Investors in the Czech Republic pleased to expand, have good conditions here
1. 12. 2016 | Source: Business and Investment Development Agency (CzechInvest)
In the first half of 2016, CzechInvest arranged investments worth nearly CZK 17 billion. In five of six cases, this involved expansions. Two of the biggest are being planned in South Bohemia.
- Forty-two investments in the value of CZK 16.9 billion should create 6,000 jobs in future
- Germans, Austrians and Chinese are planning the largest number of investments
- Top three investments: Yanfeng, Wrigley and Engel | Investments worth an additional CZK 28 billion are under discussion
In the first half of 2016, CzechInvest arranged 42 investment in the value of CZK 16.9 billion. Thanks to these investment projects, a total of six thousand jobs could be created in future. The investments primarily involve expansions, as firms already operating in the Czech Republic account for five out every six projects announced in H1 2016.
“The current good conditions and stable environment are motivating investors to further develop their business in the Czech Republic, expand their production capacities and develop other activities, especially in the areas of research and development, technology centres and shared services,” says Minister of Industry and Trade Jan Mládek. “In the case of production, they are investing in innovation and automation of processes in accordance with the oncoming fourth industrial.”
During the first six months of 2016, CzechInvest arranged the largest number of investments with German, Austrian and Chinese investors. Domestic firms accounted for just under seven percent of the total volume of nearly CZK 17 billion. In eighty percent of cases, investors applied for investment incentives to support their projects.
Investment incentives are only one of the factors motivating further investment. Other factors that are starting to become far more important include the availability and quality of workers, the quality of suppliers and the preparedness of locations. The Czech Republic currently has a lack of sufficiently large and well-prepared sites that can accommodate completely new strategic investors. New investors are also repelled by approval processes that they must undergo before starting construction in the Czech Republic and which are inordinately long in comparison with the rest of Europe.
“In cooperation with cities and towns, we have selected several potential locations that are suitable for the establishment of new industrial zones. At the same time, we are persuading the owners of zones that are already in operation to accelerate approval processes within the legal instruments so that investors can begin construction as quickly as possible upon fulfilling all of the conditions,” says Karel Kučera, CEO of CzechInvest.
The largest number of investments arranged in the first half of 2016 are in the South Bohemia region, followed by Central Bohemia and South Moravia. The Moravia-Silesia and Ústí regions also figure into the first half of the year. As in the past, vehicle manufacturing is the dominant sector, though the food and mechanical-engineering industries also account for a significant volume of investments.
The largest investment announced in the first half of 2016 is the expansion of the Chinese company Yanfeng Czechia Automotive Interior Systems, which plans to open a new facility for production of automotive interior components in Tábor by 2018 (CZK 1.85 billion, 588 jobs). The second biggest investment of H1 2016 is that of Wrigley Confections ČR, which will expand its production of candy, especially Skittles, in the Central Bohemian city of Benešov (CZK 1.46 billion, 28 jobs). The Austrian firm Engel strojírenská is behind the third biggest invest of H1 2016, which involves expansion of machinery production in Kaplice, South Bohemia (CZK 1.17 billion, 260 jobs).
“We are now in discussions regarding dozens of other possible investment projects worth roughly CZK 28 billion, which we would like to conclude by the end of the year,” says Karel Kučera.