Written by: Jasna Sýkorová
Photo: Petr Poliak, Kurt Vinion
French companies doing business in the Czech Republic are focusing on changes related to this country’s impending EU membership. Chief among them is the issue of keeping up with the increased competition.
A SORT OF CALM before the storm, that was the situation for major French players here last year. But the arrival of the Toyota Peugeot Citroen Automobile (TPCA) plant heralded a new inflow of French capital into the country. According to CzechInvest, the state agency supporting investment into the Czech Republic, the volume of expected investment in the automotive industry alone over the next few years (including the TPCA project) will amount to around EUR 1.14 billion. In comparison, the total of French direct investments in this country for all of 2002 has been EUR 400 million.
Certainly not all of the investments and activity that stem from the French business community are new. Firms that have been operating here for years are also confirming and strengthening their position. By making the most of the know-how and capital background they have gained from their parent companies in France, they are bolstering their businesses to face the increased pressure that may result from the Czech Republic’s EU entry. Like many other international companies, French firms are seeking to minimize their costs, and are implementing information technologies in their solutions. The French strategy, however, has some extra innovations – among them, the most obvious of late has been in the areas of personalized marketing and specialization of products and services.
” An individualized approach to our clients has been very important to us,” says Petr Slabý, deputy director of marketing for Komerční banka. This trend became even more significant after Société Générale, a French bank known for innovations in this field, acquired Komerční banka. “We are creating and offering individualized banking products – packages for different groups of customers. These are not only tailored to the stage of a company’s ‘life cycle’, but are also relevant to their specialization – for example, to doctors or firms using franchising as a business model,” Slabý explains.
The logic of offering personalized solutions is also apparent in the field of food-voucher distribution – a market currently controlled on a worldwide scale by three French entities: Accor Services, Sodexho Pass, and Cheque Déjeuner. Even in this seemingly uncomplicated segment, the trend is to offer packages, although these naturally take on a different form than those offered by banks. The employer (i.e., the client of the voucher company) receives “pre-packed” envelopes prepared for each employee that is on the food-voucher plan. Thus, the client’s time spent with administration and distribution is minimized.
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Guillaume Bertier
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” We have invested more than one million dollars into the new production line and printing machines,” says Guillaume Bertier, general director of Accor Services in the Czech Republic. “The process is very fast – the issued vouchers come back to us in few days time, and it has to be a very smooth operation,” he adds. Accor Services has approximately 270,000 users in the Czech Republic and a network consisting of about 20,000 restaurants. Following up on the success of this service, companies in the industry are seeking other ways to make vouchers function in other fields as well.
Treating the customer as an individual is not only the domain of service-oriented industries. It is also part of the strategy of the production plant TPCA, a French-Japanese consortium that represents the biggest investment project in central Europe lately. “The small vehicle with the ‘working name’ of B-Zero will be produced in three styles – three different body designs with the same undercarriage,” explains Jean-Pierre Chantossel, executive director of TPCA. The Czech Republic was chosen as the host country for the ambitious project after one year of debate and negotiation for possible locations. Of a total EUR 1.3 billion, EUR 800 million will be invested locally – moreover, the majority of supplies will come from domestic Czech sources (see sidebar, left). However, Chantossel does not conceal that there are many established Japanese suppliers for Toyota and French ones for PSA Peugeot Citroen, which already have production facilities in the Czech Republic, as they will be able to respond to the TPCA’s “individual” needs most promptly.
A certain number of the suppliers with an international background will merely adapt or increase their production capabilities. Examples of these flexible and responsive French firms include Valeo, a specialist in automotive air conditioning, and s.n.o.p., a producer of car parts. Others, like interior producer Lear or logistics operator Gefco, are establishing greenfield operations within the TPCA plant zone. Chantossel points out that there should be up to five companies joining the site near Kolín, and while their names have not been made public yet, the suppliers list has to be completed this summer.
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Jean-Pierre Chantossel
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Division of labor
While the Japanese part of the consortium is responsible for engineering and production, the French side is in charge of sourcing and purchasing – which is one of the reasons why this plant has attracted the attention of French companies in general, not only those directly involved. Komerční banka is said to be responsible for the banking operations, and other French companies, including property developers, are seeking avenues for other cooperation. “We are not a direct supplier to TPCA,” says Silvano Pedretti, co-president of property developer Orco Group. “But being part of such an important project in the Czech Republic is definitely an opportunity even for us. For example, we may lease some apartments to expatriates coming to work here,” Pedretti explains, adding that sharing the same French roots can be an advantage in cooperation. “We are all Czech firms with international clients and backgrounds, but the common language and culture removes some barriers immediately.”
According to Martin Jahn, managing director of CzechInvest, the TPCA plant project was an enormous boon to promoting the Czech Republic in France. “We organized a promotional tour in France called ‘Czech Days’ that drew a lot of attention from the French business community,” says Jahn. “I have to admit that if it was not for TPCA, the success would have been notably diminished. The main wave of French investments into the Czech Republic has not come yet. We expect more companies to follow,” he adds.
The facts about TPCA
On a 125-hectare plot in Kolín, the rough construction of a plant for a new model of small cars with the working name of B-Zero is nearing completion. Toyota Peugeot Citroen Automobile (TPCA), the result of a joint-venture of the Japanese automaker and its French partner, is investing a total of EUR 1.3 billion in the project, 800 million of which are earmarked for the Czech Republic alone. Production should begin in 2005, and in two years’ time the production line is expected to already be turning out around 100,000 new cars per year, with a total plant capacity of 300,000. Nearly 3,000 workers will be employed at the facility. The first 300 or so people should start this year, including 35 expatriates (26 Japanese and nine French). |
Customized packages
KOMERČNÍ BANKA adjusts its banking products according to the individual needs of customer groups. In 1997 it launched its so-called “packages strategy”, which it deepened and broadened in 2001, after it was purchased by Société Générale. |
Opportunities in accommodation
French developers don’t stop building hotels, even when the tourist industry is down due to catastrophes, natural or political. Instead, they seek synergies that help to minimize risk. Luxembourg plaza, a complex combining a luxury hotel and office space, is a good example. Local developer Orco Group will begin construction on the plaza site this summer, with total investment in the project reckoned at EUR 52 million. “It is the biggest project we are working on,” says Silvano Pedretti, co-president of Orco Group. “We want to promote the synergy between the hotel and the office space – office clients may represent five to twenty percent of the hotel occupancy, which would be especially good for the hotel in the beginning,” he observes. |
Logistics: a time of changes and investments
The logisticS services market in the Czech Republic is very competitive, and new companies will find entry without a customer base difficult, says Guilhem Vicaire of FM Česká, a daughter company of French FM Logistic. Thus new arrivals have been scarce – FM Česká itself entered the market back in 1996 with Ferrero, a confections producer. One exception is the French Gefco, which has traditionally worked for Peugeot and will thus become one of the providers of logistics solutions for TPCA. As manufacturers often hire only one company for managing shipments (warehousing, transport, and tracking the movement of goods), Gefco is hoping to get the lion’s share of the logistics business. Additionally, logistics companies often specialize in one particular area (i.e., car parts) so the fields of their activities are very clearly defined. |
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