Good morning!

Modern business operations in the Czech

Republic

…..since 1989

Good morning!

Reminder: An appreciation of dates

• Pre 1914 – Austro-Hungarian empire; Czechoslovakia created

1918

• 1918-1939• 1939-1945

– German occupation

• 1945-1989– Communist regime (Influenced by Russia)– “Prague spring” 1968– “Velvet revolution” November 1989

• Post 1989

Traditional industries (1)• “Heavy industry”

– Engineering• Skoda• Tesla

– Mining• “Black” coal• “Soft” coal• Clay• Graphite• Silver Uranium

Traditional industries (1)• “Heavy industry”

– Engineering• Skoda• Tesla

– Mining• “Black” coal• “Soft” coal• Clay• Graphite• Silver Uranium

Why did the uranium mines close?The Czechoslovakia (Czech Republic) had/has

no means of processing raw uranium into usableuranium, and their former guaranteed market place (USSR)

no longer existed.

Traditional industries (2)• Specialised

– Chemical– Medical– Shoes– Glassware– Contact lenses– Films– Musical instruments

etc, etc, etc………

Traditional industries (3)

• Other– Brewing

…….also, wines and spirits

– Agribusiness• Livestock milk/cheese/meat• Timber• Fruit/vegetables

etc, etc, etc………

During the years up to 1939

• Czech business was oriented towards the west

• Czechoslovakia was the 10th most developed industrialised country in the world

After 2nd World War:

• Communist era• Czechoslovakia became the

“workshop of the Soviet bloc”• 70% of exports went to Soviet bloc• Series of yearly and 5-yearly plans

In more detail….in 1974:

• Skoda• Tesla • Bata

In more detail….in 1974:

• Skoda• Tesla • Bata

Europe in the 1970’s

Europe in the 1970’s

Exports toSoviet bloc

Other exports70%

30%

Europe 1978: Czechoslovakia was considered the workshop of the Soviet bloc

Europe in 1990

Exports toSoviet bloc

Other exports70%

30%

Europe in 1990

Exports toSoviet bloc

Other exports70%

30%

Europe in 1993

Exports toSoviet bloc

Other exports70%

30%

Lostexports

eastwards

Europe in 1993

Czech (and Slovak) Republics have to look for other markets

Nowadays

• European Union is the biggest trade partner

• In 2008, more than 84% exports went to the EU-15 countries

• Sharp increase of foreign investment, especially from Germany

Current Czech manufacturing industries

include:• Automotive• Aerospace• Electrical engineering and

electronics• High-tech engineering• Life sciences• Medical devices

Automotive industry in the Czech Republic

Automotive industry in the Czech Republic

Passenger car production (per 100 residents)Source: Automobile Industry 4/2006

Some recent foreign investments in the Czech

automotive industry• Volkswagen – sole owner of Skoda

• Toyota-Peugeot-Citroen• Iveco

Some Czech automotive component suppliers

Current Czech manufacturing industries

include:• Automotive• Aerospace• Electrical engineering and

electronics• High-tech engineering• Life sciences• Medical devices

Aerospace industry in the Czech republic

• 10,000 people working across the country

Current Czech manufacturing industries

include:• Automotive• Aerospace• Electrical engineering and

electronics• High-tech engineering• Life sciences• Medical devices

Electrical engineering and electronics

Examples of who does what:

(1) consumer electronics• Panasonic

– flat-panels

• TVHitachi– flat-panels

• TVIPS Alpha– LCD modules

• Bang & Olufsen– various consumer electronics

• Candy– refrigerators

Examples of who does what:

(2) automotive• Kostal

– electronic modules

• Visteon/Autopal– lighting

• Tyco Electronics– various components

• Siemens VDO – Automotivecontrol modules, sensors,

panels

Examples of who does what:(3) IT

• Foxconn– PC routers

• Asus– PC– High-tech repair centre

• FIC– PC

• Inventec– PC

Current Czech manufacturing industries

include:• Automotive• Aerospace• Electrical engineering and

electronics• High-tech engineering• Life sciences• Medical devices

High-tech engineering

• Between 80% and 90% of production is exported

• R&D driven• Includes:

– Instrumentation– Machine tools– Railway industry

Instrumentation

• Around 4,000 specialised workers in this sector, eg:– Central Bohemia region 13.9%

• Siemens and Linet

– Olomouc region 12.5%• Meopta – optics and Invensis appliance controls

– Prague 12.4%• Honeywell

Machine tools

• Approx 50 companies• About 90% of production are

specialist cutting machines. Approx 80% are exported to:– (mostly) Germany– Other EU countries– US & Canada– and: China, Russia, India and South

America

Railway industry

(Includes tramways)• Three large factories: Prague, Plzen

and Koprivnice• 30% turnover is exported worldwide

Current Czech manufacturing industries

include:• Automotive• Aerospace• Electrical engineering and

electronics• High-tech engineering• Life sciences• Medical devices

Life science and Medical devices

• Life science– Especially Biotech and pharmaceutical industries

• Medical devices, eg:– Hospital beds– Ventilators– X-ray equipment– Dental technology– Mobile hospitals– Technical gases

Links

• Czech Statistics Office: http://www.czso.cz/eng/redakce.nsf/i/home

• Czech Republic (Official website): http://www.czech.cz

Thank you!