Business News

Photo: European Commission

In business news this week: prime minister Mirek Topolanek rules out euro adoption by 2010, plans to sell off Prague Airport, the interior ministry says it wants a strategic partner for the Czech postal service, a consultancy firm predicts a rise in Czech bankruptcies, Mittal Steel Ostrava announces 3,500 reduncancies, Microsoft Czech Republic pledges to double sales, and Lego opens a new distribution centre on the outskirts of Prague.

Topolanek hammers nail in coffin of 2010 euro adoption

Photo: European Commission
The new right-wing prime minister Mirek Topolanek has laid to rest any hope his country will join the eurozone by 2010, saying the date was totally unrealistic. The comments came as little surprise, analysts have been saying for some time the Czech Republic wouldn't meet the convergence criteria by 2010. Mr Topolanek predicts his country will be ready to join in 2012 or 2013, several years after former federal partner Slovakia adopts the euro.

Prague Airport edges closer to privatisation

Transport Minister Ales Rebicek,  photo: CTK
The new Transport Minister Ales Rebicek said this week that Prague's Ruzyne Airport should become a joint-stock company as soon as possible, paving the way for eventual privatisation. Mr Rebicek said more than 10 firms had expressed interest in investing in the airport, which handles some ten million passengers each year.

The airport opened a new terminal building this year to cope with a steady rise in flights to Prague, particularly among low-cost operators. The airport plans to open a second runway in 2009, to meet the rise in demand. Analysts put the airport's value at some 40 billion crowns, or 1.8 billion dollars.

Interior Minister prefers strategic partner for Czech post service

Meanwhile Interior Minister Ivan Langer, said he would prefer to sell off the state-run Czech postal service to a strategic partner, rather than offering shares on the stock market. Mr Langer is responsible for the postal service after abolishing the Ministry for Information. The postal service employs more than 38,000 people and runs 3,400 post offices around the country. Last year, it made a profit of around 670 million crowns, or 30 million dollars.

Number of bankruptcies to rise next year - Euler Hermes Cescob

The number of bankruptcies is likely to grow slightly in 2007 after falling for seven consecutive years, according to a new study by the private credit insurer Euler Hermes Cescob. The company said the predicted rise would be due to slower growth in the Czech economy in 2007 compared to this year.

Some 1,380 Czech companies went bankrupt in 2005. This year the number is expected to fall to around 1,330, but will begin rising next year, the company said. Euler Hermes owns and manages one of the largest company databases in the world.

Mittal Steel Ostrava to sack 3,500 workers over next three years

The country's largest steelmaker - Mittal Steel Ostrava - said on Tuesday it was planning to sack 3,500 workers over the next three years, bringing the total workforce to the target number of 6,300. Company executives said the planned layoffs would leave Mittal Steel Ostrava more viable and productive.

Unions have expressed their understanding for the losses, and have pointed out that some employees will effectively stay in their jobs as some of the company's activities are separated from the core steel-making business. Mittal Steel Ostrava is the new name for Nova Hut, which was bought by steel billionaire Lakshmi Mittal in 2003.

Microsoft aims to double sales in Czech Republic over next three years

U.S. software giant Microsoft says it wants to double sales in the Czech Republic by 2009. The company said it wanted to expand in new segments and raise its share of the current market at the expense of its rivals. Microsoft wants to support an increase in household computer use from the current figure of 30 percent to about 50 percent of the Czech population. Microsoft opened its Czech branch in 1992, and employs 250 people.

Lego opens distribution centre in Jirny, will employ 600 people

The Danish toy-maker Lego Group opened a new distribution centre for Europe this week which will eventually employ around 600 people. Some 80 percent of staff at the centre, located in Jirny, near Prague, will be warehouse operators. The centre will be operated by delivery firm DHL. Lego said it wants to store around two-thirds of its output by next year - that's around one billion Lego bricks made in the company's Danish and Czech plants.