the Czech Republic cannot rely onthe euro.

Aleš MichlAnalyst

Raiffeisenbank(e-mail: ales.michl@rb.cz) Ph

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– "I think it’s a big gamble and I’m not optimistic…there’s a lot ofuncertainty in prospect." Milton Friedman, Winner of the Nobel Prize forEconomic Sciences, on the founding of the eurozone, interviewed byRadio Australia on 17 July 1998.

– "I am both proud and happy to be able to say today that reality hasproven his (Friedman’s) pessimism wrong!" Gertrude Tumpel-Gugerell,Member of the Executive Board of the European Central Bank, ata conference in Austria on 6 May 2008.

The Czech Chamber of Commerce hasbeen entrusted with organising the 16thCongress of European Chambers ofCommerce, the Eurochambres 2009. TheCongress, which will take place in Praguefrom 14 to 15 May 2009, will bringtogether the representatives of all majorchambers of commerce in Europe. It willbe one of the most important events toaccompany the Czech presidency of theCouncil of the European Union.

An integral part of the 16thEurochambres Congress will be theBusiness Forum, to be held for the veryfirst time. This meeting of leadingbusinessmen and managers will focus onpromoting co-operat ion amongcompanies of the European EconomicArea, countries of the Commonwealth of Independent States (CIS) andMediterranean and Pers ion Gulfcountries.

The Eurochambres Congress and theBusiness Forum will be preceded bya number of accompanying andsupporting events in various regions ofthe Czech Republic.

B U S I N E S S F O R U MThe Bussines Forum is being prepared asa friendly meeting of representatives ofthe most important companies operatingin the European Economic Area, in CIScountries and Mediterranean and PersianGulf countries. The objective of theBusiness Forum is to offer participantsPrague’s attractive spring-time setting fora discussion on opportunit ies forintensifying foreign trade, expandinginvestment activities as well as findingways of eliminating barriers to mutualtrade.

The first day of the Business Forum, tobe opened by the Czech Prime MinisterMirek Topolánek, will be devoted topanel discussions covering four topics.The day will close with an eveningreception at Žofín Palace.

The second day will be opened byMartin Říman, Minister of Industry andTrade of the Czech Republic. The mainfeature of the day will be a joint session

of the 16th Eurochambres Congress 2009and the Business Forum. The key topics willbe "Barriers to International Trade" and"Internationalisation of Business".

During the entire duration of theBusiness Forum, bilateral trade talks –matchmaking – will be arranged for theparticipants.

1 6 T H E U R O C H A M B R E SC O N G R E S S 2 0 0 9The 16th Eurochambres Congress 2009,which runs in parallel with the BusinessForum, will focus on the sharing of know-how and experience in business supportamong economic chambers and chambersof commerce.

In line with the main theme of theCzech presidency, which is "Europewithout Barriers", the main theme of theCongress will be "Business withoutBarriers", with a special focus on:

– Doing business on the domestic market– Supporting role of the chambers in

business– Business and sources

Five hundred delegates from 46member chambers are expected to attendthe event.

Further information available at:www.eurochambres2009.euwww.komora.cz

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Kaleidoscope

■ 1 6 T H E U R O C H A M B R E S C O N G R E S S 2 0 0 9 A N D B U S I N E S S F O R U M

■ R E P R E S E N TAT I V E S O F 2 0 0 C O M PA N I E S E N G A G E DI N B R A N C H E S S U C H A S

– power industry and mining– metallurgy– chemical industry– engineering and automotive industry– construction, building, and revitalisation

of infrastructure and line construction– information and communication

technologies– food industry

are expected to participate in the BusinessForum.

■ TO P I C S O F PA N E L D I S C U S S I O N S :

– Trade and economic relations with CIS countries: The role of chambers and companies(the panel will be organised by the Chamber for Commercial Relations with CIS).

– Trade and economic relations with Mediterranean countries and Persian Gulf countries

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Czech firms have asserted their strongrepresentation among the five hundredlargest companies in Central Europe.According to the Central Europe Top 500study prepared by Deloitte consultingcompany, the Škoda Auto carmanufacturer placed highest amongCzech businesses in a survey compiledaccording to 2007 revenues, rankingimmediately behind Poland’s PKN Orlen oilconcern and the Hungarian group MOL.The Czech power company CEZ, whichplaced fifth, was, in addition, mostsuccessful of all the monitored companiesin terms of capital appreciation. Overall 70Czech companies appeared in the survey,ranking the Czech Republic third in lineafter Poland (176 companies) and theUkraine (75). In terms of income,companies in the Czech Republicaccounted for a 15% share of totalincome of the five hundred largest Central

European companies, and were only secondto Poland. In terms of market capitalisation,the largest company in the region is CEZ,mentioned above. In September 2008, CEZachieved yet another success when thecompany’s managing director, MartinRoman, was presented the title "Companyof Central and Eastern Europe" by PolishVice Prime Minister and Minister ofEconomy, Waldemar Pawlak, at the 18thEconomic Forum in Krynica, Poland. Theprize is awarded for success accomplishedunder the difficult conditions ofa transforming economy. The Deloitte study further points out that if states inCentral Europe continue in their economicreform (privatisation in particular), they maywell achieve economic growth ofapproximately 5%.

More at www.deloitte.com

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According to the European DistributionReport 2008 prepared by Cushman &Wakefield global real-estate company,three out of the five most attractivemarkets for locating industrial andlogistics facilities are to be found inCentral and East Europe. The reportreviews 25 countries on the basis ofthe cos t s o f rent and l abour,smoothness of transport, the share ofdifferent kinds of freight transport,population density, and proximity tokey markets. The best-placed countryin the survey is Belgium, followed bythe Netherlands, Hungary, and theCzech Republic.

Further information is available atwww.cushmanwakefield.com

■ THE CZECH REPUBLIC – ONEOF THE MOST ATTRACTIVELOCATIONS IN EUROPE FORINDUSTRIAL AND LOGISTICSFACILITIES

From 1 January 2009 it will be easierto employ foreigners in the CzechRepublic from countries outside theEuropean Union. The respectiveprov is ions are conta ined in anAmendment to the Employment Act,which was approved in October 2008by Václav Klaus, President of theCzech Republic.

Employment of foreigners will bemade easier by the so-called GreenCard, actually a residence visa andwork permit in one document. TheCard will be granted for jobs whichemployers fail to fill within 30 dayswith applicants from the CzechRepubl ic or European Unioncountries.

The list of these positions will bepublicly available. Only foreignerscoming from countries that will be ona list drawn up by the Ministry of theInterior will be eligible for thisemployment. Applicants will have toapply for the Cards at the Czechdiplomatic missions in their owncountries. The Card will be valid forthree years, and two years forunskilled jobs.

■ E M P L OY M E N T O F F O R E I G N E R S W I L L B E E A S I E R

■ C Z E C H F I R M S A M O N G 5 0 0 L A R G E S T C O M PA N I E S I N C E N T R A LE U R O P E

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■ I N F L U E N C E O FI N V E S T M E N T O N C Z E C HG D P G R O W T H

While in 2001-2007 the gross domesticproduct grew by 36.7% in real terms,investment (defined as gross fixed capitalformation) accounted for 9.5 percentagepoints of this growth (after inventorychanges were reflected, the increase was12.9 percentage points). Householdconsumption added 15.8 percentage pointsto real GDP growth in 2001-2007. With itsnearly 30% annual share of investment inGDP creation, the Czech Republic ranksalongside countries with the highestinvestment rate.

According to the latest figures for thesecond quarter of 2008, investmentaccounted for 1 p.p. (+4.6%) of year-on-year GDP growth. The largest contributiontowards the growth of the economy, a full 4p.p., was that of foreign trade in goods andservices. The contribution of householdconsumption (+1.5 p.p.) was also positive,while inventory changes had a strongnegative effect, reducing economic growthby 2.2 p.p.

■ S E C TO R C O N T R I B U T I O N TO G D PThe contribution of individual sectors to thecountry’s economic growth can be expressedas their percentage share in the growth ofgross added value. From this point of view,in 2001-2007 the manufacturing industryaccounted for practically a half (50.9%) ofthe increase, adding 19.5 percentage points(+37.5%) in comparison with the year 2000.Industry as a whole added +17.3 p.p. Othersectors of industry, with the exclusion ofmanufacturers (i.e. primarily the miningindustry), played a negative role in terms ofthe gross added value increase – i.e. theyreduced its growth. Other driving forces

included trade, accommodation andcatering services, and transport, addinga total 14 p.p. to Czech economic growthbetween 2001 and 2007. Banking andbusiness services contributed roughly 14%(5 p.p.) to the increase of gross added value.

If we take a closer look at the supply sideof the economy and the contributions ofdifferent sectors to its growth at present, it ispossible to say there was a clear dominanceof industry in the second quarter of 2008,which accounted for 4.6% (3.3 p.p.) of year-on-year growth of gross added value. Trade,accommodation and catering services, andtransport industry contributed 1.3 p.p.,while the remaining branches influenced thegrowth of gross added value only negligibly(positively or negatively) offsetting eachother. The manufacturing industrycontributed 3.2 percentage points to thegrowth of gross added value in the secondquarter of 2008 and influenced its growthby more than 50%, as was the case in 2002,2004, 2006, and 2007.

■ I N V E S T M E N T I N N E W F I X E DA S S E T SAccording to the latest figures of annualnational accounts (in current prices), in 2006companies invested EUR 16.8 billion in theCzech Republic, thus accounting for 59% ofthe country’s total investment volume ofEUR 28.5 billion. Companies investedespecially in new tangible fixed assets (61%,in comparison with 65% in 1995), whileinvestment in used tangible fixed assetsamounted to 20% (in comparison with 43%in 1995). Households were responsible forthe largest acquisition of used tangible fixedassets in 2006 (73% of the total volume ofused assets acquired in the Czech Republic).This was due to the mass privatisation ofapartments and apartment trading ingeneral, whereby households triggereda boom on the real estate market, whichculminated in 2007. It is only logical thatcompanies account for the highest share ofinvestment in machinery (85%), with theexception of transport equipment. In 2006,companies accounted for 74.5% of totalacquisition of transport means.

■ I N V E S T M E N T O F C O M PA N I E SU N D E R F O R E I G N C O N T R O LWhile in 1995 companies under foreigncontrol accounted for 11% of totalinvestment (gross fixed capital formation) inthe company sector in the Czech Republic,in 2006 their share rose to 41.4%. Thisincrease clearly reflects the volume offoreign direct investment, which wasrelatively low in the mid-1990s, and only

Investment is considered themost efficient factor of futuregrowth due to the multiplicationeffect it brings. Between 2001and 2007, investment accountedfor approximately 25% of theCzech Republic’s GDP increase.The greatest increases occurredin the first years of the currentdecade, when approximately75% of the GDP increase wasaccounted for by gross fixedcapital formation. In 2003 and2005, investment wasresponsible for less than one-tenth of GDP growth, and in2006 and 2007 it contributed toapproximately a quarter of GDPgrowth in the Czech Republic.Which sectors and segments ofthe Czech economy are mostactive in terms of investment? Isit those dominated by foreigncapital? In what way do theyinfluence the growth of theCzech economy?

Investment in the Czech Economy

5%

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45%

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Graph 1: Investment in the Czech economy (gross fixed capital formation, y/y in currentprices, in %)

Entire sector

Share of the manufacturing industry

Source: Czech Statistical Office, own calculations

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I N V E S T M E N T

grew stronger in the late 1990s. Owingmainly to the bulk sale of state-ownedshares in large Czech companies at thebeginning of the new decade, the CzechRepublic became the country with thehighest per capita influx of foreign directinvestment in the world (with impacts on theappreciation of the exchange rate of theCzech crown in relation to the main foreigncurrencies).

■ A P P E A L O F I N V E S T M E N T I NM A C H I N E RY …In 2006, the volume of investment bycompanies under foreign control inmachinery and equipment (with theexception of transport equipment) equallednearly half of that spent by the entire Czechcompany sector. Companies under foreigncontrol spent EUR 3.5 billion of the total EUR7 billion invested by the entire companysector in machinery and equipment (withthe exception of transport equipment,where the ratio was EUR 0.8 billion asopposed to EUR 3.2 billion).

In a long-term comparison, these ratioswere far smaller in the mid-1990s: in 1995companies under foreign control purchasedmachinery and equipment (with theexception of transport equipment) worthEUR 0.7 billion, which amounted to just14% of the total amount invested in theseassets by the entire company sector. In thecase of transport equipment, the share was10.8%.

■ … A N D T H E C Z E C HE C O N O M I C B O O MThe considerably high – approximatelyfourfold – growth of the share of foreigninvestors in machinery investment in theCzech Republic must be put into contextwith massive investment imports in 2000-2002. Direct foreign investors used importedmachinery in green field productionoperations or as equipment for their existingfacilities. At that time, investment importshad a considerably negative impact on theCzech Republic’s balance of trade (tradedeficits were tremendous). However, theirbeneficial effect appeared relatively soon,when they were transformed into exportvolumes. Therefore it is possible to concludethat the success of the Czech economy, i.e.the 2005-2007 boom, was to a large extentbased on machinery investments madeduring the "import-boom" period.

■ S E C TO R S – I N V E S T M E N TA C T I V I T YIn the course of time, the position ofindividual sectors in terms of investment

activity measured as a share of investedvolume in total volume of investment indifferent years has changed considerably.Although comparisons of the final years ofthe 1995-2006 period have their pitfalls inthat they are influenced only by the value ofinvestment in that particular year, interestingfacts can be revealed from the shares. In1995, economic sectors with the highestshare in total volume of investment in theeconomy were the utilities sector (electricity,gas manufacture, and distribution) witha share of 11.3%, the real estate sector with a share of 9.8% and the publicadministration, defence and social securitysector with a share of 6.6%.

2006 saw a differentiation of theseshares. Investment in electricity and gasproduction and distribution amounted to4.2% of total investment, ranking the sectorin 5th place among the branches in thatyear. The highest investment was in the realestate sector (16.5% of all investment in theeconomy), supporting and auxil iarytransport activities, and activities of travelagencies (10%) and in wholesale (5.2%).The automotive industry is a long-standingleader of the Czech economy. While in 1995it ranked 17th with a 2.1% share in totalinvestment in the Czech Republic, in 2006 itoccupied 6th place with a share of 3.3%.

■ L O N G - T E R M AV E R A G E SAverage values in absolute terms (currentprices) reveal a more accurate view of thestrength of investment in different sectors.According to these figures, the average suminvested in real estate activities – thanksespecially to development projects in thestrong years of 2002-2006 – amounted toEUR 3.5 billion per annum. Starting with2002, investment exceeded CZK 100 billion(EUR 3.6 billion) each year, and even EUR 5.4billion in 2006. This was nearly 2.5 fold morethan the average annual investment insupporting and auxiliary transport activities

between 1995 and 2006 (EUR 1.4 billion) orin electricity, water and gas production anddistribution (EUR 1.4 billion), which occupysecond and third place, respectively, inaverage annual investment volumes.

■ R E I N V E S T E D P R O F I TProfit reinvested by foreign direct investors inthe Czech economy is included in anothercategory of indicators, other thaninvestment in fixed assets. Graph 2 showsthe net profits of companies divided in thisway into repatriated profit in the form ofdividends and profit retained in the CzechRepublic. Beginning in 1998, when theCzech National Bank began to monitor theamount of reinvested profit, reinvestmenthas been showing significant growth,especially up until 2002, when it reachedEUR 2.3 billion. The well-known "lifecycle"of direct investment suggests that after thevolume of reinvested profit roughly equaliseswith the volume of paid-out dividends,a third phase should follow where profitsrepatriated to foreign investors’ countriespredominate. However, the year 2007presented a different picture, when theCzech Republic displayed by far the highestvolume of reinvested profit of EUR 4.7billion. In comparison with the year 2000,reinvestment doubled and was up 50%against 2006. This fact and long-termcomparisons are an expression of theconfidence of foreign direct investors in theCzech economy.

Drahomíra DubskáAnalyst

Economic and Statistical AnalysesDepartment, Czech Statistical Office(e-mail: drahomira.dubska@czso.cz)

Note: The average 2007 CZK/EUR exchangerate was used for reference conversions ofCZK into EUR.

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Graph 2: Reinvested profit and dividends of foreign direct investors in the Czech Republic(in EUR billion)

Dividends

Reinvested profit

Source: Czech National Bank

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Following a catalogue presentationby CzechTrade at the INDEX fair inDubai held in November 2007, the

company received specif ic data onpotential business partners. On the basis ofthis information, the first consignment ofgoods was carr ied out. The f i rstconsignment worth tens of thousands ofUSD was a major achievement. It attractedthe interest of traders on a market thatconcentrates most leading manufacturersof luxury goods and which is, as a result,a highly competitive business environment.Among other things, successfulnegotiat ions were establ ished witha number of major companies from theGulf countries, namely Kuwait, Oman,Bahrain, Saudi Arabia, and Iran. Director of

CzechTrade Dubai, JiříZavadil, was a great helpto the company insignificantly contributingto achiev ing majorresults in this territory.A specialised Czech glassstore was opened at thebeginning of July 2008in the Moroccan city ofRabat. František Halamagoods occupy approx.25% of the store’s salesarea. Mid-2008 the firmopened, in cooperationwith their Russ ianrepresentative, a display

room in Moscow, featur inga comprehensive collection.

The František Halama Company wasfounded in 1932 and over the years thecompany fought many battles to survive.The most difficult period the companyendured, but overcame, was thenational isation of businesses undercommunism. The company’s success isfounded on the principle of strictlymaintaining originality throughout allstages of production. Another matter-of-course principle is complexity of artisticdesign as well as meticulous refining. Thecompany occupies a special position in theglass industry - its products are impossibleto imitate owing to production processsecrets handed down to the currentowners by their predecessors.

Ninety per cent of the company’sproducts are exported abroad. Non-European Union exports go to Asia, Africa,and North America. Major Asian partnersinclude China and Japan and in Africa it isSouth Africa. A large potential for exportscan be seen in Russia. Traditional businesspartners include dealers in the UnitedStates. Customers of František Halamainclude the Chinese Minister of Trade andthe Jordanian princess.

More information at www.halama-glass.cz

The František Halama familybusiness has, despite manydifficulties, reclaimed its positionat the forefront of the Czechglass industry. The companyowners have managed topenetrate markets worldwide. In2008 František Halama acquiredcontracts for the Russian andMoroccan markets. Entry into theArabian market is alsoconsidered a success.

Czech Glass Celebrates Success

SolarWinds is a global developer ofprogrammes for computer networkadministration. Owing to its creation

of new highly specialised jobs and itsinvestment in the training of new employeesin the Czech Republic, it placed third in theInvestor of the Year 2007 competition in the"Most Important Investor of the Year –Strategic Services" category. "We have beentremendously pleased with the calibre oftalent and the enthusiasm we haveencountered here in Brno," said DougHibberd, Vice President for ProductDevelopment, SolarWinds. "The employeesof this office will play a critical role in thefuture success of the company," he added.

Another example of investment in IT isIBM, which moved its European headoffice from Vienna to Prague. Top-rankingspecial ists, excel lent infrastructure,government support and primarily a longhistory of remarkable achievements byCzech IBM employees were among themain reasons that inspired IBM to take thisdecision. Companies with developmentcentres in the Czech Republic include, forexample, Red Hat, Sun Microsystems, eBay,Skype, and Microsoft.

More at www.solarwinds.com

The Czech Republic is anattractive place for investmentby IT companies. This isconfirmed by SolarWinds ITcompany, which expanded itsBrno development centre inAugust 2008.

Expansion of SolarWinds Brno Development Centre

"Mirror" set of liqueur glasses with Art Nouveau ornaments designedin 1944.

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In this section, we present and follow interesting success stories of export projects implemented by Czech businesses froma variety of industry sectors; success that is, for the most part, founded on remarkable feats of research and innovation. We alsointroduce examples of important foreign investment projects carried out in the Czech Republic.

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C Z E C H T O P

■ P R E S E N TA T I O N O F T H EP R O J E C T

The contract is part of the Al Noor project,which involves the building of new townson the shores of the Bab al-Mandab straitsbetween Yemen and Djibouti, witha bridge to link the two sides across the straits. On the Yemeni side, the land earmarked for the new town

covers an area ofapproximately 1500sq. km. Its Djibouticounterpart wil loccupy another 1000sq. km. A uniquetechnical feature ofthe project i sa cable-stayedbridge: with its 28.5km, it will be thelongest bridge of itskind in the world. Itwi l l be the f i rstbridge across theRed Sea and wil lcarry a s ix- lanemotorway anda railway. The bridge

wil l have to withstand storms andearthquakes and its pi l lars wil l begrounded in the seabed, which is up to330 m below sea level in some places. Aspart of the project, CZMT will also work ascoordinator for Czech and Europeancompanies. "Czech companies can takeadvantage of their participation in the AlNoor project by diversifying their exports ata time when economic growth in theEuropean Union and the United States isslowing down. Czech industry is alreadystrong on EU and East European markets.Now we are re-opening the markets of theNear East, where we were successful in thelatter half of the 20th century," PetrZeman, co-owner of CZMT, pointed out.

■ A B O U T C Z M TCZMT was founded in 1999 byrepresentat i ves of Czech min ingtechnology manufacturers to representthem on foreign markets. Besides miningand raw material processing equipment,CZMT is also a supplier of technologiesfor other branches of industry (heavyengineering, petrochemical industry,power engineering).

Czech Mining Technology (CZMT)will supply technology for anironworks and a cement factoryin Yemen and Djibouti,respectively, for approximatelyEUR 700 million. It isCZMT’s largest order so far.

Near East Opens Up to Czech Industry

■ A Q U E L B O H E M I A Aquel Bohemia is a dynamically

developing company founded in the CzechRepublic at the beginning of the year 2000and inspired by the idea to provide peoplewith top-qual i ty water f i l t rat iontechnology and thus relieve them of theneed to buy packed water. Aquel Bohemiafocuses mainly on filtration technology.The technology in use by the company wasdeveloped primarily for the US army andNASA. It is based on the repeated recyclingof raw water into drinking water. Thistechnology can be used to filter bothsaltwater and fresh water, as well as urinefor instance. At present, these filters areused primarily for the desalination ofwater, turning it into drinking water, or formedical purposes. Unlike similar products,which, as a rule, remove only certainelements by filtration, Aquel filters are able

to eliminate all undesirable substances inthe water.

■ A C H I E V E M E N T S O F A Q U E LB O H E M I A Aquel Bohemia’s sales figures and its rapidexpansion to foreign markets serve asevidence of the high quality of its filters.Since its founding in the year 2000, thecompany has entered the markets ofSlovakia, Hungary, and Russ ia. InSeptember 2008 it opened a new branchin the Ukraine. However, its expansiondoes not end here. Aquel is planning toenter the market of Romania and othermarkets in Eastern and South-EasternEurope. Aquel Bohemia now has morethan 40 000 business partners andcustomers.

More at www.aquel.eu

Water is increasingly becominga strategic raw material. Itsquality directly influences humanhealth. Natural water sources arediminishing and sufficient supplyof good-quality drinking water isbecoming a serious globalproblem. One of the solutions isfiltration technology, whichremoves undesirable substancesfrom impotable water, turning itinto drinking water.

Good Prospects for Filtration Technology

Representatives of CZMT, Václav Světlík and Petr Zeman, and Sheik BandarTarik bin Ladin from Middle East Development signing a contract worthEUR 700 million.

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S E R V I C E S

■ L E G A L F R A M E W O R K F O RD O I N G B U S I N E S S I NS E C U R I T Y S E R V I C E S

This year the Chamber of Deputies of theParliament of the Czech Republic andsubsequently the Senate passed the newPolice Act. In addition, due to themodification of other laws, an amendmentwas also made to the Trade Licensing Act.This brings important changes to doingbusiness in security services. The newamendment defines two licensed trades:the protection of property and persons andthe services of private detectives. Theimportance of this rectification lies inparticular in its legal definition of licensedtrades and in that it defines clear rules andterms for service operators. The proficiencyand integrity of businessmen and theiremployees has become equally important.The amendment requires new applicantsfor licenses to demonstrate their integrityby means of a declaration of honour.

■ E D U C AT I O N A N DP R O F E S S I O N A L I S AT I O N The amendment clearly makes room forthe professionalisation of those employedin the security systems and security servicessector in the Czech Republic. This comeshand in hand with the preparation ofa system of professional education.Recently, Grémium Alarm – the Associationof Technical Security Services has beeninvolved in the implementation of a publiccontract within an extensive nationalproject of the Ministry of Labour and SocialAffairs, which is related to the entiresystem and corresponds to the lifelonglearning strategy. (This concerns theimplementation of Act No. 179/2006 Coll.,on the verification and acknowledgmentof results of further education). As a partof this project, a register of available jobvacancies – National System of Professions(NSP) - will be established. This databasewill serve the labour market – bothemployers and employees - as a source ofinformation on avai lable currentprofessions. As a follow-up to the NSP,a National System of Qualifications (NSQ)is being prepared in a similar manner, andis to contain requirements for theindividual qualifications and evaluationstandards with procedures of certificationof the listed qualifications.

■ T H E I M P O R TA N C E O FL I F E L O N G L E A R N I N G A N DW O R K E X P E R I E N C E The basis for the acknowledgment ofqualifications has been an expansion of the

ways in which an employee may acquirenecessary qualifications. An employeeneed not take only the traditional route –by means of a formal school education.Qualifications may now also be acquiredthrough lifelong learning programmesand/or through proficiency resulting fromwork experience. The key issue is to satisfythe requirements of the system ofacknowledgment and especial ly therelevant standards characteristic of theprofession. This facilitates a flexibleresponse to the needs of the labourmarket. Another advantage of the systemis that it guarantees employees who passan exam in accordance with the NSQ (thesystem that is to be a follow-up to the NSPin future; it is being prepared withina national project of the Ministry ofEducation) that their acquired qualificationis in demand on the labour market.

■ C H A N G E S I N T H EC O N D I T I O N S O F D O I N GB U S I N E S S I N S E C U R I T YS E R V I C E SNotable in this context is the new Act onthe Police of the Czech Republic and therelated law which amends certain acts inconnection with the adoption of the PoliceAct (274/2008 Coll.). The change in theconditions of entrepreneurship concernstrades licensed for providing technicalservices for the protection of property andpersons, work of detectives as well asproviders of services for the protection ofproperty and persons. In the latter two, thechanged requirements also concern theprofess ional qual i f icat ions of bothresponsible persons and ordinary securitystaff. The application of Act No. 179/2006Coll. for certification of the qualificationsof several tens of thousands of peopleworking in security services can beconsidered a landmark in proving thequalifications of both employees andentrepreneurs. Clients can rightly expectan improvement in the level of all securityservices.

■ C Z E C H T E C H N I C A LS TA N D A R D SAnother security instrument is theimplementation of technical standards intopract ice. Before 1990, the stateregulations in force at that time inCzechoslovakia were binding. Today theyare divided into harmonised and non-harmonised regulations. Only harmonisedregulations are binding. Other regulations,although not binding, form the basis fortechnically plausible solutions. And this is

The need for protection fromdanger and the logically relatedneed to signal danger haveaccompanied mankind sinceancient times. The threat ofdanger comes from the naturalelements in the form of variousnatural catastrophes. It is alsorelated to the development ofcivilisation, to the largeconcentration of people on smallor delimited areas and appearsin the form of those whoencroach upon the fundamentalrights of others in their pursuitof money or other values. Bothmaterial and immaterial damage,loss and other unpleasantconsequences exceed multiple-fold the money necessary toinvest at the beginning asa precautionary measure.Security today is influenced bythe rapid development of newsecurity technologies.Society endeavours to preventindividual threats and toeliminate criminal offences in sofar as possible. We areconstantly searching for new andmore efficient means of doingso. In its entirety, the securitytechnology market todaycomprises a wide array ofcompanies: those that focus onsecurity technology, on thedistribution of securitycomponents, on the transport ofvaluables, physical security,operational commercial security,education in the branch,guidance and consultancy.

Security Services in the Czech Republic

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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

where we come to another changeintroduced this year, which is in itselfa step in the r ight direct ion: theintroduction of electronic access totechnical standards, a reduction in theprice of standards and an increase in theirclarity. The introduction of electronicaccess and distribution of standards willinvolve the participation of professionalassociations which are expected to foundso-cal led Centres of TechnicalStandardisation. At present, technicalstandards are increasingly used as a meansof support for the implementation of legalprovisions while the matching principle isapplied. Consequently, the uttermostefforts are being made to launch theoperation of these centres and to openaccess to technical standards under themost favourable conditions.

■ S E L E C T I N G A S E C U R I T YA G E N C Y Since the beginning of the nineties, thedemand in the Czech Republic for securitydevices has increased enormously.A problem has logical ly ar isen:sophisticated electronic security systems inparticular are often supplied and fitted bycompanies and individuals who lack thenecessary prerequisites for this. This stateof affairs persists. Our basic advice to thecustomer is to check first whether thecompany fitting a security device is inpossession of a licence for the installationof security technology, which it is obligedto possess by law. The supplier must beable to provide servicing - one of the mainfactors for the selection of a securitydevice. The length of the company’sexistence and its stability on the market arethus another important factor. The qualityof a company is reflected to a large degreeby the type of certification it possesses,whether this is a certificate of theinspection body of Grémium Alarm – theAssociation of Technical Security Serviceswhich certifies assembly quality, proof ofquality management, or a permit of theNational Security Authority for work withclassified documents. We also encountercases where the general investmentsupplier – most often a constructioncompany – earmarks a small sum for thesub-delivery of a security device. This sumdoes not ful ly correspond to therequirement of the investor for quality oftechnology. This then leads to a situationwhere credible security companies refuseto carry out such construction because, foreconomical reasons, they would be forcedto go below their usual standard of quality.

■ T R A D E FA I R S O F E U R O P E A NS TA N D A R D Two large international trade fairsdominate the field of security systems,services and technology in the CzechRepublic. These are the Pragoalarm /Pragosec Praha and Pyros / Iset Brno. Thesetrade fairs have a two-year cycle. Althoughat first sight they appear to be of identicalnature, this is in fact not so.

Pragoalarm / Pragosec focusespredominantly on alarm systems such aselectronic security alarms, camera systems,municipal camera surveillance systems,alarm and transmission communicationssystems, storage containers, mechanicalsecurity appliances, access control systemsand so on. The next Pragoalarm / Pragosectrade fair will take place on 24-26 February2009 at the Prague Exhibition Grounds inHolešovice, now a traditional venue forthis trade fair. It is the most importantevent of this type to take place in 2009 inthe Czech Republic. When it last tookplace in 2007 on a net exhibition area of 2 212 sq. m, more than 113 exhibitorstook part and a total 199 companies wererepresented at the event.

In contrast, the Pyros / Iset trade fairfocuses on fire prevention. Pyros / Iset isa display of security technology andespecia l ly f i re prevent ion devices,

e lectronic f i re a larms, f ixed f i reextinguishers, salvage technology, fire-fighting technology, anti flood barriers,and so on. The sixteenth year of the tradefair took place this year on 13-16 May2008 at the Brno Exhibition Centre. Thisyear saw the part ic ipat ion of 253exhibitors, 12 companies, and 26 000visitors.

Since the very beginning, GrémiumAlarm – the Association of TechnicalSecurity Services has been the professionalsponsor of both trade fairs as well as theco-organiser of the accompanyingprogramme. Both trade fairs take placeunder the auspices of the Ministry of theInterior, the Police Presidium, and theGeneral Directorate of the Fire RescueService.

These two trade fairs are the largestdisplay of the security industry in the newEuropean Union member countries in anygiven year.

Grémium Alarm – the Association of Technical Security Services

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R E G I O N

NUTS 3 – South Moravia RegionThe South Moravia Region isone with a great economicpotential. Its gross domesticproduct accounts for one-tenthof the Czech Republic’s nationalGDP and its per capita grossdomestic product in terms ofpurchasing power parityamounts to 72% of the EUaverage. The heart of theRegion and a traditional centreof international trade andservices is the city of Brno.South Moravia’s conditions forthe development of science andresearch are exceptionallygood. Last year, with theassistance of CzechInvestAgency, Brno attracted 15 newinvestors, ten of whom areplanning to set up developmentor service centres in the city. In2007, some 40 companiesinvested in the Region, wherethey will spend an estimatedEUR 500 million on theirprojects in the next few years.The future enterprises willemploy some 3 900 people.

Krajský úřad Jihomoravského kraje(Regional Office of the South MoraviaRegion)Žerotínovo nám. 3/5601 82 Brno, Czech Republicphone: +420 541 651 111fax: +420 541 651 209e-mail: podatelna@kr-jihomoravsky.czwww.kr-jihomoravsky.cz

Brno-City

Brno-Country

Bfieclav

Blansko

Hodonín

Vy‰kov

Znojmo

AUSTRIA

SLOVAKIA

POLAND

GERMANY

■ G E O G R A P H I C A L P O S I T I O N ,T E R R I T O R I A L D I V I S I O N , A N DP O P U L AT I O NFrom the geographical point of view, theRegion has a relatively advantageousposition. This ensues from its location onthe historical junction between the southand the north of Europe. Within theEuropean Union, its neighbours areAustria and Slovakia. The South MoraviaRegion, together with the VysočinaRegion, forms a territorial unit known asNUTS 2 - South-east.

With its surface of 7 196 sq. km anda population of 1 142 013, it ranks fourthin size among the Czech Republic’sregions.

The South Moravia Region is definedby the districts (according to the EU singleh ierarch ica l c lass i f i cat ion by loca ladministrative units LAU 1) of Blansko,Brno-Ci ty, Brno-Country, Břec lav,Hodonín, Vyškov, and Znojmo and isdivided into 21 administrative districtswith enlarged competence comprising673 communities, 49 of which are towns.

Brno, the Region’s capital, is Moravia’slargest city and the second largest city inthe Czech Republic. One-third of theRegion’s population live in Brno, whichunequivocally surpasses all other cities ofthe Region in terms of economicimportance, and its significance goes farbeyond the Region’s boundar ies .(www.brno.cz).

■ E C O N O M I CC H A R A C T E R I S T I C SAltogether 275 industrial enterprises withover 100 employees were based in theSouth Moravia Region in 2007. This figureplaces the South Moravia Region at thetop of all the country’s regions. Nearly95% of the enterprises operated in themanufacturing industry.

In 2007, the revenues of industrialenterprises derived from the sale of theirown products and services exceeded the

EUR 7.5 billion margin, which is 25.8%more than in the previous year.

Among the sectors, the highestincrease in revenues was shown byenterpr i ses concerned wi th themanufacture of electrical and opticaldevices, whose revenues grew by 80.7%,followed by enterprises making othernon-metallic mineral products, whererevenues were up by 69.0%.

The highest share (53.6%) of theRegion’s total exports in 2007 wasaccounted for by the export of machinesand transport equipment, followed by theexport of semi-finished products andmaterials (21.1%). In 2007, the SouthMoravia Region had a 7% share of theCzech Republic’s total exports and ranked5th among the country’s 14 regions.

■ T H E M A N U FA C T U R I N GI N D U S T RY D O M I N AT E SFor many years, the structure of industry inthe Region was characterised by thedominance of mechanical and electricalengineering and electronics, with centres inBrno and Blansko. Currently, the dominantposition in the Region’s economy is held bythe manufactur ing industry, whichaccounted for 24.1% of the Region’s grossadded value, with agriculture and othertraditional sectors, especially in theRegion’s southern areas, accounting fora mere 3%. Construction, a developingsector in the Region, had a 7.8-per centshare and trade, and the repair ofconsumer goods a share of 14.3%, withcommercial services accounting for 15.3%.

Of the total number of 269 366registered economically active entities,13.8% operated in industry, 11.5% inconstruction, while 25.7% were involvedin trading and the repair of motorvehicles, and 21% in the real estatebusiness. Only 6.3% of economic entitiesoperated in agriculture and forestry. Inspite of this, farming in the Region isa highly productive economic activity.

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■ A G R I C U LT U R EVery favourable conditions for intensivefarming exist in the southern parts of theRegion.

Farmland accounts for more than60% of the Region’s total area, 83% ofwhich is arable land. The highestproportions of arable land are to befound in the Districts of Znojmo andBrno-Country. The main crops in theRegion are cereals, rape, and sugar beet.

The extremely good natural conditionsmake it possible for farmers to carry onthe long tradition of specialised farmingproduc t ion l i nked to theRegion’s specific features, mainly vine-g rowing and f ru i t and vege tab legrowing. 90% of the country’s vineyardsare to be found in the Region. Vine-growing is especially flourishing in theBřeclav District, which accounts for 48%of the vine-growing surface in the CzechRepublic, followed by the districts ofHodonín, Znojmo, and partly also Brno-Country. In animal production, theSouth Moravia Region holds a leadingposition in pig rearing and poultryproduction.

■ M I C R O - R E G I O N STo meet the requirements and interests ofthe Region’s communities, co-operation iscontinuing in the micro-regions, voluntarygroupings of districts, which help to realisethe Region’s development programmes.

In recent years, cross-border co-operation has been developing in theframework of the Pomoraví Euroregion,which assoc iates the reg ions ofWeinvierte l (Lower Austr ia) , SouthMoravia, and West Slovakia (www.euregio-weinviertel.org).

The intensifying linkage of thoseregions creates prerequisites for thee s t ab l i shment o f reg iona lmanufacturing networks. Good co-operation exists mainly in the area ofmeta lwork ing and woodwork ing ,suppl ies for the car industry, andenvironmental facil it ies. Increasinglynoteworthy is the co-operat ion infarming with the associated agro-industry and food industry sectors.

■ T R A N S P O R TAs regards transport, the South MoraviaRegion plays an important transit role.The skeleton of the transport system isformed by the D-1 and D-2 motorwaysand the R-43 and R-52 fast highways. Thecity of Brno is an important transportjunction for road, motorway, and railwayt ransport and the South Morav iaIntegrated Transport System. The Brno-Tuřany civilian airport can receive all typesof aircraft all the year round (www.airport-brno.cz) . Two main ra i lwaycorridors connecting EU states passthrough the Region, and Brno i sa member of the Association of EuropeanCities interested in the construction ofa fast railway.

■ E D U C AT I O NThe South Moravia Region has extremelygood conditions for the development ofscience and research thanks to the largenumber of university students and thevery good rating of its universities. Thisfact has been confirmed by companies(e.g. Bio Vendor, Honeywell, FEI, IMINorgren, MMM Group, Pliva, Tescan,Grisoft, NESS Technologies, Siemens)which have set up their Research andDevelopment centres in Brno.

A favourab le feature i s theRegion’s adequate network of pre-schoolfacilities and schools. The aim of thesecondary-level and apprentice trainingschool system is to link the supply ofsecondary-school graduates with thedemand of the labour market. Institutionsof higher learning add to the highstandard of education in the Region.11.7% of university students in the CzechRepubl ic s tudy at the Region’suniversities. An important institute is theMilitary Academy with departments inBrno and Vyškov, which have the use oflarge training grounds and a moderninfrastructure (www.unob.cz).

■ C U LT U R EBrno is an important cultural centre of theentire South Moravia Region, with 14theatres, 6 cinemas, 17 museums, and 41art galleries. Besides the Museum of theCity of Brno, which is housed in ŠpilberkCastle, there is the Moravia Land Museum,the Technical Museum, the Museum ofRomani Culture, the Arts and CraftsMuseum, and other museums. The centreof the Region’s musical life is Besední dům,the seat of the Brno State PhilharmonicOrchestra, with the most beautiful neo-Renaissance hall in Brno. Brno’s newMusical Theatre, part of the Brno CityTheatre, attracts audiences from far andwide, not only from the Region itself.

■ T O U R I S MFrom the international tourism point ofv iew, the Region boasts exquis i telandscape and historical areas, such asthe Lednice-Valtice complex, one of theCzech Republic’s monuments entered inthe UNESCO wor ld her i tage l i s t(www.zamky-hrady.cz), the Moravia Karstand the Auster l i tz bat t le f ie ld(www.slapanice.cz). Brno, with its culturalmonuments, holds a similar position.A natural attraction is the Dyje ValleyNational Park (www.nppodyji.cz). Visitorshave the opportunity of attending variouscultural events, which fact is veryimportant for the development oftourism. From this point of view, anattraction of the Region is wine tourismhighlighted by the Region’s folk cultureand its folklore traditions. Visitors toSouth Morav ia can exp lore thecountryside by bike, using the cycle trailsin the Region, even in the internationalcontext (Moravia-Silesian long-distancecycle trail, Greenways, the Amber Trail,the Brno-Vienna cycle trail).

B R I E F C H A R AC 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)LAU 1 – Blansko 863 105 885 116 123LAU 1 – Brno-City 230 368 864 1 1 604LAU 1 – Brno-Country 1 499 196 411 187 131LAU 1 – Břeclav 1 038 113 214 63 109LAU 1 – Hodonín 1 099 157 110 82 143LAU 1 – Vyškov 876 87 640 80 100LAU 1 – Znojmo 1 590 112 889 144 71NUTS 3 – South Moravia Region 7 196 1 142 013 673 159NUTS 1 – Czech Republic 78 867 1 0381 130 6 249 132

Source: Czech Statistical Office (as of 31 December 2007)NUTS = territorial unit according to the unified classification of the EU, LAU 1 = district

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South Moravia Region – Crossroads of Europe

The Region has a favourablegeographical position, in theframework of both the CzechRepublic and Central Europe.Brno, Moravia’s largest city, isa notable Central European tradefair city and the seat ofimportant national, mainlyjudicial, institutions. Twotransport corridors pass throughthe Region.

One links the north-west of Europewith its south-eastern regions,lead ing f rom Scandinav ia to

Istanbul. The other connects the BalticRepublics with the south of Europe.

In addit ion, in future the SouthMoravia metropolis, Brno, will becomea junction for the high-speed railwaynetwork. An important role is played bythe Brno-Tuřany International Airportoperating regular flights to Prague,London, and Moscow. In sum, it can besaid that the South Moravia Region is oneof the most important transport junctionsin the framework of both the CzechRepublic and Europe.

The Region’s closest neighbour is theSlovak Republic, with which the CzechRepublic is linked by common history,tradit ions, customs, and mental i ty.Therefore, from the beginning of theestablishment of the South MoraviaRegion within its current boundaries, ouremphasis has been on the establishmentof the closest possible contacts withSlovakia’s Trnava and Bratislava self-governing regions. Naturally, we also co-operate with other European regions. Wehave a partnership with the Lower Austriafederal state, with North Italy’s Bergamo,Serbia’s Šumadija district and the Dutchprovince of Utrecht. We co-operate withthe Lodz voivodeship, and our relationswith Russian regions are also developingvery dynamically.

Our contacts, however, are not limitedto Europe. In the past few years, round-table conferences have been organised inthe Region’s capital, bringing togetherloca l t rad ing companies wi threpresentatives of ASEAN states, withrepresentatives of countries associated in the New Partnership of Africa’sDeve lopment (NEPAD) , andrepresentatives of the South Americanassociation MERCOSUR and the AndesAssociation. The presentation by theSouth Moravia Region at the EXPO 2005World Exhibition in Japan’s Aichi was alsoa success. We continue to support theconstruction of a network of informationsites for businessmen.

One of the objectives of the SouthMorav ia Reg ion i s promot ing thedeve lopment of the t ransportinfrastructure aimed at making businesslocalities easily available to investors andfuture employees. The most importantproject we support is the development ofthe international airport in Brno-Tuřany.

The airport is the motivating force of allefforts to attract investments andpromote the tourist traffic in Brno and theentire region, as we know that a well-funct ioning airport i s an essent ia lprerequisite for foreign investors seekingthe best location for their investments.From this point of view, I am pleased tosay that Brno has strengthened itsposition as the second most intensivelyused airport in the Czech Republic.

The development of the South MoraviaRegion takes into account its specificconditions. It is the only one in the CzechRepublic which is a genuine vine-growingregion. That is why we attach greatimportance to this fact. From experience,we know that South Moravia vine-growers can produce wines of a qualityallowing them to compete with popularwines of other world regions. We realisethe importance of foreign investments forthe development of our region, and wetherefore publicise the opportunitiesexisting in this area at trade fairs andduring trade missions. On the domesticleve l , we co-operate c lose ly wi thChambers of Commerce andorganisations catering for different areasof business (guilds, associations ofbusinessmen, etc.). On the internationallevel, we organise trade missions thepurpose of which is to establish businesscontacts and co-operation betweenregions. We also support meetings ofbusinessmen during the visits of foreignbusinessmen arriving in South Moravia,espec ia l l y in connect ion wi th theparticipation of foreign firms in trade fairstaking place in the Brno exhibitionground.

The Czech Republic’s joining theEuropean Union has opened up newpossibilities of co-operation with otherEuropean states and has brought aboutnew opportunities and prospects for ourregion. I hope we shall make good use ofthem.

Stanislav JuránekGovernor of the South Moravia Region

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The ambition of the JIC is to build an al l-round infrastructure for the promotion of innovat ive

entrepreneurship in the South MoraviaRegion and to become a leading providerof support to innovat ive start-upcompanies in Europe. The JIC supportsinnovative firms, science and research, andstudents with ideas. It provides them withmoney, consultancy, contacts andpremises.

■ P R O J E C T S A N D A C T I V I T I E STO F O S T E R I N N O VAT I O NThe South Moravia Innovation Centre is one of the main players in the drafting of pro jects promot ing innovat iveentrepreneurship in the Czech Republic.

The projects, funded from national budgetresources and the Structural Funds of theEuropean Union, are based on theRegional Innovation Strategy of SouthernMoravia (RIS) and the City of BrnoStrategy

New grounds are being establishedfor start-up innovative firms thanks top ro jec t s o f the b io techno log i ca lincubator, INBIT, and other premises areoffered by the Technology Incubator II,which was inaugurated in the spring of2008. Soon after the opening, the firstMicrosoft Innovation Centre in theCzech Republic settled in the TI II space.Its mission is to co-operate with theSouth Moravia Innovation Centre inassisting start-up ICT firms in their

Innovative Environment Developing in the South MoraviaRegion

It is important to communicate withthose who have settled in the Region

in the past years, to ensure their closerinteraction with the local economy and opencommunication with the local government.

The purpose is to strengthen confidencein the Region as a place offering favourableconditions for the further expansion ofcompanies, as well as to increase the volumeof re-investment, especially in activities witha higher value added and in Research andDevelopment.

Last but not least, after-care is to reducethe risk of investors‘ departure for otherterritories.

In order to create a systematic after-carestructure in the Region, it was necessary toknow the needs and problems of localcompanies, and thus a pilot survey wascarried out on a representative sample offoreign investors in the region in 2007. Thispilot survey helped to provide an idea of theneeds of firms and made it possible toidentify their key problems.

The RDA SM inspired the establishmentof an "After-care working group"comprised of representatives of the SouthMoravia Region, the City of Brno,CzechInvest, employment offices anduniversities. Its primary task was to setpriorities for the research and subsequentlyto address the problems found.

The RDA SM is carrying out the researchin the form of personal discussions withrepresentatives of the companies. In 2008 ithas followed up the pilot survey, but on

a broader scale. It widened not only thesubjects discussed, but also the number offirms included in the research. Alsoaddressed besides foreign investors wereCzech companies which are importantemployers in the Region or have a greatprospect of further development.

The debated themes include humanresources (present and future requirementsfor employee numbers and structure),education (co-operation with schools,requirements regarding branches oftraining), transport (requirementsconcerning public transport, highways, useof airport) and co-operation with theauthorities (Foreign Police, employmentoffices).

So far the team has addressed 42 companies, which together employabout 14 000 people. Most of thosequestioned are preparing further expansionof their capacities to be able to create up to10 800 new jobs within five years. In mostcases - about 85% - these will be technicalposit ions, be it ski l led workers inmanufacturing or management.

The RDA SM has been providing all-round services to foreign investors since2000. Over the years, it has been involved inthe successful implementation of manyinvestment projects, since 2003 a total of49 have been brought to successfulcompletion.

More at: www.rrajm.cz

Support for the founding anddevelopment of innovative firmsin the Region is the objective ofthe South Moravia InnovationCentre (Jihomoravské inovačnícentrum - JIC) established by theSouth Moravia Region with theStatutory City of Brno, MasarykUniversity, Brno University ofTechnology (BUT), MendelUniversity of Agriculture andForestry, and the Veterinary andPharmaceutical University inBrno as its members.

After-care – Programme for Foreign Investors The Regional DevelopmentAgency of South Moravia (RDASM, RRA JM in Czech) is takingadvantage of its many years‘experience in providing servicesto foreign investors coming tothe South Moravia Region and iscurrently focusing its activity onafter-care for investors.This activity is connected withthe preparation of the RegionalInnovation Strategy of the SouthMoravia Region (RIS III).The aimis no longer only to attractinvestors who would open newmanufacturing plants in theRegion.

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development by providing specialisedconsultancy and other services.

■ TA R G E T I N GB I OT E C H N O L O G I E SThe JIC is also involved in other activities insupport of innovation in the Region, suchas the International Clinical ResearchCentre (ICRC) and the project of theCentral European Institute of Technology.

The International Clinical ResearchCentre in Brno is a strategic project of theCzech Government in the area of appliedresearch, education, public medical care,and knowledge-based economy. The ICRCrepresents a new-generation concept ofa clinical research and education centre,which reflects primarily the expected needsof the 21st century. The concept has beendeveloped jointly by Czech and US expertsover a period of more than four years. Themain l ines in the research anddevelopment will be cardiology and cardiosurgery, internal medicine, neurosciences,emergency medicine, and oncology.

The ICRC will thus become the third

international research centre, after theInternational Space Station – ISS 2 and theEuropean Organisat ion for NuclearResearch (CERN), and the first internationalcentre in the area of medical research.

Thanks to close co-operation withleading academic institutions abroad, ledby the Mayo Clinic in the USA, it will beeasier for the Czech Republic to participatein international research and educationprojects, to gain experience in latestmethods of treatment and diagnosis, aswell as to obtain grants from the EU andthe USA and thus gain the vitally neededresources for Czech science and healthcare.

The Central European Institute ofTechnology (CEITEC) is a project fora modern scientific centre of excellence inBrno, which will significantly enhance theresearch and innovation potential of theCzech Republic and will have a majorimpact on the NUTS 2 South-east Region(South Moravia and Vysočina Regions). Theproject is aimed at building a modernscientific centre of excellence which will

integrate biological and material sciences.The core will be the establishment andequipment of central laboratories that willbe used by teams of scientists in variousbranches. Their collaboration will bringdecisive progress, for example in theresearch of methods of cancer treatment,new materials, improvements in wirelesscommunication, etc. The research will beconcentrated in four centres focused onbiological research, biomedical research,health protection of animals and people,and development of advanced materialsand technologies. Dozens of companieswill participate in the project’s activities inthe creation and use of the outcomes ofthe research. Also important is co-operation with the largest hospitals in theRegion, and long-term collaboration inscientific research projects within theCEITEC is also expected to be widened toleading foreign institutions.

More at: www.jic.cz

Mahen Theatre in Brno was the first theatre with electric lighting in Europe Phot

o: C

zech

Tour

ism

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The most attractive region in theCzech Republic, in the eyes ofcompanies and investors, isclearly Prague. However, becauseof its high rental for office,retail, and industrial space, anever growing number ofinvestors are searching foralternative localities. And this iswhere the South MoraviaRegion, and Brno especially, iswinning the imaginary secondplace. Its growing popularity isdue especially to its strategicposition in the Czech Republic aswell as Central Europe (proximityof the Slovak and Austrianborders), excellent access totransport routes, lower priced –but equally qualified – labourforce, and lower unit costsoverall for the lease of spaceand related services.

Commercial Real Estate Market in South Moravia Region■ O F F I C E B U I L D I N G SThe centre of the Region – Brno – is

the second largest market for office spacein the Czech Republic after Prague. At theend of the second quarter of 2008,available office space totalled about 210 000 sq. m, with almost 75% ofbuildings in the highest "A Class" qualitystandard. The most important newcomplexes include the InternationalBusiness Centre, the AXIS Office Park,and especially two huge office andcommercial centres, the Spielberk OfficeCentre and Brno Business Park. Due tothe great acceleration of developerprojects in 2005 and 2006, about 25% ofoffice space remains unoccupied. Incontrast to Prague, this is thus a marketdominated by tenants and, as a result,prices are about half those compared withidentical standard levels in the capital city.Rental ranges between just 10–16EUR/sq. m per month, including under-ground parking. Despite that, furtherla rge pro jects are a l ready underconstruction or in the planning phase, forinstance Vienna Point, Titanium, theCampus, the architecturally interesting AZTower, or another two buildings of theBrno Business Park complex. New officespace is expected to increase by about 80000 sq. m by the year 2009. The greatinterest of developers proves that Brnowill in future continue to be an ever morelucrative locality.

■ R E TA I L S PA C EThe South Moravia Region is second inimportance after Prague also in terms ofretail space. There are several muchsought-after shopping galleries and mallsin the very centre of Brno. The mostattractive of them is Vaňkovka, a uniquecomplex built on the site of a formerdilapidated factory. The rental rate fora medium-sized retail unit (100–150 sq.m) in the complex ranges between 50–65EUR/sq. m per month, which is a pricecomparable to that of Prague shoppingcentres. Another sought-after area is thesecond largest retail complex in thecountry – Olympia Brno, where the fourthstage of construction is underway atpresent. Rental at Olympia is more in line

with the situation in South Moravia,ranging around 40 EUR/sq. m. Shops inBrno’s most sought-after local it ies,Masarykova Street, Česká Street andNáměstí Svobody (Freedom Square) arerented for 60-90 EUR/sq. m/month. Interms of retail, the region has one otherphenomenon – Freeport at the Hatěborder crossing, the first designer outletin the Czech Republic. "Freeport hasbecome one of the fastest growing outletcentres in Europe, also thanks to theopening of the border, as over a half ofcustomers ar r i ve regular ly f romneighbouring Austria, where shops areclosed at weekends", says Martin Indraf rom Col l ie rs Internat iona l CzechRepublic, a retail market specialist.

■ I N D U S T R I A L R E A L E S TAT EThe strategic location and excellent accessto transport routes is best reflected on theindustrial space market. This is whycompanies most often choose the regionto locate their distribution centres andwarehouses there which are able to serveCentral, East and West Europe. The mostsought-after locality is the Brno area,although areas close to the border withSlovakia, namely the District of Břeclav, arebecoming attractive, too, due to theavailable labour force. Up to now, thedominant developer in the area was CTPInvest. Recently, however, other playershave entered the market, such as theAmerican developer ProLogis with ParkBřeclav and Park Brno projects, andAIG/Lincoln with the D2 Logistics Park.Available industrial space now totals closeto 500 000 sq. m. Thanks to the highdemand which exceeds supply, rental ishigher there than for example in Prague,where competition is much tougher anddevelopers are more engaged inspeculative construction. Rental ratesrange between 4.25 and 4.50 EUR/sq.m/month in Brno and its vicinity, andbetween 4–4.30 EUR/sq. m in borderareas.

■ L A N DThe Region is very attractive also for landpurchases, although potential investorsmust be prepared to meet the high priceexpectations of current owners. Fewlocations with good transport access areleft and thus prices reach 70–80 EUR/sq.m and 5 EUR/sq. m more in Brno and itsvicinity.

Simona Černá, Filip Rerko, Martin Indra

Colliers International Czech Republic

RENTAL RATES AND PRICES OF LAND IN THE SOUTH MORAVIA REGIONLocality Indicative rental (EUR/sq. m/month) Price of land (EUR/sq. m)Brno 4.25–4.50* 75–85Within 25 km of Brno 4.25–4.50* 70–80Area at the Czech-Slovak border 4.00–4.30* 70–80

*) Note: Rental depends on many factors, mainly size of space, duration of lease, and quality of user.

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Brno is one of the oldest industrialcentres in Central Europe. Thequality industrial base in the cityand its immediate surroundingsoffers a wide range ofopportunities for co-operation. Thedeveloped scientific and researchand development base, along witha broad educational base, makethe city the second largesteducational centre in the CzechRepublic. It is home to 11universities and features an above-average educational structure.The Brno-City (Brno-město)District, the focal point of theRegion of South Moravia, islocated centrally in Europe, at theedge of the Moravian Gate,through which routes connectingthe northern and southerncivilisations have passed forcenturies. Geographically, it isa part of the Podunajský Region,with historical ties to Vienna,which is only 110 km away. Owingto its location on the borders ofthe Českomoravská vysočina(Czech-Moravian Highlands) andthe lowlands of South Moravia, ithas a broad and varied naturalenvironment and pleasant climaticconditions for both residence andrecreation. The Svratka Rivercreates an important recreationaldam, the Brno Water Reservoir, inthe north-western part of the city.

Brno-City District

R E G I O N

S E L E C T E D F I R M SName Based in Sector ContactZKL Brno, a.s. Brno metal-working www.zkl.czTescan, s.r.o. Brno electron microscopes www.tescan.czKrálovopolská , a.s. Brno steel structures www.kralovopolska.czGiTy, a.s. Brno system integration www.gity.czUnis, s.r.o. Brno management of technological processes www.unis.czMETA Brno, a.s. Brno handicap aids www.metabrno.czKaroseria, a.s. Brno car bodies www.aviabrno.czZPA Brno, s.r.o. Brno security systems www.zpabrno.czChepos, a.s. Brno engineering units www.chepos.czStarobrno, a.s. Brno beer production www.starobrno.czBomar,s.r.o. Brno saws and cutting machines www.bomar.czVUES Brno, a.s. Brno electrical development www.vues.cz

Statutární město BrnoMagistrát města Brna(Statutory City of Brno, Brno-City Municipality)Malinovského nám. 3601 67 BrnoCzech Republicphone: +420 542 171 111fax: +420 542 173 530e-mail: posta@brno.czwww.brno.cz

Brno-City

The Region is home to several protectedterr i tor ies that are either naturalmonuments or reserves. The Brno-CityDistrict is located at the very centre of theRegion of South Moravia taking up 230 sq.km. It is flanked by the municipalities of theBrno-Country (Brno-venkov) District. TheCity of Brno consists of 29 Districts withover 368 000 inhabitants (www.brno.cz).

■ U N I V E R S I T Y C E N T R EAlmost one-third of the inhabitants of theCity of Brno have graduated from secondary school and one-fifth havea university degree; over 50% of allinhabitants have at least graduated fromsecondary school. These values greatlyexceed the average in the Czech Republicand are almost identical to the capitalPrague. There are 11 universities in Brnowith a complete range of fields of study.The broad range of available educationgoes hand in hand with a developedresearch and development base. Brno isa strong player in the field of science,research, and innovation. The city supportsthe creation of new business incubatorsthat help to expedite the launch of newcompanies doing business in the area ofadvanced technologies. Brno builds itsdevelopment strategy around a highlyqualified workforce.

■ T R A D I T I O N A L C E N T R E O FI N D U S T RY A N D C O M M E R C EThe world-renowned trade and exhibitioncentre in Brno is host to more than 50international fairs, exhibit ions, andcongresses every year (more atwww.bvv.cz). Brno has a strong position inelectrical engineering and engineering and specialises in high-tech business.Product ion of components for theautomotive industry is one of the fieldswith a high growth potential. Importantforeign investor and developer companieshave a presence in the high-tech industry

and strategic services, making use of thequalified workforce and relatively lowproduction costs that Brno offers. The cityis becoming the centre for investorsinterested in investments in technologicalparks, development centres, sharedservices and voice service centres. Logisticsand administrative centres are alsoexperiencing significant development.

■ D E V E L O P E D S E R V I C ES E C TO RThe city features a highly developed servicesector. It is a place of business fora number of financial institutions, realestate agencies, and call centres. The entryof foreign investors currently promotesa significant development of the so-calledstrategic services. The city offers a broadand quality range of opportunities forspending free time in many of its culturaland sports facilities.

■ C E N T R E O F C Z E C H J U S T I C EThe city is home to top judicial bodies: theConst itut ional Court of the CzechRepublic, the Supreme Court, the SupremeAdministrative Court, the Office of thePublic Defender of Rights (Ombudsman)and the Supreme Public Prosecutor'sOffice.

■ C U LT U R EThe city hosts a number of cultural andtheatrical festivals, the most famous ofwhich is the festival of fun, Brno-City inthe Centre of Europe, with its fireworks

B R I E F S TAT I S T I C SIndicator District RegionArea (in sq. km) 230 7 196

Population 368 864 1 142 013

Inhabitants/sq. km 1 604 159

Unemployment rate (in %) 5.54 6.43Source: Czech Statistical Office (as of 1st quarter 2008)

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FOREIGN INVESTORSInvestor Country of origin Czech partner Sector ContactMarzotto Textile N.V. Netherlands Nová Mosilana, a.s. textile industry www.mosilana.czAsea Brown Boveri Ltd. Switzerland ABB, s.r.o. electrical engineering www.abb.czHoneywell USA Honeywell Controls, s.r.o. electronics www.honeywell.comAlstom N.V. Netherlands Alstom Power, s.r.o. energy systems www.alstom.czPöyry Oyj Finland Pöyry Environment a.s. water service buildings www.aquatis.czBeghelli, S.p.A. Italy Elplast, a.s. industrial lamps www.beghelli.czMunchen Medizin Mechanik GmbH Germany BMT, a.s. healthcare technology www.bmt.czMesse Düsseldorf Germany BVV – Veletrhy Brno, a.s. organisation and realisation www.bvv.cz

of exhibitionsDera Belgium N.V. Belgium Dera Food Technology CZ, s.r.o. food ingredients www.dera.czFEI Company USA, Netherlands FEI, s.r.o. electron microscopes www.fei.czFrencken Netherlands Netherlands Frencken Brno, s.r.o. cybernetic production systems www.frencken.czPliva Group Croatia Pliva Lachema, a.s. chemical production www.lachema.czSMC Corporation Austria, Japan SMC Industrial Automation CZ, s.r.o. industrial automation www.smc.czCendrion Company Netherlands Vink-Plasty, s.r.o. semi-finished products from plastic www.vink.czIBM USA IBM GS Delivery Center, s.r.o. Brno computers www.ibm.comFlextronics International Cork B.V. Netherlands Flextronics International, s.r.o. electrical engineering www.flextronics.comInfosys BPO Limited India Infosys BPO, s.r.o. network and database www.progeon.com

administrationCarClo Plc Great Britain CarClo Plastics-Brno, s.r.o. plastics www.carclo-plc.comLISI Automotive Former SAS France LISI AUTOMOTIVE FORM a.s. car components www.lisi-automotive.com

■ B R N O ' S D E V E L O P M E N T P R O J E C T SEuropoint Brno (www.europointbrno.cz)The Europoint Brno project is chiefly concerned with the transport accessibility and interoperability of Brno. Its realisation includesbuilding new passenger and storage railway stations as well as modernising the railway route through the city, including therealisation of an urban infrastructure with the aim of ensuring a quality rail connection to priority European multimodal corridors.The Europoint Brno project will also contribute to the development of the entire central part of the city: a modern district will becreated with new opportunities for living, accommodation, shopping and services, relaxation and recreation and, last but no least,new employment opportunities. The first important investment in this developmental area has been the successful conversion offactory premises into the business and cultural centre, Galerie Vaňkovka.

Brno Industrial Zone – Černovice Terrace (www.brno.cz) This greenfield-type development zone of 200 ha is specialised in investments related to the processing industry, strategic services,and technology centres. Current investors in the zone include European, Japanese, and American firms, mainly representing theengineering industry. The south-eastern part of the industrial zone has seen the realisation by the CTP developer company of rentalindustrial buildings, where a number of other foreign companies now conduct their activities. The companies in the industrial zonein Brno currently employ 4 540 persons.

Czech Technology Park Brno (www. technologypark.cz)This is a prestigious greenfield-type development zone of 60 ha intended for light high-tech industry and strategic services, that makeuse of the synergy of research, development and business. The present development, of the technology park is concentrated in twozones of 10.5 ha where the Technologický Park Brno, a. s., company builds and leases production and administrative space. The mostimportant clients include IBM Global Services Delivery Center Czech Republic, FEI Czech Republic, Siemens, Motorola, and others.The companies in the Czech Technology Park currently employ 3 500 persons.

University Campus of Masaryk University in Brno-Bohunice (www.muni.cz)The university campus comprising approx. 90 000 sq.m of useful area for tuition and research will become, after its completion,a base for the Faculty of Medicine, for the chemical and biological fields of the Faculty of Science, and for the Faculty of SportsStudies. The capacity of the grounds of the new Campus is designed for 5 000 students and for approximately 800 universitylecturers, researchers, and other employees. Tuition as well as the biomedical research will be supported through the connection ofthe Campus with the Brno Faculty Hospital. It is also anticipated that a tight link will be established between the Campus activitiesand commercial developmental and innovative activities.

Ponava (www.ponava.cz) The Ponava area lies within the larger centre of Brno and is historically and ecologically associated with the Lužánky City Park. It isa traditional centre of sports and recreation. The aim of the project is to regenerate this urban area comprising of about 30 ha andconvert it to a modern sports-recreational centre. Currently, a variant solution is being considered that would include a footballstadium, a multifunctional structure of metropolitan character, an aquapark and other sports facilities, with space for commercialuse.

competition, Ignis Brunensis. Brno'shistorical downtown prides itself on manymonuments of which the Špilberk Fortress,Cathedral of St. Peter and Paul, Church of

St. Jacob, and the Old Town Hall are themost famous. Brno is also characterised byits avant-garde functionalistic architecture,represented mainly by the unique work of

architect Mies van der Rohe and his VillaTugendhat, which is a part of the UNESCOWorld Cultural Heritage.

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Brno-Country District

Město Ivančice(Town of Ivančice)Palackého nám. 6664 91 IvančiceCzech Republicphone: +420 546 419 411fax: +420 546 451 844e-mail: posta@muiv.czwww.muiv.cz

B R I E F S TAT I S T I C SIndicator District RegionArea (in sq. km) 1 499 7 196

Population 195 644 1 142 013

Inhabitants/sq. km 130 159

Unemployment rate (in %) 4.31 6.43

Source: Czech Statistical Office (as of 1st quarter of 2008)

Brno-Country

The Brno-Country (Brno-venkov) Districtforms a ring surrounding the Brno-CityDistrict from all sides. There are 195 644inhabitants in 187 municipalities, 13 ofwhich are towns, on 1 499 sq. km. Thetown of Brno is the natural centre of theregion. The Brno-venkov Dist r ic tremained, despite structural changes inthe economy in the last decade,a primarily industrial-agricultural district.More than 31.6% of economically activeinhabitants are employed in theprocess ing industry and in energyproduction. Owing to favourable soil and

S E L E C T E D F I R M SName Based in Sector ContactKovolit, a.s. Modřice metal casts www.kovolit.czGemax, s.r.o. Javůrek industrial armatures www.interfluid.czKampos, s.r.o. Kuřim electrical cables www.kampos.czTOS Kuřim-OS, a.s Kuřim engineering www.tos-kurim.czEkotex, s.r.o. Ivančice non-woven fabrics www.ekotex.czLanatex, a.s. Ivančice textile manufacture www.lanatex.czBrněnské papírny, s.p. Předklášteří-Tišnov paper, cardboard production www.papirny-tisnov.czLogis průmyslové obaly, a.s. Ivančice industrial packaging www.lpo.cz

cl imatic conditions, there is a richagricultural tradition in the District, whichspecialises in the production of cereals,root-crops, f ru i t , vegetables , andgrapevine. Agricultural land takes up morethan a half of the overall district area andit is tended by 4.8% of economicallyactive inhabitants.

There are over 400 important culturaland artistic monuments in the District. Themost famous and most visited Europeanmonuments inc lude the Cisterc ianmonastery, Porta coeli in Předklášteří

u Tišnova, the Benedictine monastery in Rajhrad u Brna, and the chateau inŽidlochovice (www.jizni-morava.info).

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Blansko District

Městský úřad Blansko(Blansko Municipal Office)Náměstí Svobody 3678 24 Blansko, Czech Republicphone/fax: +420 516 775 111e-mail: mesto@blansko.czwww.blansko.cz

B R I E F S TAT I S T I C SIndicator District RegionArea (in sq. km) 863 7196

Population 105885 1142013

Inhabitants/sq. km 123 159

Unemployment rate (in %) 5,28 6,43Source: Czech Statistical Office (as of 1st quarter of 2008)

Blansko

S E L E C T E D F I R M SName Based in Sector ContactBlata, s.r.o. Blansko scooter manufacture www.blata.czMetra Blansko, a.s. Blansko engineering www.metra.czSteko, s.r.o. Blansko security doors and systems www.steko.czGumami-Print, s.r.o. Doubravice n S. printing www.gummiprint.czTylex Letovice, a.s. Letovice textile production www.tylex.czAtona, s.r.o. Blansko machine-building technologies www.atona.czČeMeBo, s.r.o. Blansko electrical engineering www.cemebo.czLetovické strojírny, s.r.o. Letovice engineering www.lsletovice.czSklárny Moravia, a.s. Úsobrno packaging glass www.sklomoravia.cz

FOREIGN INVESTORSInvestor Country of origin Czech partner Sector ContactDürkopp Adler Germany Minerva Boskovice,a.s. sewing machines www.minerva-boskovice.comTemkom AG Switzerland Novibra Boskovice, s.r.o. parts for textile machines www.novibra.czAlps Japan Japan Alps Electric Czech, s.r.o. computer components www.alps.czCelestica Canada Canada Celestica Czech Republic, s.r.o. electronics www.celestica.comP-D Group Germany P-D Refractories CZ, a.s.. heat-resistant ceramics www.mslz.cz

From the point of view of the touristt rade, the Dis t r i c t represents anattractive area for both domestic andforeign visitors as there are countlesscu l tura l monuments and natura lwonders. The 5-km-long band of Devonlimestone, the Moravian Karst, is locatedin the District. This protected landscapearea is one of the most significant karstareas in Central Europe. Both surfaceand underground karst features havedeveloped in an area of almost 100 sq.km, which have made the MoravianKarst the most visited tourist location ofthe entire District. To date, there are over1000 known stalactiform caves, some ofwhich are open to the publ ic(www.moravskykras.net). The mostimportant architectural monumentsinclude the Renaissance chateau, whichis the dominating feature of the town ofBlansko, as well as the Empire chateau inBoskovice and the chateau in Kunštátand Lysice. The castle in Rájec nadSv i tavou i s the most spectacu larstructure of early Classicism in Moravia(www.pruvodce.com/rajec).

The Blansko District is located in thenorthern part of the South MoraviaRegion. Comprising 863 sq. km, it is oneof the smal le r d i s t r i c t s . TheDistr ict's rugged terrain is mainlycharacterised by highlands. The SvitavaRiver flows through its centre. TheBlansko District is administrativelydivided into 116 municipalities, 8 ofwhich are towns.

The District's economy is dominatedby industry and thetourist trade. Thereis a tradit ion ofengineering, otherindustries includeelectrical, texti le,construction, andstoneware. There isan area of 16 hasu i tab le forinvestment in thetown of Boskovice.

Agriculture is lessdeve loped, wi th the main productsbe ing potatoes ,corn, sugar beet,maize , foddercrops, mi lk , andmeat.

The B lanskoDistrict is one of thee c o l o g i c a l l ycleanest districts inthe Czech Republic.This is partly due tothe large woodedareas in the District.

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The famous Macocha Abyss in the Moravian Karst is the deepest abyss ofits kind in Central Europe

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B R I E F S TAT I S T I C SIndicator District RegionArea (in sq. km) 1 038 7 196

Population 113 214 1 142 013

Inhabitants / sq. km 109 159

Unemployment rate (%) 6.54 6.43Source: Czech Statistical Office (as of 1st quarter of 2008)

Břeclav DistrictBfieclav

Městský úřad Břeclav(Břeclav Municipal Office)Náměstí T.G.Masaryka 3690 81 BřeclavCzech Republicphone: +420 519 311 384fax: +420 519 311 238e-mail: posta@breclav.orgwww.breclav.org

The Břeclav District lies in the southernpart of the South Moravia Region andshares its southern border with Austria andin the south-east with Slovakia. The Districtis administrat ive ly div ided into 63municipalities, 9 of which have the statusof towns.

The Břeclav District has an industrial andagricultural character. Over 27% of theDistrict’s economically active inhabitantswork in industry, which is represented bythe rubber and plast ics , chemical ,engineering, polygraphic, and foodindustries. Raw materials are supplied bysand and limestone reserves and, in theboundary areas of the District, reservoirs ofoil and gas can be found. Due to the veryfavourable soil and climatic conditions,agriculture has an important tradition inthe District and concentrates on thegrowth of cereals, root-crops and warmth-requiring vegetables, fruits, and grapevine.Agricultural land covers 68% of the totalarea of the District. The Region aroundBřeclav is linked with vine-growing, whichhas a long-standing tradition.

The Břeclav District is significant in itsconnect ion to the internat ional

S E L E C T E D F I R M SName Based in Sector ContactAgrotec Holding Hustopeče agricultural engineering www.agrotec.czAlca Plast, s.r.o. Břeclav sanitary appliances www.alcaplast.czBottling, s.r.o. Mikulov automatic doors www.bottling.czMont Group, s.r.o. Kostice advertising items www.montgroup.czGumotex, a.s. Břeclav polyurethane products www.gumotex.czRacio, s.r.o. Břeclav food industry www.racio.czMetal Plast Produkt, s.r.o. Nový Přerov plastic mouldings www.mpp.breclavsko.comTranza, a.s. Břeclav industrial conveyors www.tranza.czVinium, a.s. Velké Pavlovice wine manufacture www.vinium.cz

FOREIGN INVESTORSInvestor Country of origin Czech partner Sector ContactMedipharm AB Sweden Medipharm CZ, s.r.o. biotechnological probiotics www.medipharm.czWestfalia M.V. GmbH Germany Westfalia Metal, s.r.o. metal constructions, containers www.westfalia-group.comCatis Montagetechnik GmbH Austria Catis, s.r.o. ski fastenings www.catis.at United Technologies Holding SA USA Otis, a.s. elevators, moving walkways www.otis.comQUAPROTEK IPS GmbH Germany Quaprotek Manufacturing k.s. metal-working www.quaprotek.com

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Lednice Chateau in Moravia is on the UNESCO List of World Heritage

communications network both in road andrail transport, which has a positiveinf luence on the development ofentrepreneurial activity.

The area is an attractive touristdestination due to the well knownarchaeological site at Dolní Věstonice,which is famous for the discovery of thestatue of the Věstonice Venus, also due tothe Stolová hora (Table Mountain)observation point and due to the NovéMlýny system of waterworks. Anotherunique complex in the District is theLednice-Valtice Area, which is on theUNESCO list of World Heritage Sites(www.unesco-czech.cz/mesta/lednice_

valtice.html). The construction of this vastlandscaped park was begun in the late18th century by the House of Lichtensteinas a unique man-made tract ofcountryside, which has been known, sincethe 19th century, as the Garden of Europe.

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B R I E F S TAT I S T I C SIndicator District RegionArea (in sq. km) 1 099 7 196

Population 157 110 1 142 013

Inhabitants / sq. km 143 159

Unemployment rate (%) 10.08 6.43Source: Czech Statistical Office (as of 1st quarter of 2008)

Hodonín DistrictHodonín

Město Hodonín(Town of Hodonín)Masarykovo nám. 1695 35 HodonínCzech Republicphone: +420 518 316 111e-mail: epodatelna@muhodonin.czwww.hodonin.eu

S E L E C T E D F I R M SName Based in Sector ContactKordárna, a.s. Velká nad Veličkou textile production www.kordarna.cz/cs/kordarna2G –přikrývky a polštáře, s.r.o. Lipov textile production www.2glipov.czJiří Šašinka-Hors Hodonín confectionery www.hors.czŽelezárny Veselí, a.s. Veselí nad Moravou steel pipes and profiles www.zeves.czKM Beta, a.s. Hodonín roofing, building products www.kmbeta.czMoravské naftové doly, a.s. Hodonín crude-oil production www.mnd.czŠroubárna Kyjov,s.r.o. Kyjov screws www.sroubk.cz

FOREIGN INVESTORSInvestor Country of origin Czech partner Sector ContactVetropack Austria Holding Austria Vetropack Moravia Glass, a.s. glass manufacturing www.vetropack.czVAG Armaturen GmbH Germany Jihomoravská armaturka, s.r.o. iron and cast-iron armatures www.jmahod.cz

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The District lies in the south-eastern part ofthe South Moravia Region. Its naturalborders are formed by the Ždánice Forest,Chř iby Mountains and the WhiteCarpathians, which were promoted toa protected landscape area (www.bilekarpaty.cz). Its southern border isshared with Slovakia.

The Distr ict i s d iv ided into 82municipalities, 8 of which have the statusof towns.

The Hodnín area (www.hodonin.com)is, together with the neighbouring Břeclavarea, the most significant producing area.

Due to favourable natural conditions,the long-term development of the Districthas mainly concentrated on agriculture.Land used for agriculture covers 63% ofthe surface of the District. Vine growing,production of maize, cereals, fruit, andvegetables are well developed in theDistrict.

Industry is concentrated in the southand south-east of the Distr ict –engineering, power and textile industries.In the District, deposits of crude-oil andbr ick c lays can be found in thesurroundings of Hodonín, Kyjov, and Velké

Strážnice Chateau houses an exposition of folk music instruments, the only one of its kind in Central Europe

nad Veličkou and gravel-sands in thesurroundings of Vracov, Bzenec, andStrážnice. An increase in the utilisation ofresources of chloride-iodine mineral watersshows great potential for the future.

Example of folk culture: Easter celebrations in thetown of Strážnice

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Znojmo District

Městský úřad Znojmo(Znojmo Municipal Office)Obroková 1/12669 02 ZnojmoCzech Republicphone: +420 515 216 111fax: +420 515 216 362e-mail: info@muznojmo.czwww.znojmocity.cz

B R I E F S TAT I S T I C SIndicator District RegionArea (sq. km) 1 590 7 196

Population 112 889 1 142 013

Inhabitants / sq. km 71 159

Unemployment rate (%) 10.7 6.43

Source: Czech Statistical Office (as of 1st quarter of 2008)

Znojmo

With an area of 1590 sq. km, the ZnojmoDistrict is one of the largest in the CzechRepublic. In the south it borders on Austriaalong a line of 105 km. More than 57% ofits population of 112 889 live in thecountry, settled in 144 communities (fiveof which have town status). It is one of thedistricts with the lowest populationdensity.

The entire area of the District is situatedin the Dyje basin. The Dyje is the mostimportant river in the District, with a dambuilt in its upper reaches. The Vranov Damserves not only as a water reservoirsupplying the power station built on its oneside, but also as the region’s main summerresort.

From the economic point of view, theZnojmo District combines farming andindustry.

Farming in the District is well developed,thanks to the high quality of the vast tractsof arable land and good cl imaticconditions. The main crops are maize,grain, vegetables, and fruit. The area isknown for its vine-growing and wineproduction. The main industries are thefood industry, clay, kaolin, and nickel

FOREIGN INVESTORSInvestor Country of origin Czech partner Sector ContactImpress SA France Impress Znojmo, a.s. metal packing www.impressgroup.comColas S.A. France Colas CZ, a.s.,závod Jih construction www.colas.czLaufen, Rocco Switzerland, Spain Laufen CZ, s.r.o. ceramics www.laufen.czKoller Holz Austria Rudolf Koller, s.r.o. wooden structures www.rkoller.czErnst Schmircher Austria Znora nábytek, s.r.o. kitchen furniture www.znora.czPegas Nonwovens Luxembourg Pegas NW, a.s. non-woven textiles www.pegas.cz

S E L E C T E D F I R M SName Based in Sector ContactElektrokov, a.s. Znojmo transformers www.elektrokov.czTOS Znojmo, a.s. Znojmo engineering www.tos-znojmo.czRetex, a.s. Moravský Krumlov non-woven textiles www.retex.czDřevotvar v.d. Znojmo Znojmo furniture manufacture www.drevotvarznojmo.czZnojemské strojírny, s.r.o. Znojmo engineering www.strojirny.czMetal pres, s.r.o. Zastávka u Brna forming machines www.metalpres.czVHS plus, s.r.o. Znojmo civil engineering www.vhsplus.czProimpex,s.r.o. Moravský Krumlov electronic equipment for the automobile industry. www.proimpex.cz

Church of St. Nicholas in Znojmo

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production, the ceramics, industry, andengineering.

The well-preserved natural environmentand a pleasant cl imate are goodprerequisites for the development oftourism in the region. A choice ofrecreational and tourist opportunities isprovided especially by the Dyje NationalPark and the adjoining countryside. Theentire region is interlaced with markedhiking and cycle paths, linking up withneighbouring districts and Austria. Otherforms of tourism being promoted in theregion include wine tourism, drawing onold local traditions and prompted by newendeavours. A number of cultural, social,and sporting events are held in the region in

the course of the year. Some of them, suchas the Znojmo Grape – a film and radiofestival focusing on gastronomy - and theZnojmo Historical Vintage, held each year inSeptember (www.znojemsky-hrozen.cz),attract visitors from far and wide.

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Vyškov District

Městský úřad Vyškov(Vyškov Municipal Office)Masarykovo nám.1682 00 VyškovCzech Republicphone: +420 517 301 111fax: +420 517 368 048e-mail: posta@meuvyskov.czwww.vyskov-mesto.cz/su.asp

B R I E F S TAT I S T I C SIndicator District RegionArea (sq. km) 876 7 196

Population 87 640 1 142 013

Inhabitants / sq. km 100 159

Unemployment rate (%) 4.45 6.43Source: Czech Statistical Office (as of 1st quarter of 2008)

Vy‰kov

S E L E C T E D F I R M SName Based in Sector ContactMagnum Parket, a.s. Vyškov parquet manufacture www.magnumparket.czStaeg, s.r.o. Vyškov construction www.staeg.czDřevostyl Vyškov, s.r.o. Vyškov furniture manufacture www.drevostylvyskov.czRostex Vyškov, s.r.o. Vyškov metalworking www.rostex.czE-Com Systems, s.r.o. Slavkov u Brna military equipment www.e-comsystems.czBioveta, a.s. Ivanovice u Brna chemical production www.bioveta.czAntreg, a.s. Vyškov electronics www.antreg.czRami CZ,s.r.o. Vyškov electrical engineering www.rami.cz

FOREIGN INVESTORSInvestor Country of origin Czech partner Sector ContactFB Industrie GmbH Germany Böttcher ČR, k.s. printing rollers www.bottcher.czVelux A/S Denmark BKR-ČR, s.r.o. sun-blinds, terrace blinds www.velux.czVoest Alpine Krems GmbH Austria Voest Alpine Profiform, s.r.o. iron and steel production www.voestalpine.cz

and metallurgical processingVPK Packaging Group N.V Belgium COREX CZECH s.r.o paper tube and barrel production www.corexgroup.com/cz/Fritzmeier GmbH Germany Fritzmeier, s.r.o. metalworking www.fritzmeier.czEMS-CHEMIE HOLDING AG Switzerland EMS-PATVAG s.r.o. airbag initiators www.emspatvag.cz/Pegas Nonwovens Luxembourg Pegas NW, a.s. textile production www.pegas.cz

and agriculture. The main industry,which boasts a long tradition, especiallyin Vyškov, is engineering, followed bywoodworking, based in Rousínov. Alsorepresented in the District are thetextile and food industries. Half of theDistrict’s area is fertile land, the maincrops being sugar beet, grain, andmaize.

Thanks to its new and well-functioningSochorova Indust r ia l Park , VyškovMunicipality has managed to cope withgrowing unemployment in the District,caused by the closing down of large,originally state-owned enterprises, suchas the Zbrojovka factory and the sugarrefinery. Now, the Sochorova industrialzone employs hundreds of local peopleand, after its enlargement, this numberwill further increase. The Vyškov District isone of the regions in the Czech Republicwith a well-preserved environment anda large surface area of forestland. Visitorshave the opportunity to spend free timehik ing in an at t ract ive natura lenv i ronment , wi th a number ofarchitectural and cultural sights scatteredall over the countryside. Especial lypopular are the Rakovecké Údolí Valleyand Říčky Nature Parks and the ŽdániceForest . A great attract ion are theDistrict’s chateaux in Vyškov, Račice, andIvanovice na Hané, rebuilt in their presentform from Gothic castles. Baroquearchitecture is represented by the chateauin Slavkov u Brna, with a Napoleonicexhibition recalling the "Battle of ThreeEmperors" and a famous picture gallery.

The Vyškov District is situated in theeastern part of the South Moravia Region,on the div id ing l ine between twomountain systems – the BohemianMassive and the Carpathians.

The population of the District, whichcovers an area of 876 sq. km, resides in80 communities, five of which have townstatus.

The District’s economic character hasalways been one combining industry

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The Mound of Peace is a memorial of the Battle of Slavkov (Austerlitz)