Issue 03 | May/June 2010 | Page 01 www.gtai.com

Germany Investment NewsP

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state of Saxony-Anhalt’s thriving photovoltaic industrial environment. The company, which purchases solar cells and uses industrial production techniques to increase power output and guarantee quality, will construct a new factory in the city of Halle. In 2010, the company will invest roughly EUR 40 million in the initial construction phase of the facility, which will employ 80 people at first, with plans to double that amount. In describing why ITS chose Halle for the facility, CEO Thor Christian Tuv cited the region’s “thriving pho-tovoltaic industry and outstanding infrastructure,” such as its proxim-ity to the Leipzig-Halle airport and direct access to Germany’s Autobahn system. Germany Trade & Invest assisted ITS in its investment process.

⋅ The Japanese company Solar Fron-tier, until recently known as Showa Shell Solar, has announced that it will open its first European office in Munich in 2010. The company, which manufactures thin-film CIS (copper-indium-selenium) photo-voltaic modules, is hoping that the office will play an integral role in reaching their annual global sales target of 1 million kilowatts’ worth of modules by 2012, which is 10 times the current level. In explaining why Solar Frontier chose to locate the office in Munich, CEO Shigeaki Kameda cited “the German priority on economy, the German priority on ecology and the German market

Major Investments

⋅ General Electric (GE), one of the world’s largest industrial companies, announced its plans to open a new engineering center in Hamburg, fo-cused on project development, ap-plication engineering and advanced technology related to offshore wind energy. By 2013, the center is ex-pected to employ around 60 highly trained employees. Among the rea-sons for choosing Hamburg, GE cited its growing renewable-energy cluster and the fact that the EU Commission has awarded it the title of “European Green Capital 2011.” Georg Knoth, CEO of GE Central Europe, views the center as “added proof of our engage-ment with Germany as a location for environmental and high technol-ogy,” and says that “Hamburg offers the perfect basic conditions,” such as “its outstanding innovation and university network.” GE also plans to expand its wind turbine manufac-turing facility in Salzbergen, Lower Saxony, and the GE Global Research Center in Munich. Together, these moves will create approximately 100 new jobs and add EUR 105 million in investments to GE’s offshore wind business in Germany by 2016. The in-vestment decision process of General Electric was supported by Germany Trade & Invest.

⋅ The Norwegian solar company In-notech Solar (ITS) has announced that it will join the eastern German

size.” The office will bring the com-pany closer to Germany’s market, which is home to approximately half of the world’s solar modules, contin-ues to grow and is expected to having surpassed 10.0 GW of installations. Germany Trade & Invest supported the company with its investment plans.

⋅ Semeato, one of South America’s largest manufacturers of agriculture equipment and a specialist in the development and production of eco-friendly direct-sowing machines, has announced that it will establish its European headquarters and a production facility in the eastern German city of Halle. By 2012, the Brazilian company plans to invest EUR 5.6 million in the site, which will initially employ 15 people in the production of drilling and plant-ing equipment. Decisive factors in the company’s decision to locate in Saxony-Anhalt were its central loca-tion in Europe, Germany’s excellent transport infrastructure, the avail-ability of well-trained personnel, and its investor-friendly climate. Germany Trade & Invest assisted Semeato in set-ting up its business in Germany. (Major Investments continues on page 3)

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⋅ The German subsidiaries of automak-ers Skoda and SEAT will move into a shared, eco-friendly office complex in Weiterstadt, Hessen, which will house 400 employees. Having im-ported almost 191,000 Skoda vehicles in 2009 alone, Germany is the com-pany’s strongest export market. (7)

⋅ Owing to its modern infrastructure, new education center and optimum conditions, Rostock-Laage Airport in Mecklenburg-Vorpommern has been chosen to become home to the European pilot-training activities of Pilot Training Network GmbH, a subsidiary of Lufthansa Flight Train-ing GmbH. (8)

⋅ In 2009, North Rhine-Westphalia’s business development agency boasted its second-best year ever, at-tracting 102 companies and creating 2,048 jobs. Since 2005, NRW.INVEST has assisted 415 foreign investors – and particularly Asian ones – in set-ting up operations that have created 6,780 jobs. (9)

⋅ Despite the ongoing crisis, the Sax-ony Economic Development Corpo-ration (WFS) succeeded in bringing

News from the Federal States

⋅ In an independent survey of almost 10 million people for the World Air-port Awards 2010, Munich Airport in Bavaria was voted Europe’s best. The airport already won the award four times between 2005 and 2008, and it moved up in the global rank-ing, from fifth to fourth place. (1)

⋅ There’s more good news for Berlin’s thriving healthcare industry: After a series of recent acquisitions, the US pharmaceutical giant Pfizer will be bringing around 200 new jobs to the company’s German headquarters in Potsdamer Platz. (2)

⋅ The EU has named Brandenburg as one of only three European regions to hold the prestigious title of Eu-ropean Entrepreneurial Region of the Year 2011. The award recognizes regions with outstanding entrepre-neurial vision and encourages the promotion of small businesses. (3)

⋅ STRABAG Offshore Wind GmbH will invest EUR 300 million in the port of Cuxhaven, Lower Saxony, for facilities to produce offshore wind turbine foundations and a special ship to transport them for installa-tion in the North Sea. The plan is expected to create up to 500 new jobs. (4)

⋅ PV Power Tech, an Indian manu-facturer of premium solar modules, has established a subsidiary in Kirchzarten, Baden-Württemberg, to serve as its European business and service headquarters. (5)

⋅ In a survey of 271 European regions, the EU’s Office of Statistics (Eurostat) has ranked Hamburg as Germany’s strongest economic region and the fourth strongest in Europe. The city-state boasts a per capita GDP of EUR 47,800, or twice the EU average. (6)

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16 new investment projects to the eastern state in 2009. The roughly EUR 200 million in investments will create over 2,600 jobs, a 43 percent increase on the previous year. (10)

⋅ Hamburg’s Otto Group, the world’s largest mail-order company, has begun construction of a EUR 23 mil-lion storage and distribution center in Haldensleben, Saxony-Anhalt. The complex is part of a larger expansion of its main logistics center, which will entail up to EUR 100 million in investments and create 360 new jobs. (11)

⋅ The business development agency of Schleswig-Holstein succeeded in at-tracting 12 foreign companies to the northern state in 2009, including five from China, four from Denmark, two from India and one from France. The companies will bring 174 new jobs to the state. (12)

⋅ Companies interested in learning about investing in Thuringia can now take advantage of the state’s recently launched online portal – www.leg-thueringen.de. There, they can find detailed information on a wide range of topics, including its business environment, incentives, available real estate and research institutions. (13) Ph

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Major Investments

(continued from page 1)

⋅ Manuli Stretch Deutschland, the German subsidiary of Italian compa-ny Manuli Stretch s.p.a, the world’s largest manufacturer of stretch film used in industrial-packaging and other sectors, will expand its opera-tions in Saxony-Anhalt for the third time. The company, based in the Dow Value Park in Schkopau, will invest EUR 21 million by 2012 to erect two new plants and a 4,000m2 production hall. This will allow it to increase production capacity by 40 percent, expand its workforce by 31, and strengthen its position in the European market. Since 1998, the company has invested EUR 55 mil-lion in the site, which boasted sales of almost EUR 122 million in 2008.

⋅ The French firm Faurecia, a top-ten player in the global automotive parts industry that is majority-owned by PSA Peugeot Citroën, has been given the green light to acquire the Ger-man assets of Plastal, the insolvent Swedish car plastic components maker, for EUR 33 million. Plastal designs and produces plastic compo-nents, such as bumpers and front-end carriers, to a broad range of car-makers. The strength of the German operations can be seen in their 2009 sales figures of EUR 408 million, and the fact that they recently received a major order from Volkswagen.

⋅ Israel’s Teva Pharmaceutical In-dustries, the world’s largest generic drugmaker, has purchased Ratio-pharm, Germany’s top seller of generics, for EUR 3.6 billion. Teva will make the company the hub for its European growth strategy and believes the acquisition will boost revenues to USD 31 billion by 2015. After the United States, Germany re-cords the world’s most generic sales,

or almost two-thirds of all prescribed medications. Between 2005 and 2009, sales grew by an estimated 31 percent globally, and experts predict even stronger growth in the coming years.

⋅ German carmaker Audi has launched an offensive to become the world’s leading supplier of premium au-tomobiles. By 2012, the company plans to invest EUR 7.3 billion in its global operations for new products and future-looking technologies. Of this, EUR 3.8 billion will go to its German operations; EUR 2.5 billion to a new transmission and emissions center (stamping tools and produc-ing the popular A3 and A4 models in Ingolstadt) and EUR 1.3 billion to new engine-testing facilities in Neckarsulm. The company also plans to introduce a full hybrid model by 2011 and increase its line of models from 34 to 42 by 2015.

Managing the Crisis

Germany’s business prospects are look-ing better and better as it fights its way out of the economic slump. Germany’s federal government is awaiting that Europe’s largest economy would grow by 1.4 percent in 2010, followed by 1.6 percent in 2011. Likewise, accord-ing to the OECD’s most recent Interim Economic Assessment of short-term economic prospects in its leading in-dustrialized states (G7), Germany’s GDP will rise by 2.4 percent in the second quarter of 2010. At a press conference, OECD Chief Economist Pier Carlo Pa-doan noted “some encouraging signs of stronger activity,” despite difficult labor market conditions and sluggish credit growth. For example, exports of German vehicles have risen 47 percent in 2010 and 51 percent in March alone. And things are looking particularly bright for Germany’s small and medi-um-sized enterprises (SMEs). According to the KfW-ifo-Mittelstandsbaro-meter, between February and March, confidence in the SME business climate saw the second highest rate of growth since the survey’s inception in 1991.

Final inspection of an Audi 5 in Ingolstadt

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Issue 03 | May/June 2010 | Page 04

FDI Special

Germany’s Growing AttractivenessGermany continues to attract more for-eign direct investment despite the dif-ficult economic environment. In 2009, Germany Trade & Invest assisted 190 companies with site visits in Germany – an increase of 10 over the previous year. Of these, the company succeeded in turning over 80 investment projects representing roughly 2,800 jobs and an investment volume of EUR 700 million to the economic development agencies of the federal states. Investor interest focused especially on the service sector, but also on renew-able energies, mechanical and electron-ic technologies, chemicals and health-care. Regarding the figures, Germany Trade & Invest CEO Michael Pfeiffer says: “Foreign investors value Germany as a location for production, research and development and for the establishment of headquarters. As an investment des-tination, Germany belongs to the front-runners in international rankings.”2009 also saw Germany improve its position within Europe and worldwide in terms of total foreign investments. According to the fDi-Markets database of the Financial Times Group, Germany enjoyed 470 FDI projects in 2009, which puts it in second place in Europe and fifth place in the world among at-tractive investment locations.

from late 2009. Based on a survey of 700 global executives on the at-tractiveness of various countries for business and investment, the study ranked Germany in first place as a location for business relocation, company headquarters, and R&D; in second place for administration/accounting, sales and marketing, manufacturing and logistics centers; and in third place for innovation.

⋅ According to two recent studies pub-lished by the German Institute of Economic Research (DIW), at ap-proximately 50 percent, the propor-tion of research-intensive industries and knowledge-intensive services in Germany was the world’s largest based on 2007 aggregate value added. The studies also noted that its USD 800 billion in 2007 high-tech exports – particularly of automotive goods, but increasingly of medical, measurement, telecommunications and aerospace goods as well – put it far ahead of its competitors.

⋅ Germany leapt forward six places – from 20th to 14th – in the most recent edition of the World Economic Forum’s Global Information Technol-ogy Report. The annual ranking is the world’s most comprehensive assess-ment of the impact of ICT (information and communications technology) on the development process and competi-tiveness in 133 nations. In particular, the report gave Germany high marks for business usage and readiness as well as its market, infrastructure, po-litical, and regulatory environments.

Germany and Its Competitors

Five surveys Commend Germany⋅ Even with the crisis, Germany has

improved its reputation as an invest-ment destination. In its Foreign Di-rect Investment Confidence Index, leading management consulting firm A.T. Kearney ranked Germany the world’s fifth most attractive – and Europe’s top – investment destina-tion, a five place leap over its 2007 ranking. The 1,000 top executives of major companies around the world surveyed for the ranking particularly valued the comparatively high eco-nomic stability of Germany’s domes-tic market.

⋅ The newly published European In-novation Scoreboard 2009 (EIS) ranks Germany as an innovation leader among the EU’s 27 member states and recognizes its increas-ing innovation capacity. The study highlights Germany’s large number of innovative companies introduc-ing products or process innovations and singles out its strengths in the fields of human resources, exports and sales. The study is published annually on behalf of the European Commission’s Directorate-General for Enterprise and Industry.

⋅ Germany’s strong appeal to investors despite the crisis was recently con-firmed by an Ernst & Young study

Germany’s high-tech industries like machinery, automotive, chemicalsand electrical equipment perform outstandingly strong

Share of High-Tech Industries of Gross Value Added (in %, 2007)1

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Note: 1High-tech industries are characterized by high internal R&D expenditures of between 2.5%-7% of the average OECD turnoverSource: German Institute of Economic Research (DIW) 2010

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Cleantech News

About the Industry⋅ Germany’s government has pledged

to financially support the Desertec initiative and set up a task force to improve government-industry coop-eration. The project aims to provide Europe with solar-thermal energy from North Africa and the Middle East.

⋅ Germany’s Environment Ministry hopes to increase the amount of municipal waste that is recycled by expanding the range of materials placed in the container currently used for packaging materials.

⋅ As countries increase their use of renewable energy, they are confront-ing energy storage and manage-ment problems. German companies are leaders in related R&D and know-how and offer a number of promising investment and partnering opportunities.

⋅ A recent report found that renewable energies accounted for more than 10 percent of total heat, electricity and fuel consumption in 2009 in Ger-many. Despite the crisis, investments in the renewable sector reached a record total of EUR 17.7 billion and created more jobs.

⋅ A number of European and Asian countries have copied measures for supporting the use of renewable energies first set out in Germany’s Renewable Energy Sources Act (EEG). This promises to increase German exports in the sector, according to the Handelsblatt.

⋅ Shipbuilders are benefiting from Ger-many’s ambitious effort to construct offshore wind parks in the North and Baltic Sea. Companies building the parks have learned that ships cus-

tom-built to install wind turbines are a cheaper and better alternative to floating cranes, for example, and have commissioned shipbuilders around the world to construct the fleet they need.

About Companies⋅ The solar energy company Conergy

has announced to manufacture premium solar modules itself rather than relying on foreign suppliers. In the final quarter of 2009, the company reported its first positive figures in years. It expects to remain in the black in 2010 by continuing its restructuring and expanding business abroad.

⋅ Germany energy giant E.on plans to expand its successful collaboration with the Abu Dhabi-based invest-ment company Masdar in wind parks and other renewable energy projects.

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⋅ Evonik is building the world’s largest lithium-ion battery to store energy produced from renewable sources. It will eventually store 10 MW of en-ergy, or enough to supply power to several thousand homes.

⋅ Roth & Rau has increased its work-force in anticipation of a major jump in demand for its solar manufactur-ing equipment. For 2010, it estimates sales of EUR 285 million and EUR 25 million in gross profits.

⋅ Tesa, a manufacturer of self-adhesive products, is developing a novel, double-sided adhesive tape for attach-ing solar panels to the roofs and glass exteriors of buildings.

About Regions⋅ Brandenburg continues to play a

pioneering role in the use of renew-able energies. According to a recent report, wind turbines and biogas facilities provide almost 60 percent of its power.

⋅ The energy company Vattenfall plans to turn Berlin into a “global leader” in terms of consuming renewable resources for power and heat by erecting a new biomass plant and increasing the use of wood pellets in its conventional power plants.

⋅ Schleswig-Holstein is hoping to base a logistics center on the island of Helgoland for servicing the wind turbines being erected in the North Sea.

Conergy Solarpark Trier

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Issue 03 | May/June 2010 | Page 06

About Us – New Publication

Our latest publication focuses on “The Medical Biotechnology Industry in Germany 2010-1011.”The 16-page full-color brochure uses text as well as helpful charts and maps to provide an up-to-date snapshot of a flourishing sector second only in size to that of the United States and pro-pelled by a desire to find the medical solutions the world demands. Aside from key data on production and sales, it provides a convenient break-down of the industry into its essential parts. Special sections describe Ger-many’s health care economy, its vast research landscape and the biophar-maceuticals market. Readers can also learn about the labor market, public and private partnerships, tax and legal conditions, financing and incentives, success stories – and how we can help you!

Download the publication from our website (www.gtai.com/publications -> our publications -> industry specific information) or have it sent to you free of charge: order@gtai.com

Publisher:Germany Trade and Invest Gesellschaft für Außenwirtschaft und Standortmarketing mbHFriedrichstraße 6010117 BerlinT. +49 30 200 099-0F. +49 30 200 099-111office@gtai.com www.gtai.com

Chief Executives: Dr. Jürgen Friedrich, Michael PfeifferManaging Director Marketing & Communications: Peter AlltschekowDirector Publications: Andrea König Editor: Eva ForinyakWriter: Josh Ward Copy Editor: William MacDougallLayout: printlayout & webdesign, PotsdamCirculation: 7,000

SupportGermany Trade & Invest is promoted bythe Federal Ministry of Economics andTechnology and the Federal Government Commissioner for the New Federal Statesin accordance with a German Parliamentresolution.

Notes © Germany Trade & Invest, May – June 2010All information provided by Germany Trade & Invest has been put together with the utmost care. We assume, however, no liability for the accuracy of the informa-tion provided. Articles published under specific names do not necessarily reflect the opinion of the publisher. No reprints may be made without the prior consent of the publisher.

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Industry News

⋅ A recent study commissioned by the Federal Ministry of Economics and Technology on German companies active in the field of IT security found that they enjoy a high reputa-tion abroad for the reliability of their products. Rainer Brüderle, Federal Minister of Economics and Technol-ogy, praised the study’s findings, noting that the companies have “the outstanding technical expertise and high degree of specialization they need to meet this constantly growing market’s needs.”

⋅ German companies in the online industry are enjoying rapid growth that is projected to continue. Ac-cording to a study by the German Internet Business Association (eco), the country’s roughly 6,000 Internet companies – excluding e-commerce firms and content providers – gen-erated sales of EUR 48.7 billion in 2008. As the number of Germans going online expands, eco predicts growing sales for companies provid-ing online advertisement, data ex-change services, software rentals and cloud computing solutions.

⋅ In the ultra-competitive and dynamic medical technology sector, the com-mitment of German companies to R&D is paying off. A recent study found that, on average, German firms in the industry devote nine percent of their annual proceeds to their development budgets. Doing so has allowed them to assume leading positions in the global market for products related to computer tomog-raphy, ultrasound scanning, endos-copy and optical systems, to name just a few.

⋅ Increased devotion to R&D is also reaping benefits in another, less likely sector: textiles. More and more German companies are developing innovative textiles and composite materials that are unique and in much demand across the world.

Such products can now be found, for example, in the huge towing kites some cargo ships employ to lower fuel consumption and in stents used to keep clogged blood vessels open, and account for 27 percent of German textile sales and almost 43 percent of exports.