Monthly Newsletter - February 2007

Headline News

Lonza innovates its production in the CR

The Swiss biotechnology company Lonza is investing nearly CZK 1 billion in the innovation and expansion of production at its Kourim site in Central Bohemia. When the project is finished, Lonza will produce ALTU-135, a special blend of enzymes, for the American company Altus Pharmaceuticals. Thenew drug will improve the digestion of patients suffering from pancreatic diseases and cystic fibrosis.

Business

Rannoch preparing production increase at Era

The new owner of the Pardubice-based Era, producer of the Věra passive radar, is preparing a further production increase. Rannoch Corporation of the United States, which acquired Era last year, is planning to invest USD 2.5 million in personnel and equipment in Pardubice. Approximately 150 people currently work at Era Corporation, with an additional 70 to be hired during the expansion. The Věra monitoring system is used by airports on all continents and NATO has also expressed interest in it.

Schott Solar CR to increase production

Schott Solar CR is preparing to once again increase the production of solar modules at its facility in Valasske Mezirici in Central Moravia. The company intends to manufacture devices with an output of up to 208 MW per year instead of the originally announced production of modules with an output of 100 MW per year. The plan also includes the construction of a new production hall by the end of 2008.

Rehau expanding in Moravska Trebova

The German firm Rehau, which manufactures plastic parts for the automobile industry, will invest EUR 11.4 million (roughly CZK 320 million) into the expansion of production at its facility in the Moravska Trebova municipality of the Svitavsko district. The expansion is linked to increased demand from existing foreign carmakers, primarily Ford, Mercedes Benz, and Peugeot. The number of employees will increase from the current 250 to roughly 378 by 2009.

CTP Invest acquires Multidisplay

The Dutch firm CTP Invest has acquired the Hranice-based television-display manufacturing facility Multidisplay (formerly LG.Philips Displays CR) for EUR 40 million (CZK 1.12 billion). The new owner will continue to manufacture displays at the Hranice plant in Central Moravia at least this and next year. In the next five years CTP would like to expand the facility to include additional halls that it will offer to investors. According to CTP Invest, this could result in an increase in the employee base from the current 1,200 to possibly 3,000.

Almost 500,000 m2 of industrial properties built in 2006

The total area of industrial properties built in the Czech Republic last year was double that built in 2005 and equalled 480,000 m2. A study conducted by Cushman and Wakefield (C&W) indicates that there are currently 1.35 million m2 of industrial facilities that meet European standards available for rent in the Czech Republic. Industrial sites covering a total of 500,000 m2 were rented out last year; this represents a y/y increase of 60%. C&W expects roughly 350,000 m2 of new industrial space to be built and roughly 400,000 m2 to be rented out this year.

CTP Invest to invest into new industrial zones

CTP Invest intends to invest up to EUR 450 million (roughly CZK 12.6 billion) in the Czech Republic this year. The firm should invest roughly the same amount next year. The firm's main activity is the construction of CTPark industrial zones. CTP Invest focuses on regional centres outside Prague, such as Brno, Ostrava, and Plzen.

Economy

Foreign trade surplus reached a record

The Czech Republic's foreign trade surplus totalled a record CZK 47.3 billion last year; this represents an increase of CZK 8.7 billion on 2005. Total exports increased by 14.6 % y/y to CZK 2.141 trillion last year, imports increased by 14.4 % to CZK 2.094 trillion. The Industry and Trade Minister expects this year's foreign trade surplus to total CZK 50 - 70 billion. Trade in machines and transport equipment was the key favourable influence for the surplus.

Czech industrial revenues go up

Czech industrial revenues totalled CZK 2.83 trillion at current prices last year; this represents a y/y increase of 10%. The increase equalled 10.3% in constant prices; the industrial production index increased by 9.7% y/y, the highest growth rate since 2001. Growth driven by the automobile industry but also by the expansion of computer firms and the high-tech sector – the Czech Republic will be Central Europe's largest computer exporter in 2007. Industrial growth is expected to be 7% this year.

CEE economies expected to grow significantly in coming years

According to a forecast published by the Vienna Institute for International Economic Studies, the economies of Central and Eastern Europe will continue to grow significantly in coming years; growth will newly be driven by private consumption. The Czech economy can expect its GDP to grow by 5% in the next two years but it will have to deal with the risk of the unhealthy development of public finances.

National Plan for implementation of the Euro approved

The Czech Republic's national coordination group for implementation of the euro has approved the National Plan for Implementation of the Euro. The government should discuss the national plan at the end of March, after which the document will become available to the public. The Finance Ministry believes that the euro could realistically be implemented in the Czech Republic in 2012. The national plan should correspond to this outlook.

R&D

MATEO project increasing innovation in EU countries

PTT-RenEnergy is the name of a project whose goal is to optimally use renewable sources of energy in buildings. This concerns one of the first Czech activities within the framework of the MATEO project joining European company-based R&D centres and scientific laboratories. From the Czech Republic, PTT-RenEnergy involves specifically the companies ENVI and MANE and the Higher Professional School in Ceske Budejovice. The project is now in the phase of creation of sample construction documentation for low-energy buildings which will be subjected to computer energy analysis, the aim of which is also to calculate the lifecycle of the designed structures and to prepare their energy certification.

AllPeers creates innovative internet application

The Czech-British internet start-up AllPeers, which already has over 200,000 clients around the world, is introducing a new generation of its program of the same name. The AllPeers application, which has been recognized as one of the four most innovative internet projects in Europe, enables secure and simple data sharing over the internet. Unlike e-mail, AllPeers guarantees data protection using encrypted communication between users. The AllPeers start-up is financed by the investors Mangrove Capital Partners and Index Ventures, which are behind the popular communication programme Skype, for example.