Taiwan PC firm to build Czech plant

Electronic News, Dec 8, 1997 by Carolyn Whelan

PRAGUE--All eyes are on Prague, now that First International Computers (FIC) has decided to assemble computers in the Czech Republic. The Taiwanese PC maker announced last week that it will build a $100 million production plant near Prague, paving the way for other high-tech factories.

"FIC's investment is the first large-scale foreign computer investor in the country and will definitely be a boost to the Czech high-tech sector. It also proves the growing interest of East Asian investors in the Czech Republic," said Jan Amos Havelka, general director of CzechInvest, which brokered the deal.

Though companies like Compaq and IBM have highly visible sales offices in the country, until now no major PC manufacturer has established a final assembly site there. Among some 300 small companies stemming from privatizing Telsa the former telecommunications ministry--some assemble TVs and computers, but under a Czech name, with limited distribution. FIC has revenues of $1.1 billion, and makes computers, notebooks and peripherals at plants in Taiwan, China, the U.S. and the Netherlands. FIC is Compaq's favorite supplier and Taiwan's biggest motherboard contract assembler. Compaq has a small Czech operation, so FIC will probably service them, as well as the European arms of Dell, IBM and others they build for.

"Final assembly makes this factory unique to the Czech Republic." said Radomil Novak, director of the Investment Project at CzechInvest.

The new plant, at the Logistikpark in Rudna, will produce more than 50,000 computers, with 95 percent of those exported. Production is slated to start in February 1998, with an initial monthly output of 10,000 PCs. The share of locally-produced components is also expected to increase. An employee at a multilateral bank said locals look forward to high export volumes, to boost the country's external budget. Around 150 people will be employed at the plant.

FIC decided to locate its plant in the Czech Republic because of its strategic position in the center of Europe, and the availability of an educated, cost-competitive workforce, according to CzechInvest, which said that the country has the highest per-capita spending on information technology in Eastern Europe ($131 per household--nearly three times what Polish households spend) and is the most Internet-literate nation in Central and Eastern Europe.

Following FIC's lead, Intel is mulling over a $500 million investment in the Czech Republic, with Plzen or Pardubice mentioned as possible sites. Portugal and Egypt are also competing for that business.