Czech Focus 2/2005 - AFI

CZECH F CUSM a g a z i n e o f t h e A s s o c i a t i o n f o r F o re i g n I n v e s t m e n tCR couldadopt euroin 5 yearsQuarter in Review2-3HARD TOVolume 2. Number 2/2005Hardto competewithSector FocusCOMPETE WITH“Di er ge jia”for AsianentrepreneursCountry Focus4-78-10CR: futureleader in globaloffshoringCzech InvestmentNews11-12Clusteredto talkabout clustersEvents...First gradereport cardBusiness Climate13In thelandof beerLiving Czech14Started outin an atomicshelterSpotlight on People15Focus on Czech microelectronicsand optoelectronicssectorsSpecial supplement insideINVESTOR OF THE YEAR16

1INVESTOR’SCALENDAR INVESTOR’S CALENDARSeptember - November 2005September6. - 7.9. IQPC Shared Services Conference, Prague,Czech Republic13. - 15.9. Doing Business in the Heart of Europe,Investment Seminar, Toronto and Montreal,Canada14. - 15.9. PABORD: Pharma & Bio, Trade Fair,London, UK20. - 21.9. Investment and Business Forum, Ostrava,Czech Republic28. - 29.9. Call Centre EXPO 2005, Trade Fair,OctoberBirmingham, UK3. - 7.10. MSV (International Engineering Fair), Brno,Czech Republic10. - 12.10. Expo Real 2005, Trade Fair, Munich, Germany13. - 18.10. Equip Auto 2005, Trade Fair, Paris, France18. - 20.10. Biotechnics 2005, Trade Fair, Hannover,Germany24. - 26.10. BioNetwork, Conference, California, USA24. - 27.10. Invex, ICT Trade Fair, Brno, Czech Republic24. - 28.10. Systems, IT Seminar, Munich, Germany28.10. Los Angeles Seminar, Los Angeles,NovemberCalifornia, USA1. - 3.11. Offshore Customer Management: InternationalConference, Prague, Czech Republic7. - 9.11. BioEurope, Conference, Dresden, Germany15. - 18.11. Productronica, Trade Fair, Munich, Germany16. - 19.11. Medica 2005, Trade Fair, Düsseldorf, GermanyDear Readers,Two of Honeywell’s four main businesses are represented inthe Czech Republic: Aerospace and Automation and ControlSolutions. Both of these businesses are driven by technologicalinnovation and we see here local potential for growth opportunitiesin line with major societal trends like innovation, productivity,safety, security, comfort, and energy efficiency.Honeywell came to the Czech Republic as a diversified technologyinvestor and our experience doing business here hasshown us that Czech people excel in the disciplines of science,technology and engineering. One of the principal reasons wedecided to invest here was the high quality of technical educationand the culture of innovation.Honeywell is a major supporter of Czech technical educationand we have worked hard to develop long-term relationshipswith universities – primarily the Brno University of Technology(VUT) and the Czech Technical University in Prague (CVUT).In 2004, we donated $207,000 to Czech technical education, afour-fold increase on our 2003 contribution. Our support is notonly limited to donations or sponsorship. Honeywell representativescollaborate with both schools in non-financial areas, too, bygiving lectures, assigning and supervising theses, and co-operatingon research projects. Many students have worked in variousHoneywell businesses in the Czech Republic as interns, andsome of them later joined the company as full-time employees.In order to foster the Czech culture of innovation, we wouldlike to see more focus on intelligent risk-taking, and feweradministrative or operational barriers. When Honeywell firstopened its Prague Laboratory in 1993 – our first R&D facilityoutside the United States – we had to learn how to be innovativein a different environment and in a different way. Wetook risks and they paid off. Honeywell’s Prague Laboratoryis responsible today for developing and implementing globalenergy efficiency solutions for the company.As a member of the government’s Research and DevelopmentCouncil I believe that intelligent risk-taking, supplemented bylife-long learning and education, is a necessary element whensetting out the Czech national innovation policy and long-termresearch areas that are needed tomove our country closer to a knowledgeeconomy. Those are also thepillars in the Czech government’sStrategy for Economic Growth.Jaroslav DolezalNational Executive of Honeywellfor Czech RepublicContact: Editorial Board of Czech FocusAssociation for Foreign Investment, czechfocus@afi.czStepanska 11, 120 00 Prague 2, Czech RepublicPublished by the Association for ForeignInvestment - AFI under the auspices of CzechInvest,the Investment and Business Development Agencyof the Ministry of Industry & Trade.

QUARTERIN REVIEW2Headline News The World Bank officially labelled the Czech Republic an advancedeconomy at its spring meeting.“The Czech Republic has made remarkable progress over the past decadeand a half and is now well poised to share its experience of successful transitionwith other countries,” said Shigeo Katsu, World Bank Vice Presidentfor the Europe and Central Asia region.“After 15 years of economic, social, and political transition, the CzechRepublic is a country with an advanced and growing economy, a memberof the European Union, integrating in the global economy, and striving tore-establish its position among the world’s most developed economies,”said Czech Finance Minister Bohuslav Sobotka.Politics & Legislation The coalition government of Prime Minister Jiri Paroubek won a confidencevote in the Lower House of Parliament in May. The new cabinet will serve foronly about a year as the next general elections are scheduled for mid-next year.But it has set itself a number of tasks. “In terms of economic policy, we wouldlike to approve the new bankruptcy law, which is very important, we would liketo focus on decreasing the bureaucratic burden on entrepreneurs, the governmentalso wants to set up programmes for structural funds from the EuropeanUnion for the period from 2007-2013, also we are increasing funds for researchand development spending, we will be focusing on the development of transportationinfrastructure and many other issues,” commented the deputy PrimeMinister for Economics Martin Jahn.Economy The Czech economy is growing at the fastest rate in last eight years:real GDP growth in 1Q 2005 was 4.4% against 1Q 2004. According tothe Czech Statistical Office, the economy was driven primarily by internationaltrade. Exports of goods grew in the period by almost 20% andwere 6 percentage points higher than imports. The Czech Finance Ministry estimates inflation for this year to be 1.8%.Czech GDP should grow by 4.0%. Unemployment should fall only slowly,from 8.3% and 426,000 jobless in 2004 to 8% and 411,000 jobless in 2005.Investments should increase by 6.4% this year. Next year they should rise by7.5%. The OECD in a new prognosis for Czech economic growth estimatesthis year’s growth at 4.1% and next year’s at 4.3% . Improvement in the Czech Republic’s competitive strength is markedby its move from last year’s 43rd to this year’s 36th place on the listcompiled by the Swiss International Institute for Management Development(IMD). In terms of investment into telecommunications, the CzechRepublic is third internationally. In the export efficiency index, the CR has taken3rd place in the world with 7.1%, behind China andSouth Korea, which both scored 8.6%. Hungary placed4th with 5.9%, followed by Turkey with 5.2%, accordingto OECD statistics. The CR could adopt the European currency in5 years provided the conditions of economic growthand public finance consolidation are met, according tothe OECD.Business Japanese automobile component manufacturer Toyoda Goseiopened its second production hall in the industrial park in the municipalityof Klasterec nad Ohri in the Czech Republic and plans tocomplete another one in 2007. Barclays, the third biggest bank in Britain and one of the top tenbanks in the world, is entering the Czech market, where it will befinancing mortgage loans. The cabinet has approved Finance Minister Bohuslav Sobotka’s proposal forcutting income taxes in all categories by up to CZK 30,000 (approx. EUR 988,USD 1,334) a month as of next year. Sobotka describes the proposal, pendingParliament’s approval, as the most massive income tax cut of the past decade. The cabinet has agreed that employers will pay out sickness benefits toemployees for the first 14 days of sickness. Sickness insurance payments ofbusinesses will be reduced from 3.3% to 1.4% of employee pay. An amendment to the employment law, recently passed by the Lower House,stipulates annual state subsidies to companies that hire fresh collegegraduates. The government funding should cover all costs of graduates’ pay. A draft building bill, prepared by the Ministry for Regional Development, isto simplify and speed up the approval process for construction projects.The bill also streamlines and shortens the zoning process, removes conflicting oroverlapping legal standards, and tightens supervision of construction projects. Last year, according to the CzechStatistical Office’s macroeconomicdevelopment analysis, the Czech Republicwas the only new EU memberstate from Central Europe to fulfilthree of the four Maastricht conditionsfor the implementation of theeuro. Germany’s BoschDiesel has opened anew manufacturingplant in the Czech Republic.The plant is anexpansion of an alreadyexisting facility locatednear the town of Jihlavaand is designedto manufacture highpressurepumps. Thenew plant cost EUR100 mln (USD 129.54 mln, over CZK 3 bln) to build and will provide upto 1,000 jobs before the end of the year. Bosch Diesel is one of the largestforeign investors in the Czech Republic, employing more than 5,800people in the Jihlava region with total investments exceeding EUR 505mln (USD 654.18 mln, CZK 15.33 bln). One of the most important IT companies worldwide, Sun Microsystems,confirmed definitively that it was going to build a research and developmentcentre in Prague - one of five centres the company will have.The number of jobs might triple from the current 200. Out of 120 German investors surveyed, 77% would againchoose the CR for their investment projects, according to statisticsreleased by the Czech-German Commercial and Industrial Chamber.

3QUARTERIN REVIEW General Electric Co. is planning to expand its activities in the CzechRepublic and open a new customer support centre next year. The corporation’sCzech subsidiary, GE Money Multiservis, plans to invest overEUR 3 mln (USD 3.7 mln, over CZK 100 mln) in the centre it wants toopen next year in Ostrava, 350 km (218 miles) east of Prague. Czech firm Job Air is to build a service centre for Saab Aircraft AB atthe Ostrava Mosnov airport. The 2 companies have concluded a 10-yearcontract for exclusive repair and maintenance of Saab civilian airplanes.Holding CCG, which owns Job Air, also plans to start regular flight servicefrom Ostrava to some European cities by the end of the year. Car parts maker Peguformand internationalcompany Exatec willbuild a plant producinghigh-tech car windowsin the Czech Republic.Construction shouldbegin this year. The plantwill be built in the Liberecregion. Production shouldbe launched in 2007. Scottish company Incline opened a Prague centre for repair of flatLCD TV screens, computer LCD monitors and plasma screens. Inclineplans to reach the full capacity of 80,000 repaired screens a year by theend of 2005. Japan’s Futaba, the world’s largest manufacturer of moulded autoparts, opened a new production plant in the town of Havlickuv Brod. Theplant will supply auto components to Kolin-based automaker TPCA. French concernSchneiderElectric built atechnical supportcentre inPrague for Centraland EasternEurope. Thecentre will handlecustomer inquiriespertainingto industrialautomation. Arla Plast AB, the 3rd largest producer of polycarbonates in Europe,is to build a plant to produce polycarbonate boards in the town of Kadan.The facility is scheduled to launch production in November. China’s biggest TV set producer Changhong Electric Appliance islooking for a suitable Czech location for the construction of a new productionplant intended to produce devices for the European market.Miscellaneous The CR placed 3rd in Central and Eastern Europe in preparednessfor e-business, according to the Economist Intelligence Unit. Ona global list of 65 countries, the CR took 29th. In cell phone use and ICTspending, the CR is catching up with West European countries. The world’s largestpassenger plane, theAirbus A380, whichcan carry up to 840passengers, is a trulyEuropean cooperation.Czech scientists, too,had their share in theproject. “Many safetyparameters had to becalculated but not onlyconcerning the safety of the aircraft itself but also other planes flyingin its wake,” described the task of the Czech team Ivo Vasa from theNuclear Physics Institute. The first modern Europeans lived on the territory of the presentCzech Republic 31,000 years ago, a team of Austrian and U.S. scientistsconcluded on the basis of the first direct determination of the age ofbones coming from the Mladec caves, North Moravia. T-Mobile is to launch the wireless high-speed network UMTS inPrague in 4Q 2005. By the end of 2006, another 80 cities will get UMTSwith the maximum connection speed of 2.2/1.1 Mb/s. British companyIPWireless is to supply the technology. Czech Airlines again won this year’s award for best carrier inCentral and Eastern Europe. The prize, based on public voting, is annuallyawarded by the international Official Airline Guide. In May, the Czech hockey team defeated Canada 3-0 in the worldice hockey finals and became world champions again after four years. Internationally renowned architect Norman Foster, the designerof Germany’s Bundestag and the Millennium Bridge in London, is consideringdesigning a facility on 3 million m2 of land in south-westernPrague. Foster believes there is a market for such projects in the CzechRepublic. Together with scientists at the Technical University in Liberec, Liberec-basedfirm Elmarco developed a machine that produces nanofibersused primarily in health care to treat burns. A contract with Irish pharmaceuticalfirm Alltracel is to help win international recognition. Czech car maker Skoda Auto will launch production of the Roomster modelin the Kvasiny plant in East Bohemia as of next year and plans to presentthe new model at theGeneva motor showin March 2006. Thecompany intends touse government incentivesin the formof tax relief amountingto roughly CZK427 mln (approx.EUR 14 mln, USD19 mln) to co-financethe project.(Sources: Czech News Agency, Reuters Press Agency, Interfax,Radio Prague, Prague Daily Monitor, weekly Euro,dailies Hospodarske noviny, Pravo, MF Dnes and Lidove noviny)

SECTORFOCUS4Hardto compete withThe Czech microelectronicsand optoelectronics sectorsWhen a field combines tradition, young blood, modern technologies and a qualityinfrastructure, success is not long to follow. The Czech optoelectronics and microelectronicssectors are unquestionable proof of this.

5SECTORFOCUSThe Czech Republic offers cost structures competitive with China, the Czech universitysystem provides the full spectrum of microelectronics and semiconductor educatedmanpower (including microelectronics study programmes at four technical universities),an extensive investment incentives scheme is in play, the Czech accounting systemallows one of the fastest depreciation schemes in the world... Such advantages forinvesting are indeed hard to compete with.Intellectual capital - Czech UniversitiesPlzen2,138University of WestBohemia PlzenCzech TechnicalUniversity inPrague3,6886,527Prague26,722Liberec4,201Institute of ChemicalTechnology PragueBrno Universityof TechnologyTechnical Universityof LiberecUniversity ofPardubicePardubice3,3776,527Brno16,5012,741Ostrava13,921Technical Universityof OstravaZlin Tomas Bata2,432 University in ZlínPower semiconductor components have in the Czech Republic an outstandingtradition both in design and fabrication. Transistors, diodes, tyristors and othercomponents have been manufactured in the Czech Republic since the 1960sand have been supplied to final customers worldwide.Excluding former East Germany, the Czech Republic has the only wafer fabricationfacilities found in Central and Eastern Europe, namely ON Semiconductorin the town of Roznov pod Radhostem, North-Moravian region.Availability of qualified engineers on the market0=are not available 10=are availableCzech RepublicTotal technical students: 70,842 Of which: Electrical eng. students: 15,258Note: The figures are based on location of facultyIrelandJapanConclusions of Feasibility Studyon the Semiconductor Industry:According to a worldwide study 1 of the semiconductor industry conducted byAngelouEconomics in April 2004:The Czech Republic was defined as a top region with secondary, technical,and university education programmes customized for the semiconductorindustry and high enrolment in these programmes. The Czech Republicscored 74 points out of 100 with regard to its qualifications for semiconductorinvestment.Labour is one of the country’s strongest selling points. Czechworkers are among the most technically skilled in Europe and costless than in most western European countries. The Czech Republic hasample engineers (fab operators and technicians, designers) to supplymultiple fabs.The Czech Republic was approved to become one of the regions witha good base for developing semiconductor and microelectronics/electronicsactivity. Most regions with this qualification contain a fab, foundry, or majorhigh-tech activity. High capacity infrastructure is available. Richmond (Virginia,USA); East Fishkill (New York, USA) or Scotland are a few benchmarkingexamples.In terms of infrastructure, the industrial sites in Zatec, Usti region, andBrno in South-Moravian region were identified as suitable for wafer fabrication.Each of them rank among top regions with high-capacity and qualitywater, power and natural gas infrastructure and many tracts of land availablefor large-scale manufacturing. The sites require minimal infrastructureupgrades.The manufacturing and electronics sectors are growing. A large number ofmajor foreign investors in the Czech Republic are global electronics companies.The Czech Republic’s business climate is conducive for manufacturing companies.1AngelouEconomics is a Texas-based consulting firm specialized in microelectronics,which evaluated the Czech Republic and its ability to host a chipfoundry or a final microelectronics assembly plant.USAGermanyUnited Kingdom1 2 3 4 5 6 7 8Source: World Competitiveness Yearbook 2003, IMDAverage wages in electronics sector in 2004POSITION CZK/month EUR/monthEE devices designer 30,650 961Electronics and telecom systems designer 29,819 935Technician of electronics and EE devices 24,277 761Electronics and EE manufacturing foreman 21,509 674Assembly electronics operator 12,976 407Exchange Rate: 31.90 CZK/EUR (Average Exchange Rate in 2004)Source: Trexima, Ministry of Labour and Social Affairs, 2004Nearly one hundred years’ traditionThe tradition of the Czech electronic sector extends back to the earlytwentieth century when companies such as Blaupunkt, Elektra-Philips,Telegrafia, Prchal-Ericsson and Makrofon operated in then Czechoslovakia.In early 1946, the national enterprise Tesla was founded, which duringthe post-war years of nationalization absorbed 68 companies in theelectronics and electrical field. During the second half of the twentiethcentury Tesla had about 60 branches around the country that operatedin various fields and also had their own R&D centres, so-called researchinstitutes, that enabled them to keep pace with global technical and technologicaldevelopments. Many of these centres were terrific successesand some of them after the country’s return to a market economy (afterthe Velvet Revolution in November 1989) became the main source ofthe scientific work force for successful private companies. One exampleof these is Tescan.

SECTORFOCUS6Made by Tescan – a real compliment for everyelectron microscopeTESCAN is an originally Czech private company manufacturing scientificinstruments and laboratory equipment – namely electron microscopes.TESCAN was established by a group of experienced R&D engineers ofthe former state-owned company of TESLA Brno in summer 1991.The company has very efficiently used the huge potential that wascreated by TESLA Brno, which used to be the leading supplier of electron-opticaldevices and electronic measuring instruments in EasternEurope, and so TESCAN follows upon these activities taking advantageof the many years’ experience of the best specialists. The close cooperationwith universities and scientific institutes is another strengthof the enterprise.The first products of the company were supplementary accessories forscanning electron microscopes: image processors, special chambers, detectingsystems, etc. Subsequently Tescan extended its activity in the fieldof image processing into light optical microscopy and special applications.Tescan successfully finished several custom projects of the developmentand prototype manufacturing of electronic circuits and software in thefield of medical instruments and space research. It was awarded as an“Innovative Company of the Year” in the Czech Republic in 1994. Tescansucceeded in several research projects granted by the European Communityand the Czech government (Copernicus, Technos, etc.).Tescan now combines the experience of many years of the leadingscientists and research technicians from the traditional Brno electronmicroscopy centre with the innovative and creative attitude of young,highly-educated people. This enables the company to provide top leveltechnical solutions in electron microscopy and, through its satisfied customers,to maintain its position among the leading organizations in thefield of electron microscopy.Key players on the microelectronics marketMotorola Freescale - worldwide Centre of Excellence formotor control systems in the Czech RepublicMotorola as a world renown top company in microelectronics enteredthe Czech market in the early 1990s. Motorola Freescale, its microelectronicsdesign unit, deals in its Czech subsidiary with the development ofboth software and hardware system engineering, specializing in automotive,industrial and household applications. Motorola started its activitiesin the CR in autumn 1992. From the beginning, it focused on gainingthe best brains from the Czech technical universities, especially those inBrno, Ostrava, Prague and even Bratislava (Slovakia).In late 1992 a decision was taken to hire 20 engineers, former employeesof Tesla Roznov, which was the original integrated circuits design centrein Roznov pod Radhostem. Tesla Roznov used to be the biggest fabricationsite of bipolar technologies in former Czechoslovakia.Currently, there is a successful System Application Laboratory in the CRwhose main task is to develop and manufacture prototypes of electronicssolutions followed by technical support to its customers. The main technicalareas are automotive, telecommunication and household industryapplications. Skoda, the biggest Czech car manufacturer, uses FreescaleICs designed in the Czech Republic since the beginning of their activitieshere.The principle activity of Motorola Freescale in the CRis system engineeringThe Motor Control department deals with the final applications of the R&Dcentre’s results, such as control units for all types of electrical motors, suchas asynchrony, BLDC, synchrony, linear etc. In the development stages,designers use the whole scale of Motorola products – starting from HC08,to HCS12 to big performance devices of 56F8xx and MPC5xx.The Analog Products department prepares hardware and software solutionsusing the components of APD – Analog Products Division of Freescale,used in cable and wireless communication systems, motor controletc. Czech experts assure support to the APD division.Embedded Software is provided by Czech experts especially for platformsof HC08 (8-bit MCU), HC12 and HCS12 (16-bit MCU), MPC5xx (32-bitMCU), DSP5680x and DSP5683x (16-bit DSP), which work in real time.These applications require special software solutions.The Czech subsidiary works also on LIN (Local Interconnected Network)applications, used mainly in the automotive industry.ON Semiconductor Czech: wafer fabrication in Centraland Eastern EuropeON Semiconductor Czech has three types of activities here: wafer fab, crystalgrowing of silicon ingot and production of 4" silicon wafers, and an IC designcentre. The activities are based on continuing the local semiconductor productiontradition in the regionthat goes back to the 1960s.ON Semiconductor Czechheavily cooperates with thelocal technical universities ofOstrava and Brno.Wafer fabON Semiconductor Czech,a former division of Motorola,produces in the CRvarious types of integratedcircuits on silicon wafers,such as control circuits forswitching power supplies,+/- voltage stabilizers,adjustable voltage controllers,simple and multipleoperating amplifiers andmotor control circuits. Siliconwafers with IC dice arefurther processed in theON Semiconductor CzechRepublic Assembly Line.

7SECTORFOCUSCrystal growing of silicon ingot and production of silicon wafersThis process of silicon wafer production is unique in the CEE region, excludingformer East Germany. In the Silicon Manufacturing Unit, ON SemiconductorCzech produces silicon polished prime, monitor/test and epitaxial wafersmade of Czochralski-grown single crystals in 100, 125 and 150 mm diametersand doped by boron (B), phosphorus (P), arsenic (As) and antimony (Sb). Theavailable resistivity covers the whole range used in the semiconductor industry,including heavily doped phosphorus and arsenic materials.ON Semiconductor Czech silicon products are mainly used to produce discretecomponents (Zener and Schottky diodes, rectifiers, small-signal transistors,etc.) and integrated circuits manufactured by bipolar and/or CMOStechnology.IC Design CentreSCG Czech Design Center, one of nine design centres of American corporationON Semiconductor, develops analogue and mixed mode integratedcircuits (IC) for consumer, communication, computer, industrial, automotiveand other marketsegments. It has introducedmore than 50products in bipolar,CMOS and Bi-CMOStechnologies loadingwafer fab lines worldwide.SCG CzechDesign Center is acentre of the highestquality that was createdin the region bya world-renown leaderin the high-tech microelectronicsindustry.ST Microelectronics - Prague IP Design FactoryST Microelectronics is ST’s fastest growing design and application centre. Withmore than 200 employees, it is the largest individual design group in Central andEastern Europe excluding Russia. It provides application support for European customers,and designs high-performance linear circuits and automotive products.Lumir FlajshansElectronics and microelectronics specialistCzechInvestS3, Silicon &SoftwareSystemsThis is a Prague-basedchip design company.The facility, owned inpart by Philips, designschips for mobile phones.

COUNTRYFOCUS8“Di er ge jia” for AsianentrepreneursSoon after Asian investors entered Europe through the “Czech gateway”, the CzechRepublic has become their favourite manufacturing and service hub in the middle ofWestern and Eastern European markets. Here they found their second home (di er ge jia).“Having finished my lunch in a Chinese restaurant in Prague, close tomy office, and I still need to pack my things for a trip, not to forget totake enough business cards and to wear a tie – a gift from a Chinesefriend. I pull out my notepad full of notes from yesterday’s Chinese lessonfrom my bag so that it’s not so heavy and finish my cup of Oolong.When I leave the office, I notice a black plastic fashion bag in the corner,which I won in a Chinese restaurant a week ago in a drawing afterhaving lunch. I rush to pick up the Taiwanese investors that have justarrived at Ruzyne airport in Prague. I pass a group of Chinese touristsin the street heading for Prague’s historical centre... I get to the airportin time – I have to wait a bit and finally “my people” appear – insteadof the three confirmed there are four representatives of the Taiwaneseinvestor. I stay cool – I have a large Skoda Superb car....... My friendsget in the car and are curious what make it is, and I proudly pronounce“SKODA”. They seem to be jetlagged but in reality they probably arejust recalling their experiences with Skoda cars in China. We are nowleaving the airport for Rudna u Prahy where we have a reference visit toa private industrial park – home to three Taiwanese operations already.But this is not the final destination of our trip today..... We also attenda reference meeting with managers from Hon Hai Precision Industry inPrague....... After less than two hours’ drive from Prague to the east,during which I have been listening to a lot about Czech history fromAsians, we arrive in Brno, the Czech Republic’s second city, to have aquick stop at a developer’s park where other Taiwanese entrepreneurskeep a production hall...... Our final destination today is Ostrava, thecapital of the Moravian Silesian region, and headquarters of Asustek- one of the most renowned manufacturers of motherboards in theworld. We check into a hotel and my friends are looking a bit tiredwhen suddenly another group of Asians have come in. It is a group ofTaiwanese businessmen that have arrived from Austria to investigateinvestment opportunities in the Moravian Silesian region, too. I thoughtmy friends would continue upstairs but they have started a typical longbrainstorming session in the lobby, for which my knowledge of Chineselanguage from my last ten lessons is not enough. Fortunately, they arenot competitors and later both companies settle down in the CzechRepublic.”As former head ofthe Department ofNew Technologiesand Innovations atCzechInvest, I assistedan increasingnumber of visits offoreign investors tothe Czech Republicduring recent years.It proves the ever risinginterest of foreignentrepreneurs in thiscountry, but not only from the members of the EU – our biggest tradingpartners – but also from a dynamic South East Asia region, especiallyfrom Taiwan and Korea, despite its long geographic distance. Accordingto A.T. Kearney’s study from July 2004, the Czech Republic isthe world’s fourth most attractive location for offshoring, behindIndia (1), China (2) and Malaysia (3), and ahead of Singapore (5) andthe Philippines (6), when comparing financial structure, businessenvironment and people skills and availability.From production lines to technology centresThe major Asian investors – from mainland China, Taiwan, Korea andSingapore – entered the European market back in the 1970s and 80swhen they established their manufacturing and later service operationsoften in Germany, the Netherlands and the UK, mainly due to the convenientcustomer base and - in case of Netherlands - due to its competitiveincentive structure for new logistics hubs.During the early 90s when the Czech Republic began its economictransformation, the first Asian private entrepreneurs started exploringthe investment opportunities in the country. The main reason was thesignificantly cheaper operating costs compared to their West Europeanlocations and still favourable logistic connections to their customers.Their first intentions were to establish production lines for finalassemblies and sub-assemblies mainly of consumer electronics to ship toWestern markets, but later while expanding they often added a serviceproject, such as a repair or technology centre. Annual inflow of FDIfrom SE Asia to the Czech Republic is estimated at around 60million USD. The biggest investors come mostly from Taiwan,Mainland China, Korea and Singapore. CzechInvest registers morethan 60 projects in different stages of development from this region.In recent years we have also registered a rising interest of companiesin joint-venture projects, for instance from large semi-private Chineseconglomerates in telecommunications and the shipbuilding industry.Completed investment projectsThe main incentive forAsia Pacific companies investingin Europe is theirincreasing market sharesand their success in buildinga global brand mainlyin electronics and microelectronics.1/5 of theworld’s Top 50 globalelectronics OEMs (OriginalEquipment Manufacturers)are from Koreaand Taiwan. This achievementcan also be seen inthe Czech Republic. Thereare so far eleven Taiwanese projects facilitated by CzechInvest and atleast another dozen in preparation.Electronic components and consumer electronics manufacturersThe result of the cooperation of LG Electronics from Korea and RoyalPhilips Electronics from the Netherlands was the founding of a jointventureproject: LG.Philips Displays Czech in the town of Hranice naMorave. The plant manufactures large TV screen picture tubes. The operationconsists of three manufacturing lines installed during 2001 - 2002and more than 95% of production is intended for export to WesternEU countries.Taiwanese Tatung has recently opened its new plant in Plzen BorskaPole to run two production lines for LCD TV and desktop PC semiassemblyand manufacturing. Tatung has invested some 20 million USDinto new technologies, machinery and equipment. This new Europeancentre will supply Western EU countries but later also Eastern Europeanmarkets including Russia.

9COUNTRYFOCUSIn late 2004, Taiwanese company Mustek acquired an existing facility inMesice north of Prague to start manufacturing DVD recorders and playersfor its customers from Western EU countries.Recently, the multinational Taiwanese brand manufacturer BENQ hasdecided to locate its new European project for LCD TV and monitormanufacturing to Brno. Before start-up BENQ has been meeting itscustomers’ demand through subcontractors in Hungary. Before thedecision, this investor shortlisted the Czech Republic and Slovakia. Brnowas chosen due to its unique transportation infrastructure, proximity tomajor markets, reasonable start-up costs and attractive environment forTaiwanese expatriates.Computing technologyThe Czech Republic is becoming one of the biggest producers of computersin Europe. Foreign direct investment in this branch significantlycontributed to the fact that nearly 40% of total European computerproduction capacities are estimated to be in the Czech Republic.Exports of computers from the Czech Republic create more than 50%of the exports of the country’s high-tech production.It is popular among Asian investors to rent an existing facility for initialstart-up. There is a good selection of private developers in the CzechRepublic so the requirements of those investors are often met. Forinstance, the Taiwanese companies QUANTA COMPUTER andINVENTEC have kept existing production build-on-order capacities innew leased buildings in Prague and Brno since 2003.ASUSTeK COMPUTER opened in May 2005 its new European centrefor computer production and repair in the Ostrava Hrabova industrialzone. The production plant should be opened during this summer andthe centre’s production capacity should reach up to 200 thousandpersonal computers a month. The repair centre project for electronicequipment should be completed by late 2006. The company forecaststhat the repair centre in Ostrava will become a centre concentratingrepair activity of the holding in Europe.An increasing interest from Mainland China and KoreaCHINA STATE SHIPBUILDING CORP. has recently decided toestablish a joint-venture project in Decin Kresice to build river ships forcustomers in Germany and Belgium. The output is estimated to be morethan 50 new ships a year starting in 2006.KINLOON TECHNOLOGY is investing into their manufacturingproject in Litvinov to start production of small motorcycles initially forthe German market during 2005.Korean multinational companies such as LG and SAMSUNG haveinvested heavily in Central and Eastern Europe in recent years into theirnew manufacturing and service capacities to supply consumer electronics,especially LCD TV and monitors, to all Europe. This trend shouldcontinue when considering their still increasing market shares. LG Czechwith its headquarters in Prague announced double-digit growth in salesof brown- and white-goods just in Central Europe.New centres of computing technology manufacture were built on order,mostly in the form of greenfield investment projects. FOXCONNand FIC are among the pioneer projects in the early 1990s and soonbecame among the most important manufacturers of computers on orderand the biggest exporters. Not long after their start-up they werefollowed by other industry leaders, such as LITE-ON, TATUNG andASUSTeK.The Hon Hai PrecisionIndustry Groupwith headquartersin Taipei, whichpresents itself underthe business nameFOXCONN, boughtout the existing TES-LA Pardubice facilityand further investedinto a new centre tomanufacture desktopcomputers in Pardubice. A further investment plan is the extension ofits high-tech repair centre to include servers, work stations, desktops,notebooks and pocket computers.The company First International Computer (FIC) from Taiwan completedconstruction of its production base in Rudna u Prahy in 2001.Nowadays the company ranks among the top ten Czech exportingcompanies.Shortly after FIC set up its base in Prague, its vendor – the companyLITE-ON chose the Czech Republic to locate its production line to manufacturecomputer chassis. In April 2004, the parent company mergedwith SILITEK and LITE-ON TECHNOLOGY and the project in Opavaeven expanded to run production lines for desktop PCs on order.Taiwanese CHICONY is another supplier to computer manufacturers inthe Czech Republic. The company is known as a leading world manufacturerand marketer of input devices, especially in computer keyboardsand power supplies.Major Asian investment projects in the Czech RepublicCompany Country Sectorof originMARWI Taiwan bicycle pedal manufacturingHUALON Taiwan textilesAIDC Taiwan aviation – AE270 IBIS aircraftFOXCONN Taiwan electronics – computerFIC Taiwan electronics – computerLITE-ONTECHNOLOGY Taiwan electronics – computerCHICONY Taiwan electronics – computerINVENTEC Taiwan electronics – keyboardQUANTA Taiwan electronics – computerASUSTeK Taiwan electronics – computerASUSTeK REPAIR Taiwan electronics – computerFOXCONNREPAIR Taiwan electronics – computerTATUNG Taiwan electronics – LCD TV,computerVIVATEK Taiwan electronics – DVD recorderBENQ Taiwan electronics – LCD TVmonitorCHINA STATESHIPBUILDINGCORP. China river shipsKINLOONTECHNOLOGY China motorcyclesLG.PHILIPS Korea TV picture tubesINFOSYS India BPOFLEXTRONICS Singapore design servicesSYSTEM ACCESS Singapore software developmentAMTEK Singapore precision engineering

COUNTRYFOCUS10Furthermore, the Czech Republic has become even more accessiblefor Korean businessmen and tourists since Korean Air –a member of Sky Team – opened its direct flight fromSeoul Incheon to Prague Ruzyne three times a weekstarting June 2004. Prague’s Ruzyneairport with its on-going expansionsis becoming the largest airport inCentral and Eastern Europe. Consequently,China Airlines announcedthe opening of a new cargo flight fromTaipei to Prague in early 2005.Investments from India and SingaporeBusiness Processing Outsourcing (BPO)has been practised by primarily US-basedlarge corporations. India has traditionallybeen the most attractive destination for theseoffshore operations. However, recently there hasbeen certain interest even from Indian companiesto offshore business processes to the CzechRepublic following their US clients.PROGEON is headquartered in the state-of-art INFOSYScampus in Bangalore, India. Their centre in the Czech Republichas been located in Brno since 2004 and currently offers servicesin as many as eleven languages. Progeon is one of the leading BPOcompanies in India. It is focused on high-end process outsourcing formajor global customers across industries.There are three announced investors from Singapore – FLEXTRONICS,SYSTEM ACCESS and AMTEK. FLEXTRONICS maintains itsoperation on Design Services in Brno employing some 30 engineers.SYSTEM ACCESS is a leading financial software provider ofcustomer centric universal banking solutions for financial servicesinstitutions worldwide. They established their service operation in2002 in Prague. AMTEK is a leading global supplier of componentsand products. It established its Czech base in 2000 in Pisek and Brno.Amtek Precision Engineering CZ provides design and manufacturingof knitting machines and engineering of electronics components andautomation devices.Why?Asian investors usually choose the Czech Republic for an opportunityto minimize costs, the availability and quality of Czech humancapital, location advantages and favourable business environment. Forinstance, some investors look at the establishment of an operation inthe country as a way to avoid payment antidumping customs dutieson imports from Asia to the EU. It is also usual for the next stageof a manufacturing project to be an additional service project, such asrepair or technology centre, and/or after expansion to concentrateall activities into one hub. Many investors choose the country for theCzech supplier base. Another reason is capacity management, especiallyin nearshoring. Asian companies having their hubs still locatedin Western EU countries can easily cover excess customer demandsthrough their manufacturing and service capacities in the CzechRepublic, achieving significant cost savings by such outsourcing.Mainland China Taiwan South Korea MalaysiaSingaporeIndiaThe core processes are still kept in the home country. Later there isoften a shift from only outsourcing and non-core processes, and lowmarginproduct lines to more sophisticated processes and technologyshifts. For instance, it has taken four years for ASUSTeK from theirstart- up in Prague in a rental building until they established their hub inOstrava. Investors also use the local supply chain and logistics closerto their new customers’ locations. And, the Czech Republicis a full-fledged EU member, which brings legal, economic andpolitical stability for long-term projects.New directionsDuring recent years, South East Asian companies invested a lot in theCzech Republic, mostly into assembly lines to meet the demand fromtheir European customers on order as OEM or ODM suppliers. It hascreated a lot of capacities. Some operations have developed well so theyeven expanded and also added a service centre, usually a repair or innovationcentre. The Czech Republic has alight engineering culture. This means thatthe country is less suitable for labour-intensiveassemblies but more for projectsusing skills and brains.Jaromir CernikDirector of CzechInvest´s officein Hong KongUseful contactsEmbassy of the Republic of Korea inPrague, Czech RepublicSlavickova 5, Praha 6 – Bubenec, 160 00Phone: +420 234 090 411KOTRA Trade Center PragueVaclavske namesti 47, Praha 1, 110 00Phone: +420 221 625 600www.kotra.or.krEmbassy of the Republic of India in PragueValdstejnska 6, Praha 1 – Mala StranaPhone: +420 257 533 490www.india.czEmbassy of the People’s Republicof China in PraguePelleova 18, Praha 6 – Bubenec, 160 00Phone: +420 224 311 323 (Protocol),233 028 800www.chinaembassy.czTaiwan Economicand Cultural Office in PragueEvropska 2590/ 33c, Praha 6, 160 00Phone: +420 233 320 606www.roc-taiwan-cz.comConsulate- General of the Republicof Singapore in PragueNa Prikope 23, Praha 1, 110 00Phone: +420 221 967 208Sources:• Czech Statistical Office, 2004• Statistics of Ministry of Industry and Trade, 2005

The most important investors that decided to invest in manufacturing,R&D and business support services in the Czech Republic over the pastyear received the INVESTOR OF THE YEAR 2004 awards from Czechministers on 7th June. During this fifth annual awards ceremony held at theTroja Chateau in Prague, investment projects making the greatest contributionto the development of the Czech economy were awarded.The Investor of the Year awards were announced under the auspices ofthe Czech Ministry of Industry and Trade in collaboration with the Associationfor Foreign Investment (AFI) and the CzechInvest Investmentand Business Development Agency. The gala event took place with theparticipation of partners of the “Partnership to Support Foreign DirectInvestment in the Czech Republic”.The awards were presented in the following categories:“Greatest Economic Benefit – New Investment”“Greatest Economic Benefit – Expansion”“Investment with Greatest Innovative Potential”“Special Award for Exceptional Contribution to the Development of Foreign Investment”Representatives of award-winning companies and Czech government representativesFrom the left: AFI Chairman Jan A. Havelka,Siemens CEO Pavel Kafka and Minister ofIndustry and Trade Milan UrbanSpecial award conferred by the Association forForeign Investment – AFI for Siemens’ outstandingcontribution to the development of foreign investmentin the Czech Republic received by Ing. PavelKafka, CEO of Siemens s.r.o. and Siemens’ representativein the Czech Republic

INVESTOR OF THE YEARINVESTOR OF THE YEARGreatest EconomicBenefit – New Investment1 st PlaceDaikin Device Czech RepublicWhat countries did you choose from when deciding on which country toplace your investment and why did you decide to invest in the Czech Republic?We chose from the Czech Republic, Slovakia, Hungary and Poland. We decided toinvest in the Czech Republic because of the following reasons. 1.The main purposeto invest is to supply compressors to Daikin Industries Czech s.r.o. in Plzen, so it isrequired to locate close to the factory. 2.There are good suppliers in the Czech Republicand its surrounding countries. 3.The Czech Republic is a traditionally industrialcountry.In what way did investment incentives influence your decision on investmentlocation?We decided on the location (in Brno) because it is close to Daikin in Plzen and suppliersand it has a good and well kept up industrial area. The investment incentives werenot the main reason in the decision.Hitoshi Ozawa, President Daikin Device Czech Republic s.r.o.From the left: Daikin Device Czech Republic PresidentHitoshi Ozawa and CzechInvest CEO Radomil Novak2 nd PlaceBenteler Automotive RumburkWhat countries did you choose from when deciding where to placeyour investment and why did you decide to invest in the CzechRepublic?Benteler ultimately decided between the Czech Republic and Slovakia tolocate its new investment. The site near Rumburk in North Bohemia waschosen because of its infrastructure, preparedness, good logistical positionand sufficient qualified labour force. Another big advantage is the base ofexisting production facilities in Straz nad Nisou and Chrastava, which willguarantee the smooth production flow in the new plant.Petr Marijczuk, Technical Director, Benteler CR k. s.3 rd PlaceRWE SCHOTT Solar CRWhat countries did you choose from when deciding on which country toplace your investment and why did you decide to invest in the CzechRepublic?RWE Schott Solar headquartered in Alzenau, Germany is a joint venture between RWESolutions and Schott AG. We made investigations in which country we could match ourproject to an existing location to one of our shareholders operations. In this context wecompared logistic aspects, labor force level and services the different options wouldcontribute to our project. A detailed comparison we have made for Germany, Asia,Turkey and other East European countries. The key factors for the positive decision forValasske Mezirici were labor force quality, logistic aspects to our European key markets,support of local authorities, services of the locations and expansion possibilities.What surprised you in the Czech Republic– either pleasantly or unpleasantly– compared to production plants in othercountries?RWE and SchottAG have both verypositive experiencewith projects andactivities in Czech Republic. The local support of theproject and the skilled labor force to realize our high techand high quality operation. Sometimes unpleasant is whenwe have to deal with higher authorities ouside the regionregarding timing to finalize the tasks.Alexander BergManaging Director RWE Schott Solar GmbHChief Executive Officer RWE Schott Solar Inc. Boston, MA

SPECIAL SUPPLEMENT SPECIAL SUPPLEMENTGreatest EconomicBenefit – Expansion1 st PlaceASUS CzechTaiwan-based ASUSTeK COMPUTER INC. invested in a newEuropean centre for computer production and repair. Investmentinto the new plant and repair centre will reach 20 million EUR.“The important factors in deciding on the location of this plantwere mainly the preparedness of the industrial park in Ostrava-Hrabova and the proximity to the Technical University of Ostravawith which we intend to closely cooperate. We are interestedin their graduates and would like to take part in creating specificstudy programmes for their electrical engineering departments.We are already considering moving part of our technology-drivenactivities to the Czech Republic,” said George Wu, Associate VicePresident of ASUSTeK COMPUTER INC.The centre should produce up to 200 thousand personal computersper month and the capacity of the repair centre should reach50 thousand computers per month.From the left: Minister of Industry and Trade Milan Urban, Minister of RegionalDevelopment Radko Martinek and ASUS Czech representative, Arthur Chen2 nd PlaceBOSCH DIESEL3 rd PlaceRONAL CRWhat countries did you choose from when deciding on which country to placeyour investment and why did you decide to invest in the Czech Republic?Bosch had the choice of other European production sites in central, south and westernEurope and worldwide. We decided to invest here for a lot of different reasons.The main point is the good overall balance.The factory itself showed low costs, high quality output and good delivery performance.The country has good availability of workers (not so good concerningengineers). The workforce is well trained and motivated. Other important factorswere closeness to European customers, relatively good road conditions, authoritieswho are open and pleasant to work with, sufficient availability of land, good stabilityof society and good language skills in German and English.What surprised you in the Czech Republic – either pleasantly or unpleasantly– compared to production plants in other countries?Still some things work surprisingly complicated or do not seem to be well coordinated.But these are minor problems which we try to solve together with other companiesin the region and the state authorities onall levels. One of the positive surprises weexperienced is the speed of action. Withthe close cooperation of all authorities andCzechInvest we were able to buy land,get all permits and build a twenty thousandsquaremeter hall within less than ten monthsincluding start of production of a new hightech product – the latest diesel high pressurepump for the Bosch common rail system.Kersten Janik, Senior Vice President,BOSCH DIESELFrom the left: Kersten Janik, Senior VicePresident, BOSCH DIESEL and Chairmanof the Takenaka Europe Board ofDirectors, Yutaka KawashimaWhat countries did you choose from when deciding on which countryto place your investment and why did you decide to invest in the CzechRepublic?Slovakia, Poland, Romania. State aid, qualified labour force, the market, supportfrom an already existing company.In what way did investment incentives influence your decision on investmentlocation?Investment incentives were one of the decisive factors for locating our investmentin the Czech Republic.What surprised you in the Czech Republic– either pleasantly or unpleasantly– compared to production plants inother countries?Adaptability and flexibility of the work force.Do you already have any research or developmentactivities in the CzechRepublic or are you planning tohave any, or are you planning furtherexpansion of your activities?RONAL CR s.r.o. has an R&Dcentre that was established in2001. This centre is being developedon an ongoing basis.Jiri Hnizdo, chief executive,RONAL CR s.r.o.

INVESTOR OF THE YEAR INVESTOR OF THE YEARInvestment with theGreatest Innovation Potential1 st PlaceSKODA AUTOThe largest Czech automaker - SKODA AUTO a.s. - has decided to build its technologycentre for research, development and testing of passenger cars in Mlada Boleslav.It plans to invest more than forty million euro into construction and to create 370new job opportunities mostly for mechanical engineers and electrical engineers. Theinvestment in Mlada Boleslav is now the second announced expansion of Skoda Autothis year.According to Chairman of the Board Detlef Wittig, investment into the company’sown development is necessary because of the forthcoming expansion in thenumber of model lines. Skoda now produces the Fabia, Octavia and Superb models.Next year they will introduce the Skoda Roomster model and are consideringseries production of the Yeti off-road vehicle. They will appear on the market in2008 at the earliest. Skoda announced back in April that it is investing three billioncrowns into its subsidiary plant in Kvasiny and will create over 2000 new jobsthere. After the expansion the Kvasiny plant should also produce the Roomster inaddition to the Superb. The investment will include, for example, construction ofa new logistics centre, lay-bys for produced vehicles, an employee parking lot, busstation and a new gatehouse for trucks.From the left: PatrickDaems, Chief Executiveand member of the Boardof Directors of CSOB,Detlef Wittig, Chairmanof the Skoda Auto Boardof Directors, Martin Jahn,Deputy Prime Ministerfor Economic Affairs2 nd PlaceTyco Integrated SystemsWhat countries did you choose from when deciding on which countryto place your investment and why did you decide to invest in the CzechRepublic?We compared Europe with Asia first and decided to stay in Europe because of theproximity to existing design centres in London and Munich including similar culturalbackground, similar education, same time zone etc.. In Europe the Czech Republicwas our no. 1 choice as we got already several operations here including a developmentteam in Tyco Fire & Security in Zettler s.r.o. where we had very good experience.We validated this choice by comparing factors with neighbouring countriesand beside low salary costs the high rate of technical graduates and generally thehigh value of technical education in Czech Republic confirmed our choice.In what way did investment incentives influence your decision on investmentlocation?It was not the primary reason, but without an incentive program it would have been difficultto justify the financials. We definitely would have looked at other options then.What plans do you havehere for the future? Areyou planning a further expansionof your activities?No fixed plans but optionsfor extension of the r&d activitiesas well as productionespecially for final assembly.3 rd PlaceRicardo PragueWhat countries did you choose from when deciding where to placeyour investment and why did you decide to invest in the CzechRepublic?We chose from the Czech Republic, Slovakia, Poland and Hungary. Therewere two decisive factors: knowledge of automotive industry historyin Central Europe, i.e. the automotive tradition in the Czech Republic;personal knowledge and experience (from the time of privatization in theCzech Republic).What plans do you have here for the future? Are you planning afurther expansion of your activities?We plan to more than double the number of employees and to build upour standard portfolio. From the signals we’ve been getting from the parentcompany we can expect further expansion of the company’s portfolioalso into non-traditional areas. Any changes in our plans of course will dependon the development inthe Czech Republic and in theautomotive industry globally.Vladimir Volak, CEO,Ricardo GroupJuergen Dulling, DesignCentre Manager Brno,Tyco Integrated SystemsFrom the left: Jurgen Dulling, Development CentreManager, Tyco Integrated Systems, CSA PresidentJaroslav Tvrdik, Minister of Industry and Trade Milan UrbanFrom the left: Pavel Pilat, Metrostav CommercialManager, Vladimir Volak, CEO, Ricardo Prague,CzechInvest CEO Radomil Novak

11CZECH INVESTmentNEWSCzech Republic:future leaderin global offshoringCEO Briefing, Corporate Priorities for 2005, a report by the EconomistIntelligence Unit (EIU) released in early 2005 found that global offshoringof IT services, manufacturing and other business functions will continue togrow over the next three years. The report ranked Czech Republic thirdbehind India and China, respectively, as future leaders in global offshoring.Singapore ranked fourth, and Poland rounded out the top five. The report,in which 500 senior executives were surveyed, pointed to the Czech Republic’sattractiveness as both a near-sourcing and offshoring destinationdue to its attractive regulatory environment, cultural ties and proximity toother emerging and established markets in Europe.Offshoring Environment RankingsScoreRankIndia 7.76 1China 7.34 2Czech Republic 7.26 3Singapore 7.25 4Poland 7.24 5Canada 7.23 6Hong Kong 7.19 7Hungary 7.17 8Philippines 7.17 9Thailand 7.16 10Malaysia 7.13 11Slovakia 7.12 12Bulgaria 7.09 13Romania 7.08 14Source: EIUPrague is the top “buy” European marketfor office and industrial sectorsReal estate investors throughout Europe are optimistic about the industry’spotential to generate healthy returns over the coming year, according to thehighly-regarded real estate investment report, Emerging Trends in Real Estate®Europe 2005, published by PricewaterhouseCoopers and the Urban Land Institute(ULI).Strong “buy” markets include Helsinki, Prague, Warsaw and Budapest; whileAthens and Dublin are listed as strong “sell” markets. Prague ranked as the top“buy” market for both office and industrial property, and it was second for theretail sector’s best buy.Glen Lonie, Partner and Head of PricewaterhouseCoopers’ Real Estate IndustryTeam for the Czech Republic and Central and Eastern Europe, said: “Prague hasmade huge progress as a property investment location. In five years, from havingvirtually no investment transactions it has hit the top of investors buy lists. Thisranking and similarly high rankings for Budapest and Warsaw show a high degreeof investor confidence in the future of Central Europe.”Accenture expands in the Czech RepublicAccenture, a global management consulting, technology services andoutsourcing company, held an opening ceremony for their new facilityin its shared services centre in Prague-Chodov. Accenture, whicharrived in the Czech Republic fourteen years ago, is growing morequickly here than expected – employing more than 1,300 people andcontinues to expand. The reason for continued expansion is a rising demandfor services in outsourcing of business and IT processes, the fieldsin which Accenture operates.The new facility is part of Accenture’sBPO delivery centre in theCzech Republic and will join thecompany’s Global Delivery CentreNetwork of 40 delivery centresaround the world to provide a fullrange of consulting, technologyand outsourcing services to clientsacross more than 30 industries.The original shared services centrethat was created by Accenture in2001 and based in Nove Butovice isone of two business support servicescompanies for which the Czech Governmentapproved tax incentives in2001. “In addition to the high qualityinfrastructure and supply of qualifiedlabour, support from the state is becominga more and more importantfactor to attract such advanced investments,” says Radomil Novak,CEO of CzechInvest.The new centre will provide the same services including finance &accounting, procurement and customer support. In addition, the newChodov site will be the primary multi-lingual, multi-client European servicecentre for Accenture HR Services, the Accenture business unit thatprovides HR administration services to large, multinational organizations.

CZECH INVESTmentNEWS12Computer Associates to establishMainframe Centre of Excellence in Prague€36 million investment to create world-class development facility for next-generation software solutionsComputer Associates International, Inc. (NYSE: CA) announced that itwill create its first worldwide Mainframe Centre of Excellence in Prague,representing a major expansion of its operations in the Czech Republicand a significant commitment to the mainframe computing market. Thenew Centre will focus on software development, maintenance, validationand quality assurance for the mainframe computing environment.The staff of CzechInvest, the Investment and Business DevelopmentAgency of the Czech Ministry of Industry and Trade, is assisting CA byproviding expert advice and incentives under the Agency’s FrameworkProgramme for support of technology centres and business supportservices.“CA is proud to announce this partnership with CzechInvest to create astate-of-the art mainframe development and support centre in the heartof Europe,” said Guy Harrison, senior vice president, DevelopmentOperations at CA. “This Centre of Excellence will provide mainframeusers worldwide with a host of innovations, and will help strengthen theCzech Republic’s position as a hub of IT activity.”CA’s Mainframe Centre of Excellence will be established in a 4,237square meter (45,222 square foot) facility in Building 6 at The PARK inChodov, Prague 4 and is scheduled to open in August 2005. The Centreexpects to hire and train more than 200 people including talented students,mainframe experts and experienced managers.“CA’s Mainframe Centre of Excellence brings investment from one ofthe world’s most successful software companies to Prague and is a signthat large multi-nationals see tangible business benefits in the Czech Republic,”said Radomil Novak, CEO of CzechInvest. “The opening of thisCentre is a testament to the skills and resources we have available in thismarket, where our people and our infrastructure can provide the rightbasis for strategic growth and improved competitiveness in the globaleconomy.”Toyota Peugeot Citroen (TPCA) plant in the Czech Republichas officially launched productionPSA Peugeot Citroen and Toyota Motor Co officially inaugurated their1.3-bln-eur (1.7 billion dollar, 39 billion koruna) joint carmaking plant inthe Czech Republic. Production of three small city car models designedfor fuel-frugal Europe officially began Tuesday, May 31st at a new ToyotaPeugeot Citroen (TPCA) auto plant in the town of Kolin, 60 kilometres eastof Prague. Not only will the plant employ 3,000 people by the end of thisyear, but TPCA’s exports to other parts of Europe are expected to have ahuge impact on the Czech economy. Radomil Novak, director of the governmentagency CzechInvest, said the factory’s output is expected to boostthe country’s foreign trade balance by about 40 billion koruna annually.The ceremony was attended by Jean-Martin Folz, chief executive of PSAPeugeot Citroen, and Fujio Cho, president of Toyota, as well as CzechPrime Minister Jiri Paroubek and other ministers and officials.The plant makes small entry-level cars from a single production line to beseparately branded as Toyota Aygos, Peugeot 107s and Citroen C1s. Pricedat around 11,000 dollars each, the fuel-stingy models are designed for entry-levelbuyers in urban Europe. Production will be split equally amongthe three brands, with one vehicle rolling out every minute once full annualcapacity of 300,000 vehicles is reached early next year.“We are producing 400 cars daily but that will rise to 1,050 once full capacityis reached by next January,” said Jean-Pierre Chantossel, the vice presidentof TPCA, the joint venture running the factory.The carmakers said the central location, close to important markets, a developedsupplier network and infrastructure were key reasons for optingfor Kolin. Another was the Czech Republic’s rich industrial and automobilemanufacturing tradition.Source: TPCAAlltracel has signed a development partnershipwith Czech nanofibre technology specialistsAlltracel Pharmaceuticals Plc., thehealthcare technology company focusedon the consumer woundcare, oralcare and coronary health markets, announcedthe signing of a nanotechnologyand product development agreementwith nanofibre technology specialistsELMARCO s.r.o. of the Czech Republicfor the development of a next generationdelivery platform for Alltracel’sm-doc(TM) technology.Elmarco is a specialist R&D and manufacturingcompany specialising in advancedmanufacturing for the semiconductorcomponents industry as well asequipment for industrial production ofnanofibrous non-woven materials. TheTechnical University of Liberec (Czech Republic) came up with a breakthroughtechnology enabling industrial production of nanofibrous nonwovenmaterials. Elmarco became its partner in development of the manufacturingequipment and became an exclusive patent user of this very new andunique technology that is far ahead of present nanofiber technologies.Alltracel’s CEO Tony Richardson commented, “Alltracel has always beencommitted to innovation in our markets and we are particularly excitedby the prospects for m-doc(TM) based nanofibrous advanced woundcaredelivery systems. Although at an early stage of development nanofibretechnology is showing market transforming potential in a number of ourmarkets and we are delighted to have formalised our partnership withElmarco and the nanofibre technology team at the Technical Universityof Liberec. We are now focused on jointly reviewing a range of patentprotected potential applications for m-doc(TM) based nanofibre solutions,initially for the advanced woundcare and surgical markets and bringingthese innovations to market via our network of existing and new commercialpartners.”

13EVENTS...OR WHAT WE’VE FOUND OUTClustered to talk about clustersClusters are regional associations of business entities that operate in the same or related branch in orderto create a competitive advantage that would be unachievable alone. For this purpose they also workwith universities, research institutions and the public sector and fundamentally help the entire region’sdevelopment. Aware of the importance of clusters to the economy and its potential in the Czech Republic,CzechInvest organized an international “Cluster Conference 2005” in cooperation with OECD and theSouth Moravian Innovation Centre, which took place in Brno at the end of May.Clusters and potential clusters in the CRChemicalWaterworks eng.ElectronicsAutomotiveEngineeringWood processingMusical instrumentsTablewareSpa / TourismMechatronicsElectronicsBridge technologyAutomotiveEngineeringBeer IndustryKarlovy VaryPlzenUstiWood processingWater-treatment tech.AutomotiveRenewable resourcesImitation jewelleryTechnical textilesGlassPrahaCentral BohemiaSouth BohemiaLiberecEngineeringWood procesingpanies as well as universities and entire regions,” said CzechInvest’s CEORadomil Novak, who opened the conference. “Cooperation in clusters raisesa company’s quality, speed and number of innovations. And these very factorsare essential for the successful functioning and growth of the economy.”Nine million euros are available for projects to establish and develop clustersin regions of the Czech Republic under the national Clusters programme,funded by EU structural funds. Last September CzechInvest had alreadylaunched a project named “Clusters – a tool to develop competitiveness ofPolygraphicPackaging tech.Technical textilesPharmaceuticals-medicine tech.Beer industry ChemicalsElectronicsEngineeringTechnical plasticsWood processingHradec KraloveVysocinaPardubiceSouthMoraviaOlomoucMoravia-SilesiaZlinAutomotiveWine-makingElectronicsBiotechnologyOpticsICTNanotechnologyEngineeringMicro-eletronicsAviationProject undergoingInitial activitiesEngineeringWood processingICTConstruction materialsMetallurgyRenewable resourcesChemical industryPlasticsShoemakingAutomotiveSource: CzechInvestcompanies and regions”.This project included aseries of seminars gearedtowards anyone interestedin this issue, and alsosaw the training of thefirst group of “facilitators”,namely experts in the regionswho help to identifysuitable areas for startingclusters and who subsequentlystart them.“During the seminar weidentified a large numberof sectors in individualregions that are suitablefor creating economicallysuccessful clusters, forexample wood processing,plastics, the textileindustry, wine makingas well as modern fieldssuch as biotechnologyand optoelectronics,”said Lubos Lukasik,Director of Czech-Invest´s Company competitivenessdivision.Entrepreneurs, regional authorities, university officials and others interestedin this topic had the chance to meet with a number of foreign expertswho have rich experience with the concept of clusters. The conferencewas accompanied by interactive workshops focusing on specific fields,high-tech as well as traditional sectors of the Czech economy (plastics, automotiveetc.), services, ICT, clusters based on competences or thematiccircles (e.g. the role of universities in developing clusters). In total 250 participantsactively discussed the possibilities of using this tool to strengthenthe competitiveness of all interested parties in a cluster. Sharing their manyyears of knowledge about clusters at the conference were, for example,Ifor F. Williams, CEO of Cluster Navigators (New Zealand), Lars Eklund,vice president of the Swedish Competitiveness Institute and director ofthe Competitiveness Department at the Swedish agency for innovationsystems – VINNOVA, Dan Sjögren,consultant for innovation systems andcluster programmes in Sweden, PeterHeydebrek, partner and executive ofthe European consulting group inno AG(Germany), Mark Copsey, the “father”and implementer of many large-scaledevelopment projects to found clusters inGreat Britain and New Zealand, and manyothers. Also speaking on the fundamentalimportance of clusters for the Czech economywas Vice Premier Martin Jahn.“Experience from abroad shows thatbuilding clusters is an effective methodof indirectly supporting prospective comed.

BUSINESSCLIMATE14First grade report cardThe Czech Republic’s first year in the European UnionOur first year’s experience of EU membership was altogether positiveand soberly hopeful. There were no fundamental shocks in the economythat could be directly or indirectly related to EU accession. Before EUaccession some “arguments” appeared, most often from the ranks ofEU sceptics, showing how prices would rise without an adequate rise inincome, how external competition would “crush” our weak and inexperiencedmanufacturers and retailers, etc. It can be completely responsiblystated that hardly any of this has come true. No direct or induced shocksdue to membership have occurred; to be sure the opposite is the case.There was no destructive impact on prices, except perhaps a cosmetic increasein prices due to a one-time need for tax harmonization (VAT, excise tax). Withcustoms duty it’s a different story. The permanent cancellation of duty and tradebarriers within the EU and the transition to a common customs tariff made manycommodities cheaper; but the overall impact on price levels has been negligible.The Czech Republic has been ranked among the low inflation European economiesfor a long time.On the whole it can be said that EU accession rather met positive expectations,one of which was even that our economy has become a considerably growingmember and has shown a very positive mid-term outlook. It’s a question as tohow much EU accession influenced such respectable economic growth (4%).Nonetheless, a positive mid-term outlook can also be the reason for favourableevaluation and the impact of accession on this result is evident.The following factors are characteristic for the first year inthe Union:• an acceleration of economic growth• keeping inflation of the values that fulfil the Convergence criteriaunder control• a slight reduction in unemployment• an improvement in the current account due to the increasedannual inflow of Foreign Direct Investment (FDI)The most positively influenced indicator is without a doubt foreign trade. The dynamicsof growth of exports and imports is demonstrably enormous and unequivocallyconfirms the marked renewal of trade and business transactions involvingCzech entities within an enlarged EU.The strengthening of foreign trade transactions was furthermore accompanied bya corresponding rise in output of international goods and passenger traffic. Theeffect of expansion is clear in the continuing influx of foreign direct investment.The relocation of companies and their production and development activitiesfrom traditional member countries to the countries of new members, includingthe Czech Republic, is now easier since as of May 1, 2004 there are much simpleradministrative procedures. The change in foreign investors’ behaviour and view ofCzech reality has not been very noticeable as of yet; it will likely make itself knownafter a longer period. The fact that we are EU members nonetheless improvesour country’s references and is anotherpositive argument for our improvingreputation.Our first year’s membership confirmedthat EU funds are no chimera, but a fact.Some 5,000 project applicants now havethe support of these funds as a certainty.In summary over 30 billion crowns havefound their recipients despite the largeexcess of enquiries of some operationalprogrammes beyond their possibilitieswhile others have not yet made useof their potential. From the date ofaccession to the end of this year onecan realistically expect approximately 50billion crowns.One year is still too short a period tomeet the expectations in structuralreforms or to reduce unemployment. The new business opportunities will likelylead to the creation of new jobs; however, this effect should be more visible after alonger period. From this standpoint it seems at first sight “as if nothing happened”,but the labour market’s demands have increased and structural reforms under thepressure of EU policy will also occur. If we highlight and tally up it’s clear that theoverall tone and impression is definitely positive.One key challenge is choosing the path to the euro. It’s certainly still true thata common government and central banking plan counts on the transition to acommon European currency in the period 2009 – 2010, but with respect to thedevelopment of inflation, interest rates and exchange rate stability we needn’t inany way hesitate much in joining the eurozone. The question is, however, meetingConvergence criteria, especially in the area of public finance (i.e. ability to reducethe deficit and considerably decelerate public debt). At present the fulfilment ofthe Convergence criteria is viewed as quite satisfactory. Last year, according tothe Czech Statistical Bureau’s macroeconomic development analysis, the CzechRepublic was the only new EU member state from Central Europe to fulfil threeof the four Maastricht conditions for the implementation of the euro.It can be presumed that the Czech Republic’s accession to the EU definitelyhelped. It opened up new business opportunities; students are pursuing educationin other countries in large numbers; EU funds have become a reality. We havebecome members of a club in which the rules applied help us provided we abideby them. Some other effects will nonetheless become apparent in several years ordecades, and so one year is too short for a thorough evaluation.Sources:• www.euractiv.cz, 30.5.2005• www.europa.eu.int • Czech Ministry of FinanceMain Macroeconomic Indicators2001 2002 2003 2004 2005 2006Forecast ForecastGross domestic product increase in %. const.pr. 2.6 1.5 3.7 4.0 4.0 4.1Consumption of households increase in %. const.pr. 2.6 2.8 4.9 2.5 3.5 3.5Consumption of government increase in %. const.pr. 3.8 4.5 4.2 -3.2 1.0 -1.4Gross fixed capital formation increase in %. const.pr. 5.4 3.4 4.8 9.1 7.1 7.1GDP deflator increase in % 4.9 2.8 1.9 3.7 2.7 3.1Average inflation rate % 4.7 1.8 0.1 2.8 1.8 2.2Employment (LFS) increase in % 0.4 0.8 -0.7 -0.6 0.2 0.2Reg. unemployment rate (MoL) average in % 8.5 9.2 9.9 10.2 10.0 9.7Wage bill increase in %. curr.pr. 6.9 8.5 5.6 5.0 6.3 6.3Current account / GDP % -5.4 -5.6 -6.3 -5.2 -5.0 -3.9Source: Macroeconomic Forecast, Czech Ministry of Finance (MoF), April 2005

15SPOTLIGHTON PEOPLEGlobal leader started outin an atomic shelterThey started in a nuclear bomb shelter with tank doors and no windows. Now they are one of the two bestcompanies in the world in their field. The small Czech company called PSI (Photon Systems Instruments)with 9 employees and which is celebrating its 10th anniversary this year attained its position by narrowlyspecialising on fluorescent devices and by cooperating with Czech scientists.The founder, general director, head of research, sales manager and even travellingsalesman, in short the man behind it all, is Martin Trtilek. He started businessback in his final year at the Brno University of Technology. It was of course a farcry from how he makes his living today.His big break came shortly after graduation when he met Dr. Nedbal from theMicrobiological Institute in Trebon. Dr. Nedbal had just returned from a lengthystay in the U.S. where he established numerous contacts in the scientific communityincluding many in university circles. He wanted to measure somethingfor his research, which he did with the Americans, and realized that he didn’t havethe right instrument to do the measurements. A chance encounter with a recentelectronics graduate lead to cooperation that continues to this day.Nedbal understood the scientists’ needs and had the contacts, while Trtilek knewhow to build the device. Moreover, they understood each other very well sinceDr. Nedbal, although a researcher in biology, has a degree in Mathematics andPhysics from Charles University and has no trouble with technical ideas. Togetherthey succeeded in making the first fluorometre to measure the fluorescence ofcells, algae, bacteria, leaves and lower plants.Images from PSI´s FluorCampost harvest lemon damageFluorCam of PSI meaures Fluorescence of leaves, small plants, and algal or cyanobacterialcoloniesThe device was a hitThe Americans were excited about it and immediately proposed to commercialise itin the U.S. An arrangement was reached and Photon Systems Instruments was born.It was agreed that the company would have an American part and a Czech part andthat in time it would become a joint venture. Here fortune shined down upon MartinTrtilek a second time: within two years the American part went bankrupt. With theirhigh costs the Americans couldn’t withstand the period when it was necessary toinvest into development without commercialisation of already developed instrumentsbringing in sufficient cash flow.The Czech part held tight. On the one hand costs were lower and on the other handTrtilek’s family was supported by an activity that was already up and running since hewas a student, and so they did not depend on income from PSI.If it had been a joint venture right from the start the entire company would have goneunder. The situation in Brno continued this way until the end of the second year whenthe company finally started to get itself slowly out of the red. An excellent productionand sales strategy helped. Scientists, especially those who investigate the naturalworld, don’t have it easy. Nature manifests itself in thousands of forms; thousands ofvarious processes take place in it; it has thousands of bonds. Among microbiologistsand biologists who measure and gauge nature, each one measures things differently.This requires custom-made instruments to match their needs.For this reason PSI from the outset focused exclusively on piece production. They doquality, not quantity. Each instrument is optimised according to the individual needsof each scientist. For eight years now they have been developing and commercialisingscientific instruments that are highly specialised and at a high level.PSI is now so far along in efficiency that it can even afford to produce certain instrumentsin small series “blindly” because it knows for sure that it will be able to sell them.A satisfied customer is the best advertisingA small company from the Czech Republic cannot afford financially to pay foradvertising in global scientific magazines. Nonetheless its name has made it into themost prestigious and influential magazines such as Nature. All scientists who performmeasurements are always aware of which instrument and under what conditionsthe measurements were taken. Having one’s company appear in such a magazineis worth dozens of television spots and conference appearances. PSI of course alsotakes part in congresses and conferences, mainly to be seen and not to lose thespotlight of the scientific community. At present they don’t encounter many majorcompetitors at such events. The only one remaining is their biggest rival, the Germancompany Waltz, which already has a thirty-year tradition and thanks to this and adeveloped distribution network has for the time being a greater market share thanPSI. Other small firms, mainly American, usually rent one booth together and do notpose a threat to the positions of those two companies.It´s not all about price......although price is important, because scientists have deeper pockets than theyhad, say, five years ago. Of course, when PSI first started to try to break into globalmarkets, things were different. At that time price was key, since quality amongscientific instruments is a given. The difference was severe. They were offering for16 thousand dollars what the competition offered for 50 thousand. PSI thus soldtwenty instruments while their competitors didn’t sell a single one.At one time the company even tried to push the price down to below 10,000 USD,which is the limit up to which American scientists who receive a grant can freelydecide on what instruments to purchase. Currently, however, it is abandoning thispolicy and prices are now approaching those of its competitors. It already has theimage of a company producing world-class instruments and so can afford to do it.The company has two distributors in America and two in Asia (Japan and Korea).Europe and the rest of the world are handled directly from Brno.Micro FluorCam produced by PSISource: weekly Ekonom (3.3.2005)

LIVINGCZECH16In the land of beerThe world was astounded in 1913 when it was discovered that as many as 19 typesof beer were brewed in Mesopotamia 5,000 years ago. It is fitting that thearchaeologist who first deciphered the Sumerian tablets containing thisinformation was a Czech, Bedrich Hrozny.• What are the “degrees”?Beer is measured here with degrees, according to the method devised byProfessor Balling in the 17th century. The degree sign caused some confusionfor consumers in the past, as international norms used it to signify thetemperature of brewing and other things. So it was changed to a percentagesign, which causes confusion among consumers today. Many think that thepercent is the amount of alcohol, but it’s actually the amount of malt extractused in the brewing process. The percentage of alcohol is about a quarter ofthe “percent” shown on the bottle, so 12% beer is roughly 3.1% alcohol,though it’s often higher. Czech beer comes in degrees from 6-19%, but 10%and 12% are the most common. The highest degree is probably Pernsteinfrom Pardubice.Beer was also brewed in the earliest Czech civilizations. There is evidence thathops were already being cultivated here in 859 and were being exported in 903- the first written documentation referring to brewing dates from 1088. EvenBritish beer authority Michael Jackson agrees that the Czechs are the number onebeer-brewing nation in the world today. Beer is considered a part of the nationalheritage of the country.• What are some good Czech urban legends about beer?One of the best ones says that drinking beer makes you live longer, because itreduces the aluminum in the body, saving it from the effects of aging and Alzheimer’sdisease. Beer does contain natural B-complex vitamins, though, so it doeshave some nutritional value (maybe that’s why it’s also known in Czech as “liquidbread”).• Which Czech beer is the best?As a famous advertising slogan once proclaimed: “Beer is the best”. It didn’t specifywhich brand. While the Czech Budvar (Budweiser) beer calls itself “the beer ofkings” (due to a royal inclination towards this brew in the early 16th century), it isimpossible to say which Czech beer is the best.According to Antonin Kratochvil, the executive director of the Czech Associationof Breweries, “Saying that some beer is better and some is worse is as nonsensicalas classifying women according to the color of their hair: some men like blondes,some like brunettes.” Of the classical beer styles, mostly bottom-fermented beeris brewed in the Czech Republic - that means lager (lezak), but especially, it meansPilsner beer. Pilsner is without a doubt the world’s most famous style of beer.Outside of the Czech Republic it is usually spelled Pilsener or abbreviated to Pils.• Where do the Czechs drink beer?Czechs prefer to do their beer-drinking in pubs rather than at home. Drinkingbeer is an opportunity to meet with friends. The milieu in pubs and country inns isgregarious, the discussion are forthright. The subjects can be anything under thesun: football, ice-hockey, politics and women. Draught beer is normally served inhalf-liter glass mugs. There’s light-coloured (svetle) beer, which comes in ten-degreeand twelve-degree varieties, and has more of a bitter flavor. Then there’s alsoten-degree dark (tmave), or black (cerne) beer, which is generally sweeter. Lightbeer is more popular, although dark beer is gaining ground. For those watchingtheir figure, there are even diet (dia) varieties of both light and dark beer, whichare lower in sugar and alcohol. Beer is usually available in bottles rather than incans. Bottles of beer have too long a tradition for Czechs to be replaced by canseasily. Canned Czech beers are available, but are mostly just for the consumptionof foreign tourists.• How about some tips for drinking Czech beer?The best temperature at which to drink beer is between 7-10 degreesCelsius. You can keep your beer at this temperature by keeping it onthe seventh step down to the cellar (this tip is from the Oscar-nominatedCzech film “My Sweet Little Village”). When buying bottled beer, hold it upto the light. It should be clear, not muddied in any way. And finally, drink iteach and every day.• What to eat when drinking Czech beer?Beer goes very well with the Czech national cuisine. For Czechs, it would beunimagineable for the Czech national meal (roasted pork, cabbage and the famousCzech dumplings) to be accompanied by any beverage other than beer.However, if you’re sampling beers and you’d like to clear your palate betweenbeers, try a piece of cheese (nothing fancy), a white breadroll, or some mild salami. For the adventurous, try all three.Want to know more about Czech beer?http://www.iniciativapivovaru.cz/en/goals.phpThe Czech beer firsts are:1 st in per capita beer consumption (160 litersor 43 gallons per year)1 st beer museum in the world1 st beer brewing textbook1 st Pilsener (Pilsner Urquell is a brand-nameCzech beer produced in the town of Plzen(or Pilsen) and is the original Pilsner)1 st Budweiser (Budweiser is a brand-nameCzech beer produced in the town of CeskeBudejovice (or Budweis) and is the originalBudweiser)1 st school of brewing in the world wasfounded in the Czech Republic at theend of the 18th century. Since 1816there has been a university-level collegeof brewing, and since 1868 also a secondaryvocational school specialising in brewing.ed.

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