December, 17 2007 (Hospodářské noviny) – Minister of Industry and Trade Mr. Martin Říman together with the representatives of Czech companies visited South-East Asia in the second decade of November.
During his one-week trip he visited Indonesia and Vietnam. »Government shall help the companies in such territories where the government support brings competitive advantage to a company. For example Russia or Asian countries belong among such countries. On the other hand, Czech companies are able to help themselves in western Europe countries and USA a government assistance does not have much sense any more,« summed the Minister Říman up the reasons of his visit.
Plenty of opportunities in Indonesia
Czech balance of trade with Indonesia has been passive since 1994 and its negative balance increases. The negative balance increased mainly in 1998 during the Asian financial crisis when the Czech import from Indonesia increased in comparison with the previous year by 25 % and the Czech export decreased by 28 %. Since 1999 the Indonesian economy has been gradually revitalized. Small and middle-sized Czech enterprises also started to be commercially active in Indonesia.
Czech export to Indonesia has been developing relatively very well in the recent years and marks a significant increase. Currently the value of our export has almost doubled in comparison with the best years of the Czech export to Indonesia before the crisis during 1995 and 1996. Even though the export decreased in 2006, figures for the first seven months of 2007 indicate that the trend of growing Czech export continues. The problem remains in the growing negative balance of mutual trade; however, majority of EU countries face the same issue. Major reasons are imports of hardware components for information and communication technologies and transfer of production of textile, haberdashery, shoes and sports equipment from EU countries to Indonesia.
During negotiations with Indonesian government representatives the Minister Říman informed about the Czech companies interest to participate in industrialization of Indonesia by delivering complex industry equipment, transportation systems, capacities for the production of electricity, machinery, equipment for sugar refineries, environment protection equipment, aeronautical engineering and other advanced technologies. Negotiations also concerned the potential supply of the Czech combat aircraft L-159. »Supplies of older model L-29 have already been realized. The combat aircraft L-159 links up to the tradition,« summed Minister Říman up one of the reasons why Indonesia could think about a purchase of the Czech aircrafts. The supplier Aero Vodochody has already applied for the tender announced by the Indonesian government. In case of success it would be the first supply of L-159 to a foreign army. So far, the aircrafts have been used only in the Czech Republic.
»Opportunities for the Czech enterprises could also lie in the Indonesian government plan to construct three coal power stations of a total capacity of 10 megawatt hours. They would use the large coal supplies of Indonesia. We will certainly discuss the topic on the meetings of the Joint Czech-Indonesian Economic Committee the establishment of which we agreed on with the Indonesian government. The first meeting should be held in the next year,« said Minister Říman.
In trade, Vietnam belongs among the priority countries
Business relations between Czechoslovakia and the Socialistic Republic of Vietnam were established in fifties of the last century and continue successfully also after the establishment of independent Czech Republic. Czech Republic includes Vietnam among the priority countries as to the trade and economic co-operation. In the field of trade exchange, a slow pace of the Czech export persists while import of Vietnamese goods has strong dynamics. A potential of the Vietnamese who worked or studied in the Czechoslovakia can still be used for acquiring orders. In 2006 the volume of mutual trade increased by 41 % in comparison with the previous year and reached the value of 157 mil. USD. From the viewpoint of trade revenue, Vietnam was 55th business partner for CR in 2006. The Czech export to Vietnam amounted to 28 mil. USD and import of Vietnamese goods to CR amounted to 129 mil. USD.
An integral part of mutual relations is a co-operation in development. It reaches back to 1996 and since that time, four projects in the value of 126 million CZK were handed over to the Vientamese. Namely it was the assistance in reconstruction and modernization of Haiphong hospital, assistance in railroad transportation, assistance in construction of engineering training centre of machinery and technology for production of high quality shoes and assistance in implementation of technology of ecological biowaste processing into fertilizers.
During negotiation with the Deputy Minister of Industry and Trade Do Huu Hao Minister Říman expressed the interest of the Czech companies in industrialization of Vietnam and supplies of the Czech industrial equipment that can utilize the current unused potential of mutual co-operation, contribute to improvement of currently unbalanced trade balance and increase the volume of trade exchange. In that respect, Martin Říman emphasized the biggest on-going project – power station 6 x 500 MW Tra Vinh. In relation to the preparation of the project the Czech Minister warned about the fact that the agreed Memorandum between ČEZ and the Vietnamese party assumed Czech exclusivity and submission of the ČEB bid by the end of the current year while the feasibility study for the same project would be available not sooner than at the end of January 2008.
According to the information of the Vietnamese Ministry of Planning and Investment Vietnam currently realizes 13 other Czech investment projects in the amount of approximately 50 mil. USD. Further growth of investments will assist in completing the discussion on re-negotiation of bilateral agreement on support and mutual protection of investments. Investment activities help to develop Vietnamese companies in CR, for example the construction company Constrexim. In its building in Ho Chi Minh City the agency CzechTrade opened its foreign office at the presence of the Minister of Industry and Trade Martin Říman. It has already started to work on first orders. Today, CzechTrade actively assists in registration of Vietnamese branches and acquisition of new production plants. In this manner, Czech entrepreneurs have another reliable point of contact in South-East Asia that can help them establish themselves on the territory.
Major Czech export items to Indonesia in 2006
- Organic chemicals
- Telecommunication equipment
- Industrial fittings
- Machinery of textile fibers treatment
- Powdered milk
- Motors and generators
- Equipment for distribution of electricity
- Electrical appliances
- Parts of locomotives
Promising items of the Czech export to Vietnam
- Equipment for the production of electricity
- Equipment of industrial plants
- Technology for environmental protection
- Engineering equipment
- Breweries and minibreweries
- Means of transportation
- Petrochemical engineering
- Refrigerator equipment
- Power engineering equipment
- Medical facilities
- Transportation infrastructure, road as well as air
- Information technologies
- Services - banking and insurance