Business News


In Business News this week: Hundreds of Czechs are laid off as firms are hit by the strength of the crown; household electricity prices are set to rise again; Prague readies itself for one of the biggest urban development projects the country has ever seen; Burger King is expanding into the Czech market; there are over 17,000 dollar millionaires in the Czech Republic, and retro Tatra cars make a comeback.

Hundreds lose jobs as exporters buckle under strong crown

Hundreds of Czechs have lost their jobs since the beginning of the year because of the strength of the crown and the effect that this has had on exports, reported Hospodářské noviny on Friday. Industry and Trade Ministry figures suggest that exporters lost more than 65 billion crowns (4.3 billion USD) in the first quarter of 2008. In consequence, a number of firms are moving their operations further east. Cable manufacturer Alcoa Fujikura, for example, has laid off 850 employees and plans to move part of its production to Romania. Exporters are putting pressure on the Czech National Bank to rein in the crown in a bid to halt the exodus.

Household electricity prices to rise again

The cost of household electricity in the Czech Republic is set to go up again. As of January next year, energy firms are predicting that household electricity bills could be up to 15 percent higher, due to higher oil prices and recent energy shortages in parts of Europe. At the beginning of this year, electricity prices grew by around 9 percent. Raw electricity is trading on the Prague Energy Exchange at an all time high; one megawatthour now costs 40 percent more than it did at the start of the year.

Orco unveils massive urban development project

Property developer Orco unveiled plans this week for one of the biggest urban development projects this country has ever seen. The developer plans to build over 2,500 flats, alongside shops, service centres, a hospital and a university campus in Prague’s Bubny district. A spokesperson for the firm said the project was expected to cost around 72.4 billion CZK (4.7 billion USD). Famous architects such as Daniel Liebeskind and Hani Rashid have been linked to the project. Jakub Cigler, the Czech architect in charge of renovating Prague’s Wenceslas Square, is also involved in the Bubny scheme.

Burger King expands into the Czech market

US chain Burger King is coming to the Czech Republic. Burger King will take on its main rivals KFC and McDonald’s, as well as the Czech Republic’s indigenous sausage and schnitzel stands, in its bid for fast-food supremacy. There are currently nearly 13,000 fast-food outlets in the Czech Republic. The biggest chain in the country, McDonald’s, recorded sales of 3.2 billion crowns (209 million USD) in 2007, drawing in over 53 million customers in that twelve-month period. Now Burger King wants a piece of the pie, but has not yet divulged where its first outlet will be, nor when it will be opened.

Over 17,000 dollar millionaires in the Czech Republic

The number of dollar millionaires in the Czech Republic shot up in 2007 to over 17,000, a study by Capgemini and Meryll Lynch has found. The number is up by nearly 15 percent on the previous year’s figures. The study’s authors attributed the rise to the strength of the crown and economic growth in the Czech Republic. The richest man in the Czech Republic is Petr Kellner, the main shareholder in the country’s PPF financial group. His property wealth alone is estimated at 9.3 billion USD, which places him inside the Forbes top-100 rich list.

Carmaker Tatra to re-launch vintage car models

And finally, after a pause lasting more than a decade, Czech carmaker Tatra is to resume production of some of its now ‘retro’ car models. The company, which has in recent years specialized in lorry production, announced on Tuesday that it would be dusting-off some of its vintage car models. Tatra enthusiasts can vote for which of the cars they would like to see revived over the internet or at the carmaker’s museum in Kopřivnice. The three most popular models will then reenter production in January 2010. Tatra boss Ronald Adams has said that while the vehicles’ chassis will remain the same as the original, the cars’ engines will be brought up to date. Only a limited number of the retro cars will be produced; they are expected to cost around 620,000 crowns (40,600 USD) each.