Business briefs

Czech Republic records highest ever budget surplus; Czech farmers opposed to selling their land to make way for Hyundai car plant; Czech Airlines lost 464 million crowns in first half of 2005; Norway's Telenor to exit the Czech and Slovak markets; OMV purchase of Aral filling stations confirmed; Half of Czech corporate R&D financed by foreign companies-UNCTAD; Imports of foreign wine up 28 pct y/y - local industry in 'crisis'

Czech Republic records highest ever budget surplus

The Czech Republic has recorded the highest budget surplus in its modern history. The Finance Ministry reported a budget surplus of 25.8 billion crowns ( over 1 billion US dollars) in the first nine months of this year, the best result since the country's independence in 1993. Finance Minister Bohuslav Sobotka said the performance was a result of the government's careful spending and increased tax receipts, notably because of a crackdown on the "grey" economy.

The trade account posted a. 1.9 billion crown deficit in August, for the first deficit of 2005. The figure reflects the import of Swedish-made fighter jets worth 5.9 billion crowns - and the rising price of oil and natural gas. Without the import of the Gripen fighter jets, there would have been a surplus of 4 billion crowns for the month of August.

Czech farmers opposed to selling their land to make way for Hyundai car plant

Czech farmers at the proposed site for a new one-billion euro car manufacturing plant outside the city of Ostrava have reacted with anger to suggestions they may be forced to sell their land. The South Korean carmaker announced last week it would build a new plant in the Czech Republic, with Ostrava its top candidate site. Owners of farm land at the proposed site have said they do not wish to sell but are open to a land swap, and criticised Prime Minister Jiri Paroubek for suggesting the state could force them to accept a deal. The conflict mirrors an obstacle that the Hyundai affiliate Kia Motor faced when in 2002 it tried to buy land for its first European factory, in Slovakia.

Czech Airlines lost 464 million crowns in first half of 2005

Prague Ruzyne Airport

The national carrier Czech Airlines (CSA) sustained a loss of 464 million crowns in the first half of this year, not the planned profit of 177 million crowns. The results were based on documents discussed by the carrier's supervisory board and leaked to the media. The Czech Airlines board has not published the results. CEO Jaroslav Tvrdik acknowledged the loss and blamed jumps in the price of fuel.

Norway's Telenor to exit the Czech and Slovak markets

The Norwegian telecommunications company Telenor has said it is ready to exit the Czech and Slovak telecoms markets and has already started talks to with interested parties for its Nextra and Telenor units in the two countries. Nextra offers Internet access and communications services, and Telenor provides DSL services. All companies are to be sold at once. Reported to be among the interested parties is the British giant Vodafone, which bought the Czech mobile operator Oskar this spring.

OMV purchase of Aral filling stations confirmed

OMV has confirmed that it bought 69 Aral filling stations from BP. The Austrian company did not say how much it had paid for the Aral stations, but sector analysts put the figure at 3 to 4 billion crowns. After the takeover, subject to approval by the anti-monopoly office, OMV will become the largest fuel retailer on the Czech market in terms of sales.

Half of corporate R&D financed by foreign companies

Nearly half of all corporate research and development in the Czech Republic is financed by foreign-owned companies, the United Nations Conference on Trade and Development said in its latest World Investment Report. In this respect, the UNCTAD report places the Czech Republic in fifth place behind Ireland, Hungary, Singapore and Brazil, according to the government agency CzechInvest.

Imports of foreign wine up 28 pct y/y - local industry in 'crisis'

Imports of foreign wine are up year on year by 28 percent, according to the Czech Winemakers' Union, and sales of domestic wine are suffering. Since joining the European Union in May 2004 there has been an influx of cheap table wine, much of it sold at retail chains. The Union said the local industry is in crisis.