Expansion of Production Capacities for Offset Printing, Southern Moravia

1. POINT CZ, s.r.o. Expansion of production capacities of POINT CZ for offset printing Speakers: Barbora Hrdinova, Lubor Valek Consulting Agency

2. Region: Southern Moravia, the Czech Republic • township Medlov • Number of residents: 625

3. Region: Southern Moravia, the Czech Republic • township Medlov • Number of residents: 625

4. Region: Southern Moravia, the Czech Republic • township Medlov • Number of residents: 625

5. Region: Southern Moravia, the Czech Republic • township Medlov • Number of residents: 625

6. Company introduction • Companyestablished: 1993 • Our business: flat sheet offset printing • Number of employees: 140 • Headquarter offices located in Brno,production sites in Medlov and Jedovnice. • The philosophy: focus on development potential of suburban area of Brno.

7. Company introduction - technology • six flat sheet offset printing machines (Heidelberg Speedmaster brand) • own means of finishing of the printed matter (bookbinding, folding, etc.) • complex logistics system • elaborate warehousing

8. Main challenges • dynamic growth of company • massive investments in new technologies • requirement of new production facilities

9. Project preparatory work started in 2006 • Complicated situation due to disposition and property relations in the location

10. Need of complete consolidation and revitalization. In 2007 – possibilityto co-finance the project via OPPI REAL ESTATES support progamme grant. Project definition: • Purchase of a cow-house previously belonging to a former Uniform Agricultural Cooperative. • Demolition of the former cow-house. • Building of a new modern 2 000 sqm production hall, complete with a new access road and a loading platform. • Preparation of a network engineering for the new connection of the company and the township to planned and newlybuild wastewater treatment plant. • Modernization of current production hall and office building.

12. Project financing The Real Estate Programme makes it possible to obtain financial support for the preparation of industrial zones, renovation of buildings, and, to some extent, for the construction of rental buildings in the sector of manufacturing and related services. • Good starting „POINT“ – POINT company got in touch with professional consulting agency (DRING Consulting, Ltd.) in order to acquire financial subsidy for this project • Suitable subsidy: Ministry of industry and trade – Czech Invest – Operational Programme Enterprise and Innovation – The Real Estate programme

13. Basic characteristics (conditions) of the programme: • Enterprises and enterpreneurs can aplly • 60% of eligible costs for small enterprises • 50% of eligible costs for medium-sized enterprises • 40% of eligible costs for large enterprises • 40% of eligible costs for territorial administrative units • Industrial zone (min. 2 ha): zone preparation • Business facility (min. 500 m² of floor space after project implementation): renovation of a new facility for business purposes. • The user of the property must operate in  the field of manufacturing, technology centres or business support services. • Financial allocation for this call: 230 mil EUR • Financial limit for the project: 57 EUR /m3 – if average vertical clearance is above 6 m, otherwise 115 EUR/m3

14. OUR project - facts • The official title: • „Expansion of production capacities of POINT.CZ for offset printing“ • Start date: 20th May 2008 • End date: 31st July 2009 • Total budget: 1 275 000 € • Eligible costs: 747 577 € (60% from the total budget) • Subsidy: 373 769 € (50% from the eligible costs) • Total renovated floor space: 2 027 m2

15. Minuses • Large administrative burden (in the process of project evaluation as well as in the project realization) – the evaluation process took 9 months. Another 2 months before the conditions for funding were delivered and further 1 and half months before the contract was signed. In total the process took 12,5 months. • Need for cooperation with a consulting company to fill all reports, payment requests, prepare for the official controls, changes of the budget, publicity rules etc. • There is no space for price negotiations (link to tenders). • Slow speed of realisation (due to controls, waiting time till CI approves required changes/variations. • Big risk of not acquiring the subsidy (POINT has started to realise the project without knowing i fit gets the subsidy, because of the market pressure). • Additional costs – as it is not a new building, it is not possible to give an exact cost estimate.

16. Pluses • Enlargement of the production hall area • Material and personal capacity increase • Production output increase • Increase of productivity • Cost reduction on (additional) logistics and energy • Potential for further expansion • Credibility of the funding system

17. Future • positive experience – opportunity of grant programmes in the future (ICT, Human resources) • opportunity to use own capital more effectively for the development of the company • increase of competitiveness of the company • increase of cultural environment and social relations with the township • creation of new jobs in the area success of the project is dependent on the speed of realization => realizationof the project cannot depend on the successful acquisition of the grant

18. Thank you for your attention