Business News Business News
In this week’s Business News: package for South Korean Mobis cleared; company creation heading back to pre-crisis rates; gas pipeline company under spotlight for financial juggling; telecom companies face big bill for high speed service roll-out; and curbs sought on supermarket chains.
Government green light for Mobis car parts investment
The Czech government has cleared the investment package aimed at ensuring Hyundai car parts company Mobis invests around 4 billion crowns in a new plant on the outskirts of Ostrava. The South Korean company plans to start producing car lights for up to 750,000 vehicles in the first phase of its investment up till 2020. Production should be stepped up to 1.0 million in the second phase. Around 500 jobs should be created from 2017 as the plant starts operating with 400 in the second stage. A further 600 could be created at sub-contractors.
New companies created at pre-crisis rates
Company creation in the Czech Republic is one again proceeding apace. During the first six months of the year just over 12,500 new firms were registered according to consultancy company Bisrode. That is almost 5 percent higher than during the first half of 2013. If the tempo keeps up till the end of the year, then the county will be back at the company creation rate in force before the financial crisis in 2008.
Net4Gas owners warned over financial transactions and high debt
Strained relations between the Ministry of Industry and Trade and the Czech Republic’s main gas pipeline company NetGas have come into the open this week. The ministry has sided with the country’s energy regulator which voiced fears that Net4Gas’s high debts and moves to cut its basic capital to release cash could put the company and gas supplies at risk. The industry ministry has meanwhile sacked its representative on the supervisory board of the gas company for apparently failing to keep it up to speed with developments. Industry minister Jan Mládek has called gas pipeline bosses to a meeting on August 1.
4G high speed Internet poses revenue problems for telecoms giants
The roll out of fourth generation high speed Internet services across the country will cost the trio of big telecoms companies 25 billion crowns over the next three years, according to a survey by the Accenture consultancy. Added to those construction costs, the companies also face finding 8.5 billion in total to pay for government licences. The consultancy warns that telecoms companies will have to rethink their strategy and charges for tv and other services that they will be offer on the high speed links, which are currently only on offer in big cities. It says companies might need up to 10 years to recoup their costs.
Supermarkets face close door demand for holidays
Politicians are seeking again to curb the Czech shopping fever. The Czech upper house of parliament, the Senate, tabled a proposal that would force supermarket chains to at least close their stores on the main state holidays. The proposal, which would still allow corner shops to open, was backed in a first vote this week largely thanks to support from Social Democrat lawmakers. A similar move was made last year but failed when the lower house was dissolved ahead of elections. Czechs are reckoned to have more supermarket space per person than any other European country.