Czech exporters seek to widen business outside European strongholds

Czech companies notched up record export success in 2017. But building on that performance this year is likely to be a major challenge with companies probably needing to break into new markets.

Photo: Gerd Altmann, Pixabay / CC0 Public DomainPhoto: Gerd Altmann, Pixabay / CC0 Public Domain Czech companies last year boosted their export performance by 5.75 percent to 4.2 trillion crowns. That’s the highest ever figure in the country’s history.

It’s true, the overall trade surplus did shrink a bit last year from 2016 to total 433 billion crowns and, against all expectations given the soaring level of the Czech currency against the euro, the ambition of widening Czech trade relations outside the European Union was not achieved.

Exports to major Czech EU export destinations rose across the board last year with the exception of neighbouring Slovakia. In the case of the biggest trading partner, Germany, that increase came to just over 7 percent. Industry and trade minister Tomáš Hüner:

ʺIn the press conference we were talking about it and 84 percent of all exports are going to European Union countries. Where we have potential, these are non-EU countries in Europe and countries that are located outside Europe. From the first, we can say that the situation is very optimistic. There is also big potential in China and in India. I will have a business trip with our business partners to these countries.ʺ

Last year Czech companies did boost exports to China by around 20 percent. But it’s still the 17th export market overall, trailing the likes of Switzerland, Sweden and Romania, with the overall value of exports at around 56 billion crowns. And that makes a relatively small dent in the overwhelming flood of goods coming in the other direction.

Some of Czech hopes about better balanced trade with China are based on the country developing into a more service consuming economy, where sales of top of the market Czech hotel and leisure services, such as spa treatments, could help to narrow the trade imbalance.

Tomáš Hüner, photo: Tomáš AdamecTomáš Hüner, photo: Tomáš Adamec And the trade and industry minister also highlighted many of the countries of the former Soviet Union, the so-called ʺStansʺ as locations where Czech exporters could still do better. Actually exports last year to Russia bounced back by just over 9 percent and Czech sales in Ukraine soared by almost 29 percent. Exports to Kazakhstan climbed by almost 15 percent.

And then, there’s a whole continent where Czechs still have to make a real impact. Tomáš Hüner again:

ʺAnother location which is also very interesting for us is the continent of Africa. Unfortunately, this is one continent where we have not been improving and apart from Kenya and Ethiopia we have not had so much big success. These are the territories on which we will have to be focussed.ʺ

The Czech Confederation of Industry’s Jaroslav Hanák warned that French and German business rivals are already targeting a lot of their export efforts on countries in norther Africa. And he also urged the minister to quickly get to grips with a series of personnel upheavals at the top of the Czech state run export insurance company and export loans bank, key players in many big export contracts especially in high risk countries. The minister said that task should be achieved within a month.