Economics

Meanwhile businessmen in Slovakia celebrate, Czech exporters expect losses because of strong crown to Euro exchange rates. Slovaks can pay in Euro from the next year on. European commission and European central bank didn’t put Slovaks down and gave the green light for Euro adoption. But meanwhile traders are happy, ¾ of Slovaks do not like it very much.

Strengthening of Czech Crown makes troubles for Czech exporters already; Slovakia is the second country we export the most, just behind Germany. Especially automobile factories fear losses of profits. Skoda cars worth 1,8 bil. Czk were exported last year only. The relations manager of Skoda Auto says “every time czk strengthens of 1 czk to Euro, we lose one billion.

The plan of Slovakia, to convert to Euro in 2009 seemed maybe too ambitious at the beginning, however yesterday news revealed it was quite realistic. European Commission stated they believe Slovakia will hold its growth at reasonable level even after the Euro adoption.

All in all, this suggest the European Ministers of Finance will say ‘yes’ as their final verdict next year. Czech Crown is gaining its value at very good speed, so the Czech Republic doesn’t plan to convert quickly. The ex-presidential candidate Jan Svejnar supposes that Euro adoption in 2012 would work, however the Prime Minister Pavel Topolanek stated that the idea of adopting the Euro in 2012 is unreal.

The Czech currency has gone through one of its biggest leaps in the history. During the night from 13 to 14th April 08 it cut all the records and strengthened to 23 CZK for one Euro.

During Friday, the price moved around 25 czk, and even when the incredible 23 czk for 1 € was available for only half an hour, the Czech currency came back to 25 after that, it is a clear sign it will gain more strength in near future.

The crown reacts on the foreign markets activity; businessmen at Asian markets started to buy the currency, and because there were no deals going on at the time in Europe, a small number of purchases was able to get it to such point. The currency constantly gains strength.

Sales of Bio Food increase. Czechs have spend for the food with Bio label 1,29 bil czk (49,6 mil €) compared to 2006 it is 70% more. Bio-market is supposed to grow in the coming years steadily on. An average Czech have spent 126czk on bio-food last year. Bio food have gained for the fist time more than half of a percent – 0,55%.

Notable increase was of bio fruit and vegetable. Five and a half percent of total sales of the category is in bio-fruit and bio-vegetables. But as a matter of fact, 80% of the vegetable is imported, most from Austria and Italy. This is caused by later development in the area, so the dealers need to import, before greater part of our farms become bio-farms. This should take 2-3 years.

Based on Green Marketing annual bulletin

Czech company Kofola fuses with Hoop, the biggest Polish beverage producer. From that springs a group with year income over 10 billions czk (400 mil €). The new group will enterprise in five countries with total of 210 millions citizens, and its stocks will be traded at Warsaw stock market.

The new formation of Kofola-Hoop will be directed by the owners of Kofola, who own 57% share. The second biggest shareholder is with almost 15% one of the Hoop company founders Marek Jutkiewicz.

Hoop company is after Coca-cola and Pepsi second biggest producer of soft drinks in Poland. It also acts on Russian market, where it gets 1,9 millions czk of sales. Its total sales exceeded 6 billions czk (222 mil €) per year.

Skoda Cars are dominating the Czech Market, they don’t need to reduce their prices, there are buyers anyway. This is the reason why it is possible to save up to 100t Czech coronas (3,7t €) when buying a Czech car anywhere but in the Czech Republic.

Skoda Octavia Classic with 1,6 MPI Classic sells in the Czech Republic for 459 900 czk. In Germany in is 50 thousands cheaper, similar prices are in Poland or Slovakia.

If you go for your Octavia to Russia or Latvia, it can get even more cheaper. In Russia, Octavia in basic equip costs 386t czk, in Litvia even 350t czk.

Lesser differences are with Fabias or other models. There is also a little catch- the version ‘Classic’ means something different, as you get more equipment in the version sold in the CR. Anyway for Czechs it is a good reason for going shopping to the east.

The car factory have raised its net profits of 44,5% to 16 billions czk. During last year, Skoda Auto sold 630 032 cars worldwide. Compared to 2006, it is 14,5% increase in sales, which is the best sale outcome in the company history.

The car company Skoda Auto wants to double production in India, also it has recently introduced itself on a motor-show in Australia.

The model series with most sales is Octavia with 240 thousand (which is about 20% more than the year before last), by which it outrun another favorite model series – Fabia. There was 230 thousand Fabia cars sold in 2007.

Czech embassies could offer paid services of CzechTrade company almost in all countries. CzechTrade is the National Trade Promotion Agency of the Ministry of Industry and Trade of the Czech Republic.

CzechTrade´s main objective is to promote international trade and cooperation between Czech and foreign companies. CzechTrade´s professional information, assistance and consulting services accompany Czech exporters to foreign markets, and the agency is a contact partner for firms entering the Czech market, seeking interesting and reliable business partners and suppliers.

Examples of successes of Czech Companies with aid of Czech Trade:

Ferrit company have successfully entered Chinese market. Town of Luan inc Shanxi has received first two monorail locomotives this February.

Glasshouse Květná have participated on the Macef trade fair in Italian Milano or Blickfang exhibition in Switzerland Zurych.

MF Dnes have drawn attention to the fact; Germany, which has symbolised the rich and expensive country for Czechs twenty years ago, is now becoming comparably cheaper.

If we go through a little counting, we find out: a bottle of Pilsner Urquell costs 19,90 CZK, meanwhile in Germany it is 15,93 CZK. The beer is four crowns cheaper, and also empties of Pilsner pay for more in the Czech Republic, than in Germany.

It would be very lucrative to build a business on it, however there is a problem; beer sold in the CR must have a Czech label.

Why the company Plzensky Prazdroj, the maker of Pilsner Urquell, puts its prices so high? They can afford it, as every second beer drunk in the Czech Republic is made by the company. They are setting the price. In 2006 it made 130 millions €, which makes it tenth most profitable company in the CR.

Even when it doesn’t have to be obvious, we Prague people live quite a high standard life. If have a look at stats, we see Prague is twelve most rich region of the EU.

Prague has always been ahead of other regions, and the trend is strengthening now. At the moment, Prague produces 25% of Czech GDP. In practice, it means people have higher average salary, companies and banks build its main seats in Prague, which attract more companies to Prague, which again means more money for people.

It is logical. “The Czech Republic is a small country and for large companies it is enough to have one main seat for managing the whole country.” an economist Patria Online David Marek stated.

When Skoda Auto introduced , during the Christmas season, their skoda-cake advertisement, it was just one of the ads they show to the world. By the way, the British Television Advertising Craft Awards went to this ‘baking’ advertisement.

Skoda advertisements have their place reserved at the web Ads of the Wold, which maps creative ideas, like the one when Skoda inform es they re-plant forests at various places of Earth; “Skoda compensates for the pollution of its cars, reforesting specific areas in the world.” (picture)

The second most well-known Czech product is beer, and the Kozel brand advertisements are recognized by world’s creative minds. Kozel is the beer with the billy-goat in its emblem, and the billy-goat propagates the beer e.g. by presenting ‘beer receipts’ in Finland, or by re-cycling the 3D glasses idea in Russia.

The biggest Czech travel agency was sold by its owners to the investment group Odien. They want to invest hundreds of millions to the Czech Republic.

After 12 years Cedok changes its owner. The Unimex company sold 98 percent of Cedok to the American investment company Odien. The price is kept secret.

Because Cedok has moiety of exotic travel agency Eso Travel, the Americans have a half of this company now, too. The American holding Odien wants to invest into more travel agencies in the CR, as they expect the tourist trade to grow in Middle Europe.

Cedok is a company with long history and well-known name. It started in 1920 as a Czechoslovak tour and travel company, which mostly took customers to Adriatic sea. Its name was made famous during communism, as it had no competition as a state company.

From the assembly line in Russian city Kaluza, the first completed Skoda Octavia car came out yesterday. The factory hall owner is Volkswagen concern.

Skoda Octavia automobiles for the Russian market are still just assembled there, but since 2009 the factory should start complete manufacturing. Skoda Auto wants to meet the increasing demand of the Russian market.

“…we expect … that around 2011 the total volume of Russian car market will be about three millions automobiles… we would like to sell 50 000 cars next year”

Jan Hurt, the leader of Russian branch of Skoda Auto, commented.

The Czech Republic has been a member of the European Union since May 2004, and is a member of the Economic and Monetary Union of the European Union but has not completed the third stage of the EMU and therefore still uses its own currency, the Czech koruna.

Initially the Czech Republic planned to adopt the euro as its official currency in 2010, however recent evaluations have found this unlikely.

The Czech prime minister Mirek Topolanek have declared to adopt the euro will be possible only after changes in pensioner and health service. He said that in a TV discussion this Sunday with the Slovak prime minister Fico. Fico announced Slovakia still expects to adopt the euro in 2009.

Not an agreeable surprise for fast food lovers, however quite an objective economic indicator.

It results from the comparison made by Mf Dnes in the way set up by The Economist. The idea is to collect prices of Big Macs in different countries and use them as a base for estimation of exchange rates.

Ten years ago, Big Mac cost 51 CZK, which at that time when one dollar cost 27,60 CZK was about 1,85 $. In the US the 200g burger cost 2,36.

At the end of 2007, price of that mastodontic burger is 63 CZK. In the US it is, according to latest figures, 3,41 $, and as one dollar costs 18,30 CZK now, that makes 62,40 CZK apiece, less than in the Czech Republic.

We have caught up with the US in the price, but salaries are a different thing. A new employee of the CR branch of Mac Donald’s earns 0,85 of Big Mac an hour, in the US it is for the same job 2,59 of the burger.

Czech airlines have earned 563 millions CZK (19,4 mil. €), which is over 886 millions CZK (30,6 mil. €) more than the last year. The figures were published by the company president Radomir Lasak. Their financial plan, designed within their three three year restructuring strategy, expected profit about 40 mil. CZK.

Return of CSA into plus numbers was one of the conditions for the company privatization. Among the applicants of the company take-over are Russian Aeroflot, French-Netherlands Air France-KLM and Korean Korean Air.

Louis XIII. Black Pearl is a precious artifact, combining shining beauty with classicism, refracting light on its anthracite surface.

What is inside of the unique bottle is no less exquisite; a blend of eau de vie, a unique combination of cognacs, reaching total number of 1200. Some of them are older 100 years and come from Grande Champagne region in France.

This is the last bottle of 786 that doesn’t have an owner. The auction takes place on 14th November in the Lesser Town hotel Mandarin Oriental, Prague. It is possible that the buyer from the Czech Republic will be able to spend as much as the buyers from abroad.

The last auction prices? Louis XIII. Black Pearl is not only a gourmet delicacy and a piece of art, but also a unique investment chance. The first bottle was sold for 12 000 €, the highest price for one bottle came in Japan – 62 000 €. Black Pearl is a symbol of luxury and exquisite taste.

Deputies of the Iran International Committee prolonged their visit of the Czech Republic, as they wanted to see Skoda factory, where the new tramways are made. “The members of Iran delegation wanted to go through the factory, see how the tramways are made, Metro trains reconstruction and locomotives construction.” The speaker of Skoda holding Radka Pistoriusova announced. She also informed there was no contract signing at the time. Skoda do not export to Iran yet.

Iran chargé d’affairs Madzid Nili said their endeavor was to find out the possibility of cooperation. It concerned mostly the new Skoda tramways.

The speaker of the Ministry of Business and Industry of CR Tomas Bartovsky accepted the Iran market is interesting for Czech Industries, however they have to respect regulations and limits embedded in OSN and EU resolutions.

Not a lot of time has passed since the dramatic price increase of Prague public transport tickets in July 2005 when transfer tickets went up from 12 Kč to 20 Kč and single-use tickets from 8 Kč to 14 Kč. According to Hospodářské noviny, Prague public transit fares are already higher than those in Vienna or Paris when compared to the average salaries in those countries.

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The first express gas station of the Czech Republic started to work in Prague, Pruhonice. It was opened by W.A.G. minerální paliva (mineral fuels). Some of the strategic business commodities belonging to W.A.G. minerální paliva, a.s. are motor petrol and diesel. The company also supplies bio-diesel, certain types of heating oils and special oil products depending on specifications of individual customers.

Tank&Go is so the leader in introducing new technologies into the process of purchasing and distributing fuels. This kind of gas stations is common in Germany and Switzerland, distributing more ecological liquid mineral fuels, and high-class services. A customer simply drives in the station, inserts his/her credit card into a machine similar to a cash dispenser, enters his/her pin, chooses a maximum amount to spend, and refueling can proceed.

Considering their low prices of Natural 95, and their ‘ecological’ nature, they want to compete with the big chain companies, in which proximity they intend to build their stations. The other big companies however do not plan to compete in the same, express, field. Benzina speaker announced, they are interested in complex services for the customer, like food or rest, that won’t be available at Tank&Go stations.