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CZECH REPUBLIC – investment opportunity !

CZECH REPUBLIC – investment opportunity !. 31 March 200 5. Csaba Gy ö p ö s Director, South East Asia Operations. Presentation Structure. Role of CzechInvest General information about the Czech Republic FDI into Central and Eastern Europe and the Czech Republic Czech investment climate

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CZECH REPUBLIC – investment opportunity !

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  1. CZECH REPUBLIC – investment opportunity! 31 March2005 Csaba Gyöpös Director, South East Asia Operations

  2. Presentation Structure • Role of CzechInvest • General information about the Czech Republic • FDI into Central and Eastern Europe and the Czech Republic • Czech investment climate • CEE Electronics and Automotive Industries • Life in the Czech Republic

  3. Our Organization Minister of Industry and Trade CR V Steeringcommittee Marketing Investment support Enterprise development Smes Business properties and regions Coordination of development programs London Chicago Paris Prague Cologne Yokohama Silicon Valley Brussels Hong Kong The European investment promotion agency (IPA) of the year 2000& 2001 Best IPAin the EU accession countries of the year 2002 CzechInvest - Investment and Business Development Agency

  4. General information about the Czech Republic

  5. Czech Republic: Basic Data POPULATION 0410.3 million LABOUR FORCE 045.3 million UNEMPLOYMENT DEC 04 9.5 % GDP per capita (PPP) 03USD 18 700 GDP growth 2.Q 20044.1 % INFLATION RATE (CPI) DEC 04 2.8 % AVERAGE MONTHLY WAGE 04USD 716 1 USD = 23.50 CZK Source: Ministry of Finance, Czech Statistical Office, 2004

  6. CZECH REPUBLIC:EU MEMBER from MAY 2004 SINGLE MARKET OF 455 million CONSUMERS

  7. Foreign Direct Investment (FDI) into Central and Eastern Europe and the Czech Republic

  8. FDI stock per capita in Central and Eastern Europe By the end of 2003, the Czech Republic had attracted more FDI per capita than any other country in Central and Eastern Europe (in EUR): Sources: WIIW, Wiener Institut für internationale Wirtschaftsvergleiche, February 2004

  9. ….Attractive The Czech Republic is in the Top 10 for investment 1. China 2. USA 3. Germany 4. UK 5. Poland 6.- 7. Czech Republic,India 8.- 9. France, Russia 10. Hungary Source: Ernst &Young, Europe: The Opportunity of Diversity, 2004

  10. Inflow of foreign direct investment “2006-08: Compliance with EU regulations improves the business environment and sustains foreign direct investment (FDI) inflows of US$3.5bn-4bn annually“.Source: Country Forecast Czech Republic, EIU 1993 – Q3 2004 USD 42.1 BILLION USD BN Source: CNB, December 2004 2004 - 2008: Country Forecast, April 2004 Updater, EIU Q1 – Q3 2004: USD3.5BILLION

  11. Top 10 CzechInvest investments Source : CzechInvest, October 2004

  12. Cumulative FDI inflow by country 1993 - 2003 Total EUR: 37.818 billion Sweden 1% United Kingdom 4% Japan 1% Switzerland 5 % Other 11% Belgium 6 % United States 7% Germany 32% France 9% Austria 11% Netherlands 13% Source: Czech National Bank, March 2004

  13. Cumulative FDI inflow by sector 1993 – 2003

  14. Czech investment climate

  15. Language levels 1004 respondents Source: FESSEL-GfK Omnibus Survey in Central and Eastern Europe, 2003

  16. Completion of upper secondary education Percentage of those aged 22 who have successfully completed at least an upper secondary education in selected countries, 2002 Source: Progress towards the common objectives in education and training, EC 2004

  17. Czech university students Total number of students 259,674 Liberec 6,851 Bachelor’s programme Usti n. L 7,578 Master’s programme M. Boleslav 266 Postgraduate K. Vary 587 H. Kralove 8,496 Cheb 1,597 Opava 1,845 Kladno 183 Karvina 1,900 Litomysl 61 Prague 96,692 Pardubice 6,332 Plzen 14,594 Ostrava 25,331 Olomouc 14,925 J. Hradec 1,109 Vyskov 1,195 Zlin 5,622 Trebic 10 • Source: Institute • for Information • on Education, • Statistical Yearbook, 2004 Brno 55,181 C. Budejovice 7,900 Kunovice 526 Lednice 893

  18. 9,394 1,675 112 9,202 2,015 1,916 6,522 15,020 26,051 10 57,830 Intellectual capital - Czech Universities • total students: 274,192 • Source: Institute for Information on Education, 2004 IT students: *21,863 * The figures are based on location of faculty Prague Opava 2,135 Hradec Kralove 104,530 Plzen Ostrava Ostrava Třebíč Brno

  19. Unemployment % * * * forecast Source: Czech Ministry of Finance, April 2004

  20. Average monthly wages in the Czech Republic in 2003 Average Exchange rate 2003: 31, 844 CZK/EUR Source:Czech Statistical Office, 2004

  21. Transportation -- strategic location in the centre of Europe -- current 518 km of motorways represent about 50% of planned highways in 2010 -- the best transport network in Central and Eastern Europe Source: Ministry of Transport, 2004

  22. Investment incentives available in the Czech Republic • Manufacturing • Business Support Services & Technology Centers • Job creation in regions of high unemployment

  23. DC LB UL JN TP CL MO SM TU CV LT MB LN JC NA ME KV KD SO HK JE CH NB RK PH RA AB PU KO PS UO BE SU BR PZ TC RO KH CR OP KI PM OV PB BN SY HB OC PJ NJ FM DO PR ZR PV PI PE BK TA KT JI VS ST KM VY ZL BM TR BI JH PT CB UH HO ZN BV CK Minimum investment - according to regions (Manufacturing) • Valid: January 1 – June 30, 2005

  24. Tax incentive(Manufacturing) • New firms: corporate tax relief for max. 10 years • Existing companies: partial tax relief for max. 10 years • Current corporate income tax rate = 26 %

  25. Job creation and training grants (Manufacturing) • Offered in regions with high unemployment only • 200 000 CZK (app. 6 600 EUR / 8 000 USD) per each new job created in regions „A“ and 100 000 CZK (app. 3 300 EUR / 4 000 USD) per each new job created in regions „B“ • 35% of total training costs in regions „A, B, C“

  26. DC LB UL JN TP CL MO SM TU CV LT MB LN JC NA ME KV KD SO HK JE CH NB RK PH RA AB PU KO PS UO BE SU BR PZ TC RO KH CR OP KI PM OV PB BN SY HB OC PJ NJ FM DO PR ZR PV PI PE BK TA KT JI VS ST KM VY ZL BM TR BI JH PT CB UH HO ZN BV CK Job creation and training grants (Manufacturing) • Valid January 1 – June 30, 2005

  27. Business Support Services and Technology Centres Framework Programme for Support of Technology Centres and Centres of Business Support Services

  28. Types of supported projects • Development and innovation activities with the close linkage to production of high-tech products and technologies, including development of specific software, in the following fields: • aerospace • computers and machinery • electronics and microelectronics • telecommunications • pharmaceutics • motor vehicles • etc. • Technology Centres (TC)

  29. Forms of support(BSS & TC) • SUBSIDY FOR BUSINESS ACTIVITY • provided by the Ministry of Industry and Trade • SUBSIDY FOR TRAINING AND RETRAINING • provided by the Ministry of Labour and Social Affairs

  30. Regions with average unemployment higher than 14% • Valid for the period: January 1 – June 30, 2005 DC LB UL JN TP CL MO SM TU CV LT MB LN JC NA ME KV KD SO HK JE CH NB RK PH RA AB PU KO PS UO BE SU BR PZ TC RO KH CR OP KI PM OV PB BN SY HB OC PJ NJ FM DO PR ZR PV PI PE BK TA KT JI VS ST KM VY ZL BM TR BI JH PT CB UH HO ZN BV CK

  31. Eligibility criteria(Programme - regions) • Min. amount of investment 10 mil. CZK (cca 0,3 mil. EUR / 0,4 mil. USD) within 2 years • Min. of 10 newly created jobs within 2 years • Min. 5 mil. CZK (cca 0,16 mil. EUR / 0,2 mil. USD) of the investment will be financed with own sources • At least 25 % of the total amount of investment must be financed by resources, which do not include part of the State Aid

  32. Investment risk rating Last update: May 2004 Source: Czech National Bank, May 2004

  33. Investment Opportunities in the Czech Electronics Sector

  34. Contract electronics manufacturingEuropean production trends Eastern Europe fuels growth 45.42 39.8 34.8 24.7 30.45 19.14 27.97 14.83 PRODUCTION IN BILLION USD 24.15 11.5 7.5 5.15 19.72 3.67 12.505 2.63 10.057 1.905 3.534 8.211 20.72 20.66 20.4 19.97 19 18.96 1.433 .053 16.05 1.025 6 .838 13.05 4 237 0.697 4. 10.6 0.518 8.624 0.38 7.186 5.356 4.32 3.857 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 WESTERN EUROPE EASTERN EUROPE Source: EMS Opportunity in Europe, MHM, 2003

  35. The Czech Electric and Electronics Sector in 2003 • 12.1 billion USD sales • 11.4 billion USD exports • 182,000 employees • 15% of Czech manufacturing industry output • 450 manufacturing companies • 25% of foreign manufacturing investments • 2.5 billion USD foreign investment since 1990 • 16% of manufacturing exports BASIC DATA Source: EIA, 2004

  36. Structure of the Czech Electronics and EE Industry Electronics components, telecommunication and consumer electronics, 21% Instrument and automation equipment, 12% Computer equipment, 23% Heavy-current technology, 44% Source: Czech and Moravian electrical and electronic association, 2004

  37. COMPUTERASSEMBLY 40% of European PC production is manufactured in the Czech Republic Prague Pilsen Pardubice Ostrava

  38. 1. PANASONIC AVC NETWORKS CZECH – TV SETS 1996-97* • 2. MATSUSHITA ELECTRIC WORKS COMMUNICATION RELAYS – 1998 • 3. MATSUSHITA ELECTRIC INDUSTRIAL – EXPANSION – 1999-2000 • 4. PANASONIC MOBILE & AUTOMOTIVE SYSTEMS CZECH – 2000 • “WHY DID WE CHOOSE THE CZECH REPUBLIC?” • QUALIFIED LABOR • STRATEGIC LOCATION • POLITICAL AND ECONOMIC STABILITY • Mr. KIYOSUKE IMAI, PRESIDENT MATSUSHITA ELECTRIC WORKS, 1999 PRAHA 2 4 1+3* Ostrava USD 250 MILLION TOTAL INVESTMENT Brno *5 millionth TV set produced in March 2003

  39. Investment Opportunities in the Automotive Sector in the Czech Republic

  40. Automotive Investments In CEE - Trends • Automotive sector will continue to be the leading industrial sector in CEE countries • Knowledge and experience in this field remains an enticement of FDI • Creation of “regional” suppliers in CEE

  41. Source: Trends in Advanced Engineering study, January 2004 Attractivity of the Region Which countries or regions are you likely to consider investing in?

  42. 70% of CEE’s OEMs and suppliers are here 200 km Source: McKinsey&Company

  43. LIVING POSSIBILITIES

  44. GOOD QUALITY AT A GOOD PRICE! Quality of life Cost of livingindex consumer goods, excl. housing, New York City = 100 Source: The World Competitiveness Yearbook 2003, IMD

  45. WORLD CLASS GOLF COURSES Marianske Lazne – established 1905 & inaugurated by King Edward VII and Karlovy Vary – established 1933

  46. チェコの日本企業 製造業 合弁and OEM´S DENSO デンソー SHIMIZU IND. シミズ工業 ASAHI GLASS 旭硝子 Tokai Rika 東海理化 デンソーエアーズ DENSO AIRS TOYODA GOSEI 豊田合成 KOMATSU 小松 HITACHI SEIKO 日立精工 HITACHI METAL 日立金属 KOYO SEIKO 光洋精工 TRIS AISAN 愛三工業 OPTREX MELCO 三菱電機 KOITO 小糸製作所 Toyota Motor トヨタ自動車 SIEMENS-MATSUSHITA シーメンス松下 TESLA Y. S. PRAGUE 昭和アルミニウム SHOWA ALUMINUM ASAHI BEER アサヒビール 松下通信工業 MATSUSHITA COMMUNICATION INDUSTRIAL Co. 松下電工 MATSUSHITA EL.WORKS FURUKAWA ELECTRIC 古河電工 JCCE JAPAN METAL CHEMICAL-NIKOM 日本重化学工業 大宝工業 DAIHO KOGYO SHIMANO シマノ 京セラ KYOCERA(AVX) 三洋電機 SANYO FUTABA IND. ONAMBA オーナンバ 松下電器産業 MATSUSHITA ELECTRIC INDUSTRIAL Co. ZEXEL-VALEO 東レ TORAY INDUSTRIES アイシン精機 AISIN SEIKI アルプス電気 ALPS ELECTRIC 光洋精工 KOYO SEIKO TATSUNO タツノ 日本化薬 NIPPON KAYAKU KAWASAKI H.I. 川崎重工 豊田織機 TOYODA A.W. LOOMS オークマ OKUMA

  47. 在捷克投資的亞洲商務公司(日本除外) ASIA PACIFIC COMPANIES IN THE CZECH REPUBLIC (Excluding Japan) Singapore 星加坡 Beijing 北京 Taiwan 台灣 Korea 韓國 Malaysia 馬來西亞 Shanghai 上海 Hudong-Zhonghua Shipbuilding (Group) 滬東中華造船(集團)有限公司 Marwi 台萬工業股份有限公司 Kinloon 北京中海信業科技 Vivatek System Access Hualon 華隆 Lite-On Technology 光寶科技股份有限公司 PRAGUE FIC 大衆電腦 AIDC 漢翔航空工業 股份有限公司 5 Asustek 華碩電腦 Foxconn Honhai 鴻海精密工業股份有限公司 Daewoo OSTRAVA Lite-On Enclosure 松喬實業股份有限公司 Tatung 大同公司 Asustek 華碩電腦 LG Philips Amtek BRNO Flex Design Centre Czech Inventec英業達 Chicony 群光電子 Updated in March 2005

  48. We are here, ready and glad to assist you!Thank you www.czechinvest.org

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