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FOREIGN TRADE

FOREIGN TRADE

 
 
ACTIVITIES ABROAD


ŽPSV a.s., is fully aware of the need to expand also to foreign markets and attack them not only with its products, but mainly with its know-how. These interests of the Company are detailed in the "ŽPSV a.s. Strategy for 2006 - 2008". Besides Slovakia, where the ŽPSV Čaňa a.s. subsidiary operates successfully, ŽPSV is trying to start business in other promising markets in the region of Southeast Europe, as well as in markets, which are already somewhat more friendly with respect to the local activities. The individual specific activities, which have achieved certain success or a significant degree of completion, include:

A. Product Supplies Abroad

The export of concrete goods abroad is very strictly limited by an improper ratio of the kilogram price of concrete products and the transportation costs, which causes critical dependence of competitiveness on the hauling distance. Although the Company puts major emphasis on the marketing support of its products supported by certification abroad, success in this area is limited to the export of sleepers to Bulgaria, Slovakia and Hungary, with small-volume and irregular export of selected concrete products made to other, mostly neighboring, countries.

B. Acquisitions Abroad

1. Bulgaria
The Company has established a ŽPSV EOOD subsidiary in Varna, Bulgaria, which is currently equipped for manufacturing sleepers of the same types as in the Czech Republic. However, this is not the end of the local activities, which are further expanded and intensified. Through the mediation of this subsidiary, ŽPSV tries to create a marketing influence on local investors and the market, offer its products, know-how and experience in making infrastructure constructions in the Czech Republic. The traditional products of the ŽPSV manufacturing program are gradually being certified here, pursued in projects and manufactured in test production, so that the best possible conditions are established for the subsequent mass production. Despite initial problems with an unknown business environment and unstable economy, the Company is taking further action to reach a stable successful position on this market, which is promising mainly in the area of infrastructure constructions. This method will certainly be supported by the entry of Bulgaria into European structures.

2. Serbia
ŽPSV a.s. managed to establish a test railway section using Czech sleepers in 2006. Subsequent to its positive evaluation, the Company obtained approval from Serbian Railways to use ŽPSV sleepers on their tracks. We believe that this enterprise will open the door to other very interesting European markets. In this country, ŽPSV a.s. is also pursuing the privatization of a concrete facility in order to utilize its own well-proven know-how there, and then attack the market with the local production of a wide range of traditional ŽPSV concrete products.

3. Other
ŽPSV a.s. activities have been oriented also to other countries recently, with the goal to export the technology and know-how, and thus succeed in this market. For these purposes, there are preparations in progress in Algeria, Saudi Arabia, Turkey, Nigeria and other countries. The negotiations in these regions are long and difficult, with an unclear finish.


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