Foreign markets

Czech Republic: The Location scores with Quality

| Author / Editor: Robert Benacka / Stéphane Itasse

Czech industry is capable of manufacturing products of the level of established industrialized countries.
Czech industry is capable of manufacturing products of the level of established industrialized countries. (Photo: martinlisner/Fotolia.com)

Czech industry has well-developed since the 90s and established in Europa. This also has consequences for companies, which now consider an expansion, whether with respect to the technical level of the location or with respect to the risks such as the costs and availability of qualified employees.

The brand Skoda is the most well-known example for the economic success of Czech companies. The country is established since long as production location not only in the automobile industry, but is also leading in mechanical engineering and plant engineering in Europa – customers from all world regions get everything from the individual specific screw up to the complete manufacturing facility of high-quality industrial products from the East European landlocked country.

Also in other industrial sectors, Czech Republic is growing in small yet significant steps: in metallurgy, chemical and pharmaceutical sector as well as in glass and ceramics production.

Czech Republic is the cost leader for foundation of production locations

Czech Republic has already established as the cost leader for foundation of production locations with a steady growth in GDP and a decreasing unemployment rate of below 6 % (As on April 2015). This may also be due to the fact that the country is moving closer to the West only since joining the EU in the year 2004. After the fall of the Iron Curtain, initially the industrial corporations, then even larger medium-sized companies, manufacturing plants started establishing in Czech Republic. In the previous ten years, may suppliers followed in its wake to produce in close proximity of customers.

In the meantime, the industry in Czech Republic has intensively approximated to the essential standards, with respect to the skills of technical qualified employees. What is the significance of this for the medium-sized companies, which currently consider a first-time expansion towards East Europe? Is Czech Republic particulatly suitable based on the mentioned points – or is the risk very high to face a shortage of skilled professionals and increase in living costs in the coming years, which in turn shall increase the wages for skilled workers, engineers and managers? The survey "Qualified employees in East Europe. A survey from the perspective of German medium-sized companies" provides the references for the launch or development of Czech production location even in the upcoming years as a significant investment. The survey refers to the analysis of the management consultancies ROI Management Consulting AG and the magazine "Markt und Mittelstand". Czech Republic scores as compared to other EU-Nations in particular with the important criteria such as cooperation with government institutions, the infrastructure and level of qualification.

Medium-sized companies with their commitment in Czech Republic mostly satisfied

Czech Republic has strong representative with medium-sized companies, which are represented with minimum one location in the country since a few years. The decision makers questioned in the survey are not only satisfied with this selection – 77 % of them would even set up a Czech subsidiary today.

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