‘Czech economy is ripe for Korean investment’

Published : May 30, 2016 - 03:37 Updated : May 30, 2016 - 03:39

The Czech Republic is primarily known as a tourist destination here with more than 220,000 Koreans visiting each year. However, we are also an ideal investment destination for Korean companies.

Most firms are not aware of our potential as an economy right next to powerhouse Germany. Today our economy is strongly intertwined with Germany, where we account for 4 percent of its total imports.

The Czech Republic is one of Europe’s industrial powerhouses. Manufacturing comprises 38 percent of our gross domestic product and is connected to industrial traditions dating back to the early 19th century.

Last year, we were the fastest-growing industrial economy in the European Union, and according to Bloomberg, ranked among the most attractive investment destinations in the world.

Martin Jirovec, director of CzechInvest in Korea (CzechInvest)

Significant mutual cooperation began to take shape over the last decade. Our outstanding relations reached its peak with the visit of Czech Prime Minister Bohuslav Sobotka to Korea in February 2015, leading to a strategic partnership agreement. In December last year, Korean President Park Geun-hye visited Prague, where she signed an action plan involving strategic partnerships in energy, information technology and health care.

The first major Korean investment in the Czech Republic was made by an automotive division of Daewoo group (now General Motors) in 1995, which partnered Avia, a Czech manufacturer of freight vehicles. Although the investment was thwarted by the financial crisis in Asia, it helped reveal hidden investment opportunities in our country.

Prague has been recognized for its high living standards and skilled workers in Central Europe. In addition to high-value-added production capacities, the city offers excellent research and development and design competencies.

Many professionals are working in Prague in creative and innovation fields, automotive, electronics, mechanical engineering, bio- and nanotechnology, information communication technology, energy, life sciences, chemical, pharmaceutical and aerospace industries.

Korean businesspeople are gradually discovering these positive aspects. In 2005, Hyundai Motor Group built a factory in Nosovice, raising awareness of the Czech Republic among Korean companies. Koreans have invested more than $3.25 billion, ranking among top three non-European investors.

Korean companies are currently among the most active in establishing branches and production facilities in Central Europe. These operations subsequently help business expansion into other markets in the European Union. Roughly 50 Korean companies, particularly in automotive, are now operating in the Czech Republic employing nearly 12,000 people.

Nexen Tire is preparing the construction of a new factory, while Hyundai Mobis, Hanwha, PLAKOR and others have already proven their competitiveness and begun to expand production.

In 2009, the Korean company Doosan decided to enhance its portfolio in generating electricity with new solutions and technologies. It chose Czech company Skoda Power for its first-rate turbine-manufacturing technology, and uses the Plzen branch for developing turbines.

The Czech Republic offers many advantages beyond the mere reduction of manufacturing costs. We are a gateway to Europe with a stable and strongly growing economy. Our government offers strong support to new investors with incentives. The CzechInvest office in Seoul provides all services and consulting for interested Korean investors.

Martin Jirovec is director of CzechInvest in Korea. -- Ed