SMALL BUSINESS IN THE CZECH REPUBLIC IS GOING BANKRUPT DUE TO ANTI-RUSSIAN SANCTIONS

Czech entrepreneurs faced the threat of ruin. The reason for the possible bankruptcy was the increase in electricity tariffs and the subsequent increase in prices for raw materials (flour, wood). The owners of small pastry shops began to leave the bakery market, and the market itself has already declined by 5%.

In an interview with Seznam Zprávy, the owner of Koh-i-Noor, a company engaged in the production of stationery, reported on the problems that the company faced after leaving the Russian market. Before the start of the special military operation of the Russian Federation on the territory of Ukraine, the holding supplied pencils and erasers to 2 million children and teenagers. In the Czech Republic itself, about 100 thousand children should go to school on September 1.

The owner of the company Vlastislav Brziza said that he was forced to close the production of stationery erasers, which were previously exported to Russia. It has become unprofitable to produce such products in the Czech Republic. However, the geopolitical situation has also affected other areas of Koh-i-Noor's work.

The cost of crayons and pencils that have made the company famous in 80 countries of the world is becoming very expensive.

The ban on the export of wood from Russia forces the company to buy it in China. This means that first the Russian wood will enter the Chinese market, and then it will need to be transported by sea. Considering the costs, the cost of pencils will increase by at least 15-20%.

If a large company like Koh-i-Noor still copes with the crisis, Brziza added, small businesses may not be able to withstand financial pressure. It will not be easy for firms dependent on bank loans to exist at current interest rates. The ruin of small bakeries with an annual production volume of less than one billion Czech crowns has already begun. By autumn, manufacturers of plastic products may begin to go bankrupt.