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Home / Posts / The choice option of investing in the Czech Republic

The choice option of investing in the Czech Republic

Thursday, March 5th, 2015 A seminar organised by the SPRI Group shows the advantages of setting up in a market that is not saturated and has an industrial structure similar to the Basque Country. “Our experience is positive”, pointed out Kepa Bastida, General Manager of the Lana Group, which has had a production plant in the Czech Republic since 2007.

During the session held on Thursday, organised by the Basque business development agency, SPRI Group, dependent on the Basque Government Department of Economic Development and Competitiveness, it was made clear that the market in the Czech Republic offers a good business opportunity for Basque companies.  “Our experience is positive”, highlighted Kepa Bastida, General Manager of the Lana Group, part of the Mondragon Group, which manufactures wooden construction material.  Lana has a production plant in the Czech Republic and is one of the 48 companies with Basque capital installed in the Czech Republic and Slovakia.

At the seminar, which was attended by Czech Government officials, it was emphasised that the Czech market is not saturated, so Basque companies have potential customers. The Czech Republic is the second largest car producer in the world per capita, after Slovakia, but also has powerful machine tool, capital equipment, electrotechnical, railway, aeronautical, chemical and steel industries. Higher purchasing power and a more mature market have also converted the Czech Republic into a platform for suppliers of luxury goods, clothing or delicatessen items into Eastern Europe.

Tomás Buchtele, Manager of the SPRI office for the Czech Republic and Slovakia, a post he has held for 13 years, stated that the Czech Republic is a bridge to Central and Eastern Europe.  “The industrial fabric is similar to that of the Basque Country and there are integrator manufacturers with high added value products such as turbines and generators”. Buchtele revealed that there are more than 50 producers of machine tools, one of the strongest sectors in the Basque Country.  It is one of the most industrialised countries in the European Union and, in fact, industry accounts for 38% of Czech GDP.

Miren Madinabeitia, Internationalisation Manager of the SPRI Group, underlined the work of the Basque agency to support companies. “We conduct all kinds of market analysis, accompany companies on visits, keep in contact with the Czech authorities and advise on recruiting local human resources, another key factor for companies installing their own structures in foreign markets”.

Marketa Tomkova, Administrator of the investor support office of the Czech public agency CzechInvest, reported that investment incentives reached 25% and explained that investments and jobs must be maintained for five years. She gave the example of an investment of 4 million that created 20 jobs and was awarded almost 1.1 million euros in incentive grants.

Nella Janakova, Manager of CzechInvest, the investment promotion agency, explained the conditions for mergers with companies in the Czech Republic, while Jan Hadrava, of consultancy PwC in Prague, spoke about good conditions for investing in this country. “It has the lowest unemployment in Eastern Europe, with 6.8%, compared to 12% in the EU”.

KEPA Bastida, General Manager of the Lana Group, commented that they set up in this country in 2004 and its plant, after an investment of 14 million euros, started producing in 2007. “It was tough at first but now we are making profits”. He described the experience as “positive” with advantages such as its geographical location and, in the sector in question, wood, “the raw material is very good and industry is very strong”. The main drawback, according to Bastida, is the language. “Most speak English, but with direct labour it is difficult to find people with a command of English. And that obliges you to learn Czech”.
