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New electronics factory to boost Kutná Hora's economy

By Riva Froymovich
Staff Writer, The Prague Post
July 18th, 2007 issue

VLADIMÍR WEISS/THE PRAGUE POST
Scenes from Kutná Hora, which has one of the highest unemployment rates in Central Bohemia.
VLADIMÍR WEISS/THE PRAGUE POST
HR Manager Zdenek Petrovický, standing at the future factory site for Foxconn, says the company will attempt to recruit local residents.
A new television-screen factory slated to be built on an empty 20-hectare (49.5-acre) plot on the outskirts of Kutná Hora may be just the boost the low-income town needs to join the booming economy of the Central Bohemian region.
The Taipei, Taiwan–based Foxconn said in April it will build an LCD screen plant at the site that will employ 5,000 people. Foxconn currently has a factory in Pardubice that exports nearly all of its products abroad. It is one of the biggest electronics manufacturers in the world.
About 3,000 new homes are also planned as part of the factory development — the first to be constructed in at least five years, said Martin Kupka, a spokesman for Central Bohemia’s governor, Petr Bendl.
“This investment of Foxconn could really be a new phenomenon, and could attract new inhabitants from other regions,” Kupka said. “Kutná Hora is one of the most problematic areas, specifically with close connection to unemployment.”
Kutná Hora’s unemployment rate was 6.5 percent in June, compared with 4.4 percent in the region and 6.3 percent across the Czech Republic, the Labor and Social Affairs Ministry reported last week.
Foxconn chose Kutná Hora because of its location halfway between Prague and Pardubice, said Zdenek Petrovický, Foxconn’s head of human resources in the Czech Republic.
“[Kutná Hora] suits us well,” Petrovický said.
Foxconn plans to recruit as many workers as possible from the surrounding area and has already talked to the local labor office about finding employees. The company is worried it may not be able to find enough qualified workers in the vicinity, however, Petrovický said.
“We will do our best to recruit a maximum of workers in this region,” Petrovický said.
Foreigners make up one-third of the employees in the Pardubice plant.
“People in the Czech Republic aren’t used to moving for work in the same way as, for example, in the United States or Great Britain,” Kupka said. “We predict this behavior is changing now, slowly.”
That may especially be true as Central Bohemia grows as an economic hotbed.
“Central Bohemia is the second-biggest moneymaker in the Czech Republic,” said Tomáš Bartovský, spokesman for the Industry and Trade Ministry. The region produces slightly more than one-tenth of the country’s gross domestic product, second to Prague, which generates about 24 percent, he said.
Other foreign investment has also been picking up in the region — mainly in manufacturing, Bartovský said.
Capital construction in Central Bohemia is at its highest since 2000, according to a regional government Web site.
“We predict exports will increase because of new factories and because current plants plan to increase their amount of exports,” Kupka said. “It’s a good message for us.”
Kutná Hora is a UNESCO-protected former silver-mining town that was a jewel to the 14th-century Bohemian kingdom.
Its strongest industrial presence and main employer, the Philip Morris ČR cigarette factory, recently showed signs of a slowdown when the firm consolidated activities and closed two plants nationwide.
The city and surrounding areas experienced problems transforming its industry after the 1989 revolution, and never caught up with its neighbors, Kupka said.
“We predict this new factory can change the situation,” he said.
The heavily industrial region churns out cars, electronics and glass — as well as the highest foreign export levels of the entire country. It accounted for nearly 20 percent of all goods exported in 2006, the top performer for the second consecutive year, according to data released by the Czech Statistical Office July 9.
Central Bohemia exports were valued at 417 billion Kč ($20.2 billion) last year, 10 percent more than the year before. It helped boost the domestic foreign trade surplus to its highest level ever, 47.3 billion Kč.
Industrial powerhouse cities such as Kolín, Kladno and Mladá Boleslav have attracted companies including Toyota Peugeot Citroen Automobile and the Škoda car factory to the region. Those factories lent to the highest recorded industrial production growth in the country last year since 2001.
— Naďa Černá and Hela Balínová contributed to this report.

Riva Froymovich can be reached at rfroymovich@praguepost.com


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