South Korean companies rank among the most important foreign investors in Czechia due to investments by the likes of Hyundai, Hyundai Mobis, Nexen Tire and Doosan Škoda Power, which has most recently engaged in cooperation with the company KHNP on the delivery of two reactors for the Dukovany nuclear power plant. With an average investment of roughly CZK 1.9 billion and the creation of hundreds of jobs per project, South Korean investors greatly surpass the average of those from other countries investing in Czechia. Therefore, their next steps will have a fundamental impact on Czech industry and the country’s employment rate. The Czech side thus values the fact that most of the South Korean companies operating in Czechia are progressively expanding their operations here, which confirms the stability of the Czech business environment and the quality of the local industrial base.

“We want to play in the first league in terms of investments with high value added. The Czech Republic has the ambition to become a manufacturing and technology base for the expansion of leading companies into Europe, and our cooperation with South Korean partners is clear confirmation of that. Projects like Dukovany are opening up space for the involvement of Czech industry, research and innovation in major international projects. At the same time, we are openly addressing barriers, particularly the availability of qualified workers and conditions for the further development of investors. We are proceeding pragmatically with the aim of bolstering our competitiveness and making maximum use of the Czech economy’s potential in accordance with the economic strategy Czechia: Country for the Future 2.0,” said Minister of Industry and Trade Karel Havlíček, who also recalled that, during the difficult time of the COVID pandemic, close cooperation between the state and investors had made it possible to bring key foreign experts to Hyundai and to support the company’s transformation toward electromobility.

“If Czechia wants to retain the favour of existing investors and attract additional Korean investments, it is essential to engage in dialogue with the top representatives of the companies that are already operating here and to actively address their practical needs. The satisfaction of existing investors is a crucial prerequisite for further activities, including potential expansions and new projects,” said Jan Michal, CEO of CzechInvest.

Companies are transitioning to new production programmes, particularly in the area of electromobility, and preparing further expansions, which are also associated with new demands placed on the country’s infrastructure, power grid and regulatory environment. In particular, investors’ representatives emphasised the need for faster permitting processes, stable energy supply and competitive energy prices, as well as the development of transport infrastructure. In an age of highly automated manufacturing, these are factors that directly impact return on investment.

Hyundai has mentioned transport infrastructure as one of the prerequisites for its further development in Czechia. A critical factor for the company is the direct connection between its plant in Nošovice and the D48 motorway. According to Minister Karel Havlíček, such connection should be completed in 2030. Nexen Tire drew attention to power outages and lengthy permitting processes, which are hindering its investment plans and complicating the implementation of the third and fourth phases of its factory-expansion project.

Another repeatedly raised issue was the availability of qualified workers and the necessity of expediting visa procedures for highly skilled employees. The Czech side emphasised its readiness to further simplify those processes and to play an active role in resolving specific cases. KHNP and Doosan Škoda Power brought up the need to secure a sufficient number of highly skilled and other qualified workers. The Ministry of Industry and Trade pledged that this issue will be addressed by means of a special programme in relation to the completion of the Dukovany nuclear power plant.

Czech companies are expected to gain new opportunities

Another important point of discussion was the greater integration of Czech companies into the supply chains of South Korean investors. Though part of production relies on local suppliers, companies with foreign capital still account for a significant share. This represents unused potential for Czech industry. Therefore, CzechInvest offered South Korean investors a more systematic means of support in seeking out Czech suppliers and partners in the area of research and development. The establishment of connections with universities, research institutes and technology startups should be one of the tools for increasing the value added of investments.

“The Czech Republic has a strong industrial base, but if we want to succeed in the next phase of competition for investments, we must offer more to investors. Therefore, we are actively working on connecting them with the Czech innovation environment and supplier sector,” said Petr Kotrs, head of CzechInvest’s Foreign Operations Department, following the meeting. The existing model of cooperation – based heavily on production – is gradually winding down. Despite the fact that 90% of South Korean investments in Czechia involve production activities, further growth will depend on a shift toward research, development and innovation.
At the conclusion of their talks, both sides agreed on the necessity of continuing to hold regular dialogues. The meeting clearly confirmed that the economic relations between Czechia and South Korea remain strong and that further development will depend on the state having a flexible approach, the quality of infrastructure and the ability to offer investors an environment that fosters innovation.

Contact for media
Zdeněk Vesecký
PR manager and spokesman
+420 724 591 667
zdenek.vesecky@czechinvest.gov.cz