By Robert Muller
BLATNO, Czech Republic (Reuters) - Flush with cash and land it received in compensation for the seizure of its property under Communism, the Roman Catholic church in the Czech Republic is looking to the forestry industry as it looks to ensure its long-term financial future.
After long political battles, the church was awarded $4 billion worth of property in 2012, making it the country's largest private landowner.
Its holdings include 140,000 hectares of woodland, some blighted in the past by acid rain, which it is now managing with environmental and economic sustainability in mind.
In doing so, it faces difficulties familiar to many Czech companies: a shortage of labor, rising wages, and pressure to make profits.
"We gained economic freedom and with it also a piece of responsibility," said Stanislav Pribyl, secretary general of the Czech Bishops Conference.
"We are trying to operate with a perspective proper to the church, that is decades, centuries. Hence we do best with forests, because that is really a business for several generations ahead."
The church's holdings include parts of a vast forest in the northwest of the country, near the German border, where the trees surrounding Blatno village look healthy and fresh.
The ground, however, is still contaminated from acid rain that fell here during the Communist period from a nearby power plant, which has since undergone an extensive clean-up.
The forest also suffered excessive logging in the 1960s, when it was virtually chopped down.
"That hit was absolutely pivotal, because in a forest, there are 100 years or more between sowing and harvest," said Jan Ferkl, who is employed by the church to run the Blatno forest.
As a result, this and similar church holdings will be loss-making for years, perhaps decades, to come.
The forests are part of a wider package of restitution to the church of what communist rulers confiscated from it when they took over Czechoslovakia in 1948.
The total compensation, also including annual cash installments that will total $3 billion, goes beyond what the churches got back in neighbors Poland and Hungary.
But while the figure seems large, the church faces gradual cutbacks in contributions by the Czech government toward priests' salaries and other church expenditure. It has around 13,000 employees, of which only about 1,818 are priests.
And with only 10 percent of 10.6 million Czech citizens describing themselves in the 2011 census as Catholic, the church can't count on members' contributions on the scale of its Polish counterpart. Nor does it receive support via the tax system, as in Germany or Austria.
All of which makes its business activities critical.
"We are viewed as brave investors," Pribyl said.
Besides forests, the church has also been investing in other property - for example, it owns the land under ELI Beamlines, a European laser research facility near Prague.
In the country with the world's top beer-drinking consumption per capita, there are even a handful of church-run microbreweries - like the one in Litomerice, north of Prague, where patrons can sip mugs of "Deacon" or "Vicar".
Known as the Bishop's Brewery, it is a way for the church to earn goodwill among Czechs, whose country has been ranked as the least religious in Europe by several polls.
Besides business and property, Czech and Moravian bishops also faced a choice over where to invest the almost 2 billion Czech crowns ($91 million) they receive annually from the state in compensation for confiscated property that could not be returned.
They picked KBC's Czech unit CSOB to create an investment fund - the Catholic Fund. Established in 2014, it has 1 billion crowns under its management.
(Editing by Mark Trevelyan)