ENERGY & ENGINEERING 2021 by PP AGENCY

AMBITIOUS PLANS TO ENLARGE RENEWABLE ENERGY SOURCES BIG CHALLENGES IN ENERGY SECTOR RESEARCH REVIVAL OF DEMAND IN EUROPE, BUT WITH PROSPECTS UNCERTAIN CHANGES IN CZECH MECHANICAL ENGINEERING ON THE DOORSTEP 1 2021

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

PARTNER OF THE MAGAZINE: National Committee of the International Chamber of Commerce in CR

n INTRODUCTION

Question of the Month for Dagmar Kuchtová, General Director, Confederation of Industry of the Czech Republic

n ENGINEERING

Changes in Czech Mechanical Engineering on the Doorstep MANAGING EDITOR: Pavla Podskalská

n WE SUCCEED

Effective Wastewater Treatment Plants Under The Baton Of Abess Unique Technology of Slag Processing EDITOR: Jana Pike

n ANALYSIS

Machine Tools: Expectations – Increase in Demand and Supply Optimism in Agricultural Engineering Sector PROOFREADING: Ivana Kadlecová, Pearl Harris, Matthew Booth

n CZECH TOP

Unique Surfboards Conquering the World World Player in Electric Heating Systems Market GRAPHIC DESIGN: Stanislava Podaná

n INDUSTRY

Czech Railway Industry Exports Over Half of Its Production COVER PHOTO: Siemens archives

DEADLINE: 25. 6. 2021 © PP Agency

n ENERGY

Year 2021 Could be Groundbreaking for Czech Energy Sector Ambitious Plans to Enlarge Renewable Energy Sources in the CR Big Challenges in Energy Sector Research

n PR ADDRESS: Myslíkova 25, 110 00 Praha 1 Czech Republic e-mail: journal@ppagency.cz www.ppagency.cz, www.doingbusiness.cz

EGEM – Builder of the Largest Battery Storage Facility in Europe

n STEEL INDUSTRY

Revival of Demand in Europe, but with Prospects Uncertain

n INTERVIEW 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“

12 50

n RESEARCH Autonomous Electric Vehicle Indicates Direction in Logistics and Transportation 4.0

TRANSLATION: Vlasta Benešová, Lenka Lebedová

Arbitration in the Czech Republic at Top Professional Level

16 22

26 44

30 38 41

n PRESENTATION OF FIRMS

3D TECH spol. s r.o.; ABESS, s.r.o.; ARGO-HYTOS s.r.o.; DestroKladno s.r.o.; EGEM s.r.o.; FENIX Trading, s. r. o.; GEOtest, a.s.; ICC Czech Republic; ILV s.r.o.; KOVOSREAL s.r.o.; KPDH strojírna s.r.o.; MSR Engines s.r.o.; SALTEK s.r.o.; STAKO Červený Kostelec s.r.o.; Stream - Clean Water s.r.o. (ABESS s.r.o.); TECHNICKÁ UNIVERZITA v LIBERCI; TOS VARNSDORF, a.s.; TRIMOS, s. r. o.; TVK ENERGO s. r. o.; UNITHERM, s.r.o.; Veletrhy Brno, a.s. The publisher is not responsible for the content of paid presentations

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INTRODUCTION

Question of the Month for Dagmar Kuchtová, General Director, Confederation of Industry of the Czech Republic be crucial to be able to define the energy mix on its own. It is necessary to identify the specifics and the real potential of the Czech Republic and to take necessary decisions and measures in time, to provide the Czech Republic with enough sources, at the prices that will not have an adverse impact on businesses and households.

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chase new manufacturing technologies, to modernise or to extend their manufacturing plants and to invest in research and development. The topical issues of our magazine concern the mechanical engineering and the power sector. What are the ambitions in these sectors in the Czech Republic? Also these sectors have to face two fundamental challenges of today, the digital transformation and the green transformation. Businesses convinced themselves during the pandemic that digital investments help them handle impacts of unexpected crises. Digital investments make it feasible not only for a machinery manufacturer to provide maintenance at a distance worldwide. Moreover, businesses realise that their investments in elements of Industry 4.0 bring them a competitive edge. Together with research and innovations, the businesses want to strengthen their positions on foreign markets and penetrate new ones. The power sector is undergoing an essential metamorphosis and expects new challenges especially in the green transformation. The EU is heading for climatic neutrality, with its deadline by 2050. A series of European energy and climatic targets for the year 2030 are going to be reviewed. Prices of gas emission allowances are increasing significantly now. A lot of businesses have already set out on the journey towards climatic neutrality. For the Czech Republic, it will

What innovations are being prepared by the Confederation of Industry of the Czech Republic for the future? We hope in the first place that the health situation will improve and we will be able again to roll out the support to our exporters and to organise trade missions, accompanying top representatives of the state on foreign trips. At the moment, we are preparing ourselves for the Czech presidency of the EU, which is going to be assumed by the Czech Republic in the second half of 2022. It is a great opportunity not only to present the Czech Republic as a developed country, but mainly to highlight our priorities. Just business activities are subject to a number of European regulations, which we comment on regularly. The EU presidency will be an opportunity for us how to be seen and heard more.

Photo: Confederation of Industry of the Czech Republic archives

Czech businesses´ fears for the future are fading. Since the beginning of 2021, the proportion of the businesses expecting earnings higher than in 2020 has been growing. Businesses are acquiring more contracts and what is also helping them are measures for optimising operations which they already implemented last year. How do you assess the situation? Our latest opinion poll collecting information about the views or beliefs of the group of 150 businesses has confirmed that since the deepest slump, businesses are becoming more and more optimistic. For example, a growth of earnings, compared with the crisis year of 2020, is foreseen by 45 per cent of businesses now. In January, higher earnings were forecast by a third of businesses only. A more positive mood of the businesses is reflected also in the expected development of the amount of contracts. Higher volumes of contracts in the second half of this year, compared with the same period of 2020, are expected by 65 per cent of businesses. The economy, influenced by the positive development of the health situation, is reviving. Unfortunately, a more significant revival is being hindered for example by the lack of workforce or delayed deliveries and a sharp growth of prices of some inputs. The economic growth will be enhanced, step by step, by capital investments, too. Our Mayopinion poll indicates that in most cases businesses are going to pur-

Will you mention some successful projects of Czech businesses in relation to abroad? The Czech Republic has an open, strongly export-oriented economy. Before the pandemic, we broke records and exported goods and services for more than a trillion Czech crowns, there are lots of successful projects of Czech businesses abroad. Successful exporters include, among others, Czech car manufacturers, the pandemic accelerated the success of the Linet Company, companies engaged in mechanical engineering sector are also worthy of acknowledgement. For example, TOS Varnsdorf learned a remote method of installation and repair of machines during the closed borders. The success of our June´s business mission to Indonesia has proven that Czech businesses are sought-after in the world, as they can offer high-quality products and services at reasonable prices.

CZECH BUSINESS AND TRADE

Changes in Czech Mechanical Engineering on the Doorstep

Photo: Škoda Pars archives

Czech mechanical engineering is experiencing an apparently unprecedented period – the record-breaking year 2018 was followed by a standstill in 2019 and a deep slump in 2020, with uncertain outlooks for the year 2021. Nevertheless, this sector has a future in our country!

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 markets and new clients, Czech firms are monitoring the specifics of those markets so as to be able to react flexibly to them and to 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. The more than 5 000 firms in the Czech Republic engaged in the engineering industry employ over 130 000 people. The Czech Republic also has a high potential among the EU member states as regards the automation of production processes (up to 40 % of all processes

can be automated), which explains the high demand for automation equipment and the integration of robots in manufacturing processes. Global players such as Siemens, ABB, and Robert Bosch, which actively invest in equipment in the Czech Republic and participate in supporting science and research, are aware of the stability of the Czech

them are working on long-term projects and consequently are not excessively dependent on current demand, unlike other sectors of industry.

Republic´s economic environment, the high technological standards of its production, top research and development programmes and the close links between Czech engineering and other sectors of industry. In spite of this, a cooling down in production can be noticed in some engineering branches (not only because of the coronavirus epidemic), although power engineering is still doing well for the time being. The firms´ great advantage is that most of

ping up. For instance, Pars has become Škoda Pars. The traditional Czech company holding a significant position on the domestic market in manufacturing, modernisation, and repairs of wheeled vehicles, has been renamed to declare its relationship to Škoda Transportation. Under the wings of the parent brand of Škoda, the Šumperk-based company is undergoing a period of large investments. Currently, Škoda Pars is investing hundreds of millions of crowns in its manu-

n BET ON INVESTMENTS Although the present situation in Czech mechanical engineering is uncertain, there are also positive examples crop-

5 |

ENGINEERING

n NUCLEAR ENGINEERING

IS DOING WELL

Nuclear engineering is also doing well. For example, Plzeň Škoda JS, formerly Škoda Jaderné strojírenství, generated earnings before taxes amounting to more than CZK 122 million, with revenues totalling more than CZK 3.3 billion. Last year, the undertaking, which had been forced to become more export-oriented due to a lack of domestic opportunities, exported equipment and services for the total amount of CZK 1.5 billion, which accounts for 46 % of revenues, mostly to Slovakia, Ukraine, and Hungary, as well as to the UK. Škoda JS offers engineering, manufacturing, and servicing which, besides the stability of revenues, make it possible to provide services at all stages of the operating cycle of power plants. The main project means work on the third and fourth block of the Slovakian nuclear power plant of Mochovce. To complete the fourth block, this work will take at least two more years. Last year, the company started manufacturing the internal parts of the pressure vessel of the reactors for two blocks of EPR 1600 MW for the British Hinkley Point C power plant, the main contractor for which is the French group of EdF. The contract, worth hundreds of millions of crowns, has been concluded for the period until 2022. The French are planning to supply the pressure vessel, whereas the essential components of the internal in-built structure of the reactor, which are parts weighing tens of tonnes, will be manufactured in Pilsen. The company designed and manufactured a tightening unit last year for Loviisa, the Finnish power plant. | 6

n CRISIS AS AN OPPORTUNITY For some companies engaged in mechanical engineering, the pandemic became a new opportunity. For example, Protector Gate Company started manufacturing special disinfection gates to prevent contamination of interior spaces by the virus. The first prototype named “Protector Gate” was created in 2020 and was installed in the Czech Institute of Informatics, Robotics and Cybernetics of the Czech Technical University, where the necessary load testing was also carried out. The task of the disinfection gates, intended for entrances to the buildings of hospitals, public offices, schools, banks, and shopping centres, is to protect already disinfected interior spaces from outside contamination. They measure temperature in a touch-free manner and, in three steps, disinfect every person entering, by using a nanonebula which does not damage any type of clothing. The gate disinfects persons entering, including the soles of shoes and, at the same time, measures temperature using a thermal camera with an accuracy of up to 0.2 °C. Individual drops of disinfectant are so small that they do not leave behind any traces of humidity on the surface, but, at the same time, kill all harmful microorganisms very effectively. The aim was to design a gate that would be 100 % effective and, at the same time, as non-invasive as possible. Using a nano-nebula, the ingestion of the disinfectant preparation is minimal, compared to other methods of disinfection of whole persons. New prospects are also opening up for Kovosvit MAS, which is another traditional Czech mechanical engineering man-

ufacturer. This company received a new owner in 2020 and, together with the new owner, also a hundred-million-crown contract. The Industry Innovation company sold the South Bohemian machine tool manufacturer to the Russian investment Trust Union Fund, owned by a group of leading Russian industrialists. The new owner has the potential to help Kovosvit to multiply sales on markets where it has been operating for a long time, to maintain employment within the company and even to create new jobs.

n CONTRIBUTION OF AVIATION

INDUSTRY

Over more than the 100 years of its existence, the aviation industry in the Czech Republic has become a respected player on the international market. Knowledgeable persons associate it with the trainer and light combat aircraft made by Aero Vodochody (L-29, L-39 and L-159), and the L-410 transport aircraft made by Let Kunovice (now Aircraft Industries), as well as the vast production of aircraft of the UL/LSA category. Thousands of such planes have found satisfied customers on all continents except Antarctica and their often modernised versions carry on the successful tradition. As indicated by the list, the local industry very often boasts – and rightfully so – of the fact that this is one of a very few countries worldwide which is able to manufacture an aircraft from A to Z completely on domestic territory. A similar ability is also maintained by the Czech Republic for the development and manufacture of aircraft engines. In addition, Czech representatives are increasingly being heard of in oth-

Photo: Aero Vodochody archives

facturing facilities to raise the production capacity and to innovate technologies. The investments are concentrated on an extension of the production capacities by 35 %, compared to the present situation, and an additional modernisation of the premises. The investments are giving rise to new jobs with a high value added, and the company is successfully filling these new positions with qualified workers. Due only to large investments in research and development, Škoda Transportation is able regularly to come up with new, modern products, which are finding their place on foreign markets successfully, too.

THE

IDEA IS JUST THE

BEGINNING

3D Tech company deals with rapid prototyping, 3D printing, CNC machining, plastic injection and complex surface treatment of manufactured parts. We are partners from the development of the project, to the introduction of the new product’s production and up to serial production. All in one place with more than 2 000 m² of production space.

Our customers include the automotive, electrical, healthcare and other industries. We have focused on these segments since 1994. We comply with the automotive industry’s safety standards in our security and data sharing.

www.3dtech.cz 7 |

ENGINEERING

er fields, which is documented by a growing series of global references and successes. On closer examination, the significant competitiveness of the domestic industry is noted, the portfolio of which includes all main sub-sectors. In the first place, there are the manufacturers of ATM systems and radar technology, making the East Bohemian town of Pardubice, where they are based, an important hub. A representative of really global dimensions in this regard is ERA Company, which is a provider of ATM systems and military solutions for the detection, monitoring, and identification of targets. These products were successfully placed on a wide range of markets, including the USA, the UK, India, China, and Australia. Their presence in more than 60 countries, as well as NATO contracts, speak for themselves. Another pride of the local production is ELDIS, having manufactured active radar systems covering the airspace in Canada, Russia, and Indonesia. The last member of the successful trio is Retia, offering airspace monitoring systems and able to represent itself by contracts for the Defence Ministry of Vietnam and Airbus Defence and Space. No matter how surprising this fact may be, local manufacturers have also become well-established in propeller manufacture. The Prague-based Avia Propeller, the roots of which are more than a century old, as a manufacturer of full-metal propellers and of historical artefacts such as the T-6 Texan, has become a supplier for the Lycoming engine manufacturer. Just a few kilometres from this manufacturing plant are the premises of Woodcomp Propellers, specialising in wooden and composite propellers. The company exports its production to numerous countries worldwide. Its propellers spin on aircraft in territories ranging from South Africa to China and Japan. The wide range of manufacturers of such applications is complemented by Mejzlik Propellers, a company starting to be significantly engaged in the sector of Unmanned Aerial Vehicles (UAV). With the boost of tourism, bad transport accessibility, distances between regions, and efforts towards development of the economy, the aviation industry is gaining | 8

in strength in many parts of the world. This trend brings about the need for an adequate infrastructure. In the Czech Republic, such high demands are met by Transcon Electronic Systems. This manufacturer has already been specialising in electronic and electrical equipment for airports and heliports for 30 years. It is one of the five biggest global players in airport technologies. A part of the company’s services includes unique projects for modular airports, which make it possible to build complete airports in a very short time and at reduced costs. The company has recently succeeded with this product, for example, in Senegal, where it was awarded a project worth EUR 151 million. The permanently growing sector of UAVs, whether for civil aviation or security purposes, has also become an important part of Czech specialisation. For just the five years of its existence, Primoco UAV, based in Prague, has very quickly become a well-established company and entered markets in Asia, the Middle East, Africa, and South America. Its products are applicable in many areas, ranging from agriculture to reconnaissance and patrol purposes. In April 2020, the company attracted attention with the respectable performance of its One 150, a model which was kept in the air uninterruptedly for 15 hours and flew a distance of 1 650 km.

n ROBOTISATION AND

AUTOMATION

The Czech industry is very good at robotisation: for the last decade, Czech companies have been experiencing a boom in automation. According to statistics, there are three times more robots integrated in processes than in 2010, and the International Federation of Robotics states that the Czech Republic ranks 15th in the list of countries with the highest increase in robots. In the sector of computers and electronics, Czech companies have the same share of robots in use as German and French companies. Robotisation is no longer only for large-sized enterprises. #HowToRobot, a platform made up exclusively of experts on the industry, has already for the second year been trying to interconnect companies with the robotics

offer. This effort has resulted in an enormous rise of interest in robotics by small and medium-sized enterprises, copying the needs of the market. An example of robotisation in a Czech company can be illustrated by the example of Kovárna VIVA, a leading Czech industrial forging company. It develops and manufactures components for top European and global companies. Therefore, products of Kovárna VIVA must meet the highest quality standards. In 2019, another step in robotisation was taken by VIVA with the installation of a production line with two new robots. Since 2011, when they implemented their first robot in the production, they have increased this number up to 20. The robotisation in Kovárna VIVA significantly facilitates human labour and enhances the productivity and competitiveness of the company. The forging company will continue to follow this trend in future. It is planning to acquire at least another six robots in future. Robotisation is one of priorities and the key to success in Kovárna VIVA. “It helps us to enhance the productivity and competitiveness. Thanks to robotics, we could take on new contracts and projects which would have been out of our reach otherwise,“ says František Červenka, Executive Director of Kovárna VIVA. Customers buying steel forgings made by Kovárna VIVA include leading global companies such as BOSCH, Scania, ZF, Poclain, and Linde. Investments in robotisation also bring about the improvement of the working environment for employees of the forging company. Industrial robots facilitate their hard physical labour by carrying out monotonous tedious operations instead of them. Czech companies are assisted in their robotisation by several centres, for example, by the INTEMAC Research and Innovation Centre, owned by the South Moravian Innovation Centre, which provides its clients with advisory services for the implementation of advanced technologies in production. Moreover, INTEMAC operates a “testbed”, where companies can try out the elements of Industry 4.0 on their own. It also develops autonomous manufacturing units and assists in the enhancement of the usable properties of manufacturing machines.

KPDH strojírna s.r.o.

KPDH strojírna s.r.o. is a manufacturing and engineering company, founded in 2008 with a programme focused on supplies of the machine parts in construction industry. The company is in 100-per cent Czech ownership. Step by step, the company has extended its portfolio with supplies for other industrial sectors and has become a specialist in the manufacture and supply of the mechanical engineering parts, steel structures and technological equipment for the handling and transportation of materials, for construction, woodworking, metallurgical, mining, and mechanical engineering industries. The company has its own manufacture, with a closed

KPDH strojírna s.r.o. Střádalů 681/68 | 718 00 Ostrava-Kunčičky | Czech Republic

technological cycle, including plasma and flame cutting and the preparation of semi-finished products, welding, machining, painting and workshop assembly. At present, the company provides full services in the area of commerce, technical elaboration of business cases, purchase of the materials and components and manufacture and delivery of the single parts and assembled units of the technological equipments according to its own documentation or the foreign documentation for customers and end users in Europe and other countries worldwide. We are certified according to the EN ISO 9001:2015; EN ISO 3834-2 a EN 1090-2, EXC3.

commerce@kpdhstrojirna.cz 9 |

ENGINEERING

BLUMENBECKER PRAG – E-ROBOT – INTEGRATION OF ROBOTS IN PRODUCTION LINES The company wanted to acquire the ability to design and commission vast and complicated robotic manufacturing complexes on the basis of “virtual” commissioning. The aims of the project also included development of their own optimisation functions for the optimisation of Takt time of a line with several robots, and optimisation of the consumption of energy of the applied industrial robots. The company also decided to build its own robotic testing premises for the development and verification of new technologies according to the Industry 4.0 standards, including a digital twin and a real workplace. The main project result is a functional testing platform meeting the Industry 4.0 standards, situated in a laboratory of Blumenbecker Prag in Bezděčín. The workplace contains four robots and other related equipment, including its “digital twin”. Another result is the functional optimising plug-in. Tests of its functionality have proven that it can accelerate the activity of the robotic workplace by several seconds (depending on the type of project) and save 10 % of the energy of robots. ADLER CZECH – HYBRID ENERGY SYSTEM The company has built a hybrid photovoltaic system with batteries and cogeneration in the spaces of the Warehousing and Logistics Centre of the company in | 10

system, combining a solar power plant with energy accumulation. BD Sensors, a manufacturer of pressure sensors, was awarded by the jury for a complex approach towards the collection and usage of data from manufacturing machines throughout the company. ELA Blockchain Services, a subsidiary of the Electrical Engineering Association, deserved recognition for the creation and rollout of the first public blockchain. Koyo Bearings ČR, a company from Olomouc, scored with a solution reducing demands on the operations of its bearing-ring production line, on the basis

the premises of Contera Ostrava City. The aims included the enhancement of self-sufficiency in the energies needed for operations of the Adler company, and financial cost cutting of the purchased energies. The project has benefits for the general reduction of emissions and greenhouse gases, as well as for the stabilisation of the operations of the distribution grid. A complex of photovoltaic power plants, together with an investment in condensing cogeneration units, provides the ecological production of energy and heat for warehousing spaces. The integration of accumulators has enhanced the energy security of the building. Interconnection with a charging station for electromobiles and forklifts has raised the efficiency and commercial usability of the generated electrical energy. The annual savings of CO2 emissions reaches 291.04 tonnes. The annual savings of energies is established at 248.75 MWh. BD SENSORS – DATA TRANSFORMATION OF THE COMPANY The Industry 4.0 concept is intended to assist in the optimisation of the manufacturing lead-time and enhancement of effectivity and flexibility of the manufacturing process in the Mechanical Workshop. In the past, it used to be difficult for the company to obtain information about the actual utilisation of machines in the CNC workshop and about the utilisation rate and lifecycle of tools. So it was not possible to optimise the production ef-

of artificial intelligence, digitalisation of data and the interconnection of manufacture with logistics.

fectively or to measure abnormalities. The company proceeded to cover the manufacturing and administrative processes completely according to the Industry 4.0 concept. They integrated 20 machines into the system, from which they collect data. The working documentation about contracts is made available to the staff in tablets at workplaces. The tablet is also used to check the operator´s competence (e.g. the validity of training for operating the machines) before launch of the relevant machine. Whenever the machine stops working, the tablet asks the operator why the machine has come to a standstill. The CNC machines are automatically sent correction data from a robotic measuring cell. Thanks to these measures, the productivity has grown by 10 % and the adjustment times have been reduced by 50 %.

Photo: BD SENSORS archives; KOYO BEARINGS archives

Prizes for Industry 4.0 In 2020, the Confederation of Industry of the Czech Republic awarded the Industry 4.0 Prize for the first time. In this way, it showed its appreciation of the innovative and inspiring application of the technologies and concepts of Industry 4.0. The prize-winner was the company of Blumenbecker Prag, having applied a digital twin to integrate robots in production lines. The expert jury also chose another four projects demonstrating best practices and serving as an inspiration to other companies. Adler Czech succeeded with a hybrid power

CZECH BUSINESS AND TRADE

ELA BLOCKCHAIN SERVICES – BLOCKCHAIN PLATFORM FOR INDUSTRY The Electrical Engineering Association has come up with the idea to create a strong, trustworthy blockchain platform and to put it at the disposal not only of Czech industry for further use. The blockchain platform is one of the cornerstones of the digital transformation and Industry 4.0. ELA Blockchain Services, a subsidiary of the Electrical Engineering Association, implemented the whole chain, from the creation of the blockchain core and the first application, up to education of the wider public about what a blockchain actually is and how it can serve companies. The project has surpassed all expectations. The blockchain is starting to be used not only by industrial companies, but also by government agencies, including the Ministry of Industry and Trade and other institutions. ELA Blockchain is already in use in companies outside the Czech Republic. They are able to treat the platform as a service without necessarily having to be a part of it, for example, as an operator of a blockchain node.

KOYO BEARINGS – AUTOMATION OF BEARING RINGS’ PRODUCTION LINE The company needed to reduce the demands on operation of bearing rings’ production lines, using elements of Industry 4.0, including automated artificial-intelligence-based visual checks of products, interconnection of automated machines in the production line with a data network, and subsequent data processing and interconnection of the manufacturing process with in-house logistics. Further to this project, the company modernised

its training centre to enable effective training of employees, also by using virtual reality. Demands on the operation of the lines dropped by one-half and their productivity went up by 58 %. The general scrap rates and the cycle time were able to be reduced. The operators who were replaced by the automation process were transferred to positions with a higher added value of work. Moreover, thanks to the integration of virtual reality in the training process, the training of new employees takes up to 15 % less time. 11 |

WE SUCCEED

Effective Wastewater Treatment Plants Under The Baton Of Abess For several years, Abess, a successful Czech provider of engineering services and supplier of equipment and technologies for protection of the environment in the areas of water, soil, air, hazardous wastes, has been establishing itself especially with projects focussed on the minimisation of water consumption in various manufacturing branches and purification of highly contaminated industrial wastewater. The concept applied by Abess to the treatment of industrial water enables the long-term recirculation of water in closed systems.

“Industrial water is necessary for manufacturing in many companies. However, such water may get strongly contaminated and as wastewater discharged into the sewer system or disposed of as a liquid waste. This is the case especially in machinery and glass manufacturers,“says Jana Stejskalová, Executive Officer of Abess. Industrial presses and grinding machines are cooled with water added with cooling emulsion. If the cooling water was recirculated in a closed loop without purification, the cooling system would get damaged and water pipes would be eventually blocked. How to cope with this problem? What comes to mind from the ecological point of view is to provide recirculation of the water with effective purification of the used industrial water and reduction of the concentration of the pollutants having contaminated the water in the process of manufacturing. “For example, for purification of the cooling water contaminated | 12

with oil, we use a well-proven technological solution developed by our company – the so-called biological purification of the water applying the biotechnology of Alpha Microx®. This is an effective and efficient method of purification of industrial wastewater containingC10-C40. Compared with other methods, it reduces the production of sludge – hazardous wastes – and enables to achieve the values of C10-C40 in the treated water under 1 mg/l, adds Stejskalová.

n SECRET OF ABESS For the last28 years, Abess has been undertaking projects for minimisation of water consumption and treatment of highly contaminated industrial wastewaters in various manufacturing branches. The projects undertaken have a number of positive effects, such as 100% recirculation of the cooling water, closed-loop

water cooling, fast return on investment or preservation of the cooling emulsion features. For wastewater treatment plants and for other facilities, it uses advanced technologies, which provide the cost-efficiency of the operation and fast return on the investment. The company also uses biotechnologies for bioremediation of hazardous wastes, of surface water and groundwater, of the soil and wastes containing various types of organic compounds. Biotechnologies provide effective and ecological degradation of hazardous organic compounds. Significant projects of the company include e.g. the project undertaken for Sklárna Kavalier, a.s. (a manufacturer of heat-resistant glass), for AGC Automotive Czech a.s. (glass grinding on automotive-glass processing lines) or for Tomil, s.r.o. (a producer of cosmetics and cleaning agents).

Municipal Sector Effective purification and subsequent recycling of wastewater is topical for the municipal sector, too. Wastewater membrane filtration brings an essential upgrade of the quality of the treated water and, meeting strict hygiene criteria, it can contribute to the significant reduction of water consumption.

13 |

RESEARCH

Autonomous Electric Vehicle Indicates Direction in Logistics and Transportation 4.0 Autonomous vehicles and the whole sector of autonomous logistics are evoking great interest, both in research and in commercial use. Applications that are usable on public roads or in closed zones are occurring both in passenger and freight transportation.

n VEHICLE EQUIPPED WITH PLENTY

OF SENSES

The functional model of a small modular electric vehicle with autonomous elements has been named “Generation 0”. Subsequently, scientists examined the primary studies and the analysis of the control and movement of the vehicle in the right direction, and its reactions to unexpected situations and obstacles. “In totally the same way as if the vehicle was being driven by a person using his or her senses, nerves, brain and muscles, the | 14

autonomous vehicle being developed is equipped with plenty of sensors (senses), low-level control by a PLC program, including basic functional safety (nerves), autonomous control on the “edge layer” using a high-performance IoT unit evaluating all inputs and providing a calculation of the required trajectory in real time (brain) and, subsequently, sending commands to functional members of the chassis and permitting movement or turning (muscles),” says Michal Petrů, explaining the unique approach of the Liberec scientists.

n CLOUD SUPERSTRUCTURE Their research solution is innovative in the integration of extended reality – AR technology of Microsoft HoloLens – in the control of the whole platform. This makes it possible to exploit the poten-

tial for the actual control and tracking of the vehicle location, as well as for the use of the inbuilt functions of the HoloLens platform for remote control, including audio and video transmission. An integral part of the autonomous control being developed is also a cloud superstructure, which provides real-time evaluation of selected signals and a prediction of the demanded interventions in the control, using machine-learning principles. The cloud also provides complete reporting of telemetric data and a web user interface for monitoring and remote administration of the autonomous vehicle.

n MULTIFUNCTIONAL USE Based on the analysed data of the functional model of “Generation 0”, the solutions team has also developed the

About the Project The 4-year project named “Modular Platform for Autonomous Chassis of Specialised Electric Vehicles for Freight and Equipment Transportation“, reg. No. CZ.02.1.01/0.0/0.0/16_025/0007293 is financed by the Ministry of Education, Youth, and Sports of the Czech Republic and the European Union (European Structural and Investment Funds – Operational Programme “Research, Development, and Education). The team composed of Doc. Ing. Michal Petrů, Ph.D. (project manager), Dr. Tomáš Martinec, Dr. Robert Voženílek, Dr. Pavel Jandura, and Ing. Jan Kočí, has been working on it since 2018.

Photo: Technická Univerzita v Liberci archives

A multisectoral team from the Technical University in Liberec is developing a modular autonomous electric vehicle for effective, safe, and robust movement in unfavourable conditions. After the success of the functional model of “Generation 0”, the team is preparing a prototype of “Generation 1”. A combination of several industrial sectors has made it possible for the team to concentrate on research areas, such as the modular architecture of the chassis part, with the use of light structures, drives and accumulators for autonomous utility electric vehicles and research in the area of the systems of control of autonomous utility electric vehicles, using Mixed Reality, the Internet of Things and Big Data.

CZECH BUSINESS AND TRADE

first prototype of the modular platform with an autonomous chassis for freight and equipment transportation, named “Generation 0”. It is suitable for transportation in halls, buildings or warehouses, and may also be used for transportation of freight or inspection of contaminated areas. Now the solutions team is developing the second prototype, named “Generation 1”. The resulting design of this modular autonomous electric utility vehicle for transportation of freight will be suitable for use in general terrain, on construction sites, in mines, on agricultural and other unpaved surfaces. For many years, the team has devoted itself to the topic of light structures, electromobility and robotics, battery management, localisation of real objects, and system integration. In future, they want to focus on further development of modular platforms and systems for utility use with autonomous elements, including artificial intelligence.

The communication architecture on the vehicle has been optimised, in order to minimise delays and to follow the required trajectory accurately.

UNITHERM, s.r.o. is predominantly an export company producing aluminium castings such as gearboxes, engines and pumps, insulator flanges, pistons, parts of wind power plants, covers etc. The foundry uses two technologies – sand casting and casting into metal moulds. The Engineering Department designs the castings and the casting equipment using the SOLIDWORKS 3D program, with the support of the MAGMASOFT® program. The foundry has its own machining shop with CNC machining centres and lathes and offers the clients the possibility of machining the castings. In 2014 the company built a completely new foundry on its premises, where the technology of mould and core production utilises the self-hardening binder system based on geopolymers. This foundry is an ecological variant of the widely used toxic, highly inflammable and carcinogenic furan mixtures. This unique foundry, built on the basis of its own research and development, can form more complicated shapes while making it possible to produce larger sections with the minimum occurrence of casting flaws. We are persuaded that aluminium, now already widely used, is a metal that will play an increasingly greater role in the composition of components and will become indispensable in industrial production and technology. That is why we use the most up-to-date technologies in the manufacture of components, which are at the same time environmentally friendly, and why we invest in the development of the company for it to be able to provide all-round services, from drawing documentation to surface finishing and control, which are needed for the correct functioning of the product.

unitherm.cz

UNITHERM, s. r. o. Vedlejší 25, č. p. 88 | 466 04 Jablonec nad Nisou | Czech Republic

15 |

ANALYSIS

Machine Tools: Expectations – Increase in Demand and Supply

A significant deterioration of financial results already occurred in 2019. The main causes included a decrease in the demand for capital goods in China and structural changes in the European automotive industry. Another decisive factor was the deterioration of business relationships between China and the USA. In the automotive industry, which is dealing with the emission limits of combustion engines, a lack of electronic components and a massive rollout of e-mobility, the low demand for machine tools can mainly be attributed to problems of sub-suppliers. The biggest year-to-year slumps occurred in the category of the grinding and forming machines being used in the automotive industry for the manufacture of combustion engines and gearboxes. Moreover, the financial results for the year 2020 were already significantly influenced by the Covid–19 pandemic.

n FUTURE OF MACHINE TOOLS

SECTOR

The sector of machine tools still remains the cornerstone of entire mechanical engineering. The situation of this sector essentially influences the development of other branches of mechanical engi| 16

neering and, consequently, also of the whole industry. Its typical features are high technical standards and technological advances. Basic requirements placed on machine tools are accuracy, productivity, safety, and reliability. In many fields, machine tools are at the cutting

edge. Such fields include, for example, mechatronic systems, control systems, drives of spindles and axles, clamping and grasp machines, probes for tools and workpieces, tool magazines and many other IT and technology systems. Our manufacturers use components made

Photo: KOVOSVIT MAS Machine Tools archives

In 2020, the sector experienced another significant deterioration of financial results as compared with 2019, actually in all monitored parameters. Exports shrank by 30 per cent. In summary, for the period of 2019 and 2020, compared to 2018, exports dropped by about 50 %, i.e. down to the level of the postcrisis year of 2010. Imports even decreased by 37 %.

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EXPORT OF MACHINE TOOLS AND FORMING MACHINES BY TERRITORY FOR 1ST QUARTER 2021 Germany 24.15% 24.15% 36.59% 7.24%

4.93%

7.24% 4.95%

6.95%

7.95%

Russia 7.24% Germany 22.87 % Poland 7.24% Poland 9.03 % China 7.95% Russia 8.28 % India 6.95% China 8.15 % Turkey 4.95% USA 7.48 % USA 4.93% India 6.7 % Others 36.59% Slovakia 4.76 % Others 33.26 %

Source: www.czso.cz, www.mpo.cz

IMPORT OF MACHINE TOOLS AND FORMING MACHINES BY TERRITORY FOR 1ST QUARTER 2021 Germany 33.86%

19.18% 33.86% 5.45% 5.97% 7.68% 8.02%

10.08% 9.76%

China 10.08% Germany 31.66 % Switzerland 9.76% Japan 9.49 % S. Korea 8.02 % USA 9.04 % Italy 7.68% Italy 8.02 % USA 5.97% Taiwan 5.32 % Japan 5.45% China 4.82 % Others 19.18% Switzerland 4.79 % Others 26.85 %

Source: www.czso.cz, www.mpo.cz

by the same manufacturers as used by their competitors for their products. These CNC machines can be integrated in communication structures, meeting the requirements of the Industry 4.0 concept. Although there are currently new technologies being applied, such as additive manufacturing, machining and forming will still remain the most popular technological processes in mechanical engineering for a long time to come. Machining is still the best technology, especially in mass production in terms of economies of scale. Machining is irreplaceable when it comes to products fabricated to precise dimensions. | 18

n SUCCESS OF CZECH

COMPANIES ON DOMESTIC AND FOREIGN MARKETS

The largest part of Czech production is intended for export. In 2020, the main territories importing Czech products were Germany (23 %), China (13 %), Russia (10 %), Poland (7 %), Slovakia (5 %) and the USA (5 %). Due to the pandemic and other impacts, exports, especially to Germany, decreased. As compared with 2019, there was a mild year-to-year increase in exports to China and to the Russian Federation. This volume, however, only means about 30 %, compared to exports in 2014. This situation can mainly be attributed to EU

sanctions, resulting from persisting political disputes between the EU and Russia. A slight decrease also occurred in exports to Poland. However, the Polish market is expanding in the long run and is very important to our manufacturers. With respect to the high share of the manufacturing industry in the gross domestic product, Czech manufacturers of machine tools also find the domestic market very important, as it provides a competitive edge of the proximity of manufacturing and servicing facilities. Our manufacturers account for approx. 22 % of the domestic market. In terms of export volume, the Czech Republic is at a level comparable to, for example, Austria, France, and the United Kingdom. In comparison with member states of CECIMO, we rank 8th in exports. As far as exports commodities are concerned, the top position is held by grinding machines, followed by milling machines and machining centres. However, the gap with grinding machines is rapidly closing. The main sector buying the technologies of mechanical engineering is the automotive industry, or its sub-suppliers, manufacturers of tools and forms, and then the defence, aviation, and power industries. Traditionally, Czech businesses attend most of the major international exhibitions and trade fairs. In 2020, however, the situation changed substantially due to the Covid-19 pandemic. All significant exhibitions planned for 2020 were either cancelled or reduced to a virtual form. After long hesitation, the International Engineering Trade Fair in Brno was also finally called off. In 2021, a similar adverse situation persisted mainly in the first half of the year. The main event of this year will be the EMO exhibition in Milan, which is planned for 4–9 October. The International Engineering Trade Fair in Brno is intended to be held extraordinarily from 8–12 November 2021.

n SIGNIFICANT TRENDS

AND EXPECTATIONS

After a sharp decline in 2019 and 2020, it is expected that demand and production will increase in 2021. According to figures for the first quarter of 2021, the volumes

Photo: KOVOSVIT MAS Machine Tools archives

ANALYSIS

CZECH BUSINESS AND TRADE

of sales and new contracts are still much lower when compared with previous years. The main trends include ongoing robotisation, automatisation, digitalisation,

and connectivity, known as Industry 4.0. The significance of advanced technologies is growing; the top position among such technologies is taken by the addi-

tive manufacturing technology, which represents a new quality in production of special components and complex-shaped structures. The future of the machine tools

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19 |

ANALYSIS

SALES (2015=100) 130.0 130.0 120.0 120.0 110.0 110.0 100.0 100.0 90.0 90.0 80.0 80.0 70.0 70.0 60.0 60.0 50.0 50.0 40.0 40.0 30.0 30.0 Forecast (Czech Sta�s�cal Oﬃce) Forecast (Czech Sta�s�cal Oﬃce)

Moving Average/4 Moving Average/4

- ZPS, TOSHULIN, TOS Kuřim, FERMAT, Škoda MT and other companies. Their innovation activities are based on their own design and development capacities, supported by collaboration with universities, e.g. with the Research Centre of Manufacturing Technology RCMT at the Czech Technical University in Prague, with the University of West Bohemia in Plzeň, with the Technical University in Brno, and with individual research centres, such as the Textile Machines Research Institute in Liberec and Intemac in Kuřim.

Source: www.czso.cz, www.mpo.cz

n PRIORITIES OF THE ASSOCIATION

NEW CONTRACTS (2015=100) 120.0 120.0 110.0 110.0 100.0 100.0 90.0 90.0 80.0 80.0 70.0 70.0 60.0 60.0 50.0 50.0 40.0 40.0 30.0 30.0 Forecast (Czech Sta�s�cal Oﬃce) Forecast (Czech Sta�s�cal Oﬃce) Source: www.czso.cz, www.mpo.cz

industry will largely be shaped by the development of e-mobility and artificial intelligence. Our industry depends in the first place on the development of the automotive and aviation industries, the power sector, and other branches of mechanical engineering. To date, these trends have also been affected by a shortage of the qualified workforce.

n INNOVATIONS IN THE SECTOR The high level of Czech machine tools is given, among others, by the innovation activities of most of the manu| 20

Moving Average/4 Moving Average/4

facturers. Most significant domestic producers include e.g. TOS VARNSDORF, KOVOSVIT MAS Machine Tools, TAJMAC

OF ENGINEERING TECHNOLOGY - SST

In 2021, we expect another remarkable deterioration of sector results due to the COVID-19 pandemic. In connection with the known macroeconomic and geopolitical problems evoking concern by investors, especially in the automotive industry, as well as in many other sectors, we expect that in 2021 the domestic and foreign demand for machine tools will decline. According to the up-to-date information, we expect a decrease of approx. 20 % in indicators of products and exports, compared to 2020. In this complicated situation, the main task of the SST is to support the marketing activities of our members with an expansion of opportunities for their presentation, e.g. in the form of partially subsidised exhibitions. We also find it important to engage our member businesses in projects of the education and support of innovations. What remains a permanent task is the promotion of the sector, with the aims of increasing the interest of people in studying and working in the mechanical engineering industry and especially in our sector.

SST The Association of Engineering Technology is a member of the European Association of Machine Tool Industry (CECIMO). This Association represents the interests of 15 European countries engaged in the manufacture of machine tools and related technologies. The share of CECIMO in the global production of machine tools is currently about 35 %. Most important members of CECIMO are engineering associations of Germany, Italy, Switzerland, Austria, France, and the United Kingdom. SST already joined CECIMO in 1996 and is still the only association of such members coming from the former Eastern Bloc.

CZECH REPUBLIC Your Trade Partner Published by the PP Agency s.r.o. 2000 – 2020

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2019

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21 |

ANALYSIS

Optimism in Agricultural Engineering Sector

Can you assess the development in manufacturing and in the production of agricultural and forestry machinery in 2020? In general, despite coronavirus, the financial results of agricultural machinery manufacturers for last year were surprisingly good, the pandemic affecting sales only slightly. The results differ according to the types of products manufactured by specific businesses. However, most enterprises found 2020 successful, some of them even regarding it as the most successful year in the history of the enterprise. Any decreases that may have occurred in sales mostly resulted from economic cycle fluctuations, which, compared to the average of previous years, did not exceed 15 %. At the time of the most severe restrictive measures against the cross-border movement of persons, the agricultural machinery sector was classified as a sector attending to the crit| 22

ical infrastructure. After the initial prohibition of travel abroad, the sector enjoyed exemptions permitting business trips and at least limited movements of new machinery and servicing of machines and operating technologies. Impacts of the coronavirus crisis were therefore not fatal, compared to other sectors. What is the competitive edge of Czech manufacturers? A relative advantage of our agricultural engineering is the structure of manufacturing businesses – they are mostly small and medium-sized enterprises, which are able, even with series production, to prepare machines exactly according to the customer´s needs and wishes and to respond flexibly to changes in the demand. As far as the main types of agricultural mechanisation are concerned, tractors, the total sold number of which was 2106 pieces,

remained 8.4 % behind the average of the last ten years, while harvester threshers, the sold number of which was 171, even exceeded the long-term average by nearly 2 %. Czech enterprises are becoming increasingly involved in foreign trade and this trend was not halted either by the coronavirus crisis. Previously foreign trade was significantly affected by the 2008–2009 crisis, but since then, Czech manufacturers have been penetrating foreign markets actually at the same speed as the speed of the growth of imports of foreign machinery. The turnover of foreign trade in agricultural machinery in 2020 amounted to more than CZK 42 billion, with the levels of export (CZK 20.9 billion) and import (CZK 21.5 billion) remaining approximately the same. In other words: the financially comparable volume of what is imported from abroad is, on the contrary, exported.

Photo: Agricultural and Forestry Machinery Association archives

In despite of coronavirus, financial results of agricultural machinery manufacturers were surprisingly good last year, the pandemic affecting sales only slightly. “A relative advantage of our agricultural engineering is the structure of manufacturing enterprises – they are mostly small and medium-sized, which are able, even with solid series production, to prepare machines exactly according to the customer´s needs and wishes and to respond flexibly to changes in the demand. Czech enterprises are increasingly becoming involved in foreign trade“, says Dušan Benža, Secretary General President of the Agricultural and Forestry Machinery Association (A.ZeT).

CZECH BUSINESS AND TRADE

TRACTORS

Source: Ministry of Industry and Trade of the Czech Republic

COMBINE HARVESTERS

Source: Ministry of Industry and Trade of the Czech Republic

What about business partners of the Czech Republic? The biggest business partners are naturally the neighbouring countries – Germany, Austria, and Slovakia – followed by France, Poland, Hungary, and then it would be possible to name, one after another, almost all Member States of the EU. It depends a lot on the product portfolio. ZETOR TRACTORS is keeping its established positions in Slovakia, in Poland, in the Baltics, in Scandinavia, and in the Balkan countries; it has also found its place on growing markets in the United States, the UK and, in recent years, the brand has entered new foreign markets such as Kenya, Ethiopia, Sudan, Rwanda, Myanmar, Indonesia, Yemen, Columbia, Costa Rica, and Uruguay, and, last but not least, Vietnam. Individual manufacturers are also finding their partners in countries of the former Soviet Union – Russia, Ukraine, the Baltic States. They are also penetrating the

markets of new Member States of the EU – Romania and Bulgaria. Remarkable results have been achieved by our exporters in more exotic destinations, so they are worth mentioning, too: LASKI Smržice succeeded with its municipality machinery, wood chippers and stump cutters grinders in Australia and the UK; EURO BAGGING with supplies of technologies and equipment for fodder storage bags to Canada, the USA, New Zealand, and Japan; its first deliveries headed to the South African Republic. BEDNAR FMT and FARMET Česká Skalice are exporters to Canada and the USA, Russia, Ukraine, and Kazakhstan; SMS CZ Rokycany is an exporter of machines for soil processing, among others, to New Zealand, Australia, the USA and Canada. And coronavirus impact on Czech enterprises? The pandemic had an impact on foreign trade, especially in the first months after

the declaration of the State of Emergency, including travel restrictions. Later on, the situation was stabilised. Rather than the exporters of individual machines, the measures hit suppliers of capital equipment investment units, the on-site assembly and commissioning of which are more time-consuming and require more complicated logistics. As with many other enterprises, the most significant complications were and are regarding personnel. Fortunately, manufacturing was not significantly affected by staff illness. From time to time, the ill health of key employees paralysed only some departments. Operational restrictions or production reduction in this connection only rarely occurred. Thanks to timely detection and implementation of anti-epidemic measures, disease did not spread very notably among employees. The coronavirus pandemic affected 23 |

ANALYSIS

Can you mention the trends and expectations influencing your sector? Agricultural technologies reflect the requirements of farmers for the higher performance of machines and improvement in the quality of working operations. From “Precision Farming”, the beginnings of which date back to the first half of the ‘90s, agricultural engineering has | 24

BALANCE OF FOREIGN TRADE IN AGRICULTURAL MACHINERY CZK million

Export

Import

Source: Ministry of Industry and Trade of the Czech Republic

proceeded to “Smart Farming”. The sector is being penetrated with rhetoric similar to that used in the industry: we are talking about Agriculture 4.0. ICT is being applied both to individual machines and to the interconnection of particular machines and technologies into an intelligent data network, and in systems of the precise navigation of tractors and autonomous machines. With ICT, specific working bodies and aggregates are being monitored and controlled in detail. Due to the fact that no trade fairs or exhibitions were held last year, innovations are only presented through professional press or digital (online) fairs. For other innovations, I would rather wait for the next European agricultural technology fair. I have no idea which one, but I hope it will be already this year. The mood on the market of agricultural technology seems to be like a seesaw, too… All outlooks and forecasts have been disrupted by the crisis caused by global measures against the spread of Covid-19. Any predictions of further development, whether in the short or long term, are very difficult at the moment. The mood on the market can be demonstrated by the “Business Barometer” of the European Agricultural Machinery Association (CEMA): according to the latest survey carried out among 140 top managers coming from 9 countries of Western Europe, the mood has brightened up significantly since the autumn recession, and at the moment it is the

most optimistic, compared with the last ten years: for the next six months, 65 % of respondents expect a turnover growth, 34 % of respondents count on the maintenance of the existing level of turnover and only 1 % are afraid it will drop. Similar expectations are expressed by representatives of manufacturing businesses in our country, too. In despite of all the problems, they are viewing this year with mild optimism. Most respondents expect the turnover to be at the same level, or about 15 % higher, compared with last year. The rather pessimistic estimates count on this year´s decline as 15 %, with a deeper slump probably only in 2022. Further development will depend on the development of the pandemic situation, which is very uncertain. Owing to the fact that the Czech government has been proceeding chaotically, we are not yet “home and dry”. A serious threat may be the further deterioration that may occur and, consequently, further restrictions that may be imposed on the cross-border and even nationwide movement of persons and goods. Good, reliable handling of the situation is a precondition for a positive view of our republic from the outside and for the resulting willingness of foreign customers and business partners to come to our country, and for permission for our citizens to travel abroad. Health risks do not apply only to people. Besides the still imminent threat of the continuance of the coronavirus pandemic, there are also other risks in

Photo: Agricultural and Forestry Machinery Association archives

businesses in the aspect of human resources, especially by the restriction of the workforce flow from abroad. With respect to our geographic position, besides their regular staff, enterprises also use workforces from Slovakia, Ukraine, and Poland for many professions (welders, assemblers, …). Similarly, serious problems are being caused by the increasing massive extension of delivery times for raw materials (iron, plastics) and sub-supplies and components needed for the completion of machines, and the announced or already realised increase in their prices (on average by 5–10 %, and even by 30 % for steel). We have therefore been affected by the situation in the countries of our foreign sub-suppliers, predominantly in France and Italy, where production was interrupted for more than one month last spring, hence delaying the sub-supplies. Other examples include late deliveries and multiple extension of delivery times for engines and gearboxes from the USA, and axles from Italy. Suppliers announce that their price increases are probably not yet over and are going to continue in the course of this year as well. Freight costs are also increasing. An essential problem was the absence of social contacts, to which our salespersons and customers were used – trade fairs, seminars, conferences, demonstrations of new machines. Many contracts were lost due to the inability to travel. However, this situation has brought about something positive – the rapid command of modern information and communication technologies, when personal contact had to be replaced with online communication, and the discovery of the charms of the Home Office, although it divided people into groups of those who “can work from home” and others who “really can´t“.

CZECH BUSINESS AND TRADE

our sector, such as the African swine fever virus and Avian flu in poultry. What is the impact of the absence of international trade fairs on the agricultural and forestry technology market? Beginning in March 2020, all foreign and domestic trade fairs were called off, step by step, and the trade fair business came to a standstill. We naturally miss the exhibitions. Most harm was caused to us at first by the postponement by one year, and, finally, by the complete cancellation of the Techagro local trade fair, which is a traditional showcase of Czech agricultural engineering. For the time being, the schedule still includes the “Země živitelka” exhibition in České Budějovice, planned for late August, and the exhibition of technologies and equipment for animal husbandry – AnimalTech – which should be held in September in Brno. In any case, the exhibitions are not expected to be held in the usual scope, with respect to the fact that the current coronavirus measures will hardly be lifted completely. The participation in exhibitions and field demonstrations must be considered from several viewpoints: it is necessary to take into account the health aspect (concern about the health of own staff and visitors), as well as the general benefit of participation in such events affected by all the restrictions: limitation of the number of people gathered together, their willingness to travel, the presence / absence of some exhibitors, increased costs of sanitary measures, etc. What can you see as the biggest pitfall with respect to trade fairs? Exhibitors most of all mind that they have new machines, a lot of them at top European and global levels, but they have nowhere to present them to the public. Current customers can be informed about partial enhancements of the parameters over the Internet or through direct mailing, but to approach new customers and to present essential innovations to them, you need the personal demonstration of the technology or services. Some exhibition administrators scheduled online fairs for the same dates as the dates of the

traditional trade fairs. Full of enthusiasm, I applied for some of them. I tried to “browse” through such trade fairs, but it is like going through websites of companies, time-consuming before you click through everything. After a couple of minutes, you get lost in the web anyway and end your search. It will not replace a visit to a real trade fair. What you go through in an hour at a real fair would take several days online. Man is by nature a social animal being, and needs interaction when buying capital goods, such as agricultural machinery. There is a different situation with seminars and videoconferences. I attended some of these. They make sense in the electronic form. They actually simulate an accompanying programme of trade fairs. The pro of a seminar is that you can watch it even on a delayed basis, whenever it suits you, and rather than spending your precious time at the fair, you can

dedicate it to inspections of machines and discussions with their exhibitors. So, to summarise: it is an interesting attempt. Seminars are imaginable like this, and this method will perhaps take hold. Nevertheless, I can´t wait for the world to get back on track and for us to be allowed again to travel to trade fairs in Brno, Hannover, Paris, Bologna, Zaragoza, Herning and elsewhere, to meet colleagues from our profession, to question customers and to listen to their wishes, ideas and well-meant reservations. A way of renewing classic trade fairs is the high vaccination rate of the population. The replacement of real fairs, where people meet face to face, with any online substitutes of such events has no meaning for us. Although some classic events will already take place this year, I personally don´t expect the real trade fair business in our sector to reopen up completely before the beginning of 2022. 25 |

Unique Surfboards Conquering the World For several decades, surfing without waves and wind was an unattainable goal for lots of surfboard developers worldwide, frequent attempts to construct a compact surfboard with autonomous drive was a challenge for many years. Unsuccessfully and without market success. A break through occurred in 2010, when MSR Engines, a Czech company managed by Martin Šula, joined the sector of motorized surfing. As a young engineer, starting his business, Martin Šula participated in the development of RC models of planesMotoGP components, he also worked as a professional car mechanic and cooperated with race driving icons such as Nico Rosberg, Lewis Hamilton, or Marc Márquez. But then the motorsport world was hit by the economic crisis in 2008, which affected many developer companies. However, the threat became an opportunity and Šula decided to exploit his know-how of the development and construction of small combustion engines and materials in a new sector – motorized surfing. It took two years to develop the first prototype; anyway, with its features and vehicle handling qualities it significantly surpassed the products existing on the market so far.

n CLEAR POSITION AS GLOBAL

LEADER

The first products labelled JETSURF went to motorsport friends in Eastern Europe and Russia. After two years, the annual production reached the first hundred units and further growth was enhanced by the creation of a product series intended for amateur racing, which stirred the activity of fans of the new sport, and by the penetration of the yachting market. Step by step, the brand built its position on the market and the image, based from the very beginning on the innovation of speed, on know-how, on the minimization | 26

of outsourcing, and on racing values. In 2016, the company reached an important point – it opened a new technological centre, where it is able to design, develop, manufacture and dispatch its products.

The manufacturing facilities with a foundry, metalworking, carbon fibre manufacturing, 3D printers and a testing centre enabled JETSURF to assume the clear position of the global leader.

n NEW POTENTIAL

OF THE SECTOR

JETSURF was the first company in the sector to design and produce models encompassing various parameters and supplementary services within the framework of the growing network of its dealers worldwide. The year 2017, marked by the penetration of the US market, was the first business year when the production reached more than a thousand units and the system of air intake into the JETSURF flotation device was patented. Surfboards with combustion engines were conquering the world and carried on the innovation of speed. The unceasing innovation zest even coped with the growing legislation requirements for reduction of combustion engines emissions and with the implementation of electric drives - the product family of the brand JETSURF was extended with a new member – JETSURF Electric – the first fully electric surfboard made by a Czech manufacturer.

n BRAND ENHANCEMENT In 2019, in response to more and more prominent environmental aspects of operation of personal watercrafts, the

company came up with new drives equipped with direct fuel-injected systems – the DFI technology. So JETSURF became officially the only motorized surfboard in the world which can be legally registered and operated on public waters subject to the administration by the state authority for boating regulation. Besides the success of the

DFI engines, a strong position on the market was assumed also by the Electric, boasting the lowest weight and longest range within the segment. In 2018 – 2020, JETSURF moreover became a champion in the series of UIM MotoSurf WorldCup races.

n AND WHAT NEXT? In the sector of motorized surfing, JETSURF is the number one and, from this year on, it is going back to its roots, to racecourses. Motorized surfboards have also their counterparts in electric skateboards, with which the company is setting similar goals like with surfboards – to become the technological leader and to lay the foundations for establishment of a new sports discipline. Expressed in numbers, JETSURF exports about 90 % of its production beyond the borders of the Czech Republic at present. With its distribution network, it covers 41 countries. Where the partner network does not reach, the company makes direct sales with all sales and after-sales services. This broadens its coverage to embrace about a hundred countries in the world, where it has exported more than 10,000 its products for ten years of its existence.

WEB: https://www.jetsurf.com PHONE: +420 774 602 701 EMAIL: info@jetsurf.com 27 |

INDUSTRY

Czech Railway Industry Exports Over Half of Its Production The present successful advancement of railway transport was enabled thanks to more than 200 years of traditional development of the Czech railway industry. The former ČKD and SKODA plants, together with a range of other manufacturers, have always been at the top of their professions. The quality of their products is reflected in their high exports.

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times. And, of course, it is important for the country's economic indicators – according to an analysis prepared by Deloitte, Czech companies operating in the railway industry create an added value of approximately 26 billion crowns. If we include indirect and induced effects, it is almost 52 billion crowns, which represents 1.3 per cent of the Czech Republic's GDP. " At the same time, the whole sector has great growth potential – shortly

before the current coronavirus crisis, the European Commission introduced the so-called Green Deal for Europe, a package of measures to ensure a smooth transition to a sustainable and green economy for Europe. Significant investments in ecological transport are also directly related to this. The European Union emphasises the role of rail transport in the Green Deal - its development and support are key to the plan to reduce greenhouse gas

ECONOMIC RESULTS OF FIRMS OPERATING IN THE RAILWAY INDUSTRY 100 000 90 000 80 000 70 000 60 000 50 000 40 000 30 000 20 000 10 000 0

TURNOVER CZK MIL.

Source: analysis for 2020, ACRI

EXPORT CZK MIL.

EMPLOYEES

Photo: A.ZeT archives

This long-standing tradition is successfully linked to the present representatives of the Czech railway industry, who do not rely only on tradition but invest significantly in the development of new products, in the purchase of high-tech technologies and the renewal of production areas. This technological innovation is necessary to ensure the competitiveness of this industrial branch. A highly competitive and stable industry, that is resilient towards the economic difficulties associated with the current pandemic situation – just as can be translated into the economic results, achieved last year by companies associated in the Association of Czech Railway Industry (ACRI). Last year, ACRI members achieved a turnover of approximately CZK 77 billion and, importantly, compared to the previous year, which was not affected by the problems associated with the COVID-19 infection, their turnover increased slightly year-on-year. "The share of exports is very significant, reaching 53 per cent in 2020. It proves that Czech companies offer innovative and competitive products and services in this demanding sector, "says Marie Vopálenská, CEO of ACRI. "The stability of the industry is proving to be a very important factor in maintaining employment, especially in today's difficult

CZECH BUSINESS AND TRADE

emissions from transport by 90 per cent by 2050. The year 2021 will become the European Year of Railway. The European Union places great emphasis on ecology, a substantial reduction in the carbon footprint and climate neutrality, and therefore intends to support the strengthening of the role of rail transport. And investments in this area of railway should be at the forefront in the Czech Republic as well. Marie Vopálenská, General Director, ACRI www.acri.cz

Successful Projects of Czech Companies ACRI members export their high quality products and services especially to the member states of the European Union, the Balkan countries, Turkey, and Russia. Their products, such as train control systems, locomotives and tramcars, are of the highest European standards. The Czech railway industry is at the top among European manufacturers, and Czech companies are in a position to compete on the international scene. Worth mentioning among its export achievements is the recent contract for the delivery of electric units from ŠKODA Transportation to Germany, Turkey, Finland, or Hungary, and the delivery of tramcars from the same manufacturer to a number of European and non-European cities; AŽD Praha is modernising railways in Slovakia, the Balkans, and Turkey, rails from TŘINECKÉ ŽELEZÁRNY delivered to European countries, while railway wheels from Bonatrans can be found serving practically all over the world, and the same is true of anti-friction bearings from ZKL. *ŠKODA Transportation will supply 80 modern tramcars for the Rhein-Neckar-Verkehr transport company. Czech Railways ordered 50 super modern express vehicles from the SIEMENS-SKODA consortium. SKODA will supply 7 six-carriage trains to Saint Petersburg Metro via OOO VAGONMAŠ, part of the Škoda Transportation Group. Škoda

Transportation, in consortium with ŽOS Trnava, won the tender to supply up to 25 electric units to Slovak Railways (ZSSK). The Slovak company will receive state-ofthe-art single-decker RegioPanter units. Transtech Oy, a subsidiary of Škoda Transportation, will supply 10 ForCity Smart Artic trams to the Finnish City of Helsinki. *AŽD Praha has equipped the 13.3 km-long loop at the Velim Test Centre with ETCS Level 2. Also completed is the first commercial project for the installation of the ETCS L2 on the section Kolin – Břeclav – state border of the Czech Republic with the Slovak Republic and Austria. The ETCS L2 project on the Petrovice u Karviné – Břeclav section is under construction, and work on the Česká Třebová – Přerov section has recently been completed. AŽD Praha is collaborating on various projects in Turkey, for example on the modernisation of the Istanbul Metro, for which AŽD supplied the signalling systems and carried out the upgrade of railway crossing safety devices. It also supplied components for more than 260 railway crossings, and traffic control and information systems for Izmir. AŽD PRAHA is completing the delivery of its signalling system to Montenegro. *GHH-BONATRANS, premium supplier of railway wheelsets and their parts, a company with a history of more than 200 years with delivery footprints in more than 80 countries globally, represents an impres-

sive part of the history of wheelset design and manufacture. Generations of genuine experts continuously contribute to the development of wheelsets. Respecting the past but looking ahead, the pioneers of wheelset manufacture produce premium solutions for railways worldwide. *ŠKODA ELECTRIC offers the development, production, and integration of propulsion and control systems for various rail vehicles, i.e. underground railways, locomotives, EMUs, low-floor trams, trolleybuses and battery vehicles for environmentally friendly public transport. Škoda Electric also has experience with PMSM motors, SiC semiconductors, TCMS and system integration, and is a reliable partner and technology leader in the field of propulsion systems for rail vehicles. *AMiT is a supplier of industrial electronics and reliable solutions for public and mass transportation, industrial automation and building automation. AMiT Transportation is one of the most important players in Central Europe in the development and production of control systems for transportation, mainly for railways and rolling stock. *DAKO-CZ is a traditional manufacturer of braking systems and components for railway vehicles. It has important contracts with leading world rolling stock manufacturers, including Siemens and Stadler.

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ENERGY

Year 2021 Could Be Groundbreaking for Czech Energy Sector The energy industry is one of the most important sectors in the Czech Republic. Traditionally, we are very strong in the area of engineering and the manufacture of power generating facilities, including nuclear power sources, which the industry can build and operate efficiently.

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n ENERGY ENGINEERING Czech energy engineering is currently showing a slowdown, caused primarily by low electricity prices, which in turn led to a halt in new power plant construction. The herald of a brighter morrow is seen in the rapid development of know-how and extensive production capacity, traditions and a good name worldwide. Especially strong instances of this can be found in the East European countries, the former Soviet Union, and in the Middle East, where Czech companies were successful suppliers in the past. A solution is to offer new products and to establish a footing in new markets. One of the big firms holding a prominent position in this field is the Vítkovice Machinery Group, comprising 30 firms concerned with the preparation of large investment projects. Another important player is Doosan Škoda Power, s.r.o., a member of Doosan Heavy Industries, based in Plzeň, with a century-long tradition in turbine manufacture. The company also manufactures turbo generators, heat exchangers and engine rooms, using its own development and product testing. Also well known is Modřany Power, a.s., an important manufacturer of piping systems for the energy industry, which are exported to some 40 countries worldwide. It also supplies parts for the gas industry, and for the petrochemical and construction industries.

n ENERGY STABILITY IN THE CZECH

REPUBLIC AND ATTRACTIVENESS FOR FOREIGN INVESTORS

From the foreign investors' point of view, the Czech Republic is very attractive as regards the energy sector, both concerning legislation and future development. More investment can be expected to go into production facilities, cross-border installations and protection against electricity spilling across the border, especially from Germany, investment in the infrastructure in the area of distribution and the completion of the backbone gas pipeline running from north to south. The parameters of the updated State Energy Concept and the draft to regulate the pipeline system create good conditions for ensuring a reasonable payback period for the capital invested.

n OBJECTIVES AND AIMS OF CZECH

ENERGY INDUSTRY

The future structure of the energy mix and the strategy of the Czech Republic are outlined by the State Energy Concept, approved in 2015. The document envisages a relatively massive reduction in the use of solid fossil fuels, from the current 40 per cent to 11–17 per cent, which mainly concerns black and brown coal. Reduction is also envisaged in the use of liquid fossil fuels to 14–17 per cent from the present 20 per cent, while

Photo: E.ON archives

The Czech Republic is self-sufficient in electricity generation, based predominantly on domestic brown coal deposits and nuclear power sources. On the other hand, natural gas and oil are imported from politically unstable countries, which may endanger safe and reliable supplies in future. The adequate capacity of national and international transmission facilities creates prerequisites for international trade in electricity. The energy sector is a stable branch in the Czech Republic, attracting foreign investors and creating good prerequisites for the further development of Czech industry. The Czech power industry is still dominated by coal resources. Traditionally, with the largest proportion of energy being generated by brown coal-powered power stations, the second largest electrical power source in terms of output in the Czech Republic are the Temelín and the Dukovany nuclear power stations. Despite the protective measures and restrictions imposed by the government, in 2020 the Dukovany and Temelín power stations narrowly surpassed the 30 billion kilowatt/hour mark in electricity supply, confirming the key position of emission-free energy sources in the Czech Republic. In 2020, the Temelín power station generated 15.75 terawatt hours – historically its third highest output.

TVK ENERGO s.r.o. – Czech Company Focused on Power Sector and Mechanical Engineering We offer supplies of spare parts for technologies with their origin in the Czech Republic. We specialise in the power sector, mechanical engineering, heating plants, the chemical industry and mining. We have direct contacts to companies that supply technological complexes worldwide, under the brand names of Škoda, Vítkovice, Unex, Simex, ČKD, Sigma and others. Therefore, in collaboration with experienced experts and designers, we also provide professional consulting services and technical assistance. We assist foreign partners in their search for original technical documentation and, subsequently, at the stage of modernisation and reconstruction, we provide engineering services, including turnkey deliveries. Our future goal is to keep promoting the excellent name and tradition of Czech manufacturers. Bc. Vladimír Karpíšek, CEO

TVK ENERGO s.r.o. Na Stezce 696 | 261 01 Příbram | Czech Republic T: +420 733 684 377 | E: karpisek@tvkenergo.cz | W: www.tvkenergo.cz

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the importance of nuclear power and renewable energy sources is to increase. Concerning natural gas, pressure is expected to grow to ensure the reduction of its use, but in reality it is very likely that its importance will grow, especially with regard to the flexibility of this fuel. The Czech Republic will continue to stand on the same pillars on which it has been standing to date: nuclear energy and domestic coal, with the use of domestic renewable sources. Nuclear energy is to be supplemented with coal and gas. Therefore an important role will be played by the accumulation of heat in hot-water tanks and electricity in accumulators to ensure a short-term balance. The development of technology for hydrogen and methane production | 32

from electricity for the seasonal storage of summer surpluses gained from renewable sources for winter use will also be important. The role of coal will be weakening with the gradual exhaustion of its domestic deposits, while the role of renewable energy sources, nuclear sources, and gas will be strengthening. As regards vehicle drive development, greater space exists for the use of methane and hydrogen obtained from renewable sources, rather than for electromobility. The Czech energy industry is becoming increasingly tied to the development of the European power industry, with all its pros and cons. It will be very important to prevent the transfer of the risks and costs to the Czech power industry, arising from the source

irresponsibility in electricity production in other EU states. Distributors will have to change into platform providers and link together local plant operators with battery storage facilities, electric car charging stations, smart city applications and other entities. Grid operators will thus be playing the central role in the framework of the transformation of the Czech power industry. The year 2021 will be a demanding one for all the energy market actors. In the Czech Republic, key Act amendments are expected to be passed by Parliament, and the European Commission, too, will come forward with the revision of important directives. A major event will be the approval of the form and the follow-up invitation of tenders for the

Photo: E.ON archives

ENERGY

Surge Protective Devices For Buildings, Industry, PV solutions, IT

The safety / users satisfaction / reliability of technologies SALTEK®. A leading Czech company specialising in the development and production of surge protective devices. We offer either a complete range of Type 1 to 3 Surge protective devices for low-voltage power systems according to EN 61643-11 or surge protective devices for informatics, measurement & control and telecommunications. Our products provide protection against atmospheric and technological overvoltage and ensure safe and trouble-free operation of technological equipment, machinery and electrical appliances in industry, transport, telecommunications, data centres, office buildings as well as households.

We are here for you SALTEK s.r.o. Drážďanská 85, 400 07 Ústí nad Labem Czech Republic Phone: +420 475 655 511 E-mail: info@saltek.cz www.saltek.eu

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ENERGY

KEY ACTORS IN THE ELECTRICITY AND GAS MARKETS IN THE CZECH REPUBLIC The most significant player in the Czech market is the ČEZ Group, currently figuring among the ten most important players in the European market. ČEZ is a vertically integrated company, operating in the area of coal mining, conventional and renewable energy sources’ production, trading, electricity and gas sales, electricity distribution, energy services, and telecommunications. The ČEZ Group has the capacity to react flexibly to changes in the energy sector which, according to EBITDA, ranks it alongside the best energy companies in Europe. The company´s revenues and other operating income for 2020 totalled CZK 213.7 billion. Generation of electricity from conventional energy sources dropped by 6 %. In the Czech Republic, the generation of electricity from coal went down by 16 %, especially due to the increase of prices of gas emission allowances for coal power plants being phased out. The Earnings Before Interest, Taxes and Depreciation and Amortisation (EBITDA) for the whole year amounted to CZK 64.8 billion, which is an 8 % year-on-year increase, resulting especially from a growth of the strike prices of the electricity generat-

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ed, thanks to a several-year presale on the wholesale market and due to the stable, safe operation of nuclear sources. Europe is pursuing its goal of emission-free energy increasingly more rapidly, which is where the ČEZ Group has taken another significant step, reducing the emission intensity by 10 %. In 2021, another decrease by more than 12 % is expected. Another important actor in the Czech market is innogy Česká republika (formally the RWE Group), which is concerned with gas transmission, distribution and sales, and energy services. The company´s total operating income for 2020 amounted to CZK 2.4 billion. The commercial performance of innogy Energie in the “covid“ year of 2020 was not bad at all. The company increased its sales of natural gas to final customers by 4.3 % up to 26.9 billion kWh. The increase is attributed especially to large customers. Supplies of electrical energy went up by 8.7 % to 3.38 billion kWh. In this case, the increase is attributed to all main groups of customers. Other important players in the Czech market include the E.ON Group, selling and distributing electricity and gas and providing energy services. The Group's portfolio also comprises smaller manufacturing facilities.

Sev.en Energy is an energy group engaged in all types of activities, ranging from mining and production of brown coal of the best quality in Europe, to the generation of electrical energy and heat, and trading in commodities at European-wide level. Another company with a similar structure is Pražská energetika, operating on the territory of the capital city of Prague, which also invests in renewable energy sources outside its own distribution area. The Veolia Energie Group in the CR, too, is one of the largest producers and suppliers of heating, cooling, electricity and other energy commodities. Bohemia Energy, another energy group, achieved a 7 % year-on-year increase in revenues, amounting to CZK 23.1 billion last year. In 2020, Bohemia Energy was taken over by Energie ČS, an electricity and gas subsidiary of Česká spořitelna. Other members of the group are Amper Market, Comfort Energy, Europe Easy Energy, X Energie and Slovakia Energy, which is a company operating in Slovakia. There are also a number of alternative electricity and gas suppliers and energy service providers in the Czech Republic. Energy services are another step towards broadening the activities of vertically integrated companies and is a segment with great potential for future development.

Photo: archives

construction of new blocks in the Dukovany nuclear power plant. The launch of the Modernisation Fund will also have a great impact on the situation in the energy industry. Its fate will determine the fixing of the final horizon for the closing down of coal mining in the Czech Republic. Also important in this connection will be the debate on the transformation of the heating industry and the supply of heat to households. In addition, the Czech Republic will have to define steps regarding the growing demand for net mobility, further development of renewable energy sources and related measures in the electricity transmission and distribution networks.

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EGEM – Builder of the Largest Battery Storage Facility in Europe EGEM, an important Czech player in the power plant assembly market, has successfully completed and handed over for permanent operation a modern battery storage facility, which it has built inside the Schwarze Pumpe power station in Lower Lusatia.

After several months of professional dialogue organised by the German energy giant LEAG, during the course of which EGEM not only proved its technical expertise, but also, in the last round of the talks concerning pricing, managed to win, even in competition with major global players in the area of renewable sources, a contract for work. This contract was signed in Cottbus, Brandenburg on St Barbara´s Day, 4 December 2018. After the project design phase, work on the actual project started on 9 July 2019 by placing a commemorative capsule in the foundations of the power station. The challenges during construction continued until the final handover of the project for commercial use.

n NEW INNOVATIVE

OPPORTUNITY

The project called BigBatt, located in the Lower Lusatia brown-coal region, took several years to complete. Its realisation is a response to the search for new innovative opportunities, to compensate for the gradual elimination of traditional energy sources, such as coal and thermal power plants. Experts from LEAG and the local technical university, together | 36

with Siemens specialists, prepared the original concept of the battery source, which was approved and offered for tender. Support was granted by the Federal State of Brandenburg, on whose territory

the project is situated. The proposed concept was optimised and reinforced by EGEM specialists, in collaboration with the key suppliers of parts of the works – SMA and LG Chem. As a result, considerable savings and a reduction in the number of containers used was achieved. This was augmented by the use of modular solutions and the latest technologies, including prototypes. The main task of the proposed equipment is to provide services for the primary regulation of the transmission network of one of the German 50Hertz operators, i.e. assistance in the stabilisation of the frequency of the electric transmission network and, at the same time, the ability to compensate for reactive power and to cover energy peaks. In addition, the system is fitted with what is called the “black start option”, i.e. the ability to

EGEM s.r.o. is an engineering-supplier company oriented towards the project design, construction, reconstruction, repair, service and maintenance of power distribution equipment, including transmission paths and electrical parts of energy sources. The company offers its clients comprehensive services, from solution suggestions and their realisation, to services related to equipment operation, service and maintenance.

CZECH BUSINESS AND TRADE

restart the electrification system after a potential breakdown.

n EMPHASIS ON ENVIRONMENTAL

ASPECTS

The battery storage facility, with nominal capacity of 50 MWh, consists of thirteen 45 ft long containers with lithium-ion batteries, 13 modular platforms with inverters and inverter transformers, a self-consumption switchboard, including back-up power supply, a medium voltage switchboard, and a 110 kV block transformer, connected by cable to the outlet substation of the Schwarze Pumpe power plant. Landscaping and firefighting and anti-noise systems are also part of the project. The design and its realisation place great emphasis on environmental aspects. Landscaping

operations began in summer 2019, after the handover and approval of the project documentation and the ceremonial commencement of construction. The first step was the laying of the foundations for all the containers, which was followed by the laying of cables, the installation of all the equipment, and the connection of all parts of the works. The physical assembly of the whole project was completed in spring 2020. This was followed by an equally difficult period of testing, which verified the proposed configuration, connection and functioning of the installed components. Live, commercial operation was launched on 30 December 2020.

project, completed within a relatively short period of time, its realisation was not free of problems and challenges. The greatest of these was, incontestably, the pandemic situation, which caused delays in the delivery of key supplies, such as battery containers and actual battery modules. As a result, the entire supply of battery modules had to be temporarily stored, which also raised handling costs. Since the start of operations, LEAG´s "Big Flashlight" in Schwarze Pumpe has continuously been providing the much needed system services for the German transmission network.

n DEMANDING CHALLENGES EGEM s.r.o. www.egem.cz

Although we can be rightly proud of the successful launch of this complicated

Project Design • Construction Reconstruction • Repair Service • Maintenance of power distribution equipment, including transmission paths and electrical parts of power sources in HV, EHV and Ultra-high V ranges.

Important Czech player in the energy assembly market Operating on the market for 26 years Supplier of comprehensive solutions for the innovative energy industry EGEM s.r.o. egem@egem.cz www.egem.cz

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ENERGY

Ambitious Plans to Enlarge Renewable Energy Sources in the CR

n BIOMASS IN THE ENERGY MIX Biomass has the greatest share in the production of energy from renewable sources, and this proportion is continuously growing in Europe, including the Czech Republic, and everywhere else worldwide. In the Czech Republic, the share of biomass accounts for nearly 14 per cent of total energy consumption, according to the calculations of the European Biomass Association. Biomass supplies more than four-fifths of all renewable energy in this country. Bioenergy is planned to play this important role – to save money for the import of fossil fuels and offer the | 38

domestic alternative to Czech communities which suffer from air pollution especially in winter – also in future. And to create conditions for follow-up projects, such as building greenhouses for all-year cultivation of tomatoes and herbs in the vicinity of biogas stations, or to heat stables and

other agricultural facilities by burning straw in boilers. Czech agriculture has always been fulfilling the function of biomass energy producer along with that of food producer. Biomass is used to make biogas and there are plans to use it also in transport.

ENERGY FROM RENEWABLE SOURCES

Photovoltaic power plants 4.4 % Heat pumps 3.8 % Hydroelectric power plants 3.1 % Biodegradable part of solid communal waste 1.9 % Liquid biofuels 6.9 % Biogas 13.2 % Bioenergetics has an 87 % share of all res Source: Ministry of Industry and Trade

Photo: MPO archives

The Czech Republic is entering a new decade, whose characteristic feature will be the modernisation of the energy industry and the growth of renewable energy sources. The updated National Climate and Energy Plan (NKEP) provides for the proportion of renewable sources in energy consumption in 2030 to increase to 22 %. This plan is in keeping with the EU 2030 target to increase the proportion of renewable energy sources to 32 %. According to a study by Deloitte Company, the NKEP targets can be reasonably surpassed. In addition, estimates suggest that the European targets could be increased to as much as 39 %. In that case, this means that in the Czech Republic the proportion of energy obtained from renewable sources would be 26.5 % by the year 2030. The targets can be best met in power engineering, and the necessary step towards this target is therefore its decarbonisation.

CZECH BUSINESS AND TRADE

number one in the volume of wood pellet production in the domestic market. Number two is the Mayr-Melnhof Holz Paskov sawmill in Staříč, with an output of slightly below 100 000 tonnes per annum. Another manufacturer showing a leap in production is the Czech family firm of Biomac in Ždírec nad Doubravou. It works in three-shift operations, which increased its wood pellet production from 45 000 tonnes in 2019 to 60 000 tonnes in 2020. Also worth mentioning is the Premium Pellets company in Golčův Jeníkov, which has vastly modernised and ecologised its production. The Czech Republic exports nearly three-quarters of its wood pellet production to western markets. The largest importers, besides Italy, are Austria and Germany.

n A NEW OPPORTUNITY –

BIOMETHANE PRODUCTION

n PELLETS ARE SHOWING

STEADY GROWTH

Wood pellets are experiencing an unexpected boom, even in the current period of crisis. In the first half of the year, pellet production increased by 26 % year-onyear. From January to June 2020, total biofuel production amounted to 249 000 tonnes. Pellet production was not affected by labour shortage; on the contrary, pellet manufacturers took advantage of the excess supply of wood infested with bark beetles in the woods and of low timber prices. Pellet production was growing in practically all wood pellet manufacturing plants. For example, the sawmill with a wood pellet manufacturing plant in Chanovice, belonging to Austria´s Pfeifer wood processing group, is working at full capacity. Last year it increased its wood pellet production by 80 000 tonnes, to the current 120 000 tonnes per annum. The plant in Chanovice has become

Biogas stations account for 23 % of total power produced from renewable energy sources in the Czech Republic, which is by no means a negligible proportion. Their annual output is 2526 GWh. Currently, there are nearly 600 biogas stations in the Czech Republic, which is about 54 stations per million inhabitants. This ranks the CR third in Europe, after Germany and Switzerland. Of this number, about 400 biogas stations operate in agriculture, using mainly silage corn. Approximately 100 biogas stations process sewage sludge and only about 20 use communal and industrial biologically degradable wastes. Today, however, all biogas stations, irrespective of the input raw material they use, have a new opportunity – to produce their own biomethane. The plan is to supply the gasworks network in the Czech Republic with as much as 500 million cubic metres of biomethane per year, which is approximately 6 % of the current natural gas consumption. Some 40 % of this amount is to be obtained from waste raw materials, such as sewage sludge and various biowastes. A gas distribution network model will be created under the current SmartInject project, where different operating stages will be simulated, including the biomethane stage, according to the Czech Gas Association. The model will be adjusted on the basis of network

flow measuring, which will show the ideal composition of the gas mixture.

n SOLAR POWER PLANTS HAVE

A POTENTIAL TO GROW IN THE CZECH REPUBLIC

Photovoltaics has a great potential to grow, even in the geographical conditions of the Czech Republic. In the early stages, photovoltaics was an energy source proffered especially by ecologically-minded people and enthusiasts yearning for the country´s energetic self-sufficiency. Over the past few years, however, the cost of solar systems has greatly decreased, making them more affordable. This trend is also confirmed by the figures of ČEZ Sale Company, one of the main providers of photovoltaic panel installation work in the Czech Republic. In the first five months of 2020, the firm installed 238 solar systems on roofs in the Czech Republic, 54 % more than in the same period of the preceding year. The growing trend has not been adversely influenced even by the coronavirus pandemic. In addition, solar parks are today the most efficient renewable energy source. Investors are planning the construction of both new large conventional land parks and unconventional solar systems stationed on water, over farmed land and parking sites. The Sev.en Energy mining group, in collaboration with the Fuel Combine Ústí and J.E. Purkyně University, is preparing the first floating solar energy source with a capacity of one megawatt as a pilot project. In addition, domestic investors are considering, testing, and even implementing another new project, the installation of solar energy devices over farmed land areas and parking sites and on the roofs of industrial, warehousing or shopping centres, and employee carports. ČEZ is building the largest carport with an output of 820 kilowatt hours on its parking site for 322 cars near the Dukovany Nuclear Power Station. The facility worth CZK 60 million is using another new photovoltaic technical innovation – double-sided solar panels generating power not only from direct solar radiation, but also from light reflected 39 |

ENERGY

n ELECTRICITY STORAGE

FACILITIES

The development of renewable energy generation is made possible by electricity storage facilities, which help to balance out uneven electricity supplies from solar and wind power stations. In this decade, the number of large capacity batteries is expected to increase. Currently, more than 80 % of the installed output of large electricity storage facilities in Europe are provided by pumped storage hydroelectric power stations. In the Czech Republic, there are four such power plants. The largest of them is the Dlouhé stráně station in the Jeseniky Mountains, which also provides an important service, “start from darkness”. In the case of a blackout, the power station can renew voltage in the system by “starting” the power station in Chvaletice, which is connected to it. The same service can be provided by the Dalešice pumped storage power station, connected to the Dukovany nuclear power plant. Czech firms are taking advantage of the more favourable situation in other countries. For example, the domestic Sev.en Energy group, together with Chinese partners, is planning to build in Essex, the UK, the world´s largest battery | 40

storage facility, using the intermediary of the British firm, InterGen. The project, with an installed capacity of 320 megawatts, has already been approved by the British Department of Energy. “We are very glad that InterGen has obtained permission for the battery storage facility. We are working on the choice of the battery technology and the method of its usage. If all goes according to plan, construction could already start next year,” says Sev.en Energy spokeswoman, Gabriela Sáričková Benešová.

n CZECHS OPERATE AND

MODERNISE HYDROELECTRIC POWER STATIONS IN OTHER COUNTRIES

For the Czech Republic, a country in the centre of Europe, watercourses have a specific geographic and economic importance. There are three main European water divides on the territory of the Czech state, with the waters being drained off into three seas: North Sea, Baltic Sea, and Black Sea. Water has always played an important role in the development of the Czech economy and its export potential. Although the Czech Republic has no high mountains or great rivers and the potential of its watercourses as sources of electricity generation cannot be compared with the global hydro-energy giants, hydropower still has an important tradition in the country. After the political changes in the 1990s, private entrepreneurs began to assert themselves in Czech hydroenergetics and the follow-up engineering industry in the operation of large hydroelectric power stations in the Czech Republic, besides the state, until then their only operator. While many businessmen at that time doubted that this sector would have any chance, the new entrepreneurs saw it differently. In the manufacture of turbines and other water machines, they joined forces, for example, with the Americans and Slovenians, and hand in hand headed for third markets. In November 2020, the Czech Energo-Pro energy group published information that, after passing the necessary tests, it obtained permission to start the operation of two new hydro-electric power plants, Karakurt and

Alpaslan 2, in the east of Turkey. Soon after that, they were connected to the grid and put into commercial operation. At the end of 2020, the group operated seven hydroelectric power stations in Turkey, whose aggregate installed output, when fully completed, will have the capacity of more than 470 megawatts. Total investments of Energo-Pro in Turkish hydroelectric power plants have exceeded one billion dollars. Investments in the Karakurt and Alpaslan 2 power stations are the largest Czech investments in the area of hydroenergetics since November 1989. Another Czech Group, Hydropol, recently completed the construction of a hydroelectric power station, Lavoreit, in the north of Italy, worth CZK 140 million. The project, with a capacity estimated at nearly 5 000 megawatt hours, is part of Hydropol´s broader investment strategy on the territory of regions in central-northern Italy. In this area, the firm owns seven projects, realised either as green field structures or as acquisitions of already functioning power stations, and later modernised. Hydropol Group has been in the energy market since 1996. Besides Italy, it also operates in the UK and Indonesia. It has realised nearly 100 projects in countries on 4 continents. Currently its attention is focused on the planned construction of hydroelectric power stations in Colombia and Indonesia. The group also has experience with projects in Africa. In the Czech Republic, the group was behind the construction of hydroelectric power stations in Velký Osek, Mělník, and Přelouč.

Photo: ČVUT archives

from parked cars. Such a solar park is expected to generate up to 25 % more electricity than conventional panels. The largest roof installation in the Czech Republic is that located by Škoda Auto in Mladá Boleslav on the company roofs and parking sites. Photovoltaic installations on the company roofs and covered parking sites in Mladá Boleslav are expected to supply more than 450 megawatt hours of green electricity per annum, which the car factory will be using for its own immediate consumption. Excess electricity will be stored in batteries. According to Solar Association statistics, altogether 1 373 commercial installations were located on company roofs and covered parking sites in the Czech Republic in 2020, with an aggregate output of 28.8 MWp; nearly four times as many small stations were located on the roofs of family houses, but their aggregate capacity was a mere 22.6 megawatts.

CZECH BUSINESS AND TRADE

Big Challenges in Energy Sector Research The ultimate goal of the research, development and innovations undertaken in the Czech Republic and in Europe in the power sector is the provision of sustainable, safe, competitive, and affordable energy. In 2007, the European Commission released a proclamation about the “SET Plan“ (Strategic Energy Technology Plan), which emphasises the necessity of the development of technologies in the power sector. By 2050, this European Strategic Energy Technology Plan, focusing on climate change mitigation, will have achieved a reduction of greenhouse gas emissions by 80 to 95 %. An objective of the SET Plan is also cutting the costs of power generation with a small carbon footprint and also transformation of the power sector in the context of low-carbon energy technologies. The aforementioned objectives, set for the period until 2050, mean big challenges for the Czech Republic in the reduction of energy demands and in the improvement of endurance of electricity distribution networks. The research, development and innovations undertaken, using large state-of-the-art research infrastructure facilities, should contribute to these objectives being successfully addressed. Let us mention some interesting projects in this regard, implemented in the Czech Republic.

n CZECH SOFTWARE FOR

ELIMINATION OF ENERGY WASTE

A team of Czech researchers and professionals from the power sector is developing unique software, intended to be able, on the basis of a variety of input information, to adjust the consumption of electricity so that it is not wasted. In this way, the utilisation of renewable energy sources will be more effective. The new software is intended to enable decisions on the effective sale and purchase of energies. The use of renewable energy sources is currently becoming increasingly popular. One of the best known methods of generating this type of energy is photovoltaics. “A future system of local power generation, usable at our latitudes, is a combination of a photovoltaic power plant, a cogeneration unit and batteries providing electrical power all year round. It would be great to rely on renewable energy sources only. This is, however, impossible in the Czech Republic. The key is thus to treat energy economically. This means to manage its consumption, production, and also its accumulation,“ explains Jakub Mráček, Manager of NWT, the company working on the project. The software named “Next Generation District” is designed for flexible coverage of the whole range of potential consumers – apartment blocks, administrative

buildings, business centres, industrial premises, among others. This applies, irrespective of whether it is a residential or a commercial distribution system. “As indicated by the name itself, this is a distributed system. It uses electrical energy generated by the use of solar radiation, but when there is not enough of it, the system can switch to consume energy from the electrical grid. The software being developed is intended to make such local distribution systems more effective for its users,“ says Petr Konvalinka, Chairman of the Technology Agency of the Czech Republic, to explain the purpose of the project. The application is going to be available in the second half of 2021.

n EXPERTS DEVELOP NEW

TECHNOLOGIES FOR THE FUTURE OF THE NUCLEAR POWER SECTOR

CANUT (Centre of Advanced Nuclear Technologies) is a large project associating top scientists and manufacturing companies to create new facilities and technologies for the nuclear power sector. For the eight years of its research, the Centre has come up with a series of significant results, enhancing the competitiveness of the Czech Republic in both the European and global contexts. The project was supported by 41 |

the Technology Agency ČR with CZK 233 million within the Competence Centres Programme. Use of nuclear energy has become a natural part of the energy mix of developed countries. The reason is simple: this is one of a small number of sources covering rising demands for energy consumption and, at the same time, complying with the prospects of emissions-free energy. So it can be expected that nuclear power plants will have an essential impact on the development of the economy in future. At present, 30 % of electricity consumption in the EU is covered by nuclear energy and, together with renewable energy sources, this will be one of the main sources of energy to meet the emissions-free requirements in future. High hopes are associated with nuclear fusion, thanks to which we would obtain almost unlimited sources of energy if the research of development is successful. This research is still an open-ended question, so it is a good idea to dedicate efforts simultaneously to the development of both the existing technologies and the Generation IV Nuclear Reactors. The project was launched in 2012 and ended in 2019. It involved 5 research organisations and 3 manufacturing companies. In the 8 years of the systematic research, 5 patent applications were filed, 14 utility models and a series of functional specimens were created, with many software solutions and other results being achieved. “It is logical that we are trying to motivate the nuclear power sector by using cutting-edge technologies, to make it not only really safe, but also possibly most efficient and effective in general. We realise that the higher the efficiency, the fewer adverse impacts there will be in the form of radioactive waste,“ says Petr Konvalinka, Chairman of the Technology Agency of the Czech Republic. The total list of results of this project is very long. R+D teams worked on 7 various thematic issues, including: development of tools and design of experimental facilities for new-generation reactors nuclear instrumentation with enhanced reliability and safety of operation in the existing and new facilities systems of control and management | 42

i nnovation of fuel cycles and all parts of the external fuel cycle technology for enhancement of efficiency and safety of both existing and new nuclear power generation facilities storage and transport of radioactive waste, especially of used nuclear fuel devices for checks of parts of the primary circuit of pressurised-water nuclear reactors “The project results mean improvement of knowledge about many aspects of nuclear power and safety. At the same time, they enhance the competitiveness of the Czech Republic in the strategic area of energy self-sufficiency, and strengthen the position of the Czech Republic in development and research of new carbon-free technologies,“ says Prof. Zdeněk Peroutka, Project Manager. What has also been achieved is significant acceleration of the transfer of knowledge and technologies between research organisations and the private sector. At the same time, the international collaboration has been strengthened and strategic partnerships, e.g. with CERN, CEA, JINR Dubna, NASA, Westinghouse, ABB, have been established.

n RESEARCHERS DEVELOPING

UNIQUE TYPE OF EMISSIONSFREE HEATING PLANT

Experts are focusing on another step towards the more economical usage of renewable energy sources. A flexible system of energy storage being developed in this regard is able to recover and use accumulated heat energy, when needed, for its own production of electricity and heat. The system will be crucial in making up the difference between variable overproduction and lack of energy, which is the main problem of users of renewable energy sources. Relatively a lot of money is being invested in similar systems, especially in the USA. For the time being, Europe is unfortunately still lagging behind in this technology, merely due to the failure to exploit the full potential of European and of Czech industry itself. The Technology Agency of the Czech Republic has supported the ambitious project with almost 50 million crowns (the project is being undertaken in cooperation with Centrum výzkumu Řež s.r.o.,

Doosan Škoda Power s.r.o., Sobriety s.r.o. and ÚJV Řež a.s.). The world’s total consumption of electrical and heat energy keeps growing. However, the structure of global production of electricity is changing, with a growing share of renewable energy sources being used in its generation. However, such sources are unstable over time. The possibility of accumulation and recovery of the accumulated energy is, therefore, the logical solution to make this method of renewable energy sources’ management more effective. The “EFEKT“ project of Czech experts is able to help provide a reliable, safe, and sustainable supply of electrical energy, with simultaneous fulfilment of the obligations towards the reduction of emission limits. The proposed solution is based on the principle of energy accumulation in the form of latent heat (with the change of solid to liquid and vice versa) of the heat transfer medium, with integration of a highly efficient circulation. The accumulation material and the principle of its use will reduce the required size of the heat accumulator down to one-quarter, compared to the best solutions of competitors. The system being developed will also be usable in heating plants, for example, in emissions-free heating plants, where the energy surpluses in night hours are accumulated and in peak hours are used for combined supplies of electricity and heat. Thanks to its high safety and a minimum or even zero impact on the environment, this source can safely be operated even in urban areas, i.e. directly where the energy is consumed. Researchers undertaking this project are using modern calculation codes, specifically developed or adjusted for this particular purpose, and top simulation tools. “There are many concepts of energy storage. But all of them are coping with various problems, such as low efficiency, the need for suitable geological conditions, space demands, adverse impacts on the environment, insufficient long-term stability, etc. The unit designed in this project represents a system with an expected efficiency of approximately 40 %. All applied media are chemically stable and can easily be processed. It has no special requirements for its location. It can even be situated in close proximity to

Photo: ČVUT archives

ENERGY

CZECH BUSINESS AND TRADE

urban areas,“ says Otakar Frýbort, Project Manager, from Centrum výzkum Řež s.r.o.

n CZECH CHARGER – A UNIQUE

HYDROGEN ENERGY SOURCE

DEVINN is a development company, focused especially on the automotive industry and collaborating in particular with Škoda Auto. In 2020, it presented H2BASE, a mobile source of electrical energy from hydrogen, which is usable not only in the world of electromobility. It works on the basis of a hydrogen fuel cell and is allegedly unparalleled worldwide. The heart of the system is a fuel cell, where the synthesis of hydrogen and oxygen occurs. The hydrogen is stored in pressure containers, while the oxygen is drawn in from the surrounding air. The output is electrical and heat energy. Besides the fuel cell, the system is also equipped with a high-voltage battery, the function of which is to make up for deviations in consumption. The base unit of the H2BASE mobile fuel cell fits exactly on one Euro-pallet. This fact makes it easily transportable. It has a pressure container with a capacity of 14 kilograms of hydrogen, which is an equivalent of about 225 kWh. Such a capacity corresponds to charging 9 Škoda Citigo-e iV cars with 36.8 kWh batteries, from 10 to 80 %. If the system was used for supplies of energy in a typical

household, it would suffice for more than 50 days to cover the operation of typical household appliances. The first pieces of the H2BASE system will appear on the market in approximately the course of 2021. The Devinn Company expects it to be used for summer festivals, cultural events and testing locations, where stationary charging stations are planned to be built in future. The system may also be applied in the construction sector and as a back-up power source for data centres. The hydrogen mobile system aims at being an alternative to traditional diesel generators, contrary to which it promises quieter and more ecological operation. By the way, its only output is clean water. Moreover, the system is intended to be designed with respect to a long lifecycle.

n ANOTHER FISSION REACTOR

FOR EDUCATION AND RESEARCH

The Czech Technical University (ČVUT) in Prague will have another fission reactor for education and research. Its launch is planned for 2022. The new VR-2 reactor is classified as a subcritical reactor. This is therefore a specific research nuclear facility, which requires an external source of neutrons for maintenance of the fission chain reaction. Therefore, the only cause of its shutdown is disconnection of the source of neutrons. The actual fission chain reaction alone is not sustainable.

The reactor consists of a cylindrical vessel, approximately 1.7 metres high, with a volume of approx. 2 200 litres. Inside the vessel, there is a removable inbuilt structure with a grid for installation of fuel rods. The radiation shielding is provided by water and concrete. The Czech Republic has a total of six energy reactors in two nuclear power plants and three research reactors in another two locations: two of them in Řež near Prague and one in Prague Troja at the Czech Technical University. “Our university is one of just a few universities in the world with its own fission and fusion reactor. In three years’ time, we will even have two fission reactors, which will increase our potential for the education of key nuclear experts,“ says Igor Jex, Dean of the Faculty of Nuclear Sciences and Physical Engineering at the Czech Technical University. The Department of Nuclear Reactors of the Faculty of Nuclear Sciences and Physical Engineering uses the VR-1 reactor both for education and for research. Besides students of this university, it is also used by students of other universities and employees of various companies and organisations from the Czech Republic and from abroad. For example, it is used on a regular basis for firefighter training. The reactor has even been visited by the crew of a nuclear submarine. 43 |

CZECH TOP

World Player in Electric Heating Systems Market The Czech firm Fenix is one of the largest European manufacturers of electric heating systems, as well as an important exporter. The company exports its products to more than 70 countries across 5 continents and was ranked first in the “Large Company” category in the 2020 Czech Exporters’ Awards Competition. Its core business is the manufacture and sale of electric heating systems, with ECOFILM floor and ceiling heating foils, heating cables, cable mats and ECOFLOOR antifreeze systems, ECOSUN radiant heating panels, and recently also AES battery storage facilities for household and industrial use as the backbone of the group´s production programme.

The firm, which started as a small garage workshop making electric radiant panels, has become an important player in the market with a turnover of more than CZK 1.7 billion. In addition, this is a company which can justifiably serve as an example of showing the usefulness of including the younger generation in the company management. For the whole duration of its existence, the company´s head has been the father, Cyril Svozil, Director and owner of the holding. His daughter, Kateřina Jezerská, has several years behind her of successful employment in the position of Executive Director of the Spanish affiliation of CEILHIT. Since January 2017, she has been Director of Fenix Trading s.r.o., generating the highest revenue among the firm´s subsidiaries. The Director’s son, Cyril Svozil Jr., who spent | 44

8 years in France as head of the company´s affiliation, ACSO, now heads the department concerned with the development and manufacture of battery storage facilities and is gradually taking over the management of the entire Fenix Group. “The year 2020 for us was one that can be characterised as a year of investment, which we estimate at about CZK 180 million. Last year, the Fenix Group was joined by the Serbian company of Elmark. We are enlarging production lines in the Spanish company of Ceilhit and are increasing automation in our plant in Jeseník. There, the biggest investments were the purchase of a Salvagniny automatic punching line, to be put into operation later this year, the purchase of a railing and a welding robot, an extrusion line for the manufacture of heating cables, and a painting line. The construction of a new Fenix plant in Slovakia has been postponed until later this year, due to the Coronavirus pandemic,” said Kateřina Jezerská, Director of Fenix Trading, adding: “We are preparing for Expo Dubai, postponed until October 2021. It will be our

first international exhibition, at which we will exhibit in the Middle East.” Besides comfortable heating in residential houses, heating cables and panels have also proven themselves in agriculture and industry, e.g. for heating the soil in greenhouses, protection of vines in vineyards against frost and heating livestock stables. In recent years, heating cables have found their use in heating football pitches. They are becoming popular in the European market, in the heating of playground surfaces with artificial grass. In 2018, for example, Fenix supplied heating cables for 4 football pitches with artificial grass in Norway and, in 2019, heating rugs were installed on 11 fields. The response from the clubs using the heating systems are very good; the players prefer training on fields with electric heating, which they find much more comfortable. Long-term experience shows that electric heating responds very quickly to today´s frequent temperature changes and using this type of heating is therefore much more economical. In addition, hot water systems are unable to ensure such flexibility and such precision of small amounts of heat supplies as electric heating. Currently, the holding has affiliations in 9 countries, in addition to the Czech Republic also in Slovakia, France, Spain, the UK, Norway, Germany, and Poland, and since 1 January 2021 also in Serbia. The firm employs 325 people in these countries (in the Czech Republic 180).

Battery Storage Systems are not Something Strange for Fenix Group Since 2016, they have been testing these in their Office Centre in Jeseník, to gain firsthand experience of their usage for nearly zero-energy buildings (NZEBs). Moreover, since 2018, the Fenix Group has been operating an SAS system for the management of energy consumption peaks, which is one of the biggest battery energy storage systems in the Czech Republic. It is manufactured by the AERS subsidiary, which also last year completed the development and certification of the home modular energy accumulation systems named AES. “We are the first to introduce the AES-10 version to the market, which is a 10-kW energy accumulation system with 11.5-kWh storage capacity. This is a modular system, so the capacity of this version can be simply extended up to 22 kWh. We deliver this system to customers in an "all-in-one" finish, so all they need to do is to attach the cables from FVE panels and, on the other side, to connect it to the internal electrical network of the building,“ says Cyril Svozil Jr., Director of AERS s.r.o., adding: “For a long time, the absence of an affordable storage of energy had limited possibilities of energy savings and consumption cuts. With the development of new accumulation systems and their prices dropping, the situation is changing – renewable energy sources, together with an energy storage system, are becoming an affordable alternative for property owners.“

Only the sun does it better A NEW CONCEPT FOR BUILDINGS WITH NEARLY ZERO CONSUMPTION

THE FUTURE IS ELECTRIC

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www.fenixgroup.eu ECOSUN panels

ECOFLOOR cables and mats

ECOFILM heating foil

ECOSUN TH panels ISTSG L A I IN EC EAT

IN R

ANT

ADI

Address: Slezská 2, 790 01 Jeseník, Czech Republic Foreign Sales (Trading): Phone: +420 584 495 302; Fax: +420 584 495 303; fenix@fenixgroup.cz

STEEL INDUSTRY

Revival of Demand in Europe, but with Prospects Uncertain In 2020, domestic raw steel production declined by a mere 2.6 % year on year, even though the spring decrease was 25 %, according to the Steel Union. The reason is that the losses were offset already in the second half of the year. In 2020, Czech imports dropped to 6.6 million tonnes (in 2019, this was 7 million tonnes), while export remained at approximately the same level as in 2019. In Europe, import from China declined, while Turkey is strengthening its position, even though the European Commission´s attention is now focusing on its unfair business practices. Since the fourth quarter of 2020, raw material prices have been growing rapidly, keeping steelmakers´ margins lower than they would wish, although the price increases have been projected into the prices of final products. In any case, the uncertainties about the development of the pandemic situation make all forecasts problematic.

Last year, the steel industry found itself in the worst situation since the previous financial crises. In spite of this, raw steel production in the Czech Republic fell by a relatively small margin, specifically by 2.6 %, to 4.3 million tonnes. The Czech Republic continues to be a leader in the manufacture of long products, despite its slight decline to 2.9 million tonnes. The manufacture of flat products last year rose to 1.1 million tonnes. The remaining part of the volume is tubes. Steel imports into the Czech Republic in 2020 fell to 6.6 million tonnes from 7 million tonnes in 2019. Steel export last year were worth CZK 89 million. As in previous years, the EU member states were the key market for Czech steel export, with firms in neighbouring countries buying nearly two-thirds of Czech export. | 46

Last year´s results were largely due to the lower import of steel from countries outside the European Union, which reflected the effects of the antidumping taxes imposed by the European Commission on import from China, Russia, and Ukraine in recent years. On the other hand, Czech steelmakers were negatively affected by the tariffs imposed by the Trump administration in 2018. Třinecké železárny Steelworks, for example, has lost its traditional customers for steel tubes and rails in the United States. Many of the members of the Steel Union have left the US market completely because of the tariff; as a result, Czech export to the USA fell by two-thirds and all-European export by one-half since the imposition of the tariff. The growth pushed by revived demand and the growing prices of metallurgical products continued also in the first months of this year. For example, Liberty Ostrava Steelworks, which has had problems with its sales in recent years, now operate at full capacity. The current situation of Czech steelworks in general does not look bad at all; what is worse is their long-term outlook. Steel Union´s experts fear further pressure from the European Commission and the European Parliament to reduce emissions, which in the final analysis will lead to closing down the steelworks and transferring their production outside the EU. A certain possibility is iron ore reduction by replacing coke with hydrogen. For the time being, however, this is prevented by a short supply of hydrogen in the market and the energy intensiveness of its production. Currently, steel prices stand at record high levels in all markets, with input raw material prices accelerating at about the same rate. Last year, iron ore prices rose by 90 % and coking coal costs 45 % more than in November 2020. At the same time, scrap iron prices skyrocketed by 40 %. This has also become reflected in steel prices, which, for example in the USA, are the highest in history and the steelworks´ output is not enough to satisfy demand.

n IMPORTANT PLAYERS

IN THE MARKET

Třinecké Železárny Steelworks Firm with the longest tradition of metallurgical production in the Czech Republic. This important company with a closed metallurgical production cycle was founded in 1839. Today the TŘINECKÉ ŽELEZÁRNY – MORAVIA STEEL group comprises, for example, the companies

STROJÍRNY A STAVBY TŘINEC, a.s., SLÉVÁRNY TŘINEC, a.s., ENERGETIKA TŘINEC, a.s., Řetězárna a.s., REFRASIL, s.r.o., VÚHŽ a.s., MATERIÁLOVÝ A METALURGICKÝ VÝZKUM s.r.o., Šroubárna Kyjov, spol. s r.o. HŽP a.s., METALURGIA S.A., Kovárna VIVA a.s., D & D Drótáru zrt, ŽDB Drátovna, a.s., IMOPRA s.r.o. and DALSELV DESIGN a.s. In 2021, one of the main challenges for the firm is reducing the carbon footprint in iron and steel production. This challenge will be projected into the firm´s further development and into investments. This year, the firm is planning to invest CZK 1.6 billion. Its investments in 2020 amounted to CZK 1.4 billion. Z-GROUP Steel Holding The company is successfully continuing the long tradition of Czech-Moravian foundries and steelworks, such as Válcovny trub Chomutov, founded by the Mannesmann firm in 1890, Železárny Hrádek, founded by Rudolf Hudlický in the year 1900, Železárny Chomutov, founded by the firm Poldina Huť Kladno in 1917 and Železárny Veselí, founded in 1962. VÍTKOVICE STEEL The company is a leading European manufacturer of rolled steel products and the largest manufacturer of steel sheets in the Czech Republic. Its core production programme comprises thick sheets and shaped blanks, made in the sheet metal rolling mill, and sheet piles, manufactured in the heavy profile rolling mill. The company is the only manufacturer of sheet piles in the Czech Republic and one of two manufacturers in the European Union. In thick sheet production, it benefits from its strong market share on the key domestic market. The quality control of its products is carried out by the company’s own accredited testing laboratories, fitted with the most up-to-date testing equipment. LIBERTY Ostrava a.s. The company is an integrated metallurgical enterprise with a capacity of 3.6 million tonnes of steel, used mainly in construction, engineering and the petrochemical industry. It is a domestic leader in the manufacture of road barriers and pipes. Besides the Czech market, the company exports its products to more than 40 countries worldwide. Together with its affiliations, it employs 6 000 people. Its above-average environmentally friendly production has minimum impact on the environment. In the next ten years, GFG Alli-

CZECH BUSINESS AND TRADE

Sandvik Materials Technology ance is planning to invest EUR 750 million in This world-renowned company concerns itthe construction of a new unique steel plant self with the development and manufacture and major modernisation of the rolling mills, of products from modern stainless steels to assist the foundry in becoming a leading and special alloys for the most demanding steel company with environmentally friendly environments, including products and production of high-quality steel in Central systems for industrial heating. Its products Europe. Part of the strategic investments is and services help to increase productivity, the building in 2021–2024 of a new hybrid reliability, and cost efficiency on the part of technological steel production unit, the first of their clients. In addition, they also reduce its kind in Europe, that will make it possible for negative impacts of industrial compounds the foundry not only to use higher volumes on the environment. of scrap and reduce its dependence on imported raw materials, but also to radically GO Steel Frýdek Místek a.s. reduce the impact of production on the The company is a traditional manufacturer of environment and to achieve greater flexibility cold-rolled strips and sheets. Its main producby combining the production of steel from tion programme is steel strips and sheets for pig iron with electric arc furnace technology. anisotropic electrical engineering. The comIn April 2021, LIBERTY Steelworks in Ostrava pany is one of the world’s 13 manufacturers enlarged its manufacture of threaded rods. It of these products. It also manufactures steel is the only steelworks in the Czech Republic Gracký manuál strips and sheets for isotropic electrical engito manufacture this type of rods. Last year, this neering and strips and sheets from non-alloy firm invested more than CZK 76 million in the and alloy steels. GO Steel Frýdek Místek a.s. is manufacture of one of the most widely used part of the Stalprodukt S.A. Group. concreting and anchoring systems worldwide.

Promet Group Promet Group focuses mainly on the areas of metallurgy and engineering industry in the Czech Republic and other countries. The portfolio of its firms offers foundry production, final working of metallurgical products, supplies of crude materials for foundries and steelworks, manufacture of parts for the automobile industry, agriculture and forestry and truck semi-trailers, and custom manufacture of complete technological units for the metallurgical, engineering, power generating, and chemical industries. During its nearly 30-year existence, the Group has grown to comprise some 40 companies, most of which have their headquarters in the Czech Republic and employ around 3 500 people. According to the prestigious Forbes magazine, PROMET GROUP belongs among the TOP 10 largest Czech family firms and also among the 100 most important Czech Top 100 enterprises on the territory of the Czech Republic.

We are a family business named STAKO Červený Kostelec, celebrating the 85th anniversary of its existence this year. We are engaged in customised die-forging, using steel of various classes, including stainless steel. In addition to our forge, we also have our own tool-room. We specialise, among others, in production of high-quality forged two- and three-arm bearing pullers. We supply our products both to the Czech Republic and to foreign markets.

STAKO Červený Kostelec s.r.o. Dědov 56 | 549 57 Teplice nad Metují | Czech Republic tel.: +420 491 462 553 | e-mail: kovarna@stako-ck.cz www.stako-ck.cz

47 |

INTERVIEW

Arbitration in the Czech Republic at Top Professional Level

In 2019, you were the first lawyer in history to be elected Chairman of the International Chamber of Commerce of the Czech Republic. Since 2005, you have specialised in arbitration proceedings, including international arbitration, investment disputes, and alternative methods of resolving them. What is your goal within the ICC? I have been working with the Czech National Committee of the ICC on arbitration for many years. In the last two years, I was elected Chairman, so the range of topics has of course widened to additional areas where the ICC is active, such as trade finance, logistics, exports, and transportation. My goal is to keep the ICC of the Czech Republic at a high professional level in all areas it is engaged in and also to extend this range of areas. Taking our cue from some foreign national committees, we would like for instance to set up | 48

There are differences among countries as to the degree of enforceability of law. Where does the Czech Republic stand in this regard compared to other countries? In general, the enforceability of law is of paramount importance to every country pursuing the rule of law, and the truth is that this is a very broad topic. As far as commercial relations with an international element are concerned, the Czech Republic does not rank very high in this regard, but rather the opposite. Within the ICC Commission for International Arbitration, we hold professional discussions about how to support and enhance the enforceability of law, at least in business relations. We see one option of achieving this goal as the adoption of a brand new law on arbitration proceedings, which would be based on the UNCITRAL Model Law. This would enhance not only actual enforceability but, thanks to the predictability of the legal order, would also put the Czech Republic among those countries worth choosing as a venue for arbitration proceedings. The positive repercussions are thus clear. For a long time now, the International Chamber of Commerce has been trying to promote arbitration proceedings. Can you mention what the ICC is doing in this respect? And other activities of the ICC? Arbitration proceedings are one of the main pillars of ICC activities. This is natural as international arbitration proceedings support and facilitate international trade.

The ICC of the Czech Republic deals with international arbitration, especially within its expert commission, the members of which are leading professionals from the ranks of attorneys, academics and in-house lawyers. For the purpose of promoting international arbitration, we organise various events, such as seminars and webinars and meetings focused on specific topics. We have also organised several opinion polls to determine what arbitration users are most interested in, so that we can direct our activities accordingly. Furthermore, we publish professional articles on the topic of arbitration and also help users by answering specific questions from specific cases in consultations. However, we consider our flagship activity to be the international conference, known as the ICC Prague Arbitration Day, held for the 3rd time this year. Even though it was reduced to online form and, compared to previous years, the personal contact was missing, the response was in any event very positive. Each year it has been focused on slightly different topics and it has been a success every time. We have managed to choose attractive topics and also excellent speakers, who gladly participated in our conference. This event has great potential for the future and I believe that it significantly helps to put the Czech Republic on the world arbitration map. In your opinion, what is Czech industry’s position in the world? What do you expect from the year 2021? At present, we are facing an absolutely unprecedented situation in connection with the coronavirus pandemic and it is really difficult to predict what the future holds. Many companies experienced profit slumps last year. However, Czech industry previously had a very strong position and, if companies respond flexibly to the demand for their products, they meet all the preconditions to make up for their losses relatively quickly. But I don´t think they will do this within one year. For the year 2021, I would be optimistic to the point that companies will manage to restart production completely again and make a profit. It’s important how well they do with exports. However, it should be easier compared to 2020 and we hope the coronavirus crisis will fade away and old distribution chains will be renewed and perhaps even new ones will be established.

Photo: ICC archives

The International Chamber of Commerce (ICC) is the biggest world trade organisation for the promotion of international trade, fair dealing, and a global approach to regulation. The office of Chairman of the ICC of the Czech Republic is currently held by Miloš Olík, who is in charge of litigation matters at a high-profile law firm and is also very active as an Arbitrator and Mediator.

a competition commission and perhaps even others. What I regard as a great success is the establishment of regular meetings of members of the Commission for International Arbitration. And thanks to the active participation of leading experts, this Commission is addressing many interesting topics. The Commission has also set up a Nomination Committee thanks to which the Secretariat of the Court of Arbitration in Paris has begun to approach the Czech ICC with requests for recommendations of specific Arbitrators for arbitration proceedings. The Czech Nomination Committee has already recommended several Arbitrators, who were subsequently appointed by the Paris Court. This is evidence of the fact that the Czech ICC is gaining credibility in the eyes of the Parisian office.

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COME AND GET ACQUAINTED WITH THE NEW WORDING OF THE RULES OF INCOTERMS® 2020 è

ICC ČR organises courses for the general public with ICC certification and certified lecturers.

ICC created the INCOTERMS® rules in 1939 and since then these rules have been facilitating international trade. The rules, used all over the world, facilitate transactions, help to interpret business conditions and support good business practice. These principles and rules are fully respected and used in everyday trading and have become one of the most important pillars of international trade.

ICC ČR, as part of the international trade organisation, for 20 years has been preparing professional seminars focused on the areas of transport, logistics, banking practice, arbitration, legal issues and accounting. As creators of INCOTERMS® rules, we are the only organisation in the Czech Republic to have an Education Licence in this area (publication of teaching texts and organisation of seminars certified by ICC).

What is the content of our courses? • Incoterms® 2020 – ICC rules for the interpretation of trade conditions • Incoterms® 2020 – payment conditions • Incoterms® 2020 – relation to the transport and insurance contract and much more...

A survey of courses can be found at www.icc-cr.cz

If any of the offered dates does not suit you, we can arrange the course on the premises of your company. Contact: Národní výbor Mezinárodní obchodní komory v ČR (National Committee of the International Chamber of Commerce in CR) +420 257 217 744

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icc@icc-cr.cz

www.icc-cr.cz

WE SUCCEED

Unique Technology of Slag Processing A lot of manufacturers have to cope with the slag left over after steel manufacturing, metal smelting and refining, combustion of coals or of various wastes. What to do with it, looking like a useless waste at first sight?

“The slag does not have to pose a problem, we can look at it as an opportunity,“ says Zbyněk Karas from the company DestroKladno. For a long time, the slag, a by-product of steel and iron manufacturing, used to be treated as a waste and ended up in large volumes in landfills. But the view of it has changed and now it is perceived as a valuable material. Nowadays, the processed slag is in high demand as a high-quality substitute for gravel, especially given the fact that the natural gravel excavated in quarries is becoming less and less available. Slags also contain a high percentage of iron. Such iron can be recycled to provide a cost-efficient and high-quality material. However, the presence of the iron in the slag makes its processing very complicated. Application of conventional crushing methods usually fails. DestroKladno has come up with a unique technology named DestroServe, which is capable of processing the slag from blast furnaces, steel mills, and foundries. The output is the iron fit for further processing and a high-quality gravel substitute, crushed and screened.

n ADVANCED TECHNOLOGY Conventional technologies of crushing and screening fail in processing slags containing metallic iron. The problem is that such technologies are not able to | 50

crush metal pigs, which causes shutdowns of the slag processing plant. The solution of DestroServe removes this problem with a capacity to process up to 300 tonnes of slag per hour without any failures and shut-downs. DestroKladno has capitalised on its 30-year experience of processing wastes from iron production and offers recycling services to the plants generating the slags. Besides the aspect of economies, it also helps to create a friendlier environment, as it reduces the need for primary raw materials and for dumping high volumes of wastes in landfills.

n COMBINATION OF 3 MODERN

SYSTEMS

Raptor, Saurus, and Dino are the names of three crucial components of the DestroServe technology. Raptor is a jaw crusher, able to handle even the most resistant material. “It has a unique, patented design, which enables smooth

processing of the material containing a high percentage of big metal particles resistant to crushing. Even with the crushing slot set up to the minimum, Raptor can handle the metal particles in the slag,“ explains Zbyněk Karas. Saurus is a clever magnetic sorter precisely tuned to each fraction. It sorts 4 fractions separately so that each route is precisely set for optimal efficiency. Thanks to this, it achieves a high level of separation of the metal component. And the last member of the band, Dino? It enables setting the purity of the output material thanks to varied settings of the speed and distance of the magnet. Dino is a machine specialised in smaller, at maximum 20-mm fractions of material. The DestroServe technology is mobile within the site and can also be transported for long distances. Therefore, it is applicable wherever in the world. Sofar, it has been utilised in the USA, Turkey, Romania, Serbia, and Slovakia.

What does DestroKladno provide? The DestroServe technology is available in three alternatives. The first option is full service, including transportation to the customer, operation thereof on site, and maintenance. The DestroServe facility can also be bought or leased by the customer. For the time of operation of the facility, DestroKladno provides maintenance and servicing within the agreed scope.

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