FUTURE OF CZECH ENGINEERING by PP AGENCY

INVENTION TO HELP FIRMS MAKE SHARPER TOOLS

MACHINE TOOLS ARE FACING GREAT CHALLENGES AGRICULTURAL ENGINEERING – INTELLIGENT CONSTRUCTION AND FLEXIBLE PRODUCTION CZECH RAILWAY INDUSTRY – STABILITY, BUT ON THE CROSSROADS

FUTURE OF CZECH ENGINEERING 2 2020

We produce fluid power solutions

ARGO-HYTOS - A strong brand in fluid technology We are suppliers of fluid power technology hydraulic components and systems for mobile and stationary working machinery. We offer customer-oriented added value and expertise at the customers’ locations. As a medium-sized family business with more than 1400 employees, ARGO-HYTOS has more than 70 years of experience in Fluid & Motion Control and Filtration technology in mobile and industrial hydraulics. ARGO-HYTOS has established an international network of production and distribution companies to provide full support to our successful global customers. With production companies in Germany, the Czech Republic, Poland, India and China, as well as numerous own distribution and assembly companies, the ARGO-HYTOS Group is active worldwide. ARGO-HYTOS in the Czech Republic, develops, design and produces various valve components and integrated systems solutions and power packs and distributes them to all locations worldwide. We aim to make a substantial contribution to improve customer products and to sustainably ensure significant benefits to customers. ARGO-HYTOS s.r.o. Dělnická 1306, Vrchlabí / info.cz@argo-hytos.com /

www.argo-hytos.com

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

Questions of the Month for Karel Havlíček, Deputy Prime Minister, Minister of Industry and Trade, Minister of Transport

n ENGINEERING MANAGING EDITOR: Pavla Podskalská

EDITOR: Jana Pike TRANSLATION: Vlasta Benešová

Future of Czech Engineering

n FOCUS

Collaboration of Firms with Universities is Bearing Fruit

n RESEARCH Invention to Help Firms Make Sharper Tools

PROOFREADING: Ivana Kadlecová, Pearl Harris

n ANALYSIS GRAPHIC DESIGN: Stanislava Podaná

The Coronavirus Pandemic Confirms that Industry 4.0 Is the Right Choice for Manufacturing Enterprises Machine Tools Are Facing Great Challenges Agricultural Engineering – Intelligent Construction and Flexible Production

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COVER PHOTO: Siemens archives

n CZECH FOOTPRINTS DEADLINE: 21. 11. 2020 © PP Agency

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

Press run: 10 000 copies. It is not allowed to reproduce any part of the contents of this journal without prior consent from the Editor. Attitudes expressed by the authors of articles carried by CBT need not necessarily be consistent with the standpoint of the Publisher. MK ČR E 6379, ISSN 1211-2208 „Podávání novinových zásilek povoleno Českou poštou, s. p., odštěpný závod Přeprava, č. j. 3468/95, ze dne 24/10/1995“

Prosperity of the Firm TOS VARNSDORF KOVOSREAL – Strong Actor with Good Reputation

n INDUSTRY

Last Year Was a Good One for Czech Steel Production Czech Railway Industry – Stability, but on the Crossroads

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n LOGISTICS Industrial and Logistics Parks Continue to Be the Driving Force of the Economy

n PRESENTATION OF FIRMS

ARGO-HYTOS s.r.o.; BONATRANS GROUP a.s.; Designfoods s.r.o.; Doosan Škoda Power s.r.o.; DYTRON EUROPE s.r.o.; GMC tech s.r.o.; KOVOSREAL s.r.o.; TEPLOTECHNA PRŮMYSLOVÉ PECE, s.r.o.; TOS VARNSDORF a.s.; Veletrhy Brno, a.s.; Works L & W group s.r.o. The publisher is not responsible for the content of paid presentations

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INTRODUCTION

Questions of the Month for Karel Havlíček, Deputy Prime Minister for Economy, Minister of Industry and Trade, Minister of Transport

The Czech economy has been rather severely affected by this year´s coronavirus crisis. What is your prediction for its development in 2021? In 2021, the domestic economy, which in 2020 will suffer a dramatic fall as a result of the coronavirus crisis, will revive, but its performance will regain its pre-crisis level only in 2023 at the earliest. In 2021, I expect GDP to renew its growth in just the lower percentage units. For example, in its latest November prognosis, the Czech National Bank estimates that the economy will grow by a mere 1.7 %. The revival will be driven mainly by domestic consumption and net imports. Investment will also join in. Household consumption will be affected by the cooling down of the labour market and a slower growth of wages in conditions of the worsening economic mood of households. Its growth will be partly underscored by the low comparison base. Exports will probably increase, due to the recovery of foreign demand. The contribution of net exports to the growth of GDP will be positive. Private investment will also increase and so will government investment activity. Private investment will benefit from the revival of economic growth in other countries and will also be supported by the monetary policy. The forecast for next year, however, is affected by a high degree of uncertainty. The greatest sources of uncertainty are the pandemic and its uncertain development, with fears of a possible restriction | 4

And what about foreign trade? Regarding specific commodities, the most successful export items were automatic data processing equipment and telecommunications equipment, along with recording, sound and image reproduction accessories, drugs, including veterinary and cosmetic preparations, vacuum tubes, X-ray apparatus, diodes and transistors. Among enterprises, the most successful are those operating in the traditional sectors, such as Škoda Transportation and LINET companies, growing on both the domestic and foreign markets. Cross-over projects are also doing well, e.g. Work Press Aviation and their new WPA Nanotechnologies’ semi-masks. Companies with good prospects are Czech start-ups operating in the area of digital and artificial intelligence. Many of them also participated in CzechInvest´s “Hack the Crisis” hackathon (e.g. Grey Cortex, Behavio, Vitadio, Zat, Iterait, MycroftMind). The expansion of Czech e-commerce to other countries is also remarkable, all this thanks to Rohlík, Zásilkovna and Pilulka companies. Can you present to our readers the “ National Recovery Plan” intended to restart the economy? The Recovery and Resilience Facility (RRF) Plan is intended to aid EU countries to recover from the aftermaths of the pandemic and to support investment in the ecological and digital transformation of the European economy. In the case of the Czech Republic, the total estimated allocation for grants in the RRF framework for 2020-2026 is CZK 172 billion. In addition, the Czech Republic will be able to draw loans to the amount of about CZK 405 billion, which are supplementary to grants. Czech ministries have approved over 400 initiatives, comprising more than 20 components and divided into 6 thematic pillars: Digital Transformation; Physical Infrastructure and Green Transition; Education and the

Labour Market; Institution and Regulation and Support of Business in Reaction to COVID; Research, Development and Innovation, and Health and Resistance of the Population. These components have been created within a very short time so as to meet the requirements of the European Commission. The Prime Minister passed the first version of the material named “Starting Points of the National Recovery Plan” to the Chairwoman of the European Commission for consultation on 14 October 2020. Regular meetings with the European Commission are currently taking place in cooperation with the Office of the Government of the Czech Republic. What support are entrepreneurs currently receiving in the Czech Republic? In response to the State of Emergency declared in 2020 (first and second) and the restrictive measures introduced in socio-economic areas, the government introduced without delay a number of support measures for the directly affected sectors. The following support measures were declared for the year 2020. We will be monitoring the development of the COVID-19 pandemic, in order also to be able to react promptly to the needs of the business environment in 2021. Currently we are pushing for an increase of the current framework from EUR 800 000 to a higher amount. This concerns, for example, a compensation bonus from the Ministry of Finance (CZK 500 per month), a programme called COVID Rengals which is in existence, the “Child Care Programme for Self-employed Persons” which continues (CZK 400 per month), for sectors which have been closed or restricted due to the pandemic. Special programmes have been created, such as COVID Culture, COVID Bus, COVID Sport, COVID Tourism and AGRICOVID FOOD INDUSTRY. The ambition of the Ministry of Industry and Trade in 2021 will be to continue these programmes within the framework of the policy to reduce the administrative burden on businessmen. This concerns especially the Tradesmen´s Package, described in detail at www.zivnostensky-balicek.cz/.

Photo: Ministry of Industry and Trade of the Czech Republic archives

of activities, flexibility of the labour market and changes in global production chains and their impact on the productivity of labour.

CZECH BUSINESS AND TRADE

Future of Czech Engineering

Photo: TOS KUŘIM archives

Engineering is showing unparalleled dominance in Czech industry. It has a number of sub-sectors which supply the domestic and foreign markets with products of sizes from a few millimetres to machines weighing several tonnes, in addition to many components used in transport, the power industry and raw material excavation and mining. Of essential importance is engineering production supplying the entire domestic economic sector, one reason being that it accounts for nearly 60 per cent of total Czech exports.

Besides car making, Czech engineering firms are gaining recognition in other countries with deliveries of highly specialised and technologically advanced equipment, especially in the areas of power generation, transport equipment and machinery for agriculture and the food industry. Other sectors whose products have a good reputation in other countries are air conditioning equipment and machinery production. A special chapter is machine tool production - milling machines, machine drills, lathers, etc. The very good reputation enjoyed by this segment of Czech engineering abroad is mainly due to the long tradition of the renowned TOS trademark. To maintain their current markets and to gain new ones and new clients, Czech firms are monitoring the specifics of those markets, so as to be able to react flexibly to them and be competitive. This is a challenge facing them especially in today´s globalised and economically complicated world. A step towards maintaining competitiveness is the enlargement of the range of high added-value products following the latest technological trends, i.e. processes

using digitalisation and automation in production and 3D printing, which in general terms means Industry 4.0.

n POTENTIAL

OF THE ENGINEERING INDUSTRY

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, who actively invest in equipment in the Czech Republic and participate in supporting science and research, are aware of the stability of the Czech 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 them are working on long-term projects and consequently are not excessively dependent on current demand, unlike other sectors of industry. In 2019, production in engineering fell by 1 % in comparison with 2018. The largest markets for Czech products are the neighbouring states and also China. This year, however, experts forecast a slight decline in export activities due to the trade war between the USA and China, and Brexit. Most of the goods were exported to Germany, China, and Slovakia, followed by Poland, Russia, and the USA, according to the Association of Engineering Technology statistics.

n CONTRIBUTION

OF THE AVIATION INDUSTRY

The aviation industry is a prestigious high-tech discipline, generating high value added and employing a large proportion of highly skilled workers in research and development. It is also a sector where success without state 5 |

ENGINEERING

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packages for all current Bell Helicopter models. The facility offers customisation, delivery, and maintenance of Bell Helicopter aircraft and offers a wide range of aftermarket Citation Jet service offerings for Cessna. The facility in Prague serves as an anchor for Bell Helicopter in the region and is a key part of the strategy to provide regional sales, customisation, delivery, training, and aftermarket support to the European customers. The Czech Republic is the cornerstone of Honeywell’s global engineering strategy in Europe. The Prague Laboratory opened in 1993 and the Brno Design Centre followed ten years later. In 2006, the Brno Design Centre was integrated into Honeywell Technology Solutions’ international network of research, development and engineering centres. Honeywell also has two manufacturing sites in the Czech Republic: Aerospace in Olomouc and Environmental and Combustion Controls in Brno. More than 4 000 professionals work for Honeywell in the Czech Republic. Aviation, however, is one of the sectors most affected by the coronavirus pandemic. “We´ll not do without special assistance from the state. We must maintain a well-balanced combination of firms supplying large national and global players and companies focused on making their own aircraft. Thanks to this model, we still belong among the world´s nine countries capable of completely developing and building aircraft on its own territory,” Josef Kašpar, Head of the VZLÚ Research and Testing Aviation Institute and President of the Association of Aviation and Space Manufacturers (AL V ČR), said in July 2020.

n EMPHASIS ON DESIGN Industrial design is intensively developing in the Czech Republic. A key innovation, which is able to provide a number of competitive advantages, such as greater user comfort, is the good and functional design of products, which can assist the manufacturer to penetrate new markets, provide new business opportunities, help reduce production costs and raise the selling prices of products. In 2015, Czech engineering won the highly prized Design Oscar Award. The prestigious Red Dot Award was won by Martin Tvarůžek for his design of a horizontal boring and milling machine in the Engineering subcategory. Its manufacturer is Škoda Machine Tool in Plzeň. The unique construction of the TOS FRU machining centre with a travel portal makes possible both machining and milling operations. Its multifunctional design, which is one of the main competitive advantages in global markets, is combined with a portofolio of automatically exchangeable spindle heads. The basic design of the machine remains the same, but it is always adjusted maximally to the customer´s needs and machining technology. The centre makes it possible to work technologically demanding and largesize parts, such as steam turbines, boat engines and parts of aircraft, with the minimum need of workpiece manipulation. This significantly shortens the overall machining time of even very complicated parts. The interior of the spacious cabin fitted with vertical travel affords the utmost comfort and safety to the operator. The robust FRU machines have already found their use, for exam-

Photo: www.shutterstock.com

support is hardly possible. Customers of Czech aviation products, which have a great renown worldwide, are mostly foreign governments, armies and stateowned firms. Most products of domestic aircraft manufacturers are exported. Destinations comprise up to 30 countries. Over the past decade, aviation exports have been growing by multiple per cent per annum. In 2019, the aviation industry exported products worth CZK 16.5 billion. Over the past seven years, the volume of aviation export has doubled. Key export destinations are aviation powers in the EU market, i.e. France and Germany, followed by the United Kingdom, the USA, South America, the Near East, and Russia. There is a large number of firms in the Czech Republic operating in aviation engineering, such as Aero Vodochody ATG, Bell Helicopter, GE Aviation Czech, Honeywell, Latecoere LOM Praha, MESIT Aerotrade, VZLÚ, Aircraft Industries, Frenchtech Aerospace, and ZLIN Aircraft. In 2020, important changes took place in AERO Vodochody AEROSPACE a.s., which changed ownership after 13 years. The group of firms to which Aero belongs has been purchased from Penta by AERO Investment Partners Zrt, registered in Hungary. This is a joint venture of the firm, AERO International s.r.o., a member of the OMNIPOL group, and a renowned Hungarian investor. GE Aviation has been successfully developing and manufacturing aircraft engines in the Czech Republic since it acquired certain assets of the local Walter Company in June 2008. Since the acquisition, GE Aviation has already certified three new engine models and made significant investments in its Czech business. The company’s engineering team has already more than doubled its size and is still expected to grow as new development projects are coming down the pike. The Czech operation has become a turboprop centre of excellence for GE Aviation. Bell Helicopter’s customisation and delivery centre in Prague offers modifications, upgrades, avionics, and special mission

62. MSV INTERNATIONAL ENGINEERING FAIR 13–17 09 2021 BRNO CZ

MSV 2021

ple in Canada, Russia, India, Turkey and other countries. In the Production and Processing Machines category of the A´Design Award competition, a team of research workers at the Faculty of Mechanical Engineering scored success with their design of the Big Trimmer machine for cannabis harvesting ordered by the Czech firm, Sunflower Trimmer. “We won the Iron A´Design Award intended for one-fifth of the best designs entered in the competition. For us, this is the first award for a project we realised for an industrial partner, and it gives us great pleasure. All the more so, as our design is a highly technicist, well thought-out product. In our case, it was not a signifcantly stylish design, but an industrial product relatively modest and purposeful,” pointed out Chief Designer, David Škaroupka of the Construction Institute of the Faculty of Mechanical Engineering, VUT, who participated in the project with another two colleagues. The cannabis trimming machine was ordered from the university by a new Czech firm, Sunflower Trimmer, which focuses its activities on foreign markets. “They addressed us two years ago and brought their product, a good device

as regards its functionality, but the firm wanted more and asked us to develop a device that will compete with products of the largest companies,” Škaroupka recalled. With colleagues, Arnošt Vespalec, who works on the visual perception of the equipment, and Jakub Hurník, who devoted himself to its technical development and construction, they practically innovated the firm´s entire product range. Although the primary task of the device is its functionality, and not its aesthetics, the designers managed to create a distinctive product language, National Engineering Cluster (NSK) Since its founding in 2003, NSK has been operating mainly in the area of engineering. The firms within the cluster employ more than 20 000 workers and their annual revenue is around EUR 2 billion. The leaders within the cluster are companies bearing the VÍTKOVICE trademark, the Technical University in Ostrava, and the Strojírny a stavby Třinec engineering works. Its members cover the entire engineering supplier chain, from development and research,

transferable between the firm´s products. The products, however, retain their characteristic stainless-steel character. “We have taken advantage of this and supported the character of the Big Trimmer by placing the Tumbler dominantly over the robust plinth comprising all the other components. The rest is given by the choice of the proportions and small details at the level of material combinations. In my opinion, in this respect, the device is original, which also has certain advantages as regards operation and maintenance,” Škaroupka added. basic metal production and metallurgical processing to the manufacture of metal constructions and the building of machines and large technological wholes. In addition, NSK members have supplied forgings for the primary steam generator collectors VVER-1200 for Rosatom and rings for steam generator casings for the Indian firm Larsen & Toubro. A number of NSK members participated in the completion of the 3rd and 4th blocks of the Mochovce nuclear power station in the Slovak Republic.

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FOCUS

Collaboration of Firms with Universities is Bearing Fruit

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PROF. ING. MICHAEL VALÁŠEK, DRSC. – DEAN OF THE FACULTY OF ENGINEERING OF CZECH TECHNICAL UNIVERSITY (ČVUT) IN PRAGUE Does your Faculty of Mechanical Engineering collaborate with the business sector? For the ČVUT Faculty of Mechanical Engineering in Prague, collaboration with industrial partners is a matter of course. During its entire existence, such cooperation has been the pillar of its educational and research programmes. This collaboration is extensive and wide-ranging. We offer companies our knowledge, innovation projects based on our research and the ability to create ready-to-use innovative solutions. Currently we are working on a number of bilateral projects and collaborating with groups of companies and institutions through seven national centres covering the main industrial sectors in the Czech Republic, i.e. Mechanical Engineering, Road and Rail Transport Vehicles, Aviation and Space Technologies, Power Industry, Optics, Artificial Intelligence, and Robotics. One such institution is the Engineering Production Technology Centre, which supports collaboration between the research and industrial spheres, with the aim of maintaining and improving the competitiveness of the machine tool and forming machine sector in the Czech Republic. Its research programmes are focused on smart solutions

and the use of digital twins at the level of the particular machines and whole production systems, automation, and the use of robots and additive and hybrid production technologies. The outcome is new machines supplied to world markets by Škoda Machine Tool, TOS Varnsdorf, KOVOSVIT MAS, ZPS TAJMAC, and other companies. Another example is joint research with TÜV SÜD, European leader in the area of testing and independent physical homologation of new automobiles on the Czech market. In collaboration with other educational and research organisations and industrial partners within the Josef Božek Centre of Competence for Land Vehicles, we are working on the development of sustainable mobility programmes of road and rail vehicles and their incorporation into the transport systems, with special regard to emission reduction. One more example is our cooperation with a university hospital and joint replacements’ manufacturers on the development of intelligent skeletal and vascular replacements. Of what interesting projects can your Faculty boast? There are quite a lot of them. One such project is the opening up of the way towards emission reduction in automobiles with internal combustion engines, using hydrogen for the ignition and perfect combustion of very poor fuel mix-

Photo: ČVUT archives

Czech Engineering has a long and successful tradition, but this is no longer enough, even for the present, let alone the future. What prospects do the present generations growing up in the engineering faculties have in continuing this tradition? There are many universities and faculties in the Czech Republic specialising in Engineering, many of which having the highest employer ratings. We addressed two important representatives of faculties of Mechanical Engineering and asked them for their views as regards the situation in the current turbulent times, and their vision of the future of the sector.

CZECH BUSINESS AND TRADE

tures in internal combustion engines. A great achievement is the construction and operation of our ground aircraft engine testing laboratories. They are in fact the basis of our collaboration with the General Electric Aviation supranational company, which has decided to situate its turboprop engine development and production centre in the Czech Republic. Other firms, such as Honeywell, are considering following suit. The propeller testing room in Hradec Králové is unique in that the air flows through it horizontally, simulating the real air flow on the wing of the aircraft and in its ability to read large amounts of data from about 1 000 sensors placed on the engines being tested, based on the Industry 4.0 concept. The renewal of the aviation industry and the building of the space industry may reduce the dependence of the Czech Republic on the automotive industry and contribute actively to the transformation of the Czech economy into an economy with a high proportion of value added. Besides collaborating with world renowned giants, the Faculty also participates in interesting development programmes for firms, including smaller domestic ones. For ZPS TAJMAC, we have proposed a new solution of multispindle automatic machines raising productivity by 75 %. Last year, for example, in collaboration with Mikronex Company, we developed a special grinder for glass file manufacturers. Its new design helps the glassmaking firm to substantially increase its labour productivity and radically reduce the percentage of rejects. There are many such examples in the Czech Republic, other European states and overseas countries and we are duly proud of these. Currently, the Faculty can boast of its participation in the development and realisation of protective devices against coronavirus. Our research workers and students are working on the development of a face mask attachment for neurosurgeons at Na Homolce Hospital in Prague. They have also developed a new stick for nasal sampling, and our students have joined a programme for the development of a protective face mask made by 3D printing.

Where especially do your graduates find working opportunities? Graduates of the Engineering Faculty of Prague´s Technical University (ČVUT ) can find work practically anywhere. They are wanted not only in industrial production and research, but also in consulting and state administration. Industry means machines and machines are designed, made and maintained by engineers. This proves that Engineering is behind everything a company produces, it is what enables its further development and helps people improve their quality of life. This applies to both serially manufactured products, from automobiles to food to robots or chips in our mobile phones and highly sophisticated products made in just a few pieces, such as telescopes and complicated medical devices. That is why Mechanical Engineers will be needed even in the distant future, in the era of robots controlled by artificial intelligence. Someone, however, will have to invent, develop, program, adjust, and repair the complicated machines. Wherein do you see the future of Czech Engineering and how is your Faculty adapting to the turbulent changes in the sector? Czech Engineering has a long and successful tradition. This, however, is no longer enough, even for the present, let alone the future. Yet, we still have the potential to rank alongside the world´s most industrially advanced countries. The time is over when we were striving for the highest level of self-sufficiency in production. The only chance to succeed in future is to invent and manufacture exceptional machines with a high proportion of value added. In production, this means automation, robotisation and Industry 4.0. This is also the only way to reduce the share of foreign assembly plants and draw greater benefit from hi-tech products instead. In Czech industry, there are examples showing that we can do it. Engineering is the basis of all modern industries, and if the country is industrialised, the decisive factor is the sustainability of the economy and the country´s standard of living. The Czech Republic is one

such country. What we need, however, is managers with vision, courage and business potential. Regrettably, there are still enough owners and managers in this country who are afraid to risk, although they feel that risking is already needed today. I am sure that the recent epidemic will have shown them that, with a higher share of automation and robotisation of production, they would not have had to reduce production for hygienic reasons or for non-deliveries of components from remote countries. Throughout the history of our Technical University and its Faculty of Engineering, its professors have been doing their best to prepare students not only for the current practice, but also with a vision of future needs. We are teaching students not only the Mechanical Engineering profession, but also the basics of business and the management of large firms. Besides professional study, students participate in research programmes in different areas, such as Machine Tools, Energetics, Solar Technology, Biomechanics, Process Technology, Automobiles, Robotics and other areas. We are trying to be visionaries and to prepare the students for the future. That is why we continuously include new disciplines in our curricula. A few years ago, it was Mechatronics and now, again as the first in the Czech Republic, in 2016 we started courses in the framework of a new study programme, Industry 4.0. Our new subjects are, for example, Additive and Alternative Technologies, Artificial Intelligence, Image Recognition, Virtual and Virtual and Augmented Reality, Doing Business on the Internet, Career in Engineering, and Inventive Engineering. We are teaching students standard knowledge, as well as system engineering, creativity and moral values. These are the main pillars of our concept of preparation for the great changes awaiting Czech and global engineering and industry in general. I am persuaded that our graduates will stand their ground even when faced with unexpected challenges, both at home and in other countries. The best proof of this is the fact that prestigious employers are showing an interest in employing our students even before they have graduated. 9 |

FOCUS

What is the collaboration like between your Faculty of Mechanical Engineering and the business sector? Partnership with the application sphere is an essential part of the life of the Faculty, which enriches our curriculum with practical knowledge giving us feedback. This is most important for our research activities. Firms become involved in our educational efforts, they collaborate with us as sponsors of student teams, in collaboration with different institutions, propose subjects for Bachelor’s and Diploma theses and offer internships and future employment. The Faculty of Mechanical Engineering is open to collaboration with all firms and research institutions in the area of education, research and development. We have skilful students, important knowledge, long experience, and top instrumentation. The fact that our links with commercial partners are very strong is also supported by the figures: last year, income from contractual research amounted to CZK 70 million, and nearly half of the Faculty´s budget is in some way connected with its research projects based on collaboration with industry. | 10

In which sectors are your graduates the most sought after? Mechanical Engineers are among the most sought-after specialists in the

labour market. More than one-half of our students have their employment guaranteed even before graduation, and 97 % of graduates work or are in business within six months of completing their studies. We are persuaded that these figures are not only the result of the great demand for engineers, but also the outcome of close collaboration with firms with which students often solve practical problems during their studies. The quality of the graduates of the Faculty of Engineering in Brno is also confirmed by the fact that we have won the School Recommended by Employees award four times in a row. Wherein do you see the future of Czech Engineering and how is your Faculty adapting to the turbulent changes in the sector? One of the ways Science and the Engineering sectors will follow is multidisciplinarity. It is at the interface of different scientific branches where important results and innovations occur. Last year, teams of the Brno Faculty of Engineering started work in five National Competence Centres out of the country´s 13 Competence Centres. In two of them, the National Competence Centre of Mechatronics and Smart Technologies for Engineering (NCK MESTEC) and the National Competence Centre for Aviation and Cosmonautics (NaCCAS), the Faculty figures as coordinator. I am persuaded that, thanks to our joint efforts and multidisciplinary approach, we´ll be able to reflect meaningfully the changes in the sector and in the whole of society.

List of Universities Specialising in Engineering ČVUT Praha – Faculty of Mechanical Engineering – www.fs.cvut.cz VUT Brno – Faculty of Mechanical Engineering – www.fme.vutbr.cz Technical University Ostrava – Faculty of Mechanical Engineering – www.fs.vsb.cz/cs University of West Bohemia in Plzeň – Faculty of Mechanical Engineering – www.fst.zcu.cz Technical University Liberec – Faculty of Mechanical Engineering – www.fs.tul.cz UJEP Ústí nad Labem – www.fsi.ujep.cz

Photo: VUT archives

PROF. ING. JAROSLAV KATOLICKÝ, PH.D. – DEAN OF THE FACULTY OF MECHANICAL ENGINEERING, TECHNICAL UNIVERSITY IN BRNO

Of what interesting projects can your Faculty boast? A recent example is the success of our scientists connected with the coronavirus crisis. Our employees and students seized the opportunity and assisted in the manufacture of protective devices. Several technical solutions were prepared for the Teaching Hospital in Brno. One of them was a robotic workplace for bio-hazard laboratories that will reduce the risks facing laboratory personnel, for example, in processing potentially infectious samples. Naturally, most of our projects have no connection with COVID-19. At last year´s International Engineering Fair in Brno, a very successful project, which won a Gold Medal, was a digital twin of a robotic cell, entered for competition in the category Innovation in Automation Technology and Industry 4.0. Another area which is also very strong is 3D printing, where the Faculty presented a project financed by the European Space Agency (ESA). In addition, great success was achieved by Faculty teams in the area of electron microscopes. And we are also proud of our student teams that design and build formula cars, pneumobiles and small remote-controlled aircraft, where they rank among the top in the world. A point of interest is that our Engineering Faculty is also scoring success in fields which many would hardly expect to figure among Engineering divisions, such as Tribology, Biomechanics, Mathematics, and Physical Engineering.

CZECH BUSINESS AND TRADE

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www.doosanskodapower.com 11 |

RESEARCH

Research workers at the Institute of Technology, Faculty of Mechanical Engineering of the Brno University of Technology, have devised an original solution to the age-old problem troubling cutting tool manufacturers. Their technology will help with cutting edge deburring, i.e. blade finishing in the manufacture of tools designed for machining different materials. The result of their work is the efficient replacement of the lengthy and problematic process of cutting edge deburring by a new technology.

is labour-intensive, the brushes must be changed regularly and it often happens that the new edge is damaged. “The new edge becomes inoperative and the process may cause a breakdown of the tool. The tool practically destroys itself,” Miroslav Píška notes. “Guaranteed and efficient finishing operation is a condition of production stability and high quality of the product,” adds Vít Gilík, Acting Secretary of GSP High Tech Saws.

n OPTIMUM PROCEDURE “Sharp edges arising in cutting steel and other metals have been troubling tool manufacturers since time immemorial. Sharp edges worsen the cutting edge geometry and at the same time obstruct the effective coating of the blade with hard and abrasion-resistant coatings. An even greater problem is that the coated parts break off easily, which may cause additional damage to the tool, in layman´s terms called tooth breakage,” says Miroslav Píška of the Institute of Technology, who worked on the invention with his team. The initiative came from the Czech firm, GSP High Tech Saws, which manufactures saw blades, knives, and circular saws. Until now the deburring has been done with the aid of automatic brushes, which was not an easy job: the process | 12

The research workers decided to solve the long-standing problem efficiently. They chose to use the technology of reverse drag tumbling, where the tools are clamped on to a special holder and thereafter are tumbled in an abrasive, i.e. a rough mixture to remove the unwanted burrs. The fact that the technology really works is proved by both measuring and detailed pictures of the tested burrs, which are sharper and smoother even when observed with the naked eye. “It is

by no means a simple task, as, in addition to the chosen abrasive effect, it is necessary to correctly calculate the edge cutting phases to ensure that all the burrs are tumbled in a similar way and with the same intensity,” explains Katrin Bučková of the Institute of Technology, co-author of the project. “Our method has several advantages. One of these is that it makes it possible to work more tools at a time. Another advantage is that all the teeth, which means up to several hundred, can be worked simultaneously, in a matter of minutes. The outcome is a cutting tool free of burrs, which has a nearly ideally rounded edge with a smooth surface. And mainly, cutting tools deburred with the aid of this technology have better cutting properties and last longer,” Píška points out. VUT also collaborated on this project with Astra Motor, s r.o., a company in Brno. “This technology is useful for circular saws and other rotary tools with a large number of teeth, but it can also be applied to other tools, which is a valuable competitive advantage,” states Jan Keprda, Acting Secretary of Astra Motor, s.r.o., who has long been engaged professionally in the manufacture of cutting tools. The research team has already applied for a patent on their invention.

Photo: VUT archives

Invention to Help Firms Make Sharper Tools

CZECH BUSINESS AND TRADE

TEPLOTECHNA PRŮMYSLOVÉ PECE, s.r.o. Reliable partner in the field of building and operation of industrial furnaces We provide a complete service (turnkey projects) from the project documentation of industrial furnaces, through assembly to commissioning and subsequent service We are Subsidiary of company LANIK s.r.o

About us: 200 projects worldwide over last 25 years 40 employees, 25 design engineers Long-term contracts with manufacturing and assembly companies Czech Quality Management System

Products: GAS-FIRED AND ELECTRIC FURNACES FOR Heat treatment of metals Production of ceramics up to 1800°C Hot dip galvanizing lines Melting and casting of aluminium Drying of products

TEPLOTECHNA PRŮMYSLOVÉ PECE, s.r.o. Legionářská 1085/8 | 779 00 Olomouc IČ: 47668253 | DIČ: CZ47668253 Tel.: +420 585 570 333 | E-mail: tpp@tpp.cz | www.tpp.cz

13 |

ANALYSIS

The development of society and the reaction to the world´s coronavirus pandemic confirm that Industry 4.0 is a necessity. This term has become a family name in the Czech Republic, although companies, especially the smaller ones, hesitated even at the time of the economic growth, whether to invest large sums in innovation. In the current situation, where a number of firms are showing a decline in the volume of contracts, it is becoming apparent that investing in Industry 4.0 is no luxury, but a necessity. Let´s go and see the trends and changes the market is undergoing, a fact manufacturing companies must take into account.

| 14

Deglobalisation, decentralisation and flexibility are words which are being increasingly used, not only in connection with the coronavirus pandemic. The pandemic as such has just shown where today´s world and today´s companies are heading. Until recently, production in Asia and the transport of goods to European or American markets were the cheapest solutions, because the cost of labour in Asia to that in Europe is incomparable. Today, when the transport of goods is becoming increasingly complicated and manufacturers and customers are waiting in vain for their deliveries, people´s thinking is beginning to change. A large part of cheap labour can be replaced by robotisation. Shifting production from Asia back to Europe is also a great opportunity for Czech manufacturers. Sustainability of production goes hand in hand with production located at the place of consumption. Unnecessary transport of goods across the continents will be eliminated. Goods will not be made for stock, but on the basis of orders, according to need. In the automobile and textile industries, up to 40 % of the goods produced have never been sold. Today, such wastage proves unsustainable, not only because of the exhaustion of natural resources and raw materials, but also due to the consumer approach which is changing. This is what manufacturers will have to take into

account. Factories will be geared towards flexibility and universality. For example, in the case of urgent need, car factories will start manufacturing other products. “At the time of crisis, American car manufacturers began to make medical devices. This is the flexibility the current revolution is bringing about. In a week´s time, the production line is rebuilt and starts turning out grass mowers or respirators instead of cars. We´ll have to give thought to the resistance of the country and its industry in the face of critical, unforeseeable situations. I can imagine a company currently making motorcycles or pistols having a backup production programme in store in case of a calamity – and switching over to making face masks or breathing apparatus,” says Prof. Vladimír Mařík, Scientific Director of the Czech Institute of Informatics, Robotics and Cybernetics (CIIRC). Along with production flexibility we can imagine employees changing their habits and needs, prepared to introduce structural changes in the organisation of work. For example, a number of firms have discovered the benefits of the home-office system, which gives employees greater flexibility, eliminates unnecessary commuting and saves time and the environment. Robotised and automated factories no longer need large numbers of workers in actual production, with unskilled labour

Photo: CIIRC ČVUT archives

The Coronavirus Pandemic Confirms that Industry 4.0 Is the Right Choice for Manufacturing Enterprises

CZECH BUSINESS AND TRADE

being replaced by robots and production being managed by remote control. Another benefit is that employers will not need so much office space and consequently will be able to save a lot of money. At the same time, however, they must ensure good conditions for teleworking. A great challenge for a number of companies is cyber security, and data protection and storage, an area which must not be underestimated. This does not mean just providing good quality software and hardware; it requires a comprehensive setting of processes and especially training employees in this area. The non-observance of security measures by employees is still the most critical point as regards cyber security.

n SCIENCE IN THE FOCUS

OF INTEREST AND UTILITY

Changes and innovations in industry are becoming increasingly linked to Science. During the coronavirus pandemic, scientists have proved that the benefits of their work are indisputable. People could see how important Science is by the clear example. “For Science itself, the situation was also a turning point, because here we could show how our scientific and research infrastructure is prepared to strengthen society, find solutions and simply assist wherever needed,” says Prof. Mařík, who founded and is co-managing the Institute whose mission is to link the academic and industrial spheres. Naturally, managing a top scientific institution without good basic research is not possible; indeed, great and breakthrough innovations are built on the results of basic research. Linking up the academic and industrial spheres is naturally the concern of CIIRC and its special centres of transfer, the National Centre for Industry 4.0, the RICAIP Centre of Excellence and the Centre of the City of the Future. Digital technologies can be tested by firms directly in the digital playground – Tested for Industry 4.0. In the past few months, CIIRC CTU has been the focus of interest, when, in a matter of one week, the Institute developed and had certified a protective face mask with the highest degree of protection, made with 3D print. Immediately thereafter, owners of suitable printers could

download the mask free of charge for non-commercial purposes anywhere in the world. Currently the mask is available in more than 30 countries worldwide, including the US Navy and NATO. The success of the mask, made with the aid of 3D print (i.e. at the place of its usage and at the time of its need, fully in accordance with the Industry 4.0 principles) was followed by serial production, where several dozen firms, under the guidance of the TRIX Connections start-up, established by the Czech Technical University CTU for the purpose of technology transfer into practice, came together and prepared the serial production of the mask and had it certified in record time for the European market. This was appreciated by Deputy Prime Minister Karel Havlíček, Minister of Industry and Trade, who said: “I´m extremely pleased by the success of the

purely Czech respirator, in the creation of which a number of domestic institutions and individuals participated. Once again this has shown that Czech innovative solutions have a universal potential and that we can be inventive and self-sufficient even in extreme situations. This also shows how important targeted and fast

assistance can be. The development of the 3D print respirator has been supported under the Czech Rise Up programme, which we prepared at the Ministry of Industry and Trade within a record short time. The Czech face mask is an excellent example of technology transfer with a great export potential, fully in the spirit of our Innovation Strategy.”

n DIGITALISATION FOR ROBOTICS

AND AUTOMATION

Industry 4.0 creates close links between conventional manufacturing and new IT technologies. Data collection, using Industrial Internet of Things (IIoT) methods, makes it possible to create a digital representation of real manufacturing processes, which may be analysed and optimised with the aid of artificial intelligence methods. Currently, this approach is mostly used in what we call “predictive

maintenance”, where the analysis of data from the operating parameters of different machines helps to detect deviations from regular operation (e.g. increase in vibrations). The analysis of the historical settings of complex machines by human operators makes it possible to determine the optimum setting parameters for spe15 |

ANALYSIS

n 3D PRINT ON THE RISE 3D print is finding increasing use, not only in the hobby sphere, but also, and mainly, in industrial production. This can once again be demonstrated by the example of the protective face mask developed by CIIRC. Only the use of 3D print made it possible to produce seven different prototypes of the mask body in seven days. The mould into which the silicon seal was poured was also made with the help of 3D print. Again, the mould could be flexibly adjusted according to need, within record time. Here, the key element was speed, which standard industrial production cannot even dream of. Thanks to its flexible use in different places at the time of the coronavirus pandem| 16

ic, 3D print has shown its potential to the general public. People could better understand the versatility of its use and its advantages. Many firms have realised that they could use 3D print for printing items with long delivery terms, or items that are not serially produced. So 3D printers are becoming part of firms´ equipment, even more so, as many types are becoming increasingly affordable. Today, we would hardly find an alternative to 3D printing in prototype production, not only as regards parts of products, but also preparations for machines. In the industrial 3D print category, it is to be expected that 3D printer manufacturers will be trying to shift additive production technologies ever closer to serial production. This means further acceleration and cost reduction. Today, however, the high proportion of time and cost necessitates

the presence of an operator in handling the material or the printed pieces. It is therefore to be expected that companies will be developing printers enabling at least partial automatic handling, especially where the proportion of automated processes will be growing. As a result, it will be possible to incorporate 3D printing into serial production, where the proportion of robotised and automated processes accounts for more than 80 %; in cases where the manual manipulation of parts printed by 3D printers takes a relatively long time, 3D printing is not suitable, especially in serial production. Alena Nováková, Pavel Burget, Petr Kadera, CIIRC ČVUT More information at www.ciirc.cvut.cz, www.ncp40.cz and www.ricaip.eu

Photo: Siemens archives

cific conditions and to use them for direct setting again by means of IoT. This will replace expert knowledge and the role of experts will be shifted to the position of persons supervising the entire system. Flexibility of production is closely linked with the digital representation of products, machines and production processes (digital twin). Manufacturing companies must adapt ever more quickly to changing conditions, for example, customers´ requirements, new technological improvements and potentially unstable supplier chains. This requires the ability to quickly change the properties of the product and adjust the machines accordingly, possibly incorporate a new machine into the production line or reconfigure it. Thanks to the digital twin, different scenarios can be prepared in simulation and tried out in advance, to see how the particular configuration will behave, or to optimise the production processes with respect to the capacity of production, energy consumption, etc. This shows that it is possible to prepare production scenarios whose introduction into practice will take much less time than if they were to be tested on real machines. A very important task is to define the standard interfaces of the machines, i.e. production modules forming the production line. This makes it possible to easily supplement the modules, change their arrangement or replace them, which, as mentioned before, is one of the main requirements of flexible production.

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ANALYSIS

Machine Tools Are Facing Great Challenges

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The machine tool and forming machine sector is the cornerstone of the entire Czech engineering industry. The development of this sector basically influences the development of other engineering sectors and consequently the industry as a whole. Its characteristic features are high technical standards and technological sophistication. The basic requirements placed on machine tools are precision, productivity, safety, and reliability. In many respects, Czech machine tools are at the absolute top. This applies, for example, to mechatronic systems, control systems, spindle and axle drives, clamping and gripping technology, tool and workpiece probes, tool trays, and a number of IT and technological systems. Czech manufacturers use components for their products from the same manufacturers as their rivals. These CNC machines can be connected to communication structures meeting the requirements of the Industry 4.0 concept. Although new technologies, such as additive production, are beginning to force their way into production, machining and forming will long stay the most widely used technological processes in engineer-

ing. In production requiring absolute size precision, machining is irreplaceable.

n CZECH EXPORTS STAND

ON DEMAND FROM GERMANY

The main Czech export territories are Germany (30 %), Slovakia (9 %), Russia (6 %), Poland (6 %), the USA, and China. Exports to Germany fluctuate around 30 % on a long-term basis. Exports to China, however, have dropped by more than 60 % year on year. Exports to the Russian Federation showed a slight decline year on year and fell to the level of approx. CZK SST The Association of Engineering Technology (SST) is a member of the European Association of the Machine Tool Industries known as CECIMO. This Association represents the interests of 15 European countries engaged in the manufacture of machine tools and forming machines and related technologies. CECIMO accounts for approximately 35 % of the worldwide production of those machines.

Photo: Škoda archives

In 2019 Czech firms suffered significant worsening in all parameters under review in comparison with 2018. Exports declined by 17 per cent and production by nearly by 23 per cent. The main causes were lower demand for investment goods in China and structural changes in the European automotive industry. The massive decline in Chinese machine tool imports was caused especially by the worsening of Chinese trade relations with the USA. Standing behind the low demand on the part of subcontractors are uncertainties in the automotive industry, which is facing emission limit problems and is handicapped by the slow start of the electro mobility process. As a result, the Czech Republic has dropped several places in the world rankings of machine tool and forming machine manufacturers.

CZECH BUSINESS AND TRADE

900 million. In comparison with exports in 2014, this volume accounts for approximately 30 %. A slight decline was also shown by exports to Poland. The Polish market, which is mostly increasing, is very interesting for Czech manufacturers. Although the greatest part of the manufacturers´ production goes for export, the domestic market is also very important to them, because there they can make best use of the Czech competitive advantages. Czech manufacturers have on average an approximately 20 % share of the domestic market. In export, Czech manufacturers are at a comparable level with, for example, Austria or France. In the framework of CECIMO members, the Czech Republic occupies 9th position. As regards export commodities, the list is topped by grinding machines, followed by milling machines and machining centres. The main customers for engineering technologies are the automotive industry and its subcontractors – tool and mould manufacturers – and the defence, aviation, and power industries. Czech firms take part in a large number of important global exhibitions and trade fairs. In 2019, for example, they attended the CIMT exhibition in Beijing, Metalloobrabotka in Moscow, and EMO in Hannover. The International Engineering Fair in Brno is naturally a very important event for all domestic manufacturers.

n STRONG TRENDS

EXPORT OF MACHINE TOOLS AND FORMING MACHINES BY TERRITORY FOR 1ST QUARTER 2020 Germany 22.87 % Germany 22.87 Poland 9.03 % % Poland 9.03 % % Russia 8.28 Russia China 8.28 8.15 % % China 8.15%% USA 7.48 USA India7.48 6.7 % % India 6.7 % Slovakia 4.76 % Slovakia 4.76 % Others 33.26 % Others 33.26 % Source: www.czso.cz, www.mpo.cz

IMPORT OF MACHINE TOOLS AND FORMING MACHINES BY TERRITORY FOR 1ST QUARTER 2020 Germany 31.66 % Germany 31.66 Japan 9.49 % % Japan 9.49%% USA 9.04 USA Italy9.04 8.02% % Italy 8.025.32 % % Taiwan Taiwan 5.32% % China 4.82 China 4.82 % 4.79 % Switzerland Switzerland Others 26.854.79 % % Others 26.85 %

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

AND EXPECTATIONS

The main trends are the continuing progress of robotisation, automation, digitalisation and connectivity, referred to as Industry 4.0. The importance of new technologies is growing. In the first EMO Hannover EMO Hannover, the largest European engineering fair, held from 16 to 21 September 2019, presented the trends and technological solutions in industrial production. At the Fair, more than 2 000 manufacturers, subcontractors and service providers engaged in the engineering industry presented wide-ranging innovations in the area of machine tool and forming machine manufacture, production systems, pre-

place, this concerns additive production technologies bringing a new quality to the production of special components and complex structures. Very important for the further progress in the machine cision instruments and software solutions in production. With the support of CzechInvest Agency and the Association of Engineering Technology, the Fair was attended by 27 Czech firms, which presented their latest products there. Interest at the Fair was focused not only on the machines themselves, but also on key technologies enabling the application of new processes in production. “For the first time in the history of the Fair, its organisers devot-

tool and forming machines sector will be the development of electro-mobility and artificial intelligence. Our sector is dependent primarily on the development of the automotive and aviation industries, ed a separate part of the exhibition to the additive production technology (3D print) from metal and plastics, thus responding to the global trend of digitalisation in production and new manufacturing processes,” added Robert Keil, Sector Manager for Engineering, for CzechInvest Agency.

19 |

ANALYSIS

power engineering and other areas of the engineering industry. Until now these trends have been negatively affected by labour shortage.

n INNOVATIONS IN THE MACHINE

TOOL AND FORMING MACHINE SECTOR

n FUTURE OF THE SECTOR In 2020, further significant deterioration within the sector is expected in comparison with 2019 in connection with the impacts of the COVID–19 pandemic. As Looking back at the Presentation of the Sector at the Brno International Engineering Fair in 2019 The motto of the Fair was Industry 4.0 and Digital Factory, supported by a number of rousing speeches by politicians and workshop organisers. In this area, the machine tool sector has no need to wait for any “revolutionary” appeals, because it itself may serve as an excellent example of practical digitalisation. Visitors to the Fair had an opportunity to be informed about the top standards of the industry in the Czech Republic at the stands of many firms. The most interesting expositions there were presented by the Czech manufacturers TAJMAC-ZPS, Kovosvit MAS, CZ. TECH Čelákovice, AXA CNC STROJE, TDZ Turn and MIKRONEX. More detailed information was presented at the informa-

| 20

a consequence of the macroeconomic and geopolitical problems raising investors´ concerns, especially in the automotive industry, but also in a number of other sectors, a decline in domestic and foreign demand for machine tools is expected. An approximately 20 % decline in comparison with 2019 is expected in production and exports. In this complicated situation, the main task of the Association of Engineering Technology (SST ) is to support the marketing activities of its members by providing them with wider possibilities of presenting tion stands of the firms TOS Čelákovice (Slovácké strojírny) and TOS Olomouc. Kovosvit MAS, a regular exhibitor in Brno, last year celebrated its 80th anniversary at the Fair, where it presented its KL 435 lathe (Kovosvit Lathe), which follows on from the SP 430 lathe, using the advantages of its predecessors, such as the rigidity of the skeleton, the size of the ground surface and cinematics. The design of the machine is focused on ergonomics and comfortable operation of the machine. Another company, TAJMAC-ZPS, presented its vertical five-axis MCV 1200 machining centre, and the MANURHIN K´MX 816 long-turning two-spindle CNC automatic lathe. In the stand of CZ TECH Čelákovice, visitors could see a CNC lathe for aligning the faces of stators of electric motors and become

themselves, e.g. by subsidising their exhibitions. Another area is supporting the participation of the Association´s member firms in projects focused on education and the support of innovation. The continuing task is promoting the sector and raising the interest of young people in studying and working in Engineering, especially in our sector. Oldřich Paclík Director of the Association of Engineering Technology www.stt.cz acquainted with the offer of vertical CNC lathes of the EMAG firm, for which it provides business and technical service. AXA CNC STROJE presented a VCC 50 vertical machining centre with a turning and milling rotary tilting table, allowing six-axis machining of workpieces. The machine is fitted with a powerful spindle, type SK50, designed specifically for power skiving. TOS Varnsdorf, TOSHULIN, TOS KuřimOS, Fermat Group and Škoda Machine Tool did not have their exhibitions at the Brno Engineering Fair, but installed large displays at the EMO fair in Hannover. Most clients of those companies are foreign firms, which explains that their participation in the Brno Fair is not of key importance for them, unlike their presence in Hannover.

Photo: TOS Kuřim archives

The high standard of Czech machine tools and forming machines is mainly to the credit of the innovative activities of most manufacturers. The most important domestic producers are, for example, the companies TOS VARNSDORF, KOVOSVIT MAS Machine Tools, TAJMAC – ZPS, TOSHULIN, TOS Kuřim, and FERMAT. Their innovative activities are based on their own construction and development facilities, supported by collaboration with universities. The leading workplaces include, for example, the RCMT Research Centre of Manufacturing Technologies attached to the Technical University in Prague, the University of West Bohemia in Plzeň, the Technical University in Brno, the Textile Machine Research Institute (VÚTS) in Liberec, and Intemac in Kuřim.

Manufacture and Development of Plastics Welding Equipment Czech private company with a 28-year history of production Its best-selling products include handheld electronic and thermostatic welders for PP, PE, PB and PVDF pipe welding (dimensions 16-125 mm) Mechanical equipment for polyfusion welding and butt welding MP 75, MP 110 and ST 160 (dimensions up to 160 mm) The popularity of Dytron products is growing in and outside the EU, including Russia and Ukraine. DYTRON EUROPE s.r.o. manufactures all the components of its welding equpment and accessories in its own production facilities with consistent output control.

www.dytron.eu

GMC tech s.r.o.

www.gmctech.cz

gear grinding and cutting services CNC machining spur, helical, bevel gears, sprockets, worms, racks complete gear manufacture – CNC machining gears with straight and helical teeth bevel gears – worms and worm gears toothed profiles and rods

Production program:

CNC turning CNC drilling and milling gear cutting slotting broaching grinding gear grinding gear inspection on measuring instrument gear design, gear optimization check / repair of industrial gears and gearboxes

21 |

CZECH FOOTPRINTS

Prosperity of the Firm TOS VARNSDORF TOS VARNSDORF is one of the world´s leading engineering companies engaged in the development, production, sales and servicing of machine tools. The firm has its own construction team for the continuous development of machines and a strong production base, ensuring its own production. TOS VARNSDORF also provides services under cooperation schemes (custom metalworking, measuring and chemical-thermal treatment of engineering products). Its specialisation is the manufacture of horizontal milling and boring machines and machining centres.

The company was founded as far back as 1903. Its products, exported to all the world´s industrialised countries, reflect the many years’ experience of several generations of technicians and workers and the current high technical standards of the firm, which competes successfully even in the most discerning international markets. Its largest clients are the EU states, especially Germany, Poland and Italy, followed by the Russian Federation, Canada, and the USA.

n TOS VARNSDORF TRADEMARK

IS WELL KNOWN ALL OVER THE WORLD

The TOS VARNSDORF trademark is familiar to customers in all the inhabited continents of the world. Since 1948, the firm has manufactured nearly 20 000 machine tools, a great majority of which has been exported. Machine tools made in Varnsdorf can be found working in South and North America, throughout Europe, in Russia and China, where the firm was one of the founders of the first Chinese-Czechoslovak machine tool manufacturers, and in factories in India and several African countries, mainly in | 22

Egypt and the South African Republic, as well as in places which are relatively exotic as regards machine tools, such as Iceland, the Philippines, and the Marshall Islands. The firm’s customers naturally also include a number of supranational companies and renowned firms, such as SAAB (Sweden), ABS Pump AB (Sweden), M.E.C.A.S.E. (Spain), Goodrich Krosno (Poland),CATERPILLAR MAGYARORSZÁG AG (Hungary), ŠKODA AUTO (Czech Republic), METROWAGONMASH (Russian Federation), BELAZ (Belarus), McDonald Steel (Canada), FTV PROCLAD (UAE), CHINA STATE BUILDING (China), BHARAT HEAVY ELECTRICALS (India) and others. The company is continuously improving its services. Its customers value most the prompt delivery of spare parts, the presence of a service technician in the region and expert assistance of the dealers. To be able to provide all these services, TOS VARNSDORF is building spare parts warehouses and service bases for the technicians, and ensuring the continuous raising of the technical knowledge of its sellers. With these activities, the company is trying to support its exports, where the core of success is the high reliability of the machines.

n PARTICIPATION IN

INTERNATIONAL UNDERTAKINGS

TOS VARNSDORF participates regularly in even the largest world fairs, such as EMO (in Hannover and Milan), IMTS on the American continent in Chicago, and in China – alternately CIMT in Beijing and CCMT in Shanghai. Representatives of TOS VARNSDORF can be met regularly at the Metalloobrabotka exhibition in Moscow and naturally at the International Engineering Fair in Brno, the Czech Republic. Each year, the company organises an international conference for its sales representatives on the premises of its parent company, where some 50 of the salesmen based in more than 25 countries meet to become acquainted with what is new in the company´s production programme and to discuss the clients´ latest requirements and the situation in the markets. TOS VARNSDORF is known as a company which regularly comes to the market with new products that surprise buyers with their parameters and performance. Its latest achievements in the area of development and research include a new series of its WHT 110/130 machining centres and WVM 2600/3600 portal machining centres. Details, not only about these new items, can be found at www.tosvarnsdorf.com.

CZECH BUSINESS AND TRADE

ASSEMBLY – PROFESSIONALITY, QUALITY, SAFETY Works L&W Group s.r.o., established in 2011 is a successfully developing Czech company without foreign ownership participation, specialising in the area of production-assembly works for customers at home and abroad (e.g. Hungary, France, Norway, the UK, the Faroe Islands, Slovenia, Spain, etc.). Its services are used in the food, pharmaceutical, chemical, petrochemical and other industries. The company has acquired new premises, which have been reconstructed with financial assistance from EU funds. The compound comprises 2 000 sq.m of production space, new headquarters and 6 500 sq.m of storage space. On average, 60 – 80 people are employed. The company collaborates with Czech and foreign subcontractors. Apart from its own employees, the company also engages self-employed persons.

The company´s business programme includes: delivery and assembly of investment units, with all the required related works manufacture and assembly of skid units delivery and assembly of piping systems from carbon and stainless steel (especially for the pharmaceutical and food industries) assembly of technological equipment and movement of large-capacity equipment disassembly, production, delivery and assembly of stainless-steel structures, mainly for the food industry

“We do work we like, work that has clearly visible results and work which demands thought.” The company provides quality services. It holds a number of certifications and meets the requirements of e.g. the 2014/68/EU directive module A2 and the WPQR certificate etc. It is needless to emphasise that the strict observance of safety, health and environmental protection rules is a priority in all company activities. Our customers are: Nestlé (CZ), Stock Plzeň (CZ), Saint-Gobain Construction Products CZ (CZ), CS Cabot (CZ), Unipetrol-RPA (CZ), ASC Process Systems Ltd. (GB), ZVU Engineernig a. s. (CZ), Steap Stailor (FR), Izotechnik SP z.o.o. (PL), among others.

www.wlwgroup.cz 23 |

ANALYSIS

Agricultural Engineering – Intelligent Construction and Flexible Production

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n THE SALES OF TRACTORS AND

COMBINE HARVESTERS IN THE CR HAVE BEEN STABLE OVER THE PAST FEW YEARS

According to long-term statistics, the sales of universal tractors are stable, with approx. 2 200 machines being sold each year throughout the past decade. As regards the sales of combine harvesters, the capacity of the market, taking into account the required machinery renewal, is estimated at some 160 machines; the sales, however, fluctuate slightly year on year. In 2019, the firms sold 2 299 tractors and 150 combine harvesters; last year´s sales were among the average.

n TO WHICH COUNTRIES DOES

THE CZECH REPUBLIC EXPORT ITS AGRICULTURAL MACHINES?

The quality of Czech products compares well with EU standards. Evidence of this is the fact that a large number of agricultural machines and equipment developed and manufactured in the Czech Republic can be seen in the fields and stables all over Europe, although, for reasons of business, flying the colours of the Czech manufacturers´ trade partners The largest trade partners of the Czech Republic are its neighbours, Germany, Austria and Slovakia, followed by France and Poland. Here, much depends on the particular machine. For example, the Zetor tractors are traditionally very popular in Poland, Scandinavia, and the Balkan countries; the manufacturers have rediscovered their partners in the countries of the former Soviet Union – Russia, Ukraine, the Baltic states, and also in the new EU members – Romania and Bulgaria. The most significant Czech export items are tilling and forage and stalk crop harvesting machines, which include all harvesting machines, cutting and mowing machines, rakes and tedders, etc. This category of machinery accounts for approx.69 % of exports; tractors alone account for 22 % of agricultural machinery exports. Important exporters are FARMET in ČeskáSkalice, and BEDNAR FMT Praha, followed by OPaLL AGRIDolníŽivotice and SMS CZ Rokycany, all of them tilling machine manufacturers, AGRIO MZS Křemže, known for its sprayers, ZDT NovéVeselí, successful exporter of trailers and semi-trailers, and STROJÍRNY ROŽMITÁL, making rakes and tedders. Other export articles are mowing

machines, front loaders, manure spreaders and the full range of small agricultural machines, including tools. The manufacture of special machinery is also successful, e.g.stump cutters and oilseed refineries. FARMTEC Jistebnice, BAUER TECHNICS Tábor and AGE České Meziříčí are well-known stable machine manufacturers. The main items among imported machinery are machines which are not manufactured in the Czech Republic, such as higher performance tractors (more than 120 kW), combine harvesters and presses. Regrettably, such machines also include forage harvesters, which we used to manufacture ourselves, and which we even exported. Their production, however, has been terminated. The same fate befell sugar beet harvesters, for which we are fully dependent on imports. Sales on the Czech market over the past five years have been dominated by the

Photo: A.ZET archives

There are approximately 200 manufacturers of agricultural and forestry machines in the Czech Republic, from large enterprises and mediumsize ones to the smallest producers of accessories and components. The Agricultural and Forestry Machinery Association (A.ZeT) comprises 43 firms, whose members include all the significant domestic manufacturers and both agricultural universities, and a research institute. The overall production of the member firms is worth more than CZK 20 billion (approx. EUR 781 million), which is 80 % of overall production in the Czech Republic. The export of those firms accounts for more than 85 % of overall Czech exports amounting to CZK 18.6 billion (approx. EUR 724 billion). Manufacturers of agricultural machinery employ approximately 8 000 people in the Czech Republic.

CZECH BUSINESS AND TRADE

fairs and exhibitions have either been cancelled or postponed until next year. This also concerns the Czech domestic fair, TECHAGRO, which has established itself among the top in Europe within the sector, and was postponed by one year until April 2021, and the important European fairs EuroTier Hannover, EIMA Bologna and SIMA Paris, which were postponed from autumn 2020 until February 2021. The GaLaBau fair was cancelled indefinitely. Because of the unprecedented cumulation of the exhibition events, the Association, after consultations with its member firms, will have to reconsider which fairs it will support after 2021, and to what extent. Our priorities remain TECHAGRO Brno, AGRITECHNICA Hannover, SIMA Paris, and GaLaBau Nuremberg. Let´s hope the situation will stabilise and all the events will take place, on the duly planned or alternatively set dates.

n TECHAGRO TRADE FAIR

Czech-made Zetor tractor (20 %), together with the imported John Deere tractors (20 %), followed by New Holland (17 %) and Case IH tractors (11 %); the highest combine harvester imports are Claas (31%), New Holland (31 %), and John Deere and Massey Ferguson harvesters (together just under 30 %).

n PARTICIPATION IN TRADE FAIRS

WITH A NUMBER OF EVENTS POSTPONED UNTIL 2021

The production potential of Czech agricultural engineering exceeds the absorption capacity of the domestic market. Therefore, supporting Czech exports is one of the main activities of A.ZeT, which promotes Czech manufacturers in other countries. Its most important foreign events are SIMA fairs in Paris and AGRITECHNICA in Hannover. Both these exhibitions are the

most important events on the European and even the world scale. Until now they have been held in the same calendar year, each time in odd years. Czech firms have never missed any of them since 1995. The Association has also organised the joint participation of Czech firms in Kiev, Ukraine, Herning in Denmark, in Poland, formerly in Poznan and in recent years in Kielce, at AGROSALON in Moscow and twice at EXPO AGRO in Argentina. An important event for the manufacturers of small agricultural machines is the GaLaBau exhibition in Nuremberg. This year´s crisis caused by measures against the spread of the Covid-19 epidemic has drastically affected trade fairs and exhibitions in general, not only in our sector. The last international fair of agricultural machinery to be held this year was FIMA in Zaragoza, Spain, which took place at the end of February. All the other

Czech manufacturers and the largest importers closely collaborate with the organisers of the two most important domestic exhibitions of agricultural machinery – the Brno Trade Fair, a.s. and the České Budějovice Exhibition Grounds, a.s. The TECHAGRO / SILVA REGINA / BIOMASS exhibition complex, which has gained excellent international renown and ranks directly after the two most renowned international fairs, i.e. SIMA Paris and AGRITECHNICA Hannover, – stands the strictest comparison in the European context. In 1994, A.ZeT was the initiator of its existence. It has been one of its co-organisers from the outset and is one of the creators of the concept of the fair and its accompanying programme. A.ZeT firms traditionally occupy an important part of the exhibition surface area. In the past few years, TECHAGRO has been the most successful project of all fairs organised in the Czech Republic. The fair is held in even years. This year, it was expected to exceed the record high participation of 112 000 visitors of the year 2018, when nearly 800 exhibitors from 42 countries displayed their products on a surface area of 88 000 sq. m. Regrettably, one month before its opening in April, the fair was postponed until next year, when it should be held from 11 to 14 April. 25 |

ANALYSIS

n EXPORT – IMPORT: IN BALANCE Czech firms are becoming increasingly involved in international trade. Practically until 2008, the imports of foreign machines were growing at the same rate as did the exports by Czech manufacturers to foreign markets. In the crisis years at the end of the past decade, foreign trade, similarly to local sales, fell by approximately 30 % in comparison with the preceding period. After the crisis had been overcome, the economy resumed its growth and, in 2019, the agricultural machinery trade turnover rose to CZK 39 billion, with exports (CZK 18.5 billion) and imports (CZK 20.9 billion) being at approximately the same level. In other words, in financial

terms, the volume of what is imported from other countries is comparable with what this country exports.

n TRENDS AND EXPECTATIONS –

FLEXIBLE PRODUCTION EVEN AT THE TIMES OF COVID-19

All outlooks and prognoses have been disrupted by the crisis caused by the global measures taken against the spread of Covid-19. Predicting future development, whether short- or longterm, is currently impossible. A survey among agricultural machinery sellers in the Czech Republic has shown that 80 % of them recorded a 10 to 25 % decline in their sales in the first six months of this

BALANCE OF TRADE – AGRICULTURAL MACHINES (CZK MILL.)

25 000 20 000 15 000

2006

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

export CZK mil.

Source: Ministry ofIndustry and Trade, Czech Republic

| 26

import CZK mil.

Agricultural engineering reflects the requirements of farmers for higher performance of machines and better quality of working operations. From “precision farming”, whose beginnings date back to the mid-1990s, agricultural engineering has moved towards “smart farming”, using a similar vocabulary as industry,

Photo: A.ZeT archives

n AGRO ENGINEERING 4.0

10 000 5 000

year and expected the same decline also in the next three months. Relatively good news is that more than three-quarters of the respondents expect that they will be able to overcome the crisis without any external aid. As, at the time of the strongest restrictive measures against the cross-border movement of persons, the agricultural machinery sector was included in the category of sectors serving the critical infrastructure and at least a limited movement of new machines and the servicing of machinery and technologies in operation was made possible, the impacts of the coronavirus crisis were not so fatal to our sectors as they were for other industries. A relative advantage of our agro engineering industry is the structure of its manufacturing firms. The overwhelming majority of them are small and medium-sized enterprises, capable of flexibly responding to demand and preparing machinery precisely according to the needs and wishes of the customer.

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INDUSTRY

n INTERNATIONAL ASPECTS The Czech economy is a small and open system, practically dependent on export. Agriculture is also a sector strongly dependent on political decisions at both the national and EU levels. In addition, regular competition is disrupted by the policy of supranational chains, on which farmers are inadequately dependent due to existing legislation. So far, negotiations | 28

concerning the parameters of the Common Agricultural Policy (CAP) after 2020 have not been terminated. Owing to the different approaches of individual EU states, the question is to what extent it will be possible to push through changes that will reduce the overall volume of finance earmarked for CAP, increase the support of rural development and the improvement of the quality of life in the countryside and, at the same time, reduce production subsidies and regulation restrictions within the sector, allowing asymmetric solutions disadvantaging certain member states (including the CR) by unbalanced and unjust interventions and subsidies disrupting free competition. Controversial issues dividing the EU member states are subjects concerning the capping of direct payments to

farmers, defining redistributive payments (advantageous payment for the first hectares) and proportion of payments tied to production. The new Common Agricultural Policy should meet all the goals set forth, which means ensuring the economic sustainability of farming, an adequate level of income of farmers and, at the same time, improving environmental protection. There is only one way leading to the fulfilment of those goals: supporting new technologies using precision farming methods. Czech suppliers of agricultural machinery and technologies are already following this path. DuĹĄan BenĹža Director of the Secretariat of the A.ZeT Agricultural and Forestry Machinery Association www.zetis.cz

Photo: A.ZeT archives

with terms such as Agro Engineering 4.0 and ICT, applying to machines and their connection to intelligent data networks, the use of precision navigation systems by tractors and self-propelled machines, with individual working units being monitored and controlled. In all these aspects, Czech manufacturers are competitive even in international comparisons.

CZECH BUSINESS AND TRADE

Last Year Was a Good One for Czech Steel Production In 2019, raw steel production in the Czech Republic was 4.6 million tonnes, 8 % less than in the preceding year. Imports into both the CR and the EU declined slightly because of the falling demand. Apparent domestic consumption amounted to 7.2 million tonnes, in Europe to 172 million tonnes. Today, after 2019, which was not a very successful year, the steel industry is not experiencing happy times, with steel prices at the lowest level in the past five years and no revival of demand in sight.

After high losses suffered by European and Czech steelworkers in 2019, the beginning of this year was relatively promising with demand in the first two months showing a moderate increase. In March, however, the steel sector was hit hard by the coronavirus pandemic, when demand in the entire EU dropped by 50 % and all firms, including blast furnaces, reduced their production. This was also the case of Liberta Ostrava. Up to 40 % of workers in the steel industry have been laid off or put on short time. At the moment, steel prices in a number of product categories in the EU are below their production costs. In addition, in May, production in China began to revive, pushing up the prices of iron ore, which in June amounted to more than 100 dollars per tonne, 20 % more than at the beginning of May.

“The European steel industry was fatally hit by the combination of the collapse of demand in the customer industry and the fall in steel prices and expensive inputs. Regrettably, no revival can be expected before the first quarter of 2021, and even this is a strongly optimistic expectation,” says Daniel Urban, Statutory Director of the Czech Steel Union. The fundamental problem of the global steel market, i.e. overcapacity, remains unsolved; many countries have restarted production thanks to state aid, but with a non-negligible part of the production being put on stock. Regrettably, not even the revision of the EU safeguards, on which the Commission and the member states agreed on 12 June, will improve the situation meaningfully. “The European market remains the world´s most open market, where the volumes of duty-free quotas do in no way reflect the market situation,” said Urban. To this Dimitrij Ščuka, Chairman of the Board of Ostrava´s Vítkovice Steel, a.s., adds: “Because of the short-sighted approach of the Commission to the revision of the safeguards, we missed the opportunity to throw a lifebuoy to the drowning European steel industry. This seriously endangers the strategic industrial sector, which in the EU, represents 2.6 million direct and indirect jobs.”

n CZECH PRODUCTION AND

TRADE LAST YEAR AND IN THE FIRST QUARTER OF 2020

In 2019, steel production in the Czech Republic amounted to 4.6 million tonnes, 400 000 tonnes less than in 2018. This means that year on year, raw steel production declined by 8 %, with steel tube output falling by as much as16 %. In the first

five months of 2020, raw steel production in the Czech Republic dropped by another 6 %, to 1.9 million tonnes. The most significant decline in production occurred in April and May, when production fell by 11 % and 9 % respectively year on year. Moreover, the June results will be even worse, both in the Czech Republic and Europe as a whole. Last year, the Czech Republic imported seven million tonnes of steel products, with imports from countries outside the EU showing a decline after several years because of falling demand. The value of steel exported by the CR last year was CZK 96.2 billion. As in past years, this country´s key export market is the EU, to which 90 % of Czech exports is targeted.

n RECORD HIGH PRODUCTION

IN THE WORLD, WITH EUROPE ON THE DECLINE

Last year, world production of raw steel amounted to 1 870 million tonnes, 3.4 % more than in 2018. The position of by far the world’s largest steel manufacturer was confirmed by China, which produced 996 million tonnes of it, 8.3 % more than one year before and more than 50 % of global production. Between January and April 2020, the world steel output was 581 million tonnes, 4 % less than in the same period last year. The most significant decline was recorded in April, when the total year-on-year decline was 13 %. In the European Union, last year´s production dropped significantly, to 158 million tonnes of raw steel, 5 % less than in 2018.The decline accelerated especially in the second half of 2019, when it amounted to nearly 10 %. In the first four months of 2020, production in the EU declined by 12 %, with the output in April showing a 23 % decline year on year. An even greater fall is expected in May and June. The most seriously affected states have been Spain (-48 %), Italy (-30.7 %) and France (-38 %), i.e. countries most hit by the pandemic. The volume of imports into the EU also declined last year, when it dropped to 34.7 million tonnes. In spite of this, imported steel accounts for between one-quarter and one-fifth of European consumption on a long-term basis. Last year, the main source countries were Russia (7.2 million tonnes), Turkey (5.9 million tonnes), and Ukraine (5 million tonnes). 29 |

INDUSTRY

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. Today, the Třinecké železárny Steelworks is not only an important metallurgical company, but also an important feature in the region and the city of Třinec, which, mainly thanks to the steelworks, has developed from a small agricultural village into an important city. In 2020, the construction began of a new bar peeling facility, one of the steelworks´ largest investments this year. Its cost will exceed CZK 700 million. Its resulting production in the form of peeled steel will supply customers within a wide range of industrial sectors. The most important are the screw, forging, and automobile industries, especially in Europe. This is the second manufacturing technology to increase the value added of circular cross-section steel bar production. The first started operations in 2014. Bar and profile steel is the firm´s second best selling product. In 2019, bar and profile steel production amounted to nearly 523 kilotonnes of the steelworks’ total output of 2 508 kilotonnes. “The line is designed for the peeling of circular cross-section steel bars with diameters of from 30 mm to 80 mm and lengths of from 2.9 m to 10.5 m. The total annual capacity of the line will be 90 kt,” Radek Olszar, Director for the project at the Třinecké železárny Steelworks, explains. It is a line with modern standalone technology, which is nearly fully automatic. “It is fitted with an automated exit guide, provided with an X-ray spectrometer integrated directly inside the line serving for the identification of the chemical composition of the material. It is also fitted with a bundle conservation

| 30

device and an identification label feeder,” he adds. Since the end of April, work has been in progress on the lower part of the hall and the technical safety installation. This will be followed by the assembly of the steel construction of the hall, including its casing. The construction of foundations for the technological and storage part will start in January next year. Final assembly of the technological part will be carried out by an Italian company. The new peeling line will be put into operation in December 2021. Z-GROUP hutní skupina 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 Kadno 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-todate 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 Alliance is planning to invest EUR 750 million in the construction of a new unique steel plant and major modernisation of the rolling mills, to assist the foundry in becoming a leading steel company with environmentally friendly production of high-quality steel in Central Europe. Part of the strategic investments is the building in 2021-2024 of a new hybrid technological steel production unit, the first of its kind in Europe, that will make it possible for the foundry not only to use higher volumes of scrap and reduce its dependence on imported raw materials, but also to radically reduce the impact of production on the environment and to achieve greater flexibility by combining the production of steel from pig iron with electric arc furnace technology. Sandvik Materials Technology This world-renowned company concerns itself with the development and manufacture of products from modern stainless steels and special alloys for the most demanding environments, including products and systems for industrial heating. Its products and services help increase productivity, reliability and cost efficiency on the part of their clients. In addition, they also reduce negative impacts of industrial compounds on the environment. GO Steel Frýdek Místek a.s. The company is a traditional manufacturer of cold-rolled strips and sheets. Its main production programme is steel strips and sheets for anisotropic electrical engineering. The company is one of the world’s 13 manufacturers of these products. It also manufactures steel strips and sheets for isotropic electrical engineering and strips and sheets from non-alloy and alloy steels. GO Steel Frýdek Místek a.s. is part of the Stalprodukt S.A. Group. Z-GROUP hutní skupina The Group is successfully building on the long tradition of Czech-Moravian foundries and ironworks. The products manufactured by the Group hold an important position in the worldwide steel market.

CZECH BUSINESS AND TRADE

Czech Railway Industry – Stability, but on the Crossroads

Photo: ACRI archives

The present successful advancement of railway transport has been enabled thanks to more than 200 years of traditional development of the Czech railway industry. The former ČKD and ŠKODA 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.

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. The latest analysis by the Association of Czech Railway Industry (ACRI) of firms doing business in this sector points to the great stability of their 2019 economic results. The total turnover of firms associated in ACRI in 2019 amounted to CZK 76 billion. The share of exports has remained unchanged for three years, with the share of exports last year amounting to 54 %, i.e. approximately CZK 40 billion. Last year, Czech firms operating in the railway industry employed nearly 20 000 people. The basis of the stability of firms engaged in the Czech railway industry is mainly their high investment in innovation and new technologies, and the competitive-

ness of their products. This development is also largely due to the increased demand for suburban and urban railway transport in the Czech Republic and

other countries. “Other important factors are, on the one side, the drawing from EU funds in the area of investment activities in railway infrastructure and in the area of

ECONOMIC RESULTS OF FIRMS OPERATING IN THE RAILWAY INDUSTRY

Turnover CZK mil.

Export CZK mil.

Employees

Source: analysis for 2019, ACRI

31 |

INDUSTRY

rail vehicle supply, and, on the other side, the success of Czech export firms,” Marie Vopálenská, Managing Director of ACRI, explains. Czech firms have also become established in foreign markets, where they have been placing about 50 % of their output on a long-term basis. Adding to it also indirect and induced effects, this makes nearly CZK 52 billion, which accounts for 1.3 % of the country´s GDP.

n THE YEAR 2020 – OUTLOOK AND

PROSPECTS

In spring 2020, ACRI carried out an analysis among its member companies concerning the current situation influenced by the COVID-19 pandemic. The survey showed that most firms associated in ACRI did not suspend their production. “Most of our member firms continue developing, manufacturing, providing services, and passing on their products to customers,” Marie Vopálenská, Managing Director of ACRI, says. This is confirmed by Jakub Weimann, Managing Director of Bonatrans, who adds: “We maintain our production in | 32

a four-shift operation, naturally at higher costs because of the measures taken against the spreading of the coronavirus pandemic and the increase in overtime work, because of the growing number of people in quarantine or on sick leave.” To this, Martin Bělčík, Managing Director of the Railway Research Institute, adds: “The Velim Testing Centre continues to provide the full range of services and is meeting all the requirements of its customers without restriction.” Within the framework of ACRI, firms are fully meeting their contractual obligations towards their partners. For example, RETIA company provides support for the ReDat recording and analytical system, which is one of the key parts of the communication network of the integrated rescue system. “Our firm has not interrupted work on any of the customer projects and our specialists continue their work on the development and testing of products,” says Jan Mikula, Director of the RETIA marketing firm. “Although, for the time being, development, production and servicing in the ACRI member firms continue without

ACRI ACRI has been representing the Czech rail manufacturing industry since 1995. ACRI defends the common interests of the railway supply industry and Czech railway institutions, railway operators, rail infrastructure managers, and also EU institutions via its membership of UNIFE. ACRI acts as the Czech Centre of Technical Standardisation for the railway sector entrusted with the transfer of European technical standards into the Czech national standards system. The Association brings together 50 Czech companies, significant manufacturers and suppliers of products and services for railway transport. It represents the interests of the different sectors of the railway industry and provides services in the areas of engineering, manufacture, maintenance and renovation of rolling stock, the infrastructure, the signalling systems and other fields. ACRI members currently employ more than 20 000 people in the Czech Republic. Their annual turnover is more than EUR 3 billion, of which exports account for more than 54 %. Our vision: The Czech Railway Industry – a profit-making, flexible, and highly technically developed sector with long years of tradition, an important employer, adding to the country´s economic growth and the development of the transport system in the Czech Republic and in the world in general.

Photo: ACRI archives; AŽD archives

any major restrictions, the forthcoming economic recession caused by the coronavirus pandemic will be complicated even for those firms and support from the state will be of key importance for them. For example, in Siemens, the pandemic situation massively influences the supplier chain in the manufacture of rolling stock, which significantly delays deliveries as a result of frequent interruptions in factory production all over the world.

CZECH BUSINESS AND TRADE

them,” points out Jiří Červinka, Economic Director of Oltis. That is why the firms associated in ACRI demand that the state abstains from reducing investment in rail transport and that, on the contrary, it finalises ongoing tenders and announces new ones.

Today it is nearly certain that, unless the state meaningfully aids firms, they may soon be faced with huge problems. Our clients include railway passenger transport enterprises, which have lost practically all their customers as a result of the necessary measures taken by the government. Therefore, I think that the state should support them, because, after the crisis is over, the whole of society, not only our company, will need SUCCESSFUL PROJECTS OF CZECH FIRMS 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 six sets of carriages and six locomotives from ŠKODA Transportation to Germany for Deutsche Bahn Regio, and the delivery of tramcars from the same manufacturer to a number of European and non-European cities; CZ LOKO is busy trading with the EU and the Baltic states, and AŽD Praha is modernising railways in Slovakia, the Balkans and Turkey, 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-ŠKODA consortium. ŠKODA 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

Marie Vopálenská, Managing Director, ACRI www.acri.cz company will receive state-of-the-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 kmlong 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 impressive 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. Another important customer of DAKO-CZ is Tatravagónka Poprad, co-owner of the Třemošnice manufacturer. Besides train brakes, DAKO-CZ also supplies braking systems and components for underground railway trains and tramcars. UP to 70 % of the company´s production goes for export. For example, it has made another delivery of braking systems for LHB carriages to the Indian customer, ESCORTS. DAKO-CZ has been in the Indian market since 2006. Its exports began to grow meaningfully in 2015.

33 |

LOGISTICS

Industrial and Logistics Parks Continue to Be the Driving Force of the Economy The current crisis is showing the essential role played by Logistics and its chains in ensuring supply to companies and their functioning. Therefore, transport, storage and all the other modes of handling goods, foodstuff, information, and other resources on their way from supplier to customer must be functioning perfectly and most efficiently. How do Czech firms stand in this respect? Czech firms have proved to be competitive compared to foreign firms and were doing very well at the time of the state of emergency declared in connection with the corona pandemic. They ensured the functioning of the business sphere, as well as of households and physical persons. It transpired that having state firms ensuring logistics, transport and forwarding services was a good thing. The supplying of households was switched to e-commerce, deliveries were reliable, contactless and well priced. It can be said that, among European states, we are at the top in ensuring the connection of households to the Internet. The proportion of connections is 90 %, with 45 % of households doing their purchases online. In the first half of this year, revenue from e-purchases amounted to CZK 74 billion. Customers’ methods of payment have changed radically. The Cash on Delivery system has been reduced to a mere 15 %, while the proportion of online payments by credit card increased to 40 % and bank transfers to 12 %. The organisation of work for logistics service providers was complicated in view of the high sickness rate of personnel and the quarantine restrictions. To prevent a collapse of Logistics, teams were not allowed to meet during shift changes. The fact that the economic functioning of the state, businesses and households has been fully ensured has not been sufficiently appreciated. Supplier chains continue to play a key role even in these turbulent times, and are beginning to place greater emphasis on endurance and efficiency, while attaching more importance to e-commerce and the acceleration of this segment. How do you see it? Here I would like to point out that Logistics has managed to keep the | 34

supplier chain going without any visible problems during the state of emergency declared as a result of the Covid-19 pandemic. Logistics firms have focused on broadening the e-commerce delivery system, which substitutes for shopping in shopping centres or specialised and ordinary shops. E-commerce is facilitated and supported by e-banking, e-signing, e-documents, e-communication and contactless delivery of consignments. During the state of emergency declared in connection with the corona crisis, logistics services were provided without charging the usual financial margins, while observing the required parameters of flexibility, reliability, safety and the good physical condition of employees. What, in your opinion, will influence market conditions in the logistics properties sector in the near future? The corona crisis certainly may influence the conditions in the logistics properties sector in the near future. Demand for logistics services, however, is not expected to decline. Their development will be positive in consequence of the growing interest in online purchases, and the expansion of e-shops, consignment warehouses and other storage facilities can be expected. The pandemic has shown that the non-delivery of components by some suppliers for reasons of the high sickness rate of their employees and their obligation to stay in quarantine will require consignment warehouses to keep higher stocks. A fragmentation of the global markets is expected, with the need to move engineering production facilities to less distant localities, including the Czech Republic. This in turn will boost the demand for industrial and logistics properties. Logistics, production and warehousing halls play an important role not only in supplying households, but also in keeping Europe´s modern industries in operation. In this respect, the Czech Republic, where the buildings in larger cities and on motorways crisscrossing the country have become a symbol of the good management of the crisis, is no exception. Have industrial parks,

Photo: Cushman & Wakefield archives

Logistics has managed to keep the supplier chain going without any visible problems during the state of emergency declared as a result of the Covid-19 pandemic, and is continuing to do so. Logistics firms have focused on furthering their services by promoting the e-commerce consignment delivery system, which substitutes for consumer goods’ purchases in shopping centres and specialised, as well as ordinary shops. “E-commerce is facilitated and supported by e-banking, e-signing, e-documents, e-communication, and contactless delivery of consignments,” says Václav Cempírek, President of the Czech Logistics Association.

CZECH BUSINESS AND TRADE

ing intensively on the year 2021, when the most important event for us will be the participation of some members in the International Trade Fair for Logistics in Munich. There we want to present again the high standards of the logistics services provided by our firms.

often underestimated by some until recently, become the driving force of the Czech economy? Industrial and logistics parks continue to be the driving force of the Czech economy. They are directly linked in importance with manufacturing and processing companies and their demand for just-in-time, just-in-sequence and Kanban deliveries. For distribution chains serving end consumers, logistics properties with their sophisticated technologies are linked to the consolidation and deconsolidation of goods, with the aim of optimising the logistics of transport in terms of mileage reduction parameters. This trend, which will favourably influence the demand for industrial and logistics properties, is certain to be strengthened by emission target requirements throughout Europe. The fragmentation of global supplier chains using logistics properties will shorten transport distances. The state could support the development of these properties by investing more in the transport infrastructure, which is essential for their development. This would enable the wider use of multimodality in logistics chains in Europe by linking rail and road transport. The environmentally friendlier rail transport is suitable for transport over longer distances, while road transport is more advantageous for serving end customers.

What is the position with regard to the rental of logistics properties? Currently, the offer of logistics and industrial properties is higher than the demand. There is a discord between the growth rate of supply on the part of investors and demand, causing an imbalance and a slight increase in the number of vacant properties available for rent. The medium-term outlook will be influenced by the decisions of manufacturing firms whether or not to relocate their production facilities to the Czech Republic, and by the decisions of logistics and e-commerce entities in connection with the coronavirus crisis, economic development and the purchasing power of the population. You are President of the Czech Logistics Association. What tasks has the Association set itself for 2020? The Czech Logistics Association planned interesting projects for its members and the professional public for this year, for example, organisation of the Day of Czech Logistics, a discussion forum on topical trends in Logistics, a professional inspection of logistics firms, and other undertakings. However, because of the state of emergency declared in connection with the Covid-19 pandemic, all the events have been cancelled or postponed until 2021. Currently, we are focus-

At the same time, you are a long-standing university lecturer. Can you mention some projects by Czech students in the area of Logistics? In the past few years, Czech universities have been concerned with the intertwining of theoretical teaching with real project solutions, with the aim of preparing would-be graduates for practical work. In the area of Logistics, the University of Economics, Department of Logistics, in Prague, included its students in projects to create a method for the area of city logistics and sustainable urban mobility and to propose an intelligent system for waste management in the framework of the Smart City strategy. Students of the Faculty of Transport at Jan Perner University in Pardubice worked on projects under the Smart City Logistics programme, in conjunction with e-commerce and sustainable urban mobility plans, while the Technical and Economic University involved its students in projects oriented towards transport logistics, such as safe cities for pedestrians and seniors and the creation of methods to establish the intensity of traffic on urban roads. It also tackles projects in collaboration with students of the Faculty of Transport of the Czech Technical University in Prague. The projects concern, for example, the identification of accident localities in conjunction with the integrated rescue system programme and the behaviour of passengers in terminal stations of public transport facilities, access roads and the determination and optimum use of the rail transport infrastructure parameters. The Logistics University in PĹ&#x2122;erov integrates students in projects connected with digitalisation in logistics and the determination of the delivery of components for the automotive industry to foreign factories, with respect to the different work calendars, and the optimisation of inventory management in production plants. 35 |

LOGISTICS

A Company that Succeeded on the Global Market and Became a Czech Singularity Jakub Weimann, the CEO of BONATRANS GROUP a. s.: Our goal is to maintain the position of European leader for next generation and further.

BONATRANS is globally a very well-established supplier of railway wheelsets. What makes it unique? The most unique aspect is the fact that the people in Bohumín both construct and manufacture the wheelsets (and parts thereof, including axles, wheels, and centers) and they have a lot of experience with it. It is specifically due to “the decades of experience” that we are able to effectively react to market requirements and focus on our own development. This involves efforts in improving the products’ lifecycle, increasing their lifespan under increased costs stemming from environmental requirements, ride comfort, etc. The solution for this is the materials used, technologies and the logistics of production, and many others aspects. Where can we experience a ride in a train that runs on BONATRANS wheelsets? Are

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there some outstanding places you think are worth a mention? You can get a ride practically anywhere, as we supply our products to eighty countries, five continents and we hold a 40 % share in the European market. You can ride BONATRANS wheelsets in the subways of Paris, Prague, and New York, and if you travel to the Tibetan high plateau, which a railway in China passes through, you also have the chance to ride in our wheelsets. As far as distance is concerned, the furthest we have ever exported our product was New Zealand. However, in Europe you are most likely to catch a ride in Germany, Austria, France, or the UK, as railway operators and city transport companies of countries with most developed network of rail-bound transportation are our biggest customers. Be it for new fleets indirectly,

through manufacturers of rolling stock, or directly for existing fleets. If to consider out of Europe, it would be North America, India, and China. In 2020 BONATRANS has reached an important milestone, fifty-five years since its founding. What are your plans for the future? BONATRANS is the European leader in its field, and we would like to maintain this position. There are still markets that interest us, with potential for us to grow (in particular Italy, Scandinavia, China, North America, and India). For such expansion we will obviously need top-notch machinery equipment, smooth and flexible processes, but most importantly all of our employees onboard with their knowledge and passion. We will need to deepen the communication with our customers, to react to their ideas and help to transform them into future products. We will also strive to be involved in the development of advanced technologies, machines, and devices with focus on automation. This is for us the way forward, creating an environment that leads to prosperity and at least another fifty-five successful years.

CZECH BUSINESS AND TRADE

PIONEERS OF WHEELSET SOLUTIONS

BONATRANS and GHH-RADSATZ represent an impressive part of the history of wheelset design and manufacturing. Generations of true experts continuously contribute to the evolution of the wheelset. Respecting the past but looking ahead, the pioneers of wheelset manufacturing produce premium solutions for the railways of the world. GHH-BONATRANS supplies a full range of first class products and reliable solutions such as heavy rail wheelsets for high-speed trains and locomotives, low-floor solutions for light rail, including resilient wheels and noise absorbing solutions. Not only do we manufacture solutions of the highest possible standards, we design the products with our customers and provide a complete after-sales service.

The neverending spirit of curiosity and passion for perfection enables the birth of new innovative solutions that drive the industry forwards. • The premium supplier for wheels, axles and wheelsets • More than 200 years of history • For all types of rolling stock, including trams and metros • For all major railways and rolling stock manufacturers • More than 80 countries delivered worldwide

www.ghh-bonatrans.com 37 |

CZECH FOOTPRINTS

KOVOSREAL – Strong Actor with Good Reputation Kovosreal is a successful family engineering firm with more than 20 years of activity behind it, operating not only in the Czech market. The core of its production programme is sheet metal processing. Its powder coating plant is devoted to the surface treatment of iron, aluminium, and zinc objects. Its specialised workshop concerns itself with the construction, production, and follow-up service of cutting, bending, and towing tools and jigs, and the manufacture of precision machine parts according to the customer´s requirements.

The firm makes a point of good interpersonal relationships. Since the death, 8 years ago, of the company´s founder, Jan Kučírek, KOVOSREAL has been run by his son, Jan Kučírek, and his daughter, Kamila Hejduková. And their collaboration is perfect. “We stand 100 % by each other in every situation and respect each other, as is common in a well-functioning family, where envy and rivalry have no place and where one is always ready to help and listen to the other. Such is also our relationship with our colleagues and employees, where we are guided by the conviction that business depends on people. We have nearly zero fluctuation, which shows that our people are satisfied,” says Kamila Hejduková.

n THE YEAR 2020 AS A TEST

OF MUTUAL RELATIONS

The year 2020 will remain indelible in the memories of us all. Its very promising beginning, which looked more than favourable for KOVOSREAL´s business, was thwarted by the arrival of the new virus, which has changed our lives forever. “Time stood still and all activities slowed down. The epidemic took away people´s certainties. Fortunately, our firm didn´t have to stop production for even a single day. I can | 38

see how grateful our colleagues are for this situation and I appreciate the fact that they have no problems with the new measures we have had to take,” Hejduková says. “The new situation, meaning a restriction of personal contacts (business meetings with representatives of other firms), has given us time to make good our arrears and finish projects which had to be postponed for lack of time. We also took advantage of the time to prepare for any future potential crises. This period has really tested our relationships and the functioning of our business, showing the importance of having a good relationship with customers. In addition, we could judge the behaviour of our suppliers and see with whom we´ll continue to do business, or break off our collaboration. We could see the real characters of our employees, suppliers and customers,” Hejduková adds.

n COMPANY AS A FAMILY The company has years behind it, when it massively invested in the reconstruction of its premises and the purchase of new technologies. This year, it is concentrating on the re-implementation of its software and the digitalisation of certain processes. “These days, after a period of relative repose, the virus is once again beginning to regain strength and no one knows what the morrow will bring forth. We are part of a chain of suppliers and we realise that we are simply not in a position to influence the loss of a contract with a supranational company. Nevertheless, I am confident that we´ll withstand the situation and that in future years, 2020 will be just a memory. In the past, I could hardly have imagined

that people would be grateful for being able to go to work. It seems that what applies at a personal level also applies on the social scale, and that difficult and unpleasant situations will teach us how to enjoy the little pleasures of everyday life. I perceive our firm as a family and realise more than ever before that private life is literally reflected in the working environment. My wish for us all is that we overcome this uneasy period and move forward,” Hejduková says in conclusion. KOVOSREAL A major part of the firm´s customers are Czech affiliations of supranational companies. KOVOSREAL is one of the largest Czech suppliers for the Carrier corporation – manufacturer of refrigeration systems, which also supplies LEEL Coils, leading European manufacturer and supplier of high-quality heat exchangers. For more than 15 years, KOVOSREAL has been supplying its products to Festool, the largest German manufacturer of hand tools. KOVOSREAL´s greatest competitive advantage is its ability to react promptly to customers’ requirements. Thanks to direct management, it responds immediately to any changes in orders and makes decisions on the spot. The firm applies, maintains and continuously improves the ČSN EN ISO 9001:2016 quality management system, the ČSN EN ISO 14001:2016 environmental management system, and the ČSN OHSAS 18001:2008 health and safety management system.

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