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Nearly a fifth of Czech firms consider moving abroad

( 15 / July / 2009 )

Nearly a fifth of Czech firms are considering moving their headquarters or production abroad and they usually plan to move to the East mainly due to cheaper labour costs there, according to a poll conducted by the Economic Chamber (HK) among some 800 firms.

At the same time, firms are increasingly more interested in moving to some EU countries, such as Great Britain or the Netherlands as they are motivated by more advantageous tax legislation and a generally more welcoming business environment, HK President Petr Kuzel said.

With regard to the fact that all business sectors are experiencing problems, it is difficult to name specific sectors where the tendency to move is the strongest, Kuzel said.

However, it is now mostly manufacturing companies that are considering shifting production as they have a lack of orders and so they are trying to find other ways of cutting costs, Kuzel added.

Textile, clothing and glass industries are worst hit by the strong crown and cheap competition from Asia. For example, matches producer Solo Sirkarna already transferred production abroad and parts of production of Koh-i-noor Susice, leading Czech pencils producer, were moved to Asia.

"Despite these problems, there are still more companies that are coming to the Czech Republic rather than leaving," Kuzel said.

Source: CTK agency

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