INVESTMENT: Irish companies could benefit from the shift in multinational foreign direct investment to lower-cost economies in Central and Eastern Europe, the chief executive of the Czech equivalent of IDA Ireland, Czechinvest, said yesterday.

While some regard the shift in foreign direct investment as a threat, Mr Martin Jahn said many Irish small and medium-sized sub-suppliers could follow multinationals and take advantage of the less developed supply sector in these countries.

"Ireland has to face reality that some multinational companies will have to move to Central and Eastern Europe to be closer to their customers or to achieve better cost efficiencies, but on the other hand, indigenous Irish companies, suppliers to multinationals, could move there also," said Mr Jahn.

Many multinationals are beginning to target the Czech Republic because of its low costs, stable economy, central location and in anticipation of it becoming a full member of the EU, he said.

"I think it is an unavoidable trend and Irish companies can actually benefit from it," said Mr Jahn.

Some Irish companies did enter the Czech Republic following the collapse of Communism in the late 1980s.

However, Czechinvest has now opened a temporary representative office along with the Czech trade promotion agency to entice Irish manufacturing companies to set up operations there.