ENGINEERING

OUTLOOK OF CZECH ENGINEERING

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CZECH BUSINESS AND TRADE

Czech Business and Trade – With a Tradition of 90 Years Economic Magazine is Designed for Foreign Partners, Interested in Cooperation with the Czech Republic Issued by PP AGENCY s.r.o. in cooperation with n Ministry of Industry and Trade of the Czech Republic n Ministry of Foreign Affairs of the Czech Republic n Ministry of Regional Development of the Czech Republic n Confederation of Industry of the Czech Republic n Confederation of Employers‘ and Entrepreneurs‘ Associations of the Czech Republic n Czech Chamber of Commerce n CzechTrade

n INTRODUCTION

Question of the Month for Karel Havlíček, Deputy Prime Minister and Minister of Industry and Trade of the Czech Republic

n ENGINEERING

Outlook of Czech Engineering Vanad 2000 a.s. – Your Vision – Our Machines with a Tradition of 25 Years Boom in the Machine Tool and Forming Machine Sector

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PARTNER OF THE MAGAZINE: ICC Czech Republic EDITORIAL BOARD: Vladimír Bärtl, Jiří Hansl, Marcela Havlová, Jaromír Kohlíček, Dagmar Kuchtová, Martin Lukáš, Karel Machotka, Marie Pavlů, Tomáš Seidl, Miroslav Somol, Jarmila Škvrnová, Martin Tlapa, Jan Wiesner MANAGING EDITOR: Pavla Podskalská EDITOR: Jana Pike

n PR

We Have Great Technologies, and Yet Cannot Do Without Man Science is a Mirror of the Future. CxI Labs Are Working on the Challenges Awaiting Us UNITHERM, s.r.o.

19 34 42

n WE SUCCEED

Amest – Manufacture of Top-quality Custom-made Measurement and Control Systems 20

TRANSLATION: Vlasta Benešová PROOFREADING: Ivana Kadlecová, Pearl Harris, Matthew Booth

n ANALYSIS

Czech Agricultural Engineering Is Getting Increasingly Active in Business Five Million Tonnes of Raw Steel Were Produced in the Czech Republic in 2018

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GRAPHIC DESIGN: Stanislava Podaná COVER PHOTO: Siemens DEADLINE: 6/9/2019

n INDUSTRY

Smart Factories and Artificial Intelligence Represent an Opportunity to Be among the Best in Europe Czech Firms and Industry 4.0

28 31

© PP Agency ADDRESS: Myslíkova 25, 110 00 Praha 1 Czech Republic e-mail: journal@ppagency.cz www.ppagency.cz, www.doingbusiness.cz Press run: 10 000 copies. It is not allowed to reproduce any part of the contents of this journal without prior consent from the Editor.

Attitudes expressed by the authors of articles carried by CBT need not necessarily be consistent with the standpoint of the Publisher.

MK ČR E 6379, ISSN 1211-2208 „Podávání novinových zásilek povoleno Českou poštou, s. p., odštěpný závod Přeprava, č. j. 3468/95, ze dne 24/10/1995“

n LOGISTICS

Current Needs of Logistics – Speed, Precision, and Flexibility

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n PRESENTATION OF FIRMS

4ISP s.r.o.; Amest s.r.o.; APITEA Technologies, s.r.o.; CVP Galvanika s.r.o.; DREAMland, spol. s r.o.; GLENTOR s.r.o.; KF-NOVODUR s.r.o.; KOVOSREAL s.r.o.; LAKUM - KTL, a.s. OMEGA, spol. s r.o.; Technická univerzita v Liberci; TOS VARNSDORF a.s.; UNITHERM, s.r.o.; Vanad 2000 a.s.; Veletrhy Brno, a.s.

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INTRODUCTION

Question of the Month for Karel Havlíček, Deputy Prime Minister and Minister of Industry and Trade of the Czech Republic

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In August 2019, the Ministry of Industry and Trade and the Ministry of Finance presented a package of measures that will facilitate the life of small and medium-size businesses. What is the package about?

It comprises ten measures that will help small businessmen in pursuing their activities. It is my priority to ensure that the authorities share, to the maximum degree possible, data and information they can provide themselves, so that the state administration and the self-governments use primarily their own possibilities without shifting various obligations to the businessmen. In the package, businessmen will find all forms at www.businessinfo.cz, effective dates of laws, information about the possibility of paying returns by a single transfer, fewer statistics, targeted support to family firms, immediate establishment

of a trade, etc. The fulfilment of the measures can be checked online on the clearly arranged and intelligible sites www.zivnostensky-balicek.cz Can you perceive any strong trend or expectation influencing the Czech economy and industry in 2019?

For the rest of this year, we expect the economy to continue its solid growth, with a 2.5-per cent growth rate at the end of the year. Final consumption is likely to stay the decisive source of growth, while the contribution of foreign trade may be somewhat weaker owing to the uncertain situation in global trading.

The worsening performance of the German economy is not as yet reflected in the economic performance of the Czech Republic. Industry and export trade do not show any major fluctuations for the time being. According to the business sentiment indicators in the Czech Republic, confidence in the future development is stagnant or slightly declining. This fact may indicate that the Czech Republic, too, will be affected by the situation in the global market, in our case primarily by the situation in Germany. Another question naturally is the consequences of the withdrawal of the UK from the EU, and whether there will be a hard Brexit. In any case, there is no need to panic. In long-term investment we must be reasonably prudent, but our economy is sound, and looking at the stability of our economy, we are still among the top four in Europe. We must diversify as much as possible and invest increasingly in research, development and innovation, activities that will be creating value added, and increase our independence. This means that our economy should not be built on quantity in the sense of volume, but on quality in the sense of profitability. And this is what we are doing with a view to the future.

Karel Havlíček Deputy Prime Minister and Minister of Industry and Trade of the Czech Republic

Photo: Ministry of Industry and Trade archives; www.shutterstock.com

Your priorities are introducing tools for the innovation strategy, preparing the energy and industry concept and simplifying business support procedures.

Can you give us some details?

The innovation strategy is getting clear outlines. It will become the basis for the new National Economic Strategy, which will be prepared and presented by the end of the year. It will be based on the ground plan of science, research, innovation, and added value. This means that the future industrial and energy prognosis, also including the areas of transport, agriculture and regional development, will have their basis in smart infrastructure, innovations and investment in science and research. We also have a new programme to support innovation and the development of digitalisation and specialisation. After the government approval of the National Communication Strategy The Czech Republic: The Country for the Future, the brand shifted from the technological and innovation level to the economic strategy level. We also have a new programme for economic migration. It concerns the arrival of key specialists and scientific workers and is another important step towards the fulfilment of the Innovation Strategy.

As before, research workers from third

countries will be coming to the Czech Republic under simplified administration rules. The aim of the programme is to create a really agreeable and comfortable environment for experts and talents, PhD students and their family members. The energy mix, to which the Czech Republic is aiming, is specified in the approved 2015 State Energy Concept.

The development of the energy mix in the period until 2030, which also reflects climatic aspects, is outlined in the draft national plan in the section concerning power generation in relation to the climate, which will be finalised by the end of 2019. The Czech Republic is also one step closer to the construction of new nuclear power sources that will bring the country closer to meeting the low-emission power generation targets and raise the energy safety and self-sufficiency of the Czech Republic. In the EIA process, i.e. in the framework of the assessment of environmental impacts, the Ministry of the Environment gave its approval to the Dukovany II project, providing for the construction of a new block or blocks in the Dukovany nuclear power station to start around the year 2030.

CZECH BUSINESS AND TRADE

Outlook of Czech Engineering The Czech Republic is experiencing its historically best period of prosperity, with last year´s 2.9 per cent GDP increase and this and next year´s expectations of half a percentage point less.

Of special importance for the Czech Republic is industrial production, the volume of which last year increased by a solid 3 per cent year on year.

This favourable result, as the statistics show, is due to sectors such as the manufacture of computers, electronic and optical devices and equipment, metal constructions and metalworking products. In the first quarter of this year, for example, year-on-year exports increased by 4.1 per cent and imports by 4.4 per cent, with the balance of trade showing a surplus of nearly CZK 56 billion. Standing behind all these figures is not only a lot of work and honest and hard business, but also significant investment. Last year investment increased by nearly 11 per cent, with money going into both housing construction, a sector experiencing a massive boom, and machinery production.

Engineering is showing unparalleled dominance in Czech industry. It has a number of sub-sectors which supply the domestic and foreign markets with products of sizes from a few millimetres to machines weighing several tonnes, in addition to many components used in transport, the power industry and raw material excavation and mining. Of essential importance is engineering production supplying the entire domestic economic sector, one reason being that it accounts for nearly 60 per cent of total Czech exports. Besides car making, Czech engineering firms are gaining recognition in other countries with deliveries of highly specialised and technologically advanced equipment, especially in the areas of power generation, transport equipment and machinery for agriculture and the food industry. Other sectors whose products have a good reputation in other countries are air conditioning equipment and machinery production.

A special chapter is machine tool production - milling machines, machine drills, lathers, etc. The very good reputation enjoyed by this segment of Czech engineering abroad is mainly due to the long tradition of the renowned TOS trademark. To maintain their

current markets and to gain new ones and new clients, Czech firms are monitoring the specifics of those markets so as to be able to react flexibly to them and be competitive.

This is a challenge facing them especially in today´s globalised and economically complicated world. A step towards maintaining competitiveness is the enlargement of the range of high added value products following the latest technological trends, i.e. processes using digitalisation and automation in production and 3D printing, which in general terms means Industry 4.0.

n A GOOD SEASON, BUT… “The development of the Czech engineering industry will depend primarily on the supply of contracts. Currently this factor is showing a fluctuating trend with a positive development. The further development of the engineering industry, besides contracts, will be affected by the availability of skilled labour. In this respect, I am a great pessimist.

Objectively this is because of demographic development. There are not and there will not be qualified labour sources available at the required level. The “supply” of workers and skilled labour from abroad, as every5 |

body knows, is hindered by political reasons and the position of the trade unions. Even if we started training technically oriented young people at once, they would enter the production process within time frameof 4 to 7 years. And this may prove to be much too late. Maybe the critical situation will be addressed soon by the market, where the weaker will not survive and the stronger will profit from it. And so will the practical application of new technologies within the framework of the Industry 4.0 system,” says Jiří Rosenfeld, Chairman of the Board of Directors, Slovácké strojírny, a.s. “The Czech engineering industry as a sector is experiencing a very good period and, in my opinion, nothing will change about it for some time, even despite the labour shortage or global problems, such as customs barriers,” Milan Šlachta, Managing Director of Bosch Group in the Czech Republic and the Slovak Republic, notes. “This period, however, should be used to raise the efficiency and flexibility of our industry in order to also succeed in future years, which may bring about not only an economic slowdown, but also new competitors. We see a challenge in the digitalisation and automation of production and must adjust to new business models and logistics. This is an opportunity for us to increase the manufacture of higher value-added products in order to maintain our productivity and the quality and competence of the traditional Czech technical know-how and become less sensitive to the labour shortage,” Milan Šlachta pointed out in the framework of a structured survey carried out among companies by the CEEC Research Analytical Company.

What will be the exact figures in this year´s balance of growth in engineering? We will have to wait for that data for a few months, but the estimate is that the growth of this sector will slow down to 1.3 per cent in comparison with last year. This will be a good result as compared with the following year 2020, when a decline in the sector´s performance is expected (-0.4 per cent). The limits, which have been affecting the Czech engineering industry for some time, together with the uncertain development of foreign demand, are being projected into negative expectations by the directors of engineering firms. For 2020 most of them (56 per cent) expect the performance of the Czech engineering | 6

industry to decline by 0.4 per cent on an average. Only two-fifths (39 per cent) of firms predict that Czech engineering will continue to grow also in 2020, according to the CEEC research survey. Moreover, onethird of firms already expect a decline in the performance of the engineering sector this year.

n WHAT LIMITS THE AMOUNT

OF CONTRACTS?

Contracts. A magic word that decides the fate of every firm. In this respect the current situation is by no means dazzling for engineers. Nevertheless the majority of domestic enterprises already have about the same volume of orders contracted as in the past year, for ten months in advance on average.

In this respect, larger companies are at an advantage. Engineering firms on average work at 85 per cent of their capacity. The firms have problems with labour shortage, in a situation where 98 per cent of human resources are utilised. As a result, machinery does not work at full capacity, but only at the level of a mere 81 per cent on average. The capacity utilisation rate of the machinery of small and medium-sized companies is 78 per cent, less than that of large firms (84 per cent). The labour shortage negatively affects the ability of firms to fill their orders on time – currently the delay affects 14 percent of orders – or accept new orders (as a result of the labour shortage firms are losing 20 per cent of new orders on average). No wonder that ever greater emphasis is being placed

Photo: www.shutterstock.com

ENGINEERING

CZECH BUSINESS AND TRADE

Manufacturing Risk Index “Although the Czech Republic is far from being one of the cheapest countries as regards the manufacturing industry, where the evaluation criteria are not just the wages of the local labour force, but also the prices of energy and industrial construction, and administration fees, this country is evaluated as the best manufacturing destination in Europe, especially for its high level of safety and relative political stability in comparison with its neighbours in the East of Europe, and its economic and corporate stability.

The risks for investors are therefore minimal. A great advantage is also the country´s location in the centre of Europe, with strategic access to the main European markets,” says Ferdinand Hlobil, head of the industrial sites rental team, Cushman & Wakefield, for Central and Eastern Europe.

on both short-term solutions (import of labour from other countries) and mediumand long-term solutions (digitalisation of production and improvement of technical education and the creation of closer links to practice). Currently, 97 per cent of companies have problems with labour shortage; the firms lack most skilled workers for their specific production, according to 83 per cent of firms, which are short of some 15 per cent of workers on an average. The shortage of unskilled labour is also 15 per cent. The shortage of technical-economic workers is experienced by 43 per cent of firms. Even more serious is the fact that larger firms (59 per cent) are short of workers with suitable skills for new technologies and manufacturing processes, which they want to introduce

(10 per cent of employees on average). In respect of the outlook for the future, the directors of engineering enterprises are even more sceptical – 74 per cent of them fear they will not have enough skilled workers (programmers, designers, electro-mechanics, etc.) for the successful introduction of the Industry 4.0 system.

n EMPHASIS ON ROBOTISATION The labour shortage may be partly solved by automation and robotisation in production. This system is currently being introduced by nearly 60 per cent of firms and 20 per cent are planning its introduction soon.

Its introduction will affect the structure of working positions – automation and robotisation will reduce labour demand in

general by 13 per cent, and demand for unskilled labour by 17 per cent.

At the same time firms will need skilled workers, who will be able to use new technologies. “A number of experts in industry say that automation and robotisation will help solve the labour shortage in industry. The problem, however, is that these processes are not applicable in all types of production and they do not solve firms´ current problems, especially the pressure they are facing as regards the fulfilment of their commitments in time and good quality. In addition, their efficient introduction depends on the availability of more skilled workers – a category which is already missing on the labour market. Training of own experts costs firms time and money,” Alena Burešová, Director for Industry of CEEC Research, says, adding that at a time when the firms´ profits are declining, greater tax relief allowed by the state could help, especially as regards the broadening of the list of cost eligible items. And finally starting the much discussed “reform” of technical education, already long written down on paper. “One thing is introducing new technologies and being able to work with them – meaning the setting, diagnosing problems, and ensuring expert maintenance. This means higher qualification of 7 |

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CZECH BUSINESS AND TRADE

the personnel, which is a problem already experienced by the labour market, and the fact that the way to the Industry 4.0 system will aggravate this shortage still further,” Pavel Háněl, Managing Director of Autoneum CZ s.r.o., noted. “We are trying to attract foreign workers to these positions and at the same time we are considering to introduce something like internal intra-company education and controlled sharing of experiences and know how. We are also planning the application of modular systems administered by external specialised suppliers that will prevent growing automation from becoming linearly dependent on the need to recruit a larger number of skilled workers,” Pavel Háněl added.

n RESEARCH EXPENDITURE

Photo: BVV archives

Expenditure on research and development accounts for 5 per cent of the firms´ turnover on average. Most investment goes into new construction solutions. In the past, most firms (58 per cent) used the possibility to deduct R & D expenses from the tax base.

“Increasing the added value of production and, if possible, orientation on final products, is being continuously mentioned as Contribution of the Aviation Industry Engineering is often viewed as a sector independent of other branches, which in time have developed into separate industries, such the automotive industry or the aviation industry. A fact is that research and development in all these individual segments is influenced by the ability of firms to seek innovative solutions in the entire engineering sector in the widest sense of the word. While the automotive industry has long been the pillar of the Czech economy, the production and export of Czech jet planes – a sector which can be described as the most “high-tech”, is experiencing a promising recovery. As Giuseppe Giordo, Italian expert in this branch and today´s executive manager of Aero Vodochody says, the bet on production programmes preceded by massive own research and development has become the proponent of a new strategy of this traditional Czech firm. This means development combined with a new generation of own planes, because Aero wants

a necessary condition for raising the competitiveness of the Czech engineering industry. The future success or failure of any company rests in research and development. You may be a mere manufacturer of parts or an assembly factory for a large international company, where you are one-hundred per cent dependent on deliveries for a single customer, or you may be a company setting market trends with your own to continue making the L39 and L159 generation of military aircraft. And it was the opportunity to participate significantly in development that became the main criterion, when they were considering in Vodochody, in which international projects of production cooperation they should continue participating and in which not. “We also considered, whether the project had a direct link with the final manufacturer in the framework of those production programmes,” Giuseppe Giordo points out. Aero has given up its participation in a number of production programmes which it has found less interesting for it as regards their own development, but it continues with the development and manufacture of parts for Bombardier planes or the KC-390 of the Brazilian company Embraer. The firm in Vodochody is of course seeking strong international partners for its own planes.

In the case of the L-39NG aircraft it is the Israeli company IAI, which will supply modern avionics for it and help with its introduction to in foreign markets.

products, independently of any other company. Then you will need intense research and development programmes that will be part of your firm. This is the direction being followed by Česká zbrojovka, a.s., with R & D costs amounting to 5 per cent,” says Ladislav Britaňák, the company´s Managing Director.

Bosch invests about 8 per cent of its total turnover in R & D worldwide. “Sharing in these expenses in the CR is R & D in České Budějovice with more than 600 expert workers. The R & D centre has large testing rooms working on the projects of other development departments of Bosch Group,” Milan Šlachta, representing Bosch Group in the Czech Republic and in Slovakia, and Managing Director of Robert Bosch odbytová, s.r.o. “In our branch (development and production of electric motors), a number of product and technological innovations are currently taking place. We cannot afford neglecting this trend and must invest about 3 per cent of our turnover in research and development. Prevailing are new technologies followed by the building and testing of demonstrators of new electric machine concepts,” says Pavel Rieder, Executive Secretary, Juli Motorenwerk, s.r.o.

n EXPORTS EXPECTING A SLIGHT

DECLINE

This year, the export sales of Czech engineering firms will grow by 3.2 per cent on average, according to CEEC Research. This growth is expected by about four-fifths of the firms (74 per cent), while the remaining one-fifth (20 per cent) are preparing for lower export revenue. In 2020, company direc9 |

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tors expect a moderate slowdown of their export revenue growth, to 2.7 per cent on an average. Large companies are more optimistic than the small and medium ones (growth by 3.1 per cent as against 2.3 per cent). The outlook as regards industrial contracts is opComputer Models and Laboratories Any modern engineering firm wishing to succeed in developed markets cannot do without their own research and development laboratories. An example is the leading Czech manufacturer of water turbines based in Blansko, South Moravia.

The first hydraulic laboratory was manufactured in Blansko in the 1920s on the local river Punkva. In 1927 the engineering works in Blansko became part of the famous Czechoslovak concern Českomoravská Kolben-Daněk (ČKD). Today´s ČKD Blansko Engineering is building on the achievements of their predecessor.

Speaking about the company´s future, the director of its research and development

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cvp@cvp-galvanika.cz

timistic. In the 1st quarter of 2019, their volume increased by 3.1 per cent year on year, with new contracts from other countries rising by 2.1 per cent and domestic orders by 5.6 per cent. Despite the uncertainty about the time and method of Britain´s withdrawal department, Aleš Skoták, says: “Everybody knows that there could be no new projects without development.” Thanks to its engineers, ČKD Blansko Engineering participated in the modernisation of the renowned Dlouhé Stráně pumped storage power station in the Jeseníky Mountains, exported large irrigation pumps to India and participated in the reconstruction of hydroelectric power stations in Austria.

The company´s engineers collaborate with the Slovenian turbine manufacturer Litostroj Power and it is one of the pillars of the ENERGO-PRO multinational group based in Prague. Its tremendous success last year was the signing of large contracts in Austria, in keen competition

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from the EU and the threatening imposition of American tariffs on EU imports of cars and their parts, experts expect Czech industrial production and engineering exports to continue growing. The export of engineering products and automobiles accounts with firms in this German-speaking country. ENERGO-PRO invests large amounts of money in its modernisation. A great success was its massive investment in its hydraulic laboratory. It was already more than fifteen years ago that the company was considering installing exclusively computer models in its laboratories, Aleš Skoták recalls. “Everywhere in the world, however, it has become accepted that new solutions for larger projects require not only experts using top software, but also a follow-up verification of the parameters and behaviour of water machines – on a reduced scale on laboratory models,” Aleš Skoták says speaking of the philosophy of his firm that has led to its success.

CZECH BUSINESS AND TRADE

for more than one-half of all Czech exports.

“We do not expect the structure of products exported by Czech enterprises to change radically in the near future. Czech exports are also linked with the economic development of this country´s trade partners. Unless some major economic fluctuations occur, we expect that the economies of most of our partners will continue to grow slightly, although not so quickly as last year. Currently a great unknown is the potential impact of Brexit and the escalation of the trade wars between the USA and China and the USA and the EU,” says Jaroslav Hanák, President of the Confederation of Industry of the Czech Republic.

Last year Czech engineering firms showed a 3.3 per cent increase in exports year on year, according to the Czech Statistical Office. The largest markets for Czech products are the neighbouring states and also China.

This year, however, experts forecast a slight decline in export activities due to the trade war between the USA and China and to Brexit. Their estimate is a fall of some 5 per cent. Czech engineering exports last year were worth more than CZK 380 billion, a 3.3 per cent increase in comparison with the same period of 2017. Strongly responsible for this result was machine tool and forming machine sector, which attracted most interest of foreign clients. Most of the goods were exported to Germany, China, and Slovakia, followed by Poland, Russia, and the USA, according to the Association of Engineering Technology statistics. Although China is one of the most important Czech export markets, the leading representatives of industrial firms are questioning its further political-economic development.

One of the engineering firms which last year showed a growth in exports was the ZKL

Concern making bearings. Its achievement was all the more valuable as it occurred in spite of the considerable global economic problems, which resulted in the devaluation of currencies in some foreign markets. “This concerned especially the Argentine peso and the Turkish lira, whose value dropped by more than a half. In spite of this we recorded a revenue of CZK 967 million, a 5-per cent increase year on year,” Jiří Prášil, Jr., Executive Director of the Concern, said, adding that the greatest growth was shown by exports to developing countries. “Our opinion is that China will no longer be growing at the rate we have been used to, and the role of global economy leader will be taken over by India.

That is why we are targeting a great deal of our activities there. In the coming years we are also planning to focus our interest on African countries, where we feel great potential,” the ZKL Executive Director added.

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ENGINEERING

Vanad 2000 a.s.

Your Vision – Our Machines with a Tradition of 25 Years

n THERMAL CUTTING SHOWROOM

The company owes its existence to the fact that at the time of its inception, machines manufactured worldwide were structurally complicated and expensive and those manufactured in the Czech territory in the 1990s were conceptually obsolete. That is why Luboš Miřátský and Karel Čajčík designed and assembled a simple lightweight machine. Very soon even large domestic firms start to show interest in them, the success story began.

Today, all three sons of Luboš Miřátský work in Vanad. The two elder sons took over the management of the company and the youngest is a development technician.

Industry 4.0 and the Company´s Prospects “We endeavour to manufacture machines with simple, intuitive control and maximum elimination of human error. The current trend is robotics, full automation of the production lines, and the Industry 4.0 system. Thanks to the open B&R control system we can offer customers a machine for the shape cutting of material with additional functions according to their individual requirements, for example, connection with the racking systems or robots, and the subsequent creation of a fully automated CNC workplace. With the support of a wide range of industrial buses, we can fully meet current requirements in industrial production, with the machine system facilitating the integration of additional devices,” says technical director Ondřej Miřátský.

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In its centre in Golčův Jeníkov, Vanad operates one of the largest thermal cutting showrooms in the Czech Republic.

The firm´s employees are responsible for both the development of the machines designed according to the specific requirements of the clients and their assembly and testing. The company places its emphasis on an individual approach and comprehensive top solutions.

n THE COMPANY´S DEVELOPMENT

IS DRIVEN BY THE CUSTOMER

From the beginning of its existence, the aim of the firm has been to realise the customer´s vision of the equipment for their production programme. This is the task for Vanad Design development studio. Currently the firm has 48 employees and its turnover in 2018 was approximately EUR 5.2 million.

n THE FIRM´S COMPETITIVE

ADVANTAGES

Vanad´s great advantage is having its own development department making possible quick adjustment of the machines according to the customer´s needs. Another advantage is its focus on fast, light machines fitted with linear guides for maximum long-lasting precision of cut shapes. The basis of the control system for all Vanad machines is the same.

If, for example, the customer owns a Vanad oxyfuel or plasma machine and decides to enlarge their production programme with the addition of a fibre laser, they will be able to control the machine much faster. Another advantage for the customer is the combination of laser cutting of both sheet metal and pipes.

Only a few manufacturers offer this possibility.

n VANAD CUSTOMERS ACROSS

THE SECTORS

Vanad customers are firms specialising in custom shape cutting, engineering firms,

Vanad Cooperates with Technical Schools In the framework of cooperation with professional higher learning institutions and secondary schools, Vanad offers pupils´ and students´ training courses, organises excursions for them and events to support research. In 2019, for example, Vanad installed its Vanad Proxima CNC cutting machine using oxyfuel and plasma technology at the Technical University in Prague, in 2018, at the Liberec Technical University it installed a Vanad MIRON cutting machine and a Vanad MIRON Laser at the technical college in Zlín. Vanad machines are also to be found in technical schools in other countries. manufacturers of agricultural machines and automobiles, and steel hall and construction.

n THE FIRM´S EXPORT TARGETS Although the domestic market is still the firm´s most important outlet, Vanad is planning to increase its export to 70 per cent of its total annual turnover by the year 2021.

In foreign countries, Vanad pursues its activities through its sales representatives, who are in charge of the sale and servicing of its machines in the EU, Russia, the United Arab Emirates, Australia, Canada, and Africa.

Top Standard Vanad Machines Vanad BLUESTER designed for plasma and oxyfuel cutting of material up to 400 mm thick, using an automatic 3D plasma head fully robotic, it can be used for bevel cutting, hole drilling and tapping, and tube and shape cutting.

Vanad KOMPAKT Laser, a precision cutting fiber laser machine up to 6kW, which can work both with metallic and non-metallic materials. Suitable for all types of workshops and can also be used for tube and shape cutting.

Vanad PROXIMA is the best-selling Vanad cutting machine for plasma and oxyfuel cutting of material up to 200 mm thick and sections up to 300 mm in height, suitable for discerning clients.

Photo: Vanad 2000 a.s. archives

Vanad is a traditional, purely Czech family firm specialising in the development and manufacture of highly efficient, easily affordable CNC plasma cutting machines of modern design for precision thermal cutting of material.

CZECH BUSINESS AND TRADE

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ENGINEERING

Boom in the Machine Tool and Forming Machine Sector

In 2018, the Czech machine tool and forming machine sector showed a more than 21- per cent increase (in CZK denomination). The production growth was shown by all the nomenclatures except nomenclature 8458, lathes. Consumption in 2018 increased (cumulatively, in CZK denomination) by more than 12 per cent, with the machine tool sector showing a consumption increase of more than 21 per cent year on year and the forming machine sector recording a slight decline.

time the determining factor for the development of other engineering sectors and industry as a whole. Its characteristic features are a high technical standard and a high level of technological advancement.

The essential demands placed on machine tools are precision, productivity, safety, and reliability. In the area of electronics, drives, mechatronics, control and technological SW Czech machine tools are at the absolute top. Practically all Czech manufacturers use the same components for their products as their foreign rivals and their machines can be connected to the Industry 4.0-level communication structures. Although new technologies, such as additive production, are being increasingly applied, machining and forming will long remain the basic technological processes in engineering. In the dimensionally most accurate products machining is so far irreplaceable.

n FUTURE OF THE MACHINE TOOL

n THE MAIN OUTLETS FOR

The machine tool and forming machine sector is the basic pillar of the entire Czech engineering industry and is at the same

The main export territories of the Czech Republic are Germany (31 per cent of the

AND FORMING MACHINE SECTOR

| 14

CZECH EXPORT IN THE SECTOR ARE GERMANY AND CHINA

total volume), China (approx. 11.4 per cent) and Slovakia (6.6 per cent), followed

by Russia, Poland, Italy, and the USA. Export to Germany increased by 18 per cent year on year, and export to China by as much as 50 per cent. Export to the Russian Federation increased by a narrow margin and returned to the approximately CZK 1.1 billion level. In comparison with the period before 2014, however, it is still a mere one-third. After a massive decline in export to China in 2016 and a slight increase in 2017, the year 2018 showed a significant increase. Export to Poland also rose significantly in 2018.

The domestic market is naturally very important for most Czech manufacturers, where they can profit most from their competitive advantage. Czech manufacturers have an approximately twenty-two per cent share of the domestic market. In export trading, Czech manufacturers are at a comparable level with countries like Austria or France. In the framework of CECIMO, the Czech Republic occupies 13th position.

As regards the Czech export commodity structure, first place is held by grinders,

Photo: TOS Kuřim archives

In 2018, the Czech machine tool sector showed a significant improvement in all parameters under review. Production increased by 21.6 per cent and export by 18.6 per cent. The main reason for the growth was the culminating boom in the domestic market and in most of the foreign markets.

As a result, the Czech Republic shifted to 13th position in the world rankings of machine tool and forming machine manufacturers.

CZECH BUSINESS AND TRADE

www.lakum.cz

LAKUM KTL, a.s. is a part of the engineering specialist, LAKUM Group, incorporating companies LAKUM and MASSAG.

We produce transport trucks and cages, we deliver pallets and stackers for the transport of parts in the automotive industry.

We provide comprehensive services in the field of processing of sheet metal, pipes, wires and surface finishes. We can provide you with assistance in the creation of your design, with advisory services in the development, prior to the production phase and ensure serial production. We focus on precision to the smallest detail.

We hold ISO 9001, ISO 14001 and IATF 16949 certificates of quality.

According to your requirements we will process sheet metal, pipes and wires on CNC machines, or mechanical presses from 25 - 400 tonnes. We weld and assemble units. We produce prototypes and use a 3D printer. Surface finishing - we use cataphoresis as well as powder coating processes, galvanic zinc plating of even large parts, including Zinc - Nickel.

Contacts:

sales@lakum.cz

We are seeking companies engaged in serial production, not necessarily in the automotive, electrical engineering, furniture producing, and construction sectors that require co-production of metal components for their products. We believe in long-term relationships that bring value to both businesses.

We are LAKUM Group - Experience. Guarantee.

Confidentiality. Cost saving.

Contact us with your requirements, we will be glad to prepare a tailored offer for you.

+420 558 442 244 15 |

ENGINEERING

The Association of Engineering Technology (SST) is a member of the European Association of the Machine Tool Industry, known by its French acronym CECIMO. It represents about 35 per cent of the world machine tool and forming machine production.

followed by machining centres and milling machines. The main buyer of engineering technology is the automotive industry and its subcontractors, manufacturers of tools and moulds, and the defence, aviation, and power industries.

2018, for example, they attended the CIMT Exhibition in Beijing, the Metalloobrabotka Exhibition in Moscow, and the IMTS fair in Chicago (more on p. 18). Many Czech firms attended the CIMT exhibition in Beijing (more on p. 18). A very important event for all domestic manufacturers is the International Engineering Fair in Brno, which in the even years takes place under the IMT designation, meaning International Machine Tool Exhibition. In 2019, the most important international event will be the EMO fair in Hannover, which is the largest and presumably the most important world machine tool exhibition. Several Czech companies, including SST, will also attend.

n CZECH PARTICIPATION

n STRONG TRENDS

Czech firms participate in practically all important world exhibitions and trade fairs. In

The main trends are the continuing robotisation, automation, digitalisation, and

IN TRADE FAIRS

AND EXPECTATIONS

connectivity, known as Industry 4.0. The importance of new technologies is growing steadily. Ranking first among them is the additive production technology, which signifies a new quality in the production of special parts and complex structures. The development of electromobility and artificial intelligence, too, is expected to strongly influence the machine tool and forming machine sector. Currently, however¸ these trends are negatively affected by the shortage of skilled labour, the same as in all other industrialised countries worldwide.

nINNOVATION IN THE SECTOR,

EDUCATION

The Czech machine tool and forming machine sector owes much of its success to the innovative activity of most manufacturers, like TOS VARNSDORF, KOVOSVIT MAS Machine Tools, TAJMAC – ZPS, TOSHULIN,

Export

2010

2011

2012

2013

2014

2015

2016

2017

2018

125 762

173 785

198 767

175 288

183 463

169 057

168 276

178 721

211412

China

44 596

50 794

37 732

31 348

53 407

70 766

41 628

51 199

78 248

Slovakia

20 037

32 445

30 819

31 690

43 630

44 777

27 311

43 999

45 502

Russia

55 004

76 387

84 166

106 924

104 901

80 772

62 133

37 334

41 719

Poland

18 508

17 982

26 189

24 798

24 187

24 595

17 469

26 579

40 419

Germany

Source: Association of Engineering Technology

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Photo: TOS Kuřim archives

Development of Export to Germany, China, Slovakia, Russia, and Poland (in EUR thous.)

CZECH BUSINESS AND TRADE

Czech Export and Import of Machine Tools and Forming Machines in 2018 in CZK thous.

Export

Import

MT

16 327 815

10 885 811

FM

1 260 910

3 519 732

17 588 725

14 405 543

Total

Source: Association of Engineering Technology

TOS Kuřim FERMAT and others. The basis are the manufacturers´ own construction and development facilities, supported by collaboration with universities, e.g. RCMT, Czech Technical University, Prague, and independent research workplaces, such as VÚTS Liberec and manufacturers and suppliers of electronic and mechatronic components, tools, and robots.

Besides the continuous improvement of the concept of existing machine tools it is gratifying that Czech manufacturers are also keeping pace with new technologies.

For example, in 2017 KOVOSVIT MAS introduced to the market a new series of CNC lathes (KL 285) and TOS Varnsdorf a new series of portal milling centres (WVM 2600 T).

One of the main factors limiting the development of the sector is the shortage of technical school graduates and skilled apprentices. Although the situation is improving, companies are forced to seek their own ways to find skilled workers. A rare example is the recent establishment by TOS Varnsdorf of their own secondary school.

Most companies, however, rely on cooperation with state-run schools and apprentice training centres.

n FUTURE OF THE SECTOR In 2019, a sharp worsening in the performance of the sector is expected in com-

STATISTICS OF THE SECTOR – 2 nd QUARTER 2019 (January – June) Key indicators as compared with 2018: Overall decline in export by more than 12 per cent Nomenclature 8457 – machining centres – decline by 44 per cent Nomenclature 8458 – lathes – increase by 15 per cent Nomenclature 8460 – grinding machines – decline by 19 per cent Nomenclature 8452 – forming machines – increase by 57 per cent Total import showed a moderate decline, by 3.41 per cent, in nearly all nomenclatures. The largest increase was recorded by nomenclature 8463 – other forming machines.

Export to Germany amounted to 33 per cent.

The largest import came once again from Germany, accounting for 37 per cent of the total volume.

parison with 2018. Production and export are expected to decline by approximately 10 per cent. As a Result of the well-known macroeconomic and geopolitical problems arousing investors´ fears, especially in the automotive industry, but also in a number of other sectors, domestic and foreign demand for machine tools is expected to decline. To cope with this situation, the Association is considering to support the marketing activities of its members by subsidising their exhibitions and organising expert training and promotion projects for them.

Oldřich Paclík Director, Association of Engineering Technology www.sst.cz 17 |

ENGINEERING

n CHICAGO ENGINEERING FAIR

CONFIRMS A REVIVAL OF INDUSTRIAL PRODUCTION

In September 2018, Chicago was the city for the 32nd International Manufacturing Technology Show (IMTS 2018), the largest engineering fair in North America. It was attended by more than 125 000 visitors from 117 countries. The firms, which presented their latest technologies at the show, also included representatives of Czech firms and the CzechInvest Agency. The largest exhibitor from the Czech Republic was TOS Varnsdorf.

The Czech Republic was presented there not only as a country with a rich engineering tradition, but also as one with great potential for the future. TOS Varnsdorf is trying to follow up with its export of machinery to the USA in the 1990s. Other companies based in the Czech Republic with a presence in the US market include ZPS Tajmac Zlín, Dorner Pramet and Schneeberger, which had large exhibitions of their products at the fair. Smaller firms, which displayed their products there and which already export their goods to the USA or are considering introducing them to the US market, were Pilana Wood s.r.o. and Trelleborg Bohemia a.s.). The Director of the Association of Engineering Technologies, Mr Oldřich Paclík, who was one of the visitors at the show, summed up the history of the presence of Czech engineering firms in the USA saying: “Aware of the keen competition prevailing in the US market and the expectations of the American customer, who takes it for granted that the servicing of the machine will be carried out in a matter of hours, Czech firms are massively investing not only in having well-supplied warehouses with spare parts in different parts of the country, but also in training service personnel... There are about five or | 18

six Czech companies which are in a position to stand up to the keen competition, able to financially cover the necessary service infrastructure.” A completely different category are smaller companies exporting separate parts for machines completed on the spot.

Source: Ministry of Foreign Affairs

n CHINA INTERNATIONAL

MACHINE TOOL SHOW

CHINA INTERNATIONAL MACHINE TOOL Show (CIMT) is one of the most prestigious fair shows within the sector worldwide, which attracts visitors not only from China, but also from the whole East Asia region. The 30th instalment of this event in 2019 occupying an area of more than 131 000 square metres was attended by more than 1 700 exhibitors from thirty countries. As on the previous occasions, this year, too, the Czech Republic presented itself by an official national pavilion. From among European countries such a presentation was given by just five other states, Germany, Switzerland, Italy, the UK, and Spain.

The design of the Czech display was favourably recognised not only by Czech exhibitors, but also their trade partners and visitors. The firms, which displayed their products there, included ŠKODA MACHINE TOOL, TOSHULIN, FERMAT CZ, TOS Varnsdorf, TOS Olomouc, TOS Kuřim, RETOS Varnsdorf, KSK Precise Motion, a.s, ČKD BLANSKO-OS, a.s., and Pilana Metal.

The most important official guests who visited the Czech exhibition were Wang Liming, Vice President of the largest Chinese trade union organisation for engineering CMTBA, and Ambassador of the Czech Republic to China Mr Vladimír Tomšík. The Czech firms valued their presentation at the fair as very beneficial. “The Chinese market is very important for our firm, and we also want to continue strengthening our position in it in the future.

That is why we took advantage of the offer to participate in the show. Judging by the talks we have already had, and their results,

n METALLOOBRABOTKA 2019 A number of Czech firms attended the 20th Metalloobrabotka fair held in Moscow. It is the most important engineering exhibition in the entire Russian Federation and the Commonwealth of Independent States (CIS). The key areas represented at the exhibition included engineering, metal cutting and forming, casting equipment, robotisation, tools, and measuring and control equipment. In the framework of the Czech Republic´s official participation the event was attended by 16 companies. “For KSK and HESTEGO I can say that participation in the exhibition will be undeniably beneficial for us. Our stand was widely visited, with businessmen showing great interest in our products and services. We had discussions with our existing and potential clients,” said Anton Morozov, area manager of KSK Precise Motion, a.s. “The Metalloobrabotka 2019 was attended by 21 manufacturing firms. On the part of the Russian organisers and partners the umbrella organisation for Czech participation was the Association of Engineering Technology. This year´s Czech participation was organised as an official event under the aegis of the Ministry of Industry and Trade of the Czech Republic, which was very well received by the Russian partners,” Pavel Čáp, representing the Czech Association of Engineering Technology (SST ), said.

Source: Ministry of Industry and Trade

Photo: Ministry of Industry and Trade archives

Important Undertakings in 2018-2019

we can already value the show as successful,” said Antonín Kopřiva, commercial director of KSK Precise Motion. As for TOS Varnsdorf, Mr Petr Bališ, Managing Director of TOS affiliation in Shanghai, said that CIMT 2019 was a great opportunity for all the three participating companies, TOS Varnsdorf, TOS Olomouc, and RETOS Varnsdorf, adding: “We have come to CIMT 2019 mainly to establish contacts with new clients and meet the old ones. In this we have succeeded. TOS Varnsdorf has held several dozen discussions, during which the company has gained 15 new clients. We also managed to push ahead our current negotiations on the purchase of machines. In five cases it is very likely that contracts will be signed in the very near future. The most important negotiations concerned the sale of two WRD machines to a large Chinese firm. For TOS Varnsdorf I can say that the CIMT 2019 show has been very beneficial for us.”

Source: Ministry of Industry and Trade

CZECH BUSINESS AND TRADE

We Have Great Technologies, and Yet Cannot Do Without Man Kovosreal is a successful family firm, which has a good year behind it. Its core programme is sheet metal processing; in the powder paint shop its job is the surface finishing of iron, aluminium, and galvanised objects, while another workshop concerns itself with the construction, manufacture and the follow-up service of shearing, bending and drawing tools and jigs and the manufacture of precision machine parts according to customer requirements. “The fact that today we are being addressed by large firms with enquiries prompted by references is a sign showing that we are doing good work,” says Kamila Hejduková, who leads this forward-looking Czech company together with her brother Jan Kučírek.

Is there any news concerning your company?

The greatest news concerning our company is two big investments we made last year, when we modernised the production area within our company premises. The first was the reconstruction of the old hall into a new production space, including the purchase of a new cutting-out centre, which increased our production capacity. The other great investment was the modernisation of the existing powder paint shop, which has increased its capacity with regard to the sizes

of the painted products and the speed of the production process. Already three months after the modernisation had been completed, we could see an increase in production.

What is now most in the focus of your interest in production?

It is the re-implementation of our company software that will make the planning of our production more efficient; the next step will be the use of bar codes in our warehouse management.

Wherein are you better than your competitors?

Our greatest advantage in comparison with our competitors is prompt reaction to customer requirements. Thanks to direct management, we react immediately to any changes in the orders; we make our decisions without delay. We respect and observe all legal regulations concerning labour safety and the environment. Our firm strictly observes and is continuously improving the quality management and quality improvement systems in accordance with the ČSN EN ISO 9001:2016 and ČSN EN ISO 14001:2016 standards, and the system of health and safety protection at work in accordance with ČSN OHSAS 18001:2008.

What is your greatest value added?

Our greatest value added, in my opinion, rests on interpersonal relationships, both within the firm and in relation to our customers. We are a family firm and deal with our people as if they were family members. Our employees know everything about the products they make and have very good working conditions and an agreeable working environment, which we are further improving. We fulfil all our obligations towards the employees and expect the same from them towards us. The fact that our employees are not leaving the firm is evidence of their satisfaction

with working with us. Similarly, we are also trying to build such a relationship with our customers and are doing our utmost for our trade relations to be really good and based on mutual confidence. We are aware that even brilliant technologies would be useless without man behind the machine. And, most important, in my opinion, is what the man is like, whether a worker or director.

Which are the greatest achievements your firm can be proud of?

That is definitely our success in the 2017 Firm of the Year contest, organised by the Hospodářské noviny daily, where we were placed 2nd in the Ústí Region. This success was all the more valuable to us, as the ceremony at which we were presented with the prize took place on the eve of the 5th anniversary of the death of our father, when, in 2012, my brother and I took over the firm. We remember him with great humility and are to this day drawing on what he taught us.

Which countries do most of your customers come from? Can you mention any references?

Most of our customers are the Czech affiliates of supranational firms. We are among the largest Czech suppliers for the firm of Carrier, manufacturer of cooling equipment, and the Leel Coils firm, leading European manufacturer and supplier of high-quality heat exchangers. For more than 15 years, we have been supplying our products to the German hand tool manufacturer, Festool company. At the moment, our production capacity is full.

Where can you see the future of your firm?

My brother and I are fully agreed that our future rests on long-term bilaterally advantageous trade relations. At the moment, we are starting two very interesting projects and are persuaded that we´ll bring them to a successful conclusion. The fact that today we are being addressed by large firms with enquiries prompted by references is a sign showing that we are doing good work. Our wish is that we and our people may continue on this course.

19 |

WE SUCCEED

Amest – Manufacture of Top-quality Custom-made Measurement and Control Systems Amest is a modern, dynamic firm supplying tracking gauges and control preparations. In addition, it provides industrial enterprises with qualified consulting services in the areas of precision measuring, production control and optimum production technologies. “In the history of Amest, the firm´s excellence has always consisted of development and research resulting in a prototype. The outstanding distinction of our firm is that we have been making our living by selling prototypes for unbelievable 30 years. This is work bearing risks and placing high demands on all the technical processes involved. Excellence always rests on how the machine is designed, i.e. the method by which the specific part, group of parts, or entire product group will be measured. The brains of our firm, in which all employees participate, comprise mechanical construction, HW and SW, the actual assembly of various machine parts and putting them into operation. We are fortunate that all these areas and positions are fully occupied and that, thanks to the professional pride of our employees and their determination to succeed, we have become exceptional,” says the Company Director, Jaroslav Staněk.

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Can you tell us about what is new in your company? What is the main focus of your attention and what is Amest´s long-term vision?

Our current plans are linked not only with the effort to connect automatic measuring with a specific part, but also with the building of equipment that is flexible and meets the highest requirements.

This means flexibility and the satisfaction of the customer, who will appreciate that the changes made in the final product as a result of development do not mean the need to significantly adjust our measuring stations to them. This philosophy was at the base of the development of a new generation of measuring stations for both the automotive industry and the railways, where the outcome is measuring stations for the control of the basic elements of high-speed railways. Today, the measuring stations for wheelset, wheel and axle control are used by leading manufacturers within the sector. In addition, this

equipment is fitted with multidimensional measuring heads for universal use.

In 2018, you won a demanding tender offered by the largest Chinese manufacturer of railway elements (CRRC Sifang) for the supply of four automatic measuring stations and now, after the demanding testing and takeover, you are exporting the stations to the customer. Can you give us any details?

The contract is for the control of wheelsets and axles for high-speed railways. The main advantage for the customer is the high precision control of the parameters, which no rival firm could offer. It is a separate unit fitted into the production lines of a different degree of automation and production seriality, enabling different methods of handling. In this area, it collaborates with colleagues who, using their profound theoretical knowledge, are capable of analysing the measuring procedures so that the final design of the station in terms of

CZECH BUSINESS AND TRADE

good name of the products is overshadowed by inadequate customer care.

You have a number of foreign reference orders. Which projects have been among the most interesting?

All our winning projects are interesting. The main criterion on the part of the customer is usually the product excellence linked with the fulfilment of the customer´s extraordinary requirements. As a rule, these requirements are not fulfilled by the traditional solutions used by large firms. It is probably our ability to dynamically accept a special requirement which determines the customer´s choice of our firm.

tions and to realise demanding methods of communication with the company control systems, while realising the metrological requirements in our stations. That is why we have established close collaboration with specialists in those areas.

What are your specific plans for the development of your company? Which trends can you observe in your line of business?

Let me give you a general answer. One of the quotes by Galileo Galilee – “Measure what can be measured, and make measurable what cannot be measured” – is the

the statistical evaluation of the gauges may achieve the required Cg and Cgk values.

You are an important Czech exporter, exporting a major part of your production. Do you think Czech products enjoy a good name in other countries?

Establishing a good name with foreign customers means not only their satisfaction with the technical design of the key functions, but also the firm´s ability to supply them with all the accompanying services and spare parts, train the personnel and meet customers’ special requirements in the area of visualisation of the results, etc. These are the areas in which the good name of products is created. It is also dependent on the position of Czech exporters in foreign markets. Czech technicians are known for their innovative ideas, whose value, however, is often reduced by a lack of accompanying services. This is a problem which Czech products often experience in foreign markets to this day, so that the

You are also a firm fostering innovation and continuously improving its products.

How do you perceive the current pressure for innovation?

With regard to measurement methodology, we are persuaded that we have chosen the right method. Currently, the innovation pressure can be seen especially in the ability of Asian SW engineers to combine their work with a profound knowledge of their specialisation. This is where we can see a tangible lack of talent, a lack of people willing to work under the demanding condi-

basic philosophy of the developers in our firm. We do not think that long-term concepts in today´s world will be synchronised with the specific requirements of the customer. Therefore, besides the already existing measuring stations having a specific task, we are intensively developing the basic building blocks of the measuring stations, and building and trying to raise both the theoretical and practical standards of knowledge of our people, so that the value added that will ensure our competitiveness in future may stand on good foundations.

21 |

ANALYSIS

There are more than 200 manufacturers of agricultural and forestry machines in the Czech Republic, from large enterprises to medium-sized and very small companies, the latter specialising especially in complementary equipment and components. The A.ZeT Association of Agricultural and Forestry Machinery brings together 43 firms, including all the largest domestic manufacturers and also both Czech agricultural universities and a research institute. The total output of the member firms is worth more than CZK 20 billion (approximately EUR 777 million), which accounts for 80 per cent of overall Czech production. Of the total Czech exports amounting to CZK 18.7 billion (EUR 720 million), the export of A.ZeT members accounts for more than 85 per cent. Agricultural machinery manufacturers employ about 8 000 people in the Czech Republic.

| 22

n THE SALE OF TRACTORS AND

COMBINE HARVESTERS IN THE CR SHOWED A MODERATE GROWTH LAST YEAR

Long-term statistics reveal a moderately stable increase in the sale of universal tractors, in the range of approximately 2 200 machines per year for the past decade. As regards the sale of combine harvesters, the capacity of the market is estimated at some 170 machines, taking into account the condition of the machines in use and the need to renew the machine park. However, the sales of the machinery fluctuate slightly from year to year. In 2018, a more or less average year, firms sold 2 311 tractors and 164 combine harvesters.

At the beginning of 2018, a new EU directive, 167/2013, entered into force, which laid down stricter rules for placing new tractors on the market and their registra-

tion. Manufacturers were prepared for the new situation, but their efforts to sell machines already manufactured in the previous year caused a fluctuation at the turn of the year, which later became stabilised at the usual level. The quality of Czech products is comparable with European standards, one proof of which being the fact that a number of machines and equipment developed and manufactured in Czech factories can be seen in the fields and used in the stables all over Europe, which, for business reason, fly the colours of the Czech manufacturers´ trade partners.

The production potential of the Czech agricultural engineering sector exceeds the absorption capacity of the domestic market. Therefore, one of the main activities of A.ZeT is supporting Czech exports and presenting Czech manufacturers in other countries. Its most important foreign un-

Photo: SMS CZ archives

Czech Agricultural Engineering Is Getting Increasingly Active in Business

CZECH BUSINESS AND TRADE

dertakings are the organisation of the participation of Czech firms in the trade fairs, SIMA in Paris (see p. 26) and AGRITECHNICA in Hannover (the official participation of the Czech Republic is ensured by the Ministry of Industry and Trade – the exhibition will take place in November 2019). Both these exhibitions are the most important ones within the sector in the European and even the world context. So far, these fairs have always been held in the same calendar year, each time in the odd year, and Czech firms have never missed them ever since 1995.

In the past, the Association organised the joint participation of Czech firms in trade fairs in Kiev, Ukraine, Herning in Denmark, in Poland – formerly in Poznan and since last year in Kielce, at the AGROSALON in Moscow, and twice at EXPO AGRO in Argentina.

For the manufacturers of small agricultural mechanisation, an important event is

GaLaBau fair in Nuremberg. Because, starting from the next event, SIMA fair in Paris will switch its organisation from February every odd year to November in even years, we will consult with our member firms and reconsider which fairs and to what extent to support them as from 2020. The quality of Czech products is comparable with European standards. One of the proofs of this fact is that a large number of machines developed and manufactured in the Czech Republic can be seen working in the fields and stables all over Europe, but for business reasons are flying the colours of the Czech manufacturers´ foreign trade partners.

n WHAT ARE THE DESTINATIONS

OF CZECH AGRICULTURAL ENGINEERING EXPORT?

The largest trade partners of the Czech agricultural engineering sector are the neigh-

bouring countries of Germany, Austria, and Slovakia, followed by France and Poland. Here, much depends on the specific items. For example, Zetor is a traditionally successful exporter to Poland, Scandinavia, and the Balkan countries, while individual manufacturers are renewing their ties with their one-time partners in the countries of the former Soviet Union – Russia, Ukraine, the Baltic States and in the new EU member countries – Romania and Bulgaria.

The most important Czech agricultural engineering export items are forage and hay harvesting machines, which comprise all mowers and cutters, including lawn mowers, rakes and tedders, accounting for 40 per cent of total agricultural machinery export, followed by tractors with a share of 22 per cent, and soil preparation and processing machines, with a share approximately the same as that of tractors.

Important exporters of these machines are FARMET in Česká Skalice near Náchod and BEDNAR FMT Praha, followed by OPaLL AGRI Dolní Životice and SMS CZ Rokycany, all manufacturing soil treatment machines, AGRO MZS Křemže making sprayers, and ZDT Nové Veselí, a successful exporter of trailers and semi-trailers. Other export articles are mowing machines, front loaders, manure spreaders, and the full range of small agricultural mechanisation equipment and tools. Other successful export articles are special equipment, such as stump cutters and oleaginous seed processing plants. Well-known stable technology manufacturers are FARMTEC Jistebnice, BAUER TECHNICS Tábor, and AGE České Meziříčí.

n AGRICULTURAL MACHINERY

IMPORT

The main agricultural machinery import items are machines which are not manufactured in the Czech Republic, such as higher power tractors (over 120 kW), combine harvesters, and presses. Regrettably, this category of machines today also includes forage harvesters, which used to be made in the CR in the past, and even exported, but their manufacture has been terminated. The same happened to sugar beet harvesters, where today farmers must rely on import. As regards the sale of tractors on the Czech market over the past five years, first place is shared by the 23 |

ANALYSIS

SALES ON CZECH MARKET – TRACTORS

the TECHAGRO / SILVA REGINA / ANIMAL VETEX/ BIOMASS international trade fair complex in Brno, which has built an excellent international renown for itself, ranking closely after the two most important events within the sector in the European context, the trade fairs SIMA Paris and AGRITECHNICA Hannover. Its initiator in 1994 was the A.ZeT Association, which is one of its co-organisers to this day participating in forming the concept of the fair and its accompanying programme. A.ZeT members traditionally occupy an important part of the exhibition surfaces. For the past few years, TECHAGRO has been the most successful such project organised in the Czech Republic. The fair is held in even years. The next fair will take place from 31st March to 4th April 2020. The interest shown by exhibitors in reserving space at the fair anticipates the expectations that the 2018 record presence of nearly 800 exhibitors from 42 countries, who displayed their products on an area of 88 000 sq. m, and attracted a turnout of 112 000 visitors, will once again be surpassed.

Source: A.ZeT

SALES ON CZECH MARKET – COMBINE HARVESTERS

n THE IMPORTANCE AND

POSITION OF THE SECTOR IN EUROPEAN AND WORLD CONTEXT

Source: A.ZeT

Czech Zetor machine (20 per cent) and foreign-made John Deere (20 per cent), New Holland (17 per cent) and Case IH (11 per cent) tractors. The remaining market share of less than one-third is divided between John Deere (20 per cent) and Massey Ferguson (8 per cent).

n TECHAGRO TRADE FAIR Czech manufacturers and importers cooperate closely with the organisers of two major domestic agricultural machinery exhibitions, Brno Trade Fair, a.s. and České Budějovice Exhibition Grounds, a.s. The strictest benchmarking criteria are met by

FOREIGN TRADE DEVELOPMENT – FORESTRY AND AGRICULTURAL MACHINERY MANUFACTURE (IN CZK MILL.) 20 000

15 000

10 000

n TRENDS AND EXPECTATIONS,

OPPORTUNITIES AND THREATS FACING AGRO-ENGINEERING

5 000 2005

2006

2007

2008

2009

export CZK mil.

Source: MIT CR

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Czech firms are becoming increasingly active in international trade. Practically until 2008, foreign machinery import grew at the same rate as Czech export. In the crisis years at the end of the past decade, foreign trade, like domestic sales, dropped by approximately 30 per cent in comparison with the preceding period. After the crisis had been overcome, foreign trade began to recover, and its growth is continuing. In 2018, trade in agricultural machinery was more than CZK 38.6 billion, with the volume of export (CZK 18.7 billion) and import (CZK 19.9 billion) being at practically the same level. In other words, in financial terms: a comparable volume of what is imported is also exported.

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import CZK mil.

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A relative advantage of Czech agro-engineering is the structure of the country´s manufacturing firms. Most of them are small and medium-sized enterprises, capa-

61 st InternatIonal engIneerIng FaIr CZECH BUSINESS AND TRADE

7 – 11 10 2019 brno cz

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ANALYSIS

ble of flexibly responding to demand, and in a position to prepare machines to meet customers’ needs and wishes precisely.

Agricultural machinery is designed to meet farmers´ demands for higher machine performance and higher quality of working operations. From precision farming, whose beginnings date back to the mid-1990s, agricultural engineering has moved to what we now call smart farming. The sector is using similar terminology as industry, speaking about “Agrotechnics 4.0”, which means not only using ICT in machinery in general and machine and technology networking linked with precise navigational systems in tractors and self-moving machines, but also individual machine and system monitoring and controlling. In all these aspects, Czech manufacturers are competitive in international comparisons.

The Czech economy is small and open and practically dependent on exports. Agriculture is a sector strongly dependent on political decisions both at the national and EU levels. Regular competition is also hindered by supermarket chains, on which farmers are excessively dependent owing SIMA 2019 The SIMA 2019 International Agri-Business Show took place in the Parc des Expositions de Paris-Nord Villepinte exhibition ground from 24th to 28th February. SIMA is one of the most important fairs of its kind in Europe, which is attested by the broad participation of 1 800 exhibitors from 42 countries and the high number of visitors. This year´s turnout was 232 000 people from all over the world. The importance of the event is mainly due to the fact that France is the largest agricultural machinery market in Europe and also Europe´s largest importer of agricultural machines. This year, the show was attended by five Czech firms, which presented a wide-ranging offer of agricultural machinery and components for field farming, special soil cultivation, and livestock production: BEDNAR FMT s.r.o. is a forward-looking manufacturer of agricultural machines for tilling, sowing, fertilising, and mulching. Owing to its close links with practical agriculture, BEDNAR FMT ranks alongside

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to current legislation. A controversial issue dividing EU member states is common agricultural policy (CAP) financing, which distorts free competition by imbalanced and unjust interventions and subsidies and demotivates hundreds of Czech farmers even from the production of meat, cereals, milk, fruit and vegetables, where Czech agriculture is well competitive.

Due to different approaches in the different EU member countries, a question mark hangs over to what extent it will be possible to push through changes that will cut down the amount of money to have to be paid under the CAP rules, raise rural development support and improve the quality of life in the countryside, while reducing production subsidies and restricting regulation within the sector, so as to prevent asymmetric solutions putting certain member states (including the CR) at a disadvantage.

Dušan Benža Secretary General of A.ZeT Association of Agricultural and Forestry Machinery www.zetis.cz the most innovative agricultural machinery manufacturers making high added value machines for final users. The company employs more than 250 people and exports its products to 35 countries in Europe, Asia, Australia, North and South America, and Africa.

SMS CZ Rokycany s.r.o is a Czech dynamically developing company concerned with the construction and manufacture of its own high quality agricultural machines for tilling, soil preparation, rolling, field renovation, and pasture land founding, selling its products worldwide. Its machines and technologies are friendly to the environment. This is especially appreciated in its project of designing and constructing waste incinerating plants and flue gas cleaning equipment.

JK Machinery, s.r.o. boasts a 30-year experience in the development and manufacture of equipment for agriculture and the food industry. Its core line of business is the manufacture of equipment, design and supply of complete technologies for cleaning, sorting, peeling, and grinding of

Examples of Successful Exports: Czech-made Agricultural Machines in Australia and Africa Agricultural machinery is the pride of Czech exports. Czech-made agricultural machines are exported even to faraway destinations, such as Australia and New Zealand. At the end of last year, EGAP, the Czech export insurance company, supported the export of four tilling machines, which the Czech manufacturer BEDNAR FMT in Rychnov nad Kněžnou will supply to its Australian client, the Power Ace Pty. firm. This is a collaborative deal of family firms located in different parts of the world. “Our cooperation started in 2014, and since that time we have delivered to our partners in Australia 100 machines worth an aggregate of EUR 5.6 million. So far, EGAP insurance has covered only the last delivery,” said Lucie Nováková, Financial Director of BEDNAR FMT. In the past, EGAP insured the export of agriculturagricultural products. The firm also designs and manufactures special technologies for flour and peeling mills, flake-making plants, malt houses, breweries and other food processing plants.

OPaLL-AGRI s.r.o. is one of the largest domestic agricultural machinery manufacturers and one of the largest suppliers of wear parts within Europe. Originally an engineering factory, the company has developed into a business-engineering firm with direct links to the agrarian sector, not only in terms of business, but also as regards feedback from farmers, which the firm uses for the adjustment of existing machines and the development of new models.

BOBCAT CZ a.s. is the exclusive and authorised seller of skid steer and wheel loaders, excavators, telescopic manipulators, accessories and spare parts bearing the Bobcat trademark. Its collaboration with the renowned Bobcat machinery manufacturer, who in 2018 celebrated the 60th anniversary of launching production of the world´s first skid gear loader, Bobcat M400, goes long into the past.

CZECH BUSINESS AND TRADE

al machines from Rychnov nad Kněžnou to other countries – Russia, Ukraine, and Serbia – for nearly EUR 10 million. “BEDNAR FMT is one of the medium-sized Czech exporters showing dynamic growth. We especially appreciate the emphasis this firm places on innovation. As a state-run insurance company giving support to exporters in entering new markets, we are seeing a great potential for further cooperation,” said Jan Procházka, Managing Director of EGAP. BEDNAR FMT was founded in 1997 by Ladislav Bednář and his partners. At first, the firm specialised in exporting Czech-made agricultural machines, and later began to manufacture their own machines for tilling, sowing, fertilising, and mulching. Currently they employs 250 people and export their products, including accessories and spare parts, to 35 countries on all continents, except Antarctica. At the end of last year, BEDNAR FMT won a prize from EGAP in the Best Export Transaction category, worth more than CZK 100 million (EUR 4 million) supported by the state. “The markets in Australia, and New Zealand have a special advantage for Czech agricultural machinery manufacturers in that farmers in those territories have their main season at the time when we, in the northern hemisphere, have winter, i.e. the season when orders for new machines are placed, and our production is therefore more even,” Nováková explains, adding that BEDNAR FMT is strongly oriented on development, partly in cooperation with Czech universities. The aim is to ensure that agricultural machinery made in Rychnov nad Kněžnou can contribute to protecting the environment, for example, by helping to retain water in the countryside and by promoting environmentally friendly farming methods.

Another trading company, Knights, for example, last year sent 520 Czech-made mini- tractors to Ghana. The contract worth EUR 10 million (CZK 250 million), signed at Techagro fair in Brno, is part of a broader cooperation programme between Ghana and the Czech Republic. Czech agricultural machinery has already been exported to this West African country before, but this is a record high business deal. “In this first phase of the agreement with the Ghana Ministry of Agriculture, the deal will comprise 220 small compact tractors and 300 mini-tractors,” says Karl Laryea, Head of Knights. Collaboration is expected to continue. Hundreds of tractors for the deal will be made by Šálek

Zetor Tractors – Strong Trademark but Showing a Loss Last year, Zetor Tractors, based in Brno, for the first time after eight years of profit making, suffered a loss. The firm turned out 685 tractors fewer than the year before and, despite its revenue of CZK 2.3 billion, suffered a loss of CZK 149 million. The reason, according to the company´s Executive Director, Marian Lipovský, was the delayed placing of several models in the market in the first half of the year, which resulted in the need to adapt them so as to meet a new EU directive. “In addition, the company had to cope with the long-term decline in the tractor market which has lasted since 2012.

The market conditions worsened especially in the second half of 2018 as a result of extreme droughts, which negatively affected the farmers´ economic situation. This situation had the greatest impacts on our largest markets, in the Czech Republic and Poland, where the entire market fell by 21 and 20 per cent, respectively,” Lipovský added. In spite of this, Zetor will continue developing its core product ranges and will redesign its model series of Proxima, Forterra and Crystal, similarly to having redesigned two models in the Major product range last year.

Although in the past eight years the company was showing a profit, the number of company in Prostějov. “We were looking for a suitable supplier in the market, but larger manufacturers, like Zetor and others, did not even want to hear about any adjustments of existing models. Šálek was sufficiently flexible and wanted to know how it could best meet the requirements of farmers in Ghana,” Laryea says. The tractors are to be used mainly for work in rice fields. For Šálek, this meant an essential contract. In 2016, the firm´s turnover was close on CZK 100 million. “African countries offer manufacturers, mainly agro-exporters, tremendous opportunities, and domestic firms need to be supported in this,” says Jaroslav Výborný, Director of the Czech Export Bank, which is becoming involved in this deal and is currently having talks with Knights firm on financing the export deal. In the past few years, Czech exports to Ghana have been worth some CZK 500 million annually. One of the largest exporters of agricultural products is Wellbeing Natural Products. This Czech-Ghanaian

tractors it sold was on the decline. While still in 2014 Zetor sold 4 178 tractors, in 2017 its sales dropped to 2 786, and so did its revenue. Although Zetor is the strongest trademark in the Czech Republic, 87 per cent of its output is exported. The largest importers, in addition to Slovakia, are Poland, Lithuania, Ireland, Germany, the UK, France, the USA, and Bulgaria. In 2017, Zetor signed a memorandum in Russia on the delivery of 6 000 sets of Forterra tractors by the year 2022. The deliveries are progressing according to the plan. Zetor Tractor, too, has taken part in a number of trade fairs, especially in the largest events held in Slovakia, Ukraine, Lithuania, Poland, Romania, Estonia, Germany, Serbia, Bulgaria and the UK. At the end of March, it presented itself at the Agrosalon in Slovakia, in April Czech-made tractors could be seen at the Ka pasesi 2019 exhibition in Lithuania, at Agromarsz in Poland, Agraria in Romania, Maames in Estonia, and Agra in Germany. In May, it participated in exhibitions and fairs in southern Europe: Agro Pitesti, Agriplanta and Timagralim in Romania, the International Agricultural Fair in Serbia, and Bata Agro in Bulgaria. In June, ZETOR displayed its machines at Agro 2019 in Ukraine, the Royal Highland Show in the UK and Days in the Fields in Slovakia. project focuses on food bioproducts, such as SkyWater packed water. A number of Czech firms are tendering for contracts to build food processing plants, poultry farms, meat processing plants and specialised farms. The modernisation of farms and investment in agriculture are key subjects of the entire Ghanaian economy.

In April 2019, Czech firms presented themselves in the Czech pavilion at the AgriTech Expo agricultural fair in Chisamba, Zambia.

AgriTech Expo is the largest agricultural fair in Zambia, attended by hundreds of local and international exhibitors. This year, the Czech Republic had its own pavilion at the fair for the third time in succession. The firms which displayed their products in the pavilion included Eurobagging, Farmet, the Impulse breeding cooperative, TechnoExport, VVS Verměřovice and Zetor. Other participants were Mendel University and organisers of the development projects in Zambia – Man in Need, Charity Czech Republic, and Njova.

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INDUSTRY

The Research and Innovation Centre on Advanced Industrial Production project (RICAIP) will enter its second phase in September 2019. The complicated-sounding name represents a vision which has a potential to fundamentally change the paradigm of industrial production. The datadriven business model which is at heart of the concept will enable industrial production anywhere around the world.

The advantages of the concept are clear – you can flexibly use the production capacity of machinery that you do not own for production anywhere around the world and that way eliminate expensive and complicated transfers of goods which in return will shorten the necessary production times.

Machinery owners on the other hand can utilise their free capacity more efficiently.

This business model is always beneficial for customers who can obtain their products cheaper and in less time. At the moment this type of production model is being tested and verified but it is already obvious that industrial companies are interested.

“When CIIRC CTU together with its partners – Brno University of Technology (BUT) and the German research institutes DKFI and ZEMA – launched the first preparatory phase of RICAIP in August 2016 with support by the German Chancellor Angela Merkel, they were totally ahead of their time,” says Pavel Burget, Director of Testbed for Industry 4.0 at CIIRC CTU. “It is only now that Europe is beginning to think about projects like these. And it is at the same time as RICAIP was granted European financial support for 6.5 years at the amount of almost EUR 50 million, which is more than CZK one billion,” Burget adds.

The foundation of RICAIP is a geographically distributed network of experimental and testing industrial production facilities joined together into one integrated European industrial testbed. This forms the basis of a completely new research infrastructure for advanced industrial production which has been missing in the EU so far.

n ROBOTS WILL LEARN HOW

TO IMITATE HUMAN MOVEMENT AND UNDERSTAND VERBAL INSTRUCTIONS

While the RICAIP project is changing and setting new standards for the industry as a whole, CIIRC CTU is also working on projects that bring solutions in specific areas only. Karla Štěpánová from the robotics | 28

department is working on a project that will simplify communication with robots and will teach them to perform tasks by imitating human movements or following verbal instructions.

Lately companies are beginning to invest more in robots and automation and not only because of the lack of skilled workers.

Up until now it has not been worth it for productions that put out only small series or require extremely flexible performance to own a robotic facility as reprogramming a robot to a new task is very time consuming and costly and requires a skilled worker to do so.

“However, if robots would be able to learn from people, any worker could give them instructions,” Štěpánová explains the reasons for her project, which has gained support of the Czech Technological Agency in the amount of CZK 2.5 million.

For example it will be possible to tell the robot where to place a box by a hand gesture. At the same time a worker can say the same command aloud and then tell the robot for example to put spare parts in the box or drill a hole.

In the future it might be possible not only to use these robots in industry, but also as assistants for handicapped and elderly people. “They can learn to bring a cup, make a coffee and hand glasses but they can also learn by observation how to vac-

Photo: National Centre for Industry 4.0 archives

Smart Factories and Artificial Intelligence Represent an Opportunity to Be among the Best in Europe

CZECH BUSINESS AND TRADE

uum an apartment,” says Štěpánová adding that before these helpers can enter households they will first of all have to absolutely safe.

n OPPORTUNITY FOR THE CZECH

REPUBLIC IS IN THE AREA OF AI

The development of industry in the way we indicated by the two examples above would not be possible without the development of artificial intelligence (AI). The principals of machine learning and computer perception are applied across different sectors in many ways – from industry and agriculture to state administration, smart cities, healthcare and even education. With its concentration of research facilities and specialists, the Czech Republic has the potential to become the European AI super hub. An ambition which is also part of the government National Artificial Intelligence Strategy (NAIS) paper. The

strategy sets the priorities of the Czech AI based on the results of Czech science with the main issues being cyber security, industrial production, and communication between a man and a machine.

According to data supplied by the AICZECHIA artificial intelligence platform, there are nearly 900 experts, many with interesting scientific results, currently involved in the research of artificial intelligence.

“Research, development, and application of artificial intelligence aimed at humans are absolutely essential for the security and economic development of the Czech Republic and Europe,” says Professor Vladimír Mařík, Scientific Director of CIRC CTU and founder of the platform.

AICZECHIA is an open platform made up by 42 respected representatives of Czech research institutions and teams involved in the area of artificial intelligence who

make it their goal to develop artificial intelligence regardless of the boundaries of scientific disciplines and that way supporting and fulfilling the National Innovation Strategy. “The potential of the Czech Republic for the development of artificial intelligence is immense. Within the framework of AICZECHIA and thanks to the open collaboration of the best Czech teams and workplaces across the various disciplines of artificial intelligence, we are becoming an important player in the EU,” says Professor Václav Snášel, Rector of the Mining University in Ostrava (VŠB) and a member of AICZECHIA Steering Committee.

CIIRC CTU not only concentrates teams that work on basic and applied research, but is also involved in several European AI networks. CIIRC CTU is the only Czech Digital Innovation Hub for Artificial Intelligence and is the seat of the prestigious pan-European initiatives CLAIRE and ELLIS.

WE SUPPLY, REPAIR AND REPURCHASE CONTROL SYSTEMS COMPETITIVE PRICES FOR BOTH NEW AND REFURBISHED PARTS EXPRESS DELIVERY WITH 24/7/365 RELEASE FROM THE WAREHOUSE REPAIRS AND DIAGNOSTICS IN OUR OWN SERVICE CENTRE

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INDUSTRY

n CZECH FIRMS ARE LOOKING

FOR THEIR ADDED VALUE

The most advanced in the area of digitalisation in the Czech Republic are foreign corporations which have adopted digitalisation models from their parent companies. Gradually the society is entering the next phase when even the management of smaller companies is starting to realise the importance of implementing Industry 4.0 to maintain their competitiveness.

Although according to a DEL and BDO survey, one-third of Czech managers still does not recognise or sufficiently understand the term Industry 4.0, the situation is changing. There is also a number of firms | 30

which are highly innovative and creative and bring solutions built on new business models with a high added value. Whether they work with digital twins, virtual and augmented reality or 3D printing, these firms actively participate in the transfer of know-how from the academic to the industrial sphere within the framework of collaborative research or through partnership in the National Centre for Industry 4.0.

n DIGITAL CZECH REPUBLIC AIMS

TO PREPARE FOR WIDER SOCIETAL CHANGES

Industry 4.0 is part of a broader concept of societal changes that are tied to the Internet of things, digitalisation and the development of robotisation and artificial intelligence. Therefore the Czech government has drawn up the Digital Czech Republic strategic paper, which aims to prepare the country for joining the Digital Europe Programme. Digital transformation includes the areas of industry, construction, society, labour, and education. The objective of the strategy is to create a more effective system of direct and indirect support of research, development, and innovation.

It also aims to prepare the economy for digital transformation and the citizens for changes on the labour market and in the area of education. All of these changes will of course require accompanying measures regarding cybernetic safety and legislation. A big part of the transform-

ation for companies is the aspect of financing the digital economy.

n EVEN SCHOOLS RESPOND TO

INDUSTRY 4.0

Schools, too, are beginning to respond to the specific needs of firms by offering classes that cover the area of digital technologies in their curriculum. Unfortunately that is currently happening only on the level of individual schools despite the fact that digital education should be part of the education system from kindergarten level. A bigger change in this area can be expected in the horizon of several years, which means that graduates with digital education skills will be on the labour market a few years later than what the immediate needs of companies are.

Among the first universities to respond to the changing environment was the School of Engineering with the Czech Technical University in Prague, which opened its first Industry 4.0 master’s degree course in the 2016/2017 academic year. Other technical universities such as BUT, VSBTU in Ostrava and Technical University in Liberec offer Industry 4.0 related subjects as part of their accredited programmes.

Alena Nováková National Centre for Industry 4.0 E-mail: alena.novakova@cvut.cz More information at www.ncp40.cz and www.circ.cvut.cz

Photo: National Centre for Industry 4.0 archives

To enable the development of the country´s potential in the AI area, industrial production and to encourage greater competitiveness of companies, it is important to build 5G networks for fast internet.

These networks are already being implemented in Korea and the USA, the Czech Republic is only now preparing frequency tenders and it is estimated that they will be in place in five years’ time.

“Massive acceleration of the Internet is a necessity. It is also necessary to build a large-capacity optical cable network in the Czech Republic because even the 5G network will be overloaded eventually,” says professor Mařík of the technology’s potential but also a possible threat of a loss of competitiveness.

CZECH BUSINESS AND TRADE

Czech Firms and Industry 4.0 Ten per cent of small and medium-sized enterprises (SMEs) have at least one fullyautomated production line.

Twenty-five per cent of firms are planning to robotise their production within five years, but the greatest obstacle to their digitalisation plan is lack of qualified labour. Currently, twenty-two per cent of small and medium-sized firms invest in automation and robotisation.

An important way for Czech firms in the framework of Industry 4.0 automation and robotisation is simplification of the process and greater efficiency, use of production control and optimisation technology, combination of technologies with a smart solution, remote data transmission, etc., according to a survey carried out by IPSOS Agency for the Association of Small and Medium-Sized Enterprises (AMSP ČR).

“Firms are learning unbelievably quickly in the area of Industry 4.0. An important role in this progress is played by both the media and professional events, and new technologies, not to forget their involvement in the supply chains. While only a few years ago the term Business 4.0 was understood rather as a marketing gadget, today anything that is linked with the term 4.0 is taken as a natural entry into the digital era,” says Karel Havlíček, Deputy Prime Minister for Economy and Minister of Industry and Trade.

n INDUSTRY 4.0 NATIONAL

INITIATIVE

“Czech companies have a good idea of what Industry 4.0. really means. But the journey from theory to practice, yielding good output data, is relatively long. In the case of SMEs it is important whether there exists a business model in the firm, with reliable documentation of the processes.

If so, the businessman´s ideas can be very specific,” says Evžen Reitschläger, member of the board of AMSP ČR and guarantor of the project 2019, Year of Digital Business.

Very often industrial firms use the internet of things (IoT), train their employees in digital skills and use the cloud. As regards the introduction of new technologies, larger firms in the SME sector are more in the lead. Firms with a turnover of more than CZK 30 million can afford to invest more, both as regards modern technologies and human resources. This is one of the reasons why they can draw greater

advantage from the new trend and do so sooner than smaller companies. No wonder that IoT, online measuring or education in digital skills are frequently mentioned in connection with the term 4.0.

n TWENTY-TWO PER CENT

OF FIRMS INVEST IN AUTOMATION AND ROBOTISATION

Investing in this area is more typical of firms with a turnover of over CZK 30 million. Automation and robotisation as the most frequent area of investment by Czech SMEs can be observed in enterprises concerned with serial production, such as suppliers for the automotive industry. The owners of smaller firms mostly move within the custom production sector, for which automation is so far uninteresting because of its high rate of return on investment. On the whole, firms invest little, and more than two-thirds of them do not invest at all. At least one-third of firms invest at least CZK 50 001 in train31 |

INDUSTRY

products and services focused on attaining their aims in accordance with the Industry 4.0 initiative. An example is its new welding robotic cell FlexArc(R) TT, bringing the latest knowledge and experience gained during its engagement in the automotive industry into the area of small-series production. Thanks to the most up-to-date digital technologies, such as ABB Ability, it helps its clients to efficiently control their production processes,” says Vítězslav Lukáš, Director of ABB Robotika ČR.

n INADEQUATELY SKILLED

ing their employees in digital skills. Such investment is becoming a great subject.

Businessmen believe that it pays to invest in training their employees, convinced that it will bring them success in the long run. Digital education has become a new necessity not only for Czech enterprises. In general, nearly one-half of small and medium-size enterprises invest in digitalisation, with at least one-quarter of them spending at least CZK 50 001 on it. “An important thing is considering the extent and suitability of digitalisation. We must not forget that automation and digitalisation are not an end in themselves, but a way to succeed in competition on the market, make good use of the company´s assets and raise their value from the point of view of the shareholders. As regards production management, automation and digitalisation can especially help in raising the quality and performance of production.

Investment in automation and digitalisation must therefore be well considered, with respect to the potential benefit it will bring to the specific firm,” says Jiří Pavlík, Senior Manager in the area of Strategy & Operations of Deloitte consulting company.

In industry, business firms have about 10 per cent of their production lines fully automated. Czech enterprises are characteristic of their above-standard abilities to introduce automation in production, | 32

especially those operating in the automotive sector. Surveys reveal that especially smaller firms do not have the capital needed for the full automation of their production lines, or full automation does not make sense for them from the technological or economic points of view.

Twenty-six per cent of firms, especially those with a turnover of more than CZK 30 million, are planning to robotise their production in the next five years. In this respect, Karel Dobeš, Vice-Chairman of the Board of Directors, AMSP CR – Government Commissioner for cooperation with GSA Agency, says: “Owing to the persisting problem in the labour market an ever larger number of Czech businessmen are considering the idea of automation and robotisation. About half of the firms with a turnover of more than CZK 30 million have decided to invest in robotisation so as to be competitive in the global market also in the coming period. A logical conclusion is that a small firm has substantially higher demands on flexible production equipment and related facilities.”

“The company ABB has long been pursuing the idea of supporting and promoting the development of automation and digitalisation in the small and medium size enterprise manufacturing sector. It offers clients from among smaller firms a full range of

Photo: National Centre for Industry 4.0 archives

LABOUR HINDERS PROGRESS

Twenty-six per cent of industrial enterprises view the inadequately skilled labour force as an obstacle to introducing digitalisation in their production. “One of the obstacles to fast track the progress of digitalisation in Czech enterprises is lack of skilled labour. Surveys, however, have shown that human resources are not the essential hindrance. A problem is that businessmen often do not realise the higher price of a skilled and sufficiently qualified worker for this area,” Evžen Reitschläger points out.

Introducing the Industry 4.0 system is a matter of the firms´ long-term strategy.

Transition to highly digitalised production is a matter of gradual transformation and planning. The speed of transformation much depends on the economic situation of the particular firm. For smaller firms even the initial smaller investment in automation and digitalisation can be an important experience in getting a clear idea in what direction the next steps should be made,” says Jan Čejka from the Welding Robotisation Department of ŠKODA AUTO. Many industrial firms (38 per cent) check the suppliers of Industry 4.0 technological solutions on the basis of recommendations from their trade partners. About one-fifth (20 per cent) of businessmen check them on the basis of their personal experience or their visit to the foreign country concerned. One per cent less, i.e. 19 per cent of businessmen, make their decisions on the basis of the suppliers´ web sites or references. In this respect, Czech firms are rather conservative, which, considering the importance of the process, is mostly to the benefit of the successful realisation of the entire business plan.

CZECH BUSINESS AND TRADE

promitea.com With Promitea Procurement Cloud solution, both large and mid-size companies achieve full digital transformation across entire company procurement.

Procurement controls at least 50 % of company‘s total costs, in the automotive industry up to 80 %. Promitea cuts this cost by more than 10 %. Thus, the procurement is ideally suited for the digitalisation of its processes.

In this way, digital transformation of Procurement may double your company profit by 100 % within 1 year without investment in hardware or software, with your current staff and without expensive consulting.

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Promitea enables the digital transformation of procurement for all industries and company size from SME (e.g. a German automotive supplier with sales < 100 M€ / per year) up to international corporations (e.g. a Czech company with > 8 B€ /per year).

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PR

Science is a Mirror of the Future.

CxI Labs Are Working on the Challenges Awaiting Us

example a unique high-efficiency filter made up of special nanofibrous membranes for wastewater treatment, flood and fire protection systems to increase population protection and much more. CxI also presents the latest trends in 3D printing, promising research results focused on the use of nanofibers in medical field, an ongoing work on autonomous driving, as well as the development of special robots and augmented reality.

n AUTONOMOUS UTILITY

ELECTRIC VEHICLE

The Institute for Nanomaterials, Advanced Technologies and Innovation is a research centre of the Technical University of Liberec, which focuses on material research and competitive engineering with 10 scientific workplaces, 190 employees including 25 from abroad, working mainly on applied research. The CxI Institute at the Technical University of Liberec has been operating for ten years and its turnover from contractual research is around EUR 2.6 million per year. The Institute has a number of unique devices whose use for research and cooperation is crucial.

At present CxI cooperates with more than 200 companies from the Czech Republic and abroad, as long-term cooperation with the application sphere is one of the core priorities of the Institute. CxI scientists have developed for the application sphere for | 34

At present, there is no doubt that in addition to the Internet of Things and Robotics, autonomous vehicles are the third most important innovation trend that will change the world of logistics in the coming years.

The world sea of research, professional and business interest has so far focused mainly on applications in the area of transport of

persons and cargo on roads and in closed zones. The multidisciplinary university team led by associate professor Michal Petrů from the CxI went outside of well-mapped areas and focused on the development of autonomous “off-road” resp. autonomous utility electric vehicles. The vehicle on which a team of researchers from Liberec is working within the project “Modular platform for autonomous chassis of specialized electric vehicles for freight and equipment transportation“, reg. č. CZ.02.1.01 /0.0/0.0/16_025/0007293, funded by the Ministry of Education and European funds should perform logistical, transport and special operations in the off-road areas, on construction sites, on unpaved areas and in other demanding conditions. The development of such a vehicle bears several scientific and research challenges, which also determines the individual research intentions of the project. Experts deal with modular ar-

Photo: Technical University of Liberec archives

Autonomous commercial vehicles, nuclear power plants at the end of their lifetime, use of augmented reality in automotive or construction, for most of us these are talk topics about the near future, for scientists from the Institute of Nanomaterials, Advanced Technologies and Innovations - CxI at the Technical University of Liberec these are already their daily bread. They find material, construction, and IT solutions for a world that is still waiting behind the closed door, but is knocking impatiently and emphatically.

CZECH BUSINESS AND TRADE

chitecture of chassis parts using lightweight constructions, drives and accumulators as well as research in the field of control systems of autonomous utility electric vehicles using Augmented Reality (AR) or Internet of Things for cooperation with other subjects.

The project ends in 2022, at which time a functional prototype of a modular autonomous commercial electric vehicle should be developed in Liberec, which will contribute to higher productivity in freight transport, higher level of safety and, last but not least, lower environmental impact.

n SAMPLING ROBOT FOR

PRIMARY CIRCUIT PIPELINES OF DECOMMISSIONED NUCLEAR FACILITIES

A challenge for the not so distant future in many countries of the world will also be the dismantling of old nuclear power plants.

The lifetime of pressurized water-cooled nuclear reactors is about 50 years. Although it can be prolonged at the expense of large investments, it is necessary to prepare for their shut down in advance. For example it is being talked of the Czech nuclear power plant Dukovany shutting down around 2035–2037. Scientists from the CxI in cooperation with ONS Řež, a. s. developed a robot that can take samples from the primary circuit of a nuclear reactor and deliver them for radioactivity analysis. The unique robotic equipment is thus designed to help detect

radioactivity before and after decontamination, which will precede the dismantling of decommissioned nuclear power plants not only in the Czech Republic, but anywhere in the world. A robot designed to move in the pipeline is equipped with two independent telescopic brush probes for sampling. “We have chosen a brush with diamond grains as the sampling probe. It has sufficient hardness and durability to be able to grind the inner surface of the steel pipe even with possible deposits. At the same time, there is no undesirable contamination of the sample with abrasives, because the diamond in its nature is a crystalline carbon. In addition, brushing produces fine dust samples that are ideal for analysis” says František Novotný, Head of the CxI Department of Mechatronic Systems, who is in charge of developing a unique robot.

When the robot returns from a pipeline, a worker in protective clothing can easily

remove the brushes and replace them with new probes. Experts from the CxI and ÚJV Řež worked on its development within the

project Knowledge Base for Decommissioning of Nuclear Power Plants, which is co-financed by the European Union.

n AUGMENTED REALITY CxI is one of the few Czech scientific workplaces that work with Microsoft HoloLens glasses for AR. For one of the car design companies, CxI scientists are developing for example a prototype scene for the preparation of a clay model of the car. The HoloLens designer's field of vision displays a car of which voice and hand movements can change colour and components such as wheels, headlights, rear view mirrors, and so on. Special glasses not only provide a realistic look at the future visage, but also lead to a significant cost reduction in prototype preparation. In addition, this environment can easily be designed to function as a virtual showroom in which

the end customer simply “projects” and selects the components of their car.

All of this can be done in a classic virtual environment, but as Jan Kočí, the Head of Research from the CxI Laboratory of System Integration, points out: “the ability to change viewpoints and browse through visible 3D space gives the whole process dynamism and a great deal of flexibility.“ CXI in cooperation with CTU also investigates a construction, engineering project where AR should be applied in all phases of construction, beginning with the project and integration into BIM tools to the comparison of the projected state with the real one. AR is also planned to be used in the passportization of older buildings and digitization of their actual condition.

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ANALYSIS

Five Million Tonnes of Raw Steel Were Produced in the Czech Republic in 2018

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Metallurgy is one of the key sectors of the Czech manufacturing industry. It is closely linked with the supplier and customer sectors, construction, mining industry services, power industry, and transport. The situation in the steel industry has direct and indirect impacts not only on the Moravia-Silesia region, where this country´s three largest steelworks are located (ArcelorMittal Ostrava, a. s. – newly Liberty Ostrava, Třinecké železárny, a. s., and Vítkovice Steel a. s.), but on the economy as a whole.

According to the Czech Steel Union, in 2018 Czech steelworks produced 5 million tonnes of raw steel, one-tenth more than in 2017.

Traditionally good results were shown by pipe manufacturers, who turned out more than half a million tonnes of them, which is about as much as that of France, a country much larger than the Czech Republic.

Czech exports increased by 6 per cent year on year, to 4.9 million tonnes, and thanks to the industry´s orientation to more sophisticated products, their value rose to a record CZK 108 billion. Regrettably, the volume of imported steel grew even faster, attaining a historical maximum of 7.5 million tonnes.

“The figures show that the CR is managing to increase the value of its export, but also the fact that import into the Czech Republic and

Europe in general is at a record high, as a result of the persisting overcapacity of China and other developing countries,” says Daniel Urban, Director of the Steel Union. The key market for Czech steel is Europe, which accounts for a full 89 per cent of total Czech steel export. The largest importer is Germany with a share of 24 per cent, which is at the same time the main supplier, accounting for 21 per cent of total Czech steel import.

n TRADE In 2018, steel trading was affected by US protectionist measures. On the whole, however, the situation in the steel market last year was unequivocally positive. “There has been a moderate decline in the performance of the automotive industry, which will most probably manifest itself more distinctly only this year. The European markets are influenced by the change of the emission permit trading system to be introduced after 2020. To cope with the expected significant cost increase, we´ll have to change the company´s product portfolio and adjust the orientation of investments so as to offset the negative effects as much as possible,” says Ján Moder, Vice-Chairman of the Supervisory Board of Třinecké železárny steelworks.

Photo: Vítkovice Power Engineering archives

Steel is one of the pillars of European industry, directly employing more than 300 000 people and over 2 million indirectly. It is a sector with above-average value added per employee at the all-European level. In the Czech Republic, the steel industry gives work to nearly 100 000 people, directly and indirectly, and creates value added amounting to nearly CZK 70 billion per year. Regrettably, metallurgy is sometimes seen as a nonecological and obsolete sector, but this is not true. European steelworks are the most modern in the world, releasing the lowest volume of emissions and making products not manufactured anywhere else.

CZECH BUSINESS AND TRADE

China reaffirmed its position as the largest world steel manufacturer, which last year produced 928 million tonnes of steel, i.e.

Steel Union The Steel Union associates all important steelmaking companies in the Czech and Slovak Republics. Its largest members are ArcelorMittal Ostrava, Třinecké železárny steelworks and Vítkovice Steel. The firms associated in the Union employ some 30 000 people.

Raw steel production in the Czech Republic between 2008 and 2018 (in millions of tonnes):

2008

6.39

2009

4.59

2010

5.18

2011

5.87

2012

5.09

2013

5.17

2014

5.36

2015

5.26

2016

5.31

2017

4.55

2018

4.97

Czech raw steel import and export between 2008 and 2018 (in millions of tons)

2008

Import

Export

5.83

4.92

2009

4.00

3.79

2010

5.32

4.53

2011

5.78

4.79

2012

5.96

4.88

2013

5.99

5.00

2014

5.84

4.56

2015

6.26

4.66

2016

6.62

5.02

2017

7.24

4.63

2018

7.52

4.89

more than 50 per cent of global production and 100 million tonnes more than one year before. Steel production in EU countries last year amounted to 168 million tonnes, less than in 2017, but more than American and Russian production taken together (87 and 72 million tonnes, respectively). Last year, Europe imported a record 43 million tonnes of steel, with the imported steel continuing to push out European production. The USA and the EU, which last year in total imported 75 million tonnes of steel products, five times more than China, remain as the largest outlets for foreign steel. In February, in News ArcelorMittal Ostrava a.s. – newly Liberty Ostrava – turns out more than two million tonnes of steel per year. Most of the steel is used in construction and engineering. The steelworks is the largest manufacturer of road barriers and tubes in the Czech Republic. Besides the domestic market, it exports its products to more than 40 countries worldwide.

The firm, located in the Moravia-Silesia Region, has 6 500 employees. Thanks to its above-standard eco-friendly technologies, the company´s production has a minimal impact on the environment. In 2019, the European Commission said that the British company, Liberty Steel, was a suitable buyer of several metallurgical works of ArcelorMittal and permitted a transaction, which also concerned the steelworks in Ostrava. In July 2019, Liberty Steel, which is a part of the GFG Alliance global concern, took over the management of the Ostrava company. After registration in the Companies Register, ArcelorMittal Ostrava changed its name to Liberty Ostrava. This change will also concern all the company´s affiliations within the firm´s premises. “The name of the company has changed, but steel production in the works, dating back nearly 70 years, will continue,” said Ashok Patil, Managing Director of the Ostrava Steelworks.

VÍTKOVICE STEEL is a leading European manufacturer of rolled steel products and the largest manufacturer of steel sheet in the Czech Republic. Its core pro-

retaliation to the imposition of duties by the US, the EU introduced protective measures valid until 30 June 2021. “Czech steelmakers are not enthusiastic about the protective measures. Nevertheless, in a situation where political shortsightedness has brought the world to the edge of a trade war, there is no option but to defend oneself,” explains Jan Czudek, President of the Steel Union. The Steel Union expects European economies to slow down in the next two years. This will have a generally negative effect, not excluding on the Czech Republic and its key neighbours. gramme is the production of thick sheet and shaped sections made in the sheet metal rolling mill, and sheet piles manufactured in the heavy section rolling mill.

The company is the only sheet pile manufacturer in the Czech Republic and one of two manufacturers in the European Union. In thick sheet production, it benefits from its large share of the domestic market, its main outlet. Quality control of the products takes place in the company´s own accredited testing laboratories, which are provided with the most up-todate testing equipment.

In the past 10 years, Třinecké železárny steelworks has been the largest raw steel manufacturer in the Czech Republic. Since its founding in 1939, the works has turned out more than 180 million tonnes of steel.

Despite the complicated situation in the steel market, last year the company made a profit of CZK 3.33 billion after tax. In 2018, Třinecké železárny produced 2.583 million tonnes of raw steel, approximately 2 per cent more than in the preceding year. Its best-selling product, in the long run, is rolled wire, which in 2018 accounted for 41.2 per cent of its total sales and amounted to 979 000 tonnes, 70 per cent of which were exported. The sales of rod and profile steel amounted to 537 000 tonnes, and the sales of rails and railway accessories placed 250 000 tonnes on international and domestic markets. Nearly 70 per cent of the products bearing the three hammers in a circular logo are exported, mainly to Germany, Slovakia, Italy, and Poland.

Source: Steel Union

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LOGISTICS

Current Needs of Logistics – Speed, Precision, and Flexibility

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Standing behind the extensive development of logistics, originally a military discipline, is primarily the global economy of the past fifty years. Transport companies are under growing pressure from clients with a steadily increasing number of orders and requirements. How would you characterise the development of the Czech logistics market? Does the Czech logistics market differ from the rest of the EU? What are its specifics?

The Czech logistics market is continuously developing and responding to the requirements of the national and global economies. At the same time, however, we must admit that until the groundbreaking year of 1989, the former Czechoslovakia was an east-oriented country with a planned socialist economy. Since 1990, this country has been developing on market-economy principles with completely new logistics requirements. The market has been flooded with a wide assortment of goods, which placed completely new demands on logistics service providers.

New distribution centres have been built, from which the goods were supplied to shops on the basis of orders, using the precise time delivery system. Production management changed radically, with the

final product manufacturers subordinating their production strictly to demand. The manufacturers shifted the management of the material flows and the management of physical distribution on to logistics service providers. Logistics centres were built in the vicinity of manufacturing firms, where the deliveries are sorted out on the basis of the Just in Time, Just in Sequence, or Kanban systems. Transport was moved on to the road, which ensured flexibility, where the trucks could meet the clients´ specific logistics requirements, with house to house delivery at a specific time given in advance. At that time, such a service could not be provided by rail. This has changed completely, with railways entering logistics supply chains meeting the transport requirements of clients and the vehicle fleets being adjusted to the needs of logistics. It can be said that today the Czech logistics market differs in no way from the rest of the EU and its standard is very high.

The trend in logistics is towards the use of modern technologies offering unique opportunities. One of them is the Internet of Things (IoT). Analysts estimate that very soon some 14.2 billion facilities will be connected to the Internet of Things

Photo: Accolade archives

The Czech logistics marked is continuously developing and reacting to the requirements of the national and global economy. Which trends influence logistic services in the Czech Republic? “It is definitely the collection and analysis of big data that will analyse a large volume of data from currently unconnected sources in real time, with the aim to optimise processes in logistics, reduce costs, improve control and shorten delivery times. Big data processing is essential for fully automated efficient processes,” says Václav Cempírek, President of the Czech Logistics Association.

CZECH BUSINESS AND TRADE

Network. By the year 2021, this figure will rise to 25 billion, as a result of which the volume of the data collected will increase dramatically. How do you see it?

With the introduction of the Industry 4.0 platform and digitalisation in logistics and transport, we can say that the volume of data will grow excessively. This will place excessive requirements on their administration, which a number of enterprises will not be able to afford. This is where external cloud storage services (online storage, web disks), facilitating data backup and data sharing by different users, with easy access to files from PC, notebook, tablet, phone, etc., are coming into consideration. Reference must also be made of the disadvantages, for example: for efficient use of the cloud, the fastest connection to the internet is necessary without any data transfer limit; another unpleasant thing is that in their contracts some cloud service providers reserve for themselves the right of access to the files saved.

Can you estimate how much money logistics firms invest in modern technologies?

I don´t know the exact figure, but the sums are high indeed. Investment in mod-

ern technologies is also linked with investment it the training of the personnel operating the equipment. The use of new technology with unattended operation, however, is being increasingly used in both production and logistics. The reasons are well known and are linked with the labour shortage. For example 4 per cent of enterprises with more than 10 workers are using RFID technology. Companies whose trading processes are automatically connected with the suppliers´ or customers´ processes account for 12 per cent (EU28 18 per cent) and those using software solutions (CRM) for analysing information about the clients for marketing purposes account for 16 per cent (EU28 21 per cent). Modern technologies are expected to facilitate the internal improvement of processes and product innovation, reduce costs, and increase yields.

You are President of the Czech Logistics Association. Can you mention the tasks the Association has set itself for 2019?

Our main task this year was to organise the Day of Czech Logistics. The history of this event, started in 2015, has become a tradition and a firm part of the European Supply Chain Day organised by the Euro-

pean Logistics Association (ELA) based in Brussels. This year´s subject was “Education and the human potential in logistics”. The event took place at the Prague School of Economics and was addressed by logistics experts of leading manufacturing, logistics, forwarding, and financial companies. It was attended by students of the Prague School of Economics, students of the Přerov School of Logistics o.p.s., Tomáš Baťa University Zlín, the Technical and Economic School České Budějovice, Pardubice University, and the Czech Technical University Prague.

The Czech Logistics Association as an ELA member is authorised to certify workers in logistics. This system has been created by ELA in order to help to raise the standard of EU logistics experts in their activities at the national and EU level. The would-be experts are examined to prove their knowledge in the area of supply chain and logistics system management in the form of tests and essays.

At the EU level, the certification programme is controlled and checked by the European Certification Board for Logistics (ECBL), Each year, we announce the national round of the all-European competition for the European logistics project of the year. Projects which occupied the first three places in the national competition are nominated by the Czech Logistics Association for the European round of the European Gold Medal Competition in Logistics and Supply Chains. The winner in 2018 was the Budějovický Budvar national corporation with its project for the automated control of the distribution warehouse with connection to the production process.

Each year the Association organises for its members excursions to enterprises using high-standard logistics control systems. In September the members, together with members of the Slovak Union of Forwarding and Logistics Service Providers, will inspect the Kia Slovakia auto production plant, The Association also organises round-table conferences for its members on topical issues in the area of logistics, transport and forwarding, e.g. liability for damage in logistics chains or new technologies in logistics.

Where can you see opportunities or threats in the logistics sector?

An opportunity for logistics is the good economic condition of all sectors of the 39 |

LOGISTICS

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dergoing accreditation proceedings for the â&#x20AC;&#x153;Logisticsâ&#x20AC;? programme of study with emphasis on new trends (Industry 4.0, IoT, EDI and digitalisation).

A threat for logistics and transport firms is the persisting shortage of drivers in road transport and engine drivers in railway transport. A great problem is the bad technical condition of the transport infrastructure, transport restrictions, construction closures, and inadequate capacity of the infrastructure. These negative phenomena strongly influence the economy of enterprises causing congestions and delays owing to detours, which, in addition, have a negative effect on the environment.

AÂ problem for haulage companies will be toll collection on first-class roads commencing in the new year, which will make services more expensive and will affect final consumption. The amount of the extra costs involved is not accurate, so that the

estimated profit from toll collection of up to CZK 1.5 billion is doubtful.

Are there any trends you can observe affecting logistics services?

One of them is definitely big data collection and analysis that will ensure the analysis of a large volume of data from presently unconnected sources. This will optimise processes in logistics, decrease costs, improve control, and shorten delivery time. Big data processing is essential for fully automated efficient processes.

Sensors are being increasingly used for the optimisation of free space on the handling means, in the load compartment of the vehicle, the transport unit and warehouse.

In the past few years significant progress has been made in the development of autonomous logistics, which is opening up completely new perspectives as regards technological times and deliv-

Photo: pixabay.com

Czech national economy and the growth of e-commerce, although overall confidence in the economy has slightly declined in comparison with the same period last year.

The onset of digitalisation accelerates the processes in logistics chains, which leads to the shortening of times in final products and services. An important opportunity is the introduction of the Internet of Things technology. For the time being, however, its use in Eastern and Central Europe is only about 28 per cent, but with a growing trend towards digitalisation. Business entities still have a long way to go to ensure smooth and efficient operation. A great opportunity is the possibility of studying logistics at universities, in both full-time and long-distance learning courses. For example, the College of Logistics, the only higher-learning technical institution in the Czech Republic teaching logistics, in close connection with practice, is currently un-

CZECH BUSINESS AND TRADE

ery routes in both internal and external logistics.

Another trend is ecologisation, which manifests itself most in the packing industry using recycled packing materials. Those materials are environmentally friendly and form an important part of logistics. Their use is also important in transport, where it helps to reduce CO2 emissions.

In conclusion I would like to say that the top priority of manufacturers in the long term is higher speed, precision and flexibility in the entire supply chain.

What are your expectations this year?

I expect that companies operating in the area of logistics will this year again meet their target, as indicated by the year-onyear growth of gross domestic product (GDP) (by approx. 0.6 per cent) in comparison with last year. Despite the fears and un-

certainties on the part of enterprises and households, the economy has maintained its growth. From the companies´ point of view the greatest risk is foreign development, where the effect of the withdrawal of the UK from the EU is unclear and the threat of a trade war and the declining performance of the economies of the country´s main trade partners are causing great uncertainties.

How are logistics and transport developing in the other Central and Eastern European countries?

Central and Eastern European (CEE) countries are continuing on course for a massive growth in their GDP (e.g. Hungary by 5.2 per cent, Romania by 5.1 per cent).

A comparison of GDP growth in the EU shows that the first thirteen positions are occupied by countries which joined the EU

after the year 2000. The Czech Republic is closing with a growth rate of 2.8 per cent.

In the past few years the growth of those economies has been linked with higher investment and consumption activity, the growth of investment being connected with and supported by the cycle of European subsidies. The faster economic growth in the later EU members also indicates their convergence to the richer part of the Union. The favourable development of the economies of those countries has a direct effect on the development of logistics, as proved by the construction of modern logistics halls, transport infrastructure, and the introduction of new technologies.

Václav Cempírek Czech Logistics Association www.czech-logistics.eu/ E-mail: vaclav.cempirek@vslg.cz

KF-NOVODUR s.r.o.® w w w.kfnovodur.cz Vyrábíme: galvanické linky pro povrchové pokovování kovů neutralizační stanice nadzemní i podzemí kruhové a obdélníkové nádrže titanové přípravky pro galvanické provozy polotovary z titanu, nerezové oceli, oceli a plastu dodáváme a montujeme technologické celky povrchových úprav a neutralizačních stanic, nádrží a van, přívodní a odsávací vzduchotechniky na všechny naše dodávky poskytujeme záruční i pozáruční servis

KF-NOVODUR s.r.o.

Štěrboholská 1307/44 102 00 Praha 15 Česká republika telefon +420 569 722 488 e-mail: info@kfnovodur.cz

41 |

PR

UNITHERM, s.r.o.

Aluminium alloy castings play an irreplaceable role in industry.

Among other things, they are used to make gear, motor and pump boxes, insulator flanges, pistons, wind turbine components and covers and lids. All these and many more items, which it has been manufacturing for over 25 years, can be found in the portfolio of UNITHERM foundry. The company specialises in small batch production and supplies its products to all branches of industry, except large-scale production for the automotive industry.

There are different types of aluminium casting technologies. UNITHERM uses sand casting (gravitation) and casting into metal moulds (gravitation, tilting, and low-pressure casting). In addition, in view of its location on the limits of a protected landscape area, the foundry exclusively uses technologies and chemicals which are friendly to the environment. In view of the ever stricter environmental restraints, this provides a competitive advantage for the company.

A shining example is its unique sand foundry, built on the basis of its own research and development. While the currently used moulds made of betonite mixtures are quick and simple to use, they do not have such strength properties as moulds made of mixtures emitting toxic fumes after being filled with liquid aluminium (e.g. furan moulds). Therefore, in order to maintain its competitive position, while adhering to its environmentally friendly approach, the company has built

| 42

a new foundry using the sandmould casting system, where geopolymer components are used as bonding agents, which themselves harden the mould. Moreover, all the sand mixture used is completely regenerable, which, besides being economical, also adds to environmentally friendlier processing.

To meet customers´ needs, the company can manufacture larger series of certain parts of their products by die casting.

With its three large low-pressure casting machines, a specially designed tilting casting machine, three gravitation casting machines, and four gravitation casting stands, the company is in a position to fully meet their requirements.

To satisfy its customers to the fullest extent, the company has built its own machining shop furnished with turning, milling, and

drilling machines and a heat treatment line, not to mention all the equipment needed for the checking of all its products – 3D CMM, blast testing machine, spectroanalyser, helium leak measurement machine, and an X-ray machine. For surface finishing by paint or anodisation, the company collaborates with selected suppliers.

The castings production construction process and the shaping of the casting equipment appearance are effected under the 3D SOLIDWORKS programme, supported by the MAGMASOFT(C) programmes used for verifying the correctness of the casting construction and the casting technology, which also predicts potential defects in the casting. This simulation programme has been complemented with a simulation module for geopolmyer sand mixtures, making UNITHERM a universally unique foundry.

UNITHERM, s.r.o.

Vedlejší 25, č. p. 88 | 466 04 Jablonec nad Nisou Czech Republic

Ing. Adam Rokos Chief Commercial Officer arokos@unitherm.cz Mobile: +420 777 792 211 | Phone: +420 488 388 112

Future belongs to aluminium!

www.unitherm.cz

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