The Prague Post Online: Business: Biz Week

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September 8th, 2008

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SUBPRIME The Czech Republic was relatively immune to the subprime mortgage crisis that spread from the United States to Europe last week. The European Central Bank (ECB) injected 203.7 billion euros ($281 billion/5.7 trillion Kč/) into money markets within the euro zone to stabilize lending rates, including a 47.7 billion euro infusion Aug. 13. The market is now “normalizing,” the ECB reported.

SHORTAGE Three-quarters of Czech companies are having trouble finding new employees, according to a survey conducted for Hospodářské noviny (HN) by the Economic Chamber and reported Aug. 13. Especially difficult to find are technicians, IT specialists, truck drivers and shop assistants. Almost 60 percent of the 1,905 companies polled said wages were rising because of this shortage.

FLATTENED Multidisplay, the television-screen manufacturer, will end its production of standard CRT screens in Hranice, north Moravia, and fire almost 600 employees, HN reported Aug. 10. The market for CRTs has dropped off precipitously, the company said, and the plant had already been idle for four months. The company was lured to the country by 1.5 billion Kč ($73.3 million) in incentives seven years ago.

STRUCTURE The government has announced a simplified application system for firms and institutions seeking EU structural funds, Regional Development Minister Jiří Čunek announced Aug. 9. The system should be launched by Sept. 15. The unified application form is available on the ministry’s Web site, www.mmr.cz. The country will be able to draw on some 750 billion Kč in EU funds over the next six years.

TURKEY Adex Agro, the country’s largest turkey-meat processor, has gone bankrupt, the company’s CEO, Blahoslav Dolejší, said Aug. 8. Some 120 workers will lose their jobs, as turkey buyers prefer meat from Germany and Poland. The company’s debt totals about 120 million Kč, spread out among 200 creditors, Dolejší said.

HEINEKEN The Anti-Monopoly Office has approved the takeover of the Krušovice brewery by Dutch giant Heineken. The move will make Heineken the third-largest brewer in the country, with 8 percent of the market. Some smaller brewers fret that Heineken’s plans to expand in the country will not stop with the Krušovice acquisition.

SURPLUS The country posted a record trade surplus of 9.3 billion Kč in June, up 1.9 billion Kč from last year, the Czech Statistical Office reported. Most economists expect this year’s total surplus to be greater than 60 billion Kč, largely due to faster-than-expected growth in the EU economy.

RUSSIA ČEZ has a preliminary agreement in place to construct a giant gas-fired power plant six kilometers north of Moscow, the company said Aug. 7. The plant would produce 600 megawatts of power. Contract negotiations between the city and ČEZ are expected to last for six months. This is the second Russian deal the company has announced this year.

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