Business News

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In this week's Business News, Czech Budvar comes to China, high costs push Czech transportation companies out of business, both wind and gas power usage is set to increase and a building boom in the Czech Republic sees the country at the top of the EU construction table.

Budvar goes to China

Czech brewery Budějovický Budvar is to begin selling its beer in China. The beer, which will be known as Bai De Fu, which means “Much Luck” has been renamed as Chinese people have difficulty pronouncing the word Budvar. Budvar has been exported to Hong Kong since 2006, and on Friday, the first two consignments of the beer were shipped to China. It is expected that between 700-800 hectolitres will be sold to the country this year alone. At present other Czech breweries are not planning to expand their markets to China, remaining wary of high transport costs. Budvar is sold in numerous places across the globe including South Korea, Mongolia and Brazil.

High costs pushing Czech transportation companies out of business

More than a hundred Czech transport companies have gone out of business since the beginning of the year, according to the Czech road hauliers' association, Česmad Bohemia. The reasons for the bankruptcies, which are affecting largely small and medium sized firms, have been given as rising transportation costs, particularly rising fuel costs. At present, rather than raising prices, most Czech transportation companies remain focused on reducing costs, for example tanking up where fuel is cheapest, and cutting overheads. Česmad representatives have also written to the Prime Minister asking for financial assistance including tax rebates or lower road tolls.

Fivefold increase in wind power expected

Photo: European Commission
The Czech Republic is set for a major increase in wind farms, according to ČSVE, the country’s wind power association. By 2012, 20 wind farms are to be built in Moravia alone leading to a ten-fold increase in wind power production. At present, the country produces 133 MW, and if the plans come into effect that figure will rise to more than 1,000 MW. The plants could produce a total of 2.5 TWh of electricity annually, which is one-fifth of that produced by the Temelín nuclear power station. Investors in the project include ČEZ, RWE and J&T.

Czech set to become a gas nation

Staying with energy, as coal power stations close and the construction of new nuclear power stations remains in limbo, the Czech Republic is set to become a major user of natural gas. Energy giant ČEZ, the J&T group as well as several other companies are all seeking to construct new gas fuelled power stations. At present, coal stations remain more financially viable, but projections suggest that this will soon change as coal prices drastically increase and supplies fall. Current plans would see new gas-fuelled power stations come into operation within two years, while negotiations are underway with Russia to gain greater supplies. Naturally, a greater reliance on Russian gas has some worried about excessive dependence on that country, but despite this, at present gas is viewed as one of the greenest ways for the country to provide for its energy needs.

Country tops table in building boom

A building boom in the Czech Republic has left it in second place in a table of European nations. Beaten for the top spot by neighbouring Slovakia, between 2000-2007 the Czech Republic showed exceptional growth in the construction business. Much of the boom comes from the construction of apartments and houses, long neglected by the former communist regime. Part of the reason for the boom is the slow phasing out of government regulated rent – this has led many Czechs to decide to buy a plot of land and build themselves a new home. Another reason is the increase in property costs, particularly great in Prague. Another interesting trend is that Czech companies are also becoming successful at participating in building projects in other countries – in 2003, this accounted for 1.1 percent of construction; by 2007 the figure was 2.8 percent. The building boom is expected to continue for a number of years before trailing off.