Czech & Slovak Republic manufacturing growing to reclaim industry position
Once among the world's industrial powerhouses, the Czech and Slovak Republics are working to regain their former lofty status among the world's producers with help from foreign investment and a relatively recent focus on energy efficiency.
Between the two world wars, the former Czechoslovakia built up an impressive position among the industrial countries of the world. The groundwork for the region's 20th century advance was laid during the Industrial Revolution, when the vast majority of the manufacturing plants of the multi-national Austro-Hungarian Empire originated in the areas of Bohemia and Moravia. During both world wars, the Bohemian countries were seen as a vital industrial base, first for Austria-Hungary and later for Nazi Germany.
Though the Czechoslovakian manufacturing industries once represented the top of industrial production in terms of the quality and popularity of products, as well as in the modernity of its manufacturing equipment, by the end of 1980s after 40 years behind the Iron Curtain, Czech industrial enterprises lagged far behind the rest of the industrialized world. The most notable problems for the region were in technological development and work productivity.
The past 20 years, however, has been marked by the Czech industries' intense attempt to quickly match the current technology level of the Western European countries, USA, and Japan. These attempts have been equally shared across various manufacturing segments by companies such as Škoda Plzen, Budvar Ceske Budejovice, Trinecke zelezárny, and Vítkovicke strojírny, as well as by green field plants built by foreign investors.
Some of the most notable foreign investments in the Czech and Slovak Republics have come from Japanese and Korean automotive companies—Kia Motors in the Slovakian Zilina, Hyundai in Nošovice, and a joint venture between Toyota and Peugeot in Kolín. Asia-based companies have also played a major role in the recent growth of the electro-technical industry in the Czech and Slovak Republics, as can be seen by the Panasonic plants in Plzen and Zatec, Sony in the Slovakian Nitra, and Foxconn in Pardubice.
The degree of automation of these plants is an important indicator of the maturity of industrial production as a whole. This is especially evident in the automotive industry; even though it has been slowed by the worldwide economic crisis, it remains a great consumer of the latest automation technologies. According to a recent survey in Control Engineering Cesko, automotive manufacturing plants and their subcontractors consume more than 40% of the total sales of industrial robots in the Czech region. Evidence of this can be seen at Škoda Auto Mladá Boleslav (Volkswagen Group), which has automated 60% of its welding shops. This figure reaches up to 90% in its VW-affiliated plants.
Another important factor affecting the Czech and Slovak economy is energy efficiency. From the latest data published by Eurostat (the statistical authority of the EU), both the Czech and Slovak economies are still significantly lagging behind the average of the EU 27. The Czech and Slovak regions are even considered to be lagging when compared to surrounding countries, such as Hungary or Poland. Currently, the consumption of electricity per capita in the Czech Republic is considered to be the highest in Central Europe, even with the unit price for kWh approximately double for both industrial enterprises and residential use, when compared to the price per kWh in the U.S.
As a result, energy management has quickly become the center of interest for the managers of manufacturing plants. The Czech branch of Schneider Electric, with its focus on production and facilities energy efficiency, is serving as an example of where the region's industry as a whole is heading with its energy-saving initiatives.
The CEO of Schneider Electric CZ, Olaf Körner, recently said: “Based on our activities, we can unambiguously state that the efficient use of energy is an important topic for our customers; a topic which is gaining increasing priority in planning measures and investments. The existing economic recession leads to a general limitation of investment and operations costs and this fact includes investments in efficiency and environmentally safe technologies. The critical aspect is the economic return of the invested means; if, in the past, the acceptable limit was five years, today the requested economic return is one to two years. This time horizon affects current decisions on investing in energy saving projects.”
Another automation supplier, National Instruments, has been holding seminars in the area focused on energy savings and green applications; these topics are very popular in the central European region. The biggest players in the region—Siemens, ABB, and Rockwell Automation—have not been standing idly by. They, as well as many domestic companies, such as Papouch, ELVAC, and Elcom, have kept up with the growing interest in energy efficiency and are offering customized solutions for specific customers and applications.
Even though the former Czechoslovakia split into two successor states in 1993, the Czech and Slovakian way to mature industrial production is, in many aspects, similar. For both countries, it represents a challenge to undo the old mistakes and to return to a respected position among the most developed economies of the world.
Milan Katrušák is the editor-in-chief of Control Engineering Cesko. You can contact him at email@example.com .